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International DIY News

Hornbach reports 'dynamic sales growth'

Hornbach store 725 x 500

The Hornbach Holding AG & Co. KGaA Group (Hornbach Group) maintained the positive sales trend already seen in the first three months of its current financial year. Consolidated sales for the second quarter (June 1 to August 31, 2016) grew 6.8% to Euro 2,186.7 million. In parallel, the Group’s earnings performance also gained momentum. Consolidated operating earnings (EBIT) rose by 2.2% to Euro 76.0 million in the second quarter and cumulatively by 0.9% to Euro 152.5 million. The Group has confirmed its sales and earnings forecasts for the 2016/2017 financial year as a whole.

The pace was set by the dynamic sales performance at the 154 DIY stores with garden centers operated across Europe by Hornbach Baumarkt AG, the largest operating subgroup, as of August 31, 2016. Six-month sales here topped the two billion euro mark for the first time. Following growth of 7.0% to Euro 1,003.6 billion in the second quarter (2015/2016: Euro 938.2 million), the subgroup’s sales for the first half of 2016/2017 rose by 6.7% to Euro 2,062.5 million (2015/2016: Euro 1,933.4 million). On a like-for-like basis and net of currency items, the subgroup increased its sales by 4.5% in both the second quarter and the first half of 2016/2017.

Top rankings in Kundenmonitor survey underline strong performance in Germany

“With like-for-like growth of 2.5%, our DIY stores with garden centers in Germany significantly outperformed the DIY sector average”, commented Albrecht Hornbach, Chairman of the Board of Management of Hornbach Management AG, at the half-year conference in Frankfurt. “This strong performance is underlined by the excellent results we achieved in Kundenmonitor Deutschland 2016.” In Germany’s most prestigious retail consumer survey, published just a few days ago, Hornbach was ranked first for overall satisfaction in the DIY and home improvement store sector, achieving an overall grade of 2.20. The company also came first in 19 more of the 46 other categories. “Consumers not only confirmed our price leadership, they also certified that we offer the most competent advice, best product quality, and greatest product selection and variety. This impressive statement of confidence is both an honor for us and a motivation for us to press ahead with our strategy”, added Albrecht Hornbach.

Substantial boost in sales in international business

The greatest momentum at Hornbach Baumarkt AG in the first half was still generated by the Other European countries region, in which this subgroup’s retail activities in eight countries outside Germany are pooled. Their cumulative share of subgroup sales rose from 42.3% to 44.6%. On a like-for-like basis and net of currency items, sales here grew by 7.7% in the second quarter and by 7.1% in the first half.

Hornbach has successfully established itself as a project partner to DIY customers in its international network. These days, that no longer applies only to the stationary DIY stores with garden centers, but increasingly to the company’s e-commerce activities as well. Professional customers and DIY enthusiasts in Austria, Switzerland, the Netherlands, the Czech Republic, and Luxembourg, are now also turning to Hornbach’s online store to make their purchases.

Hornbach Baustoff Union benefits from increased housing construction demand

The Hornbach Baustoff Union GmbH (HBU) subgroup, which focuses on the needs of professional customers in its main target groups in the main construction and subconstruction trades, as well as on private construction clients, also noticeably boosted its sales performance in the second quarter of 2016/2017. Net sales here grew by 4.1% to Euro 66.5 million (2015/2016: Euro 63.9 million). Cumulatively for the first six months, HBU increased its consolidated sales by 2.6% to Euro 123.3 million (2015/2016: Euro 120.2 million). With growth of 6.9% to Euro 5.8 million, half-year operating earnings (EBIT) at the subgroup rose disproportionately compared with sales (2015/2016: Euro 5.4 million). HBU reported substantial sales growth in its “Construction” and “Civil Engineering” product ranges, with this being driven in particular by higher demand in the housing construction industry. Having opened a further outlet in the second quarter, as of August 31, 2016 the subgroup was operating 25 builders’ merchant outlets in south-western Germany and two locations close to the border in France (Lorraine).

Operating earnings at Hornbach Group slightly ahead of previous year’s figure

The Hornbach Group improved its operating earnings performance in the second quarter of 2016/2017 compared with the previous quarter. This was chiefly driven by the pleasing like-for-like sales performance net of currency items at the DIY stores operated by the Hornbach Baumarkt AG subgroup, the sales growth achieved at the Hornbach Baustoff Union GmbH subgroup, and improved cost ratios at the Group. These factors more than offset the lower gross margin and disproportionate rise in costs for the increasing digitization of the DIY retail business. At the end of the first half of the 2016/2017 financial year, the Hornbach Group’s operating earnings (EBIT) came to Euro 152.5 million and were thus 0.9% ahead of the previous year’s figure (Euro 151.1 million). At the Hornbach Baumarkt AG subgroup, the cumulative EBIT of Euro 119.5 million fell slightly short of the previous year’s figure of Euro 122.4 million. The full-year sales and earnings forecasts for the Hornbach Group and the Hornbach Baumarkt AG subgroup for the 2016/2017 financial year have each been confirmed by the Board of Management.

Source : Hornbach Press Release 

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29 September 2016

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