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HORNBACH HOLDING AG & CO. KGAA

(HBH)
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PRESS RELEASE : Hornbach Holding AG & Co. KGaA: 'There is still very great demand at DIY stores!'

12/22/2020 | 01:01am EDT
 
 DGAP-News: Hornbach Holding AG & Co. KGaA / Key word(s): 9 Month 
figures/Quarterly / Interim Statement 
Hornbach Holding AG & Co. KGaA: 'There is still very great demand at DIY 
stores!' 
 
2020-12-22 / 07:00 
The issuer is solely responsible for the content of this announcement. 
 
*"There is still very great demand at DIY stores!" * 
 
Hornbach Group maintains growth course in first nine months of 2020/21: 
Nine-month consolidated sales rise 20.2 % to Euro 4.5 billion / Adjusted 
EBIT increases 67.2 % to Euro 401.5 million / Annual forecast confirmed 
despite lockdown risks 
 
_Bornheim, December 22, 2020. _ 
During the second wave of coronavirus infections, consumers are still 
spending significantly more on improving their homes and renovation 
projects. This trend, which has continued unabated since the outbreak of the 
pandemic, is clearly reflected in the latest results of the Hornbach Group 
(Hornbach Holding AG & Co. KGaA Group). Consolidated sales in the third 
quarter of 2020/21 (September 1 to November 30, 2020) rose by 20.3 % to Euro 
1,371.0 million. Even the closure of stores to the general public in Austria 
and the Czech Republic in October and November 2020 had no noticeably 
negative impact on the Group's quarterly figures. The reduction in sales in 
the regions affected was more than offset by ongoing strong growth in other 
regions and by the impact of purchases being brought forward or caught up 
after the measures were lifted. In the first nine months of the current 
financial year, the Hornbach Group's sales rose by 20.2 % to Euro 4,503.1 
million (2019/20: Euro 3,745.3 million). Benefiting also from improved cost 
ratios, the Group's earnings for the first nine months of 2020/21 showed 
sharply disproportionate growth compared with sales. The Hornbach Group's 
full-year sales and earnings forecast for 2020/21, which was raised in early 
November 2020, has been confirmed, and that although the hard lockdown in 
Germany, Austria, the Netherlands, and Slovakia means that the 
coronavirus-related risks to the Group's business performance in the final 
quarter (December 1, 2020 to February 28, 2021) have risen significantly. 
 
At *Hornbach Baumarkt AG,* the largest operating subgroup (DIY retail) which 
operated a total of 161 DIY megastores with garden centers and online shops 
in nine European countries as of November 30, 2020, net sales grew by 20.7 % 
to Euro 4,224.2 million in the nine-month period (2019/20: Euro 3,499.3 
million). On a like-for-like basis and net of currency items, the DIY stores 
and garden centers generated sales growth of 19.5 % (2019/20: plus 7.1 %). 
 
Net sales at the HORNBACH DIY stores and online shop in Germany rose by 24.5 
% to Euro 2,219.4 million in the first nine months of 2020/21 (2019/20: Euro 
1,782.1 million). On a like-for-like basis, sales in Germany grew by 24.6 % 
(2019/20: 6.2 %). In the eight countries outside Germany ("Other European 
Countries"), net sales rose by 16.7 % to Euro 2,004.8 million (2019/20: Euro 
1,717.2 million). The international share of sales at the Hornbach Baumarkt 
AG subgroup therefore amounted to 47.5 % (2019/20: 49.1 %). Net of currency 
items, like-for-like sales in Other European Countries increased by 14.3 % 
(2019/20: 8.1 %). Due to the coronavirus pandemic, the online business 
gained further momentum and grew by around two thirds across the Group in 
the first nine months of the financial year. 
 
"Compared with other sector players, Hornbach has generated above-average 
growth in the current year. During the coronavirus crisis it has been more 
important than ever to provide our customers with the best possible supply 
based on our closely interlinked stationary and online businesses, also at 
times when there have been restrictions on sales. We owe this to our 
employees, who have shown great dedication and impressive success in 
handling customers' needs even in the more difficult circumstances due to 
the pandemic", comments Erich Harsch, CEO of Hornbach Baumarkt AG. As a sign 
of its appreciation, the company has distributed one-off coronavirus bonuses 
to employees in all regions in the current financial year. "We are all aware 
of the great difficulties faced by many businesses and institutions. When 
making the one-off payments to employees, we explicitly asked them to 
support companies in their local areas that have been hit hard by the impact 
of the coronavirus pandemic. Solidarity is more important than ever during 
this crisis", he adds. 
 
*Disproportionate growth in operating earnings * 
 
Together with improved cost ratios, the highly dynamic sales performance in 
the 2020/21 financial year led to a substantial increase in adjusted EBIT at 
the *Hornbach Group.* EBIT adjusted to excluded non-operating earnings items 
(adjusted EBIT) increased by 59.9 % to Euro 66.9 million in the third 
quarter of 2020/21 (2019/20: Euro 41.8 million) and by 67.2 % to Euro 401.5 
million in the first nine months of 2020/21 (2019/20: Euro 240.2 million). 
Nine-month earnings per share grew year-on-year to Euro 13.72 (2019/20: Euro 
8.02). 
 
On the level of the *Hornbach Baumarkt AG subgroup,* nine-month adjusted 
EBIT rose by 79.2 % to Euro 359.8 million in 2020/21 (2019/20: Euro 200.9 
million). Earnings per Baumarkt share are reported at Euro 7.50 (2019/2020: 
Euro 3.72). The *Hornbach Immobilien AG* subgroup contributed adjusted EBIT 
of Euro 43.7 million to group earnings (2019/20: Euro 43.1 million). 
 
The *Hornbach Baustoff Union GmbH subgroup* (HBU), which currently operates 
34 builders' merchant outlets in south-western Germany and two outlets close 
to the border in France (Lorraine), also reported pleasing growth. 
Nine-month sales here rose by 13.5 % to Euro 277.8 million (2019/20: Euro 
244.8 million). HBUgenerated adjusted EBIT of Euro 10.0 million (2019/20: 
Euro 5.5 million). 
 
*Lockdown has intensified consumers' basic need to improve their 
surroundings * 
 
"We can count ourselves very lucky with our business performance to date. At 
the end of the day, this also reflects the marked change in consumer 
behavior since the onset of the pandemic. Making sure that life in your own 
four walls is as attractive and safe as possible has become a key focus. 
There is a great need for DIY products and advice - not just because a tap 
is dripping or an electric appliance is broken and needs repairing, but 
because home improvement offers a meaningful occupation when consumers are 
in crisis mode and have few alternatives available", explains Albrecht 
Hornbach, CEO of Hornbach Management AG. The hard lockdown imposed in 
Germany and other countries in December had once again clearly revealed 
people's great need for DIY. According to Hornbach, the announcement that 
DIY stores would close to the general public had triggered a wave of 
last-minute purchases. "We nevertheless expect a backlog of demand to build 
up in households. Politicians should consider allowing system-relevant DIY 
stores and garden centers to meet their public supply responsibilities, 
while complying with the highest safety standards, in the foreseeable future 
once again", remarks Albrecht Hornbach. 
 
*Board of Management confirms full-year forecast for 2020/21 despite higher 
coronavirus risks * 
 
Looking ahead to developments in the final quarter of 2020/21 (December 1, 
2020 to February 28, 2021), in its quarterly statement published today the 
Hornbach Group has upheld its annual forecast, and that despite increased 
coronavirus-related risks, based on the measures known of at the editorial 
deadline on December 21, 2020. 
 
The nationwide restrictions on sales in Germany (December 16, 2020 to 
January 10, 2021), the Netherlands (December 15, 2020 to January 19, 2021), 
Austria (December 26, 2020 to at least January 17, 2021), and Slovakia 
(December 19, 2020 to January 10, 2021) affect a total of 129 stores. At 
many locations, however, sales to commercial customers and tradespeople are 
still possible, as are the reservation and collection or delivery of 
reserved goods. Christmas tree sales are also still permitted in Germany and 
Slovakia. 
 
Germany, Austria, and the Netherlands posted an exceptionally positive sales 
performance in December 2020 through to the beginning of the hard lockdown 
and most recently witnessed massive volumes of purchases being brought 
forward. Other countries also reported significantly higher customer demand 
during the month compared with the same period last year. Based on the 
conditions currently known of in the countries in which it operates, 
Hornbach does not expect to see any reduction in December sales despite the 
restrictions on sales activities. Albrecht Hornbach: "Ultimately, the 
crucial question is when we are allowed to reopen the stores now closed to 
private customers after the new year. Previous experience shows that a good 
share of the sales we lose due to store closures can be offset thanks to 
substantial volumes of catch-up purchases and thanks to strong growth in 
other regions and our online retail business." 
 
The Board of Management believes that the negative impact of the lockdown 
measures known of to date on the sales and earnings performance of the 
Hornbach Group will be on a scale that will most likely still be covered by 
the existing forecast range. Consolidated sales (2019/20: Euro 4.7 billion) 
are therefore still expected to show growth in a corridor of between plus 13 
% and plus 17 %. Depending on the extent of potential coronavirus-related 
effects, the Board of Management expects adjusted EBIT (2019/20: Euro 227 
million) to range between Euro 290 million and Euro 360 million. 
 
*The forecast is confirmed based on the assumption that there are no 
significant extensions or intensifications in restrictions on sales over and 
above those already announced or any additional lockdowns affecting DIY 
stores and garden centers in further countries in the remainder of the 
fourth quarter of 2020/21. * 
 
Note: The financial reports of Hornbach Holding AG & Co. KGaA and Hornbach 

(MORE TO FOLLOW) Dow Jones Newswires

December 22, 2020 01:00 ET (06:00 GMT)

Stocks mentioned in the article
ChangeLast1st jan.
HORNBACH BAUMARKT AG -1.29% 34.35 Delayed Quote.-4.05%
HORNBACH HOLDING AG & CO. KGAA -1.23% 84.05 Delayed Quote.6.80%
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Financials
Sales 2022 5 474 M 6 492 M 6 492 M
Net income 2022 141 M 167 M 167 M
Net Debt 2022 1 023 M 1 213 M 1 213 M
P/E ratio 2022 9,59x
Yield 2022 2,38%
Capitalization 1 345 M 1 594 M 1 595 M
EV / Sales 2022 0,43x
EV / Sales 2023 0,40x
Nbr of Employees 15 462
Free-Float 54,6%
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Number of Analysts 3
Average target price 111,33 €
Last Close Price 84,05 €
Spread / Highest target 41,6%
Spread / Average Target 32,5%
Spread / Lowest Target 24,9%
EPS Revisions
Managers and Directors
NameTitle
Albrecht Hornbach Chairman-Management Board
Karin Dohm Chief Financial Officer
John Feldmann Chairman-Supervisory Board
Simone Krah Member-Supervisory Board
Melanie Thomann-Bopp Member-Supervisory Board
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