FACTBOOK 2015/2016 Q3/9M + Trading Statement Page 1
HORNBACH Holding Group A leading European DIY retailer 1877 Foundation 1968 1st DIY store with garden center 1980 1st DIY megastore 1987 Going public HORNBACH HOLDING Group 1993 Going public HORNBACH- Baumarkt Subgroup 1996 Austria 1997 Netherlands 1998 Czech Republic 2001 Zuckerhut Award 2002 Switzerland 2003 Sweden 2004 Slovakia 2004 Emission High Yield bond (6,125%) 2006 HORNBACH wins German Handelspreis 2007 Romania 2007 Lifetime Award for Otmar Hornbach 2008 Retailer of the Year in Germany 2010 Start of Multi-Channel Retailing 2013 Emission Eurobond (3,875%) 2015 Change in legal form of HORNBACH Holding AG into KGaA Page 2
Shareholder Structure HORNBACH Group Free Float HORNBACH Familien Treuhand GmbH 100% since October 24, 2015 Free Float 23.6% HORNBACH Baumarkt AG³ Bornheim Listed Ordinary Shares² (ISIN DE0006084403) 56.25% 43.75% HORNBACH Holding AG & Co. KGaA Neustadt/Weinstraße Listed Ordinary Shares 1 (ISIN DE0006083405) c 76.4% 100% 100% HORNBACH Immobilien AG 3 Bornheim Not listed HORNBACH Baustoff Union GmbH 3 Neustadt/Weinstraße Not listed HORNBACH Management AG (General Partner) Management 1 Number of shares: 16,000,000 / Stock market code: HBH 2 Number of shares: 31,807,000 / Stock market code: HBM 3 plus other subsidiary companies in Germany and abroad Page 3
Shareholder Structure HORNBACH Group Neustadt/Weinstrasse February 29, 2016 100% 76.4% 100% Property Development within HOLDING Group 153 DIY and garden stores 1.8 million sqm sales area in 9 countries Germany (99) Austria (13), Netherlands (11), Czech Republic (9), Luxembourg (1), Switzerland (6), Sweden (5), Slovakia (3), Romania (6) 26 Outlets Builders merchant business South-West Germany (24) France (2) Page 4
European Network of HORNBACH Group Germany 99 stores 1,052,000 sqm 24 x 2 x February 29, 2016 153 DIY stores in 9 countries sales area: 1.8 million sqm store size: Ø 11,600 sqm Austria 13 stores 161,100 sqm Czech Republic 9 stores 124,500 sqm Romania 6 stores 86,600 sqm Slovakia 3 stores 46,300 sqm Luxembourg 1 store 12,100 sqm Sweden 5 stores 73,100 sqm Netherlands 11 stores 137,700 sqm Switzerland 6 stores 78,000 sqm Page 5
01 02 00 / 01 / 15 / 14 / 13 / 12 / 11 / 10 / 09 / 08 / 07 / 06 / 05 / 04 / 03 / 16 15 14 13 12 11 10 09 08 07 06 05 04 03 00 99 / 02 / 99 98 97 96 95 94 93 92 91 90 89 88 98 / 97 / 96 / 95 / 94 / 93 / 92 / 91 / 90 / 89 / 88 / 87 / Sustainable Sales Growth HORNBACH Group 3.76 bn 132 m Page 6
Successful International Expansion Key market entries of HORNBACH Baumarkt AG Subgroup FY 2015/2016: RO 4000 3.57 bn SK SE 3500 CH 3000 NL 2500 CZ L 43% A 2000 35% 1500 57% 65% 1000 500 Germany 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 0 International Page 7
Jobmachine HORNBACH Group 1987/1988-2015/2016 17,433 12,014 7,386 3,924 1,372 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 613 Page 8
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Top Ranking of the European DIY Retailers 2014 14,952 14,736 5,791 4,956 3,357 2,607 pe u ro G A o de n Ki he if s g r B O I Ba u us ha rn Ho ch ba o sk e K Z s eu 2,454 a /H ba e g 2,263 u T m oo M B r. 1,896 a ol ir c ge ic Br 1,895 ch ar om é [Source: Dähne, Company information] Page 10
Top Ranking of the German DIY Retailers 2014 Net Sales (Europe): HORNBACH ranks #3 5,790 [Source: Dähne, HORNBACH] 4,956 3,357 2,454 2,263 1,300 I OB a uh Ba CH BA N R HO us Z ba age H / S EU u om To s bu Glo but is #1 in sales per store ( million) 951 la /He to aus b o r Eu ff and sales per sqm ( ) 23.0 19.4 1,970 1,733 12.9 1,340 1,162 10.0 4.7 1,699 1,639 1,010 6.5 2.6 I OB s au h u Ba A NB R HO CH / us Ze u ba e g Ha om To e s/h u ob Gl la ff sto u ba ro u E I OB au uh Ba s HO H AC B RN /H us e Z au eb g a To om o Gl el a /H s bu r Eu ff sto u a ob Page 11
DIY Top 10 Germany 2014 Average store size, net sales and sales densities Bubble size = total net sales (Europe) average store size (in sqm) 14000 OBI 12000 Bauhaus Megastore HORNBACH 10000 Toom 8000 Globus/Hela Zeus/Hagebau 6000 Eurobaustoff EMV-Profi 4000 Hellweg 2000 0 750 1000 1250 1500 1750 2000 Net Sales/ sqm [Source: Dähne, HORNBACH; Hellweg incl. Baywa] Page 12
Like-for-like DIY Sales in Germany (calendar year - cumulative) 140 130 + 33% DIY-Sector (D) HORNBACH (D) 1998 = 100% 120 110 100 90-13% 80 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e [Source: BHB, HORNBACH] Page 13
HORNBACH s Market Share in Germany Market share in % of DIY store sales 11.0 10.0 8.5 7.1 4.9 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 [Source: BHB/GfK DIY-Panel (until 2013), GfK DIY-TSR (from 2014), HORNBACH] Page 14
Our Strategy for the DIY World HORNBACH is the top address for DIY projects Every-daylow-price Superior product offering Project-oriented services Megastore network & multi-channel retailing Sophisticated logistics & IT Continuing internationalisation Outperforming the DIY market & delivering a unique customer experience Page 15
We re a Project DIY Store Partner for project customers and professionals. Top quality specialist advice. Added value with our product range and service offerings. Everything in stock. Making shopping easier. Unique advertising campaigns. Every-Day-Low-Price. Page 16
High Quality Store Network Our Store Formats Prime locations Focus on big catchment areas Large store format Homogeneous store network Generates economies of scale in store operation and store development Meets customers needs and provides superior shopping experience Store Type Selling Space CapEx 1) (BHB weighted) HORNBACH4 HORNBACH5 HORNBACH6 HORNBACH Typ 2 1) 2) Type 4 8,500 10,999 sqm (incl. drive thru) 15 20 m Type 5 11,000 14,999 sqm 20 25 m Type 6 15,000 sqm (incl. drive thru) 25 30 m Type 2 ( HORNBACH Compact ) 2) ~ 800 sqm ~ 2 m average CapEx for property and building currently in trial phase Page 17
Property Ownership and Hidden Reserves Property HI Property HBM Operating Leases Others 2% 4 29% end-february 2015 43 61 43% No. of stores Sales area in % 26% 38 FY 14/15 ( million) Book value Yield value (x13) Hidden Reserves (x13) Baumarkt Subgroup 498 770 272 Immobilien Subgroup 441 788 347 HORNBACH Group 939 1,558 619 Page 18
E-Business in DIY Retailing: Gaining in Significance Online share of DIY retail market (Germany) In 2014, online retail accounted for around 5% of DIY sales in Germany. Industry experts expect e-commerce to account for 25% of sales by 2030. 25.0% 5.0% 2014 2030e [Source: IFH, BHB, Roland Berger] Page 19
HORNBACH Pursuing Sustainable Multichannel Strategy Since launching its webshop in December 2010, HORNBACH has Germany s most extensive online range of construction and renovation products. Catalyst for EDLP transparency and price awareness Time-saving: Reserve online & collect in-store Spill-over benefits for our stores Additionally addressing customers living outside of the catchment areas of our stationary stores International roll-out Page 20
Road Map of Going Live Country Start of Online Shop Number of SKUs (December 2015) Germany December 2010 110,000 Austria January 2013 83,000 Switzerland November 2014 57,000 Netherlands March 2015 25,000 Czech Republic December 2015 Luxembourg December 2015 Romania / Slovakia / Sweden scheduled for 2017 Advantages of stationary retail Advantages of online retail Page 21
Elaborated Supply Chain Management Ensures Europe-wide Logistics (B2B) Sophisticated merchandise management in conjunction with our homogeneous store network Our logistics system combines direct supplies to stores and indirect deliveries via logistics centers Enhanced import possibilities Group-wide integrated IT and merchandise systems Page 22
B2B Logistics: Our Network for the Supply of Goods throughout Europe LC: Lehrte (1994) Import warehouse: Soltau (2012) Berlin (2015)* Castrop-Rauxel (2015)* Nürnberg (2015)* Lorsch (2015)* LC: Essingen (1999) * Special warehouse for long and bulky goods LC: Vilshofen (2005) Page 23
B2C Logistics: Mirroring Our Multichannel Strategy Pure online business: 3 ways to customers Store as e-commerce service partner Home delivery service Reserve & collect at store Direct shipment supplier Collect products ordered online at store Fulfillment HORNBACH DVZ Fulfillment service provider HORNBACH4 HORNBACH6 MVZ Store HORNBACH mailing center Page 24
HORNBACH Private Label Strategy Benefits of private labels Private labels share of sales* USP compared with competitors. 35,0% Lower dependency on national manufacturer brands. 30,0% Exclusive control over market launch and market positioning. Active management of product lifecycle. Significantly higher gross margins! Successful way to counter downward price pressure from internet! 30,0% 25,0% 20,0% 17,6% 15,0% 15,0% 10,0% 8,2% 10,3% 5,0% 0,0% FY 06/07 FY 10/11 FY 12/13 FY 14/15 long-term target * year-end figure Page 25
Growth Drivers Cocooning New target groups (retreat-to-home lifestyle trend) ( women-at-work, Do-it-for-me, seniors) Increasing need for renovation Multichannel retailing (80% of houses/flats > 20 years) Sustainability and energy efficiency Insulation of facades Replacement of outdated boilers Use of rainwater FSC timber products Strong private labels International expansion Page 26
Sales Figures Financial Year 2015/2016 Page 27
Constant Growth in Net Sales HORNBACH-Group 3,204 3,229 1,729 1,741 3,369 3,572 3,755 +5.1% 2,011 1,966 1,827 +2.3% 1,524 1,272 1,279 1,325 1,390 202 207 216 213 218 2011/12 2012/13 2013/14 2014/15 2015/16 HORNBACH Baustoff Union +9.6% HORNBACH Baumarkt AG [International] +2.4% HORNBACH Baumarkt AG [Germany] [rounding differences] Page 28
Net Sales HORNBACH-Group HORNBACH Baumarkt Subgroup 2014/15 1035 1052 940 1003 876 977 926 2015/16 995 878 720 938 775 815 863 687 739 +1.6% +6.7% +5.7% +7.6% +1.8% +6.8% +5.9% +7.6% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Page 29
Like-for-like Sales* HORNBACH Baumarkt AG Subgroup Q1 2015/16 Q2 2015/16 H1 2015/16 Q3 2015/16 9M 2015/16 Q4 2015/16 FY 2015/16 (1.1) 4.0 1.3 2.9 1.8 5.6 2.6 Previous year 14.6 (1.0) 6.7 1.0 4.9 2.4 4.4 Germany (2.4) 4.0 0.6 (0.2) 0.4 2.5 0.8 Previous year 19.4 (1.0) 8.9 1.4 6.5 1.8 5.5 International 0.7 4.0 2.3 7.0 3.7 9.7 4.9 Previous year 8.2 (1.0) 3.6 0.6 2.6 3.4 2.8 Total * in constant currencies Page 30
Financial Year 2015/2016 3rd Quarter / 9 Months Page 31
Q3/9M Key figures HORNBACH Group Page 32
Q3/9M Key figures HORNBACH Baumarkt AG Subgroup Page 33
Gross Margin - Nine Months Impacts on gross margin Lower procurement prices almost compensating for decreasing retail prices Positive currency items Reduction in retail prices (internet & discount campaigns at competitors) Freight costs (B2C) not covered by freight revenues Product range changes due to different product mix of increasing e-commerce sales One-off base effect of procurement terms for transformed Praktiker/Max Bahr stores 37.9 37.4 37.6 37.3 37.2 37.2 36.9 36.5 36.5 36.4 9M 2011/12 9M 2012/13 9M 2013/14 HORNBACH Baumarkt Subgroup 9M 2014/15 9M 2015/16 HORNBACH Holding Page 34
EBIT HORNBACH Group 1) nine months 2014/15 million 2015/16-9.8% 88.2 76.8 65.8 74.4-42.7% 191.2 172.5 2014/15 2015/16 37.2-13.0% + 13.0% Q1 Q2 21.3 Q3 based on International Financial Reporting Standards (IFRS) 1) Previous year s figures adjusted due to IFRIC 21 Page 35
EBIT Breakdown Nine Months 1) - 10.4% 142.2 million 127.3-3.6% 42.8 2014/15 2015/16 41.3-5.1% 8.7 HBM 8.3 HBU HBM: HORNBACH Baumarkt Subgroup HBU: HORNBACH Baustoff Union Subgroup HI: HORNBACH Immobilien Subgroup HI 1) Previous year s figures adjusted due to IFRIC 21 Page 36
Earnings per Share - Nine Months 5.87 5.21 5.38 2.58 2.51 2012/13 2013/14 3.17 2011/12 HORNBACH Holding 1) Previous 6.15 5.94 2.90 2.88 2014/15 2015/16 1) HORNBACH Baumarkt Subgroup year s figures adjusted due to IFRIC 21 Page 37
Cash Flow Statement HORNBACH Holding Cash flow statement (abridged) million 2015/2016 2014/2015 9 months 9 months 195.1 198.0 1) Cash flow from operating activities of which: funds from operations 174.0 173.7 of which: change in working capital 21.1 24.3 Cash flow from investing activities -118.3-86.9 Cash flow from financing activities -33.1-51.9 Cash-effective change in cash and cash equivalents 43.7 59.1 Change in cash and cash equivalents due to changes in exchange rates 0.0-0.2 Cash and cash equivalents at March 1 400.9 428.8 Cash and cash equivalents at November 30 444.6 487.7 rounding differences 1) Previous year s figures adjusted due to IFRIC 21 Page 38
Cash Flow Statement HORNBACH Baumarkt AG Subgroup Cash flow statement (abridged) million 2015/2016 2014/2015 9 months 9 months 168.9 164.8 1) Cash flow from operating activities of which: funds from operations 135.3 131.5 of which: change in working capital 33.6 33.3 Cash flow from investing activities -108.6-75.9 Cash flow from financing activities -13.0-36.2 Cash-effective change in cash and cash equivalents 47.3 52.7 Change in cash and cash equivalents due to changes in exchange rates -0.1-0.1 Cash and cash equivalents at March 1 334.8 371.1 Cash and cash equivalents at November 30 382.1 423.7 rounding differences 1) Previous year s figures adjusted due to IFRIC 21 Page 39
Group Balance Sheet Structure (IFRS) HORNBACH Holding ASSETS 401 674 1,358 EQUITY and LIABILITIES Total assets 2,549 Liquid funds 445 2,433 1) Inventories, accounts receivable and other assets 686 Non-current assets 1,419 2,549 617 Total assets 2,433 Current liabilities 576 Non-current liabilities 1,356 Shareholders equity 53.2% February 28, 2015 1) Previous November 30, 2015 November 30, 2015 681 1,259 51.7% February 28, 2015 year s figures adjusted due to IFRIC 21 494 rounding differences Page 40
Group Balance Sheet Structure (IFRS) HORNBACH Baumarkt Subgroup ASSETS 1,731 Total assets EQUITY and LIABILITIES 1,845 382 335 1,845 526 Liquid funds 599 797 1) 605 Total assets Current liabilities 326 Inventories, accounts receivable and other assets 401 408 Non-current liabilities 858 993 Shareholders equity 922 Non-current assets 53.8% February 28, 2015 1) Previous 1,731 November 30, 2015 November 30, 2015 year s figures adjusted due to IFRIC 21 53.3% February 28, 2015 rounding differences Page 41
Outlook Page 42
Store Openings 2015/2016 Saarbrücken (replacement) Regau Neunkirchen (HB Compact) Alzey (HB Compact) Geleen (replacement) Best Klagenfurt Geleen Sibiu Best Saarbrücken Regau Klagenfurt Sibiu Page 43
Financial Calendar 2016 and Disclaimer March 22, 2016 Trading Statement for the 2015/2016 Financial Year May 24, 2016 Annual Press Conference for 2015/2016 Financial Year Publication of Annual Report DVFA Analysts Conference HORNBACH Baumarkt AG June 24, 2016 Financial Update: 1st Quarter of 2016/2017 as of May 31, 2016 July 7, 2016 July 8, 2016 Annual General Meeting HORNBACH Baumarkt AG HORNBACH Holding AG & Co. KGaA September 29, 2016 Half-Year Financial Report 2016/2017 as of August 31, 2016 DVFA Analysts Conference HORNBACH Holding AG & Co. KGaA December 22, 2016 Financial Update: 3rd Quarter of 2016/2017 as of November 30, 2016 This presentation is to be read in the context of the audited financial data of the HORNBACH Holding Group and the disclosures made in the notes to the consolidated financial statements contained in the annual report. It contains statements relating to the future based on assumptions and estimates made by HORNBACH s Board of Management. Forward-looking statements are only valid at the time at which they are made. Although we assume that the expectations reflected in these forecast statements are realistic, the company can provide no guarantee that these expectations will turn out to be accurate. The assumptions may involve risks and uncertainties which could result in actual events differing significantly from the forecast statements. Such factors include those discussed in the Risk Report and Outlook of the annual report. We do not assume any obligation to update the forward-looking statements contained in this presentation. Page 44