We hereby affirm that, to the best of our knowledge, the consolidated financial statements give a true and fair picture of the assets, liabilities, financial position and results of operations of the Group in accordance with the applicable reporting principles, and the group management report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group.
Neustadt an der Weinstrasse, May 16, 2012 HORNBACH HOLDING AG
The Board of Management
AUDITOR'S REPORT
171
AUDITOR'S REPORT
We have audited the consolidated financial statements prepared by Hornbach Holding AG, Neustadt / Wein- strasse, comprising the income statement, statement of comprehensive income, balance sheet, statement of changes in equity, cash flow statement and the notes to the consolidated financial statements, together with the group management report for the financial year from March 1, 2011 to February 29, 2012. The prepara- tion of the consolidated financial statements and the group management report in accordance with IFRS as adopted by the EU and the additional requirements of German commercial law pursuant to § 315a (1) HGB are the responsibility of the company’s management. Our responsibility is to express an opinion on the con- solidated financial statements and on the group management report based on our audit.
We conducted our audit of the consolidated financial statements in accordance with § 317 HGB and German generally accepted standards for the audit of financial statements promulgated by the Institut der Wirt- schaftsprüfer (IDW). Those standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the net assets, financial position and results of operations in the consolidated financial statements in accordance with the applicable financial reporting framework and in the group management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Group and expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the internal control system in respect of the financial reporting process and the evidence supporting the disclosures in the consolidated financial statements and the group management report are examined, primarily on a test basis, within the framework of the audit. The audit includes assessing the annual financial statements of those entities in- cluded in consolidation, the determination of entities to be included in consolidation, the accounting and consolidation principles used and significant estimates made by the management, as well as evaluating the overall presentation of the consolidated financial statements and group management report. We believe that our audit provides a reasonable basis for our opinion.
Our audit has not led to any reservations.
In our opinion, based on the findings of our audit, the consolidated financial statements comply with IFRS as adopted by the EU and the additional requirements of German commercial law pursuant to § 315a (1) HGB, and give a true and fair view of the net assets, financial position and results of operations of the Group in accordance with these requirements. The group management report is consistent with the consolidated financial statements and as a whole provides a suitable view of the Group’s position and suitably presents the opportunities and risks of future development.
Frankfurt am Main, May 16, 2012 KPMG AG Wirtschaftsprüfungsgesellschaft
Bertram Kunisch
172
IMPRINTPublished by
HORNBACH HOLDING Aktiengesellschaft Le Quartier Hornbach 19 67433 Neustadt a. d. Weinstrasse Germany Tel: (+49) 0 6321 / 678-0 … + FSC-LOGO DISCLAIMER
This annual report is to be read in the context of the audited financial data of the HORNBACH HOLDING AG Group and the disclo- sures 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. The fac- tors which could produce such variances include changes in the economic and business environment, particularly in respect of consumer behavior and the competitive environment in those retail markets of relevance for HORNBACH. Furthermore, they in- clude a lack of acceptance of new sales formats or new product ranges, as well as changes to the corporate strategy. HORNBACH has no plans to update the forecast statements, neither does it accept any obligation to do so. The diagrams and charts, as well as the comments relating to such, have been provided for illustrative purposes and do not form part of the management report.
IMPRINT
Key Figures / Company Profile
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Change in 2010 / 2011
Amounts shown in € million, 2010 / 2011 2009 / 2010 2008 / 2009 2007 / 2008 2006 / 2007 2005 / 2006 2004 / 2005 2003 / 2004 2002 / 2003 2001 / 2002 unless otherwise stated
Sales and earnings figures 1)
Net sales 5.7 % 3,017 2,853 2,752 2,617 2,544 2,367 2,220 2,057 1,709 1,439
of which in other European countries 7.9 % 1,195 1,109 1,065 962 862 788 688 611 424 317
Sales growth as % of net sales 5.7 3.7 5.1 2.9 7.5 6.6 8.0 20.3 14.5 10.4
EBITDA 2) 3.0 % 229 222 251 181 197 180 181 156 137 152
as % of net sales 7.6 7.8 9.1 6.9 7.7 7.6 8.2 7.6 8.0 10.2
EBIT 3) 5.0 % 159 152 179 105 119 92 99 79 68 88
as % of net sales 5.3 5.3 6.5 4.0 4.7 3.9 4.5 3.8 4.0 5.9
Earnings before taxes and extraordinary result
and minority interests 9.7 % 127 116 144 68 83 53 62 45 35 47
as % of net sales 4.2 4.1 5.2 2.6 3.3 2.2 2.8 2.2 2.1 3.1
Net income for the year before minority interests 20.6 % 99 82 113 58 76 32 37 27 20 24
as % of net sales 3.3 2.9 4.1 2.2 3.0 1.4 1.7 1.3 1.2 1.6
Gross margin as % of net sales 36.6 36.1 36.0 35.7 35.3 35.2 35.9 35.1 34.9 36.2
Store expenses as % of net sales 4) 27.4 27.7 27.3 27.7 27.4 28.1 27.5 27.2 28.1 28.2
4.1 4.0 4.2 4.2 4.0 4.3 4.1 4.0 4.3 4.4
Pre-opening expenses as % of net sales 4) 0.2 0.2 0.3 0.3 0.2 0.5 0.5 0.6 1.2 0.7
Cash flow figures
Cash flow from operating activities -1.0 % 182 184 144 90 215 38 142 28 46 75
Investments 17.5 % 113 97 130 201 123 208 135 134 206 215
Proceeds from divestments 48 9 83 46 55 193 28 99 7 139
Earnings potential 5) -0.5 % 187 188 153 97 220 49 153 41 67 86
as % of net sales 6.2 6.6 5.6 3.7 8.7 2.1 6.9 2.0 3.9 5.8
Dividend payments 8.9 8.9 8.9 8.9 8.9 8.9 8.9 8.9 8.9 8.9
Balance sheet and financial figures
Total assets 9.9 % 2,233 2,033 1,996 1,902 1,842 1,794 1,762 1,664 1,582 1,451
Non-current assets 5.1 % 1,125 1,070 1,010 1,000 983 959 1,045 1,030 1,071 971
Inventories 8.3 % 489 451 516 498 463 512 444 441 376 334
Cash and cash equivalents 41.5 % 474 335 275 196 265 161 162 69 55 88
Shareholders’ equity 6) 11.7 % 962 861 780 688 630 559 536 433 421 415
as % of total assets 43.1 42.4 39.1 36.1 34.2 31.1 30.4 26.0 26.6 28.6
Return on shareholders’ equity
based on net income – % 10.9 10.0 15.4 8.8 12.8 5.9 7.6 6.3 4.8 6.2
Net working capital 1.8 % 375 368 398 387 346 457 354 366 262 226
Additions to non-current assets 10.6 % 113 103 131 202 120 202 131 133 231 201
Inventory turnover rate per year 4.1 3.8 3.5 3.5 3.4 3.2 3.2 3.2 3.1 3.0
Other information Employees – annual average –
converted into full-time equivalents 1.6 % 12,066 11,881 11,542 11,078 10,622 10,595 9,979 9,139 7,909 7,026 Number of shares 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000
Average Earnings per share in € 7) 21.9 % 10.14 8.32 11.41 6.00 7.89 3.37 3.47 2.69 2.17 2.20
1) Starting in the 2003 / 2004 financial year: other taxes (e. g. property tax) have been included under operating expenses
2) Earnings before interest, taxes, depreciation and amortization; starting in the 2007 / 2008 financial year: including other taxes
3) Earnings before interest and taxes; starting in the 2007 / 2008 financial year: including other taxes
4) Starting in the 2003 / 2004 financial year: excluding interest
5) Cash flow from operating activities, plus pre-opening expenses
6) Pursuant to IFRS; starting in the 2004 / 2005 financial year: including minority interests
7) Prior to the 2001 / 2002 financial year: earnings based on DVFA / SG
IFRS financial year on
previous year
Costs of central administration as % of net sales 4)
Key Group, Financial and Operating Data
4
COMPANY PROFILEHORNBACH HOLDING AG is the parent company of the HORNBACH Group. It is not itself an operating company, but has a number of major subsidiaries. By far the largest and most important subsidiary is HORNBACH-Baumarkt-AG, which operates DIY megastores in Germany and abroad. The retail activities of the Group are supple- mented by HORNBACH Baustoff Union GmbH, which is active in the construction materials and builders’ merchants business and mainly has commercial customers. The development and utilization of first- class retail real estate constitutes a further business activity of HORNBACH HOLDING AG. This is undertaken in part by HORNBACH Immobilien AG, which owns much of the extensive real estate portfo- lio of the HORNBACH Group.
The HORNBACH Group is characterized by its ability to respond to the challenges of trading in DIY, home improvement and garden products, and to set new standards in the process. Since the company was founded in 1877, five generations of the Hornbach family have been active in almost all areas of the construction sector – in the building trade, as manufacturers of prefabricated components and, for the first time in 1900, as builders’ merchants. As one of the pioneers in Germany and Europe, HORNBACH opened its first DIY store in 1968 and combined it with a garden center – at its time unique in Europe. This combination has since developed to become a European stan- dard in the DIY sector today.
In the second half of the 1980s, HORNBACH added a new dimension to the market with its concept of large DIY and home improvement megastores with garden centers. Today, an impressively presented range of around 50,000 top quality DIY and gardening articles is available to DIY customers in spacious stores and at permanently low prices. Well-trained, service-oriented employees make project customers and DIY enthusiasts, especially those on the lookout for solutions for extensive renovation and construction projects, the focus of their activities. At the balance sheet date on February 28, 2011, the HORNBACH-Baumarkt-AG subgroup was operating 133 DIY megastores with garden centers across Europe (92 of which in Germany). HORNBACH HOLDING AG generated (net) consolidated sales of € 3,017 million in the 2010/2011 financial year.
The consistent implementation of the company’s concept, coupled with the high expectations it places in the quality of its locations, its stores, its product range and employees, have facilitated the dynamic growth witnessed by the company in recentyears. Together, these factors form the basis for further expansion in the DIY mega- store and garden center segment in Germany and Europe. Following the company’s successful entry into the Austrian market in August 1996, it has consistently pressed ahead with its expansion into neighboring European countries. Stores were subsequently opened in the Netherlands, Luxembourg and the Czech Republic. The company’s international growth was maintained with its expansion to Switzerland, Sweden and Slovakia. The entry into the Romanian market followed in the summer of 2007. As of February 28, 2011, the company was operating a total of 41 DIY megastores with garden centers in eight countries outside Germany. Since December 1, 2010, the stationary retail business has been supplemented by HORN- BACH’s online shop, with which the Group aims to make targeted use of the opportunities presented by multichannel retailing.
Both HORNBACH HOLDING AG and HORNBACH-Baumarkt-AG are publicly listed stock corporations. The share capital of HORNBACH HOLDING AG is divided equally between ordinary and non-voting preference shares. Of the four million preference shares (ISIN DE0006083439), 82.6% are owned by independent shareholders, while 17.4% are held by the British retail group and our strategic partner Kingfisher plc. The preference shares are admitted to the subsection of official trading of the German Stock Exchange which involves additional admissions obligations (Prime Standard). HORN- BACH HOLDING AG is a member of the SDAX index. 75% of the four millionunlisted ordinary shares are owned by the Hornbach family. Kingfisher holds 25% plus one share of the voting capital. The shares in HORNBACH-Baumarkt-AG are also listed in the Prime Standard of the German Stock Exchange. Of around 15.9 million ordinary shares in the company, 76.4% are held by HORNBACH HOLDING AG, and 18.4% are owned by independent shareholders. Kingfisher plc held a stake of around 5.2% at the balance sheet date.
COMPANY PROFILE
iMpRiNt
Published by
HORNBACH HOLDING Aktiengesellschaft Le Quartier Hornbach 19
67433 Neustadt a. d. Weinstrasse - Germany - Telephone (+49) 0 63 21 / 678 - 0 Fax (+49) 0 63 21 / 678 - 9300 [email protected] www.hornbach-holding.com Investor Relations Telephone (+49) 0 63 48 / 60 - 23 20 [email protected] www.hornbach-group.com Design Concept und Production colours ec gmbh
Neulandstraße 2 – 4
49084 Osnabrück - Germany - [email protected]