HORNBACH defies the crisis

Corporate news announcement processed and transmitted by Hugin AS. The issuer is solely responsible for the content of this announcement. ---------------------------------------------------------------------- -------------- Successful course maintained in third quarter of 2008/2009 as well: - Overall Group boosts sales by 6.5% in first nine months - Earnings show significantly disproportionate growth - Further increase in head start over competition - Positive outlook confirmed for the 2008/2009 financial year Bornheim bei Landau, December 22, 2008. The HORNBACH Group, one of Europe's largest operators of DIY stores and garden centers, successfully maintained its growth course in the third quarter of the 2008/2009 financial year (September to November 2008). Notwithstanding the downturn in confidence in the wake of the financial and economic crisis, HORNBACH HOLDING AG boosted its third-quarter sales by 6.1% to ¤ 688.5 million (previous year's quarter: ¤ 648.7m). In the first nine months of the financial year (March to November 2008), the parent company of the HORNBACH Group increased its sales by 6.5% to ¤ 2.214 billion (¤ 2.078bn). Key earnings figures showed disproportionate growth. "So far, there is no sign of any lull in consumer demand at our HORNBACH DIY megastores with garden centers", commented Albrecht Hornbach, Chairman of the Board of Management of HORNBACH HOLDING AG. "It is our clear profile as the top DIY store for projects and innovation leader in our sector that makes us so successful, even in more difficult economic times." The HORNBACH concept was primarily based on good advice, high quality, an extensive product range, large volumes of stock on hand, low and above all honest prices. "The most important factors we can offer our customers are reliability and confidence. It is these qualities that consumers honor most, especially in times of crisis", stressed Albrecht Hornbach. This was accompanied by the company's role as innovation leader. "We are the pioneers in energy-saving projects for house and home, such as insulating façades or roofs, or renewing windows. The combination of these energy-saving product ranges with professional advice will contribute disproportionately to our sales growth in future as well." The DIY megastores with garden centers which represent the HORNBACH Group's core business accounted for 94% of total sales. Sales at the HORNBACH-Baumarkt-AG subgroup climbed by 6.4% to ¤ 644.2 million in the third quarter (¤ 605.7m) and by 6.6% to ¤ 2.083 billion in the first nine months (¤ 1.955bn). In the third quarter, like-for-like sales (excluding newly opened stores and extensions) rose by a further 1.5% at the Group as a whole. This major key figure for the retail sector improved by 1.8% in the first nine months. Like-for-like sales in Germany grew by 1.9% in the third quarter and by 1.7% in the first nine months of the financial year. Market share acquired According to the BHB sector association, comparable store sales at all German DIY stores and garden centers fell by 2.2% in the first three quarters of the 2008 calendar year, with the decline of 3.7% in the first half being followed by growth of 0.9% in the third quarter. HORNBACH, by contrast, outperformed the sector average for the first nine months of the calendar year by almost five percentage points. Based on its own assessment, HORNBACH also expects to have outperformed the overall sector by a clear margin once more in October and November. Germany's fourth-largest DIY store player has thus further increased its market share, which amounted to 8.3% in 2007 (previous year: 8.1%). Disproportionate earnings growth - High equity ratio The earnings of the HORNBACH Group showed even more marked growth than sales. Operating earnings (EBIT) at the overall Group for the first nine months improved by 65.0% to ¤ 164.5 million (¤ 99.7m). Third-quarter earnings grew by 67.9% to ¤ 22.6 million (¤ 13.4m). The EBIT of the largest subgroup, HORNBACH-Baumarkt-AG, rose by 64.4% to ¤ 129.0 million in the first nine months (¤ 78.5m). In the third quarter, this key figure more than doubled to ¤ 14.6 million (¤ 6.2m). This growth was chiefly driven by like-for-like sales growth in Germany and abroad, coupled with a slight increase in the gross margin and improved store cost efficiency. Moreover, the rise in profits at the overall Group also benefited from earnings growth already recorded in the real estate segment in the first two quarters of the current 2008/2009 financial year. HORNBACH stands on a solid financial foundation. The equity ratio of the HORNBACH HOLDING AG Group amounted to 38.3% as of November 30, 2008 (year-end reporting date on February 29, 2008: 36.1%). The equity ratio at the HORNBACH-Baumarkt-AG subgroup most recently reached 40.7% (February 29, 2008: 38.2%). Thanks to a substantial increase in cash and cash equivalents, the net financial liabilities of the overall Group could be reduced within nine months by ¤ 88 million to ¤ 495.3 million (February 29, 2008: ¤ 583.6m). Net financial liabilities at the Baumarkt subgroup dropped by more than ¤ 100 million to ¤ 188.4 million (February 29, 2008: ¤ 289.3m). More than 500 new jobs HORNBACH continues to act as a job machine even in difficult economic times. The Group had 13,255 employees across Europe as of November 30, 2008, equivalent to 545 or 4.3% additional positions since the beginning of the financial year (12,710 employees). As a result of the lower number of new store openings (three, as against five in the previous year), the investments made by the overall Group in the first nine months declined from ¤ 152.8 million in the previous year to ¤ 100.5 million. In the current financial year to date, HORNBACH has opened three new stores in Bucharest, Stockholm and Biel/Switzerland. The company thus now operates 128 DIY megastores with garden centers in nine European countries, of which 91 stores are in Germany. The international share of sales at the HORNBACH-Baumarkt-AG subgroup has risen from 38.7% to 41.1%. One further store opening is scheduled to take place by the end of the current financial year (at the end of February). The DIY megastore with a garden center in Hamburg-Eidelstadt, where shell construction work has already been completed, will be the first HORNBACH location in this North German city upon its opening on January 28, 2009. Forecast confirmed for 2008/2009 Notwithstanding the uncertainty surrounding future economic developments, the HORNBACH Group is looking to the future with confidence. "There are a number of imponderable factors, especially with regard to how private consumer spending will develop in the coming months. To date, however, we see no reason to scale down our forecast for the overall 2008/2009 financial year", commented Albrecht Hornbach. Accordingly, sales at the holding company and the largest subgroup are both expected to grow in a medium single-digit percentage range. Operating earnings (EBIT) are set to grow considerably more rapidly than sales and to exceed the record figures posted for the 2006/2007 financial year (¤ 119m at the HORNBACH HOLDING AG Group and ¤ 96m at the HORNBACH-Baumarkt-AG subgroup). Key Figures 3rd Quarter and First Nine Months 2008/2009 Key Figures of the HORNBACH HOLDING AG 3rd Quarter 3rd Quarter Change Group (in ¤ million, unless otherwise 2008/2009 2007/2008 in % stated) Net sales 688.5 648.7 6.1 of which in other European countries 271.2 240.5 12.8 Like-for-like sales growth (DIY) 1.5% -4.1% Gross margin as % of net sales 34.8% 34.5% EBITDA 40.4 33.8 19.4 EBIT 22.6 13.4 67.9 Consolidated earnings before taxes 14.4 3.8 - Consolidated net income * 9.3 1.8 - Earnings per preference share in ¤ 0.97 0.24 - Investments 39.5 34.4 14.8 Key Figures of the HORNBACH HOLDING AG Nine Months Nine Months Change Group (in ¤ million, unless otherwise 2008/2009 2007/2008 in % stated) Net sales 2,214.0 2,077.9 6.5 of which in other European countries 855.9 756.8 13.1 Like-for-like sales growth (DIY) 1.8% 0.0% Gross margin as % of net sales 35.5% 35.4% EBITDA 217.2 157.4 38.0 EBIT 164.5 99.7 65.0 Consolidated earnings before taxes 139.3 73.5 89.4 Consolidated net income * 105.0 63.2 66.0 Earnings per preference share in ¤ 10.70 6.48 65.1 Investments 100.5 152.8 -34.2 Misc. Key Figures of the HORNBACH November 30, February 29, Change HOLDING AG Group 2008 2008 (in ¤ million, unless otherwise in % stated) Total assets 2,041.5 1,902.0 7.3 Shareholders' equity 781.3 687.6 13.6 Shareholders' equity as % of total assets 38.3% 36.1% Number of employees 13,255 12,710 4.3 Key Figures of the 3rd Quarter 3rd Quarter Change HORNBACH-Baumarkt-AG Group (in ¤ million, unless otherwise 2008/2009 2007/2008 in % stated) Net sales 644.2 605.7 6.4 of which in other European countries 271.2 240.5 12.8 Like-for-like sales growth 1.5% -4.1% Gross margin as % of net sales 35.6% 35.3% EBITDA 28.6 23.4 22.5 EBIT 14.6 6.2 134.3 Consolidated earnings before taxes 11.5 1.0 - Consolidated net income 7.7 0.5 - Earnings per share in ¤ 0.49 0.03 - Investments 25.9 20.1 28.9 Key Figures of the Nine Months Nine Months Change HORNBACH-Baumarkt-AG Group (in ¤ million, unless otherwise 2008/2009 2007/2008 in % stated) Net sales 2,083.3 1,955.0 6.6 of which in other European countries 855.7 756.7 13.1 Like-for-like sales growth 1.8% 0.0% Gross margin as % of net sales 36.3% 36.0% EBITDA 170.7 126.7 34.7 EBIT 129.0 78.5 64.4 Consolidated earnings before taxes 116.9 62.9 86.0 Consolidated net income 86.6 52.3 65.5 Earnings per share in ¤ 5.51 3.35 64.4 Investments 58.8 77.3 -23.9 Misc. Key Figures of the November 30, February 29, Change HORNBACH-Baumarkt-AG Group 2008 2008 (in ¤ million, unless otherwise in % stated) Total assets 1,447.5 1,350.9 7.2 Shareholders' equity 589.6 515.7 14.3 Shareholders' equity as % of total assets 40.7% 38.2% Number of stores 128 125 2.4 Sales area in 000 m² (based on BHB) 1,431 1,385 3.3 Average store size in m² 11,179 11,079 0.9 Number of employees 12,663 12,110 4.6 * pursuant to IFRS including minority interests. Rounding up or down may lead to discrepancies between percentages and totals. Calculation of percentage figures based on ¤ 000s. About HORNBACH The HORNBACH Group is one of Europe's largest operators of DIY megastores with garden centers. In addition to the largest operating subgroup, HORNBACH-Baumarkt-AG (DIY megastores with garden centers), the overall HORNBACH HOLDING AG Group also comprises the subgroups HORNBACH Baustoff Union GmbH (regional builders' merchant and construction materials business) and HORNBACH Immobilien AG (real estate and location development). The HORNBACH DIY megastores with garden centers have an average size of more than 11,000 square meters, a figure unmatched by any other competitor in Europe. The HORNBACH Group generated sales of more than ¤ 2.6 billion in the past 2007/2008 financial year (March 1, 2007 to February 29, 2008). This is equivalent to growth of 2.9 % on the previous year. The company's market share in Germany rose during the financial year from 8.1 % to 8.3 %. The 36 international stores contributed almost 40 % of total DIY store sales. Founded in 1877, the family-run company, which has its roots in the Palatinate region, was first publicly listed in 1987. HORNBACH currently operates 128 DIY megastores with garden centers in nine countries, of which 91 stores are in Germany. The other countries are Austria, the Netherlands, the Czech Republic, Switzerland, Sweden, Slovakia, Luxembourg and, since June 2007, Rumania. HORNBACH's sales concept and product range are entirely tailored to the needs of project and professional customers. HORNBACH guarantees its customers permanently low prices and is thus the price leader in the sector. The high quality of advice and excellent service provided by the company have been attested in numerous independent tests and studies. HORNBACH was awarded the German Retail Prize in 2006 for the management achievement of the year. Last year, Otmar Hornbach, pioneer and founder of the DIY company, received the top prize awarded by the Federal Association of German DIY, Home Improvement and Specialist Garden Stores (BHB) - the "Life Time Award" - for his life's achievement. Pioneering achievements, such as the first combined DIY store with a garden center (1968), the first megastore (1980) and the first DIY store with a drive-in facility (2003), provide proof of HORNBACH's ongoing innovative power. Since 2001, a strategic partnership has been in place with the British retail group Kingfisher. HORNBACH has acted as a "job machine" for decades, with more than 13,000 individuals now employed at the Group. --- End of Message --- HORNBACH HOLDING AG Le Quartier Hornbach 19 Neustadt an den Weinstraße Germany WKN: 608343; ISIN: DE0006083439 ; Index: CDAX, Prime All Share, SDAX; Listed: Prime Standard in Frankfurter Wertpapierbörse, Amtlicher Markt in Frankfurter Wertpapierbörse;