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by Ralf Witzler, Euro am Sonntag
D.he Corona year was a good one for HORNBACH. Hardware stores have been among the winners of the pandemic since the first wave of the virus. Many customers used the crisis to make their own four walls more beautiful as do-it-yourselfers, hobbyists and gardeners or to adapt them to the requirements of the home office.
CEO Albrecht HORNBACH sees the course of business this year as a reflection of changed customer behavior: “The beautiful and safe home has moved into the center of life.” It is no longer just about dripping taps, but also about meaningful employment in the crisis.
The business figures for the third quarter, which ended on November 30th, were also strong as expected. In the months of September to November, sales rose year-on-year by a good 20 percent to almost 1.4 billion euros. The increase in adjusted operating profit (EBIT) was even steeper. Here it went up to almost 67 million euros, an increase of almost 62 percent.
In addition, despite the increasingly rigid corona measures, HORNBACH confirmed its forecast for the full year up to February 2021. Accordingly, sales should increase in a corridor of 13 to 17 percent. The target for the operating result is 290 to 360 million euros. The forecast is subject to the proviso that there will be no major extensions or tightening or additional sales restrictions at the DIY megastores with garden centers in the current quarter.
Hope for catch-up effects
In any case, there was no noticeable decline in business dynamics by mid-December, the company said. In addition, the experience from other countries with the hard lockdowns in spring shows that catch-up effects would partly offset the lack of sales. While business continues at Baustoff Union and Immobilien AG, which are also part of the HORNBACH Holding, the current lockdown affects more than three quarters of the 161 DIY stores. Under normal conditions, they account for around 90 percent of the holding’s turnover.
At the DIY store, HORNBACH benefits from its experience in the rapid shift of business from stationary to online retail, including delivery service. Because the reservation and collection or delivery to order is also possible for private customers in most federal states. The sale to commercial customers is still allowed anyway. HORNBACH’s good dovetailing of online offerings and brick-and-mortar retail was given a boost during the pandemic, which should also pay off if the boom gradually subsided as a result of the pandemic in 2021.
The high level of customer satisfaction, a higher-margin product mix with a higher proportion of own brands and the increasing need for maintenance and modernization of many properties in Germany should enable HORNBACH to continue doing good business in the future. That should also promote the development of the share – if perhaps not with the same dynamic as last time.
Attractive: The DIY trend continues. Stationary and Online trades are well linked. The stock still has potential.
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Image sources: HORNBACH Holding, HORNBACH