The operator of DIY and garden centers benefited from the retreat of many people into their own four walls during the pandemic. But inflation and the consequences of the Ukraine war are worrying.
A continued high demand for DIY needs is driving the DIY and garden center operator Hornbach. The company’s management reported on Tuesday in Frankfurt that the end of many corona measures did not stop the trend towards beautifying one’s own home.
After a record year with sharp increases in sales and profits, the Hornbach Group intends to increase sales even further. However, high prices and tense markets cloud the view of the 2022/2023 financial year.
Corona-Profiter
Having your own four walls is much more important today than it was before the pandemic, said Albrecht Hornbach, CEO of Hornbach Management AG. “Once you start beautifying your home, you don’t suddenly stop just because the restaurants and museums are open again or you can go on vacation again.” In the past year, the Hornbach hardware stores did better than the German hardware store industry as a whole, which includes larger competitors such as Obi and Bauhaus.
With its hardware store chain, Hornbach Holding is one of the Corona beneficiaries, as many people rediscovered their houses, apartments or gardens. Although DIY stores had to close at times during the pandemic, Hornbach was able to do so with strong online trading and offers such as Click
In the 2021/2022 financial year (ending at the end of February), sales at SDax-listed Hornbach Holding grew by 7.7 percent to a record of almost EUR 5.9 billion. Adjusted operating profit (EBIT) rose by a good 11 percent to EUR 362.6 million. The bottom line is that profits climbed by more than a fifth to 244.5 million euros.
Many goods are currently scarce
However, Hornbach is worried about rapidly rising prices and the consequences of the Ukraine war. It is true that one benefits from high demand, for example for gas stoves, and the desire of many people for independence in the current energy crisis. But at the same time, the costs of transport, raw materials and energy are high and many goods are scarce. Hornbach does this when it comes to purchasing, but they don’t want to pass the increased prices on to customers “one-to-one”, said Karin Dohm, CFO of the parent company Hornbach Holding.
She is cautiously optimistic for the current financial year. “Although we consider further closures in the wake of Corona regulations to be unlikely, the challenges in terms of inflation, supply chain and product availability have continued to increase in recent months.” Sales are likely to exceed the record from the past 2021/22 financial year. Adjusted operating profit, meanwhile, could be slightly below the comparative figure.
Headquartered in Bornheim, Palatinate, Hornbach operates 167 DIY megastores with garden centers across Europe, 98 of which are in Germany. The Hornbach Group does not have any stores in Russia or the Ukraine. The group with 25,000 employees is also active in trading in building materials.
