Hornbach-Baumarkt-AG Group

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30 THE HORNBACH-BAUMARKT SHARE THE HORNBACH-BAUMARKT SHARE Share price performance: March 1, 2012 to February 28, 2013 130 120 110 100 90 80 70 March 2012 >> April May June July August September October November December January 2013 >> February HORNBACH-Baumarkt-AG (Xetra) SDAX MDAX DAX Index (100 = base March 1, 2012) Hunt for returns leads investors to equities Many investors will retain fond memories of 2012 as a good year on the stock markets. Historically low interest rates meant that even highly defensive investors were increasingly obliged to invest in equities and thus to accept higher risks. The strategy tried and tested over decades of investing large shares of assets in government bonds with impeccable creditworthiness no longer works in times of debt crisis. Fixed income investments alone are no longer a source of adequate yields. In the hunt for returns, there is thus no alternative to the stock market. The Dax, the German lead index, certainly felt the effects of this tailwind in the 2012 financial year, rising by almost 30% to 7,612 points. That marked the highest gain for nine years. During the year, there was the odd nail-biting moment within the maelstrom of macroeconomic jitters and the sovereign debt crisis. Toward the middle of 2012, the Dax returned to a level of 6,000 as investors worried about the future of the euro. Once ECB boss Mario Draghi had signaled a clear commitment to uphold the currency area, the index then embarked on a distinct rally from July 2012. In spring 2013, the German lead index was well on the way to what would then become a new all-time high in May 2013, and that despite temporary setbacks due to the threat of government bankruptcy in Cyprus. At the end of our financial year (February 28, 2013), the Dax amounted to 7,742 points, thus rising by 11.5% in the twelve-month period. German small-cap stocks performed even better. The SDax rose by 16.5%, while the MDax even surged by 26.3%. The HORNBACH-Baumarkt-AG share (ISIN DE0006084403) was regrettably unable to match this performance. In the past, it has been apparent that the Baumarkt share is relatively crisis-resistant, particularly in times of great uncertainty on the financial markets. Conversely, the share has also been
THE HORNBACH-BAUMARKT SHARE 31 less prone to join in any euphoria in the overall market. This pattern was clearly recognizable once again in the course of the past financial year. Stable sideways movement The Baumarkt share was listed at a Xetra price of € 25.20 on March 1, 2012. While fears of a break-up in the euro area sent stock markets plummeting through until June 2012, our share remained unaffected and tended sideways. This reflects the trust investors place in our share. Given the sales and earnings performance of the HORNBACH-Baumarkt-AG Group, however, there was little potential for upward development in the share price in the further course of the 2012/2013 financial year. As described in detail in the group management report (please see Page 36 onwards), HORNBACH had to contend with the recession across large parts of Europe in the third and fourth quarters in particular. On November 27, 2012, the company reduced its sales and earnings forecast for 2012/2013 as a whole to account for the increasingly subdued economic backdrop. The general public was informed by ad-hoc announcement that consolidated sales would most probably match the previous year’s figure of € 3.0 billion and that operating earnings would fall short of the record figure of € 128 million posted for the 2011/2012 financial year. In the wake of this profit warning, the Baumarkt share price dipped slightly, reaching its annual low at € 24.20 on December 10, 2012. This situation was exacerbated by investors’ more pessimistic overall assessment of growth prospects in the European DIY sector. Unfavorable weather conditions in the 2012/2013 winter, which significantly impaired customer demand at DIY stores and garden centers, also played a part in attracting investors’ interest towards other sectors. The Baumarkt share thus lacked momentum to break out of its sideways motion. It reached its annual high at € 26.40 on February 5, 2013. On the balance sheet date on February 28, 2013, the share closed at € 26.00, thus posting growth of 3.2% over the twelve-month period. The performance of the HORNBACH-Baumarkt-AG stock over a long-term investment horizon was notably more attractive. Anyone who bought the security at the beginning of March 2003, for example, and then kept it in the portfolio for ten years would have been pleased to see annual average share price growth of 9.9%. By reinvesting the dividend, they could have achieved 15.2% growth a year with the Baumarkt share. Given these figures, it is clear that our share is mostly to be found in the portfolios of so-called value investors, a group which has accompanied our company over decades in some cases. They particularly trust the company’s management, the quality and sustainability of its unmistakable business model, and our market position in Germany and eight other European countries. Not only that, HORNBACH can point to a stable financial structure, a further increase in its equity ratio, and high cash holdings, factors that meet the investment needs of investors keen on safety and stability. Successful bond placement in February 2013 HORNBACH exploited the low interest rates available at the beginning of 2013 to refinance its non-current financial debt. The company successfully placed a seven-year bond (ISIN DE000A1R02E0) with a volume of € 250 million on February 15, 2013. The issue was several times oversubscribed, with great demand from private and institutional investors alike. The bond received an interest coupon of 3.875%, upon issue the lowest coupon for an issuer in this rating class (Standard & Poor’s: BB+; Moody’s: Ba2). Based on the issue price of 99.25%, this corresponds to a yield of 4.00% p.a. The proceeds were used to prematurely redeem the ten-year high-yield bond (ISIN XS0205954778), placed in November 2004 with a coupon of 6.125%, on February 25, 2013. This significantly improved the maturity profile of the Group’s financial liabilities. Given the great interest shown in the new Eurobond by private investors in particular, within a few weeks the price reached more than 104%, corresponding to a yield of around 3.2%. The bond issue offers long-term security for the HORNBACH Group’s further growth.
Page 1 and 2: Hornbach-Baumarkt-AG Group Annual R
Page 3 and 4: Key Group, Financial and Operating
Page 5 and 6: Time and Space Those are the dimens
Page 7 and 8: COMPANY PROFILE 7 Germany. The net
Page 10 and 11: 10 TO OUR SHAREHOLDERS TO OUR SHARE
Page 12 and 13: 12 REPORT OF THE SUPERVISORY BOARD
Page 14 and 15: 14 REPORT OF THE SUPERVISORY BOARD
Page 16 and 17: 16 DIRECTORS & OFFICERS DIRECTORS &
Page 18: The timesavers Got the internal fit
Page 21 and 22: CORPORATE GOVERNANCE 21 of its Boar
Page 23 and 24: CORPORATE GOVERNANCE 23 worked with
Page 25 and 26: CORPORATE GOVERNANCE 25 Dates of re
Page 27 and 28: CORPORATE GOVERNANCE 27 to a member
Page 32 and 33: 32 THE HORNBACH-BAUMARKT SHARE Key
Page 34: The workhorses There’s one area o
Page 37 and 38: GROUP MANAGEMENT REPORT Macroeconom
Page 39 and 40: GROUP MANAGEMENT REPORT Macroeconom
Page 41 and 42: GROUP MANAGEMENT REPORT Sales Perfo
Page 43 and 44: GROUP MANAGEMENT REPORT Sales Perfo
Page 45 and 46: GROUP MANAGEMENT REPORT Earnings Pe
Page 51 and 52: GROUP MANAGEMENT REPORT Financial S
Page 53 and 54: GROUP MANAGEMENT REPORT Financial S
Page 55 and 56: GROUP MANAGEMENT REPORT Asset Situa
Page 57 and 58: GROUP MANAGEMENT REPORT Non-Financi
Page 63 and 64: GROUP MANAGEMENT REPORT Corporate R
Page 65 and 66: GROUP MANAGEMENT REPORT Corporate R
Page 67 and 68: GROUP MANAGEMENT REPORT Risk Report
Page 73 and 74: GROUP MANAGEMENT REPORT Other Discl
Page 75 and 76: GROUP MANAGEMENT REPORT Outlook 75
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GROUP MANAGEMENT REPORT Outlook 79
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82 GROUP MANAGEMENT REPORT Outlook
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84 GROUP MANAGEMENT REPORT Outlook
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Getting organized Like perfectly ch
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CONSOLIDATED FINANCIAL STATEMENTS B
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CONSOLIDATED FINANCIAL STATEMENTS C
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NOTES TO THE CONSOLIDATED FINANCIAL
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AUDITOR’S REPORT 159 AUDITOR’S
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Germany Baden-Württemberg Binzen E
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