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36 GROUP MANAGEMENT REPORT Macroeconomic Framework GROUP MANAGEMENT REPORT Macroeconomic Framework Global economy shifts down a gear According to figures released by the International Monetary Fund (IMF), the global economy grew by 3.2% in 2012, and thus at a notably weaker rate than in the two previous years and the average for the past decade. Following an upturn in the first calendar quarter, global economic growth weakened noticeably once again in the two following quarters. For large parts of the year, these developments were due in particular to the debt crisis in the euro area. Through to the fall of 2012, however, levels of economic growth remained highly subdued in major emerging economies as well. Only towards the end of the year were there once again increasing signs of a gradual rise in global economic momentum. Viewed on a regional level, data from the German Bundesbank would appear to indicate that the group of emerging economies stepped up a gear in the fourth quarter of 2012. In the industrialized economies, by contrast, the low level of growth seen previously has reverted to a decline in production, one that has clearly left its mark in Europe as well. Europe in recession Eurostat, the European Union statistics authority, has calculated that gross domestic product (GDP) in the 2012 calendar year declined by 0.3% in the European Union as a whole (EU 27), and even by 0.6% in the euro area. The recession already underway since the fall of 2011 intensified sharply in the fourth quarter of 2012. Seasonally-adjusted real-term GDP fell by 0.5% and 0.6% respectively compared with the relatively stable previous quarter. By the end of 2012, the unfavorable economic developments within the euro area had spread to increasing numbers of countries. As a result, macroeconomic conditions in the nine countries across Europe in which HORNBACH’s stores are located also deteriorated increasingly in the fourth quarter of 2012. Based on the economic data available upon completion of this report, Germany, which in the first nine months of 2012 had stood firm as rock in the European storm, also felt a tangible downturn in economic output. The economic downturn in the Netherlands and the Czech Republic slowed compared with the third quarter. However, from a full-year perspective both countries suffered a marked weakening in their economies in 2012, with GDP downturns of 1.0% and 1.3% respectively. By contrast, the other countries in our network mostly posted marginally positive economic growth in a range of 0.2% to 1.0% in 2012, and thus significantly ahead of the EU average. Slovakia even achieved growth of 2.0%. GDP growth rates in countries with HORNBACH DIY megastores and garden centers Percentage change on previous quarter 1 st Quarter 2 nd Quarter 3 rd Quarter 4 th Quarter Calendar Year Source: Eurostat (calendar year figures) 2012 2012 2012 2012 2012 vs. 2011 Germany 0.5 0.3 0.2 (0.6) 0.7 Luxembourg 0.0 0.5 (0.5) 1.6 0.2 Netherlands 0.1 0.2 (1.0) (0.4) (1.0) Austria 0.4 0.1 0.1 (0.1) 0.8 Romania (0.1) 0.6 (0.2) 0.4 0.3 Slovakia 0.3 0.4 0.3 0.2 2.0 Sweden 0.4 0.8 0.3 0.0 0.8 Switzerland 0.5 (0.1) 0.6 0.2 1.0 Czech Republic (0.5) (0.6) (0.4) (0.2) (1.3) Euro area (0.1) (0.2) (0.1) (0.6) (0.6) EU 27 (0.1) (0.2) 0.1 (0.5) (0.3)
GROUP MANAGEMENT REPORT Macroeconomic Framework 37 Alongside declining demand from outside Europe, the poor performance of the European economy in the course of 2012 chiefly resulted from home-made problems in the euro area. Consumer, business and investor confidence all clearly took a knock from the intensification in the crisis in the summer of 2012, as is apparent in, among other sources, the sentiment indicators calculated by the European Commission. Both consumer confidence and the business confidence index plummeted from the spring through to the fall of 2012. Consistent with this picture was the weak level of domestic demand, the primary cause of the recession. Gross fixed capital formation fell sharply in the euro area, reducing by a quarterly average of around four percent compared with the respective previous year’s period. In particular, this reflected a sharp drop in output by more than five percent in the European construction industry. In terms of the countries where HORN- BACH operates, the downturn in construction output was especially severe in the Czech Republic (minus 6.6%), the Netherlands (minus 8.6%) and Slovakia (minus 12.3%). This was the result not only of restrictions on housing construction activity and uncertainties surrounding fiscal support for real estate, but also of reductions in public and commercial construction investments. Not only that, given rising state duties, shrinking real-term incomes, rapidly rising unemployment, and a widespread feeling of uncertainty, private households remained unwilling to spend. Private consumer spending contracted by more than one percent within the twelve-month period. Accordingly, realterm retail sales fell by 0.9% in the European Union and even by 1.8% in the euro area in 2012. Five of the nine countries in HORNBACH’s store network – Germany, the Netherlands, Austria, the Czech Republic, and Slovakia – witnessed a contraction in real-term retail sales. The Eurostat figures show positive growth rates for Luxembourg, Romania, Sweden, and Switzerland. Indicators available from trade association surveys show that in most European countries demand levels in the DIY store and garden center sector, i.e. in the DIY retail sector, fared less favorably in 2012 than in the overall retail sector. German economy proves resilient The German economy successfully held the European recession at bay for large parts of 2012 and notwithstanding difficult macroeconomic omens managed to post moderate growth. According to figures released by the Federal Statistical Office (Destatis), real-term gross domestic product was 0.7% higher than in the previous year (calendar-adjusted: 0.9%). However, Europe’s largest economy ran out of steam towards the end of 2012. Fourth-quarter real-term GDP adjusted for seasonal and calendar factors shrank by 0.6% compared with the previous quarter. Despite generating positive growth in each of the first three quarters of 2012, the German economy consistently lost momentum. The key factors influencing domestic demand, and thus the most important means of assessing the underlying framework for German DIY stores and garden centers, as well as for the builders’ merchant business, showed disparate developments in 2012. According to the harmonized consumer price index (HCPI), the annual inflation rate rose by 2.1%. As real-term incomes rose faster than inflation in 2012, as had also been the case in the two previous years, private households had increasing spending power. Adjusted for inflation, private consumer spending grew by 0.6%. Consumers were thus a source of only modest momentum. GfK consumer surveys nevertheless pointed to consistently positive consumer confidence. This was chiefly due to the robust situation on the labor market and substantial income growth. On the other hand, capital expenditure in Germany in 2012 fell notably short of the figure for the previous year. That applied not only to investments in equipment (down by 4.8% in real terms), but also to construction investments. Following strong priceadjusted growth of 5.8% in the previous year, these then contracted by 1.5% in 2012. Overall, construction activity in Germany showed a divided picture. In real terms, housing construction investments grew year-on-year by 1.5% in 2012, while non-housing construction fell by almost five percent.
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 &
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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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