Hornbach-Baumarkt-AG Group

GROUP MANAGEMENT REPORT Earnings Performance 47
Earnings from rental activities
Rental income in the real estate segment, 99% of which
comprises internal rental income, grew by 8.4% to
€ 143.6 million in the year under report (2011/2012:
€ 132.5 million). Driven mainly by higher operating expenses
and depreciation, real estate expenses for the same period
nevertheless rose less markedly, increasing by 5.5% to
€ 97.8 million (2011/2012: € 92.7 million). Earnings from
rental activities grew by 15.1% to € 45.8 million in the year
under report (2011/2012: € 39.8 million).
Disposal gains/losses and net real estate income
We generated marginal disposal gains of € 0.3 million in the
year under report. These contrasted with disposal losses of
€ 0.5 million from real estate transactions in the 2011/2012
financial year. Net income on real estate activities rose by
17.4% to € 46.1 million (2011/2012: € 39.2 million).
Other income and expenses
Other income and expenses (excluding disposal gains/losses)
are reported at minus € 1.4 million for the 2012/2013 financial
year (2011/2012: minus € 1.7 million). Earnings for the
year under report were reduced by other expenses and provisions
for the refurbishment of DIY store properties, as well as
by impairment losses recognized for pieces of land.
EBITDA and EBIT
Thanks to higher rental income in conjunction with a less
marked increase in real estate expenses and a year-on-year
reduction in charges on earnings due to real estate development,
we were able to report pleasing earnings growth in the
real estate segment in the reporting period from
March 1, 2012 to February 28, 2013. EBITDA thus rose by
22.8% to € 57.7 million (2011/2012: € 47.0 million) and EBIT
grew by 19.2% to € 42.8 million (2011/2012: € 35.9 million).
Earnings performance by geographical region
Our German retail business gained further significance in
terms of the Group’s earnings performance in the 2012/2013
financial year. As is apparent from the breakdown by geographical
regions in the segment report, the weighting of
earnings contributions has shifted in favor of the Germany
segment. This reflects the robust performance in like-for-like
sales in the domestic business, which thus contributed to a
significantly more stable earnings performance than that in
the other European countries segment.
EBITDA in Germany fell by 3.6% from € 68.2 million to
€ 65.8 million, thus contrasting with the 15.5% downturn in
EBITDA on group level. The domestic share of the Group’s
EBITDA rose from 37% to 42%. EBIT in the Germany segment
decreased from € 33.9 million to € 29.6 million. The domestic
share of operating earnings thus improved from 26% to 30%
in the 2012/2013 financial year. The EBIT margin in Germany
amounted to 1.7%, as against 2.0% one year earlier.
In the 2012/2013 financial year as well, the domestic share of
operating earnings included significant expenses for sustainable
innovation projects. A major portion of the project-related
administration expenses of around € 22 million (2011/2012:
around € 13 million) related to the further expansion in our
online store, which since being launched in December 2010
has offered ever more articles, order possibilities, and service
information. The costs attributable to the planned international
rollout of online retailing have been charged on within
group allocations. Not only that, we also pressed ahead with
developing the Customer Service Center for German stores.
Alongside these projects, we also worked on a series of other
development projects in the fields of procurement, logistics,
and operations at DIY megastores with garden centers which
are intended to promote the Group’s further growth.
Against this backdrop, administration expenses in the Germany
segment increased by 9.0% in the year under report. If
these upstream costs for central forward-looking projects are
deducted from the income statement of the Germany segment,
then our administration expenses were at the same level as in