Hornbach-Baumarkt-AG Group

84 GROUP MANAGEMENT REPORT Outlook for the Group
• The statements concerning the revision of expectations for
the domestic business in 2013/2014 are basically also
transferrable to the sales forecast for other European
countries. Due to the more fragile state of the macroeconomic
framework in most EU countries outside Germany,
however, the downside risk in the other European countries
segment is to be classified higher overall. We therefore expect
to see a lower rate of like-for-like sales growth than in
Germany in the 2013/2014 financial year. As the long winter
led to substantial losses of sales in the first quarter of
2013/2014 in other European countries as well, we believe
that the most likely scenario is that like-for-like sales will
not match the level seen in the 2012/2013 financial year.
In the 2014/2015 financial year, we intend to improve our
sales in other European countries once again compared
with 2013/2014. Our aim is to achieve like-for-like sales
growth, in some cases significant, in the countries outside
Germany. We see this aim as realistic not only because of
the positive economic outlook for 2014 in the countries in
which we operate, but also due to the ongoing substantial
backlog of work in the European construction and modernization
market. Thanks to our focus on project and professional
customers, we have above-average growth potential
in this regard compared with our competitors. Should there
be any significant deterioration in the macroeconomic
framework, then this would also involve an additional risk
to like-for-like sales at our locations in other European
countries.
Sales forecast
We expect our consolidated sales, i.e. our net sales accounting
for new openings, closures and extensions of stores, for the
2013/2014 financial year to slightly exceed the level seen in
the 2012/2013 financial year. In the following 2014/2015
financial year, our sales should achieve a higher growth rate
than in 2013/2014.
Earnings performance
Our future earnings performance is mainly based on the
earnings contributions expected from the “DIY stores” and
“Real estate” segments.
• The operating earnings performance of the DIY store
segment is primarily dependent on the rate of change in
like-for-like sales. A further key factor is the gross margin,
which we believe will match the level seen in the previous
year in the 2013/2014 financial year and then tend slightly
downwards in the following years. We see this as being
due above all to the increased pressure on margins on account
of the sharp growth in e-commerce in DIY store sector.
The growing range of internet stores can be expected to
lead to tougher price competition. We intend to counter the
negative impact on prices largely with positive volume effects
and by raising our share of private labels.
Due to the expected development in like-for-like sales, the
store expense ratio (store expenses as a percentage of net
sales) will remain at around the same level as in the previous
year in the 2013/2014 financial year and is expected
to decrease significantly in the 2014/2015 financial year.
This development will be driven above all by savings in
general operating expenses and great cost discipline at
the stores. Pre-opening expenses will increase year-on-year
in 2013/2014, as they already include costs incurred for
stores scheduled to be opened in the first months of the
following year. In the 2014/2015 financial year, preopening
expenses should then fall to levels significantly
below the 2012/2013 financial year (€ 9.6 million).
We will continue to channel targeted resources into key
forward-looking projects in the forecast period, such as in
particular into consistently expanding our online store in
Germany and other European countries. In view of this, the
administration expense ratio will increase further in
2013/2014. From the 2014/2015 financial year onwards,
the administration expense ratio is expected to gradually
decline.