Hornbach Hldg Ag

Good morning, ladies and gentlemen, and welcome to the conference call regarding the first quarter results 2021-2022 of Hornbach Group. At this time, all participants have to take some less than a minute. The floor will be open for questions following the presentation. Let me now turn the floor over to your host, Axel Müller.

Yeah, thank you very much. Good morning, everybody. It's just one hour ago that we released our final set of figures this morning at 7 o'clock. And I think it's worthwhile to have a deeper look in the details, and that's why I'm sitting together with my colleagues, CFO Karin Dohm and Investor Relations Manager Anis Gies. Myself is Axel Müller, Head of Investor Relations. And yes, I would like to directly hand over to Karin, please.

Thank you, Axel. And also welcome from my side to our Q1 analyst call. Very happy to guide you through some of our figures and the results of the last quarter and take your questions afterwards. So let me highlight first a couple of our Q1 results here and on the following slides. We saw in the first quarter a very persistently high demand from our clients as we saw in the previous year for our D&Y products. And therefore, as a result, net sales rose by 6.4% and online sales surged more than 70%. This was, of course, also influenced by the fact that Q1, in our case, saw a couple of closures across our region, and therefore we saw this very increased sale on the online side as well. All-in adjusted EBIT close to previous year's records is our guidance, and we see a slightly sales increase above previous years, roughly between 1% and 4% going forward. When we look a little bit deeper into the sales, as said, we have here previous year's record level, once again, beyond those, with a total increase of a set of 6.4%. That is, of course, the majority in our Hornbach-Baumarkt group, and all that despite the strong restrictions and the negative weather effects that we saw specifically in March, April, and partially also in May, April. The shop closure affected, on an average, 50% of our stores still in this quarter. So I would like you to take that into account when you take a deeper look into our sales figures. In Germany, it was even across 60%. Underlying also, you have the results of one of the subsidiaries of the holding, which is the Baustoff Union, the business merchant outlet, which in itself increased the sales by more than 20%. thanks to also its high-performing network of logistics and the ability to have the stocks in place that customers demanded. I mentioned roughly the rising e-commerce sales in my opening remarks, and I think it's worth looking here not only into the ones of Q1, which, as said, rose by 71% all in, thereof a click and collect, as you see here on the slide, which was nearly double what we saw before. But also, if you look into the bars, which give you an indication of the 12-month rolling, we managed to get beyond $1 billion in Q1 with the combination of direct delivery and click and collect. Underlying is the strong performance, not only of our logistics team, but also of the merchandising team, which was able to make sure that we have those products in stock that customers needed, whether that was professional or our C-client, specifically in light of the, as you're well aware, the global challenges on both sides, both logistics as well as prices for commodities and some of the products. Taking all this into account and as published, We have an adjusted EBIT that remains on a very high level, so we're continuing on the record year that we had until the end of February. We had no adjusting events in Q1, and the EBIT margin is well above the pre-crisis levels at 10.1%. The high demand, as I said, which we see on the sales side, is at the end of the day also coming through here as net results on the EBIT level. Sales growth, nevertheless, also required some increased expenses, partially, as mentioned, in the logistics and fulfillment area, which was influenced by the closure and the high portion of click and collect. In addition, we saw some normalized expenses in the field of marketing, which held back some of our results. Net added assets only marginally reduced, and you see this also when you look into the lower right side of this chart where you have the subgroup segments of the Hornbach Group. Looking a bit into our cash flow and investments during Q1, As mentioned and announced in our last call in May, we have the intention to invest more in this full year than we have invested in the previous year. We have, and you see those effects now coming in already in Q1, the increased capex is going or has gone mainly into buildings and real estate. That is, of course, related to our intended new markets. We said we will open five this year and probably another five in the next year. And, of course, this has now the effect here also into our capex. In addition, there is a little bit of plant and office equipment in existing markets. And last but not least, some intangible assets that we invested into. The change in working capital that you see is driven by a deliberate prepayment of liabilities to also make sure we use cash efficiently and effectively and therefore reduce those payables accordingly. Strong balance sheet is still existing and as you know, one of our core aims as well. So you see here a continued stability with increases, of course, relating to the investments on the asset side and a reduction in the net financial debt, which reduced it from 295 to 137 rounded. Equity ratio, shareholders' equity and the ratio rose. We are now at 45.1. And of course, as said, we have new openings in our store landscape coming up. We will have at the end of June our store in Trollhättan and we have in July then Cluj as the next one being opened in the northern part of Romania. And as announced, that will be followed by a couple of others across other existing countries and a similar portion also, as I said before, in the next year. Looking into the full year, as set at the beginning of this call, we expect and believe that sales will be slightly outperforming again in this year, so we will keep the record year figures and go a little bit beyond on the sales side, probably at that 2-5%. The adjusted EBIT will fall slightly short, but will be way beyond the levels that we saw pre-crisis from our current expectation, probably around 290 to 326, with an EBIT margin that is somewhere between 5.3 to 5.7. CapEx probably moving beyond 200 million. We had last year on the group level 154, as you know. So that all is built on the expectation that we have, as you currently know, lower infection rates regarding corona across our country. We, of course, are well aware that we might see a couple of more customers going over summer on a vacation and spending both time as well as money in other places. But these figures and expectations for a full year take into account that we will have based on current expectations, not the same closures in Q4 as we had them in the last year. So if that would come again, our expectation would be adjusted. I think those were the main highlights which I wanted to bring forward and bring into your attention. So I would stop here and would be delighted to take your questions.