Q3 2012 Report of Praktiker AG
Quarter characterised by transformation
• German business influenced by uncertainty
• Max Bahr and International with positive EBITA
• Gross margin and financial result improved
Hamburg - 25 October 2012. For Praktiker AG, the third quarter 2012 was characterised by a special situation. The top priorities were the restructuring and realignment of the business model in Germany and the financing which has in the meantime been successfully secured. Against the backdrop of the unclear perspectives for the future of the Group which lasted until the end of the quarter, uncertainties appeared mainly in the German business that affected sales and earnings. In this context, the brand Max Bahr - the company's future main sales division in the German market - proved to be more stable than the Praktiker brand which is undergoing a transformation process. Abroad, third quarter sales continued to drop, but at a lower rate than during the first six months of the year. Moreover, Max Bahr and the segment International made a positive contribution to earnings. At the level of the Group, the gross margin and financial result improved during the period under review.
"The course of business in the third quarter was
influenced by exceptionally challenging general
conditions", stressed Armin Burger, CEO of Praktiker AG
since 15 October. "During this period, the top
management's attention mainly focused on the Group's
restructuring and on securing the financing, on the one hand,
while the perspectives for the future, which were still
unclear during the period under review, temporarily affected
the relationship with the suppliers thereby materially
weighing on goods availability, on the other. The general
conditions significantly improved after the turn of the
quarter with the contractual safeguarding of all essential
elements of the financing concept and will now have a
positive effect on operational business. We now have a stable
planning basis and a concrete development perspective that
will give us new strength. With the realignment of the
business model initiated by the present Management Board we
are on the right track. I am confident that, based on the
existing restructuring programme, Praktiker AG will
successfully achieve the turnaround and return to a solid
growth course".
In the third quarter 2012, the Praktiker Group generated
sales of 758.2 million euro which is 10.2 percent down from
the year-earlier period (844.4 million euro). As a
consequence, also operational earnings (EBITA) deteriorated
and were reported at minus 17.3 million euro. The gross
margin, by contrast, developed better rising from 32.3 to
33.5 percent year-on-year. This was driven by the fact that
significantly less old stocks had to be sold at high
discounts as compared to 2011. With regard to the financial
result, the deficit reported one year ago could be reduced as
well. On account of less exchange rate fluctuations in
improved from minus 22.1 to minus 15.1 million euro. At a
minus of 32.4 million euro, earnings before taxes remained
almost unchanged year-on-year.
During the first nine months of the current financial year,
Group sales came in at 2,308.0 million euro. This is 6.5
percent less than one year earlier. Operating earnings
improved significantly on the grounds of lower extraordinary
effects to come in at minus 88.0 million euro (2011: minus
153.6 million euro).
Germany
In Germany, Q3 business was characterised by the start of
store conversions from the Praktiker brand to the Max Bahr
brand and by the then as yet unresolved financing which in
turn had a negative impact on goods supply and customer
frequency. At 522.9 million euro, domestic sales came in 11.7
percent below the year-earlier value. The Praktiker brand, in
particular, suffered from the aforementioned strains and
reported sales totalling 331.2 million euro which is a drop
of 15.2 percent. During the third quarter, the sales division
Max Bahr generated sales of 171.9 million euro or 4.8 percent
less than one year earlier.
In view of the higher gross margin and lower extraordinary
effects it was possible to report a better result in terms of
EBITA. Overall, operating earnings from domestic operations
improved during the third quarter from minus 23.1 to minus
20.8 million euro. Max Bahr delivered a positive contribution
to earnings which - on account of the drop in sales - fell
short of the prior-year value coming in at 2.9 million euro.
Year to date, EBITA of Praktiker Germany improved to minus
73.5 million euro (2011: minus 125.4 million euro) and at Max
Bahr to 19.6 million euro (2011: 15.3 million euro).
International
In the segment International, we experienced a certain pickup
of the economic environment. Whereas in the first half of the
year sales still lagged 12.2 percent behind the year-earlier
value, this drop receded by 6.8 percent to 235.3 million euro
during the period from July to September. This was mainly
attributable to the continued tense situation in Greece. In
Romania, a slight plus in sales in local currency was
achieved for the first time in a long while. Sales revenues
in the Ukraine again reported by far the highest growth
climbing 20.0 percent.
In line with the restructuring programme, Praktiker continued
its efforts aimed at controlling costs and strengthening
profitability in the International segment. As a consequence,
it was possible to again report a positive EBITA in the
amount of 3.5 million euro in the third quarter. Although
being 9.6 million euro lower than one year earlier, it is
based on a comparably broad foundation. During the period
from July to September, five of the eight international
subsidiaries generated positive earnings: Bulgaria, Greece,
Luxemburg, Romania and Hungary.
Store portfolio
The core element of the realignment of the German business
initiated in late May is the nation-wide extension of the Max
Bahr store portfolio by converting up to 120 Praktiker stores
to the more upmarket and more profitable Group brand. This
led to first shifts in the store portfolio during the third
quarter. The number of Max Bahr stores climbed from 78 to 85
year-on-year while the number of Praktiker locations -
including nine store closures - dropped from 236 to 220.
Abroad, Praktiker was operating 111 stores as at 30
September, one up from the year-earlier period.
in € million | Q3/12 | Q3/11 |
Change | 9M/12 | 9M/11 |
Change |
Sales | 758.2 | 844.4 | -10.2 | 2,308.0 | 2,467.5 | -6.5 |
Germany | 522.9 | 592.0 | -11.7 | 1,690.2 | 1,779.2 | -5.0 |
- thereof Praktiker | 331.2 | 390.4 | -15.2 | 1,092.1 | 1,171.9 | -6.8 |
- thereof Max Bahr | 171.9 | 180.5 | -4.8 | 532.5 | 540.3 | -1.4 |
- thereof Sonstiges | 19.8 | 21.1 | -6.2 | 65.5 | 67.0 | -2.2 |
International | 235.3 | 252.5 | -6.8 | 617.8 | 688.2 | -10.2 |
EBITA | -17.3 | -10.1 | - | -88.0 | -153.6 | - |
Germany | -20.8 | -23.1 | - | -59.4 | -114.3 | - |
- thereof Praktiker | -23.0 | -28.3 | - | -73.5 | -125.4 | - |
- thereof Max Bahr | 2.9 | 6.4 | - | 19.6 | 15.3 | - |
- thereof Sonstiges | -0.7 | -1.3 | - | -5.4 | -4.2 | - |
International | 3.5 | 13.0 | - | -28.6 | -39.4 | - |
Financial result | -15.1 | -22.1 | - | -38.6 | -46.3 | - |
Earnings before taxes* | -32.4 | -32.2 | - | -126.6 | -359.4 | - |
Capital expenditure | 5.8 | 21.2 | - | 21.9 | 59.4 | - |
Number of stores as at 30 Sep | 432 | 441 | -0.2 | |||
Germany | 321 | 331 | -3.0 | |||
- thereof Praktiker | 220 | 236 | -6.8 | - | ||
- thereof Max Bahr | 85 | 78 | 9.0 | |||
- thereof Sonstiges | 16 | 17 | -5.9 | |||
International | 111 | 110 | 0.9 |
*undiluted
Quarterly Report Q3 2012 / Nine-Month Financial Report 2012
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