HORNBACH Baumarkt : Quarterly Statement Q3 2022/2023

HORNBACH HOLDING AG & CO. KGAA GROUP

Statement on Q3 and 9M of 2022/23 (March 1 - November 30, 2022)

Rounding up or down may lead to discrepancies between percentages and totals. Calculation of percentage figures based on € 000s.

1. Like-forlike sales net of currency items; includes sales at all stores that have been open for at least one year and online sales
2. Adjusted to exclude non-operating income and expenses
3. Including minority interests pursuant to IFRS
4. Including passive employment relationships

Substantial sales growth in third quarter - earnings still ahead of pre-pandemic levels

• Ongoing high demand for DIY and home improvement products: Consolidated sales rise by 10.4 % to € 1,546.3 million in
  third quarter (Q3) of 2022/23 (2021/22: € 1,400.8 million)
• • DIY stores and garden centers (HORNBACH Baumarkt) boost net sales by 10.1 % and post like-for-like,constant-cur- rency sales growth of 7.2 % in Q3
  • Online sales grow by 11.8 % in Q3 2022/23; online business (HORNBACH Baumarkt) accounts for 14.5 % share of sales in first nine months (9M) of 2022/23 (2021/22: 17.6 %)
  • Builders' merchant business (HORNBACH Baustoff Union) increases net sales by 15.8 % in Q3 2022/23
• Adjusted operating earnings (adjusted EBIT) fall year-on-year by 12.6 % to € 48.9 million in Q3 and by 17.0 % to € 326.3 million in 9M. Adjusted EBIT nevertheless still clearly ahead of pre-pandemic 2019/20 financial year
• 2022/23 earnings guidance dated June 13, 2022 is confirmed: Slight growth expected in net sales, adjusted EBIT expected to show a low double-digit percentage reduction compared with previous year

The third quarter (Q3) of 2022/23 (September 1 to November 30, 2022) saw continuing high demand for DIY and home improvement products from both private and professional customers. Consolidated net sales exceeded the record figure reported for the previous year's quarter by 10.4 % and rose to € 1,546.3 million (2021/22: € 1,400.8 million). Sales in the first nine months (9M) of 2022/23 (March 1 to November 30, 2022) grew by 6.7 % to € 5,009.7 million (2021/22: € 4,693.2 million).

Net sales at the largest operating Subgroup, HORNBACH Baumarkt AG (DIY retail), rose by 10.1 % to € 1,430.4 million in

Q3 2022/23 (2021/22: € 1,299.7 million) and by 6.4 % to € 4,667.1 million in 9M 2022/23 (2021/22: € 4,385.0 million). On a

like-for-like basis and net of currency items, the Subgroup increased its sales by 7.2 % in Q3 (2021/22: minus 0.1%) and by

3.4 % in 9M (2021/22: 2.3 %). Three-year comparison with the pre-pandemic period in 2019/20 reveals growth of 29.5% in like-for-like sales net of currency items. Online sales including click & collect grew by 11.8 % in Q3 2022/23; in the first nine months (9M) of the current 2022/23 financial year, the online business accounted for 14.5% of sales (2021/22: 17.6 %).

The HORNBACH Baustoff Union Subgroup increased its net sales by 15.8 % to € 116.6 million in Q3 2022/23 (2021/22: € 100.7 million). Its net sales in the 9M period therefore grew by 11.7 % to € 343.2 million.

The HORNBACH Group's operating earnings adjusted to exclude non-operating items (adjusted EBIT) decreased by 12.6 % to

• 48.9 million in Q3 2022/23 (2021/22: € 55.9 million). In 9M 2022/23, the adjusted EBIT of € 326.3 million fell 17.0 % short of the record figure posted for the previous year's period (€ 393.1 million). Due to the increased shareholding in HORNBACH Baumarkt AG, the earnings per share of € 13.08 were only slightly lower than in the previous year (2021/22: € 13.66).

The full-year earnings guidance for 2022/23 as adjusted on June 13, 2022 is confirmed. Adjusted EBIT is still expected to show a low double-digit percentage reduction compared with the record figure reported for the 2021/22 financial year

(€ 362.6 million). The sales guidance (slight increase on previous year's figure of € 5,875 million) remains unchanged on the guidance published on May 17, 2022.

Earnings, Financial, and Asset Position

Seasonal and calendar-related factors

With largely sunny and mild weather, the fall offered favorable weather conditions overall for implementing projects at home and in the garden. There was a Group-wide average of 0.7 business days fewer in the third quarter of 2022/23 than in the equivalent period in the previous year. Cumulatively for the first nine months of 2022/23 (March 1 to November 30, 2022), there were 0.1 business days fewer than one year earlier.

Sales performance of the HORNBACH Group

The HORNBACH Holding AG & Co. KGaA Group comprises the HORNBACH Baumarkt AG, HORNBACH Baustoff Union GmbH, and HORNBACH Immobilien AG Subgroups.

The HORNBACH Group's sales in the third quarter of the 2022/23 financial year (September 1 to November 30, 2022) rose by 10.4% to € 1,546.3 million (2021/22: € 1,400.8 million), whiles its sales in the first nine months of 2022/23 grew by 6.7% to € 5,009.7 million (2021/22: € 4,693.2 million).

HORNBACH Baumarkt AG Subgroup

One new DIY store and garden center was opened in the third quarter of 2022/23, namely in Constanţa (Romania). As of Novem- ber 30, 2022, the HORNBACH Baumarkt Subgroup therefore operated a total of 170 retail outlets with total sales areas of

2.02 million m², of which 98 stores in Germany and 72 in other European countries. Two new locations were already added in the first quarter of 2022/23, in this case in Nitra (Slovakia) and Enschede (Netherlands).

The Subgroup's net sales grew by 10.1 % to € 1,430.4 million in Q3 2022/23 (2021/22: € 1,299.7 million). Net sales in the

Germany region rose by 8.2% to € 690.7 million (2021/22: € 638.6 million). In the Other European Countries region, quarterly net

sales increased year-on-year by 11.9 % to € 739.6 million (2021/22: € 661.2 million). On a like-for-like basis and net of currency

items [ Brief Glossary on Page 9], net sales grew by 7.2 % in Q3 2022/23 (2021/22: minus 0.1 %). Including currency items for

non-euro countries, namely the Czech Republic, Romania, Sweden and Switzerland, like-for-like sales grew by 8.0 % (2021/22: plus 0.4 %).

In 9M 2022/23, the Subgroup increased its net sales by 6.4 % to € 4,667.1 million (2021/22: € 4,385.0 million). The international

share of consolidated sales in the nine-month period stood at 50.9 % (2021/22: 49.4 %). On a like-for-like basis, Group-wide net

sales rose by 3.4 % excluding and 4.2 % including currency items (2021/22: plus 2.3 % and plus 2.6 % respectively).

Like-for-like sales performance1) (in %)

1. Excluding currency items

Sales in the online business (including click & collect) grew by 11.8 % to € 196.7 million in Q3 2022/23 (2021/22: € 176.0 mil- lion). In 9M 2022/23, online sales fell to € 677.1 million, down by 12.1 % on the previous year's period, which had been affected by restrictions on sales (2021/22: € 770.4 million). As stores were open, customers made considerably less use of click & collect in particular. The online share of total sales therefore amounted to 14.5 % (2021/22: 17.6 %) and was still significantly ahead of the pre-pandemic figure of 9.7 % in 2019/20.

The market share of the HORNBACH Baumarkt Subgroup in Germany calculated by the GfK for the period from January to October 2022 eased slightly to 14.9 % (2021/22: 15.2 %). Thanks to its successful online strategy, the Subgroup made significant gains in market share in the previous year, which was marked by restrictions on sales due to the pandemic. Its market share is still considerably higher than in the same period in the 2020 calendar year (13.9 %). In the second half of the 2022 calendar year (through to November), HORNBACH Baumarkt AG again grew notably faster than the overall German DIY sector.

Based on GfK data for the period from January to October 2022, the HORNBACH Baumarkt AG Subgroup increased its market share in the Netherlands, Switzerland, and the Czech Republic. Its market share in Austria was at the same level as in the previous year. No sector data is available for the other countries in which HORNBACH operates.

HORNBACH Baustoff Union GmbH Subgroup

The HORNBACH Baustoff Union GmbH (HBU) Subgroup, which focuses on the needs of professional customers in the main construction and subconstruction trades, as well as on private construction clients, currently operates 39 builders' merchant outlets, of which two locations close to the border in France (Alsace/Lorraine) and 37 in south-western Germany, including two locations acquired in Saarland as of July 1, 2022. In the third quarter of 2022/23, HBU generated sales growth of 15.8 % to € 116.6 million (2021/22: € 100.7 million). On a cumulative basis for the nine-month period, the Subgroup increased its net sales by 11.7 % to € 343.2 million (2021/22: € 307.2 million).

Earnings performance

The following comments refer to the earnings performance of the overall HORNBACH Holding AG & Co. KGaA Group.

Rounding up or down may lead to discrepancies between percentages and totals. Calculation of percentage figures based on € 000s.

3rd quarter of 2022/23 (September 1 to November 30, 2022)

Key data on the earnings performance of the HORNBACH Group in the third quarter are as follows:

• Gross profit increased by 4.4 % to € 500.5 million (2021/22: € 479.4 million). The rise in procurement prices and transport expenses was partly offset by higher retail prices. The gross margin [ Brief Glossary on Page 9], i.e. gross profit as a per- centage of net sales, decreased to 32.4 % (2021/22: 34.2 %).
• Due to higher operating, personnel, and advertising expenses, selling and store expenses grew by 7.1 % to € 380.9 million (2021/22: € 355.7 million). The store expense ratio [ Brief Glossary on Page 9] eased to 24.6 % (2021/22: 25.4 %). Given the Group's expansion and salary adjustments, store personnel expenses (excluding bonuses) increased by 7.3 %. Driven by factors including higher energy prices, quarterly operating expenses rose year-on-year by 10.1 %.
• Pre-openingexpenses decreased from € 5.9 million to € 1.3 million in the third quarter of 2022/23, as a result of which the pre-openingexpense ratio [ Brief Glossary on Page 9] fell from 0.4 % to 0.1 %.
• General and administration expenses increased by 10.3 % to € 72.2 million (2021/22: € 65.5 million). At 4.7 %, the admin- istration expense ratio [ Brief Glossary on Page 9] was at the previous year's level.
• Earnings before interest, taxes, depreciation and amortization (EBITDA) [ Brief Glossary on Page 10] fell by 3.8 % to
• • 102.0 million in the third quarter of 2022/23 (2021/22: € 106.1 million).
• At € 48.9 million, operating earnings adjusted to exclude non-operating items (adjusted EBIT) [ Brief Glossary on Page 9] did not match the previous year's high level (€ 55.9 million) but were significantly higher than in the financial year prior to the coronavirus pandemic (2019/20: € 41.8 million). As in the previous year, there were no non-operating items in the quar- ter under report. Adjusted EBIT therefore corresponds to EBIT [ Brief Glossary on Page 10].
• Net financial expenses decreased from minus € 8.5 million to minus € 12.3 million. This was due to the changes in currency items from plus € 2.4 million to minus € 0.3 million and in net interest expenses from minus € 10.9 million to minus
• • 12.0 million.
• Consolidated earnings before taxes (EBT) [ Brief Glossary on Page 10] amounted to € 36.6 million, 22.8 % lower than in the previous year's quarter (2021/22: € 47.5 million).