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Good morning, ladies and gentlemen, and welcome to the conference call regarding the third quarter results 2020-2021 of HORNBACH Group. [Operator Instruction]. Let me now turn the floor over to your host, Axel Müller.
Yes. Thank you very much. Dear, ladies and gentlemen. Good morning. My name is Axel Müller. I'm Head of Investor Relations, and I'm sitting together with CFO, Roland Pelka; and Investor Relations Manager, Anne Spies. We wish you a warm welcome to our conference call on the results of the third quarter and the 9-month period. In the next couple of minutes, we would like to show you the most important figures of the period under report and to give an outlook on the full year 2021. We are all facing a very demanding and special year due to the corona pandemic. The main message from my point of view is since the outbreak of the pandemic people spend much more time and money on improving their homes and renovation projects.There's a great need for DIY products. Following our interconnected retail strategy, we are able to provide our customers with the best possible supply, and this is also at times of restrictions on sales, respectively, lockdown periods, we will talk on later during this call. Now it's time to give you a brief overview before we start the Q&A session. And this is why I'd like to hand over to Roland. Please go ahead.
Yes. Thank you, Axel, for the opening remarks. Good morning, ladies and gentlemen. I think it's the best idea is to go through the presentation, and we have prepared a short presentation for you. The first slide shows the number of stores across Europe. As you can see, we operate 161 large format DIY stores in Europe in 9 different countries. In the third quarter of our current financial year, we opened one more store in Romania, very close to the Hungarian border in Oradea. And in addition, we operate 36 builders merchant outlets, 34 in Germany and 2 in France. In September, we opened a new outlet in [ spring time ] in the southwest of Germany. In total, we operate 161 stores with a sales area of 1.9 million square meters and the average store size of 11,829 square meters. Now we have -- let's have a look on the impact of the corona pandemic as you can see in the schedule, we are confronted now with a number of lockdowns in the countries where we have -- where we operate stores. As you see, we are -- we have now locked down in Germany, beginning last Wednesday, and it's now limited to the January of 10, but we know that on January 5, the German government will decide again. We 96 -- we operate 96 stores, and we have very different requisitions in the various federal states in Germany. But in most cases, in all cases, we can see the stores in Germany are open for commercial customers, professional customers, not always open so that they can enter the store. But what was always allowed for professional customers is click and collect. And in some countries, for example, in , we have also click and collect available for private customers. So it's a very different picture in Germany. Yes, Luxembourg. Okay. Yesterday's evening the Prime Minister of Luxembourg also announced lock down now from beginning December 26 and ending in January 10. That's the newest information, which is not included in our -- in this presentation, but it was an information we got very late yesterday evening. In the Netherlands, we have also a lockdown now. We operate 15 stores, and the stores are closed for private customers since last Tuesday and limited through January 19 but the stores are open for commercial, professional customers and in all stores, reserve and collect or click and collect is available also for private customers. In Austria, now we have I think it's the third lock down now beginning on December 26. We had a lock down in spring. We had the lockdown in November. And now after that lockdown in Austria, and stores are closed for private customers but open for commercial customers, reserve and collect, or click and collect is available in all the stores in Austria. In Romania, Sweden and Switzerland, until today, we have no store closures. Slovakia, I think again, Slovakia has its third lockdown now in the current financial year. Beginning, it was -- it started on last Friday -- no last Saturday, sorry, and is [indiscernible] now through January 10. The stores are open for commercial customers and click and collect for private customers is also available. And in Czech Republic it's now sixth -- the third -- or second lockdown in Czech Republic, after the lockdown in spring. Now, we have a lockdown in November and until December -- December 2. And until today, we have no further information about new lockdown in Czech Republic, but the risks are high, the Czech Republic will have to go undergo another lockdown. But that's the information we have today. Looking on the third quarter of the current financial year and the 9 months sales development where the extremely -- where we have an extremely positive financial year with 20.3% plus in sales in the third quarter and 20.2% and in the 9 months accumulated, so EUR 4.5 billion. Very successful this year is Germany, the most important area. We we have our store operations with a plus of 24.5%, but also international with 16.7% is also very positive. Despite the various shutdowns, lockdown, store closures, where we confirmed it. And builders merchant is also doing very well with a plus of 13.5%. Very important in the retail industry is the [ like sales ] number, which is called like-for-like sales development. And in this, this excludes new store openings, but our online our commercial business is also included in these numbers. And as you can see, after 9 months, a plus of 19.5% like-for-like. It's also very, very positive. And Germany is leading other countries with a plus of 24.6% and international 14.3%. In all nearly all countries, we were positive after 9 months in like-for-like sales, except Slovakia, but in Slovakia, we had the longest lockdown period in springtime. And Czech Republic is negative in the third quarter as a result of the shutdown quite interesting is the development in Austria. Austria had also a lockdown in November, as you might know, but is still positive with 15.3% in the third quarter. What is also very impressive from my point of view is the out-performance of the industry in Germany. As you can see, we out performed -- the industry as a whole, in Germany, the DIY industry is benefiting from the situation where people have to sit at home and traveling is not allowed and things like that. So people spend a lot of money, as we already mentioned it for DIY projects. But we are outperforming the industry in a very significant way. And the earnings numbers are also very positive as a result of the extraordinary development in sales. We are 67% ahead of the previous year in EBIT number. EUR 402 -- closed EUR 402 million after 9 months. And the good earnings performance is coming from the especially from our retail business, HORNBACH Baumarkt AG, our builders merchant business is also doing very well and which is not a surprise, which couldn't be a surprise. The property business is very stable. And the cash flow is also very good after 9 months. So we have to have a huge cash inflow now. And the number of CapEx is one -- amount of CapEx is EUR 108 million after 9 months, so it is very easy to finance all the capital expenditures with the cash inflow, what we have from our operating business and so we spent close to EUR 108 million after 9 months, 57%, especially for the real estate for our stores for new stores and existing stores. And 4% for intangible assets, especially IT, software and 39% in plant and office equipment for existing and new stores. Balance sheet looks all the very fine with a 45% equity ratio, which is a very good result compared to 42.7% at the year-end. So it looks also very good and especially the high number of liquid funds with EUR 743 million. And also the balance sheet of HORNBACH Baumarkt actually is -- looks very good with 34.8% equity ratio and also a high, high amount of liquid funds with EUR 655 million. Now as you're -- now coming to the end of my short presentation, as we already mentioned in our quarterly information, we haven't changed our earnings and sales forecast so far. As you know, we adjusted the forecast after the 6-months results. And now we happen to decide whether we change the forecast or not, with the basis of background, what I already explained to you with all the shutdowns and store closures where we are confronted now. But our forecast or the basis is of our forecast. This is -- allow us to cover all the risk, what we know today. So if we assume that the store closures will end as they have been announced so far that we can achieve our forecast in sales and earnings. We are performing still performing very good. Still, despite store closures, we will presumably -- we'll presumably grow in December compared to the previous year despite the store closures. And it is now very difficult to forecast generally in February, but as I said, if the store shutdowns in the various countries, limited as we explained it to you, then we can achieve our forecast. If the German governance or other countries or the government and other countries will decide again in the shutdown or shutdown and store closures lockdown will continue then we have to decide again in January or February, whenever it is -- it will be worthwhile to do so. But I think as of today, we are pretty comfortable with the forecast, which we have -- which I explained to you, and there's no need to change it as of today. So that brings me to the end of my short presentation. And now very happy, would appreciate to answer your questions, and we'll do it together with my colleagues: Anne Spies; and Axel Müller. Thank you for listening.
[Operator Instruction]. And the first question comes from Mark Josefson from Pareto Securities. Please go ahead.
Congratulations to the group, for the figures, particularly in Germany for [ all the set ] of figures. I had a question regarding last year. So the year for year through February 2020, what sort of sales were generated by trade customers? Or what was the share of sales that were generated by trade customers or generated non-trade customers tab. So how important is the trade competitive non-trade in the last full year.
This is a Axel speaking Mark. The line is quite bad in the -- we can't understand the whole message of your question. Could you please repeat it?
Yes. Apologies. My question is, in the last 4 years, so through to February 2020, how significant were trade customers in comparison with private individuals?
Okay. This is Roland Pelka speaking again. So trade customers, or let's say, professional customers who are very important for us, and it is an increasing number we have all the -- we have the necessary assortment, we have the necessary prices. We have large-format stores, so we can offer best services to professional customers. And we know -- and the number of professional customers is increasing over the last couple of years and this is a target customer group for us.Very -- it is difficult to estimate the number of s for professional customers. We know, of course, the number of professional card owners. We have a special loyalty card for professionals but this is -- we know this number, but the real number of professional customers in our stores is much higher. It is a very important customer group for us, and it is a growing customer group.
And we should be able to enlarge the customer base during this lock down period. And this is why we are optimistic to cope with that difficult environment.
Yes. Fair point, fair point. Okay. My second question relates to Bodenhaus. You didn't mention it in your opening remarks. But I think that by the end of the year, that should be too up and running. Now this is only floor covering, but is this only to trade customers? Or will this be to -- in the private individuals as well?
Okay, Roland Pelka speaking again. First of all, we should have mentioned this we plan to open the first Bodenhaus store in Berlin. The store opening was planned for December 11 -- was December, right?
15.
December 15, okay. December 15, so one day before the shutdown in Germany, so we decided to postpone the store opening in Berlin until February. Probably -- and there's one more store in preparation in Cologne and the store opening is still scheduled for February.And the Bodenhaus stores is a concept, especially for professional customers, but it's also allowed for -- and we expect the high -- very high share of professional customers. And we offer all the services which professional customers expect, but the stores are also open for prior customers.
Okay. I think it makes sense to wait until February for them. That's my personal view. But anyway, congratulations on the number. They were my questions.
Thank you. Are there any further questions, please?
At the moment, there seem to be no further questions. [Operator Instruction]. We have one more question from [indiscernible] from SKM.
Congratulations on the strong results. I was just wondering, what's your plans for the use of cash that you've generated since the balance sheet now has EUR 400 million more cash than it did at the start of the year?
Yes. Thanks for using the cash. Okay. We have -- first of all, we have to be -- we are conservative. And it's always better to the cash balance -- or cash is key from my point of view. And so -- and we have -- we spent much more -- more money in the fourth quarter, we have -- we spent money for new locations. We are acquiring land, and we have stores already under construction, which will open next year. And we have -- and we are in preparation for the next year's plan. So and I think it is -- we have no special or we have no -- there's no plan. As of today, there is no plan to -- for an extra dividend or something like that. That's not the case.
We have one more question from [indiscernible] from Deutsche Finance.
A question regarding your online business, can you elaborate a little bit on the CapEx that you spent the last 9-months from your total CapEx for the total online expansion? And what is the plan to further kind of optimize your online, click and collect business?
Okay. Roland Pelka speaking again. In the CapEx -- total CapEx number of EUR 108 million after 9 months, online -- is not playing any role. We spent hundreds of millions over the last 10 years for our online based business. And most, most of the spend had to be expensed and the number of CapEx -- capitalized items is a very limited number. And when it will talk about when I explained to you, EUR 4 million for IT software, for example. This is probably a portion of or let's say, part of it or major part of basis related to online. But online is more or less is a business, which needs people and needs -- we have all the systems in place where which we need, okay, there is always something to do and new systems had to be introduced and things. But there are no big CapEx spendings. The high majority of our CapEx spending is related to stores. And as I explained, 58% of total spendings is related to properties to new stores to existing stores and so on. And the rest, 42% is a small portion for IT. And the rest is for the equipment in our stores for new stores and existing stores.
Okay. So that means you're fully equipped and you can fully participate on the online business?
Yes, of course, we have -- our online business is in place in all the countries where we have stores. So 49 European countries, you can order online with HORNBACH. And other systems -- in the past, we spent a lot of money. We spent hundreds of millions for to introduce and to build our online business, but this phase is over now. And we are in a very comfortable situation that we have all the necessary systems in place that we have the people trained and educated and so on and so. From my point of view, we are very confident in this situation today.
Thank you very much. And congratulations for the good results.
The next question comes from Thilo Kleibauer from Warburg Research GmbH.
I have 2 questions. The first is on the gross margin. The gross margin declines were owing to a higher share of online sales. So maybe you can give us some more details on product mix or is it mainly related to delivery costs? And should we expect a drone gross margin impact in the current quarter where probably the share of online sales is even higher. And my second question is regarding stock availability as well from some sectors, and there are risks on the supply chain that there are shortages in and several assortments. So though there's a strong sales development, so are you still able to deliver all those stock [indiscernible] about your inventory level there. Maybe you can comment on this?
Okay, Roland Pelka speaking again. Your first question relates to the development of the gross margin. The gross margin which is approximately 30 -- 30 basis points below the previous year's level, and this has to do with a high share of our online business. This is the most important and really the only reason for the decline of the gross margin. And we have same prices online as off-line, but we still have the situation that the transportation costs of delivered goods to our customers are much higher than the customers have to pay for this service. And this puts pressure on the gross margin. And this is the most important reason for the short decline of gross margin. And I think your second question relate to our assortment and the delivery of the supply chain, in [indiscernible]. And okay, the supply chain, it is now not easy, we have a lot with our logistics department and our merchants, they have a lot of work because it is -- the supply chain is under pressure. Especially -- and we know that from the Far East, China and other Far East states say [indiscernible] the correct way to open. They are manufacturing, but a lot of containers are flowing around the world and can be used -- and this is a one time -- as of today, a difficult situation, but we think that we have everything under control. We have -- and we use different ways for goods flow from Far East, not only ships, but more and more trains and in some cases, airplanes. But there is pressure on the supply chain, but we think we have the things under control, and we don't expect a major impact on our business. Are there any further questions, please?
There are no further questions.
Okay. So I would, nevertheless, to give you a last opportunity to pose a question or different questions. So how about? Are there any further questions we could answer right now?
Yes. We have one more question from Mark Josefson from Pareto Securities.
Yes, just of interest more than anything. But with respect to the personnel expenses, there was referenced in the statement regarding a corona bonus for employees. And hopefully, some of that will be used for local concerns. But how significant was that corona bonus in the period?
Yes, Roland Pelka speaking again. The corona bonus we paid in Germany in 2 -- I think we pay in total now EUR 1,000 per employee in the stores and EUR 400 for all the employees in the -- on the administration. And international, it is different. But in all the countries, we paid bonuses according to which are related through the current situation, extra work for our people. And so -- and in total, it is a number of approximately EUR 10 million-plus now, I think it's a good guess. But in addition, we also reserved -- we have -- as you know, we have a bonus system in all the countries, different bonus systems. And we provided for high bonus payments for the current financial year. And this has also -- or when we had to expand all the provisions and it's another amount of approximately now in other bonus, let's say, corona bonuses and plus bonuses accrued for payment next year according to the good earnings development, it's an amount of, let's say, EUR 50 million now. And it's flexible relating to the further development of our business.
Yes. Thank you, Ronald. And I think that's a very good gesture to employees, well done.
And the next question comes from [indiscernible].
Can you hear me all right?
Yes, we can understand you pretty clearly.
That's great. Congratulations on great numbers. Can I just ask kind of looking forward for the next 2 or 3 months. I think in some years in the past, there has been some volatility in the reported results over the end of the winter, depending on how harsher winter it has been or otherwise. I guess some of your stock might be plants that need to be planted out at a certain time or something like that. Do you envisage any planning challenges, shall we say, over the next 2 or 3 months because of the lockdown.
Yes, good morning Mr. [indiscernible]. So the next 2 to 3 months where -- extremely there will be a challenge for all of us. And the weather is always an important factor in winter, but an impact on our business but this year, the impact is coming from all the various shutdowns, lockdowns in all the countries where we have operations. And as I said to you, it is as of today, we think that we can achieve our forecast. And -- but the uncertainty is extremely high, nobody knows what will happen in January or in February and also in March. But the positive trend in favor of our business, the so-called megatrends only [indiscernible] and so on. I think they will continue these key spreads, and people will continue to spend a high share of their income in favor our business for restorations, renovations and so on.
But you're not reducing the orders from your suppliers or perishable stocks at this stage?
Not yet.
There are no further questions.
Okay. This is why I would like to ask once again, if there's anybody who would like to pose a question, this is the right moment.
[Operator Instructions]
It seems to us that there are no further questions so far. This is why I would like to thank you for listening. We get back to the capital market with our news flow according our financial calendar in March next year. And of course, if we have new experiences and new data and information on the further outcome of the corona pandemic we will let you know. And before that, we would very much appreciate you wish you all very warm and Merry Christmas and a healthy New Year. Yes, thank you for listening again. Bye-bye.
Thank you. Bye-bye.