Actividades preventivas

GROUP MANAGEMENT REPORT Asset Situation

57

Key balance sheet figures of the HORNBACH HOLDING AG Group

Key figure Definition 2.28.2013 2.29.2012

Equity ratio Equity / Total assets % 48.3 45.9

Return on equity Annual net income before minority interests /

Average equity % 7.2 9.4

Return on total capital NOPAT¹⁾/ Average total capital²⁾ % 7.2 8.9

Debt / equity ratio (gearing) Net debt / Equity % 33.9 33.4

Additions to non-current assets, including advance payments for

land € million 150.8 162.6

Net working capital Inventories and receivables less trade payables € million 406.1 415.9

Inventory turnover rate Cost of goods sold / Average inventories 4.0 4.1

1) Net operating profit after tax, defined as EBIT minus unchanged standardized tax rate of 30% for the HORNBACH Group

2) Average total capital, defined as average equity, plus average net debt

Assets Equity and liabilities

2,267 2,270 2,270 2,267

Cash and cash equivalents 422/ 357

Current liabilities 453 / 540

Inventories, trade, receivables and other assets 605 / 609

Non-current liabilities 722 / 686

Non-current assets 1,240 / 1,304

Shareholders’ equity 1,095 / 1,041

2.29.2012 2.28.2013 2.28.2013 2.29.2012 (Rounded up/down to nearest € million)

Structure of consolidated balance sheet (€ million)

58

Receivables and other assets (including income tax receiv-ables) decreased from € 96.6 million to € 91.3 million. Due mainly to the addition of three pieces of land in the 2012/2013 financial year, non-current assets held for sale and disposal groups recognized pursuant to IFRS 5 increased by € 1.0 million to € 2.5 million (2011/2012: € 1.5 million).

Non-current and current liabilities

Liabilities, including provisions, totaled € 1,174.4 million at the balance sheet date, as against € 1,225.8 million in the previous year. Non-current liabilities rose from € 686.0 million to € 721.9 million. Non-current liabilities include deferred tax liabilities of € 60.3 million (2011/2012: € 63.8 million).

Due to scheduled repayments and unscheduled redemptions of loan liabilities, current financial debt fell from

€ 173.8 million to € 96.6 million. Trade payables and other liabilities were reported at € 262.9 million at the balance sheet date, and thus € 5.9 million higher than in the previous year (2011/2012: € 257.0 million).

Other provisions and accrued liabilities amounted to

€ 63.3 million (2011/2012: € 72.8 million).

The net debt of the HORNBACH HOLDING AG Group, i.e. finan-cial debt less cash and cash equivalents, increased to

€ 370.9 million at the balance sheet date, up from

€ 347.8 million in the previous year.

Off-balance sheet financing instruments and rental obligations

In addition to the DIY megastores with garden centers owned by the HORNBACH HOLDING AG Group and those used on the basis of finance lease agreements, there are 57 DIY stores with garden centers that are let from third parties.

Moreover, the Group also has a small number of additional land leasehold, leasing and rental agreements.

The obligations under rental, hiring, leasehold and leasing contracts relate exclusively to rental agreements for which the companies of the HORNBACH HOLDING AG Group do not con-stitute the economic owners of the assets thereby leased pursuant to IFRS accounting standards (Operating Lease). The rental agreements principally relate to DIY megastores with garden centers in Germany and other countries. The terms of the rental agreements usually amount to between 15 and 20 years, with subsequent rental extension options. The respec-tive agreements include rent adjustment clauses.

At February 28, 2013, obligations under rental, hiring, lease-hold and leasing contracts amounted to € 678.3 million (2011/2012: € 725.8 million). This reduction is mainly due to annual rent payments for the 2012/2013 financial year. Fur-thermore, a number of rental adjustment and extension op-tions were exercised in the 2012/2013 financial year.

Overall assessment of earnings, financial and net asset situation

The HORNBACH HOLDING AG Group performed satisfactorily in the 2012/2013 financial year and strengthened its market position. Sales at the HORNBACH-Baumarkt-AG subgroup sales showed slight growth, and that despite an increasingly subdued economic climate across Europe and poor weather conditions in the fourth quarter. It is pleasing to note that we managed to maintain like-for-like sales at the HORNBACH DIY megastores with garden centers in Germany at the high previ-ous year’s level and expanded our market share yet again.

Given the recession across Europe, our international activities, which upheld their share of sales, performed satisfactorily.

Due in particular to a weaker like-for-like sales performance and less favorable cost ratios, in line with the forecast the subgroup’s earnings for the 2012/2013 financial year fell short of the record figures reported for the previous year.

By contrast, the HORNBACH Baustoff Union GmbH and HORN-BACH Immobilien AG subgroups managed to boost their earn-ings strength in the year under report.

GROUP MANAGEMENT REPORT Asset Situation

59

Irrespective of its short-term earnings position, HORNBACH pressed ahead with sustainable innovation projects in its DIY retail business in the 2012/2013 financial year. A large share of the project-related administration expenses were incurred for the consistent expansion in our e-commerce activities.

Furthermore, further development projects also helped im-prove the foundations for the Group’s long-term growth.

The equity ratio has risen to 48.3%. The capital structure and liquidity remain at good levels. In view of our broad spectrum of financing sources, we enjoy a high degree of security and flexibility to finance our further growth. Overall, the economic situation of the HORNBACH Group is satisfactory.

60

No normal DIY store – dedicated to projects

“We’re no normal DIY store. We’re a project DIY store”. Consis-tent with this image of itself, HORNBACH focuses above all on project customers. We are the address for people with big plans – construction and renovation projects in their houses, apartments and gardens – people with a passion for home improvement. At HORNBACH, they can rely on a partner that offers them a comprehensive range of services for their pro-ject – with easily accessible locations, great breadth and depth of product range, the right volume of stock on hand for their projects, uncomplicated and easily comprehensible merchandise presentation, dependable permanently low prices, and professional advice. In this, customers can de-pend not only on our high-performance stationary retail store network, but also on our extensive online offering. In Germany and successively in other countries, customers now have the option of conveniently making their purchases at our internet store. Not only that, customers in all HORNBACH countries can find inspiring project ideas, product information, and plan-ning and implementation aids on the internet.

HORNBACH’s concept – a European recipe for success Our unmistakable position as the top address for projects was honored once again in various consumer surveys and sector studies in the past financial year.

In the “Kundenmonitor” study issued by ServiceBarometer AG since 1992 and one of Germany’s most renowned customer satisfaction surveys, almost 6,000 DIY customers were sur-veyed about their home DIY store once again in 2012. Of the ten large DIY chains covered by the survey, HORNBACH was awarded the best average marks in many key individual categories. Among others, we came top in categories particu-larly important to project customers, such as “product range compared with competitors”, “merchandise and product quality”, “value for money”, “prices compared with competi-tors”, and “service compared with competitors”.

In the international arena as well, consumers confirmed that HORNBACH had created benefits for its customers and clearly differentiated itself from its competitors with its consistent

project focus. In the “Kundenmonitor 2012” survey performed by analogy with its German counterpart in Austria and Switzer-land, for example, we came first in the “product range”,

“selection and product variety”, and “prices compared with competitors” categories. In Austria, we also scored highly in categories such as “value for money”, while in Switzerland we came top in terms of “product quality”.

HORNBACH received the best assessment in the annual Swed-ish Quality Index (SKI) customer satisfaction survey, and that for the fifth year in succession. We even improved on the very high satisfaction figures already awarded in 2011, and re-ceived correspondingly high marks in individual categories.

Our Dutch customers were also particularly satisfied in 2012 and singled out HORNBACH as “Retailer of the Year” in the DIY store category. In the Czech Republic, HORNBACH scored very highly in terms of its prices and product range in the “Do it yourself 2012” survey performed by GfK. We also received top marks in the “specialist advice” category.

Homogenous store network across Europe

HORNBACH has decades of experience in operating DIY mega-stores with garden centers. The network of 138 mega-stores in nine countries across Europe forms the stationary foundation for implementing the company’s project concept. Our portfolio of locations in Germany and abroad is highly homogenous, with 84% of the Group’s sales areas as of the balance sheet date at stores which are larger than 10,000 m². This facilitates the rapid rollout of universal and/or innovative concepts to old and new sales areas alike.

What’s more, the combination of homogeneity and large sur-faces generates substantial logistics benefits, thus securing a competitive advantage for us. Moreover, we are also working continuously on bringing the design of older stores in line with the latest standards, and on enhancing operating processes to enable customers’ wishes to be met even more closely.

These measures include signs, shelving measures, adjust-ments to the layout of stores, through to store extensions and the further enhancement of product ranges. Alongside our stationary retail business, in December 2010 we began work