• Group sales at 865.1 million euros (-1.4 percent)
• Sales and earnings forecast for 2008 confirmed
• International business with strong sales and earnings growth
• Modified marketing strategy in Germany

Kirkel – April 23, 2008. Praktiker Bau- und Heimwerkermärkte Holding AG made a slow start into the financial year 2008. Despite a sustained double-digit growth abroad, group sales receded by 1.4 percent to 865.1 million euros. Since Praktiker had distinctly reduced the number of discount campaigns, domestic sales declined by 6.6 percent. The consolidated quarterly loss in operating earnings that is usual for the season rose slightly to 20.8 million euros.

The Interim Report 1/2008 is available here.

The statement of CEO Wolfgang Werner regarding the interim report Q1/2008 is available here.

During the first three months of 2008 the Praktiker Group did not succeed in keeping up with the prior-year growth. Although international business continued to develop very dynamically and international sales rose by 15.5 percent over the prior-year period to reach 238.6 million euros (2007: 206.5 million euros), sales generated on the domestic market declined to 626.5 million euros (2007: 671.0 million euros). This is equivalent to a minus of 6.6 percent that is exclusively attributable to the Praktiker brand. Sales of the Max Bahr brand rose on account of the first-time inclusion of its January sales.

The decline in domestic sales is attributable to several factors. The return of winter in the high sales month of March prevented the gardening business from gaining momentum. In addition, the first quarter also had two selling days less than last year due to the early Easter holidays. On top the effects of a strategic reorientation of Praktiker’s marketing strategy has to be considered. This re-orientation, which will increase the focus on permanently low prices for selected articles in the further course of the year in the first instance resulted in a clear reduction of the 20 percent discount campaigns. This negatively affected sales but contributed positively to raising the gross margin on sales of the Praktiker Group by 2.7 percentage points to 31.2 percent.

Group earnings slightly down – International business strongly up

The operating losses of the first quarter which typically occur for seasonal reasons this year were reported at 20.8 million euros (2007: 19.9 million euros) for the Praktiker Group. In Germany, EBITA came in at minus 22.1 million euros – following minus 20.0 million euros one year earlier. Here, the reorientation of the marketing strategy for the Praktiker brand is showing effect. Although this quarter there had been no one-time effects from the integration of Max Bahr, the financial statements for the first time also include the traditionally loss-generating January results of the Hamburg-based subsidiary. Also included in the First Quarter report are the expenses for the conversion of eleven German stores to the Easy-to-Shop concept, which came in at roughly the same level than one year earlier.

In the international business, the operating result was raised from 0.1 million euros to 1.3 million euros. This was mainly due to contributions from Praktiker’s operations in Bulgaria, Greece, Poland, and Romania.

“Under the prevailing conditions“, stressed Wolfgang Werner, CEO of Praktiker Bau- und Heimwerkermärkte Holding AG, “the Group’s operating result is encouraging overall. It not only demonstrates that the international markets are growing sustainably and profitably. It also shows that the reorientation of the marketing strategy for the Praktiker brand in Germany is strengthening the gross margin and thus heading in the right direction“.

Capital expenditure stepped up further

During the First Quarter 2008 the Praktiker Group continued to invest into the future. It raised the capex volume to 27.7 million euros. This is around 29 percent up from the same period one year earlier (21.5 million euros). The largest share of these investments – 18.2 million euros – was spent on the international operations where two new stores were opened, one in Poland and one in Turkey.

Total assets up, equity ratio at high level

Compared against the annual report 2007, the balance sheet of the Praktiker Group only saw material changes with regard to two items. To prepare for the upcoming gardening season, inventories were stepped up appreciably. At the same time, also the trade payables increased distinctly. As a consequence, the total assets rose by 5.9 percent to 2.28 billion euros. The equity ratio stood at 40.0 percent.

Store network extended, headcount abroad increased

On account of the progressing expansion in Eastern Europe the store network operated by Praktiker Bau- und Heimwerkermärkte Holding AG grew once again. As per March 31, 2008, the Praktiker Group operated a total of 427 locations. These include 16 stores abroad that have been newly opened during the past twelve months. In Germany, the Praktiker portfolio was reduced by seven outlets while the number of Max Bahr stores remained unchanged at 76. The headcount for the group (quarterly average, translated into full-time equivalents) rose from 21,696 to 23,068 (plus 6.3 percent). This increase, too, is solely driven by the dynamic expansion of the group’s international business: a strong 24 percent rise in the headcount to 10.017 employees at the international operations contrasts with a 4.2 percent staff reduction to 13.051 employees in Germany.

Sales and earnings forecast for 2008 confirmed

With a view to the overall business year 2008, the management confirms its forecast presented on the occasion of its Annual Press Conference held on April 2 in Frankfurt/Main. According to this forecast, Praktiker expects sales to rise by a mid-single digit rate. Domestic like-for-like sales should come in below the prior-year level. Abroad, Praktiker expects a sustained strong growth of sales that should attain a double-digit rate in view of the strong expansion of its store portfolio. The operating earnings (EBITA) are expected to come in somewhere between 135 and 140 million euros and thus exceed the earnings achieved by the Praktiker Group in 2007 prior to Federal Cartel Office requirements by 10 to 15 million euros. From today’s viewpoint, overall cash affective capital expenditure will amount to at least 150 million euros.

Werner’s closing remark: “I can say that, all things considered, the Praktiker Group is excellently positioned and continues to be on the right track; in Germany, where our market position together with Max Bahr is stronger than the First Quarter figures may suggest, and also abroad, where we continue to focus on profitable growth“.

QUARTERLY FINANCIAL REPORT – Q1 / 2008

Operating data	31.03.2008	31.03.2007	Change
Locations Germany	337	344	-7
Locations International	90	74	16
Greece	10	8	2
Luxembourg	3	3	0
Poland	21	18	3
Hungary	17	15	2
Turkey	10	8	2
Romania	20	16	4
Bulgaria	8	6	2
Ukraine	1	0	1
Locations Praktiker Group	427	418	9
Selling space in thousand m²	2.729	2.639	3,4%
Germany	2.099	2.120	-1,0%
International	630	519	21,5%
Employees, full-time equivalents on an annual average (01 Jan. - 31 Mar.)	23.068	21.696	6,3%
Germany	13.051	13.619	-4,2%
International	10.017	8.077	24,0%