• Sales after nine months at 3,014.5 million euros (- 0.9 %)
• EBITA improved by 21.2 % to 109.5 million euros
• International: sales up by more than 20 percent
• Germany: higher quality of earnings
• Sales and earnings forecast for 2008 unchanged

Kirkel - October 23, 2008. Praktiker Bau- und Heimwerkermärkte Holding AG continues to be on target for the fiscal year 2008. Despite the further booming international business, consolidated sales narrowly missed the record level of the prior year and came in at just around 3.015 billion euros. The quality of earnings however increased distinctly. The positive trend in operating earnings from the Second Quarter continued unbroken. The EBITA generated during the period from January through September of 109.5 million euros are 21.2 percent up from the figure reported last year. A similar increase in earnings (22.1 percent) was reported for the Third Quarter.

The Interim Report Q3/2008 is available here.

The statement of CEO Wolfgang Werner regarding the interim report Q3/2008 is available here.

“With these figures we are well on target” stressed the Chairman of the Management Board of Praktiker Bau- und Heimwerkermärkte Holding AG, Wolfgang Werner. “To meet our own earnings forecast for this year – 135 to 140 million euros – we only have to keep our earnings level stable in the Fourth Quarter as compared to last year. From today’s viewpoint this should be manageable“. In the same way, the company is also confirming its forecast that group sales will come in with a “moderate plus” by year’s end. Werner: “Although the current financial crisis does not help sales, we do not expect it to result in a sustained drop in demand for consumer goods in the DIY sector”.

Record 2007 sales narrowly missed

In a mixed Third Quarter, net sales of the Praktiker Group reached 1,017.3 million euros, thereby falling short of the corresponding figure reported in the record year 2007 (1,036.5 million euros) by 1.9 percent. For the first nine months of the year, consolidated sales came in at 3,014.5 million euros and are thus 0.9 percent down from last year which was by far the best business year Praktiker ever reported.

Also the quality of earnings improved appreciably. Third Quarter operating earnings (EBITA) came in at 50.3 million euros which is 9.1 million euros or 22.1 percent up from Q3 2007. For the first nine months of the current financial year, the company thus reports total EBITA of 109.5 million euros compared against 90.3 million euros for the same period last year. This corresponds to an increase by 21.2 percent. When comparing both figures it has to be considered, however, that the prior-year earnings were impacted by one-time expenses resulting from the German Cartel Office requirements for approval of the Max Bahr acquisition. But also net of these one-time expenses, EBITA generated during the first three quarters 2008 would be nine percent up against the adjusted prior-year value.

Earnings per share further increased

Group net income for the first nine months 2008 is reported at 60.4 million euros (2007: 24.4 million euros) of which 28.2 million euros (2007: minus 8.9 million euros) were generated in the Third Quarter. Based on these figures, the company reports undiluted earnings per share at the end of the Third Quarter 2008 of 1.02 euros (2007: 0.40 euros). In the Third Quarter, undiluted earnings per share came in at 0.48 euros (2007: minus 0.16 euros).

Germany: better margins, lower sales at Praktiker

Last year – especially during the Third Quarter that was characterized by extensive marketing activities – the Praktiker Group had managed to distinctly escape the negative trend in the German DIY market. The realignment of the marketing mix for the Praktiker brand (margin over volume) entailed a massive reduction in the sales-driving 20 percent discount campaigns. As anticipated, this resulted in a distinct decline in sales at the Praktiker stores in the current financial year – with an improved quality of earnings. Accordingly, group sales generated in Germany during the first nine months dropped by 7.7 percent to 2,075.8 million euros (2007: 2,248.0 million euros). Like-for-like, sales declined by 9.2 percent during this period. In the Third Quarter during which the number of discount days was massively cut back, domestic sales came in at 656.9 million euros, which is 11.0 percent down from last year (738.4 million euros).

A distinct improvement, by contrast, was reported in domestic earnings. During the first nine months, EBITA of 51.8 million euros were generated. This is 14.4 million euros or 38.4 percent higher than the figure recorded for the same period one year earlier. Also the Third Quarter EBITA of 16.9 million euros were up 20.5 percent up from last year (14.0 million euros) which was impacted by the already mentioned one-time expenses resulting from the requirements of the German Cartel Office for the acquisition of Max Bahr. Without this item, the domestic EBITA generated during the first nine months of the current financial year would have exceeded the prior-year earnings by 4.2 million euros or 8.8 percent.

International: double-digit growth in sales and earnings

The International segment reported an excellent development of business. The dynamic growth that had already characterized the first half of the year accelerated further during the period from July to September. At 360.4 million euros, sales generated outside Germany during the Third Quarter 2008 were 20.9 percent up from last year (298.1 million euros). Like for like, i.e. excluding newly opened stores, sales rose by 2.9 percent. With these figures, international sales during the first nine months reached a new record high of 938.7 million euros which corresponds to an increase of 18.3 percent year on year. Like for like, sales during this period increased by 2.4 percent. Thus, the plus in sales from international operations resulted mainly from extension of the selling space. But sales productivity, which had already been drastically improved last year, was raised once again too.

A similarly positive development was also reported for the operating earnings of the international operations. In the Third Quarter, EBITA reached 33.4 million euros which is equivalent to a 23.0 percent increase. During the period from January to September 2008, the International segment generated EBITA totaling 57.7 million euros. The fact that this figure is only 9.1 percent up from the prior-year figure is due to an addition to provisions in the amount of four million euros in the Second Quarter 2008 to account for an antitrust procedure pending with the Polish Cartel Office. Net of this one-off item, EBITA would have come in with a plus of 16.6 percent. Nearly all country organizations contributed to this operating result, in particular Bulgaria, Poland and Romania.

More stores and more staff

As per 30 September 2008, the Praktiker Group operated a total of 431 stores, 95 of which outside Germany. The international portfolio increased by 14 stores year on year: five in Romania, three in Greece, two each in Poland and Bulgaria as well as one each in Turkey and the Ukraine. In Germany, by contrast, the portfolio was reduced by five stores. Of the currently 336 domestic locations, 76 continue to be operated under the Max Bahr banner.

The dynamic international growth also reflects in the headcount of the Praktiker Group. As per 30 September 2008, the number of employees (on a full-time basis, nine-month average) rose from 22,289 to 23,362 (plus 4.8 percent) group-wide. The international businesses reported a strong growth of 19.6 percent (to now 10,264) while the headcount in Germany receded by 4.4 percent to 13,098.

NINE MONTHS FINANCIAL REPORT 2008 / Quarterly Report Q 3 - 2008

* incl. additions to provisions in Poland (4.0 million euros)
** 2007 excluding Cartel Office requirements Q3 51.4 million euros, 9M 100.5 million euros
*** 2007 excluding Cartel Office requirements Q3 24.2 million euros, 9M 47.6 million euros
**** undiluted

Operating Data	September 30, 2008	September 30, 2007	Change
Number of stores Germany	336	341	-5
Number of stores International	95	81	14
Greece	11	8	3
Luxembourg	3	3	0
Poland	21	19	2
Hungary	17	17	0
Turkey	10	9	1
Romania	23	18	5
Bulgaria	9	7	2
Ukraine	1	0	1
Number of stores Praktiker Group	431	422	9
Selling space in thousand m²	2.759	2.676	3,1%
Germany	2.094	2.111	-0,8%
International	665	565	17,7%
Employees - full time on annual average (January 1 – September 30)	23.362	22.289	4,8%
Germany	13.098	13.708	-4,4%
International	10.264	8.581	19,6%