Q1 2026/27 (Englisch) Transcript

Friday, June 19 2026 | 08:30 AM CET

HORNBACH HOLDING

AG & CO. KGAA

XTRA:HBH

Q1 2026/27 Earnings Call Transcripts

HORNBACH Holding AG & Co. KGaA (XTRA:HBH) | Q1 2027 Earnings Call June 19, 2026

Table of Contents

Call Participants 3

Presentation 4

Question & Answer 8

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HORNBACH Holding AG & Co. KGaA (XTRA:HBH) | Q1 2027 Earnings Call June 19, 2026

Call Participants

Executives

Antje Kelbert

Head of Investor Relations

Joanna Kowalska

CFO & Member of the Mgmt., Board of HORNBACH Mgmt., AG

Analysts

Michael Heider

Joh. Berenberg, Gossler & Co. KG, Research Division

Miro Zuzak

JMS Invest AG

Volker Bosse

Baader-Helvea Equity Research

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HORNBACH Holding AG & Co. KGaA (XTRA:HBH) | Q1 2027 Earnings Call June 19, 2026

Presentation

Antje Kelbert

Head of Investor Relations

Good morning, and welcome to our Q1 update call for company website. Kindly also take note of the

HORNBACH Holding. My name is Antje Kelbert, Head of disclaimer, which applies to the entire presentation as

Investor Relations. Earlier today at 7 a.m., we well as the Q&A session. After the presentation, we will published our financial results for the first 3 months of take your questions. The technicalities will be fiscal year 2026-'27, covering the period from 1st of explained by our operator at the beginning of the Q&A

March until the end of May 2026. session.

I extend my warmest welcome to our CFO, Dr. Joanna With that, I'm delighted to hand over to Joanna to walk

Kowalska, who will be our host today presenting our us through the key developments of the first quarter of latest set of numbers. Please note that this conference this year. Over to you, Joanna. call, including the Q&A session, will be recorded and made available along with the transcript on our

Joanna Kowalska

CFO & Member of the Mgmt., Board of HORNBACH Mgmt., AG

Good morning, everyone. Thank you, Antje. It's a Overall, I can say we are happy with our figures, pleasure to be back and to share our latest results with especially against the backdrop of the challenging you. Before turning to the details, let me briefly outline macro environment I have just outlined. the broader macroeconomic and retail environment we faced over the course of the first quarter. Consumer Let me now guide you through today's results. We will sentiment remains subdued, particularly in Germany, cover 3 topics. The first one, an overview of the Q1 key but also across other markets. GDP growth and financial figures. The second one, details on the P&L, forward-looking expectations remain modest overall. balance sheet and cash flow. And the third one, the

However, against this backdrop, we have made a guidance for the current fiscal year. Let me start with successful start to the new financial year. And on a the key financial figures. HORNBACH Group net sales personal note, I'm incredibly proud to be serving as reached EUR 2 billion, an increase of 4.9% from last

CFO at a time when we have recorded the highest year. This was mainly driven by international sales at quarterly net sales in our company's history, with May HORNBACH Baumarkt AG. Like-for-like sales at being the strongest month ever. HORNBACH Baumarkt grew by 2.8% and once again outperforming the DIY sector as a whole. The DIY

This positive development has -- was driven by solid sector in Germany saw significantly weaker figures like-for-like sales growth in our existing stores, along from March to May compared to our results. This is with additional contributions from newly opened based on data by the industry association, BHB. And stores. The spring season went well, with customers additional market research data proves that in our appreciating our broad and project-focused other European countries, we at least matched or assortment and services as well as our everyday low outpaced the overall sector performance. price promise. While these achievements belong to the entire organization, it's rewarding to see our strategy, Gross profit increased by 4.0% or EUR 27 million to execution and teamwork translate into record results. EUR 700 million. This resulted in a gross margin of

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HORNBACH Holding AG & Co. KGaA (XTRA:HBH) | Q1 2027 Earnings Call June 19, 2026

35.0%. Adjusted EBIT reached EUR 161 million, across Europe. And this is not only about expansion, matching last year's level. We opened a new store in but also very much about driving profitable growth in

Trnava, Slovakia and continued to invest in further our existing retail space. We were yet successful in this future growth. Overall, we remain very much regard in the first quarter of '26-'27. As you can see, committed to our organic expansion plans. And despite sales on a like-for-like basis, excluding new opened recording higher CapEx, our free cash flow was only stores, increased by 2.8%. This was preliminarily slightly below prior year's level. driven by bigger basket size, but also customer frequency developed positively.

So what do our Q1 figures look like in detail? Let's start by taking a closer look at our sales performance. As yet You can see that our international regions are growing mentioned, group sales increased by 4.9% to a total of relatively faster on a like-for-like basis. However,

EUR 2 billion. Looking at sales at HORNBACH Baumarkt Germany also recorded growth of 1.0%. This means

AG, we saw an increase of 4.7% to EUR 1.9 billion. We that we once again outperformed the German DIY are benefiting significantly from our diversified market, which developed negatively from March to

European footprint. Sales in our other European May. The other European countries achieved growth of markets grew by 7.5% and now account for 53% of 4.4%. We achieved these growth rates against a very group sales. However, Germany also achieved sales strong prior year quarter, underlying our resilience. growth of 1.8%. We further strengthened our Our top 3 performance in this respect are Slovakia, the international presence, and our business resilience is Netherlands and Czechia. Slovakia recorded strong resulting from a well-balanced geographical mix. We growth of over 9%. In the previous year, local remain firmly committed to this strategic direction and purchasing power had been subdued due to political continue to push ahead with our expansion plans in a changes. The Netherlands continued its successful controlled manner. Also, Baustoff Union, as you can development, achieving growth of just under 9%, and see, contributed to our growth, increasing in sales by Czechia grew by 5.6%, showing even stronger growth

6.8%. than in the prior year quarter.

And now let us take a look at market shares in the DIY All other countries performed also very well. At the retail segment. Once again, we were able to further bottom of the table, you can see a decline in Romania, expand our market shares in all HORNBACH countries where consumer sentiment is temporarily impacted by for which data is available. The left side shows our top tax increases impacting consumer spending in general.

3 regions in terms of market share growth. In Czechia, Overall, like-for-like sales growth trends give us we are #1, and were able to further increase our confidence for the future. Considering that sales market share to above 40%. This is a continuation of a development was also affected by negative calendar strong momentum of recent years. In the Netherlands, effects, this performance is particularly encouraging. customers value our product-focused offering. This has We had 2 business days lower than in the previous led to an increase in our market share to 40.4%. We year, and also our e-commerce contributed to the also continued to improve our position in Switzerland. increase in sales.

The right side of the slide shows that we also achieved gains in highly competitive markets such as Germany Here, we recorded an increase of EUR 20 million, which and Austria. In Germany, our largest market, market is a plus of 9%. Direct delivery accounted for the largest share rose further, an increase of 0.5 percentage point share of our online business, growing by 5%, and Click year-on-year. We also recorded further gains in & Collect recorded an increase of 18%. This

Austria. development shows us that our Click & Collect offering is meeting customers' demand. As you can see, the e-

Overall, these results underline that HORNBACH is commerce share of HORNBACH Baumarkt sales rose to very well positioned in its market, and our ambition is 13.6% in the last quarter. And compared to the pre- to continue strengthening and expanding our presence pandemic period, we have nearly doubled our e-

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HORNBACH Holding AG & Co. KGaA (XTRA:HBH) | Q1 2027 Earnings Call June 19, 2026 commerce sales. By seamlessly integrating our e- opened stores compared to Q1 of the prior year as well commerce offering with our stores, we are able to as salaries. provide customers with a truly interconnected shopping experience. We were among the pioneers in Let us now turn to adjusted EBIT. Adjusted EBIT

Germany in the e-commerce space, investing in this amounted to EUR 161 million, remaining largely in line business more than 15 years ago. And this is now with the prior year level. There were no nonoperating paying off. effects to adjust for the first quarter. On the right side, you can see the contribution from Germany and the

Let us now have a look on the profits for the period. Our rest of Europe to adjusted EBIT. Countries outside gross profit increased by EUR 27 million. The margin - Germany contributed 62% to adjusted EBIT. This share

- the gross margin was slightly below the prior year at increased and is 2 percentage point above the previous

35%. The development of gross profit was year's level. preliminarily driven by sales growth. At the same time, challenges in logistics and increasing purchase prices Let us now take a look at the cash flow statement. driven by the current geopolitical environment put Operating cash flow plays an important role in our pressure on the margins. We are monitoring, of course, strategy of organic expansion, which is largely financed these developments very closely and aim to mitigate by our cash flow. The slight increase in operating cash the impact through prudent planning. flow to EUR 199 million was mainly driven by increased funds from operations. CapEx amounted to

On the right side, you can see the total costs, which EUR 56 million and increased by EUR 11 million increased overall by EUR 27 million or 5.2%. We were compared to the previous year. This is in line with our able to fully offset the increase in cost through higher strategy of organic growth. Around 46% of gross profit. Where did the increase in costs come investments related to land and real estate, from? Mainly from selling and store costs. Those rose preliminary in connection with the development of due to new stores and increases in operating costs, new store locations. 34% of investments was located - mainly maintenance, cleaning and payment - was allocated to store equipment for new and existing transaction costs. However, the cost ratio remained stores. stable at 22.6% of sales.

The remainder was invested mainly in software to

As you can see also, general and admin costs also further advance digitalization. And in this context, increased. Here, too, higher personnel expenses were migration to SAP S/4HANA should also be mentioned, the main driver as expected. And in addition, costs for which is being driven forward with high priority. Free our IT infrastructure have increased. These cash flow after CapEx and dividend payments investments are essential for us to future-proof our amounted to EUR 143 million. The elevated cash flow business model, optimize processes, increase from financing activities includes new promissory note efficiency and consistently drive forward our digital loan. This will be used for refinancing the bond of transformation. HORNBACH Baumarkt, which will be redeemed early at the end of July.

The central cost ratio remained at a comparable level to the previous year. Preopening costs were slightly Due to the new loans, the balance sheet total increased before the previous year's level. And as personnel costs to EUR 5.3 billion. The equity ratio decreased to 42.3%, are the key component of both store and central costs, in line with the higher balance sheet total. However, it let me briefly provide you here some further details on remains at a very solid level. Net financial debt that. Total personnel costs across all mentioned cost decreased by 9.2%. This was mainly due to the higher categories amounted to around EUR 370 million, an liquid funds. And the leverage ratio defined as net debt- increase of 5.5%. This increase was mainly driven by a to-EBITDA of 2.5 was below the year-end level. Looking higher number of employees as a result of the new ahead, we will continue to manage our leverage

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HORNBACH Holding AG & Co. KGaA (XTRA:HBH) | Q1 2027 Earnings Call June 19, 2026 prudently. At the same time, we will ensure efficient year financial year. Adjusted EBIT is expected to be financial flexibility to support further organic growth. roughly at the previous year's level. We will continue to maintain a controlled pace of further organic

This brings me to our guidance for the current fiscal expansion. Therefore, we expect increased investment year. We made a successful start to the '26-'27 financial in the coming financial year. CapEx is likely to be year. We also saw a good customer response in the first significantly above the prior year level, and for sure, weeks of Q2 and expect to benefit from the selling days this will put some pressure on our free cash flow that were missing in Q1. At the same time, there exist compared to last year. many uncertainties. Challenges in logistics arising from the current geopolitical situation as well as rising raw Nevertheless, our operating cash flow remains solid. As material prices are expected to persist for the time long as this holds, investing in future growth being and continue to put pressure on margins. Also, opportunities justifies a somewhat lower free cash flow discussions on wage arrangements with trade unions in the current fiscal year. We continue to see significant are currently still ongoing in Germany. Based on the medium- and long-term growth potential in the home outcome, this might have an effect on personnel improvement sector. All in all, we are pleased with the expenses. results in the first quarter, and Q2 has started, and we are well prepared. We are doing our best to maintain

Against this backdrop, we remain prudent in our our positive momentum and continue delivering a forecasts and confirm the guidance issued in May. For strong performance. Just in line with our motto, there the HORNBACH Holding Group, we currently expect is always a job to be done. net sales to be at or slightly above the level of the prior

Antje Kelbert

Head of Investor Relations

Thank you for your valuable insights, Joanna. We are now happy to take your questions. In the interest of time, please limit yourself to 1 or 2 questions. Please state one question at a time. And now I hand over to our operator to explain the technicalities of our Q&A session. Please go ahead.

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HORNBACH Holding AG & Co. KGaA (XTRA:HBH) | Q1 2027 Earnings Call June 19, 2026

Question & Answer

Operator

[Operator Instructions] There is Mr. Maul. Mr. Maul? So we might move to another participant, Mr. Bosse.

Volker Bosse

Baader-Helvea Equity Research

Can you hear me?

Operator

Yes, we can hear you.

Volker Bosse

Baader-Helvea Equity Research

Perfect. Okay. Sorry. I would have 2 questions. You speak about cost increases in general, but you also mention negotiations with the trade unions, so also potential cost increases. Could you give us here an update? What kind of negotiations are currently running? And what kind of outcome do you expect from these trade unions negotiations and from the overall cost inflation trend, which we see, to get your view here?

And the second question would be on the 2 openings. Congratulations to the first opening in Q1. Where and when will be the mentioned 2 other openings in the year to come?

Joanna Kowalska

CFO & Member of the Mgmt., Board of HORNBACH Mgmt., AG

Volker, thank you very much for your question. Let me year with 4% nearly. And we -- yes, the prediction is start with the first one on personnel costs, the very difficult. development there. Personnel costs increased by 5.5% in the first quarter. And as I mentioned, there are some But to be honest, the cost increases are in line with negotiations in Germany. The situation is this: that the HORNBACH's strategy and the growth agenda. The negotiations start always once a year, and we never increase in expenses reflects 2 factors. The wage know how will be the outcome, yes. Therefore, it is very increases as always to keep pace with inflation, and difficult to make any clear statement on this matter. also the increase in head count, which is a natural

But of course, we plan with the increase and for the full consequence of our ongoing expansion program with

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HORNBACH Holding AG & Co. KGaA (XTRA:HBH) | Q1 2027 Earnings Call June 19, 2026 the opening new stores. And to be honest, I see we are ever, in the history. Our strategy to really invest in the investing in our employees, and this is really an asset people is, I think, very, very good. And -- but of course, of HORNBACH. Investing in employees is essential to we always are committed to finding the right balance expand our customer reach and to continue providing between investment in our people and maintaining the first-class service at every location. cost discipline. Therefore, also we -- yes, we are -- we monitor all costs and try to find efficiency gain going

And if you consider that we performed such as we forward. performed even in this strong competition, even in these challenging times, having the best quarter results

Volker Bosse

Baader-Helvea Equity Research

Yes. I do not complain about your strategy, and I see the reasons for investing. Just for a clarification, you mentioned you have 4% full year cost increases. This is on personnel costs or cost increases overall. And if you say in personnel costs, this includes also new employees, of course, on the back of the store expansions.

Joanna Kowalska

CFO & Member of the Mgmt., Board of HORNBACH Mgmt., AG

I mentioned the 4.4% increase. It relates only to the personnel costs.

Volker Bosse

Baader-Helvea Equity Research

And includes new employees as well, right?

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HORNBACH Holding AG & Co. KGaA (XTRA:HBH) | Q1 2027 Earnings Call June 19, 2026

Joanna Kowalska

CFO & Member of the Mgmt., Board of HORNBACH Mgmt., AG

Of course, this is total. And yes, this is a roughly prediction. [ Never know what ] it will come. And...

Volker Bosse

Baader-Helvea Equity Research

Would you say that overall cost inflation is also in the range by 4%, so exclude -- or including personnel, overall costs, so to say, OpEx in general? Is that a rough

Joanna Kowalska

CFO & Member of the Mgmt., Board of HORNBACH Mgmt., AG

It's difficult to say. To be honest, of course, as I Therefore yes. And Volker, you mentioned also the mentioned, we have also pressure in the gross margin, question, too, about other openings, yes. So we plan 2 logistic costs, and to make any prediction on the new openings. The first one is Vloeren in the increase of this cost or energy or -- it's very difficult. Netherlands, and the second one is Graz in Austria.

Yes, but 60% of our total costs are personnel costs.

Volker Bosse

Baader-Helvea Equity Research

When to come roughly? Summer, autumn or next year?

Joanna Kowalska

CFO & Member of the Mgmt., Board of HORNBACH Mgmt., AG

Yes. Both are planned for autumn this year.

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HORNBACH Holding AG & Co. KGaA (XTRA:HBH) | Q1 2027 Earnings Call June 19, 2026

Operator

So we move to another participant dialed in by phone,

Mr. Heider.

Michael Heider

Joh. Berenberg, Gossler & Co. KG, Research Division

It's Michael Heider from Berenberg Bank. [Foreign

Language]

Operator

Mr. Heider, in English, please.

Michael Heider

Joh. Berenberg, Gossler & Co. KG, Research Division

Yes. Okay. Sorry for that. I have 2, 3 questions, if I may. First one on CapEx. We had EUR 55 million, or you had EUR 55 million in the first quarter. Last year it was EUR 220 million. You say this year you expect significantly higher CapEx. I suppose that's in relation to the 2 more openings coming. But I mean, is there -- can you be a little bit more specific here after the first quarter? Yes, is my assumption right here that this is going to accelerate in the rest of the year? That would be my first question.

Then second question on the Baustoff Union, which saw a nice acceleration in growth, can you give us the reasons behind this? And then the last one, you touched upon it, but maybe you can elaborate a little bit more on the current pricing environment. Do you think we have reached the peak here now with the political situation currently? Or what is your expectation here?

Joanna Kowalska

CFO & Member of the Mgmt., Board of HORNBACH Mgmt., AG

Thank you, Michael, for your questions. So I'll start with this year -- we have in this year many opportunities the first one about the CapEx. Yes, the CapEx grew by and also many options to invest. Therefore, I

EUR 11 million, and it reflects the higher investment in announced that the CapEx will be at higher level than expansion. To your question, to be more specific on the last year. Let me answer -- and the second question that, unfortunately, I appreciate your interest in this was about topic. However, this is not information we disclose. And

I can only tell you our strategic growth strategy, yes. In

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HORNBACH Holding AG & Co. KGaA (XTRA:HBH) | Q1 2027 Earnings Call June 19, 2026

Michael Heider

Joh. Berenberg, Gossler & Co. KG, Research Division

Baustoff Union.

Joanna Kowalska

CFO & Member of the Mgmt., Board of HORNBACH Mgmt., AG

And here, we are really happy and very, very satisfied existing locations, and we are very happy having the with the development in this quarter. This is really situation now. And of course, the situation stays tense something which we, for a long time, waited for. And in the building sector. But yes, we hope that the next both driven by existing location plus the M&A months will develop as in the -- yes, in the same line transaction. Maybe you remember St. Wendel. We with the last month. We hope. We will see. bought a small store or location from Baustoff Union, but the most impact of the growth are coming from

Michael Heider

Joh. Berenberg, Gossler & Co. KG, Research Division

So is this related to increasing construction activity in the area or you gaining market share or something?

Joanna Kowalska

CFO & Member of the Mgmt., Board of HORNBACH Mgmt., AG

We see a little bit of recovery in the building sector.

Last year, we see that the permit -- how to say permit

Antje Kelbert

Head of Investor Relations

Building permit.

Joanna Kowalska

CFO & Member of the Mgmt., Board of HORNBACH Mgmt., AG

Building permits were rising, and it was last year. And your question three was the, yes, the current

Therefore, I think this is a result of that. Of course, good situation on the market and the price increases. Let me weather, yes. And yes, we have to see how the next answer in this way. The situation remains volatile. Of months will develop. course, supply chains from Asia continue to face extended lead times and higher container rates, and

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HORNBACH Holding AG & Co. KGaA (XTRA:HBH) | Q1 2027 Earnings Call June 19, 2026 more and more suppliers really are demanding higher prices nearly each day. And we are continuously in What we see is the increase in freight costs. And this negotiations with them. And not all claims are justified, affects not only HORNBACH directly, but also our but in some cases, we need to make concessions. suppliers. Therefore, yes, we -- the pressure on the gross margin is expected to continue in coming

What we value long-term supplier relationships, and it quarters at a similar level, I would say. Of course, yes, is important to us that our supply chain remains stable we all know the current situation is very volatile, and to provide our customers with everything they need. each day we have new news. But to be honest, yes, I

And to make some details on the price increases, this expect to -- that we will face the pressure on the gross preliminary affects all freight-intensive product margin and higher logistic costs and purchase prices. ranges, such as building materials, garden constructions materials as well as oil-based products.

And this is only a part of our product range.

Operator

So we move on to the next participant, [ Mr. Saripalli ].

So this seems not to be able for him, unfortunately. And we therefore get to Mr. Miro Zuzak.

Miro Zuzak

JMS Invest AG

Can you hear me?

Antje Kelbert

Head of Investor Relations

Yes, we can hear you.

Miro Zuzak

JMS Invest AG

I have a question regarding the reverse factoring program. So I see from -- I would like to understand how it works. I see from, basically, the balance sheet that you repaid EUR 149 million during the quarter, and I would like to understand against or how this is booked. Basically, what -- how -- whether this moves through the

P&L or how it moves through the P&L and the cash flow statement.

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HORNBACH Holding AG & Co. KGaA (XTRA:HBH) | Q1 2027 Earnings Call June 19, 2026

Antje Kelbert

Head of Investor Relations

Yes, so how to understand the reason of that? I think I think we've taken over a couple of times now to make this is a normal procedure. We see for the last couple of balanced cash flow situation. This is just to smoothen years, we are conducting this instrument. So in Q4, we our cash flow structures. And I think the booking will normally start with that. We are then fully repay in Q1. taken by Joanna.

So this is the pattern. In the end, it's to prolong our paying terms to industry standards. So it's a procedure.

Joanna Kowalska

CFO & Member of the Mgmt., Board of HORNBACH Mgmt., AG

So of course, the EUR 150 million from the last year was EUR 100 million of the reverse factoring, and now in recorded as a payables and when we repay this, we this year we had the EUR 150 million. And in the have this not on our balance sheet. This is a matter of current financial year, we plan to use it at the same cash, yes. But in the P&L, we only see the cost for this level. program, and the benefits of the program clearly exceed the costs. We had -- in the last year, we have

Miro Zuzak

JMS Invest AG

And sorry to ask it again. So if you repay the roughly EUR 150 million, what is -- basically it reduces your liability? Is it booked against cash? Or is it booked against another like balance sheet position against, I don't know, inventories or...

Joanna Kowalska

CFO & Member of the Mgmt., Board of HORNBACH Mgmt., AG

No, no. This is like payables to suppliers. Therefore, yes, terms, and have a little bit air to -- yes, to balance our with this instrument, we just postpone our payment season.

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HORNBACH Holding AG & Co. KGaA (XTRA:HBH) | Q1 2027 Earnings Call June 19, 2026

Miro Zuzak

JMS Invest AG

And the account would be payables?

Joanna Kowalska

CFO & Member of the Mgmt., Board of HORNBACH Mgmt., AG

Exactly. Exactly.

Operator

So due to the fact that we don't have any risen hands, I hand back over to Antje Kelbert.

Antje Kelbert

Head of Investor Relations

Okay. So thank you. Those who had some technical issues can always come back to us. So for those who were unable to unmute and post their questions, so we are here at the Investor Relations team, just come back to us. But the other questions, it looks like all those have been addressed now. And with that, also thank you for Joanna for her contribution today.

After the summer break, we will have already scheduled participation in several capital market events and conferences. And we look forward to engaging in personal conversations with many of you there. So you can also find an overview of the upcoming Investor Relations activities on our website. So as already said, if anything comes afterwards or you were not able to post your questions during the call, just don't hesitate to come back to the

Investor Relations team.

And all the others, thank you very much for your interest and time this morning. We hope to see you soon, and we wish you a great summertime. Thank you very much.

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HORNBACH Holding AG & Co. KGaA (XTRA:HBH) | Q1 2027 Earnings Call June 19, 2026

Disclaimer

Airtime Software AG, Germany is the publisher of this transcript.