Short cuts: Praktiker/Hornbach, Thermador, Portfolio transactions


Yesterday, Praktiker gave notice that also the “healthy” subsidiary Max Bahr is insolvent and will seek creditor protection. In my opinion this coul simply the following:

1. an even lower recovery for the Praktiker Bonds. I had read a couple of analysis where people thought that Max Bahr could be sold for hundreds of millions with the proceeds covering the bond partly. Under current circumstances, Praktiker Bond holders in my opinion would be lucky if they get even 5% of nominal back. There will be nothing left.

2. It will be much harder to keep Max Bahr as a fully functional competitive entity. So this improves the outlook a lot for the other DIY chains. If for instance Hornbach could get 10-20% of Praktikers business, this might turn into nice growth. I am therefore quite surprised that the Hornbach shares didn’t react on this news. I personally think that there is a good chance to see a “Schlecker” effect. Schlecker had a higher market share compared to Praktiker, but according to this article, competitors DM and Rossmann saw sales jumping +14 to +16%. A lot of this increase is sales per existing square meter, so I assume with a nice profitability.

I think Hornbach at the moment provides a good risk/return relationship. The had a rather bad last quarter due to the ugly weather. Based on personal observations, I assume that the made up for that in the current quarter plus tailwinds from the Praktiker bancruptcy make me positive about the shares.


Thermador issued half year numbers a few days ago, here and here.

Clearly, 2013 will be a difficult year for them. But as the already mentioned after Q1, Q2 was already relatively seen much better than Q1 (sales down -5.2% against 2012 vs. -8.7% in Q1). Profitability is clearly lower, but all in all I think they are still doing quite well. I would have hoped that the stock price might go down a little bit in order to add to my half position, but it seems not to be the case right now.

Portfolio transactions

I sold the second half of the Dart position today at ~2.45 GBP. On the other side, I am adding to Hornbach Baumarkt as I think there is a very good chance for a positive medium term surprise despite all the issues. I will increase from currently 3.7% of the portfolio to a “full” 5%.


  • Schnueffelnase

    It seems that Praktiker is not going to be shut down like Schlecker was:

  • Hi,

    I´m a Swede following youre great blog.
    Found this Austrian real estate company called Immofinanz through skagen founds monthly letter.
    With a pb ratio of 0,6 and real estates in wiena/berlin 50% and eastern europe 50%.
    The capital market day video here gives a good overview if intressted.
    Would be intressting hering youre thoughts about the value of the german austrian side.

    • Hi Andreas,

      thank you for your comment. Honestly, I do not know a lot about Immofinaz. I usually also don’t like real estate companies unless there is something “special”.

      P/B or a highly leveraged real estate portfolio is sometimes misleading as one could have seen with IVG. In such situations, I ould want to be higher up in the capital structure.

      Finally, corporate governance in Austria is sometimes questionable.

      So all in all, I do not see really any reason to look into this company.


      • Ok, the special thing in this case is that they are planing an IPO or a new listning in Frankfurt for the Austrian/German side 2014. With that 50% part being nerarly worth todays stockprice it should be a great upside.

  • Hi MMI,

    I agree with your opinion concerning Hornbach and added some shares after the publishing.

  • Forgot to say that despite this fact I totally agree with Hornbach beeing a good longterm investment with rock solid financials. By the way, why do you prefer HBM over HBH?

    • thanks for the comment. You are right, the effect will be smaller than Schlecker, but if they actually take over some good locations it might still be interesting.

      I prefer the Baumarkt shares. In general I like to be close to the operating assets…..

  • I think you might be overestimating the effect for Hornbach. I had the chance to talk to the management sometime ago on this toppic, and they were not too optimistic about this point seeing that Hornbach target group is quite different to that of Praktiker. Max Bahr has a more comparable target group; however, the majority of the locations of Max Bahr are in northern Germany where Hornbach’s presence is comparably weak. You should also consider that some suppliers will also run into financial distress in the wake of Praktier/Max Bahr which could lead to some supply shortage at Hornbach. Although I concur with the overall positive effect for the industry on a midterm perspective I think the Schlecker comparison is not a good proxy seeing that there are far more competitors in the DIY-Market.

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