METRO GROUP achieves record earnings of €2,415 million

22 March 2011

  • Sales of METRO GROUP rise 2.6% to €67.3 billion
  • EBIT before special items rose by 19.3% to €2.415 million
  • All sales divisions contribute to EBIT growth
  • Contribution of Shape 2012 to earnings since the start of the programme climbs to €527 million
  • Dividend increase of €0.17 to €1.35 per ordinary share proposed
  • 100 new store openings in 25 countries realised – more than 110 new locations planned for 2011

METRO GROUP closed the financial year 2010 with record earnings. EBIT before special items rose by 19.3% to €2.415 billion. The contribution to earnings of the efficiency- and value-enhancement programme Shape 2012 has climbed to €527 million since the start of the programme. "We have achieved record earnings during the greatest restructuring in the company's history and at the end of a severe economic crisis. At the half-time of Shape 2012 we can already say that we are now stronger than before the crisis", said Dr Eckhard Cordes, CEO of METRO AG. To let shareholders adequately participate in this success, an increased dividend of €1.35 per ordinary share will be proposed to the Annual General Meeting. 

Overview Financial Year 2010

Sales

Sales of METRO GROUP rose by 2.6% to €67.3 billion (in local currency: +0.9%) in financial year 2010. 

In Germany, sales adjusted for store disposals and divestments came in at the prior-year level. Before adjustment, sales dropped by 1.4% to €26.1 billion also due to poor weather conditions prevailing during the important Christmas business.  

International sales, by contrast, went up by 5.4% (in local currency: +2.5%). In Western Europe (excluding Germany), sales climbed by 2.8% to €21.5 billion (in local currency: +2.1%). In Eastern Europe, sales increased also on account of exchange rate effects by 7.1% to €16.9 billion (in local currency: +1.5%). Business in Asia/Africa showed a very gratifying development in financial year 2010. Sales climbed by 17.3% to €2.7 billion (in local currency: +12.9%). "This demonstrates that the international positioning of METRO GROUP has once again proven its worth", said Cordes.

EBIT before special items

EBIT before special items of METRO GROUP went up €391 million to €2,415 million. This corresponds to a rise of 19.3%. All sales divisions contributed to this result. 

Earnings development

The improvement of the financial result is mostly due to the increase in cumulative results from currency effects and valuation results from hedging transactions and hedging relationships. 

EBT before special items rose by 31.7% to €1.834 million. The special items related to Shape 2012 totalled €204 million.

The Group income tax rate was at 37.9% above the long-term targeted average of approximately 30-33%. The increase in taxes paid or due resulted largely from the positive earnings development during the reporting year. This resulted in an increase in tax payments in Eastern Europe, in particular.

The net profit for the period before special items went up €315 million to €1,139 million. This corresponds to a rise of 38.2%. After discounting the shares of minority shareholders, the net profit for the period before special items soared by 48.6% to €1,019 million.

The earnings per share before special items reached €3.12 after €2.10 in the prior year. 

The Management Board and the Supervisory Board propose to the Annual General Meeting on 6 May 2011 an increased dividend of €1.35 (2009: €1.18) per ordinary share and €1.485 (2009: €1.298) per preferred share for financial year 2010.

The net debt again dropped significantly by €246 million to €3.5 billion. Conversely, the equity ratio moved up from 18.0% to 18.4%. In the year 2010, METRO GROUP had an average workforce of 283,280 employees.

During the year under review, METRO GROUP generated 61.1% of its sales outside its home market. At €1.7 billion, investments were €166 million higher than one year earlier. The capex budget of €1.9 billion was not fully used. The capital efficiency was raised and smaller stores requiring lower construction cost were opened. The largest part of the investments was again used for the international expansion of Metro Cash & Carry and Media Markt, respectively Saturn. In total, METRO GROUP opened 100 new stores during the year under review of which 38 Metro Cash & Carry stores, two Real hypermarkets and 60 Media Markt and Saturn consumer electronics stores.

Key Financial Data 2010

Outlook

In the medium term, METRO GROUP expects a sales growth of more than 6% per year. For 2011 - assuming an overall economic recovery and a moderate price increase, in particular in the fields of energy and raw materials - sales are anticipated to grow by more than 4% adjusted for portfolio changes. 

In terms of earnings, measured as EBIT before special items, a growth of more than 10% per annum is anticipated for the medium term. Provided that the general economic conditions continue to improve further, METRO GROUP expects to be able to achieve a growth of EBIT before special items of around 10% in 2011. 

However, in view of the as yet incalculable effects of the disaster in Japan, the recent political developments in Northern Africa and the Middle East as well as the continued difficult financial situation in individual European countries also the risks for a deterioration of the economic environment have increased. Although Shape will make a positive contribution to earnings also this year, it cannot be excluded that market conditions might deteriorate and affect the targeted earnings momentum. 

New store openings

For 2011, an increased capex budget of €2.2 billion is planned. Metro Cash & Carry plans to open more than 40 new stores during the current year and will further step up this figure in the next few years. At Real, five new hypermarkets are planned for the present year and more than ten new locations per year in the medium term. Media Markt and Saturn will open at least 70 consumer electronics stores per annum. 

Sustainability

Our sustainability organisation, with the Sustainability Board, has taken root in 2010 and made significant progress. For example, our listing in the Dow Jones Sustainability World-Index improved. In addition, the rating agency Oekom research rated Metro shares for the first time as a Prime

recommendation for sustainable investors to buy. Furthermore, METRO GROUP joined the UN Global Compact, the United Nations network for corporate responsibility. 

Additional information

Sales Q4

Earnings Q4

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