METRO GROUP suspends negotiations about the sale of Galeria Kaufhof

17 January 2012

Group sales 2011 slightly below prior-year level 

  • Financial market conditions not optimal
  • Portfolio strategy remains unchanged
  • Group sales of METRO GROUP 2011 in line with expectations
  • International sales in local currency up by 0.4%
  • EBIT guidance 2011 confirmed: EBIT before special items expected to come in slightly below prior-year level of €2.4 billion

METRO GROUP has suspended talks with interested parties for the takeover of its department store subsidiary, Galeria Kaufhof. This move was taken in view of the not optimal situation on the financial markets: "The present situation on the capital markets does not offer suitable conditions for such an important transaction", said Olaf Koch, CEO of METRO AG. At the same time, the Düsseldorf-based retailing group presented its preliminary sales figures for financial year 2011. Group sales declined by 0.8% to €66.7 billion and were thus in line with expectations. In local currency, sales reached the prior-year level (-0.2%). "Despite a good finish, the Christmas business was disappointing overall. Our online business, by contrast, developed gratifyingly", continued Koch. "In this important growth segment we made significant progress in all sales divisions". Yesterday also saw the launch of the Media Markt online shop. 

Regarding the suspended sale negotiations for the department store subsidiary Galeria Kaufhof, Koch underlined: "We have always stressed that a sale must reflect the potential of Galeria Kaufhof. Currently, the earnings potential can be better tapped by us than by a sale." Therefore, METRO AG's Management Board decided to discontinue the divestment activities until further notice and work on further enhancing the value of Galeria Kaufhof. This decision will not change the existing portfolio strategy of METRO GROUP. 

With a view to the development of business in 2011, Koch continued: "The past year was strongly impaired by extraordinary developments. In particular the sovereign debt crisis, high unemployment rates and austerity programmes in many European countries have resulted in a buying restraint among the customers". 

In the 4th quarter 2011, sales of METRO GROUP declined by 1.3% to €19.5 billion due to the weak Christmas season (in local currency: -0.2%). In Germany, sales in financial year 2011 decreased by 1.0% to €25.9 billion. In the 4th quarter, sales declined by 0.3% to €7.8 billion. Sales in international operations receded by 0.7% in 2011 due to currency fluctuations. In local currency, by contrast, sales climbed by 0.4%. In the 4th quarter, international sales slipped 2.0% (in local currency: -0.2%). In Western Europe, sales for the full year 2011 fell 3.1% to €20.9 billion (in local currency: -3.6%). In the 4th quarter, sales went down by 4.2% (in local currency: -4.6%). In Eastern Europe, sales for the full year 2011 climbed by 0.4% to €17.0 billion. In local currency, sales growth of 3.4% was achieved. In the 4th quarter, sales dropped by 1.0%. In local currency, by contrast, sales were up by 4.3%. Sales in Asia/Africa continued their positive trend in financial year 2011 and soared by 11.3% to €3.0 billion (in local currency: +14.3%). In the 4th quarter, sales climbed by 10.8% (in local currency: +9.8%). 

Sales 2010
(€ billion)
2011
(€ billion)
Change Change in
local curr.
METRO GROUP 67.3 66.7 -0.8% -0.2%
Germany 26.1 25.9 -1.0% -1.0%
Western Europe (excl.
Germany)
21.5 20.9 -3.1% -3.6%
Eastern Europe 16.9 17.0 0.4% 3.4%
Asia/Africa 2.7 3.0 11.3% 14.3%
Sales Q4 2010
(€ billion)
Q4 2011
(€ billion)
Change Change in
local curr.
METRO GROUP 19.7 19.5 -1.3% -0.2%
Germany 7.8 7.8 -0.3% -0.3%
Western Europe (excl.
Germany)
6.3 6.0 -4.2% -4.6%
Eastern Europe 4.9 4.8 -1.0% 4.3%
Asia/Africa 0.7 0.8 10.8% 9.8%

METRO GROUP reiterates its EBIT guidance for financial year 2011. The Group continues to expect EBIT before special items slightly below the prior-year value of €2.4 billion. The financial statements for the year 2011 will be published on 20 March 2012. 

Metro Cash & Carry

In 2011, sales at Metro Cash & Carry grew by 0.2% to €31.2 billion (in local currency: +1.4%), whereby the delivery business continued to grow dynamically. Sales growth, however, was impaired year-on-year on account of the market exit from Morocco. In like-for-like terms, sales grew by 0.1%. In Q4, sales decreased slightly by 0.3%, but increased in local currency by 1.2%. 

In Germany, sales in the full year 2011 declined on account of store closures. In like-for-like terms, sales grew slightly in the full year as well as in Q4. 

Full year sales in Western Europe were down year-on-year as a result of the continuing difficult economic conditions. In Q4, sales developed slightly below the trend of the first nine months.  

In Eastern Europe, sales in the full year increased thanks to double-digit growth in Russia. In Q4, on the other hand, the region recorded a slight sales decline and was unable to keep up the pace of development seen in the first nine months. 

In Asia/Africa, the strong growth trend continued in financial year 2011. The Moroccan market exit was more than offset by strong sales growth in Asia. All countries recorded double-digit sales growth. In Q4, sales in the region again grew by a double-digit figure thanks to the strong development in China and Vietnam. 

Metro Cash & Carry 2010 2011 Q4 2010 Q4 2011
Sales (€ billion) 31.1 31.2 8.6 8.6
Change (€) 1.6% 0.2% 2.1% -0.3%
Change in local currency -0.6% 1.4% 0.0% 1.2%

Real

In 2011, sales at Real decreased by 2.3% to €11.2 billion (in local currency: -1.4%) also due to store disposals. Sales in Q4 declined by 3.9% to €3.1 billion (in local currency: -2.1%). Non-food in particular remained difficult and had a negative impact on the sales development. 

In Germany, sales in the full year declined, mainly on account of store disposals. Like-for-like sales were flat year-on-year. In Q4, Real was unable to continue the positive like-for-like sales development of the first nine months. Especially non-food sales were below last year's tough quarterly comparable.  

Sales in Eastern Europe declined in 2011 as a result of continuing consumer reticence in Poland and Romania. The sales development in Q4 was unable to match the trend of the first nine months. This deteriorating trend was primarily attributable to negative currency effects. Russia continued to report double-digit sales growth. 

Real 2010 2011 Q4 2010 Q4 2011
Sales (€ billion) 11.5 11.2 3.3 3.1
Change (€) 1.8% -2.3% 1.1% -3.9%
Change in local currency 0.2% -1.4% 0.0% -2.1%

Media-Saturn

Despite difficult economic conditions, sales at Media-Saturn declined by only 0.9% to €20.6 billion (in local currency: -1.0%) in the full year 2011. This sales decline also reflects the disposal of the French consumer electronics stores effective 30 June 2011. Redcoon, the online retailer that was acquired in March and consolidated as from Q3, contributed positively to sales. In Q4, sales were only slightly down year-on-year and comparatively, the sales development was better than in the first nine months. This improvement was supported, in particular, by noticeable like-for-like sales growth in Eastern Europe. 

In Germany, sales increased in 2011. The acquisition of Redcoon supported this growth. In addition, like-for-like sales grew again in Q4. Aside from Media Markt's new pricing strategy, which was very well received by customers, the successful launch of Saturn.de on 10 October 2011 contributed to this sales growth. 

Sales in Western Europe in the full year 2011 decreased considerably year-on-year as a result of the disposal of the French consumer electronics stores as well as the challenging market conditions. The online business, on the other hand, recorded strong growth rates. The sales development in Q4 remained below the trend of the first nine months.  

In Eastern Europe, on the other hand, Media-Saturn achieved sales growth in financial year 2011, with Russia and Turkey driving growth. In Q4, the sales development was also boosted by positive like-for-like growth. Russia as well as Poland and Hungary contributed to this growth. 

In Asia, sales continued to grow dynamically, both in the full year and in Q4. Seven stores were open in Shanghai at the end of the year.  

Media-Saturn 2010 2011 Q4 2010 Q4 2011
Sales (€ billion) 20.8 20.6 6.6 6.6
Change (€) 5.6% -0.9% 1.3% -0.5%
Change in local currency 4.3% -1.0% 0.1% -0.1%

Galeria Kaufhof

In 2011, sales at Galeria Kaufhof declined by 3.7% to €3.4 billion. The unseasonable weather conditions considerably impacted the sales of seasonal product lines. In addition, Galeria Kaufhof started to phase out the sale of low-margin technical goods, with the associated remodellings having a negative effect on the business development. In Belgium, sales developed significantly better and continued to grow in like-for-like terms. 

Sales at Galeria Kaufhof in Q4 were down year-on-year. Although the rally in the closing phase of the Christmas trading provided satisfactory results for hardware sales, it was unable to compensate for poor textile sales. 

Galeria Kaufhof 2010 2011 Q4 2010 Q4 2011
Sales (€ billion) 3.6 3.4 1.2 1.1
Change (€) 1.3% -3.7% 0.9% -4.6%

Store network development

  31 Dec
2010
New store
openings 2011
Closures/
disposals 2011
31 Dec
2011
Change
(absolute)
Metro Cash & Carry 701* +37** -10 728 +27
Real 429 +2 -5 426 -3
Media M. / Saturn 877 +57 -41 893 +16
Galeria Kaufhof 138 +4 -2 140 +2
Total 2,145 +100 -58 2,187 +42

* including 14 satellite stores
** including 11 satellite stores

Financial calendar

Annual Report 2011 Tuesday 20 March 2012 08:00 h
Quarterly Financial Report Q1 2012 Thursday 3 May 2012 07:15 h
Annual General Meeting Wednesday 23 May 2012 10:30 h
Half-Year Financial Report H1/Q2 2012 Tuesday 31 July 2012 07:15 h
Quarterly Financial Report 9M/Q3 2012 Tuesday 30 October 2012 07:15 h

All time specifications are Central European Time 

METRO GROUP is one of the largest and most international retailing companies. In 2010 the Group reached sales of around € 67 billion. The company has a headcount of some 283,000 employees and operates more than 2,100 stores in 33 countries. The Group's performance is based on the strength of its sales brands which operate independently in their respective market segment: Metro/Makro Cash & Carry - the international leader in self-service wholesale, Real hypermarkets, Media Markt and Saturn - European market leader in consumer electronics retailing, and Galeria Kaufhof department stores.