METRO GROUP increases sales 2012 and confirms EBIT guidance

16 January 2013

  • Sales of METRO GROUP grew by 2.3% adjusted for the disposals of Makro UK and Saturn France
  • EBIT guidance for 2012 confirmed: EBIT before special items of around € 2 billion expected
  • Q4 sales of Media-Saturn in Germany grew by 3% like for like - online sales more than doubled
  • METRO GROUP will not continue engagement of Media Markt in China
  • Successful conclusion of real estate transaction in France

According to preliminary figures, METRO GROUP increased sales by 1.2% to € 66.7 billion in financial year 2012 (0.8% in local currency). Adjusted for the disposals of Makro UK and Saturn France, sales rose by 2.3%. "Despite tougher market conditions, especially in Southern Europe, we succeeded in increasing sales in the fourth quarter. Our goal is to continuously become more attractive for our customers and therefore increase our competitiveness. Here, we already made significant progress in 2012, in particular also owing to the extraordinary commitment of our employees in this challenging year", said Olaf Koch, Chairman of the Management Board of METRO AG. "The driving forces behind our customer-orientated business realignment have been the successful expansion of our delivery and multichannel activities, our product range and price positioning improvements as well as the further strengthening of our own brands. Upon this foundation, we shall continue to build".  

Financial year 2012 was marked by rising unemployment in Europe and increased measures toward consolidation among European governments to curb the sovereign debt crisis. The resulting consumer reticence had a negative impact on our business development. Taking into account these factors, the sales development was satisfactory, both in the full year and in Q4. Sales in all regions except Western Europe (excluding Germany) increased. "We succeeded in gaining shares in many markets", said Koch. "The most impressive development was that of Media-Saturn in Germany: Investments in the attractiveness of the store-based business together with the consequent development of the Internet presence led to the very positive sales momentum in the course of the year." 

METRO GROUP confirmed its 2012 EBIT before special items forecast of around €2 billion. This figure includes a success-fully concluded real estate transaction in France in Q4 2012. METRO GROUP continues to expect cash flow to improve considerably. As a result, net debt is expected to decline. 

In addition, METRO GROUP also decided to discontinue the business operations of Media-Saturn in China and set up the corresponding provisions in the balance sheet. This decision was prompted by the experiences and forecasts deriving from the two-year test phase that expired at the end of December. The way forward will now be determined together with the joint venture partner Foxconn Technology Group, with whom METRO GROUP jointly operates Media Markt China. "After carefully analysing all alternatives, we have decided not to continue our business activities", said Koch. "In order to keep METRO GROUP on target for success, it is essential for us to concentrate on those business units and markets where we can clearly sharpen our profile and build up a strong market position. We will further intensify our successful commitment to METRO Cash & Carry in China. The country is key and a promising market with good future prospects for our wholesale business". 

Sales development in financial year 2012

In Q4 2012, sales grew by 0.5% to €19.4 billion (in local currency: -0.5%). Excluding Makro UK, sales increased by 1.8%. Following a subdued start to the Christmas business, sales momentum increased significantly at the end of the year despite the negative calendar effect. Overall, Christmas trading was satisfactory, especially at Media-Saturn. In financial year 2012 METRO GROUP opened 97 stores in 17 countries, 57 thereof in Q4 2012. 

METRO GROUP 2011 2012 Q4 2011 Q4 2012

Sales (€ billion)

65.9 1

66.7

19.3

19.4

Change (€)

-0.9%

1.2%

-1.3%

0.5%

Change in local currency

-0.2%

0.8%

-0.1%

-0.5%

1 Since Q1 2012, METRO GROUP reports sales revenues from so-called commission transactions only in the amount of the commission it receives in its role as an agent. The goal is to achieve a better comparability with other retail companies, especially with a view to the EBIT margin. The gross profit and EBIT are not affected by the changed reporting. To ensure comparability, the sales proceeds for the full year 2011 were adjusted by € 0.8 billion. 

METRO Cash & Carry

In financial year 2012, sales at METRO Cash & Carry grew by 1.6% to €31.6 billion (in local currency: +0.7%). However, the exit from the UK market had a significantly negative impact on sales growth compared to the previous year’s period. Adjusted for the disposal of the 30 Makro stores in the United Kingdom sales grew by 3.2%, in Q4 even by 3.4%. The delivery business continued growing dynamically and amounted to €2.2 billion (2011: €1.6 billion). 

In Germany, sales in financial year 2012 decreased, particularly due to the optimisation of the store base (Q4 2011: 10 closures) as well as weaker non-food sales. 

Sales in Western Europe were negatively impacted by the disposal of Makro UK, in particular. The difficult economic environment in Southern Europe also led to sales decreases. This mainly affected the non-food business. This trend continued in Q4. 

Sales in Eastern Europe increased significantly in the financial year. The development in Russia, in particular, was very positive. Momentum increased further in Q4 with positive currency effects also becoming apparent. 

In Asia, the strong growth trend continued once again in financial year 2012. All countries recorded double-digit sales growth. The sales development in Q4 followed the positive trend in the previous quarter. With the exception of Vietnam, like-for-like sales increased significantly in all countries - by double-digit figures in some cases. In China 12 stores were opened. METRO Cash & Carry opened the highest number of stores in one year in one country in its entire history. 

METRO Cash & Carry 2011 2012 Q4 2011 Q4 2012

Sales (€ billion)

31.1

31.6

8.6

8.6

Change (€)

0.2%

1.6%

-0.3%

0.4%

Change in local currency

1.4%

0.7%

1.2%

-1.1%

Real

In financial year 2012, sales at Real were on par with the previous year's figure, amounting to €11.0 billion (in local currency: +0.1%). Sales in Q4 increased by 0.6% to €3.1 billion (in local currency: -0.3%). Sales in Germany were slightly up year-on-year despite store disposals. This trend increased in Q4 and Real profited from an higher demand for food in the Christmas business. 

In Eastern Europe, sales in local currency in financial year 2012 were on par with the previous year’s figure despite consumer reticence in Poland and Romania. The non-food business was difficult and prevented a better sales development. 

Real 2011 2012 Q4 2011 Q4 2012

Sales (€ billion)

11.0

11.0

3.1

3.1

Change (€)

-2.4%

-0.1%

-3.9%

0.6%

Change in local currency

-1.5%

0.1%

-2.1%

-0.3%

Media-Saturn

Financial year 2012 sales at Media-Saturn increased by 1.8% to €21.0 billion (in local currency: +1.5%) in despite of the continuing difficult economic conditions. Adjusted for the disposal of Saturn in France in the financial year 2011, sales grew significantly by as much as 2.9%. The acquisition of Redcoon also supported this growth. We more than doubled online sales to a total of €0.8 billion. Media-Saturn therefore generated almost 4% of total sales online, especially in Q4 Internet-generated sales momentum increased significantly. 

In Germany, sales developed extremely positively in financial year 2012. For the first time since 2009, Media-Saturn again reported like-for-like growth. In Q4, the Christmas trading significantly boosted sales despite a negative calendar effect. Like-for-like sales grew by more than 3%. At the same time Media-Saturn gained additional market share. The company succeeded in significantly improving the business trend in the course of the year. This progress was achieved by enhancing the attractiveness and competitiveness of the store-based retail operations and by the successful launch of the online shops. It showed that the investments into the price positioning and multichannel business are starting to pay off. 

Sales in Western Europe were down considerably year-on-year, both in financial year 2012 and Q4 2012. The negative effects created by VAT hikes, in particular, had a significantly negative impact on business. 

Sales in Eastern Europe increased dynamically in financial year 2012. Like-for-like sales were also up year-on-year. In Q4, sales at Media-Saturn also increased significantly, supported by positive currency effects. The key growth countries were once again Russia and Turkey. 

Media-Saturn 2011 2012 Q4 2011 Q4 2012

Sales (€ billion)

20.6

21.0

6.6

6.6

Change (€)

-0.9%

1.8%

-0.5%

1.3%

Change in local currency

-1.0%

1.5%

-0.1

0.6%

Galeria Kaufhof

In financial year 2012, sales at Galeria Kaufhof declined by 0.9% to €3.1 billion. The consumer electronics business has now been phased out in all stores in favour of higher-margin accessories, textile and shoe ranges. Textile ranges developed very positively in the financial year and Galeria Kaufhof managed to gain further market share. The online business was expanded further in financial year 2012 and developed very positively. At the close of financial year 2012, the product offering of Galeria Kaufhof’s online shop already comprised around 50,000 articles. The company succeeded in more than doubling its online sales. 

Galeria Kaufhof 2011 2012 Q4 2011 Q4 2012

Sales (€ billion)

3.1

3.1

1.0

1.0

Change (€)

-4.4%

-0.9%

-5.1%

-2.9%

Store network development

  31/12/ 2011 New Store Openings 2012 * Closures/ Disposals 2012 31/12/ 2012 Change (absolut)

METRO Cash & Carry

728

+46

-31

743

+15

Real

426

+2

-7

421

-5

Media-Saturn

893

+52

-3

942

+49

Galeria Kaufhof

140

+1

-4

137

-3

Total

2,187

+101

-45

2,243

+56

* incl. 4 METRO Cash & Carry stores in Pakistan (included in the store network as part of a joint venture) 

METRO GROUP is one of the largest and most international retailing companies. In 2012 the Group reached sales of around € 67 billion. The company has a headcount of over 280,000 employees and operates around 2,200 stores in 32 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.