German company Metro had a drop in sales of 3.6% in the second quarter, mainly due to the dire economic circumstances in Europe. On a comparable basis the group only lost half a percent: no wonder CEO Koch talks about a ‘positive business development’.
15.3 billion euro quarterly sales
The parent company of Metro, Makro, Media Markt and Saturn reports sales of 15.3 billion euro for the second quarter (-3.6%), while the EBIT dropped 12% to 276 million euro. That means the company does slightly better than was expected by analysts: they predicted sales of 15.26 billion euro and an EBIT of 269 million euro.
"The disposable income and purchasing power of our customers in nearly all European countries were still burdened by austerity measures", said Olaf Koch. "Nevertheless, we continued to significantly strengthen our balance sheet and achieved overall a positive business development.”
Through a strict cost policy Metro has even succeeded in boosting its net profits to 33 million euro. A year earlier the group had made a loss of 18 million euro, in the same period.
Cash & carry surprises, Media-Saturn disappoints
The cash & carry business (Metro, Makro), worth 45% of sales and by far the most important branch of the Metro Group, had a nice surprise in store: on a comparable basis the drop in sales in the second quarter was limited to 0.9%. In the first quarter that had been 1.7%. This means the EBIT was 241 million euro, more than the 222 million euro that was expected by analysts.
This ‘good’ news was overshadowed by the poor results of Media-Saturn: to compete with the online players, both chains are forced to lower their prices. As a result the online business of the branch has gone up significantly: +90% in the second quarter, +76% over the first six months.
Prognosis for 2013 retained
During the entire six months METRO Cash & Carry had sales of 14.8 billion euro (-2.9%), Media-Saturn 9.6 billion euro (+0.9%), REAL 5 billion euro (-6.2%) and Galeria Kaufhof 1.4 billion euro (-1.3%). That brings total sales for the first half of the year to 30.8 billion euro, about 2% less than the 31.5 billion euro of the previous year. Not including the results of recent divestments (Makro UK, REAL in Eastern Europe and Media Markt China) sales almost remained status-quo (+0.1%).
Metro is also retaining its prognosis for the – shortened – financial year 2013 (running from January to September) and is still counting on the operational result to be slightly higher than across the same nine months of last year, which was 706 million euro.