Ceconomy, the parent company of Media Markt and Saturn, has achieved a tiny turnover growth in its previous financial year. Although net profit increased, no dividend will be paid next year as management wants to strengthen the company's equity.
Unfavourable exchange rates
Ceconomy achieved a total turnover of 21.46 billion euros in its 2018-2019 financial year, representing a slight increase of 0.2 %. Exchange rate effects impacted on the company, particularly in Eastern Europe. At constant exchange rates, the group would have recorded growth of 0.8 %. The strongest increase in turnover was seen in the DACH countries Austria, Germany and Switzerland (+ 1.2 %).
Online sales increased by 13.2 % to 2.9 billion euros: e-commerce now accounts for 13.7 % of the company's total turnover. The 'services & solutions' branch, which includes guarantees and repairs, also grew and now accounts for 7% of the total revenue.
Adjusted gross operating profit remained stable at 650 million euros. However, this profit figure also includes 186 million euros of restructuring costs and the costs related to replacing the management. Net profit meanwhile increased from 87 million euros to 158 million euros. Ceconomy managed to save on personnel costs, marketing and rent.
“2018/19 was a year of stabilisation", CEO Bernhard Düttmann said in a press release. "We attended to the fundamentals and laid the groundwork for the future. Now it is up to us to successfully complete our strategy process and actually implement the strategy." No dividend will be paid next year: in view of the heavy restructuring costs, the Board of Directors is preferring to strengthen the group's equity.