German chains MediaMarkt and Saturn have seen their losses grow by 50 % and turnover stagnate, but owner Ceconomy believes the future is positive as transformation should bring rewards.
Minimal turnover growth
Ceconomy confirms its forecasts for the current fiscal year: no great results are expected, but the group says its reorganisation is going in the right direction, but further transformation is needed according to CEO Jörn Werner. Comparable quarterly turnover went up a tiny 0.2 % to 4.6 billion euros: successful marketing campaigns in Germany and Italy sent West- and South-European turnover up 1.3 %, despite 2018 being a very strong base of comparison as many people had bought new TV sets for the World Cup football.
The company's online turnover went up 1.7 %: the CEO notices that almost half (46 %) of all online orders are actually picked up in physical stores. A major contributor to the disappointment regarding the results was the company branch that sells insurances for new devices: its turnover went down 8.4 %.
New transformation plan
Ceconomy's EBIT fell tremendously from minus 30 million euros in 2018 to minus 45 million now, partly caused by 80 million euros the company had to pay for reorganisation costs. Net losses went down a bit, from 90 million last year to 62 million now. This however came also largely courtesy of a big one-off: the sale of its remaining shares in former parent company Metro.
At the end of the year, Ceconomy wants to announce a new transformation plan, after having reached agreements with the trade unions about hundreds of planned lay-offs.