German wholesaler Metro has had a mixed first quarter of its financial year 2018/19. While turnover went up slightly (on a comparable basis), profit went down. Western Europe saw strong performances.
Investing in price levels
Turnover (on an absolute basis) dropped 0.6 % to 8.02 billion euros, due to adverse exchange rate fluctuations in Russia and Turkey, while on a comparable basis it went up 2.3 % as Eastern European activities (excluding Russia) performed strongly. France, Italy and Spain pushed Western European comparable turnover 1 % higher; German turnover suffered from store closures.
The adverse effect of the Russian rouble and the cost of investments in the same country pushed operational profit 6.4 % lower. The investments were necessary as Metro incurred some heavy losses of late on the Russian market. Its repositioning in the country is fueled by lower prices and huge volume discounts in order to lure more independent entrepreneurs to its stores.
CEO Olaf Koch thinks the results are "in line with expectations", and he is positive about the effect of measures taken in Russia and about the development of activities in Asia and Eastern Europe. He feels fine confirming the predictions for 2018/19, the CEO adds, but he refused to elaborate on the upcoming sale of supermarket chain Real.