Despite the pandemic, the German Metro Group has met its targets. While turnover dropped by 3 %, profit went up 1 % to 1.17 billion euros. A strong second semester saved the day, after an abysmal performance in the first six months of the financial year.
Strong recovery
Total sales went down 3 % to 24.8 billion euros in Metro’s broken financial year 2020/21, which is a lot better than the negative evolution in its first half (in which sales fell by almost 12 %) led to expect. Sales fell in all major markets for the group (Germany, Western Europe, Russia, Eastern Europe and Asia) when converted to euros, but outside the eurozone this was due to very negative exchange rate effects: in local currencies, turnover rose by 3 % in Russia, 5 % in Eastern Europe and 3 % in Asia.
Adjusted ebitda rose sharply in Germany (+ 23 million euros), while falling even more in Russia (- 27 million). Globally, aebitda went up ever so slightly, from 1.16 billion to 1.17 billion euros. This growth was despite a huge growth of transformation costs to 65 million euros, the price for withdrawing from Japan and Myanmar.
Tobacco cuts growth
“In the past financial year, METRO has proven its resilience and demonstrated its growth potential. We have invested in our future growth so that we can emerge from the pandemic stronger”, CEO Steffen Greubel stated. As reasons for his optimism, he points to a strong growth in hospitality customers and in online sales.
The strong second semester allows Metro to forecast strong growth for its financial year 2021/22, in which sales should rise by 3 to 7 %. Growth in Western Europe (excluding Germany) should be even stronger, but growth in Metro’s home market would be cut short as the company plans to reduce its tobacco sales there.
