Metro publishes disappointing net results

Worldwide turnover growth – except in Western Europe

Metro’s turnover went up 2.2% to 15.6 billion euro, despite the economic
crisis and very low consumer confidence that keeps Western European
consumers on tight budgets. Most of the growth was therefore achieved in
Asia and Africa (+15.2%) and Eastern Europe (+3.5%).

In Western Europe, Metro’s turnover decreased by 1.2%, while in its home
market Germany an excellent performance by the Cash & Carry
department led the group to a 1.6% growth. Media Markt and Saturn’s turn
towards online sales also pushed the sales figure in the right
direction.

Still, the rising turnover could not prevent that major investments –
price cuts and expansion costs for Media Markt and Saturn – drove
Metro’s operational result down from +142 million euro in last year’s
first quarter to -9 million now.

Employees to pay for poor results

To compensate these losses, Metro will reduce further investments this
year by 10% to 1.8 billion euro, and look for other ways to cut costs as
well. Analysts expect two important measures: redundancies in the
Düsseldorf headquarters and a (temporary) halt to the Indonesian
expansion plans.

As Metro will remain focused on Cash & Carry and Media Markt –
Saturn, its two other chains Kaufhof and Real will continue to lose
importance for the group. The group is still looking for interested
parties to take over either of them, but Koch realises that in the
current circumstances, finding one will not be easy.

For the rest of the year, Metro predicts sustainable growth in sales and profits.
Contrary to former CEO Eckhard Cordes, whose main objective was to limit
losses, the new chairman aims to raise turnover in existing stores
(like-for-like).