.
- Group sales in Q3 up 10.8 percent to € 15.7 billion
- International business grows 13.6 percent to € 9.2 billion
- German operations stepped up sales by 6.9 percent
- EBIT up 14.8 percent to € 323 million in Third Quarter
METRO Group continued on its successful growth path in the Third Quarter. Compared to the prior year, the company increased sales by 10.8 percent to € 15.7 billion. This result was achieved despite the negative calendar effect due to one missing trading day. Excluding the acquisitions of Wal-Mart Germany and Géant in Poland, sales went up by 7.1 percent. During the period from January to September 2007, METRO Group generated € 46.0 billion in sales, which corresponds to a rise of 10.8 percent.
"In view of the good business trend during the first nine months we are raising our sales forecast to now over 9 percent", said Thomas Unger, Chief Financial Officer of the METRO Group. "The growth driver continues to be our international business." Here, sales climbed 13.6 percent to € 9.2 billion during the Third Quarter. Excluding the acquisition of Géant in Poland international sales rose by 11.9 percent.
In Western Europe, sales grew by 4.1 percent during the Third Quarter. METRO Group achieved above-average growth in Eastern Europe and Asia where it recorded a plus in sales of 26.8 percent and 27.0 percent, respectively. Compared to the same period last year, the share of international sales in consolidated sales rose from 57.4 percent to 58.9 percent. In Germany, sales went up by 6.9 percent during the Third Quarter to reach € 6.4 billion. Despite the calendar effect, organic growth came in at 0.5 percent.
Earnings before interest, taxes, depreciation and amortization (EBITDA) during the Third Quarter increased by 12.1 percent to € 643 million. EBIT even improved by 14.8 percent to € 323 million.
Changes in German tax legislation, especially the corporate tax reform 2008, resulted in extraordinary, additional, non-cash effective tax expense of € 160 million. As a consequence, the earnings per share from continuing operations came in at € -0.20. Adjusted for this special fiscal effect, the earnings per share in the Third Quarter came in at € 0.29 following € 0.25 during the same period one year earlier.At the close of September, the METRO Group operated a total network of 2,401 locations.
Metro Cash & Carry distinctly raised EBIT
Metro Cash & Carry continued the positive trend of the first half of 2007 and raised its sales by 6.3 percent to € 7.8 billion during the Third Quarter. The international share in total sales increased to 82.6 percent.
The sales division recorded particularly high sales growth in Eastern Europe and Asia. In Eastern Europe, sales went up 16.9 percent during the Third Quarter. The high-revenue countries Russia, the Ukraine and Turkey again contributed above-average growth rates. Also Asia and Africa saw sales grow by 17.6 percent. All Asian countries recorded double-digit growth rates. In Germany, sales receded slightly by 0.3 percent.
EBIT of Metro Cash & Carry improved distinctly during the Third Quarter, namely by 19.3 percent to € 222 million. Two Metro Cash & Carry stores were opened in the Ukraine and one each in Germany, Denmark, Russia and Vietnam. With store locations in 28 countries, Metro Cash & Carry is the most international sales division of the METRO Group and operates 592 locations.
Real completed the integration of Wal-Mart Germany
Third Quarter sales of the sales division Real rose by 24.1 percent to € 2.9 billion. Net of the acquisitions of Wal-Mart Germany and Géant in Poland, sales grew by 2.3 percent.
The business development was particularly successful in Eastern Europe, where sales went up by 90.6 percent. Even excluding the takeover of Géant in Poland, growth in Eastern Europe was extraordinarily high, coming in at 51.3 percent. The share of international sales in total sales climbed to 18.9 percent.
The integration of Wal-Mart Germany was completed by the end of September. From the 85 locations originally taken over, a total of 14 have in the meantime been disposed of. The remaining 71 stores will continue to be operated. From the network of existing Real stores, the concept conversion was further advanced also during the Third Quarter and ten hypermarkets were converted. At the end of the Third Quarter, 35 locations in total had been converted to the new concept.
Real’s EBIT during the Third Quarter came in at € -75 million following € -41 million during the same period one year earlier. The Third Quarter was also impacted by higher start-up losses resulting from the accelerated expansion in Eastern Europe. At the end of September the store network comprised 679 locations, of which 601 in Germany (349 hypermarkets) and 78 in Eastern Europe.
Media Markt and Saturn continued their fast-paced growth
Media Markt and Saturn continued their fast-paced growth in the Third Quarter and raised sales by 13.6 percent to € 3.9 billion. Also on a like-forlike basis, sales grew by 2.4 percent. In Eastern Europe, sales of Media Markt and Saturn soared by 53.4 percent. In Western Europe, sales climbed 14 percent. In particular Belgium and The Netherlands reported a continued, very dynamic growth. The German operations saw sales climb by 7.4 percent during the Third Quarter.
Despite high start-up costs in the new countries Russia, Turkey and Sweden, EBIT rose by 5.2 percent to € 126 million. In Istanbul, the first Media Markt in Turkey opened its gates on 25 September. At the end of September, the store network of Media Markt and Saturn included 658 electronics centers in now 15 countries, of which 349 in Germany, 242 in Western Europe and 67 in Eastern Europe.
Galeria Kaufhof with a positive EBIT already in the Third Quarter
Sales of the Galeria Kaufhof department stores receded only slightly by 1.9 percent to € 814 million. This is a positive development taken into consideration that one trading day was missing and that weather conditions in July and August were rather poor. In Belgium, sales increased 5.1 percent to € 77 million.
Typically, German department stores achieve a positive EBIT not until the Fourth Quarter; this notwithstanding, Galeria Kaufhof managed to generate a positive EBIT of € 4 million already in the Third Quarter.
Since 13 September, Galeria Kaufhof now also presents the "world class shopping" concept at its Hannover store located opposite the central station. Newly designed lifestyle worlds with a total selling space of around 27,000 square meters on six floors set new standards. In Berlin, one department store was closed during the Third Quarter. The department store network now comprises 141 locations of which 126 in Germany and 15 in Belgium.
Outlook
METRO Group will consistently pursue its profitable growth path. Based on the assessment of the general economic situation, the industry trend and the development of the sales divisions, the company anticipates a positive course of business for the year 2007.
In 2007, METRO Group now expects sales to grow by more than 9 percent (original forecast: 8 to 9 percent) including the acquisition of Wal-Mart’s activities in Germany and Géant’s outlets in Poland. For the EBIT, METRO Group expects earnings to rise between 6 and 8 percent. This forecast is based on EBIT totaling € 1,910 million adjusted for the effects of the repositioning of Real and the acquisitions of Wal-Mart Germany and Géant in Poland.
The investments into the existing store network, including conversion of the Wal-Mart locations to Real, as well as for the organic expansion will probably come in at around € 2.5 billion for 2007.
- Group sales in Q3 up 10.8 percent to € 15.7 billion
- International business grows 13.6 percent to € 9.2 billion
- German operations stepped up sales by 6.9 percent
- EBIT up 14.8 percent to € 323 million in Third Quarter
METRO Group continued on its successful growth path in the Third Quarter. Compared to the prior year, the company increased sales by 10.8 percent to € 15.7 billion. This result was achieved despite the negative calendar effect due to one missing trading day. Excluding the acquisitions of Wal-Mart Germany and Géant in Poland, sales went up by 7.1 percent. During the period from January to September 2007, METRO Group generated € 46.0 billion in sales, which corresponds to a rise of 10.8 percent.
"In view of the good business trend during the first nine months we are raising our sales forecast to now over 9 percent", said Thomas Unger, Chief Financial Officer of the METRO Group. "The growth driver continues to be our international business." Here, sales climbed 13.6 percent to € 9.2 billion during the Third Quarter. Excluding the acquisition of Géant in Poland international sales rose by 11.9 percent.
In Western Europe, sales grew by 4.1 percent during the Third Quarter. METRO Group achieved above-average growth in Eastern Europe and Asia where it recorded a plus in sales of 26.8 percent and 27.0 percent, respectively. Compared to the same period last year, the share of international sales in consolidated sales rose from 57.4 percent to 58.9 percent. In Germany, sales went up by 6.9 percent during the Third Quarter to reach € 6.4 billion. Despite the calendar effect, organic growth came in at 0.5 percent.
Earnings before interest, taxes, depreciation and amortization (EBITDA) during the Third Quarter increased by 12.1 percent to € 643 million. EBIT even improved by 14.8 percent to € 323 million.
Changes in German tax legislation, especially the corporate tax reform 2008, resulted in extraordinary, additional, non-cash effective tax expense of € 160 million. As a consequence, the earnings per share from continuing operations came in at € -0.20. Adjusted for this special fiscal effect, the earnings per share in the Third Quarter came in at € 0.29 following € 0.25 during the same period one year earlier.At the close of September, the METRO Group operated a total network of 2,401 locations.
Metro Cash & Carry distinctly raised EBIT
Metro Cash & Carry continued the positive trend of the first half of 2007 and raised its sales by 6.3 percent to € 7.8 billion during the Third Quarter. The international share in total sales increased to 82.6 percent.
The sales division recorded particularly high sales growth in Eastern Europe and Asia. In Eastern Europe, sales went up 16.9 percent during the Third Quarter. The high-revenue countries Russia, the Ukraine and Turkey again contributed above-average growth rates. Also Asia and Africa saw sales grow by 17.6 percent. All Asian countries recorded double-digit growth rates. In Germany, sales receded slightly by 0.3 percent.
EBIT of Metro Cash & Carry improved distinctly during the Third Quarter, namely by 19.3 percent to € 222 million. Two Metro Cash & Carry stores were opened in the Ukraine and one each in Germany, Denmark, Russia and Vietnam. With store locations in 28 countries, Metro Cash & Carry is the most international sales division of the METRO Group and operates 592 locations.
Real completed the integration of Wal-Mart Germany
Third Quarter sales of the sales division Real rose by 24.1 percent to € 2.9 billion. Net of the acquisitions of Wal-Mart Germany and Géant in Poland, sales grew by 2.3 percent.
The business development was particularly successful in Eastern Europe, where sales went up by 90.6 percent. Even excluding the takeover of Géant in Poland, growth in Eastern Europe was extraordinarily high, coming in at 51.3 percent. The share of international sales in total sales climbed to 18.9 percent.
The integration of Wal-Mart Germany was completed by the end of September. From the 85 locations originally taken over, a total of 14 have in the meantime been disposed of. The remaining 71 stores will continue to be operated. From the network of existing Real stores, the concept conversion was further advanced also during the Third Quarter and ten hypermarkets were converted. At the end of the Third Quarter, 35 locations in total had been converted to the new concept.
Real’s EBIT during the Third Quarter came in at € -75 million following € -41 million during the same period one year earlier. The Third Quarter was also impacted by higher start-up losses resulting from the accelerated expansion in Eastern Europe. At the end of September the store network comprised 679 locations, of which 601 in Germany (349 hypermarkets) and 78 in Eastern Europe.
Media Markt and Saturn continued their fast-paced growth
Media Markt and Saturn continued their fast-paced growth in the Third Quarter and raised sales by 13.6 percent to € 3.9 billion. Also on a like-forlike basis, sales grew by 2.4 percent. In Eastern Europe, sales of Media Markt and Saturn soared by 53.4 percent. In Western Europe, sales climbed 14 percent. In particular Belgium and The Netherlands reported a continued, very dynamic growth. The German operations saw sales climb by 7.4 percent during the Third Quarter.
Despite high start-up costs in the new countries Russia, Turkey and Sweden, EBIT rose by 5.2 percent to € 126 million. In Istanbul, the first Media Markt in Turkey opened its gates on 25 September. At the end of September, the store network of Media Markt and Saturn included 658 electronics centers in now 15 countries, of which 349 in Germany, 242 in Western Europe and 67 in Eastern Europe.
Galeria Kaufhof with a positive EBIT already in the Third Quarter
Sales of the Galeria Kaufhof department stores receded only slightly by 1.9 percent to € 814 million. This is a positive development taken into consideration that one trading day was missing and that weather conditions in July and August were rather poor. In Belgium, sales increased 5.1 percent to € 77 million.
Typically, German department stores achieve a positive EBIT not until the Fourth Quarter; this notwithstanding, Galeria Kaufhof managed to generate a positive EBIT of € 4 million already in the Third Quarter.
Since 13 September, Galeria Kaufhof now also presents the "world class shopping" concept at its Hannover store located opposite the central station. Newly designed lifestyle worlds with a total selling space of around 27,000 square meters on six floors set new standards. In Berlin, one department store was closed during the Third Quarter. The department store network now comprises 141 locations of which 126 in Germany and 15 in Belgium.
Outlook
METRO Group will consistently pursue its profitable growth path. Based on the assessment of the general economic situation, the industry trend and the development of the sales divisions, the company anticipates a positive course of business for the year 2007.
In 2007, METRO Group now expects sales to grow by more than 9 percent (original forecast: 8 to 9 percent) including the acquisition of Wal-Mart’s activities in Germany and Géant’s outlets in Poland. For the EBIT, METRO Group expects earnings to rise between 6 and 8 percent. This forecast is based on EBIT totaling € 1,910 million adjusted for the effects of the repositioning of Real and the acquisitions of Wal-Mart Germany and Géant in Poland.
The investments into the existing store network, including conversion of the Wal-Mart locations to Real, as well as for the organic expansion will probably come in at around € 2.5 billion for 2007.
