Metro Group's full year results conference today confirmed previously released figures for 2012, and gave a cautious but optimistic outlook for the year ahead.
Modest growth in 2012
Metro confirmed that total group revenues rose a modest 1.2%, reaching €66.7bn for the full year 2012. Operating profit fell by 16.7% to €1.98bn, in line with its revised guidance. Performance was mixed between markets and divisions, with Eastern Europe, Asia, and Africa being the regions driving growth. Sales in Asia and Africa grew by 26.2%, and by 4.8% in Eastern Europe. Western Europe remained problematic, with sales in this region down by 4.3% year on year. Meanwhile, in its domestic market of Germany, Metro managed slight growth of 0.6%.
Focusing on cash & carry
The cash & carry business performed well against last year, with sales growth of 1.6%, however profitability was less satisfactory, dropping by 17.5%. The announcement earlier this week that CEO Olaf Koch is to take on chief executive responsibility for Metro Cash & Carry underlines the importance of this as Metro's largest and most valuable division. Koch described it as a "unique business" with strong market shares in the markets it is present in, which it has strengthened through price investments. Despite the fall in profits, he claimed 2012 was a year of positive development, opening a record of 42 new stores. Plans for the year ahead include rolling out a new approach to category management and improving how the business manages its suppliers.
Investing in the future
The group invested in portfolio optimisation in 2012 - describing it as "a year of realignment". It also saw the business investing in operational cost efficiencies, private label development, and growing its multi-channel offering, and is already seeing sales growth as a result. Internet sales did particularly well in 2012, doubling year on year, which CFO Mark Frese attributed to the expansion of its multi-channel offer in Germany where online sales contributed 4% of domestic sales. Commenting on the outlook for the year ahead, Koch claimed to be optimistic - particularly about the opportunity for further expansion in high growth markets China, Russia and Turkey. He did however caution that the business is still facing a macro-economic headwind and, whilst it expects profits to increase this year, that will be dependent upon the economic climate.
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