Metro Group Q1: like-for-likes rise 2.3%

Date : 13 February 2019

Germany-based Metro has reported its first quarter results saying total sales fell by 0.6% to €8.0bn. Metro said in local currency terms sales had risen by 2.1%, with the fall in sales ‘due to the negative development of the Russian and Turkish currency’. However, the company was able to report that like-for-like sales had risen by 2.3% during the period, with it noting this was ‘mainly driven by Eastern Europe (excluding Russia) and Asia’.

Challenges in Germany and Russia overshadow results

Metro said in its home market total sales fell by 1.3%, which was affected by the closure of a store, while like-for-like sales contracted by 0.2%. In Western Europe (excluding Germany) Metro noted that total sales increased by 1.2%, while like-for-like sales rose by 1.0%, aided by a ‘ strong development in France, Italy and Spain’.

In Eastern Europe (excluding Russia) Metro was able to report that total sales, in local currency terms, grew by 6.3%, while like-for-like sales rose by 6.4%. The company said that in the region ‘almost all countries… contributed to this [result]’.

Metro said in the key country of Russia, total sales declined by 2.8%, in local currency terms, while like-for-like sales decreased by 2.4%. In volume terms, though, Metro said it had enjoyed an increase in sales of 3%. Despite the contractions, Metro said the results were positive and underlined how they had ‘benefited from an attractive pricing model as well as the expansion of the franchise format Fasol’.

In Asia, total sales, in local currency terms, rose by 6.9%, while like-for-like sales rose 5.9%. As part of the results announcement, Metro confirmed it was considering strategic options for its operations in China. It has been previously suggested that it could sell a majority stake in the business to a local company.

Real disposal continues against a weakening backdrop

Metro said its Real hypermarket business saw a slight decrease in like-for-like sales, by 0.6%, while total sales fell by 1.7%, affected by two temporary store closures. It also reported that its online business had shown ‘a dynamic development’, with its gross merchandise value rising by 65% to €171m.

Metro said it expected to complete the disposal of Real as a whole, standalone business within the next two to four months. Metro’s chief executive, Olaf Koch, said the disposal process was being challenged by competition regulations, but non-binding offers were expected soon, with a binding offer to come later.