German retail conglomerate Metro Group reports that it has successfully continued its transformation in financial year 2015/16 and met its sales and earnings targets, as the company posts better than expected fourth-quarter results ahead of splitting itself in two next year.
Group sales edge up while profit sees steady growth
For the year, underlying operating profit was up 3.2% to €1.56bn, underlying net profit grew by 5.7% to €727m, while sales grew by 0.4% to €58.4bn on a constant-currency basis (-1.4% reported). Like-for-like sales, meanwhile, edged up 0.2%.
Olaf Koch, Chairman of the Management Board, said the results show “that we are on the right track with our strategic focus”. For the current fiscal year, the group expects sales and underlying operating profit to continue growing.
Cash & Carry division expands its delivery business
The core Cash & Carry division saw sales decline by 2.3% to €29bn, hurt by currency fluctuations and some divestments, but they were up 0.4% on a constant-currency basis, while LFL sales grew by 0.6%.
At the same time, the sales line reached important milestones in the expansion of its delivery business. Sales in the delivery business increased by 17.9%, accounting for 12.8% of total sales. Newly acquired premium food supplier Rungis Express complements the delivery business of Metro Cash & Carry Germany, particularly in the area of fresh and ultra-fresh food.
Confirmed demerger of the food and electronics businesses
In March, the group announced it planned to list its wholesale & food and consumer-electronics business separately in a bid to boost sales growth and profits. It has confirmed now that the Metro Group Wholesale and Food Specialist Company will be called METRO, the Metro Group Consumer Electronics Company will be called CECONOMY. The two companies are set to present their strategies as independent entities.
"Two dynamic companies with the best positioning in their sectors will introduce themselves. Each of these companies has established a strong and future-proof strategic, operative and financial position - and as independent companies we will set our course for sustainable and healthy growth," said Olaf Koch, Chairman of the Management Board of METRO AG,