Overview of group business development

METRO’s business development in the past financial year 2019/20 was markedly impacted by the Covid-19 pandemic and its consequences. After a successful start and positive operational development in Q1 and Q2 of 2019/20, government measures in relation to the Covid-19 pandemic had a noticeable negative impact on METRO’s business development, especially from mid-March to the beginning of May 2020. From the second half of Q3 2019/20, thanks to the continuous easing of government restrictions and the roll-out of numerous operational initiatives, business development improved continuously again. In Q4 2019/20, another strong trend improvement was achieved in all regions and business development was almost at the level of the . In this phase METRO benefited from the diversification of its business model and from its active positioning in the recovery phase of the business.

The individual segments of METRO are affected by the Covid-19 pandemic to varying degrees. The development is dependent on

  • the composition of the customer groups,
  • the duration of government restrictions, and
  • the extent of these measures in the respective countries.

The segments with a high and SCO sales share were able to counteract the decline in HoReCa sales through the positive sales development in these 2 customer groups. The sales growth in Russia (31% Traders, 55% SCO sales share in financial year 2019/20) and Eastern Europe (excluding Russia) (33% Traders, 36% SCO sales share in financial year 2019/20) developed positively overall, while Germany (13% Traders, 46% SCO sales share in financial year 2019/20) remained roughly at previous year’s level. In segments with a high HoReCa sales share and where government measures were more stringent, the restrictions imposed on restaurants and hotels had a greater impact on business development. This was particularly noticeable in Western Europe (excluding Germany), where the HoReCa sales share in financial year 2019/20 accounts for 60% with a country portfolio that was particularly affected by the restrictions in the reporting year, such as France, Italy, Spain and Portugal.

For financial year 2019/20, this results in a of −3.9%. The like-for-like sales development was positive in Russia and Eastern Europe (excluding Russia). Germany was roughly at previous year’s level. Western Europe (excluding Germany) and Asia experienced significantly negative like-for-like sales growth, mainly due to the effects of the Covid-19 pandemic. Sales in local currency declined by −4.0%. Negatively impacted by adverse currency developments, especially in Turkey and Russia as well as other countries in Eastern Europe and Asia, reported sales of METRO AG decreased by −5.4% to €25.6 billion.

The adjusted reached a total of €1,158 million in financial year 2019/20 (2018/19: €1,392 million). Government measures in the context of the Covid-19 pandemic had a negative impact on the majority of segments, especially in Western Europe. It was offset by cost savings (for example, in the course of the efficiency programme announced at the headquarters), improved earnings in logistics, licensing income from the partnership with Wumei and stable operating performance in Russia, Eastern Europe (excluding Russia) and Germany. of €47 million were incurred in financial year 2019/20 (2018/19: €0 million). They were exclusively incurred in the Others segment and relate in particular to the successful restructuring at the headquarters. The exchange rate developments of primarily the Russian and Turkish currencies had a negative impact on earnings. Adjusted for , the decrease was €−205 million (−15.1%) against the previous year.

Earnings contributions from real estate transactions amounted to €3 million (2018/19: €339 million). The EBITDA reached a total of €1,113 million (2018/19: €1,731 million).

€ million

2018/191

2019/20

Change

Sales

27,082

25,632

−5.4%

Adjusted EBITDA

1,392

1,158

−16.8%

Transformation costs

0

47

Earnings contributions from real estate transactions

339

3

−99.2%

EBITDA

1,731

1,113

−35.7%

EBIT

957

257

−73.1%

Investments

826

627

−24.1%

Stores

678

678

0.0%

Selling space (1,000 m2)

4,728

4,723

−0.1%

1

Adjustment of previous year due to full retrospective application of IFRS 16 (Leases).

The reconciliation from sales to like-for-like sales in local currency is shown in the following:

 

Continuing operations

 

€ million

2018/19

2019/20

Change

Total sales

27,082

25,632

−5.4%

Total sales in local currency1

26,691

25,632

−4.0%

Sales of stores that were not part of the like-for-like panel in 2019/202

85

73

Like-for-like sales in local currency

26,606

25,559

−3.9%

1

Sales in local currency of the previous year were calculated by converting reported sales of the previous year at the average exchange rate of the current financial year.

2

Not included in the like-for-like panel are, among others, new openings, stores in start-up phase, closures, service companies and major refurbishments.

Previous year
Period of 12 months relating to the financial year preceding the reporting year, usually cited as reference for statements in an annual report.
Glossary
HoReCa
Short for hotel, restaurant and catering businesses. The HoReCa segment is an important customer group for METRO.
Glossary
Traders
The term ‘Traders’ at METRO refers to the customer group of independent resellers such as operators of small grocery stores and kiosks, street food vendors, gas stations and wholesalers.
Glossary
Like-for-like sales growth
Term for sales growth in local currency on a comparable area or with respect to a comparable group of locations or merchandising concepts such as online retail and delivery. The figure only includes sales of locations with a comparable history of at least 1 year. Locations affected by openings, closures or significant refurbishments during the reporting period or comparison year are excluded.
Glossary
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation)
Profit or loss before interest result, income taxes, depreciation/amortisation/impairment losses/reversals of impairment losses on property, plant and equipment, intangible assets and investment properties. This key figure serves the purpose of comparing companies with accounting systems that follow different accounting rules.
Glossary
Transformation costs
Non-recurring expenses related to the focus on the wholesale business and the restructuring measures resulting from this realignment are presented separately in the financial reporting as transformation costs.
Glossary
Currency effects
Currency effects result from situations where the same amount of currency units is translated into another currency at differing exchange rates.
Glossary