The financial year 2021/22 was a special year for your company. In January 2022, we presented our sCore growth strategy with our targets until 2030. We are making great progress with the implementation. Thanks to our strong business development, we increased our sales and earnings outlook twice this year. We are wrapping up the financial year with record growth. For the coming year, we have again set our sights high: we will continue to invest in growth and capture further market share thanks to our attractive and resilient multichannel business model.
Growth is our priority. Why? The markets which we are active in are growing structurally and are highly fragmented. This offers an enormous opportunity for us. In this market environment our combination of wholesale stores, delivery service and online marketplace is unique – and above all highly attractive for the customer. The different channels fulfil different customer needs and that pays off: multichannel customers buy manifold more than monochannel customers. This is what we are counting on. With a clear focus on wholesale, intensive expansion of multichannel offers and significant investments in our infrastructure.
We reached many milestones in the past financial year. In the stores, we are forging ahead with the roll-out of an attractive, volume-based pricing policy (‘Buy more, pay less’). We continued to expand the sales team (>800 FTE added) and created delivery space (+13 Out-of-Store locations and +2 new depots). Our online marketplace METRO MARKETS has now also expanded into Italy and in October 2022 also to Portugal and is thus active in 4 countries. Last but not least, we are working towards our climate target by replacing refrigeration systems and switching to natural refrigerants. We have also optimised our portfolio through 3 strategic acquisitions in the delivery and digitalisation area and by divesting the loss-making business in Belgium. We successfully completed the wind-down of Japan and Myanmar, which began in 2020/21. Russia’s war in Ukraine and its impact on the global economy remains a significant challenge for all of us. We have acted prudently and responsibly in this crisis so far as ONE METRO and we will continue to do so.
Achieving the milestones above paid off: we were able to significantly increase our sales and EBITDA outlook in April and July. We ultimately achieved 21.4% sales growth1 and €204 million EBITDA growth11. All channels and all segments contributed to this achievement. We are in the upper half of the outlook range in terms of sales and EBITDA and have gained more market share. This development is also reflected in our sCore KPIs. We use these key figures to measure the implementation of our strategic goals. With the revised remuneration system for the Management Board, we decided that we want to be measured directly by the level of implementation of these goals in the future. In the past financial year, we have achieved quite a lot:
- Wholesale value proposition: 71% strategic customers sales share, 19% own-brand sales share (an all-time record), 95% stock availability
- Multichannel growth: 21% record FSD sales share, 9% digital sales share
Despite this very good performance, EPS declined to €−0.92. The significant operating profits were reduced by one-time and mainly non-cash postings related to the Russian war in Ukraine and the sale of the Belgian business. In accordance with our dividend policy, no dividend distribution is therefore foreseen. Without these one-time effects, we would have achieved positive EPS in the past financial year and thus significant growth compared to the previous year. This shows that METRO’s core business is resilient and well positioned for the current phase.
The motto for the coming financial year 2022/23 is ‘Here we go’. And we continue to forge ahead with great strides. The external developments around high inflation and energy price trends pose new challenges for us and our clients. However, the attractiveness of the sector and the advantages of the multichannel business model are not diminished. Quite the contrary. Right now, we are scoring points with reliably attractive prices in the wholesale stores, our own brands and close customer support from the sales force. Our digital solutions help our customers increase productivity and counteract the lack of personnel.
Investments and market share gains will therefore continue to be at the forefront next year, so that we can achieve our ambitious goals. The Management Board expects a total sales growth of 5% to 10% for financial year 2022/23. However, the operating performance is offset by rising costs – especially due to the temporary drastic increase in energy prices, the cyberattack and expiring income from business disposals. Accordingly, we expect a decline in adjusted EBITDA by €75 million to €225 million. However, this decline comes after an EBITDA increase of over €200 million in the previous year. In conclusion, we continue to expect a good development in line with our medium and long-term ambition.
None of this would be possible without the tireless efforts of our approximately 90,000 employees in 31 countries. We are working on sCore as ONE METRO with a great deal of motivation and commitment. Together, we will move our company forward and achieve the targets we have set for ourselves by 2030. We are doing what we do best – multichannel wholesale. Dear shareholders, we sincerely thank you for your support in achieving these goals.
Yours truly,
Dr Steffen Greubel
Chairman of the Management Board of METRO AG
1 Exchange rate-adjusted, without Japan and Myanmar, but with Aviludo and Pro a Pro Spain. Belgium incl. up to 31 May 2022.
