Metro like for like sales rise in 1999 - Brief Article

Eurofood, Feb 17, 2000

German retailer Metro reported a 6.6% drop in consolidated net sales to DM85.65bn (??43.9bn) in 1999, reflecting a 4.7% decline to DM25.74bn in the fourth quarter (1998: DM27bn). However, adusted for the impact of acquisitions and divestments full year sales rose by 5.3% to DM83.625bn from DM79.298bn in 1998, while Q4 sales climbed 6.4%. One of the key divestments was that of Mercatone, the Italian non-food hypermarket sold last year. Metro decided to forfeit Mercatone's DM85 lm turnover in order to concentrate more closely on its core food and mixed retail activities, and it was largely that divestment which accounts for the unadjusted decline in sales. The group said that Christmas and millennium business was roughly in line with stated expectations, with both European cash & carry sales and German retail sales both showing robust growth rates.

INTERNATIONALISATION CONTINUES APACE

Metro reported 1999 operating profits up 19% to DM1.35bn with the overall group result more or less in line with expectations. Food retail profits were down on the previous year as a result of the cost of integrating Allkauf and Kriegbaum as well as higher foreign expansion costs. The share of turnover generated on foreign markets rose to 39.1% from 37.0% in 1998. Foreign sales rose by 12.2% to DM33.52bn. Sales in Poland, where Metro operates 18 cash & carry stores and 35 other outlets, rose by 19.1% to DM3.79bn. By the end of the year Metro was operating 394 stores in 20 countries in Europe (excluding Germany), China and Morocco

Sales through hypermarkets inched up 0.7% in the full year to DM15.6bn, despite a 2.1% decline in hypermarket sales in Germany to DM14.72bn. The Real hypermarkets posted a sales increase of 1.1% but inched down by approximately 0.1% on a like-for-like basis. Sales in the Allkauf and Kriegbaum hypermarkets were slightly down on 1998.

METRO 1998 foreign sales by country (DM m, net)

                           1998(1)      1999      % /-

Austria                      2 447     2 519        72
Belgium                      1 916     2 004        88
Bulgaria                         0       227       227
China                          431       945       514
Czech Republic                 630       898       268
Denmark                        464       464        -1
France                       5 030     5 293       264
Greece                         871       954        83
Hungary                      1 415     1 555       140
Italy                        3 787     4 156       369
Luxembourg                      62        54        -9
Morocco                        346       384        38
Netherlands                  2 128     2 299       171
Poland                       3 179     3 787       607
Portugal                     1 246     1 239        -7
Romania                        422       420        -2
Spain                        1 557     1 728       171
Switzerland                    477       822       345
Turkey                         766       907       141
United Kingdom               2 690     2 861       171

Total foreign sales         29 865    33 516     3 651
% of total sales              37.0      39.1

Source: Metro Notes: (1) Results post-restructuring (i.e. excluding sales generated by Divaco and Mercatone)

Metro, full year and Q4 net consolidated food retail sales(DM m)

                                      Full year

                       1998      1999      % /-(1)   % /-(2)

Total food            21 045    21 354       1.50     -1.80
Hypermarkets          15 498    15 603       0.70     -2.60
Germany               15 033    14 719      -2.10     -2.50
Rest of Europe           465       884      90.20     -6.00

Food stores            5 547     5 751       3.70      0.60
Adjustment(2)         -1 428    -1 587      11.20        --
Adjusted sales        19 617    19 767       0.80     -1.80

                                        Q4

                       1998      1999      % /-(1)   % /-(2)

Total food             5 954     5 956        0.0      -0.2
Hypermarkets           4 454     4 396       -1.3      -0.9
Germany                4 286     4 080       -4.8      -0.8
Rest of Europe           168       315       87.5      -5.0

Food stores            1 500     1 560        4.0       2.1
Adjustment(2)           -481      -448       -6.8        --
Adjusted sales         5 474     5 508        0.6      -0.2

Source: Metro Note: (1) Total change (2) Adjusted for divestments and acquisitions (3) Acquisition of Kriegbaum as at 01.03.98, adding 21 hypermarkets and 18 food stores.