During the first quarter of financial year 2013/14, METRO GROUP markedly boosted its EBIT to EUR 1,094 million from EUR 985 million in Q1 2012/13. EBIT before special items finished the period under review at EUR 1,073 million and, as forecast, below the level for the previous year’s period (EUR 1,273 million) mainly due to lower real estate income.
Adjusted for currency and portfolio effects, group sales rose by 1.1%.
“As expected, we generated more than half of our targeted full year EBIT in the important first quarter”, said Olaf Koch, Chairman of the Management Board at METRO AG.
Following the divestment of Real’s business operations in Russia, Romania and Ukraine, sales in Eastern Europe totalled EUR 4.6 billion, 10.8% below the previous year’s level.
Mainly as a result of the lack of income from real estate sales and the loss of earnings contributions from Real Eastern Europe, EBIT before special items totalled EUR 1,073 million compared with EUR 1,273 million during the previous year’s period. This figure also reflects negative currency effects resulting from the strong euro and the lower earnings of Media-Saturn. Earnings before taxes (EBT) rose during the first quarter of 2013/14 to EUR 944 million (Q1 2012/13: EUR 859 million). Before special items, earnings before taxes totalled €932 million
During the first quarter of 2013/14, sales of METRO Cash & Carry fell by 1.1% to EUR 8.5 billion due to strong currency effects. Measured in local currency, though, sales jumped by 2.2%. Overall, METRO Cash & Carry performed well, generating like-for-like sales growth of 0.9%.
In like-for-like terms, sales also did extremely well, climbing by 2.1%. In addition to Poland and Turkey, Russia remained a business driver in Eastern Europe and produced strong growth rates. In local currency terms, sales jumped by 11.4%. On a like-for-like basis, sales increased by 7.0%. The highest growth rates were achieved by China, India and Pakistan. During the first quarter of 2013/14, sales at Real decreased by 16.0% to EUR 2.6 billion. The primary cause of this decline was the divestment of Real in Russia, Romania and Ukraine.
In Germany, sales fell by 2.2% to EUR 2.2 billion. In addition to a comparatively strong quarter in the previous year, this decline was due to persistently strong competition, particularly by discounters. In addition, prices were lowered in the food business. During the first quarter of 2013/14, sales at Real in Eastern Europe decreased by 55.5%. The reason for this drop is that Real Ukraine, Real Russia and Real Romania have no longer been included in the consolidated financial statements of METRO GROUP since 1 March 2013, 1 April 2013 and 1 September 2013, respectively. With the conclusion of the divestment of Real Poland on 6 February 2014, the sale of Real Eastern Europe to Groupe Auchan has now been completed.
Above all, the lack of earnings contributions from sold Real Eastern Europe activities had a particularly negative impact. Adjusted for this effect, EBIT before special items rose considerably. This is due, in particular, to higher provisions in previous year, to reduced costs and a decrease in advertising expenditures.