Sales at Galeria Kaufhof grow by 0.4%, METRO GROUP

17 Aug '10

4 min read

METRO GROUP reported a robust development of business during the first half of 2010. The retail company thus continued the positive trend from the first quarter: sales and earnings increased again in the second quarter.

"The economic recovery trend is consolidating; METRO GROUP is developing from a solid basis. Even if the crisis is not over yet, we see clear silver linings on the horizon in an increasing number of countries", says Dr Eckhard Cordes, CEO of METRO GROUP.

In an environment that continues to be challenging, METRO GROUP raised its H1 sales by 2.4% to €31.2 billion. Positive currency effects also contributed to this result. EBIT before special items during the first half of 2010 rose by €67 million to €470 million. The efficiency- and value-enhancement programme Shape 2012 contributed materially to this result. Against the backdrop of the robust business trend reported for the first half of 2010 METRO GROUP raises the capital expenditure budget for this year by €0.2 billion to €2.1 billion – coming back basically to the level before the crisis set in.

"The increase of the capital expenditure budget is a sign of our confidence: we are focusing more on growth and expansion again – the period of caution is over", says Cordes. The company had continued to expand strongly already during the first half of the year: the sales divisions Metro Cash & Carry, Real as well as Media Market and Saturn opened a total of 28 new stores.

All sales divisions contributed to the robust business development in the first half of 2010. In addition, the turnaround programmes at Real Germany and Metro Cash & Carry Germany resulted in positive effects. A strong sales growth was again reported by Media Markt and Saturn who continued to further extend their market leadership. Real showed clear sales and EBIT growth despite numerous price reduction rounds. Galeria Kaufhof and Metro Cash & Carry stood their ground in a challenging market environment. At the same time, the strength of the international positioning of METRO GROUP in different economic regions that allows for a balanced growth potential was demonstrated once again.

From January to June 2010, METRO GROUP generated sales of €31.2 billion (H1 2009: €30.5 billion). This corresponds to a 2.4% sales increase. The sales development in H1 was thereby supported by positive currency effects. However, price effects contributed only to a very small extent to the sales development in H1. In local currency, METRO GROUP's sales grew by 0.6%. The sales development in Q2 2010 was marked by the shift of the Easter business. Q1 benefited from the earlier timing of the Easter business; for that reason Q2 saw a contrary development. Nevertheless, METRO GROUP's sales increased in comparison to Q2 2009. Sales in Q2 2010 grew by 2.4% to €15.7 billion (Q2 2009: €15.3 billion).

Sales in Germany in H1 2010 were slightly below prior year's level, especially due to store disposals, and declined by 1.4% to €12.2 billion. Adjusted for store disposals and divestments, sales were only 0.3% below H1 2009. Q2 was materially characterised by the shift of the Easter business. In addition, the unusually cold weather conditions in April and May impaired the sales development in several categories.

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