Adler shows an overall weak development at METRO

11 Aug '08

5 min read

METRO Group continued its profitable growth in the first six months of 2008. Group sales increased by 7.1% to €31.7 billion.

For the first time, METRO Group's international share of sales exceeded 60%. Sales in the second quarter grew by 6.9% to €16.1 billion.

"Overall METRO Group has achieved a successful first half-year. We managed to continue our strong growth in an increasing difficult economic environment.

Again the most important value and growth drivers have been Metro Cash & Carry as well as Media Markt and Saturn. But also Real shows improvements", said Dr. Eckhard Cordes, CEO of METRO Group. "The initiated measures show first results. Real is becoming more attractive for customers again."

In Germany, sales increased by 1.6% to €12.5 billion in the first half-year of 2008 (second quarter 2008: +2.3% to €6.2 billion). This sales growth was achieved despite the further streamlining of Real's store base as planned.

Adjusted for the disposals at Real, sales even grew by 3.0%. Thus, the positive development already seen in the first quarter accelerated in the second quarter.

Conversely, the Adler fashion stores showed an overall weak development in a very difficult textile market environment. Against this backdrop, the Management Board of METRO Group resolved to accelerate the disposal of Adler. In this context, Adler group has been devalued on the basis of a revised plan.

International sales grew by 11.1% to €19.2 billion in the first half-year 2008 (second quarter 2008: +10.1% to €9.8 billion). Sales in Western Europe (excluding Germany) grew by 4.1% to €9.8 billion.

Business in Eastern Europe continued to develop dynamically. In the first half-year sales grew notably by 20.0% to €8.3 billion. Also sales in Asia/Africa increased significantly by 15.8% to €1.0 billion.

Adjusted for currency effects, sales increased by 22.7%. Thereby, all countries showed like-for-like growth, also in the second quarter 2008.

Adjusted for special items, earnings before interest, tax, depreciation and amortisation (EBITDA) in the first half-year 2008 grew to €1,140 million. This corresponds to an increase of 7.2% compared to the same period in 2007.

With special items, EBITDA reached €874 million in the first half-year 2008 following €1,063 million in the same period prior year (second quarter 2008: €396 million following €621 million in the second quarter of 2007).

This included €203 million expenses resulting from the announced, and in the second quarter resolved, streamlining of Real's German store base (Real: €-223 million; Other Companies/Consolidation: €+20 million).

In addition, non-cash effective expenses in the segment Other Companies/Consolidation negatively affected EBITDA by €63 million due to Adler's revaluation.

EBIT in the first half-year 2008 amounted to €482 million, adjusted for special items. This corresponds to an increase of 10.2% compared to prior year.

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