Germany's retail group Metro has reported first quarter figures which show a clear improvement on the same period a year earlier, despite difficulties from exchange rate fluctuations and the tough German economy.
The group announced sales revenues in the first quarter up 5.0 per cent to €12.1 billion on a constant currency basis, although like many of Europe's retailers with operations in several countries, it was affected by exchange rate fluctuations. On a reported basis, sales were up by a more modest 2.7 per cent.
The company said that the performance was all the more welcome because it had come against the previous year's first quarter which included the important Easter period, which traditionally boosts sales. Easter was in the second quarter this year, and should give new impetus to sales for that period.
Earnings before interest and tax (EBIT) climbed from losses of €5.9 million to profits of €22.2 million, despite a 55 per cent increase in capital expenditure on internationalisation and restructuring.
"The Metro group has had a good start to the year, demonstrating its ability to generate revenues and profits in the difficult trade environment," said Dr Hans-Joachim Körber, chairman and CEO of the company.
"Our sales divisions succeeded in substantially expanding their market position, and we can confirm our target of increasing sales revenues before currency effects by around 5 per cent."
In Germany itself, sales revenues rose by 3.3 per cent to €6.69 billion, while sales elsewhere rose by 1.9 per cent to €5.45 billion. Excluding the impact of negative currency effects, especially in Eastern Europe, the growth rate from the international business was 6.7 per cent.
Metro opened 17 new stores in the first quarter of 2003, taking its total number of outlets worldwide to 2,317. The focus of expansion was on the dynamic Metro Cash & Carry and Media Markt/Saturn (electronic goods) operations, which opened a total of 14 new stores.
The Metro Cash & Carry sales division boosted sales revenues by 1.8 per cent to €5.50 billion compared to the same period a year earlier, although the currency effects from Eastern Europe meant that this growth was less than hoped for. Sales from Eastern Europe were up just 1.9 per cent in actual terms, but by 12.9 per cent at constant currency level. The company said it was pleased with the performance of its newly opened stores in Russia and Croatia.
The performance of the Real hypermarket group was also good, with the division expanding its market leadership in Germany. However, Real's sales revenues in the first three months of the year decreased by 3.8 per cent to €1.91 billion (or by 1.7 per cent after adjusting for currency effects in Poland and Turkey). In Germany, which is in the grip of a recession, revenues declined by just 0.9 per cent despite the fact that the Easter business was not included in the figures, the company said.
The group's Extra supermarket unit also registered a decline in sales - 3.7 per cent to €680.9 million, although excluding the impact of Easter, this meant that sales were roughly in line with those in 2002, Metro said. The company has just announced a major restructuring of the Extra business, which divested eight stores during the first quarter.
At the group's non-food businesses, the Media Markt and Saturn operations lifted sales by 11.3 per cent to €2.35 billion, while the Praktiker DIY stores boosted revenues by 22.4 per cent to €705.9 million.