The weakness of the German economy has plagued companies for months, but the latest figures from one of the country's leading retail groups suggests that the green shoots of recovery could well be appearing.
Metro Group has today announced a 4.5 per cent increase in first half sales to €24.95 billion and forecast further growth for the year as a whole, a clear sign that one company, at least, believes that consumer spending will begin to rise again.
Excluding the impact of exchange rate fluctuations, sales for the six-month period would have been up 6.3 per cent, the company said. Metro also reported an increase in pre-tax profits (EBIT), which rose 6 per cent to €233.7 million, and in EBITDA, which increased 9 per cent to €868.2 million.
But while the company was clearly pleased with its performance, and with the likelihood of further sales growth for the year as a whole, it stressed that the difficult times were far from over.
"We are favourably positioned and are successful in our business in spite of the ongoing difficult general economic situation," said Dr. Hans-Joachim Körber, chairman and CEO of the company.
"This motivates us to raise our sales revenues forecast from around 5 per cent to at least 5.5 per cent growth, currency-adjusted. Moreover, we presume that the increase in earnings per share will be in the upper range of the forecast corridor of 6 to 10 per cent in fiscal year 2003. We are confident that the positive course of business will continue in the coming months."
Sales in Germany itself rose by 3.7 per cent during the half to €13.40 billion, while international revenues were ahead 5.4 per cent to €11.54 billion. At constant exchange rates, international sales growth would have been 9.5 per cent.
As a result of the increase, the company's international operations increased their share of total sales to 46.3 per cent in the first six months, an indication that the company will still have to cope with the vagaries of exchange rate fluctuations even if the German economy continues to strengthen.
Metro highlighted in particular good performances in France, Spain, Italy and the Netherlands, while performances in Russia, Bulgaria and Romania also showed positive developments.
The company now operates 2,328 outlets worldwide, including cash & carry, food retail, department stores and electrical goods stores. The latest outlet, a Metro Cash & Carry store, was opened earlier this week in Hanoi, Vietnam, the company's third store in a country where Metro plans to open eight stores.