METRO AG - METRO Group

Against the background of
sluggish consumer demand,
Metro Wholesale generated
sales of DM 11 billion (down
1.4 percent), consolidating its
dominant earnings position.
Department Stores sales fell
by 1.7 percent to DM 11.5 billion
with the difficult environment
in this sector persisting,
although favorable profit levels
were achieved.
Taking into account declining
sales in southern Germany
owing to the continuing conversion
of stores to the Real
marketing concept, Hypermarkets
achieved virtually
unchanged sales of DM 10.7
billion. The disposal of small
supermarkets (Bolle, Schätzlein)
led to a 5.4-percent
decrease in sales to DM 7.9
billion in the Food Stores &
Discounters division. The
results were satisfactory in
general given the background
of absorbed restructuring
expenses.
Consumer Electronics Centers
saw sales climb strongly to
DM 7.6 billion (up 19.5 percent)
thanks to targeted expansion.
Even on a same-space basis,
sales increased by an appreciable
6.9 percent. Profit levels
were likewise encouraging.
Home Improvement Centers
recorded a sales growth of
5.5 percent to DM 4.3 billion,
further expanding their market
position in a highly competitive
sector. However, this division
fell well short of profit
expectations.
Inter alia owing to the closedown
of unprofitable stores,
sales at Furniture Centers
dropped by 13.1 percent to
DM 1.7 billion. Earnings suffered
from a recessionary
environment in this sector
and continuing expenditure
on restructuring.
Computer Centers achieved
a sales rise of 1.6 percent to
DM 3.1 billion in a market
characterized by fierce price
competition. Although failing
to fulfill earnings expectations,
the division did succeed in
gaining another lead over
competitors.
METRO AG
Management Report
Fashion Centers recorded a
heartening 4.0-percent rise in
sales to DM 1.4 billion. Adjusted
for nonrecurring costs
amounting to DM 42 million
for the transfer of the existing
logistics center, the division’s
result was good.
The income generated by
Metro service companies from
synergy projects has been
duly allocated to the annual
results achieved by the divisions,
all according to the
originator principle.
One of the METRO AG Group’s
fundamental strategic goals is
to expand abroad. Here, gross
sales of DM 3.0 billion, up
10.8 percent, were achieved,
the main sales markets being
Austria, France, Switzerland,
and Italy. Sales were recorded
for the first time in Poland
and the People’s Republic of
China, countries targeted for
strategic expansion.
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