Metro Group: continued growth path in Q3/2007

Duesseldorf / DE. (mg) Metro Group continued on its successful growth path in the Third Quarter. Compared to the prior year, the company increased sales by 10,8 percent to 15,7 billion Euro. This result was achieved despite the negative calendar effect due to one missing trading day. Excluding the acquisitions of Wal-Mart Germany and Geant in Poland, sales went up by 7,1 percent. During the period from January to September 2007, Metro Group generated 46 billion Euro in sales, which corresponds to a rise of 10,8 percent.

«In view of the good business trend during the first nine months we are raising our sales forecast to now over nine percent», said Thomas Unger, Chief Financial Officer of the Metro Group. «The growth driver continues to be our international business». Here, sales climbed 13,6 percent to 9,2 billion Euro during the Third Quarter. Excluding the acquisition of Geant in Poland international sales rose by 11,9 percent.

In Western Europe, sales grew by 4,1 percent during the Third Quarter. Metro Group achieved above-average growth in Eastern Europe and Asia where it recorded a plus in sales of 26,8 percent and 27 percent, respectively. Compared to the same period last year, the share of international sales in consolidated sales rose from 57,4 percent to 58,9 percent. In Germany, sales went up by 6,9 percent during the Third Quarter to reach 6,4 billion Euro. Despite the calendar effect, organic growth came in at 0,5 percent.

Earnings before interest, taxes, depreciation and amortization (EBITDA) during the Third Quarter increased by 12,1 percent to 643 million Euro. EBIT even improved by 14,8 percent to 323 million Euro.

Changes in German tax legislation, especially the corporate tax reform 2008, resulted in extraordinary, additional, non-cash effective tax expense of 160 million Euro. As a consequence, the earnings per share from continuing operations came in at minus 0,20 Euro. Adjusted for this special fiscal effect, the earnings per share in the Third Quarter came in at 0,29 Euro following 0,25 Euro during the same period one year earlier.

At the close of September, the Metro Group operated a total network of 2.401 locations.

Metro Cash + Carry distinctly raised EBIT

Metro Cash + Carry continued the positive trend of the first half of 2007 and raised its sales by 6.3 percent to 7,8 billion Euro during the Third Quarter. The international share in total sales increased to 82,6 percent.

The sales division recorded particularly high sales growth in Eastern Europe and Asia. In Eastern Europe, sales went up 16,9 percent during the Third Quarter. The high-revenue countries Russia, the Ukraine and Türkiye again contributed above-average growth rates. Also Asia and Africa saw sales grow by 17,6 percent. All Asian countries recorded double-digit growth rates. In Germany, sales receded slightly by 0,3 percent.

EBIT of Metro Cash + Carry improved distinctly during the Third Quarter, namely by 19,3 percent to 222 million Euro. Two Metro Cash + Carry stores were opened in the Ukraine and one each in Germany, Denmark, Russia and Vietnam. With store locations in 28 countries, Metro Cash + Carry is the most international sales division of the Metro Group and operates 592 locations.

Real completed the integration of Wal-Mart Germany

Third Quarter sales of the sales division Real rose by 24,1 percent to 2,9 billion Euro. Net of the acquisitions of Wal-Mart Germany and Geant in Poland, sales grew by 2,3 percent.

The business development was particularly successful in Eastern Europe, where sales went up by 90,6 percent. Even excluding the takeover of Geant in Poland, growth in Eastern Europe was extraordinarily high, coming in at 51,3 percent. The share of international sales in total sales climbed to 18,9 percent.

The integration of Wal-Mart Germany was completed by the end of September. From the 85 locations originally taken over, a total of 14 have in the meantime been disposed of. The remaining 71 stores will continue to be operated. From the network of existing Real stores, the concept conversion was further advanced also during the Third Quarter and ten hypermarkets were converted. At the end of the Third Quarter, 35 locations in total had been converted to the new concept.

Real´s EBIT during the Third Quarter came in at minus 75 million Euro following 41 million Euro during the same period one year earlier. The Third Quarter was also impacted by higher start-up losses resulting from the accelerated expansion in Eastern Europe.

At the end of September the store network comprised 679 locations, of which 601 in Germany (349 hypermarkets) and 78 in Eastern Europe.

Attention: The chapters «Media Markt and Saturn continued their fast-paced growth» and «Galeria Kaufhof with a positive EBIT already in the Third Quarter» of this report bakenet:eu has truncated. Interested parties find them here.


Metro Group will consistently pursue its profitable growth path. Based on the assessment of the general economic situation, the industry trend and the development of the sales divisions, the company anticipates a positive course of business for the year 2007.

In 2007, Metro Group now expects sales to grow by more than nine percent (original forecast: eight to nine percent) including the acquisition of Wal-Mart´s activities in Germany and Geant´s outlets in Poland. For the EBIT, Metro Group expects earnings to rise between six and eight percent. This forecast is based on EBIT totaling 1.910 million Euro adjusted for the effects of the repositioning of Real and the acquisitions of Wal-Mart Germany and Geant in Poland.

The investments into the existing store network, including conversion of the Wal-Mart locations to Real, as well as for the organic expansion will probably come in at around 2,5 billion Euro for 2007.

About: Metro Group is one of the most important international retailing companies. In 2006 the group reached sales of about 60 billion Euro. The company has a headcount of some 270.000 employees and operates about 2.400 outlets in 31 countries. The operating business is performed by the sales brands which operate independently in the market: Metro/Makro Cash + Carry – world market leader in cash + carry wholesale, Real hypermarkets and Extra supermarkets, Media Markt and Saturn – market leader in consumer electronics centers in Europe, and Galeria Kaufhof department stores.