Metro ends FY on positive note

Date : 15 December 2020

Keshia Beadle

Senior Retail Analyst

Germany-based Metro has ended its 2019/20 financial year on a positive trajectory after a challenging year that saw its major markets and customers impacted heavily by the COVID-19 pandemic.

Positive Q4 sees Metro gain market share

In its full year, Metro reported like-for-like sales contracted by 3.9%, which was at the upper end of its guidance range. The company said that ‘with the exception of Q3, which was impacted by COVID-19, Metro looks back on an overall robust FY 2019/20, in which the transformation to a pure wholesaler was completed’. Its performance improved in the second half of Q3, as restrictions were lifted, with this continuing into Q4. The results enable it to report a ‘significant’ gain in market share in its core business in Germany, France and Italy.

The numbers…

In its full year, Metro announced:

  • Reported sales fell, year-on-year, by 5.4% to €25.6 bn
  • Sales in local currency terms fell by 4.0%
  • Like-for-like sales contracted by 3.9%
  • Adjusted EBITDA fell by 16.8% to €1.16 bn

Eastern Europe and Russia help offset…

Metro’s performance in Germany saw it generate sales in line with its previous financial year, with like-for-likes down only 0.8%. The operation’s performance fluctuated strongly during the year, with H1 seeing sales ‘develop positively’, while Q3 suffered from the government-imposed restrictions. Q4 benefited from the market’s reopening, which led to a positive like-for-like sales growth to be reported.

In Russia, like-for-like sales for the full year stood at +3.8%, while total sales, in local currency terms, rose 4.2%. The company said its ‘strategic repositioning measures’, which had taken in the previous financial year, had generated positive results. It noted how ‘increased demand from Traders and SCO customer groups, the expansion of the Fasol trader franchise business and the growing ecommerce business were positive drivers’.

Russia’s performance was supported by a wider set of positive results across Eastern Europe. The region generated an increase in like-for-like sales of 2.2% for the full year, with sales ‘predominantly attributable to the performance in Ukraine, Turkey and Romania’. While restrictions imposed because of the COVID-19 pandemic affected HoReCa customers, the negative impact was offset by a positive performance with its Traders and SCO business.

…challenges elsewhere

In Western Europe, Metro reported like-for-like sales fell by 10.6% in the full year. Restaurant closures had a strong impact on its performance in France, Italy, Spain and at Pro à Pro. However, as restrictions were lifted the same markets saw an improved performance, which led to ‘clear signs of market share gains in France, Italy and Spain’. Finally, in Asia, like-for-like sales fell by 7.0%, which saw its operations in India and Japan impacted by the COVID-19 pandemic.

FY2020 / 21 outlook to remain clouded by COVID-19

As it looks forward to its 2020 / 21 financial year, Metro said its performance would continue to ‘be impacted by the development of the COVID-19 pandemic’. The challenge of forecasting how governments could restrict shoppers’ lives and how long or they could last for or how sever they might be meant it was difficult to determine their impact. As a result, Metro said it expects ‘ sales (both total sales and like-for-like) to be slightly below [its FY2019/20]. EBITDA adjusted is expected to decline by a mid-double-digit million euro amount’.