Metro AG: Q1 results impacted by COVID-19

Date : 11 February 2021

Keshia Beadle

Senior Retail Analyst

Germany-based wholesaler Metro reported sales were down 11.2% in local currency terms, to €6.3 bn. The company said, despite its performance being affected strongly by COVID-19 restrictions in many of its markets, it had outperformed its peers in its core markets of Germany, France, and Italy.

Western Europe sees strongest effect from pandemic

Metro said its operations had performed better during the lockdowns in Q1, versus the one in the third quarter of its previous financial year. While its sales were down strongly in Western Germany (excluding Germany), its operations in Russia continued to show an improvement, with sales up by 6.3% in local currency terms. Metro said its performance in Russia in Q1 continued the ‘positive development for 4 quarters in a row’.

Sales to Traders rose, while HoReCa customers continued to be impacted

Metro reported sales to HoReCa customers ‘declined significantly in Q1’, while those to Traders, especially SCO customers, ‘developed positively’. In its home market, like-for-like sales fell by 4.5%, with the decline in HoReCa sales less severe than recently due to the ‘positive development of the SCO business’. Elsewhere in Western Europe, like-for-like sales declined by 23.7%. Restrictions implemented in France, Italy and Spain were noted to have particularly affected performance.

Russia enjoyed like-for-like sales growth of 6.6%, with sales growth ‘driven by the Trader and SCO customer groups’. Elsewhere in Central and Eastern Europe, exchange-rate adjusted sales declined by 3.5%. In local currency terms sales ‘developed positively in Ukraine and Turkey, but restrictions had a negative impact in Czech Republic and Poland.

Finally, in Asia, Metro reported that exchange-rate adjusted sales fell by 5.2%, with its operations in Japan particularly affected.

Metro’s co-chairman and CFO, Christian Baier, said:

As expected, our Q1 was impacted by the 2nd COVID-19 wave. METRO was well prepared for it, so the declines were less pronounced than in the 1st wave. Our core markets, such as Germany, France and Italy are still developing above market level and our growth in Russia is proving sustainable. This confirms our assumptions and we are preparing for a return to normality in our business, even though COVID-19 will still impact our business in the coming months.