FY16 RESULTS

German retailer Metro reported sales of €58.4 billion in FY16, down 1.4% from €59.2 billion in FY15, and slightly lower than the consensus estimate of €58.8 billion. Sales grew by 0.4% in local currency and comps grew by 0.2%. In 4Q16, sales declined by 0.5% to €14.2 billion. Sales increased slightly by 0.2% year over year in local currency and comps grew by 0.1%.

PERFORMANCE BY SEGMENT

 Metro Cash & Carry

This segment reported full-year sales of €29.0 billion, down 2.3% from €29.7 billion in FY15. Metro stated that the development of exchange rates, particularly the Russian ruble, and the sale of activities in Vietnam, negatively impacted reported growth in the segment. In local currency terms, sales growth was 0.4% and comps increased by 0.6%. In 4Q16, sales in this segment were €7.4 billion, with flat growth in reported currency terms and up 1.3% year over year in local currency, which the company attributed to the acquisitions of Rungis Express and Classic Fine Foods. Comps grew by 1.4%.

 Media-Saturn

Media-Saturn reported full-year sales of €21.9 billion, up0.6% from €21.7 billion in FY15. In local currency terms, sales growth was 1.6%. Comps increased slightly by 0.1%. In 4Q16, sales in this segment were €5.0 billion, down 1.0% in reported currency terms and down0.7% year over year in local currency. Comps fell by 2.0%. The company noted that online sales under the Media Markt and Saturn brands grew strongly (+35% year over year), but were offset by decreasing sales at Redcoon.

 Real

Real reported full-year sales of €7.5 billion, down 3.3% from €7.7 billion in FY15. Comps fell by 1.1%. In 4Q16, sales in this segment were €1.8 billion, down 1.6% from 4Q15. Comps grew by 0.3%. Metro noted that successful advertising campaigns helped improve sales during the quarter.

OUTLOOK

Olaf Koch, Chairman of Metro, noted that the company achieved its sales target in a somewhat challenging market environment, and reconfirmed the company’s guidance for EBIT before special items. Koch also stated that the breakout of the group into separate businesses, with one focusing on wholesale and food, while the second focuses on consumer electronics, was on track. Metro mentioned that it is well prepared for the coming Christmas season and anticipates a favorable market environment during the period.