METRO continues to grow in Q3 2022/23 despite challenging economic conditions

• Sales development continues to be positive due to consistent implementation of the sCore strategy

– Currency- and portfolio-adjusted sales increase by 5.9%
– Sales in local currency increase by 2.5%, reported sales decrease by 3.4% to €7.6 billion (PY: €7.9 billion) due to negative currency and portfolio¹ effects
– Adjusted EBITDA reaches €332 million (Q3 2021/22: €441 million)

• Further growth of online marketplace and delivery business: METRO MARKETS sales increase to €36 million (+97.4%), delivery sales to €1.8 billion (+2.0%); sales in store-based business decline to €5.8 billion (–5.3%) due to currency and portfolio effects
• Sales growth in local currency in all segments except Russia
• Net profit for the period² amounts to €174 million in Q3 2022/23 (Q3 2021/22: €–290 million), earnings per share increase to €0.48 in Q3 2022/23 (Q3 2021/22: €–0.80); this includes €0.27 from the sale of the Indian business
• Outlook for FY 2022/23 is confirmed for the group

METRO continued its growth course and the consistent implementation of the sCore strategy in Q3 2022/23 as well. The past quarter was characterised by challenging economic conditions due to persistent inflation, rising costs and a decline in out-of-home consumption in Germany and western Europe in April and May due to weather conditions. In addition, the sales figures of the Indian business were only included until April 2023 following its sale. Overall, sales in local currency increased by 2.5%, while currency- and portfolio-adjusted sales increased by 5.9%. The growth was driven by the delivery business and METRO MARKETS as well as the East and West segments in particular, while sales in Russia declined. Reported sales declined by 3.4% to €7.6 billion due to negative currency effects (especially in Türkiye and Russia) and portfolio effects (in particular the sale of the Indian and Belgian businesses). Adjusted EBITDA reached €332 million (Q3 2021/22: €441 million). The decline is mainly due to the expiry of post-transaction effects (primarily Real) and licence revenues from the partnership with Wumei as well as the developments in Germany and further in Russia. The outlook for sales and adjusted EBITDA is confirmed for the financial year 2022/23 for the group; the mid-term ambitions are also confirmed.

“We continued our growth journey in Q3 2023 despite a challenging market environment as well as a strong quarter last year. We are growing both our delivery and digital businesses and are seeing good progress in the wholesale transformation of our stores. This includes optimising our assortment as well as expanding our volume-based pricing model ‘buy more, pay less’ and strengthening delivery out of stores. The goal is to further develop our stores into efficient warehouses and logistics platforms to ensure an optimal interaction between store-based business and delivery, as well as between stores and depots, and thus achieve our ambitious goals in the delivery business. Moreover, we are also seeing strong progress in the strategic key performance indicators: on the one hand, we were able to significantly expand our sales force and delivery infrastructure, while again significantly increasing the strategic customer share and digital sales share compared to the first half of the year on the other hand. This shows that we are on the right track with the sCore strategy implementation. We will continue to consistently pursue this path with a view to gaining further market shares and achieving our ambitions for 2030,” said Dr Steffen Greubel, CEO of METRO AG.

Sales and earnings growth by segment

In Germany, sales increased by 1.9% in Q3 2022/23. The HoReCa business was restrained in April and May due to the weather conditions. However, adjusted for inflation, the overall sales trend improved again in May and June. Market shares gained could be defended. Adjusted EBITDA decreased significantly to €35 million (Q3 2021/22: €64 million). This was due to the already-expected cost inflation, the year-on-year decline in the inflation rate and the weather-related restrained gastronomy business in April and May. In addition, there were continued investments in price positioning as well as selective adjustments to the assortment and stock.

In the West segment, sales increased by 1.6% in Q3 2022/23. France and Spain in particular, as well as the delivery specialists Pro à Pro France, Pro a Pro Spain and Aviludo, contributed to this with double-digit growth. Since May 2023, the sales of the Swedish delivery specialist JHB have also been included in these figures. Sales development with HoReCa customers was restrained due to the weather conditions. The HoReCa business in France, Spain and Italy developed well and market shares gained were defended. Adjusted EBITDA decreased slightly to €195 million (Q3 2021/22: €203 million). The expected actual cost inflation already had an impact. There were no significant transformation gains in total. EBITDA increased to €196 million (Q3 2021/22: €65 million), mainly driven by the absence of prior-year costs in connection with the sale of the Belgian business in the amount of €138 million.

In Russia, sales declined by 2.7% in local currency in Q3 2022/23. Reported sales decreased by 21.1% due to negative exchange rate effects and reached €0.6 billion. Adjusted EBITDA decreased to €37 million in Q3 2022/23 (Q3 2021/22: €54 million). Adjusted for exchange rate effects, adjusted EBITDA decreased by €8 million. The decrease is mainly due to the difficult macroeconomic environment and the associated decline in margins.

In the East segment, sales in Q3 2022/23 increased by 4.2% in local currency. Due to negative exchange rate effects, especially in Türkiye, reported sales decreased by 8.6%. In Q3 2022/23, adjusted EBITDA decreased to €89 million (Q3 2021/22: €108 million). Adjusted for exchange rate effects, adjusted EBITDA decreased by €8 million. Transformation gains of €149 million (Q3 2021/22: €0 million) were generated, in particular from the sale of the Indian business. EBITDA increased to €237 million (Q3 2021/22: €108 million).

In the Others segment, sales in Q3 2022/23 increased by €29 million to €60 million (Q3 2021/22: €31 million) and include in particular METRO MARKETS sales of €36 million (Q3 2021/22: €18 million). The increase is driven by the strong growth of the marketplace in Germany, Spain, Italy, Portugal and the Netherlands. The sales of POS provider Eijsink (first consolidation as of 31 March 2022) and Günther Group (first consolidation as of 1 August 2022) also contributed to the increase. In Q3 2022/23, adjusted EBITDA was €–23 million (Q3 2021/22: €10 million). The decline is due to the expiry of post-transaction effects (Real), further investments in digitalisation and IT and the expiry of license revenue from the partnership with Wumei. There were no significant transformation costs. In total, EBITDA decreased to €–26 million (Q3 2021/22: €11 million).

As of 30 June 2023, the store network comprised 628 locations, thereof 524 out-of-store (OOS) and 73 depots. Due to the sale of the Indian business, the 31 Indian METRO stores are no longer included in the store network. Furthermore, two of the AGM stores, in Klagenfurt and Bludenz respectively, were divested due to antitrust requirements. In Q3, the network was expanded by 8 depots: 5 depots from the acquisition of the delivery specialist JHB, 2 depots at the delivery specialist Classic Fine Foods and another depot in Spain.

¹ Japan, Myanmar, Belgium, JHB and India.
² Attributable to METRO shareholders.