METRO grows by 5% in Q1 2022/23 and continues growth trend despite cyber attack

Out-of-home consumption was stable with inflation continuing but slightly softening. In this market environment, the company successfully defended market share gains in the HoReCa business in Germany, France, Spain and Italy. At the same time, the cyberattack had a significant impact on the first quarter. All sales channels (store-based business, delivery and METRO MARKETS) and all segments except Russia contributed to the growth. Sales in local currency increased by 5.2% in Q1 2022/23, while reported sales increased by 6.6% to €8.1 billion (Q1 2021/22: €7.6 billion). Adjusted EBITDA was €465 million (Q1 2021/22: €521 million), earnings contributions from real estate transactions amounted to €207 million (Q1 2021/22: €3 million). In addition, an agreement was signed in December 2022 to sell the Indian business, which is expected to be completed in the first half of the calendar year 2023. The outlook for sales and adjusted EBITDA for financial year 2022/23 as well as the mid-term ambitions were confirmed.

‘Our growth momentum continues and, despite the cyberattack, we have consistently driven the implementation of the sCore strategy in the first quarter of the new financial year. METRO is growing in all channels and all segments except Russia, we defend market shares gained and the hospitality industry shows growing confidence for the current year. Moreover, we are observing strong progress on our strategic key performance indicators. In addition to the expansion of the delivery business and our strategic customer sales share, the own brand sales share rose strongly compared to the same period last year. With our own brand assortment, we offer our customers high-quality products with a strong price-performance value proposition in a time that is marked by high inflation. In line with our strategic priorities, we also sold our Indian business in December. This allows us to focus even more on growth within the remaining country portfolio’, says Dr Steffen Greubel, CEO of METRO AG.

Sales growth in almost all segments

In Germany, reported sales in Q1 2022/23 increased by 3.5%. The implementation of the sCore strategy and the associated introduction of a volume-based pricing system (‘Buy more, pay less’) made good progress. This was also reflected in the sales development with HoReCa customers. The HoReCa business performed well and METRO was able to defend the market shares gained. In Germany, adjusted EBITDA followed the sales development with €84 million (Q1 2021/22: €83 million) and a stable adjusted EBITDA was achieved.

The reported sales in segment West increased by 3.9%. The countries France, Italy and Spain, in particular, contributed to this. In addition, the delivery specialists Pro à Pro France, Pro a Pro Spain and Aviludo achieved 2-digit growth rates. The missing sales of the Belgian business, which was sold in June 2022, could be partly compensated by the first-time consolidation of AGM Markets in Austria since May 2022. The HoReCa business in France, Spain and Italy performed well and METRO was able to defend the market shares gained. Adjusted EBITDA dropped significantly to €173 million (Q1 2021/22: €202 million). Furthermore, expected cost inflation was already having an impact in some countries.

Supported by positive currency effects, reported sales in Russia increased by 11.3%. Sales in local currency declined significantly in Q1 2022/23 by -14.1%. The Russian war in Ukraine and the associated reluctance to buy had a negative impact. Furthermore, the cyberattack significantly impacted the business. Adjusted EBITDA in Russia decreased to €60 million (Q1 2021/22: €81 million). The currency-adjusted decline of €45 million followed the sales development.

Reported sales in segment East grew by 8.9%. The development of the Turkish and Ukrainian currencies had a counteracting effect. Almost all countries contributed to the positive development, mainly driven by the clearly positive development of the HoReCa business. Turkey recorded the highest sales growth, strongly supported by inflation. In Ukraine, sales developed more resiliently than expected despite the war and declined by 22.5% compared to the same quarter of the previous year, which was still unaffected by the war. In the segment East, adjusted EBITDA in principal also followed sales growth and increased in Q1 2022/23 to €146 million (Q1 2021/22: €140 million). Turkey, the Czech Republic and Classic Fine Foods in particular contributed to the good development. Adjusted for currency effects, adjusted EBITDA rose by €18 million in the segment East.

In the Others segment, sales increased by €31 million to €51 million (Q1 2021/22: €20 million) and includes METRO MARKETS sales of €21 million (Q1 2021/22: €15 million). This increase is attributable to the positive development in the digital business with strong growth of the marketplace in Germany, Spain, Italy and Portugal. Sales of the POS provider Eijsink and the Günther Group also contributed to the increase. Adjusted EBITDA was €–2 million and thus below the previous year (Q1 2021/22: €15 million). Adjusted EBITDA also benefited from the license earnings from the partnership with Wumei at the same level as in the previous year, which will continue to accrue until April 2023. The decline is attributable to the expiry of other post-transaction effects and further investments in digitalisation.

As of 31 December 2022, the store network comprised 628 stores, of which 524 were out-of-store (OOS)¹ locations, and 64 were depots. Due to the sale of the Indian business² the 31 Indian METRO stores are no longer included in the store network. Furthermore, two of the AGM locations, Klagenfurt and Bludenz, were divested due to antitrust requirements.

¹ Total volumes of METRO MARKETS platform (and third-party platforms) excluding VAT and after cancellations but before any deductions; includes disposal sales in full.

¹ Due to the sale of the Indian business (approval by the regulatory authority expected in the first half of the calendar year 2023), METRO India is no longer included in the country portfolio and the 31 Indian METRO stores are no longer included in the store network.
² OOS refers to the existing METRO store network and includes METRO stores that supply from the store as well as stores that operate their own depot in the store.

¹ OOS refers to the existing METRO store network and includes METRO stores that supply from the store as well as stores that operate their own depot in the store.
² Closing is expected in the first half calendar year 2023.

METRO is a leading international food wholesaler which specialises in serving the needs of hotels, restaurants, and caterers (HoReCa) as well as independent merchants (Traders). Around the world, METRO has approx. 17 million customers who benefit from the wholesale company’s unique multichannel mix: customers can purchase their goods in one of the large stores in their area as well as by delivery (Food Service Distribution, FSD) – all digitally supported and connected. In parallel, METRO MARKETS is being developed as an international online marketplace for the needs of professional customers which has been growing and expanding continuously since 2019. Acting sustainably is one of the company principles of METRO which has been listed in various sustainability indices and rankings for many years, including FTSE4Good, MSCI, CDP and the Dow Jones Sustainability Index. METRO operates in more than 30 countries and employs over 93,000 people worldwide. In financial year 2021/22, METRO generated sales of €29.8 billion. More information can be found at MPULSE.de, our online magazine.