Metro_Retailer_Presentation_Metro_Full_Presentation

nullRetailer Presentation Updated March 2010Retailer Presentation ContentsContentsRetailer Summary Strategy Management Structure Countries of Operation Financial Information Key Formats SWOT Where no source is provided, data and images are Source: IGD Metro: Summary Domestic Market: Germany Operating countries: 33 Turnover (2009): €65,529m Store Numbers: 2,127 Sales Area: 12,586,516 sqm Number of Formats: 4 Ownership: Public CEO: Dr Eckhard Cordes Metro: SummaryNote: All data excludes discontinued operations unless otherwise stated.Metro: Corporate StrategyMetro: Corporate StrategyMission Statement: “…dedicated to making a contribution to the further development of the retail industry on the national and international levels, while at the same time influencing innovations in the trade sector on a worldwide scale.” Priorities: Western Europe/Germany: Establish retail brands through concept enhancements and aggressive marketing. Bundling of upstream functions to reduce cost structures. Focus on the reduction of personnel costs. Utilisation of new technologies to optimise processes. Maintaining its leading position in Germany’s consumer electronics sector. Metro: Corporate StrategyMetro: Corporate StrategyEastern Europe Targeted expansion of Real and Media Markt. Adaptation of formats to local market requirements. Increased buying synergies between the cash & carry foreign subsidiaries. Focus on Human Resources to secure growth quality. Stepping up expansion in Russia, Ukraine and Romania.  International Expansion Strategy Organic growth is the preferred market entry. Partnerships are used where they provide clear added value. Cash & carry format generally used to enter a new market. Global ambitions for its Cash & Carry division; aims to capitalise on the growth opportunities in the emerging markets of Central Europe and Asia. Focus on Asia with store openings in China, Vietnam, India and Pakistan. Egypt is the next market Metro will open a new store in this year. Metro: TradingCurrent Priorities: Focus on Fresh produce in cash & carry and hypermarkets. Greater emphasis on quality and sourcing. Improve health & beauty offering in hypermarkets. Development of ‘ECO’ cash & carry store, aimed at foodservice sector. Sourcing: MGBI (Metro Group Buying International) was responsible historically for all procurement activities. The “Shape 2012” announcement included provision for this company to be broken up. The buying functions are to be fulfilled by each business stream individually. Until now, MGBI has been a cross-divisional service company, which bundles volumes for all banners and drives the introduction of new technologies and manages long-term relationships with all the major suppliers. At the end of 2009, the group structure had been decentralised. The cross-divisional service companies have been dissolved and each sales division has operational control of its activities. EDIINT: on-line data interchange for suppliers. Aims to reduce costs of value-added network connections. Metro: TradingMetro: Private Label StrategyMetro: Private Label Strategy Metro is pursuing a co-ordinated approach towards own brand development across its banners. In 2009, Metro C&C launched a new private label strategy with 6 labels. Metro manages its private label through its Metro E-Marketing internet platform. The system is not used for the actual purchase of the own brands, but for the organisation of the back-up processes for all of Metro’s PL suppliers. Food Labels: Real Tip - Value Real Quality - Standard Real Bio – Organic Real Select – Premium Non-Food: Activ (sportswear), Alaska (electrical), Budget (DIY), Car Jack (car), Faust (DIY), Fleurelle (gardening), Objekta (photographical), Sigma (office), Watson (audio) Cash & Carry: Aro – entry-level Horeca Select Rioba Fine Food Sigma H-LineMetro: Management BoardMetro: Management BoardDr. Eckhard Cordes Chairman & CEO Thomas Unger Vice Chairman of the Management BoardOlaf Koch Chief Financial OfficerFrans W.H. Muller CEO Metro C&C Asia / New MarketsJoël Saveuse CEO Metro C&C Europe /MENA CEO RealnullEurope (96.5% of sales) 2,052 stores Cash & Carry, Hypermarkets, Consumer Electronics, Department storesAfrica & Asia (3.5% of sales) 77 stores Cash & Carry Metro: Store Numbers by RegionMetro: Top Ten Operating Markets (2009)Metro: Top Ten Operating Markets (2009)Source: Retail Analysis Datacentre Key: C&C = Cash & Carry H = Hypermarkets CE = Consumer Electronics O= Other Market Shares – Metro GroupMarket Shares – Metro GroupSource: IGD Market Share. The methodology is detailed at the end of this presentation.Metro: Last Full Year: FY 2009 ResultsMetro: Last Full Year: FY 2009 ResultsFY 2009 Highlights: Group sales adjusted for currency effects increased by 0.2% in 2009. EBIT before special items reached €2.024 billion, beating market expectations. ‘Shape 2012’ has started to show positive effects: €208 million earnings contribution. 80 new store openings in 2009 despite worldwide economic downturnMetro: Five Year ReviewMetro: Five Year ReviewSource: Retail Analysis Datacentre*Extra was divested in July 2008. Metro restated its annual results to exclude Extra from 2007 onwards.Metro: Turnover €mMetro: Turnover €mMetro: % Segmented Turnover by Region (2009)Metro: % Segmented Turnover by Region (2009)Note: 2008 figures are shown in bracketsMetro: % Segmented Turnover by Store Format (2009)Note: 2008 figures are shown in brackets.Metro: % Segmented Turnover by Store Format (2009)1.5 (1.4)Metro: Operating Profit 2009 (EBIT)Metro: Operating Profit 2009 (EBIT)2,098Metro: Store Numbers Metro: Store Numbers Includes discontinued operations. 339 Praktiker stores divested in 2005. 245 Extra stores divested in 2007.Metro: Store Numbers By Format Metro: Store Numbers By Format Includes discontinued operations. DIY chain, Praktiker, divested in 2005. Extra supermarkets divested in 2007.nullMetro: Sales Space Includes discontinued operations. DIY chain, Praktiker, divested in 2005. Extra supermarkets divested in 2007. Source: Retail Analysis Datacentre estimates nullMetro: Sales Space By Format Estimated figures. Includes discontinued operations. DIY chain, Praktiker, divested in 2005. Extra supermarkets divested in 2007.Metro: Cash & CarryMetro: Cash & Carry668 outlets 33 markets Total Net Turnover (2009): €30,841mSource: Retail Analysis Datacentre. Top 5 Markets 2009Metro: Cash & CarryMetro: Cash & Carry Source: Retail Analysis photo galleryThree cash & carry formats: ECO: 2,500-3,000sqm. 14,000 SKUs. Main focus: catering trade, fresh food. Junior: Used for international expansion. 7,000-9,000sqm. 20,000 SKUs. Classic: Original store format. Over 10,000sqm. Standard design is ideal for promoting ongoing international expansion. Delivery services introduced in 2009 to some German stores. In 2010, the group started a new concept store trial for 5 stores in Germany with a re-modelled design and merchandising layout.Metro: HypermarketsMetro: Hypermarkets434 hypermarkets 6 markets Total Net Turnover (2009): €11,635m Entry into Ukraine planned in 2009Source: Retail Analysis Datacentre. Markets 2009Metro: Hypermarkets Metro: HypermarketsThe division has underperformed for a number of years; in 2009 sales declined by 2.9% due to negative currency effects. Building its brand and price perception amongst customer is a key focus for Metro in Germany In 2009 it re-launched its own label lines with clear good (Real Tip), better (Real Qualität), best (Real Select) segmentation Internationally, Metro is pursuing an aggressive programme of store openings in Russia and Romania. Building supply chain synergies with the cash & carry division in international markets is also on the agenda. The latest Future Store is a Real hypermarket opened in May 2008, featuring new technologies and innovations that may be extended to other stores.Metro: Consumer Electronics818 stores 17 markets (new market entry to China in 2010) Total Net Turnover (2009): €19,693mSource: Retail Analysis Datacentre. Top 5 MarketsMetro: Consumer ElectronicsMetro: Consumer Electronics Rapid programme of international expansion. Pursuing an accelerated organic growth programme in Europe and will have first store in China in 2010. Aggressive pricing and category dominance in Germany. The strategy of Media-Saturn has three main pillars: Flexible Stores: Metro has developed four store configurations which allow it to tailor its offer to the local market. Entrepreneurial management: strategic activities are pooled in the Media-Saturn holding company. Each store manager is joint-owner of the individual store. High Profile Brand Recognition: 98% brand recognition in the German market. Metro: Consumer ElectronicsMetro: Department Stores141 stores 2 markets Total Net Turnover (2009): €3,539mSource: Retail Analysis Datacentre. MarketsMetro: Department StoresMetro: Department Stores The Kaufhof chain is being developed into a stand alone entity with complete autonomy from the Metro Group. Once economic circumstances improve this will enable it to sold more readily. In March 2009 it announced the closure of 2 stores, with a further 2 under consideration. In 2009 despite the negative overall business development in the department store sector, Metro maintained its leading position in this market. Banner breakdown: Galeria Kaufhof (88 stores) Kaufhof (22 stores) Galeria Inno (15 stores – Belgium) Sportarena (13 stores) Volme Galerie (1 store) Carsch-Haus (1 store) Lust For Life (1 store) Metro: Department StoresMetro: SWOT AnalysisMetro: SWOT AnalysisIGD Market Share MethodologyIGD Market Share MethodologyIGD has a single, universal methodology to enable comparisons of market shares and consolidation levels between countries. It is calculated by comparing retailers’ sales from grocery formats with IGD’s grocery retail market size. IGD defines the grocery retail market as all food, drink and non-food products (e.g. health & beauty, pet care, clothing, DIY) sold through all retail outlets selling predominantly food in a given country. This definition includes both modern retail formats such supermarkets and hypermarkets, and traditional retail formats such as open air markets and traditional food stores such as bakers. However, it excludes Cash & Carry operations and drugstores/pharmacies and sales tax. IGD market sizes are ‘top down’, derived from national statistical bodies wherever possible. In all other cases, the figures published in this report represent IGD estimates and are based on a consistent methodology and knowledge of local markets. For each retailer, the turnover used is total sales from grocery format, and therefore excludes non-food formats (such as DIY, electrical stores, department stores etc). IGD also exclude Cash & Carry formats and drugstores/pharmacies from this measure, to ensure the data sources are comparable; 1.Retail turnover is excluding VAT 2.Retail turnover is excluding non-food formats (e.g. furniture, electrical stores etc) 3.Cash & Carry operations are excluded 4.Where known, we have subtracted the Cash & Carry operations of players such as Carrefour and Rewe to use a pure grocery retail estimate of turnover. IGD’s market shares differ from panel-based or till-roll markets shares (e.g. from ACNielsen, TNS or IRI) due to the different methodologies; the latter are based on limited categories/retailers.For More Information For More Information Visit the Metro hubpage on Retail Analysis. Use the IGD Datacentre for statistics on Metro’s operations by banner and format, plus macroeconomic data on its operating markets. Visit the photo archive and store visit reports for images of Metro. Got a MyReports subscription? Try checking our strategic reports. To find out how an IGD Customised Briefing can bring you up to speed on the market and the key players, email anne.bordier@igd.com Still can’t find what you’re looking for? Contact us igd@igd.com or 01923 857141.