German retailer Metro net income down 7 percent in 2009 to $716 million

Metro 2009 net income falls 7 percent

FRANKFURT — German retailer Metro AG said Wednesday its 2009 net income fell 7 percent to euro519 million ($716 million) as the economic downturn cut into sales at most divisions, including its Kaufhof department stores and Cash & Carry wholesale outlets.

Metro, Germany’s biggest retail group, reported net income of euro558 million in 2008. Revenue for the period declined 4 percent to euro66 billion from euro68 billion in 2008.

The company, based in Duesseldorf, said it expects 2010 earnings before special items to significantly surpass 2009 levels.

In 2009, Metro reported earnings before taxes and special items of euro1.4 billion, 16 percent lower than 2008 levels, largely due to charges related to the company’s cost-savings program called Shape 2012.

Metro did not break out full fourth quarter figures, which is common for German companies when reporting for a full year.

“We have weathered the most severe economic crisis in 80 years. This is something the whole group can be proud of,” Eckhard Cordes, Metro’s chief executive, said in the report.

“The comprehensive reorganization of the group bore fruit,” he said, adding that Metro is proposing an unchanged dividend of euro1.18 for the year.

The company saw revenue decline for the year at all divisions except its Media Markt and Saturn electronics and appliance stores. At the electronics stores, the company reported a near 4 percent increase in revenue for the year to almost euro20 billion.

Revenue at Cash & Carry wholesale stores fell almost 8 percent to euro31 billion. The Real branded supermarkets saw a near 3 percent decline to euro11.3 billion, while Galeria Kaufhof department stores saw a 2 percent drop to euro3.5 billion.

Metro said international revenues for the group were negatively affected by currency effects, especially in eastern Europe. Sales internationally declined nearly 6 percent to euro39 billion. Eastern Europe’s revenue alone declined by 13 percent.

Western European revenues were nearly stable year-on-year at euro21 billion. Meanwhile, African and Asian revenue increased by almost 5 percent to euro2.3 billion.

Analysts have said the company appears to be making good progress with efficiency measures it started in early 2009 and which have contributed euro208 million to last year’s earnings.

The savings and productivity program, for example, shifted purchasing to unit companies, giving the units more operating responsibility.

Metro has said it wants to achieve annual cost savings of euro1.5 billion through the program by 2012.

The results and outlook sent shares of Metro 2.3 percent higher to euro40.04 in Frankfurt morning trading.

On the Net:

www.metrogroup.de