2010 business year: REWE Group increases turnover to 53 billion euros

Köln, 25.05.11

Turnover increase of 5 per cent in the first four months of 2011

Record turnover in Germany with 36.5 billion euros (+4.2%)

Foreign turnover rises by 3.5 per cent to 16.6 billion euros

Number of employees grows by 3.1 per cent to 336,000

Number of trainees increases by 3.6 per cent to 7,560

Independent retail trade in Germany grows by 6 per cent

REWE Combine increases turnover by 3.4 per cent to 39 billion euros

Discount stores increase turnover by 0.3 per cent to more than 10 billion euros

National full-range store segment grows by 6.5 per cent to 14.5 billion euros

International full-range store segment increases 1.2 per cent to 9 billion euros

National specialist store segment increases turnover to 2.5 billion euros (+5.6%)

Tourism: invoiced sales grow by 4.3 per cent to 4.3 billion euro

REWE Combine increases turnover in the first four months of 2011 by 5 per cent During the business year 2010, the REWE Group achieved the highest turnover in its more than 80-year history, generating total foreign turnover in excess of 53 billion euros. This corresponds to an increase of 4 per cent compared to the previous year. Whereas the retail trade sector in Germany grew by just under 2 per cent, the cooperative consortium experienced a 4.2 per cent increase in turnover, up to 36.5 billion euros, in its domestic market. As a result, the Cologne-based trade and tourism company managed once again to outperform the overall market by a clear margin. Foreign turnover rose by 3.5 per cent to 16.6 billion euros.

“In 2010, the REWE Group once again impressively demonstrated its operational capacities. Consequently, we firmly reinforced our position as one of the leading trade and tourism companies in Germany and Europe. The critical optimism with which we planned for the 2010 business year was confirmed as a whole. Even under challenging overall economic conditions, we are convincing our international and domestic customers with our sales formats, products and services, and we are also acquiring new customers. That is the very solid basis for our profitable growth during the previous business year and also in future”, commented Alain Caparros, CEO of the REWE Group, today (24 May) in Cologne where the Group presented its annual results.

The number of stores supplied in Germany and 15 other countries under the umbrella of the Group is 15,571, a total that remains nearly unchanged (+0.8% compared to 2009). The same goes for Germany: The network of stores there totals 10,899 (+0.1%).

The number of employees in Europe grew to 335,992, a 3.1 per cent increase compared to 2009. That figure includes 224,039 employees in Germany (+2.2%) and 111,953 in other European countries (+4.9%). As a result, the REWE Group is one of the largest employers in Europe. The company is also very committed to the training of young people. In Germany alone in 2010, 7,562 young people embarking on their careers completed a training programme with the trade and tourism group. This corresponds to a 3.6 per cent increase compared to the previous year.

Independent retail trade under the umbrella of the REWE Group also clearly outperformed the sector as a whole. Its turnover in Europe increased by 5.6 per cent to 9.4 billion euros. The number of stores supplied in Europe fell slightly to 6,132 locations (-0.5%). In Germany, independent traders achieved an even greater increase in turnover compared to the previous year: a 6 per cent rise to around 9 billion euros. The number of stores supplied (5,592) more or less held firm at the 2009 level (-0.1%).

“Independent traders represent the core of the cooperative REWE Group. Our partners are very successful due to their impressive capacities, innovative strength and, particularly, their proximity to customers. That is how they managed to significantly increase both turnover and results during the 2010 business year”, said Alain Caparros.

The REWE Combine – not taking into account at-equity companies, investments and independent retail trade – increased turnover in 2010 by 3.4 per cent to roughly 39 billion euros.

The earnings before interest, taxes, depreciation and amortisation (EBITDA) in the 2010 business year were around 1.3 billion euros.

Earnings before interest, taxes and amortisation expenses (EBITA), including the relinquished business operation, amounted to 514 million euros.
EBITA for continuing operations was 502 million euros. This EBITA, according to international reporting standards (IFRS), takes non-cash-effective provisions for debited amounts and asset impairments totalling 136 million euros into account. Without these erratic items EBITA is 638 million euros.

Cash flow from operating activities was around 953 million euros, and therefore down from the previous year’s amount (-2.5%). Overall, the REWE Group invested 1.2 billion euros in fixed assets and acquisitions during the past year.

“We remained true to our conservative financial strategy in 2010 as well. The success of this strategy is reflected not least of all in our balance sheet. During the previous year, equity was increased by nearly 11 per cent, from 4 billion euros to 4.4 billion euros. The equity ratio increased from 26 per cent to 28 per cent. That is a very respectable ratio in our sector”, said Norbert Fiebig, CFO and head of REWE Group’s tourism division.

Business segment: discount stores
In an overall challenging competitive field, PENNY performed significantly better internationally than it did in Germany. The 3,668 stores (+2.2%) in Germany, Italy, Austria, Hungary, the Czech Republic, Romania and Bulgaria generated total turnover of 10.3 billion euros (+0.3%). The number of employees in Europe rose to 43,773.  In Germany, the 2,401 stores (+0.7%) generated 6.9 billion euros in turnover, falling 1.2 per cent below the previous year’s total. The number of employees rose to 27,235.

Apart from Germany, PENNY is active in Italy, Austria, Hungary, the Czech Republic, Romania and Bulgaria. The 16,538 employees there generated 3.4 billion euros in turnover (+3.5%) in 1,267 stores (+5.3%). With turnover in excess of one billion euros, the Czech Republic is PENNY’s largest foreign market. There, PENNY remains the discount store market leader.

Business segment: national full-range stores
The national full-range stores (including REWE, toom Verbrauchermarkt DIY stores, nahkauf, TEMMA) achieved a 6.5 per cent increase in turnover, up to 14.5 billion euros. This makes it once again the highest turnover-generating business segment in the REWE Group. Last year, 68,523 employees worked in 1,827 national full-range stores (+1.3%). The increase in turnover for the national full-range stores is due primarily to strong growth in existing locations as a result of strategic and conceptual further developments – and moreover to the acquisition of the Sky, Delhaize and Tengelmann stores.  Very encouraging was the fact that the REWE supermarkets in Germany did particularly well. They had a 7.9 per cent increase in turnover, including acquisitions and expansion. Adjusted for those two factors, growth was around 3.7 per cent.

Business segment: international full-range stores
In the international full-range store business segment, turnover increased by 1.2 per cent to 9 billion euros. It was generated by a total of 67,632 employees in 2,527 stores (+3.1%). The full-range stores in Austria contributed significantly to the international success of the REWE Group. The 1,719 stores (+1.4%) generated turnover of around 4.9 billion euros. This corresponds to 5.5 per cent growth compared to the previous year, which once again underscores Austria’s role as a strong second domestic market for the REWE Group. With an increase in turnover of 3.8 per cent to 598 million euros in 2010, BIPA continues to be Austria’s drug store market leader. The sales line offers its customers in Austria more than 8,500 brand-name articles in the 571 shops (+0.5%).

In addition to Austria, the stores in Central and Eastern Europe also contributed to the growth of the REWE Group. Turnover there rose by 3.9 per cent to 2.3 billion euros. As a result, the international full-range stores managed to exploit the potential in those markets further in spite of the challenging economic situation. The increase in turnover went hand in hand with an expansion of stores in the Central and Eastern European countries. The network of stores grew to a total of 588 (+9.1%). The number of employees rose to 25,943.

Business in Russia was especially good. Turnover grew there by 34.3 per cent to 381 million euros. Second place in terms of growth was claimed by BILLA in the Ukraine. It increased its turnover by 25.2 per cent to 86 million euros. In 2010, the Czech Republic continued to be the largest full-range market in the REWE Group, with a turnover of 798 million euros. The number of stores in the Czech Republic totalled 200 last year (+2.0%).

Business segment: national specialist store
The REWE Group’s specialist store segment – toom Baumarkt DIY stores, B1 Discount DIY stores and ProMarkt – look back on a business year with very positive turnover growth. With 5.6 per cent growth the specialist store segment increased its turnover from 2.4 billion euros (2009) to 2.5 billion euros. The trend demonstrates that the strategic course taken in each case is correct. Also contributing to this was the launch of the multi-channel marketing concept in the case of ProMarkt, as well as the focus on the classic DIY store business and the introduction of extended business hours (until 10 pm on Fridays) in the case of toom Baumarkt DIY stores.

toom Baumarkt DIY stores generated turnover of 1.9 billion euros, including wholesale trade. This corresponds to increased turnover of 3.9 per cent. In the 316 (-2.2%) stores throughout Germany, toom Baumarkt DIY stores had 12,620 employees. The 52 independent partner and franchise markets generated 261 million euros in turnover.

ProMarkt closed out 2010 with an 11.4 per cent increase in turnover over the previous year. Overall, the stores generated 613 million euros in turnover. The electronic specialty store opened its 70th store in 2010 (+1.4%) and had 1,954 employees.

Business segment: Business to Business
The REWE Group relinquished its 50 per cent stake in the B2B joint venture called transGourmet Holding SE in January 2011. The strategic sales decision means that the REWE Group will focus on its two core businesses: retail trade and tourism. The transGourmet Holding SE joint venture increased its turnover in 2010 by 6.7 per cent to 6.2 billion euros. With its 22,510 employees in the cash & carry and food service segments transGourmet claims the No. 2 position in Europe in wholesale pickup and delivery.

FEGRO/SELGROS is part of that with its 78 cash & carry stores in Germany, Poland, Romania and Russia. Compared to the previous year, turnover increased by 8,9 per cent, from 2.8 billion euros to 3 billion euros. Including the cash & carry stores in Switzerland, its turnover increased by 9,3 per cent over the previous year, from 3.5 billion euros to 3.9 billion euros. The number of employees remained more or less steady at 15,193.

Its food service line is the leading delivery specialist to restaurants, hotels and cafeteria operators not only in Germany but also in France and Switzerland. Food service turnover increased by 3 per cent to 2.4 billion euros.

Business segment: travel and tourism
In 2010, more than six million holidaymakers travelled with one of the three package tour operators ITS, JAHN REISEN and TJAEREBORG, or with the individual and long-haul travel operators DERTOUR, MEIER’S WELTREISEN and ADAC REISEN. In spite of the crisis in Greece and the volcanic ash cloud incident, the REWE Group’s tourism companies increased their invoiced sales by 4.3 per cent to 4.3 billion euros.

Package tourism with ITS, JAHN REISEN and TJAEREBORG recorded a clear increase in the number of guests. This was reflected in increased turnover of 2.1 per cent. The strongest turnover driver was building-component tourism. Here, in particular growth in the primary destination areas, the further expansion of travel destinations to the Mediterranean region as well as a generally stronger demand for long-haul travel led to an impressive turnover increase of 7.2 per cent. In addition, there were special effects due to trips to the FIFA World Cup in South Africa and to the Olympic Games in Vancouver.

Outlook
The REWE Group has started out 2011 on a successful note. From January to April, the REWE Combine increased turnover by 5 per cent compared to the same period of the previous year.

“The fundamentally robust consumer climate definitely contributed to the positive turnover trend in Germany. On the other hand, consumers are sensing very clearly that rising costs, for instance for energy and fuel, are putting a strain on private household budgets. Therefore, 2011 will not necessarily be a guaranteed success for the REWE Group. Nevertheless, we are facing these challenges with continuous further development of our sales formats, private label brands and services as well as with many innovative ideas in order to optimally satisfy the wishes and needs of our customers”, explained Caparros. With investments of 1.3 billion euros (2010: 1.2 billion euros) the REWE Group will push ahead with its profitable growth both at home and abroad in the 2011 business year. The focus will be on modernising and consolidating the distribution networks. Altogether, the REWE Group is planning to open more than 350 new stores this year in Germany and other countries.  

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REWE GROUP-Corporate Communications
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E-Mail: presse(at)rewe-group.com

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