New Acquisition in Russia Drives International Growth at REWE Group

Cologne, 03.04.06

220 new openings in 13 countries for 2006 – International turnover for 2005 increased to 11.1 billion euros – Three-billion mark surpassed in Eastern Europe

REWE Group is accelerating its international business with the acquisition of 15 supermarkets in Moscow that was completed over the weekend. “This means we have taken an enormous stride on the growing Russian market that we first entered in 2004. With this acquisition alone, by which we will double the number of our stores in Moscow all at once, we expect to increase our turnover in Russia by 50 to 60 per cent for the current year”, Dr. Achim Egner, REWE Group CEO, said at the annual press conference in Cologne on Monday, April 3. The new locations acquired through the Eurobilla subsidiary and previously operated as Prodmak and Grossmart-brand supermarkets in Moscow will be converted to REWE Group’s international supermarket format under the BILLA brand and integrated into the marketing chain. The supermarket chain is to be expanded from today’s 32 to 40 stores by the end of the year, and to between 80 and 100 stores by 2008. The Russian operations are run as a joint venture with the Russian-based Marta Group.

Over the current year, REWE Group plans to generally boost its international expansion efforts by opening 220 new stores in 13 European countries where the Group does business outside Germany. For the 2005 fiscal year, foreign turnover rose by 4.9 per cent to 11.1 billion euros despite the sale of Penny France and Pick Pay in Switzerland. This increased the share of foreign turnover in total Group turnover at REWE Group to over 32 per cent. The developments in Eastern Europe were particularly dynamic over the past year, as REWE Group managed to surpass the three-billion euro mark for the first time through its 640 BILLA, miniMAL, Penny, XXL and Selgros stores. Turnover in this region increased by more than 15 per cent. The greatest gains came from the addition of new Penny discount stores in Romania and BILLA supermarkets in Croatia. In Romania and Poland, the Selgros cash-and-carry stores – operated jointly with Hamburg-based Otto-Versand – were an important source of turnover and growth. With 235 BILLA and Penny stores, the Czech Republic (665 million euros) led the Eastern European sales champions at REWE Group, followed by Romania (660), Poland (565) and Hungary (420). In the Czech Republic and Hungary, the more than 300 Penny outlets managed to maintain their leading market position despite intensified competition among discounters.

In Western Europe outside Germany, 2,263 BILLA, Merkur, Standa, Penny and Bipa stores increased their turnover in 2005 to 8.1 billion euros (+1.1 per cent). This moderate rate of growth could be attributed to divestments from Swiss retailing and from the French discount segment. The largest foreign subsidiary in terms of turnover was REWE Group Austria, which bolstered its market leadership in Austrian food trading with a turnover of more than 4.4 billion euros on its domestic market alone (+1.8 per cent). REWE Group Italia ended the fiscal year with a better-than-average growth rate of 5.3 per cent. The expanding Penny discount chain played a significant role in attaining the total turnover figure of 1.7 billion euros with an increase in turnover of more than six per cent.

Overall, REWE Group operates 2,903 stores with 82,450 employees in Europe outside Germany. Total turnover for the number three in European food trading rose by 2.2 per cent to 41.7 billion euros in 2005. REWE Group employs a workforce of 260,594 at 11,804 stores across Europe.

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

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