Report by the Management Board 2023

The REWE Group successfully concluded financial year 2023 on a stable footing thanks to its broad international presence in the Retail, Travel and Tourism segments. Total external revenue clearly outstripped the 92 billion-euro mark – albeit partly as a result of inflation. EBITA bounced back into positive territory after a decline in 2022. Our consolidated earnings for the year amounted to 736.2 million euros. Our workforce increased by 1.3 per cent to 389,270. The company continued our systematic three billion-euro programme of investment in infrastructure, modernisation, digitalisation, innovation and sustainability so that we can continue to meet the needs of our customers in the future.

The geopolitical and economic environment remained fraught in 2023, with the knock-on effects from the war in Ukraine and conflict in the Middle East, extreme weather events and natural catastrophes, supply chain uncertainty, price hikes in every area – with logistics, transport and packaging among the primary price drivers, soaring inflation and the resulting financial precarity hitting home with consumers. Despite these challenges, the REWE Group performed well economically in 2023. Key steps to ensure the Group’s future competitive viability and its continued sustainable, healthy growth were initiated and successfully implemented.

Affordable prices for all customers a top priority again in 2023 – Travel and Tourism back on track to success

The cost-of-living crisis remained at the forefront of people’s worries in 2023, and not only in Germany. Many found themselves forced – or at least eager – to cut spending on groceries. Affordable prices for all of our customers therefore remain a top concern. This is why we also invested in prices in 2023.

Acute price sensitivity in every consumer stratum had a tangible impact on shopping habits in 2023: we again invested in prices in 2023.

Acute price sensitivity in every consumer stratum had a tangible impact on shopping habits in 2023: Consumers increasingly took advantage of special offers, private labels and low-price products. At REWE and PENNY, we focused on the right priorities and our customers took notice. We are seeing excellent development in supermarkets as well as at discount stores, albeit with a certain inflation element built in. And thanks to their customer proximity and focus, REWE’s 1,550 independent retailers at 2,090 stores (a 2.5 per cent increase as compared to 2022) generated 17.4 billion euros in revenue, up roughly nine per cent.

The summer of 2023 was marked by significant demand for travel in every source market. For one thing, travellers are continuing to make up for lost time after the pandemic. For another, many people have decided to treat themselves to a holiday, and recoup savings elsewhere. The DERTOUR Group was in an excellent position to benefit from surging interest in package tours and the trend throughout Europe towards booking higher-quality travel. Aside from expanding its specialist holidays segment in 2023, the DERTOUR Group also continued to develop its strategic growth segment of hotels by opening new and investing in additional hotel properties.

REWE Group records 8.9 per cent increase in revenue

The REWE Group’s total external revenue increased by 8.9 per cent in the past financial year, from 84.8 to 92.3 billion euros. In Germany, revenue rose by 7.8 per cent to 63.2 billion euros (2022: 58.6 billion euros). The international business rose by 11.3 per cent to 29.1 billion euros. The employee headcount increased in the past year by 1.3 per cent to 389,270, of which 284,758 (+1.4 per cent) were employed in Germany and 104,512 (+1.1 per cent) abroad.

Revenue for the REWE Group – excluding independent retail and at-equity companies – increased by 8.8 per cent last year, from 77.2 to 84.0 billion euros. Revenue in Germany grew by 7.6 per cent to 55.2 billion euros, and abroad by 11.0 per cent to 28.7 billion euros.

The operating result (EBITA) increased by 25.6 per cent from 1.45 billion euros in 2022 to 1.83 billion euros. Our consolidated earnings rose by 46.2 per cent from 503.5 million euros to 736.2 million euros and was thus back to the level last recorded in 2021 – thanks primarily to the positive performance of the Travel and Tourism segment. The return on sales in relation to EBITA (ratio of EBITA to sales) was 2.2% in 2023 after 2.1% (2021) and 1.9% (2022). In relation to the annual result, the return on sales (ratio of annual result to sales) amounted to 0.9% in 2023 after 1.1% (2021) and 0.7% (2022).

Our consolidated earnings were shaped by two offsetting developments. On the one hand, soaring food inflation had a positive influence on revenue development, while on the other hand increasing procurement prices and costs eroded EBITA. The positive performance, primarily of Travel and Tourism as well as the Convenience segment too, had a significantly positive influence on earnings.

We also stepped up our investment activity despite the crisis. We increased investments in property, plant and equipment and intangible assets by around 200 million euros, from 2.8 to 3.0 billion euros.

The REWE Group is again planning investments of 3.0 billion euros in the current year. Equity rose by 6.9 per cent, from 9.4 to 10.0 billion euros.

2023 revenue development for the REWE Group’s segments and divisions

Revenue grew by 7.8 per cent to 40.4 billion euros in the Retail Germany business segment (REWE stores and PENNY). Revenue for Retail International, comprising Austrian Full-Range Stores (BILLA, BIPA, ADEG), CEE Full-Range Stores (BILLA and IKI) and PENNY International, increased by 11.1 per cent (adjusted for exchange rate effects: +10.5 per cent) to 19.2 billion euros.

National Full-Range (REWE) lifted its revenue by 7.7 per cent to 30.6 billion euros. This included the retail sales of the REWE stores and wholesale revenue with retailers and other partners. International Full-Range Stores (Austrian Full-Range and CEE Full-Range) increased its revenue by 7.5 per cent to 11.5 billion euros. The Austrian Full-Range Stores segment (BILLA, BIPA and ADEG) contributed revenue of 7.8 billion (+6.7 per cent compared to 2022). CEE Full-Range Stores (BILLA and IKI) increased revenue by 9 per cent (adjusted for exchange rate effects: 8.1 per cent) to 3.8 billion euros.

The 1,550 REWE retailers under the aegis of the REWE Group cooperative increased revenue by 8.9 per cent to 17.4 billion euros.

PENNY Germany increased revenue in the past business year by 8.6 per cent to 9.5 billion euros. While the number of stores remained virtually unchanged at 2,123 (2022: 2,135), the number of customers rose again sharply by 4.8 per cent to just under 600 million. Revenue at PENNY International, a country-specific discounter in Italy, Austria, Romania, the Czech Republic and Hungary, grew by 17.1 per cent (adjusted for exchange rate effects: +15.9 per cent) to 7.7 billion euros. Once again, revenue at PENNY Romania grew most sharply in by 25.4 per cent (adjusted for exchange rate effects), followed by Hungary and the Czech Republic.

In the Convenience business segment, including the national and international business of the Lekkerland Group, revenue grew by 6.1 per cent to 15.1 billion euros.

Revenue in the DIY Store business segment fell year on year by 2.7 per cent to 2.5 billion euros.

Travel and Tourism grew by 22.7 per cent in 2023, thus increasing invoiced revenue to 6.1 billion euros.