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28. March 2017

Record revenue and result: REWE Group increases revenue by 5 per cent* to 54 billion euros


EBITA of REWE Combine at around 1 billion euros

Alain Caparros

• REWE Combine increases revenue by 5 per cent* to 45.6 billion euros
• EBITA from continuing operations increases to 1 billion euros
• Independent REWE retailers: EBITA grows to 289 million euros
• Investments totalling 1.6 billion euros
• REWE supermarkets increase revenue by 5.1 per cent at the top of the German food retail sector
• International Full-Range Stores grow by 4.4 per cent*
• National Discount Stores grow by 2.3 per cent and are still in the black
• International Discount Stores: revenue growth of 4.1 per cent*
• toom Baumarkt DIY stores like-for-like at previous year’s figure
• Travel and Tourism achieves revenue growth of 16.5 per cent in first full year of Kuoni integration
* revenue growth figures adjusted for currency effects

REWE Group facts and figures 2016


REWE Group continues to grow with great dynamism, both at home and abroad: In 2016, the cooperative group increased total external revenue by 5 per cent to 54 billion euros. One main factor behind the company’s successful development was its business operations in Germany, which increased revenue by 2.1 per cent to 39 billion euros. Revenue produced by REWE Group’s international activities grew by 13.4 per cent to around 15 billion euros. At the presentation of the not yet audited business figures on 28 March 2017, Alain Caparros, CEO of REWE Group, stated: “In the past business year, REWE Group has increased its revenue by 2.6 billion euros. In view of the competitive situation in Germany and Europe, this is a very good development both in food retail and in travel and tourism. REWE Group’s strategy is successful and proves to be resilient and effective even under difficult conditions. Over the past few years, we have optimised our company portfolio at home and abroad, consistently continued our course f innovation and modernisation and ensured even greater efficiency and speed in our company mainly through internal structural reforms. This is why we are not only growing dynamically in terms of revenue, but are also highly profitable.”

The strongest driver of growth in the retail business of REWE Group was once again the supermarket business of REWE in Germany. National  Full-Range Stores increased revenue by 3.9 per cent to 18.4 billion euros.  According to data provided by consumer researchers at GfK and TradeDimensions, no other German food retailer grew more strongly than REWE in the past business year. Once again, the economic development of the medium-sized independent REWE retailers was even stronger, achieving a revenue increase of 10.1 per cent. At his last press conference as CEO, Caparros, who will resign from his position as CEO of REWE Group on 30 June 2017, stated: “REWE Group and its companies are excellently positioned today. 2016 was a year of record revenue and earnings. All areas under the umbrella of our company operate profitably and are ready for the future – not least PENNY, which has made a turnaround through hard work. Through great effort and commitment, we at REWE Group have developed excellent future prospects in retail as well as in travel and tourism. I would like to thank all those who have contributed to this success during the eleven years that I have been at the helm of this company.”

Number of employees increases by 1.9 per cent
The number of employees in Germany and other European countries rose by 1.9 per cent to 325,727 (continuing operations). In Germany, the number of employees increased by 1.7 per cent from 232,027 to 235,911 in 2016.  The number of employees abroad increased by 2.4 per cent to 89,816. Compared to 2015 (as of 30 September), the Cologne-based trade and tourism group increased the number of trainees by 2.1 per cent last year  from 8,000 to 8,168 (as of 30 September). During the course of 2016,  3,584 (2015: 3,486) entry-level employees started their careers at REWE Group. National Full-Range Stores, with 5,906 (+2.4%) trainees, is the largest trainer within the company group, followed by PENNY with 959 (+1.7%), toom Baumarkt DIY stores with 665 (+8.7%), and Travel and Tourism at REWE Group with 419 trainees.

REWE Combine: Highest EBITA in the company’s history
The revenue of REWE Combine from continuing operations, adjusted for  currency effects, rose last year by 5 per cent from 43.5 billion euros to 45.6 billion euros. In Germany, REWE Combine grew by 2.3 per cent and  abroad, adjusted for currency effects, by 11.2 per cent. Combine earned revenue amounts to 45.6 billion euros, with around 68 per cent being generated in Germany and 32 per cent abroad. Countries abroad thus continue to be a mainstay of the overall positive development of REWE Combine.

REWE Combine’s earnings before interest, taxes, depreciation and amortisation (EBITDA) climbed by 34 per cent to 2 billion euros compared with the previous year’s total of 1.49 billion euros. The operating result  (EBITA) from continuing operations totalled around 1 billion euros – an increase of 62 per cent compared with the previous year’s figure of 616 million euros. This does not include the EBITA of independent REWE retailers, which improved by around 16 per cent, rising from 250 million euros to 289 million euros, thus reaching a new high. The annual profit of  REWE Combine is estimated to have increased by around 21 per cent in 2016 compared with the previous year to 463 million euros. The key earnings figures for REWE Combine include net positive special items in the 2016 business year. Special income from our central settlement, which is the result of an amended case law of the European Court of Justice,  faces a series of one-off expenses from taxes and balance sheet  precautionary measures. The cash flow from operating activities before working capital effects was 1.7 billion euros and therefore exceeded the previous year’s figure by 13.4 per cent. Investments made in 2016 totalled 1.6 billion euros, significantly above the high level of the previous year.

Due to the high operating cash flow, the net financial debt without finance  leases decreased by 262 million euros to 135 million euros despite these high investments. Equity reached a new high of 5.7 billion euros in 2016.  This represents an equity ratio of 32.3 per cent.

REWE Group’s Chief Financial Officer, Dr. Christian Mielsch, commented:  “Due to our strong earnings position, high equity and very low debt, we are well equipped for the challenges ahead. The economic situation of REWE  Combine is excellent and gives us the opportunity to continue our  long-term strategy of innovating and modernising our business models with unchanged dynamics.”

Alain Caparros said: “Not least, the dispute over the takeover of Kaiser’s Tengelmann has shown that there are hardly any opportunities for major takeovers in the food retail sector in Germany. We must therefore concentrate on organic expansion and qualitative growth in the form of  relocations and comprehensive modernisations to increase area output. And it also means that we will consistently continue to take opportunities to grow our foreign operations, where presented to us. We are planning to make investments totalling more than 1.7 billion euros in the 2017  business year. At the same time, the issue of digitalisation in retail and travel and tourism remains at the top of our strategic agenda. For us, the focus is on the further development of omni-channel business models.  This means that we must continually optimise our traditional stationary activities. Only those who are high-performing and futureoriented in their core business have the power to successfully break new ground.”

National Full-Range Stores business segment

National Full-Range Stores with REWE, REWE Center, REWE City, REWE To Go and TEMMA, as well as Nahkauf and other wholesale partners,  generated a revenue increase of 3.9 per cent to 18.4 billion euros in 2016. The external revenue of REWE supermarkets (branches, REWE-operated stores, partners and independent retailers) increased by 5.1 per cent  compared with the previous year. A significant driver of this growth was the intensive work on optimising the product range. Last year, REWE recorded the highest growth rates for fruit and vegetables. The attractive store brands REWE Beste Wahl, REWE Bio, ja! and REWE Regional also recorded a continuing positive trend. In addition, as part of work being carried out on the product ranges, the development of new areas such as convenience products and regional as well as local products is having a positive effect.

PAYBACK continues to develop very positively: In 2016, 13.7 million PAYBACK customers visited REWE stores: 1.2 million customers more than in 2015. Another success factor was the introduction of the new app from PAYBACK. More than 10.5 million users have already downloaded the PAYBACK app.

The best examples of the success of innovative concepts are the REWE Lieferservice (delivery service), which is currently available in around 75 cities, and REWE To Go. The long-term cooperation with Aral, which was agreed in the last business year, will see the introduction of the innovative REWE To Go sales format at more than 1,000 company-owned Aral petrol stations in Germany in the coming years.

International Full-Range Stores business segment
International Full-Range Stores combines activities in Austria, the Czech Republic, Slovakia, Russia, Bulgaria, Croatia and Ukraine. Adjusted for  currency effects, revenue from continuing operations rose by 4.4 per cent to 8.5 billion euros. Revenue in Austria with BILLA, BIPA, MERKUR and ADEG rose by 3.2 per cent to 6.2 billion euros. BILLA and MERKUR  increased by 4.3 per cent to 4.9 billion euros, growing faster than the industry average. The revenue increase of BILLA and ADEG was particularly gratifying. BILLA grew by 5 per cent and ADEG recorded a gain of 2.6 per cent. With a market share of more than 35 per cent, REWE Combine remains number one in the food retail sector in Austria. In  Central and Eastern Europe, BILLA generated a revenue increase of 7.7  per cent, adjusted for currency effects.

National Discount Stores business segment
PENNY Germany achieved a revenue increase of 2.3 per cent to 7.2 billion euros. The number of stores rose by 0.7 per cent from 2,134 to 2,148. Thus in 2016, PENNY’s revenue growth once again outpaced the discount market in Germany, which grew only by 1.9 per cent according to GfK. The reason for this development is that more customers are again buying  more at PENNY: The average monthly revenue and the area output per  branch each grew by 2.5 per cent.

International Discount Stores business segment
In Italy, Austria, Hungary, Romania and the Czech Republic, PENNY  International generated revenue of 4.2 billion euros. Compared to the previous year, this means a revenue increase of 4.1 per cent, adjusted for currency effects. The countries achieving the highest revenue are the Czech Republic (1.2 billion euros), Italy (1.1 billion euros) and Austria (780 million euros). PENNY International again recorded its strongest revenue development in Romania with 12.5 per cent. Hungary followed with 6.6 per cent. Particularly noteworthy is the development in Austria, an established  and highly competitive market. There, PENNY increased its revenue by 3.6 per cent.

National Specialist Stores business segment
The National Specialist Stores business segment encompasses the DIY store activities of toom Baumarkt and B1 Discount Baumarkt. In the past  year, revenue fell by 1.5 per cent to 2.1 billion euros. This development is explained primarily by the decrease in the number of stores by 3 per cent to 287. Like-for-like, toom Baumarkt DIY stores was able to match the previous year’s revenue. The revenue development at toom Baumarkt DIY  stores is, in addition to the closure of nonperforming stores, also due to  effects of seasonal business as well as to a more aggressive price  positioning.

Travel and Tourism business segment
2016 was a turbulent year for DER Touristik, characterised by the threat of terrorism and international crises. And yet, it was still an economically  successful time. The invoiced revenue of the Travel and Tourism business increased by 16.5 per cent to 6.3 billion euros. The European tour operator and sales activities acquired from Kuoni in September 2015 contributed to this result for the entire business year for the first time.