Total revenue up 10.4 per cent, or 8 billion euros, to 84.8 billion euros
Operating result (EBITA) slightly down on previous year because of cost increases and investment in costumer prices
Travel and tourism comeback: Revenue back to 2019 pre-covid levels, revenue more than doubled compared with 2021, break-even after pandemic
Investments boosted by 2.8 billion euros in 2022 despite crises
Food retail in Germany (REWE, PENNY):
Revenue up 6.8 per cent to 37.4 billion euros
Decline in results compared with 2021 as a result of deliberate investment in stabilising customer prices
Cologne. REWE Group ended the 2022 business year on a successful note and continues its stable performance. In view of the many different impacts of the Ukraine war, the consistent course and broad-based international structure (retail, travel and tourism, convenience) have once again paid off. Total revenue rose – including for inflation-related reasons – to a high level, while the operating result (EBITA) was down slightly on the previous year’s level. The negative effects on the results – deliberately costed decline in food retail in Germany by investing in customer prices, cost increases from energy, raw materials, staff, logistics and risk provisions for selected equity investments – were offset by positive contributions from other parts of the group. This stable result was driven especially by the strong comeback of travel and tourism after the coronavirus pandemic, as well as an encouraging trend in the international business and at Lekkerland. REWE Group’s investments were not only continued in 2022, but intensified at a very high level.
“We did not leave our customers out in the rain without an umbrella in 2022”, says Lionel Souque, CEO of REWE Group, making good on his promise. “As announced, we invested a three-digit million sum in Germany alone, effectively and verifiably stabilising our customer prices and deliberately accepting a decline in the result in food retail in Germany and actively foregoing profit.” Calculated for 2022 as a whole, product range inflation – i.e. price increases on REWE’s shelves – was kept at 7.3 per cent at REWE, which for customers was noticeably lower than the consumer price index – CPI – for food of 13.4 per cent in 2022, explains Souque.
“By investing in our customers in food retail, we took a conscious decision to forego profit. The strong comeback of travel and tourism and the good performance of other parts of the Group helped us offset the decline. We can do that because, as a cooperative, we are not driven by dividends, but aim to maintain sustainable business practices and generate long-term growth. We ultimately invest up to 99 per cent of what we earn in developing our business segments”, emphasizes Souque upon publication of the as yet unaudited financials of the company in Cologne. He added that this long-term focus also included, for example, the portfolio management strategy of REWE Group’s wholesale energy trading subsidiary EHA, which in response to skyrocketing energy prices had cushioned the resulting cost increases by almost 150 million euros in Germany in 2022. “And unlike other players, we did not scale back or discontinue our investments during the crisis. On the contrary, with a complete focus on what our customers want for the future – modernisation, digitalisation, innovation and greening – we even increased them across all business segments to a total volume of 2.8 billion euros.”
Overall, after three years of economic and socio-political extremes, the broadly based international group of companies was in a very solid financial position, explains the CEO of REWE Group: “Given our revenue, results, debt, equity and investment performance, we are in a position to continue in the overall direction we have taken and remain on a steady course from our own resources. We have the right game strategy, composition and team.” It was a fact, however, that even REWE Group can cushion inflation-driven developments – by investing in customer prices – only for a limited time. “Given the lower overall return on sales compared with other industries, we kept a very close eye on the continuing cost increases and our earnings power. We have to do so – not least out of a sense of responsibility to millions of customers across Europe, 384,000 employees, tens of thousands of partners and suppliers and our owners – to allow us to handle the investments in the medium and long term and to continue to develop the business on a sustainable financial basis”, explains Lionel Souque.
The revenue generated by the REWE retailers under the umbrella of the cooperative REWE Group increased by 6.4 per cent to 15.9 billion euros. “The independent REWE retailers were able to score, even in a year that was economically very difficult for our customers; they are and will remain the drivers of success for REWE”, continues the CEO of REWE Group.
In the last business year, REWE Group’s revenue rose by 10.4 per cent, from 76.8 billion to 84.8 billion euros. The cooperative combine grew by 8.2 per cent to 58.6 billion euros (2021: 54.1 billion euros) in Germany and by 15.7 per cent (15.5 per cent adjusted for exchange rate effects) to 26.2 billion euros internationally. The number of employees rose by 1.4 per cent to 384,239. In Germany, the number increased slightly (+0.2%) to 280,839, while the group’s workforce expanded by 4.7 per cent internationally, to around 104,000.
REWE Group’s revenue – excluding independent retail and equity-accounted entities – from continuing operations rose by 11.3 per cent from 69.4 billion euros to 77.2 billion euros in the year under review. Revenue in Germany increased by 8.7 per cent to 51.3 billion euros and internationally by 16.8 per cent (16.6 per cent adjusted for exchange rate effects) to 25.9 billion euros.
The operating result (EBITA) was down 2.3 per cent from 1.49 billion euros (2021) to 1.45 billion euros, while combined net profit fell by 33.4 per cent, from 755.6 million euros to 503.5 million euros.
The combined result of the international group was driven by two opposing trends. The deliberately accepted decline in the result in food retail in Germany (REWE, PENNY), cost increases from energy, raw materials, logistics and staff, as well as risk provisions for selected equity investments were offset by positive contributions from other parts of the combine; contributing factors were especially the positive trend in travel and tourism, complemented by good performance in the international business and at Lekkerland.
At the same time, the combine further boosted its investment activities despite the crisis: Investments in property and intangible assets rose by around 520 million euros from 2.3 billion euros to 2.8 billion euros.
REWE Group is planning investments of 2.7 billion euros in the current year. Equity climbed by 9.3 per cent from 8.6 billion euros to 9.4 billion euros.
Revenue of the Retail Germany business segment (REWE stores and PENNY) grew by 6.8 per cent to 37.4 billion euros. The Retail International business segment, which includes the Austrian supermarkets (BILLA, BIPA, ADEG), the CEE supermarkets (BILLA, IKI) and PENNY International, went up by 10.5 per cent (10.2 per cent adjusted for exchange rate effects) to 17.3 billion euros.
National Supermarkets achieved a revenue increase of 6.1 per cent to 28.4 billion euros. This included the retail revenue of the REWE branches and wholesale revenue with retailers and other partners.
At International Supermarkets (Austria and CEE) revenue increased by around 11 per cent to more than 11 billion euros. In the Austrian supermarkets (which include BILLA, BIPA and ADEG), revenue rose by 4.2 per cent to 7.3 billion euros. In the CEE supermarkets (BILLA, IKI), revenue was 13.4 per cent higher at 3.5 billion euros.
PENNY Deutschland generated a revenue increase of 8.9 per cent to 8.8 billion euros in 2022. With the number of stores in the network virtually constant at 2,135, the number of customers climbed significantly by almost 11 per cent to more than half a billion.
Revenue at PENNY International, which operates in Italy, Austria, Hungary, Romania and the Czech Republic, increased by 16.7 per cent to 6.6 billion euros. After adjustments for exchange rates, PENNY expanded the most in Romania, growing by more than 27 per cent, followed by Hungary and the Czech Republic.
The Convenience business segment, including the national and international business of the Lekkerland Group, was up by 4.2 per cent to 14.2 billion euros. In Germany, revenue of the REWE To Go stores rose sharply, up more than 11 per cent.
Revenue in the DIY Stores business segment expanded by 8.7 per cent year-on-year to 2.6 billion euros.
Travel and Tourism revenue increased significantly compared with the previous year, more than doubling to 5,7 billion euros. “In summer 2022, Europeans regained their desire to travel, and business returned to pre-crisis-levels at the tour operators of DER Touristik. DER Touristik Group recorded a very strong summer of travel across all source markets, with revenue in some parts even exceeding the 2019 level”, says Lionel Souque, summarising the encouraging trend.