Trading group Metro has an alcohol problem in Russia – economy

The ratio of the metro to Russia remains complex. The food wholesaler from Düsseldorf had to cope with a double-digit decline in sales there in the last financial year. The retailer lost 40 percent in sales, especially in the last three months of the financial year (until the end of September). The operating profit before taxes (adjusted Ebitda) in Russia also fell from 231 million euros to 152 million euros within one year. This has a lot to do with the consequences of Russia’s attack on Ukraine.

Among other things, this made it more difficult to procure food. Metro boss Steffen Greubel said at an annual press conference in Düsseldorf on Thursday that Western brands were less frequently available. They are being replaced by local brands, some from the same manufacturers, which are cheaper. In addition, a cyber attack in Russia had a particularly strong impact. You have to know that the sale of alcohol in Russia has to be reported. However, this was no longer possible because the cyber attack paralyzed the systems.

The attack came from a group called Black Basta. It is unclear who is behind it. “Such groups are virtual; they can come together from all possible countries,” said Greubel. Metro will “arm itself to the teeth” to fend off another cyber attack. As a result, the group lost a low three-digit million euro amount in sales. In addition, the ruble has lost value against the euro. All of this was reflected in the balance sheet of the trading group listed in the S-Dax for smaller companies.

Russia wants to avoid the money being taken out of the country

Nevertheless, Metro assured the Russian state that it would remain in the country in the long term. This was one of the requirements for Metro being allowed to transfer dividends from Russia to Germany. Greubel did not name a specific amount. The Russian Ministry of Finance granted Metro special approval for the transaction. The Saarland grocer Globus also received them.

According to observers, such permits are rarely granted. Russia wants to avoid money being taken out of the country, especially to so-called “unfriendly states”. According to media reports, companies are allowed to transfer up to 50 percent of the previous year’s net profit. Metro Russia is said to have achieved a result of 8.8 billion rubles, or the equivalent of around 113 million euros. This is more than is officially allowed to be exported from so-called unfriendly states: only 120 million rubles per year. For larger sums you need a special permit.

In order to receive this, they must meet the requirements of the Russian state. Among other things, you must fundamentally declare your willingness to stay in Russia. This is currently out of the question for Metro and Globus. “But it’s not like we signed: Yes, we’ll stay forever,” said Greubel. The whereabouts are constantly checked.

Metro also expects below-average development in Germany

The retailer justifies sticking with the Russian business by saying that he is responsible for the 9,000 employees still in the country and for supplying the civilian population with food. Greubel also mentioned the fate of other international companies such as Danone and Carlsberg. These were quickly expropriated in Russia by decree. They had previously announced that they would withdraw from the Russian market. Metro is aware of the risk. According to the balance sheet, the group’s operating value in Russia amounts to around 2.4 billion euros.

In addition to renewed pressure from the weak Russian ruble, Greubel also expects below-average development in Metro’s home country of Germany. The past year was mixed overall. Adjusted operating income (Ebitda) shrank to around 1.2 (previous year: 1.4) billion euros. The bottom line is that Metro posted a profit of 439 million euros after a loss in the previous year. Total sales were a good 30 billion euros

However, shareholders can look forward to a payout for the first time in several years: Metro announced a dividend of 55 cents per share. Last year, the shareholders around major shareholder Daniel Křetínský had to make do without a dividend.