Metro update: Bad, but may be not so bad at all ?
A quick update on the Metro case. This is how I ended the Metro post from a few days ago:
For me, it is currently too early to do something. It is not clear to me if the stock price has overreacted or if more trouble is coming along especially from Russia.
Selling now would be clearly an uninformed decision as well as buying more. The next step will be the release of the 6M report next week. I think I will then still wait and see how Russia develops. If, for instance there would be a further profit warning because of Russia, then this would be a clear sell signal.
So let’s quickly check out the half-year report.
The good:
- Real, the German Supermarket chain is doing batter than last year. However the improvement in Q2 was smaller than in Q1 and might have been aided by early Easter holidays
- Delivery & Real Online do well, but are small
- Asia stable despite negative FX impact
The bad:
- Metro Germany is still losing money
- Eastern Europe less profitable despite good growth
- FCF Q2 lower by -130 mn (reason given: Store openings)
- Restructuring charges at Real of up to -40 mn EUR (over 2 years if I understood correctly)
The ugly:
- EBITDA in Russia in Q2 dropped -50%, Like for like sales by almost -9%
value and opportunity 