Otto Group exceeds growth targets

16.05.2018 | Hamburg

The international retail and services group continues on its growth track, increasing revenues in the past 2017/18 financial year (to 28 February) with a climb to 13.653 billion euros. This corresponds to an increase of 6.7 percent. At the same time the Otto Group further raised its profitability, clearly exceeding its own targets. Notwithstanding high investments in technology, logistics and new retail concepts, the Otto Group increased its earnings before interest and taxes (EBIT) by almost 11 percent to 405 million euros. The Group’s digitised retail saw particularly dynamic growth with a climb of 10.9 percent in online revenues to 7.9 billion euros.

Having embarked successfully on a focused growth strategy in the past 2017/18 financial year, the Otto Group exceeded its forecast revenues and earnings growth. Substantial investments in focus companies with particularly high growth potential paid off, contributing to powerful growth in revenues of 9.1 percent to 13.653 billion euros. Due to the Group-wide harmonisation of previously divergent financial years, which lead to a financial year one or two months longer at some individual Group companies, this jump in revenues is slightly exaggerated. At Group companies that previously had a divergent financial year-end, the year-end date was harmonised with the Group’s annual financial reporting date of 28 February. This lead several Otto Group companies to report a financial year that was extended by one or two months. Adjusted for this one-off effect, the Group’s overall growth was still 6.7 percent and thus 2 percentage points above plan.

Very good earnings development
The successful financial year is also evident in the earnings figures; notwithstanding high investments in technology, logistics and new retail concepts, the EBITDA result (earnings before interest, taxes, depreciation and amortisation) climbed by another 20 million euros compared to the very good preceding financial year to reach 750 million euros. The EBIT result (earnings before interest and taxes) also improved correspondingly, from 365 to 405 million euros. The EBT (earnings before taxes) result rose strongly thanks to the outstanding financial result, which climbed from 262 to 629 million euros. This jump was mainly the result of the sale and revaluation of the Otto Group’s remaining shareholding in the high-growth start-up About You, but also reflects other effects such as the sales of the financial service provider Ratepay and French logistics service providers. After taxes, the Otto Group’s net earnings for the financial year thus rose clearly from 41 to 519 million euros.

“On our chosen path driven by the focused growth strategy, with a revenue target of 17 billion euros by 2022 on a comparable basis, in the past financial year we made better progress than we expected. We successfully pushed the limits in all core areas of the strategy – Kulturwandel (cultural change), innovation, customer relevance, and economic success – and created the prerequisites for further sustainable growth”, says Alexander Birken, Chairman of the Otto Group Executive Board.

All three segments growing above plan
All three segments of the Otto Group reported a thoroughly positive development. The Multichannel Retail segment achieved an increase in revenues of around 5.3 percent – factoring in financial-year harmonisation effects this was even 7.4 percent to 10.5 billion euros. In particular, digitised retail made a major contribution to this strong development; with growth of 10.9 percent – factoring in financial-year harmonisation effects, even 12.3 percent – the Otto Group raised its online revenues to 7.9 billion euros. 75 percent of all the Group’s retail revenues are already generated online (over-the-counter/OTC retail: around 12 percent; catalogue business: around 13 percent). In Germany the Group’s online retail revenues grew by 10.2 percent to exceed 5.4 billion euros. This means the Otto Group has reaffirmed its position as Germany’s second-largest e-commerce player and numbers amongst the world’s largest online retailers.

The Financial Services segment, in which the EOS Group is the major company, raised revenues by 9.2 percent – taking the supporting effects of the financial-year harmonisation into account, by 14.9 percent – and generated revenues of 841 million euros (previous year: 732 million euros). The Service segment, which mainly comprises Hermes Group companies, reported a particularly strong increase in revenues, with the clear rise in external revenues leading to a plus of 12.9 percent on a 12-month basis. Factoring in the financial-year harmonisation, growth was 15.8 percent and reached 2.3 billion euros.

Focus companies driving growth
Almost all focus companies within the Otto Group saw revenues develop above plan in the past financial year. The Group company OTTO grew for the eighth year in a row, raising revenues by around 8.5 percent or more than 200 million euros to almost 3 billion euros. Here, the Furniture and Interior Furnishing assortment developed particularly well. The number of active customers reached an all-time high, at more than 6.5 million. Over 2.8 million articles from over 6,700 brands and roughly 280 marketplace partners are currently offered on otto.de. In the current financial year the online retailer also invests some 100 million euros in expanding otto.de to become a platform on which a steadily growing number of external retailers and manufacturers can offer their goods.

About You was also able to develop its fashion platform further with great success and more than double its revenues to 283 million euros (+110 percent). With 2.5 million active customers the company has created a sound basis for its ambitious growth plans; besides Germany, Austria and Switzerland it has also launched its highly individualised business concept in the Netherlands and Belgium, with an expansion to further countries planned. With the About You Cloud the company is making its outstanding IT expertise accessible to other retailers and has also won corporate clients within the Otto Group, such as the Witt Group. Through opening up to investors and strategic partners, About You will be even better positioned to continue its high rate of growth in the years to come.

The Witt Group, as a leading provider to the 50+ target group, grew successfully once again and raised revenues by a good 8 percent to 818 million euros, with repeated very high profitability. With its successful market entry in the USA, in the past financial year Witt expanded beyond Europe for the first time. As the baby-boomer generation is increasingly Witt’s target group, the retailer is investing heavily in e-commerce to be able to address and serve this generation of customers in a highly personalised way.

The international fashion provider Bonprix reported revenues at the same high level seen in the previous financial year. Taking the effects of the financial year harmonisation into account, revenues rose slightly by 3.2 percent to reach 1.561 billion euros. By making targeted investments, in the current financial year Bonprix intends to address new female customers and continue its profitable growth path.

The North American lifestyle retailer Crate and Barrel raised revenues by 5.5 percent to 1.564 billion euros, adjusted for exchange-rate effects and the harmonisation of the financial year. The furniture retailer, which originated as an OTC retailer, generated double-digit growth in e-commerce and is working intensively on a closer dovetailing of its online and OTC retail businesses.

The EOS Group, one of the leading international providers of individual financial services, generated record revenues in the 2017/18 financial year and also achieved outstanding earnings: EOS raised revenues by 13.5 percent – 20 percent when adjusted for the effects of the financial-year harmonisation – to approximately 774 million euros.

The Hermes Group also clearly exceeded its growth targets and generated growth of 13.2 percent on a comparable basis. The growth has reached over 30 percent to a total of more than 2.1 billion euros in external revenues due to the integration of the French logistics business units Mondial Relay and Girard Agediss. This step moves Hermes up to become the no. 2 logistics service provider in its core European markets of Germany, Great Britain and France. By 2020 the Hermes Group plans to invest up to 500 million euros in building and expanding high technology logistics centres, goods warehouses and ParcelShop network, as well as in electromobility for delivery in metropolitan regions and an individualised, more flexible delivery system supported by Business Intelligence.

More than 2,000 new jobs
Thanks to this positive business development the Otto Group was able to create new jobs, with its global workforce growing from 49,750 to around 51,800 full time equivalents (FTE). In Germany the number of equivalent positions rose by almost 1,500 to over 28,100.

Outlook
For the financial year now under way and with a view to the revenue target of 17 billion euros on a comparable basis by the 2022/23 financial year, the Otto Group will continue to rely on the digital transformation of the entire group of companies, and will continue to drive its focused growth strategy forward. “In the past year we laid a good foundation for further investments as well as long-term profitable growth, and will continue to pursue our strategy with discipline. In the current 2018/19 financial year we expect ongoing revenue growth of around 5 percent on a comparable basis and an operating result that should match the previous year’s good figure”, says Alexander Birken.

The Otto Group Annual Report for the 2017/18 financial year, with a focus on values, will be available for download from noon CET on 16 May 2018 under ottogroup.com/hellovalues. Print copies can be ordered from 23 May 2018 onwards.


Press material

Alexander Birken
Alexander Birken
CEO Otto Group
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Petra Scharner-Wolff
Petra Scharner-Wolff
Member of the Executive Board, Chief Financial Officer (CFO)
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Alexander Birken at the Otto Group annual press conference 2018 in Hamburg
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Petra Scharner-Wolff at the Otto Group annual press conference 2018 in Hamburg.
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Otto Group Annual Press Conference 2018 in Hamburg
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Media Contact

Thomas Voigt
Phone: +49 40 6461 4010
E-Mail: thomas.voigt@ottogroup.com

Robert Hägelen,
Phone.: +49 40 6461 3129
E-Mail: robert.haegelen@ottogroup.com  

 

About the Otto Group

Founded in Germany in 1949, today the Otto Group is a globally active retail and services group with around 51,800 employees. The Group comprises 123 major companies and does business in over 30 countries in Europe, North and
South America, and Asia. Its business activities are grouped into three segments: Multichannel Retail, Financial Services, and Service. In the 2017/18 financial year (to 28 February) the Otto Group generated revenues of 13.7 billion euros. With online revenues of approximately 7.9 billion euros, the Otto Group is one of the world’s largest online retailers. Ecommerce, catalogue sales and over-the-counter (OTC) retail form the three pillars of the Otto Group’s multichannel retail activities. Worldwide corporate activities, numerous strategic partnerships and joint ventures provide the Otto Group with excellent opportunities to transfer know-how and leverage areas of synergy potential. Group companies operate largely independently, guaranteeing flexibility, customer proximity and optimum target-group appeal in their respective national markets.


Recording annual press conference 2017

Recording annual press conference 2017

Annual Report 2017/18 available for download

Otto Group Annual Report 2017/18

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