Otto Group on strong growth path

04.04.2018 | Hamburg

The international retail and services group has launched the 2017/18 financial year with a new growth strategy. The targets set by the strategy were already exceeded in the first financial year (28 February). According to preliminary figures, the Group, with headquarters in Hamburg, increased revenues more than planned by just under 7 percent. Growth in e-commerce was even more significant. Worldwide, the Otto Group increased its online revenues by 10.9 per cent to EUR 7.8 billion.

With its growth strategy, the Otto Group invests particularly in selected Group companies from various business areas that have high potential. Almost all focus companies have exceeded their targets and have thus significantly driven the growth of the Group as a whole. Due to a Group-wide standardisation of previously different financial years, the reported revenue growth was even higher (For all Group companies that had a different fiscal year end, the fiscal year end was harmonised to the consolidated closing date of February 28. As a result, several Otto Group companies recorded an extended financial year of one or two months). This one-time revenue effect amounted to around EUR 300 million for the Otto Group as a whole, so that reported revenues increased from 12.5 to just under EUR 13.7 billion. This corresponds to growth of around 9 per cent - and thus 2 percentage points more than the above-mentioned 7 per cent on a 12-month basis. In Germany, the Otto Group increased its revenues by more than 7 per cent to just under EUR 8.3 billion.

Improvement in profitability
The Otto Group's high revenue growth was accompanied by a significant improvement in profitability, so that the previous year's result was clearly exceeded. Alexander Birken, Chairman of the Executive Board of the Otto Group, is very satisfied with the development: "With our focused growth strategy, we have set the course for strong and profitable growth in the past financial year. Our companies are attracting more and more customers and we are investing massively in our employees and new technologies to drive forward the digital transformation of our business areas."

Thanks to the positive business development, the number of employees worldwide rose by almost 2,600 to 52,300 full-time equivalents; in Germany, the number of employees converted to full-time equivalents increased by almost 1,500 to more than 28,100.

Online revenues rise to EUR 7.8 billion
The Group exceeded its sales targets in all three segments. The Multichannel-Retail segment grew by around 5.3 per cent and due to the fiscal year harmonisation by even 7.4 per cent to more than EUR 10.5 billion. Once again, e-commerce was a key factor in this positive development. Worldwide, online sales grew by 10.9 per cent to just under EUR 7.8 billion. In the German online business, the Otto Group generated revenues of more than EUR 5.4 billion, an increase of 10.2 per cent. The Otto Group is thus maintaining its position as the second largest e-commerce player in Germany and one of the largest in the world.

The Financial Services segment, largely shaped by the EOS Group, which is also defined as a focus company, increased its revenue by 9.5 per cent and, taking the harmonisation of the financial year into account, by 15.1 per cent to EUR 843 million. The Service segment, which essentially consists of the focus company Hermes Group, experienced even more dynamic growth. Here, external revenues rose by 12.8 per cent on a 12-month basis. For the harmonised financial year, growth amounted to 15.7 per cent to around EUR 2.27 billion.

Growth drivers OTTO and About You
An important factor for the good performance is the above-plan development of the two focus companies OTTO and About You. OTTO was able to grow for the eighth year in a row and has successfully started the profound transformation of its business model - from a retailer to a platform that also allows external retailers and producers to offer their goods. At the same time, OTTO increased its revenues by 8.5 per cent to just under EUR 3 billion and the number of active customers by 8 per cent to 6.6 million. About You has also pushed its business ahead of plan. The fashion platform more than doubled its revenues to EUR 283 million (+110 percent) and thus exceeded its own target.

The focus companies with the business model “Brand” also reported revenue growth. The Witt Group, which specialises in the 50+ customer segment, had a very successful financial year. The company improved sales by around 8 per cent to EUR 818 million. The international fashion provider Bonprix grew profitably in its ninth year and posted revenues slightly above the previous year's level; taking the result of the harmonization of the fiscal year into account, the company increased sales by 3.2 per cent to EUR 1.56 billion. The US furniture and lifestyle specialist Crate and Barrel increased sales in local currency by around 5 per cent. Taking into account the effects of the harmonisation of the financial year, growth in local currency even amounted to 11.3 per cent. On a EUR basis, sales increased accordingly by 6 per cent to EUR 1.564 billion.

The Baur Group developed particularly dynamically - also thanks to its Austrian subsidiary Unito and the integration of an online-shop. The Group increased its turnover by 13.6 per cent to EUR 757 million. The Mytoys Group which focuses on young families with its concepts Mytoys, Mirapodo, Ambellis, Yomonda and Limango increased revenues by around 11 per cent. Due to the adjustment of the fiscal year, revenues even grew by 17.3 per cent to EUR 652 million. By contrast, the Schwab Group reported a decline in revenues of 14.8 per cent to EUR 173 million, mainly due to a repositioning of the Sheego brand. Heine was able to keep revenues stable compared to the previous year. On a comparable basis, however, the company achieved noticeable sales growth. The sports retailer Sportscheck has developed steadily and, at 286 million EUR, has kept revenues almost at the previous year's level - with growing online sales.

The UK-based Freemans Grattan Holding increased its turnover in local currency by 4.2 per cent - but in EUR terms revenues fell by 1.3 per cent to EUR 216 million. The Otto Japan Group recorded a slight decline of 1.6 per cent in local currency, while the decline in turnover in EUR due to unfavourable exchange rate developments was more severe : 8.9 per cent to EUR 144 million. In local currency terms, Otto Group Russia posted a decline in revenues of around 4 per cent. However, sales in local currency rose by 7.7 per cent due to the effects of the adjusted year-end change. On a EUR basis, this represents an increase of 13.2 per cent to EUR 276 million.

"To achieve our target of EUR 17 billion in revenue by 2022 on a comparable basis, we have to grow by around 5 percent annually. In the past fiscal year, we exceeded this target - and we are confident that we will continue to achieve high turnover growth in 2018/19", says Alexander Birken.

The audited consolidated financial statements for the 2017/18 financial year will be presented at the annual press conference on May 16, 2018.

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Media Contact

Thomas Voigt
+49 40 6461 4010
thomas.voigt@ottogroup.com

Robert Hägelen
+49 40 6461 3129
robert.haegelen@ottogroup.com 

 

 

About Otto Group

Founded in Germany in 1949, today the Otto Group is a globally operating retail and services group with around 52,300 employees. The Group includes 123 major companies and is present 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), according to preliminary calculation the Otto Group generated turnover of just under EUR 13.7 billion. It is one of the world’s largest online retailer. E-commerce, catalogue sales and over-the-counter retail form the three pillars of the Otto Group’s Multichannel Retail strategy. Its 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.

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