Migros with MMMini profit
Published: Tuesday, Mar 26th 2024, 15:20
العودة إلى البث المباشر
Migros suffered a slump in profits last year. On balance, the "orange giant" only made a net profit of 175 million francs. This is the worst result since the mid-1980s.
The last time Migros earned less was in 1985 with CHF 174 million. At that time, however, the Group also made three times less turnover than today.
Migros achieved a new record turnover of 32.0 billion Swiss francs in 2023. However, net profit fell by 62 percent to just 175 million. A year earlier, the bottom line was 459 million francs.
Half a billion in value adjustments
Operating profit (EBIT) fell to CHF 286 million from CHF 628 million in the previous year. Value adjustments of 500 million francs were mainly to blame.
This is no mean feat, said the new CEO Mario Irminger. "For an operating profit of CHF 500 million, the discounter Denner and its 6,000 employees would have to work for several years."
Real estate accounted for the largest chunk of the value adjustments, explained CFO Isabelle Zimmermann at the annual media conference in Zurich on Tuesday. One logistics center alone caused a value adjustment of CHF 100 million. But investments (110 million), IT projects (80 million) and the planned sale of the SportX and Melectronics specialty stores (75 million) also made a big dent in the accounts.
Migros also has to pay 15 million for the Globus loan to Austrian investor René Benko's bankrupt Signa Group. The total loan amount is even higher. However, the rest of the money is "secured by valuable guarantees", said the head of finance.
Operational increase
In operational terms, however, Migros was able to make gains, as the new Group CEO Mario Irminger said, who wants to improve the retail giant's profitability. Migros and Denner had gained market share in food retailing. Migros Bank had achieved a top result, said Irminger. The tour operator Hotelplan Group also achieved its best operating profit in a decade and a half.
Without the value adjustments, the Group would have improved its overall EBIT by a quarter to 786 million francs, said CFO Zimmermann. Net profit would even have risen by 42 percent to 650 million.
Migros' operating performance is impressive, said one analyst in an interview with the news agency AWP on the fringes of the annual media conference. The retail giant is in a robust position.
Sharp loss in the industry
Migros-Industry is a drag on the bottom line, however, with an operating loss of 175 million francs, almost half of which is attributable to IT write-downs. In the previous year, Migros-Industry had still made a mini profit of CHF 9 million.
Migros intends to sell its cosmetics and hygiene subsidiary Mibelle. The travel subsidiary Hotelplan Group is also to be sold. The sales should be completed by the end of the year, Irminger said in a video interview with AWP.
There was good news for the employees of Migros subsidiaries SportX and Melectronics: following the sale by Migros, the stores and their staff will continue to be run by the new owners. The sales process is already at an advanced stage. The new owners will be announced by mid-summer, said Irminger.
Migros no longer has any more skeletons in its closet. "From our point of view, we have carried out a very comprehensive impairment test. We believe that we have identified the key elements," said the CEO. Profits will pick up again in the current year.
©كيستون/إسدا
Arabic 
English 
German 
French 
Spanish