Metro (B4B) Q4 2024 earnings summary

Executive summary

• Multi-year transformation under the sCore strategy is driving a shift to a fully multi-channel wholesale model, focusing on digitalization, delivery (FSD), and own brands, with resilience despite external headwinds such as geopolitical tensions, inflation, and a significant cyberattack.

• Sales grew by 6% in 2023/24, reaching €31.0 billion, with all channels and regions contributing; growth outpaced inflation and competition.

• Adjusted EBITDA declined to €1,058 million from €1,174 million year-over-year, mainly due to cost pressures and transformation requirements.

• Net income turned negative at -€120 million to -€125 million, with EPS at -€0.33, reflecting absence of prior year one-time gains and transformation costs.

• Portfolio has been streamlined through divestments (Japan, Myanmar, Belgium, India) and targeted acquisitions (Eijsink, JHB, Caterite), with no further country exits planned.

Financial highlights

• Sales increased by 6% year-over-year in 2023/24, with all regions and channels contributing; reported sales reached €31.0 billion, with negative currency effects, especially in Russia and Turkey.

• Adjusted EBITDA reached €1,058 million, with reported EBITDA at €1,122 million, both lower than last year due to reduced transformation and real estate gains.

• Net income was negative at -€120 million to -€125 million, with EPS at -€0.33, mainly due to one-off effects and transformation costs.

• Free cash flow was slightly negative but improved versus prior year, mainly due to net working capital improvements.

• Net debt increased to €3,203 million, mainly due to higher leasing liabilities and dividend payments.

Outlook and guidance

• Sales growth guidance for 2024/25 is 3%-7% across all segments, with adjusted EBITDA expected to see a slight increase; up to €150 million in transformation costs anticipated.

• EPS and free cash flow are expected to remain negative in 2024/25 due to ongoing transformation and investment, with net debt likely to increase.

• 2030 ambitions reaffirmed: sales >€40 billion, adjusted EBITDA >€2 billion, free cash flow >€0.6 billion, and cost savings of up to €300 million p.a. by 2027/28.

• Growth targets by 2030 reaffirmed: 5–10% average sales growth and 5–7% average EBITDA growth.