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Otto Group increases revenue and profit in 2016/17

By Prachi Singh


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The Otto Group saw rise in profitability and raised revenue by 3.4 percent to 12.5 billion euros (13.8 billion dollars) for the 2016/17 fiscal year. This, the company said, is the equivalent to 5 percent or 600 million euros (666 million dollars) turnover growth on a like-for-like basis. Given the positive results, the company said that it executive board has initiated a focused strategy and an ambitious target of 17 billion euros (18 billion dollars) in annual turnover by 2022 on a like-for-like basis.

“We have set ourselves the aspirational goal of leading the Otto Group back onto a track of strong and sustained growth”, said Alexander Birken, the new CEO of the Otto Group in a media release.

The Otto Group posts improved EBITDA results

The company said, EBITDA, which shows the result from the operational business, reported at 730 million euros (811 million dollars) – the highest level for many years. EBIT rose by more than 100 million euros to 365 million euros (405 million dollars). The Otto Group added that despite balance-sheet burdens from the successfully divested retail activities of the French 3SI Group, annual net earnings of 41 million euros (45 million dollars) were achieved.

E-commerce was the principal growth driver. Revenue from the Otto Group’s over 100 online shops worldwide grew by around 10 percent on a like-for-like basis and amounted to nearly 7 billion euros (7.7 billion dollars). In Germany, online sales also grew by just under 10 percent to around 5 billion euros (5.5 billion dollars).

In all three segments – multichannel retail, financial services and services – the Otto Group increased revenues and achieved a positive net result (EBIT). In multichannel retail, revenues grew by 2.4 percent to 9.819 billion euros (10.910 billion dollars), with 5 percent growth on a like-for-like basis. An EBIT of 146 million euros (162 million dollars) was achieved. The financial services segment raised revenues by 8 percent to 732 million euros (813 million dollars) and achieved EBIT of 297 million euros (330 million dollars).

In the service segment, external sales increased by 6.7 percent to 1.961 billion euros (217 billion dollars), achieving EBIT of 6 million euros (6.6 million dollars). The Hermes Group, the leading company in this Otto Group business segment, raised external sales by 4.9 percent to 1.574 billion euros (1.749 billion dollars). Adjusted for exchange-rate fluctuations, the Hermes Group sales grew by 11.3 percent.

Retail companies under the group perform well

The Otto Group’s three largest retail companies, Otto, Bonprix, and Crate and Barrel together increased their combined revenues by 384 million euros (426 million dollars). Otto grew by 6.3 percent to 2.724 billion euros (3,026 billion dollars). The international fashion retailer Bonprix increased revenues by 5.6 percent to 1.512 billion euros (1.680 billion dollars), while the North American lifestyle retailer Crate and Barrel raised revenues by 10.7 percent to around 1.475 billion euros (1.638 million dollars).

Among other retail companies, the Mytoys Group, with its brands Mytoys, Mirapodo, Ambellis, Yomonda and Limango, saw revenue climb by nearly 10 percent to reach 556 million euros (617 million dollars). The Witt Group revenues were steady at the previous year’s level at 757 million euros (841 million dollars), while the Baur Group saw a slight decline in revenue of 2.4 percent to 667 million euros (741 million dollars). The Schwab Group also reported declining revenues in the amount of 6 percent to 203 million euros (225 million dollars).

The Heine Group reported a revenue fall of over 23 percent to 282 million euros,(313 million dollars), which the company said was due primarily to the disposal of Alba Moda at the start of the 2016/17 financial year. At Sportscheck, revenues declined around 8.8 percent to 291 million euros (323 million dollars). The Manufactum Group increased revenues by over 3 percent to 92 million euros (102 million dollars), while Frankonia grew by 7.2 percent to 136 million euros (151 million dollars).

Revenues in Russia declined 6.2 percent

The company said, due to the persistently tough macroeconomic situation, Otto Group Russia reduced the expected decline in revenues to 6.2 percent and achieved 244 million euros (271 million dollars). The Otto Japan Group reported a slight drop in revenue on a yen basis of 2.7 percent, but thanks to a beneficial exchange rate development in euros represented a growth of 8.4 percent to 158 million euros (175 million dollars).

The British Freemans Grattan Holdings exceeded the previous year’s revenue figure in local currency by more than 6 percent and increased its customer base significantly. Due to the sharp devaluation of the British pound following the Brexit decision, a drop in revenue was 7.2 percent to 219 million euros (243 million dollars) reported on a euro basis.

Otto Group initiates growth strategy

The Otto Group has decided to target its investment towards group companies which are trusted to achieve good performance and high growth in business models. For example, the company said, the online retailer Otto will be developed into an e-commerce platform with a significantly larger range of products and services. Similarly focus will be on start-up Collins with its About You platform, which is being developed with a view to reaching the billion-euro revenue mark.

In the area of vertical brands, the Otto Group has big plans for the international fashion retailer Bonprix, the Witt group with its 50+ target group in 17 countries, and the highly popular brands of Crate and Barrel, the US furniture and lifestyle specialist. Other focus companies with high investment and growth expectations, from the executive board’s perspective, are Hermes Europe in the service business segment, the EOS Group in the financial Services segment, as well as Project A and Eventures in the corporate ventures market area.

Picture:Bonprix website

Otto Group