REWE Group
Annual Report 2020

Report by the
Management Board

Lekkerland acquisition fuels strong growth | REWE Group revenue tops 75 billion euros for the first time | Independent REWE retailers record very strong revenue growth | Higher tax burden and substantial losses in travel and tourism lead to decline in consolidated earnings | Increase in investments

 

REWE GROUP

REVENUE TOPS 75 BILLION EUROS FOR THE FIRST TIME

Thanks to the successful integration of the Lekkerland Group, the REWE Group’s total external revenue reached a record level of 75.3 billion euros in the 2020 business year. After exchange rate adjustment, this represents an increase of 20.4 per cent relative to the previous year (62.7 billion euros).

The year 2020 was overshadowed by the coronavirus pandemic at the REWE Group as well. We were ultimately able to achieve our economic goals, thanks to positive trends in our retail business that offset significant stresses in the tourism division. We would particularly like to thank our company’s more than 380,000 employees in Germany and abroad, as well as our retailers, for their outstanding performance and extraordinary commitment under the challenging conditions posed by the coronavirus crisis. Our cooperative has become even more united and that makes us particularly proud. With the successful integration of the Lekkerland Group, the REWE Group has acquired a new and very promising business segment. With the Lekkerland Group, we have excellent prospects in the growing convenience sector in Germany and Europe. The REWE Group is planning additional investments to modernise its stores, expand its logistics infrastructure and continue on its course towards digitalisation.

Under the umbrella of the cooperative group, the independent food retail sector again showed very strong growth. The REWE retailers in Germany generated 20.5 per cent more revenue compared to the previous year.

The number of employees in Germany and other European countries rose by roughly 22,000, to approximately 384,000, comprising 282,000 in Germany and 102,000 in other countries. This is an increase of 6 per cent. The number of trainees at the REWE Group in Germany (as of 30 September 2020) increased by 388 (+4.1 per cent) to 9,762, with 4,409 beginning their training in 2020.

REWE COMBINE

INCREASED REVENUE AND LOWER CONSOLIDATED EARNINGS

The REWE Combine revenue – not including independent retailers, shareholdings and at-equity entities – rose by 23.4 per cent, from 55.3 billion to 68.2 billion euros. Revenue in Germany increased by 24.4 per cent, to 46.6 billion euros; whilst revenue in other countries increased by 22.7 per cent, to 21.6 billion euros, after adjustment for exchange rates.

Operating EBITA grew from 910 million euros in 2019 to 1.22 billion euros.

Consolidated earnings EAT dropped from 507 million to 415 million euros. This decline is due to a significantly higher tax burden, owing to non-offsettable losses of the DER Touristik Group, among other factors.

The REWE Combine’s EBITDA increased from 4.1 billion euros in the previous year to 4.4 billion euros.

Investments in tangible and intangible assets totalled 1.9 billion euros, approximately 140 million euros more than in 2019. We intend to increase our investments to 2.3 billion euros in 2021. We are also planning similar investments for the years 2022 and 2023.

Equity capital grew from 7.3 billion to 7.6 billion euros. Net financial debt, not including financial leasing, totalled 1.7 billion euros as of 31 December 2020.

Revenue development in the business segments

In the Retail Germany business segment, which includes the divisions of REWE, PENNY Germany and Retail Germany Central Businesses, revenue totalled 34.7 billion euros. Beside the domestic real estate businesses, the production and sales of baked goods under the Glocken Bäckerei brand and the production of meat and sausage products under the Wilhelm Brandenburg brand are also part of Retail Germany. 

National Full-Range Stores, including the retail revenue of the REWE stores and the wholesale revenue of retailers and other partners, increased revenue by 12.3 per cent from 23.6 billion euros to 26.5 billion euros.

In the National Discount Stores segment, PENNY Germany achieved revenue growth of 5.4 per cent and, for the first time, generated external revenue of 8 billion euros.

The Retail International business segment comprises the business segments International Full-Range Stores and International Discount Stores. The Retail International business segment achieved revenue of 15.9 billion euros. This corresponds to a revenue increase of 4.4 per cent (6.1 per cent adjusted for exchange-rate effects). 

In the International Full-Range Stores segment, the REWE Group divested itself of its stores in Ukraine in the 2020 business year. It now has supermarkets and drugstores in Austria, the Czech Republic, Slovakia, Russia, Bulgaria, Croatia and Lithuania. Revenue rose by 2.4 per cent (3.6 per cent adjusted for exchange-rate effects) from 10.1 billion to 10.4 billion euros. The full-range sector in Austria, with BILLA, BIPA, MERKUR and ADEG, saw revenue increase by 4.3 percent to 6.8 billion euros.

In the International Discount Stores segment, PENNY recorded even more dynamic growth. In Italy, Austria, Hungary, Romania and the Czech Republic, PENNY’s overall revenue increased by 8.3 per cent (by 11 per cent after exchange rate adjustment), from 5.1 billion to 5.5 billion euros.

In the new Convenience business segment, with the Lekkerland Group’s national and international activities in Germany, the Netherlands, Belgium, Luxemburg and Spain, total external revenue reached 13.1 billion euros. For the first time, this figure also includes the REWE To Go segment.

In the DIY Stores business segment, which includes toom Baumarkt, revenue rose from 2.2 billion to 2.7 billion euros, an increase of 19.9 per cent.

Consolidated revenue in the Travel and Tourism business segment suffered a serious decline – by 5 billion euros, or 73.9 per cent, to 1.3 billion euros.