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Resignation: METRO shares firmer: Mission accomplished – Chef Koch leaves | message


What’s going on at METRO, what the analysts are saying and where the share price is headed.


After eleven years, it’s over for CEO Olaf Koch: He leaves, but voluntarily. The manager recently announced that his mission had been fulfilled and that he wanted to terminate his contract early. Koch has gradually converted METRO into a pure wholesaler. After several attempts, the Düsseldorf-based group parted with its Galeria Kaufhof department store. The electronics retailer Media-Saturn was spun off and listed on the stock exchange under the name Ceconomy. Most recently, METRO parted with the Chinese retail business and the long-standing problem child, the supermarket chain Real. Through all these steps, Koch succeeded in reducing the group’s liabilities by 7 billion euros.

In doing so, METRO itself would become a takeover target. An attempt by the Czech billionaire Daniel Kretinski failed last year. Since then, its holding company EPCG has been the largest shareholder. Not only the management around Koch, but also the METRO founders Beisheim and Meridian opposed the attempt to take over. The two founders bundled their holdings and built them into a de facto blocking minority. Together, the two companies hold a good 23 percent in METRO, and Kretinsky just under 30 percent.

His job at METRO was fulfilled with the sale of the Real department store chain in June, Koch said in an interview with “Welt” that he was leaving the company early. It was the largest and also the most difficult construction site, now things are settled. He does not yet know what he will do in the future. The only thing that is certain is: “I would never go to a company that competes with METRO even in the beginning.” Koch started as CFO at METRO in 2009 and has been managing the group since 2012. So now the group is looking for a new top manager.

Koch wants to support the group until the end of the year. The corona pandemic and the associated collapse in demand are also burdening the retail group’s business. The restaurant and hotel closings not only bothered restaurateurs and owners themselves, but also the wholesalers. Sales and earnings have been negative since mid-March. And it will take some time before out-of-home consumption reaches pre-crisis levels, according to the Group’s estimates some time ago.

The third quarter was thus shaped by the economic consequences of the Corona crisis: A loss was incurred in continuing operations. Overall, METRO was able to increase its profit significantly, but only because of the sale of its Chinese activities. Koch commented that METRO had nevertheless “mastered the crisis well so far and is emerging stronger from it”.

At the beginning of August, the group issued a new forecast for the financial year ending at the end of September: METRO is now expecting a decline in sales of 3.5 to 5 percent. The adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) should decrease by 200 to 250 million euros. In the previous year, the wholesaler reported an adjusted Ebitda of 1.39 billion euros in continuing operations.


Koch had successfully converted METRO from a retail conglomerate to a wholesaler, wrote analyst Thilo Kleibauer from Warburg Research after the announcement of the personnel with a view to the failed EPCG takeover. He has a “Hold” rating for METRO.

The reasons for the step are understandable, commented Lars Lusebrink from the analysis company Independent Research Koch’s withdrawal. The balance sheet of his term in office was “mixed”. Although he was responsible for some sales and the restructuring of the group, there were also disputes with major shareholders during his term of office and the rejection of the EPCG takeover offer.

Lusebrink also points to the weak development of the share price since the “new METRO” was first listed in 2017 after the spin-off from Ceconomy. In addition, the corona pandemic has shown that the focus on food wholesaling “makes sense but is also risky,” said Lusebrink. He does not expect any lasting effects of the personality on the share price. Lusebrink also recommends its customers to keep METRO.

As expected, the third quarter was weak, wrote Thomas Davies from the private bank Berenberg, but business is recovering faster than expected. He also advises holding the share. Overall, nine of the 14 experts recorded in the dpa-AFX analyzer recommend this. Four advise to sell and only one to buy.


The corona crash caused the METRO share to plummet to a record low. If the paper was worth more than 14 euros at the beginning of the year, the price fell temporarily in March to just a little more than six euros. Since then, 9 euros has been a hurdle that the course has only overcome a few times. Since the beginning of August, however, the share has remained consistently above eight euros. The price is currently just under EUR 8.30, which means that the share has lost more than 40 percent since the beginning of the year.

If you look at the overall course of the share since its initial listing, it doesn’t look good for shareholders either: the share price has continued to decline since 2017. The share was last worth more than 18 euros at the beginning of 2018. This means that investors have lost almost half of their money within 3 years.

After the price decline in recent years, METRO is only worth around three billion euros on the stock exchange. This means that the company itself only ranks in the lower third of the 60 MDAX stocks in the MDAX, and the company’s former stock market glory has finally vanished. In the middle of the last decade, when Ceconomy had not yet split off and the Kaufhof department store chain was also part of the group, METRO was at times worth more than 20 billion euros – and was also listed in the DAX until September 2012.

The METRO share is currently gaining 1.52 percent to EUR 8.42 via XETRA.

/ knd / nas / fba / e.g.


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Image sources: Metro Group

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