Auchan has said a strong performance in emerging markets has helped offset a difficult environment in Europe in the first half of 2011, as the French retailer reported mixed half-year results.
The company today (31 August) posted a 5.8% rise in revenues and a slight fall in EBITDA.
The retailer said consolidated revenue, excluding taxes, increased by 5.8% to reach EUR21.2bn (US$30.6bn). At constant exchange rates, revenue excluding petrol sales also grew, by 5%. Like-for-like sales were up 1.3%.
However, EBITDA declined 1.5% to EUR1,005m, mainly due to pressure on margins in the eurozone. Operating profit from continuing operations fell by 8.5% to EUR450m as a result of the decline in EBITDA and higher depreciation charges linked to investments.
Reported operating profit increased by 24.4% to EUR611m; it included a EUR161m capital gain generated on the restructuring of the partnership operated by Auchan in China with Taiwanese firm Ruentex Group.
Net profit from continuing operations increased 45.4% to EUR361m. Restated for the capital gain linked to the restructuring in China, net profit would have fallen 11.2%. Net profit attributable to the owners of the parent for the six months ended 30 June 2011 totalled EUR341m.
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By GlobalData“The group’s activities in Europe were set against the backdrop of a difficult environment in the first half of 2011, comparable to that of the second half of 2010. The summer of 2010 marked a dramatic change as the implementation of government stringency plans in many European countries had a major impact on consumer spending,” Auchan said.
Revenue trends varied, however, by country: in France, Auchan saw revenues increase 3.3%. Sales from the retailer’s other western European markets fell 0.8%. In contrast, revenue in Central and Eastern Europe and in Asia continued to grow sharply, rising by 16.8%, the company said.
At 30 June, Auchan’s operations outside France accounted for more than 55% of revenue, compared with 54% in 2010.
Vianney Mulliez, chairman of the board of directors, said: “Our staff have successfully withstood the continuing difficult conditions in Western Europe while continuing to operate a quality discount business. We have also reduced our debt load while increasing investment, particularly internationally. Our international business now accounts for 55% of total revenue, thanks to our growth and our performances in Eastern Europe and China. Our fundamentals are solid, enabling us to retain and win the confidence of the greatest number of customers despite the current volatile conditions. Combined with the commitment of our staff, these are our greatest assets as we embark upon a second half year that seems just as uncertain as we had expected a year ago.”