Otto Group keeps growing

While announcing its preliminary figures for the year ending 29 February, Hamburg-based Otto Group stated it was off to a flying a start into the new financial year.

The German mail-order and e-commerce behemoth provided little evidence, however, that business will continue to thrive in 2016, aside from mentioning that its workforce will be trimmed in the wake of divestment.

Annual group revenues grew 4.3% to €12.5bn, while rising 5.5% in Germany, its core market. That growth rate was the basis of a decent operating performance, and is well above the domestic inflation rate, which stood at about 0.3% last year.

The main driver of growth was online retailing, with global online revenue up 6.5% to €6.6bn. Germany was the star performer, with online sales rising about 10% to €4.4bn, which helped the group “reaffirm its position as one of the world’s largest online B2C retailers.”

The multichannel retail business unit, which is responsible for over €10bn of revenues, grew 2.4% last year. OTTO, the largest company among its lean portfolio of assets, hit €2.5bn in revenues, growing “well above plan of almost 10%”, while fashion retailer Bonprix (€1.4bn revenue, +11% year-on-year), textile retailer The Witt Group (€755m revenues, +4% year-on-year) and Baur Group (€683m revenues +1.3% year-on-year) are by comparison side business units with revenue above half a billion euros that are also driving growth.

Elsewhere, the service segment – which is dominated by the Hermes Group, Germany’s largest independent home delivery operator – fared even better in terms of growth, recording a rise in revenues of 16.6% to €1.7bn for the year.

Meanwhile, its smaller financial services unit grew its top-line by 5.3% to €680m.

Its international business enjoyed mixed fortunes. The group noted that “while revenues in North and South America and in Great Britain partly saw strong increases, sales figures of the French 3SI Group and the Otto Group Russia declined again”, due to a very weak economy and a volatile rouble exchange rate.

With regard to staff, “at the end of the past financial year comprised approximately 52,200 full-time equivalent (FTE),” which represents a decline of “around 1,800 positions, mainly caused by the sale of companies”.

“The past financial year marked a turning point. We successfully continued to strengthen our core business, to further expand our e-commerce and to adjust our company portfolio,” it added.

Source: Transport Intelligence, 19th April 2016

Author: Alessandro Pasetti