Otto Group

2016-07-20

About the Otto Group

Established in Germany in 1949, today the Otto Group is a globally operating retail and services group with around 49,600 employees. The Group includes 123 major companies and does business in over 30 countries in Europe, North and South America, and Asia. Its business activities are grouped into three segments: Multichannel Retail, Financial Services, and Service. In the 2015/16 financial year (to 29 February), the Otto Group generated revenues of 12.1 billion euros. With e-commerce revenues of around 6.5 billion euros, the Otto Group is one of the world’s largest online retailers. E-commerce, catalogue sales and over-the-counter retail form the three pillars of the Otto Group’s Multichannel Retail strategy. Our worldwide corporate activities, numerous strategic partnerships and joint ventures provide the Otto Group with excellent opportunities to transfer know-how and leverage areas of synergy potential. Group companies operate largely independently, guaranteeing flexibility, customer proximity and optimum target-group appeal in their respective national markets.

Otto Group: successful turnaround

25.05.2016 | Hamburg

In the 2015/16 financial year (as at 29 February 2016) the globally active retail and services company Otto Group, Hamburg, achieved the targeted turnaround in its major business areas. The strategic initiatives previously announced by Hans-Otto Schrader, Chairman of the Otto Group Executive Board and Chief Executive Officer (CEO) Otto Group, including the clear reinforcement of the Group’s core businesses, investments in digital transformation and new business models, the restructuring of some Group companies and the rationalisation of the company portfolio, were consistently and successfully implemented.

In the 2015/16 financial year (as at 29 February 2016) the globally active retail and services company Otto Group, Hamburg, achieved the targeted turnaround in its major business areas. The strategic initiatives previously announced by Hans-Otto Schrader, Chairman of the Otto Group Executive Board and Chief Executive Officer (CEO) Otto Group, including the clear reinforcement of the Group’s core businesses, investments in digital transformation and new business models, the restructuring of some Group companies and the rationalisation of the company portfolio, were consistently and successfully implemented.

Consolidated revenues climbed by 5.4 per cent to 12.104 billion euros, with an improvement in pre-tax earnings (EBT) from 44 to 187 million euros. The Group thus achieved its objective of returning to operative profitability. The only clouds on the balance sheet were the disappointing revenue development and repeated high losses at the 3Suisses mail-order business. The retail activities of the French 3SI Group are earmarked for sale, which led to high one-off balance-sheet burdens.


"With our strong core businesses, a focused company portfolio and targeted investments in technology, mobile commerce and new business models such as Collins and Otto Group Media, we have laid a sound foundation for sustainable, value-driven growth in the years to come”, emphasizes CEO Hans-Otto Schrader.


Market-share gains in German e-commerce

The Otto Group’s online business reported a particularly dynamic development in the past financial year. The Group’s global e-commerce revenues rose by 8.8 per cent to reach 6.5 billion euros, thereby reaffirming the Group’s strong position as one of the world’s largest online retailers. In Germany the Group increased its online revenues by 12.3 per cent or 500 million euros to reach 4.6 billion euros. This figure confirms the Otto Group outperformed the overall German e-commerce sector (+11.9 per cent; source: bevh), thereby winning additional market share.

Growth in all business segments

All three Otto Group business segments – Multichannel Retail, Financial Services, and Service – successfully raised revenues, in some cases substantially.


The Financial Services segment, which is mainly driven by the EOS Group, saw 5 per cent growth from 646 to 678 million euros.


The Service segment’s logistics and service activities, which are dominated by the Hermes Group, reported strong growth of 15.3 per cent, climbing from 1.594 to 1.838 billion euros. This growth was once again driven mainly by Hermes’ business activities in Great Britain, although Hermes saw clear growth in Germany too.


Multichannel Retail, by far the Otto Group’s largest revenue driver, reported sales of 9.588 billion euros, which represents growth of 3.7 per cent. On a consolidated basis the Otto Group’s retail activities increased EBIT from 161 to 178 million euros.


In Germany the Otto Group’s retail revenues rose in total by 5.1 per cent, thus reflecting a clearly superior development to that of the overall retail sector (+2.9 per cent; source: German Federal Office for Statistics). With revenues of 6.323 billion euros and over 32 million customers (+4 per cent), Otto Group companies reached almost every second household in Germany.


Strong growth at core businesses

OTTO, the largest single company in the Otto Group, reported an outstanding financial year, due amongst other factors to the highly successful campaign ‘20 Years of otto.de’. The company saw above-plan revenue growth of 9.8 per cent to reach 2.563 billion euros. Fashion provider Bonprix, active in 29 countries, also enjoyed an outstanding development, raising revenues by 10.6 per cent to 1.432 billion euros. The Witt Group, which focuses on the economically attractive 50+ target group, grew by 4.1 per cent to 756 million euros, while the Baur Group reported revenue growth of 1.3 per cent to reach 683 million euros. The Schwab Group suffered a revenue decline of 6.9 per cent to 216 million euros, while the Schwab brand Sheego was able to raise revenues slightly. The Heine Group saw revenues decline by 4.8 per cent to 458 million euros, while the Mytoys Group returned to its previous strong growth and at 508 million euros raised revenues by almost 20 per cent. Sportscheck also reported higher revenues, and at 319 million euros generated 7.7 per cent more sales income than in the previous year. The start-up Collins, with its brands ‘About you’ and ‘Edited’, continues to enjoy dynamic growth and is heading for the 100 million-euro revenue milestone.


Looking at the Otto Group’s foreign activities, Otto Group Russia once again battled a deeply recessive environment and a volatile rouble exchange rate. Although revenues slid by 35 per cent to 260 million euros, management nevertheless succeeded in leading the company into operating profitability. The Otto Japan Group saw a slight revenue decline of 2.6 per cent with revenues of 145 million euros. By contrast, British company Freemans Grattan Holdings (FGH) reported strong growth of 19.4 per cent to reach 236 million euros. After a weak previous year, North American lifestyle group Crate and Barrel delivered a particularly satisfactory performance, raising revenues by no less than 24.3 per cent to reach 1.332 billion euros. Even though this growth was supported by the exchange-rate development, the new management team has turned in an impressive result.


Rise in profits from operative business

The positive business development at many Otto Group companies contributed to the rise in consolidated earnings before interest and taxes (EBIT) to 259 million euros. The most significant key figure, earnings before taxes (EBT), was clearly above the previous year’s result at 187 million euros. Profit for the year from the continued business activities was 90 million euros.


Discontinued business areas burden result

The decision to sell off the overall unprofitable retail operations of the French 3SI Group by the end of the 2016/17 financial year (‘Discontinued Operations’) already led to high extraordinary balance-sheet losses in the reporting year now closed, under IFRS 5 accounting rules. In total the balance-sheet burden from the divestment of the French 3SI Group led to an accounting loss for the Otto Group for the past financial year of 190 million euros.


The number of Otto Group employees, calculated as Full-Time Employees (FTEs), was 49,600 as at the reporting date, representing a decline of around 2,000 jobs which is mainly attributable to company divestments. As already announced, office-supplies providers OTTO Office and JM Bruneau were sold, as were fashion mail-order provider Alba Moda and French service providers Taylormail and Cité Numérique. In Germany, at approximately 25,800 FTEs the headcount remained at the previous year’s level.


Hans-Otto Schrader provides a positive outlook for the current 2016/17 financial year: “The dynamic growth of our companies and the rising number of new customers mean

we are confident that we can raise the Otto Group’s overall revenues by 4 per cent on a comparable basis, and further improve our earnings situation.”

On our way into a digital future.

The Otto Group is in the midst of digital transformation. Our Group has aligned its activities in the business areas of Multichannel Retail, Financial Services and Services with the needs of today’s e-commerce sector. Always bearing the welfare of people and nature in mind is what sets us apart.

Otto Group 4.0

Constant renewal is the fuel for successful entrepreneurship. To ensure the Otto Group continues to benefit from the dynamic development of online retail in future, the company can count on a sound E-Commerce Strategy, teams of highly qualified experts and strong international networks.

Sustainability is part of our DNA – it’s what drives us

Sustainability is everybody’s business! At the Otto Group, it is a top-management responsibility and a fundamental guiding principle for our actions. For almost 30 years we have successfully combined business goals with social and environmental responsibility towards people and nature.

media Contact

Thomas Voigt

Tel. +49 40 6461 4010

E-Mail: thomas.voigt@ottogroup.com 

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