In the Retail and Industry sector, the result decreased by CHF 317 million to CHF 325 million (-49.4%).
In the Financial Services sector, the operating result increased by CHF 10 million to CHF 280 million (+3.7%).
Operating result of the Retail and Industry sector
The operating result for the Retail and Industry sector deteriorated significantly in 2017 compared to the previous year. Within the individual strategic business units, the trend varies. The online trade and the omni-channel presence are growing in importance, while in-store business is on the decline. Disruptive trends and digitalisation are influencing the course of business. In order to be able to overcome future challenges, a range of measures – including realignments and restructuring – were decided upon in the reporting year and several companies were sold. Value adjustments had to be made in individual companies.
Sharp decline in operating results in a challenging market environment.
Thanks to rigorous procurement management and process optimisation measures, gross profit increased by CHF 216 million to CHF 11'375 million (+1.9%). In addition to salary rises of between 0.3% and 0.7%, the increase in personnel expenses by CHF 175 million to CHF 5'774 million (+3.1%) is mainly due to the change in the scope of consolidation and the expansion of a number of companies. The increase of CHF 131 million in depreciation and amortisation to CHF 1'470 million (+9.8%) is due to normal investment activities. The increase in other operating expenses by CHF 227 million to CHF 3'805 million (+6.4%) is due mainly to higher rental costs as well as higher expenses in terms of energy materials and consumables, advertising and IT.
Overall, the operating result for the Retail and Industry sector decreased by CHF 317 million to CHF 325 million (-49.4%). Impairments weighed heavily upon the strategic business units Cooperative Retailing and Industry & Wholesaling in particular.
Operating result of the Financial Services sector
The Financial Services sector generated income from financial services business totalling CHF 779 million with costs of CHF 191 million. Net income from financial services business increased from CHF 571 million to CHF 588 million, due to higher income in the commission business.
Whereas income from financial services business decreased by CHF 39 million, expenses and impairment losses in the financial services business fell by CHF 55 million. In terms of income, lower interest income was partially offset by higher commission income.
Personnel expenses decreased slightly, by CHF 2 million to CHF 172 million. While depreciation and amortisation remained on a par with the figure recorded for the previous year (CHF 30 million), other operating expenses increased by CHF 3 million to CHF 110 million.
Overall, the fall in income was outweighed by the improvements in terms of expenses, with the operating result increasing by CHF 10 million to CHF 280 million.