Portfolio adjustments impact the financial result
The Migros Group's earnings before interest and taxes (EBIT) and before portfolio adjustments were CHF 686 million in the reporting year, 5.5% above the previous year. This positive development is due to the successful implementation of comprehensive measures along the entire value-added chain. As a result, the Migros Group is able to invest more in new services, further expand the shopping experience for its customers and focus on the changing market situation. As a result of losses from the disposal of the Depot Group and m-way, however, the Group profit decreased by 29.6% to CHF 335 million.
Investments were high at CHF 1'574 million (2018: CHF 1'516 million).
Retail sales in Switzerland, which includes Cooperative Retailing and the companies from the Commerce strategic business unit, increased by 0.6% on the previous year to CHF 22.030 billion.
The consolidated sales of Cooperative Retailing fell slightly to CHF 16.756 billion (-0.6%) in 2019. The Migros supermarkets and hypermarkets generated sales of CHF 11.596 billion (-1.4%) in Switzerland. Despite strong competition, Denner was able to maintain its position as Switzerland's leading discounter.
Regional and sustainable products continued on a growth course in 2019. Sales of products with ecological or social added value stood at CHF 3.148 billion (+0.6%). Thus, one in five Swiss francs generated by Migros in Cooperative Retailing came from products in this promising segment. For the first time, Migros customers spent more than CHF 1 billion on organic food.
Migros further cemented its position as the market leader in Swiss e-commerce. The Migros Group's online sales increased considerably by 9.8% to CHF 2.285 billion. The online retailer Digitec Galaxus generated record sales of CHF 1.106 billion (+16.1%).
In the health sector, Medbase/Santémed further expanded the therapeutic and medical range in the reporting year. Sales amounted to CHF 226 million (+50.8%). In addition to organic growth, the integration of Topwell Apotheken into the Medbase Group made a significant contribution to the positive development.
Growth of M-Industry abroad
M-Industry further strengthened its market position abroad in 2019 with consolidated sales of CHF 5.872 billion (previous year: CHF 5.829 billion). This growth was driven mainly by the encouraging business abroad, which grew by 9.9%. The South Korean subsidiary Gowoonsesang Cosmetics recorded strong growth in particular. Business in the Swiss market saw a slight decline of 0.7%.
In the 2018/2019 financial year, the Hotelplan Group focused on high-quality holidays with the aim of improving margins. The travel company posted sales of CHF 1'188 million (previous year: CHF 1'259 million). Passenger figures were down by 6.8%. The result was influenced by external factors such as Brexit and the insolvency of Thomas Cook.
Migros Bank continued to grow in 2019, despite the challenging environment. The mortgage volume increased by 3.6%. The performance of the investment and corporate clients business was also encouraging. Profit across all divisions was up 12.9% to CHF 231 million.
In 2019, Migros Culture Percentage invested CHF 118 million in culture, society, education, leisure and the economy. It includes Migros Club School, the Gottlieb Duttweiler Institute (GDI) and the Migros Museum of Contemporary Art. Migros Culture Percentage was initiated by Gottlieb Duttweiler in 1957 and is incorporated in the statutes.
The Engagement Migros development fund was set up in 2012 to supplement Migros Culture Percentage. With the fund, the companies from the strategic business units Commerce, Financial Services and Travel undertake to invest 10% of their dividends in supporting projects in the areas of culture, sustainable development, business and innovation. In total, CHF 20 million was made available (CHF 18 million spent) in the reporting year.
Regional roots are important to the Migros Group, as they ensure that the company stays close to its customers. The Group's structures reflect the diversity of Switzerland and its regions. Migros has strong values and excellent control systems and processes, which ensures good corporate management. However, resolving identified problems quickly is not always easy, due to the decentralised responsibilities. Migros therefore decided in 2019 that it would carefully assess different ways to improve governance further.
Migros as an employer
In 2019, Migros employed 106'119 people, 89'140 of whom were based in Switzerland, equating to a decrease of 531 positions. Adjusted for the companies sold in the Commerce department, the number of jobs within the Migros Group in 2019 decreased slightly by 357 (-0.4%) in comparison with the previous year.
Migros therefore continues to be the largest private employer in Switzerland. Its goal is to show particular responsibility towards its staff by providing above-average employee benefits and a working environment that values every employee.