Operating results
The operating result (EBIT) of Migros Group was CHF 201 million, CHF 449 million (-69.1%) below the previous year's figure.
In the Retail and Industry sector, the result fell by CHF 472 million to CHF -113 million (-131.4%).
In the Financial Services sector, the operating result increased by CHF 23 million to CHF 314 million (+7.9%).
Operating result of the Retail and Industry sector
The operating result for the Retail and Industry sector deteriorated sharply in 2019 compared to the previous year. This is due to the total loss of CHF 485 million suffered as a result of the sale of Depot Group and m-way in connection with the portfolio adjustments in the strategic segment Commerce.
Within the individual strategic business units, the trend varies. The online trade and the omnichannel presence are growing in importance, while in-store business is on the decline. Disruptive trends and digitalisation are influencing the course of business.
Gross profit increased by CHF 37 million in the reporting year to CHF 10'966 million (+0.3%). Other operating income grew by CHF 174 million to CHF 573 million (+43.6%), due in particular to real estate sales in Cooperative Retailing. The increase in personnel expenses by CHF 21 million to CHF 5'862 million (+0.4%), along with salary increases of between 0.5% and 1.0%, is mainly due to the change in the scope of consolidation. Depreciation and amortisation increased by CHF 66 million to CHF 1'503 million (+4.6%). The increase in other operating expenses by CHF 597 million to CHF 4'287 million (+16.2%) is due mainly to the loss from the disposal of investments and to higher administrative and other operating expenses, whereas advertising expenditure fell.
Portfolio adjustments negatively impact operating results
Portfolio adjustments resulted in a total operating loss of CHF 113 million in the Retail and Industry sector, corresponding to a CHF 472 million (-131.4%) deterioration in the result compared to the previous year. 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 769 million with costs of CHF 136 million. Net income from financial services business increased from CHF 615 million to CHF 633 million, due in particular to improved interest business (see Note 7 of Migros Group financial statements).
Whereas income from financial services business decreased by CHF 8 million, expenses and impairment losses in the financial services business fell by CHF 26 million (in particular lower interest expense).
The expansion of the core activities led to an increase in personnel expenses of CHF 8 million to CHF 189 million, and to a rise in other operating expenses of CHF 3 million to CHF 122 million. At CHF 28 million, depreciation and amortisation was down by CHF 2 million on the level of the previous year.
Thanks to savings in terms of expenses, the operating result was increased by CHF 23 million to CHF 314 million.
