Portfolio adjustments impact the financial result
Earnings before interest and taxes (EBIT) amounted to CHF 1.866 billion. Before portfolio adjustments and adjusted for the effects of the FINMA Accounting Ordinance (RelV-FINMA), which has applied to Migros Bank since 01.01.2020, operating profit at EBIT level came to CHF 718 million (+4.7%). Among other things, the result was negatively impacted by the losses of Globus (up to its sale in spring) and the Hotelplan Group. Group profit amounted to CHF 1.757 billion (CHF 555 million before portfolio adjustments). These funds will enable Migros to further enhance the shopping experience for its customers and respond flexibly to the changing market situation.
Retail sales of all Migros companies that supply end consumers increased by 2.6% to CHF 24.379 billion. Adjusted for the sale of Globus and Depot, retail sales amounted to CHF 24.195 billion, representing growth of 7.3% in comparison with the previous year.
Consolidated sales of CHF 17.736 billion (+5.0%) were generated in Cooperative Retailing. This also includes Migros Online, with sales of CHF 266 million (+40.0%). The ten Cooperatives and their subsidiaries generated sales of CHF 15.062 billion (+2.5%) in Switzerland. Sales abroad increased by 9.5% to CHF 1.498 billion. The Cooperatives increased their domestic market share by 0.7 percentage points to 15.9%. Although catering services, Club Schools and fitness/leisure facilities suffered a decline in revenue, supermarkets and hypermarkets recorded significant growth. Domestic sales came to CHF 12.455 billion (+7.4%). Organic food sales increased by 15.6%. Products with ecological or social added value recorded growth of 7.4%.
In the health sector, the Medbase Group expanded its medical and pharmacy units. With the takeover of zahnarztzentrum.ch, it also developed dentistry as a business segment. Sales amounted to CHF 380 million (+68.4%). With the launch of MiSENSO, Migros also entered the optometry and hearing aid markets in the reporting year, thus adding a new business segment to its health portfolio.
Adjusted for the sale of Globus, Swisstherm, Depot and m-way, the strategic business unit Commerce recorded a 14.3% increase in sales to CHF 7.538 billion (unadjusted -1.3%). In addition to the strong growth achieved by Digitec Galaxus (+56.4% to CHF 1.699 billion in Switzerland), Denner in particular performed extremely well (+15.7% to CHF 3.762 billion). The convenience store migrolino also recorded growth (+20.8% to CHF 716 million).
Migros-Industry felt the effects of the pandemic in third-party business and overseas markets, including the US and the UK. However, thanks to strong growth in the Migros channels, it was able to compensate for these effects. Sales increased by 1.8% to CHF 5.975 billion.
Due to the massive travel restrictions introduced in response to the pandemic, the strategic business unit Travel posted the worst result in its history. The travel group achieved net sales of CHF 732 million (-38.4%). Including vtours, acquired in 2019, sales were down by 57% year-on-year. Passenger figures fell by 28.2% (-50.8% including vtours).
Migros Bank increased its business volume significantly, despite the challenging conditions created by the pandemic. Customer deposits increased by 7.2% to CHF 38.0 billion, and mortgage volume rose by 4.5%. The performance of the investment and corporate clients business was also encouraging. Due to the negative interest rate environment and value adjustments for inherent default risks, profit fell by 16.3% to CHF 193 million.
Migros as an employer
Migros Group employed 99'155 staff in 2020 (2019: 106'119). The change is due mainly to the disposals made as part of the portfolio adjustments, which led to an 8'000 reduction in the workforce. However, Migros also created new jobs in Switzerland, including 1'200 in the areas of online retail and health. Migros therefore continues to be the largest private employer in Switzerland.
The 2021 financial year will also be dominated by the Covid-19 pandemic. We are convinced that the Migros Group can strengthen its position further in the strategic growth areas and increase its market shares. It remains a reliable employer and continues to fulfil its responsibility to supply the Swiss population with great dependability and commitment. The Migros Group is in good shape and well equipped to deal with future challenges and developments.