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#316 Michael Otto $5.36B

Random fact: Father and Otto Group founder, Werner, lived until age 102.

Overview

Otto is the chairman of Otto Group, a Hamburg-based online retail company. The closely held business operates in more than 30 countries and employs about 50,000 people. It has retail, financial services, logistics and travel divisions, and reported revenue of 12.5 billion euros ($13.8 billion) in the year to Feb. 28, 2017.

As of July 21, 2017:
Last change +$140M (+2.7%)
YTD change +$1.42B (+36.0%)
Industry Retail
Biggest asset Otto Group (retail)
Citizenship Germany
Age 74
Wealth Inherited
View net worth over:   Max 1 year 1 quarter 1 month 1 week

Relative Value

Michael Otto's net worth of $5.36B can buy ...

0
troy ounces of gold
0
barrels of crude oil

... and is equivalent to ...

0%
of the GDP of the United States
0%
of the total wealth of the 500 richest people in the world
0%
of the top 100 U.S. college endowments
0%
of the top 200 U.S. executives’ total awarded compensation
0%
of U.S. existing home sales
0
times the median U.S. household income

Latest News

Net Worth Summary

Cash
Private asset
Public asset
Misc. liabilities
Confidence rating:

The majority of Otto's fortune is derived from his 43.2 percent stake in Otto Group, a closely held conglomerate with interests in retail, financial services, travel and logistics. The company had revenue of 12.5 billion euros ($13.8 billion) and Ebitda of 730 million euros ($803 million) in the year ended Feb. 28, 2017, according to its annual report. The valuation was updated on June 15, 2017 to reflect these financials, which led to an increase in the net wealth calculation.

Otto controls the business through Kommanditgesellschaft Atlas Vermoegensverwaltung, according to Orbis, a company database published by Bureau van Dijk. His four half-siblings and his father's third wife own 39.4 percent of Otto Group through the same holding company. Otto's stake was reduced from 78.5 percent in July 2016, based on a review of the Otto family's ownership.

In April 2015, Otto Group announced Michael Otto had transferred most of his shares to a non-profit foundation. Otto remains credited with the shares.

Otto Group's retail business is valued using the average enterprise value-to-sales and enterprise value-to-Ebitda multiples of four publicly traded peer companies: Pier One Imports, Next, N Brown Group and Debenhams. The financial services segment is valued using the average enterprise value-to-sales and enterprise value-to-Ebit multiples of two publicly traded peers: Total System Services and Global Payments Inc. The logistics and travel businesses are valued using the average enterprise value-to-sales and enterprise value-to-Ebitda multiples of four publicly traded peers: DKSH Holding, Logwin, Norbert Dentressangle and Deutsche Post.

The value of his cash and other assets is based on his share of the family's investments, based on comments from a person familiar with them who asked not to be identified because the investments are private.

Robert Haegelen, an Otto Group spokesman, declined to comment on the net worth calculation.

Biography

Birthdate: 4/12/1943
Family: Married, 2 children
Education: Ludwig-Maximilians-Universitaet Muenchen

Michael Otto was born in Nazi-occupied Poland in 1943, nine years after his father, Werner, was jailed for distributing anti-Hitler pamphlets. After World War II, Werner Otto took his family to Hamburg and began making shoes. He founded the Otto Group in 1949, a shoe mail-order business, with 6,000 Deutsche marks and three employees.

Michael Otto became an apprentice at a Munich bank in 1962. He obtained a doctorate in economics and joined Otto Group in 1971, becoming CEO a decade later. Throughout the 1980s, the company researched and experimented with technological advancements occurring in the U.S. At the cusp of the Internet boom, Otto played a role in a Time Warner interactive project that set out to determine whether customers in Orlando, Florida, would shop online. The experiment was a high-profile bust, though it gave Otto and his executives crucial insight into e-commerce. Introduced in 1995, Otto's online sales business was profitable within three years.

Not all of Otto's retail ventures worked out. Spiegel, its mail-order catalog business based in Chicago, filed for bankruptcy in 2003 after extending too much credit to unqualified customers. The family eventually gave up the company, and defended itself against an investigation by the U.S. Securities and Exchange Commission over its financial reporting.

The Otto family paid 1 billion euros in 2008 to buy back a 25 percent stake in the company from German media company WAZ Group, which had invested in the company in 1962. Seven years later, Michael Otto transferred the majority of his shares in the Group to a foundation that aims to support sustainable development and nature conversation projects, according to the foundation's website.

Milestones
  • 1943 Michael Otto is born in Poland during World War II.
  • 1949 Father, Werner Otto, opens retail business in a Hamburg factory.
  • 1965 Father creates his first real estate company, ECE.
  • 1969 Werner Otto Foundation established.
  • 1981 Takes control of Otto Group as chairman and CEO.
  • 1993 Michael Otto Foundation established.
  • 2000 Half-brother, Alexander, takes over ECE.
  • 2007 Leaves CEO role at the Otto Group after 26 years.
  • 2011 Father dies in Berlin at age 102.
  • 2015 Son Benjamin Otto joins the company as a managing partner.