MADE TO TRADE. Sanford C. Bernstein Strategic Decisions Conference

Transcription

1 MADE TO TRADE. Sanford C. Bernstein Strategic Decisions Conference 2 October 2013 London METRO AG October 2013 METRO AG

2 Disclaimer and Notes To the extent that statements in this presentation do not relate to historical or current facts, they constitute forward-looking statements (including within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended). All forward-looking statements herein are based on certain expectations and assumptions at the time of publication of this presentation and are subject to risks and uncertainties that could cause actual results, performance or financial position to differ materially from any future results, performance or financial position expressed or implied in this presentation. Many of these risks and uncertainties relate to factors that are beyond METRO GROUP s ability to control or estimate precisely. The risks and uncertainties to which these forward-looking statements may be subject, include (without limitation) future market and economic conditions, the behaviour of other market participants, the ability to successfully transform the business model of METRO Cash & Carry, reorganise the management structure of METRO Cash & Carry, invest in innovative sales formats, expand in online and multichannel sales activities, integrate acquired businesses and achieve anticipated cost savings and productivity gains, and the actions of government regulators. Readers are cautioned not to place reliance on these forward-looking statements. METRO GROUP does not undertake any obligation to publicly update any forward-looking statements or to conform them to events or circumstances after the date of this presentation. This presentation is intended for information only. It is not intended as an offer for sale, or as a solicitation of an offer to purchase, any securities in any jurisdiction. This presentation may not be reproduced, distributed or published without prior written consent of METRO AG. All numbers are before special items, unless otherwise stated. Please note that new accounting standards have been applied. More information regarding the application of accounting methods, refer to the notes to the Annual Report Since 1 January 2013, it is mandatory to apply the revised IAS 19. The previous option granted for actuarial gains and losses from defined benefit pension plans, which allowed these amounts to be recognised either immediately in the income statement, directly in equity or according to the so-called corridor method, has been abolished. The revised IAS 19 only allows for actuarial gains and losses to be recognised immediately in equity ( other comprehensive income ). The amounts collected in equity remain there and will not be reclassified to the income statement in subsequent periods. As a result, the income statement will in future remain unaffected by actuarial gains and losses. As METRO AG used the corridor method in the past, this resulted in a change of method. Another change concerns the fact that, in future, expected returns on plan assets will be determined using the discount rate used to measure the pension obligations. In addition, past service costs will in future be recognised fully in profit or loss during the period in which the respective plan changes were effected. The consolidated financial statements have been prepared in euros. All amounts are stated in million euros ( million) unless otherwise indicated. Amounts below 0.5 million are rounded and reported as 0. In contrast to the practice of past years, only the amounts in the income statement, the reconciliation from profit or loss for the period to total comprehensive income, the balance sheet, the statement of changes in equity and the cash flow statement were rounded to produce the respective totals. In all other tables, the individual amounts and the totals were rounded separately. This may entail rounding differences. 2 October 2013 METRO AG

3 Overview METRO at a Glance 3 Strategic Priorities 7 Four Market Leading Sales Lines 10 Performance in Q2 & Outlook METRO A Compelling Investment 22 2 October 2013 METRO AG

4 Fourth Largest Retailer Worldwide in 2012 Sales: 66.7bn EBIT: 2.0bn Cash Flow: 2.3bn Stores: 2,243 Countries: 32 Employees: 280,000 / 180 nations 2 October 2013 METRO AG

5 4 OpCos, 1 PropCo* & 1 Strategic Management Holding METRO AG The world s leading player in the cash & carry sector One of the leading operators of hypermarkets in Germany Europe s No. 1 consumer electronics retailer One of Europe s leading department store operators The most international portfolio in retail and wholesale 2012 Sales Share 2012 EBIT Share** * As of 01/10/2013 no separate real estate segment reporting ** Pre Other and consolidation 2 October 2013 METRO AG

6 Strong International Presence Germany Western Europe Eastern Europe Asia/Africa METRO GROUP Countries Sales Share 2012 EBIT Share 38% 30% 27% 5% 100% 26% 33% 43% -2% 100% We generate nearly one third of Group sales and more than 40% of total earnings in emerging markets 2 October 2013 METRO AG

7 Overview METRO at a Glance 3 Strategic Priorities 7 Four Market Leading Sales Lines 10 Performance in Q2 & Outlook METRO A Compelling Investment 22 2 October 2013 METRO AG

8 Strategic Priorities: Customer Centricity & Business Excellence Customer Centricity Business Excellence Our Goal: Long-term value creation for METRO s stakeholders 2 October 2013 METRO AG

9 Active Portfolio Management in 2012 All shares of MAKRO UK and 30 freehold properties were sold on a debt- and cash-free basis to Booker (closed on 4 July 2012) for a 9.08% stake in issued share capital of Booker and 15.8m in cash Sale of Real s complete activities in Eastern Europe (excluding Turkey), including real estate for an enterprise value of 1.1bn to Groupe Auchan Discontinuation of Media Markt in China after the two-year test phase expired in December 2012 and closure of all stores as per beginning of March 2013 Transforming the Group further and focusing on what really matters 2 October 2013 METRO AG

10 Overview METRO at a Glance 3 Strategic Priorities 7 Four Market Leading Sales Lines 10 Performance in Q2 & Outlook METRO A Compelling Investment 22 2 October 2013 METRO AG

11 The World s Leading Player in the Cash & Carry Sector Focused on B2B self-service wholesaling to HoReCa, Trader and SCO customer groups High performance internationally replicable concept Matchless emerging markets footprint: International share of sales over 80% 743 stores in 29 countries, of which 8 focus countries Profitable Growth Drivers: USP: Outstanding freshness & quality in food Business model transformation Dedicated sales force Innovative store concepts 2.2bn delivery sales 5.3bn own brand sales Expansion focus on Russia, China and Turkey million Sales 31,121 31,636 EBIT 1, EBIT Margin 3.7% 3.0% RoCE 19.0% 15.7% 2 October 2013 METRO AG

12 Strategic Ambitions Overall Ambition: Market leadership through unique product ranges and strong focus on B2B solutions that make our customers more competitive. Stronger overall customer focus Further expansion of franchise solutions for Traders Ongoing country and store portfolio review Further organic expansion centred on high-growth countries Strong push in delivery sales, driven by enlarged field force Grow own brand sales, especially in light of challenging macro Trialling new non-food concepts in Germany Improving core operations 2 October 2013 METRO AG

13 Europe s No. 1 in Consumer Electronics Retailing Pan-European market leader with 935 stores in 15 countries Large-scale, full assortment store base with entrepreneurial store managers Very competitive EDLP pricing strategy Innovative merchandising and marketing concepts Profitable Growth Drivers: Business model transformation Multichannel sales activities in 9 countries 0.8bn online sales and with c.23 / c.34 million site visits per month Four own brands Expansion focus on Russia and Turkey million Sales 20,604 20,970 EBIT EBIT Margin 2.6% 1.6% RoCE 21.5% 16.0% 2 October 2013 METRO AG

14 Strategic Ambitions Overall Ambition: Superior shopping experience in consumer electronics, best offer, service and price for our customers in our stores and online. Continue implementation of strategic transformation Ensure price competitiveness / leadership Continuously enhance value proposition regarding assortment and service including online services (Juke, Video on demand) Optimise sourcing approach Intensifying online activities: 10% of sales expected by the end of ,000 SKUs to be available in Germany by the end of October 2013 METRO AG

15 Leading Operator of Hypermarkets in Germany Following the divestment of activities in Eastern Europe (ex Turkey) focus will be on Germany with 312 stores Food accounts for approx. 75% of sales Comprehensive product range of 80,000 different articles Member of Germany s leading loyalty card programme PAYBACK Profitable Growth Drivers: Business model transformation 13.2% own brand sales share with almost 5,000 products (TiP, Real Quality, Real Bio, Real Selection) Entrepreneurial store management Multichannel: Webshop with more than 10,000 products; Drive concept million Sales 11,032 11,017 EBIT EBIT Margin 1.2% 0.9% RoCE 5.6% 5.3% 2 October 2013 METRO AG

16 Strategic Ambitions Overall Ambition: Unique choice and quality in food retail complemented by a compelling non-food range. Well-adjusted to serve our key customer groups. Enhanced through multichannel. Formation of regional management structure to drive repositioning at lower cost Increased execution discipline through regional management team Better adaption to local/regional markets through customised advertising and regional assortments Rollout of >650 concepts modules with focus on categories with strong differentiation potential Marketing mix complemented by events and professional campaigns 2 October 2013 METRO AG

17 One of Europe s Leading Department Stores Concept and systems leader in Germany and market leader in Belgium with 137 stores in total Powerful international product ranges and high-quality own-brand products Strong cost and stock management 19% own brand share Optimisation of space allocation (consumer electronics vs apparel and accessories) Profitable Growth Drivers: Focus on mid-market and lifestyle orientation (sharper brand and own brand portfolio) Consistent trading-up strategy Multichannel: Webshop with >50,000 products New category management based on loyalty card data million Sales 3,119 3,092 EBIT EBIT Margin 3.9% 4.4% RoCE 10.6% 12.2% 2 October 2013 METRO AG

18 Strategic Ambitions Overall Ambition: Concept leadership for department stores in Germany and Belgium. Absolutely customer-driven providing a meaningful and compelling offer for our customers. Consequent deployment of multichannel strategy: Extend multichannel services, product range enlargement and intensified advertising measures Continue to optimise assortment following customer insights Strengthen own brand presence Continue to optimise in-store space allocation and visual merchandising Selective modernisation of stores Further extension of premium brand listing 2 October 2013 METRO AG

19 Overview METRO at a Glance 3 Strategic Priorities 7 Four Market Leading Sales Lines 10 Performance in Q2 & Outlook METRO A Compelling Investment 22 2 October 2013 METRO AG

20 Q Highlights Sales grew by 0.1% (adjusted for portfolio changes and FX) despite difficult consumer environment Sales Development in million Real Russia closed Market share gains in many countries ,282 Transformation progress continued: Own brand sales share: 12.1% (+40bp) Delivery sales: 0.7 billion (+22%) Q1 Q2 Q3 Q4 Q1 Q2 Online sales: 0.3 billion (+89%) Solid EBIT development: 362 million EBIT after special items EBIT in million , million EBIT before special items Significant net debt and cash flow improvement Sales and EBIT guidance confirmed 14-8 Q1 Q2 Q3 Q4 Q1 Q2 2 October 2013 METRO AG

21 Outlook for Stub Year 2013 (9M) Confirmed milllion H H M 2012 Stub FY 2013 E Sales growth (in %) >0 EBIT before special items >706 3 Capex <954 Net debt (in billion ) <7.7 New store openings (number of) Adjusted for sale of MAKRO UK, Real Eastern Europe and Media Markt China 2 Adjustment resulted from the first-time adoption of the revised IAS 19 3 Incl. higher contribution from real estate gains vs 9M 2012 Despite challenging economic environment we remain on track to achieve our targets 2 October 2013 METRO AG

22 Overview METRO at a Glance 3 Strategic Priorities 7 Four Market Leading Sales Lines 10 Performance in Q2 & Outlook METRO A Compelling Investment 22 2 October 2013 METRO AG

23 METRO A Compelling Investment Leading market positions in wholesale & retail Unique emerging markets footprint Strong focus on customer centricity Growing multichannel activities Clear strategy of sustainable profitable growth Generating high cash flow and further strengthen balance sheet Valuable real estate asset backing 2 October 2013 METRO AG

24 MADE TO TRADE. Appendix 2 October 2013 METRO AG

25 METRO Cash & Carry: Q2 Quarter-on-quarter improvement in LFL sales growth Sequential sales trend improvement in both Western and Eastern Europe Considerable LFL sales improvement in big countries like France, Spain and Turkey Delivery sales increased by 22% Like-for-Like Sales Development % -0.3% -0.1% -0.4% -0.9% -1.7% Q1 Q2 Q3 Q4 Q1 Q2 Delivery Sales in million Own brand shares constituted more than 17% of total sales Initiated cost savings mostly compensated the price investments and sales-related EBIT Q1 Q2 Q3 Q4 Q1 Q2 decline 1 new store opening in China More than 5,800 franchise traders supported in Eastern Europe 2 October 2013 METRO AG

26 Strategic Update: METRO Cash & Carry Germany Clear approach to customer target groups (TGM) Implementing organisational transition: Empowering the right people Optimising the store base Introducing new food product ranges with strong focus on HoReCa Non-food to become much more focused and different: New management structure with common strategy and greater range standardisation approach Radical clearance of non-strategic stock to better merchandise the sales space Düsseldorf store trial 2 October 2013 METRO AG

27 Real: Q2 Sales decline also due to sale of Real Russia and Ukraine; Germany was impacted by earlier Easter business and strike action 3.5% Like-for-Like Sales Development Own brand sales share in Germany improved by 90bp to 16.5% -0.3% -1.0% -1.6% -0.5% More than 30 stores now under an -4.6% entrepreneurial management approach Q1 Q2 Q3 Q4 Q1 Q2 Considerable price investments in Germany and the missing Russian EBIT contribution led to earnings shortfall Like-for-Like Sales Development Germany 4.8% stores disposed of resp. closed 1.5% 1.5% (17 Russia, 1 Germany) -0.7% -1.7% -2.5% Q1 Q2 Q3 Q4 Q1 Q2 2 October 2013 METRO AG

28 Deal Update: Real Eastern Europe 1.1 billion enterprise value Three of four countries now successfully closed: Ukraine on 13/03/2013, Russia on 25/04/2013, Romania on 12/09/2013 Closing Poland expected in H In H1 2013: 137 million EBIT contribution (classified as special item); total estimated EBIT effect from transaction of million confirmed Other financial result and deferred taxes negatively affected by technical oneoff effects from the deconsolidation 1 billion reduction in rating-relevant net debt:* (total relief of 1.5 billion confirmed) 0.3 billion finance lease relief billion cash-in billion operating lease relief * according to S&P methodology 2 October 2013 METRO AG

29 Media-Saturn: Q2 Media-Saturn faced tough comps which included the UEFA EURO 2012 as well as the digital switchover in Germany In Western Europe, sales trend improved quarter-on-quarter Further dynamic growth in online sales Redcoon with more than 30% sales growth since new ad campaign began Decline in EBIT solely due to further price investments to successfully gain market shares 8 new store openings and 2 stores closed LFL Sales Development % % -3.1% -2.4% -3.1% -3.0% Q1 Q2 Q3 Q4 Q1 Q2 Online Sales ( million) Q1 Q2 Q3 Q4 Q1 Q2 LFL Sales Development Germany % 3.1% 3.4% -3.7% -2.1% -1.8% Q1 Q2 Q3 Q4 Q1 Q2 2 October 2013 METRO AG

30 Strategic Update: Media-Saturn Online sales in H grew by 76% and reached nearly 6% of total sales Multichannel sales overtook for the first time Online Only sales Accelerated online sales growth in Q2 in Germany, Spain, Sweden, Switzerland and Poland in particular Online share of total sales (in %) Electro/Electricals panel market* vs Media Markt/Saturn** May 2013 cum, %-chg. vs PY, local currencies Market position %-points Austria % 23.5% -0.4% Belgium % 13.7% 2.0% Germany % 17.1% 1.1% Greece 2 9.6% 10.5% 0.9% Hungary % 11.8% -1.2% Italy % 13.4% -0.3% Luxembourg % 26.7% 0.5% Netherlands % 17.6% -0.8% Poland % 13.3% 0.1% Portugal 4 7.5% 7.2% -0.3% Russia 4 3.4% 3.6% 0.2% Spain % 13.0% 1.6% Sweden 3 9.2% 9.8% 0.6% Switzerland % 12.8% -0.9% Turkey 3 4.5% 4.1% -0.4% * Retail panel sales including VAT/sales tax both for panel market and MSH. Panel market including brown and white goods, Information Technology, TELCO, Photo, Office Equipment, excluded boxed entertainment (e.g. CD, DVD/Blue Ray) ** Media-Saturn including Redcoon and other online sales if applicable Source: GfK 2 October 2013 METRO AG

31 Galeria Kaufhof: Q2 Market leadership now also attained in Germany Notable LFL sales growth of 0.6% Like-for-Like Sales Development % Online sales more than doubled Market share gains despite tough 0.1% 0.9% 0.6% weather conditions and Easter effect -1.9% -2.8% Q1 Q2 Q3 Q4 Q1 Q2 2 October 2013 METRO AG

32 Q2 Sales and EBIT by Division Sales Like-for-Like EBIT Change million Q Change Q Change million METRO Cash & Carry 7, % -0.9% % -6 Real 2, % -4.6% Media-Saturn 4, % -3.0% % -35 Galeria Kaufhof % 0.6% 4 >100% 3 Real Estate % 5 Others % % 17 Consolidation >-100% -2 METRO GROUP 15, % % -39 METRO Cash & Carry: LFL sales trend improved in both Western and Eastern Europe despite still tough trading conditions, especially for non-food Real: German LFL sales burdened by earlier Easter and strike activities Media-Saturn: Tough UEFA EURO comp in Germany, sequential improvement in Western Europe continued Galeria Kaufhof: Further LFL sales growth in Germany; market leadership attained Real Estate: 3 portfolio transactions in Germany and Turkey supported EBIT development Others: Enhanced cost savings led to significant improvement year-on-year 2 October 2013 METRO AG

33 Income Statement (After Special Items) million Q Q Change Other operating income % EBIT >100% Net financial result % EBT Income taxes Profit or loss for the period Profit or loss attributable to shareholders of METRO AG EPS in (basic = diluted) Adjustment resulted from the first-time adoption of the revised IAS 19 Special item: Net financial result 36 million decline in other financial result due to negative FX effects resulting from the deconsolidation of Real in Russia 2 October 2013 METRO AG

34 Income Statement (Before Special Items) million Q Q Change General administrative expenses % EBIT % Net financial result % EBT % Income taxes % Profit or loss for the period % Non-controlling interests >-100% EPS in (basic = diluted) % 1 Adjustment resulted from the first-time adoption of the revised IAS 19 Net financial result: Decline in other financial result due to unfavorable currency movements predominantly in Poland, Russia, the Czech Republic and Turkey Decline in non-controlling interests due to EBIT decline at Media-Saturn 2 October 2013 METRO AG

35 Other Key Financials million 30/06/ /06/2013 Change Net debt -8,206-6, % Net working capital -1,693-1, % Cash flow from operating activities -2,913-2, % Cash flow from investing activities Capex (YTD) % Number of new store openings (YTD) % Significant net debt reduction of 1.9 billion to 6.3 billion Net working capital improvement of 132 million Increase in cash flows from: Operating activities: 283 million Investing activities: 972 million More focused capex: 22 new store openings, thereof 17 in emerging markets 34 stores closed or sold 2 October 2013 METRO AG

36 Portfolio Optimisation and Efficiency Measures million H H million Portfolio Optimisation Measures Exit Real Eastern Europe (ex TR) Kaufhof Others Efficiency-Enhancing Measures Others (including Praktiker) Total Special Items (EBIT) October 2013 METRO AG

37 Number of Stores by Division and Country METRO Cash & Carry Real Media-Saturn Galeria Kaufhof METRO GROUP Q2 H1 30/06/13 Q2 H1 30/06/13 Q2 H1 30/06/13 Q2 H1 30/06/13 Q2 H1 30/06/13 Germany Austria Belgium Denmark 5 5 France Italy Luxemburg 2 2 Netherlands Portugal Spain Sweden Switzerland Western Europe Bulgaria Croatia 7 7 Czech Republic Greece Hungary Kazakhstan 8 8 Moldova 3 3 Poland Romania Russia Serbia Slovakia 6 6 Turkey Ukraine Eastern Europe China Egypt 2 2 India Japan 9 9 Pakistan 9 9 Vietnam Asia/Africa Total ,231 2 October 2013 METRO AG

38 2012 Restated due to IAS 19 million Q Q M 2012 Q M 2012 Q FY 2012 Net sales 15,647 15,846 31,493 15,887 47,380 19,359 66,739 Cost of sales -12,504-12,586-25,090-12,588-37,678-15,091-52,769 Gross profit on sales 3,143 3,260 6,403 3,299 9,702 4,268 13,970 Other operating income , ,664 Selling expenses -3,052-2,991-6,043-2,916-8,958-3,152-12,110 General administrative expenses , ,465 Other operating expenses EBIT ,273 1,979 thereof METRO Cash & Carry Real Media-Saturn Galeria Kaufhof Real Estate Others Consolidation Result from associated companies Other investment result Interest income Interest expenses Other financial result Net financial result EBT ,147 1,436 Income taxes Profit or loss for the period Profit or loss for the period attributable to non-controlling interests Profit or loss for the period attributable to shareholders of METRO AG EPS in (basic = diluted) October 2013 METRO AG

39 Contact Investor Relations Metro-Straße Düsseldorf Germany Tel.: +49 (0) Fax: +49 (0) investorrelations@metro.de Internet: 2 October 2013 METRO AG