1/5 INVESTOR NEWS 2-2016/17 Profitability and solid growth as benchmarks METRO GROUP: The launch of two strong companies New company names published: It is intended that, in the future, the METRO GROUP Wholesale and Food Specialist Company will be called METRO, the METRO GROUP Consumer Electronics Company will be called CECONOMY Two focused, independent companies present their equity stories at the Capital Markets Day After effective date of the demerger, both companies expected to qualify for the MDAX Management teams confirm planned dividend continuity Separation at ratio of 1:1: it is proposed that each shareholder of the former METRO AG will receive one share of the new METRO AG in addition to the METRO (future CECONOMY) share Through its planned demerger, METRO GROUP is launching two strong, successful and strategically focused companies. For the first time, the Wholesale and Food Specialist and the company focused on Consumer Electronics are set to present their strategies as independent entities. At the Capital Markets Day in Düsseldorf, company names and brand positioning will be presented for the first time: It is intended that, in the future, the Wholesale and Food Business will operate under the corporate brand METRO, while the Consumer Electronics division will operate under the brand CECONOMY.
2/5 Today, two dynamic companies with the best positioning in their sectors will introduce themselves. Each of these companies has established a strong and future-proof strategic, operative and financial position and as independent companies we will set our course for sustainable and healthy growth, said Olaf Koch, Chairman of the Management Board of METRO AG, at the Capital Markets Day in Düsseldorf. Our Wholesale and Food business is already one of the leading international companies, and we will gain momentum in all 35 countries in which we operate our store-based and delivery business. Pieter Haas, designated CEO of the future CECONOMY, said: We are the number one in European Consumer Electronics and we have created an excellent starting position for our upcoming independence through a comprehensive realignment. We currently generate 22 billion in annual sales and have nearly two billion customer contacts each year. All our stores are now fully digitised and integrated into our multichannel strategy. We combine the emotional shopping experience in our stores with the benefits of digital technologies. With our products and services, we are present for our customers on all channels and we are their partner and daily companion in an increasingly digitising world. We are ready! I am convinced that our best years are yet to come. Wholesale and Food business: Realignment offers ideal conditions for continued appreciation in value The new METRO AG is an internationally leading specialist in wholesale and food retail and primarily comprises METRO Cash & Carry and Real, in addition to delivery specialists and other companies. METRO is active in 35 countries with local wholesale companies and delivery specialists (Classic Fine Foods, Rungis Express, Pro à Pro, Midban). This business has attained an excellent position in its markets, both through its leading role in the self-service wholesale trade, but also through a growing presence in the delivery business. In financial year 2014/15, METRO Cash & Carry introduced a new operating model to increase growth and sales. It gives far more entrepreneurial freedom to the individual countries and allows for greater customer focus. METRO profited from the focus on increased customer value; for 13 quarters in a row, like-for-like sales have increased and profitability has improved substantially. The second activity under the new roof is Real, a leading large-scale full-range supplier (hypermarket) in the food retail sector in Germany. Real operates 285 hypermarkets in
3/5 Germany. Following a phase of consolidation, Real has created the economic framework for future growth, particularly by implementing new market concepts, an agreement with the trade union and procurement cooperation with Markant and PHD. As a benchmark for the distribution of dividends, the future METRO AG confirmed a targeted range of 45 to 55% of the company s earnings per share. Largest supplier of consumer electronics in Europe is well-positioned for further growth and increased profitability CECONOMY is the holding company of Media-Saturn, the European number one in consumer electronics on the basis of its sales of 22 billion (financial year 2015/16), market share, selling space and its 65,000 employees. Media-Saturn is active in 15 European countries and is the market leader in nine of them. All of the more than 1,000 stores have now been made multichannel ready and have been converted to digital technology. In combination with its strong web presence, the company currently reports 5.8 million customer contacts per day. In the past two years, Media-Saturn has increased sales and improved profitability. Media-Saturn intends to utilize its solid financial structure and experienced management to increase internet and online-induced sales in particular, expand its services business and lead consolidation in the sector. In principle, the company intends to base its dividend payment on a payout ratio of 45 to 55% of the earnings per share. Separation of the companies at a ratio of 1:1 MDAX qualification expected for both companies While it is intended that the former METRO AG will continue to exist as future CECONOMY AG and will constitute the Consumer Electronics business, it is planned that the Wholesale and Food Specialist will be spun off as an independent, stock-listed company and will operate under the established name of METRO. The separation of METRO GROUP into two independent companies will be proposed to the shareholders at a ratio of 1:1. Hence, each shareholder of the former METRO AG will receive one share of the new METRO AG in addition to the CECONOMY share. These new shares are entitled to participate in dividends for the financial years starting 1 October 2016. The future CECONOMY will hold 10% of the future METRO AG. 1% of the share capital is paid in return for the transfer of the assets to be spun off; the disposal is blocked for seven years. The remaining 9% also constitutes a purely financial participation and does
4/5 not involve any managerial role at the future METRO AG. This participation is subject to a customary holding period of six months. The annual general meeting of METRO AG will vote on this demerger on 6 February 2017. The decision to separate the businesses requires a majority of three-quarters of the share capital of METRO AG represented at the annual general meeting. All three anchor shareholders of METRO AG together holding almost 50% of the vote have already indicated their support for the demerger. These anchor shareholders have also agreed to a holding obligation (so-called lock-up) conforming to usual market conditions and other restrictions on disposal. Right after the effective date of the demerger, all shares of the new METRO AG are expected to be admitted for trading in the Prime Standard of the Frankfurt Stock Exchange; a secondary listing on the Luxembourg Stock Exchange is planned. The Management Board of the former METRO AG expects that both companies will meet the MDAX criteria and will be listed in this market segment. The aim is to achieve Investment Grade Rating for both companies. As a result of the demerger, costs for taxes in the single-digit millions and transaction costs amounting to approximately 100 million are expected to be incurred. Composition of the Management Boards and the Supervisory Boards With effect from the date of the separation, probably in mid-2017, the future METRO AG will be managed by a Management Board that will be reduced from five to four members and headed by the Chairman of the Management Board Olaf Koch. The current Board members Pieter Boone (COO) and Heiko Hutmacher (Human Resources) will be joined by Christian Baier, previously CFO of METRO Cash & Carry, as the new CFO. It is intended that the Management Board of CECONOMY will consist of three persons: Besides designated Chairman of the Management Board Pieter Haas and CFO Mark Frese (both Board members at the old METRO AG), it is planned that Dr. Dieter Haag Molkenteller will serve as the Chief Legal and Compliance Officer. As a result of the demerger of METRO AG, the 20-person strong Supervisory Boards of the companies will also be reconstituted. Some of the current members of METRO AG s Supervisory Board are expected to be appointed to the new Supervisory Board. As reported, it is planned that the Supervisory Board of the new company METRO AG will be chaired by METRO s current Chairman of the Supervisory Board Jürgen B. Steinemann.
5/5 The following persons are designated to become further members of the Supervisory Board and representatives of the shareholders: Gwyn Burr, Dr. Florian Funck, Peter Küpfer, Mattheus P. M. (Theo) de Raad and Dr. Fredy Raas. The remaining shareholder representatives have not yet been appointed at this stage. As previously reported, it is proposed that Jürgen Fitschen will chair the Supervisory Board of CECONOMY. The independent management consultant Dr. Bernhard Düttmann will be nominated for election at the next annual general meeting in place of Jürgen B. Steinemann who will be stepping down. Dr. jur. Hans-Jürgen Schinzler will remain a member after the spin-off. Regine Stachelhaus will be newly recommended for election to the Supervisory Board. She will be nominated in place of Prof. Dr. Ann-Kristin Achleitner who will withdraw. In place of Gwyn Burr, who will move to the new METRO AG, Julia Goldin, Member of the Executive Board of Lego A/S, Billund/Denmark is nominated for election. In place of Mattheus P.M. (Theo) de Raad, who will also move, American national Jo Harlow, Member of the Board of InterContinental Hotels, is nominated for election. Further proposals have not been finalised at this point. This investor news may contain forward-looking statements based on current assumptions and forecasts made by Metro management and other information currently available to METRO. Various known and unknown risks, uncertainties, and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. METRO does not intend, and does not assume any liability whatsoever, to update these forward-looking statements or to conform them to future events or developments. METRO GROUP Metro-Straße 1 40235 Düsseldorf Germany Investor Relations Phone: +49 (0) 211-6886 - 1051 Fax: +49 (0) 211-6886 - 3759 Email: investorrelations@metro.de