INVESTOR UPDATE. February PDF Free Download

INVESTOR UPDATE February 2015

DISCLAIMER AND NOTES To the extent that statements in this presentation do not relate to historical or current facts, they constitute forward-looking statements. 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, investments in innovative sales formats, expansion in online and multichannel sales activities, integration of acquired businesses and achievement of anticipated cost savings and productivity gains, and the actions of government regulators. Readers are cautioned not to place too much reliance on these forward-looking statements. See also Risk and Opportunity Report on pages 145-167 of the METRO GROUP Annual Report 2013/14 for risks as of the date of such Annual Report. 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. Financial Year 2012/13 consists of Q4 2012, Q1 2013, Q2 2013 and Q3 2013. To enable better comparability following the change of the financial year, Q3 2013 (original reporting) is referred to in this report as Q4 2012/13. Additionally, the previous year figures are updated according to the new segment structures. 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. Since 2012, 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. February 2015 METRO AG 2015 1

AGENDA 01 METRO GROUP at a Glance 3 02 Strong Progress Made in 2013/14 7 03 Four Market Leading Sales Lines 12 04 Performance in Q1 2014/15 & Outlook FY 2014/15 26 05 METRO Back to Attack 29 February 2015 METRO AG 2015 2

ONE OF THE LARGEST RETAILERS IN THE WORLD Sales: 63 billion EBIT: 1.7 billion Stores: 2,200 Countries: 31 Employees: 255,000 February 2015 METRO AG 2015 3

FOUR MARKET LEADING SALES LINES METRO AG 2013/14 The world s leading player in the cash & carry sector Europe s No. 1 consumer electronics Retailer One of the leading operators of hypermarkets in Germany One of Europe s leading department store operators 2013/14 Sales Share 49% 33% 13% 5% 2013/14 EBIT Share* 65% 19% 5% 11% * Pre Other and consolidation February 2015 METRO AG 2015 4

STRONG INTERNATIONAL PRESENCE Germany Western Europe Eastern Europe Asia/Africa METRO GROUP Countries 1 11 14 5 31 2013/14 41% 30% 23% 6% 100% 2014/14 Sales Share We generate nearly 30% of Group sales in emerging markets February 2015 METRO AG 2015 5

ALL TARGETS ACHIEVED Major challenges Sluggish economic environment Geopolitical crisis Weak emerging market currencies Major achievements Consequent focus on our customers in terms of Assortment Services Solution Competences Improved company culture Active portfolio management LFL Sales EPS Net Debt Dividend +0.1% +25% to 1.84-0.7bn to 4.7bn 0.90 per ordinary share Better sales, higher earnings, stronger balance sheet February 2015 METRO AG 2015 7

ACTIVE PORTFOLIO MANAGEMENT GAINED MOMENTUM Disposals METRO Cash & Carry Morocco Saturn France 2010-2011 Media-Markt China Real Eastern Europe MAKRO Cash & Carry UK 2012-2013 METRO Cash & Carry Denmark MAKRO Cash & Carry Egypt METRO Cash & Carry Vietnam Real Turkey Sale of Booker stake MAKRO Cash & Carry Greece 2014 Freeing up cash to grow the core business and strengthening the balance sheet February 2015 METRO AG 2015 8

INNOVATION AND TRANSFORMATION ACCELERATED Fast expansion in delivery and online Investment in new businesses Redcoon, MidBan, Emmas Enkel etc. Business innovation team installed New talent on board Delivery 2009 597 million 2013/14 2.8 billion 2020 Online 2009 0 2013/14 1.4 billion 2020 February 2015 METRO AG 2015 9

SUSTAINABILITY: MEMBER OF THE MOST IMPORTANT INDICES Achievements METRO GROUP Transparent supply chain for fish and meat Reduction of our carbon footprint More products with fair trade and organic labels Rewards 2013/14 Listing in Dow Jones Sustainability Europe and World Indices First time membership of FTSE4Good Europe and Global Indices Carbon disclosure Leader with a new record of 98 out of 100 points New Corporate Responsibility report available February 2015 METRO AG 2015 10

THE WORLD S LEADING PLAYER IN THE CASH & CARRY SECTOR Focused on B2B self-service wholesaling to 3 customer groups: HoReCa, Trader and SCO High performance internationally replicable concept International share of sales of 84% 766 stores in 28 countries Profitable Growth Drivers: Outstanding freshness & quality in food Dedicated sales force Innovative store concepts Delivery Own brands Expansion Focus on Russia, China, India and Turkey million FY 2012/13 FY 2013/14 Sales 31,165 30,513 RoCE 15.7% 13.3% EBIT 1,379 1,125 EBIT Margin 4.4% 3.7% February 2015 METRO AG 2015 12

METRO CASH & CARRY: HIGHLIGHTS FY 2013/14 LfL sales increased by 1.0% supported by successful 50 years marketing campaign Eastern Europe and Asia with positive LfL growth, Germany improving Focus on USP food shows first results: LfL food sales +2.1% Delivery sales increased by 9.5% to 2.8 billion Own brand sales share +20 bps to 17.0% 17 new store openings, 3 store closures Like-for-Like Sales Development 2012/13 2013/14 2.0% 0.9% 0.9% 0.8% 1.0% 0.1% Q4 Q1 Q2 Q3 Q4 FY EBIT Development in million 2012/13 2013/14 1,125 387 540 43 281 261 Q4 Q1 Q2 Q3 Q4 FY Delivery Sales in million 2012/13 2013/14 2,785 706 669 648 708 760 Q4 Q1 Q2 Q3 Q4 FY February 2015 METRO AG 2015 13

STRATEGIC AMBITIONS Being the Champion for Independent Business Strong differentiation through exceptional food competence Development and roll-out of innovative wholesale concepts Ongoing cost structure review Overall Ambition: Market Leadership in well defined sectors through unique product ranges and strong focus on B2B solutions that make our customers more competitive February 2015 METRO AG 2015 14

EUROPE S NO. 1 IN CONSUMER ELECTRONICS RETAILING Pan-European market leader with 986 stores in 15 countries and online presence 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 Omnichannel sales activities in 14 countries Online sales Own brands million FY 2012/13 FY 2013/14 Sales 21,053 20,981 RoCE 15.5% 14.9% EBIT 299 335 EBIT Margin 1.4% 1.6% February 2015 METRO AG 2015 15

MEDIA-SATURN: HIGHLIGHTS FY 2013/14 LfL sales down 0.9% but with strong finish (LfL Q4: +1.7%) Continued strong growth in online sales: +30% to 1.4 billion Internet offering comprises almost 70,000 products at Media Markt and more than 50,000 at Saturn Multi-channel strategy is bearing fruits: Market share gains in 10 out of 15 markets Recognition as distribution partner of choice further improved 50 new store openings, 12 store closures Like-for-Like Sales Development 2012/13 2013/14 1.7% -1.9% -1.0% -0.2% -3.7% -0.9% Q4 Q1 Q2 Q3 Q4 FY EBIT Development in million 2012/13 289 2013/14 335 75 130-14 -70 Q4 Q1 Q2 Q3 Q4 FY Online Sales in million 2012/13 2013/14 1,446 283 403 363 328 353 Q4 Q1 Q2 Q3 Q4 FY February 2015 METRO AG 2015 16

STRATEGIC AMBITIONS Continue transformation to seamless multichannel approach Enhance position as partner of choice for suppliers Further improving cost position: Target cost ratio of 19% Overall Ambition: Media Markt and Saturn: Europe s leading seamless shopping experience in consumer electronics Redcoon: Europe s leading online pure player with a big product range and the lowest prices February 2015 METRO AG 2015 17

LEADING OPERATOR OF HYPERMARKETS IN GERMANY Following the divestment of activities in Eastern Europe and Turkey focus is on Germany with 307 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: Store remodellings Own brands Entrepreneurial store management Multichannel activities: Webshop www.real-onlineshop.de with more than 20,000 products million FY 2012/13 FY 2013/14 Sales 10,366 8,432 RoCE 5.8% 4.1% EBIT 145 81 EBIT Margin 1.4% 1.0% February 2015 METRO AG 2015 18

REAL GERMANY: HIGHLIGHTS FY 2013/14 LfL sales down 0.9% but with improving trend (LfL Q4: +0.2%) despite food price deflation 50 remodeled stores with positive momentum Own brand sales share increased to 16.3% Online sales increased by 15.5% to 22 million Ongoing streamlining of store portfolio: Closing 14 nonprofitable stores until end of FY 2014/15 Management board with reorganised responsibilities Like-for-Like Sales Development in Germany 2012/13 2013/14 5.1% 0.2% -0.4% -2.1% -0.9% -6.6% Q4 Q1 Q2 Q3 Q4 FY 2012/13 REAL EBIT Development in million 98 2013/14 13 28 81-41 -3 Q4 Q1 Q2 Q3 Q4 FY February 2015 METRO AG 2015 19

STRATEGIC AMBITIONS Capturing market share by offering best customer propositions Extending own brand offering and multichannel activities Continuing remodeling program Strict cost control 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. February 2015 METRO AG 2015 20

ONE OF EUROPE S LEADING DEPARTMENT STORES Market leader in Germany and Belgium with 137 stores in total Powerful international product ranges and high-quality own-brand products (19% own brand share) Strong cost and stock management Optimisation of space allocation Profitable Growth Drivers: Focus on mid-market and lifestyle orientation Consistent trading-up strategy Multichannel: Webshop www.galeria-kaufhof.de Category management based on loyalty card data million FY 2012/13 FY 2013/14 Sales 3,082 3,099 RoCE 11.0% 8.9% EBIT 229 193 EBIT Margin 7.4% 6.2% February 2015 METRO AG 2015 21

GALERIA KAUFHOF: HIGHLIGHTS FY 2013/14 LfL sales improved by 0.5% driven by Germany (+0.8%) Webshop with continued strong sales growth of 64% Further market share gains in the German textile market Introduction of 1,100 tablets in all department stores to support multichannel approach New corporate and management structure successfully implemented Like-for-Like Sales Development 2012/13 2013/14 2.2% 1.1% 0.6% 1.2% 0.5% -1.9% Q4 Q1 Q2 Q3 Q4 FY EBIT Development in million 2012/13 2013/14 159 193 16 22 14-2 Q4 Q1 Q2 Q3 Q4 FY February 2015 METRO AG 2015 22

STRATEGIC AMBITIONS Strengthening leadership for department stores in Germany and Belgium Continuous investment in store base and online offering Further cost structure optimisation Overall Ambition: Market and concept leadership for department stores in Germany and Belgium. Absolutely customer-driven providing a meaningful and compelling offer for our customers. February 2015 METRO AG 2015 23

MOST INTERNATIONAL PORTFOLIO IN WHOLESALE AND RETAIL GERMANY 1.4 million sqm sales area owned WESTERN EUROPE 0.9 million sqm sales area owned EASTERN EUROPE 2.0 million sqm sales area owned ASIA/AFRICA 0.5 million sqm sales area owned 23% 32% 71% 68% 39% Gross self-owned floor area MISC (rented to third parties, HQ, department stores) 1.2 million sqm sales area owned METRO GROUP TOTAL 4.8 million sqm sales area owned 585 owned stores in 28 countries with a book value of c. 6bn and a market value of c. 10bn February 2015 METRO AG 2015 24

Q1 2014/15: SALES AND EBIT BY DIVISION Δ Sales Like-for-Like EBIT EBIT EBIT Q1 2014/15 Q1 2014/15 Change Change reported comparable reported vs Q1 2013/14 million Q1 2013/14 Q1 2013/14 Q1 2014/15 comparable METRO Cash & Carry 8,197-3.6% 1.4% 540 ~480 481 1 Media-Saturn 6,875 4.1% 3.8% 289 289 349 +60 Real 2,231-14.4% 0.9% 98 98 84-13 Galeria Kaufhof 993-1.0% -1.4% 159 159 139-20 Others/Consolidation 15 - - -13-13 -30-17 METRO GROUP 18,311-2.2% 2.1% 1,073 ~1,013 1,024 +11 6 th consecutive quarter with LfL growth; EBIT on PY level if adjusted for FX Strongest LfL growth since Q1 2007; significant EBIT development driven by top-line LfL growth driven by strong Christmas business; EBIT development influenced by targeted marketing investments and missing EBIT contribution from Real Eastern Europe Mild weather in October and November dampened LfL sales and led to higher price investments than usual February 2015 METRO AG 2015 26

OUTLOOK 2014/15: FINANCIAL TARGETS billlion Reported FY 2013/14 Guidance FY 2014/15 Sales growth 1.2 +1.3% >0% LFL sales growth +0.1% >0% EBIT before special items 1.727 >1.727 2 Capex 1.2 <1.7 Net debt 4.7 <4.7 Number of new store openings 68 ~50 1 Adjusted for portfolio changes 2 Based on constant foreign exchange rates February 2015 METRO AG 2015 27

AGENDA 01 METRO GROUP at a Glance 3 02 Strong Progress Made in 2013/14 7 03 Four Market Leading Sales Lines 12 04 Performance in FY 2013/14 & Outlook FY 2014/15 26 05 METRO Back to Attack 29 February 2015 METRO AG 2015 28

BACK TO ATTACK : SUSTAINABLE VALUE CREATION First successes achieved, but we continue to focus on Customer centricity and innovation Improved product ranges and services Growth in new sales channels Optimised cost structures A strong and effective organisation Consistent investments and reduction of debt Creating added value for all METRO GROUP stakeholders February 2015 METRO AG 2015 29

APPENDIX February 2015 METRO AG 2015 30

Q1 2014/15 HIGHLIGHTS Significant LfL growth of 2.1% driven by Media-Saturn and METRO Cash & Carry Best LfL growth in Christmas quarter for many years All divisions with LfL growth in December Market share and position in many countries strengthened Successful transformation progress continued: Own brand share at 10.3% of sales Delivery sales: 0.7 billion (+10.8%) Online sales: 0.6 billion (+31%) EBIT above prior year s level if FX adjusted Net debt further reduced by 0.9 billion to 1.5 billion Sale of MAKRO Cash & Carry Greece successfully closed -0.2 Q1-2.2 Q1 2010/11 1,073 Like-for-Like Sales Development in % 2013/14 2014/15 1.7 0.7 2.1-1.8 Q2-1.8 Q1 2011/12 Q3 Like-for-Like Sales Christmas Quarter in % -1.4 Q1 2012/13 Q4 EBIT in million 276 418-0.2 Q1 2013/14 Q1 2.1 Q1 2014/15 2013/14 2014/15 1,024-40 Q1 Q2 Q3 Q4 Q1 February 2015 METRO AG 2015 31

APPRECIATION OF EBIT Q1 2014/15 (BEFORE SPECIAL ITEMS) in million 1,073 ~60 ~1,013 1,024 Q1 2013/14 Negative FX Impact Q1 2013/14 (Comparable) Q1 2014/15 February 2015 METRO AG 2015 32

Q1 2014/15 INCOME STATEMENT (EBIT TO EPS) million Q1 2013/14 Q1 2014/15 Change EBIT 1,073 1,024-49 Net financial result -141-115 +26 EBT 932 909-23 Income Taxes -429-408 +21 Profit or loss for the period 503 501-2 Non-controlling interests 63 56-7 EPS in 1.35 1.36 +0.01 Net financial result improved due to lower net debt and interest level Tax rate of 44.9% in line with FY guidance (Q1 2013/14: 46.1%) February 2015 METRO AG 2015 33

Q1 2014/15: OTHER KEY FINANCIALS million Q1 2013/14 Q1 2014/15 Change Net debt (as at 31/12) 2,402 1,509-893 Net working capital (as at 31/12) 4,603 4,551-52 Change in net working capital (cash flow impact) 2,288 2,357 +69 Cash flow from operating activities 3,569 1 3,616 +47 Capex 273 176-97 Number of new store openings 36 23-13 1 Separate disclosure of cash and cash equivalents from disposal groups Net debt further reduced by 0.9 billion to 1.5 billion Net working capital and cash flow from operating activities almost on PY level due to the stable business development Capex of 176 million mainly invested in expansion and remodellings February 2015 METRO AG 2015 34

METRO CASH & CARRY: HIGHLIGHTS Q1 2014/15 Solid LfL growth driven by Eastern Europe and Asia Signs of stabilization in Western Europe; most countries with positive LfL growth Germany slightly down due to the deflationary sales price development Delivery sales increased by 10.8% (around 9% of total sales) Own brand sales share 16% 9 new store openings Sale of METRO Cash & Carry Vietnam on track All stores in Denmark closed; sale of MAKRO Cash & Carry Greece successfully completed Like-for-Like Sales Development in % 2013/14 2014/15 2.0 1.4 0.9 0.8 0.1 Q1 Q2 Q3 Q4 Q1 Delivery Sales Share in % 2013/14 2014/15 7.9 9.4 9.4 10.0 8.6 Q1 Q2 Q3 Q4 Q1 February 2015 METRO AG 2015 35

STRATEGIC UPDATE Implementation of new pricing strategy Price-performance ratio as key factor for customer loyalty Analysis and improvement of price perception vs price reality Transparency and stable prices to increase sales volume and profit Continuation of successful marketing campaigns Project 51: METRO United Special marketing offers Sales promotion activities You & METRO Bocuse d Or February 2015 METRO AG 2015 36

MEDIA-SATURN: HIGHLIGHTS Q1 2014/15 Strong LfL growth driven by all regions Spain, Russia, Hungary and Poland with double digit LfL growth Further dynamic growth in online sales (+28.7%), 7.4% of total sales Internet product offering increased to around 90,000 SKUs at www.mediamarkt.de and around 80,000 SKUs at www.saturn.de 13 new store openings -1.0 Q1 403 Like-for-Like Sales Development in % 2013/14 2014/15 3.8 1.7-0.2-3.7 Q2 Q3 Q4 Q1 Online Sales in million 2013/14 2014/15 512 363 328 353 Q1 Q2 Q3 Q4 Q1 February 2015 METRO AG 2015 37

STRATEGIC UPDATE New store concept Ingolstadt New ways of combining the on- and off-line activities Exciting shopping experience on 3.400 sqm Larger product range and topic islands Novelties (Drive-in, charging stations for smart phones and electric cars, a gigantic interactive video screen combination, interactive tariff advisor) Innovation First Saturn store introduces 24-hour pickup station Launch of online stores on ebay (Media Markt listing over 52,000 electronic products and Saturn over 41,000 articles) February 2015 METRO AG 2015 38

REAL GERMANY: HIGHLIGHTS Q1 2014/15 3rd consecutive quarter of LfL sales growth Strong Christmas business driven by dry food, sweets and beverages 50 remodelled stores continued to outperform; roll-out to another 32 stores in March Own brand sales share in Germany 15.2% Around 50 stores will be switched to LED lighting to improve energy costs Cooperation with Emmas Enkel - a new food retail format Like-for-Like Sales Development in Germany in % 2013/14 2014/15 5.1 0.2 0.9-2.1-6.6 Q1 Q2 Q3 Q4 Q1 February 2015 METRO AG 2015 39

GALERIA KAUFHOF: HIGHLIGHTS Q1 2014/15 Market share gains in textile despite LfL decline Mild weather prevented a better sales development Webshop with continued strong growth of 38.8% New store opening in Hasselt, Belgium Launch of new online shop in Belgium (www.inno.be) Like-for-Like Sales Development in % 2013/14 2014/15 2.2 1.2 0.6-1.4-1.9 Q1 Q2 Q3 Q4 Q1 Textile Market change vs py in % -0.6-0.4-6.3 2013 2013/14 Q1 2014/15 Delta Galeria Kaufhof vs Textile Market change vs. py in % 3.1 1.2 0.8 2013 2013/14 Q1 2014/15 February 2015 METRO AG 2015 40

THE CORE OF OUR STRATEGY February 2015 METRO AG 2015 41

TECHSTARS A PIONEER OF INNOVATION Techstars is a mentorship-driven startup accelerator founded by David Cohen, Brad Feld, David Brown, and Jared Polis. Techstars holds 13 week programs for startups in 13 cities worldwide. Fewer than 1% of the companies that apply to Techstars are accepted. Of the 500+ companies that have completed its program, 89% are active or have been acquired. Techstars mentors include Foursquare CEO Dennis Crowley, tumblr CEO David Karp, HubSpot co-founder and CTO Dharmesh Shah, and Fred Wilson of Union Square Ventures February 2015 METRO AG 2015 42

FAST FORWARD WITH THE TECHSTARS METRO ACCELERATOR Seeking the best digital innovations for hotels and restaurants. Intensive start-up-bootcamp Broad network of experienced mentors 3 prestigious partners 10 companies to be chosen techstars METRO ACCELERATOR with R/GA Berlin 2015/2016 February 2015 METRO AG 2015 43

INNOVATION AND M&A ARE A CRUCIAL INGREDIENT FOR THE ENHANCEMENT OF OUR PORTOLIO GROUP STRATEGY BUSINESS MODEL PORTFOLIO COUNTRY PORTFOLIO STRATEGIC INITIATIVES February 2015 METRO AG 2015 44

EVOLUTION AND REVOLUTION: UTILIZING OUR STRENGTH Three decisive success factors for scaling new business models 100m customers p.a. 80m customer cards (METRO Card & Payback) 1.6bn store visits, 900m online visits Founding Growing Customer Access 2,200 stores with 13m sqm sales floor 30 countries and > 60 websites and apps > 2bn direct marketing contacts 5,500 sales force representatives Marketing & Selling Power ~ 50bn purchasing volume 100% of the important suppliers in our categories with global reach Sourcing February 2015 METRO AG 2015 45

SPECIAL ITEMS In Q1 2014/15 mainly Real for restructuring measures February 2015 METRO AG 2015 46

STORES BY DIVISION AND COUNTRY February 2015 METRO AG 2015 47

CONTACT Investor Relations Metro-Straße 1 40235 Duesseldorf Germany Tel.: +49 (0)211 6886-1051 Fax: +49 (0)211 6886-3759 Email: investorrelations@metro.de Internet: www.metrogroup.de February 2015 METRO AG 2015 48

INVESTOR UPDATE. February 2015