METRO GROUP HALF-YEAR FINANCIAL REPORT H1/Q GROUP FINANCIAL FIGURES P. 1. Half-Year Financial Report of METRO GROUP

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1 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 GROUP FINANCIAL FIGURES P. Half-Year Financial Report of METRO GROUP H/Q 03

2 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 GROUP FINANCIAL FIGURES P. Group financial figures 5 METRO shares 6 Interim Group management report 6 Macroeconomic conditions 6 Financial position and financial performance 9 Opportunities and risks 9 Sustainability 0 METRO Cash & Carry Real 3 Media-Saturn 5 Galeria Kaufhof 7 Real Estate and Others 8 Subsequent events and outlook 9 Store network 0 Reconciliation of special items 4 Interim consolidated financial statements 4 Income statement 5 Total comprehensive income reconciliation 6 Balance sheet 7 Cash flow statement 8 Statement of changes in equity 9 Notes 9 Segment reporting 33 Other 4 Responsibility statement 43 Review report 44 Financial calendar and imprint Financial foundation substantially strengthened; guidance reiterated Improved cash flow from operating activities ( +83 million) Net debt reduced considerably by.9 billion to 6.3 billion Sales and earnings guidance confirmed for the short financial year 03 Q METRO GROUP sales decreased by 3.6% (in local currency: -3.0%) due to both the earlier Easter business and portfolio changes Adjusted for portfolio changes (MAKRO UK, Real Eastern Europe and Media Markt China), sales decreased by only 0.5% (in local currency: +0.%) EBIT before special items: 76 million (Q 0: 35 million); EBIT after special items up considerably to 36 million (Q 0: 7 million) EPS before special items: 0.06 (Q 0: 0.34) EPS after special items: 0.0 (Q 0: -0.06) METRO Cash & Carry Sales: -3.0%; adjusted for MAKRO UK: -0.% Sales development in Western and Eastern Europe improved against Q 03 Stable EBIT margin development before special items Real Sales: -.5% due to the disposal of Real Ukraine and Russia Real Germany below prior year due to Easter effect and strike action Real Russia was disposed of in April Media-Saturn Sales: -0.3% Germany almost on par with the previous year, despite a strong Q 0 (European football championship) Sales in Eastern Europe increased considerably Galeria Kaufhof Sales: -.0%; like-for-like sales: +0.6% Market leadership in Germany confirmed EBIT margin before special items improved further H METRO GROUP sales decreased by.3% to 30.8 billion (in local currency: -.9%); adjusted for portfolio changes: +0.% (in local currency: +0.5%) EBIT before special items amounts to 90 million (H 0: 307 million)

3 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 GROUP FINANCIAL FIGURES P. 3 OVERVIEW H 03 Sales growth (in %) EBITDA, ( million) 3,96, Q H 9M FY Q Q 3 H H 3 9M 9M 3 FY FY 3 in In local currency EBIT, ( million) EPS, ( ) 706, Q 0 03 H 9M FY Q H 9M FY 0 03 million H 0 H 03 Change ( ) Change (local currency) Sales 3,493 30,78 -.3% -.9% Germany,989, % -0.7% International 9,504 8,873-3.% -.6% Western Europe (excl. Germany) 9,576 9,00-6.0% -5.9% Eastern Europe 8,77 7, % -.4% Asia/Africa,75, % 0.3% International share of sales 6.9% 6.3% - EBITDA % EBIT % EBT Net profit for the period, % EPS ( ) % Capex % Stores,09,3.0% Selling space (,000 m ),96,96-0.4% Employees (full-time basis) 48,833 4, % Before special items Adjustment resulted from the first-time adoption of the revised IAS 9 3 Profit attributable to shareholders of METRO AG

4 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 GROUP FINANCIAL FIGURES P. 4 OVERVIEW Q 03 Sales growth (in %) EBITDA, ( million), Q Q Q3 Q Q Q 3 Q Q 3 Q3 Q3 3 Q4 Q4 3 in In local currency EBIT, ( million) EPS, ( ) 399, Q Q Q3 Q Q Q Q3 Q million Q 0 Q 03 Change ( ) Change (local currency) Sales 5,846 5,8-3.6% -3.0% Germany 5,94 5, % -.4% International 9,904 9,483-4.% -3.3% Western Europe (excl. Germany) 4,88 4,66-5.4% -5.% Eastern Europe 4,3 4,05-4.7% -3.% Asia/Africa % 8.6% International share of sales 6.5% 6.% - EBITDA % EBIT % EBT % Net profit for the period, % EPS ( ) % Capex % Stores,09,3.0% Selling space (,000 m ),96,96-0.4% Employees (full-time basis) 48,833 4, % Before special items Adjustment resulted from the first-time adoption of the revised IAS 9 3 Profit attributable to shareholders of METRO AG

5 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 METRO SHARES P. 5 METRO SHARES Share price development H index-based /0/03 0/0/03 0/03/03 0/04/03 0/05/03 0/06/03 METRO Ordinary share DAX Dow Jones Euro Stoxx Retail The METRO share developed very positively in H 03, rising by 5.8% to 4.3 despite the ex-dividend markdown. This was much better than the DAX and the Dow Jones Euro Stoxx Retail, the relevant sector index, which climbed by 4.6% and 6.4% respectively. buy. Interest in the METRO share remained high in the days that followed, closing on 8 May at an annual high to date of The METRO share declined a little in June, closing the quarter at 4.3 following the consolidation on the stock markets and a recommendation to sell. The indices rose to new all-time highs in H 03, especially in Europe and the United States, on account of the hope of the stabilisation of the global economy, together with sustained relaxed monetary policy by the central banks. The METRO share developed very positively at the beginning of the year. However, the announcement of the dividend proposal resulted in the share price declining. This decline was partially compensated in March. The publication of the Q 03 results on May had a positive impact on the share price. Dividend purchases in the run-up to the Annual General Meeting led to additional share price gains. The shareholders approved a dividend of.00 per ordinary share and.06 per preference share. The METRO share climbed by 0.3% on May following a recommendation to As of the end of June 03, Deutsche Börse s index ranked METRO AG s share 36 in terms of market capitalisation and 9 in terms of stock market trading volume. Q 03 Q 03 Closing price ( ) Ordinary shares Preference shares Highest price ( ) Ordinary shares Preference shares Lowest price ( ) Ordinary shares Preference shares Market capitalisation ( billion) Total At the end of the reporting period Data based on XETRA closing prices

6 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 INTERIM GROUP MANAGEMENT REPORT P. 6 INTERIM GROUP MANAGEMENT REPORT Macroeconomic conditions The weak global economic development continued in H 03. Many countries, especially in Western Europe, were still in recession in Q. When compared to the respective quarter from the previous year, economic output by countries in the European Monetary Union declined for seven quarters in a row. The austerity measures to stabilise public debts continued to negatively impact disposable incomes and consumers purchasing power. At the same time, unemployment figures hit new records in many countries. Consumer confidence consequently remained low in many countries and food prices rose again. As a result, the difficult ongoing macroeconomic conditions increasingly burdened retail sales in H 03. Germany was also unable to break away from the weak economic environment. The German economy cooled slightly in H 03 compared to H 0. However, Germany continued to develop comparatively robustly compared to other eurozone countries. Unemployment rose only slightly, disposable income increased and consumer confidence also showed a positive overall trend. Retail sales were therefore solid on the whole. In real terms, however, retail sales have stagnated over the course of the year so far. Many Western European countries were still in recession in H and experienced declining economic output. The sovereign debt crisis remained the main negative factor. The divergence between robust core countries and crisis-ridden peripheral countries still continued. However, no country has been immune to the economic crisis. The negative consequences for retail sales have intensified further. After stagnating in the previous year, nominal retail sales showed a negative trend and are now down more than % year on year. The drop is even greater once adjusted for inflation. Development in Eastern European countries was weaker on account of the ongoing recession in Western Europe, among other things. The downward trend continued in many countries. Overall, Eastern Europe s development was far below its economic potential. The same also applied to retail sales. The Asian emerging markets once again recorded the strongest growth in H, despite economic slowdown in China in particular. Retail sales growth also remained high. China, for example, continued to record double-digit growth rates in Q and Q. Financial position and financial performance Sales Although macroeconomic conditions remained difficult, METRO GROUP generated 30.8 billion in sales from January to June 03 (H 0: 3.5 billion). This corresponds to a decrease of.3%. In local currency, METRO GROUP sales were down.9% on the previous year. Adjusted for the already implemented and announced portfolio changes (MAKRO Cash & Carry in the United Kingdom, Real Eastern Europe and Media Markt China), sales increased slightly by 0.%. Sales development in Q 03 was down on that in Q. This is primarily due to the disposal of Real Russia and the earlier Easter business. The previous year also saw Media-Saturn in particular profit from the European football championship. As a result, sales declined by 3.6% in Q 03 to 5.3 billion (Q 0: 5.8 billion). Adjusted for currency effects, sales decreased by 3.0%, but adjusted for portfolio changes, sales only fell by 0.5%. Delivery sales rose significantly by 9.% to.3 billion in H 03. In Q, they even climbed by.8% to 0.7 billion. The share of own brand sales increased noticeably to.6% in H 03 (H 0:.4%). Q was particularly successful, since the share of own brand sales rose from.7% to.%. In H 03, METRO GROUP generated online sales of 0.6 billion, up 7.0% on H 0. Online sales came to 0.3 billion in Q 03 (+88.5%). In Germany, sales in H 03 fell marginally by 0.7% to.9 billion. The earlier Easter business and strike action in particular impacted Q. Sales declined by.4% to 5.8 billion. Galeria Kaufhof generated a positive sales development, also in likefor-like terms. International sales decreased by 3.% to 8.9 billion from January to June 03. Sales in local currency fell by.6%. However, adjusted for portfolio changes, sales increased by 0.6%. The international share of sales amounted to 6.3% (H 0: 6.9%). Sales in Q decreased by 4.% to 9.5 billion (in local currency: -3.3%). Adjusted for portfolio changes, sales even increased by 0.8%. The international share in sales amounted to 6.%. Sales in Western Europe (excluding Germany) in H 03 fell by 6.0% to 9.0 billion (in local currency: -5.9%) and were

7 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 INTERIM GROUP MANAGEMENT REPORT P. 7 mainly impacted by the previous year s disposal of MAKRO Cash & Carry in the United Kingdom, but when adjusted, sales only dropped by.7%. This is also a reflection of the continued decline in economic performance. Sales in Q decreased by 5.4% to 4.6 billion (in local currency: -5.%). Adjusted for MAKRO Cash & Carry, however, sales only fell by.0%. Sales in Eastern Europe dropped by.3% to 8.0 billion from January to June 03 (in local currency: -.4%). This was mainly due to the sale of Real in Russia and Ukraine. Sales in Q decreased by 4.7% to 4.0 billion, and by 3.% in local currency. Adjusted for the sale of Real Russia and Ukraine, sales declined slightly by 0.% in Q. special items, EBIT declined from 307 million to 90 million. EBIT before special items decreased in Q 03 from 35 million to 76 million. This was due to the sales development as well as price investments, especially at Media-Saturn, and adverse effects from strikes, particularly at Real in Germany. The net financial result in H 03 amounted to -347 million compared to -60 million in H 0. The net interest result was -46 million (H 0: -59 million). The other financial result decreased by 99 million to -0 million. This was primarily the result of effects from the closing of the sale of Real Russia and currency effects from the Russian rouble and the Polish z oty. Asia/Africa remains METRO GROUP s fastest-growing region by far. Sales rose significantly by 7.5% to.9 billion in H 03. Sales in local currency even increased by as much as 0.3%. Sales continued to increase dynamically in Q, despite negative currency effects, and climbed by 5.3% to 0.8 billion. Sales in local currency increased by 8.6%. Adjusted for Media Markt China, sales in Q rose by a considerable 9.0%. Special items Non-recurring business transactions such as restructuring and portfolio measures are classified as special items. Reporting before special items therefore provides a better reflection of the operating performance, thus increasing the value of the information provided. An overview, including the reconciliation of special items, is printed on pages 0 to 3. EBT in H 03 amounted to 7 million (H 0: -97 million). Adjusted for special items, EBT was -7 million (H 0: 47 million). Pursuant to the IFRS rules on interim reporting, the so-called integral approach is used for recognising tax during the financial year. According to this method, the recognised tax expenses and income correspond with the expected tax rate at the end of the financial year. As an overall positive pre-tax result is expected at the end of the short financial year both before and after special items, corresponding income tax expenses will result for both. Profit or loss for the period improved significantly in H 03 from -05 million to 0 million. The improvement is primarily due to the positive special items. EPS amounted to 0.05, after in H 0. Adjusted for special items, EPS declined from 0.0 to In Q, EPS before special items fell to 0.06 (Q 0: 0.34). Earnings EBITDA increased considerably in H 03 to 96 million (H 0: 876 million) and included positive special items of 98 million (H 0: -7 million). The special items mainly comprise positive effects from the sale of Real Eastern Europe. These were offset by costs from the insolvency of Praktiker AG and its subsidiaries as well as goodwill amortisation at METRO Cash & Carry. Adjusted for special items, EBITDA amounted to 863 million compared to 949 million in H 0. EBITDA increased considerably in Q 03 from 570 million to 66 million. Before special items, EBITDA amounted to 563 million (Q 0: 64 million). EBIT in H 03 increased considerably to 364 million (H 0: 63 million). This figure includes positive special items to the amount of 74 million (H 0: -44 million). The special items mainly comprise positive effects from the sale of Real Eastern Europe. These were offset by costs from the insolvency of Praktiker AG and its subsidiaries. Adjusted for Capex METRO GROUP s capex in H 03 amounted to 97 million (H 0: 555 million). Of this amount, 65 million pertained to Q (Q 0: 336 million). Store network In H 03, new stores were opened and 34 were disposed of or closed (H 0: 8 new stores and 0 disposals/ closures). 9 openings and 0 disposals occurred in Q. METRO Cash & Carry opened a total of 4 stores from January to June 03 (H 0: 5), one thereof in Q 03. One store was closed in H 03.

8 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 INTERIM GROUP MANAGEMENT REPORT P. 8 Real expanded its store network by 4 hypermarkets in H 03 (H 0: 0) and disposed of or closed stores (H 0: 3). This is primarily due to the disposal of Real Russia (7 stores) and Real Ukraine ( stores). Media-Saturn opened a total of 4 stores in H 03 (H 0: ), 8 thereof in Q 03, and closed stores (H 0: 3). As at the end of June 03, METRO GROUP operated a total of,3 stores in 3 countries (30 June 0:,09 stores in 33 countries). Balance sheet Total assets decreased by 5. billion to 9.7 billion compared to 3 December 0. This is mainly due to the decrease in cash and cash equivalents and trade payables typical for Q in comparison to the year-end closing. As at 30 June 03, METRO GROUP s balance sheet disclosed 5.3 billion equity. Due to the balance sheet contraction and despite the dividend distribution in May 03, the year-to-date equity ratio increased considerably from 6.3% to 7.8%. A detailed presentation on the business development of the individual divisions is given on pages 0 to 7. Funding METRO GROUP employs typical capital market permanent issuance programmes for funding purposes. To cover mediumand long-term funding requirements, the Group has a Debt Issuance Programme available. Bonds are issued from this programme. The maximum programme volume amounts to 6 billion and was drawn down by around 4.5 billion nominal volume as at 30 June 03 (30 June 0: 3.8 billion). Balance sheet net debt, after netting cash and cash equivalents, as well as bank deposits, with financial liabilities (including finance leases), totalled 6.3 billion as at 30 June 03 compared to 3. billion as at 3 December 0. This increase in net debt against the prior year-end closing is characteristic and resulted from the 3.7 billion reduction in trade payables. The reason for this reduction lies in the high share of sales Q4 contributes to the full year, which regularly corresponds to high trade payables at the year-end closing, which are then reduced over the course of Q. Net debt decreased by a considerable.9 billion compared to 30 June 0, however, thanks to the improved development of cash flow. The promissory note loans (Schuldscheindarlehen) of 50 million reaching maturity this year were repaid on time in H 03. Both the Euro Commercial Paper Programme as well as a further commercial paper programme, specifically geared to French investors, facilitate the coverage of short-term funding requirements. The maximum volume of each programme amounts to billion. The total drawdown on both programmes from January to June 03 amounted to. billion on average (H 0:.4 billion). In addition, METRO GROUP has bilateral and syndicated credit facilities amounting to 4.5 billion with durations up to 07. As at 30 June 03, the drawdown thereof was.3 billion (30 June 0:.6 billion). 3. billion in bilateral and syndicated credit lines were not drawn down, of which 3.0 billion have a term of more than one year. METRO GROUP S credit rating assigned by Moody's and Standard & Poor s of Baa3 and BBB- respectively with stable outlook is unchanged within investment grade. Cash flow From January to June 03, cash outflow from operating activities amounted to.6 billion (H 0:.9 billion cash outflow). This reflects the seasonal increase in net working capital. The improvement was mainly as a result of the increase in EBIT. Net working capital was improved thanks to strict inventory management and improved supplier management. Cash flow from investing activities included cash outflows for capex ( 0.3 billion) as well as cash inflows relating to the closing of the sale of Real Russia ( 0.6 billion). Total cash inflow amounted to 0.5 billion (H 0: 0.4 billion cash outflow).

9 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 INTERIM GROUP MANAGEMENT REPORT P. 9 Cash flow before financing activities improved considerably by.3 billion to -. billion (H 0: -3.4 billion). Cash outflow from financing activities amounted to.0 billion (H 0:.8 billion cash inflow). The significant decrease was due to considerably lower borrowings. Sustainability In mid-june 03, METRO GROUP signed Bangladesh s treaty for better fire prevention and more building safety in the textile industry. This means that the company is committed to making a further contribution to ensure a safe and sustainable textile industry in Bangladesh. Opportunities and risks Since the preparation of the Annual Report ( March 03), no material changes arose from the reported opportunities and risks concerning the ongoing development of METRO GROUP as described in detail in the Annual Report 0 (pp. 5 to 60). Parts of Germany were hit by flooding in June 03. Local METRO GROUP employees showed a great deal of dedication even though some were themselves affected. METRO Cash & Carry supported aid organisations and helped to supply the emergency teams and evacuees. Real offered discounts to flood victims. METRO AG provided 00,000 to support relief efforts. There are no risks that could endanger the company s existence and at present, none can be identified for the future.

10 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 INTERIM GROUP MANAGEMENT REPORT P. 0 METRO Cash & Carry Sales ( million) Change ( ) Currency effects Change (local currency) lfl (local currency) H 0 H 03 H 0 H 03 H 0 H 03 H 0 H 03 H 0 H 03 Total 5,35 4,794.8% -.9% 0.% -0.8%.7% -.% 0.8% -.3% Germany,384,75 -.0% -4.6% 0.0% 0.0% -.0% -4.6% 0.9% -4.7% Western Europe (excl. Germany) 5,555 5,050 -.% -9.% 0.4% -0.% -.5% -8.9% -.8% -.5% Eastern Europe 5,69 5,6 3.3% -0.% -.% -.% 5.5%.0%.% -0.9% Asia/Africa,677, % 0.7% 9.7% -3.0% 6.% 3.8% 5.7% 6.% Sales ( million) Change ( ) Currency effects Change (local currency) lfl (local currency) Q 0 Q 03 Q 0 Q 03 Q 0 Q 03 Q 0 Q 03 Q 0 Q 03 Total 7,95 7,76.0% -3.0% 0.4% -.0%.5% -.9% -0.3% -0.9% Germany,36,73-4.5% -5.% 0.0% 0.0% -4.5% -5.% -.7% -4.7% Western Europe (excl. Germany),983, % -8.4% 0.6% -0.3% -.5% -8.% -.6% -.9% Eastern Europe,969,970.7% 0.0% -.0% -.7% 4.7%.7%.% 0.0% Asia/Africa % 0.% 4.7% -3.6% 8.9% 3.7% 6.4% 5.9% From January to June 03, sales at METRO Cash & Carry fell by.9% to 4.8 billion (in local currency: -.%). However, adjusted for the sale of MAKRO Cash & Carry in the United Kingdom, sales remained almost on par with the previous year s level. Like-for-like sales declined by.3%. Sales also declined in Q due to the earlier Easter business and the continuously challenging macroeconomic conditions. Adjusted for MAKRO Cash & Carry in the United Kingdom, sales only decreased slightly. Sales from the delivery business continued to grow very dynamically, rising by 9.% to,6 million (H 0:,058 million). Sales even climbed by.8% in Q. The share of own brand sales also rose once more, from 6.7% to 7.0% in H 03, and from 6.9% to 7.4% in Q. In Germany, sales in H 03 declined by 4.6% to.3 billion. In like-for-like terms, sales were down 4.7%. In Q, the earlier Easter business impacted sales, which fell by 5.%. In like-forlike terms, sales stabilised at a low level against Q. Non-food sales, in particular, were unsatisfactory. The store in Düsseldorf remodelled its non-food offering and significantly reduced the number of products available. Further stores are expected to be remodelled by the end of the calendar year.,500 food articles were identified as being of particular relevance to HoReCa customers. Some 300 of these were added to the product range by the end of June. Sales in Western Europe amounted to 5. billion in H, down 9.% as against H 0, primarily due to the sale of MAKRO Cash & Carry in the United Kingdom; adjusted for these portfolio measures, sales only fell by.6%. Like-for-like sales declined by.5%. While sales in Spain continued to decline due to the macroeconomic development, sales rose in France. Despite the earlier Easter business, the sales trend improved in Q: the drop in like-for-like sales amounted to.9% compared to a 3.% decline in Q 03. Sales continued to decline in Italy and Spain, but to a lesser degree than in Q. At 5.6 billion, H 03 sales in Eastern Europe were on par with the previous year. Sales in local currency increased by.0%. In like-for-like terms, sales were down 0.9%. The sales development in Q improved quarter-on-quarter and sales were on par with the previous year s figures. Russia continued to be the region s most important growth country. Sales in Asia/Africa rose by a considerable 0.7% to.9 billion in H 03 (in local currency: +3.8%). The sales development in Q followed the positive development in Q. Sales increased significantly in China, in particular. The international share in sales generated during H 03 increased from 84.4% to 84.6%.

11 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 INTERIM GROUP MANAGEMENT REPORT P. million H 0 H 03 Change Q 0 Q 03 Change EBITDA % % EBITDA before special items % % EBIT 45 8 >00% 70 >00% EBIT before special items % % Capex % % Adjustment resulted from the first-time adoption of the revised IAS 9 3//0 30/06/03 Change 3/03/03 30/06/03 Change Stores Selling space (,000 m ) 5,484 5, ,548 5,539-9 Employees (full-time basis) 5,33,044-3,87,55,044 - EBITDA in H 03 increased to 38 million (H 0: 9 million). This figure includes positive special items to the amount of million (H 0: 50 million). EBITDA before special items amounted to 339 million (H 0: 34 million). Q 03 from 47 million to 4 million. A large proportion of the sales-related decline in earnings was compensated for by cost savings and efficiency-enhancing measures as well as by the lapsed loss generated by the business in the United Kingdom. In addition, further price investments were made. EBIT in H 03 increased significantly to 8 million (H 0: 45 million). This was due to special items in the previous year from the disposal of MAKRO Cash & Carry in the United Kingdom as well as expenses incurred from stopping expansion into Indonesia and from implementing restructuring measures in Portugal and at the headquarters of METRO Cash & Carry in Germany. Special items in H 03 amounted to 7 million (H 0: 76 million), primarily for goodwill amortisation at METRO Cash & Carry in Denmark. EBIT before special items in H 03 totalled 09 million (H 0: million). EBIT before special items decreased only slightly in Capex from January to June 03 for expansion and modernisation amounted to 7 million (H 0: 3 million). MET- RO Cash & Carry opened a total of 4 stores in H 03; store each was opened in Belgium, China, India and Russia. store was also closed in China. As at 30 June 03, METRO Cash & Carry operated 746 stores in 9 countries, thereof 07 in Germany, 36 in Western Europe, 85 in Eastern Europe and 8 in Asia/Africa.

12 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 INTERIM GROUP MANAGEMENT REPORT P. Real Sales ( million) Change ( ) Currency effects Change (local currency) lfl (local currency) H 0 H 03 H 0 H 03 H 0 H 03 H 0 H 03 H 0 H 03 Total 5,39 4,999 0.% -6.% -.% 0.0%.3% -6.%.% -.6% Germany 3,933 3,878.% -.4% 0.0% 0.0%.% -.4%.0% -0.5% Eastern Europe,396, -.8% -9.7% -4.3% 0.0%.6% -9.7% -0.8% -0.8% Sales ( million) Change ( ) Currency effects Change (local currency) lfl (local currency) Q 0 Q 03 Q 0 Q 03 Q 0 Q 03 Q 0 Q 03 Q 0 Q 03 Total,665, % -.5% -.% -0.% -0.8% -.4% -.0% -4.6% Germany,965,90 -.% -3.3% 0.0% 0.0% -.% -3.3% -0.7% -.5% Eastern Europe % -34.5% -4.3% -0.3% 0.7% -34.% -.6% -.5% In H 03, sales at Real decreased by 6.% to 5.0 billion (in local currency: -6.%). This drop was mainly due to the disposal of Real in Russia and Ukraine; adjusted for these two countries, sales only fell by.8%. Like-for-like sales decreased by.6%. Sales in Q were impacted by the earlier Easter business and therefore declined more than in Q. In Germany, sales in H 03 fell by.4% to 3.9 billion. In like-for-like terms, sales were down 0.5%. This means that Real maintained its good position in the hypermarket sector. In Q, the earlier Easter business impacted sales, which fell accordingly. Furthermore, operations were also disrupted by strike action, which negatively impacted the business development. Sales in Eastern Europe in H 03 fell by 9.7%. This is mainly due to the fact that Real Ukraine and Real Russia have no longer been included in the consolidated financial statements of METRO GROUP since March 03 and April 03, respectively. The disposals of Real in Romania and Poland are expected during the course of the year, subject to the approval from the relevant antitrust authorities. The international share in sales generated during H 03 decreased from 6.% to.4%. million H 0 H 03 Change Q 0 Q 03 Change EBITDA % % EBITDA before special items % % EBIT >00% EBIT before special items % Capex % % 3//0 30/06/03 Change 3/03/03 30/06/03 Change Stores Selling space (,000 sqm) 3,043, ,06,930-3 Employees (full-time basis) 50,065 47,343 -,7 48,76 47,343 -,49 EBITDA improved significantly in H 03 from 88 million to 43 million. EBITDA before special items amounted to 46 million (H 0: 86 million). EBIT increased significantly to 83 million (H 0: -4 million). This figure includes 9 million special items that resulted primarily from the sale of Real Eastern Europe. EBIT before special items decreased to -9 million (H 0: -6 million). EBIT increased considerably in Q 0, from 9 million to

13 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 INTERIM GROUP MANAGEMENT REPORT P million, due to positive special items. EBIT before special items fell from 7 million to - million, mainly due to the missing EBIT contribution from Russia, as well as to sales decreases in Germany, additional price investments and the strike action. Capex in H 03 amounted to 0 million (H 0: 58 million). In line with contractual requirements, Real acquired 4 stores in Poland; however, these will also be sold within the context of the disposal of Real Poland. Real disposed of hypermarkets in Germany. The sale of Real Ukraine and Real Russia to Groupe Auchan comprised 9 stores. As at 30 June 03, the store network comprised a total of 404 stores, thereof 30 in Germany and 94 in Eastern Europe. Media-Saturn Sales ( million) Change ( ) Currency effects Change (local currency) lfl (local currency) H 0 H 03 H 0 H 03 H 0 H 03 H 0 H 03 H 0 H 03 Total 9,5 9,609.3% 0.9% -0.% -0.%.5%.0% -0.9% -.% Germany 4,357 4, %.5% 0.0% 0.0% 5.5%.5%.% 0.9% Western Europe (excl. Germany) 3,933 3, % -.8% 0.5% 0.% -3.0% -.8% -3.8% -5.7% Eastern Europe,6,57 5.7% 8.3% -3.9% -0.9% 9.5% 9.%.9% -.7% Asia % -69.0% 9.% 0.3% 58.6% -69.% - - Sales ( million) Change ( ) Currency effects Change (local currency) lfl (local currency) Q 0 Q 03 Q 0 Q 03 Q 0 Q 03 Q 0 Q 03 Q 0 Q 03 Total 4,538 4,55 4.5% -0.3% -0.% -0.% 4.7% -0.%.7% -3.0% Germany,09,086.4% -0.3% 0.0% 0.0%.4% -0.3% 6.8% -.8% Western Europe (excl. Germany),857,84 -.5% -0.8% 0.4% 0.% -.8% -0.9% -3.4% -4.6% Eastern Europe % 7.6% -3.5% -.9% 6.6% 9.4%.7% -.4% Asia % -.3% - 4.6% Although the overall market remained difficult in H 03, sales at Media-Saturn rose by 0.9% to 9.6 billion (in local currency: +.0%). Media-Saturn thereby underpinned its position as European market leader and continued to expand its market share in many countries. Like-for-like sales fell by.%. Sales only declined slightly in Q 03 despite the fact that Q 0 profited greatly from the effects of the European football championship. Online sales continued to grow dynamically, with sales rising by 76% to 565 million in H 03, accounting for 5.9% of total sales. The growth rate even amounted to more than 90% in Q. British mobile phone specialist Carphone Warehouse and METRO GROUP are examining an extensive co-operation for the sale of mobile phone devices, contracts and services. Following a successful test phase at Media-Saturn in the Netherlands, now also the 7 Dutch wholesale stores of METRO s subsidiary MAKRO Cash & Carry are testing common concepts with Carphone Warehouse. Opportunities for a co-operation are also being examined for the other METRO GROUP sales lines. In Germany, sales in H 03 rose by.5% to 4.5 billion. Likefor-like sales increased by 0.9%. Sales in Q declined by a slight 0.3% against a very high prior year base of comparison. The European football championship and the digital switchover of analogue satellite transmission drove sales of digital satellite set-top boxes and TV sets with integrated digital satellite receivers. Despite an overall shrinking market, Media-Saturn gained additional market shares in Q. Customers continue to positively receive the multichannel offer. The online product range has been further expanded and now comprises more than 3,000 products at Mediamarkt.de and almost 9,000 at Saturn.de. The in-store pickup rate remained high at approximately 40%.

14 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 INTERIM GROUP MANAGEMENT REPORT P. 4 In H 03, sales in Western Europe decreased by.8% to 3.9 billion (in local currency: -.8%). Like-for-like sales fell by 5.7%. The difficult economic environment continued to significantly impact demand for consumer electronics, particularly in Southern Europe. Against this backdrop, Media-Saturn was nevertheless able to selectively increase its market shares. The sales development in Q was better than in Q. In Eastern Europe, sales in H 03 increased significantly by 8.3% to.3 billion (in local currency: +9.%). Like-for-like sales declined by.7%. The sales development at Media- Saturn in Q was similar to that seen in Q. Demand picked up noticeably in Poland, and sales increased in all countries with the exception of Greece. The international share in sales generated during H 03 amounted to 53.5% (H 0: 54.%). million H 0 H 03 Change Q 0 Q 03 Change EBITDA % EBITDA before special items % EBIT % % EBIT before special items % % Capex % % 3//0 30/06/03 Change 3/03/03 30/06/03 Change Stores Selling space (,000 sqm) 3,035 3,00-5 3,000 3,00 0 Employees (full-time basis) 58,46 56,3 -,84 56,650 56,3-58 EBITDA in H 03 totalled 30 million (H 0: 57 million). EBITDA before special items amounted to 5 million (H 0: 57 million). EBIT in H 03 amounted to -04 million (H 0: -79 million) and included 4 million positive special items. EBIT before special items fell to -08 million (H 0: -79 million). In Q, EBIT before special items amounted to -94 million (Q 0: -59 million). This is a reflection of price investments to gain additional market shares as well as lower advertising subsidies. Capex in the store network totalled 05 million in H 03 (H 0: 0 million). A total of 4 stores were opened from January to June 03, thereof 5 in Turkey, 3 in Russia, in Poland and each in Germany, Spain, the Netherlands and Sweden. 7 stores were closed in China, 4 in Spain and in Switzerland. At the end of Q 03, the store network of Media-Saturn comprised 944 stores in 5 countries, thereof 405 in Germany, 36 in Western Europe and 77 in Eastern Europe. In addition, Media-Saturn is present online in France and Denmark.

15 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 INTERIM GROUP MANAGEMENT REPORT P. 5 Galeria Kaufhof Sales ( million) Change lfl H 0 H 03 H 0 H 03 H 0 H 03 Total,39, % -.3% -.4% 0.8% Germany,303,87-0.9% -.3% -.7% 0.9% Western Europe (excl. Germany) % -.4%.8% -.4% Sales ( million) Change lfl Q 0 Q 03 Q 0 Q 03 Q 0 Q 03 Total % -.0% -.8% 0.6% Germany % -.% -3.% 0.7% Western Europe (excl. Germany) % -0.3% 3.5% -0.3% Sales at Galeria Kaufhof declined slightly by.3% to.4 billion in H 03. However, like-for-like sales were up 0.8% year on year. Although the cold weather lasted for a long period and led to a slump in sales in the textile market, Galeria Kaufhof still gained additional market shares. Q also developed very positively despite the Easter shift. Easter business, unfavourable weather conditions and strike action at a number of stores. Galeria Kaufhof gained additional market shares. The modernised webshop also continued to perform very well, with sales more than doubling. In Germany, sales at Galeria Kaufhof, the market leader in the German department store business, fell by.3% to.3 billion in H 03. This was due to the store closures in the previous year. However, like-for-like sales increased by 0.9%. The positive sales development continued in Q, despite the earlier Sales in Western Europe fell by.4% from January to June 03. However, the sales development picked up in Q against Q and was almost on par with the previous year s level. Business profited from a good textile sales development. million H 0 H 03 Change Q 0 Q 03 Change EBITDA % % EBITDA before special items % % EBIT % - - EBIT before special items % 4 >00% Capex % % 3//0 30/06/03 Change 3/03/03 30/06/03 Change Stores Selling space (,000 sqm),44,438-3,440,438 - Employees (full-time basis) 8,53 7,5 -,88 7,06 7,5 +9

16 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 INTERIM GROUP MANAGEMENT REPORT P. 6 EBITDA in H 03 totalled 8 million (H 0: 9 million). EBITDA before special items increased from 9 million to 3 million. EBIT fell in H 03 from -3 million to -34 million. However, EBIT before special items increased from -3 million to -9 million. In Q 03, EBIT decreased to - million (Q 0: million). This figure primarily includes expenses of 5 million incurred for the three planned closures in Düsseldorf, Heilbronn and Augsburg; the rental contracts for these stores, which expire between the end of 04 and the end of 05, will not be renewed. Galeria Kaufhof generated positive earnings in Q thanks to EBIT before special items of 4 million, thereby clearly increasing on the previous year s quarter by 3 million. In addition to a higher gross profit from an improved margin mix, the rise is also a result of further strict cost management. From January to June 03, capex in the store network amounted to 7 million (H 0: 36 million). As at 30 June 03, the store network of Galeria Kaufhof comprised 37 stores, thereof in Germany and 5 in Belgium.

17 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 INTERIM GROUP MANAGEMENT REPORT P. 7 Real Estate Others million H 0 H 03 Change EBITDA % EBITDA before special items % EBIT % EBIT before special items % Capex % million H 0 H 03 Change Sales % EBITDA % EBITDA before special items % EBIT % EBIT before special items % Capex % 3//0 30/06/03 Change Employees (full-time basis),588, //0 30/06/03 Change Employees (full-time basis) 8,5 8,33-9 million Q 0 Q 03 Abw. EBITDA % EBITDA before special items % EBIT % EBIT before special items % Capex % 3/03/03 30/06/03 Change Employees (full-time basis),69, million Q 0 Q 03 Change Sales % EBITDA EBITDA before special items EBIT % EBIT before special items % Capex % 3/03/03 30/06/03 Change The segment Real Estate comprises all METRO GROUP s real estate assets, as well as all real estate-related services. As at 30 June 03, METRO GROUP owned 60 properties (3 December 0: 60). EBITDA in H 03 totalled 457 million (H 0: 474 million). These earnings mainly constitute rental income paid by METRO GROUP's divisions. EBIT amounted to 300 million compared to 37 million in the previous year. The positive special item relates to income from the closing of the sale of Real Russia, which more than offset the risk provisions from the effects of the insolvency of Praktiker. EBIT before special items amounted to 76 million (H 0: 8 million). Lower rental income as a result of store disposals was partially offset by new store openings and indexation-related rental increases. Store disposals included two in Germany (Dortmund and Mannheim) and the Meydan Ümraniye shopping centre in Istanbul. Employees (full-time basis) 8,08 8,33 +5 The segment Others comprises, aside from METRO GROUP s strategic management holding, METRO AG amongst others, the procurement organisation in Hong Kong, which also operates for third parties, as well as the logistics services. In H 03, sales in the segment Others totalled 6 million (H 0: 6 million). Sales mainly included the commission from third-party business via METRO GROUP s procurement organisation in Hong Kong. EBIT improved significantly in H 03 from -4 million to -6 million. EBIT before special items increased from -89 million to -56 million. EBIT amounted to -4 million in Q 03 (Q 0: -60 million). EBIT before special items amounted to -9 million (Q 0: -36 million). This EBIT improvement resulted primarily from cost savings.

18 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 INTERIM GROUP MANAGEMENT REPORT P. 8 Subsequent events and outlook Events after the quarter-end closing On 0 July 03, the Management Board of Praktiker AG denied a positive continuation forecast for Praktiker AG and individual Praktiker group companies; corresponding insolvencies resulting from over-indebtedness and illiquidity were filed for on July 03. On 6 July 03, the management boards of the Praktiker group companies operating the Max Bahr DIY stores in Germany, which were at first not affected by the insolvency proceedings, also filed for insolvency. METRO GROUP is in particular impacted by Praktiker s insolvency as it leases properties inter alia in Germany and Turkey and provides services to the Praktiker group. The resulting expected costs are mainly included in the interim financial statements and disclosed as special items. Moreover, the Romanian competition authority approved the sale of Real Romania to Groupe Auchan on 9 July 03. Macroeconomic outlook Economic indicators suggest that the downturn has gradually bottomed out. Overall, we still expect the global economy to recover only very slowly for the rest of the year. At the same time, the economy remains fragile and is supported in particular by monetary policy measures; the possibility of setbacks cannot be excluded. At a little over %, global economic growth in calendar year 03 is likely to be on par with the very weak previous year. Eurozone countries will continue to decline, just like last year. Retail sales will be more sharply affected in 03 than in 0 on account of record levels of unemployment. We expect the German economy to stagnate in the full year. Eastern Europe will likely grow even less in 03 than in the weak previous year. However, large growth potential remains here. Growth rates amongst the Asian emerging markets continue to remain high despite the economic cooling in China. Outlook METRO GROUP Sales For the short financial year 03 ( January to 30 September 03), we expect in spite of the continuing difficult business conditions to generate moderate growth in sales (adjusted for portfolio changes). Earnings Earnings trends in the abbreviated financial year 03 will be impacted by the uncertain economic situation described earlier. As a result, we will continue to closely focus in 03 and future years on efficient structures and strict cost management. In the short financial year 03, we expect EBIT before special items to increase compared to the level achieved in the corresponding period of the previous year ( 706 million). This projection is based on the assumption of higher income from the sale of real estate assets compared to the year-earlier period. Due also to the lack of major sports events, operating earnings are expected to fall short of the level of the first 9 months of 0. milllion 9M 0 Short FY 03 Sales growth.5% >0% EBIT before special items 706 >706 3 Capex 954 <954 Net debt (in billion ) 7,7 <7,7 New store openings Adjusted for sale of MAKRO UK, Real Eastern Europe and Media Markt China Adjustment resulted from the first-time adoption of the revised IAS9 3 Incl. higher contribution from real estate gains vs 9M 0

19 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 INTERIM GROUP MANAGEMENT REPORT P. 9 Store network As at 30 June 03 METRO Cash & Carry Real Media-Saturn Galeria Kaufhof METRO GROUP Q H 30/06 Q H 30/06 Q H 30/06 Q H 30/06 Q H 30/06 Germany Austria Belgium Denmark 5 5 France Italy Luxemburg Netherlands Portugal Spain Sweden Switzerland Western Europe Bulgaria 4 4 Croatia 7 7 Czech Republic 3 3 Greece Hungary 3 34 Kazakhstan 8 8 Moldova 3 3 Poland Romania Russia Serbia 0 0 Slovakia 6 6 Turkey Ukraine Eastern Europe China Egypt India Japan 9 9 Pakistan 9 9 Vietnam 9 9 Asia/Africa Total ,3

20 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 INTERIM GROUP MANAGEMENT REPORT P. 0 Reconciliation of special items (operating segments) H 03 Special items by sales line As reported Special items Before special items million H 0 H 03 H 0 H 03 H 0 H 03 EBITDA thereof METRO Cash & Carry Real Media-Saturn Galeria Kaufhof Real estate Others Consolidation EBIT thereof METRO Cash & Carry Real Media-Saturn Galeria Kaufhof Real estate Others Consolidation Financial result EBT Income taxes Profit or loss for the period Profit or loss for the period attributable to non-controlling interests Profit or loss attributable to shareholders of METRO AG Earnings per share in (basic = diluted) Adjustment resulted from the first-time adoption of the revised IAS 9

21 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 INTERIM GROUP MANAGEMENT REPORT P. Reconciliation of special items (regional segments) H 03 Special items by region As reported Special items Before special items million H 0 H 03 H 0 H 03 H 0 H 03 EBITDA thereof Germany Western Europe (excl. Germany) Eastern Europe Asia/Africa Consolidation EBIT thereof Germany Western Europe (excl. Germany) Eastern Europe Asia/Africa Consolidation Net financial result EBT Income taxes Profit or loss for the period Profit or loss for the period attributable to non-controlling interests Profit or loss attributable to shareholders of METRO AG Earnings per share in (basic = diluted) Adjustment resulted from the first-time adoption of the revised IAS 9

22 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 INTERIM GROUP MANAGEMENT REPORT P. Reconciliation of special items (operating segments) Q 03 Special items by sales line As reported Special items Before special items million Q 0 Q 03 Q 0 Q 03 Q 0 Q 03 EBITDA thereof METRO Cash & Carry Real Media-Saturn Galeria Kaufhof Real estate Others Consolidation EBIT thereof METRO Cash & Carry Real Media-Saturn Galeria Kaufhof Real estate Others Consolidation Financial result EBT Income taxes Profit or loss for the period Profit or loss for the period attributable to non-controlling interests Profit or loss attributable to shareholders of METRO AG Earnings per share in (basic = diluted) Adjustment resulted from the first-time adoption of the revised IAS 9

23 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 INTERIM GROUP MANAGEMENT REPORT P. 3 Reconciliation of special items (regional segments) Q 03 Special items by region As reported Special items Before special items million Q 0 Q 03 Q 0 Q 03 Q 0 Q 03 EBITDA thereof Germany Western Europe (excl. Germany) Eastern Europe Asia/Africa Consolidation EBIT thereof Germany Western Europe (excl. Germany) Eastern Europe Asia/Africa Consolidation Net financial result EBT Income taxes Net profit for the period Profit or loss for the period attributable to non-controlling interests Profit or loss attributable to shareholders of METRO AG Earnings per share in (basic = diluted) Adjustment resulted from the first-time adoption of the revised IAS 9

24 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 INTERIM CONSOLIDATED FINANCIAL STATEMENTS P. 4 INTERIM CONSOLIDATED FINANCIAL STATEMENTS Income statement million H 0 H 03 Q 0 Q 03 Net sales 3,493 30,78 5,846 5,8 Cost of sales -5, -4,66 -,607 -,4 Gross profit on sales 6,38 6,0 3,39 3,040 Other operating income Selling expenses -6,80-5,866-3,9 -,88 General administrative expenses Other operating expenses EBIT Result from associated companies Other investment result Interest income Interest expenses Other financial result Net financial result EBT Income taxes Profit or loss for the period Profit or loss for the period attributable to non-controlling interests Profit or loss attributable to shareholders of METRO AG Earnings per share in (basic = diluted) Adjustment due to the first-time adoption of the revised IAS 9

25 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 INTERIM CONSOLIDATED FINANCIAL STATEMENTS P. 5 Total comprehensive income reconciliation million H 0 H 03 Q 0 Q 03 Profit or loss for the period Other comprehensive income Items of "other comprehensive income" that will not be reclassified subsequently to profit or loss Remeasurements of defined benefit pension plans Income tax attributable to items of "other comprehensive income" that will not be reclassified subsequently to profit or loss Items of "other comprehensive income" that may be reclassified subsequently to profit or loss Currency translation differences from the conversion of the accounts of foreign operations Effective portion of gains/losses from cash flow hedges and gains/losses from the revaluation of financial instruments in the category "available for sale" Income tax attributable to items of "other comprehensive income" that may be reclassified subsequently to profit or loss Total comprehensive income Total comprehensive income attributable to non-controlling interests Total comprehensive income attributable to shareholders of METRO AG Changed presentation due to the first-time adoption of the revised IAS Adjustment due to the first-time adoption of the revised IAS 9

26 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 INTERIM CONSOLIDATED FINANCIAL STATEMENTS P. 6 Balance sheet Assets million 3//0 30/06/0 30/06/03 Non-current assets 7,33 8,407 6,763 Goodwill 3,780 4,006 3,778 Other intangible assets Tangible assets,34,05 0,770 Investment properties Financial investments Investments accounted for using the equity method Other financial and non-financial assets Deferred tax assets 94, Current assets 7,479 3,00,93 Inventories 6,86 6,874 6,46 Trade receivables Financial investments 79 9 Other financial and non-financial assets,886,644,834 Entitlements to income tax refunds Cash and cash equivalents 5,99,768,09 Assets held for sale, ,80 3,47 9,686 Equity and liabilities million 3//0 30/06/0 30/06/03 Equity 5,666 5,57 5,87 Share capital Capital reserve,544,544,55 Reserves retained from earnings,4,68,89 Non-controlling interests Non-current liabilities 9,064 9,399 8,794 Provisions for pensions and similar commitments,58,399,5 Other provisions Borrowings 6,736 6,787 6,508 Other financial and non-financial liabilities Deferred tax liabilities Current liabilities 0,07 6,446 5,605 Trade liabilities 3,53 0,50 9,768 Provisions Borrowings,84 3,9,05 Other financial and non-financial liabilities,90,330,493 Income tax liabilities Liabilities related to assets held for sale ,80 3,47 9,686 In the previous year included in financial investments (non-current) Adjustment due to the first-time adoption of the revised IAS 9

27 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 INTERIM CONSOLIDATED FINANCIAL STATEMENTS P. 7 Cash flow statement million H 0 H 03 EBIT Write-backs/write-downs of assets excl. financial investments Change in provisions for pensions and other provisions Change in net working capital -3,08 -,908 Income taxes paid Reclassification of gains (-) / losses (+) from the disposal of fixed assets Other Total cash flow from operating activities -,93 -,630 Corporate acquisitions - Investments in tangible assets (excl. finance leases) Other investments Divestments Disposal of fixed assets 4 53 Gains (-) / losses (+) from the disposal of fixed assets Total cash flow from investing activities Profit distribution to METRO AG shareholders to other shareholders Redemption of liabilities from put options of non-controlling interests 0-7 Raising of borrowings 4,53,493 Redemption of borrowings -,00 -,485 Interest paid Interest received Profit and loss transfers and other financing activities - -8 Total cash flow from financing activities, Total cash flows -,58-3,074 Exchange rate effects on cash and cash equivalents 6-6 Total change in cash and cash equivalents -,575-3,090 Cash and cash equivalents on January 3,355 5,99 Cash and cash equivalents on 30 June,780,09 Less cash and cash equivalents from disposal groups - 0 Cash and cash equivalents on 30 June,768,09 Adjustment due to the first-time adoption of the revised IAS 9 Adjustment of previous year by the Change in cash and cash equivalents due to first-time consolidation of companies

28 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 INTERIM CONSOLIDATED FINANCIAL STATEMENTS P. 8 Statement of changes in equity million Share capital Capital reserve Effective portion of gains/losses from cash flow hedges and gains/losses from the revaluation of financial instruments in the category "available for sale" Currency translation differences from the conversion of the accounts of foreign operations Remeasurements of defined benefit pension plans Income tax attributable to items of "other comprehensive income" 0/0/0 835, Revision of IAS Subtotal 835, Dividends Total comprehensive income Capital balance from acquisitions of shares Other changes 30/06/0 835, /0/03 835, Revision of IAS Subtotal 835, Dividends Total comprehensive income Capital balance from acquisitions of shares Other changes 7 30/06/03 835, Adjustment due to the first-time adoption of the revised IAS 9 Continued statement of changes in equity million Other reserves retained from earnings Total reserves retained from earnings Total equity before noncontrolling interests thereof attributable to "other comprehensive income" Non-controlling interests thereof attributable to "other comprehensive income" Total equity 0/0/0 3,336,985 6, ,437 Revision of IAS Subtotal 3,335,84 6, 7 6,9 Dividends Total comprehensive income (-3) -7 () -37 Capital balance from acquisitions of shares Other changes /06/0,793,68 5, ,57 0/0/03,89,645 6, ,0 Revision of IAS Subtotal,90,4 5, ,666 Dividends Total comprehensive income 7 (-5) - (-4) -9 Capital balance from acquisitions of shares Other changes /06/03,594,89 5,77 0 5,87

29 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 NOTES P. 9 NOTES Segment reporting H 03 Divisions METRO Cash & Carry Real Media-Saturn Galeria Kaufhof million H 0 H 03 H 0 H 03 H 0 H 03 H 0 H 03 External sales (net) 5,35 4,794 5,39 4,999 9,5 9,609,39,373 Internal sales (net) Total sales (net) 5,48 4,80 5,39 4,999 9,5 9,60,39,373 EBITDA Depreciation/amortisation/ impairment losses Reversal of impairment losses EBIT Investments Segment assets 7,93 7,534 3,470,996 5,53 5, thereof non-current (4,76) (4,087) (,350) (,78) (,768) (,698) (489) (460) Segment liabilities 5,39, 5,44,463,46 5,50 5, Selling space (,000 m ) 5,555 5,539 3,050,930,98 3,00,440,438 Locations (number) Adjustment due to the first-time adoption of the revised IAS 9 Adjustment of previous year (see chapter Notes to Group accounting principles and methods ) Continued divisions Real Estate Others Consolidation METRO GROUP million H 0 H 03 H 0 H 03 H 0 H 03 H 0 H 03 External sales (net) ,493 30,78 Internal sales (net) 0 0,873,8 -,886 -, Total sales (net) 0 0,890,88 -,886 -,838 3,493 30,78 EBITDA Depreciation/amortisation/ impairment losses Reversal of impairment losses EBIT Investments Segment assets 8,587 7,607,43, ,5 5,3 thereof non-current (8,056) (7,74) (489) (477) (-39) (-6) (7,88) (5,488) Segment liabilities ,633,, ,430, 4,58 Selling space (,000 m ) ,96,96 Locations (number) ,09,3 Adjustment due to the first-time adoption of the revised IAS 9 Adjustment of previous year (see chapter Notes to Group accounting principles and methods )

30 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 NOTES P. 30 Regional segments Germany Western Europe (excl. Germany) Eastern Europe Asia/Africa million H 0 H 03 H 0 H 03 H 0 H 03 H 0 H 03 External sales (net),989,908 9,576 9,00 8,77 7,989,75,883 Internal sales (net) Total sales (net),08,0 9,65 9,044 8,80 7,996,767,897 EBITDA Depreciation/amortisation/impairment losses Reversal of impairment losses EBIT Investments Segment assets,38 0,79 6,975 6,403 7,80 6,75,678,635 thereof non-current (6,89) (6,47) (3,705) (3,599) (5,550) (4,406) (,9) (,069) Segment liabilities 6,379 6,747, 4,57 4,93 3,09, Selling space (,000 m ) 5,754 5,779 3,07,877 3,495 3, Locations (number) Adjustment due to the first-time adoption of the revised IAS 9 Adjustment of previous year (see chapter Notes to Group accounting principles and methods ) Continued regional segments International Consolidation METRO GROUP million H 0 H 03 H 0 H 03 H 0 H 03 External sales (net) 9,504 8, ,493 30,78 Internal sales (net) Total sales (net) 9,56 8, ,493 30,78 EBITDA Depreciation/amortisation/impairment losses Reversal of impairment losses EBIT Investments Segment assets 6,473 4, ,5 5,3 thereof non-current (0,374) (9,074) (-6) (-3) (7,88) (5,488) Segment liabilities, 8,377 8, , 4,430 4,58 Selling space (,000 m ) 7,09 7,37 0 0,96,96 Locations (number),73,87 0 0,09,3 Adjustment due to the first-time adoption of the revised IAS 9 Adjustment of previous year (see chapter Notes to Group accounting principles and methods )

31 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 NOTES P. 3 Segment reporting Q 03 Divisions METRO Cash & Carry Real Media-Saturn Galeria Kaufhof million Q 0 Q 03 Q 0 Q 03 Q 0 Q 03 Q 0 Q 03 External sales (net) 7,95 7,76,665,360 4,538 4, Internal sales (net) Total sales (net) 7,957 7,78,665,360 4,538 4, EBITDA Depreciation/amortisation/ impairment losses Reversal of impairment losses EBIT Investments Segment assets 7,93 7,534 3,470,996 5,53 5, thereof non-current (4,76) (4,087) (,350) (,78) (,768) (,698) (489) (460) Segment liabilities 5,39, 5,44,463,46 5,50 5, Selling space (,000 m ) 5,555 5,539 3,050,930,98 3,00,440,438 Locations (number) Adjustment due to the first-time adoption of the revised IAS 9 Adjustment of previous year (see chapter Notes to Group accounting principles and methods ) Continued divisions Real Estate Others Consolidation METRO GROUP million Q 0 Q 03 Q 0 Q 03 Q 0 Q 03 Q 0 Q 03 External sales (net) ,846 5,8 Internal sales (net) 0 0,46,387 -,43 -, Total sales (net) 0 0,43,390 -,43 -,399 5,846 5,8 EBITDA Depreciation/amortisation/ impairment losses Reversal of impairment losses EBIT Investments Segment assets 8,587 7,607,43, ,5 5,3 thereof non-current (8,056) (7,74) (489) (477) (-39) (-6) (7,88) (5,488) Segment liabilities ,633,, ,430, 4,58 Selling space (,000 m ) ,96,96 Locations (number) ,09,3 Adjustment due to the first-time adoption of the revised IAS 9 Adjustment of previous year (see chapter Notes to Group accounting principles and methods )

32 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 NOTES P. 3 Regional segments Germany Western Europe (excl. Germany) Eastern Europe Asia/Africa million Q 0 Q 03 Q 0 Q 03 Q 0 Q 03 Q 0 Q 03 External sales (net) 5,94 5,799 4,88 4,66 4,3 4, Internal sales (net) Total sales (net) 5,995 5,854 4,893 4,636 4,5 4, EBITDA Depreciation/amortisation/impairment losses Reversal of impairment losses EBIT Investments Segment assets,38 0,79 6,975 6,403 7,80 6,75,678,635 thereof non-current (6,89) (6,47) (3,705) (3,599) (5,550) (4,406) (,9) (,069) Segment liabilities 6,379 6,747, 4,57 4,93 3,09, Selling space (,000 m ) 5,754 5,779 3,07,877 3,495 3, Locations (number) Adjustment due to the first-time adoption of the revised IAS 9 Adjustment of previous year (see chapter Notes to Group accounting principles and methods ) Continued regional segments International Consolidation METRO GROUP million Q 0 Q 03 Q 0 Q 03 Q 0 Q 03 External sales (net) 9,904 9, ,846 5,8 Internal sales (net) Total sales (net) 9,94 9, ,846 5,8 EBITDA Depreciation/amortisation/impairment losses Reversal of impairment losses EBIT Investments Segment assets 6,473 4, ,5 5,3 thereof non-current (0,374) (9,074) (-6) (-3) (7,88) (5,488) Segment liabilities, 8,377 8, , 4,430 4,58 Selling space (,000 m ) 7,09 7,37 0 0,96,96 Locations (number),73,87 0 0,09,3 Adjustment due to the first-time adoption of the revised IAS 9 Adjustment of previous year (see chapter Notes to Group accounting principles and methods )

33 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 NOTES P. 33 Notes to Group accounting principles and methods These interim consolidated financial statements as at 30 June 03 have been prepared in accordance with International Accounting Standard (IAS) 34 (Interim Financial Reporting), which regulates interim financial reporting under the International Financial Reporting Standards (IFRS). As a condensed interim report, it does not contain all the information required by IFRS for annual consolidated financial statements. These interim consolidated financial statements are unaudited, but they were subject to an auditor s review in accordance with Section 37w (5) of the German Securities Trading Act (WpHG). These interim consolidated financial statements have been prepared in euros. All amounts are stated in millions of euros ( million), unless otherwise indicated. Furthermore, to provide a better overview within the tables, decimal places have been partly omitted. Since the financial year 0, only the numbers within the income statement, the total comprehensive income reconciliation, the balance sheet, the statement of changes in equity and the cash flow statement have been rounded in a way that they form the sum when added up. In the remaining tables, the individual numbers and the sums have been rounded independently. As a result, rounding differences may occur. During the financial year, sales-related and cyclical items are accounted for pro-rata, where material. In preparing these interim consolidated financial statements, all applicable standards and interpretations published by the International Accounting Standards Board (IASB), adopted by the European Union, were applied. With the exception of new or revised standards and interpretations, the same recognition and measurement principles have been applied as in the last consolidated financial statements as at 3 December 0. More information regarding the recognition and measurement principles applied can be found in the notes to the annual consolidated financial statements as at 3 December 0 (see Annual Report 0, pages 80-96). New financial reporting standards IFRS 3 (Fair Value Measurement) The new standard IFRS 3 stipulates standardised requirements for measuring fair value. However, other IFRSs continue to stipulate where fair value measurement must be used or where fair value has to be disclosed in the notes. First-time application of IFRS 3 as of January 03 did not result in any material deviations in fair value measurement at METRO AG. IAS (Presentation of Financial Statements) The amendment to IAS Presentation of Items of Other Comprehensive Income was applied in these interim consolidated financial statements. It stipulates that when reconciling the items of other comprehensive income from profit or loss for the period to total comprehensive income, they have to be split according to whether they will be reclassified to the income statement in the future if the correct conditions for this are met or if they will remain permanently in equity. In addition, the corresponding tax effects for these two new categories in other comprehensive income must be recognised separately. IAS 9 (Employee Benefits) Since January 03, it is mandatory to apply the revised IAS 9. 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 9 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. In accordance with the transitional provisions, METRO AG applied for the first time the revised IAS 9 retrospectively. Reserves retained from earnings were adjusted by -67 million as of 3 December 0, by -483 Mio. as of 30 June 0 and by -03 million as of January 0 without any effect on the income statement (excluding the offsetting effect from deferred taxes) corresponding to the amount of the actuarial gains and losses recorded as of the respective closing dates, which had been recognised off-balance sheet in the past according to the corridor method. Provisions and/or plan assets as well as balance sheet profit were adjusted accordingly. Adjustments also had to be made in the income statement for Q 0. By recognising past service costs in the income statement, general administrative expenses decreased by million (H 0: million), resulting in a corresponding rise in EBIT. Due to the derecognition of the amortisation of

34 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 NOTES P. 34 actuarial gains and losses recognised in Q 0, interest expenses decreased by million (H 0: 3 million). Furthermore, the application of the actuarial interest rate on pension obligations to plan assets increased interest income by million (H 0: 4 million). In total, the financial result therefore increased by 3 million (H 0: 7 million). Imputed tax expenses of million (H 0: 4 million) were recognised correspondingly. Annual improvements to IFRS (009-0) It was also mandatory to apply the Annual Improvements to IFRS (009-0) for the first time on January 03. These, however, had no material impact on these interim consolidated financial statements. Further amendments to IFRS In addition to the amendments stated above, the Government Loans amendment to IFRS (First-time Adoption of International Financial Reporting Standards) as well as the interpretation IFRIC 0 (Stripping Costs in the Production Phase of a Surface Mine) came into force as of January 03. However, as these are only relevant for IFRS first-time adopters or entities operating in the surface mining industry, this amendment had no effect on METRO AG. Additionally, the amendment to IFRS 7 (Financial Instruments: Disclosure) Disclosures! Offsetting Financial Assets and Financial Liabilities have to be applied as of January 03. This amendment does not result in a disclosure obligation for METRO AG in the interim financial statements due to reasons of materiality. This resulted in a 48 million drop in segment liabilities as of 30 June 0 in the Other segment and a decline of 50 million in the METRO Cash & Carry segment as the Miscellaneous other liabilities are added to segment liabilities, but not the Liabilities to third-party interests. Preference shares In the recent past, the predominant opinion has formed that preference shares issued in the form of METRO AG s must be treated as pure equity instruments. METRO AG agrees with this and therefore abandoned the previous recognition method of stating part of the amounts received from issuing preference shares in equity and part in debt as of January 03. A corresponding amount of 7 million was reclassified from Other financial and non-financial liabilities (non-current) to Capital reserve. Change of the financial year METRO AG will close its financial year on 30 September rather than 3 December this year. For transition purposes, the financial year 03 will be a short 9-month financial year from January 03 to 30 September 03. The following financial year 03/4 will be a regular, -month financial year from October 03 to 30 September 04. Revised disclosure Put options held by non-controlling interests In the financial year 0, the reporting of put options held by non-controlling interests was harmonised. In the past, liabilities from put options were recognised in Other financial and non-financial liabilities, either under Liabilities to third-party interests or Miscellaneous other liabilities. Since Q4 0, they are all recognised in Liabilities to third-party interests. As the old logic was applied in the first three quarters of the financial year 0, these figures were adjusted retrospectively. On 3 June 0, 98 million was reclassified from Miscellaneous other liabilities to Liabilities to third-party interests.

35 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 NOTES P. 35 Notes to the income statement Depreciation/amortisation/impairment losses Depreciation of 639 million (H 0: 87 million) included impairments to the amount of 79 million (H 0: 9 million, thereof 7 million relating to the divestment of the British wholesale business). 60 million of this amount related to Q 03 (Q 0: 9 million), thereof million for impairment losses in connection with Real s Eastern European business held for sale and 6 million for goodwill impairments at METRO Cash & Carry Denmark. The allocation of depreciation amounts between the income statement and the asset classes involved is as follows: Notes to the balance sheet Dividends paid Net profit in financial year 0 came to 349 million. By resolution of the Annual General Meeting on 8 May 03, a total of 37 million of this amount was distributed on 9 May 03, divided into dividends of.00 per ordinary share and.06 per preference share. The remaining amount was carried forward to new account. Assets held for sale/liabilities related to assets held for sale million H 0 H 03 Selling expenses General administrative expenses 76 7 Cost of sales 8 0 Other operating expenses million H 0 H 03 Intangible assets Tangible assets Investment properties 6 6 Assets held for sale million Q 0 Q 03 Selling expenses General administrative expenses Cost of sales 4 5 Other operating expenses By contractual agreement dated 30 November 0, METRO GROUP and Groupe Auchan agreed on the sale of Real s business in Poland, Russia, Romania and the Ukraine to Groupe Auchan. As of 3 December 0, the sale was still subject to the approval of the respective national antitrust authorities. Until the antitrust authorities have given their approval, all assets and liabilities that fall under the agreement are being treated as a disposal group pursuant to IFRS 5. Following the approval from the Ukrainian antitrust authority in Q 03, the deconsolidation of Real s business in the Ukraine was reported for the first time in the Quarterly Financial Report Q 03. The last remaining condition in connection with the Real business in Russia was fulfilled at the beginning of Q 03. Corresponding, the effect of the deconsolidation of the Real business in Russia was part of the Half-Year Financial Report as of 30 June 03 for the very first time. With the divestment of the real business in Ukraine and in Russia As a result of the disposal of Real s business in the Ukraine and in Russia, Assets held for sale decreased by 53 million since 3 December 0 and Liabilities related to assets held for sale fell by 77 million. million Q 0 Q 03 Intangible assets 40 5 Tangible assets Investment properties 3 3 Assets held for sale Impairments of capitalised financial instruments valued at amortised cost amounted to 68 million (H 0: 47 million). 38 million of this amount related to Q 03 (Q 0: million).

36 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 NOTES P. 36 The reduction of assets and liabilities held for sale consisted of the following items: million Assets Other intangible assets 8 Tangible assets 33 Other financial and non-financial assets (non-current) Inventories 8 Other financial and non-financial assets (current) 47 Cash and cash equivalents 44 Liabilities Borrowings (non-current) 4 Trade liabilities 48 Provisions (current) 5 Other financial and non-financial liabilities (current) 8 Income tax liabilities The value adjustment of the remaining assets and liabilities of the disposal group in Romania and Poland and the continued operations in these two countries led to a further reduction of 7 million in Assets held for sale to 456 million, and a reduction of 87 million in Liabilities related to assets held for sale to 46 million. The composition of the assets and liabilities held for sale of the remaining assets and liabilities of the disposal group in Romania and Poland is as follows: million Assets Other intangible assets Tangible assets 35 Inventories 63 Trade receivables 4 Other financial and non-financial assets (current) 40 Cash and cash equivalents 3 Liabilities Borrowings (non-current) 0 Other financial and non-financial liabilities (non-current) Trade liabilities 69 Provisions (current) Borrowings (current) 7 Other financial and non-financial liabilities (current) The remaining assets and liabilities of the disposal group contributed 383 million to the Real segment s assets and 59 million to the segment s liabilities. In the Real Estate segment, these contributed 58 million to segment assets and 0 million to segment liabilities. Segment assets in the Consolidation segment declined by 6 million and segment liabilities by 9 million. Additional assets and liabilities were disposed of to other purchasers following the sale of Real in Eastern Europe. 56 million of these were recognised in assets held for sale and 8 million of the liabilities were recognised in liabilities related to assets held for sale. In the Real segment, the assets held for sale and liabilities related to assets held for sale contributed 4 million to segment assets and 3 million to segment liabilities. In the Real Estate segment, these contributed 0 million to segment assets and 0 million to segment liabilities. The earnings affecting EBIT resulting from the deconsolidation of Real in Ukraine and Russia as well as from the value adjustment of the two remaining disposal groups and other valuation effects in connection to the sale amounted to 37 million. It is primarily shown with an amount of 64 million as Other operating income and -33 million of this amount as Other operating expenses. 93 million relates to the Real segment and 44 million to the Real Estate segment. In view of the intention to sell and due to renovation-related retroactive capitalisation of properties already included in Assets held for sale, the balance sheet item increased by 6 million. Conversely, the disposal of properties to the amount of 3 million following its sale and currency effects of 4 million had a negative impact. Properties held for sale amount to 05 million. It is assumed that the properties included in Assets held for sale will be disposed of within one year. No impairment of these properties to their fair value less cost to sell was required. They are shown in the segment reporting item segment assets in the amount of 05 million in the Real Estate segment.

37 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 NOTES P. 37 Carrying amounts and fair values according to measurement category The carrying amounts and fair values of recognised financial instruments are as follows: 30/06/03 million Carrying amount Balance sheet value (Amortised) cost Fair value affecting profit or loss Fair value outside of profit or loss Fair value Assets 9,686 n/a n/a n/a n/a Loans and receivables,76,76 0 0,76 Loans and advance credit granted Receivables due from suppliers,44,44 0 0,44 Trade receivables Miscellaneous financial assets Held to maturity Securities Miscellaneous financial assets Held for trading Derivative financial instruments not part of a hedge under IAS Securities Other financial receivables Available for sale n/a Investments n/a Securities 0 0 Other financial receivables Derivative financial instruments within hedges under IAS Cash and cash equivalents,09,09 0 0,09 Receivables from finance lease (amount according to IAS 7) 4 n/a n/a n/a 5 Assets not classified under IFRS 7 4,495 n/a n/a n/a n/a Liabilities 9,686 n/a n/a n/a n/a Held for trading Derivative financial instruments not part of a hedge under IAS Other financial liabilities Other financial liabilities 8,308 8, ,570 Borrowings excl. finance leases (incl. underlying hedging transactions under IAS 39) 7,7 7, ,433 Trade liabilities 9,768 9, ,768 Miscellaneous financial liabilities,369, ,369 Derivative financial instruments within hedges under IAS Liabilities from finance lease (amount according to IAS 7),36 n/a n/a n/a,64 Liabilities not classified under IFRS 7 9,993 n/a n/a n/a n/a Unrealised gain (+)/loss ( ) from total difference between fair value and book value 540

38 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 NOTES P. 38 Due to their mostly short terms, the fair values of receivables due from suppliers, trade receivables and liabilities as well as cash and cash equivalents essentially correspond to their carrying amounts. million of the total carrying amount of investments to the amount of 35 million is measured at cost as their fair value cannot be reliably determined. These are unlisted financial instruments with no active market. There are no plans at present to sell the investments measured at cost. Listed investments of 3 million are measured at fair value directly in equity. The measurement of the fair value of bonds, liabilities to banks and promissory note loans is based on the market interest rate curve following the zero-coupon method in consideration of credit spreads. The amounts comprise the interest prorated to the closing date. Other financial liabilities include liabilities from put options held by non-controlling interests to the amount of 80 million that are subsequently measured at fair value directly in equity. The fair values of all other financial assets and liabilities that are not listed on an exchange correspond to the present value of payments underlying these balance sheet items. The calculation was based on the applicable country-specific yield curves as of the closing date. The following table depicts the financial instruments that are recognised at fair value in the balance sheet. These are classified into a 3-level fair value hierarchy whose levels reflect the degree of closeness to the market of the data used in the determination of the fair values: 30/06/03 million Total Level Level Level 3 Assets Held for trading Derivative financial instruments not part of a hedge under IAS Available for sale Investments Securities 0 0 Derivative financial instruments with part of a hedge under IAS Liabilities Held for trading Derivative financial instruments not part of a hedge under IAS Other financial liabilities Miscellaneous financial liabilities Other financial liabilities Derivative financial instruments with part of a hedge under IAS Total The measurement of securities (level ) is carried out based on quoted market prices on active markets. Interest rate swaps and forex transactions (all level ) are measured using the mark-to-market method based on quoted exchange rates and market yield curves. The fair value of commodity derivatives (level ) is calculated as the average of the past month's price noted on the exchange. No transfers between levels and were effected during the reporting period. Level 3 includes the fair values of liabilities from put options held by non-controlling interests. The fair value measurement is based on the respective contract design. The fair values of put options are determined using various methods: Fair values of liabilities from put options, which are determined on the basis of the discounted cash flow method, are based on expected future cash flows over a detailed planning period of three years plus perpetuity. The assumed growth rate for the perpetuity is 4.3% to 8.3%. The respective local WACC is used as the discount rate. In the reporting period, discount rates ranged from.% to 6.3%. If the individual interest rates were to increase by 0.0%, the fair value of these liabilities would decline by 7 million.

39 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 NOTES P. 39 The changes in value of the put options developed as follows: million Opening balance 0/0/ Transfers into Level 3 0 Transfers out of Level 3 0 Total gains (-) or losses (+) for the period 0 Included in profit or loss 0 Included in other comprehensive income 0 Other changes in value not affecting profit or loss 3 Changes resulting from transactions 7 Award of new rights 0 Redemption of existing rights 7 Total 30/06/03 80 Segment investments include additions to non-current intangible and tangible assets (including additions to the consolidation groups) as well as in-vestment properties, except for additions due to the reclassification of assets held for sale as non-current assets. Segment assets include non-current and current assets. They do not include mostly financial assets, investments accounted for using the equity method, tax items, cash and cash equivalents and assets allocable to discontinued operations. The reconciliation from segment assets to Group assets is shown in the following table: Other notes Segment reporting Segment reporting has been carried out in accordance with IFRS 8 (Operating Segments). The segmentation corresponds to the Group s internal controlling and reporting structures and is generally based on the division of the business into individual sectors. Aside from the information on the operating segments listed above, equivalent in-formation is provided on the METRO regions. Here, a distinction is made between the regions Germany, Western Europe (excluding Germany), Eastern Europe and Asia/Africa. External sales represent sales of the operating segments to third parties outside the Group. million 30/06/0 30/06/03 Segment assets 7,5 5,3 Non-current and current financial investments Investments accounted for using the equity method 57 9 Cash and cash equivalents,768,09 Deferred tax assets, Entitlements to income tax refunds Other entitlements to tax refunds Liabilities related to assets held for sale 5 44 Receivables from other financial transactions Other 43 9 Group assets 3,47 9,686 Adjustment due to the first-time adoption of the revised IAS9 In the previous year included in financial investments (non-current) 3 Included in the balance sheet item other financial and non-financial assets (current) 4 Included in the balance sheet items other financial and non-financial assets (non-current and current) Segment liabilities include non-current and current liabilities. They do not include, in particular, borrowings, tax items and liabilities allocable to discontinued operations. Internal sales represent sales between the Group s operating segments. Segment EBITDA comprises EBIT before depreciation, amortisation and impairment and reversals of impairment on tangible, intangible assets and investment properties. EBIT, as the key ratio for segment re-porting, describes operating earnings for the period before net financial income and income taxes. Intra-Group rental contracts are shown as operating leases in the segments. The properties are leased at market rates. In principle, store-related risks and recoverability risks related to non-current assets are only shown in the segments where they represent Group risks. In analogy, this also applies to deferred assets and liabilities, which are only shown at segment level if this was also required in the consolidated balance sheet.

40 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 NOTES P. 40 The reconciliation from segment liabilities to Group liabilities is shown in the following table: million 30/06/0 30/06/03 Segment liabilities, 4,430 4,58 Non-current and current borrowings 9,979 8,533 Deferred tax liabilities Income tax liabilities Income tax provisions Other tax liabilities Liabilities from other financial transactions Liabilities to third parties, Liabilities related to assets held for sale 4 8 Interest for other provisions 57 5 Other 3 0 Group liabilities 5,845 4,399 Adjustment of previous year (see chapter Notes to Group accounting principles and methods ) Adjustment due to the first-time adoption of the revised IAS9 3 Included in the balance sheet items other provisions (non-current) and provisions (current) 4 Included in the balance sheet items other financial and non-financial liabilities (non- current and current) In principle, transfers between segments are made based on the costs incurred from the Group s perspective. Contingent liabilities The contingent liabilities underlie no material changes in the considered period. million 3//0 30/06/0 30/06/03 Liabilities from suretyships and guarantees Liabilities from guarantee and warranty contracts Other legal issues Information on legal disputes, investigations and other legal issues as well as on the related possible risks and consequences for METRO GROUP can be found in point 45. Other Legal Issues of the notes to the consolidated financial statements of METRO AG as of 3 December 0. The following material developments with regard to legal disputes, investigations and other legal issues have occurred since the consolidated financial statements were prepared: jurisdiction, the Federal Court of Justice rejected the appeal filed by the non-controlling shareholder against denial of leave to appeal. This means that a final decision has now been made fully in favour of METRO AG in this case, which focused on, among other things, the establishment of an advisory board at MSH. Following the approval of METRO AG s Supervisory Board, the originally resolved proviso subjecting the budget for the MSH sub-group to the Supervisory Board s approval could be lifted at the second meeting of the advisory board of MSH on 6 March 03. The same member of the advisory board who had filed a claim against the original budget resolution in particular with reference to the Supervisory Board s proviso filed yet another claim against this decision to lift the Supervisory Board s proviso. The new claim is based on similar legal arguments as the previously reported claims against advisory board resolutions. METRO therefore deems the chance of success of this claim to also be low as the question of voting majority requirements on the advisory board in particular was clarified in the ruling by the arbitration court made in August 0. A METRO AG shareholder filed a claim to declare the approved annual financial statements of METRO AG as of 3 December 0 void on the basis of an alleged violation in particular of the provisions governing the segmentation of the annual financial statements due to the alleged erroneous consolidation of the Media-Saturn group companies in the consolidated financial statements of METRO AG. METRO AG was served with the suit in June 03. Based on the alleged invalidity of the annual financial statements, the same shareholder also challenged the resolution of the General Meeting on the appropriation of balance sheet profits for the 0 financial year and the election of the auditor, among other things. METRO AG has not yet been served with this suit. METRO AG sees no grounds to doubt the legal validity of the annual financial statements or the resulting resolution of the General Meeting on the appropriation of balance sheet profits for the 0 financial year; METRO AG believes that the appellant s line of reasoning is futile. METRO AG s annual financial statements were prepared in accordance with the accounting standards contained in the German Commercial Code (HGB). METRO AG also remains convinced that the consolidation of the Media-Saturn group companies was rightfully effected, both in the past and in the consolidated financial statements as of 3 December 0 prepared according to international accounting principles (IFRS, as they are applicable within the EU). Even if the consolidation of the Media-Saturn group companies in METRO AG s consolidated financial statements were erroneous, this would not affect the legal validity of METRO AG s annual financial statements. In a lawsuit initiated by a non-controlling shareholder of Media- Saturn-Holding GmbH (MSH) before the courts of ordinary

41 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 NOTES P. 4 Events after the quarter-end closing On 0 July 03, the Management Board of Praktiker AG denied a positive continuation forecast for Praktiker AG and individual Praktiker group companies; corresponding insolvencies resulting from over-indebtedness and illiquidity were filed for on July 03. On 6 July 03, the management of the Praktiker group companies operating the Max Bahr hardware stores in Germany, which were at first not affected by the insolvency proceedings, also filed for insolvency. METRO GROUP is in particular impacted by Praktiker s insolvency as it leases properties inter alia in Germany and Turkey and provides services to the Praktiker group. The resulting expected costs are mainly included in the interim financial statements and disclosed as special items. As at 30 June 03, METRO GROUP companies provided goods/services totalling million to companies included in the group of related companies. This concerns primarily the granting of energy and lease rights. The goods/services totalling 8 million that METRO GROUP companies received from related companies as at 30 June 03 consisted of services, to an amount of 5 million, and real estate leases, to an amount of 3 million. The decline in goods/services received primarily resulted from the inclusion of a company previously managed as a related party in the consolidated group of METRO GROUP. Business relations with related parties are based on contractual agreements providing for arm s length prices. Moreover, the Romanian competition authority approved the sale of Real Romania to Groupe Auchan on 9 July 03. Share-based payment for executives Notes on related parties A further tranche of performance shares was distributed in April 03. The following conditions apply: METRO GROUP maintained the following business relations to related companies during the reporting period: The vesting period ends in April 06. The 3-month average price before allotment is.84. The number of performance shares issued in 03 as of 30 June 03 was,04,6. million H 0 H 03 Goods/services provided therefore to associated companies 0 0 Goods/services received 8 therefore from associated companies 4 Receivables from goods/services provided 0 0 Liabilities from goods/services received million Q 0 Q 03 Goods/services provided 0 0 therefore to associated companies 0 0 Goods/services received 4 4 therefore from associated companies Receivables from goods/services provided 0 0 Liabilities from goods/services received 0

42 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 RESPONSIBILITY STATEMENT P. 4 RESPONSIBILITY STATEMENT To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the interim management report of the Group includes a fair review of the development and performance of the business and the position of the group, together with a description of the principal opportu-nities and risks associated with the expected development of the Group for the remaining financial year. Düsseldorf, 3 July 03 The Management Board

43 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 REVIEW REPORT P. 43 REVIEW REPORT To METRO AG, Düsseldorf We have reviewed the condensed interim consolidated financial statements of the METRO AG -comprising the balance sheet, the income statement, total comprehensive income reconciliation, cash flow statement, statement of changes in equity and selected explanatory notes together with the interim group management report of the METRO AG, for the period from January to June 30, 03 that are part of the semi annual financial report according to 37 w WpHG [ Wertpapierhandelsgesetz : German Securities Trading Act ]. The preparation of the condensed interim consolidated financial statements in accordance with those IFRS applicable to interim financial reporting as adopted by the EU, and of the interim group management report in accordance with the requirements of the WpHG applicable to interim group management reports, is the responsibility of the Company s management. Our responsibility is to issue a report on the condensed interim consolidated financial statements and on the interim group management report based on our review. We performed our review of the condensed interim consolidated financial statements and the interim group management report in accordance with the German generally accepted standards for the review of financial statements promulgated by the Institut der Wirtschaftsprüfer (IDW) and additionally in accordance with the International Standard on Review Engagements, Review of Interim Financial Information Performed by the Independent Auditor of the Entity (ISRE 40). Those standards require that we plan and perform the review so that we can preclude through critical evaluation, with a certain level of assurance, that the condensed interim consolidated financial statements have not been prepared, in material aspects, in accordance with the IFRS applicable to interim financial reporting as adopted by the EU, and that the interim group management report has not been prepared, in material aspects, in accordance with the requirements of the WpHG applicable to interim group management reports. A review is limited primarily to inquiries of company employees and analytical assessments and therefore does not provide the assurance attainable in a financial statement audit. Since, in accordance with our engagement, we have not performed a financial statement audit, we cannot issue an auditor s report. Based on our review, no matters have come to our attention that cause us to presume that the condensed interim consolidated financial statements have not been prepared, in material respects, in accordance with the IFRS applicable to interim financial reporting as adopted by the EU, or that the interim group management report has not been prepared, in material respects, in accordance with the requirements of the WpHG applicable to interim group management reports. Cologne, 3 July 03 KPMG AG Wirtschaftsprüfungsgesellschaft Lurweg Klaaßen Auditor Auditor

44 METRO GROUP HALF-YEAR FINANCIAL REPORT H/Q 03 FINANCIAL CALENDAR AND IMPRINT P. 44 Financial calendar Short Financial Year 03 Trading Statement Thursday 7 October a.m. Annual Business Press Conference and Analysts Presentation Short Financial Year 03 Thursday December 03 Christmas Trading Statement 03 Monday 3 January a.m. Quarterly Financial Report Q 03/04 Tuesday February a.m. Annual General Meeting 04 Wednesday February a.m. All time specifications are CET. Imprint METRO AG Metro-Straße 4035 Düsseldorf, Germany PO Box Düsseldorf, Germany Published: August 03 Investor Relations Phone +49 () Fax +49 () investorrelations@metro.de Creditor Relations Phone +49 () Fax +49 () creditorrelations@metro.de Corporate Communications Phone +49 () Fax +49 () presse@metro.de Visit our website at the primary source for publications and in-formation about the METRO GROUP. With the METRO GROUP News Abo you can subscribe to regular news and official publications of the company online. Please note: In case of doubt the German version shall prevail. Disclaimer This report contains forward-looking statements which are based on certain expectations and assumptions at the time of publication of this report and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in these materials. Many of these risks and uncertainties relate to factors that are beyond METRO GROUP s ability to control or estimate precisely, such as future market and economic conditions, the behaviour of other market participants, the ability to successfully integrate acquired businesses and achieve anticipated cost savings and productivity gains as well as the actions of government regulators. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this report. METRO GROUP does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of these materials.