MADE TO TRADE. Bankers Meeting METRO AG 20 May 2014 METRO AG 2014
Disclaimer and Notes To the extent that statements in this presentation do not relate to historical or current facts, they constitute forward-looking statements. All forward-looking statements herein are based on certain expectations and assumptions at the time of publication of this presentation and are subject to risks and uncertainties that could cause actual results, performance or financial position to differ materially from any future results, performance or financial position expressed or implied in this presentation. Many of these risks and uncertainties relate to factors that are beyond METRO GROUP s ability to control or estimate precisely. The risks and uncertainties to which these forward-looking statements may be subject, include (without limitation) future market and economic conditions, the behaviour of other market participants, invest in innovative sales formats, expand in online and multichannel sales activities, integrate acquired businesses and achieve anticipated cost savings and productivity gains, and the actions of government regulators. Readers are cautioned not to place reliance on these forward-looking statements. See also Presentation of the Risk Situation on pages 164-178 of the METRO GROUP Annual Report 2013 for risks as of the date of such Annual Report. METRO GROUP does not undertake any obligation to publicly update any forward-looking statements or to conform them to events or circumstances after the date of this presentation. This presentation is intended for information only. It is not intended as an offer for sale, or as a solicitation of an offer to purchase, any securities in any jurisdiction. This presentation may not be reproduced, distributed or published without prior written consent of METRO AG. All numbers are before special items, unless otherwise stated. To enable better comparability following the change of the financial year, Q1 2013 is referred to in this report as Q2 2012/13. H1 2012/13 consists of Q4 2012 and Q1 2013. Additionally, the previous year figures are updated according to the new segment structures. Reported figures for April 2014 are unaudited and preliminary. Please note that new accounting standards have been applied. More information regarding the application of group accounting principles and methods refer to the corresponding chapter in the notes to the Annual Report 2013. The consolidated financial statements have been prepared in euros. All amounts are stated in million euros ( million) unless otherwise indicated. Amounts below 0.5 million are rounded and reported as 0. In contrast to the practice of past years, only the amounts in the income statement, the reconciliation from profit or loss for the period to total comprehensive income, the balance sheet, the statement of changes in equity and the cash flow statement were rounded to produce the respective totals. In all other tables, the individual amounts and the totals were rounded separately. This may entail rounding differences. 1
METRO old style Acting as a pure portfolio administrator champion at claiming Living on past success Lack of new ideas, change and spirit Lagging behind in industry trends: e-commerce, delivery, connectivity Lack of customer focus Bureaucracy Limited empowerment on operational level We almost got it wrong 2
We had to TRANSFORM! In 2012, we have embarked on the most incisive transformation journey of METRO GROUP s history we had to TRANSFORM: 1 Business concepts of sales lines challenged 2 Unbalanced Balance Sheet 3 Outdated leadership culture 4 Lacking execution efficiency 3
METRO started to be YOUNG & WILD again Full of passion Absolute customer centricity Improved customer relevance new product ranges, store formats and services New leadership culture Decentralization reduced bureaucracy 4
What is new at Cash & Carry? New marketing campaign (YOU & METRO) successfully launched New non-food procurement and sales strategy Delivery strategy Further roll-out of new store concepts Further stock streamlining Cost structure improved and ongoing review 5
50th Anniversary: YOU & METRO 6
METRO Cash & Carry: Q2 2013/14 LFL sales grew by 0.8% despite Easter shift Germany improved (adj. for calendar effect); positive development in Eastern Europe especially in Russia Delivery sales increased by 9.4% (share of online orders in delivery strongly grew to 11%) Own brand sales share grew to 16.9% Streamlining of operations in Belgium India new expansion country Like-for-Like Sales Development in % 2012/13 2013/14 Q1 Q2 Q3 Q4 Q1 Q2 Delivery Sales in million 2012/13 2013/14 Q1 Q2 Q3 Q4 Q1 Q2 7
What is new at real,-? Flagship store concept Essen successfully rolled-out in 30 further stores (~10% of total Real stores in Germany, 15% of sales and even higher share of EBIT) Remodeled stores opened on 3 April 2014, strong outperformance of existing stores since opening Sales +7% Frequency +6% Strengthening of entrepreneurial store management Fruit and Vegetables: Accelerated rollout of concept module to >160 stores Strong meat and sausage competence to be further emphasized: Der Meistermetzger Piloting new real,- drive concept 8
Real: Q2 2013/14 LFL sales decline in Germany mainly due to the shift of Easter business as well as continued competitive market conditions Like-for-Like Sales Development in Germany in % 2012/13 2013/14 Range of new sub-price-entry own brand products extended to more than 100 items (33 Food and 68 Non-Food) Q1 Q2 Q3 Q4 Q1 Q2 Own brand sales share in Germany improved to 17.2% Streamlining store portfolio: Closing 8 nonprofitable stores until end of FY 2014/15 9
What is new at MSH? Strategic and organisational realignment of Media-Saturn with the target to strengthen our No. 1 position as Europe s leading multi-channel retailer in consumer electronics METRO AG Board Member Pieter Haas has already been delegated as Deputy Chairman of Media-Saturn- Holding management board to continue the successful path of Horst Norberg All multi-channel activities of Media-Saturn will be bundled in the company Media-Saturn E-Business GmbH Further strategic development of all offerings of its retail brands and all channels to adapt to changing market conditions and purchasing behaviour of customers 10
Media-Saturn: Q2 2013/14 Germany and Western Europe suffering from continuing challenging market environment, but Media-Saturn is winning market shares in general Eastern Europe with stable LFL development - double digit growth rates in Hungary and Turkey Like-for-Like Sales Development in % 2012/13 2013/14 Q1 Q2 Q3 Q4 Q1 Q2 Online Sales in million 2012/13 2013/14 Further dynamic growth in online sales of +27% Joint procurement of assortment in Germany (Media-Markt and Saturn) Q1 Q2 Q3 Q4 Q1 Q2 2013/14 ytd (new business year) including February MSH including Redcoon 11
What is new at Galeria Kaufhof? Optimization of store network and real estate use in Germany Determination of new real estate strategy with dedicated management team Acceleration of multichannel retailing activities Premium concept at selected top locations (Berlin Alex, Cologne Hohe Straße, Frankfurt/Zeil, München Marienplatz) Introduction of new upscale brands New store opening in Belgium and market entry into Luxemburg 12
Galeria Kaufhof: Q2 2013/14 Notable LFL sales growth of approx. 1% (adj. for calendar effect) Like-for-Like Sales Development in % 2012/13 2013/14 135 th anniversary Webshop with continued strong growth of 61% and long-term sales share target of 10% Q1 Q2 Q3 Q4 Q1 Q2 Introduction of 1,100 tablets in all department stores to support multichannel approach New management structure for real estate portfolio and multi-channel business 13
Q2 Highlights METRO Cash & Carry with strong performance Sales Development in million 2012/13 2013/14 Transformation progress continued: Own brand sales share increased by 60 bps to 11.6% Delivery sales: 0.6 billion (+9.4%) Online sales: 0.4 billion (+27%) Net debt reduced by 0.9 billion to 5.6 billion (31/03 vs PY) Q1 Q2 Q3 Q4 Q1 Q2 Like-for-Like Sales Development in % 2012/13 2013/14 Q1 Q2 Q3 Q4 Q1 Q2 EBIT in million 2012/13 2013/14 Q1 Q2 Q3 Q4 Q1 Q2 14
Excursus: Derivation of Comparable EBIT Q2 2012/13 in million 14 EBIT-impact from portfolio changes ~-36-40 Negative FX impact ~25 ~25 Q2 2012/13 Q2 2012/13 (comparable) Q2 2013/14 15
Q2 2013/14: Sales and EBIT by Division Sales Q2 2013/14 million METRO Cash & Carry 6,861 Change -3.1% Change 0.8% Change 4.9% Q2 2012/13 43 Q2 2012/13 ~18 43 Media-Saturn 4,881-4.0% -3.7% 0.3% -14-14 -14 Real 1,900-28.0% -6.4% 14.2% 11 ~-14-41 Galeria Kaufhof 682-1.9% -1.9% 4.6% -3-3 -2 Others 2-29.3% - - -26-26 -27 Consolidation - - - - 3 3 2 METRO GROUP 14,326-7.6% -1.8% 4.7% 14 ~-36-40 METRO Cash & Carry: 3 rd consecutive quarter with positive LFL growth and significant comparable EBIT improvement despite Easter shift Media-Saturn: LFL suffered from market weakness and low performance in Germany; EBIT almost stable driven by better cost and margin management Real: LFL and EBIT impacted by a combination of intensified competition, Easter shift and store remodellings Like-for-Like Galeria Kaufhof: 5 th consecutive quarter with LFL growth if adjusted for Easter shift; EBIT stable despite missing Easter business April 2014 Like-for-Like EBIT reported EBIT comparable EBIT Q2 2013/14 16
Outlook FY 2013/14 confirmed billlion FY 2012/13 FY 2013/14 Sales growth 1,2-1.4% >0% LFL sales growth -1.3% ~0% EBIT before special items² 2.0 2.0 Adjusted EBIT before special items², ³ 1.7 ~1.75 Capex 1.2 <1.6 Net debt 5.4 <5.4 Number of new store openings 91 ~70 1 Adjusted for portfolio changes ² Based on stable FX ³ Adjusted for significant real estate transactions and portf olio changes 17
What do we still have to do? Our Finance Priorities. GET the finance basics right Further strengthening of Balance Sheet Enforcement of active Cash Steering Improvement of Credit Rating metrics IMPROVE financial steering of METRO Stronger ties between Finance and Operations Further roll-out of homogeneous operational steering philosophy Ensuring lean administration structures DELIVER innovative finance solutions Transparency on value creation potential Risk reduction of balance sheet (e.g. pensions) Freeing up financial resources to create strategic leeway to invest 18
Thank you very much for the excellent collaboration in 2013! 19