MADE TO TRADE Credit Suisse Amsterdam/Stockholm Consumer IR …/assets/mag/documents/... ·...

MADE TO TRADE.

MADE TO TRADE. Credit Suisse Amsterdam/Stockholm Consumer IR Days 014/15 May 2013 | © METRO AG 2013

Credit Suisse Amsterdam/Stockholm Consumer IR Days

14/15 May 2013 | Amsterdam/Stockholm | © METRO AG 2013

14/15 May 2013 | © METRO AG 2013 1MADE TO TRADE. Credit Suisse Amsterdam/Stockholm Consumer IR Days

To the extent that statements in this presentation do not relate to historical or current facts, they constitute forward-looking statements (including within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended). All forward-looking statements herein are based on certain expectations and assumptions at the time of publication of this presentation and are subject to risks and uncertainties that could cause actual results, performance or financial position to differ materially from any future results, performance or financial position expressed or implied in this presentation. Many of these risks and uncertainties relate to factors that are beyond METRO GROUP’sability to control or estimate precisely. The risks and uncertainties to which these forward-looking statements may be subject, include (without limitation) future market and economic conditions, the behaviour of other market participants, the ability to successfully transform the business model of METRO Cash & Carry, reorganise the management structure of METRO Cash & Carry, invest in innovative sales formats, expand in online and multichannel sales activities, integrate acquired businesses and achieve anticipated cost savings and productivity gains, and the actions of government regulators. Readers are cautioned not to place reliance on these forward-looking statements. METRO GROUP does not undertake any obligation to publicly update any forward-looking statements or to conform them to events or circumstances after the date of this presentation.

This presentation is intended for information only. It is not intended as an offer for sale, or as a solicitation of an offer to purchase, any securities in any jurisdiction.

This presentation may not be reproduced, distributed or published without prior written consent of METRO AG.

All numbers are before special items, unless otherwise stated.

Please note that new accounting standards have been applied. More information regarding the application of accounting methods, refer to the notes to the Annual Report 2012.

Since 1 January 2013, it is mandatory to apply the revised IAS 19. The previous option granted for actuarial gains and losses from defined benefit pension plans, which allowed these amounts to be recognised either immediately in the income statement, directly in equity or according to the so-called corridor method, has been abolished. The revised IAS 19 only allows for actuarial gains and losses to be recognised immediately in equity (“other comprehensive income”). The amounts collected in equity remain there and will not be reclassified to the income statement in subsequent periods. As aresult, the income statement will in future remain unaffected by actuarial gains and losses. As METRO AG used the corridor method in the past, this resulted in a change of method. Another change concerns the fact that, in future, expected returns on plan assets will be determined using the discount rate used to measure the pension obligations. In addition, past service costs will in future be recognised fully in profit or loss during the period in which the respective plan changes were effected.

The consolidated financial statements have been prepared in euros. All amounts are stated in million euros (€ million) unless otherwise indicated. Amounts below €0.5 million are rounded and reported as 0. In contrast to the practice of past years, only the amounts in the income statement, the reconciliation from profit or loss for the period to total comprehensive income, the balance sheet, the statement of changes in equity and the cash flow statement were rounded to produce the respective totals. In all other tables, the individual amounts and the totals were rounded separately. This may entail rounding differences.

Disclaimer and Notes


Overview

METRO at a Glance 3

Strategic Priorities 7

Four Market Leading Sales Lines 10

Performance in Q1 2013 & Outlook 21

METRO – a Compelling Investment 24


Fourth Largest Retailer Worldwide

Sales: €66.7bn

EBIT: €2.0bn

Cash Flow: €2.3bn

Stores: 2,243

Countries: 32

Employees: 280,000 / 180 nations


The world’s leading player in the cash & carry

sector

The most international

portfolio in retail and wholesale

One of Europe‘s leading department

store operators

Europe’s No. 1 consumer electronics

retailer

One of the leading operators

of hypermarkets in Germany

4 OpCos, 1 PropCo & 1 Strategic Management Holding

METRO AG

2012 SalesShare

2012 EBIT

Share*

* Pre Other and consolidation

444


Strong International Presence

Germany WesternEurope

EasternEurope Asia/Africa METRO

GROUP

Countries 1 11 14 6 32

38% 30% 27% 5% 100%

26% 33% 43% -2% 100%

2012 SalesShare

2012 EBIT

Share

We generate nearly one third of Group sales and more than 40% of total earnings in emerging markets


Overview

METRO at a Glance 3






Strategic Priorities: Customer Centricity & Business Excellence

Customer Centricity Business Excellence

Our Goal: Long-term value creation for METRO’s stakeholders


Active Portfolio Management in 2012

All shares of MAKRO UK and 30 freehold properties were sold on a debt- and cash-free basis to Booker (closed on 4 July 2012) for a 9.08% stake in issued share capital of Booker and £15.8m in cash

Sale of Real’s complete activities in Eastern Europe (excluding Turkey), including real estate for an enterprise value of €1.1bn to Groupe Auchan

Discontinuation of Media Markt in China after the two-year test phase expired in December 2012 and closure of all stores as per beginning of March 2013

Transforming the Group further and focusing on what really matters


Overview

METRO at a Glance 3






The World’s Leading Player in the Cash & Carry Sector

Focused on B2B self-service wholesaling to HoReCa, Trader and SCO customer groups

High performance internationally replicable concept

Matchless emerging markets’ footprint:International share of sales over 80%

743 stores in 29 countries, of which 8 focus countries

Profitable Growth Drivers:USP: Outstanding freshness & quality in foodBusiness model transformationDedicated sales forceInnovative store concepts€2.2bn delivery sales€5.3bn own brand sales Expansion focus on Russia, China and Turkey

€ million 2011 2012Sales 31,121 31,636

EBIT 1,148 947

EBIT Margin 3.7% 3.0%

RoCE 19.0% 15.7%


Strategic Ambitions

Overall Ambition: Market leadership through unique product ranges and strong focus on B2B solutions that make our customers more competitive.

Stronger overall customer focus

Further expansion of franchise solutions for Traders

Ongoing country and store portfolio review

Further organic expansion centred on high-growth countries

Strong push in delivery sales, driven by enlarged field force

Grow own brand sales, especially in light of challenging macro

Trialling new non-food concepts in Germany

Improving core operations


Europe’s No. 1 in Consumer Electronics Retailing

Pan-European market leader with 935 stores in 15 countries

Large-scale, full assortment store base with entrepreneurial store managers

Very competitive EDLP pricing strategy

Innovative merchandising and marketing concepts

Profitable Growth Drivers:Business model transformationMultichannel sales activities in 9 countries€0.8bn online saleswww.saturn.de and www.mediamarkt.de with c.23 / c.34 million site visits per monthFour own brandsExpansion focus on Russia and Turkey

€ million 2011 2012Sales 20,604 20,970

EBIT 542 326


RoCE 21.5% 16.0%

http://www.saturn.de/

http://www.mediamarkt.de/


Strategic Ambitions

Overall Ambition: Superior shopping experience in consumer electronics,best offer, service and price for our customers in our stores and online.

Continue implementation of strategic transformation

Ensure price competitiveness / leadership

Continuously enhance value proposition regarding assortment and service including online services (Juke, Video on demand)

Optimise sourcing approach

Intensifying online activities:10% of sales expected by the end of 2015 30,000 SKUs to be available in Germany by the end of 2013


Leading Operator of Hypermarkets in Germany

Following the divestment of activities in Eastern Europe (ex Turkey) focus will be on Germany with 312 stores

Food accounts for approx. 75% of sales

Comprehensive product range of 80,000 different articles

Member of Germany’s leading loyalty card programme PAYBACK

Profitable Growth Drivers:Business model transformation 13.2% own brand sales share with almost 5,000 products (TiP, Real Quality, Real Bio, Real Selection)Entrepreneurial store management

€ million 2011 2012Sales 11,032 11,017

EBIT 134 102


RoCE 5.6% 5.3%

Multichannel: Webshop www.real-onlineshop.de with more than 10,000 products; Drive concept

http://www.real-onlineshop.de/




Strategic Ambitions

Overall Ambition:Unique choice and quality in food retail complemented by a compelling non-food range. Well-adjusted to serve our key customer groups. Enhanced through multichannel.

Formation of regional management structure to drive repositioning at lower cost

Increased execution discipline through regional management teamBetter adaption to local/regional markets through customised advertising and regional assortments

Rollout of >650 concepts modules with focus on categories with strong differentiation potential

Marketing mix complemented by events and professional campaigns


One of Europe’s Leading Department Stores

Concept and systems leader in Germany and market leader in Belgium with 137 stores in total

Powerful international product ranges and high-quality own-brand products

Strong cost and stock management

19% own brand share

Optimisation of space allocation (consumer electronics vs apparel and accessories)

Profitable Growth Drivers:Focus on mid-market and lifestyle orientation (sharper brand and own brand portfolio) Consistent trading-up strategy

€ million 2011 2012Sales 3,119 3,092

EBIT 121 136


RoCE 10.6% 12.2%

Multichannel: Webshop www.galeria-kaufhof.de with >50,000 productsNew category management based on loyalty card data

http://www.galeria-kaufhof.de/




Strategic Ambitions

Overall Ambition: Concept leadership for department stores in Germany and Belgium. Absolutely customer-driven providing a meaningful and compelling offer for our customers.

Consequent deployment of multichannel strategy: Extend multichannel services, product range enlargement and intensified advertising measures

Continue to optimise assortment following customer insights

Strengthen own brand presence

Continue to optimise in-store space allocation and visual merchandising

Selective modernisation of stores

Further extension of premium brand listing


Strategic Ambitions

Overall Ambition:Position METRO PROPERTIES as top class service provider and value-enhancing business partner for our sales lines.

Profitable InvestmentsFurther optimisation of current property usage and construction costs

Profitable DivestmentsInnovative ways to reduce net debt and risk position

Asset Management & Project DevelopmentAnalysing all locations in terms of long-term strategy, as well as fully supporting the sales lines in all real estate-related affairs

Organisational EfficiencyFurther focussing on our organisation


620 owned stores in 27 countries with a book value of €6.4bn and a market value exceeding €10bn

GERMANY1.3 million sqmsales area owned

WESTERN EUROPE1.1 million sqmsales area owned

EASTERN EUROPE2.2 million sqmsales area owned

ASIA / AFRICA0.5 million sqmsales area owned

METRO GROUPTOTAL5.2 million sqmsales area owned

Gross self-owned floor area MISC (rented to third parties, HQ, department stores)1.3 million sqm sales area owned

Most International Portfolio in Retail and Wholesale

22%40%

70%40%62%


Overview

METRO at a Glance 3






Sales grew 0.7% (adjusted for portfolio changes) despite difficult consumer environment

Germany with LFL sales growth;3 out of 4 sales divisions contributed

Market share gains in many countries

Transformation progress:

Own brand sales: €1.7 billion (-1%)

Delivery sales: €0.6 billion (+16%)

Online sales: €0.3 billion (>50%)

EBIT improvement driven by Media-Saturn, Real and Other

Operating cash flow improved

Net debt strongly reduced by €0.9 billion to €6.5 billion

Sales and EBIT guidance confirmed

Q1 2013 Highlights

Sales Development in € million

EBIT in € million

Q1

15.499

Q4

19.359

Q3

15.887

Q2

15.846

Q1

15.647

2012 2013

-8

14

399

315

Q1Q4

1,273

Q3Q2Q1

2012 2013


Outlook Stub Year 2013 (9M) and 2013/14 (12M)

€ milllion 9M 2012 Stub FY 2013 FY 2013/14***

Sales growth (in %) 1.5% >0%*

EBIT before special items 706 >706**

Capex 954 <954

Net debt (in billion €) 7.7 <7.7

New store openings 40 30-40

* adjusted for sale of MAKRO UK, Real Eastern Europe and Media Markt China** incl. higher contribution from real estate gains vs 9M 2012*** vs pro-forma FY 2012/13 (01/10/2012 - 30/09/2013)

Economic environment to remain challenging in 2013


Overview

METRO at a Glance 3






METRO – A Compelling Investment

Leading market positions in wholesale & retail

Unique emerging markets footprint

Strong focus on customer centricity

Growing multichannel activities

Clear strategy of sustainable profitable growth

Generating high cash flow and further strengthen balance sheet

Valuable real estate asset backing

MADE TO TRADE.

MADE TO TRADE. Credit Suisse Amsterdam/Stockholm Consumer IR Days 2514/15 May 2013 | © METRO AG 2013

Appendix


Q1 Sales and EBIT by Division

METRO Cash & Carry: LFL sales impacted by ongoing tough trading conditions in Southern Europe and Poland, especially in non-food

Real: Good LFL sales growth again in Germany

Media-Saturn: Strong LFL growth in Germany, sequential improvement in Western Europe

Galeria Kaufhof: LFL sales growth in Germany, significant market share gains in textile

Real Estate: EBIT development reflects lower rental income due to sale of real estate in 2012

Sales Like-for-Like EBIT

€ million Q1 2013 Change Q1 2013

METRO Cash & Carry 7,078 -2.8% -1.7% -31 -25.6% -6

Real 2,639 -0.9% -0.5% -7 68.5% 16

Media-Saturn 5,084 2.0% -1.4% -14 30.7% 6

Galeria Kaufhof 695 -1.5% 0.9% -23 4.4% 1

Real Estate - - - 125 -8.3% -11

Other 3 -66.4% - -37 30.3% 16

Consolidation - - - 1 - -

METRO GROUP 15,499 -0.9% - 14 - 22

Change Change ∆ € million


Income Statement

€ million Q1 20121 Q1 2013 Change

EBIT -8 14 -

Net financial result -122 -123 -0.8%

EBT -130 -109 15.9%

Income taxes 51 106 >100%

Profit or loss for the period -79 -3 96.2%

Non-controlling interests 1 1 0.0%

EPS in € (basic = diluted) -0.24 -0.01 95.0%1 Adjustment resulted from the first-time adoption of the revised IAS 19

Gross profit margin at 19.9%

Selling expenses stable as a percentage of sales

General admin expenses decreased significantly due to improved cost structures

EBIT improvement also driven by cost savings measures and efficiency gains

Income tax credit reflected integral approach assuming a tax rate of 97% forFY 2013 (9M)


13 new store openings, thereof 12 in emerging markets, 14 stores closed or soldNet working capital improvement of €226 millionOperating cash flow increased by €89 millionSignificant net debt reduction of €922 million€275 million increase in pension provisions resulted from lower actuarial interest rates

Other Financials

31/03/2012 31/03/2013 Change

New store openings (YTD) 15 13 1 -13.3%

Net working capital (€ m) -1,858 -2,084 12.2%

Cash flow from operating activities (€ m) -2,931 -2,842 3.0%

Cash capex (€ m) 369 271 -26.6%

Net debt (€ bn) 7.4 6.5 12.2%

Pension provisions (€ m) 1,243 2 1,518 22.1%1 Including acquisition of 4 stores in Poland for Real2 Adjustment resulted from the first-time adoption of the revised IAS 19


Sales adjusted for disposal of MAKRO UK on PY level

Very tough comps in Germany and Eastern Europe

Challenging trading conditions remained, especially for non-food

3 new store openings (Russia, India and Belgium); 1 store closed in China

Delivery sales increased by 16% and contributed more than 8% to sales

Own brand share constituted more than 16% of total sales

More than 5,000 franchise traders supported in Eastern Europe

Q1

-1.7%

Q4

-0.4%

Q3

-0.1%

Q2

-0.3%

Q1

2.0%

586552588554504

Q1Q4Q3Q2Q1

2012 2013

2012 2013

Like-for-Like Sales Development

Delivery Sales in € million

Metro Cash & Carry: Q1


Accelerating the Transformation Process

Sales & Profit

CoreDriver

CoreObjectives

CoreEnablers

Customer Focus

Market Position

Structure & Processes

People & Culture

FOCUS on Differentiation and ProfileCustomer-driven with clear approach regarding target groups, current market position, mid-term ambition and action plan for growth

Setting the SightsFood is our passion and USP – both in assortment & service

Non-food will become much more focused

Improved Leadership StructureEnlarging Country MD responsibilities to sales, marketing and CRM

Leaner and more effective organisation

Focus on eight countries remains – leadership intensified

Introduction of a Chief Restructuring Officer

Clearing Away the CobwebsOld stock reductions

Less superfluous reporting and internal red tape

Accelerate the benefits from our shared service centres

HIGH attention on cost reduction


Strong sales growth in Germany supported by successful marketing campaigns (especially Real Deal)

Real brand further strengthened by roll-out of concept modules

Entrepreneurial store approach now possible in all stores

Own brand sales share in Germany improved by 70 bps to 16.4%

Sale of Real Ukraine and Russia closed in March and April respectively

Real: Q1


Q1

-0.5%

Q4

-0.3%

Q3

-1.6%

Q2

-1.0%

Q1

3.5%

2012 2013

Like-for-Like Sales Development Germany

Q1

1.5%

Q4

1.5%

Q3

-1.7%

Q2

-0.7%

Q1

4.8%

2012 2013


LFL sales growth in Germany further accelerated

Market share gains in 7 countries, especially in Germany; market consolidation ongoing

Tough market environment especially in Southern Europe continued

Further dynamic growth in online sales

6 new store openings and 10 store closures, including 7 in China

Media-Saturn: Q1

LFL Sales Development

-1.4%

Q4

-3.1%

Q3

-2.4%

Q2

1.7%

Q1

-3.1%

Q1

2012 2013

Q1

3.4%

Q4

3.1%

Q3

-2.1%

Q2

6.8%

Q1

-3.7%

LFL Sales Development Germany2012 2013

Online Sales (€ million)

Q1

281

Q4

275

Q3

158

Q2

147

Q1

175

2012 20135 3

2 4

+

MSH Market Share

Mar

ket d

evel

opm

ent

(%-g

row

th v

s. p

y)

MSH market share vs. Market development#Countries**

7 7 ∑=14

8

6

ATHUITNLPL

BEGRLUES

PTCH

DERUSE

5 3

2 4

+

MSH Market Share

Mar

ket d

evel

opm

ent

(%-g

row

th v

s. p

y)

MSH market share vs. Market development#Countries**

7 7 ∑=14

8

6

ATHUITNLPL

BEGRLUES

PTCH

DERUSE


Notable LFL sales growth of 1.1% in Germany

German store-based textile market declined by more than 9% also due to unfavourable weather conditions

Sizable market share gains in menswear, ladieswear, leather goods, home textiles and sporting goods

Webshop growing strongly

Galeria Kaufhof: Q1


-1.9%

2.8%

Q1

0.9%

Q3 Q4Q2

-2.8%

Q1

0.1%

2012 2013


Outlook for Stub Year 2013 (9M) Confirmed

€ milllion 9M 2012 Stub FY 2013

Sales growth (in %) 1.5% >0%1

EBIT before special items 7062 >7063

Capex 954 <954

Net debt (in billion €) 7.7 <7.7

New store openings (number of) 40 30-401 Adjusted for sale of MAKRO UK, Real Eastern Europe and Media Markt China2 Adjustment resulted from the first-time adoption of the revised IAS 193 Incl. higher contribution from real estate gains vs 9M 2012


We are on Track to Achieve our Targets

€ milllion Q1 2012 Q1 2013

Sales growth (in %) 0.7%1

EBIT before special items -82 14

Capex 219 132

Net debt (in billion €) 7.4 6.5

New store openings (number of) 15 131 Adjusted for sale of MAKRO UK, Real Eastern Europe and Media Markt China2 Adjustment resulted from the first-time adoption of the revised IAS 19


Investor Relations

Metro-Straße 1

40235 Düsseldorf

Germany

Tel.: +49 (0)211 6886-1051

Fax: +49 (0)211 6886-3759

Email: [email protected]

Internet: www.metrogroup.de

Contact

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