Management system

METRO GROUP’s rigorous focus on creating added value for customers is also reflected in our internal management system. The primary objective is to create sustained value for the company by focusing on added value for customers. For this reason, METRO GROUP has been using value-orientated performance metrics since 2000 to plan, manage and monitor business activities. The corresponding value drivers that have a direct impact on value creation form the core of our operational management system. Our focus in this process is on growth (sales), operational efficiency (EBIT) and optimised capital deployment.

Please note that, in line with the formal specifications of German Accounting Standard No. 20 (GAS 20), only the most meaningful performance metrics (sales growth as well as EBIT before special items) are part of the forecast report and the comparison with actual business developments in the following year that is based on this forecast report. Voluntary forecasts of other key metrics will no longer be included in the forecast report, but in the respective chapters of the combined management report, which are indicated in the following. Unless stated otherwise, the key metrics in the consolidated financial statements, which are prepared pursuant to International Financial Reporting Standards (IFRS), are used.

Performance metrics: earnings position

For METRO GROUP as a retail and wholesale company, sales growth represents a key operational performance metric. As a result, sales growth is one of the key metrics of METRO GROUP and is reported both as total sales in euros and as like-for-like sales in local currency. To enhance its assessments of operational developments, the Management Board also regularly informs itself about the key drivers of sales trends, such as the online or delivery business.

Alongside sales growth, EBIT before special items is one of the group’s key performance metrics. Adjustment for special items reflects a focus on operational developments and serves to enhance comparisons between the reporting periods.

For a description of special items, see chapter 4 Earnings position.

Earnings per share and profit or loss for the period are also included in METRO GROUP’s performance metrics. They integrate the tax and financial result into management of the earnings position and enable shareholders to better assess the group’s earnings position.

Detailed information about these performance metrics can be found in chapter 4 Earnings position.

Performance metrics: financial and asset position

METRO GROUP manages its financial and asset position to ensure the long-term liquidity of group companies and cover their funding requirements in a cost-efficient manner.

For a comprehensive overview of the financial and asset position, see chapter 5 Financial and asset position.

Performance metrics include investments which are planned and reported on aggregate group level as well as separately for the sales lines. In addition, the Management Board conducts differentiated assessments of different investments (for example, expansion and online business) with a view to enhancing benefits for customers and adding value for METRO GROUP.

Aside from the focus on investments, regular working capital analyses are carried out to maintain a focus on operations and optimised capital deployment.

The composition of working capital is shown in the notes to the consolidated financial statements in no. 41 “Notes to the cash flow statement”.

Investments and working capital not only impact customer benefits and the company’s value creation, but also have an effect on the company’s indebtedness and financial situation. In this context, cash flow before financing activities and net debt serve as performance metrics for liquidity and the capital structure.

A detailed overview of these performance metrics can be found in chapter 5 Financial and asset position.

Value-oriented performance metrics

As METRO GROUP’s management system is strongly focused on value creation for the company, it also comprises value-orientated performance metrics such as EBIT after cost of capital (EBITaC) and return on capital employed (RoCE), which are based on the above-mentioned operational performance metrics.

These performance metrics are analysed in detail in chapter 4 Earnings position.