30. Assets held for sale/liabilities related to assets held for sale

Divestment of Real’s Eastern European business

By contractual agreement of 30 November 2012, METRO GROUP and the French retail group Groupe Auchan agreed on the sale of Real’s Eastern European business to Groupe Auchan. At this time, Real’s Eastern European operations comprised 91 Real hypermarkets in Poland, Russia, Romania and Ukraine including real estate assets at 14 of these locations. As of 31 December 2012, the sale was still subject to various conditions precedent, including the approval of the respective national antitrust authorities. Until the respective national conditions precedent have been fulfilled, Real’s Eastern European business will remain part of METRO GROUP and will continue to contribute to group results. Since the effective date of the agreement between METRO GROUP and Groupe Auchan, all assets and liabilities that fall under the agreement have been treated as a disposal group pursuant to IFRS 5. Following consolidation of all intra-group assets and liabilities, they are therefore shown in the item “assets held for sale” or “liabilities related to assets held for sale” in the consolidated balance sheet as of 31 December 2012. Fulfillment of the respective national conditions will reduce both positions as part of the deconsolidation of the affected country organisations according to the disposal value related to deconsolidation.

Following the approval of the Ukrainian antitrust authorities in the first quarter of 2013, the deconsolidation of Real’s Ukrainian business was presented for the first time in the quarterly report as of 31 March 2013. The last condition precedent related to Real’s business in Russia was fulfilled at the beginning of the second quarter of 2013. As a result, the effect of the deconsolidation of Real’s Russian business was presented for the first time in the half-year report as of 30 June 2013. Over the course of the third quarter of 2013, the last conditions related to the sale of Real’s Romanian business were finally fulfilled so that its deconsolidation could be presented in the consolidated financial statements for the short financial year as of 30 September 2013.

The sale of Real’s business in Ukraine, Russia and Romania reduced “assets held for sale” by €795 million as of 31 December 2012. Against this backdrop, “liabilities related to assets held for sale” fell by €430 million. The assets and liabilities held for sale disposed of as a result of the deconsolidations in the short financial year 2013 can be broken down as follows:

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€ million

9M 2013

Assets

 

Goodwill

18

Property, plant and equipment

539

Other financial and non-financial assets (non-current)

2

Inventories

128

Trade receivables

6

Other financial and non-financial assets (current)

53

Cash and cash equivalents

49

 

795

Liabilities

 

Borrowings (non-current)

147

Trade liabilities

239

Provisions (current)

5

Borrowings (current)

4

Other financial and non-financial liabilities (current)

32

Income tax liabilities

3

 

430

In total, the deconsolidation of Real’s business in Ukraine, Russia and Romania as well as the continuation of Real’s operational business in Poland reduced “assets held for sale” to €174 million. Against this backdrop, “liabilities related to assets held for sale” fell to €264 million. Following the consolidation of all intra-group assets and liabilities, the remaining disposal group in Poland contains the following individual items:

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€ million

30/9/2013

Assets

 

Property, plant and equipment

15

Inventories

114

Trade receivables

2

Other financial and non-financial assets (current)

36

Cash and cash equivalents

7

 

174

Liabilities

 

Borrowings (non-current)

69

Other financial and non-financial liabilities (non-current)

19

Trade liabilities

130

Provisions (current)

15

Borrowings (current)

6

Other financial and non-financial liabilities (current)

25

 

264

The assets and liabilities held for sale that are related to Real’s Polish business contribute €168 million to segment assets and €212 million to segment liabilities in the Real segment. They have no effect on the Real Estate segment. The effect on assets and liabilities in the Consolidation segment is €–7 million and €–24 million, respectively.

Additional assets are scheduled to be sold to Groupe Auchan as well as other buyers in the context of the divestment of Real’s Eastern European business. At €13 million, these assets are also recognised in “assets held for sale” and contribute the same amount to segment assets in the Real Estate segment. They do not contribute to the segment assets in the Real segment. “Liabilities related to assets held for sale” do not exist for these additional assets.

METRO GROUP expects that the remaining Real operations in Poland will be disposed of shortly.

The positive EBIT contribution resulting from the deconsolidation of Real’s business in Ukraine, Russia and Romania and the related valuation effects in this context amounted to €162 million. It is primarily recognised under “other operating income” with €192 million and under “other operating expenses” with €34 million. €119 million is recognised in the Real segment and €43 million in the Real Estate segment.

Sale of French real estate assets

In August 2013, METRO GROUP sold 75.00 per cent of its previously fully owned subsidiary OPCI FRENCH WHOLESALE STORES – FWS (OPCI) to Luxembourg-based Hexagon Real Estate Investments S.à.r.l. The transfer of ownership took effect on 29 August 2013. Since that time, the remaining 25.00 per cent shareholding in OPCI is recognised at equity as an associated company in the consolidated financial statements of METRO GROUP.

The disposal of OPCI added €134 million to “other operating income” in METRO GROUP’s EBIT. This includes income of €1 million from the revaluation of the investment recognised at equity.

As of 30 September 2013, subsequent measurement of the investment recognised at equity resulted in income of €0.1 million, which is shown in the net financial result.

At the time of the disposal and after consolidation of all intra-group circumstances, the OPCI sale resulted in a decrease of €114 million in “assets held for sale”. “Liabilities related to assets held for sale” were not incurred.

The assets that were derecognised as part of this transaction reduced segment assets in the Real Estate segment by €114 million. Segment assets in the METRO Cash & Carry segment increased by €2 million as a result of the capitalisation of one finance lease.

As part of the OPCI sale, METRO GROUP’s METRO Cash & Carry segment divested of a total of 43 French locations. Of these, one location was classified as a finance lease in the context of a sale-and-lease-back transaction and therefore once again recognised in METRO GROUP’s fixed assets.

The sale of real estate assets as well as currency effects reduced the carrying amount of “assets held for sale” by €241 million. Plans to dispose of additional real estate assets in the course of one year and renovation-related additional capitalisations of real estate assets already recognised under “assets held for sale” added €131 million to this balance sheet item.

METRO GROUP expects to dispose of the real estate assets recognised as “assets held for sale” during the course of the financial year 2013/14. No impairment losses to a lower fair value less costs to sell became necessary. Within segment reporting, these assets are recognised in segment assets of the Real Estate segment at €105 million.