Overview of financial year 2014/15

Earnings position

  • METRO GROUP’s like-for-like sales climbed by 1.5 per cent in financial year 2014/15
  • Due to negative currency and portfolio effects, reported sales for financial year 2014/15 decreased by 1.2 per cent to €59.2 billion (in local currency: +0.5 per cent)
  • EBIT from continuing operations before special items: €1,511 million (2013/14: €1,531 million)
  • Profit or loss for the period before special items: €688 million (2013/14: €673 million)
  • Earnings per share before special items improved to €1.91 (2013/14: €1.84)

Financial and asset position

  • Net debt declined by €2.2 billion to €2.5 billion (30/9/2014: €4.7 billion)
  • Investments totalled €1.4 billion (2013/14: €1.0 billion)
  • Cash flow from operating activities reached €1.8 billion (2013/14: €2.0 billion)
  • Total assets amounted to €27.7 billion (30/9/2014: €28.2 billion)
  • Equity: €5.2 billion (30/9/2014: €5.0 billion); equity ratio: 18.7 per cent (30/9/2014: 17.8 per cent)
  • Long-term rating: BBB– (Standard & Poor’s)

Sales and earnings development

Group sales of METRO GROUP 2014/15

by region

Group sales of METRO GROUP 2014/15 (pie chart)

METRO GROUP’s like-for-like sales grew by 1.5 per cent in financial year 2014/15. Sales in local currency rose by 0.5 per cent. Due to negative currency and portfolio effects, however, reported sales of €59.2 billion were 1.2 per cent lower than in the previous year.

In Germany, like-for-like sales matched the previous year’s level. Sales totalled €22.5 billion, a slight decline of 0.3 per cent compared with the previous year’s figure. This was due to lower sales at METRO Cash & Carry and Real. At Real, store closures had a negative impact on reported sales. In contrast, Media-Saturn posted higher sales.

Like-for-like sales in the international business increased by 2.4 per cent. International sales rose by 1.0 per cent in local currency. Reported sales declined by 1.7 per cent to €36.7 billion. This decline was primarily due to currency effects as well as store disposals and closures. International sales accounted for 62.0 per cent of total sales (2013/14: 62.4 per cent).

In Western Europe (excluding Germany), like-for-like sales rose by 1.1 per cent. Sales in local currency increased by 0.7 per cent. Reported sales improved by 1.0 per cent to €19.1 billion. This was due largely to positive developments in Italy, Spain and the Netherlands.

Like-for-like sales in Eastern Europe rose markedly by 5.3 per cent. Adjusted for currency effects, sales climbed by 1.7 per cent. Business developments in Russia and Hungary especially contributed to this increase. However, due to negative exchange rate developments and active portfolio measures (Real Eastern Europe and METRO Cash & Carry Greece), reported sales declined by 9.7 per cent to €13.3 billion.

While like-for-like sales in the Asia/Africa region declined slightly by 0.4 per cent overall, the trend in India was positive. Sales in local currency improved by 0.5 per cent. Due to positive currency trends, reported sales rose by 16.1 per cent to €4.3 billion.

In financial year 2014/15, METRO GROUP’s EBIT amounted to €711 million, a decline of €366 million compared with the previous year’s level (2013/14: €1,077 million). However, this figure includes special items amounting to €800 million (2013/14: €454 million). These special items can be broken down into impairment losses on goodwill (particularly at Real Germany, with €446 million), restructuring and efficiency improvement measures amounting to €285 million (essentially planned closures) as well as other special items of €66 million. Portfolio changes produced a net positive special item of €23 million.

In addition, gains from the sale of Galeria Kaufhof resulted in a positive special item of €841 million in discontinued operations.

Special items include transactions that do not regularly recur, such as restructurings or changes to the group portfolio. Reporting before special items better reflects the company’s operating performance and thus renders the earnings presentation more meaningful.

In financial year 2014/15, EBIT before special items at METRO GROUP fell from €1,531 million to €1,511 million. However, this figure includes negative currency effects of €117 million, meaning that METRO GROUP recorded higher EBIT before special items in local currency.

Development of group sales

by sales line and region

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Change in % compared with the previous year’s period

 

 

 

 

 

 

 

 

2013/141
€ million

2014/15
€ million

in €

Currency effects in percentage points

in local currency

like-for-like sales in local currency

1

Adjustment of previous year’s figures due to discontinued operations (see the Annual Report 2014/15)

METRO Cash & Carry

30,513

29,690

−2.7

−2.7

0.0

0.9

Media-Saturn

20,981

21,737

3.6

−1.0

4.6

3.1

Real

8,432

7,735

−8.3

0.0

−8.3

−0.8

Others

10

56

METRO GROUP

59,937

59,219

−1.2

−1.7

0.5

1.5

thereof Germany

22,558

22,490

−0.3

0.0

−0.3

0.1

thereof international

37,379

36,728

−1.7

−2.8

1.0

2.4

Western Europe (excl. Germany)

18,902

19,090

1.0

0.3

0.7

1.1

Eastern Europe

14,755

13,318

−9.7

−11.4

1.7

5.3

Asia/Africa

3,722

4,319

16.1

15.5

0.5

−0.4

Development of group EBIT and EBIT of the sales lines

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EBIT1

 

 

 

€ million

2013/142

2014/15

1

Before special items

2

Adjustment of previous year’s figures due to discontinued operations (see the Annual Report 2014/15)

METRO Cash & Carry

1,125

1,050

Media-Saturn

335

442

Real

81

88

Others

−10

−63

Consolidation

0

−5

METRO GROUP

1,531

1,511

Net financial result and taxes

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€ million

2013/141

2014/15

1

Adjustment of previous year’s figures due to discontinued operations (see the Annual Report 2014/15)

Earnings before interest and taxes EBIT

1,077

711

Result from associates and joint ventures

9

2

Other investment result

78

0

Interest income/expenses (interest result)

−386

−282

Other financial result

−242

−172

Net financial result

−541

−452

Earnings before taxes EBT

536

259

Income taxes

−539

−480

Profit or loss for the period from continuing operations

−3

−221

Profit or loss for the period from discontinued operations after taxes

185

935

Profit or loss for the period

182

714

Net financial result

The financial result primarily comprises the interest result of €−282 million (2013/14: €−386 million) and the other financial result of €−172 million (2013/14: €−242 million). The interest result improved thanks largely to the lower level of interest rates as well as reduced debt. The change in the other financial result of €70 million was caused primarily by negative currency effects, particularly in Russia and Kazakhstan, and the absence of currency effects in the amount of around €−122 million resulting from the disposal of subsidiaries (Real Poland and Turkey) that were shown in the income statement in the previous year. In the previous year, income of €62 million from the disposal of a 9 per cent stake in Booker Group PLC had impacted the other investment result.

Taxes

Reported income tax expenses of €480 million (2013/14: €539 million) are €59 million beneath the previous year’s level. This is due to a large number of individual effects at various individual companies as well as exchange rate fluctuations.

In the reporting period, the group tax rate from continuing operations stood at 185.5 per cent (2013/14: 100.6 per cent). Adjusted for special items, the rate amounted to 48.6 per cent (2013/14: 54.0 per cent). The group tax rate represents the relationship between recognised income tax expenses and earnings before taxes. The large difference between the reported tax rate and the tax rate adjusted for special items largely results from the fact that the expenses related to the special items generally have no corresponding tax effect (in particular, expenses related to impairment losses on goodwill at Real Germany). Under consideration of discontinued operations, the group tax rate amounts to 42.0 per cent (2013/14: 74.3 per cent). Adjusted for special items, the group tax rate under consideration of discontinued activities amounts to 43.7 per cent (2013/14: 45.4 per cent). This is primarily due to gains from the deconsolidation of the department store business of the Galeria Kaufhof group as well as expenses from impairment losses on goodwill at Real Germany.

Profit or loss for the period and earnings per share

Profit for the period in financial year 2014/15 totalled €714 million, an increase of €532 million over the previous year’s result (2013/14: €182 million). Profit for the period included special items totalling €−26 million (2013/14: €491 million). As a result, profit for the period adjusted for these special items stood at €688 million (2013/14: €673 million).

Net of non-controlling interests, profit for the period attribut-able to the shareholders of METRO AG totalled €672 million (2013/14: €127 million). This represents a significant improvement of €545 million.

In financial year 2014/15, METRO GROUP improved its earnings per share to €2.06 (2013/14: €0.39). The calculation for the reporting period continued to be based on a weighted number of 326,787,529 shares. Profit for the period attributable to the shareholders of METRO AG of €672 million was distributed according to this number of shares. There was no dilution from so-called potential shares in financial year 2014/15 or in the previous year.

Earnings per share before special items totalled €1.91 (2013/14: €1.84). This result forms the basis for the dividend recommendation.

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Change

 

 

 

 

 

 

 

 

2013/141

2014/15

absolute

%

1

Adjustment of previous year’s figures due to discontinued operations (see the Annual Report 2014/15)

2

After non-controlling interests

Profit or loss for the period from continuing operations

€ million

−3

−221

218

Profit or loss for the period from discontinued operations after taxes

€ million

185

935

−750

Profit or loss for the period

€ million

182

714

532

Profit or loss for the period attributable to non-controlling interests

€ million

55

42

−13

−23.8

from continuing operations

€ million

54

42

−12

−23.0

from discontinued operations

€ million

1

0

−1

Profit or loss for the period attributable to shareholders of METRO AG

€ million

127

672

545

from continuing operations

€ million

−57

−263

−206

from discontinued operations

€ million

184

935

751

Earnings per share (basic = diluted)2

0.39

2.06

1.67

from continuing operations

−0.18

−0.80

−0.62

from discontinued operations

0.57

2.86

2.29

Earnings per share before special items2

1.84

1.91

0.07

4.1

from continuing operations

1.27

1.48

0.21

16.9

from discontinued operations

0.57

0.43

−0.14

−24.6

Liquidity (cash flow statement)

METRO GROUP’s liquidity is calculated on the basis of the cash flow statement. The cash flow statement serves to calculate and display the cash flows that METRO GROUP generated or employed during the financial year from operating, investing and financing activities. In addition, it shows the changes in cash and cash equivalents between the beginning and end of the financial year.

Cash inflow from operating activities in financial year 2014/15 amounted to €1,846 million (2013/14: €+2,008 million). Investing activities led to a cash inflow of €785 million (2013/14: €−715 million). Compared with the previous year’s period, this represents an increase in cash flow before financing activities of €1,338 million to €2,631 million. Cash outflow from financing activities totalled €597 million (2013/14: €−1,448 million).

For more information, see the Annual Report 2014/15.