43. Segment reporting

The segmentation corresponds to the group’s internal controlling and reporting structures. Operating segments are aggregated to form reporting segments based on the division of the business into individual sectors.

METRO Cash & Carry

METRO Cash & Carry operates in the cash-and-carry sector with its METRO and MAKRO brands as well as through the Classic Fine Foods group and focuses on three commercial customer groups: Horeca (focusing on hotels, restaurants and catering firms), traders (focusing on independent resellers such as kiosk operators, bakers and butchers) as well as multispecialists (focusing on the remaining customer groups as well as service companies and offices). METRO Cash & Carry operates in 25 countries across Europe and Asia.

The three clusters mentioned above represent operating segments, as the allocation of in-house resources and performance measurement by the so-called Chief Operating Decision Maker (member of the Management Board of METRO AG) are based on the three clusters. Since the three customer groups currently display sufficient similarities with respect to their business model, their products and services as well as their customer structure – especially compared with the other legal entities of METRO AG – these three operating segments will be bundled into one reporting segment in spite of their divergent strategic focus.

Media-Saturn

Media-Saturn offers a comprehensive assortment of the latest branded products in consumer electronics retailing as well as related services. The sales line is represented in 15 countries with its two strong sales brands Media Markt and Saturn. In addition, the group of companies operates pure online retail platforms such as Redcoon and iBOOD as well as the digital entertainment platform Juke. Internal management with respect to the allocation of in-house resources and performance measurement by the Chief Operating Decision Maker (member of the Management Board of METRO AG) is applied to Media-Saturn as a whole. Media-Saturn therefore represents both the operating and the reporting segment.

Real

Real is a hypermarket operator in Germany, where it operates both physical stores and an online store. All stores offer a broad food assortment with a large proportion of fresh produce that is complemented by a non-food assortment. In March 2016, Real signed the purchase contract for the acquisition of online shopping portal Hitmeister. Real represents a separate operating and reporting segment as internal management with respect to the allocation of in-house resources and performance measurement by the Chief Operating Decision Maker (member of the Management Board of METRO AG) is separately applied to Real.

Discontinued operations

Discontinued operations comprise the Galeria Kaufhof group which represented a separate reporting segment until financial year 2013/14.

For more nformation about the segments, see the combined management report.

Aside from the information on the operating segments listed above, equivalent information is provided on the METRO GROUP regions. Here, a distinction is made between the regions Germany, Western Europe (excluding Germany), Eastern Europe and Asia.

The key components of segment reporting are as follows:

  • External sales represent sales of the operating segments to third parties outside the group.
  • Internal sales represent sales between the group’s operating segments.
  • Segment EBITDA comprises EBIT before depreciation and reversals of impairment losses of property, plant and equipment, intangible assets and investment properties.
  • EBIT is the key ratio for segment reporting and describes operating earnings for the period before net financial result and income taxes. Intra-group rental contracts are shown as operating leases in the segments. The properties are leased at market terms. In principle, store-related risks and impairment risks related to non-current assets are only shown in the segments where they represent group risks. In analogy, this also applies to deferred assets and liabilities, which are only shown at segment level if this was also required in the consolidated balance sheet.
  • Transactions that do not regularly recur such as restructurings or changes to the group portfolio are adjusted in EBITDA and EBIT before special items.

The reconciliation from EBITDA before special items to reported EBITDA and the reconciliation from EBIT before special items to reported EBIT are shown in the following table:

 Download XLS (22KB)

€ million

2014/15

2015/16

EBITDA before special items

2,458

2,509

Portfolio measures

25

443

Restructuring and efficiency-enhancing measures

−237

−340

Risk provisions

−14

0

Other special items

−56

−82

Reported EBITDA

2,177

2,530

 Download XLS (22KB)

€ million

2014/15

2015/16

EBIT before special items

1,511

1,560

Portfolio measures

23

442

Restructuring and efficiency-enhancing measures

−285

−408

Risk provisions including impairment losses on goodwill

−472

0

Other special items

−66

−82

Reported EBIT

711

1,513

  • Segment investments include additions to non-current intangible assets and property, plant and equipment (including additions to the consolidation groups) as well as investment properties except for additions due to the reclassification of assets held for sale as non-current assets.
  • Segment assets include non-current and current assets. They do not include mostly financial assets, investments accounted for using the equity method, tax items, cash and cash equivalents and assets allocable to discontinued operations.

The reconciliation from segment assets to group assets is shown in the following table:

 Download XLS (23KB)

€ million

30/9/2015

30/9/2016

1

Included in the balance sheet item other financial and non-financial assets (current)

2

Included in the balance sheet items other financial and non-financial assets (non-current and current)

Segment assets

21,142

20,942

Non-current and current financial assets

123

105

Investments accounted for using the equity method

184

188

Cash and cash equivalents

4,415

2,368

Deferred tax assets

724

663

Entitlements to income tax refunds

202

216

Other entitlements to tax refunds1

358

365

Assets held for sale

5

0

Receivables from other financial transactions2

479

100

Other

23

7

Group assets

27,656

24,952

  • In principle, transfers between segments are made based on the costs incurred from the group’s perspective.