Financial management

Principles and objectives of financial activities

METRO AG centrally performs the management of the group’s financing activities. It ensures solvency of the group at all times, reduces financial risks where economically feasible and grants loans to group companies. The objective is to cover the financing requirements of the group companies cost-effectively and in sufficient amounts via the international banking and capital markets. The financial activities are based on a financial budget for the group, which covers all relevant companies. The selection of financial products is generally based on the maturities of the underlying transactions.

Through intra-group cash pooling, financial resources can be allocated as needed by group companies with financing needs using the liquidity surpluses of other group companies. This reduces the financing volume and thus the interest expense.

METRO’s current long-term investment grade rating of BBB– and short-term rating of A‑3 (Standard & Poor’s) support access to the international financial and capital markets, which is particularly utilised within the scope of the Euro Commercial Paper Programme and the ongoing capital market bond programme as needed. Regular dialogue with credit investors and analysts takes place.

The following principles apply to all group-wide financial activities:

• Central management of financing activities by METRO AG
• External presentation of METRO as a single financial unit
• Cost-effective capital procurement by using banking and capital markets
• Diversification of dependency relationships with individual banks by limiting the credit volume per bank
• Separation of duties for initiation, controlling and management of financial transactions
• Central financial risk management

Rating

METRO AG has instructed Standard & Poor’s to assess and monitor its credit rating, which is presented as follows:

Financing measures

The company’s medium-term and long-term financing needs are covered by a bond issuance programme with a maximum volume of €5 billion. As of 30 September 2021, the utilised bond issuance programme amounted to a total of €1,776 million.

Short-term financing requirements are covered through the Euro Commercial Paper Programme with a maximum volume of €2 billion. On average, the programme was used at €376 million during the reporting period. As of 30 September 2021, the utilisation amounted to €26 million (30/9/2020: €295 million). Furthermore, bilateral credit facilities totalling €102 million were drawn down.

As a cash reserve, METRO AG concluded a syndicated credit facility of €850 million and additional multi-year bilateral credit facilities of €695 million. There was no drawdown during the reporting period.