Overview of financial year 2016/17

Earnings position

  • Due to positive currency and , reported sales for financial year 2016/17 increased by 1.6% to €37.1 billion (in local currency: +1.1%)
  • Like-for-like sales at METRO climbed by 0.5% in financial year 2016/17
  • Reported amounts to €852 million (2015/16: €1,219 million)
  • EBIT before : €1,106 million (2015/16: €1,106 million) on par with the
  • Profit for the period before special items: €583 million (2015/16: €495 million)
  • before special items improved to €1.55 (2015/16: €1.33)

Financial and asset position

  •  increased by €0.1 billion to €3.1 billion (30/9/2016: €3.1 billion)
  • Investments totalled €0.8 billion (2015/16: €1.0 billion)
  • Cash flow from operating activities reached €1.0 billion (2015/16: €1.2 billion)
  • Total assets amounted to €15.8 billion (30/9/2016: €16.0 billion)
  • Equity: €3.2 billion (30/9/2016: €2.9 billion); equity ratio: 20.3% (30/9/2016: 18.3%)
  • Long-term : BBB– (Standard & Poor’s)

Sales and earnings development

Supported by positive currency effects and the acquisition of Pro à Pro, METRO’s reported sales for financial year 2016/17 increased by 1.6% to €37.1 billion. Sales rose by 1.1% in local currency. Like-for-like sales at METRO climbed by 0.5%. underwent particularly positive developments, while the sales of Real decreased after a difficult first half of the year.

At €12.0 billion, reported sales in Germany were 2.6% lower than in the previous year. Like-for-like sales decreased by 1.7%. Following a difficult first half of the year during which sales at METRO Wholesale and Real declined considerably, the trend improved significantly during the second half of the year.

The reported sales in the international business increased by 3.7% to €25.2 billion. This is especially due to the opening of new stores and the acquisition of Pro à Pro. Currency effects also played a part. International sales rose by 3.0% in local currency. Like-for-like sales increased by 1.6%. The international share of total sales stood at 67.8% (2015/16: 66.4%).

The reported sales in Western Europe (excl. Germany) increased by 3.6% to €10.5 billion. This is especially due to the acquisition of Pro à Pro. Like-for-like sales decreased slightly by 0.3%.

The reported sales in Eastern Europe increased by 4.5% to €10.3 billion. Especially positive currency effects in Russia influenced this development. Particularly positive sales trends were recorded in Turkey. Sales rose by 1.8% in local currency. Like-for-like sales increased by 2.3%.

The reported sales in Asia increased by 2.3%. All countries contributed to this positive development. Sales rose by as much as 4.2% in local currency. Like-for-like sales climbed by 4.7%.

Group sales of METRO 2016/17

by regions

Group sales of METRO 2016/17 (pie chart)
Development of METRO by segments and region

 

 

 

 

 

 

Change in % compared with the previous year’s period

 

 

2015/16
€ million

 

2016/17
€ million

 

in group currency (€)

Currency effects in percentage points1

in local currency

Like-for-like sales in local currency

1

The currency effect is calculated by comparing reported sales of the current financial year in euros with sales of the previous period, converted at the average exchange rate of the current financial year.

METRO Wholesale

 

29,000

 

29,866

 

3.0

0.7

2.3

0.9

Real

 

7,478

 

7,247

 

−3.1

0.0

−3.1

−1.0

Others

 

72

 

27

 

−62.4

−0.3

−62.1

METRO

 

36,549

 

37,140

 

1.6

0.5

1.1

0.5

thereof Germany

 

12,279

 

11,962

 

−2.6

0.0

−2.6

−1.7

thereof international

 

24,270

 

25,177

 

3.7

0.8

3.0

1.6

Western Europe (excl. Germany)

 

10,173

 

10,543

 

3.6

0.0

3.6

−0.3

Eastern Europe

 

9,828

 

10,266

 

4.5

2.7

1.8

2.3

Asia

 

4,269

 

4,368

 

2.3

−1.9

4.2

4.7

Development of group EBIT and EBIT of the segments

 

 

EBIT1

€ million

 

2015/16

2016/17

1

before special items.

METRO Wholesale

 

1,048

1,114

Real

 

105

80

Others

 

−43

−86

Consolidation

 

−5

−1

METRO

 

1,106

1,106

The EBIT before  amounted to €1,106 million, reaching the level of the previous year (2015/16: €1,106 million). This figure contains income from the sale of real estate amounting to €175 million (2015/16: €153 million). In 2016/17, the included 3 material real estate transactions, 2 of which in China (contributing approximately €110 million to the result) and 1 in Germany (approx. €40 million). Adjusted for positive currency effects of €37 million, EBIT before special items was €37 million lower than in the .

Reported group EBIT totalled €852 million in financial year 2016/17 (2015/16: €1,219 million). This decrease was due in particular to income from the sale of the activities in Vietnam during the previous year (€446 million). Adjusted for the one-time income gained from the Vietnamese sale in the previous year, the special items are below the previous year’s level due to fewer restructuring activities.

Net financial result and taxes

€ million

 

2015/16

 

2016/17

Earnings before interest and taxes EBIT

 

1,219

 

852

Earnings share of non-operating companies recognised at equity

 

3

 

0

Other investment result

 

−3

 

−11

Interest income/expenses (interest result)

 

−211

 

−156

Other financial result

 

−114

 

−37

Financial result

 

−325

 

−204

Earnings before taxes EBT

 

894

 

649

Income taxes

 

−375

 

−304

Profit or loss for the period

 

519

 

345

Financial result

The net financial result primarily comprises the interest result of €−156 million (2015/16: €−211 million) and the other financial result of €−37 million (2015/16: €−114 million). The interest result improved thanks, in particular, to the lower level of interest. The €77 million improvement in the other financial result is mainly due to negative effects from the deconsolidation of METRO Cash & Carry Vietnam in the previous year and lower negative negative currency effects in the reporting period, primarily from Kazakhstan. In the decreased other investment result, the change mainly reflects the amortisation of the shares in real,- Digital Payment & Technology Services GmbH.

Taxes

The reported income tax expenses of €304 million (2015/16: €375 million) are €71 million lower than in the previous year and essentially concern deferred taxes.

The group tax rate in the reporting period amounted to 46.9% (2015/16: 42.0%). The comparatively low tax rate of the previous year is mainly due to the sale of METRO Cash & Carry Vietnam. Before special items, the tax rate amounted to 34.9% (2015/16: 38.7%). Adjusted for deferred tax income from the reversal of deferred tax liabilities in connection with the reallocation of goodwill, the tax rate before special items in the reporting period was 39.8%. The group tax rate represents the relationship between recognised income tax expenses and earnings before taxes.

Profit or loss for the period and earnings per share

Profit for the period in financial year 2016/17 totalled €345 million, a decline of €174 million compared with the previous year’s figure (2015/16: €519 million).

Net of non-controlling interests, profit for the period attributable to the shareholders of METRO AG totalled €325 million (2015/16: €506 million). This corresponds to a decline of €181 million.

In financial year 2016/17, METRO recorded earnings per share of €0.89 (2015/16: €1.39). The calculation was based on a weighted number of 363,097,253 shares. Profit for the period attributable to the shareholders of METRO AG of €325 million was distributed according to this number of shares. There was no dilution from so-called potential shares in financial year 2016/17 or in the previous year.

At €1.55, earnings per share before special items are €0.22 higher than in the previous year (2015/16: €1.33). This result forms the basis for the dividend recommendation.

 

 

 

 

 

 

 

 

Change

 

 

 

 

2015/16

 

2016/17

 

absolute

%

1

After non-controlling interests.

2

Pro forma disclosure of combined financial statements.

Profit or loss for the period

 

€ million

 

519

 

345

 

−174

−33.5

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

 

€ million

 

13

 

20

 

7

53.9

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

 

€ million

 

506

 

325

 

−181

−35.8

Earnings per share (basic = diluted)1

 

 

1.392

 

0.89

 

−0.50

−36.0

Earnings per share before special items1

 

 

1.332

 

1.55

 

0.22

16.5

Liquidity (cash flow statement)

METRO’s liquidity is derivated on the basis of the cash flow statement. The cash flow statement serves to calculate and display the cash flows that METRO 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 2016/17 amounted to €1,027 million (2015/16: €+1,173 million). Investing activities led to cash outflow of €601 million (2015/16: €+512 million). Compared with the previous year’s period, this represents a decrease in cash flow before financing activities of €1,259 million to €426 million. Cash outflow from financing activities totalled €438 million (2015/16: €−3,513 million).

Portfolio effect
Adjustments to group structures are called portfolio measures or portfolio effects.
Glossary
EBIT (Earnings Before Interest and Taxes)
This key figure is used for the international comparison of companies.
Glossary
Special items
Business transactions or a number of uniform business transactions that do not recur regularly, that are reflected in the income statement and that have a significant impact on business activities are classified as special items. As a result, the presentation of special items better reflects ordinary business performance and contributes to a better understanding of the earnings position.
Glossary
Previous year
Period of 12 months, usually cited as reference for statements in the annual report.
Glossary
Earnings per share (basic/diluted)
Earnings per share (basic) is the indicator that relates profit or loss for the period attributable to the shareholders of METRO AG to the average number of ordinary shares. Earnings per share (diluted) additionally take into account the effect of so-called potential ordinary shares (for example, stock options issued).
Glossary
Net debt
Net debt is calculated by offsetting financial liabilities including finance leases against cash and cash equivalents according to the balance sheet as well as financial investments. Financial investments include short-term bank deposits and short-term liquid debt instruments.
Glossary
Rating
In the financial sector, ratings represent the systematic, qualitative assessment of creditworthiness. Ratings are expressed in various grades of creditworthiness. Well-known agencies that issue ratings are Standard &Poor’s, Moody’s and Fitch.
Glossary
Wholesale, METRO Wholesale
The METRO Wholesale segment comprises the METRO Cash & Carry sales line of METRO AG with more than 750 wholesale markets across 25 countries worldwide. The delivery business (food service distribution) is also part of this segment, with companies like METRO Delivery Service and the delivery specialists Classic Fine Foods, Pro à Pro and Rungis Express.
Glossary
Special items
Business transactions or a number of uniform business transactions that do not recur regularly, that are reflected in the income statement and that have a significant impact on business activities are classified as special items. As a result, the presentation of special items better reflects ordinary business performance and contributes to a better understanding of the earnings position.
Glossary
EBIT (Earnings Before Interest and Taxes)
This key figure is used for the international comparison of companies.
Glossary
Previous year
Period of 12 months, usually cited as reference for statements in the annual report.
Glossary