Annual General Meeting 2019: METRO on its way to becoming a pure wholesaler

15 February 2019
At today’s Annual General Meeting of METRO AG Olaf Koch, Chairman of the Management Board, presents the shareholders the results for the financial year 2017/18.
  • Adjusted guidance for the financial year 2017/18 reached
  • Sale of the hypermarket business on schedule
  • Proposed dividend of €0.70 per share
  • Re-elections to the Supervisory Board of METRO AG

 

“Despite unexpected challenges, the financial year 2017/18 was all in all a successful one for METRO AG. We reached our adjusted guidance and METRO was once again able to increase like-for-like sales. This is mainly due to our consistent focus on the target groups HoReCa and Trader. We are on the right track”, says Olaf Koch. “By initiating the divestment process of our hypermarket business, we have taken a significant step closer to fully becoming a pure wholesale business. In the financial year 2018/19 we will continue to invest in the expansion of our delivery business and digitalisation in order to achieve sustainable growth.”

In the financial year 2017/18 METRO achieved a like-for-like sales growth of 0.7%. In local currency reported sales increased by 0.7%, but came down 1.6% at €36.5 billion due to negative currency effects. Reported EBITDA excluding earnings contributions from real estate transactions reached €1,396 million (2016/17: €1,436 million). Adjusted for currency effects, EBITDA excluding earnings contributions from real estate transactions rose by 1.2%. Hence, METRO AG reached its adjusted guidance. METRO had to adjust its guidance in April 2018 because expectations for the Russian business had deteriorated and the temporary tariff agreement between Verdi and Real had been terminated.

At today’s Annual General Meeting, a dividend of €0.70 per common and preference share will be proposed. In order to provide the shareholders an attractive dividend yield and dividend continuity, as well as to demonstrate our trust in the future of METRO, the dividend proposal corresponds to 74% of earnings per share (EPS) and thus exceeds the distribution quota of 45-55% of EPS provided for in METRO’s dividend policy. This should also be seen against the background that earnings per share in the past financial year were noticeably impaired by a non-cash goodwill impairment at Real.

 

Strategic priorities for the financial year 2017/18

In the financial year 2017/18 METRO AG continued its transformation to become a partner for small and medium-sized companies in the hospitality and retail sector. By consistently focusing on the target groups hotels, restaurants and caterers (HoReCa) as well as independent traders (Trader), METRO increased its like-for-like sales for the fifth year in a row. Like-for-like sales with HoReCa customers grew by 3.6% and 4.6% with independent traders1. Like-for-like sales with food grew by c. 2%.

METRO Wholesale’s delivery business also continued to develop dynamically with a sales growth of 14%. As a result, the delivery business accounted for 18% of total sales.

The divestment process of the hypermarket business announced by the Management Board of METRO AG in mid-September 2018 is progressing according to schedule. It is planned that a contract for the sale of the hypermarket business will be concluded within the next 2 to 4 months.

 

METRO starts the financial year 2018/19 with a like-for-like sales growth of 2.3%2

In Q1 2018/19 METRO AG’s like-for-like sales increased by 2.3% in comparison with the previous year. This was mainly driven by Eastern Europe (excluding Russia) and Asia as well as a positive day effect. In local currency METRO’s sales increased by 2.1%. The reported sales decreased by -0.6% to €8.0 billion, mainly due to the negative development of the Russian and Turkish currency. EBITDA excluding earnings contributions from real estate transactions reached a total of €470 million in Q1 2018/19 (Q1 2017/18: €504 million). The decline of €-34 million is mainly a result of negative currency effects in Russia and Turkey, as well as investments in the price positioning of METRO in Russia. Adjusted for currency effects, the decline amounts to merely €-16 million. EPS from continuing operations remained at €0.50 (Q1 2017/18: €0.50).

 

Re-elections to the Supervisory Board

The agenda of today's Annual General Meeting includes elections of three members to the Supervisory Board: Dr Fredy Raas, Eva-Lotta Sjöstedt und Alexandra Soto. Dr Fredy Raas, chairman of the foundation board of Prof. Otto Beisheim-Stiftung in Munich and vice-president of the foundation council of Prof. Otto Beisheim-Stiftung in Baar, Switzerland, has been a member of the Supervisory Board of the former METRO AG (now operating under the name CECONOMY AG) since 2013. Since 2017, Dr Raas has also been a member of the Supervisory Board of the new METRO AG. Eva-Lotta Sjöstedt is an independent business consultant and has been a member of the Supervisory Board of METRO AG since 2017. Alexandra Soto is Chief Executive Officer of Lazard & Co., Limited, and Chief Operating Officer of Lazard Europe, London. She as well has been member of the Supervisory Board of METRO AG since 2017.

 

1 Trader countries without Russia: Bulgaria, India, Pakistan, Poland, Romania, Serbia, Slovakia, Czech Republic.

2 Figures for continued operations. Discontinued operations include mainly the former segment Real and a few entities and assets from the former segment Others.

 

METRO is a leading international wholesale company with food and non-food assortments that specialises on serving the needs of hotels, restaurants and caterers (HoReCa) as well as independent traders. Around the world, METRO has some 24 million customers who can choose whether to shop in one of the large-format stores, order online and collect their purchases at the store or have them delivered. METRO in addition also supports the competitiveness of entrepreneurs and own businesses with digital solutions and thereby contributes to cultural diversity in retail and hospitality. Sustainability is a key pillar of METRO’s business. METRO has been the sector leader in the Dow Jones Sustainability Index for the last four years. The company operates in 35 countries and employs more than 150,000 people worldwide. In financial year 2017/18, METRO generated sales of €36.5 billion. In September 2018 METRO AG initiated the divestment process for the food retail chain Real with its 34,000 employees.