Quarterly Report • Oct 30, 2007
Quarterly Report
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Q3 2007:
METRO Group: Sales +10.8%; EBIT +14.8%
Metro Cash & Carry: Sales +6.3%, EBIT +19.3%
Real completes integration of Wal-Mart Germany with closure of headquarters
Media Markt and Saturn: Sales +13.6%, EBIT +5.2%
Galeria Kaufhof already EBIT positive in Q3
*before special items
| € million | 9M 2007 | 9M 2006 | Change | Q3 2007 | Q3 2006 | Change |
|---|---|---|---|---|---|---|
| Sales | 45,962 | 41,472 | 10.8% | 15,650 | 14,131 | 10.8% |
| Germany | 19,510 | 18,172 | 7.4% | 6,429 | 6,014 | 6.9% |
| International | 26,453 | 23,300 | 13.5% | 9,221 | 8,116 | 13.6% |
| International share of sales | 57.6% | 56.2% | - | 58.9% | 57.4% | - |
| EBITDA | 1,695 | 1,626 | 4.3% | 643 | 574 | 12.1% |
| EBIT | 742 | 741 | 0.2% | 323 | 282 | 14.8% |
| EBT | 382 | 399 | -4.2% | 180 | 164 | 10.1% |
| EPS (€) | 0.09 | 1.07 | -91.5% | -0.20 | 0.25 | - |
| from continuing operations | 0.09 | 0.63 | -85.7% | -0.20 | 0.25 | - |
| from continuing operations before special items |
0.58 | 0.63 | -8.4% | 0.29 | 0.25 | 15.7% |
| from discontinued operations | - | 0.44 | - | - | - | - |
| Capex | 1,316 | 1,219 | 8.0% | 606 | 538 | 12.7% |
| Stores | 2,401 | 2,219 | 8.2% | 2,401 | 2,219 | 8.2% |
| Selling space (1,000 sqm) | 12,020 | 10,784 | 11.5% | 12,020 | 10,784 | 11.5% |
From January until September 2007 METRO Group generated sales of €46.0 billion (9M 2006: €41.5 billion). This corresponds to an increase of 10.8% (adjusted for currency effects: +10.6%).
In Q3 2007 sales growth amounted to 10.8% (adjusted for currency effects: +10.1%) despite a negative calendar effect due to a missing trading day compared to last year. This growth rate almost reaches the high H1 level. Also in Q3 2007 organic growth (excluding the acquisitions of Wal-Mart Germany and Géant in Poland) was 7.1% and above the medium-term growth target of METRO Group of around 6% p.a. The international share of sales reached a new record of nearly 59%.
Sales in Germany rose by 7.4% to €19.5 billion in the first nine months. Despite the reduction in purchasing power due to the VAT increase at the beginning of 2007, organic sales growth was 0.4%.
Regardless of the negative calendar effect, sales grew by 6.9% in Q3 2007. Organic sales growth was above the rate in H1 2007 and was 0.5%.
Internationally, sales grew in the first nine months by 13.5% to €26.5 billion (adjusted for currency effects: +13.0%). Organically, international sales grew by 11.9%.
The international business continued also in Q3 2007 to be the growth driver of METRO Group. Sales grew by 13.6% to €9.2 billion (adjusted for currency effects: +12.4%). Organic sales growth amounted to 12.0%.
Sales in Western Europe (excluding Germany) grew significantly by 5.5% to €14.3 billion in the first three quarters, especially against the backdrop of the positive business development at Media Markt and Saturn. Thereby, the influence from currency effects was negligible.
The negative calendar effect, as well as the unfavourable weather conditions in several countries in July and August, dampened sales growth in Q3 2007, which amounted to 4.1%.
In the first nine months, sales in Eastern Europe grew dynamically by 24.6% to €10.8 billion (adjusted for currency effects: +22.5%). Organic sales growth was 20.2%.
In Q3 2007, sales growth accelerated. Sales increased by 26.8% to €3.9 billion (adjusted for currency effects: +22.6%). Organic sales growth was 22.5%. The sales development in Russia, Romania, Poland and Turkey was particularly good.
From January until September, sales in Asia/ Africa increased significantly by 26.7% to €1.3 billion (adjusted for currency effects: +32.1%). All Asian countries contributed to this good performance with double-digit sales growth.
In Q3 2007, sales increased by 27.0% to €0.5 billion (adjusted for currency effects: +30.9%).
In the first nine months, EBITDA reached €1,695 million (9M 2006: €1,626 million). EBIT was €742 million (9M 2006: €741 million) and included expenses amounting to €45 million resulting from the integration of Real's acquisitions executed in 2006. Adjusted for these integration expenses at Real, EBIT rose significantly above prior year's level. In the segment Other, earnings resulting from active real estate portfolio management were €38 million (9M 2006: €29 million). EBT was €382 million after €399 million in 9M 2006. Changes in German tax legislation, especially the corporate tax reform 2008, resulted in an extraordinary, additional, noncash effective tax expense of €160 million. Accordingly, EPS from continuing operations was €0.09. Excluding the tax special item, EPS from continuing operations was €0.58 compared to €0.63 last year.
In Q3 2007 METRO Group's EBITDA reached €643 million and thus grew by 12.1%. EBIT increased to €323 million (Q3 2006: €282 million). In the segment Other earnings resulting from active real estate portfolio management contributed €27 million. EBT reached €180 million after €164 million in Q3 2006 and reflected higher interest expenses as well as a negative, currency-related Other financial result. Changes in German tax legislation, especially the corporate tax reform 2008, resulted in an extraordinary, additional, noncash effective tax expense of €160 million. Accordingly, EPS from continuing operations was €-0.20. Excluding this special item, EPS amounted to €0.29. Therefore, the adjusted tax rate was on prior year's level.
From January until September 2007, METRO Group's capex amounted to €1,316 million following €1,219 million in 9M 2006.
In the first nine months, the store network was further extended by 58 new store openings. 36 stores were disposed of respectively closed, thereof 31 at Real in Germany, three at Media Markt and Saturn in France, and two at Galeria Kaufhof.
Metro Cash & Carry's store network was extended by eight stores. Real opened seven hypermarkets and two Extra supermarkets. Media Markt and Saturn was able to open 40 new stores. Galeria Kaufhof opened one new department store.
In Q3 2007, 27 stores were opened, thereof six at Metro Cash & Carry, four at Real and 17 at Media Markt and Saturn - including the largest Media Markt Europe-wide with 7,600 sqm sales area in Berlin and the first store in Turkey.
As at the end of September METRO Group operated 2,401 stores.
METRO Group's short- and medium-term funding comprises typical capital markets' issuance programmes. Among these are the "Euro Commercial Paper Programme" started in 1999, and the "Commercial Paper Programme" specifically geared to French investors. The drawdown on both programmes in the reporting period amounted on average to €1,723 million. Furthermore, as per 30 September 2007, €2,116 million bilateral bank credit facilities were drawn down.
Total assets decreased by €1.5 billion to €30.6 billion compared to year-end closing 2006. The change in current assets of €1.3 billion is largely attributed to the decrease in cash and cash equivalents compared to year-end closing 2006.
As at third quarter-end closing 2007, METRO Group's balance sheet reported equity of €5.7 billion, which was below the year-end 2006 amount due to the dividend payment in Q2. The equity ratio remained almost unchanged at 18.8%.
After netting cash and cash equivalents with financial debts (including finance leases) net debt totalled €8.0 billion compared with €5.2 billion as at 31 December 2006. This increase in net debt is characteristic and resulted mainly from the reduction in trade payables of €2.3 billion. The reason behind this reduction lies in the high share Q4 sales contribute to the full year, which consistently corresponds to high trade payables at year-end closing. Year-on-year net debt rose only slightly by €0.1 billion.
A cash outflow of €1.3 billion (9M 2006: €0.9 billion) resulted from current operating activities in 9M 2007.
Investing activities led to cash outflows of €0.7 billion. Last year, the divestment of Praktiker led to a smaller cash outflow of €0.5 billion. Cash flow from financing activities showed inflows of €1.1 billion (9M 2006: €0.7 billion).
In 9M 2007 no significant change arose from the reported opportunities and risks concerning the ongoing development of the METRO Group as described in detail in the Annual Report 2006 (p. 63-66). There are no potentially ruinous risks for the company and presently no risks can be identified that could endanger the company's existence in the future.
Material events after the quarter-end closing were non-existent.
We shall consequently continue our profitable growth path. On the basis of economic forecasts, the sector's business situation and developments in the sales divisions, we expect a positive business development in 2007 for the METRO Group.
Over the medium-term we expect the METRO's profitable growth strategy to lead to sales growth of around 6% and an even higher increase in EBIT growth before special items. In 2007 we now project a sales growth of more than 9% (previously 8% to 9%) including the acquisitions of the Wal-Mart Germany and the Géant business in Poland. We expect an EBIT increase of 6% to 8% based on EBIT of €1,910 million. The basis is the EBIT adjusted for effects resulting from the repositioning of Real including the acquisitions of Wal-Mart Germany and Géant in Poland.
In 2007 our investments in the current store network, including the conversion of the Wal-Mart stores to the Real brand, and in our organic expansion are expected to total about €2.5 billion.
On 25 September 2007, the employees of Extra were informed, that the Management Board of METRO AG is currently reviewing potential strategic options for the sales brand Extra. At the end of September the sales division Real operated 252 supermarkets under the sales brand Extra concentrated in Northern and Western Germany as well as in Berlin.
We are working to further extend our position as a leading international retailer also in the future. Thereby, we will continue to assume our social responsibility.
| 9M 2007 | 9M 2006 | Change (in %) | Change | |||||
|---|---|---|---|---|---|---|---|---|
| € million | € million | total | lfl | 9M 2007 | 9M 2006 | (in %) | ||
| Sales | 22,541 | 21,356 | 5.5 | 2.1 | EBITDA (€ million) | 908 | 821 | 10.6 |
| EBIT (€ million) | 606 | 526 | 15.1 | |||||
| Germany | 4,063 | 4,097 | -0.8 | -2.4 | Capex (€ million) | 506 | 521 | -2.9 |
| Western Europe | 9,071 | 9,067 | 0.1 | -0.3 | Stores (number) | 592 | 561 | 5.5 |
| Eastern Europe | 8,177 | 7,141 | 14.5 | 7.3 | Selling space (1,000 sqm) | 4,579 | 4,350 | 5.3 |
| Asia/Africa | 1,230 | 1,052 | 16.9 | 5.2 | Employees at closing date (full-time basis) |
104,180 | 98,086 | 6.2 |
Sales at Metro Cash & Carry grew by 5.5% to €22.5 billion in the first nine months compared to a high prior year level. Adjusted for currency effects, sales increased by 5.1%. In Q3 2007, the growth rate was higher at 6.3% (excluding currency effects: +5.3%).
In Germany sales declined slightly. Despite the negative calendar effect, sales in Q3 2007 however showed a better development than in H1 2007.
Sales in Western Europe were slightly above prior year's level and amounted to €9.1 billion. Especially in Q3 2007, like-forlike sales decreased slightly. Besides the negative calendar effect, business was impaired by unfavourable weather conditions in several countries.
In the first nine months, sales in Eastern Europe rose significantly by 14.5% to €8.2 billion (excluding currency effects: +12.6%). Like-for-like sales growth amounted to 7.3%. The high-revenue countries Russia, Romania, Ukraine and Turkey showed above-average sales growth rates. The sales development accelerated in Q3 2007.
Sales in Asia/Africa increased significantly by 16.9% to €1.2 billion in the first nine months (excluding currency effects: +21.9%). All Asian countries showed double-digit growth rates.
The international share of sales increased from 80.8% to 82.0%.
Earnings also followed the good development seen already in H1 2007. From January until September 2007, EBITDA increased by 10.6% to €908 million. With the good like-for-like sales development, EBIT also improved significantly by 15.1% to €606 million.
From January until September, capex for expansion as well as for the modernisation of the store network amounted to €506 million. The store network was enlarged by eight stores. Two Metro Cash & Carry stores were opened in both Russia and Ukraine. In Germany, Denmark, China and Vietnam one store each was opened.
Metro Cash & Carry is the most international sales division of METRO Group with a presence in 28 countries and operates a total of 592 stores, thereof 121 in Germany, 252 in Western Europe, 165 in Eastern Europe and 54 in Asia/Africa.
| Q3 2007 | Q3 2006 | Change (in %) | Change | |||||
|---|---|---|---|---|---|---|---|---|
| € million | € million | total | lfl | Q3 2007 | Q3 2006 | (in %) | ||
| Sales | 7,784 | 7,322 | 6.3 | 2.9 | EBITDA (€ million) | 324 | 285 | 13.4 |
| EBIT (€ million) | 222 | 186 | 19.3 | |||||
| Germany | 1,353 | 1,356 | -0.3 | -1.8 | Capex (€ million) | 250 | 264 | -5.4 |
| Western Europe | 3,090 | 3,109 | -0.6 | -0.9 | Stores (number) | 592 | 561 | 5.5 |
| Eastern Europe | 2,930 | 2,508 | 16.9 | 9.5 | Selling space (1,000 sqm) | 4,579 | 4,350 | 5.3 |
| Asia/Africa | 411 | 350 | 17.6 | 7.9 | Employees at closing date (full-time basis) |
104,180 | 98,086 | 6.2 |
| 9M 2007 | 9M 2006 | Change (in %) | Change | |||||
|---|---|---|---|---|---|---|---|---|
| € million | € million | total | lfl | 9M 2007 | 9M 2006 | (in %) | ||
| Sales | 8,937 | 7,097 | 25.9 | -0.9 | EBITDA (€ million) | -48 | 26 | - |
| EBIT (€ million) | -182 | -75 | - | |||||
| Germany | 7,386 | 6,265 | 17.9 | -1.4 | Capex (€ million) | 252 | 122 | - |
| Stores (number) | 679 | 591 | 14.9 | |||||
| Eastern Europe | 1,551 | 832 | 86.6 | 2.7 | Selling space (1,000 sqm) | 3,494 | 2,700 | 29.4 |
| Employees at closing date (full-time basis) |
60,987 | 44,252 | 37.8 |
In the first nine months, sales at Real increased by 25.9% to €8.9 billion (excluding currency effects: +25.7%).The acquisitions of Wal-Mart Germany and Géant in Poland, which took place in 2006, contributed especially with €1.7 billion to this development. Adjusted for these acquisitions, sales growth amounted to 2.6%. Like-for-like sales decreased slightly by 0.9% year-on-year.
In Germany like-for-like sales declined by 1.4% in 9M 2007. Thereby, Q3 showed a below-average development due to the negative calendar effect. The integration of Wal-Mart Germany was fully completed with the closure of the headquarters by the end of September. Meanwhile, 14 of the 85 acquired stores have been disposed of.
Further conversions of Real's heritage store network progressed with ten hypermarkets in Q3 2007. At the end of Q3 2007, a total of 35 concept stores have been converted.
The selective expansion in Eastern Europe continued very successfully. Sales grew by 86.6% to €1.6 billion. All Géant stores were converted to Real already by the end of March. Also the organic sales grew significantly by 40.4%.
The international share of sales grew from 11.7% to 17.4%.
EBITDA amounted to €-48 million after €26 million year-on-year. EBIT was €-182 million (9M 2006: €-75 million) and included integration expenses of €45 million. Furthermore, Q3 in particular was burdened by higher start-up losses for the accelerated international expansion in Eastern Europe.
In 9M 2007 capex amounted to €252 million (9M 2006: €122 million). In Germany 31 stores were disposed of (14 former Wal-Mart, eight Real and nine Extra stores). One Extra supermarket was converted to Real and one Wal-Mart store to Extra. Four hypermarkets were opened in Russia, two in Turkey, one in Romania and two Extra supermarkets in Germany. At the end of September the store network comprised 679 stores, thereof 601 in Germany (349 hypermarkets) and 78 in Eastern Europe.
| Q3 2007 | Q3 2006 | Change (in %) | Change | |||||
|---|---|---|---|---|---|---|---|---|
| € million | € million | total | lfl | Q3 2007 | Q3 2006 | (in %) | ||
| Sales | 2,928 | 2,360 | 24.1 | -1.6 | EBITDA (€ million) | -28 | -8 | - |
| EBIT (€ million) | -75 | -41 | -83.9 | |||||
| Germany | 2,376 | 2,070 | 14.8 | -2.5 | Capex (€ million) | 85 | 57 | 48.6 |
| Stores (number) | 679 | 591 | 14.9 | |||||
| Eastern Europe | 552 | 290 | 90.6 | 4.8 | Selling space (1,000 sqm) | 3,494 | 2,700 | 29.4 |
| Employees at closing date (full-time basis) |
60,987 | 44,252 | 37.8 |
| 9M 2007 | 9M 2006 | Change (in %) | Change | |||||
|---|---|---|---|---|---|---|---|---|
| € million | € million | total | lfl | 9M 2007 | 9M 2006 | (in %) | ||
| Sales | 11,390 | 9,988 | 14.0 | 3.8 | EBITDA (€ million) | 401 | 374 | 7.2 |
| EBIT (€ million) | 249 | 235 | 5.8 | |||||
| Germany | 5,364 | 5,068 | 5.8 | 1.7 | Capex (€ million) | 266 | 223 | 19.2 |
| Western Europe | 4,975 | 4,244 | 17.2 | 4.2 | Stores (number) | 658 | 590 | 11.5 |
| Eastern Europe | 1,051 | 676 | 55.5 | 16.6 | Selling space (1,000 sqm) | 2,046 | 1,809 | 13.1 |
| Employees at closing date (full-time basis) |
49,488 | 42,216 | 17.2 |
In first nine months sales at Media Markt and Saturn increased by 14.0% to €11.4 billion (excluding currency effects: +14.0%). Like-for-like sales grew significantly by 3.8%.
The market position in Germany was strengthened further. Despite the VAT increase, sales grew by 5.8% from January until September. Regardless of the high store density, like-for-like sales grew by 1.7%. In Q3 2007, the like-for-like sales growth of 2.6% was significantly higher than the growth rate in H1 2007.
In the first nine months, sales in Western Europe grew significantly by 17.2% to €5.0 billion (excluding currency effects: +17.7%). Except for France, all countries generated sales growth. Thereby, like-forlike sales in Belgium and The Netherlands showed an above-average development. Considering the tough comparatives and lower marketing intensity, sales growth decelerated in Q3 2007.
In Eastern Europe sales increased by 55.5% to €1.1 billion (excluding currency effects: +51.2%). In Q3 the business development remained on a high level following very good prior quarters.
The international share of sales increased significantly from 49.3% to 52.9%.
EBITDA improved from €374 million to €401 million. EBIT grew from €235 million to €249 million despite higher start-up losses in the new countries Russia, Sweden and Turkey.
Capex in the store network amounted to €266 million after €223 million in 9M 2006. The store network was enlarged by 40 stores (9M 2006: 32). In Germany nine stores were opened, among them the currently largest Media Markt at Berlin Alexanderplatz in the shopping centre "Alexa" opened on 12 September 2007. Spain and Italy opened six stores each. Five stores opened in Poland. The store network in France, Netherlands, Sweden, Hungary and Russia was extended each by two new stores and in Switzerland, Austria and Portugal by one store each. The first Media Markt in Turkey opened on 25 September 2007 in Istanbul.
At the end of September 2007 the store network of Media Markt and Saturn comprised 658 stores in now 15 countries, thereof 349 in Germany, 242 in Western Europe and 67 in Eastern Europe.
| Q3 2007 | Q3 2006 | Change (in %) | Change | |||||
|---|---|---|---|---|---|---|---|---|
| € million | € million | total | lfl | Q3 2007 | Q3 2006 | (in %) | ||
| Sales | 3,901 | 3,434 | 13.6 | 2.4 | EBITDA (€ million) | 176 | 167 | 5.1 |
| EBIT (€ million) | 126 | 120 | 5.2 | |||||
| Germany | 1,794 | 1,670 | 7.4 | 2.6 | Capex (€ million) | 134 | 90 | 48.7 |
| Western Europe | 1,733 | 1,520 | 14.0 | 0.5 | Stores (number) | 658 | 590 | 11.5 |
| Eastern Europe | 374 | 244 | 53.4 | 13.1 | Selling space (1,000 sqm) | 2,046 | 1,809 | 13.1 |
| Employees at closing date (full-time basis) |
49,488 | 42,216 | 17.2 |
| 9M 2007 | 9M 2006 | Change (in %) | Change | |||||
|---|---|---|---|---|---|---|---|---|
| € million | € million | total | lfl | 9M 2007 | 9M 2006 | (in %) | ||
| Sales | 2,411 | 2,446 | -1.4 | -2.0 | EBITDA (€ million) | 30 | 10 | - |
| EBIT (€ million) | -48 | -72 | 33.0 | |||||
| Germany | 2,185 | 2,236 | -2.3 | -3.0 | Capex (€ million) | 72 | 108 | -33.6 |
| Western Europe | 226 | 210 | 7.2 | 7.6 | Stores (number) | 141 | 142 | -0.7 |
| Selling space (1,000 sqm) | 1,481 | 1,486 | -0.3 | |||||
| Employees at closing date (full-time basis) |
18,343 | 19,017 | -3.5 |
Sales in the first nine months at Galeria Kaufhof decreased by 1.4%. However, gross sales maintained prior year's level. Like-for-like sales developed better in Q3 2007 than in H1 2007. Especially taking into account the missing trading day and the unfavourable weather conditions in July and August, this development is satisfactory.
In Germany, sales declined by 2.3% to €2.2 billion. While apparel sales developed well despite the poor summer weather, the hardline assortment sales decreased. All in all, in Q3 2007 Galeria Kaufhof compensated by and large the effects of the VAT increase in Q3 2007 despite the missing trading day.
In Belgium, the development continued benignly and sales increased by 7.2% to €226 million.
The international share of sales grew from 8.6% to 9.4% year-on-year.
In the first nine months EBITDA of Galeria Kaufhof reached €30 million after €10 million in 9M 2006. EBIT significantly improved by €24 million to €-48 million. A higher gross margin and the unchanged high cost orientation contributed to this improvement. Typically, German department stores reach positive earnings in Q4. Notwithstanding, Galeria Kaufhof already achieved EBIT positive in Q3.
From January until September 2007 capex in the store network was €72 million (9M 2006: €108 million). In Q1 the department store network was extended by one store in Berlin. In Q3 another Berlin store was closed as was a small-sized store in Q1.
Following the store at Alexanderplatz in Berlin, Galeria Kaufhof presents from 13 September 2007, the "World Class Shopping" concept in Hannover near the central station. With around 27,000 sqm of sales space on six floors, newly-designed lifestyle departments set new standards.
Therewith, the store network comprised 141 stores, thereof 126 in Germany and 15 in Belgium.
| Q3 2007 | Q3 2006 | Change (in %) | Change | |||||
|---|---|---|---|---|---|---|---|---|
| € million | € million | total | lfl | Q3 2007 | Q3 2006 | (in %) | ||
| Sales | 814 | 830 | -1.9 | -1.3 | EBITDA (€ million) | 29 | 20 | 43.6 |
| EBIT (€ million) | 4 | -7 | - | |||||
| Germany | 738 | 757 | -2.6 | -2.0 | Capex (€ million) | 40 | 24 | 71.8 |
| Western Europe | 77 | 73 | 5.1 | 5.7 | Stores (number) | 141 | 142 | -0.7 |
| Selling space (1,000 sqm) | 1,481 | 1,486 | -0.3 | |||||
| Employees at closing date (full-time basis) |
18,343 | 19,017 | -3.5 |
| € million | 9M 2007 | 9M 2006 | Q3 2007 | Q3 2006 |
|---|---|---|---|---|
| Net sales | 45,962 | 41,472 | 15,650 | 14,131 |
| Cost of sales | -36,541 | -33,109 | -12,425 | -11,271 |
| Gross profit on sales | 9,421 | 8,363 | 3,225 | 2,860 |
| Other operating income | 1,174 | 1,087 | 429 | 345 |
| Selling expenses | -8,775 | -7,800 | -2,956 | -2,614 |
| General administrative expenses | -1,013 | -852 | -354 | -287 |
| Other operating expenses | -65 | -57 | -21 | -22 |
| EBIT | 742 | 741 | 323 | 282 |
| Result from associated companies | 0 | 0 | 0 | 0 |
| Other investment result | 2 | 1 | 2 | 0 |
| Interest income | 142 | 105 | 57 | 35 |
| Interest expenses | -495 | -445 | -180 | -152 |
| Other financial result | -9 | -3 | -22 | -1 |
| Net financial income | -360 | -342 | -143 | -118 |
| EBT | 382 | 399 | 180 | 164 |
| Income taxes | -284 | -132 | -217 | -55 |
| thereof extraordinary expenses due to changes in German tax legislation (especially corporate tax reform 2008) |
-160 | - | -160 | - |
| Income from continuing operations | 98 | 267 | -37 | 109 |
| Income from discontinued operations after taxes | - | 143 | - | - |
| Net profit for the period | 98 | 410 | -37 | 109 |
| allocable to minorities | 68 | 60 | 28 | 28 |
| from continuing operations | 68 | 60 | 28 | 28 |
| from discontinued operations | - | - | - | - |
| allocable to stockholders of METRO AG | 30 | 350 | -65 | 81 |
| from continuing operations | 30 | 207 | -65 | 81 |
| from discontinued operations | - | 143 | - | - |
| Earnings per share (€) | 0.09 | 1.07 | -0.20 | 0.25 |
| from continuing operations | 0.09 | 0.63 | -0.20 | 0.25 |
| from discontinued operations | - | 0.44 | - | - |
| Assets | 30.09.2007 | 30.09.2006 | 31.12.2006 |
|---|---|---|---|
| € million | |||
| Non-current assets | 18,763 | 17,526 | 18,978 |
| Goodwill | 4,382 | 4,159 | 4,379 |
| Other intangible assets | 492 | 431 | 478 |
| Tangible assets | 12,280 | 10,998 | 12,087 |
| Investment properties | 112 | 144 | 136 |
| Financial assets | 110 | 143 | 139 |
| Other receivables and assets | 485 | 515 | 535 |
| Deferred tax assets | 902 | 1,136 | 1,224 |
| Current assets | 11,873 | 9,940 | 13,170 |
| Inventories | 6,634 | 5,810 | 6,640 |
| Trade receivables | 456 | 376 | 481 |
| Financial assets | 16 | 36 | 21 |
| Other receivables and assets | 2,638 | 2,218 | 2,852 |
| Entitlements to income tax refunds | 297 | 284 | 279 |
| Cash & cash equivalents | 1,832 | 1,108 | 2,732 |
| Non-current assets held for sale | - | 108 | 165 |
| 30,636 | 27,466 | 32,148 |
| Equity and Liabilities | 30.09.2007 | 30.09.2006 | 31.12.2006 |
|---|---|---|---|
| € million | |||
| Equity | 5,747 | 5,317 | 6,047 |
| Capital Stock | 835 | 835 | 835 |
| Additonal paid-in capital | 2,544 | 2,551 | 2,544 |
| Reserves retained from earnings | 2,116 | 1,713 | 2,451 |
| Minority interests | 252 | 218 | 217 |
| Non-current liabilities | 8,542 | 8,672 | 8,869 |
| Provisions for pensions and similar commitments | 987 | 995 | 1,023 |
| Other provisions | 502 | 445 | 506 |
| Financial liabilities | 6,186 | 6,291 | 6,279 |
| Other liabilities | 587 | 461 | 599 |
| Deferred tax liabilities | 280 | 480 | 462 |
| Current liabilities | 16,347 | 13,477 | 17,232 |
| Trade payables | 10,113 | 8,534 | 12,416 |
| Provisions | 632 | 268 | 719 |
| Financial liabilities | 3,677 | 2,742 | 1,740 |
| Other liabilities | 1,852 | 1,800 | 2,029 |
| Income tax liabilities | 73 | 105 | 304 |
| Liabilities related to non-current assets held for sale | - | 28 | 24 |
| 30,636 | 27,466 | 32,148 |
| € million | 9M 2007 | 9M 2006 |
|---|---|---|
| EBIT | 742 | 741 |
| Depreciation and amortisation on tangible and intangible assets | 953 | 885 |
| Change in provisions for pensions and other provisions | -131 | -10 |
| Change in net working capital | -2,297 | -1,982 |
| Income taxes paid | -402 | -336 |
| Other | -165 | -174 |
| Cash flow from operating activities of continuing operations | -1,300 | -876 |
| Cash flow from operating activities of discontinued operations | - | - |
| Total cash flow from operating activities | -1,300 | -876 |
| Cash inflow from the acquisition of Wal-Mart | 186 | - |
| Investments in tangible assets (excl. finance leases) | -1,202 | -1,024 |
| Other investments | -136 | -221 |
| Divestment of Praktiker | - | 484 |
| Disposals of fixed assets | 415 | 321 |
| Cash flow from investing activities of continuing operations | -737 | -440 |
| Cash flow from investing activities of discontinued operations | - | - |
| Total cash flow from investing activities | -737 | -440 |
| Profit distribution | ||
| METRO AG stockholders | -366 | -334 |
| other stockholders | -45 | -50 |
| Change of financial debts | 1,825 | 1,313 |
| Interest paid | -490 | -435 |
| Interest received | 140 | 112 |
| Profit and loss transfers and other financing activities | 72 | 58 |
| Cash flow from financing activities of continuing operations | 1,136 | 664 |
| Cash flow from financing activities of discontinued operations | - | - |
| Total cash flow from financing activities | 1,136 | 664 |
| Total cash flows | -901 | -652 |
| Exchange rate effects on cash and cash equivalents | 1 | -7 |
| Overall change in cash and cash equivalents | -900 | -659 |
| Cash and cash equivalents on January 1 | 2,732 | 1,767 |
| Cash and cash equivalents on September 30 | 1,832 | 1,108 |
| less cash and cash equivalents from discontinued operations as per September 30 | - | - |
| Cash and cash equivalents from continuing operations as per September 30 | 1,832 | 1,108 |
| Capital Stock | Capital reserve |
Reserves retained from |
Total | Minorities | Total equity | |
|---|---|---|---|---|---|---|
| € million | earnings | |||||
| 01.01.2006 | 835 | 2,551 | 1,721 | 5,107 | 206 | 5,313 |
| Net profit for the period | - | - | 350 | 350 | 60 | 410 |
| Profit distribution | - | - | -334 | -334 | -50 | -384 |
| Remeasurement IAS 39 | - | - | 4 | 4 | - | 4 |
| Currency translation | - | - | -30 | -30 | 0 | -30 |
| Other | - | - | 2 | 2 | 2 | 4 |
| 30.09.2006 | 835 | 2,551 | 1,713 | 5,099 | 218 | 5,317 |
| 01.01.2007 | 835 | 2,544 | 2,451 | 5,830 | 217 | 6,047 |
| Net profit for the period | - | - | 30 | 30 | 68 | 98 |
| Profit distribution | - | - | -366 | -366 | -45 | -411 |
| Remeasurement IAS 39 | - | - | 20 | 20 | - | 20 |
| Currency translation | - | - | -21 | -21 | 1 | -20 |
| Other | - | - | 2 | 2 | 11 | 13 |
| 30.09.2007 | 835 | 2,544 | 2,116 | 5,495 | 252 | 5,747 |
Sales Divisions
| Metro | Media Markt | Other/ | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash & Carry | Real | and Saturn | Galeria Kaufhof | Consolidation | METRO Group | |||||||
| € million | 9M 2007 9M 2006 9M 2007 9M 2006 9M 2007 9M 2006 9M 2007 9M 2006 9M 2007 | 9M 2006 | 9M 2007 | 9M 2006 | ||||||||
| External sales (net) | 22,541 | 21,356 | 8,937 | 7,097 | 11,390 | 9,988 | 2,411 | 2,446 | 684 | 585 | 45,962 | 41,472 |
| Internal sales (net) | 2 | 46 | 1 | 1 | 7 | 7 | 11 | 8 | -20 | -62 | - | - |
| Total sales (net) | 22,543 | 21,402 | 8,937 | 7,098 | 11,397 | 9,995 | 2,421 | 2,454 | 664 | 522 | 45,962 | 41,472 |
| EBITDA | 908 | 821 | -48 | 26 | 401 | 374 | 30 | 10 | 404 | 395 | 1,695 | 1,626 |
| Depreciation/amortisation | 303 | 295 | 135 | 101 | 153 | 139 | 78 | 82 | 285 | 268 | 953 | 885 |
| EBIT | 606 | 526 | -182 | -75 | 249 | 235 | -48 | -72 | 118 | 127 | 742 | 741 |
| Investments | 506 | 521 | 252 | 122 | 266 | 223 | 72 | 108 | 221 | 246 | 1,316 | 1,219 |
| Segment assets | 12,032 | 11,234 | 4,538 | 3,295 | 4,874 | 4,038 | 1,237 | 1,283 | 4,272 | 4,474 | 26,953 | 24,325 |
| Segment liabilities | 5,657 | 5,118 | 2,312 | 1,250 | 4,023 | 3,172 | 994 | 941 | 1,131 | 1,551 | 14,117 | 12,031 |
| Employees at closing date | ||||||||||||
| (full-time equivalents) | 104,180 | 98,086 | 60,987 | 44,252 | 49,488 | 42,216 | 18,343 | 19,017 | 16,056 | 15,165 | 249,054 | 218,736 |
| Selling space | ||||||||||||
| (in 1,000 sqm) | 4,579 | 4,350 | 3,494 | 2,700 | 2,046 | 1,809 | 1,481 | 1,486 | 419 | 439 | 12,020 | 10,784 |
| Stores (number) | 592 | 561 | 679 | 591 | 658 | 590 | 141 | 142 | 331 | 335 | 2,401 | 2,219 |
| Western Europe | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Germany | excl. Germany | Eastern Europe | Asia / Africa | Consolidation | METRO Group | |||||||
| € million | 9M 2007 9M 2006 9M 2007 9M 2006 9M 2007 9M 2006 9M 2007 9M 2006 9M 2007 | 9M 2006 | 9M 2007 | 9M 2006 | ||||||||
| External sales (net) | 19,510 | 18,172 | 14,333 | 13,594 | 10,780 | 8,648 | 1,339 | 1,057 | - | - | 45,962 | 41,472 |
| Internal sales (net) | 7 | 10 | 1 | 1 | - | - | 592 | 560 | -600 | -570 | - | - |
| Total sales (net) | 19,517 | 18,182 | 14,335 | 13,594 | 10,780 | 8,648 | 1,931 | 1,617 | -600 | -570 | 45,962 | 41,472 |
| EBITDA | 543 | 557 | 561 | 584 | 591 | 499 | -2 | -12 | 3 | -2 | 1,695 | 1,626 |
| Depreciation/amortisation | 490 | 481 | 233 | 222 | 203 | 156 | 27 | 25 | 1 | 0 | 953 | 885 |
| EBIT | 53 | 76 | 328 | 362 | 388 | 343 | -29 | -37 | 2 | -3 | 742 | 741 |
| Investments | 507 | 526 | 257 | 256 | 489 | 405 | 63 | 33 | - | - | 1,316 | 1,219 |
| Segment assets | 13,425 | 12,288 | 8,878 | 8,177 | 6,770 | 5,215 | 990 | 723 | -3,109 | -2,077 | 26,953 | 24,325 |
| Segment liabilities | 6,816 | 5,711 | 4,372 | 4,069 | 3,061 | 2,151 | 435 | 399 | -567 | -298 | 14,117 | 12,031 |
| Employees at closing date | ||||||||||||
| (full-time equivalents) | 108,204 | 100,865 | 51,602 | 48,722 | 75,071 | 57,119 | 14,177 | 12,030 | - | - | 249,054 | 218,736 |
| Selling space | ||||||||||||
| (in 1,000 sqm) | 6,719 | 6,168 | 2,703 | 2,589 | 2,200 | 1,671 | 397 | 356 | - | - | 12,020 | 10,784 |
| Stores (number) | 1,508 | 1,438 | 529 | 494 | 310 | 239 | 54 | 48 | - | - | 2,401 | 2,219 |
Sales Divisions
| Metro | Media Markt | Other/ | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash & Carry | Real | and Saturn | Galeria Kaufhof | Consolidation | METRO Group | |||||||
| € million | Q3 2007 Q3 2006 Q3 2007 Q3 2006 Q3 2007 Q3 2006 Q3 2007 Q3 2006 Q3 2007 | Q3 2006 | Q3 2007 | Q3 2006 | ||||||||
| External sales (net) | 7,784 | 7,322 | 2,928 | 2,360 | 3,901 | 3,434 | 814 | 830 | 223 | 185 | 15,650 | 14,131 |
| Internal sales (net) | 1 | 0 | 0 | 0 | 2 | 4 | 2 | 2 | -5 | -7 | - | - |
| Total sales (net) | 7,785 | 7,323 | 2,928 | 2,360 | 3,904 | 3,438 | 816 | 832 | 217 | 178 | 15,650 | 14,131 |
| EBITDA | 324 | 285 | -28 | -8 | 176 | 167 | 29 | 20 | 144 | 109 | 643 | 574 |
| Depreciation/amortisation | 101 | 99 | 46 | 33 | 50 | 48 | 25 | 27 | 98 | 86 | 320 | 292 |
| EBIT | 222 | 186 | -75 | -41 | 126 | 120 | 4 | -7 | 46 | 23 | 323 | 282 |
| Investments | 250 | 264 | 85 | 57 | 134 | 90 | 40 | 24 | 96 | 103 | 606 | 538 |
| Segment assets | 12,032 | 11,234 | 4,538 | 3,295 | 4,874 | 4,038 | 1,237 | 1,283 | 4,272 | 4,474 | 26,953 | 24,325 |
| Segment liabilities | 5,657 | 5,118 | 2,312 | 1,250 | 4,023 | 3,172 | 994 | 941 | 1,131 | 1,551 | 14,117 | 12,031 |
| Employees at closing date (full-time equivalents) |
104,180 | 98,086 | 60,987 | 44,252 | 49,488 | 42,216 | 18,343 | 19,017 | 16,056 | 15,165 | 249,054 | 218,736 |
| Selling space (in 1,000 sqm) |
4,579 | 4,350 | 3,494 | 2,700 | 2,046 | 1,809 | 1,481 | 1,486 | 419 | 439 | 12,020 | 10,784 |
| Stores (number) | 592 | 561 | 679 | 591 | 658 | 590 | 141 | 142 | 331 | 335 | 2,401 | 2,219 |
| Western Europe | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Germany | excl. Germany | Eastern Europe | Asia / Africa | Consolidation | METRO Group | |||||||
| € million | Q3 2007 Q3 2006 Q3 2007 Q3 2006 Q3 2007 Q3 2006 Q3 2007 Q3 2006 Q3 2007 | Q3 2006 | Q3 2007 | Q3 2006 | ||||||||
| External sales (net) | 6,429 | 6,014 | 4,918 | 4,723 | 3,857 | 3,041 | 447 | 352 | - | - | 15,650 | 14,131 |
| Internal sales (net) | 2 | 4 | 1 | 0 | - | - | 246 | 226 | -248 | -229 | - | - |
| Total sales (net) | 6,431 | 6,018 | 4,919 | 4,723 | 3,857 | 3,041 | 692 | 577 | -248 | -229 | 15,650 | 14,131 |
| EBITDA | 203 | 166 | 216 | 235 | 226 | 178 | -1 | -6 | -1 | 0 | 643 | 574 |
| Depreciation/amortisation | 164 | 155 | 77 | 75 | 69 | 54 | 9 | 8 | 1 | 0 | 320 | 292 |
| EBIT | 39 | 11 | 139 | 160 | 156 | 124 | -10 | -14 | -1 | 0 | 323 | 282 |
| Investments | 191 | 209 | 143 | 90 | 244 | 229 | 27 | 10 | - | - | 606 | 538 |
| Segment assets | 13,425 | 12,288 | 8,878 | 8,177 | 6,770 | 5,215 | 990 | 723 | -3,109 | -2,077 | 26,953 | 24,325 |
| Segment liabilities | 6,816 | 5,711 | 4,372 | 4,069 | 3,061 | 2,151 | 435 | 399 | -567 | -298 | 14,117 | 12,031 |
| Employees at closing date (full-time equivalents) |
108,204 | 100,865 | 51,602 | 48,722 | 75,071 | 57,119 | 14,177 | 12,030 | - | - | 249,054 | 218,736 |
| Selling space (in 1,000 sqm) |
6,719 | 6,168 | 2,703 | 2,589 | 2,200 | 1,671 | 397 | 356 | - | - | 12,020 | 10,784 |
| Stores (number) | 1,508 | 1,438 | 529 | 494 | 310 | 239 | 54 | 48 | - | - | 2,401 | 2,219 |
The interim financial statements as at 30 September 2007 were prepared in accordance with the International Financial Reporting Standard (IFRS) IAS 34 "Interim Financial Reporting" and have not been audited. They do not include all information required for the full annual consolidated financial statements at the end of the full year in accordance with IFRS.
In preparation of the interim consolidated financial statements, the same recognition and valuation methods were applied as in the last preceding annual consolidated financial statements as at 31 December 2006. Details on applied recognition and valuation methods are provided in the notes of the annual consolidated financial statements as at 31 December 2006.
During the year, sales-dependent and cyclical positions are accounted for pro-rata based on corporate planning, where material.
The current interim consolidated financial statements apply the accounting standards and interpretations newly introduced by the IASB which were adopted by the Council of the European Commission (please see METRO Group's Annual Report 2006, pp. 105-106). The application of these accounting standards had no impact on METRO Group's financial position and financial performance.
To provide a better overview in the tables, decimal places have partly been left out. Therefore rounding differences can occur.
In 9M 2007 companies that are included in the circle of related companies rendered goods/services to the amount of €107 million to METRO Group companies. These consist primarily of leasing services. Business relations with related companies are based on contractual agreements and conform to market conditions. In the reporting period, METRO Group had no business relations with related natural persons.
The Chairman of the Management Board of METRO AG, Dr. Hans-Joachim Körber, asked the Supervisory Board to be released from his responsibilities effective from 31 October 2007. In the meeting on 26 September 2007, the Supervisory Board approved this request. At the same time the Supervisory Board appointed Dr. Eckhard Cordes as member of the Management Board and elected him Chairman of the Management Board as of 1 November 2007.
Dr. Eckhard Cordes resigned from his mandate as Chairman and member of the Supervisory Board of METRO AG effective from 31 October 2007. The district court of Düsseldorf has appointed upon request of the Management Board of METRO AG Mr. Franz M. Haniel as the succeeding Supervisory Board member with effect from 1 November 2007.
Schlueterstraße 1 40235 Duesseldorf
PO Box 230361 40089 Duesseldorf
| Investor Hotline: | +49 (0) 1802 - 725 750 |
|---|---|
| Phone: | +49 (0) 211 - 6886 - 1936 |
| +49 (0) 211 - 6886 - 1051 | |
| Fax: | +49 (0) 211 - 6886 - 3759 |
| [email protected] |
| Phone: | +49 (0) 211 - 6886 - 1904 |
|---|---|
| Fax: | +49 (0) 211 - 6886 - 1916 |
| E-mail: | [email protected] |
| Phone: | +49 (0) 211 - 6886 - 2947 |
|---|---|
| Fax: | +49 (0) 211 - 6886 - 2000 |
| E-mail: | [email protected] |
Visit our website at www.metrogroup.de, the primary source for publications and information about the METRO Group. With the METRO Group News Abo you can subscribe to regular news and official publications of the company online.
Please note: In case of doubt the German version shall prevail.
This report contains certain statements that are neither reported financial results nor other historical information. These forward-looking statements are subject to risk and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond METRO Group's ability to control or estimate precisely, such as future market and economic conditions, the behavior of other market participants, the ability to successfully integrate acquired businesses and achieve anticipated synergies and the actions of government regulators. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this presentation. METRO Group does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of these materials.
Thursday, 10 January 2008, 8.00 am
Trading Statement 2007
8.00 am Annual Report 2007 2.00 pm Analysts' Meeting
Tuesday, 29 April 2008, 7.15 am
Interim Financial Report Q1 2008
Friday, 16 May 2008, 10.30 am
Annual General Meeting 2008
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