MADE TO TRADE. Merrill Lynch Retail, Transport & Leisure Conference 2013

Transcription

1 MADE TO TRADE. Merrill Lynch Retail, Transport & Leisure Conference May 2013 London METRO AG

2 Disclaimer and Notes To the extent that statements in this presentation do not relate to historical or current facts, they constitute forward-looking statements (including within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended). All forward-looking statements herein are based on certain expectations and assumptions at the time of publication of this presentation and are subject to risks and uncertainties that could cause actual results, performance or financial position to differ materially from any future results, performance or financial position expressed or implied in this presentation. Many of these risks and uncertainties relate to factors that are beyond METRO GROUP s ability to control or estimate precisely. The risks and uncertainties to which these forward-looking statements may be subject, include (without limitation) future market and economic conditions, the behaviour of other market participants, the ability to successfully transform the business model of METRO Cash & Carry, reorganise the management structure of METRO Cash & Carry, invest in innovative sales formats, expand in online and multichannel sales activities, integrate acquired businesses and achieve anticipated cost savings and productivity gains, and the actions of government regulators. Readers are cautioned not to place reliance on these forward-looking statements. METRO GROUP does not undertake any obligation to publicly update any forward-looking statements or to conform them to events or circumstances after the date of this presentation. This presentation is intended for information only. It is not intended as an offer for sale, or as a solicitation of an offer to purchase, any securities in any jurisdiction. This presentation may not be reproduced, distributed or published without prior written consent of METRO AG. All numbers are before special items, unless otherwise stated. Please note that new accounting standards have been applied. More information regarding the application of accounting methods, refer to the notes to the Annual Report Since 1 January 2013, it is mandatory to apply the revised IAS 19. The previous option granted for actuarial gains and losses from defined benefit pension plans, which allowed these amounts to be recognised either immediately in the income statement, directly in equity or according to the so-called corridor method, has been abolished. The revised IAS 19 only allows for actuarial gains and losses to be recognised immediately in equity ( other comprehensive income ). The amounts collected in equity remain there and will not be reclassified to the income statement in subsequent periods. As a result, the income statement will in future remain unaffected by actuarial gains and losses. As METRO AG used the corridor method in the past, this resulted in a change of method. Another change concerns the fact that, in future, expected returns on plan assets will be determined using the discount rate used to measure the pension obligations. In addition, past service costs will in future be recognised fully in profit or loss during the period in which the respective plan changes were effected. The consolidated financial statements have been prepared in euros. All amounts are stated in million euros ( million) unless otherwise indicated. Amounts below 0.5 million are rounded and reported as 0. In contrast to the practice of past years, only the amounts in the income statement, the reconciliation from profit or loss for the period to total comprehensive income, the balance sheet, the statement of changes in equity and the cash flow statement were rounded to produce the respective totals. In all other tables, the individual amounts and the totals were rounded separately. This may entail rounding differences. 1

3 Overview METRO at a Glance 3 Strategic Priorities 7 Four Market Leading Sales Lines 10 Performance in Q & Outlook 21 METRO a Compelling Investment 24 2

4 Fourth Largest Retailer Worldwide Sales: 66.7bn EBIT: 2.0bn Cash Flow: 2.3bn Stores: 2,243 Countries: 32 Employees: 280,000 / 180 nations 3

5 4 OpCos, 1 PropCo & 1 Strategic Management Holding METRO AG The world s leading player in the cash & carry sector One of the leading operators of hypermarkets in Germany Europe s No. 1 consumer electronics retailer One of Europe s leading department store operators The most international portfolio in retail and wholesale 2012 Sales Share 2012 EBIT Share* * Pre Other and consolidation 4

6 Strong International Presence Germany Western Europe Eastern Europe Asia/Africa METRO GROUP Countries Sales Share 2012 EBIT Share 38% 30% 27% 5% 100% 26% 33% 43% -2% 100% We generate nearly one third of Group sales and more than 40% of total earnings in emerging markets 5

7 Overview METRO at a Glance 3 Strategic Priorities 7 Four Market Leading Sales Lines 10 Performance in Q & Outlook 21 METRO a Compelling Investment 24 6

8 Strategic Priorities: Customer Centricity & Business Excellence Customer Centricity Business Excellence Our Goal: Long-term value creation for METRO s stakeholders 7

9 Active Portfolio Management in 2012 All shares of MAKRO UK and 30 freehold properties were sold on a debt- and cash-free basis to Booker (closed on 4 July 2012) for a 9.08% stake in issued share capital of Booker and 15.8m in cash Sale of Real s complete activities in Eastern Europe (excluding Turkey), including real estate for an enterprise value of 1.1bn to Groupe Auchan Discontinuation of Media Markt in China after the two-year test phase expired in December 2012 and closure of all stores as per beginning of March 2013 Transforming the Group further and focusing on what really matters 8

10 Overview METRO at a Glance 3 Strategic Priorities 7 Four Market Leading Sales Lines 10 Performance in Q & Outlook 21 METRO a Compelling Investment 24 9

11 The World s Leading Player in the Cash & Carry Sector Focused on B2B self-service wholesaling to HoReCa, Trader and SCO customer groups High performance internationally replicable concept Matchless emerging markets footprint: International share of sales over 80% 743 stores in 29 countries, of which 8 focus countries Profitable Growth Drivers: USP: Outstanding freshness & quality in food Business model transformation Dedicated sales force Innovative store concepts 2.2bn delivery sales 5.3bn own brand sales Expansion focus on Russia, China and Turkey million Sales 31,121 31,636 EBIT 1, EBIT Margin 3.7% 3.0% RoCE 19.0% 15.7% 10

12 Strategic Ambitions Overall Ambition: Market leadership through unique product ranges and strong focus on B2B solutions that make our customers more competitive. Stronger overall customer focus Further expansion of franchise solutions for Traders Ongoing country and store portfolio review Further organic expansion centred on high-growth countries Strong push in delivery sales, driven by enlarged field force Grow own brand sales, especially in light of challenging macro Trialling new non-food concepts in Germany Improving core operations 11

13 Europe s No. 1 in Consumer Electronics Retailing Pan-European market leader with 935 stores in 15 countries Large-scale, full assortment store base with entrepreneurial store managers Very competitive EDLP pricing strategy Innovative merchandising and marketing concepts Profitable Growth Drivers: Business model transformation Multichannel sales activities in 9 countries 0.8bn online sales and with c.23 / c.34 million site visits per month Four own brands Expansion focus on Russia and Turkey million Sales 20,604 20,970 EBIT EBIT Margin 2.6% 1.6% RoCE 21.5% 16.0% 12

14 Strategic Ambitions Overall Ambition: Superior shopping experience in consumer electronics, best offer, service and price for our customers in our stores and online. Continue implementation of strategic transformation Ensure price competitiveness / leadership Continuously enhance value proposition regarding assortment and service including online services (Juke, Video on demand) Optimise sourcing approach Intensifying online activities: 10% of sales expected by the end of ,000 SKUs to be available in Germany by the end of

15 Leading Operator of Hypermarkets in Germany Following the divestment of activities in Eastern Europe (ex Turkey) focus will be on Germany with 312 stores Food accounts for approx. 75% of sales Comprehensive product range of 80,000 different articles Member of Germany s leading loyalty card programme PAYBACK Profitable Growth Drivers: Business model transformation 13.2% own brand sales share with almost 5,000 products (TiP, Real Quality, Real Bio, Real Selection) Entrepreneurial store management Multichannel: Webshop with more than 10,000 products; Drive concept million Sales 11,032 11,017 EBIT EBIT Margin 1.2% 0.9% RoCE 5.6% 5.3% 14

16 Strategic Ambitions Overall Ambition: Unique choice and quality in food retail complemented by a compelling non-food range. Well-adjusted to serve our key customer groups. Enhanced through multichannel. Formation of regional management structure to drive repositioning at lower cost Increased execution discipline through regional management team Better adaption to local/regional markets through customised advertising and regional assortments Rollout of >650 concepts modules with focus on categories with strong differentiation potential Marketing mix complemented by events and professional campaigns 15

17 One of Europe s Leading Department Stores Concept and systems leader in Germany and market leader in Belgium with 137 stores in total Powerful international product ranges and high-quality own-brand products Strong cost and stock management 19% own brand share Optimisation of space allocation (consumer electronics vs apparel and accessories) Profitable Growth Drivers: Focus on mid-market and lifestyle orientation (sharper brand and own brand portfolio) Consistent trading-up strategy Multichannel: Webshop with >50,000 products New category management based on loyalty card data million Sales 3,119 3,092 EBIT EBIT Margin 3.9% 4.4% RoCE 10.6% 12.2% 16

18 Strategic Ambitions Overall Ambition: Concept leadership for department stores in Germany and Belgium. Absolutely customer-driven providing a meaningful and compelling offer for our customers. Consequent deployment of multichannel strategy: Extend multichannel services, product range enlargement and intensified advertising measures Continue to optimise assortment following customer insights Strengthen own brand presence Continue to optimise in-store space allocation and visual merchandising Selective modernisation of stores Further extension of premium brand listing 17

19 Most International Portfolio in Retail and Wholesale GERMANY 1.3 million sqm sales area owned WESTERN EUROPE 1.1 million sqm sales area owned EASTERN EUROPE 2.2 million sqm sales area owned ASIA / AFRICA 0.5 million sqm sales area owned 22% 40% 62% 70% 40% Gross self-owned floor area MISC (rented to third parties, HQ, department stores) 1.3 million sqm sales area owned METRO GROUP TOTAL 5.2 million sqm sales area owned 620 owned stores in 27 countries with a book value of 6.4bn and a market value exceeding 10bn 18

20 Strategic Ambitions Overall Ambition: Position METRO PROPERTIES as top class service provider and value-enhancing business partner for our sales lines. Profitable Investments Further optimisation of current property usage and construction costs Profitable Divestments Innovative ways to reduce net debt and risk position Asset Management & Project Development Analysing all locations in terms of long-term strategy, as well as fully supporting the sales lines in all real estate-related affairs Organisational Efficiency Further focussing on our organisation 19

21 Overview METRO at a Glance 3 Strategic Priorities 7 Four Market Leading Sales Lines 10 Performance in Q & Outlook 21 METRO a Compelling Investment 24 20

22 Q Highlights Sales grew 0.7% (adjusted for portfolio changes) despite difficult consumer environment Germany with LFL sales growth; 3 out of 4 sales divisions contributed Sales Development in million Market share gains in many countries Transformation progress: Own brand sales: 1.7 billion (-1%) Delivery sales: 0.6 billion (+16%) Q1 Q2 Q3 Q4 Q1 Online sales: 0.3 billion (>50%) EBIT improvement driven by Media-Saturn, Real and Other Operating cash flow improved Net debt strongly reduced by 0.9 billion to 6.5 billion 315 EBIT in million , Sales and EBIT guidance confirmed 14-8 Q1 Q2 Q3 Q4 Q1 21

23 Outlook Stub Year 2013 (9M) and 2013/14 (12M) milllion 9M 2012 Stub FY 2013 Sales growth (in %) 1.5% >0%* EBIT before special items 706 >706** Capex 954 <954 Net debt (in billion ) 7.7 <7.7 New store openings FY 2013/14*** * adjusted for sale of MAKRO UK, Real Eastern Europe and Media Markt China ** incl. higher contribution from real estate gains vs 9M 2012 *** vs pro-forma FY 2012/13 (01/10/ /09/2013) Economic environment to remain challenging in

24 Overview METRO at a Glance 3 Strategic Priorities 7 Four Market Leading Sales Lines 10 Performance in Q & Outlook 21 METRO a Compelling Investment 24 23

25 METRO A Compelling Investment Leading market positions in wholesale & retail Unique emerging markets footprint Strong focus on customer centricity Growing multichannel activities Clear strategy of sustainable profitable growth Generating high cash flow and further strengthen balance sheet Valuable real estate asset backing 24

26 MADE TO TRADE. Appendix 25

27 Q1 Sales and EBIT by Division Sales Like-for-Like EBIT Change million Q Change Q Change million METRO Cash & Carry 7, % -1.7% % -6 Real 2, % -0.5% % 16 Media-Saturn 5, % -1.4% % 6 Galeria Kaufhof % 0.9% % 1 Real Estate % -11 Other % % 16 Consolidation METRO GROUP 15, % METRO Cash & Carry: LFL sales impacted by ongoing tough trading conditions in Southern Europe and Poland, especially in non-food Real: Good LFL sales growth again in Germany Media-Saturn: Strong LFL growth in Germany, sequential improvement in Western Europe Galeria Kaufhof: LFL sales growth in Germany, significant market share gains in textile Real Estate: EBIT development reflects lower rental income due to sale of real estate in

28 Income Statement million Q Q Change EBIT Net financial result % EBT % Income taxes >100% Profit or loss for the period % Non-controlling interests % EPS in (basic = diluted) % 1 Adjustment resulted from the first-time adoption of the revised IAS 19 Gross profit margin at 19.9% Selling expenses stable as a percentage of sales General admin expenses decreased significantly due to improved cost structures EBIT improvement also driven by cost savings measures and efficiency gains Income tax credit reflected integral approach assuming a tax rate of 97% for FY 2013 (9M) 27

29 Other Financials 31/03/ /03/2013 Change New store openings (YTD) % Net working capital ( m) -1,858-2, % Cash flow from operating activities ( m) -2,931-2, % Cash capex ( m) % Net debt ( bn) % Pension provisions ( m) 1, , % 1 Including acquisition of 4 stores in Poland for Real 2 Adjustment resulted from the first-time adoption of the revised IAS new store openings, thereof 12 in emerging markets, 14 stores closed or sold Net working capital improvement of 226 million Operating cash flow increased by 89 million Significant net debt reduction of 922 million 275 million increase in pension provisions resulted from lower actuarial interest rates 28

30 Metro Cash & Carry: Q1 Sales adjusted for disposal of MAKRO UK on PY level Very tough comps in Germany and Eastern Europe Like-for-Like Sales Development % -0.3% -0.1% -0.4% -1.7% Challenging trading conditions remained, especially for non-food 3 new store openings (Russia, India and Belgium); 1 store closed in China Q1 504 Q2 Q3 Q4 Q1 Delivery Sales in million Delivery sales increased by 16% and contributed more than 8% to sales Q1 Q2 Q3 Q4 Q1 Own brand share constituted more than 16% of total sales More than 5,000 franchise traders supported in Eastern Europe 29

31 Accelerating the Transformation Process FOCUS on Differentiation and Profile Customer-driven with clear approach regarding target groups, current market position, mid-term ambition and action plan for growth Setting the Sights Food is our passion and USP both in assortment & service Non-food will become much more focused Improved Leadership Structure Enlarging Country MD responsibilities to sales, marketing and CRM Leaner and more effective organisation Focus on eight countries remains leadership intensified Introduction of a Chief Restructuring Officer Clearing Away the Cobwebs Old stock reductions Less superfluous reporting and internal red tape Accelerate the benefits from our shared service centres HIGH attention on cost reduction Core Driver Core Objectives Core Enablers Customer Focus Sales & Profit Market Position Structure & Processes People & Culture 30

32 Real: Q1 Strong sales growth in Germany supported by successful marketing campaigns (especially Real Deal) Real brand further strengthened by rollout of concept modules 3.5% Like-for-Like Sales Development Entrepreneurial store approach now possible in all stores Own brand sales share in Germany improved by 70 bps to 16.4% Sale of Real Ukraine and Russia closed in March and April respectively -0.3% -1.0% -0.5% -1.6% Q1 Q2 Q3 Q4 Q1 Like-for-Like Sales Development Germany % 1.5% 1.5% -0.7% -1.7% Q1 Q2 Q3 Q4 Q1 31

33 Media-Saturn: Q1 LFL sales growth in Germany further accelerated Market share gains in 7 countries, especially in Germany; market consolidation ongoing MSH market share vs. Market development #Countries** Market development (%-growth vs. py) 7 7 =14 AT HU 5 IT 3 NL PL PT CH MSH Market Share DE RU SE Tough market environment especially in Southern Europe continued Further dynamic growth in online sales BE GR LU ES 8 6 LFL Sales Development % -1.4% -2.4% -3.1% -3.1% Q1 Q2 Q3 Q4 Q1 Online Sales ( million) Q1 Q2 158 Q Q4 Q1 LFL Sales Development Germany % 3.1% 3.4% 6 new store openings and 10 store closures, including 7 in China -3.7% -2.1% Q1 Q2 Q3 Q4 Q1 32

34 Galeria Kaufhof: Q1 Notable LFL sales growth of 1.1% in Germany Like-for-Like Sales Development German store-based textile market declined by more than 9% also due to unfavourable weather conditions 0.1% 2.8% 0.9% Sizable market share gains in menswear, ladieswear, leather goods, home textiles and sporting goods -2.8% -1.9% Webshop growing strongly Q1 Q2 Q3 Q4 Q1 33

35 Outlook for Stub Year 2013 (9M) Confirmed milllion 9M 2012 Stub FY 2013 Sales growth (in %) 1.5% >0% 1 EBIT before special items >706 3 Capex 954 <954 Net debt (in billion ) 7.7 <7.7 New store openings (number of) Adjusted for sale of MAKRO UK, Real Eastern Europe and Media Markt China 2 Adjustment resulted from the first-time adoption of the revised IAS 19 3 Incl. higher contribution from real estate gains vs 9M

36 We are on Track to Achieve our Targets milllion Q Q Sales growth (in %) 0.7% 1 EBIT before special items Capex Net debt (in billion ) New store openings (number of) Adjusted for sale of MAKRO UK, Real Eastern Europe and Media Markt China 2 Adjustment resulted from the first-time adoption of the revised IAS 19 35

37 Contact Investor Relations Metro-Straße Düsseldorf Germany Tel.: +49 (0) Fax: +49 (0) investorrelations@metro.de Internet: 36