Financial management

Our financial management ensures the long-term liquidity of the company, reduces financial risks where economically feasible and grants loans to group companies. METRO AG centrally performs and monitors these activities for the group. The objective is to ensure that group companies can cover their funding requirements in a cost-efficient manner and, where possible, via the international capital markets. This applies to operating activities as well as to investments. As a matter of principle, METRO AG bases its selection of financial products on the maturities of the underlying transactions.

Intra-group cash pooling allows the surplus liquidity of individual group companies to be used for providing internal finance to other group companies. This reduces the group’s amount of debt and thus its interest expenses. METRO’s financial activities are based on a financial budget for the group, which covers all relevant companies.

METRO AG’s current long-term investment grade rating of BBB- and short-term rating of A-3 by Standard & Poor’s both ensure access to international financial and capital markets. We are utilising this access within the scope of our commercial paper programme as well as our ongoing capital market programme as required.

We support our access to the capital markets by engaging in regular dialogue with credit investors and analysts. Our Creditor Relations Team presents our company to all key European financial markets during its annual roadshow. Moreover, credit investors and analysts can learn about METRO’s impressive capabilities in face-to-face meetings and on guided factory tours. The following principles apply to all group-wide financial activities:

Financial unity

METRO presents itself as a coherent financial entity in order to gain access to the most important financial instruments on the financial and capital markets at favourable conditions.

Financial scope

In our relationships with banks and other business partners in the financial arena, we consistently maintain our scope of action in order to remain independent. In the context of our banking policy, limits have been defined to ensure that the group is able to substitute one financing partner with another at any time.

Centralised financial risk management

Our financial instruments on the international money and capital markets serve the purpose of ensuring our group’s funding requirements. They also serve the purpose of hedging underlying transactions that are exposed to interest rate and currency risks. METRO’s entire portfolio of financial instruments is monitored centrally by METRO AG.

Centralised risk monitoring

Changes in financial parameters, such as interest rate or exchange rate fluctuations, can impact the funding of METRO. The associated risks are regularly quantified via scenario analyses by METRO AG. Open risk positions, such as financial instruments without an underlying business transaction, may only be incurred if approved by the Management Board of METRO AG.

Approved business partners

For financial instruments, only contractual partners that have been approved by METRO AG are considered. The creditworthiness of these business partners is assessed on a daily basis by tracking their ratings and monitoring their credit risk ratios (essentially credit default swap analyses). This also provides the basis for the continual monitoring of compliance with the approved limits by the Treasury Controlling unit of METRO AG.

Mandatory approval

As a matter of principle, all transactions involving financial instruments that are conducted by any group company are contractually conducted by METRO AG. In cases where this is not possible for legal reasons, these transactions are concluded on behalf of the group company or directly between the group company and an external contractual partner in coordination with METRO AG.

Audit security

Our company employs the 4-eyes principle. All processes and responsibilities are laid down in group-wide guidelines. The conclusion of transactions involving financial instruments is separated from settlement and controlling in organisational terms.