21. Property, plant and equipment

As of 30 September 2019, property, plant and equipment totalling €4,760 million (30/9/2018: €5,314 million) was recorded. The development of property, plant and equipment is shown in the following table.

€ million

Land and buildings

Other plant, business and office equipment

Assets under construction

Total

Acquisition or production costs

 

 

 

 

As of 1/10/2017

9,223

4,927

195

14,344

Currency translation

−138

−88

−5

−231

Additions to consolidation group

0

0

0

0

Additions

178

169

315

662

Disposals

−248

−238

−10

−496

Reclassifications in accordance with IFRS 5

−2,134

−1,157

−56

−3,346

Transfers

−53

315

−282

−19

As of 30/9/2018 | 1/10/2018

6,828

3,928

158

10,914

Currency translation

149

52

3

204

Additions to consolidation group

0

0

0

0

Additions

100

111

161

372

Disposals

−126

−86

−5

−218

Reclassifications in accordance with IFRS 5

−681

−363

−15

−1,059

Transfers

32

129

−186

−25

As of 30/9/2019

6,303

3,770

116

10,188

Depreciation

 

 

 

 

As of 1/10/2017

4,290

3,221

11

7,522

Currency translation

−39

−47

−1

−86

Additions, scheduled

287

302

0

589

Additions, impairment

22

11

1

34

Disposals

−153

−228

−1

−382

Reclassifications in accordance with IFRS 5

−1,259

−814

0

−2,073

Reversals of impairment losses

−3

0

0

−3

Transfers

−79

78

0

−1

As of 30/9/2018 | 1/10/2018

3,066

2,524

10

5,600

Currency translation

39

27

0

67

Additions, scheduled

216

239

0

455

Additions, impairment

6

1

0

7

Disposals

−74

−79

0

−154

Reclassifications in accordance with IFRS 5

−356

−168

0

−524

Reversals of impairment losses

−4

−1

0

−5

Transfers

−22

4

0

−18

As of 30/9/2019

2,871

2,547

10

5,429

Carrying amount as of 1/10/2017

4,932

1,705

184

6,822

Carrying amount as of 30/9/2018

3,763

1,404

148

5,314

Carrying amount as of 30/9/2019

3,432

1,223

106

4,760

The €554 million decrease in property, plant and equipment results in the amount of €409 million from the reclassification of property, plant and equipment to assets held for sale in connection with METRO China. In addition, reclassifications of property, plant and equipment to assets held for sale in connection with individual properties in the amount of €127 million and disposals of real estates in the amount of €52 million (2017/18: €95 million) led to a reduction in property, plant and equipment. In contrast, positive of €138 million (2017/18: €−144 million) increased property, plant and equipment.

In accordance with 5, the scheduled depreciation of METRO China in the amount of €44 million (2017/18: €43 million) is not included in the current profit or loss for the period from continuing operations. These impairment losses are included in the movement schedules on the development of financial assets up to the point of reclassification on 30 September 2019; consequently, the amounts stated there may differ from the notes on depreciation.

Restrictions on titles in the form of liens and encumbrances for items of property, plant and equipment amounted to €11 million (30/9/2018: €12 million, thereof €0 million for METRO China).

Contractual commitments were recorded for items of property, plant and equipment in the amount of €42 million (30/9/2018: €84 million, thereof €0 million for METRO China).

  • Disclosures on assets/liabilities held for sale in connection with the sale of the hypermarket business and METRO China can be found under no. 43 – discontinued operations.

Leases

Assets available to METRO under the terms of finance leases were recognised at €481 million (30/9/2018: €468 million, thereof €0 million for METRO China); they essentially relate to leased buildings.

Finance leases generally have terms of 15 to 25 years with options under expiration to extend them at least once for 5 years. The interest rates used for discounting vary between 1.42% and 10.05%, depending on the market and the date on which the contract was concluded.

In addition to finance leases, METRO also signed other types of leases classified as operating leases based on their economic value. Operating leases generally have an initial term of up to 15 years. The interest rates in the leases are based partly on variable and partly on fixed rents.

Payments due under finance and operating leases in subsequent periods are shown as follows:

€ million

Up to 1 year

1 to 5 years

Over 5 years

Finance leases 30/9/2018

 

 

 

Future lease payments due (nominal)

126

373

517

Discount

−10

−88

−268

Present value

116

286

250

Operating leases 30/9/2018

 

 

 

Future lease payments due (nominal)

414

1,427

1,990

€ million

Up to 1 year

1 to 5 years

Over 5 years

Finance leases 30/9/2019

 

 

 

Future lease payments due (nominal)

112

419

528

Discount

−8

−90

−229

Present value

104

329

299

Operating leases 30/9/2019

 

 

 

Future lease payments due (nominal)

561

1,413

1,683

Future payments due on finance leases contain purchase payments amounting to €13 million (30/9/2018: €13 million, thereof €0 million for METRO China) required for the exercise of more favourable purchase options.

The nominal value of future lease payments due to METRO from the subleasing of assets held under finance leases amounts to €148 million (30/9/2018: €150 million, thereof €0 million for METRO China).

The nominal value of future lease payments due to METRO from the subleasing of assets held under operating leases amounts to €319 million (30/9/2018: €364 million, thereof €0 million for METRO China).

Profit or loss for the period from continuing operations includes expenses from leases totalling €484 million (2017/18: €484 million). Income from tenancy agreements totalling €236 million (2017/18: €268 million) is included.

Contingent lease payments from finance leases, included as income in the net profit or loss for the period from continuing operations, amount to €0 million (2017/18: €2 million). Contingent lease payments from operating leases recognised as expenses during the period amount to €9 million (2017/18: €9 million).

Conditional lease payments are sales-dependent, use-based or price-indexed payments.

Lease payments due in subsequent periods from entities outside METRO for the rental of properties that are legally owned by METRO (METRO as lessor) are shown below:

€ million

Up to 1 year

1 to 5 years

Over 5 years

Operating leases 30/9/2018

 

 

 

Future lease payments due (nominal)

29

77

52

€ million

Up to 1 year

1 to 5 years

Over 5 years

Operating leases 30/9/2019

 

 

 

Future lease payments due (nominal)

24

63

44

Currency effects
Currency effects result from situations where the same amount of currency units is translated into another currency at differing exchange rates.
Glossary
IFRS (International Financial Reporting Standards)
Internationally applicable rules for financial reporting developed by the IASB. Contrary to the accounting rules under the German Commercial Code, the IFRS emphasise the informational function.
Glossary