Comparison of outlook with actual business developments

The comparison of the actual business development with the outlook for financial year 2019/20 relates to the continuing operations of METRO.

The original sales and outlook for financial year 2019/20 was retracted on 3 April 2020. The reason for it was the uncertainty over the duration of the restrictions imposed by the government in response to the Covid-19 pandemic and their effects on business development. For financial year 2019/20, METRO had originally expected growth in total sales and like-for-like sales of 1.5% to 3% and EBITDA excluding and earnings contributions from real estate transactions at approximately the same level as in financial year 2018/19. The outlook was based on the assumption of stable exchange rates and no further adjustments to the portfolio and only covered METRO's continuing operations.

After the business development at the beginning of Q3 2019/20 was initially significantly negatively affected by government measures in connection with Covid-19 and the resulting impact on public life, the gradual easing of Covid-19 restrictions in the further course of Q3 and the measures taken by the Management Board in this regard to adjust to the prevailing conditions led to an enormous recovery in sales development. Against this background and considering the stable sales development and further trend improvement in the business at the beginning of Q4, the Management Board decided on 3 August 2020 to issue the following outlook for financial year 2019/20:

For financial year 2019/20, METRO expects a decline in total sales in local currency and like-for-like sales of 3.5% to 5% and a decline in adjusted EBITDA of around €200 million to €250 million compared to the . Russia and Eastern Europe (excluding Russia) are expected to demonstrate significantly better developments in terms of sales and EBITDA than the group average for financial year 2019/20, while Western Europe and Asia are expected to turn out weaker. As a result of savings and other effects, the adjusted in the Others segment will also have a significant positive effect.

The outlook was based on the assumption of stable exchange rates and no further adjustments to the portfolio and only covers METRO's continuing operations. The outlook was also based on the assumption that there will be no further escalations of the Covid-19 pandemic and no corresponding negative effects in countries relevant for METRO and that the stable recovery of the HoReCa sector will continue.

With a decline in total sales of −4.0% in local currency and like-for-like sales of −3.9%, METRO reached the upper end of the outlook (−3.5% to −5%). The significantly better development expected for Russia and Eastern Europe (excluding Russia) than the Group average in terms of sales occurred as projected. As expected, Western Europe and Asia did not develop as strongly. Germany was almost at the same level as the previous year.

In terms of adjusted EBITDA, the Management Board of METRO AG expected a decline of around €200 million to €250 million compared to the previous year (€1,392 million). As a result of savings and other effects, the adjusted EBITDA in the Others segment will also have a significant positive effect here. Adjusted for negative of €29 million, METRO’S adjusted EBITDA was €−205 million or −15.1% below the previous year’s figures. It already reflects the unexpected circumstances surrounding the second voluntary takeover bid by EPGC in the mid to high single-digit million range. With this decline, METRO is at the upper end of its outlook. This also applies to the outlook for the segments Russia and Eastern Europe (excluding Russia), which, as expected, achieved a significantly better EBITDA development than the group average. The segments Western Europe and Asia developed weaker than expected. Germany was almost at ’s level. As expected, the adjusted EBITDA in the Others segment developed significantly positively, reaching €42 million (2018/19: €−34 million).

METRO achieved its adjusted sales and earnings outlook for financial year 2019/20 at the upper end of the outlook range.

EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation)
Profit or loss before interest result, income taxes, depreciation/amortisation/impairment losses/reversals of impairment losses on property, plant and equipment, intangible assets and investment properties. This key figure serves the purpose of comparing companies with accounting systems that follow different accounting rules.
Glossary
Transformation costs
Non-recurring expenses related to the focus on the wholesale business and the restructuring measures resulting from this realignment are presented separately in the financial reporting as transformation costs.
Glossary
HoReCa
Short for hotel, restaurant and catering businesses. The HoReCa segment is an important customer group for METRO.
Glossary
Previous year
Period of 12 months relating to the financial year preceding the reporting year, usually cited as reference for statements in an annual report.
Glossary
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation)
Profit or loss before interest result, income taxes, depreciation/amortisation/impairment losses/reversals of impairment losses on property, plant and equipment, intangible assets and investment properties. This key figure serves the purpose of comparing companies with accounting systems that follow different accounting rules.
Glossary
Currency effects
Currency effects result from situations where the same amount of currency units is translated into another currency at differing exchange rates.
Glossary
Previous year
Period of 12 months relating to the financial year preceding the reporting year, usually cited as reference for statements in an annual report.
Glossary