Financial management

Principles and objectives of financial activities

METRO AG centrally performs the management of the group’s financing activities. It ensures solvency of the group at all times, reduces financial risks where economically feasible and grants loans to group companies. The objective is to cover the financing requirements of the group companies cost-effectively and in sufficient amounts via the international banking and capital markets. The financial activities are based on a financial budget for the group, which covers all relevant companies. The selection of financial products is generally based on the maturities of the underlying transactions.

Through intra-group cash pooling, financial resources can be allocated as needed by group companies with financing needs using the liquidity surpluses of other group companies. This reduces the financing volume and thus the interest expense.

METRO’s current long-term investment grade rating of BBB- and short-term rating of A-3 (Standard & Poor’s) ensure access to the international financial and capital markets, which is particularly utilised within the scope of the Euro Commercial Paper Programme and the ongoing capital market bond programme as needed. Frequent dialogue with credit investors and analysts takes place.

The following principles apply to all group-wide financial activities:

• Central management of financing activities by METRO AG
• External presentation of METRO as a single financial unit
• Cost-effective capital procurement by using banking and capital markets
• Protection of our financial scope of action by limiting the volume of transactions with individual banks
• Segregation of duties for initiation, controlling and management of financial transactions
• Centralised financial risk management

Rating

METRO AG has instructed Standard & Poor’s to assess and monitor its credit rating, which is currently presented as follows:

Financing measures

The company’s medium-term and long-term financing needs are covered by a bond issuance programme with a maximum volume of €5 billion. On 20 January 2020, a due bond of €125 million with a coupon of 4.05% was repaid on time. As of 30 September 2020, the utilised bond issuance programme amounted to a total of €1,776 million .

Short-term financing requirements are covered through the Euro Commercial Paper Programme with a maximum volume of €2 billion. On average, the programme was used at €575 million during the reporting period. As of 30 September 2020, the utilisation amounted to €295 million (30/9/2019: €387 million).

Bilateral credit facilities totalling €150 million were drawn down as of 30  September 2020. As a cash reserve, 2 syndicated credit facilities of €1,750 million and additional multi-year bilateral credit facilities of €250 million were concluded.

In financial year 2019/20, a syndicated credit facility of €900 million as well as temporary multi-year bilateral credit facilities of €200 million were drawn down. The syndicated credit facility and the multi-year bilateral credit facilities were utilised because liquidity on the money market was limited in the wake of the Covid-19 pandemic and short-term refinancing via commercial papers was not ensured. All drawn credit facilities were repaid prior to maturity.