Notes to the Business Combinations

Davigel España, S.A.U.

Pursuant to the purchase contract dated 30 December 2020, METRO Cash & Carry International Holding B.V. acquired 100% of the shares in Davigel España, S.A.U. (Davigel) as of 30 December 2020 from SYSCO FRANCE SAS (Sysco), France. The purchase price agreed and paid was less than €1 million. Davigel is an established food service distribution (FSD) company in Spain with a strong presence in the Balearic Islands as well as the Canary Islands. More than 70% of all customers are hotel chains, while independent restaurateurs and HoReCa operations account for about 30% of sales. The transaction is of high strategic relevance for METRO in Spain, since Davigel provides access to new customers. It also secures exclusive rights for certain articles from Sysco’s product range.

The initial consolidation was carried out as of 1 January 2021. Davigel is part of the segment METRO Western Europe (excl. Germany).

The fair values of the acquired assets and liabilities assumed as of the acquisition date were as follows:

The gross amount of trade receivables is €3 million, of which €1 million was assessed as probably uncollectible at the time of the acquisition.

Costs of significantly less than €1 million were incurred in connection with the transaction and are included in other operating expenses.

The acquisition of Davigel resulted in negative goodwill of €7 million, which was recognised in full as other operating income in financial year 2020/21. The negative goodwill results from the challenging market conditions due to the Covid-19 pandemic, which significantly affect Davigel’s main customers in the hotel and hospitality industry and were recognised by reducing the purchase price accordingly.

Since the initial consolidation date of 1 January 2021, Davigel has contributed €13 million to METRO’s sales but reduced its profit or loss for the period by €1 million (excluding the recognition of negative goodwill).

Assuming that the acquisition had taken place on 1 October 2020, Davigel would have contributed €16 million to METRO’s sales and reduced its profit or loss for the period by €3 million (excluding the recognition of negative goodwill).

The government measures based on the Covid-19 pandemic had a massively negative impact on Davigel’s sales and earnings development.

Aviludo Group

Pursuant to the purchase contract dated 16 October 2020, METRO FSD HOLDING PORTUGAL, SGPS, S.A. acquired the following companies (Aviludo Group) from AVILUDO SGPS, S.A., Portugal, on 28 February 2021:

• Aviludo – Indústria e Comércio de Produtos Alimentares, S.A. (100%)
• ATLA – Logística, S.A. (100%)
• LUDOFOODS, S.A. (100%)
• FOOD GO – Import Export, LDA (100%)
• X4DEV – Business Solutions, S.A. (71%)

The purchase price agreed and paid was in the low double-digit millions of euros. With a strong presence in Lisbon and the tourist-oriented south of Portugal, the Aviludo Group has expertise in meat processing and is known for its consistent quality and customer service standards. The Aviludo Group is the second-largest Portuguese food supplier, specialising in independent restaurateurs, canteens and restaurant chains. This acquisition is a decisive step towards a complete focus on HoReCa customers. The resulting access to complementary HoReCa customer groups boosts METRO’s position in the growing FSD segment and simultaneously creates an additional assortment for local customers.

The initial consolidation was carried out as of 1 March 2021. The Aviludo Group is part of the segment METRO Western Europe (excl. Germany).

The fair values of the acquired assets and liabilities of the consolidated group as of the acquisition date were as follows:

The licence price analogy method as well as the residual value method were used to determine the fair values of the acquired intangible assets. The licence price analogy method recognises the discounted estimated payments of usage fees that are expected to be saved by owning the rights to the names. The residual value method is based on the present value of the expected net cash flows generated by the customer relationships, excluding any cash flows associated with supporting assets.

The gross amount of trade receivables is €5 million, of which €1 million was assessed as probably uncollectible at the time of the acquisition.

Costs of €2 million were incurred in connection with the transaction (thereof €1 million in financial year 2019/20) and are included in other operating expenses.

The acquisition of the Aviludo Group resulted in goodwill of €7 million, which is mainly attributable to the future earnings potential arising from expected synergy effects with the wholesale business of MAKRO Portugal. Part of the expected synergy effects is attributable to the cash-generating unit MAKRO Cash & Carry Portugal; consequently, an amount of €3 million was allocated to it. The recognised goodwill is not deductible for tax purposes.

Since its initial consolidation on 1 March 2021, the Aviludo Group has contributed €74 million to METRO’s sales and €0 million to profit or loss for the period.

Assuming that the acquisition had taken place on 1 October 2020, the Aviludo Group would have contributed €104 million to METRO’s revenue and reduced its profit or loss for the period by €5 million.

The government measures based on the Covid-19 pandemic had a massively negative impact on the sales and earnings development of the Aviludo Group.