41. Segment reporting

Segmentation follows the group’s internal reporting as it is used as a basis for resource allocation and performance measurement by the Chief Operating Decision-Maker (member of the Management Board of METRO AG).

METRO is active in the self-service wholesale trade with the brands METRO and MAKRO as well as in the (FSD) with the METRO delivery service and, among others, with the supply specialists Classic Fine Foods, Pro à Pro, Rungis Express, Aviludo and Davigel Spain. Operating segments are aggregated to form reporting segments based on the division of the business into individual regions. The individual regions are Germany, Western Europe (excluding Germany), Russia, Eastern Europe (excluding Russia) and Asia.

The Others segment includes in particular Hospitality Digital, the business unit that bundles the group’s digitalisation initiatives. It also includes the service companies METRO PROPERTIES, METRO LOGISTICS, METRO DIGITAL, METRO ADVERTISING and METRO SOURCING and others, which provide group-wide services in the areas of real estate, logistics, information technology, advertising and procurement. METRO MARKETS is further expanding its digital portfolio for independent restaurateurs with a new B2B online marketplace. Through this distribution channel, METRO offers non-food articles from its own product range as well as products from third parties. The sales and pro rata costs generated through METRO MARKETS were included in the respective operating units in the , while METRO MARKETS’ development activities beyond it were included in the Others segment.

This allocation in the operating units was not continued in financial year 2020/21, so that all sales revenues and costs are now reflected in the Others segment.

The main components of segment reporting are described below:

  • External sales represent sales of the operating segments to third parties outside the group.
  • Internal sales represent sales between the group’s operating segments. These transactions are settled at normal market conditions.
  • Segment comprises before depreciation and reversals of goodwill, impairment losses of property, plant and equipment, other intangible assets and investment properties.
  • The adjusted EBITDA includes EBITDA excluding and earnings contributions from real estate transactions.
  • The term ‘transformation costs’ refers to non-regularly-recurring expenses related to the focus on the wholesale business or the closure of business in individual countries. In financial year 2020/21, this includes country exits in Japan, Myanmar and Classic Fine Foods Philippines, as well as individual measures mainly in Germany.
  • The earnings contributions from real estate transactions include the EBITDA-effective earnings from the disposal of land and land usage rights and/or buildings as part of a disposal transaction. Earnings from the disposal of dedicated real estate companies or the disposal of shares in such companies capitalised at equity are, as a result of their commercial substance, also included in the earnings contributions from real estate transactions. The earnings have been reduced by cost components incurred in relation to real estate transactions.
  • EBIT is the key ratio for segment reporting and describes operating earnings for the period before net financial result and income taxes. Intra-group rental contracts are shown as operating leases in the segments. The rental takes place at normal market conditions. In principle, impairment risks related to non-current assets are only shown in the segments where they represent group risks. In analogy, this also applies to deferred assets and liabilities, which are only shown at segment level if this was also required in the consolidated balance sheet.
  • Segment investments include additions (including additions to the consolidation groups) to goodwill, other intangible assets and property, plant and equipment and investment properties. Exceptions to this are additions due to the reclassification of assets held for sale as non-current assets.
  • Non-current segment assets include non-current assets. They mainly exclude financial assets, investments accounted for using the equity method, tax items, inventories, trade receivables, receivables from suppliers and cash and cash equivalents.
  • In principle, transfers between segments are made based on the costs incurred from the group’s perspective.

The reconciliation from non-current segment assets to non-current group assets is shown in the following table:

€ million

30/9/20201

30/9/2021

Non-current segment assets

7,504

7,203

Financial assets

98

92

Investments accounted for using the equity method

421

361

Deferred tax assets

258

345

Other

2

3

Non-current group assets

8,284

8,004

1

Previous year’s comparative values were adjusted due to a change in the accounting method (inventories); see the notes section ‘Change in accounting method (inventories)’.

Delivery (Food Service Distribution, FSD)
Delivery service for professional customers. The delivery segment includes transactions without customers having contact with a METRO store. Customers order items online or by phone and receive their order delivered at the agreed time. In recent years, this type of purchasing has gained much more momentum.
Glossary
Previous year
Period of 12 months that is usually cited as a reference for statements in the annual report and refers to the financial year preceding the reporting year.
Glossary
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation)
Profit or loss before financial 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
EBIT (Earnings Before Interest and Taxes)
Profit or loss before financial result and (income) taxes. Due to its independence from different forms of financing and tax systems, this key figure is also used for international comparison with other companies, among other things.
Glossary
Transformation costs
Non-recurring expenses related to the focus on the wholesale business and the restructuring measures resulting from this realignment as well as with the closure of individual national subsidiaries. Such expenses are presented separately in the financial reporting as transformation costs.
Glossary