Contents

A

Amfori Business Social Compliance Initiative (Amfori BSCI)

Founded in 2003, this global business association for open and sustainable trade works to ensure that production in all supplier countries complies with minimum social standards. The association aligns its standards with the UN’s Universal Declaration of Human Rights and the conventions of the International Labour Organization (ILO).

Audit

A procedure that assesses an organisation’s processes and structures according to previously formulated standards and guidelines. For example, an audit provides information on the effectiveness of process optimisation measures. If an audit is conducted by an external auditor, the certificate issued after the review can be used as evidence of adherence to standards.
C

Carbon Disclosure Project (CDP)

The unaffiliated organisation was founded in London in 2000. It aims to disclose companies’ CO2 emissions as well as their climate risks, thereby contributing to the transparency of their corporate financial reporting on climate-relevant data. In addition, the CDP conducts annual company surveys.

Commercial Paper Programme

Ongoing capital market programme typical of money markets that covers short-term financing needs. It facilitates the issuance of commercial papers (CP) as discounted, unsecured bearer bonds without standardised terms of maturity.

Committee of Sponsoring Organizations of the Treadway Commission (COSO)

US-based private-sector organisation that developed and published a standard for internal controls in 1992 that is recognised by the U.S. Securities and Exchange Commission. In 2004, this standard was updated and the COSO ERM (Enterprise Risk Management – Integrated Framework), also known as COSO II, was published.

Compliance

All measures specifying compliance with legal requirements as well as social guidelines and values by a company and its employees.

Currency effects

Currency effects arise when the same number of currency units is converted into another currency at different exchange rates.
D

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.

Diversity management

A central element of HR policy that harnesses the diversity of employees for corporate success in terms of gender, age, ethnicity, beliefs, sexual identities and potential disabilities.

Dow Jones Sustainability Indices (DJSI)

An index family that measures the sustainability of the company. The measurement is comprised of economic, environmental and social criteria. For listed companies, the focus is on corporate management, employee policy and transparency, compliance with human rights and risk management. Among all sustainability indices, the DJSI family carries a particular cachet in terms of quality.
E

Earnings per share (basic/diluted)

The earnings per share (basic) are calculated by dividing the profit share attributable to the shareholders of METRO AG by the weighted average number of shares in circulation. The earnings per share (diluted) also take into account the effect of so-called potential shares, for example due to issued stock options.

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.

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.

EVA (Economic Value Added)

Value-oriented key figure that depicts the absolute value contribution of a company created in a single period under consideration of a risk-adjusted interest rate. It provides information on the difference between the company profit after tax and the cost of capital on the average capital employed.
F

Fair value

Recognised fair value that would be received in return for the disposal of an asset or paid for the assignment of a debt in an ordinary transaction conducted between market participants on the assessment date.

Food, non-food

Under the global term food, METRO summarises the following categories of goods: fresh foods, durable foods, nutrients, frozen foods and drinks of all kinds, as well as luxury foods, dietary supplements and pet food, but also detergents, cleansers and cleaning agents, which are sometimes also labelled as near-food. All other goods are considered non-food items.

Franchising

Contractually regulated form of organisation in which the franchisor grants the independent franchisees from the Traders segment the right to distribute certain goods or services using a name or trademark of the franchisor. METRO offers a variety of franchise concepts in different countries.

Free cash flow

Adjusted EBITDA – lease payments – cash-effective investments (excluding mergers and acquisitions) +/− changes in net working capital.

Free cash flow conversion

(Adjusted EBITDA – lease payments – cash-effective investments (excluding mergers and acquisitions) +/− changes in net working capital) / (adjusted EBITDA – lease payments).
G

Global Food Safety Initiative (GFSI)

The initiative was established in 2000 and is the world’s largest organisation for the improvement of food safety. The initiative promotes the establishment of international audits to evaluate food suppliers.

GLOBALGAP

A private-sector organisation that certifies agricultural and aquacultural products. The standard for ‘good agricultural practice’ (GAP) resulted from an initiative of European retail companies.

Governance

Statutory and factual regulatory framework for the management and supervision of a company.

Governance management system

System for controlling all management and monitoring processes of a company. The METRO governance management system comprises the risk management system, the internal control system, the compliance management system and the internal auditing system.
H

HoReCa

Short for hotel, restaurant and catering businesses. The HoReCa segment is an important customer group for METRO.
I

IASB (International Accounting Standards Board)

An independent international body with head offices in London that develops and continually revises the International Financial Reporting Standards (IFRS).

IFRIC

Interpretation on IFRS prepared by the IFRS Interpretations Committee (or its predecessor) and approved by the IASB.

IFRS 16 – Leases

Standard adopted by the IASB in January 2016 regarding the handling of leases. Under the new rules (right-of-use model), lessees must recognise leases in most cases as rights of use and lease liabilities in the balance sheet.

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.

ISAE (International Standard on Assurance Engagements)

Standards for the procedure of auditors for assurance engagements published by the International Auditing and Assurance Standards Board and intended for uniform application worldwide.
L

Like-for-like sales growth

The sales growth measured in local currency generated on a comparable space or in relation to a comparable panel of locations or merchandising concepts, such as online shopping and delivery. Only sales from locations with a comparable history of at least 1 year are taken into account. Locations that are affected by openings, closures or significant renovations in the reporting year or in the comparison year are excluded from the analysis.
M

Mark-to-market valuation

Calculation of the fair value of financial instruments on the basis of market prices at a particular assessment date.

Multichannel retail

Combination of traditional store-based retail with e-commerce, social media as well as applications for smartphones and tablets. Integrating various channels offers consumers a flexible and seamless shopping experience, since the channels are interlinked at all purchasing phases.
N

Net debt

The net debt results from the balance of financial liabilities (including liabilities from leases), cash and cash equivalents plus financial investments. Financial investments include short-term bank deposits and liquid debt instruments that can be sold at short notice.

Net Promoter Score (NPS)

Key figure that measures the success and customer satisfaction of a business. A standardised customer survey provides ratings from customers that can be used to determine a comparable cross-company measured value.

Net working capital

The net working capital includes inventories, trade receivables and receivables due from suppliers included in the item other financial and non-financial assets. Trade liabilities are deducted from the total amount of these items.
O

Omnichannel retail

Combination of traditional store-based retail with e-commerce, social media as well as applications for smartphones and tablets. Integrating all channels offers consumers a flexible and seamless shopping experience, since the channels are holistically linked in all purchasing phases.

Own brands

Brand products with an attractive price/performance ratio developed by a retail company and protected by trademark law.
P

Performance share

As part of performance-related participation agreements, a performance share entitles its owner to a cash payment matching the share price.

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.
R

Rating

In the financial sector, rating represents the systematic, qualitative measurement of creditworthiness. Ratings are expressed in various grades of creditworthiness. Well-known agencies that perform ratings are Standard & Poor’s, Moody’s and Fitch.

Return on Capital Employed (RoCE)

A key figure that indicates the rate at which the employed capital (less liquid funds and short-term borrowing) is bearing interest at METRO.
S

SCO (Service Companies and Offices)

This term refers to a METRO customer group and includes service providers, public authorities, etc.

Sedex audit according to SMETA

Sedex, a data platform for transparency in the sustainability commitment of companies, provides SMETA (Sedex Members Ethical Trade Audit), one of the world’s most frequently used concepts for social audits. The audit is focused on working conditions, occupational safety, environmental management and business ethics as well as respect for human rights and temporary employment.

SME services

Abbreviation for small and medium-sized enterprise services. Services for small and medium-sized enterprises. SME services stands for METRO’s strategic approach of offering customers customised solutions for the challenges of their business operations. In addition to food and non-food items, it includes professional services and digital solutions. By intertwining services and product ranges, METRO will be able to offer its customers a more comprehensive assortment and respond to their needs in a targeted manner.

Social compliance

The adherence to laws, guidelines, standards, codes and/or social conventions by which an organisation ensures socially responsible operations within its value and supply chains. The aim is to ensure the safety and health of employees and to protect their basic rights in their own company as well as among its suppliers.

Start-up company

Newly founded company characterised by an outstanding business idea and a high degree of innovation.

Sustainable Development Goals (SDGs)

Under the title ‘Transforming our World: the 2030 Agenda for Sustainable Development’, the United Nations formulated political goals. They are addressed to the entire international community, to companies as well as to private individuals. The agenda includes 17 main objectives that take into account all 3 dimensions of sustainability: economic, social and environmental. METRO is aware of its responsibility and readily contributes to the achievement of the goals.
T

Task Force on Climate-related Financial Disclosures (TCFD)

Task force deployed by the Financial Stability Board (FSB) in 2015 with the objective of consistently disclosing climate-related financial risks in order to provide different stakeholders with consistent information. The task force’s recommendations are intended to help companies customise their climate-related risk reporting to the needs of investors. Information is published on a voluntary basis.

Total shareholder return (TSR)

A key figure that is used to assess the performance of equity investments. It accounts for investment income and dividends.

Traders

The term ‘Traders’ at METRO refers to the customer group of independent resellers such as operators of small grocery stores and kiosks.

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.
W

Weighted average cost of capital (WACC)

The WACC results from the weighted average of the cost rate for equity and borrowing, in each case based on a capital market-based derivation. The weighting is based on the equity and borrowing components of METRO measured at market prices.

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