31. Equity

The subscribed capital of METRO AG as of 30 September 2022 remains unchanged and is broken down as follows:

As of 30 September 2022 and as of 30 September 2021, the subscribed capital of METRO AG amounted to €363,097,253. It is divided into a total of 360,121,736 ordinary shares (pro rata value of the share capital: €360,121,736, approximately 99.18%), as well as 2,975,517 preference shares (pro rata value of the share capital: €2,975,517, approximately 0.82%). Each no-par-value share in the company has a notional interest of €1.00 in the share capital.

Each ordinary share entitles to a single vote in the company’s Annual General Meeting. The ordinary shares carry full dividend rights. In contrast to ordinary shares, preference shares do not carry voting rights but confer a preferential entitlement to profits as prescribed in § 21 of the Articles of Association of METRO AG, which state:

(1) Holders of non-voting preference shares will receive a preliminary dividend from the annual balance sheet profit in the amount of €0.17 for each preference share.

(2) Should the balance sheet profit available for distribution not suffice in any financial year to pay the preliminary dividend, the arrears (excluding any interest) shall be paid from the balance sheet profit of subsequent financial years in such manner that any older arrears are paid off prior to any more recent ones and that the preference dividends payable from the profit of a financial year are not distributed until all accrued arrears have been paid.

(3) Following distribution of the preliminary dividends, the holders of ordinary shares will be paid a dividend of €0.17 for each ordinary share. Subsequently, a non-cumulative extra dividend per share will be paid to the holders of non-voting preference shares. The extra dividend shall amount to 10% of the dividend paid to the holders of ordinary shares under observation of Section 4, provided such dividend equals or exceeds €1.02 per ordinary share.

(4) The holders of non-voting preference shares and of ordinary shares will equally share in any additional profit distribution in the proportion of their shares in the share capital.’

Authorised capital

The Annual General Meeting on 11 February 2022 authorised the Management Board to increase the share capital, subject to the consent of the Supervisory Board, by issuing new ordinary shares against cash contributions in one or several tranches for a total maximum of €108,929,175 by 10 February 2027 (authorised capital). Existing shareholders may exercise their subscription rights. Subject to the consent of the Supervisory Board, the Management Board is authorised to exclude shareholder subscription rights to offset fractional amounts. To date, the authorised capital has not been fully utilised.

Contingent capital

The Annual General Meeting held on 16 February 2018 resolved a contingent increase in the share capital by up to €50,000,000, divided into a maximum of 50,000,000 ordinary shares (contingent capital). This contingent capital increase is related to the establishment of an authority of the Management Board to issue, subject to the consent of the Supervisory Board, one or several tranches of warrant or convertible bearer bonds (collectively ‘bonds’) with a nominal value of up to €1,500,000,000 prior to 15 February 2023, and to grant the holders of warrant or convertible bearer bonds warrant or conversion rights or to impose warrant or conversion obligations on them for ordinary bearer shares in METRO AG representing up to €50,000,000 of the share capital in accordance with the terms of the warrant or convertible bearer bonds, or to provide for the company’s right to deliver ordinary shares in the company as full or partial payment in lieu of a cash redemption of the bonds. The Management Board is, subject to the consent of the Supervisory Board, authorised to exclude shareholder subscription rights in certain cases. To date, no warrants and/or convertible bearer bonds have been issued under the aforementioned authority.

• For more information about the voting rights, the company’s authorised capital and contingent capital, or the authority to issue warrant and/or convertible bearer bonds, see chapter 6 takeover-related disclosures in the combined management report.

Capital reserve and reserves retained from earnings

Prior to the effective date of the reclassification and demerger of CECONOMY AG on 12 July 2017, METRO AG was not yet a group within the meaning of IFRS 10. Accordingly, combined financial statements of METRO Wholesale & Food Specialist GROUP (hereinafter: MWFS GROUP) were still prepared for METRO AG’s stock exchange prospectus. Equity in the combined financial statements was the residual amount from the combined assets and liabilities of MWFS GROUP. Following the demerger, METRO became an independent group with METRO AG as the listed parent company. Therefore, the equity in the consolidated financial statements is subdivided according to legal requirements. The subscribed capital of €363 million and the capital reserve of €6,118 million were recognised at the carrying amounts from the Annual Financial Statements of METRO AG as of 30 September 2017. For this purpose, a transfer was made from the equity item net assets, recognised as of 1 October 2016, attributable to the former METRO GROUP of the combined financial statements of MWFS GROUP. The remaining negative amount of this equity item was reclassified to other reserves retained from earnings. Thus, it cannot be traced back to a long-term loss history.

Reserves retained from earnings can be broken down as follows:

Changes in the financial instruments presented above consist of the following components:

The valuation effects of equity and debt instruments relate to the subsequent measurement of investments.

In addition, currency translation differences recognised in equity had an impact of €744 million (2020/21: €110 million). They can be broken down as follows:

The first-time adaption of IAS 29 led to an effect of €28 million at the transition date, which was taken into account as an adjustment as of 1 October 2021. The translation of the local financial statements to the group currency without affecting profit or loss resulted in an increase of €705 million in other comprehensive income, particularly due to the development of the Russian rouble. Furthermore, the derecognition through profit or loss of cumulative currency differences of companies that were deconsolidated or discontinued within financial year 2021/22 had an impact of €11 million.

The remeasurement of defined benefit pension plans resulted in effects outside of profit or loss before deferred taxes in the amount of €150 million. Moreover, as part of the deconsolidation of Belgium and the buy-out of pension obligations in the United Kingdom, the effects from the valuation of pension plans (€136 million) included in other comprehensive income were reclassified to other reserves retained from earnings.

• Additional information on remeasurement of defined benefit pension plans can be found in no. 32 – provisions for post-employment benefits plans and similar obligations.

• An overview of the shares of other comprehensive income of associates/joint ventures accounted for using the equity method can be found in no. 23 – financial investments and investments accounted for using the equity method.

• An overview of the tax effects on components of other comprehensive income can be found in no. 25 – deferred tax assets/deferred tax liabilities.

The remaining reserves retained from earnings decreased from €−2,231 million by €175 million to €−2,406 million. The decrease is mainly the result of the profit or loss for the period attributable to the shareholders of METRO AG in the amount of €−334 million, the reclassification of the effects from the valuation of pension plans contained in other comprehensive income (including taxes) in the amount of €−135 million, as well as the withdrawal from the capital reserve and additions to reserves retained from earnings in the amount of €294 million, which had the opposite effect.

Non-controlling interests

Non-controlling interests comprise the shares held by third parties in the equity of the consolidated subsidiaries. As of 30 September 2022, they amount to €21 million (30/9/2021: €21 million).

• An overview of subsidiaries with major non-controlling interests is published in the notes to the group accounting principles and methods.

Appropriation of the balance sheet profit, dividend

Dividend distribution of METRO AG is based on the Annual Financial Statements of METRO AG prepared under German commercial law.

Since the annual financial statements do not show any distributable balance sheet profit earnings, there are no planned dividend distributions in financial year 2021/22 for ordinary shares or preference shares.