As part of the sCore strategy, METRO is aligned towards long-term, profitable growth. Our primary objective here is to increase the company value permanently. In connection with sCore, METRO has also introduced specific key figures which are used to continuously measure and review the implementation status of the key strategic elements. At the top of the key figure system are core key figures, which are supplemented or operationalised at subsequent levels with other specific key figures. In addition to the management system, the remuneration system for the Management Board is also intended to support implementation of the business strategy through the value-oriented and long-term management of METRO which takes sustainability aspects into account. Specifically, METRO uses the key figures described in the following for the planning, management and control of our business activities as well as for the majority of Management Board remuneration:
Financial key performance indicators
In light of the focus on long-term, profitable growth, total sales growth and adjusted EBITDA are the most important key performance indicators for METRO. As such, they are crucial for internal management and the assessment of our business development and thus also the core of our outlook. To account for operating performance, total sales growth is adjusted for currency effects. In addition, we also consider total sales growth as a key figure adjusted for portfolio changes, that is, adjusted for significant acquisitions and/or divestments in the financial year. This perspective adjusted for portfolio changes also basically represents the starting point for the outlook.
With respect to earnings, adjusted EBITDA, that is, excluding earnings contributions from real estate transactions and transformation costs (+) or transformation gains (−), reflects the operating efficiency of METRO in a transparent format. Irrespective of it, the development of real estate assets and the proceeds from divestments remain core components of the group’s real estate strategy. Transformation costs generally only comprise non-regularly recurring expenses and gains from strategic portfolio adjustments.
Other important key performance indicators of METRO are the profit or loss for the period and the earnings per share. These key figures ensure that the tax and net financial result as well as impairment losses are given consideration in addition to the operational result. Thereby, they allow for a holistic assessment of METRO’s earnings position from the perspective of the shareholders.
The strategic customer sales share, the FSD sales share, the digital sales share and the own-brand sales share are further important sales-related key figures in connection with the strategy implementation.
The management of METRO’s financial and asset position aims at sustainably assuring liquidity and arranging cost-effective sources for the financing requirements of our subsidiaries.
We regularly analyse the net working capital for the purpose of managing the operational business and capital deployment.
Additionally, with regard to the appropriation of funds, we separately consider the investments that form the foundation for METRO’s future growth and the long-term earnings performance as well as its digitalisation and decarbonisation. Investments are defined as additions to non-current assets (excluding financial instruments and deferred tax assets).
We use net debt and free cash flow as key figures to manage liquidity and capital structure. Free cash flow represents the unrestricted funds generated throughout the financial year, which are primarily available for redemption of borrowings, distribution of dividends or for M&A activities.
The Return on Capital Employed (RoCE) key figure is still used to assess the profitability of the operational business. It measures the Return on Capital Employed (RoCE = EBIT/average capital employed) in a certain period under review and allows for an assessment of the performance by comparing it to the cost of capital before taxes. The latter represents a minimum yield on the employed capital at market rates and is based on capital market models. It is determined annually at the end of the financial year.
Non-financial key performance indicators
In addition to the financial key figures presented, METRO factors selected non-financial key figures into its management system: availability of goods, net promoter score (NPS) of strategic customers and sustainability aspects, specifically the reduction of CO2 emissions and the reduction of food waste. METRO has set long-term targets in this regard that are presented separately in the company’s Corporate Responsibility Report 2022/23.
- The specific definitions of the individual key figures are listed in the glossary of the annual report. The development of the key figures is presented in the economic report.