With the sCore strategy, METRO is aligned towards long-term, profitable growth. Our primary objective here is to increase the company value permanently. In the course of sCore, METRO 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 line with 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 form the core of our guidance. In order to reflect operational performance adequately, total sales growth is adjusted for currency effects. In addition, we 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 guidance.
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. In the reporting period, transformation costs only comprise non-regularly recurring expenses and gains from strategic portfolio adjustments.
METRO has defined targets and measures to achieve those targets for total sales growth and adjusted EBITDA that are presented in chapter 2 economic report – 2.2 asset, financial and earnings position, and in chapter 3 outlook report.
Profit or loss for the period and earnings per share are other important key performance indicators, which take account of depreciation, amortisation and impairment losses and the tax and net financial result in addition to the operating 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 implementation of our sCore strategy.
The management of METRO’s financial and asset position aims at sustainably assuring liquidity and arranging cost-effective sources for financing requirements.
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, 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 the key figures of net debt and free cash flow 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 indicator return on capital employed (RoCE) is 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 and enables an assessment of performance by comparing it to the cost of capital before taxes, which 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 defined long-term targets in this regard that are presented in chapter 1.3 combined non-financial statement and separately in the ESG Key Figures Report 2023/24.
Changes to key performance indicators from financial year 2024/25 onwards
In connection with the productivity measures implemented to meet our sCore targets by 2030, restructuring costs will be incurred, starting in financial year 2024/25, which will be adjusted for the adjusted EBITDA key figure. In order to continue to present METRO’s performance efficiency in a transparent and comparable manner, adjusted EBITDA will in future continue to show earnings excluding real estate transactions and transformation costs (+)/income (−), but transformation costs will then include not only portfolio measures, but also costs incurred in connection with group-wide restructuring initiatives. All other most important and important key figures will remain unchanged.