Independent auditor’s report

To METRO AG, Düsseldorf

Report on the Audit of the Consolidated Financial Statements and of the Combined Management Report

Opinions

We have audited the consolidated financial statements of METRO AG, Düsseldorf, and its subsidiaries (the Group), which comprise the consolidated balance sheet as at 30 September 2024, the consolidated income statement, the reconciliation from profit or loss to total comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the financial year from 1 October 2023 to 30 September 2024, as well as the notes to the consolidated financial statements, including a summary of significant accounting policies. In addition, we have audited the management report of METRO AG and the Group (hereinafter “combined management report”) for the financial year from 1 October 2023 to 30 September 2024.

In accordance with German legal requirements, we have not audited the content of those components of the combined management report specified in the “Other Information” section of our auditor’s report.

In our opinion, on the basis of the knowledge obtained in the audit,

• the accompanying consolidated financial statements comply, in all material respects, with the IFRSs as adopted by the EU, and the additional requirements of German commercial law pursuant to Section 315e (1) HGB [Handelsgesetzbuch: German Commercial Code] and, in compliance with these requirements, give a true and fair view of the assets, liabilities, and financial position of the Group as at 30 September 2024, and of its financial performance for the financial year from 1 October 2023 to 30 September 2024, and
• the accompanying combined management report as a whole provides an appropriate view of the Group’s position. In all material respects, this combined management report is consistent with the consolidated financial statements, complies with German legal requirements and appropriately presents the opportunities and risks of future development. Our opinion on the combined management report does not cover the content of those components of the combined management report specified in the “Other Information” section of the auditor’s report.

Pursuant to Section 322 (3) sentence 1 HGB, we declare that our audit has not led to any reservations relating to the legal compliance of the consolidated financial statements and of the combined management report.

Basis for the Opinions

We conducted our audit of the consolidated financial statements and of the combined management report in accordance with Section 317 HGB and the EU Audit Regulation No 537/2014 (referred to subsequently as “EU Audit Regulation”) and in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). Our responsibilities under those requirements, principles and standards are further described in the “Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements and of the Combined Management Report” section of our auditor’s report. We are independent of the group entities in accordance with the requirements of European law and German commercial and professional law, and we have fulfilled our other German professional responsibilities in accordance with these requirements. In addition, in accordance with Article 10 (2)(f) of the EU Audit Regulation, we declare that we have not provided non-audit services prohibited under Article 5 (1) of the EU Audit Regulation. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinions on the consolidated financial statements and on the combined management report.

Key Audit Matters in the Audit of the Consolidated Financial Statements

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements for the financial year from 1 October 2023 to 30 September 2024. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, we do not provide a separate opinion on these matters.

• Impairment testing of goodwill
  
  

  For the accounting policies applied, we refer to the disclosures in the notes in the section entitled “Notes to the group accounting principles and methods”. Disclosures on the development of goodwill as well as impairment testing can be found in Note 17 to the consolidated financial statements. We also refer to Note 14 on impairment.

The financial statement risk

Goodwill in the amount of EUR 721 million was reported in the consolidated financial statements of METRO as at 30 September 2024. Goodwill is allocated pursuant to IAS 36 to groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose. These units are the organisational units for each country for METRO.

The recognised goodwill is tested for impairment once a year as at 30 June and, if there are any indicators of impairment, also on an ad hoc basis.

For impairment testing, the carrying amount of the respective organisational unit including allocated goodwill is compared with its recoverable amount. If the carrying amount including allocated goodwill exceeds the recoverable amount, there is a need for impairment. The recoverable amount is the higher of fair value less costs to sell and value in use of the organisational unit. Fair value is measured according to the discounted cash flow method.

Impairment testing is complex and based on a range of assumptions that require judgement. This is based on cash flow planning, the starting point of which is the multi-year plan prepared by METRO. Future cash flows are discounted using the weighted discount rate of the respective organisational unit. The result of this impairment testing is heavily dependent upon estimates of the expected business and earnings performance of the organisational units as well as the estimated discount rate used and is therefore subject to considerable uncertainty.

In the consolidated financial statements as at 30 September 2024, the goodwill of the affected groups of cash-generating units was fully written down by a total of EUR 20 million. This was attributable especially to cash-generating unit METRO Austria. The impairment losses were largely driven by lower expectations for sales revenue and earnings as well as the associated expected future cash flows.

The Company’s sensitivity analysis for an additional group of cash-generating units indicated that a reasonably possible change in the discount rate or expected future cash flows would cause impairment.

There is a risk for the financial statements that impairment losses are not recognised in the correct amount.

IAS 36 requires extensive disclosures in the notes to the financial statements, particularly also in terms of METRO’s consideration of the potential sensitivity of material measurement assumptions and parameters. There is the risk that the disclosures in the notes are not complete and adequate.

Our audit approach

We evaluated how indicators of goodwill impairment are identified by METRO. To assess the annual impairment test, we made a risk-oriented, deliberate selection of the organisational units with goodwill.

For the selected organisational units, we assessed the appropriateness of the key assumptions and the calculation method of the Company with the involvement of our valuation specialists. To this end, we discussed and assessed the expected business and earnings development with regard to sales revenue and margin development in the detailed planning horizon with those responsible for planning. We also reconciled this information with internally available documents, such as monthly reports and strategic planning documentation, as well as the budget prepared by the Management Board and approved by the Supervisory Board. We additionally assessed the consistency of the assumptions by reconciling them with general and industry-specific market expectations.

In this regard, we also confirmed the appropriateness of METRO’s budget process. As a result of the continuing uncertainties, METRO has prepared multi-year planning based on scenarios. Finally, we critically analysed previous adherence to budget on the basis of past target/actual deviations prepared by METRO.

To assess the methodically and mathematically correct implementation of the valuation method, we verified the Company’s valuation using our own calculations and analysed deviations.

In view of the high sensitivity of the calculated fair values to changes in the discount rates or expected future cash flows, we analysed – taking into account country-specific particulars – the underlying assumptions and data of the discount rates and the expected future cash flows and assessed the calculation formula for computational and formal accuracy. Based on the sensitivity analyses carried out by METRO, we examined to what extent a reasonably possible change to the assumptions underlying the calculation could require recognising an impairment loss.

We also evaluated the completeness and adequacy of the disclosures in the notes to the consolidated financial statements pursuant to IAS 36. This also included an assessment of the appropriateness of disclosures in the notes according to IAS 36.134(f) on sensitivity in the event of a reasonably possible change in the key assumptions used for measurement.

Our observations

The valuation model used for impairment testing is appropriate and in line with applicable IFRS accounting policies. The Company’s assumptions and data used for measurement are within an appropriate range and are balanced. The disclosures made in the notes in this connection are appropriate.

• Impairment testing of land, buildings and right-of-use assets
  
  

  For the accounting policies applied, we refer to the disclosures in the notes in the section entitled “Notes to the group accounting principles and methods”. Disclosures on movements in property, plant and equipment are provided under Note 18 in the notes to the consolidated financial statements. We also refer to Note 14 in the notes on depreciation and impairment of non-current assets.

The financial statement risk

The consolidated financial statements of METRO as at 30 September 2024 report land and buildings with a carrying amount of EUR 2,164 million and right-of-use assets (according to IFRS 16) with a carrying amount of EUR 2,271 million, which includes EUR 2,036 million relating to land and buildings. In the reporting year, impairment losses totalling EUR 19 million were recognised for land, buildings and right-of-use assets.

In accordance with IAS 36, real estate and right-of-use assets must be tested for impairment if there are any indications of potential impairment. Operating performance and the real estate market are relevant indicators of any potential impairment. Pursuant to IAS 36, the carrying amount of the affected cash-generating unit must be compared with the recoverable amount for impairment testing purposes. The recoverable amount of a cash-generating unit is the higher of its fair value less costs to sell and its value in use. METRO regularly carries out impairment tests based on fair value less costs to sell. The basis for measurement is the present value of the future cash flows of the respective cash-generating unit, which is determined using the discounted cash flow method.

Impairment testing is complex and based on a range of assumptions that require judgement. It is based on the cash flow planning of the cash-generating unit. Future cash flows are discounted using the country-specific discount rates and discount rates specific to real estate. The result of impairment testing is heavily dependent on the estimate of future cash flows and market rent, as well as on the country-specific discount rates and the real estate-specific discounting and capitalisation rates used and, therefore, is subject to considerable uncertainty.

There is the risk that necessary impairment losses are not recognised in the correct amount or are recognised too late.

Our audit approach

We evaluated how indications of impairment of land, buildings and right-of-use assets are identified by METRO.

Our audit, which we carried out with the involvement of our own valuation experts, included, among others, assessing the appropriateness of the valuation method underlying the impairment testing, particularly in terms of the accounting policies used as well as formal and computational accuracy.

We also confirmed the appropriateness of the future cash flows and market rents used in the calculation, among others, by comparing this information with the current budget figures as well as through comparison with general and use-specific market data. In this regard, we also confirmed the appropriateness of METRO’s budget process. As a result of the continuing uncertainties, METRO has prepared multi-year planning based on scenarios. We analysed previous adherence to the budget on the basis of past target/actual deviations prepared by METRO.

To assess the methodically and mathematically correct implementation of the valuation method, we verified the Company’s calculation of real estate’s fair value by using our own calculations and analysed deviations.

Furthermore, we evaluated the country-specific discount rates as well as the real estate-specific discount and capitalisation rates.

Our observations

The indications of impairment of land, buildings and right-of-use assets were appropriately identified. The valuation method used for impairment testing is appropriate and in line with applicable accounting policies. The Company’s assumptions and data used for measurement are appropriate and balanced.

• Consolidation of business activities in Russia
  
  

  For the accounting policies applied, we refer to the disclosures in the notes in the section entitled “Notes to the group accounting principles and methods”. Information concerning the figures on Russian business activities can be found in the segment reporting section in the notes (Note 38).

The financial statement risk

The METRO Group has business units in Russia that contributed EUR 2,438 million to the consolidated sales revenue and EUR 143 million to adjusted group EBITDA in reporting year 2023/2024, as well as EUR 520 million to non-current segment assets as at 30 September 2024.

The aforementioned business activities are spread out across a total of five legal entities. These are shown in the list of shareholdings, which is included as an appendix to the consolidated financial statements, as well as disclosed in the German Company Register [Unternehmensregister]. The business units are fully consolidated pursuant to IFRS 10.

The Company continuously checks whether the requirements for consolidation in compliance with IFRS 10 are still met without any changes. Also due to the many sanctions and counter-sanctions in connection with the ongoing war in Ukraine, there are restrictions and difficulties in conducting transactions between the non-Russian parent company and the Russian subsidiaries, such as concerning the distribution of dividends. These restrictions and difficulties could impact the ability to exercise control over the Russian activities, which conflicts with consolidation within the meaning of IFRS 10. The assessment as to whether METRO has the power of control over the decisive transactions and can influence the returns from the Russian business units is based on management’s estimates.

There is the risk for the consolidated financial statements that the Russian business units are improperly consolidated.

Our audit approach

We first gained an understanding of METRO’s process activities to assess control within the meaning of IFRS 10 and evaluated the Company’s documentation with regard to further consolidation of the Russian business units.

We also consulted with the Management Board as to what extent the operating activities in Russia should be continued and supplemented these findings by inspecting committee minutes.

Moreover, we discussed to what extent the management of Russian activities by the Group is possible without change and in what way restrictions have resulted for METRO.

With the involvement of our own specialists, we examined the existing sanctions and counter-sanctions for any relevant provisions that could affect METRO. We compared the results of this examination with the Company’s own analyses.

Furthermore, we analysed the possibility of payments being made from and to Russia with regard to any restrictions and their potential relevance for the decision to consolidate entities.

In addition, we critically discussed our understanding with the component auditors of the Russian business units and, in doing so, drew on findings from the inspection of their working papers.

Our observations

METRO’s approach for assessing the requirements for consolidating the Russian business units is appropriate and in line with the applicable principles of IFRS. The assumptions made by management regarding consolidation of the Russian entities are appropriate.

Other Information

The Management Board and/or the Supervisory Board are/is responsible for the other information. The other information comprises the following components of the combined management report, whose content was not audited:

• the combined non-financial statement for the Company and the Group, which is contained in Section 1.3 of the combined management report,
• the combined corporate governance statement for the Company and the Group referred to in the combined management report, and
• information extraneous to management reports and marked as unaudited.

The other information also includes the remaining parts of the annual report. The other information does not include the consolidated financial statements, the combined management report information audited for content and our auditor’s report thereon.

Our opinions on the consolidated financial statements and on the combined management report do not cover the other information, and consequently we do not express an opinion or any other form of assurance conclusion thereon.

In connection with our audit, our responsibility is to read the other information and, in so doing, to consider whether the other information

• is materially inconsistent with the consolidated financial statements, with the combined management report information audited for content or our knowledge obtained in the audit, or
• otherwise appears to be materially misstated.

In accordance with our engagement letter, we conducted a separate limited assurance engagement of the non-financial statement. Please refer to our assurance report dated 5 December 2024 for information on the nature, scope and findings of this assurance.

Responsibilities of the Management Board and the Supervisory Board for the Consolidated Financial Statements and the Combined Management Report

The Management Board is responsible for the preparation of consolidated financial statements that comply, in all material respects, with IFRSs as adopted by the EU and the additional requirements of German commercial law pursuant to Section 315e (1) HGB and that the consolidated financial statements, in compliance with these requirements, give a true and fair view of the assets, liabilities, financial position, and financial performance of the Group. In addition, the Management Board is responsible for such internal control as it has determined necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud (i.e., fraudulent financial reporting and misappropriation of assets) or error.

In preparing the consolidated financial statements, the Management Board is responsible for assessing the Group’s ability to continue as a going concern. They also have the responsibility for disclosing, as applicable, matters related to going concern. In addition, they are responsible for financial reporting based on the going concern basis of accounting unless there is an intention to liquidate the Group or to cease operations, or there is no realistic alternative but to do so.

Furthermore, the Management Board is responsible for the preparation of the combined management report that, as a whole, provides an appropriate view of the Group’s position and is, in all material respects, consistent with the consolidated financial statements, complies with German legal requirements, and appropriately presents the opportunities and risks of future development. In addition, the Management Board is responsible for such arrangements and measures (systems) as they have considered necessary to enable the preparation of a combined management report that is in accordance with the applicable German legal requirements, and to be able to provide sufficient appropriate evidence for the assertions in the combined management report.

The Supervisory Board is responsible for overseeing the Group’s financial reporting process for the preparation of the consolidated financial statements and of the combined management report.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements and of the Combined Management Report

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and whether the combined management report as a whole provides an appropriate view of the Group’s position and, in all material respects, is consistent with the consolidated financial statements and the knowledge obtained in the audit, complies with the German legal requirements and appropriately presents the opportunities and risks of future development, as well as to issue an auditor’s report that includes our opinions on the consolidated financial statements and on the combined management report.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Section 317 HGB and the EU Audit Regulation and in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer (IDW) will always detect a material misstatement. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements and this combined management report.

We exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements and of the combined management report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinions. The risk of not detecting a material misstatement resulting from fraud is higher than the risk of not detecting a material misstatement resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls.
• Obtain an understanding of internal control relevant to the audit of the consolidated financial statements and of arrangements and measures (systems) relevant to the audit of the combined management report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of these systems.
• Evaluate the appropriateness of accounting policies used by the Management Board and the reasonableness of estimates made by the Management Board and related disclosures.
• Conclude on the appropriateness of the Management Board’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditor’s report to the related disclosures in the consolidated financial statements and in the combined management report or, if such disclosures are inadequate, to modify our respective opinions. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to be able to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements present the underlying transactions and events in a manner that the consolidated financial statements give a true and fair view of the assets, liabilities, financial position and financial performance of the Group in compliance with IFRSs as adopted by the EU and the additional requirements of German commercial law pursuant to Section 315e (1) HGB.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express opinions on the consolidated financial statements and on the combined management report. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our opinions.
• Evaluate the consistency of the combined management report with the consolidated financial statements, its conformity with [German] law, and the view of the Group’s position it provides.
• Perform audit procedures on the prospective information presented by the Management Board in the combined management report. On the basis of sufficient appropriate audit evidence we evaluate, in particular, the significant assumptions used by the Management Board as a basis for the prospective information, and evaluate the proper derivation of the prospective information from these assumptions. We do not express a separate opinion on the prospective information and on the assumptions used as a basis. There is a substantial unavoidable risk that future events will differ materially from the prospective information.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with the relevant independence requirements, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, the actions taken or safeguards applied to eliminate independence threats.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter.

Other Legal and Regulatory Requirements

Report on the Assurance on the Electronic Rendering of the Consolidated Financial Statements and the Combined Management Report Prepared for Publication Purposes in Accordance with Section 317 (3a) HGB

We have performed assurance work in accordance with Section 317 (3a) HGB to obtain reasonable assurance about whether the rendering of the consolidated financial statements and the combined management report (hereinafter the “ESEF documents”) contained in the electronic file “METRO ESEF final-2024-09-30-de V6.zip” (SHA256-Hashwert: 8db75d559baf840c3f3a81ed0b4dfc699746ec381f02f0d509a706107151ee4b) made available and prepared for publication purposes complies in all material respects with the requirements of Section 328 (1) HGB for the electronic reporting format (“ESEF format”). In accordance with German legal requirements, this assurance work extends only to the conversion of the information contained in the consolidated financial statements and the combined management report into the ESEF format and therefore relates neither to the information contained in these renderings nor to any other information contained in the file identified above.

In our opinion, the rendering of the consolidated financial statements and the combined management report contained in the electronic file made available, identified above and prepared for publication purposes complies in all material respects with the requirements of Section 328 (1) HGB for the electronic reporting format. Beyond this assurance opinion and our audit opinion on the accompanying consolidated financial statements and the accompanying combined management report for the financial year from 1 October 2023 to 30 September 2024 contained in the “Report on the Audit of the Consolidated Financial Statements and the Combined Management Report” above, we do not express any assurance opinion on the information contained within these renderings or on the other information contained in the file identified above.

We conducted our assurance work on the rendering of the consolidated financial statements and the combined management report contained in the file made available and identified above in accordance with Section 317 (3a) HGB and the IDW Assurance Standard: Assurance Work on the Electronic Rendering of Financial Statements and Management Reports Prepared for Publication Purposes in Accordance with Section 317 (3a) HGB (IDW AsS 410 (06.2022)) and the International Standard on Assurance Engagements 3000 (Revised). Our responsibility in accordance therewith is further described below. Our audit firm applies the IDW Standard on Quality Management 1: Requirements for Quality Management in Audit Firms (IDW QS 1).

The Company’s Management Board is responsible for the preparation of the ESEF documents including the electronic rendering of the consolidated financial statements and the combined management report in accordance with Section 328 (1) sentence 4 item 1 HGB and for the tagging of the consolidated financial statements in accordance with Section 328 (1) sentence 4 item 2 HGB.

In addition, the Company’s Management Board is responsible for such internal control that they have considered necessary to enable the preparation of ESEF documents that are free from material intentional or unintentional non-compliance with the requirements of Section 328 (1) HGB for the electronic reporting format.

The Supervisory Board is responsible for overseeing the process of preparing the ESEF documents as part of the financial reporting process.

Our objective is to obtain reasonable assurance about whether the ESEF documents are free from material intentional or unintentional non-compliance with the requirements of Section 328 (1) HGB. We exercise professional judgement and maintain professional scepticism throughout the assurance work. We also:

• Identify and assess the risks of material intentional or unintentional non-compliance with the requirements of Section 328 (1) HGB, design and perform assurance procedures responsive to those risks, and obtain assurance evidence that is sufficient and appropriate to provide a basis for our assurance opinion.
• Obtain an understanding of internal control relevant to the assurance on the ESEF documents in order to design assurance procedures that are appropriate in the circumstances, but not for the purpose of expressing an assurance opinion on the effectiveness of these controls.
• Evaluate the technical validity of the ESEF documents, i.e. whether the file made available containing the ESEF documents meets the requirements of the Commission Delegated Regulation (EU) 2019/815, as amended as at the reporting date, on the technical specification for this electronic file.
• Evaluate whether the ESEF documents provide an XHTML rendering with content equivalent to the audited consolidated financial statements and the audited combined management report.
• Evaluate whether the tagging of the ESEF documents with Inline XBRL technology (iXBRL) in accordance with the requirements of Articles 4 and 6 of the Commission Delegated Regulation (EU) 2019/815, as amended as at the reporting date, enables an appropriate and complete machine-readable XBRL copy of the XHTML rendering.

Further Information pursuant to Article 10 of the EU Audit Regulation

We were elected as group auditor at the Annual General Meeting on 7 February 2024. We were engaged by the Supervisory Board on 26 March 2024. We have been the group auditor of METRO AG without interruption since financial year 2016/2017.

We declare that the opinions expressed in this auditor’s report are consistent with the additional report to the audit committee pursuant to Article 11 of the EU Audit Regulation (long-form audit report).

Other matter – Use of the Auditor’s Report

Our auditor’s report must always be read together with the audited consolidated financial statements and the audited combined management report as well as the examined ESEF documents. The consolidated financial statements and combined management report converted to the ESEF format – including the versions to be entered in the German company register [Unternehmensregister] – are merely electronic renderings of the audited consolidated financial statements and the audited combined management report and do not take their place. In particular, the ESEF report and our assurance opinion contained therein are to be used solely together with the examined ESEF documents made available in electronic form.

German Public Auditor Responsible for the Engagement

The German Public Auditor responsible for the engagement is Michael Jessen.

Düsseldorf,​​ 5 December 2024

KPMG AG
Wirtschaftsprüfungsgesellschaft

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