38. Segment reporting

METRO is active in the store-based wholesale trade with the brands METRO and MAKRO as well as in the delivery business (FSD) with the METRO delivery service and, among others, with the supply specialists Classic Fine Foods, Caterite, Pro à Pro, R Express, Aviludo, Pro a Pro Spain and Johan i Hallen Bergfalk (JHB). Apart from that, digital solutions round off the multichannel approach. Segmentation follows the group’s internal reporting as it is used as a basis for resource allocation and performance measurement by the Chief Operating Decision-Maker (member of the Management Board of METRO AG). Accordingly, the organisational unit for each country is an operating segment.

The operating segments are aggregated into reporting segments on the basis of their regional allocation. In this context, the regional allocation also reflects slight differences in the economic environment (for example market saturation, inflation level) and in the political and regulatory situation of the countries. This accordingly leads to the reporting segments West and East; in view of their historical significance for the group, the countries Germany and Russia are still presented as separate reporting segments. The segment Others includes in particular DISH Digital Solutions, the business unit that bundles the group’s digitalisation initiatives. It also includes METRO MARKETS and the service companies METRO PROPERTIES, METRO LOGISTICS, METRO DIGITAL and METRO SOURCING and others, which provide group-wide services in the areas of real estate, logistics, information technology, advertising and procurement. In the digital business sector, METRO MARKETS plays a special role with its B2B online marketplace for professional equipment for HoReCa customers. Through this distribution channel, METRO offers food and non-food articles from its own product range as well as products from third parties.

The main components of segment reporting are described below:

• External sales represent sales of the operating segments to third parties outside the group.
• Internal sales represent sales between the group’s operating segments. These transactions are settled at normal market conditions.
• The term ‘transformation costs’ comprises non-regularly-recurring effects from strategic portfolio adjustments. Starting in financial year 2024/25, transformation costs/income will comprise not only portfolio measures, but also costs incurred in connection with group-wide restructuring initiatives.
• The earnings contributions from real estate transactions include the EBITDA-effective earnings from the disposal of land and land usage rights and/or buildings as part of a disposal transaction. Earnings from the disposal of dedicated real estate companies or the disposal of shares in such companies capitalised at equity are, as a result of their commercial substance, also included in the earnings contributions from real estate transactions. The earnings have been reduced by cost components incurred in relation to real estate transactions.
• EBIT is the key ratio for segment reporting and describes operating earnings for the period before net financial result and income taxes. Intra-group rental contracts are shown as operating leases in the segments. The rental takes place at normal market conditions. In principle, impairment risks related to non-current assets are only shown in the segments where they represent group risks. In analogy, this also applies to deferred assets and liabilities, which are only shown at segment level if this was also required in the consolidated balance sheet.
• Segment investments include additions (including additions to the consolidation groups as well as effects from hyperinflationary accounting) to goodwill, other intangible assets and property, plant and equipment and investment properties. Exceptions to this are additions due to the reclassification of assets held for sale as non-current assets.
• In principle, transfers between segments are made based on the costs incurred from the group’s perspective.

The reconciliation from non-current segment assets to non-current group assets is shown in the following table:

In financial year 2023/24, significant external sales of €6,356 million (2022/23: €6,312 million) and significant non-current segment assets of €1,259 million (30/9/2023: €1,236 million) were attributable to France (in the segment West).