Report of the Supervisory Board

METRO celebrated its 60th birthday this year, and the many messages of congratulation we received from our customers, from the business world and from political figures are testimony to the value of what we have built over the last 6 decades. The group-wide implementation of our sCore strategy, with its consistent wholesale orientation and multichannel approach, resulted in positive sales development once again this financial year, generating growth across all regions and sales channels. METRO posted sales growth of 6% in the outlook view with an increase in total sales to €31 billion. The ongoing transformation requirements in the wholesale business, persistent cost pressures and the expiry of post-transaction effects meant that adjusted EBITDA came to €1,058 million.

A challenging economic landscape is to be expected again in the coming financial year. The Management Board will continue to drive sales growth and improve cash flow by boosting efficiency and productivity. To signal our focus on this goal, we streamlined our Management Board back in June and reorganised responsibilities so that all Board departments received additional operational functions. CEO Dr Steffen Greubel took on responsibility for METRO France in addition to METRO Deutschland. CFO Eric Riegger, who joined the Management Board of METRO AG in February, now also has overall responsibility for IT (METRO DIGITAL). Christiane Giesen has taken on the COO function alongside her role as Labour Director, and the new member of the Management Board Guillaume Deruyter is responsible for the CCMO department. We would like to thank Claude Sarrailh and Rafael Gasset, who have left the Management Board, for the valuable work they have done for the company.

I would also like to take this opportunity to say farewell to Xaver Schiller, the long-standing member and Vice Chairman of the Supervisory Board, and Prof. Dr Edgar Ernst, the former Chairman of the Audit Committee. They both have a long association with the Supervisory Board of METRO AG and I offer them my sincere thanks on behalf of the entire Supervisory Board for their dedication and constructive approach.

Finally, my thanks go to you, our shareholders, for believing in us during these turbulent economic times and for your confidence in the lasting success of our transformation.

Jürgen Steinemann

Chairman of the Supervisory Board

• More information about the Chairman of the Supervisory Board and the other members of the Supervisory Board can be found on the website www.metroag.de/en in the section About us – Supervisory Board.

Advice and supervision in consultation with the Management Board

In financial year 2023/24, the Supervisory Board performed the duties imposed on it by law, the Articles of Association and the Code of Procedure. We advised the Management Board in relation to the management of METRO AG and the group and supervised its activities. The Management Board has provided us with detailed written and verbal information on all significant matters within METRO at the Supervisory Board meetings and on other occasions in a timely manner and in accordance with the statutory requirements. Its reporting in particular included information on current business developments, on the intended business policies and other fundamental concerns relating to corporate planning as well as information about the situation of the company and the group (including the risk position, risk management and compliance). The Management Board provided explanations for any deviations from planned business performance. We have given our approval for individual business transactions, if it was required by law, the Articles of Association or internal regulations. Since no matters requiring clarification arose, we did not make use of the Supervisory Board’s rights of inspection and audit pursuant to § 111 Section 2 Sentences 1 and 2 of the German Stock Corporation Act (AktG). Managers from the relevant departments or subsidiaries of METRO attended Supervisory Board meetings to address particular agenda items. 

As the Chairman of the Supervisory Board, I also worked especially closely with the Chief Executive Officer, Dr Steffen Greubel, but also the other members of the Management Board, outside of meetings and regularly exchanged information with regard to key issues and pending decisions. I was in contact with the members of the Supervisory Board outside of meetings. In our capacity as committee chairmen, Willem Eelman and I also reported on the work and recommendations of the respective committees at the subsequent Supervisory Board meeting.

In so-called closed sessions, the members of the Supervisory Board regularly exchanged views without the participation of the members of the Management Board. As was customary in the past, both the shareholder and employee representatives on the Supervisory Board of METRO AG discussed relevant agenda items in separate pre-meetings.

Changes in the composition of the Supervisory Board and the Management Board

The terms of office of Prof. Dr Edgar Ernst, Roman Šilha, Stefan Tieben and myself ended at the close of the Annual General Meeting of METRO AG on 7 February 2024. Roman Šilha, Stefan Tieben and myself were elected by the Annual General Meeting for a further term of office, although my term of office was limited to 1 year at my own request. Prof. Dr Edgar Ernst was not available for another office term. By appointment by the Annual General Meeting, he was succeeded by Willem Eelman as new shareholder representative on the Supervisory Board. Xaver Schiller, the previous Vice Chairman of the Supervisory Board, resigned from the Supervisory Board at the end of financial year 2023/24. Manuela Wetzko joined the Supervisory Board to replace him as his elected alternate member. The Supervisory Board subsequently elected Paul Loyo as the new Vice Chairman of the Supervisory Board at the beginning of October 2024.

Effective 1 February 2024, we appointed Eric Riegger to the Management Board as Chief Financial Officer (CFO). In June 2024, we then reduced the size of the Management Board of METRO AG from 5 to 4 members. Moreover, all Board departments received additional operational functions. This is intended to further increase the efficiency of the Management Board’s work in the course of implementing sCore. In the course of this, the appointment of Rafael Gasset was terminated by mutual agreement and his responsibilities as Chief Operating Officer were transferred to Christiane Giesen, who assumed this role additionally to her function as Labour Director. Claude Sarrailh (Chief Customer & Merchandise Officer) had already indicated at an early stage that he was no longer interested in prolonging his contract, which was due to expire at the end of 2024. His appointment was therefore also terminated by mutual agreement. As his successor, we appointed Guillaume Deruyter, who was already responsible for the Food Service Distribution (FSD) cluster as Executive Vice President, to the Management Board. In addition to METRO Deutschland, CEO Dr Steffen Greubel also assumed responsibility at country level for METRO France, and Eric Riegger assumed responsibility for METRO DIGITAL alongside his existing functions.

Main topics of the Supervisory Board meetings and resolutions

The Supervisory Board held a total of 6 meetings in financial year 2023/24, of which 1 was convened as an extraordinary meeting. Moreover, 1 resolution was passed in a written procedure outside a Supervisory Board meeting. In every ordinary meeting, the Supervisory Board received a detailed status update on the current business developments in the group, in particular on financial reporting during the year. As part of this, the Management Board informed us about the progress of implementing the sCore corporate strategy. It also reported to us regularly on the status of significant projects at METRO and on changes in top management. In addition to these regular topics, the Supervisory Board dealt with the following topics in the past financial year: 

November 2023 – At this meeting, Eric Riegger introduced himself to the full Supervisory Board as a candidate for the CFO position and was appointed as a member of the Management Board effective 1 February 2024. In the course of the country deep dive, the Supervisory Board received an update on the business development of METRO Deutschland and approved the extension of lease agreements for a portfolio consisting of 31 METRO Deutschland locations, as well as the associated gross investments. The Supervisory Board addressed the strategic alignment of METRO LOGISTICS and was informed about the current status of the project for enhancing the technology structure and governance at METRO. The Supervisory Board also received an update on sustainability and discussed the annual report on governance functions in the group. With regard to Management Board remuneration, the Supervisory Board passed a resolution on the individual performance factors of the short-term incentive for financial year 2022/23 for the individual members of the Management Board as well as the amount of the variable remuneration components to be granted for financial year 2022/23. Furthermore, resolutions on the Corporate Governance Statement and the 2022/23 report of the Supervisory Board were passed.

December 2023 – At the beginning of the meeting, Willem Eelman – the candidate recommended by the Nomination Committee for initial appointment to the Supervisory Board – introduced himself. When it was informed about current business developments, the Supervisory Board received a country deep dive on MAKRO Czech Republic. Afterwards, the annual financial statements were reviewed and discussed. The Supervisory Board passed a resolution on the acknowledgement or approval of the annual financial statements, the consolidated financial statements, the combined management report for METRO AG and the group, including the non-financial statement, the report of the Management Board on the company’s relationships with affiliated companies (dependency report) and the corresponding audit reports of the auditor. The Supervisory Board also adopted the remuneration report that was jointly prepared with the Management Board and subsequently submitted to the Annual General Meeting in February 2024 for approval. Furthermore, we adopted a resolution on the proposed resolutions for Annual General Meeting 2024 of METRO AG. As a precautionary measure, we also passed a resolution to engage a law firm to handle any legal action against resolutions of the Annual General Meeting. With regard to the METRO project environment, the Management Board provided a further update on the projects to enhance the technology structure and governance at METRO, and to modernise and standardise financial processes and systems. The Supervisory Board also resolved amendments to the Code of Procedure of the Supervisory Board and the schedule of responsibilities of the Management Board.

February 2024 – At its meeting on the day prior to the Annual General Meeting, the Supervisory Board again received information about the current status of the project to enhance the technology structure and governance at METRO, and on the further implementation planning. At the same time as a further amendment to the schedule of responsibilities for the Management Board was implemented, the Supervisory Board resolved the specific total target remuneration for financial year 2023/24 for Eric Riegger and discussed his strategic targets for the short-term incentive. Subject to the election of the auditor by Annual General Meeting 2024, the Supervisory Board passed a resolution on the audit assignments of the auditor for financial year 2023/24.

In a written procedure directly following the Annual General Meeting, the Supervisory Board again elected me as its Chairman and made appointments to the committees. As part of this procedure, the shareholder representatives on the Supervisory Board passed a resolution on the assessment of the independence of its members.

May 2024 – At an extraordinary meeting, the Supervisory Board approved optional location-specific lease extensions for a range of METRO Deutschland locations. These were part of the portfolio of locations that was already the subject of a Supervisory Board resolution in November 2023. Personnel matters relating to the Management Board were also resolved: the appointment and employment contract of Claude Sarrailh were terminated by mutual agreement and the Supervisory Board resolved to appoint Guillaume Deruyter as Chief Customer & Merchandise Officer as his successor, and approved the corresponding employment contract. The appointments and employment contracts of Rafael Gasset and Christiane Giesen were also terminated by mutual agreement, and at the same time, Christiane Giesen was appointed for a further term of 5 years. The Supervisory Board approved the conclusion of a new employment contract with amended total target remuneration to reflect her additional responsibility as Chief Operating Officer. The Supervisory Board subsequently resolved the resulting amendments to the schedule of responsibilities of the Management Board.

June 2024 – The main focus of the 2-day strategy meeting in Rome was the implementation status of the sCore corporate strategy at the national subsidiaries, in particular with regard to the main components (i) wholesale focus, (ii) multichannel customer experience and (iii) network optimisation. Potential modifications to the strategy in certain countries to strengthen profitability as well as productivity were also discussed. The management of METRO Italy presented the status of its sCore development with a clear focus on HoReCa customers. The Supervisory Board approved further expenditures for the project to modernise and standardise financial processes and systems, and resolved the target achievement for tranche 2020/21 of the long-term variable remuneration of the Management Board. The new Chief Transformation & Strategy Officer also provided an updated overview of the general METRO project environment, and the Supervisory Board discussed succession planning in the Management Board.

September 2024 – The scheduled topic of the meeting was the approval of the budget and medium-term planning. The Supervisory Board also received an update on METRO Russia in the form of a country deep dive. In addition, the Supervisory Board resolved to modify the engagement of the auditor to audit the remuneration report, confirmed the diversity concepts for the Management Board and the Supervisory Board and resolved the declaration of conformity pursuant to § 161 of the German Stock Corporation Act (AktG). With the support of the independent remuneration consultants Willis Towers Watson, the Supervisory Board examined and confirmed the horizontal and vertical appropriateness of the remuneration of the members of the Management Board. The Supervisory Board was also informed about the status of the variable remuneration components for financial year 2023/24. Following this, the individual total target remuneration for financial year 2024/25 and the financial STI and LTI performance targets of the members of the Management Board were defined, and the strategic STI targets of the entire Management Board and the individual members of the Management Board were discussed.

Work in the Committees

For the purpose of effectively performing its duties, the Supervisory Board relies on the work of 4 committees: the Presidential Committee, the Audit Committee, the Nomination Committee and the Mediation Committee pursuant to § 27 Section 3 of the German Co-determination Act (MitbestG). The committees prepare the consultations and resolutions in the Supervisory Board meetings. In addition, also decision-making responsibilities were transferred to the committees within the legally allowed parameters. The respective chairmen of the committees report to the Supervisory Board regularly with regard to the work in the committees. Guests such as managers from the responsible departments and subsidiaries of METRO or the auditors were invited to the committee meetings to discuss specific topics.

Presidential Committee – The Presidential Committee is mainly concerned with the personnel and remuneration issues of the members of the Management Board and monitors compliance with legal regulations and the application of the German Corporate Governance Code. In addition, the Presidential Committee is responsible for urgent resolutions and issues that the Supervisory Board has delegated to it for resolution. The Presidential Committee held 5 meetings in financial year 2023/24; 1 of the meetings was convened as an extraordinary meeting. The discussions and resolutions in financial year 2023/24 focused on changes in the Management Board and the corresponding contractual issues: at the beginning of the financial year, the committee addressed the appointment of Eric Riegger as a member of the Management Board for the position of Chief Financial Officer, and made a corresponding proposal for resolution to the Supervisory Board. At the extraordinary meeting in May 2024, the committee prepared the reduction in the number of members of the Management Board, with changes in the appointments to the Management Board and the areas of responsibility of the individual members of the Management Board, and made corresponding proposals for resolution to the Supervisory Board. In addition, the Presidential Committee reviewed the horizontal and vertical appropriateness of the remuneration of the members of the Management Board and prepared the resolutions of the Supervisory Board for Management Board remuneration for 2023/24 and 2024/25. Further issues addressed by the Presidential Committee included corporate governance at METRO, especially the preparation of the declaration of conformity in accordance with § 161 of the German Stock Corporation Act (AktG), as well as the Corporate Governance Statement. The committee also addressed the remuneration report. Long-term succession planning on the Management Board was one of the regular topics of discussion in the committee.

Audit Committee – The Audit Committee is in particular responsible for supervising the company’s accounting, accounting processes, the effectiveness and development of the internal control systems, the risk management system, the internal audit system, the audit of the annual financial statements (in particular relating to the selection and independence of the auditor, the audit strategy and planning, the quality of the audit and any additional services provided by the auditor) and the financing strategy as well as compliance.

The Audit Committee convened 6 times in financial year 2023/24 and adopted 1 resolution outside the meetings. The Management Board was represented by the Chairman of the Management Board and the Chief Financial Officer. Representatives from the METRO departments were available at the meetings to discuss specific topics. The auditor participated in discussions on agenda items that were relevant to the audit of the financial statements, and the committee frequently discussed issues with the auditor without the Management Board being present. The Chairman of the Audit Committee frequently and closely communicated with the Chairman of the Supervisory Board and with the Management Board, especially with the Chief Financial Officer, outside the meetings to exchange information and ideas on important topics and upcoming decisions. To support this, there were also frequent one-on-one discussions with the auditor and the heads of various METRO departments.

The Audit Committee prepared the meeting of the Supervisory Board and reviewed the annual and consolidated financial statements for financial year 2022/23, the combined management report of METRO AG and the group for financial year 2022/23, including the combined non-financial statement contained in the combined management report, as well as the report of the Management Board on relationships with affiliated companies. The auditor reported on the results of the audits and was available to answer additional questions and provide information in the absence of the Management Board. In the presence of the auditor, the committee also discussed the results of the audit and recommended to the Supervisory Board to approve the annual and consolidated financial statements for financial year 2022/23. The Audit Committee also decided to recommend to the Supervisory Board that they should suggest to Annual General Meeting 2024 to elect KPMG AG Wirtschaftsprüfungsgesellschaft as auditors for financial year 2023/24. Following Annual General Meeting 2024, the members of the Audit Committee elected Willem Eelman as the successor to Prof. Dr Edgar Ernst, who had resigned, as Chairman of the Audit Committee, in a written procedure.

Before publication in each case, the members of the Audit Committee discussed in detail the quarterly statements for the first and third quarters and the half-year financial report for financial year 2023/24 in the presence of the auditor.

Furthermore, the Audit Committee prepared the issuance of the audit engagements for financial year 2023/24 and addressed the auditor’s audit planning and areas of emphasis. In line with the recommendation in the German Corporate Governance Code, the committee also discussed the assessment of the audit risk, the audit strategy and the audit planning as well as the areas of emphasis. In addition to ensuring the independence of the auditor, it also supervised the quality of the audit by surveying committee members and representatives of the internal finance organisation and by examining the auditor’s quality report. The committee addressed the governance functions in the group (internal control systems, risk management system, internal audit and compliance), group tax planning and the Internal Audit unit’s audit planning. The Audit Committee was also informed about the awarding of donations and the capital market’s perspective on METRO. In August and September, the focus of the Audit Committee was on preparing the resolutions for the 2024/25 budget planning. It also frequently addressed the non-audit services of the auditor, received an update on financial reporting standards and prepared the engagement of the auditor by the Supervisory Board for the modified audit of the remuneration report. The committee was also frequently updated about the cybersecurity situation and was informed about the current status of the project to enhance the technology structure and governance at METRO.

Nomination Committee – The Nomination Committee prepares for the election of shareholder representatives to the Supervisory Board and proposes suitable candidates to the Supervisory Board for recommendation to the Annual General Meeting. In financial year 2023/24, a total of 2 committee meetings were held for the purpose of preparing election proposals to the Annual General Meeting for 2024 and 2025.

Mediation Committee – In financial year 2023/24, the Mediation Committee established in accordance with § 27 Section 3 of the German Co-determination Act (MitbestG) did not have to be convened.

Meeting format and individual attendance at meetings

In financial year 2023/24, 1 meeting of the Supervisory Board and 1 meeting of the Audit Committee were held as hybrid meetings, and 1 meeting of the Presidential Committee was held virtually. The other meetings were held as in-person meetings, although we also generally offer the option of virtual participation via telephone or video conference if physical attendance is not possible for any of the members. The average attendance rate at meetings of the Supervisory Board and its committees in financial year 2023/24 was 94%. Attendance at meetings is disclosed for each member in the following. Only those meetings that took place during the respective membership on the Supervisory Board or committee are listed.

Corporate Governance

In September 2024, the Management Board and the Supervisory Board of METRO AG issued their annual declaration of conformity with regard to the recommendations of the Government Commission on the German Corporate Governance Code pursuant to § 161 of the German Stock Corporation Act (AktG). The declaration of conformity is permanently published on the website www.metroag.de/en in the section About us – Corporate Governance. Further information on METRO’s corporate governance can be found in the Corporate Governance Statement, which has also been published on the website www.metroag.de/en in the section About us – Corporate Governance.

The Supervisory Board held 1 training event in financial year 2023/24. The subject was ‘Artificial Intelligence and its impacts on METRO’. In addition, there were individual onboarding events for the newly elected Chairman of the Audit Committee with both the Chairman of the Supervisory Board and with members of the Management Board and managers from departments relevant for the Audit Committee.

The members of the Supervisory Board are required to disclose any conflicts of interest without delay. No such conflicts of interest arose in financial year 2023/24.

Annual and consolidated financial statements, report on relationships with affiliated companies 2023/24

The auditor KPMG AG Wirtschaftsprüfungsgesellschaft has reviewed the annual financial statements prepared by the Management Board in accordance with the German Commercial Code (HGB) and the consolidated financial statements prepared by METRO AG based on the International Financial Reporting Standards (IFRS). It also reviewed the combined management report for METRO AG and the group for financial year 2023/24 as well as the remuneration report prepared by the Management Board and the Supervisory Board pursuant to § 162 of the German Stock Corporation Act (AktG) and issued an unqualified audit certificate. The auditor also issued an unqualified certificate about the combined non-financial statement contained in the combined management report as a result of his audit to provide limited assurance. The auditor provided a written report on these audits.

In accordance with § 312 of the German Stock Corporation Act (AktG), the Management Board of METRO AG has prepared a report on the company’s relationships with affiliated companies for financial year 2023/24. The auditor has also audited this report, reported the result of the audit in writing and issued the following opinion:

‘Following our audit and review in accordance with professional standards, we confirm that

1. the factual disclosures in the report are correct,
2. the Company´s consideration with respect to the legal transactions listed in the report was not inappropriately high.’

This report, the documents for the financial statements, including the combined non-financial statement, as well as the audit reports were discussed and reviewed in great detail during the meeting of the Audit Committee on 5 December 2024 and in the Supervisory Board meeting on 6 December 2024 in the presence of the auditor. The required documents were distributed to all members of the Audit Committee and the Presidential Committee as well as the Supervisory Board in due time prior to these meetings. In all mentioned meetings, the auditor reported about the key findings of his audits and was at the Supervisory Board’s disposal to answer questions and provide additional information, even in the absence of the Management Board.

The auditor also provided information on services rendered in addition to auditing services. No issues resulting in a disqualification due to bias arose.

Based on our own review of the annual financial statements, the consolidated financial statements and the combined management report, including the combined non-financial statement, as well as the report of the Management Board on relationships with affiliated companies for financial year 2023/24, we had no objections and the Supervisory Board approved the result of the audit. As recommended by the Audit Committee, we approved the annual financial statements and the consolidated financial statements submitted by the Management Board. The Annual Financial Statements of METRO AG are thus adopted. After our own careful review and in consideration of the interests to be taken into account, we agree to the Management Board’s proposal to Annual General Meeting 2025 on the appropriation of the balance sheet profit. As a result, we have also determined that there are no objections to be raised against the declaration of the Management Board at the end of the report on relationships with affiliated companies 2023/24.

Düsseldorf, 6 December 2024

The Supervisory Board

Jürgen Steinemann
Chairman