Annual General Meeting 2020: positive progress made in METRO’s transformation to a pure wholesaler

At today's Annual General Meeting, Olaf Koch, Chairman of the Management Board of METRO AG, is drawing positive conclusions for the financial year 2018/19.

• METRO AG and SCP Group reached a commercial agreement regarding the sale of Real GmbH
• Sale of majority stake of METRO China to Wumei signed
• Outlook for financial year 2018/19 achieved
• Proposed dividend of €0.70 per share
• Elections to the Supervisory Board of METRO AG

'The financial year 2018/19 marks significant progress on our path to becoming a pure wholesaler. We achieved the strongest like-for-like sales growth for METRO Wholesale in the past 10 years. It has shown that our consistent focus on our target groups HoReCa and Trader pays off', says Olaf Koch, Chairman of the Management Board of METRO AG. 'With the sale of the majority stake of METRO China, we are further advancing the focus of our portfolio. Furthermore, we reached a commercial agreement with financial investor SCP Group for the sale of Real GmbH. With the closing of both transactions, we expect net proceeds of more than €1.5 billion, which will provide financial flexibility and enable us to achieve dividend continuity, targeted acquisitions and further reduce our net debt.'

Financial year 2018/19: outlook achieved

Including METRO China and without Real (outlook analysis, before IFRS 16), METRO increased like-for-like sales in the financial year 2018/19 by 2.4%. METRO has thus achieved the highest growth in wholesale business in the past decade. Reported sales increased by 1.5% to €29.9 billion. EBITDA excluding earnings contributions from real estate transactions reached €1,173 million. Adjusted for currency effects, EBITDA excluding earnings contributions from real estate transactions decreased by 52 Mio. €or -4.2% compared to the previous year. Excluding the costs for the voluntary takeover offer (~€20 million), the decline was only -2.6%. METRO thus reached its sales and earnings outlook for the financial year 2018/19.

Earnings per share considerably improved from €1.22to €1.44. A dividend of €0.70per ordinary and preferred share will be proposed at today's Annual General Meeting. This dividend proposal corresponds to 49% of earnings per share and is thus in line with METRO AG's dividend policy.

Strategic priorities in financial year 2018/19

In the financial year 2018/19, METRO made further progress in implementing its transformation strategy. By focusing on the customer target groups hotels, restaurants and catering companies (HoReCa) as well as independent traders, METRO's like-for-like sales grew significantly by 4.5% (incl. METRO China) with HoReCa customers and 5.1%¹ with Trader customers.

In October 2019, METRO signed a contract for the sale of a majority stake of METRO China to Wumei. As a result of the sale, HoReCa and Trader sales share has increase to around 70%. After deduction of debt, taxes and other transaction costs, METRO expects net proceeds of more than €1.0 billionfrom this transaction. This will create further opportunities to accelerate growth organically and through acquisitions.

Furthermore, METRO AGreached a commercial agreement with SCP Group regarding the sale of Real GmbH. This transaction values Real at an enterprise value of €1.0 billion. METRO expects net proceeds of around €0.3 billionat the close of the sale. The transaction is subject for approval by company bodies and the respective regulatory and controlling authorities.

¹Trader countries excluding Russia: Bulgaria, Czech Republic, India, Pakistan, Poland, Romania, Serbia, Slovakia.

METRO with like-for-like sales growth of 1.0% in Q1 2019/20

METRO introduced IFRS 16, the new financial reporting standard on accounting for leases, at the beginning of financial year 2019/20. The reporting for Q1 2019/20is thus the first quarterly report under IFRS 16. Prior-year figures have been adjusted to follow full retrospective application under IFRS 16.

In Q1 2019/20 METRO AG's like-for-like sales from continuing operations (excl. Real and excl. METRO China) increased by 1.0% in comparison to the previous year. Eastern Europe (excl. Russia) and Asia were the main contributors to this positive development, while a slight trend improvement was achieved in Russia compared to Q4 2018/19.

In local currency METRO's sales increased by 1.0%. Reported sales increased by 2.2% to €7.5 billion, supported by positive currency effects. EBITDA excluding earnings contributions from real estate transactions reached €526 million(Q1 2018/19: €530 million). Adjusted for currency effects EBITDA excluding earnings contributions from real estate transactions decreased by -2.2%.

In Q1 2019/20 earnings per share from continuing operations decreased to €0.33 (Q1 2018/19: €0.47), including discontinued operations earnings per share were at €-0.09 (Q1 2018/19: €0.62). METRO AG confirms the outlook for the financial year 2019/20.

Elections to the Supervisory Board

The agenda for today's Annual General Meeting includes the elections to the Supervisory Board. Dr. Florian Funck, Chief Financial Officer at Haniel, resigned from office as a member of the Supervisory Board of METRO AGwith effect as of the end of 7 December 2019. On 22 January 2020, the Local Court of Duesseldorf notified METRO AGof the decision by which Marco Arcelli, Director Business Development at Energeticky a prumyslovy holding, a.s (EPH), Prague, Czech Republic, has been appointed member of the Supervisory Board of METRO AGuntil the next Annual General Meeting. Marco Arcelliis now standing for election to the Supervisory Board at today's Annual General Meeting of METRO AG.

Furthermore, the re-elections of Gwyn Burr, Prof. Dr. Edgar Ernstand Dr. Liliana Solomonas members of the Supervisory Board are proposed to the Annual General Meeting. Gwyn Burris Member of Board of Directors of Hammerson plc, London, United Kingdom. From 2015 until the demerger of METRO Group in July 2017 Gwyn Burrwas a member of the Supervisory Board of former METRO AG(now CECONOMY AG). Since 2017 she has been a member of the Supervisory Board of today's METRO AG. Prof. Dr. Edgar Ernstis President of Deutsche Prüfstelle für Rechnungslegung (German Financial Reporting Enforcement Panel). Since 2017 he has been a member of the Supervisory Board of METRO AGand Chairman of its Audit Committee. Dr. Liliana Solomonis Chief Financial Officer of Awaze Group Limited, London, United Kingdom, and also member of the Supervisory Board of METRO AGsince 2017.

METRO is a leading international wholesale company with food and non-food assortments that specializes on serving the needs of hotels, restaurants and caterers (HoReCa) as well as independent traders. Around the world, METRO has some 16 million customers who can choose whether to shop in one of the large-format stores, order online and collect their purchases at the store or have them delivered. METRO in addition also supports the competitiveness of entrepreneurs and own businesses with digital solutions and thereby contributes to cultural diversity in retail and hospitality. Sustainability is a key pillar of METRO's business. METRO has been the European sector leader in the Dow Jones Sustainability Index. The company operates in 34 countries and employs more than 100,000 people worldwide. In financial year 2018/19, METRO generated sales of €27.1 billion. In September 2018 METRO initiated the divestment process for the food retail chain Real with its more than 33,000 employees.