METRO gROUP : ANNUAL REPORT 2011 : BUsiNEss
For a breakdown of sales by business and regional segments, see the segment reporting.
2. Other operating income
Gains from the disposal of fixed assets primarily include revenues from sale-and-lease-back transactions totalling €198 million (previous year: €198 million).
Income from deconsolidation essentially includes gains from the disposal of shareholdings in MeDIa saTURn FRanCe s.C.s. (previous year: Metro Cash & Carry Morocco s.a.). Miscellaneous other operating income comprises, in par- ticular, income from damages totalling €43 million (previous year: €16 million). In addition, it includes income from the derecognition of statute-barred liabilities, income from con- struction services, public aid, income from canteen revenues and other reimbursements, among other things.
3. selling expenses
The reduction in selling expenses is largely due to one-time expenses in the previous year relating to the disposal of con- sumer electronics stores in France. In addition, declining expenses related to shape 2012 offset the expansion-related increase in selling expenses.
The decline in personnel expenses is essentially due to the reduction in restructuring expenses compared with the
€ million 2010 2011
Rents incl. reimbursements
of subsidiary rental costs 479 488
services rendered to suppliers 298 349
services/cost refunds 306 318
Gains from the disposal of fixed
assets and from write-backs 279 251
Income from deconsolidation 52 28
Miscellaneous 213 256 1,627 1,690 € million 2010 2011 personnel expenses 5,940 5,816 Cost of material 6,233 6,112 12,173 11,928
The non-controlling shareholder was granted an offer to tender his capital interests in the purchase contract. This tender right was recognised as a financial liability at the pres- ent value of the repurchase amount. accordingly, the acqui- sition was presented as though 100 percent of the shares had been acquired.
The acquisition of Redcoon GmbH including its seven subsid- iaries results in goodwill of €83 million.
The acquisition of the Redcoon group results in subsid- iary acquisition costs of €2 million, which have been rec- ognised as general administrative expenses in the income statement.
since its consolidation, the Redcoon group has contributed €239 million to Group sales and €–2 million to net profit for the period.
assuming the acquisition had been effected as of 1 January 2011, the Redcoon group would have contributed €432 million to MeTRo GRoUp sales and €–1 million to net profit for the period.
Notes to the income statement
1. sales
(net) sales can be broken down as follows:
The sales listed in the “others” segment were mainly gen- erated by MGB MeTRo GRoUp Buying HK ltd. at €228 mil- lion (previous year: €238 million) and logistics companies at €32 million (previous year: €30 million).
a total of €40.8 billion (previous year: €41.1 billion) in sales was generated by Group companies based outside of Germany.
€ million 2010 2011
Metro Cash & Carry 31,095 31,155
Real 11,499 11,230
Media-saturn 20,794 20,604
Galeria Kaufhof 3,584 3,450
others 286 263
67,258 66,702
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METRO gROUP : ANNUAL REPORT 2011 : BUsiNEss
6. Other investment result
aside from profit distributions, the other investment result of €41 million (previous year: €15 million) also includes €27 million in income from the sale of the shareholding in loyalty partner Holdings s.a.
7. interest income/interest expenses
net interest income can be broken down as follows:
Interest income and interest expenses from financial instru- ments are assigned to Ias 39 measurement categories on the basis of the underlying transaction.
€ million 2010 2011
Interest income 112 133
thereof finance leases (1) (1)
thereof pension provisions (41) (43)
thereof financial instruments of the Ias 39 measurement categories:
loans and receivables incl. cash
and cash equivalents (46) (60)
held to maturity (0) (0)
held for trading incl. derivatives within
hedges in accordance with Ias 39 (5) (8)
available for sale (0) (0)
Interest expenses –718 –713
thereof finance leases (–117) (–134)
thereof pension provisions (–127) (–109)
thereof financial instruments of the Ias 39 measurement categories:
held for trading incl. derivatives within
hedges in accordance with Ias 39 (–10) (–11)
other financial liabilities (–388) (–379)
–606 –580
previous year as well as lower performance-based one-time payments. In addition, savings were generated from store closures in the Real segment.
The decline in the cost of material is mostly due to lower impairments as prior-year figures were dampened by the decision to dispose of the French consumer electron- ics stores. as a result, lower impairments as well as lower expenses on provisions were recorded during the reporting year compared to the previous year. In addition, lower adver- tising volumes and increased special conditions, particularly at Media-saturn in Germany, in the area of advertising costs, offset the expansion-related increase in the cost of material.
4. general administrative expenses
substantially reduced performance-based one-time pay- ments as well as lower severance payments in personnel expenses neutralised the cost increase resulting from the expansion-related establishment of additional administra- tive structures. as a result, general administrative expenses remained nearly unchanged from a year earlier.
aside from expansion-related expenses, the development of new sales concepts added to the cost of material, particularly through consulting, eDp and travel costs.
5. Other operating expenses
Miscellaneous other operating expenses include, in particu- lar, expenses from construction services totalling €12 million (previous year: €6 million).
€ million 2010 2011
personnel expenses 889 826
Cost of material 696 761
1,585 1,587
€ million 2010 2011
losses from the disposal of fixed assets 21 23
Miscellaneous 30 41
51 64
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The other financial income and expenses from financial instru- ments are assigned to measurement categories on the basis of the underlying transactions pursuant to Ias 39. Besides income and expenses from the measurement of financial instruments according to Ias 39, this also includes the meas- urement of foreign currency positions according to Ias 21. The overall result from currency effects and measurement results from hedging transactions and hedging relation- ships totalled €–51 million (previous year: €28 million). This figure results largely from foreign currency financings in poland, Romania, Russia and the Czech Republic. Develop- ments in individual eastern european currencies, in particu- lar, resulted in a distinctly negative result in currency effects as well as hedging transactions compared with the previ- ous year. valuation yields of commodity contracts for energy and fuels resulted in expenses of €3 million (previous year: income of €12 million).
For possible effects from currency risks, see no. 42 “Man- agement of financial risks”.
9. Net results according to measurement categories
The key effects of earnings from financial instruments are as follows:
8. Other financial result
€ million 2010 2011
other financial income 471 151
thereof currency effects (379) (100)
thereof hedging transactions (87) (42)
other financial expenses –461 –253
thereof currency effects (–380) (–127)
thereof hedging transactions (–58) (–66)
Other financial result 10 –102
thereof financial instruments of Ias 39 measurement categories:
loans and receivables incl. cash and
cash equivalents (4) (–19)
held to maturity (0) (0)
held for trading (30) (–28)
available for sale (0) (1)
other financial liabilities (–15) (–31)
thereof fair value hedges:
underlying transactions (0) (0)
hedging transactions (0) (0)
thereof cash flow hedges:
ineffectiveness (–1) (4)
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2010
€ million invest-ments interest
Fair value measure-
ments translationCurrency Disposals impair- ment Other Net result
loans and receivables incl. cash and
cash equivalents 0 46 0 1 0 –31 2 18
Held to maturity 0 0 0 0 0 0 0 0
Held for trading incl. derivatives within
hedges in accordance with Ias 39 0 –5 29 0 0 0 0 24
available for sale 15 0 0 0 0 0 0 15
other financial liabilities 0 –388 0 –2 9 0 –12 –393
15 –347 29 –1 9 –31 –10 –336
2011
€ million invest-ments interest
Fair value measure-
ments translationCurrency Disposals impair-ment Other Net result
loans and receivables incl. cash and
cash equivalents 0 60 0 –19 0 –30 1 12
Held to maturity 0 0 0 0 0 0 0 0
Held for trading incl. derivatives within
hedges in accordance with Ias 39 0 –3 –24 0 0 0 0 –27
available for sale 41 0 1 0 0 0 0 42
other financial liabilities 0 –379 0 –8 15 0 –23 –395
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METRO gROUP : ANNUAL REPORT 2011 : BUsiNEss
The increase in taxes paid or due essentially results from international tax audits.
Deferred taxes are determined on the basis of the tax rates expected in each country upon realisation. In principle, these are based on the valid laws or legislation that has been passed at the time of the closing date.
Deferred tax income for the reporting year includes an effect of €1 million from the change in the tax rate.
at €732 million (previous year: €694 million), income tax expenses, which are fully included in the result from ordinary operations, are €282 million higher (previous year: €196 mil- lion) than the expected tax expenses of €450 million (previous year: €498 million) that would have resulted if the German corporate income tax rate had been applied to the Group’s taxable income for the year.
Reconciliation of estimated to actual income tax expenses:
€ million 2010 2011
Deferred taxes in the income statement 35 –9
thereof from temporary differences (44) (–39)
thereof from loss and interest carry- forwards (–9) (30)
€ million 2010 2011
Earnings before taxes 1,630 1,473
expected income tax expenses (30.53%) 498 450
effects of differing national tax rates –137 –101
Tax expenses and income
relating to other periods 49 102
non-deductible business expenses 90 102
effects of not recognised or
impaired deferred taxes 182 203
additions and reductions for local taxes 38 27
Tax holidays –33 –24
other deviations 7 –27
income tax expenses according to the
income statement 694 732 Effective tax rate (in %) 42.56 49.71
earnings and expenses from financial instruments are assigned to measurement categories on the basis of the underlying transactions pursuant to Ias 39.
Investment income is included in other investment income. Interest income and expenses are part of the net interest result. Fair value measurements and effects from currency translations are included in other financial result. Income effects from the disposal of other financial liabilities are included in earnings before interest and taxes (eBIT). In the same manner, expenses from impairments are essen- tially included in earnings before interest and taxes. They are detailed in no. 27 “Impairments of capitalised financial instruments”. Remaining financial income and expenses, which are included in other financial result, primarily concern bank commissions and similar expenses that are incurred within the context of assets and liabilities.
10. income taxes
Income taxes include taxes on income paid or due in the indi- vidual countries as well as deferred taxes.
The income tax rate of the German companies of MeTRo GRoUp consists of a corporate income tax of 15.00 percent plus a 5.50 percent solidarity surcharge on corporate income tax as well as the trade tax of 14.70 percent given an average assess- ment rate of 420.00 percent. all in all, this results in an aggre- gate tax rate of 30.53 percent. The tax rates are unchanged from the previous year. The income tax rates applied to for- eign companies are based on the respect-ive laws and regu- lations applying in the individual countries and vary in a range from 0.00 percent (tax holidays) to 40.69 percent. These tax rates are also unchanged from the previous year.
€ million 2010 2011
Taxes paid or due 659 741
thereof Germany (215) (174)
thereof international (444) (567)
thereof tax expenses/income
of current period (610) (639)
thereof tax expenses/income
of previous periods (49) (102)
Deferred taxes 35 –9
thereof Germany (22) (50)
thereof international (13) (–59)
694 732
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11. Net profit for the period attributable to non-controlling interests
of net profit for the period attributable to non-controlling interests, profit shares accounted for €211 million (previous year: €178 million) and loss shares for €101 million (previous year: €92 million). This mainly concerns profit/loss shares of non-controlling interests in the Media-saturn sales division.
12. Earnings per share
MeTRo aG defines earnings per share as earnings per ordinary share. In 2010, holders of preference shares of MeTRo aG were entitled to a dividend of €1.485 that was €0.135 higher than that paid to holders of ordinary shares. In the calculation of earnings per share, this additional divi- dend is deducted from profits attributable to MeTRo aG shareholders.
earnings per share are determined by dividing earnings attrib- utable to MeTRo aG shareholders by a weighted number of issued shares.
There was no dilution in the financial year 2011 or the year before from so-called potential shares.
earnings per preference share amounted to €2.07 in the financial year 2011 (previous year: €2.74) and thus exceeded earnings per share by the amount of the additional dividend of €0.135.
2010 2011
Weighted number of no-par-value shares
outstanding 326,787,529 326,787,529
net profit for the period attributable to
MeTRo aG shareholders (€ million) 850 631
Earnings per share (€) 2.60 1.93
13. Depreciation/amortisation
non-scheduled write-downs were included in selling expenses to the amount of €102 million (previous year: €141 million), to the amount of €2 million in general admin- istrative expenses (previous year: €12 million), and to the amount of €1 million in the net financial result (previous year: €0 million). Write-downs of intangible assets accounted for €19 million (previous year: €11 million), write-downs of fixed assets for €81 million (previous year: €134 million), write- downs of investment properties for €4 million (previous year: €8 million), and write-downs of non-current financial assets for €1 million (previous year: €0 million).
Metro Cash & Carry accounts for €10 million (previous year: €2 million) of the non-scheduled write-downs, Real for €12 million (previous year: €17 million), Media-saturn for €23 million (previous year: €73 million, essentially for the French consumer electronics stores that have since been sold), the Real estate segment for €58 million (previous year: €50 million) and other companies for €2 million (previous year: €11 million).
14. Cost of materials
The cost of sales includes the following cost of materials:
€ million 2010 2011
scheduled depreciation on tangible and intangible assets and investment
properties 1,274 1,246
non-scheduled write-downs on tangible assets, intangible assets (incl. goodwill)
and investment properties 153 104
non-scheduled write-downs on non-current
financial assets 0 1
1,427 1,351
€ million 2010 2011
Cost of raw materials, supplies and
goods purchased 52,491 52,207
Cost of services purchased 96 21
52,587 52,228
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15. Personnel expenses
personnel expenses can be broken down as follows:
In the financial year 2011, expenses relating to severance payments within MeTRo GRoUp amounted to €55 million (previous year: €63 million).
personnel expenses also include income from share-based payments totalling €19 million (previous year: expenses of €32 million).
annual average number of Group employees:
€ million 2010 2011
Wages and salaries 6,066 5,959
social security expenses,
expenses for post-employment benefits
and related employee benefits 1,301 1,327
thereof post-employment benefits (67) (69)
7,367 7,286
Number of employees 2010 2011
Blue collar/white collar 283,280 280,856
apprentices/trainees 10,682 9,891
293,962 290,747
The above figure includes an absolute number of 79,229 (pre- vious year: 80,975) part-time employees. The percentage of employees working outside of Germany (full-time equiva- lents) stood at 63.5 percent compared to 62.7 percent in the previous year.
16. Other taxes
other taxes (for example, tax on land and buildings, motor vehicle tax, excise tax and transaction tax) of €163 million (previous year: €152 million) are included in the cost of sales and the selling and general administrative expenses.
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