demerger update

DEMERGER UPDATE September 2016

METRO GROUP, September 2016 – demerger update

September 2016 | © METRO AG 2016 1

DISCLAIMER AND NOTES

This presentation is intended for information only , does not constitute a prospectus or a similar document and should not be treated as investment advice. It is not intended as an offer for sale, or as a solicitation of

an offer to purchase or subscribe to, any securities in any jurisdiction. Neither this presentation nor anything contained therein shall form the basis of, or be relied upon in connection with, any commitment or contract

whatsoever. This presentation may not, at any time, be reproduced, distributed or published (in whole or in part) without prior written consent of METRO AG.

To the extent that statements in this presentation do not relate to historical or current facts, they constitute forward-looking statements. All forward-looking statements herein are based on certain estimates,

expectations and assumptions at the time of publication of this presentation and there can be no assurance that these estimates, expectations and assumptions are or will prove to be accurate. Furthermore, the

forward-looking statements are subject to risks and uncertainties that could cause actual results, performance or financial position to differ materially from any future results, performance or financial position

expressed or implied in this presentation. Many of these risks and uncertainties relate to factors that are beyond METRO GROUP’s ability to control or estimate precisely. The risks and uncertainties to which these

forward-looking statements may be subject include (without limitation) future market and economic conditions, the behaviour of other market participants, investments in innovative sales formats, expansion in online

and multichannel sales activities, integration of acquired businesses and achievement of anticipated cost savings and productivity gains, and the actions of government regulators. Readers are cautioned not to place

reliance on these forward-looking statements. See also “Risk and Opportunity Report” on pages 121 - 138 of the METRO GROUP Annual Report 2014/15 for risks as of the date of such Annual Report. METRO

GROUP does not undertake any obligation to publicly update any forward-looking statements or to conform them to events or circumstances after the date of this presentation. In addition, market research data and

trend information as interpreted or used by METRO AG is based on certain estimates and assumptions and there can be no assurance that these estimates and assumptions as well as any interpretation of the

relevant information by METRO AG are accurate. The market research institutes which data METRO AG used as basis for this presentation are neither registered broker dealers nor financial advisors and the

permitted use of any market research data does not constitute financial advise or recommendations.

Historical financial information contained in this presentation is mostly based on or derived from the consolidated (interim) financial statements of METRO AG for the respective period. Financial information with

respect to the prospective W&FS Co. and CE Co. businesses is particularly based on or derived from the segment reporting contained in these consolidated financial statements of METRO AG. Such financial

information is not necessarily indicative for the operational results, the financial position and/or the cash flow of the prospective W&FS Co. and/or CE Co. businesses on a stand-alone basis neither in the past nor in

the future and may, in particular, deviate from any historical financial information based on corresponding combined financial statements with respect to the W&FS Co. and CE Co. businesses.

This presentation includes supplemental financial measures which are or may be non-GAAP financial or operative measures. Such measures are in each case described in more detail in the consolidated financial

statements of METRO AG. These measures should not be viewed in isolation as alternatives to financial measures presented in accordance with IFRS. Other companies that disclose similarly titled measures may

calculate them differently. All numbers shown are before special items, unless otherwise stated. All amounts are stated in million euros (€ million) unless otherwise indicated. Amounts below €0.5 million are rounded

and reported as 0. Rounding differences may occur.

Activities of Galeria Kaufhof group are disclosed as discontinued operations in Q2 2014/15. Previous year’s figures have been adjusted (with the exception of the balance sheet).

Intended demerger: To date, neither the management board, the supervisory board nor the general meeting of METRO AG have taken a decision on the demerger of METRO GROUP. Thus, any information on the

intended demerger only reflects the current status and targeted measures / structure, all of which may be subject to changes in the course of the future process.



METRO AG

INTRODUCTION TO METRO GROUP

Germany’s largest

hypermarket chain

Europe’s No. 1

consumer electronics

retailer

An international leader

in wholesale trade



STRATEGIC TRANSFORMATION OF METRO GROUP

Our strategic transformation

since 2012 is fully focused on

CUSTOMER VALUE

generation



A 5 YEAR TRANSFORMATION – WITH FURTHER TRANSFORMATIONAL NEEDS

Customer-centric

Modernised business models

Strengthened balance sheet

Optimised portfolio

Focused organisation

2015

CUSTOMER-FOCUSED STRATEGY

2012 2013 2014

FOCUSING – PORTFOLIO OPTIMISATION – DELEVERAGING

MODERNISATION OF OUR BUSINESS MODEL

BUSINESS INNOVATION STRATEGY

CORPORATE CULTURE, LEADERSHIP CULTURE, EMPLOYEE ENGAGEMENT

SUSTAINABILITY

ACQUISITIONS

START-UP INV. / ACCELERATORS

2012 2013 2014 2015 2016



CREATION OF TWO DISTINCT, PURE-PLAY SECTOR LEADERS

Sales: ~€37bn2

EBITDA: ~€1.8bn2

35 countries

Sales: ~€22bn3

EBITDA: ~€0.7bn3

15 countries

Independent, dedicated management teams and governance

Improved focus, flexibility, operational efficiency and transparency

Greater optionality for each company to pursue independent partnerships and M&A

Creating value for our shareholders, customers, employees and business partners

1 For the purposes of this document; businesses to be appropriately named in due course

2 Financials include the segments METRO Cash & Carry, Real, Others and Consolidation; external sales from continuing operations; EBITDA before special items from continuing operations. FY 2014/15

3 Financials include the segment Media-Saturn; external sales from continuing operations; EBITDA before special items from continuing operations. FY 2014/15

CE Co1 W&FS Co1



THE DEMERGER IS THE LOGICAL NEXT STEP

Greater management focus and operational flexibility to drive performance

Accelerated transformation and innovation to grow appeal and relevance for customers

Enhanced W&FS Co. and CE Co. identities with tailored value creation agendas

Valuation transparency by separate public listing and capital market access

Accelerate acquisition and partnership strategies

Distinct, focused investment thesis and visibility to drive shareholder value



DEMERGER PROCESS UPDATE – SIGNIFICANT PROGRESS MADE

Listing Mid

2017

Transaction structure & governance A

Capital structure analysis B

Strategy for independent sector leaders

C

AGM approval of demerger & listing preparation

2016 2017

Q2 Q4 Q3 Q2 Q1

Wh

at

ha

ve

we

do

ne s

o f

ar?

W

hat’

s n

ex

t? Documentation

and final decision making

Organizational

separation

(30 Sep, 2016)

Capital

Markets Day



SIMPLIFIED TRANSACTION STRUCTURE

Combination of hive-down

and spin-off

Tax structure in implementation based

on binding ruling from tax authorities

To be spun-off W&FS Co business to

comprise the sales line METRO Cash

& Carry and Real as well as other

related entities and business activities

and significant real estate assets

10% W&FS Co stake to strengthen CE

Co capital base

Organizational separation effective 30

Sep 2016

Both companies will be headquartered

in Düsseldorf

A

100% 90% (new W&FS shares

issued in spin-off)

10% shareholding of

CE Co in W&FS Co

100% 78.38%

Shareholders

METRO AG (old)

=

CE Co (new)

W&FS Co (new)



CHAIRMEN OF SUPERVISORY BOARDS A

1 Subject to shareholder resolution and election by supervisory board 2 Subject to election by supervisory board

Chairman of METRO AG supervisory board and

the presidential, personnel, nomination &

mediation committee

Former CEO of Barry Callebaut

Member of the Board of Directors at Barry

Callebaut and Lonza

Previous experience includes senior management

positions at Barry Callebaut, Nutreco and Unilever

Chairman of the

Supervisory Board of W&FS Co1

Jürgen B. Steinemann

Member of METRO AG supervisory board (since

2008); member of the presidential / personnel

committee as well as the nomination committee

Senior Advisor and former CEO of Deutsche Bank

AG

Member of the Board of Directors at Kuehne +

Nagel

Previous experience includes senior management

positions at Deutsche Bank and citibank

Chairman of the

Supervisory Board of CE Co2

Jürgen Fitschen



PRE-DEMERGER CAPITAL STRUCTURE / DEBT ALLOCATION B

Debt allocation based on economic use and legal requirements

All financial debt incl. pension obligations to be transferred to W&FS Co

‒ exception: Pension obligations relating to disposed businesses (mainly Kaufhof), retired and remaining CE

Co employees

External debt transfer by or in connection with a hive-down according to German Transformation Act

(“Umwandlungsgesetz”); no bond holders approval required

Split of operating lease obligations based on existing rental contracts between W&FS Co and CE Co

Joint liability for performance of all pre-existing liabilities for five years (10 years for METRO AG pensions)

1 Other financial debt includes liabilities to banks, promissory note loans and liabilities from finance leases

2 NPV according to S&P methodology

CURRENT

DEBT

STRUCTURE

(FY 14/15)

DEBT

ALLOCATION

4,6

2,8 1,3

6,1

Bonds Other fin. debt Pension obligations Lease obligations(off balance)

€bn

1

2



POST-DEMERGER CAPITAL STRUCTURE B

No requirement to issue new equity capital

Cash flow optimization through better capex

efficiency, tight NWC control and less further one-

off expenses for restructuring

Policy of pursuing value- and rating-accretive real

estate structuring and transactions to be continued

100% ~100% ~40% ~60%

Bonds Other fin. debt Pensionliabilities

Leaseobligations

(off balance)

W&FS Co CE Co

DEBT

ALLOCATION

CAPITAL

STRUCTURING

MEASURES

0% ~0% ~40% ~60%

Bonds Other fin. debt Pensionliabilities

Leaseobligations

(off balance)

No financial debt (only pension and lease

obligations)

10% shareholding in W&FS Co to strengthen

capital base for future growth

‒ of which 1% for tax structuring purposes

(7y lock-up)

Investment grade capital structures providing strategic flexibility

1 Other financial debt includes liabilities to banks, promissory note loans and liabilities from finance leases

2 NPV according to S&P methodology

1 1

2 2



W&FS CO EXECUTIVE TEAM C

20 years of experience

Led METRO GROUP

transformation as CEO

since 2012

Former CFO METRO

AG

Previous experience

includes senior positions

at Permira and Daimler

CEO1

Olaf Koch


Current CFO of METRO

Cash & Carry

Former Group Director

Strategy, M&A &

Business Innovation;

with METRO since 2011

Previous experience

includes positions at

Permira, Lehman

Brothers and

LBBW/BW-Bank

1 Subject to supervisory board decision


METRO AG board

member responsible for

Cash & Carry (since

2015)

Former Managing

Director MCC Russia

Previous experience

includes numerous

senior operational

management positions

at SHV


METRO AG board

member responsible for

HR, IT, Audit and

Sustainability (since

2011)

Previous experience

includes senior HR

positions at IBM and

Akzo Nobel

CFO1

Christian

Baier

COO1

Pieter Boone

CHRO1

Heiko

Hutmacher



High brand recognition Attractive professional customer base

12 consecutive quarters of like-for-like2 growth

€3.1bn in delivery sales growing at a double digit rate

4,849 €/m² sales density3

~4.9% EBITDA margin and 12.8% ROCE

Figures as per Q3 15/16 or FY 14/15 for full year data unless specified other 1 By number of warehouses, employees and geographical presence; 2 Reflects sales growth on a comparable area or with respect to a comparable group of locations in local currency. 3 Based on warehouse sales

only; 4 customers that have at least bought once at Metro in the last 12 months 5 HoReCa: Hotels, Restaurants, Catering

W&FS CO / METRO – INTERNATIONAL WHOLESALE LEADER1 C

Powerful sales and solid returns Unique global presence

Wholesale Delivery

35 countries incl. 25 megacities

764 stores, 48 depots

>5.4m m² selling space

>112,000 employees

21m buying customers4

Proprietary customer data collection leads

to unique understanding of customer needs

C. 40% of sales in HoReCa5

Germany

16%

Western

Europe

(excl. Germany)

34%

Eastern

Europe

35%

Asia

15%

14/15A sales: €30bn



FIVE DISTINCT LEVERS FOR ACCELERATED VALUE CREATION

Warehouse Delivery Franchising

Solutions and digital enablers across customers and channels

Operational improvements

C

Capture full potential of

warehouse wholesale

Expand FSD4

Further roll out of trader franchising

HoReCa1

SCO3

Trader2

1 HoReCa: Hotels, Restaurants, Caterers; 2 Generalist and specialist food retailers, kiosks, street food trader and petrol stations and small retail chains 3 SCO: Service providers, offices and institutions

1

2

5

3

4

4 Food Service Distribution



WHOLESALE

STRONG PORTFOLIO OF LOCALIZED B2B BUSINESSES

Strong international portfolio of

leading wholesale and FSD

companies with significant synergies

Customer value focused and

tailored to local needs

Leadership approach based on an

active ownership principle

Value creation plans (VCPs)

conducted for most entities

Growth and margin potential

confirmed bottom-up

Strong focus on cash performance

FSD

C



VCP IMPLEMENTATION TO INCREASE CAPITAL EFFICIENCY

RESTRUCTURING

EFFORTS ALMOST

COMPLETE

FOCUSED

GROWTH

Significant restructuring activity in the last four years; historically reflected in inflated special items

Further restructuring to be completed prior to demerger; focus on value creation from day one

Thus, no special items post FY 16/17

Significant market share and earnings potential identified

Localized bottom-up initiatives, combined with review of central functions

Cost-efficiency measures already in implementation

Stop everything not creating customer value

C

MORE WITH LESS

Stronger capex and cash-flow focus as well as cost discipline

Locally tailored strategies allow for more efficient capital allocation

Uncompromised customer focus to result in stickier and higher capital returns



REAL POSITIONING AND STRATEGIC DIRECTION C

Largest German player with

comprehensive food and nonfood offer

Experienced management team

Hybrid store concept combines big shop

and inspirational food lover offering

Pilot store in Krefeld to be opened in fall

Tariff agreement with ver.di with

significant reduction in personnel cost

Improvement of purchasing terms through

buying cooperations with PHD & Markant

Supply chain and logistics optimization

Big Bang store remodeling with

increased customer frequency and

sales

Selective store upgrades

Top quality and fresh assortment

Significant multichannel

growth through click & collect

Acquisition of Hitmeister

Big Bang Store remodeling

New hybrid store concept

Next-level cost efficiency

Multichannel Growth

293 hypermarkets

>2.0m sqm selling space

~€8bn sales and

~6% market share1

~60% sales share with

payback loyalty card holders

~3% EBITDA margin

~1m customer visits per day

#2 in choice2

~80,000 SKUs

Company information unless specified otherwise 1 Nielsen Handelspanel 2016, Total Store Read Umsatzmonitor (TSR) 2 Company information . “Kundenbarometer 2016 - Forschungsgruppe gdp, Hamburg”



CE CO EXECUTIVE TEAM C

1 Subject to supervisory board decision

30 years of experience; thereof 15 years at

Media-Saturn & METRO

Deputy Chairman of the Management

Board of Media-Saturn Holding since

2014; Chairman since Jan 2016

Previous experience includes various

management positions at Media-Saturn

since 2001, Buhrmann NV and HayGroup

CEO1

Pieter Haas


CFO METRO AG (since 2012) with

responsibility for Finance, Accounting,

Global Business Services, Tax, Investor

Relations, Risk Management & Internal

Control Finance, METRO PROPERTIES,

MIB METRO GROUP Insurance Broker

and METRO Logistics

Prior CFO METRO Cash & Carry and

Senior Vice President Planning +

Controlling METRO AG

Previous experience includes various other

management positions at Galeria Kaufhof,

METRO and Banking


General Counsel & Chief Compliance

Officer METRO Group since 2012

As of 2005 board member of Metro Group

Asset Management for portfolio and asset

management

Starting in 1998 in METRO Group

responsible for legal affairs and projects

(M&A); promoted General Manager in

2002

Previously German Federal Privatization

Agency heading Energy and Mining and

Syndikus (Counsel) of Lurgi AG

CFO1

Mark Frese

CLCO1

Dr. Dieter Haag

Molkenteller



CE CO – EUROPE’S LARGEST CONSUMER ELECTRONICS RETAILER

Customer-focused solutions combining products &

services and physical & digital based on 2 unique core assets:

- A huge and loyal customer base with 5.5m avg. daily

customer touchpoints across all channels

- 1,000+ stores, fully multi-channel enabled & digital-ready

1 Western Europe includes Austria, Switzerland, Spain, Portugal, Italy, Greece, Netherlands, Belgium, Luxembourg, Sweden; 2 Eastern Europe includes Hungary, Poland, Russia and Turkey; 3 Includes pure play online and multi-channel (includes

pick-up); 4 Excludes pick-up; 5 Own METRO analysis based on market research data by GfK; GfK has established a retail panel in all CE countries ; the coverage in the panel varies; based on the panel market data GfK also estimates the total CE

market; 6 Currency effects normalized.

46%

41%

13% 8%

92%

Online3

Stationary4 Germany

Western

Europe1

Eastern Europe2

€21.7bn

C

Highlights Key assets

Sales by region FY14/15A Sales by channel FY14/15A

Europe’s largest consumer electronics retailer5 with

significant online sales (2bn EUR, 8% of total) growing online

and “multi-channel” sales double digit in 2014/15

Leading multi-channel and services offering through store

network as well as online and mobile channel

Well-diversified country portfolio with #1 position in 9 regions,

15 countries in total5

9 consecutive quarters of positive like-for-like growth6

€21.7bn



CE Co is the partner, day-to-day companion and navigator for consumers in the fascinating yet sometimes

complicated digital world.

CE Co offers customer-focused solutions combining products & services as well as physical & digital.

PHYSICAL DIGITAL

PRODUCTS

SERVICES

CUSTOMER

CE CO’S AMBITION C



CE Co reaching >5.5m customers per day across all

channels

>1,000 stores in 15 countries ensure significant physical

presence and reach of CE Co. banners

Store network optimized and rightsized during the last years,

leading to increased m² productivity since 2014

Stores are fully multi-channel enabled and digital ready (e.g.

only retailer with digital price tags in all stores)

CRM programmes in place: increased customer knowledge

through highly successful loyalty programmes (>1m Media

Markt Club members in just 6 months) as well as data analytics

Media Markt and Saturn highly recognized and trusted brands

# of stores …

Media Markt Saturn

1

1 Unique visits measures frequency with which website is accessed. Each IP-address is counted only once in pre-defined period of time, irrespective of the number

of visits during this time.

CE CO – CUSTOMER REACH & STORE NETWORK ARE THE TWO KEY ASSETS C

1,000+ Store Network: fully multi-channel and

digital ready 2

# "Customer Journey"



1 Currently in 175 German cities/regions – further international roll out planned.

Multiple store formats covering

specific customer needs and

securing customer proximity

Store sizes from 150m² to

~5,000m² in city center sites,

shopping centers, shop-in-shop

and stand-alone locations

Stores serve as selling points,

points of promotion, showrooms,

warehouses and pick-up location

for online orders

Pick-up Online check of in-store

availability and order

Products collected by

customer in-store

or at locker

Same Day Delivery Online order

Product delivered to

customers’ address on

same day¹

Express Delivery Online order delivered

from store stock

within 3 hours incl. defined

time window¹

CE Co. leverages its customer

understanding to meet its

customers' needs in a seamless

multi-channel approach

- Stores

- Webshop

- Mobile Shop

- Communities

- Content-Platforms

- Service Touch Points

- Call Centre

Multiple Store Formats / Roles Seamless Multi-Channel Approach Unique Delivery Solutions through

store network

C CE CO – MULTI-CHANNEL OFFERING



C CE CO – SERVICES PLAY AN INCREASINGLY IMPORTANT ROLE

1 PoS = Point of Sales

‘Traditional’

Services

Standard

services at PoS1

Call Centre

Consumer Electronics Services Value Chain

PRELIMINARY Insurance, extended warranties & care plans

In-warranty repairs (incl. warranty buy-out)

Asset recovery/ Recycling

Repairs not covered by insurance/warranty

Consumer credit/leasing Refurbishment

(Pre-)Buy

Delivery

Ongoing support

Customer advisory & training

Set-up & installation

Personalized products

Set-Up & Use Repair

CE Service Ecosystem

Both via in-house and 3rd party sales: e.g. add-on services to core products, e.g. energy contracts



NEXT STEPS

Listing Mid 2017

Transaction structure & governance A

Capital structure analysis B Strategy for

independent sector leaders C

AGM approval of demerger & listing preparation

2016 2017

Q2 Q4 Q3 Q2 Q1

Wh

at

hav

e

we d

on

e s

o

far?

Wh

at’

s n

ext?

Preparation of documentation and final

decision making

Organizational

separation

(30 Sep, 2016)

Focus on strategic positioning and branding for W&FS Co and CE Co in next three months

Capital Markets Day in December

Approval of intended demerger targeted for next AGM; anchor shareholders support the intended demerger

Completion aimed for mid-2017

Capital

Markets Day



Mark Frese

CFO

Olaf Koch

CEO

Q&A



Investor Relations

Metro-Straße 1

40235 Duesseldorf

Germany

Tel.: +49 (0)211 6886-1051

Fax: +49 (0)211 6886-3759

Email: [email protected]

Internet: www.metrogroup.de

CONTACT

demerger update

Documents