THINK FRESH!cbr:///cms/9701/9725/69418/69421/72633/9823
THAT'S SHAPE 2012cbr:///cms/9701/9725/69418/69421/72633/9820
Strategy
Content
Shape 2012cbi:///cms/69427
Since it was founded in 1996, METRO Group has experienced rapid growth, evolving from a Company with 16 sales divisions that generated about 96 percent of its sales in Germany to a focused international retailing group. In 2009, METRO Group generated only about 40 percent of its sales in its domestic market of Germany. In the past, each of its 4 sales divisions, Metro Cash & Carry, Real, Media Markt and Saturn as well as Galeria Kaufhof, generally appeared as independent companies in the marketplace. Numerous services, however, were bundled in cross-divisional service companies, including such key functions as procurement and logistics. In addition, the Company has optimised its portfolio repeatedly in recent years. Optimisation measures include the initial public offering of Praktiker Bau- und Heimwerkermärkte in 2005, the sale of the Extra supermarkets in 2008 as well as the divestment of the Adler fashion stores in 2009.
The clear division of responsibilities within the Company has furthered METRO Group's dynamic expansion in recent years. In the process, the Company's organisational structure has been adapted to its fast growth and internationalisation. METRO Group strives to optimally respond to altered business parameters at all times while rigorously living up to its commitment to market and customer centricity. This also includes the Company's financial management, which flexibly adapts the Company to changing conditions.
On 20 January 2009, METRO Group launched its efficiency and value-enhancing programme Shape 2012 with the aim of ensuring the Company's sustained profitable growth over the long term. The programme aims for profit improvement potential of €1.5 billion from 2012. Cost savings, which are likely to be fully reflected in income from 2011, account for about €800 million of this. The rest is expected to come from productivity gains and other profit-boosting measures, such as the tapping of new customer groups. These measures will be fully reflected in income from 2012. Shape 2012 contributed €208 million to earnings for the financial year 2009.
Under Shape 2012, each sales division and each segment of METRO Group contributes a defined total. Metro Cash & Carry will contribute €700 million in profit improvement potential from 2012, Real will account for €400 million, Media Markt and Saturn for €250 million, Galeria Kaufhof, Real Estate and "others" for €50 million each cbi:///cms/72642
The clear division of responsibilities within the Company has furthered METRO Group's dynamic expansion in recent years. In the process, the Company's organisational structure has been adapted to its fast growth and internationalisation. METRO Group strives to optimally respond to altered business parameters at all times while rigorously living up to its commitment to market and customer centricity. This also includes the Company's financial management, which flexibly adapts the Company to changing conditions.
On 20 January 2009, METRO Group launched its efficiency and value-enhancing programme Shape 2012 with the aim of ensuring the Company's sustained profitable growth over the long term. The programme aims for profit improvement potential of €1.5 billion from 2012. Cost savings, which are likely to be fully reflected in income from 2011, account for about €800 million of this. The rest is expected to come from productivity gains and other profit-boosting measures, such as the tapping of new customer groups. These measures will be fully reflected in income from 2012. Shape 2012 contributed €208 million to earnings for the financial year 2009.
Under Shape 2012, each sales division and each segment of METRO Group contributes a defined total. Metro Cash & Carry will contribute €700 million in profit improvement potential from 2012, Real will account for €400 million, Media Markt and Saturn for €250 million, Galeria Kaufhof, Real Estate and "others" for €50 million each cbi:///cms/72642
Key areas of actioncbi:///cms/72655
The maxim of Shape 2012 is: as decentrally as possible, as centrally as necessary. The changes implemented as part of this programme are designed, in particular, to simplify the Company's organisational structures, to transfer full operational responsibility to the sales divisions, and strengthen the Finance, Controlling and Compliance functions at the holding company level. Shape 2012 enables METRO Group to respond even faster and more flexibly to its customers' needs. The programme comprises 5 areas of action: cbi:///cms/72658
- Promotion of market and customer centricity
METRO Group is decentralising operational decision-making authorities. To increase local-market centricity, the sales divisions and national subsidiaries are given greater individual responsibilities. In future, for example, Metro Cash & Carry, the most international sales division, will manage its operational activities largely from the 3 regions "Western Europe and Middle East, North Africa", "Central and Eastern Europe" as well as "Asia". - Undivided operational responsibility of the sales divisions
In future, Metro Cash & Carry, Real, Media Markt and Saturn as well as Galeria Kaufhof will be responsible for the entire supply chain - from procurement and logistics to sales. Functions that have so far been handled at the Group level are being transferred to the sales division level. - Optimised organisational structure for finance and compliance - strengthened human resources focus
The Finance, Controlling and Compliance functions are managed centrally and directly at the holding company level. This organisational structure facilitates the Group's financial management and ensures more effective compliance and risk management for the entire Company. The Board department Human Resources is being strengthened to account for the growing importance of executive recruiting and retention. METRO AG takes over the Company-wide recruitment and support of highly qualified executives. - Real estate portfolio as profit centre
To render the value contribution transparent, METRO Group's real estate portfolio is being managed as a profit centre and shown separately in segment reporting. - Strict management through centralised return targets
METRO Group's new management structures enable the Company to focus even more strongly on cost management and efficiency gains. This applies, in particular, to administrative functions. Operational units that do not meet return requirements will be systematically restructured or disposed of.
Reorganisation largely completedcbi:///cms/72693
s early as the first half of 2009, METRO Group prepared and implemented its key changes in corporate structures. One objective was to improve internal cooperation and to provide for simpler and more transparent core processes within the Company.
Effective 31 December 2009, responsibility for the key functions of procurement logistics and infrastructure provision was fully transferred to the sales divisions. In countries where METRO Group is represented with several companies, Supply Chain Councils manage the activities of the METRO Group companies in charge of logistics.
Meanwhile, business areas that are crucial to the management and oversight of the Company were centralised further. This concerns, in particular, Finance, Controlling and Compliance, which have been managed by METRO AG based in Düsseldorf since mid-2009. cbi:///cms/72694
Effective 31 December 2009, responsibility for the key functions of procurement logistics and infrastructure provision was fully transferred to the sales divisions. In countries where METRO Group is represented with several companies, Supply Chain Councils manage the activities of the METRO Group companies in charge of logistics.
Meanwhile, business areas that are crucial to the management and oversight of the Company were centralised further. This concerns, in particular, Finance, Controlling and Compliance, which have been managed by METRO AG based in Düsseldorf since mid-2009. cbi:///cms/72694
Necessary personnel changes implementedcbi:///cms/72695
Shape 2012 also calls for personnel adjustments. The programme will affect about 17,000 jobs around the world by 2012. As far as possible, the adjustments are to be carried out through normal turnover, which means that not all vacant positions are being refilled. METRO Group has already eliminated about 8,600 jobs (full-time equivalents) under Shape 2012. This figure corresponds to the balance of expansion-related personnel increases less personnel adjustments related to Shape 2012 including the divestment of locations. cbi:///cms/72696
Start of transformation phasecbi:///cms/72722
On the basis of the new organisational structure, all METRO Group segments are developing their own measures to achieve the desired sales and earnings improvements. One focus is on projects that allow METRO Group to bolster and expand its competitive position in countries where METRO Group already does business.
Since the start of Shape 2012, more than 6,000 measures that can contribute to profit growth have been developed. They include, among other things: cbi:///cms/72724
Since the start of Shape 2012, more than 6,000 measures that can contribute to profit growth have been developed. They include, among other things: cbi:///cms/72724
- Metro Cash & Carry has introduced a delivery service in several markets, including Germany, Austria, the Czech Republic, Italy and Russia. Customers can order the desired goods in their chosen wholesale store. Employees package the products and deliver them on the following day or even the same day. The service added more than €100 million to sales volume in Germany alone.
- At Real, the new own brands Real Quality, Real Bio and Real Selection continued their positive development in 2009. Sales of the new Real own brands and TiP in the food area grew by more than 10 percent year on year in 2009. The Real Quality brand is the key driver of this trend. Its brand claim, "Brand quality, consistently better prices.", now covers more than 1,500 products.
- As part of the supply chain optimisation programme in 2009, the Media-Saturn group of companies adapted the use of warehousing structures to actual demand. In view of the current market situation and order processes, the stock optimisation resulted in a substantial reduction of used and rented (external) warehouse space.
- Galeria Kaufhof has adjusted its marketing structures and redefined processes. The centralisation of art buying, the use of new materials in visual merchandising and a new creative concept, for example, produced cost savings. At the same time, the sales division enhanced the quality of its advertising approach in 2009.
Rigorous implementationcbi:///cms/72727
METRO Group generated earnings improvements of about €208 million from Shape 2012 during the reporting year, although most of the projects that have been launched so far have not yet had an impact on Group earnings. To record the current status of individual measures, the Company has defined 5 degrees of implementation which reflect the life cycle of a measure from idea generation to financial impact on the Company's results.
As part of Shape 2012, METRO Group will from 2010 focus on assessing all existing measures, implementing promising projects and realising the associated profit improvements as fast as possible. In addition, new measures must be developed to prepare for changing economic parameters. The focus will be on: cbi:///cms/72728
As part of Shape 2012, METRO Group will from 2010 focus on assessing all existing measures, implementing promising projects and realising the associated profit improvements as fast as possible. In addition, new measures must be developed to prepare for changing economic parameters. The focus will be on: cbi:///cms/72728
- Customer orientation
- Procurement
- Own-brand products
- New business models
- Processes in stores and locations
- Administrative processes
- Logistics and supply chain management
Effective managementcbi:///cms/72731
All sales divisions and companies of METRO Group operate so-called programme offices. Their task is to manage their respective Shape 2012 measures, to offer support and help project managers to implement these measures. cbi:///cms/72732
additional Informations
