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Letter to the shareholderscbi:///cms/258849
Video message cbi:///cms/258850
Dear Ladies and Gentlemen,
cbi:///cms/258857As the new Chairman of the Management Board of METRO AG, I am pleased to present the 2011 Annual Report to you. "Made to Trade": that is the principle that continued to guide your Company as it worked to create sustainable value during the reporting year - value for our customers, for our staff and for you. cbi:///cms/258858
Looking back, 2011 was an eventful year: Following initial signs of recovery, economic growth cooled in some parts of the world during the second half of the year. The ongoing sovereign debt crisis in Europe and the United States made consumers more reluctant to spend money. In addition, we watched political revolutions unfold in North Africa and the Middle East. They were followed by a massive earthquake in Japan that triggered a devastating tsunami and the nuclear catastrophe in Fukushima. All in all, the economies of the world grew at varied rates. From METRO GROUP's perspective, however, global economic developments in 2011 fell distinctly short of expectations for the year and of actual developments in 2010. cbi:///cms/258859
Despite all this, METRO GROUP was able to keep Group sales and EBIT before special items at nearly the high level generated in the previous year. Please keep one point in mind: in 2010, we generated the highest result before special items in the history of METRO GROUP. In 2011, EBIT before special items totalled €2.4 billion as Group sales climbed to €66.7 billion. cbi:///cms/258860
In my opinion, our performance is primarily the result of a cultural change that was initiated by our value-enhancing programme Shape 2012. Your Company is now addressing challenges in a more determined and efficient manner. It is more focused on creating value for customers and is developing forward-looking solutions more systematically. The pillars and drivers of this change are our 280,856 employees, whom I would like to thank on behalf of the entire Management Board. Because of them, METRO GROUP is more competitive and more customer-focused than it was just a few years ago. Examples of these achievements can be found throughout the entire Company. cbi:///cms/258861
Our wholesale business Metro Cash & Carry has further expanded its range of own-brand products that are tailored to the needs of professional customers. The same is true of our delivery service, which we were able to significantly grow once again. New formats and targeted ways of approaching customers also enabled us to acquire and retain customers. Furthermore, we were able to grow our international business, in particular in the dynamic markets of Eastern Europe and Asia. cbi:///cms/258862
Our Real sales division also considerably expanded the range of own-brand products. Customers can now choose between more than 4,000 products. The integration of the concept modules - that is, fixtures for a modern product presentation - has advanced further. The success of these measures is backed up by the figures. cbi:///cms/258864
At Media-Saturn, we set the course for the future. This included the purchase of the online retailer Redcoon, enhancing the sales division's online presence. In October 2011, Saturn launched its multichannel marketing effort in Germany, our most important market by far. Media Markt has also been online since January 2012. Dovetailing the sales divisions’ stationary sales with online retailing is an enormous competitive advantage. At the same time, Media-Saturn has sharpened its price profile in an effort to further improve its competitive position. Our goals are just as ambitious: we want to also position the sales division as the leading consumer electronics retailer on the Internet over the long term. cbi:///cms/258866
Galeria Kaufhof remains one of the leading operators of department stores in Germany and has maintained its profitability. In 2011, we continued to enhance the sales division, adding, for instance, a new online shop. As you know, we decided in January 2012 to discontinue sales negotiations until further notice. The current capital market environment does not offer the right parameters for such an important transaction. For this reason, we took a decision that is in your best interest and are pressing forward with further value-enhancing steps on our own. cbi:///cms/258867
METRO GROUP is not just a retail and wholesale company. It is also a major property manager. With 2,187 sites in 33 countries, we boast a unique portfolio of retail locations. In 2011, we stepped up our active portfolio management efforts and further improved our real estate expertise. cbi:///cms/258868
To sum up: your Company once again made progress in 2011. This progress is not yet reflected in the share price, which performed disappointingly in 2011. In light of this, we would like to thank you all the more for your trust. METRO GROUP's continually high earnings strength allows us to propose an unchanged dividend of €1.35 per ordinary share at the Annual General Meeting on 23 May 2012. cbi:///cms/258869
Today, it is clear that the current financial year will be a very challenging one. Your Company is better equipped than ever to deal with these challenges and successfully continue down the path of long-term growth. Our activities are focused on our customers and the benefits or added value we can offer them - by intensifying our core competencies and continually improving our offer. We continue to expand our customer - focused sales channels, assortments and services. Metro Cash & Carry is diversifying its business model through such complementary offers as a delivery service, new formats and e-commerce. Media-Saturn will expand its multichannel marketing in Europe, and Galeria Kaufhof is also bolstering its online presence. These measures are accompanied by continued efforts to improve our cost efficiency to enhance our attractiveness for our customers. cbi:///cms/258870
I am confident that all sales divisions have significant potential to perform even better. With the cultural change, we are also fostering entrepreneurial spirit, making increased individual responsibility and more efficiency part of everyday reality at METRO GROUP. We will energetically exploit the opportunities that arise, take a far-sighted approach and continue to boost our competitiveness. cbi:///cms/258872
Sincerely, cbi:///cms/258877
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