Other notes
41. Segment reporting
Segment reporting has been carried out in accordance with IfRS 8 (Operating Segments). The segmentation corres- ponds to the Group’s internal controlling and reporting structures and is generally based on the division of the busi- ness into individual branches.
Self-service wholesale
Metro Cash & Carry is now represented in 30 countries through its Metro and Makro brands. Its assortments, ser- vices and complete solutions are customised to the require- ments of commercial customers, including hotel and res- taurant owners, catering firms, independent retailers as well as service providers and public authorities.
Food retail
Real operates hypermarkets in Germany and Poland. In addition, the sales division has locations in Romania, Russia, ukraine and Turkey. All stores offer a wide range of food including a large share of fresh products, which is supple- mented by a nonfood assortment.
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→ NOTES
“assets held for sale” as fixed assets. Additions to non- current financial assets represent another exception. → Segment assets include non-current and current assets.
They do not include mostly financial assets according to the balance sheet, income tax items, cash and assets allocable to discontinued operations.
→ Segment liabilities include non-current and current liabilities. They do not include, in particular, financial liabilities according to the balance sheet, income tax items and liabilities allocable to discontinued opera- tions.
→ In principle, transfers between segments are made based on the costs incurred from the Group’s perspec- tive.
→ discontinued operations in 2009 include the figures relating to the Adler fashion stores.
Reconciliation statement
€ million 31/12/2010
Segment assets 28,064 Non-current and current financial assets 251 Cash and cash equivalents 4,799
deferred taxes 1,000
Entitlements to income tax refunds 412 Other entitlements to tax refunds1 356
Receivables from other financial transactions2 108
Other 77
Group assets 35,067
Segment liabilities 19,031 Non-current and current financial liabilities 8,283
deferred taxes 212
Income tax liabilities 291 Income tax provisions3 147
Other tax liabilities4 535
liabilities from other financial transactions4 41
liabilities to third parties4 30
Other 37
Group liabilities 28,607
1 Included in balance sheet item “other receivables and assets” (current)
2 Included in balance sheet items “other receivables and assets” (non-current and current) 3 Included in balance sheet items “other provisions” (non-current) and “provisions” (current) 4 Included in balance sheet item “other liabilities” (non-current and current)
Consumer electronics retail
Media Markt and Saturn offers a comprehensive assort- ment including the latest brand products. With its two strong brands, the sales division is now represented in 17 countries.
Department stores
Galeria Kaufhof operates department stores in Germany and Belgium. In Belgium, the sales division operates under the name Galeria Inno. Galeria’s department stores offer high-quality assortments with a focus on textiles.
Real Estate
METRO Group Asset Management manages METRO GROuP’s real estate assets in 30 countries. Its responsibilities include, among other things, actively increasing the port- folio value, developing new stores and branches as well as managing existing locations.
Additional information on the segments is provided in the management report.
Aside from the information on the operating segments listed above, equivalent information is provided on the Metro regions. here, a distinction is made between the regions Germany, Western Europe excluding Germany, Eastern Europe and Asia/Africa.
→ External sales represent sales of the operating seg- ments to third parties outside the Group.
→ Internal sales represent sales between the Group’s operating segments.
→ Segment EBITdAR represents EBITdA before rental expenses less rental income.
→ Segment EBITdA comprises EBIT before write-downs and write-ups on tangible and intangible assets. → EBIT as the key ratio for segment reporting describes
operating earnings for the period before net financial income and income taxes. Intra-Group rental contracts are shown as operating leases in the segments. The properties are leased at market rates. In principle, loca- tion risks and recoverability risks related to non-current assets are only shown in the segments when they rep- resent Group risks.
→ Segment investments include additions to assets adjusted for additions due to the reclassification of
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METRO GROuP’s remaining interest rate risk is assessed in accordance with IfRS 7 using a sensitivity analysis. In the process, the following assumptions are applied in the con- sideration of changes in interest rates:
The total impact determined by the sensitivity analysis relates to the actual balance as of the closing date and reflects the impact for one year.
Original floating-rate financial instruments whose interest payments are not designated as the underlying transaction in a cash flow hedge against changes in interest rates are recognised in interest income in the sensitivity analysis. Original fixed-interest financial instruments generally are not recognised in interest income. They are only recognised in other financial result if they are designated as the under- lying transaction within a fair value hedge and measured at their fair value. In this case, however, the interest-related change in the value of the underlying transaction is offset by the change in the value of the hedging transaction upon full effectiveness of the hedging transaction. The variable interest flows within the Group that result from a fair value hedge are recognised in interest income.
financial instruments designated as the hedging transac- tion within a cash flow hedge to hedge against variable inter- est flows will only be recognised in interest income when the payment flows have actually been initiated. however, the measurement of the hedging transaction at fair value is rec- ognised in reserves retained from earnings without being reported as a profit or loss.
Interest rate derivatives that are not part of a qualified hedg- ing transaction under IAS 39 are recognised at fair value in other financial results and, through resulting interest flows, in interest income.
At the closing date, the remaining interest rate risk of METRO GROuP results essentially from variable interest receivables and liabilities to banks with a total investment balance after consideration of hedging transactions in the amount of €3,924 million (previous year: €2,963 million).