METRO Cash & Carry Serbia is a member of the METRO GROUP, one of the largest international retail companies. The presentation discusses key performance indicators (KPIs) for retail industries, comparing them between retail and manufacturing businesses. It covers classification of KPIs, quantitative KPIs derived from financial statements, qualitative KPIs from other sources, and monitoring profit and loss KPIs such as sales, margins, costs and the cash conversion cycle.

1. METRO Cash & Carry Serbia Member of
ICV Serbia
KPI’s in Retail Industries
Belgrade
May 17th , 2013

2. METRO Cash & Carry Serbia Member ofPage 2
METRO GROUP
Retail vs. Manufacturing
Classification of KPI
Summary
CCC
Monitoring P&L KPI’s

3. METRO Cash & Carry Serbia Member ofPage 3
The Driving Force in International Trade and Retail
An Overview of the Corporate Structure
Foundation of Corporate Culture
Employer of some 280,000 People Around the World
METRO A.G.
METRO GROUP is one of the most important international retailing companies
Fiscal Year 2012
Sales € 66.7 billion
of which abroad € 41.1 billion
(61.6 percent)
Earning before Interest and Taxes (EBIT) € 1.4 billion
Earning before Interest, Taxes, Depreciation, Amortization (EBITDA) € 3 billion
Consolidated Netincome € 101 million
Locations 2,243
Countries with METRO Presence 32
Number of Staff on Annual Average Total 282,989
Sales (bn): € 21.0
Countries: 17
Stores: 942
Cross functional companies
Hypermarkets
Sales (bn): € 11.0
Countries: 6
Stores: 421
Self-service
wholesale
Sales (bn): € 31.6
Countries: 29….
Stores: 744
Sales (bn): € 3.1
Countries: 2
Stores: 137
Consumer electronic
stores
Department
stores

4. METRO Cash & Carry Serbia Member ofPage 4
Retail vs. Manufacturing
METRO GROUP
Classification of KPI
Summary
CCC
Monitoring P&L KPI’s

5. METRO Cash & Carry Serbia Member of
Short P&L details
Retailers are gaining profit on quantities
X Y
15% - 20% 50% - 55%
13% - 19% 40% - 45%
1% 15%
1.5% - 3.5% 10% - 13%
Suppliers and customers
Method of reporting earnings is the same
Product costing vs. Trading Goods
Low cost vs. “Investing in sales”
EBIT is main KPI for measuring Company’s performance

6. METRO Cash & Carry Serbia Member ofPage 6
Classification of KPI
METRO GROUP
Retail vs. Manufacturing
Summary
CCC
Monitoring P&L KPI’s

7. METRO Cash & Carry Serbia Member of
• Quantitative
KPI derived from Financial
Statements!
• Qualitative
KPI (derived by Interviews,
Monitoring, Surveys, etc.) like
customer satisfaction or employee
attitude
Classification of KPI
Number of NSO

8. METRO Cash & Carry Serbia Member ofPage 8
Monitoring P&L KPI’s
METRO GROUP
Retail vs. Manufacturing
Summary
CCC
Classification of KPI

9. METRO Cash & Carry Serbia Member of
Influence factors on Sales

10. METRO Cash & Carry Serbia Member of
Sales - Trading day shift (I)
Example: Day Effects of April 2013
Sales - Trading day shift
Do we earn more sales on Wednesdays or Saturdays?
Sales of Tuesday
will contribute to
2013 instead sales of
Sunday
Ortodox Easter in
2012 leads to
additional
Sunday in 2013
In 2012 two Big
effects in April:
Easter and 1st of May

11. METRO Cash & Carry Serbia Member of
Bank Holiday effect = (Actual sales of weekday / Ø-sales of weekday) - 1
Choose months for individual periods
Serbia
April
April
Country
Start month
End month
Sum effect abs. 2012: Holiday effect * Average weekday sales in 2012
Sum effect abs. 2013: Holiday effect * Average weekday sales in 2012
Combined effect
(Day constellation & Bank Holiday effect)
Day constellation
Change to PY in %P = ((36.9 / 37.4) - 1) x 100
April = -1.4 in % to PY when operative performance is 0
2012: Actual sales
2013 (simulated): Sum of Ø-sales per weekday per month in 2012
•Problem 1: Holidays do sometimes not affect the whole country.
•Problem 2: Holidays do in some countries not indicate closed stores.
•Problem 3: Bridge days do sometimes compensate potential sales losses (especially food).
•Problem 4: No time period shifts (e. g. Easter effects).
Sales - Trading day shift
Calculation example
2
1
3
4
Day effect for given period:
Day effects
2012
2013
Sum of Ø sales Sum effect abs. Sum m€
46.9
57.6
-9.5
-20.7
37.4
36.9
-1.4%

12. METRO Cash & Carry Serbia Member of
absolute
Net sales
% of sales
100,0%1.000
Merchandise purchase costs -95,0%-950
Inventory discrepancies -0,5%-5
Change in write down -0,4%-4
Statistical gross profit 4,1%41
Bonus
Cash discount
Merchandising allowances
Slotting fees
Opening fees
Synergies
Transport reimbursement
Disposal reimbursement
...
2,0%
2,9%
5,5%
0,8%
0,3%
1,5%
0,4%
0,3%
0,1%
20
29
55
8
3
15
4
3
1
Later reimbursement total 13,8%138
Total result 17,9%179
„Head-Terms“,
direct related to the
article
Not traceable to
article
Income – Overview
Costs of
goods
sold

13. METRO Cash & Carry Serbia Member of
Income: t0: 8,8% x 1.000 = 88 €
Margin
in % o.s.
t1: 10,2% x 1.300 = 132,6 € : 44,6 €
10,2%
Margin-related variance:
Sales-related and margin-
related variance:
(10,2% - 8,8%) x 1.000 = €14
8,8%
t0
Sales-related
variance:
t1
(10,2% - 8,8%) x
(1.300 -1.000) = 4,2
(1.300 – 1.000)
x 8,8% = €26,4
1.000
Sales
1.300
Calculation of income variances
Income Variance

14. METRO Cash & Carry Serbia Member of
Example: Discount Impact
ABC Trading company has weekly sales of 500 € (quantity 500 with a price of 1 €).
The gross profit margin is 20%.
For one week there is a special promotion campaign which is offering 5% discount.
What is the necessary quantity growth to reach the same gross profit as
before?
MADE TO TRADE. Retail Key Figures. Financial Management Training June 2012 | © METRO AG 2012 21

15. METRO Cash & Carry Serbia Member of
before discount after discount
20%=
gross profit 100
sales 500
gross profit 75
sales 475
=15,79%
GP(old) = GP(new) 100 = 100
GPM(old) * sales(old) = GPM(new) * sales(new) 20% * 500 = 15,79% * x
when sales(old) = 1 then when sales(old) = 1 then
sales(new) = GPM(old) / GPM(new) 1,266 = 20% / 15,79%
To reach the same gross profit, sales have to grow by +26,6%.
gp(old) * quantity(old) = gp(new) * quantity(new) 0,2 * 500 = 0,15 * x
quantity(new) = gp(old) * quantity(old) / gp(new)
x = 0,2 * 500 / 0,15
x = 666,6
666,6 / 500 = 1,333
Accordingly the quantity has to grow by +33,3%.
Example: Discount Impact

16. METRO Cash & Carry Serbia Member of
Example P&L
ACT
2009
M€
Net Sales
Gross Profit on Sales
Other Operating Income
Total Income
Personnel Expenses
Depreciation
Advertising Expenses
Leasing Expenses
Maintenance
Other Costs
Other operating Expenses
Total Costs
EBIT
1.297
327
4
331
-47
-14
-6
-45
-6
-78
0
-195
135
%o. S.
100,0
25,2
0,3
25,5
-3,6
-1,1
-0,5
-3,4
-0,5
-6,0
0,0
-15,1
10,4
M€
1.465
362
4
366
-58
-14
-9
-48
-8
-88
1
-224
142
ACT
2010
%o. S.
100,0
24,7
0,3
25,0
-4,0
-1,0
-0,6
-3,3
-0,6
-6,0
0,1
-15,3
9,7
Dev.
2010 vs. 2009
M€%o. S.
168
35
0
35
-11
0
-3
-3
-2
-10
1
-29
6
13,0
10,8
-6,3
10,6
-24,6
-2,8
-41,6
-7,9
-31,1
-12,6
---
-14,6
4,7
Sales rel. Dev.:
25,5% * 168 =
43
Margin rel.
Dev.: (incl. Mix
effect)
35-43 = -8
Cost efficiency indicators

17. METRO Cash & Carry Serbia Member of
Cost efficiency indicators – Step Chart

18. METRO Cash & Carry Serbia Member ofPage 18
Summary
METRO GROUP
Retail vs. Manufacturing
Monitoring P&L KPI’s
CCC
Classification of KPI

19. METRO Cash & Carry Serbia Member of
Selected sales, margin and cost related KPIs

20. METRO Cash & Carry Serbia Member ofPage 20
CCC
METRO GROUP
Retail vs. Manufacturing
Monitoring P&L KPI’s
Summary
Classification of KPI

21. METRO Cash & Carry Serbia Member of
Cash Conversion Cycle (CCC) – Manufacturing Company.
The Cash Conversion Cycle refers to the number of days, the capital is
“locked” in the company. The shorter the better.
Cash Conversion Cycle (CCC) – Manufacturing Company.

22. METRO Cash & Carry Serbia Member of
Cash Conversion Cycle (CCC) – Retail Company.
negative Cash Conversion Cycle (CCC)
= DIO + DSO - DPO
•The Cash Conversion Cycle of a retail company is ideally negative.
•The retailer pays his bill after the customer has bought the product.
Cash Conversion Cycle (CCC) – Retail Company.