- METRO Cash & Carry Russia is a division of METRO Group that operates cash and carry wholesale stores in Russia. It has 52 stores and generates €2.6 billion in annual sales. - The document discusses METRO's strategies around supplier collaboration, category management, and EDI implementation to improve operations and customer satisfaction. - Key focus areas include stock reduction through improved supplier discipline, analytics to inform category planning, and expanding the use of EDI to digitize processes like ordering and invoicing.

1. ECR International Forum – “Act Local” Akin Bayer Moscow, June 2nd, 2010 Copyright © 2009 METRO Cash & Carry Russia Member of METRO Group METRO Cash & Carry Russia

2. METRO Cash & Carry – a core Division of METRO Group Page Member of METRO Group METRO Cash & Carry Russia Sales (bn): € 19.7 Countries: 16 Stores: 818 METRO Group sales 2009: € 65.5 bn Sales (bn): € 11.3 Countries: 6 Stores: 441 Sales (bn): € 3.5 Countries: 2 Stores: 141 Sales (bn): €30.6 Countries*: …. Stores*: Self-Service Wholesale Food retail Department stores Nonfood specialty Cross functional companies

3. METRO Cash & Carry is internationally leading self-service wholesaler Page Member of METRO Group METRO Cash & Carry Russia 670 Stores in 30 countries 5.3 million m2 total sales area 106.000 employees 31 billion EUR Sales in 2009 METRO Cash & Carry International METRO Cash & Carry Russia 2001 – start of operation 52 operative stores (federal) 13.000 employees 2.6 billion EUR sales in 2009

4. METRO Cash&Carry participates actively in ECR initiatives worldwide Page Member of METRO Group METRO Cash & Carry Russia Anti theft protection Building Brands Shrinkage Food Safety Couponing Efficient Unit Loads Shelf ready packaging EPC Task Force Category Management GDS RFID Logistics On Shelf Availability Enabling Technologies

5. Economic developments in 2009 underline the necessity to foster deeper cooperation between retailers and suppliers Page Member of METRO Group METRO Cash & Carry Russia +38% Drop in retail market development Drop in currency rate Drop in customer confidence

6. Satisfying customers needs and expectations is key Page Member of METRO Group METRO Cash & Carry Russia EDI Supply chain & Supplier collaboration Category Management

7. Successful category management requires a trustful relation with suppliers and producers Page Member of METRO Group METRO Cash & Carry Russia relationship turns into collaboration exchange of information and data's joint business building Active category management approach fosters the relation between retailer & supplier … with the main aim to serve customers needs and to meet their expectations in terms of availability easy to find quality packaging Selected intensified cooperation's

8. Category management is the interface to the customer – findings category shopper helps us to indentify the decision drivers Page Member of METRO Group METRO Cash & Carry Russia Decision Drivers BRAND known product (62%), favourite taste (45%) manufacturer/ brand (27%) PRICE (33%) *Raffaello = 100% brand awareness, >17%* market share “ Brand of the Year” in Pralines in 2009 Conclusion: Visual Anchor in the Category needed to: bring shoppers in the aisle and help to orientate visual Anchor = the strongest brand in the category I have already bought these pralines and I like them Specifics of taste and formula Acceptable price Producer company Good value for money Producer country Brand Beautiful pack I wanted to taste novelty Another person asked me Different tastes in one pack

9. Category management is the interface to the customer – findings from category shopper helps to identify the decision drivers Page Member of METRO Group METRO Cash & Carry Russia Visual Anchor Shopper Decision factors Brand as recipe and price tier Planograms based on: Sales in RUR and Metro units Total Income Shelf Stock coverage Professional assortment Own Brands Usage of planograms Integration of visual anchors

10. Supplier Collaboration aimed to improve availability and stock days at the same time Page Member of METRO Group METRO Cash & Carry Russia Stock reduction measures allowed to reduce stock days: Supplier discipline – more accurate deliveries due to adjusted time schedules and minimum order recalculation Planning of promo-actions Master data issues – timely price adjustment, missing, wrong bar-coding, timely articles blocking Administrative issues – delivery documents completeness, certificates availability - supplier’s data sources (internet portal of the suppliers) Out of Stock at supplier’s warehouse – forecasting improvement, production adjustments *1Q 2010 vs Q1-Q4 2009: Stock days decrease* Service level*

11. EDI implementation proved significant benefits EDI ( E lectronic D ata I nterchange) performs a great impact for MCC and supplier business processes: Process optimization Cost optimization Reliable and on-time payments EDI solutions are significantly flexible for business needs, traceable and transparent EDI is a considerably stable and well-performed technology. Page Member of METRO Group METRO Cash & Carry Russia 2005 2008 2009 2009 EDI launch DESADV RECADV Invoice SLS INVPRT EDI business impacts Implementation milestones EDI penetration results Message Comment Number of suppliers Penetration (% of documents) ORDERS Purchase order 3271 81,61% DESADV Delivery note 515 25,39% RECADV Goods receiving 497 20,23% MCC RU is a “pathfinder” for EDI in Russia

12. EDI INVOICE is the next milestone to be reached Page Member of METRO Group METRO Cash & Carry Russia Paper invoice Invoice payment Input of total data Goods receiving data EDI invoice Retail chain Supplier Aim of the project: Implement EDI invoice with suppliers. As soon as necessary law changes are adopted immediately switch to EDI invoice without paper. Current status : 63 suppliers are in production, another 600 suppliers are in test including Kraft foods, Nestle, WBD. Target 2010 : receive 5% of the invoices by EDI Current EDI process together with paper Reconciliation of EDI and paper invoice Archive

13. ECR activities are not only fostering customer orientation, but also an excellent dialog platform Page Member of METRO Group METRO Cash & Carry Russia improve efficiency by spotting non-productive processes makes End to End Supply Chain processes and costs transparent helps to reduce pipeline cost supports reliable cooperation, best practice transfers between supplier and retailer however, it’s an important dialog platform ECR initiatives are depending on shared vision “customer” ready to share relevant information and best practices mutual respect and trust between the players full commitment

14. Contact Page Member of METRO Group METRO Cash & Carry International GmbH Page 14 AKIN BAYER Managing Director METRO Cash & Carry Ltd Leningradskoye Shosse, 71 G, 125445 Moscow Russian Federation Phone: +7 (495) 660 26 00 Fax: +7 (495) 502 12 20 Mobile: +7 (919) 991 94 09 Akin.Bayer@metro.com.ru © Copyright This concept is intended only for the purpose of presentation and is the intellectual property of Metro Cash & Carry International GmbH. Passing on to third parties as well as the use and exploitation of the presentation either in whole or in part is expressly forbidden METRO Cash & Carry International GmbH Geschäftsführung/Executive board of management: Frans W.H. Muller (CEO); Dr. Andrea Francesco Martinelli; Dr. Christian Mielsch; Dr. Claudia Schlossberger; Thomas Ziegler Sitz/registered office Düsseldorf, Amtsgericht Düsseldorf HRB 36616 - Commercial Register of the Duesseldorf Local Court HRB 36616