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METRO GROUP : ANNUAL REPORT 2010 : BUSINESS
→ GROUP MANAGEMENT REPORT : 11. RISK REPORT
11. Risk report
Risk management at METRO GROUP is an integral part of
value-orientated business management. It helps the Company’s
management to limit risk and exploit opportunities
and is based on a systematic process of risk identification,
assessment and control for the entire Group. Risks are
internal or external events that can negatively impact the
realisation of short-term objectives or the implementation
of long-term strategies. They can also emerge from missed
or poorly exploited opportunities. we define opportunities
as possible successes that extend beyond the defined objectives.
within the framework of risk management, we recognise
unfavourable developments at an early stage and put
the necessary countermeasures into place. In addition, we
also systematically identify, assess and seize positive Groupwide
opportunities.
Centralised management and efficient
organisation
METRO GROUP’s risk management officer continuously and
promptly informs the Management Board of METRO AG of
important developments in risk management. Based on an
annual Group-wide risk audit, the risk management officer
writes the risk report. The most critical responsibilities of
central risk management include ensuring the Group-wide
exchange of information on risk-relevant issues and developing
risk management in all sales divisions and Group
units. This involves coordinating the Group-wide recording
and systematic assessment of all essential risks according
to uniform standards. The risk management officer compiles
the results in a risk portfolio that provides the basis for
determining METRO GROUP’s total risk and opportunities
situation.
Group-wide risk management tasks and responsibility
for risk management are clearly regulated and mirror
METRO GROUP’s corporate structure. This combines centralised
management by the management holding company
METRO AG with the decentralised operating responsibility
of the individual sales divisions. The sales divisions and consolidated
subsidiaries are thus responsible for the risks, in
particular operating risks. They oversee risk management,
while METRO AG supervises its implementation. The Supervisory
Board and its Accounting and Audit Committee work
intensely on risk management.
EBIT after Cost of Capital (EBITaC) as a
risk assessment metric
→ p. 129
The value contribution, which we calculate as EBITaC (EBIT
after Cost of Capital), is a key benchmark for corporate
success. This represents EBIT including special items from
Shape 2012 periodised over four years less the costs of capital.
The degree of readiness to assume risk also focuses on
this key metric and thus follows the principle of sustainably
increasing enterprise value. In principle, METRO GROUP
takes entrepreneurial risks only if they are manageable and
if the opportunities involved promise reasonable value added.
Strict risk policy principles
Risks incurred in conjunction with the core processes of
wholesale and retail trading are borne by METRO GROUP.
The core processes include the development and implementation
of business models, decisions on store locations, the
procurement and sale of merchandise and services, human
resources development relating to specialists and managers,
as well as liquidity protection. In principle, we do not
assume risks that are not related to these core processes
or support processes.
Clearly defined risk management details
The coordinated application of risk management tools is
assured by the compilation of all relevant facts in guidelines.
These include the Articles of Association and by-laws of
Group companies, internal Group procedures and the risk
management manual of METRO AG that provides information
on how the risk management system works, offers a
comprehensive overview of potential risk areas, assigns
responsibility for monitoring and provides instructions on
how to act. The risk management manual is continuously
reviewed and updated. Risks, as well as opportunities, are
identified in a bottom-up process that extends through all
management levels. An early-warning system assesses
business risks in terms of scope for a planning period fixed
at three years.
Group reporting promotes internal
risk communication
Group reporting is the central vehicle for internal risk communication.
It is complemented by risk management reporting.
The aim is to allow for the structured and continuous