METRO AG (incorporated with limited liability in Düsseldorf, Federal Republic of Germany)

Transkript

1 Debt Issuance Programme Prospectus METRO AG (incorporated with limited liability in Düsseldorf, Federal Republic of Germany) Metro Finance B.V. (incorporated with limited liability in Venlo, The Netherlands) guaranteed by METRO AG (incorporated with limited liability in Düsseldorf, Federal Republic of Germany) 6,000,000,000 Debt Issuance Programme In relation to notes issued under this Programme (the "Notes"), application has been made to the Commission de Surveillance du Secteur Financier (the "CSSF") of the Grand-Duchy of Luxembourg ("Luxembourg") in its capacity as competent authority (the "Competent Authority") under the Luxembourg Act on Securities Prospectuses (loi relative aux prospectus pour valeurs mobilières) (the "Luxembourg Act") for approval of this Prospectus (as defined below). In order to be able to conduct a public offer and/or listing on a regulated market in relation to certain issues of Notes, the Issuers intend to apply for a notification pursuant to Article 19 of the Luxembourg Act for an offer of such Notes in the Federal Republic of Germany ("Germany"). Each Issuer may request the CSSF to provide the relevant competent authority in additional host member states within the European Economic Area with a notification pursuant to Article 19 of the Luxembourg Act. This document constitutes two base prospectuses for the purposes of article 5.4 of Directive 2003/71/EC of the European Parliament and the Council of 4 November 2003: (i) the base prospectus of METRO AG in respect of non-equity securities within the meaning of Art. 22 (6) no. 4 of the Commission Regulation (EC) No 809 / 2004 of 29 April 2004 and (ii) the base prospectus of Metro Finance B.V. in respect of non-equity securities within the meaning of Art. 22 (6) no. 4 of the Commission Regulation (EC) No 809 / 2004 of 29 April 2004 (together, the "Debt Issuance Programme Prospectus" or the "Prospectus"). Arranger Deutsche Bank Citigroup Deutsche Bank J.P. Morgan The Royal Bank of Scotland Dealers Commerzbank HSBC Société Générale Corporate & Investment Banking UniCredit Bank 24 May 2012

2 Table of Contents Table of Contents...2 Responsibility Statement...3 Documents incorporated by reference...5 Summary of the Prospectus (English Version)...7 Summary of the Prospectus (German Version)...22 Risk Factors...40 Forms of the Notes...49 Terms and Conditions of the Notes (German Version)...51 Terms and Conditions of the Notes (English Version)...51 Set A of the Terms and Conditions of the Notes (German Version)...53 Set A of the Terms and Conditions (English Version)...53 Set B of the Terms and Conditions of the Notes (English Version) Pro Forma Final Terms Form of Guarantee of METRO AG (German Version) Form of Guarantee of METRO AG (English Version) Form of Undertaking of METRO AG (German Version) Form of Undertaking of METRO AG (English Version) Description of METRO AG Selected Consolidated Financial Information of METRO Group for 2011 and Selected Consolidated Financial Information of METRO Group for the period from 1 January to 31 March of 2012 and Description of Metro Finance B.V Selected Financial Information of Metro Finance B.V. for 2011 and Financial Information of Metro Finance B.V. for Financial Information of Metro Finance B.V. for Taxation Subscription and Sale General Information Address List

3 Responsibility Statement Each of METRO AG and Metro Finance B.V. (each an "Issuer" and together the "Issuers") and METRO AG in its capacity as guarantor (the "Guarantor") accepts responsibility for the information contained in this Prospectus. The Issuers and the Guarantor declare that, having taken all reasonable care to ensure that this is the case, the information contained in this Prospectus is, to the best of its knowledge, in accordance with the facts and contains no omission likely to affect its import. Notice This Prospectus should be read and construed together with any supplements hereto and, in relation to any Tranche of Notes, should be read and construed together with the relevant Final Terms (as defined below), provided always that any such supplements and such Final Terms shall not form part of the listing particulars as contained in this document. Each of the Issuers and the Guarantor have confirmed to the Dealers named under "Subscription and Sale" below that this Prospectus (including for this purpose, each relevant Final Terms or Set A Terms and Conditions or Set B Terms and Conditions, as applicable) contains all information which is (in the context of the Programme, the issue, offering and sale of the Notes and the Guarantee of the Notes) material; that such information is true and accurate in all material respects and is not misleading in any material respect; that any opinions, predictions or intentions expressed herein are honestly held or made and are not misleading in any material respect; that this Prospectus does not omit to state any material fact necessary to make such information, opinions, predictions or intentions (in the context of the Programme, the issue, offering and sale of the Notes and the Guarantee of the Notes) not misleading in any material respect; and that all proper enquiries have been made to verify the foregoing. No person has been authorised to give any information or to make any representation not contained in or not consistent with this Prospectus or any other document entered into in relation to the Programme or any information supplied by either of the Issuers or the Guarantor or such other information as is in the public domain and, if given or made, such information or representation should not be relied upon as having been authorised by either of the Issuers, or the Guarantor or any Dealer. To the extent permitted by the laws of any relevant jurisdiction no representation or warranty is made or implied by the Dealers or any of their respective affiliates, and neither the Dealers nor any of their respective affiliates makes any representation or warranty or accepts any responsibility as to the accuracy or completeness of the information contained in this Prospectus. Neither the delivery of this Prospectus or any Final Terms nor the offering, sale or delivery of any Note shall, in any circumstances, create any implication that the information contained in this Prospectus is true subsequent to the date hereof or the date upon which this Prospectus has been most recently supplemented or that there has been no adverse change, or any event reasonably likely to involve any adverse change, in the condition (financial or otherwise) of the relevant Issuer or the Guarantor since the date thereof or, if later, the date upon which this Prospectus has been most recently supplemented or that any other information supplied in connection with the Programme is correct at any time subsequent to the date on which it is supplied or, if different, the date indicated in the document containing the same. The distribution of this Prospectus and any Final Terms or Set A Terms and Conditions or Set B Terms and Conditions, as applicable, and the offering, sale and delivery of the Notes in certain jurisdictions may be restricted by law. Persons into whose possession this Prospectus or any Final Terms comes are required by each of the Issuers, the Guarantor and the Dealers to inform themselves about and to observe any such restrictions. For a description of certain restrictions - 3 -

4 on offers, sales and deliveries of Notes and on the distribution of this Prospectus or any Final Terms and other offering material relating to the Notes, see "Subscription and Sale". In particular, Notes have not been and will not be registered under the United States Securities Act of 1933 (as amended) (the "Securities Act") and may be subject to U.S. tax law requirements. Subject to certain exceptions, Notes may not be offered, sold or delivered within the United States or to U.S. persons. The Prospectus is drawn up in the English language. The English language version shall prevail over any part of this Prospectus translated into the German language except for the Final Terms and Terms and Conditions in respect of the issue of any Tranche (as hereinafter defined) of Notes under the Programme in relation to which the prevailing language will be specified in such Final Terms and Terms and Conditions. The Issuers accept responsibility for the information contained in this Prospectus and confirm that the non-binding translation of the Final Terms and the Terms and Conditions of a Tranche of Notes, being the German or English language, as the case may be, correctly and adequately reflects the respective binding language version. Neither this Prospectus nor any Final Terms or Set A Terms and Conditions, as applicable, for its own constitutes an offer or an invitation to subscribe for or purchase any Notes and should not be considered as a recommendation by either of the Issuers, the Guarantor, the Dealers or any of them that any recipient of this Prospectus or any Final Terms or Set A Terms and Conditions or Set B Terms and Conditions, as applicable, should subscribe for or purchase any Notes. Each recipient of this Prospectus or any Final Terms shall be taken to have made its own investigation and appraisal of the condition (financial or otherwise) of the relevant Issuer and the Guarantor. In connection with the issue of any Tranche of Notes, the Dealer or Dealers (if any) named as the stabilising manager(s) (or persons acting on behalf of any stabilising manager(s)) in the applicable Final Terms may over allot Notes or effect transactions with a view to supporting the market price of the Notes at a level higher than that which might otherwise prevail. However, there is no assurance that the stabilising manager(s) (or person(s) acting on behalf of the stabilising manager(s)) will undertake stabilisation action. Any stabilisation action may begin on or after the date on which adequate public disclosure of the terms of the offer of the relevant Tranche of Notes is made and, if begun, may be ended at any time, but it must end no later than the earlier of 30 days after the issue date of the relevant Tranche of Notes and 60 days after the date of the allotment of the relevant Tranche of Notes. Any stabilisation action or overallotment shall be conducted in accordance with all applicable laws and rules

5 Documents incorporated by reference The following documents mentioned in the table below shall be incorporated into this Prospectus: Document / Heading Page reference in the relevant financial report Included on page of Prospectus METRO AG Quarterly Financial Report Q of the METRO GROUP Income Statement 18 5 Balance Sheet 20 5 Cashflow Statement 21 5 Notes to the Quarterly Financial Report METRO AG Annual Report 2011 / Consolidated Financial Statements of the METRO GROUP Income Statement Balance Sheet Statement of changes in equity Cashflow Statement Notes to the Consolidated Financial Statements Auditor's Report METRO AG Annual Report 2010 / Consolidated Financial Statements of the METRO GROUP Income Statement Balance Sheet Statement of changes in equity Cashflow Statement Notes to the Consolidated Financial Statements Auditor's Report Any document incorporated by reference (as specified in the table above under "Documents Incorporated by Reference") and this Prospectus will be available for inspection at the specified office of the relevant Issuer and at the specified office of the Fiscal Agent during normal busi

6 ness hours, as long as any of the Notes are outstanding, and on the website of the Luxembourg Stock Exchange under " Such documents may also be obtained free of charge at the registered office of METRO AG and are also available on the website of METRO AG ( For the avoidance of doubt, such parts of the documents relating to METRO AG (which together with its affiliates is referred to as the "METRO GROUP", "METRO AG Group" or the "Group") for the financial years 2010 and 2011, respectively, or for the first quarter of 2012 which are not explicitly listed in the table above, are not incorporated by reference into this Prospectus. Information contained in such parts is either of no relevance for an investor or covered in other parts of this Prospectus

7 Summary of the Prospectus The following constitutes the summary (the "Summary") of the essential characteristics and risks associated with each Issuer and the Guarantor and the Notes to be issued under the Programme. This Summary should be read as an introduction to this Prospectus. Any decision by an investor to invest in the Notes should be based on consideration of this Prospectus as a whole, including the documents incorporated by reference, any supplements thereto and the relevant Final Terms. Where a claim relating to the information contained in this Prospectus, including the documents incorporated by reference, any supplements thereto and the relevant Final Terms is brought before a court, the plaintiff investor might, under the national legislation of such court, have to bear the costs of translating the Prospectus, including the documents incorporated by reference, any supplements thereto and the relevant Final Terms before the legal proceedings are initiated. Liability attaches to those persons who have tabled this Summary including any translation thereof, and has applied or will apply for its notification, but only if the Summary is misleading, inaccurate or inconsistent when read together with the other parts of this Prospectus. Summary Description of the Notes The following summary is qualified in its entirety by the remainder of this Prospectus. Issuers: METRO AG, Düsseldorf, Germany Metro Finance B.V., Venlo, The Netherlands Guarantor: Arranger: Dealers: METRO AG, Düsseldorf, Germany Deutsche Bank Aktiengesellschaft, Frankfurt am Main, Germany Citigroup Global Markets Limited, London, United Kingdom Commerzbank Aktiengesellschaft, Frankfurt am Main, Germany Deutsche Bank Aktiengesellschaft, Frankfurt am Main, Germany HSBC Trinkaus & Burkhardt AG, Düsseldorf, Germany HSBC Bank plc, London, United Kingdom J.P. Morgan Securities Ltd., London, United Kingdom Société Générale, Paris, France The Royal Bank of Scotland plc, London, United Kingdom UniCredit Bank AG, Munich, Germany and any other Dealer appointed from time to time either generally in respect of the Programme or in relation to a particular Tranche (as defined below) of Notes

8 Fiscal Agent: Approval and Notifications: Deutsche Bank Aktiengesellschaft, Frankfurt am Main, Germany Application has been made to the Commission de Surveillance du Secteur Financier (the "CSSF") of the Grand-Duchy of Luxembourg ("Luxembourg") in its capacity as competent authority under the Luxembourg Act on Securities Prospectuses (loi relative aux prospectus pour valeurs mobilières) (the "Luxembourg Act") for approval of this Prospectus. In order to be able to conduct a public offer and/or to arrange for listing on a regulated market in relation to certain issues of Notes, the Issuers intend to apply for a notification pursuant to Article 19 of the Luxembourg Act. Currently, it is envisaged to apply for a notification into Germany. The Issuer may from time to time arrange for a notification into other jurisdictions under Article 19 of the Luxembourg Act. Listing and Admission to Trading: Clearing Systems: Initial Programme Amount: Issuance in Series: Terms and Conditions: Application may be made to list Notes issued under the Programme on the Official List of the Luxembourg Stock Exchange and to admit to trading such Notes on the Regulated Market of the Luxembourg Stock Exchange (Bourse de Luxembourg). The Luxembourg Stock Exchange's Regulated Market is a regulated market for the purposes of the Market and Financial Instruments Directive 2004/39/EC. The Programme provides that Notes may be listed on other or further stock exchanges, as may be agreed between the relevant Issuer and the relevant Dealer(s) in relation to each Series, as specified in the relevant Final Terms. Notes may further be issued under the Programme without being listed on any stock exchange. Either (i) Euroclear Bank SA/NV ("Euroclear") and/or Clearstream Banking, société anonyme, Luxembourg ("Clearstream, Luxembourg") or (ii) Clearstream Banking AG, Frankfurt am Main ("Clearstream, Frankfurt") or (iii) in relation to any Tranche of Notes, any other clearing system as may be specified in the relevant Final Terms or, as the case may be, in the Set A Terms and Conditions (as defined below). Up to EUR 6,000,000,000 (or its equivalent in other currencies) aggregate principal amount of Notes outstanding and guaranteed at any one time. Notes will be issued in Series. Each Series may comprise one or more tranches ("Tranches", and each a "Tranche") issued on different issue dates. The Notes of each Series will all be subject to identical terms, except that the issue date (the "Issue Date"), the issue price, the interest commencement date and the first interest payment date may be different in respect of different Tranches. The Notes of each Tranche will all be subject to identical terms in all respects save that a Tranche may comprise Notes of different denominations. Each Tranche of Notes will be subject either to Set A Terms and Conditions ("Set A Terms and Conditions") or Set B Terms and - 8 -

9 Conditions ("Set B Terms and Conditions") (together, the "Terms and Conditions", and, in each case any reference to a numbered Condition shall be construed accordingly). Set A Terms and Conditions are primarily intended to be used for syndicated issues of Notes which are governed by German law. Set A Terms and Conditions will be amended and completed so as to constitute specific terms and conditions relating to the relevant Tranche of Notes, and will be annexed in full to, and thereby become part of, the relevant Global Note. Set A Terms and Conditions may also be used, subject to amendment and completion, for issues of Notes governed by laws other than German law. Set B Terms and Conditions are primarily intended to be used for non-syndicated and/or privately placed issues of Notes under German law. Set B Terms and Conditions will be issued with a minimum denomination of Euro 50,000 or EUR 100,000, as the case may be, subject to the revision of the prospectus directive 809/2004 and are subject to amendment and completion by, and are to be read together with, the Final Terms. In relation to each Tranche of Notes, such Final Terms may specify other terms and conditions. To the extent so specified, and to the extent of any inconsistency therewith, such other terms and conditions shall replace, supplement, or modify these terms and conditions for the purposes of such Tranche of Notes. In addition, however, such terms and conditions may be used for issues which are governed by laws other than German law. Final Terms: Form of Notes: Each Tranche of Notes in respect of which the Set B Terms and Conditions are applicable will be the subject of the final terms ("Final Terms") which, for the purposes of that Tranche only, supplements the Terms and Conditions and this Prospectus and must be read in conjunction with this Prospectus. The terms and conditions applicable to any particular Tranche of Notes in respect of which the Set B Terms and Conditions are applicable are the Terms and Conditions of the Notes as supplemented, amended and/or replaced by the final terms. The Final Terms will also be prepared for each Tranche of Notes in respect of which the Set A Terms and Conditions are applicable. Each such Final Terms will only amend or complete this Prospectus in the context of such Tranche of Notes. Notes may only be issued in bearer form. Each Tranche of Notes will initially be in the form of either a Temporary Global Note or a Permanent Global Note, in each case as specified in the relevant Final Terms or, as the case may be, in the Set A Terms and Conditions. Notes may be issued in new global note ("NGN") or in classical global note ("CGN") form, both as stated in the relevant Final Term or, as the case may be, in the Set A Terms and Conditions. Each Global Note will be deposited on or around the relevant Issue Date with Clearstream, Frankfurt and/or, in the case of a Global Note which will be issued in CGN form, as stated in the relevant Final Terms or, as the case may be, in the Set A Terms and Conditions, a depositary or a common depositary, as applicable, for Euroclear and/or Clearstream, Luxembourg and/or any other relevant - 9 -

10 clearing system. A Global Note which will be issued in NGN form, as stated in the relevant Final Terms or, as the case may be, in the Set A Terms and Conditions, may be delivered on or prior to the Issue Date to a common safekeeper for Euroclear and Clearstream, Luxembourg. Each Temporary Global Note will be exchangeable for a Permanent Global Note. If the TEFRA D Rules are specified in the relevant Final Terms or, as the case may be, in the Set A Terms and Conditions, as applicable, certification as to non-u.s. beneficial ownership will be a condition precedent to any exchange of an interest in a Temporary Global Note or receipt of any payment of interest in respect of a Temporary Global Note. Currencies: Status of the Notes: Notes may be denominated in any currency, subject to compliance with all applicable legal and/or regulatory and/or central bank requirements. Payments in respect of Notes may, subject to such compliance, be made in and/or linked to, any currency other than the currency in which such Notes are denominated. Notes will be issued on an unsecured and unsubordinated basis. Status of the Guarantee: Notes issued by Metro Finance B.V. will be unconditionally and irrevocably guaranteed by the Guarantor on an unsubordinated basis. Issue Price: Maturities: Redemption: Optional Redemption: Tax Redemption: Interest: Denominations: Notes may be issued at any price and either on a fully or partly paid basis, as specified in the relevant Final Terms. Any maturity between 30 days and 30 years, subject, in relation to specific currencies, to compliance with all applicable legal and/or regulatory and/or central bank requirements. Notes may be redeemable at par or at such other Redemption Amount (detailed in a formula, index or otherwise) as may be specified in the relevant Final Terms or, as the case may be, in the Set A Terms and Conditions or the Set B Terms and Conditions. Notes may also be redeemable in two or more instalments on such dates and in such manner as may be specified in the relevant Final Terms or, as the case may be, in the Set A Terms and Conditions. Notes may be redeemed before their stated maturity at the option of the relevant Issuer in whole and the Noteholders to the extent (if at all) specified in the relevant Final Terms or, as the case may be, in the Set A Terms and Conditions or the Set B Terms and Conditions. Except as described in "Optional Redemption" above, early redemption will only be permitted for tax reasons as described in Set A Condition 5(b) or Set B Condition 9(b) as the case may be. Notes may be interest-bearing or non-interest bearing. Interest (if any) may accrue at a fixed rate or a floating rate or other variable rate or be index-linked and the method of calculating interest may vary between the Issue Date and the maturity date of the relevant Series. Notes issued by METRO AG and by Metro Finance B.V. will be issued in such denominations as may be agreed by the relevant Issuer

11 and the relevant Dealer(s) and specified in the relevant Final Terms, save that the minimum denomination of the Notes will be Euro 1,000 or, if any currency other than Euro, in an amount in such other currency equal to or exceeding the equivalent of Euro 1,000 at the time of the issue of the Notes. Where Notes have a maturity of less than one year and either (i) the issue proceeds are received by the Issuer in the United Kingdom or (ii) the activity of issuing the Notes is carried on from an establishment maintained by the Issuer in the United Kingdom, such Notes must (a) have a minimum denomination of 100,000 (or its equivalent in other currencies) and be issued only to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or (b) be issued in other circumstances which do not constitute a contravention of section 19 of the FSMA by the Issuer. Negative Pledge: Cross Default: Taxation: The Notes will have the benefit of a negative pledge as described in Set A Condition 3(a)(b) or Set B Condition 5 (Negative Pledge), as the case may be. The Notes will have the benefit of a cross default as described in Set A Condition 8(c) or Set B Condition 12(c) (Events of Default), as the case may be. All payments in respect of Notes will be made free and clear of withholding taxes of the Federal Republic of Germany or The Netherlands, as the case may be, unless the withholding is required by law. In that event, the relevant Issuer will (subject as provided in Set A Condition 7 or Set B Condition 11 (Taxation)), as the case may be, pay such additional amounts as will result in the Noteholders receiving such amounts as they would have received in respect of such Notes had no such withholding been required. The gross-up obligation does not apply to German withholding tax on interest income (Kapitalertragsteuer) including, if any, church tax, to be deducted or withheld pursuant to the German Income Tax Act (Einkommenssteuergesetz) in its applicable version even if the deduction or withholding has to be made by the Issuer or its representative or Solidaritätszuschlag (solidarity surcharge) imposed on payments made under the Notes in the Federal Republic of Germany. None of the Issuers, the Guarantor, any paying agent or any other person shall be required to pay any additional amounts with respect to any withholding or deduction (i) imposed on or in respect of any Note pursuant to sections 1471 to 1474 of the U.S. Internal Revenue Code of 1986, as amended (the Code ) and the regulations promulgated thereunder ( FATCA ), any law of the Federal Republic of Germany or The Netherlands implementing FATCA, or any agreement between the relevant Issuer and the United States or any authority thereof entered into for FATCA purposes, or (ii) imposed on or with respect to any dividend equivalent payment made pursuant to section 871 or 881 of the Code. Resolutions of Noteholders: In accordance with the German Bond Act

12 Governing Law: Selling Restrictions: (Schuldverschreibungsgesetz), which came into effect on 5 August 2009, the Notes governed by German law may contain provisions pursuant to which the Noteholders of each Series may agree with the Issuer by resolution to amend the Terms and Conditions relating to that Series and to decide upon certain other matters regarding the Notes relating to that Series including, without limitation, the appointment or removal of a common representative for the Noteholders. As set out in the relevant Terms and Conditions, resolutions providing for certain material amendments thereto require a qualified majority of not less than 75 per cent. of the rights to vote participating in the vote. The Notes will be governed by German or other law as specified in the relevant Final Terms or, if Set A Terms and Conditions apply, by German law or other law as specified therein. All other contractual documents relating to the Programme will be governed by German law. Any offers, sales and deliveries of Notes and on the distribution of offering material have to be in compliance with the applicable laws and regulations

13 Summary Description of METRO AG The METRO GROUP was created in 1996 by the merger of leading trade and retail companies. The group is composed of independent individual companies and businesses. The group includes the Metro Cash & Carry sales brand, the hypermarket operator Real; consumer electronics sales brands, Media Markt and Saturn; and Galeria Kaufhof, the department store business. METRO GROUP is managed by METRO AG as the strategic management holding company. The consolidated financial information of METRO AG can be summarized as set forth in the below table. METRO GROUP in figures million million Sales (net)... 66,702 67,258 EBITDA... 3,429 3,591 EBITDA before special items... 3, ,726 3 EBIT... 2,113 2,211 EBIT before special items... 2, ,415 3 Earnings before taxes... 1,473 1,630 Earnings before taxes and special items 2 1, ,834 3 Net profit for the period thereof from continuing operations thereof from discontinued operations Net profit for the period before special items ,139 Investments... 2,095 1,683 Total assets... 33,987 35,067 Equity... 6,437 6,460 1 Only continuing operations and 2011 adjusted for special items from Shape (2010) adjusted for special items from Shape 2012: 222 million ( 135 million) was adjusted in EBITDA, with Metro Cash & Carry accounting for 111 million ( 11 million), Real for 29 million ( 11 million), Media- Saturn for 42 million ( 58 million), Galeria Kaufhof for 26 million ( 1 million), Real Estate for 14 million ( 14 million), the others segment for 20 million ( 41 million) and consolidation for 8 million ( 29 million); 259 million ( 204 million) was adjusted in EBIT and in earnings before taxes, with Metro Cash & Carry accounting for 111 million ( 10 million), Real for 40 million ( 27 million), Media-Saturn for 49 million ( 133 million), Galeria Kaufhof for 27 million ( 0 million), Real Estate for 4 million ( 20 million), the others segment for 20 million ( 41 million) and consolidation for 8 million ( 13 million) Metro Cash & Carry Metro Cash & Carry sales division is the international leader in self-service wholesale trade. It operates under the brand names Metro and Makro in 30 countries in Europe, Asia and Africa. In Germany, the portfolio is complemented by the C+C Schaper brand. Every day, more than 100,000 employees around the world offer commercial customers, including hotel and restaurant owners, catering firms, independent retailers, service providers and public authorities, excellent service and professional advice. With about 20,000 food and around 30,000 nonfood items, the sales division s assortment is tailored specifically to these target groups

14 In fiscal year 2011, sales at Metro Cash & Carry's two brand name wholesale stores, Metro and Makro were approx. EUR 31.2 billion which represents 46.7% of total sales of METRO GROUP. Real Real is among Germany's leading hypermarket operators. It also has stores in Poland, Romania, Russia, Turkey and Ukraine. The 426 hypermarkets have up to 15,000 square metres of selling space. In these stores, customers find all the products that cover their daily needs under a single roof. Sales at Real were approx. EUR 11.2 billion in 2011 (16.8% of METRO GROUP's total sales). Media Markt and Saturn In terms of sales and number of employees, Media-Saturn is METRO GROUP s second-largest sales division and No. 1 among consumer electronics stores in Europe. Media Markt, Saturn and the online retailer Redcoon, which joined the Media-Saturn group of companies in July 2011, do business autonomously in the marketplace and compete against one another. In 2011 sales at Media Markt and Saturn were approx. EUR 20.6 billion which represents 30.9 % of METRO GROUP's total sales. Galeria Kaufhof Galeria Kaufhof sales division is one of Europe s leading department store operators. Its stores are characterised by powerful international product ranges and high-quality ownbrand products. The product range focuses on fashion, shoes, bags, accessories, jewellery, undergarments, stockings and perfumery items. In fiscal year 2011 Galeria Kaufhof generated sales of approx. EUR 3.5 billion which represents 5.2% of METRO GROUP's total sales. Real Estate METRO PROPERTIES is the real estate company of METRO GROUP. It owns 687 retail properties and manages another 153 retail-related properties. The primary job of METRO PROPE RTIES is to increase the value of the Group s real estate assets, whose current book value amounts to about 8 billion, over the long term by practicing active, strategic portfolio management. The company acts as a service provider that assists with the search for suitable business locations as well as the development, construction and management of retail properties. By taking this approach, METRO PROPERTIES supports and accelerates the international expansion of our sales divisions. Others The "Others" segment comprises, among others, METRO AG as the strategic management holding company of METRO GROUP, the procurement organisation in Hong Kong, which also operates on behalf of third parties, as well as logistics services. In fiscal year 2011 "Others" generated sales of approx. EUR 0.3 billion which represents 0.4% of METRO GROUP's total sales

15 Summary Description of Metro Finance B.V. METRO Finance B.V. (in this section also referred to as the "Company") operates as a finance company within the METRO Group. The ultimate parent company of this group is METRO AG which is incorporated in Düsseldorf, Germany and which also is the sole shareholder of the Company. The main activities of Metro Finance B.V. focus on providing short term financial services (up to one year), in particular by granting loans to and accepting deposits from METRO Group companies as well as granting loans for mid an long-term funding of Metro Group companies as well as hedging of related interest rate and currency risks. Besides accepting deposits from METRO Group companies refinancing is done via the capital markets. In the fiscal year 2011, METRO Finance B.V. made a net result after operating expenses and taxes of approximately EUR 2.4 million. The authorised share capital of METRO Finance B.V. consists of 700 ordinary shares of EUR 1,000 each. The issued and fully paid-up share capital consists of 453 shares of EUR 1,

16 Summary Description of Risk Factors Risks relating to the Notes Prospective investors in the Notes are exposed to risks associated with the various specifications of the different types of Notes. The following describes risks relating to the Notes. As the Notes may not be widely distributed and for which there is currently no active trading market, there is no assurance as to the development or liquidity of any trading market for the Notes. The amount of principal and/or interest, if any, payable by the Issuer might be substantially less than the issue price or, as the case may be, the purchase price invested by the Noteholder and may even be zero in which case the Noteholder may lose his entire investment. The Issuer may have the right to redeem all outstanding Notes if the Issuer or the Guarantor would be obliged to increase the amounts payable in respect of any Notes due to any withholding or deduction for or on account of, any present or future taxes. Further, the Notes may be redeemable at the Issuer's option in certain other circumstances. As the Global Notes are held by or on behalf of Clearstream, Frankfurt or Euroclear and Clearstream, Luxembourg, investors will have to rely on their procedures for transfer, payment and communication with the Issuer and/or the Guarantor. Prospective investors should be aware that the payment of principal and/or interest, other interest than fixed rate interest, can be linked to different factors, like indices, equity assets, commodities and other assets or can be limited on the amounts received by the Issuer from a third party. Therefore, the risk of default with respect of such interest payment depends on the specific risks associated with the applicable type of reference asset. Prospective investors of the Notes should be aware that an investment in the Notes may involve exchange rate risks and should determine whether an investment in the Notes is appropriate in their particular circumstances. Prospective investors should be aware that the acquisition of the Notes by a prospective investor of the Notes, whether under the laws of the jurisdiction of its incorporation or the jurisdiction in which it operates (if different) may be unlawful. The market value of the Notes will be affected by the creditworthiness of the Issuer and the Guarantor and a number of additional factors, including but not limited to the value of the respective reference assets or the indices and prospects, market interest and yield rates and the time remaining to the maturity date of the Notes. The price at which a Noteholder will be able to sell the Notes prior to maturity may be at a discount, which could be substantial, from the issue price or the purchase price paid by such purchaser. In relation to Notes governed by German law, a Noteholder supporting a dissenting view on a matter is subject to the risk of losing rights vis-à-vis the Issuer against his will in the event that German Bond Act (Schuldverschreibungsgesetz) is applicable and the Noteholders agree pursuant to the Terms and Conditions with the Issuer to make certain amendments thereto by majority vote according to the German Bond Act. In the case of an appointment of a common representative for all Noteholders a particular Noteholder may lose, in whole or in part, the possibility to enforce and claim his rights against the Issuer regardless of other Noteholders

17 Presentation of the risk situation Business and sector risks As an international company, METRO GROUP is dependent on political and economic developments in the countries in which it operates. Following the economic recovery that started in 2010 and lasted into the first half of 2011, the outlook for the global economy, and the EU economy, in particular, weakened significantly. In many European countries, the heightening sovereign debt crisis, the resulting austerity programmes and growing unemployment have deeply unsettled customers. All of this puts pressure on purchasing power, consumer confidence and overall private consumption. Retail business The German and Western European retail industry, in particular, is characterised by saturated markets, fast change and intense competition. The resulting conditions can influence business developments and represent natural business risks. A fundamental business risk is consumers fluctuating propensity to consume. Strategic company risks International expansion The situation in individual countries can change rapidly. Unrest, changes in political leadership, terrorist attacks or natural disasters can endanger METRO GROUP's business in the affected country. Locations With each new opening, however, the risk that the business will receive less customer acceptance than planned still remains. Moreover, sales could also decline at existing locations. The reasons for this could include changing demographics over time or a change in the competitive situation in the respective geography. Portfolio changes In past years, METRO GROUP has continuously optimised its portfolio. All portfolio changes and the related strategic and investment decisions focus on value creation for the Company. As a result, METRO GROUP can minimise risks associated with changes in the portfolio. Online business In addition to international expansion, Internet sales are an important factor and, at the same time, an opportunity to secure the future success of our Company. Online retail is experiencing strong growth. METRO GROUP expects this development to continue. As a result, it is imperative for METRO GROUP to further strengthen its Internet sales channel to ensure that it does not leave competitors any room to gain market share

18 Risks related to business performance Suppliers As a retail and wholesale company, METRO GROUP depends on external providers for the supply of goods and services. METRO GROUP choose its suppliers very carefully, particularly in the own-brand area. METRO GROUP place a high priority on the reliability of its suppliers as well as on product quality and compliance with safety and social standards. Defective or unsafe products, an exploitation of our environment or inhumane working conditions would cause extensive damage to the image of METRO GROUP and pose a long-range threat to the Company's success. Products METRO GROUP's success also depends heavily on the procurement prices of the products offered for sale. In many cases, METRO GROUP's large purchasing volumes in numerous countries have a positive effect. Product prices are based on the availability of the required raw materials that may temporarily or continually become scarce. This can drive up procurement prices or lead to a certain level of volatility. For example, increased energy prices can lead to higher procurement prices for a variety of products. Logistics The responsibility of logistics is to ensure a high security of goods supplies at optimised cost structures while considering sustainability-related aspects such as energy and fuel consumption. The wide variety of goods and articles and the high merchandise turnover, however, result in organisational, IT and logistics risks. Information technology risks The demands of METRO GROUP's information technology (IT) have markedly increased as a result of new formats and sales channels, such as online retail and deliveries. Other tasks include realtime analyses of business processes and timely monitoring and management of merchandise flows. Regulations, for example on data protection or credit card processing, the associated increased public debate about misconduct as well as the increasing complexity of IT generate additional risks for the Company. Human resources risks The expertise, dedication and motivation of METRO GROUP's employees are key success factors that have a decisive impact on METRO GROUP's competitive position. One prerequisite to achieving strategic goals are highly qualified experts and managers. It is an ongoing challenge to recruit and retain such valuable employees for the Group, in particular in the face of demographic change and intense competition for the best people. Environmental risks METRO GROUP is aware of its responsibility for our environment and has firmly embedded the principle of sustainable business in its corporate strategy. Environmentally harmful practices along the supply chain can seriously damage our image over the long term and endanger METRO GROUP's business. Legal risks, tax risks

19 Legal risks arise primarily from labour and civil law cases. In addition, risks for METRO GROUP may arise from preliminary investigations, for example in the context of possible infringements of cartel or competition law. Tax risks are mainly connected to external audits. Control of Media-Saturn-Holding GmbH METRO AG indirectly through its subsidiary METRO Kaufhaus und Fachmarkt Holding GmbH holds percent of the shares in Media-Saturn-Holding GmbH. Pursuant to IFRS (International Financial Reporting Standards), the power to influence the financial or business decisions of an entity and/or the extent of this influence determines the way in which a holding company is included in the consolidated financial statements. In the process, IAS 27 (Consolidated and Separate Financial Statements) draws on the control criterion as a concept of possible domination. This means that the "power to govern the financial and operating policies of an entity so as to obtain benefits from its activities" (IAS 27.4) suffices to evidence control. In addition, according to IAS 27.13, control is presumed to exist when the parent owns, directly or indirectly through subsidiaries, more than 50 percent of the voting power of an entity unless in exceptional circumstances it can clearly be demonstrated that such ownership does not constitute control. In case of doubt, therefore, control can be assumed. Under the definition of IAS 27.4, the question of whether an entity controls another must consider not only these legal criteria, but also the economic relationship to a holding company. The key factor is the consideration of all rights, facts and relationships that determine a partnership. Based on the holistic treatment required under IAS 27 and in consideration of the relationship with Media-Saturn- Holding GmbH, the Management Board of METRO AG assumes the existence of control. This assumption includes the possibility that the advisory board may take decisions with a simple majority in number. In spring 2011, METRO AG initiated measures to strengthen the governance structures at Media-Saturn-Holding GmbH. With the creation of an advisory board, a simple majority is to apply to certain authorisation requirements, including the approval of the budget. In the past, these authorisations required an 80 percent majority in the shareholders' general meeting. A noncontrolling shareholder of Media-Saturn- Holding GmbH has initiated an action to rescind the shareholders' decision to create an advisory board. This lawsuit was dismissed by the district court of Ingolstadt in its ruling of 11 October As such, the court agreed that the advisory board had been created in a lawful manner. As part of a separate action for a declaratory judgement that was initiated by the same non-controlling shareholder, the district court ruled that the advisory board should take its decisions with an 80 percent majority for matters requiring authorisation. METRO AG's legal opinion is that these matters should be decided by simple majority in number. METRO AG has appealed this decision through its subsidiary METRO Kaufhaus und Fachmarkt Holding GmbH and is confident that it will prevail. In addition, METRO Kaufhaus und Fachmarkt Holding GmbH submitted an arbitration action by written application of 28 March 2011 with the aim of having the advisory board of Media-Saturn-Holding GmbH declared the body responsible for transactions requiring approval and of enabling it to take decisions in these areas by simple majority. The Management Board of METRO AG also expects a decision in favour of the simple majority in number in the case of the arbitration action. According to the Articles of Association of Media-Saturn-Holding GmbH, METRO AG has the right to delegate one more member to the advisory board than the collective body of shareholders and therefore has a majority by number on the advisory board. If, contrary to expectations, this legal action should lead to a legal decision that would put METRO AG at a disadvantage that is, the decision to block the advisory board from taking certain decisions requiring authorisation with a simple majority this could make it necessary for the Group to deconsolidate the Media-Saturn group of companies, unless the Group s sus

20 tained ability to exercise control could be assumed also in that case. The deconsolidation would be a non-cash transaction. However, as a result of the first-time recognition of the Media-Saturn shareholdings at their fair value, it would have a significant positive effect on earnings in the year of deconsolidation. The assets and liabilities of the partnership with the Media-Saturn group of companies would no longer be shown separately, but in a single balance sheet line as an investment book value recognised at equity. The result of the at equity investment would then also be shown in a single line in the income statement, which means that the profit or loss contributions would no longer be shown in individual items of the income statements, such as sales, selling expenses or general administrative expenses. This changed inclusion of the Media- Saturn Group could affect the Group s financial results and its rating. A rating downgrade would be expected to have a negative impact on earnings before taxes in the mid-double-digit millions based on the Group s refinancing structure in Compliance risks The activities of METRO GROUP are subject to various legal stipulations and self-imposed standards of conduct. In 2007, METRO GROUP bundled and complemented existing compliance measures in its uniform Group-wide compliance programme. Since then, a Group-wide compliance organisation has been established, developed and refined to meet both increased legal requirements in the various relevant jurisdictions and public expectations. Financial risks The financial department of METRO AG manages the financial risks of METRO GROUP. Financial risks include the risk of price changes (interest rate risks, currency risks, share price risks), liquidity risks, creditworthiness risks and risks arising from cash flow fluctuations. Price risks For METRO GROUP, price risks result from the impact of changes in market interest rates, foreign currency exchange rates, share price fluctuations or changes in commodity prices. Interest rate risks are caused by changes in interest rate levels. METRO GROUP faces currency risks in its international procurement of merchandise and because of costs and financings that are incurred in a currency other than the relevant local currency or are pegged to the price of another currency. Share price risks result from share-based compensation of METRO GROUP executives. Liquidity risks METRO AG acts as financial coordinator for METRO GROUP companies to ensure that they are provided with the necessary financing to fund their operating and investing activities at all times and in the most cost-efficient manner possible. The necessary information is provided by means of a Group financial plan, which is updated monthly and checked monthly for deviations. This financial plan is complemented by a weekly rolling 14-day liquidity plan