Annual Report 2024
COMPANY PROFILE
METRO INC. is a food and pharmacy leader in Québec and Ontario. As a retailer, franchisor, distributor, and
manufacturer, the Corporation operates or services a network of 995 food stores under several banners including
Metro, Metro Plus, Super C, Food Basics, Adonis and Première Moisson, as well as 639 pharmacies primarily under
the Jean Coutu, Brunet, Metro Pharmacy and Food Basics Pharmacy banners, providing employment directly or
indirectly to more than 98,000 people.
2024 HIGHLIGHTS
•
52-week Fiscal year versus 53 weeks in 2023
•
Sales of $21,219.9 million, up 2.4% and up 4.4% based on 52 weeks in 2023
•
Net earnings of $931.7 million, down 8.5%
•
Adjusted net earnings(1) of $972.9 million, down 3.3%
•
Fully diluted net earnings per share of $4.11, down 5.5%
•
Adjusted fully diluted net earnings per share(1) of $4.30, unchanged versus last year
•
Successful completion of supply chain modernization program
•
Return on equity(1) of 13.4%
•
Dividends per share increase of 10.6%, the 30th consecutive year of dividend growth
RETAIL NETWORK
Québec
Ontario
New Brunswick
Total
Supermarkets
Metro
Metro Plus
192 Metro
132
324
Adonis
11 Adonis
4
15
Discount stores
Super C
110 Food Basics
145
255
Neighbourhood
stores
Marché Richelieu
53
Marché Richelieu
1
54
Marché Ami
315 Marché Ami
1 Marché Ami
5
321
Specialized
stores
Première Moisson
25 Première Moisson
1
26
Total food
706
283
6 995
Pharmacies
Brunet
Brunet Plus
Brunet Clinique
Clini Plus
141
Metro Pharmacy
Food Basics Pharmacy
77
218
PJC Jean Coutu
PJC Health
PJC Health & Beauty
384
PJC Jean Coutu
PJC Health
9
PJC Jean Coutu
PJC Health
PJC Health & Beauty
28 421
Total
pharmacies
525
86
28 639
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 2 -
FINANCIAL HIGHLIGHTS
2024
2023
2022
2021
2020
(52 weeks)
(53 weeks)
(52 weeks)
(52 weeks)
(52 weeks)
OPERATING RESULTS
(Millions of dollars)
Sales
21,219.9
20,724.6
18,888.9
18,283.0
17,997.5
Operating income before depreciation,
amortization and impairment of assets
1,987.0
1,969.6
1,844.6
1,732.5
1,683.6
Net earnings
931.7
1,018.8
849.5
825.7
796.4
Adjusted net earnings(1)
972.9
1,006.6
922.1
854.2
829.1
Cash flows from operating activities
1,680.0
1,563.5
1,461.4
1,583.3
1,474.1
FINANCIAL STRUCTURE
(Millions of dollars)
Total assets
14,140.6
13,865.3
13,401.3
13,592.1
13,423.9
Current and non-current debt
2,674.3
2,665.6
2,342.8
2,636.8
2,633.0
Current and non-current lease liabilities
1,636.2
1,658.7
1,779.0
1,927.2
2,069.4
Equity
7,038.9
6,816.3
6,618.4
6,412.8
6,155.4
PER SHARE
(Dollars)
Basic net earnings
4.13
4.36
3.53
3.34
3.15
Fully diluted net earnings
4.11
4.35
3.51
3.33
3.14
Adjusted fully diluted net earnings(1)
4.30
4.30
3.82
3.44
3.27
Dividends
1.3075
1.1825
1.0750
0.9750
0.8750
FINANCIAL RATIOS
(%)
Operating income before depreciation,
amortization and impairment of
assets / Sales
9.4
9.5
9.8
9.5
9.4
Return on equity(1)
13.4
15.2
13.0
13.1
13.1
SHARE PRICE
(Dollars)
High
87.22
78.90
73.54
66.25
64.61
Low
65.43
67.09
59.14
52.63
49.03
Closing price (At year-end)
84.84
70.54
69.84
60.18
64.02
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 3 -
MESSAGE FROM THE CHAIR OF THE BOARD
Dear Shareholders,
The Company achieved good results in 2024 in a constantly changing market, in line with the financial guidance we
communicated at the start of the 2024 fiscal year. As the Company had indicated, results were influenced by the
investments and expenses required in connection with the transformation of the Company's supply chain. In fact,
2024 saw the commissioning of the new fresh produce distribution centre in Toronto, the final milestone in the
Company's infrastructure modernization project, which began seven years ago. Over the past seven years, the Board
has approved and closely monitored this major project, supporting the company's management in its efforts to build a
modern supply chain that will enable the Company to serve its customers more effectively and efficiently(2).
In collaboration with its affiliated Metro retailers and pharmacist owners, the Company also continued to invest in its
food retail and pharmacy network, opening several new stores and renovating, expanding or relocating existing ones.
The Board supported the Company's management in its network development strategy and closely monitored the
progress of the development plan. This plan will enable the Company to become more competitive and better serve
its customers(2).
Proud of the success of the Moi loyalty program in Quebec, launched in May 2023, METRO has extended the
program to Ontario under the name Moi Rewards, in partnership with RBC and its Avion Rewards program. The
Board has reviewed and approved this initiative and has offered its support to the management team in the roll-out of
this important project, which has been highly successful to date.
These results and projects could not have been achieved without the commitment and hard work of management,
employees, retailers as well as pharmacist-owners, who have enabled the Company to achieve this good
performance and meet these challenges.
Board of Directors
The Board of Directors continued to support and monitor management's implementation of the Company's strategic
plan. Over the past year, the Board reviewed and discussed with the senior management team growth opportunities,
competition, potential risks and key strategic enablers. The Board also approved and monitored key projects such as
the roll-out of the Moi Rewards program in Ontario mentioned above.
Throughout the year, the Board of Directors, through its Governance and Corporate Responsibility Committee,
continued to monitor the Company's activities relating to the priorities set out in the 2022-2026 Corporate
Responsibility Plan, including the strategy and initiatives put forward in the fight against climate change. The Board
also reviewed and approved the annual Corporate Responsibility Report in which the Company disclosed for the first
time its results with regards to its five short-term, science-based greenhouse gas emission reduction objectives,
which had been approved by the Board in 2023. The Board also reviewed and approved the first report published
under the Fighting Against Forced Labour and Child Labour in Supply Chains Act, which demonstrates the
Company's approach on this issue and how it assesses supplier practices.
The Board, on the recommendation of the Human Resources Committee and with the assistance of its compensation
consultant, reviewed executive compensation and approved a new Performance Share Unit Plan. This new plan will
measure performance at the end of the 3-year cycle, as opposed to the sum of 3 years of annual objectives in the
previous plan, and will include a corporate responsibility component. In addition, the Board has adopted new
minimum shareholding requirements for senior executives which takes into account total direct compensation. These
new requirements come into effect in fiscal 2025. The Board believes that these changes will further align the
Company's compensation practices with its performance and, by the same token, with shareholders' interests.
As in previous years, as part of our shareholder engagement policy, the Chair of the Corporate Governance and
Responsibility Committee and I met with some of the Company's major shareholders to discuss issues affecting the
Board of Directors, including Board renewal and diversity, the corporate responsibility plan and strategy, including
climate strategy, and corporate governance. These meetings enabled us to have a constructive dialogue with the
Company's shareholders on subjects of importance to the Board, the Company and shareholders in general.
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 4 -
The Board considers that its current composition is totally appropriate, allowing for a diversity of opinions,
backgrounds, skills and experience, in the interests of the Company and its shareholders. I would like to thank the
members of the Board of Directors for their collaboration and commitment to making METRO a successful, innovative
and inclusive Company that continues to build for the future.
Finally, I would like to thank our shareholders for the trust and support you continue to show us.
Pierre Boivin
Chairman of the Board
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 5 -
MESSAGE FROM THE PRESIDENT AND CEO
The main highlight of 2024 was the completion of our supply chain modernization program, a nearly billion-dollar
investment over seven years. This transformation will provide capacity for future growth and enable efficiency gains,
as well as strengthen our market position by offering our customers more freshness and variety(2).
We also achieved another milestone in our strategic plan with the launch of our Moi Rewards program in Ontario. The
program, which celebrated its first anniversary in Quebec in May, has been extended to our Ontario Metro and Food
Basics banners, providing additional savings for members in Ontario.
Although food inflation in Canada saw a noticeable decline in 2024, rising food prices continue to have an impact on
consumers. Our teams continued to work tirelessly to deliver the best value possible in all our banners. With our
discount, conventional and specialty banners, we strive every day to serve the needs of our customers, in store and
online.
Our success this year was driven by the popularity of our food banners, particularly Food Basics and Super C, whose
sales grew at a faster pace than the market. Our conventional banners performed well relative to their peers
delivering value and great fresh food to their local communities. The complementarity of our banners has enabled us
to grow our market share and maintain our leadership position in Quebec and Ontario.
Our pharmacy division also recorded a solid performance, driven by the strong growth of prescriptions, specialty
drugs, and professional services. In Fiscal 2024, 4.3 million clinical services were performed by our affiliated
pharmacists. Sales of over-the-counter medicines, cosmetics as well as health and beauty products also increased.
After years of discussions, all major food retailers voluntarily agreed to adhere to the proposed Grocery Code of
conduct. METRO had committed to signing the Code as early as 2021 and our team played a leading role in its
development. The Code of conduct should promote more transparency in retailer-manufacturer negotiations and
ensure a more resilient supply chain(2).
2024 Financial Results
Fiscal 2024 was a 52-week year versus 53 weeks in 2023. We are satisfied with our results for Fiscal 2024, which
was a transition year with the commissioning of two new automated distribution centres in the last 12 months.
While these investments position us well for continued long-term profitable growth, they created significant headwinds
in Fiscal 2024 in terms of temporary duplication of costs and learning curve inefficiencies, as well as higher
depreciation and lower capitalized interest. Since we would not be able to fully absorb these additional expenses, we
provided the following guidance in November of 2023: operating income before depreciation and amortization and
impairment of assets, were forecasted to grow by less than 2% in Fiscal 2024 versus the level reported in Fiscal
2023, and adjusted net earnings per share(1) were forecasted to be flat to down $0.10 in Fiscal 2024 versus the level
reported in Fiscal 2023.
Sales reached $21.2 billion, up 2.4% and up 4.4% excluding the 53rd week in 2023. Gross margin remained stable at
19.7% of sales while operating expenses stood at 10.4% resulting in an operating income before depreciation,
amortization and impairment of assets as a percentage of sales of 9.4% as compared to 9.5% last year. Adjusted net
earnings(1) were $972.9 million, down 3.3% versus the previous year. Adjusted fully diluted earnings per share(1) were
$4.30, the same as last year. METRO’s results landed well withing the guidance provided in November 2023. We also
increased the dividend per share by 10.6%, the 30th consecutive year of dividend growth.
2024 HIGHLIGHTS
Modernization of our distribution network
The inauguration of the second phase of our automated fresh distribution centre in Toronto last fall marked the final
milestone in a nearly billion-dollar investment in the modernization of our supply chain.
Initiated in 2017, the distribution network modernization project included investments in the new automated fresh and
frozen distribution centre in Terrebonne that opened in 2023, the expansion of the fresh produce distribution centre in
Laval, and the construction of two new automated distribution centres in Toronto - a frozen facility that opened in
2022, and the first phase of the fresh facility that opened in 2021.
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 6 -
The modernization of our supply chain represents a significant investment in METRO's future by improving service to
our store network with greater accuracy and reduced handling time, delivering efficiencies throughout the supply
chain, enhancing the customer experience through greater variety and freshness, and supporting our growth plans.
Retail investments
In collaboration with our affiliated Metro retailers as well as our Jean Coutu and Brunet pharmacist-owners, we
continued to invest in our food and pharmacy networks. In Quebec, we opened seven Super C stores. We also
completed major expansions or renovations at five Metro and Metro Plus stores and two Super C stores in Quebec.
In Ontario, we opened one new Metro store and one new Food Basics store and carried out major renovations at
three Metro stores and one Food Basics store. As for our proximity banners, we integrated three new Marché
Richelieu stores into our network, including our very first in New Brunswick.
On the pharmacy side, we opened three new Jean Coutu and Jean Coutu Santé pharmacies. One expansion and 11
major renovations were carried out at Jean Coutu. One Brunet pharmacy was renovated and another converted to
the Jean Coutu banner.
Loyalty
We launched the Moi Rewards program at Metro and Food Basics stores in Ontario in the fall and expanded our
partnership with RBC and Avion Rewards. Our goal is to help our customers save on everyday essentials by
becoming the most personalized and relevant loyalty program in Canada(2). We are building on the success of the Moi
program in Quebec, which ranked third in LoyauT's ranking of all loyalty programs in Canada in 2024. The strength
and complementarity of our food and pharmacy networks, as well as our strong personalization capabilities, are an
integral part of its success.
The program is now available in eight banners and over 1,175 stores across Quebec, Ontario and New Brunswick,
with 3.9 million active members.
eCommerce
Our online food sales grew by 46%, driven by third-party marketplaces and by the rollout of our click and collect
service to our discount banners.
We introduced our click and collect service at Food Basics, and it is now available in 63 stores. At the same time, we
deployed the service at Super C, bringing the total number of stores of that banner offering click and collect to 92.
A new delivery service was also introduced for Adonis, through our partnership with Instacart and we extended our
partnership with Uber to the Jean Coutu and Brunet banners.
Pharmacy Division: Amendments to the Pharmacy Act
Over the past year, pharmacists in the Jean Coutu and Brunet networks performed more than 3 million consultations
related to their expanded field of practice, above and beyond the advice they provide daily, helping to ease the
pressure on the healthcare system. Bill 67 was adopted by the Quebec National Assembly on November 7, giving
pharmacists greater agility by broadening the situations in which they can help their patients. This is an important
development for the practice of pharmacy, and a significant gain for patients who will benefit from greater accessibility
to care in our 525 Jean Coutu and Brunet pharmacies. These new responsibilities will officially come into effect when
the government adopts the regulatory framework of Bill 67 in 2025(2).
Corporate Responsibility
We completed the third year of our 2022-2026 Corporate Responsibility Plan and published our 14th report.
To meet the requirements of new legislation, we published last April our first Report under the Fighting Against Forced
Labour and Child Labour in Supply Chains Act, which sets out the measures we have taken to prevent and mitigate
the risk of forced labour or child labour in our operations. Our continuing partnership with Sphera, formerly
SupplyShift, allows us to assess our suppliers against our Supplier Code of Conduct for Responsible Procurement,
an important dimension in making our business more resilient in the long term.
For the first time, we are disclosing our results against our five greenhouse gas emission reduction targets. Finally,
we have significantly improved our waste diversion rate, both in our stores and in our distribution centres.
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 7 -
Investing in our communities
In support of our purpose to nourish the health and well-being of our communities, we announced the creation of the
METRO Shared Kitchens community network, in collaboration with Food Banks of Quebec. We will be investing
nearly $2 million in the first phase to establish eight shared community kitchen projects across the province. These
collective spaces will allow various community groups and organizations to bring together their clienteles to offer
culinary education workshops or organize collective cooking groups. Our vision is to continue developing this network
and, in line with local needs, add more shared kitchens in Quebec and Ontario(2).
2025 Outlook and priorities(2)
Our teams strive every day to offer the best possible value to our customers in all our food stores and pharmacies
with competitive everyday prices, our extensive range of private brands, our attractive weekly promotions and our
loyalty program.
To achieve our mission of meeting or exceeding our customers’ expectations every day, our priorities for Fiscal 2025
are to:
1.
Achieve our budgets and business plans;
2.
Execute with excellence in stores and pharmacies;
3.
Reduce costs and increase efficiency;
4.
Engage our customers and increase their loyalty;
5.
Develop the best team;
6.
Achieve our corporate responsibility goals.
Now that the commissioning of our new distribution centres is behind us, we are focused on realizing efficiency gains
and improving the service to our store network. These investments in our supply chain have also positioned us well
for growth through the expansion of our retail network in the years ahead, and we are planning to open a dozen new
stores in Fiscal 2025.
We expect to gradually resume our profit growth in Fiscal 2025 and we maintain our publicly disclosed annual growth
target of between 8% and 10% of adjusted net earnings per share(1) over the medium and long term.
Acknowledgments
I would like to thank all our employees, affiliated retailers, franchisees and pharmacist-owners, as well as my
management colleagues, for their commitment to serve the customers and patients every day. I would also like to
thank the members of the Board of Directors for their oversight and constant support. Finally, I would like to thank
you, dear shareholders, for your trust.
Eric La Flèche
President and Chief Executive Officer
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 8 -
MANAGEMENT'S DISCUSSION AND ANALYSIS
AND CONSOLIDATED FINANCIAL STATEMENTS
For the year ended September 28, 2024
TABLE OF CONTENTS
Page
Overview ............................................................................................................................................................................
11
Purpose, mission and strategy ......................................................................................................................................
11
Key performance indicators ............................................................................................................................................
13
Key achievements
............................................................................................................................................................
14
Events after the reporting period ...................................................................................................................................
15
Selected annual information ...........................................................................................................................................
16
Outlook ..............................................................................................................................................................................
16
Operating results ..............................................................................................................................................................
17
Quarterly highlights ..........................................................................................................................................................
19
Cash position ....................................................................................................................................................................
21
Financial position .............................................................................................................................................................
22
Sources of financing ........................................................................................................................................................
26
Contractual obligations ....................................................................................................................................................
26
Related party transactions ..............................................................................................................................................
26
Fourth quarter ...................................................................................................................................................................
27
Derivative financial instruments and hedge accounting ............................................................................................
29
New accounting standards .............................................................................................................................................
29
Forward-looking information ...........................................................................................................................................
29
Non-GAAP and other financial measurements ...........................................................................................................
29
Controls and procedures ................................................................................................................................................
31
Significant judgments and estimates ............................................................................................................................
32
Risk management ............................................................................................................................................................
33
Management's responsibility for financial reporting ...................................................................................................
38
Independent auditors' report ..........................................................................................................................................
39
Annual consolidated financial statements ....................................................................................................................
43
.
The following Management's Discussion and Analysis sets out the financial position and consolidated results of METRO INC. for the
fiscal year ended September 28, 2024, and should be read in conjunction with the annual consolidated financial statements and the
accompanying notes as at September 28, 2024. This report is based upon information as at December 4, 2024 unless otherwise
indicated. Additional information, including the Annual Information Form and Certification Letters for Fiscal 2024, is available on the
SEDAR website at www.sedarplus.ca.
- 10 -
OVERVIEW
The Corporation is a leader in food and pharmaceutical industries in Québec and Ontario.
The Corporation, as a retailer, franchisor or distributor, operates under different grocery banners in the conventional
supermarket and discount segments. For consumers seeking a higher level of service and a greater variety of
products, we operate 324 supermarkets under the Metro and Metro Plus banners. The 255 discount stores operating
under the Super C and Food Basics banners offer products at low prices to consumers who are both cost and quality-
conscious. The Adonis banner, which currently has 15 stores, is specialized in fresh products as well as
Mediterranean and Middle-Eastern products. The Corporation also operates Première Moisson, a banner specialized
in premium quality artisan bakery, pastry, and deli products. Première Moisson sells its products to the Corporation’s
stores, to restaurants and other chains as well as directly to consumers in its 26 stores. The majority of the stores are
owned by the Corporation or by structured entities and their financial statements are consolidated with those of the
Corporation. Independent owners bound to the Corporation by leases or affiliation agreements operate a large
number of Metro and Metro Plus stores. The Corporation supplies these stores and their purchases are included in
our sales. The Corporation also acts as a distributor for independent neighbourhood grocery stores. Their purchases
are included in the Corporation's sales.
The Corporation also acts as franchisor and distributor for 421 PJC Jean Coutu, PJC Health and PJC Health &
Beauty pharmacies as well as 141 Brunet Plus, Brunet, Brunet Clinique, and Clini Plus pharmacies, held by
pharmacist owners. The Corporation supplies these pharmacies and their purchases are included in our sales. The
Corporation operates 77 pharmacies in Ontario under Metro Pharmacy and Food Basics Pharmacy banners and their
sales are included in the Corporation's sales. Sales also include the supply of non-franchised pharmacies. The
Corporation is also active in generic drug distribution through its subsidiary Pro Doc Ltée.
PURPOSE, MISSION AND STRATEGY
For more than 75 years, METRO has made its mark, first in Québec and then in Ontario and New Brunswick, by
meeting the nutrition and health needs of the communities it serves. Its organic and acquisition-led growth has
positioned it today as a leader in the food and pharmacy sectors in Eastern Canada.
The 2018 acquisition of The Jean Coutu Group strengthens METRO's position in the health sector. The combination
of these two leading companies creates retail leader with more than $21 billion in revenues to meet the growing
needs of consumers in food, pharma, health and beauty.
METRO's purpose is a reflection of its increased presence in health and represents its current reality and aspirations.
For METRO, nourishing the health and well-being of our communities is the work our employees undertake with
excellence, day after day, to feed and serve the people of the communities where we operate.
Our purpose is based on four pillars, which are anchored in our daily practices and ways. These guide our actions
and decisions, allowing us to fulfill our mission of exceeding our customers' expectations every day to earn their long-
term loyalty.
Customer focus
We put the customer at the center of all our decisions in each of our banners. Offering them the best experience as
well as quality products at competitive prices and professional health services to help them live healthier lives are at
the heart of our actions.
Best team
We strive to attract and retain the best talent by offering them opportunities for development and advancement in a
collaborative, healthy and safe environment where they can achieve their full potential. In addition, we are committed
to ensure that our employees make a difference at work and in the communities where we live and work.
Operational Excellence
We set high operating standards and are results-oriented. We measure our performance systematically to be agile to
our customers' needs and the competition.
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 11 -
Financial Discipline
We deliver the expected results and achieve our objectives by managing our resources optimally and by exercising
strict financial control.
The annualized growth targets we will strive to achieve over the medium and long term are:
•
Sales growth between 2% and 4%;
•
Adjusted earnings before net financial costs and income taxes(1) growth between 4% and 6%;
•
Adjusted fully diluted net earnings per share(1) growth between 8% and 10%.
Our assumptions related to these performance targets include the following:
•
Ability to continue to execute our business model, our strategic plan and our capital plan;
•
Medium to long-term inflation rate (CPI) in line with historical levels;
•
Population growth rate remains stable;
•
No material change in the macro-economic or regulatory environment;
•
No material shift in the competitive landscape;
•
No material labour, supply chain or distribution center disruptions;
•
Ability to continue to deliver merchandising and promotional strategies that resonate with our customers;
•
Ability to continue to operate our distribution centers and stores efficiently and effectively.
The occurrence of certain risks could impact our ability to achieve our performance targets, notably disruptions in the
supply chain, distribution centers or technological systems, a material labour shortage or conflict or an event that
significantly tarnishes our brand or reputation. For further details see section "Risk management" of this report.
The foundation of our business strategy remains corporate responsibility and the continued integration of ESG factors
into our business model. We aim(2) to ensure that our actions bring value to METRO, and to our stakeholders -
customers, employees, suppliers, shareholders and community partners.
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 12 -
KEY PERFORMANCE INDICATORS
We evaluate the Corporation's overall performance using the following key indicators:
•
sales:
◦sales growth;
◦same-store sales growth;
◦average customer transaction size and number of transactions;
◦average weekly sales;
◦average weekly sales per square foot;
◦sales per hour worked by store to assess productivity;
◦percentage of sales represented by customers who are loyalty program members;
◦market share;
◦customer satisfaction;
•
gross margin percentage;
•
operating income before depreciation, amortization and impairment of assets as a percentage of sales;
•
adjusted earnings before net financial costs and income taxes(1) growth;
•
net earnings as a percentage of sales;
•
net earnings per share growth;
•
adjusted fully diluted net earnings per share(1) growth;
•
retail network investments:
◦dollar value and nature of store investments;
◦number of stores;
◦store square footage growth;
•
return on equity;
•
total shareholder returns.
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 13 -
KEY ACHIEVEMENTS
Sales for Fiscal 2024 totalled $21,219.9 million, up 2.4% compared to $20,724.6 million for Fiscal 2023, and up 4.4%
based on 52 weeks in 2023. Net earnings for Fiscal 2024 were $931.7 million compared with $1,018.8 million for
Fiscal 2023, while fully diluted net earnings per share were $4.11 compared with $4.35 in 2023, down 8.5% and 5.5%
respectively. Adjusted net earnings(1) for Fiscal 2024 totalled $972.9 million compared with $1,006.6 million for Fiscal
2023, down 3.3%. Adjusted fully diluted net earnings per share(1) for Fiscal 2024 amounted to $4.30 the same amount
as Fiscal 2023. In 2023, the labour conflict at 27 Metro stores in the Greater Toronto Area had an unfavorable impact
of approximately $27.0 million after-tax or $0.12 per share and the 53rd week had a favorable impact of $27.0 million
net of tax or $0.12 per share.
We realized several achievements over the fiscal year, including the following major ones:
•
With the second phase of our Fresh distribution centre in Toronto now fully operational, the final milestone of
METRO’s seven-year, nearly billion-dollar modernization project has been reached. Initiated in 2017, the project
has included investments in a new automated fresh and frozen distribution centre in Terrebonne, Quebec that
opened in 2023, the expansion of the fresh produce distribution centre in Laval, Quebec, and the construction of
two new automated distribution centres in Toronto – a frozen facility that opened in 2022, and the fresh facility
completed in 2024.
•
Last October, we launched the Moi Rewards program in Ontario, in partnership with RBC and its Avion Rewards
program. The Ontario launch is an evolution of the Moi program that follows the successful 2023 launch of
METRO’s Moi coalition loyalty program in Quebec. Most recently, the 2024 Leger Wow Survey ranked Moi as
the most widely used loyalty program in Quebec, with 79% of METRO customers actively engaging with the
program and experiencing its benefits. The number of memberships in Ontario has already reached over
1,000,000 since the launch last October, a sign that the program is well received by our customers.
•
We continued to invest in our retail network. In Quebec, we opened four new Super C stores, converted three
Metro stores to Super C, relocated one Metro store, and, with our affiliated retailers, carried out major
renovations and expansions at seven other stores. In Ontario, we opened one Metro store, one Food Basics
store, relocated one Food Basics store, and completed major renovations at four other stores. On the pharmacy
side, we opened three stores, relocated three, converted two, and carried out major renovations in 13 stores.
•
Over the past year, pharmacists in the Jean Coutu and Brunet networks carried out more than 3 million
consultations related to their expanded field of practice. Added to this are the millions of recommendations they
provide daily, helping to ease the pressure on the healthcare system. At a time when patients are turning more
and more to pharmacists, the recent adoption of Bill 67, which aims to expand the professional practice of
pharmacists, constitutes a recognition of their role as front-line health professionals, a role that is bound to
continue to grow and become more prominent in the years to come.
•
In 2024, METRO continued to grow its e-commerce services with the expansion of the click and collect service
to 63 stores in the Food Basics banner in Ontario. At the end of Fiscal 2024, 231 Metro, 92 Super C stores and
311 PJC pharmacies now offer the pick-up service. Metro.ca has also expanded its delivery service through its
partnership with Instacart, offering the delivery service to 46 new locations in Ontario & Quebec, as well as
adding more same-day delivery capacity. METRO has also redesigned and launched one new transactional
mobile application for the Super C banner. We have also expanded the delivery service to our pharmaceutical
banners, Jean-Coutu and Brunet, via the Uber Eats app. Customers can place orders for same-day delivery at
nearly 330 Jean Coutu and Brunet stores and receive their order in as little as two hours.
•
The market research and analytics firm Léger revealed last April the ranking of the most admired companies by
Quebecers. The Jean Coutu banner once again secured the top position this year in the retail sector and the
second position in the overall ranking for Quebec. Jean Coutu is the only pharmacy banner to have made it into
the top 10. It also ranked second in the Quebec Employer Rankings.
•
METRO private labels once again stood out at the 31st Canadian Grand Prix New Product Awards, winning a
total of 8 awards, the highest among all retailers, recognizing our products as the best innovations of the year in
Canada. Organized by the Retail Council of Canada, this prestigious competition showcases the finest industry
innovations across the country.
•
We are halfway through implementing our 2022-2026 Corporate Responsibility (CR) plan. Once again this year,
we have made progress on our priorities and are on track to achieve most of our objectives. Environmental,
social and governance (ESG) issues are subject to increasing regulation, and we are preparing for the many
impending legislative changes. The publication of our first Report under the Fighting Against Forced Labour and
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 14 -
Child Labour in Supply Chains Act is a good example of this. We continue to assess the practices of our
suppliers, thus improving transparency within our supply chain, thanks to our ongoing partnership with Sphera,
formerly SupplyShift. In 2024, we also made additional efforts to reduce single-use plastic, including taking part
in a pilot project in Ontario to share reusable containers. In terms of climate change, we disclosed for the first
time our results against our five near-term science-based greenhouse gas emission reduction targets set for
2023. Our efforts to reduce waste have also paid off: for the first year, we have seen a significant improvement
in our diversion rate, both in our stores and in our distribution centres. In addition, we continued our community
investment strategy and increased our corporate donations compared with 2023.
•
At METRO, community investment is deeply rooted in our values and is an integral part of our corporate
responsibility approach. It represents an important lever to reflect and live our purpose: Nourishing the health
and well-being of our communities. It is in this context, and with the ambition to create a legacy in the
communities where we have been established for over 75 years, that we announced the creation of a
community network of shared kitchens across Quebec, in collaboration with Banques Alimentaires du Québec
(BAQ). Through this initiative, METRO aims to build collective gathering spaces at the heart of communities to
provide better access to healthy food for those experiencing food insecurity. These shared kitchens will be
multifunctional spaces that users can utilize for various purposes: offering culinary education workshops,
organizing collective cooking groups, facilitating access to healthy and nutritious food through innovative
programs, fostering a sense of belonging to their community, and breaking isolation, for example.
•
METRO is committed to adopting short-term, science-based greenhouse gas (GHG) emissions reduction
targets for its direct and indirect emissions. METRO and FLO, a leading North American electric vehicle (EV)
charging company and smart charging solutions provider, announced a new partnership to provide fast charging
at more than 130 Metro, Super C, Food Basics and Marché Adonis grocery store locations across Quebec and
Ontario. Through this partnership, we are taking action to reduce our indirect emissions linked to the transport of
our customers, while contributing to the collective effort of transition towards a more low-carbon economy. The
partnership, which will install at least 500 fast charging ports, will ensure EV drivers have access to fast
charging in convenient and accessible places, keeping them charged up and on the road.
•
METRO was awarded the Maurice-Pollack Prize, which recognizes the exceptional efforts of a company in
managing ethnocultural diversity, in the category of "Large Companies (employing 250 or more people)". This
award highlights the METRO team, which includes nearly 19% of workers who are immigrants or from
ethnocultural minorities. In addition to providing a healthy, respectful, and inclusive work environment for its staff
from diverse backgrounds, METRO develops innovative practices in diversity and inclusion, while setting
concrete goals to increase the representation of individuals from cultural diversity in its management teams.
EVENTS AFTER THE REPORTING PERIOD
On November 27, 2024, the Corporation issued through a private placement Series L unsecured senior notes in the
aggregate principal amount of $500.0 million, bearing interest at a fixed nominal rate of 3.998%, maturing on
November 27, 2029. On December 2, 2024, the Corporation redeemed all of the Series J notes, bearing interest at a
fixed nominal rate of 1,92%, in the amount of $300.0 million that matured on the same day.
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 15 -
SELECTED ANNUAL INFORMATION
2024
2023
Change
2022
Change
(Millions of dollars, unless otherwise indicated)
(52 weeks)
(53 weeks)
%
(52 weeks)
%
Sales
21,219.9 20,724.6
2.4 18,888.9
9.7
Net earnings attributable to equity holders of the parent
928.8
1,014.8
(8.5)
846.1
19.9
Net earnings attributable to non-controlling interests
2.9
4.0
(27.5)
3.4
17.6
Net earnings
931.7
1,018.8
(8.5)
849.5
19.9
Basic net earnings per share
4.13
4.36
(5.3)
3.53
23.5
Fully diluted net earnings per share
4.11
4.35
(5.5)
3.51
23.9
Adjusted net earnings(1)
972.9
1,006.6
(3.3)
922.1
9.2
Adjusted fully diluted net earnings per share(1)
4.30
4.30
—
3.82
12.6
Return on equity(1) (%)
13.4
15.2
—
13.0
—
Dividends per share (Dollars)
1.3075
1.1825
10.6
1.0750
10.0
Total assets
14,140.6 13,865.3
2.0 13,401.3
3.5
Current and non-current portions of debt
2,674.3
2,665.6
0.3
2,342.8
13.8
Sales for Fiscal 2024 totalled $21,219.9 million, up 2.4% compared to $20,724.6 million for Fiscal 2023, and up 4.4%
based on 52 weeks in 2023.
Net earnings for Fiscal 2024, 2023 and 2022 totalled $931.7 million, $1,018.8 million and $849.5 million, respectively,
while fully diluted net earnings per share amounted to $4.11, $4.35 and $3.51. Taking into account the items relating
to Fiscal 2024 and 2023 shown in the “Net earnings and fully diluted net earnings per share (EPS) adjustments(1)”
table in the “Operating results” section, as well as for Fiscal 2022, loss on impairment of a loyalty program, adjusted
net earnings(1) for Fiscal 2024 stood at $972.9 million compared with $1,006.6 million for Fiscal 2023 and
$922.1 million for Fiscal 2022, while adjusted fully diluted net earnings per share(1) was $4.30 for 2024 and 2023 and
$3.82 for 2022, flat and up 12.6% respectively.
OUTLOOK(2)
As we begin our 2025 fiscal year, the significant investments in the modernization of our supply chain are largely
behind us, and we are now focused on realizing efficiency gains and improving the service to our store network.
These investments have also positioned us well for growth through the expansion of our retail network in the years
ahead. We expect to gradually resume our profit growth in Fiscal 2025 and we maintain our publicly disclosed annual
growth target of between 8% and 10% of adjusted fully diluted net earnings per share(1) over the medium and long
term.
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 16 -
OPERATING RESULTS
SALES
Sales for Fiscal 2024 totalled $21,219.9 million, up 2.4% compared to $20,724.6 million for Fiscal 2023, and up 4.4%
based on 52 weeks in 2023, driven by higher sales in our retail network this year and the negative impact of a labour
conflict at 27 Metro stores in the Greater Toronto Area in the fourth quarter of 2023. Food same-store sales(1) were up
2.7% (up 7.6% in 2023). Online food sales(1) in 2024 increased by 45.6% compared to last year, mostly driven by
higher partnership sales while online food sales(1) increased by 78.0% in 2023. Pharmacy same-store sales(1) were
up 5.2% (6.5% in 2023), with a 6.4% increase in prescription drugs(1) and a 2.6% increase in front-store sales(1).
OPERATING INCOME BEFORE DEPRECIATION, AMORTIZATION AND IMPAIRMENT OF ASSETS
This earnings measurement excludes financial costs, taxes, depreciation, amortization and impairment of assets.
Operating income before depreciation, amortization and impairment of assets for Fiscal 2024 totalled $1,987.0 million
or 9.4% of sales, up 0.9% versus Fiscal 2023. Fiscal 2024 included gains on disposal of assets of $6.8 million versus
gains of $4.2 million last year.
Gross margin(1) for Fiscal 2024 was 19.7%, unchanged versus last year.
Operating expenses as a percentage of sales for Fiscal 2024 were 10.4% versus 10.2% for Fiscal 2023. The increase
in operating expenses is mainly due to the commissioning of our new automated distribution centre for fresh and
frozen products in Terrebonne and the launch of the final phase of our fresh distribution centre in Toronto.
DEPRECIATION AND AMORTIZATION
Total depreciation and amortization expense for Fiscal 2024 was $570.4 million versus $525.2 million for Fiscal 2023.
The increase in depreciation and amortization expense is mainly due to the commissioning of our new automated
distribution centre for fresh and frozen products in Terrebonne and the final phase of our fresh distribution centre in
Toronto.
IMPAIRMENT OF ASSETS
During Fiscal 2024, the Corporation recorded $20.8 million of impairment of assets resulting from the decision to have
Metro stores in Ontario withdraw from the Air Miles® loyalty program in the summer of 2024. This impairment
represents the entire carrying value of the loyalty program asset.
NET FINANCIAL COSTS
Net financial costs for Fiscal 2024 were $145.7 million versus 122.6 million for Fiscal 2023. The increase is mainly
due to an increase in average debt and lower capitalized interest related to our distribution center automation
projects.
INCOME TAXES
The income tax expense of $318.4 million for Fiscal 2024 represented an effective tax rate of 25.5% compared with
an income tax expense of $303.0 million for Fiscal 2023 which represented an effective tax rate of 22.9%. The
increase in the effective tax rate in 2024 is mainly attributable to a favorable $40.7 million income tax entry in respect
of prior years recorded in the third quarter of Fiscal 2023.
NET EARNINGS AND ADJUSTED NET EARNINGS(1)
Net earnings for Fiscal 2024 were $931.7 million compared with $1,018.8 million for Fiscal 2023, while fully diluted
net earnings per share were $4.11 compared with $4.35 in 2023, down 8.5% and 5.5% respectively. Excluding the
specific items shown in the table below, adjusted net earnings(1) for Fiscal 2024 totalled $972.9 million compared with
$1,006.6 million for Fiscal 2023, down 3.3%. Adjusted fully diluted net earnings per share(1) for Fiscal 2024 amounted
to $4.30 the same amount as Fiscal 2023. In 2023, the labour conflict at 27 Metro stores in the Greater Toronto Area
had an unfavorable impact of approximately $27.0 million after-tax or $0.12 per share and the 53rd week had a
favorable impact of $27.0 million net of tax or $0.12 per share.
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 17 -
Net earnings and fully diluted net earnings per share (EPS) adjustments(1)
2024
2023
Change (%)
(52 weeks)
(53 weeks)
Net earnings
(Millions of
dollars)
Fully diluted
EPS
(Dollars)
Net earnings
(Millions of
dollars)
Fully diluted
EPS
(Dollars)
Net
earnings
Fully
diluted
EPS
Per financial statements
931.7
4.11
1,018.8
4.35
(8.5)
(5.5)
Loss on impairment of a loyalty program, net
of taxes of $2.7
18.1
—
Gain on disposal of an investment in an
associate, net of taxes of $1.6
(5.4)
—
Amortization of intangible assets acquired in
connection with the Jean Coutu Group
acquisition, net of taxes of $10.2
28.5
28.5
Favorable tax adjustment in respect of prior
years
—
(40.7)
Adjusted measures(1)
972.9
4.30
1,006.6
4.30
(3.3)
—
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 18 -
QUARTERLY HIGHLIGHTS
(Millions of dollars, unless otherwise indicated)
2024
2023
Change (%)
Sales
Q1(3)
4,974.2
4,670.9
6.5
Q2(3)
4,655.5
4,554.5
2.2
Q3(4)
6,651.8
6,427.5
3.5
Q4(5)
4,938.4
5,071.7
(2.6)
Fiscal
21,219.9
20,724.6
2.4
Net earnings
Q1(3)
228.5
231.1
(1.1)
Q2(3)
187.1
218.8
(14.5)
Q3(4)
296.2
346.7
(14.6)
Q4(5)
219.9
222.2
(1.0)
Fiscal
931.7
1,018.8
(8.5)
Adjusted net earnings(1)
Q1(3)
235.0
237.6
(1.1)
Q2(3)
206.4
225.4
(8.4)
Q3(4)
305.0
314.8
(3.1)
Q4(5)
226.5
228.8
(1.0)
Fiscal
972.9
1,006.6
(3.3)
Fully diluted net earnings per share (Dollars)
Q1(3)
0.99
0.97
2.1
Q2(3)
0.83
0.93
(10.8)
Q3(4)
1.31
1.49
(12.1)
Q4(3)
0.98
0.96
2.1
Fiscal
4.11
4.35
(5.5)
Adjusted fully diluted net earnings per share(1) (Dollars)
Q1(3)
1.02
1.00
2.0
Q2(3)
0.91
0.96
(5.2)
Q3(4)
1.35
1.35
—
Q4(5)
1.02
0.99
3.0
Fiscal
4.30
4.30
—
(3) 12 weeks
(4) 16 weeks
(5) 12 weeks for 2024 and 13 weeks for 2023
Sales in the first quarter of Fiscal 2024 ended on December 23, 2023 were $4,974.2 million, up 6.5% versus the first
quarter of the prior year which ended on December 17, 2022. Food same-store sales(1) were up 6.1% (7.5% in the
first quarter of 2023), and up 3.4% when adjusting for the Christmas shift. Our food basket inflation was about 4.0%,
lower than reported CPI and down from 5.5% in the previous quarter. Pharmacy same-store sales(1) were up 3.9%
(7.7% in the first quarter of 2023), with a 6.6% increase in prescription drugs(1) and a 1.2% decrease in front-store
sales(1), as we cycled very high sales last year due to an exceptionally strong cough and cold season.
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 19 -
Sales in the second quarter of Fiscal 2024 ended on March 16, 2024 were $4,655.5 million, up 2.2% versus the
second quarter of the prior year which ended on March 11, 2023, driven by higher sales in our retail network. Our
food basket inflation was about 3.0%, down from 4.0% in the previous quarter. Food same-store sales(1) were up
0.2% in the second quarter of Fiscal 2024 (5.8% in the second quarter of 2023), and up 2.7% when adjusting for the
Christmas shift. Pharmacy same-store sales(1) were up 5.9% (7.3% in the second quarter of 2023), with a 6.0%
increase in prescription drugs(1) and a 5.8% increase in front-store sales(1), driven by a strong cough and cold season
and effective merchandising strategies.
Sales in the third quarter of Fiscal 2024 ended on July 6, 2024 were $6,651.8 million, up 3.5% versus the third quarter
of the prior year which ended on July 1, 2023, driven by higher sales in our retail network. Our food basket inflation
was slightly lower than the reported CPI for food purchased from stores of 1.1%. Food same-store sales(1) were up
2.4% in the third quarter of Fiscal 2024 (9.4% in the third quarter of 2023). Pharmacy same-store sales(1) were up
5.2% (5.9% in the third quarter of 2023), with a 6.3% increase in prescription drugs(1) and a 3.0% increase in front-
store sales(1), primarily driven by over-the-counter products, cosmetics and health and beauty.
Sales in the fourth quarter of Fiscal 2024 ended on September 28, 2024 were $4,938.4 million, down 2.6% versus the
fourth quarter of the prior year, and up 5.7% based on 12 weeks in 2023, driven by higher sales in our retail network
this year and the negative impact of a labour conflict at 27 Metro stores in the Greater Toronto Area in the fourth
quarter of 2023. Our food basket inflation was slightly higher than the reported CPI for food purchased from stores of
1.7%. Food Same-store sales(1) were up 2.2% in the fourth quarter of Fiscal 2024 (6.8% in the fourth quarter of 2023).
Online food sales(1) were up 27.6% versus the comparable 12-week period last year (116.0% in the fourth quarter of
2023). Pharmacy same-store sales(1) were up 5.7% (5.5% in the fourth quarter of 2023), with a 6.8% increase in
prescription drugs(1) and a 3.3% increase in front-store sales(1), primarily driven by over-the-counter products,
cosmetics and health and beauty.
Net earnings for the first quarter of Fiscal 2024 were $228.5 million compared with $231.1 million for the
corresponding quarter of 2023, while fully diluted net earnings per share were $0.99 compared with $0.97 in 2023,
down 1.1% and up 2.1% respectively. Adjusted net earnings(1) for the first quarter of Fiscal 2024 totalled
$235.0 million compared with $237.6 million for the corresponding quarter of 2023 and adjusted fully diluted net
earnings per share(1) were $1.02 versus $1.00, down 1.1% and up 2.0% respectively. The first quarters of 2024 and
2023 included an adjustment for the pre-tax amortization of intangible assets acquired in connection with the Jean
Coutu Group acquisition of $8.9 million as well as the income taxes relating to this item.
Net earnings for the second quarter of Fiscal 2024 were $187.1 million compared with $218.8 million for the
corresponding quarter of 2023, while fully diluted net earnings per share were $0.83 compared with $0.93 in 2023,
down 14.5% and 10.8% respectively. Adjusted net earnings(1) for the second quarter of Fiscal 2024 totalled
$206.4 million compared with $225.4 million for the corresponding quarter of 2023 and adjusted fully diluted net
earnings per share(1) were $0.91 versus $0.96, down 8.4% and 5.2% respectively. The second quarters of 2024 and
2023 included an adjustment for the pre-tax amortization of intangible assets acquired in connection with the Jean
Coutu Group acquisition of $8.9 million and the second quarter of 2024 also included a loss on the impairment of a
loyalty program of $20.8 million and a gain on disposal of an investment in an associate of $7.0 million, as well as the
income taxes relating to these items.
Net earnings for the third quarter of Fiscal 2024 were $296.2 million compared with $346.7 million for the
corresponding quarter of 2023, while fully diluted net earnings per share were $1.31 compared with $1.49 in 2023,
down 14.6% and 12.1% respectively. Adjusted net earnings(1) for the third quarter of Fiscal 2024 totalled
$305.0 million compared with $314.8 million for the corresponding quarter of 2023, down 3.1% and adjusted fully
diluted net earnings per share(1) were $1.35, the same amount as the corresponding quarter of 2023. The third
quarters of 2024 and 2023 included an adjustment for the pre-tax amortization of intangible assets acquired in
connection with the Jean Coutu Group acquisition of $11.9 million, as well as the income taxes relating to this item
and the third quarter of 2023 also included an adjustment for a favorable $40.7 million income tax entry in respect of
prior years.
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 20 -
Net earnings for the fourth quarter of Fiscal 2024 were $219.9 million compared with $222.2 million for the
corresponding quarter of 2023, while fully diluted net earnings per share were $0.98 compared with $0.96 in 2023,
down 1.0% and up 2.1% respectively. Adjusted net earnings(1) for the fourth quarter of Fiscal 2024 totalled
$226.5 million compared with $228.8 million for the corresponding quarter of 2023, down 1.0%. Adjusted fully diluted
net earnings per share(1) for the fourth quarter of Fiscal 2024 were $1.02, versus $0.99 in 2023, up 3.0%. In the fourth
quarter of 2023, the labour conflict at 27 Metro stores in the Greater Toronto Area had an unfavorable impact of
approximately $27.0 million after-tax or $0.12 per share and the 13th week had a favorable impact of $27.0 million net
of tax or $0.12 per share. The fourth quarters of 2024 and 2023 included an adjustment for the pre-tax amortization of
intangible assets acquired in connection with the Jean Coutu Group acquisition of $9.0 million, as well as the income
taxes relating to this item.
2024
2023
(Millions of dollars)
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Net earnings
228.5 187.1 296.2 219.9
231.1 218.8 346.7 222.2
Loss on impairment of a loyalty program, net
of taxes
—
18.1
—
—
—
—
—
—
Gain on disposal of an investment in an
associate, net of taxes
—
(5.4)
—
—
—
—
—
—
Amortization of intangible assets acquired in
connection with the Jean Coutu Group
acquisition, net of taxes
6.5
6.6
8.8
6.6
6.5
6.6
8.8
6.6
Favorable tax adjustment in respect of prior
years
—
—
—
—
—
— (40.7)
—
Adjusted net earnings(1)
235.0 206.4 305.0 226.5
237.6 225.4 314.8 228.8
2024
2023
(Dollars)
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Fully diluted net earnings per share
0.99
0.83
1.31
0.98
0.97
0.93
1.49
0.96
Adjustments impact
0.03
0.08
0.04
0.04
0.03
0.03 (0.14)
0.03
Adjusted fully diluted net earnings per
share(1)
1.02
0.91
1.35
1.02
1.00
0.96
1.35
0.99
CASH POSITION
OPERATING ACTIVITIES
Operating activities generated cash inflows of $1,680.0 million in Fiscal 2024 compared with $1,563.5 million in Fiscal
2023. The increase is mainly due to changes in non-cash working capital items during the year compared to last year.
INVESTING ACTIVITIES
In Fiscal 2024, investing activities required cash outflows of $456.4 million compared with $572.5 million for Fiscal
2023. This difference stemmed mainly from lower investments in tangible and intangible assets and goodwill of
$100.2 million in 2024 notably due to our investment in our automated distribution center in Terrebonne in Fiscal
2023.
During 2024, we and our retailers opened 9 stores, carried out major expansions and renovations of 11 stores,
2 stores were relocated and 5 stores were closed for a net increase of 318,100 square feet or 1.5% of our food retail
network.
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 21 -
FINANCING ACTIVITIES
Financing activities required cash outflows of $1,223.7 million in Fiscal 2024 compared with $974.9 million in Fiscal
2023. This difference is mainly due to lower debt increase of $173.4 million and higher debt repayments of $148.2
million in 2024 compared to 2023, partially offset by lower share repurchases in 2024.
FINANCIAL POSITION
We do not anticipate(2) any liquidity risk and consider our financial position at the end of Fiscal 2024 as very solid. We
had an unused authorized revolving credit facility of $564.6 million.
At the end of Fiscal 2024, the main elements of our debt were as follows:
Interest Rate
Maturity
Notional
(Millions of dollars)
Revolving Credit Facility
Rates fluctuate with changes in bankers'
acceptance rates
October 27, 2028
35.4
Series J Notes
1.92% fixed nominal rate
December 2, 2024
300.0
Series G Notes
3.39% fixed nominal rate
December 6, 2027
450.0
Series K Notes
4.66% fixed nominal rate
February 7, 2033
300.0
Series B Notes
5.97% fixed nominal rate
October 15, 2035
400.0
Series D Notes
5.03% fixed nominal rate
December 1, 2044
300.0
Series H Notes
4.27% fixed nominal rate
December 4, 2047
450.0
Series I Notes
3.41% fixed nominal rate
February 28, 2050
400.0
On November 27, 2024, the Corporation issued through a private placement Series L unsecured senior notes in the
aggregate principal amount of $500.0 million, bearing interest at a fixed nominal rate of 3.998%, maturing on
November 27, 2029. On December 2, 2024, the Corporation redeemed all of the Series J notes, bearing interest at a
fixed nominal rate of 1,92%, in the amount of $300.0 million that matured on the same day. For more details, see the
Events after the reporting period section.
On February 6, 2023, the Corporation issued through a private placement Series K unsecured senior notes in the
aggregate principal amount of $300.0 million, bearing interest at a fixed nominal rate of 4.66%, maturing on
February 7, 2033. In anticipation of this issuance, on November 14, 2022, the Corporation entered into a bond
forward contract designated as cash flow hedge on a component of a highly probable future debt issuance in the
amount of $250.0 million that effectively locked-in a 10-year fixed interest rate of 2.996%. The effective part of the
loss on the hedging instrument was recognized in Other Comprehensive Income. Following the Series K Notes
issuance, the amounts accumulated in equity were reclassified to net financial costs on a linear basis over the life of
the debt.
During Fiscal 2022, the Corporation entered into a $300.0 million interest rate swap effectively locking in a floating
rate of interest of 11 basis points (0.11%) over the 3-month bankers' acceptance rate (CDOR) over the life of the
Series J Notes. As at September 28, 2024, the balance of the Series J unsecured senior notes was $298.8 million
($288.9 million as at September 30, 2023), reflecting an increase in fair value adjustments relating to interest rate
swaps designated as fair value hedges of $9.9 million in 2024 (increase of $3.8 million in 2023).
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 22 -
CAPITAL STOCK
Common Shares issued
(Thousands)
2024
2023
Balance – beginning of year
228,949
236,929
Share redemption
(6,680)
(8,170)
Stock options exercised
433
190
Balance – end of year
222,702
228,949
Balance as at December 4, 2024 and December 1st, 2023
222,115
228,236
Treasury shares
(Thousands)
2024
2023
Balance – beginning of year
296
335
Acquisition
105
99
Release
(113)
(138)
Balance – end of year
288
296
Balance as at December 4, 2024 and December 1st, 2023
288
296
STOCK OPTIONS PLAN
As at
December 4, 2024
As at
September 28, 2024
As at
September 30, 2023
Stock options (Thousands)
1,996
2,179
2,226
Exercise prices (Dollars)
41.16 to 77.75
41.16 to 77.75
40.23 to 77.75
Weighted average exercise price (Dollars)
62.61
61.15
56.42
PERFORMANCE SHARE UNIT PLAN
As at
December 4, 2024
As at
September 28, 2024
As at
September 30, 2023
Performance share units (Thousands)
564
571
572
NORMAL COURSE ISSUER BID PROGRAM
Under the normal course issuer bid program covering the period between November 27, 2023 and
November 26, 2024, the Corporation repurchased 7,000,000 Common Shares at an average price of $72.90, for a
total consideration of $510.3 million.
The Corporation decided to renew the issuer bid program as an additional option for using excess funds. Thus, the
Corporation will be able to repurchase, in the normal course of business, between November 27, 2024 and
November 26, 2025, up to 10,000,000 of its Common Shares representing approximately 4.5% of its issued and
outstanding shares on November 14, 2024. Repurchases will be made through the facilities of the Toronto Stock
Exchange at market price, in accordance with its policies and regulations, or through the facilities of alternative
trading systems as well as by other means as may be permitted by a securities regulatory authority, including by
private agreements. Between November 27, 2024 and December 4, 2024, the Corporation has repurchased 50,000
Common Shares at an average price of $92.22 for a total consideration of $4.6 million.
DIVIDEND
For the 30th consecutive year, the Corporation paid quarterly dividends to its shareholders. The annual dividend
increased by 10.6%, to $1.3075 per share compared to $1.1825 in 2023, for total dividends of $294.6 million in 2024
compared to $275.0 million in 2023.
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 23 -
SHARE TRADING
The value of METRO shares remained in the $65.43 to $87.22 range throughout Fiscal 2024 ($67.09 to $78.90 in
2023). A total of 113.0 million shares traded on the TSX during this fiscal year (118.6 million in 2023). The closing
price on Friday, September 27, 2024 was $84.84, compared to $70.54 at the end of Fiscal 2023. Since fiscal year-
end, the value of METRO shares has remained in the $81.01 to $93.19 range. The closing price on
December 4, 2024 was $92.78. METRO shares have maintained sustained growth over the last 10 years.
COMPARATIVE SHARE PERFORMANCE (10 YEARS)*
CONTINGENCIES
In the normal course of business, various proceedings and claims are instituted against the Corporation. The
Corporation contests the validity of these claims and proceedings and at this stage, the Corporation does not
believe(2) that these matters will have a material effect on the Corporation's financial position or on consolidated
earnings. However, since any litigation involves uncertainty, it is not possible to predict the outcome of these claims or
the amount of potential losses. No accruals or provisions for contingent losses have been recognized in the
Corporation’s annual consolidated financial statements.
In May 2019, two (2) proposed class actions relating to opioids were filed in Ontario and in Québec by opioid end
users against a large group of defendants including, in Québec, a subsidiary of the Corporation, Pro Doc, and, in
Ontario, Pro Doc and Jean Coutu Group. In December 2023, the Ontario Superior Court of Justice dismissed the
class action against Pro Doc, Jean Coutu Group and the distributor defendants. As plaintiff did not appeal the
decision, this decision is therefore final. In April 2024, the Quebec Superior Court authorized the class action, the
authorization process being merely a procedural step and the judgment in no way decides the case on the merits.
In February 2020, a proposed class action relating to opioids was filed in British Columbia by opioid end users against
a large group of defendants including subsidiaries of the Corporation, Pro Doc and Jean Coutu Group. In April 2021,
a proposed class action relating to opioids was filed in Alberta by the City of Grande Prairie (Alberta) and the City of
Brantford (Ontario). That proposed class action, amended in late November 2024, is made against multiple
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 24 -
defendants, including the Corporation, Pro Doc and Jean Coutu Group. In September 2021, multiple defendants,
including Pro Doc and Jean Coutu Group, were served with a proposed class action relating to opioids and filed by
the Peter Ballantyne Cree Nation and the Lac La Ronge Indian Band, in Saskatchewan. The allegations in these
proposed class actions are similar to the allegations contained in the proposed class action filed by the Province of
British Columbia in August 2018 against numerous manufacturers and distributors of opioids, including subsidiaries of
the Corporation, Pro Doc and Jean Coutu Group. All these proposed class actions contain allegations of breach of the
Competition Act, of fraudulent misrepresentation and deceit, and negligence. The Province of British Columbia seeks
damages (unquantified) on behalf of all federal, provincial and territorial governments and agencies for expenses
allegedly incurred in paying for opioid prescriptions and other healthcare costs that would be related to opioid
addiction and abuse while the Québec claim and the British Columbia proposed claim filed by opioid end users seek
recovery of damages on behalf of opioid end users in general. The City of Grande Prairie, on its behalf and on behalf
of all Canadian municipalities and local governments, seeks damages which are unquantified in relation to public
safety, social service, and criminal justice costs allegedly incurred due to the opioid crisis. The Peter Ballantyne Cree
Nation and the Lac La Ronge Indian Band are attempting a similar recourse, claiming unquantified damages from
multiple defendants on their own behalf and on behalf of all Indigenous, First Nations, Inuit and Metis communities
and governments in Canada. The Corporation believes(2) these proceedings are without merits and that, in certain
cases, there is no jurisdiction. No provisions for contingent losses have been recognized in the Corporation’s annual
financial statements.
In 2017, the Canadian Competition Bureau began an investigation into the supply and sale of commercial bread
which involves certain Canadian suppliers and retailers, including the Corporation. Based on the information available
to date, the Corporation does not believe that it or any of its employees have violated the Competition Act. Proposed
class-action lawsuits have also been filed against the Corporation, suppliers and other retailers. On December 19,
2019, the Québec Superior Court granted the application for authorization to institute one of these class actions, the
authorization process being merely a procedural step and the judgment in no way decides the case on the merits. On
December 31, 2021, the Ontario Superior Court of Justice partially certified another of these class actions. The
Corporation is contesting all these actions at the certification and on the merits. No provisions for contingent losses
have been recognized in the Corporation’s annual consolidated financial statements.
During the 2016 fiscal year, an application for authorization to institute a class action was served on Jean Coutu
Group by Sopropharm, an association incorporated under the Professional Syndicates Act of which certain franchised
drugstore owners of the Jean Coutu Group are members. The application seeks to have the class action authorized
in the form of a declaratory action seeking amongst others (i) to set aside certain contractual provisions of the Jean
Coutu Group’s standard franchise agreements, including the clause providing for the payment of royalties on sales of
medication by franchised establishments; (ii) to restore certain benefits; and (iii) to reduce certain contractual
obligations. On November 1, 2018, the Québec Superior Court granted the application for authorization to institute a
class action, the authorization process being merely a procedural step and the judgment in no way decides the case
on the merits. The Corporation contests this action on the merits. No provisions for contingent losses have been
recognized in the Corporation's annual consolidated financial statements.
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 25 -
SOURCES OF FINANCING
Our operating activities generated in 2024 cash flows in the amount of $1,680.0 million. These cash flows were used
to finance our investing activities, including $579.7 million in fixed asset and intangible asset and goodwill
acquisitions, to redeem shares for an amount of $478.2 million, to pay dividends of $294.6 million, to reimburse
interest on debt of $132.0 million and to pay lease liabilities (principal and interest), net of payments and interest
received from subleases totalling $209.9 million, as well as to carry out other investing and financing activities.
At the end of Fiscal 2024, our financial position mainly consisted of cash and cash equivalents in the amount of
$29.4 million, an unused authorized Revolving Credit Facility of $564.6 million maturing in 2028, Series J Notes in the
amount of $300.0 million maturing in 2024, Series G Notes in the amount of $450.0 million maturing in 2027, Series K
Notes in the amount of $300.0 million maturing in 2033, Series B Notes in the amount of $400.0 million maturing in
2035, Series D Notes in the amount of $300.0 million maturing in 2044, Series H Notes in the amount of
$450.0 million maturing in 2047 and Series I Notes in the amount of $400.0 million maturing in 2050.
We believe(2) that cash flows from next year's operating activities will be sufficient to finance the Corporation's current
investing activities.
CONTRACTUAL OBLIGATIONS
Payment commitments by fiscal year (capital and interest)
(Millions of dollars)
Facility
and loans
Notes
Lease
liabilities
Service
contract
commitments
Total
2025
20.0
402.0
326.8
136.5
885.3
2026
41.8
101.1
297.9
122.5
563.3
2027
4.1
101.1
258.7
106.3
470.2
2028
2.4
538.4
221.2
26.8
788.8
2029
2.0
85.8
180.3
5.7
273.8
2030 and thereafter
47.7
2,897.4
579.6
1.0 3,525.7
118.0
4,125.8
1,864.5
398.8 6,507.1
RELATED PARTY TRANSACTIONS
During Fiscal 2024, we supplied pharmacies held by a member of the Board of Directors and by an officer of the
corporation. These transactions were carried out in the normal course of business and recorded at exchange value.
They are itemized in note 23 to the consolidated financial statements.
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 26 -
FOURTH QUARTER
2024
2023
Change (%)
(Millions of dollars, except for net earnings per share)
( 12 weeks)
(13 weeks)
Sales
4,938.4
5,071.7
(2.6)
Operating income before depreciation, amortization and impairment of
assets
459.6
448.0
2.6
Net earnings
219.9
222.2
(1.0)
Adjusted net earnings(1)
226.5
228.8
(1.0)
Fully diluted net earnings per share
0.98
0.96
2.1
Adjusted fully diluted net earnings per share(1)
1.02
0.99
3.0
Cash flows from:
Operating activities
456.7
387.1
—
Investing activities
(150.1)
(207.6)
—
Financing activities
(282.5)
(174.7)
—
OPERATING RESULTS
SALES
Sales in the fourth quarter of Fiscal 2024 ended on September 28, 2024 were $4,938.4 million, down 2.6% versus the
fourth quarter of the prior year, and up 5.7% based on 12 weeks in 2023, driven by higher sales in our retail network
this year and the negative impact of a labour conflict at 27 Metro stores in the Greater Toronto Area in the fourth
quarter of 2023. Our food basket inflation was slightly higher than the reported CPI for food purchased from stores of
1.7%.
Food same-store sales(1) were up 2.2% in the fourth quarter of Fiscal 2024 (6.8% in the fourth quarter of 2023).
Online food sales(1) were up 27.6% versus the comparable 12-week period last year (116.0% in the fourth quarter of
2023). Pharmacy same-store sales(1) were up 5.7% (5.5% in the fourth quarter of 2023), with a 6.8% increase in
prescription drugs(1) and a 3.3% increase in front-store sales(1), primarily driven by over-the-counter products,
cosmetics and health and beauty.
OPERATING INCOME BEFORE DEPRECIATION, AMORTIZATION AND IMPAIRMENT OF ASSETS
This earnings measurement excludes financial costs, taxes, depreciation, amortization and impairment of assets.
Operating income before depreciation and amortization and impairment of assets for the fourth quarter of Fiscal 2024
totalled $459.6 million, or 9.3% of sales, an increase of 2.6% versus the corresponding quarter of Fiscal 2023.
Gross margin(1) for the fourth quarter of Fiscal 2024 was 19.7% versus 19.5% for the corresponding quarter of 2023.
Operating expenses as a percentage of sales for the fourth quarter Fiscal 2024 were 10.4% versus 10.7% in the
corresponding quarter of 2023. Excluding the impact of the labour conflict last year, our operating expense as a
percentage of sales for the fourth quarter of Fiscal 2023 would have been similar to this year.
DEPRECIATION AND AMORTIZATION
Total depreciation and amortization expense for the fourth quarter of 2024 was $135.8 million versus $125.0 million
for the corresponding quarter of 2023. The increase in depreciation and amortization expense is mainly due to the
commissioning of our new automated distribution centre for fresh and frozen products in Terrebonne and the final
phase of our fresh distribution centre in Toronto.
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 27 -
NET FINANCIAL COSTS
Net financial costs for the fourth quarter of Fiscal 2024 were $32.6 million compared with $30.1 million for the
corresponding quarter of 2023. The increase is mainly due to an increase in average debt and lower capitalized
interest related to our distribution center automation projects.
INCOME TAXES
The income tax expense of $71.3 million for the fourth quarter of Fiscal 2024 represented an effective tax rate of
24.5% compared with an income tax expense of $70.7 million and an effective tax rate of 24.1% for the fourth quarter
of Fiscal 2023.
NET EARNINGS AND ADJUSTED NET EARNINGS(1)
Net earnings for the fourth quarter of Fiscal 2024 were $219.9 million compared with $222.2 million for the
corresponding quarter of 2023, while fully diluted net earnings per share were $0.98 compared with $0.96 in 2023,
down 1.0% and up 2.1% respectively. Excluding the specific item shown in the table below, adjusted net earnings(1)
for the fourth quarter of Fiscal 2024 totalled $226.5 million compared with $228.8 million for the corresponding quarter
of 2023, down 1.0%. Adjusted fully diluted net earnings per share(1) for the fourth quarter of Fiscal 2024 were $1.02,
versus $0.99 in 2023, up 3.0%. In the fourth quarter of 2023, the labour conflict at 27 Metro stores in the Greater
Toronto Area had an unfavorable impact of approximately $27.0 million after-tax or $0.12 per share and the 13th
week had a favorable impact of $27.0 million net of tax or $0.12 per share.
Net earnings and fully diluted net earnings per share (EPS) adjustments(1)
2024
2023
Change (%)
(12 weeks)
(13 weeks)
Net earnings
(Millions of
dollars)
Fully diluted
EPS
(Dollars)
Net earnings
(Millions of
dollars)
Fully diluted
EPS
(Dollars)
Net
earnings
Fully
diluted
EPS
Per financial statements
219.9
0.98
222.2
0.96
(1.0)
2.1
Amortization of intangible assets acquired in
connection with the Jean Coutu Group
acquisition, net of taxes of $2.4
6.6
6.6
Adjusted measures(1)
226.5
1.02
228.8
0.99
(1.0)
3.0
CASH POSITION
Operating activities
Operating activities generated cash inflows of $456.7 million in the fourth quarter of Fiscal 2024 compared with
$387.1 million for the corresponding quarter of Fiscal 2023. The increase is mainly due to changes in non-cash
working capital items during the quarter compared to last year.
Investing activities
Investing activities required cash outflows of $150.1 million in the fourth quarter of Fiscal 2024 compared with
$207.6 million for the corresponding quarter of Fiscal 2023. This difference stemmed mainly from lower investments
in tangible and intangible assets and goodwill of $58.5 million in 2024.
Financing activities
In the fourth quarter of 2024, financing activities required cash outflows of $282.5 million compared with
$174.7 million in the corresponding quarter of 2023. The variation is mainly due to higher debt repayments in 2024.
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 28 -
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGE ACCOUNTING
The Corporation adopted a financial risk management policy, approved by the Board of Directors in April 2010 and
amended in 2019, setting forth guidelines relating to its use of derivative financial instruments. These guidelines
prohibit the use of derivatives for speculative purposes. During Fiscal 2024, the Corporation used derivative financial
instruments as described in notes 2 and 25 to the consolidated financial statements.
NEW ACCOUNTING STANDARD
ACCOUNTING STANDARD ISSUED BUT NOT YET EFFECTIVE
Presentation and Disclosures in Financial Statements
In April 2024, the IASB issued IFRS 18, which replaces IAS 1 Presentation of Financial Statements, and
consequential amendments to several other standards. IFRS 18 introduces new requirements for presentation within
the statement of profit or loss, including specified totals and subtotals. Entities are required to classify all income and
expenses within the statement of profit or loss into one of five categories: operating, investing, financing, income
taxes and discontinued operations, with prescribed subtotals for each new category. It also requires disclosure of
management-defined performance measures which will now form part of the audited financial statements.
IFRS 18, and the amendments to the other standards, is effective for reporting periods beginning on or after
January 1 2027, but earlier application is permitted and must be disclosed. IFRS 18 will apply retrospectively. The
Corporation is currently working to identify all impacts the amendments will have on the consolidated financial
statements and notes to the consolidated financial statements.
FORWARD-LOOKING INFORMATION
We have used, throughout this annual report, different statements that could, within the context of regulations issued
by the Canadian Securities Administrators, be construed as being forward-looking information. In general, any
statement contained in this report that does not constitute a historical fact may be deemed a forward-looking
statement. Expressions such as "continue", “anticipate”, "believe", "aim", "expect", "estimate" and other similar
expressions as well as the use of the future or conditional tense are generally indicative of forward-looking
statements. The forward-looking statements contained in this report are based upon certain assumptions Canadian
food and pharmaceutical industries, the general economy, our annual budget, as well as our 2025 action plan.
The forward-looking statements contained in these presents do not provide any guarantee as to the future
performance of the Corporation and are subject to potential known and unknown risks, as well as uncertainties that
could cause our financial position, financial performance, cash flows, business or reputation to differ significantly.
Additional risks and uncertainties that we currently deem to be immaterial may also prove to have a material adverse
effect. A description of the risks can be found under the “Risk Management” section of this annual report that could
have an impact on these statements. We believe these statements to be reasonable and relevant as at the date of
publication of this report and represent our expectations. The Corporation does not intend to update any forward-
looking statement contained herein, except as required by applicable law.
NON-GAAP AND OTHER FINANCIAL MEASUREMENTS
In addition to the International Financial Reporting Standards (IFRS) measurements provided, we have included
certain non-GAAP and other financial measurements. These measurements are presented for information purposes
only. They do not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar
measurements presented by other public companies.
National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure sets out specific disclosure
requirements for non-GAAP financial measures, non-GAAP ratios, and other financial measures, which are capital
management measures, supplementary financial measures, and total of segments measures, as defined in the
Instrument (together the “specified financial measures”).
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 29 -
The specified financial measures we disclose in our documents made available to the public are presented by
measurement categories below.
NON-GAAP FINANCIAL MEASURES
Adjusted earnings before net financial costs and income taxes is a non-GAAP financial measurement that, with
respect to its composition, is adjusted to exclude net financial costs and special items from the composition of the
most directly comparable financial measure disclosed in our consolidated financial statements, which is earnings
before income taxes. Special items may include acquisition and restructuring charges, gains or losses on the disposal
of investments, and amortization and impairment losses of intangible assets resulting from a business acquisition.
Adjusted net earnings is a non-GAAP financial measurement that, with respect to its composition, is adjusted to
exclude special items from the composition of the most directly comparable financial measure disclosed in our
consolidated financial statements, which is net earnings. Special items may include acquisition and restructuring
charges, gains or losses on the disposal of investments, amortization and impairment losses of intangible assets
resulting from a business acquisition, and significant prior-year tax adjustments.
For measurements depicting financial performance, we believe that presenting earnings adjusted for these items,
which are not necessarily reflective of the Corporation's performance, leaves readers of financial statements better
informed thus enabling them to better perform trend analysis, evaluate the Corporation's financial performance and
assess its future outlook. Adjusting for these items does not imply that they are non-recurring.
NON-GAAP RATIOS
Adjusted fully diluted net earnings per share is a non-GAAP ratio by where a non-GAAP financial measure is used
as one or more of its components. The non-GAAP component used is adjusted net earnings(1). Adjusted fully diluted
net earnings per share is calculated by dividing the adjusted net earnings(1) attributable to equity holders of the parent
by the weighted average number of Common Shares outstanding during the year, adjusted to reflect all potential
dilutive shares.
We believe that presenting this ratio, in which a non-GAAP financial measurement is used as one or more of its
components, leaves readers of financial statements better informed as to the current period and corresponding prior
year's period's performance, thus enabling them to better perform trend analysis, evaluate the Corporation's financial
performance and assess its future outlook. Adjusting for these items does not imply that they are non-recurring.
SUPPLEMENTARY FINANCIAL MEASURES
The supplementary financial measures listed below are, or are intended to be, disclosed on a periodic basis to depict
the historical or expected future financial performance, financial position or cash flow of the Corporation.
Food same-store sales are defined as comparable retail sales of stores with more than 52 consecutive weeks of
operations, including relocated, expanded and renovated locations. Food same-store sales is a measure based on all
stores in our network, including those whose sales are not included in the Corporation's consolidated financial
statements.
Online food sales are the sum of sales made from all our online channels.
Pharmacy same-store sales (including total, front-store and prescription drugs) are defined as comparable
retail sales of stores with more than 52 consecutive weeks of operations, including relocated, expanded and
renovated locations. Pharmacy same-store sales do not form part of the Corporation’s consolidated financial
statements because the pharmacies are held by pharmacist owners.
Gross margin ratio is calculated by dividing gross profit by sales.
Return on equity ratio is calculated by dividing net earnings by the average equity.
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 30 -
CONTROLS AND PROCEDURES
The President and Chief Executive Officer, and the Executive Vice President, Chief Financial Officer and Treasurer of
the Corporation, are responsible for the implementation and maintenance of disclosure controls and procedures
(DC&P), and of the internal control over financial reporting (ICFR), as provided for in National Instrument 52-109
regarding the Certification of Disclosure in Issuers' Annual and Interim Filings. They are assisted in this task by the
Disclosure Committee, which is comprised of members of the Corporation's senior management.
An evaluation was completed under their supervision in order to measure the effectiveness of DC&P and ICFR.
Based on this evaluation, the President and Chief Executive Officer and the Executive Vice President, Chief Financial
Officer and Treasurer of the Corporation concluded that the DC&P and the ICFR were effective as at the end of the
fiscal year ended September 28, 2024.
Therefore, the design of the DC&P provides reasonable assurance that material information relating to the
Corporation is made known to it by others, particularly during the period in which the annual filings are being
prepared, and that the information required to be disclosed by the Corporation in its annual filings, interim filings and
other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported
within the time periods specified in securities legislation.
Furthermore, the design of the ICFR provides reasonable assurance regarding the reliability of the Corporation's
financial reporting and the preparation of its financial statements for external purposes in accordance with IFRS.
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 31 -
SIGNIFICANT JUDGMENTS AND ESTIMATES
Our Management's Discussion and Analysis is based upon our annual consolidated financial statements, prepared in
accordance with IFRS, and it is presented in Canadian dollars, our unit of measure. The preparation of the
consolidated financial statements and other financial information contained in this Management's Discussion and
Analysis requires management to make judgments, estimates and assumptions that affect the recognition and
valuation of assets, liabilities, sales, other income and expenses. These estimates and assumptions are based on
historical experience and other factors deemed relevant and reasonable and are reviewed at every closing date. The
use of different estimates could produce different amounts in the consolidated financial statements. Actual results
may differ from these estimates.
JUDGMENTS
In applying the Corporation's accounting policies, management has made the following judgments, which have the
most significant effect on the amounts recognized in the consolidated financial statements:
Consolidation of structured entities
The Corporation has no voting rights in certain food stores. However, the franchise contract gives it the ability to
control these stores' main activities. Its decisions are not limited to protecting its trademarks. The Corporation retains
the majority of stores' profits and losses. For these reasons, the Corporation consolidates these food stores in its
financial statements.
The Corporation has no voting rights in the trust created for performance share unit plan participants. However, under
the trust agreement, it instructs the trustee as to the sale and purchase of Corporation shares and payments to
beneficiaries, gives the trustee money to buy Corporation shares, assumes vesting variability, and ensures that the
trust holds a sufficient number of shares to meet its obligations to the beneficiaries. For these reasons, the
Corporation consolidates this trust in its financial statements.
The Corporation also has an agreement with a third party that operates a plant exclusively for the needs and
according to the specifications of the Corporation, which assumes all costs and control the plant's main activities. For
these reasons, the Corporation consolidates it in the Corporation's financial statements.
Determination of the aggregation of operating segments
The Corporation uses judgment in determining the aggregation of business segments. The operating segment
comprises the food operations segment and the pharmaceutical operations segment. The Corporation has
aggregated these two business segments due to the similar nature of their goods and services and similar economic
characteristics: operations are carried on primarily in Québec and Ontario and are therefore subject to the same
regulatory environment and competitive and economic market pressures, use the same product distribution methods
and serve the same customers.
ESTIMATES
The assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that
have a significant risk of causing a material adjustment to the value of assets and liabilities within the next period, are
discussed below:
Impairment of assets
In testing for impairment of intangible assets with indefinite useful lives and goodwill, value in use and fair value less
costs of disposal are estimated using the discounted future cash flows model, the capitalized excess earnings before
financial costs and taxes (EBIT) and royalty-free license methods. These methods are based on various assumptions,
such as the future cash flow estimates, excess EBIT, royalty rates, discount rate, earnings multiples and growth rates.
The key assumptions are disclosed in notes 12 and 13 to the annual consolidated financial statements.
Pension plans and other plans
Defined pension plans, ancillary retirements and other long-term benefits obligations and costs associated to these
obligations are determined from actuarial calculations according to the projected credit unit method. These
calculations are based on management's best assumptions relating to salary escalation, retirement age of
participants, inflation rate and expected health care costs. The key assumptions are disclosed in note 20 to the
annual consolidated financial statements.
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 32 -
RISK MANAGEMENT
Management identifies the main risks to which the Corporation is exposed as well as the appropriate measures for
proactively managing these risks and presents both the risks and risk reduction measures to the Audit Committee and
the Board of Directors on an ongoing basis. Internal Audit has the mandate to audit all business risks triennially.
Hence, each segment is audited every three years to ensure that controls have been implemented to deal with the
business risks related to its business area.
In the normal course of business, we are exposed to various risks, which are described below, that could have a
material impact on our earnings, financial position and cash flows. In order to counteract the principal risk factors, we
have implemented strategies specifically adapted to them.
CLIMATE CHANGE
METRO takes risks related to climate change seriously as it may pose risks to our operations and supply chain in
short, medium and long terms. We also recognize that nature loss and climate change are intrinsically interlinked, and
that a failure in one sphere will cascade into the other. As a food and pharmaceutical retailer and distributor, our
reliance on a sustainable natural environment is fundamental to ensuring the continuity of our business.
As such, in 2023 we conducted our first climate scenario analysis. In alignment with the recommendations of the Task
Force on Climate-related Financial Disclosures (TCFD), we categorized climate-related risks into physical and
transition risks.
Physical risks are associated with the physical impacts from a changing climate which can either be event-driven
(acute) or longer-term (chronic) shifts in climate patterns. The climate scenario analysis confirms that some physical
risks – comprising sea level rise, tropical cyclone, extreme cold and water stress – do not currently pose significant
threats to the corporate operations. The analysis revealed that some risks heighten in 2050 and may impact our
operations if no mitigation measures are implemented. Inadequate mitigation of these risks could adversely affect our
business. These physical risks are flooding, wildfire and extreme heat.
According to our evaluation, the extent of physical risks in our supply chain hinges on the geographical locations of
our suppliers and the nature of the products they cultivate or manufacture. Based on our evaluation, sea level rise
and flooding pose minimal risks for our suppliers. In contrast, the vulnerability to risks like wildfires, tropical cyclones,
extreme heat, and water stress fluctuates from low to high based on specific regions and operational characteristics.
Transition risks are associated with a transition to a lower-carbon economy, which may include extensive regulatory,
technology and market changes to address mitigation and adaptation requirements related to climate change.
Macroeconomic conditions, with related effects on consumer spending and confidence, investor expectations,
transition to lower emissions technology and new regulatory requirements, may result in compliance risk and higher
operational costs. Furthermore, the climate scenario analysis concludes that carbon price and price/supply shocks in
the energy markets represent the most significant risks to the Corporation in the long term.
The Corporation has put in place mitigation measures to address these specific climate risks. For over 20 years,
METRO has maintained a business continuity management program to ensure a state of readiness for coordinated
and effective emergency responses and to sustain operations during incidents that could impact them. Additionally,
METRO is developing strategies to enhance supply chain resilience, allowing access to a diverse range of products
throughout the year despite climate-related challenges. These efforts collectively support METRO’s ability to seek to
respond effectively to climate-related disruptions and maintain uninterrupted operations.
In order to increase the resilience of our business to address climate-related risks and continue to integrate climate
risks and opportunities, the Corporation has published its first TCFD report aligned with TCFD’s 11 recommendations.
For more details on climate governance, strategy, risk management, metrics and targets, please consult the
Corporation’s 2023 TCFD Report on climate-related risks and opportunities.
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 33 -
BRAND, REPUTATION, AND TRUST
Product safety
Metro has exposure to potential liabilities and costs regarding food and pharmaceutical safety through risks
associated with product contamination, improper handling, and defective or improperly labelled products. Such
liabilities may arise from loss of effective controls during product manufacturing, packaging and labelling, in-store
preparation, warehousing, and distribution. Food products represent the highest proportion of our sales, and we could
be at risk in the event of a major outbreak of a food-borne illness or an increase in public health concerns regarding
certain food products.
To mitigate these risks, Metro has implemented various food safety standards, procedures and controls throughout
the supply and distribution chain. All Metro suppliers must take measures to ensure supply of safe and compliant food
products and are required to maintain registration with Canadian Food Inspection Agency (CFIA) or equivalent
regulatory oversight from their jurisdiction. Distribution Centres and Stores have comprehensive food safety programs
in place to comply with all applicable standards and regulations while being audited by the relevant Public Health,
including the Ministère de l'Agriculture, des Pêcheries et de l'Alimentation du Québec (MAPAQ), or CFIA authorities.
Employees receive task relevant food safety training and food safety standards are integrated in job task procedures.
Compliance with food safety standards within our Private Label, Distribution and Store programs is monitored and
maintained by a dedicated team of Quality Assurance and Food Safety professionals. In the event of a product recall
Metro has comprehensive traceability and recall communication systems to effectively isolate and remove affected
products from inventory.
We are also exposed to potential product safety issues regarding the sale of pharmaceutical products. Our
distribution activities are subject to regulatory oversight by Health Canada and our pharmacists must meet
professional standards as they carry out their work across the pharmacy network.
Brand reputation
The Corporation benefits from well-recognized brands. Failure to act with integrity or to maintain ethical and socially
responsible activities could damage our reputation and have a material impact on our financial position. To mitigate
these risks, we have implemented internal policies, controls and governance processes including a code of conduct,
a confidential whistle blower program and a Corporate Responsibility approach.
TECHNOLOGY RISKS
Technology systems
We depend on extensive information technology systems to manage virtually all aspects of our business. A system
breakdown or any disruption to these systems or the data collected by them could have a significant adverse impact
on our operations and our financial results.
In order to mitigate these risks, management has deployed various technological security measures, which include a
high availability environment for all of its critical systems, and has set up processes, procedures and controls related
to the various systems concerned.
Cybersecurity and data protection
Various computer systems are necessary for our business activities and we could have to deal with certain security
risks, notably cyberattacks, which could harm the availability and integrity of the systems or compromise data privacy.
In the normal course of business, we gather information that is confidential in nature concerning our customers,
suppliers, employees, partners, and loyalty program participants. Personal and confidential data is also gathered from
customers who do business with the pharmacies in our network. Furthermore, the online shopping sites represent an
additional risk with respect to the security of our systems. As a result, we are even more exposed to the risk of
cyberattacks aimed at stealing information or interrupting our computer systems.
A cyberattack or an intrusion into our systems could result in unauthorized persons altering our systems or gaining
access to sensitive and confidential information and then using or damaging it. Such situations could also affect third
parties who provide essential services to our operations or who store confidential information. These events could
have a negative impact on our customers and partners that could result in financial losses, reducing our competitive
advantage or tarnishing our reputation.
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 34 -
In order to respond to these risks, a committee comprised of executives from the Corporation oversees cybersecurity
activities, including Information Security Service activities. Meetings are held regularly to monitor the progress of
various cybersecurity projects, review significant incidents and review various security-related performance indicators.
This committee reports on its work to the members of the Board of Directors on a biannual basis. The Information
Security Service sets up and coordinates prevention, detection, and remediation measures in the area of
cybersecurity. Cybersecurity measures include, among others, setting up strong controls with respect to systems
access and hiring specialized firms to carry out intrusion tests. We have also implemented an information security
awareness and training program for our employees.
No significant incident attributable to the Corporation's technology occurred over the past fiscal year. Considering the
rapid evolution of risks with respect to cybersecurity as well as the complexity of threats, we cannot guarantee that
the measures taken, by the Corporation and third parties it deals with, will be sufficient to prevent or detect a
cyberattack. In that regard, we stay current with the latest information security trends and practices in order to take
proactive action.
HUMAN RESOURCE RISKS
Labour relations
The majority of our store and distribution centre employees are unionized. Collective bargaining may give rise to work
stoppages or slowdowns that could negatively impact the Corporation. We negotiate collective agreements with
different maturity dates and conditions that ensure our competitiveness, and terms that promote a positive work
environment in all our business segments. We develop contingency plans to minimize the impact of possible labour
conflicts. We have experienced some labour conflicts over the last few years, and we expect(2) to maintain good
labour relations in the future.
Occupational health and safety
Workplace accidents may occur at any of our sites. To minimize this risk, we have developed a worked-related
accident prevention policy and programs. Furthermore, at all of our sites, we have workplace health and safety
committees responsible for setting-up action and accident prevention plans.
Hiring, employee retention and organization structure
Our recruitment program, salary structure, performance evaluation programs, succession plan, development and
training plan all entail risks which could negatively impact our capacity to execute our strategic plan as well as our
ability to attract and retain necessary qualified resources to sustain the Corporation's growth and success. We have
proven practices to attract the professionals necessary for our operations. Our performance evaluation practices are
supervised by our human resources department. Our compensation structure is regularly reviewed in order to ensure
that we remain competitive on the market. We have a succession plan in place to ensure we have well-identified
resources for the Corporation's key positions and we invest in the development and training of our employees.
LEGAL, REGULATORY AND CORPORATE RESPONSIBILITY RISKS
Legal Proceedings
In the normal course of business, various proceedings and claims are instituted against the Corporation. The
Corporation contests the validity of these claims and proceedings and at this stage, the Corporation does not believe
that these matters will have a material effect on the Corporation's financial position or on consolidated earnings.
However, since any litigation involves uncertainty, it is not possible to predict the outcome of these litigations or the
amount of potential losses. A more detailed description of certain proceedings affecting the Corporation or its
subsidiaries can be found in the “Contingencies” Section of this Management Discussion & Analysis.
Regulatory environment
Changes are regularly made to accounting policies, laws, regulations, rules or policies impacting our operations. We
monitor these changes closely.
The Corporation relies on prescription drug sales for a portion of its sales and operating income. The pharmacy
activities are exposed to risks related to the regulated nature of some of our activities and the activities of our
pharmacist/owner franchisees.
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 35 -
Any changes to laws and regulations or policies regarding the Corporation's activities could have a material adverse
effect on its performance and on the sales growth. Processes are in place to ensure our compliance as well as to
monitor any and all changes to the laws and regulations in effect and any new laws and regulations.
Corporate responsibility
Over the past decade, through our corporate responsibility plans, we have implemented structuring programs and we
disclose our progress and challenges in a report published annually. To anticipate and manage risks related to ESG
issues, we stay abreast of emerging issues, new practices and legislative changes, and work to continuously improve
our processes. We aim to ensure that our actions bring value to METRO, and to our stakeholders - customers,
employees, suppliers, shareholders and community partners. Any failure or perceived failure to advance the
corporate responsibility priorities and objectives of the Corporation or those of its stakeholders may negatively affect
the Corporation’s reputation, operations or financial performance.
MARKET RISKS
Competition and prices
Intensifying competition, the possible arrival of new competitors, higher-than-normal levels of cost inflation, and
changing consumer needs are constant concerns for us.
To cope with competition and maintain our leadership position in the Québec and Ontario markets, we are on the alert
for new ways of doing things and new sites. We have an ongoing investment program for all our stores to ensure that
our retail network remains one of the most modern in Canada.
Increased competition could lead to pressure on retail prices and margins. As a result, we adopt innovative marketing
strategies to better meet the evolving needs of consumers and protect our market shares.
Higher-than-normal levels of cost inflation could also lead to pressure on retail prices, margins and operating costs.
As a result, we implement robust merchandising programs, have developed a strong private label offer and work with
our supply chain partners to mitigate the impacts.
We have also developed a successful market segmentation strategy. Our grocery banners: the conventional Metro
supermarkets, Super C and Food Basics discount banners, and the Mediterranean product stores Adonis, target
three different market segments. The Première Moisson banner is specialized in bakery, pastry, deli products and
other food offerings prepared on an artisanal basis and respectful of great traditions.
In the pharmacy market, we have a network of large, medium, and small pharmacies under the Jean Coutu, Brunet,
Metro Pharmacy, and Food Basics Pharmacy banners.
With the proprietary Moi loyalty program in our Metro, Super C, Food Basics, and Première Moisson banners and our
Jean Coutu and Brunet pharmacy network, we are able to know the buying habits of loyal customers, offer them
personalized promotions so as to increase their purchases at our stores.
Consumer behaviour and digital shift
Consumer buying habits are evolving and if we are unable to adapt our offering it could have a negative impact on
our financial results.
Our online grocery service, websites and various mobile applications are part of the Corporation's overall digital
strategy, which aims to position METRO as the retailer that offers the food experience most suited to the needs and
behaviors of consumers.
SUPPLY CHAIN
Suppliers
Negative events such as disruptions related to climate change or other catastrophic or public health events or labour
disputes could affect a supplier and lead to service breakdowns and store delivery delays. To remediate this situation,
we deal with several suppliers. In the event of a supplier's service breakdown, we can turn to another supplier
reasonably quickly.
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 36 -
Distribution centre business interruption
A prolonged interruption at one of our distribution centres could impact our ability to supply our stores and have an
unfavorable impact on our financial results. We have measures in place to prevent business disruptions and have
developed contingency plans aiming to respond in the event an interruption occurs.
FINANCIAL RISKS
Exchange rates and financial instruments
We make some foreign-denominated purchases of goods and services and we have, depending on market
conditions, US borrowings, exposing ourselves to exchange rate risks. According to our financial risk management
policy, we may use derivative financial instruments, such as foreign exchange forward contracts and cross currency
interest rate swaps. The policy's guidelines prohibit us from using derivative financial instruments for speculative
purposes, but they do not guarantee that we will not sustain losses as a result of our derivative financial instruments.
Credit
We hold receivables generated mainly from sales to customers. To guard against credit losses, we have adopted a
credit policy that defines mandatory credit requirements to be maintained and guarantees to be provided. Affiliate and
franchised customer assets guarantee the majority of our receivables.
Liquidity
We are also exposed to liquidity risk mainly through our non-current debt and creditors. We evaluate our cash
position regularly and estimate(2) that cash flows generated by our operating activities will be sufficient to provide for
all outflows required by our financing activities.
Price of fuel, energy and utilities
We are a big consumer of utilities, electricity, natural gas, and fuel. Increases in the price of these items may affect
us.
Montréal, Canada, December 11, 2024
(1) This measurement is presented for information purpose only. It does not have a standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measurements presented by other public companies. See table in section "Operating Results" and section on "Non-GAAP
and Other Financial Measurements"
(2) See section on "Forward-looking Information"
- 37 -
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING
The preparation and presentation of the consolidated financial statements of METRO INC. and the other financial
information contained in this Annual Report are the responsibility of management. This responsibility is based on a
judicious choice of appropriate accounting principles and policies, the application of which requires making estimates
and informed judgments. It also includes ensuring that the financial information in the Annual Report is consistent with
the consolidated financial statements. The consolidated financial statements were prepared in accordance with
International Financial Reporting Standards and were approved by the Board of Directors.
METRO INC. maintains accounting systems and internal controls over the financial reporting process which, in the
opinion of management, provide reasonable assurance regarding the accuracy, relevance and reliability of financial
information and the well-ordered, efficient management of the Corporation's affairs.
The Board of Directors fulfills its duty to oversee management in the performance of its financial reporting
responsibilities and to review the consolidated financial statements and Annual Report, principally through its Audit
Committee. This Committee is comprised solely of directors who are independent of the Corporation and is also
responsible for making recommendations for the nomination of external auditors. Also, it holds periodic meetings with
members of management as well as internal and external auditors to discuss internal controls, auditing matters and
financial reporting issues. The external and internal auditors have access to the Committee without management. The
Audit Committee has reviewed the consolidated financial statements and Annual Report of METRO INC. and
recommended their approval to the Board of Directors.
The enclosed consolidated financial statements were audited by Ernst & Young LLP and their report indicates the
extent of their audit and their opinion on the consolidated financial statements.
Eric La Flèche
François Thibault
President and Chief Executive Officer
Executive Vice President,
Chief Financial Officer and Treasurer
December 11, 2024
- 38 -
INDEPENDENT AUDITORS' REPORT
To the shareholders of METRO INC.
Opinion
We have audited the consolidated financial statements of METRO Inc. and its subsidiaries (the “Group”), which
comprise the consolidated statements of financial position as at September 28, 2024 and September 30, 2023, and
the consolidated statements of net income, comprehensive income, changes in equity and cash flows for the years
then ended, and notes to the consolidated financial statements, including a summary of significant accounting
policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the
consolidated financial position of the Group as at September 28, 2024 and September 30, 2023, and its consolidated
financial performance and its consolidated cash flows for the years then ended in accordance with International
Financial Reporting Standards (IFRSs).
Basis for opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities
under those standards are further described in the Auditor’s responsibilities for the audit of the consolidated financial
statements section of our report. We are independent of the Group in accordance with the ethical requirements that
are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of the
consolidated financial statements of the current period. These matters were addressed in the context of the audit of
the consolidated financial statements as a whole, and in forming the auditor’s opinion thereon, and we do not provide
a separate opinion on these matters. For the matter below, our description of how our audit addressed the matter is
provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the consolidated
financial statements section of our report, including in relation to this matter. Accordingly, our audit included the
performance of procedures designed to respond to our assessment of the risks of material misstatement of the
consolidated financial statements. The results of our audit procedures, including the procedures performed to address
the matter below, provide the basis for our audit opinion on the accompanying consolidated financial statements.
Key Audit Matter
How our audit addressed the key audit matter
Impairment test of the goodwill of the
pharmaceutical operating segment
Impairment testing of goodwill is to be done at least
annually, or at any time an indicator of impairment
exists. As disclosed in note 13, goodwill with a
carrying amount of $1,307.2 million was attributed to
the operating segment related to pharmaceutical
operations. For the purpose of the impairment test,
the recoverable amount was determined based on
its value in use, which was calculated using
discounted pre-tax cash flow forecast for the next
fiscal year from management-approved budget.
To test the estimated recoverable amount of the
pharmaceutical operating segment, we performed,
among others, the following procedures:
•
Recalculated
the
value
in
use
of
the
pharmaceutical operating segment using the
Corporation’s discounted cash flow model.
•
Compared
Management’s
underlying
assumptions used in the recoverable amount,
specifically EBITDA in the cash flow forecast
for the next fiscal year to budget. We assessed
management’s ability to forecast by comparing
previous forecasts to actual results.
•
Evaluated, with the assistance of our valuation
specialists,
the
Corporation’s
valuation
methodology
and
the
discount
rate
by
referencing current industry, economic and
comparable company information.
- 39 -
Auditing management’s annual goodwill impairment
test required significant auditor attention given the
significance of the goodwill on the consolidated
statement of financial position as well as the degree
of
judgment
and
subjectivity
in
evaluating
management’s estimates and assumptions used in
determining
the
recoverable
amount
of
the
pharmaceutical
operating
segment
as
at
September 28, 2024. The assumptions that required
significant auditor attention and audit effort included
earnings before interest, tax, depreciation and
amortization (EBITDA) in the cash flow forecast for
the next fiscal year and the discount rate, which are
affected by expectations about future market and
economic conditions.
•
Performed sensitivity analyses of the significant
assumptions to evaluate changes in the
recoverable amount that would result from
changes in the underlying inputs.
•
Assessed the adequacy of the disclosures in
respect of the significant judgments made by
management as described above.
Other Information
Management is responsible for the other information. The other information comprises the information, other than the
consolidated financial statements and our auditor’s report thereon, in the Annual Report.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information
identified above, and in doing so, consider whether the other information is materially inconsistent with the
consolidated financial statements, or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
We obtained the Annual Report prior to the date of this auditor’s report. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to report that fact in this
auditor’s report. We have nothing to report in this regard.
Responsibilities of management and those charged with governance for the consolidated financial
statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in
accordance with IFRSs, and for such internal control as management determines is necessary to enable the
preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no
realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
- 40 -
•
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Group’s internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by management.
•
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures
in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Group to cease to continue as a going concern.
•
Evaluate the overall presentation, structure, and content of the consolidated financial statements, including
the disclosures, and whether the consolidated financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.
•
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the consolidated financial statements. We are
responsible for the direction, supervision and performance of the group audit. We remain solely responsible
for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Monica Rusu.
Montréal, Canada
December 11, 2024
1 CPA auditor, Public accountancy permit no. A136576
- 41 -
This page intentionally left blank
- 42 -
Consolidated Financial Statements
METRO INC.
September 28, 2024
- 43 -
Page
Consolidated statements of net income .......................................................................................................................
45
Consolidated statements of comprehensive income ..................................................................................................
46
Consolidated statements of financial position .............................................................................................................
47
Consolidated statements of changes in equity
............................................................................................................
48
Consolidated statements of cash flows ........................................................................................................................
49
Notes to consolidated financial statements .................................................................................................................
50
1- Description of business ............................................................................................................................................
50
2- Significant accounting policies ................................................................................................................................
50
3- New accounting standard ........................................................................................................................................
56
4- Significant judgments and estimates
......................................................................................................................
57
5- Sales ............................................................................................................................................................................
58
6- Net financial costs .....................................................................................................................................................
58
7- Income taxes ..............................................................................................................................................................
59
8- Net earnings per share .............................................................................................................................................
60
9- Inventories ..................................................................................................................................................................
61
10- Fixed assets .............................................................................................................................................................
61
11- Leases .......................................................................................................................................................................
62
12- Intangible assets .....................................................................................................................................................
65
13- Goodwill ....................................................................................................................................................................
66
14- Other assets .............................................................................................................................................................
67
15- Accounts payable ....................................................................................................................................................
67
16- Debt ...........................................................................................................................................................................
68
17- Other liabilities .........................................................................................................................................................
69
18- Capital stock ............................................................................................................................................................
70
19- Dividends ..................................................................................................................................................................
72
20- Employee benefits ..................................................................................................................................................
73
21- Commitments ...........................................................................................................................................................
77
22- Contingencies ..........................................................................................................................................................
77
23- Related party transactions .....................................................................................................................................
79
24- Management of capital ...........................................................................................................................................
80
25- Financial instruments ..............................................................................................................................................
80
26- Events after the reporting period ..........................................................................................................................
83
27- Approval of financial statements ...........................................................................................................................
83
Table of contents
- 44 -
2024
2023
(52 weeks)
(53 weeks)
Sales (notes 5 and 23)
21,219.9
20,724.6
Cost of sales
(17,040.6)
(16,642.4)
Gross Profit
4,179.3
4,082.2
Operating expenses
(2,199.1)
(2,116.8)
Gain on disposal of assets (notes 10, 11 and 12)
6.8
4.2
Operating income before depreciation, amortization and impairment
of assets
1,987.0
1,969.6
Depreciation and amortization (notes 10, 11 and 12)
(570.4)
(525.2)
Impairment of assets (note 12)
(20.8)
—
Net financial costs (note 6)
(145.7)
(122.6)
Earnings before income taxes
1,250.1
1,321.8
Income taxes (note 7)
(318.4)
(303.0)
Net earnings
931.7
1,018.8
Attributable to:
Equity holders of the parent
928.8
1,014.8
Non-controlling interests
2.9
4.0
931.7
1,018.8
Net earnings per share (Dollars) (notes 8 and 18)
Basic
4.13
4.36
Fully diluted
4.11
4.35
See accompanying notes
Consolidated statements of net income
Years ended September 28, 2024 and September 30, 2023
(Millions of dollars, except for net earnings per share)
- 45 -
2024
2023
(52 weeks)
(53 weeks)
Net earnings
931.7
1,018.8
Other comprehensive income
Items that will not be reclassified to net earnings
Changes in defined benefit plans
Actuarial gains (note 20)
45.0
73.0
Asset ceiling effect (note 20)
22.9
(21.8)
Corresponding income taxes (note 7)
(18.0)
(13.6)
49.9
37.6
Items that will be reclassified later to net earnings
Change in fair value of derivatives designated as cash flow hedges (note 25)
—
(3.0)
Reclassification of the change in fair value of derivatives designated as cash
flow hedges to net earnings (note 25)
0.1
0.1
Corresponding income taxes (note 7)
—
0.8
0.1
(2.1)
50.0
35.5
Comprehensive income
981.7
1,054.3
Attributable to:
Equity holders of the parent
978.8
1,050.3
Non-controlling interests
2.9
4.0
981.7
1,054.3
See accompanying notes
Consolidated statements of comprehensive income
Years ended September 28, 2024 and September 30, 2023
(Millions of dollars)
- 46 -
2024
2023
ASSETS
Current assets
Cash and cash equivalents
29.4
29.5
Accounts receivable (notes 14 and 23)
749.7
728.3
Accounts receivable on subleases (note 11)
96.1
96.1
Inventories (note 9)
1,508.3
1,451.0
Prepaid expenses
73.2
65.9
Current taxes
17.3
32.8
2,474.0
2,403.6
Non-current assets
Fixed assets (note 10)
3,951.3
3,768.3
Right-of-use assets (note 11)
953.9
942.8
Intangible assets (note 12)
2,698.9
2,733.0
Goodwill (note 13)
3,314.2
3,307.4
Deferred taxes (note 7)
35.9
37.9
Defined benefit assets (note 20)
225.9
160.5
Accounts receivable on subleases (note 11)
404.7
426.5
Other assets (note 14)
81.8
85.3
14,140.6
13,865.3
LIABILITIES AND EQUITY
Current liabilities
Accounts payable (note 15)
1,645.9
1,619.4
Deferred revenues
42.7
36.8
Current taxes
16.2
6.9
Current portion of debt (note 16)
317.2
19.3
Current portion of lease liabilities (note 11)
263.6
278.4
2,285.6
1,960.8
Non-current liabilities
Debt (note 16)
2,357.1
2,646.3
Lease liabilities (note 11)
1,372.6
1,380.3
Defined benefit liabilities (note 20)
37.5
29.4
Deferred taxes (note 7)
1,042.2
1,001.6
Other liabilities (note 17)
6.7
30.6
7,101.7
7,049.0
Equity
Attributable to equity holders of the parent
7,021.7
6,801.2
Attributable to non-controlling interests
17.2
15.1
7,038.9
6,816.3
14,140.6
13,865.3
Commitments and contingencies (notes 10, 11, 21 and 22)
Events after the reporting period (note 26)
See accompanying notes
On behalf of the Board
ERIC LA FLÈCHE
BRIAN MCMANUS
Director
Director
Consolidated statements of financial position
Years ended September 28, 2024 and September 30, 2023
(Millions of dollars)
- 47 -
Attributable to the equity holders of the parent
Capital
stock
(note 18)
Treasury
shares
(note 18)
Contributed
surplus
Retained
earnings
Accumulated
other
comprehensive
income
Total
Non-
controlling
interests
Total
equity
Balance as at
September 30, 2023
1,601.1
(17.9)
23.6 5,195.6
(1.2) 6,801.2
15.1 6,816.3
Net earnings
—
—
—
928.8
—
928.8
2.9
931.7
Other comprehensive income
—
—
—
49.9
0.1
50.0
—
50.0
Comprehensive income
—
—
—
978.7
0.1
978.8
2.9
981.7
Stock options exercised
21.4
—
(2.5)
—
—
18.9
—
18.9
Shares redeemed
(47.0)
—
—
—
—
(47.0)
—
(47.0)
Share redemption premium
(note 18)
—
—
—
(431.2)
—
(431.2)
—
(431.2)
Tax on share redemption
—
—
—
(7.1)
—
(7.1)
—
(7.1)
Acquisition of treasury shares
—
(7.5)
—
—
—
(7.5)
—
(7.5)
Share-based compensation
cost
—
—
9.6
—
—
9.6
—
9.6
Performance share units
settlement
—
5.8
(5.2)
—
—
0.6
—
0.6
Dividends (note 19)
—
—
—
(294.6)
—
(294.6)
(0.8)
(295.4)
(25.6)
(1.7)
1.9
(732.9)
—
(758.3)
(0.8)
(759.1)
Balance as at
September 28, 2024
1,575.5
(19.6)
25.5 5,441.4
(1.1) 7,021.7
17.2 7,038.9
Attributable to the equity holders of the parent
Capital
stock
(note 18)
Treasury
shares
(note 18)
Contributed
surplus
Retained
earnings
Accumulated
other
comprehensive
income
Total
Non-
controlling
interests
Total
equity
Balance as at
September 24, 2022
1,649.3
(16.2)
23.3 4,947.2
0.9 6,604.5
13.9 6,618.4
Net earnings
—
—
— 1,014.8
— 1,014.8
4.0 1,018.8
Other comprehensive income
—
—
—
37.6
(2.1)
35.5
—
35.5
Comprehensive income
—
—
— 1,052.4
(2.1) 1,050.3
4.0 1,054.3
Stock options exercised
8.8
—
(1.0)
—
—
7.8
—
7.8
Shares redeemed
(57.0)
—
—
—
—
(57.0)
—
(57.0)
Share redemption premium
(note 18)
—
—
—
(529.0)
—
(529.0)
—
(529.0)
Acquisition of treasury shares
—
(7.6)
—
—
—
(7.6)
—
(7.6)
Share-based compensation cost
—
—
7.2
—
—
7.2
—
7.2
Performance share units
settlement
—
5.9
(5.9)
—
—
—
—
—
Dividends (note 19)
—
—
—
(275.0)
—
(275.0)
(1.4)
(276.4)
Buyout of minority interests
—
—
—
—
—
—
(1.4)
(1.4)
(48.2)
(1.7)
0.3
(804.0)
—
(853.6)
(2.8)
(856.4)
Balance as at
September 30, 2023
1,601.1
(17.9)
23.6 5,195.6
(1.2) 6,801.2
15.1 6,816.3
See accompanying notes
Consolidated statements of changes in equity
Years ended September 28, 2024 and September 30, 2023
(Millions of dollars)
- 48 -
2024
2023
(52 weeks)
(53 weeks)
Operating activities
Earnings before income taxes
1,250.1
1,321.8
Non-cash items
Depreciation and amortization
570.4
525.2
Gains on disposal of assets
(6.8)
(4.2)
Impairment losses of assets
20.8
—
Share-based compensation cost
13.1
12.0
Difference between amounts paid for employee benefits and current year cost
17.1
21.0
Net financial costs
145.7
122.6
2,010.4
1,998.4
Net change in non-cash working capital items
(54.3)
(125.5)
Income taxes paid
(276.1)
(309.4)
1,680.0
1,563.5
Investing activities
Proceeds on disposal of an investment in an associate
13.3
—
Buyout of minority interests
—
(1.4)
Net change in other assets
0.7
0.3
Additions to fixed assets (note 10)
(499.0)
(597.2)
Disposals of fixed assets (note 10)
0.8
1.2
Additions to intangible assets and goodwill (notes 12 and 13)
(80.7)
(82.7)
Payments received from subleases
93.4
92.9
Interests received from subleases
15.1
14.4
(456.4)
(572.5)
Financing activities
Shares issued (note 18)
18.9
7.8
Shares redeemed (note 18)
(478.2)
(586.0)
Acquisition of treasury shares (note 18)
(7.5)
(7.6)
Performance share units settlement
(2.1)
—
Increase in debt
327.5
500.9
Repayment of debt
(336.4)
(188.2)
Interest paid on debt
(132.0)
(113.1)
Payment of lease liabilities (principal)
(267.8)
(269.1)
Payment of lease liabilities (interest)
(50.6)
(44.8)
Net change in other liabilities
(0.9)
0.2
Dividends (note 19)
(294.6)
(275.0)
(1,223.7)
(974.9)
Net change in cash and cash equivalents
(0.1)
16.1
Cash and cash equivalents – beginning of year
29.5
13.4
Cash and cash equivalents – end of year
29.4
29.5
See accompanying notes
Consolidated statements of cash flows
Years ended September 28, 2024 and September 30, 2023
(Millions of dollars)
- 49 -
1.
DESCRIPTION OF BUSINESS
METRO INC. (the Corporation), is incorporated under the laws of Québec. The Corporation is one of Canada’s
leading food and pharmacy retailers and distributors. It operates a network of supermarkets, discount stores and
pharmacies. Its head office is located at 11011 Maurice-Duplessis Blvd., Montréal, Québec, Canada, H1C 1V6. Its
business segments, food operations and pharmaceutical operations, are combined into a single reportable operating
segment due to the similar nature of their operations (note 4).
2.
SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements, in Canadian dollars, have been prepared by management in accordance with
International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board
(IASB). The consolidated financial statements have been prepared within the reasonable limits of materiality, on a
historical cost basis, except for certain financial instruments and defined benefit plan assets, measured at fair value,
and defined benefit obligations, measured using an actuarial valuation method. The significant accounting policies are
summarized below:
Consolidation
The consolidated financial statements include the accounts of the Corporation and its subsidiaries, as well as those of
structured entities (notes 4 and 23). All intercompany transactions and balances were eliminated on consolidation.
Revenue from contracts with customers
Revenue from contracts with customers are accounted for when control of goods or services is transferred to the
customer. Retail sales of corporate stores and stores that qualify as structured entities are recorded at the time of
sale to the consumer. Sales to unconsolidated affiliated or franchised stores and other customers are recorded when
the goods are delivered to them. Discounts granted by the Corporation are recorded as a reduction in revenue.
Recognition of considerations from vendors
Cash considerations from vendors are considered as an adjustment to the vendor's product pricing and are therefore
characterized as a reduction of cost of sales and related inventories when recognized in the consolidated financial
statements.
Loyalty programs
The Corporation has one active loyalty program and has withdrawn from a second loyalty program.
The active loyalty program belongs to the Corporation. At the time of a sale to the customer, part of the sale is
recorded as deferred revenue equal to the fair value of the points issued under the Corporation's loyalty program.
This fair value is determined based on the exchange value of the points awarded. There is no estimate of expected
redemption included in the calculation of deferred revenue. The deferred revenue is recognized as sales when the
points are redeemed.
The second program, for which the Corporation acted as an agent, belongs to a third party and its cost was recorded
as a reduction in sales at the time of sale to the customer. The Corporation withdrew from this program in the summer
of 2024.
Foreign currency translation
The consolidated financial statements are presented in Canadian dollars, the Corporation's functional currency.
Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the
transaction. At each closing, monetary items denominated in foreign currency are translated using the exchange rate
at the closing date. Non-monetary items that are measured at historical cost in foreign currency are translated using
the exchange rate at the date of the transaction. Gains or losses resulting from currency translations are recognized
in net earnings.
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 50 -
Income taxes
Current tax assets and liabilities for the current and prior years are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to determine these amounts are those that
are enacted or substantively enacted by tax authorities by the closing date.
The Corporation follows the liability method of accounting for income taxes. Under this method, deferred tax assets
and liabilities are accounted for based on estimated taxes recoverable or payable that would result from the recovery
or settlement of the carrying amount of assets and liabilities. Deferred tax assets and liabilities are measured using
substantively enacted tax rates expected to be in effect when the temporary differences are expected to reverse.
Changes in these amounts are included in current net earnings in the period in which they occur. The carrying
amount of deferred tax assets is reviewed at every closing date and reduced to the extent that it is no longer probable
that sufficient earnings will be available to allow all or part of the deferred tax assets to be utilized.
Income tax relating to items recognized directly in equity is recognized in equity.
Share-based payment
A share-based compensation expense is recognized for the stock option and performance share unit (PSU) plans
offered to certain employees as well as a deferred share unit (DSU) plan offered to directors.
Stock option awards vest gradually over the vesting term and each tranche is considered as a separate award. The
value of the remuneration expense is calculated based on the fair value of the stock options at the option grant date
and using the Black-Scholes valuation model. The compensation expense is recognized over the vesting term of
each tranche.
The compensation expense for the equity-settled PSU plan is determined based on the fair value of the Corporation's
Common Shares at grant date. Compensation expense is recognized on a straight-line basis over the vesting period.
The impact of any changes in the number of PSUs is recorded in the period where the estimate is revised.
The compensation expense and corresponding liability for the cash-settled PSU plan are recognized on the grant
date and determined based on the grant date market value of the Corporation’s Common Shares. The PSU liability is
included in accounts payable and other liabilities and is periodically adjusted to reflect any changes in the stock
market valuation of the Corporation’s Common Shares.
The compensation expense and corresponding liability for the DSU plan are recognized on the grant date and
determined based on the grant date market value of the Corporation’s Common Shares. The DSU liability is included
in accounts payable and is periodically adjusted to reflect any changes in the stock market valuation of the
Corporation’s Common Shares.
Net earnings per share
Basic net earnings per share is calculated by dividing the net earnings attributable to equity holders of the parent by
the weighted average number of Common Shares outstanding during the year. For the fully diluted net earnings per
share, the net earnings attributable to equity holders of the parent and the weighted average number of Common
Shares outstanding are adjusted to reflect all potential dilutive shares.
Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, bank balances, highly liquid investments (with an initial term of
three months or less) and outstanding deposits. They are classified and measured at amortized cost.
Accounts receivable
Accounts receivable, accounts receivable on subleases and loans to certain customers are classified as “Loans and
receivables”. After their initial fair value measurement, they are measured at amortized cost using the effective
interest method. For the Corporation, the measured amount generally corresponds to cost.
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 51 -
Inventories
Inventories are valued at the lower of cost and net realizable value. Warehouse inventories cost is determined using
the average cost method net of certain considerations received from vendors. Retail inventories cost is valued at the
retail price less the gross margin and certain considerations received from vendors. All costs incurred in bringing the
inventories to their present location and condition are included in the cost of warehouse and retail inventories.
Fixed assets
Fixed assets are initially recorded at cost. Principal components of a fixed asset with different useful lives are
depreciated separately. Buildings and equipment are depreciated on a straight-line basis over their useful lives.
Leasehold improvements are depreciated on a straight-line basis over the shorter of their estimated useful lives or the
remaining lease term. The depreciation method and estimate of useful lives are reviewed annually.
Buildings
20 to 50 years
Equipment
3 to 20 years
Leasehold improvements
5 to 20 years
Leases
The Corporation as lessee
The Corporation recognizes right-of-use assets and the corresponding lease liabilities at the lease inception date, the
date at which the lessor makes available the leased asset to the Corporation. Rental payments under short-term
leases or leases with low-value underlying assets and variable payments that are not based on an index or rate are
recorded in operating expenses on a straight line basis over the duration of the lease.
Lease liabilities represent the present value of fixed and variable lease payments that are based on an index or rate,
net of lease incentives receivable. Subsequent to the initial measurement, the Corporation measures the lease
liabilities at amortized cost using the effective interest method. Lease liabilities are remeasured when a change is
made to the lease agreement. Lease payments are discounted at the lessee’s incremental borrowing rate at lease
inception. The interest expense is recognized in net financial costs. The lease term includes renewal options that the
Corporation is reasonably certain to exercise.
Right-of-use assets are measured at the initial value of the lease liabilities, less lease incentives received and
restoration costs. Subsequent to initial measurement, the Corporation applies the cost model to right-of-use assets.
Right-of-use assets are measured at cost less accumulated amortization, accumulated impairment losses and any
remeasurement of lease liabilities. Assets are depreciated from the lease inception date on a straight-line basis over
the shorter of the asset’s useful life and the lease term.
The Corporation as lessor
For subleases, for which the Corporation acts as an intermediate lessor, it evaluates the classification in relation to
the right-of-use assets arising from the main lease. The Corporation accounts for the main lease and the sublease as
two separate leases. A sublease contract is classified as a finance lease if substantially all risks and rewards
incidental to the underlying asset are transferred to the lessee. Otherwise, leases are classified as operating leases
and rental income is recognized on a straight-line basis over the lease term.
For subleases that are classified as finance leases, the Corporation derecognizes the corresponding right-of-use
assets and records a net investment in the subleases. Interest income is recorded in net financial costs. The net
investment is presented in current and non-current accounts receivable on subleases.
Investment properties
Investment properties are held for capital appreciation and to earn rentals. They are not occupied by the owner for its
ordinary activities. They are recognized at cost. Principal components, except for land which is not depreciated, are
depreciated on a straight-line basis over their respective useful lives which vary from 20 to 50 years. The depreciation
method and estimates of useful lives are reviewed annually. Investment properties are presented in other assets in
the consolidated statements of financial position.
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 52 -
Intangible assets
Intangible assets with finite useful lives are recorded at cost and amortized on a straight-line basis over their useful
lives. The amortization method and estimates of useful lives are reviewed annually.
Software
3 to 7 years
Retail network retention premiums
5 to 30 years
Customer relationships
10 to 27 years
The banners that the Corporation intends to keep and operate, the private labels for which it continues to develop
new products and the loyalty programs it intends to maintain qualify as intangible assets with indefinite useful lives.
They are recorded at cost and not amortized.
Goodwill
Goodwill, which represents the excess of purchase price over the fair value of the acquired enterprise's identifiable
net assets at the date of acquisition, is recognized at cost and is not amortized.
Impairment of non financial assets
At each reporting date, the Corporation must determine if there is any indication of depreciation of its fixed assets,
intangible assets with finite and indefinite useful lives, investment properties, right-of-use assets and goodwill. If any
indication exists, the Corporation has to test the assets for impairment. Impairment testing of intangible assets with
indefinite useful lives and goodwill is to be done at least annually, regardless of any indication of depreciation.
Impairment testing is conducted at the level of the asset itself, a cash generating unit (CGU) or group of CGUs. A
CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash
inflows from other assets or groups of assets. Each store is a separate CGU. Impairment testing of warehouses is
conducted at the level of the different groups of CGUs. Impairment testing of common assets is conducted at the level
of the smallest CGU to which assets have been allocated. Impairment testing of goodwill is conducted at the level of
the smallest CGU to which the goodwill relates. Impairment testing of investment properties, banners, private labels
and loyalty programs is conducted at the level of the asset itself.
To test for impairment, the carrying amount of an asset, CGU or group of CGUs is compared with its recoverable
amount. The recoverable amount is the higher of the value in use and the fair value less costs of disposal. The value
in use corresponds generally to the pre-tax cash flow projections from the management-approved budgets for the
next fiscal year. These projections reflect past experience and are discounted at a pre-tax rate corresponding to the
expected market rate for this type of investment. Fair value represents the price that would be obtained for the sale of
an asset in an arm's length transaction. If the carrying amount exceeds the recoverable amount, an impairment loss
in the amount of the excess is recognized in net earnings. CGU or group of CGUs' impairment losses are allocated
first to goodwill, if applicable then pro rata to the assets of the CGU or group of CGUs, without however reducing the
carrying amount of the assets below the highest of their fair value less costs of disposal, their value in use or zero.
Except for goodwill, any reversal of an impairment loss is recognized immediately in net earnings. A reversal of an
impairment loss for a CGU or group of CGUs is allocated pro rata to the assets of the CGU or group of CGUs. The
recoverable amount of an asset increased by a reversal of an impairment loss may not exceed the carrying amount
that would have been determined, net of depreciation and amortization, if no impairment loss had been recognized for
the asset in prior years.
Employee benefits
Employee benefits include short-term employee benefits which correspond to wages and fringe benefits and are
recognized immediately in net earnings as are termination benefits which are also recorded as a liability when the
Corporation cannot withdraw the offer of termination.
Employee benefits also include post-employment benefits which comprise pension benefits (both defined benefit and
defined contribution plans) and ancillary benefits such as post-employment life and medical insurance. Employee
benefits also comprise other long-term benefits, namely long-term disability benefits not covered by insurance plans
and ancillary benefits provided to employees on long-term disability. Assets and obligations related to employee
defined benefit plans, ancillary retirement benefits and other long-term benefits plan are accounted for using the
following accounting policies:
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 53 -
•
Defined benefit obligations and the cost of pension, ancillary retirement benefits and other long-term benefits
earned by participants are determined from actuarial calculations according to the projected credit unit method.
The calculations are based on management’s best assumptions relating to salary escalation, retirement age of
participants, inflation and expected health care costs.
•
Defined benefit obligations are discounted using high-quality corporate bond yield rates with cash flows that
match the timing and amount of expected benefit payments.
•
Defined benefit plan assets or liabilities recognized in the consolidated statement of financial position correspond
to the difference between the present value of defined benefit obligations and the fair value of plan assets. In the
case of a surplus funded plan, these assets are limited at the lesser of the actuarial value determined for
accounting purposes or the value of the future economic benefit by way of surplus refunds or contribution
holidays. Furthermore, an additional liability could be recorded when minimum funding requirements for past
services exceed economic benefits available.
•
The interest expense on defined benefit obligations, on the asset ceiling and on the minimum funding
requirement is net of interest income on plan assets, which is calculated by applying the same rate used to
evaluate the obligations, and is recognized as financing costs.
•
Actuarial gains or losses on pension plans and ancillary post-employment benefits arise from changes to current
year end actuarial assumptions used to determine the defined benefit obligations. They also arise from variances
between the experience adjustments of the plans for the current year and the assumptions defined at the end of
the previous fiscal year to determine the employee benefit expense for the current fiscal year and the defined
benefit obligations at the previous fiscal year end.
•
Remeasurements of defined benefit net liabilities include actuarial gains or losses, the yield on plan assets, and
asset ceiling and minimum funding requirement changes, excluding the amount already recorded in net interest.
Remeasurements are recognized under other comprehensive income during the period in which they occur and
reclassified from accumulated other comprehensive income to retained earnings at the end of each period.
•
Actuarial gains or losses related to other long-term employee benefits are recognized in full immediately in net
earnings.
•
Past service amendment costs are recognized immediately in net earnings.
•
Defined contribution plan costs, including those of multi-employer plans, are recorded when the contributions are
due. As sufficient information to reliably determine multi-employer defined benefit plan obligations and assets is
not available and as there is no actuarial valuation according to IFRS, these plans are accounted for as defined
contribution plans and the Corporation participation is limited to the negotiated contributions. The vast majority of
the Corporation's contributions to multi-employer plans are paid into the Canadian Commercial Workers Industry
Pension Plan (CCWIPP). The Corporation and its franchisees represent approximately 25% of the Plan’s total
number of participants.
Deferred revenues
Deferred revenues include loyalty points issued as part of the Corporation’s loyalty programs and gift cards
outstanding as at year end for which revenue is recognized upon redemption.
Provisions
Provisions are recognized when the Corporation has a present obligation (legal or constructive) resulting from a past
event, when it will likely have to settle the obligation and the amount of which can be reliably estimated. The amount
recognized as provision is the best estimate of the expense required to settle the present obligation at the closing
date. When a provision is measured based on estimated cash flows required to settle the present obligation, its
carrying amount is the discounted value of these cash flows. Provisions are included in other liabilities.
Other financial liabilities
Bank loans, accounts payable, the revolving credit facility, notes and loans payable are classified as “Liabilities
measured at amortized cost” and initially measured at fair value less financing costs. They are subsequently
measured at amortized cost using the effective interest method.
Financing costs related to debt are deferred and amortized using the effective interest method over the term of the
corresponding loans. When one of these loans is repaid, the corresponding financing costs are charged to net
earnings.
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 54 -
Non-controlling interests
Non-controlIing interests are recognized in equity.
Offsetting a financial asset and a financial liability
A financial asset and a financial liability will be offset and the net amount presented in the consolidated statements of
financial position when we currently have a legally enforceable right to set off the recognized amounts and intend
either to settle on a net basis or to realize the asset and settle the liability simultaneously.
Financial instruments
Financial assets and liabilities are recognized when the Corporation becomes a party to the contractual provisions of
a financial instrument. Upon initial recognition, financial instruments are measured at fair value adjusted for
transaction costs that are directly attributable to the acquisition or issue of financial instruments that are not classified
as fair value through profit or loss (FVTPL). Subsequently, financial assets are measured on the basis of their
classification, which is included in one of the following categories: at amortized cost, at fair value through other
comprehensive income (FVOCI), and at FVTPL.
Financial assets that are not designated as FVTPL upon initial recognition, are classified and measured at amortized
cost if they are held within a business model whose objective is to hold assets to collect contractual cash flows, and
the contractual terms give rise, on specified dates, to cash flows that correspond only to payments of principal and
interest. Otherwise, they are classified and measured at FVOCI, as long as the asset is held within a business model
whose objective is achieved by both the collection of contractual cash flows and the sale of financial assets, and the
contractual terms, on specified dates, give rise to cash flows that correspond only to payments of principal and
interest. Classification and measurement of financial liabilities are based on amortized cost or FVTPL.
In summary, the Corporation's assets and liabilities are classified and measured valued as follows:
•
Cash, cash equivalents, accounts receivable, accounts receivable on subleases and loans to certain customers
are classified and measured at amortized cost;
•
Bank loans, accounts payable, the revolving credit facility, notes and loans are classified and measured at
amortized cost;
•
Non-controlling interests are measured at their acquisition-date fair values. Gains and losses from the
remeasurement at the end of each period are recorded through retained earnings;
•
Derivative and hybrid financial instruments that are not designated as hedges are classified and measured at
FVTPL and presented in the consolidated statements of net income.
Impairment of financial assets
At the end of each reporting period, the Corporation estimates expected credit losses (ECL) based on lifetime credit
losses. ECLs are adjusted for factors specific to receivables, receivables on subleases and loans to certain
customers, the general economic condition and an assessment of the current and expected economic conditions at
the reporting date, including the time value of the money, if applicable. The measurement is carried out using the
simplified method for cash equivalents, other assets and accounts receivable on subleases and the general method
for loans. The net change in ECLs on cash equivalents, receivables, receivables on subleases and loans to certain
customers is recorded in net income.
Derivative financial instruments and hedge accounting
In accordance with its risk management strategy, the Corporation uses derivative financial instruments for hedging
purposes of reducing volatility so as to minimize interest rate risk, foreign exchange rate risk and commodity price risk
that impact our ability to optimize its financial results to meet its financial objectives. On inception of a hedging
relationship, the Corporation indicates whether it will apply hedge accounting to the relationship. Should there be any,
the Corporation formally documents several factors, such as the election to apply hedge accounting, the hedged item,
the hedging item, the risks being hedged and the term over which the relationship is expected to be effective, as well
as risk management objectives and strategy.
The effectiveness of a hedging relationship is measured at its inception to determine whether it will be highly effective
over the term of the relationship and assessed periodically to ensure that hedge accounting is still appropriate. The
results of these assessments are formally documented.
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 55 -
The Corporation could use foreign exchange forward contracts, cross currency interest rate swaps and equity forward
transaction. Given their short-term maturity or low dollar value amount, the Corporation elected not to apply hedge
accounting. These derivative financial instruments are classified as "Financial assets or liabilities measured at
FVTPL" and measured at fair value with revaluation at the end of each period. Resulting gains or losses are recorded
in net earnings. Depending on the maturity date of the contracts or if they are in a gain or loss position we record their
balance on the consolidated statements of financial position in accounts receivable, other assets, accounts payable
and other liabilities. We record the change in fair value of these derivatives in the consolidated statements of net
income.
The changes in the fair value of the interest rate swaps are recognized in the consolidated statements of net income.
The changes in the fair value of the hedged items attributable to the risk hedged are accounted for as an adjustment
to the carrying amount of the hedged items and are also recognized in the consolidated statements of net income.
For bond forwards designated as cash flow hedges the changes in the fair value of the hedging instrument will be
recognized as follows. The effective part of the gain or loss on the hedging instrument will be recognized in OCI.
Following the debt issuance, the amounts accumulated in equity will be reclassified to profit or loss, on a linear basis,
in the same period during which the hedged expected future cash flows affect profit or loss, adjusting finance costs,
net. The ineffective part of the gain or loss on the hedging instrument will be recognized in the consolidated
statements of net income.
Fiscal year
The Corporation's fiscal year ends on the last Saturday of September. The fiscal year ended September 28, 2024
included 52 weeks of operations and the fiscal year ended September 30, 2023 included 53 weeks of operations. An
additional week is included in the fourth quarter every five or six years to realign the Corporation’s fiscal year with
calendar. This inclusion occurred in the fourth quarter of Fiscal 2023.
3.
NEW ACCOUNTING STANDARD
ACCOUNTING STANDARD ISSUED BUT NOT YET EFFECTIVE
Presentation and Disclosures in Financial Statements
In April 2024, the IASB issued IFRS 18, which replaces IAS 1 Presentation of Financial Statements, and
consequential amendments to several other standards. IFRS 18 introduces new requirements for presentation within
the statement of profit or loss, including specified totals and subtotals. Entities are required to classify all income and
expenses within the statement of profit or loss into one of five categories: operating, investing, financing, income
taxes and discontinued operations, with prescribed subtotals for each new category. It also requires disclosure of
management-defined performance measures which will now form part of the audited financial statements.
IFRS 18, and the amendments to the other standards, is effective for reporting periods beginning on or after
January 1 2027, but earlier application is permitted and must be disclosed. IFRS 18 will apply retrospectively. The
Corporation is currently working to identify all impacts the amendments will have on the consolidated financial
statements and notes to the consolidated financial statements.
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 56 -
4.
SIGNIFICANT JUDGMENTS AND ESTIMATES
The preparation of the consolidated financial statements requires management to make judgments, estimates and
assumptions that affect the recognition and valuation of assets, liabilities, sales, other income and expenses. These
estimates and assumptions are based on historical experience and other factors deemed relevant and reasonable
and are reviewed at every closing date. The use of different estimates could produce different amounts in the
consolidated financial statements. Actual results may differ from these estimates.
JUDGMENTS
In applying the Corporation's accounting policies, management has made the following judgments, which have the
most significant effect on the amounts recognized in the consolidated financial statements:
Consolidation of structured entities
The Corporation has no voting rights in certain food stores. However, the franchise contract gives it the ability to
control these stores' main activities. Its decisions are not limited to protecting its trademarks. The Corporation retains
the majority of stores' profits and losses. For these reasons, the Corporation consolidates these food stores in its
financial statements.
The Corporation has no voting rights in the trust created for PSU plan participants. However, under the trust
agreement, it instructs the trustee as to the sale and purchase of Corporation shares and payments to beneficiaries,
gives the trustee money to buy Corporation shares, assumes vesting variability, and ensures that the trust holds a
sufficient number of shares to meet its obligations to the beneficiaries. For these reasons, the Corporation
consolidates this trust in its financial statements.
The Corporation also has an agreement with a third party that operates a plant exclusively for the needs and
according to the specifications of the Corporation, which assumes all costs and control the plant's main activities. For
these reasons, the Corporation consolidates it in the Corporation's financial statements.
Determination of the aggregation of operating segments
The Corporation uses judgment in determining the aggregation of business segments. The operating segment
comprises the food operations segment and the pharmaceutical operations segment. The Corporation has
aggregated these two business segments due to the similar nature of their goods and services and similar economic
characteristics: operations are carried on primarily in Québec and Ontario and are therefore subject to the same
regulatory environment and competitive and economic market pressures, use the same product distribution methods
and serve the same customers.
ESTIMATES
The assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that
have a significant risk of causing a material adjustment to the value of assets and liabilities within the next period, are
discussed below:
Impairment of assets
In testing for impairment of intangible assets with indefinite useful lives and goodwill, value in use and fair value less
costs of disposal are estimated using the discounted future cash flows model, the capitalized excess earnings before
financial costs and taxes (EBIT) and royalty-free license methods. These methods are based on various assumptions,
such as the future cash flow estimates, excess EBIT, royalty rates, discount rate, earnings multiples and growth rates.
The key assumptions are disclosed in notes 12 and 13.
Pension plans and other plans
Defined pension plans, ancillary retirements and other long-term benefits obligations and costs associated to these
obligations are determined from actuarial calculations according to the projected credit unit method. These
calculations are based on management's best assumptions relating to salary escalation, retirement age of
participants, inflation rate and expected health care costs. The key assumptions are disclosed in note 20.
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 57 -
5.
SALES
The following table disaggregates the Corporation's sales based upon where the ultimate sales to consumers occur in
our network of stores:
2024
2023
(52 weeks)
(53 weeks)
Food
16,577.4
16,214.8
Pharmacy
4,642.5
4,509.8
21,219.9
20,724.6
6.
NET FINANCIAL COSTS
The net financial costs were as follows:
2024
2023
(52 weeks)
(53 weeks)
Current interest
12.4
5.6
Non-current interest
118.6
113.6
Net interest on lease liabilities (note 11)
35.5
30.8
Interest on defined benefit obligations net of plan assets (note 20)
(6.2)
(3.2)
Amortization of deferred financing costs
1.4
1.4
Interest income and capitalized interest
(16.2)
(25.9)
Passage of time
0.2
0.3
145.7
122.6
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 58 -
7.
INCOME TAXES
The effective income tax rates were as follows:
2024
2023
(Percentage)
(52 weeks)
(53 weeks)
Combined statutory income tax rate
26.5
26.5
Changes
Favorable tax adjustment in respect of prior years
(1.3)
(3.5)
Other
0.3
(0.1)
25.5
22.9
The Corporation recorded tax assets of $40.7 in the third quarter of Fiscal 2023 ($8.2 of current tax assets and $32.5
of deferred tax assets) with an equivalent reduction of the tax expense following a favorable judgement at the Tax
Court of Canada. Capital losses previously disallowed by the Canada Revenue Agency (“CRA”) on the disposition of
shares of a subsidiary in the years 2012 to 2014, have now been granted. The CRA subsequently accepted that the
Corporation amend a rollover form filed for the tax year ended March 3, 2018, resulting in an increase in the tax base
of intangible assets.
The main components of the income tax expense were as follows:
Consolidated income statements
2024
2023
(52 weeks)
(53 weeks)
Current
Current tax expense
293.8
249.5
Deferred
Adjustment related to temporary differences
24.6
53.5
318.4
303.0
Consolidated comprehensive income statements
2024
2023
(52 weeks)
(53 weeks)
Deferred tax related to items reported directly in other
comprehensive income during the year
Changes in defined benefit plans
Actuarial gains
11.9
19.4
Asset ceiling effect
6.1
(5.8)
Change in fair value of derivatives designated as cash flow hedges
—
(0.8)
18.0
12.8
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 59 -
Deferred income taxes reflect the net tax impact of temporary differences between the value of assets and liabilities
for accounting and tax purposes. The main components of the deferred tax expense and deferred tax assets and
liabilities were as follows:
Consolidated statements
of financial position
Consolidated statements
of income
As at
September 28, 2024
As at
September 30, 2023
2024
2023
(52 weeks)
(53 weeks)
Accrued expenses, provisions and
other reserves that are tax-
deductible only at the time of
disbursement
9.7
11.0
(1.3)
(7.4)
Lease liabilities
433.6
439.5
(5.9)
(31.9)
Deferred tax losses
2.1
6.8
(4.7)
(0.2)
Inventories
(11.6)
(10.3)
(1.3)
(0.7)
Employee benefits
(52.9)
(36.7)
1.8
4.6
Accounts receivable on subleases
(132.7)
(138.5)
5.8
13.4
Difference between net carrying value
and tax value
Fixed assets
(395.1)
(364.2)
(30.9)
(73.3)
Right-of-use assets
(252.8)
(249.9)
(2.9)
13.8
Intangible assets
(546.2)
(564.6)
18.4
28.1
Goodwill
(60.1)
(57.5)
(2.6)
0.2
Others
(0.3)
0.7
(1.0)
(0.1)
(1,006.3)
(963.7)
(24.6)
(53.5)
Deferred tax assets
35.9
37.9
Deferred tax liabilities
(1,042.2)
(1,001.6)
(1,006.3)
(963.7)
8.
NET EARNINGS PER SHARE
Basic net earnings per share and fully diluted net earnings per share were calculated using the following number of
shares:
2024
2023
(Millions)
(52 weeks)
(53 weeks)
Weighted average number of shares outstanding – Basic
225.1
232.5
Dilutive effect under:
Stock option plan
0.4
0.5
Performance share unit plan
0.3
0.3
Weighted average number of shares outstanding – Fully diluted
225.8
233.3
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 60 -
9.
INVENTORIES
2024
2023
Wholesale inventories
897.9
864.8
Retail inventories
610.4
586.2
1,508.3
1,451.0
10.
FIXED ASSETS
Land
Buildings
Equipment
Leasehold
improvements
Total
Cost
Balance as at September 24, 2022
557.9
1,759.3
2,143.7
1,014.0
5,474.9
Acquisitions
16.5
166.4
346.8
67.5
597.2
Transfer to Investment properties
(8.3)
—
—
—
(8.3)
Disposals and write-offs
(0.1)
(0.6)
(68.9)
(25.7)
(95.3)
Balance as at September 30, 2023
566.0
1,925.1
2,421.6
1,055.8
5,968.5
Acquisitions
16.6
122.1
273.9
86.4
499.0
Disposals and write-offs
—
(3.1)
(48.2)
(34.0)
(85.3)
Balance as at September 28, 2024
582.6
2,044.1
2,647.3
1,108.2
6,382.2
Accumulated depreciation and impairment
Balance as at September 24, 2022
—
(388.7)
(1,092.0)
(536.5)
(2,017.2)
Depreciation
—
(47.8)
(158.5)
(71.5)
(277.8)
Disposals and write-offs
—
0.2
68.9
25.7
94.8
Balance as at September 30, 2023
—
(436.3)
(1,181.6)
(582.3)
(2,200.2)
Depreciation
—
(55.1)
(185.4)
(72.8)
(313.3)
Disposals and write-offs
—
2.7
47.6
32.3
82.6
Balance as at September 28, 2024
—
(488.7)
(1,319.4)
(622.8)
(2,430.9)
Net carrying value
Balance as at September 30, 2023
566.0
1,488.8
1,240.0
473.5
3,768.3
Balance as at September 28, 2024
582.6
1,555.4
1,327.9
485.4
3,951.3
During the fiscal year, the Corporation invested $579.7 ($679.9 in 2023) in capital spending consisting of $499.0 in
fixed assets and $80.7 in intangible assets ($597.2 and $82.7 in 2023). Additions of intangible assets accrued at year-
end amounted to $6.3 in 2024 ($5.0 in 2023).
As at September 28, 2024, work in progress not yet amortized included in buildings, equipment and leasehold
improvements totalled $57.5, $18.8 and $7.0 ($104.8, $87.0 and $1.3 in 2023), respectively.
As at September 28, 2024, the Corporation had contractual commitments to purchase fixed assets totalling $182.1 in
2024, consisting mainly of buildings and equipment.
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 61 -
11. LEASES
The Corporation as lessee
The main right-of-use assets held under the Corporation's leases are real estate, vehicles and equipment.
As at September 28, 2024, changes in right-of-use assets were as follows:
Buildings
Rolling stock
and other
Total
Balance as at September 24, 2022
966.2
28.9
995.1
New leases
32.6
0.6
33.2
Terminations and adjustments
75.5
—
75.5
Depreciation
(151.1)
(9.9)
(161.0)
Balance as at September 30, 2023
923.2
19.6
942.8
New leases
49.9
1.0
50.9
Terminations and adjustments
124.5
—
124.5
Depreciation
(155.9)
(8.4)
(164.3)
Balance as at September 28, 2024
941.7
12.2
953.9
The Corporation has variable lease payments for property taxes, common operating costs and insurance costs for
leased properties. The Corporation also has variable lease payments that vary according to a percentage of retail
sales. These expenses are recorded in operating expenses and totalled $129.7 in 2024 ($126.3 in 2023).
As at September 28, 2024, changes in lease liabilities were as follows:
Balance as at September 24, 2022
1,779.0
Additions
61.6
Terminations and adjustments
87.2
Lease payments
(314.3)
Interest expense on lease liabilities
45.2
Balance as at September 30, 2023
1,658.7
Current portion
278.4
Non-current portion
1,380.3
Balance as at September 30, 2023
1,658.7
Additions
86.5
Terminations and adjustments
158.8
Lease payments
(318.4)
Interest expense on lease liabilities
50.6
Balance as at September 28, 2024
1,636.2
Current portion
263.6
Non-current portion
1,372.6
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 62 -
The weighted average incremental borrowing rate was 3.16% as at September 28, 2024 (2.80% in 2023). The
weighted average remaining contractual life as at September 28, 2024 was 5 years (5 years in 2023).
Contractual undiscounted payments under leases defined above will be as follows:
2025
326.8
2026
297.9
2027
258.7
2028
221.2
2029
180.3
2030 and thereafter
579.6
1,864.5
The Corporation has also entered into short-term leases or leases with underlying low-value asset, specifically for the
rental of machinery and equipment, as well as vehicles and trailers. These leases were recorded in operating
expenses for a total of $5.4 in 2024 ($6.5 in 2023).
The Corporation as lessor
The Corporation acted as intermediate lessor for real estate subleases.
Finance leases
Finance income for the year ended in 2024 was $15.1 ($14.4 in 2023). Future minimum lease payments receivable
by the Corporation relating to subleased properties to third parties will be as follows:
2025
110.8
2026
98.7
2027
83.7
2028
68.3
2029
54.5
2030 and thereafter
151.5
Total undiscounted lease payments receivable
567.5
Unearned finance income
(66.7)
Accounts receivable on subleases
500.8
Current portion
96.1
Non-current portion
404.7
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 63 -
Operating leases
The Corporation leases buildings under operating leases. The Corporation recorded rental income of $52.8 in 2024
($53.1 in 2023).
The lease payments expected to be received over the next five fiscal years for owned properties will be as follows:
2025
48.8
2026
41.6
2027
33.3
2028
21.3
2029
11.8
2030 and thereafter
57.5
214.3
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 64 -
12.
INTANGIBLE ASSETS
Intangible assets with finite useful lives were as follows:
Software
Retail network
retention
premiums
Customer
relationships
Total
Cost
Balance as at September 24, 2022
352.7
284.4
1,067.4
1,704.5
Acquisitions
64.3
17.2
—
81.5
Disposals and write-offs
(0.1)
(7.0)
—
(7.1)
Balance as at September 30, 2023
416.9
294.6
1,067.4
1,778.9
Acquisitions
55.1
25.1
—
80.2
Disposals and write-offs
(1.7)
(5.9)
—
(7.6)
Balance as at September 28, 2024
470.3
313.8
1,067.4
1,851.5
Accumulated amortization
and impairment
Balance as at September 24, 2022
(242.0)
(147.6)
(195.4)
(585.0)
Amortization
(26.9)
(19.6)
(39.7)
(86.2)
Disposals and write-offs
0.1
5.7
—
5.8
Balance as at September 30, 2023
(268.8)
(161.5)
(235.1)
(665.4)
Amortization
(31.9)
(21.1)
(39.7)
(92.7)
Disposals and write-offs
1.7
5.1
—
6.8
Balance as at September 28, 2024
(299.0)
(177.5)
(274.8)
(751.3)
Net carrying value
Balance as at September 30, 2023
148.1
133.1
832.3
1,113.5
Balance as at September 28, 2024
171.3
136.3
792.6
1,100.2
During the fiscal year, the Corporation invested $579.7 ($679.9 in 2023) in capital spending consisting of $499.0 in
fixed assets and $80.7 in intangible assets ($597.2 and $82.7 in 2023). Additions of intangible assets accrued at year-
end amounted to $6.3 in 2024 ($5.0 in 2023).
As at September 28, 2024, there was $22.6 of work in progress for software not yet amortized (nil in 2023).
Intangible assets with indefinite useful lives were as follows:
Banners
Private labels
Loyalty programs
Total
Balances as at September 24, 2022 and
September 30, 2023
1,473.3
122.7
23.5
1,619.5
Impairment losses
—
—
(20.8)
(20.8)
Balance as at September 28, 2024
1,473.3
122.7
2.7
1,598.7
Impairment testing of the loyalty program and exclusive private labels was conducted at the individual asset level.
The recoverable amount was determined based on its fair value less costs of disposal, which was calculated using
the capitalized excess EBIT method. The estimated EBIT directly allocated to the programs and private labels, after
deduction of the return on contributory assets, was based on historical data reflecting past experience. For the loyalty
program, the earnings multiple used was 16.0 (16.0 in 2023) considering a growth rate of 2.0% (2.0% in 2023)
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 65 -
corresponding to the consumer price index. For the private labels, the earnings multiples used ranged between 15.4
and 17.4 (14.3 and 15.4 in 2023) considering a growth rate of 2.0% (2.0% in 2023) corresponding to the consumer
price index.
During the second quarter of Fiscal 2024, the Corporation recorded $20.8 of impairment of assets resulting from the
decision to have Metro stores in Ontario withdraw from the Air Miles® loyalty program in the summer of 2024. The
loss represents the excess in the carrying value of the indefinite-lived intangible over the recoverable amount. The
recoverable amount is based on fair value less costs of disposal over the remaining duration of the program. The fair
value measurement was categorized as a Level 3 fair value based on the inputs in the valuation technique used. The
key assumption is the discount rate use of 8.3%.
Impairment testing of banners and private labels were conducted at the level of the asset itself. The recoverable
amount was determined based on its fair value calculated using the royalty-free license method for banners and the
capitalized excess EBIT method for other private labels. The estimated royalty rate was based on information from
external sources and historical data reflecting past experience. For the banners and these private labels, the royalty
rate used was 1.0% to 3.0% (1.0% to 3.0% in 2023) and the multiples used were between 15.4 and 17.4 (14.3 and
15.4 in 2023) considering growth rate of 2.0% (2.0% in 2023) corresponding to the consumer price index.
13.
GOODWILL
2024
2023
Balance – beginning of year
3,307.4
3,301.2
Acquisitions through business combinations
6.8
6.2
Balance – end of year
3,314.2
3,307.4
For impairment testing, goodwill with a carrying amount of $2,007.0 ($1,984.1 as at September 30, 2023) was
allocated to the operating segment related to food operations. The recoverable amount was determined based on its
value in use, which was calculated using pre-tax cash flow forecasts from the management-approved budgets for the
next fiscal year. Cash flows for subsequent years are based on a 2.0% growth in line with the consumer price index. A
pre-tax discount rate of 8.6% (9.6% in 2023) was used. No reasonably possible change in any of these assumptions
would result in a carrying amount higher than the recoverable amount.
For impairment testing, goodwill with a carrying amount of $1,307.2 ($1,323.3 as at September 30, 2023) was
allocated to the operating segment related to pharmaceutical operations. The recoverable amount was determined
based on its value in use, which was calculated using pre-tax cash flow forecasts from the management-approved
budgets for the next fiscal year. Cash flows for subsequent years are based on a 2.0% growth in line with the
consumer price index. A pre-tax discount rate of 9.2% (10.1% in 2023) was used. No reasonably possible change in
any of these assumptions would result in a carrying amount higher than the recoverable amount.
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 66 -
14.
OTHER ASSETS
2024
2023
Loans to certain customers, bearing weighted average floating interest rates of
3.63%, maturing through 2041
47.1
43.9
Investment in a joint venture
0.5
10.0
Investment properties
19.5
21.1
Derivative financial instruments
22.5
18.4
Other assets
1.7
1.5
91.3
94.9
Current portion included in accounts receivable
9.5
9.6
81.8
85.3
The fair value of investment properties was $24.1 as at September 28, 2024 ($23.2 as at September 30, 2023). The
Corporation classified the fair value measurement in Level 2, as it is derived from observable market inputs, i.e.,
recent transactions on these assets or similar assets.
15.
ACCOUNTS PAYABLE
2024
2023
Accounts payable (gross amount)
1,720.1
1,685.5
Vendor rebate receivables
(74.2)
(66.1)
Accounts payable (net amount)
1,645.9
1,619.4
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 67 -
16.
DEBT
2024
2023
Revolving Credit Facility, bearing interest at a weighted average rate of 7.37%
(6.71% in 2023), repayable on October 27, 2028
35.4
39.9
Series J Notes, bearing interest at a fixed nominal rate of 1.92%, maturing on
December 2, 2024
298.8
288.9
Series G Notes, bearing interest at a fixed nominal rate of 3.39%, maturing on
December 6, 2027
450.0
450.0
Series K Notes, bearing interest at a fixed nominal rate of 4.66%, maturing on
February 7, 2033
300.0
300.0
Series B Notes, bearing interest at a fixed nominal rate of 5.97%, maturing on
October 15, 2035
400.0
400.0
Series D Notes, bearing interest at a fixed nominal rate of 5.03%, maturing on
December 1, 2044
300.0
300.0
Series H Notes, bearing interest at a fixed nominal rate of 4.27%, maturing on
December 4, 2047
450.0
450.0
Series I Notes, bearing interest at a fixed nominal rate of 3.41%, maturing on
February 28, 2050
400.0
400.0
Loans, maturing on various dates through 2060, bearing interest at an average rate
of 3.95% (4.18% in 2023)
51.5
49.6
Deferred financing costs
(11.4)
(12.8)
2,674.3
2,665.6
Current portion
317.2
19.3
2,357.1
2,646.3
The Notes of the Corporation are redeemable at the issuer's option prior to maturity at the prices, terms and
conditions specified for each series.
The Corporation has access to an unsecured revolving credit facility with a maximum of $600.0 bearing interest at
rates that fluctuate with changes in bankers' acceptance rates. As at September 28, 2024, the unused authorized
revolving credit facility was $564.6 ($560.1 as at September 30, 2023).
The debt related to the acquisition of intangible assets, excluded from debt changes presented at the consolidated
statements of cash flows, totaled $6.3 in 2024 ($5.0 in 2023).
On February 6, 2023, the Corporation issued through a private placement Series K unsecured senior notes in the
aggregate principal amount of $300.0, bearing interest at a fixed nominal rate of 4.66%, maturing on
February 7, 2033. In anticipation of this issuance, on November 14, 2022, the Corporation entered into a bond
forward contract designated as cash flow hedge on a component of a highly probable future debt issuance in the
amount of $250.0 that effectively locked-in a 10-year fixed interest rate of 2.996%. The effective part of the loss on
the hedging instrument was recognized in Other Comprehensive Income. Following the Series K Notes issuance, the
amounts accumulated in equity are reclassified to net financial costs on a linear basis over the life of the debt.
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 68 -
Repayments of debt in the upcoming fiscal years will be as follows:
Facility and
loans
Notes
Total
2025
17.2
300.0
317.2
2026
37.7
—
37.7
2027
2.6
—
2.6
2028
1.1
450.0
451.1
2029
0.7
—
0.7
2030 and thereafter
26.4
1,850.0
1,876.4
85.7
2,600.0
2,685.7
17.
OTHER LIABILITIES
2024
2023
Provisions
1.7
12.4
Deferred revenues
—
3.0
Derivative financial instruments
1.3
12.8
Share-based compensation
3.7
2.4
6.7
30.6
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 69 -
18. CAPITAL STOCK
The authorized capital stock of the Corporation was summarized as follows:
•
unlimited number of Common Shares, bearing one voting right per share, participating, without par value;
•
unlimited number of Preferred Shares, non-voting, without par value, issuable in series.
Common Shares issued
The Common Shares issued and the changes during the year were summarized as follows:
Number
(Thousands)
Balance as at September 24, 2022
236,929
1,649.3
Shares redeemed for cash, excluding premium of $529.0
(8,170)
(57.0)
Stock options exercised
190
8.8
Balance as at September 30, 2023
228,949
1,601.1
Shares redeemed for cash, excluding premium of $431.2
(6,680)
(47.0)
Stock options exercised
433
21.4
Balance as at September 28, 2024
222,702
1,575.5
Treasury shares
The treasury shares changes during the year are summarized as follows:
Number
(Thousands)
Balance as at September 24, 2022
335
(16.2)
Acquisitions
99
(7.6)
Released
(138)
5.9
Balance as at September 30, 2023
296
(17.9)
Acquisitions
105
(7.5)
Released
(113)
5.8
Balance as at September 28, 2024
288
(19.6)
Treasury shares are held in trust for the PSU plan. They will be released into circulation when the PSUs settle. The
trust, considered a structured entity, is consolidated in the Corporation's financial statements.
Stock option plan
The Corporation has a stock option plan for certain Corporation employees providing for the grant of options to
purchase up to 30,000,000 Common Shares. As at September 28, 2024, a balance of 4,816,922 shares could be
issued following the exercise of stock options (5,250,342 as at September 30, 2023). The subscription price of each
Common Share under an option granted pursuant to the plan is equal to the market price of the shares on the day
prior to the option grant date and must be paid in full at the time the option is exercised. While the Board of Directors
determines other terms and conditions for the exercise of options, in general no options may have a term of more
than five years from the date the option may initially be exercised, in whole or in part, and the total term may in no
circumstances exceed ten years from the option grant date. Options may generally be exercised two years after their
grant date and vest at the rate of 20% per year.
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 70 -
The outstanding options and the changes during the year were summarized as follows:
Number
Weighted
average
exercise
price
(Thousands)
(Dollars)
Balance as at September 24, 2022
2,092
51.47
Granted
363
77.62
Exercised
(190)
42.23
Cancelled
(39)
58.03
Balance as at September 30, 2023
2,226
56.42
Granted
407
68.86
Exercised
(433)
43.62
Cancelled
(21)
70.47
Balance as at September 28, 2024
2,179
61.15
The information regarding the stock options outstanding and exercisable as at September 28, 2024 is summarized
below:
Outstanding options
Exercisable options
Range of exercise prices
(Dollars)
Number
(Thousands)
Weighted
average
remaining
period
(Months)
Weighted
average
exercise
price
(Dollars)
Number
(Thousands)
Weighted
average
exercise
price
(Dollars)
41.16
to
57.81
1,037
25.3
51.95
633
50.04
62.82
to
77.75
1,142
62.3
69.51
76
62.82
2,179
44.7
61.15
709
51.40
The weighted average fair value of $12.07 per option ($13.17 in 2023) for stock options granted during Fiscal 2024
was determined at the time of grant using the Black-Scholes model and the following weighted average assumptions:
risk-free interest rate of 3.4% (3.0% in 2023), expected life of 5.6 years (5.6 years in 2023), expected volatility of
16.2% (15.4% in 2023) and expected dividend yield of 1.8% (1.4% in 2023). The expected volatility is based on the
historic share price volatility over a period similar to the life of the options.
Compensation expense for these options amounted to $3.7 for Fiscal 2024 ($3.1 in 2023).
Performance share unit plan
The Corporation has a PSU plan. Under this program, senior executives and other key employees (participants)
periodically receive a given number of PSUs. The PSUs entitle the participant to Common Shares of the Corporation,
or at the latter's discretion, the cash equivalent, if the Corporation meets certain financial performance indicators.
PSUs vest at the end of a period of three years.
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 71 -
PSUs outstanding and changes during the year are summarized as follows:
Number
(Thousands)
Balance as at September 24, 2022
557
Granted
209
Settled
(138)
Cancelled
(56)
Balance as at September 30, 2023
572
Granted
210
Settled
(151)
Cancelled
(60)
Balance as at September 28, 2024
571
The weighted average fair value of $70.61 per PSU ($74.16 in 2023) for PSUs granted during Fiscal 2024 was the
stock market valuation of a Common Share of the Corporation at grant date.
The compensation expense comprising all PSUs amounted to $9.4 for Fiscal 2024 ($8.8 in 2023).
In Fiscal 2023, the liability for cash-settled PSU awards was reclassified from contributed surplus to other liabilities.
As at September 28, 2024, the cash-settled PSU liability amounted to $6.9 ($5.5 as at September 30, 2023). During
the third quarter of Fiscal 2023, the Corporation entered into a prepaid equity forward contract to economically hedge
a portion of the price risk driven by fluctuations in the fair value of our cash-settled PSU awards (note 25).
Deferred Share Unit Plan
The Corporation has a DSU plan designed to encourage stock ownership by directors who are not Corporation
officers. Under this program, directors may choose to receive all or part of their compensation in DSUs. DSUs vest
when granted. On leaving, a director receives a lump-sum cash payout from the Corporation.
The DSU expense totalled $4.9 for Fiscal 2024 ($1.8 in 2023). During the third quarter of Fiscal 2023 and the second
quarter of Fiscal 2022, the Corporation entered into prepaid equity forward contracts to economically hedge a portion
of the price risk driven by fluctuations in the fair value of our DSU awards (note 25).
As at September 28, 2024, the DSU liability amounted to $18.3 ($14.7 as at September 30, 2023).
19.
DIVIDENDS
In Fiscal 2024, the Corporation paid $294.6 in dividends to holders of Common Shares ($275.0 in 2023), or $1.3075
per share ($1.1825 in 2023). On September 30, 2024, the Corporation's Board of Directors declared a quarterly
dividend of $0.3350 per Common Share payable on November 12, 2024.
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 72 -
20.
EMPLOYEE BENEFITS
The Corporation maintains several defined benefit and defined contribution plans for eligible employees, which
provide most participants with pension, ancillary retirement benefits, and other long-term employee benefits which in
certain cases are based on the number of years of service or final average salary. The defined benefit plans are
funded by the Corporation's contributions, with some plans also funded by participants' contributions. The Corporation
also provides eligible employees and retirees with health care, life insurance and other long-term benefits. Ancillary
retirement benefits plans and other long-term employee benefits are not funded and are presented in other plans.
Pension committees made up of employer and employee representatives are responsible for all administrative
decisions concerning certain plans.
Defined benefit pension plans and ancillary retirement benefit plans expose the Corporation to actuarial risks such as
interest rate risk, longevity risk, investment risk and inflation risk. Consequently, the Corporation’s investment policy
provides for a diversified portfolio whose bond component matches the expected timing and payments of benefits.
The changes in present value of the defined benefit obligation were as follows:
2024
2023
Pension
plans
Other
plans
Pension
plans
Other
plans
Balance – beginning of year
1,236.6
23.5
1,286.3
25.4
Participant contributions
11.4
—
10.5
—
Benefits paid
(54.7)
(3.2)
(61.1)
(3.2)
Annuity buy-out contracts settlement
(335.9)
—
—
—
Amounts paid under a settlement
—
(0.1)
—
(2.2)
Items in net earnings
Current service cost
37.4
2.0
41.0
2.0
Past service cost
—
—
0.6
0.1
Loss from a settlement
—
—
—
0.4
Interest cost
65.8
1.3
64.7
1.2
Actuarial losses
—
0.9
—
0.1
103.2
4.2
106.3
3.8
Items in other comprehensive income
Actuarial losses (gains) from demographic assumptions
(9.5)
0.1
—
0.3
Actuarial losses (gains) from financial assumptions
137.4
1.2
(109.6)
(0.9)
Adjustments due to experience
7.5
—
4.2
0.3
135.4
1.3
(105.4)
(0.3)
Balance – end of year
1,096.0
25.7
1,236.6
23.5
The present value of the defined benefit obligation may be reflected as follows:
2024
2023
(Percentage)
Pension
plans
Other
plans
Pension
plans
Other
plans
Active plan participants
69
71
51
70
Deferred plan participants
9
—
5
—
Retirees
22
29
44
30
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 73 -
The changes in the fair value of plan assets were as follows:
2024
2023
Pension
plans
Other
plans
Pension
plans
Other
plans
Fair value – beginning of year
1,451.9
—
1,446.7
—
Employer contributions
22.9
3.3
20.6
5.4
Participant contributions
11.4
—
10.5
—
Benefits paid
(54.7)
(3.2)
(61.1)
(3.2)
Annuity buy-out contracts settlement
(335.9)
—
—
—
Amounts paid under a settlement
—
(0.1)
—
(2.2)
Items in net earnings
Interest income
76.7
—
70.9
—
Administration costs
(2.7)
—
(3.0)
—
74.0
—
67.9
—
Item in other comprehensive income
Return on plan assets, excluding the amounts included in
interest income
181.7
—
(32.7)
—
Fair value – end of year
1,351.3
—
1,451.9
—
The changes in the asset ceiling and the minimum funding requirement for pension plans were as follows:
2024
2023
Asset
ceiling
Minimum
funding
requirement
Asset
ceiling
Minimum
funding
requirement
Balance - beginning of year
(60.7)
—
(37.1)
—
Interest
(3.4)
—
(1.8)
—
Change in defined benefit assets
22.9
—
(21.8)
—
Balance - end of year
(41.2)
—
(60.7)
—
The value of the economic benefit that determined the asset ceiling represents the amount of surplus that the entity
has an unconditional legal right to obtain as a refund, less any associated costs, plus the present value of future
contribution holidays. The minimum funding requirement represents the present value of required contributions under
the law, which do not result, once made, in an economic benefit for the Corporation.
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 74 -
The changes in the defined benefit plans' funding status were as follows:
2024
2023
Pension
plans
Other
plans
Pension
plans
Other
plans
Balance of defined benefit obligation – end of year
(1,096.0)
(25.7)
(1,236.6)
(23.5)
Fair value of plan assets – end of year
1,351.3
—
1,451.9
—
Funded status
255.3
(25.7)
215.3
(23.5)
Asset ceiling effect
(41.2)
—
(60.7)
—
214.1
(25.7)
154.6
(23.5)
Defined benefit assets
225.9
—
160.5
—
Defined benefit liabilities
(11.8)
(25.7)
(5.9)
(23.5)
214.1
(25.7)
154.6
(23.5)
The defined contribution and defined benefit plans expense recorded in net earnings was as follows:
2024
2023
Pension
plans
Other
plans
Pension
plans
Other
plans
Defined contribution plans, including multi-employer plans
33.7
—
34.3
—
Defined benefit plans
Current service cost
37.4
2.0
41.0
2.0
Past service cost
—
—
0.6
0.1
Loss from a settlement
—
—
—
0.4
Actuarial losses
—
0.9
—
0.1
Administration costs
2.7
—
3.0
—
40.1
2.9
44.6
2.6
Employee benefits expense
73.8
2.9
78.9
2.6
Interest on obligations, asset ceiling effect and minimum
funding requirement net of plans assets, presented in net
financial costs
(7.5)
1.3
(4.4)
1.2
Net total expense
66.3
4.2
74.5
3.8
The remeasurements recognized as other comprehensive income were as follows:
2024
2023
Pension
plans
Other
plans
Pension
plans
Other
plans
Losses (gains) on accrued obligation
135.4
1.3
(105.4)
(0.3)
Return on plan assets
(181.7)
—
32.7
—
Change in the effect of the asset ceiling
(22.9)
—
21.8
—
(69.2)
1.3
(50.9)
(0.3)
Total cash payments for employee benefits, consisting of cash contributed by the Corporation to its funded pension
plans and cash payments directly to beneficiaries for its unfunded other benefit plans, amounted to $26.2 in 2024
($26.0 in 2023). The Corporation plans to contribute $3.3 to the defined benefit plans and $32.5 to multi-employer
plans during the next fiscal year.
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 75 -
Weighted average duration of defined benefit obligations was 15 years as at September 28, 2024 and was 13 years
as at September 30, 2023.
The most recent actuarial valuations for funding purposes in respect of the Corporation's pension plans were
performed on various dates between December 2022 and September 2024. The next valuations will be performed in
December 2024.
Included in the plan assets are shares, evaluated at Level 1 based on quoted market prices in an active market,
bonds and other, evaluated at Level 2 derived from observable market inputs, and annuity buy-in contracts, evaluated
at Level 3 derived from unobservable market inputs. The plan assets are held in trust and their weighted average
allocation as at the measurement dates were as follows:
Asset categories (Percentage)
2024
2023
Annuity buy-in contracts
—
24
Shares in Canadian corporations
19
16
Shares in foreign corporations
28
24
Government and corporation bonds
37
22
Other
16
14
In the third quarter of Fiscal 2024, the Corporation converted $335.9 of qualifying annuity buy-in contracts purchased
in Fiscal 2022 for six of the seven defined benefit pension plans to qualifying annuity buy-out contracts to complete
the full transfer of these obligations. The contracts were effective on June 30, 2024. These annuity buy-out contracts
eliminated all further legal or constructive obligations to the Corporation. Accordingly, the Corporation derecognized
the buy-in annuity assets and corresponding defined benefit obligations previously recognized on a net basis. The
transactions did not result in a settlement charge as the defined benefit obligations being settled and the qualifying
annuity buy-in contracts were of equal value.
Pension plan assets included shares issued by the Corporation with a fair value of $3.9 as at September 28, 2024
($4.0 as at September 30, 2023).
The principal actuarial assumptions used in determining the defined benefit obligation and service costs were as
follows:
2024
2023
(Percentage)
Pension plans
Other plans
Pension plans
Other plans
Discount rate on defined benefit obligation
4.75
4.75
5.60
5.60
Discount rate on service costs
5.51
5.51
4.93
4.93
Rate of compensation increase
3.00
3.00
3.00
3.00
Mortality table
CPM2014Priv
CPM2014Priv
CPM2014Priv
CPM2014Priv
To determine the most suitable discount rate, management considers the interest rates for high-quality bonds issued
by entities operating in Canada with cash flows that match the timing and amount of expected benefit payments. The
mortality rate is based on available mortality tables. Projected inflation rates are taken into account in establishing
future wage and pension increases.
A 1% change in the discount rate, without taking into consideration any modifications to other assumptions, would
have the following effects:
Pension plans
Other plans
1% increase
1% decrease
1% increase
1% decrease
Effect on defined benefit obligation
(147.0)
187.0
(1.9)
2.2
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 76 -
The assumed annual health care cost trend rate per participant was set at 5.1% (5.2% in 2023). Under the
assumption used, this rate should gradually decline to 4.0% in 2040 and remain at that level thereafter. A 1% change
in this rate would have the following effects:
1% increase
1% decrease
Effect on defined benefit obligation
(1.2)
1.1
The wage and fringe benefits and the employee benefits expenses recorded in net earnings were as follows:
2024
2023
Wages and fringe benefits
2,038.9
1,962.4
Employee benefits expense
76.7
81.5
2,115.6
2,043.9
21. COMMITMENTS
Service contracts
The Corporation has service contract commitments essentially for transportation and IT, with varying terms through
2033 and no renewal option. Future minimum payments under these service contracts will be as follows:
2024
2023
Under 1 year
136.5
140.5
Between 1 and 5 years
261.3
268.0
Over 5 years
1.0
1.4
398.8
409.9
22. CONTINGENCIES
Guarantees
The Corporation has guaranteed loans granted to certain stores by financial institutions, with varying terms through
2029. The balance of these loans amounted to $0.3 as at September 28, 2024 ($0.5 as at September 30, 2023). No
liability has been recorded in respect of these guarantees for the years ended September 28, 2024 and
September 30, 2023.
Buyback agreements
Under inventory repurchase agreements, the Corporation has undertaken with respect to financial institutions to
repurchase at cost the inventories of certain stores, when they are in default, up to the amount drawn on lines of
credit granted to these same stores by the financial institutions. As at September 28, 2024, inventory financing
amounted to $189.4 ($169.7 as at September 30, 2023). However, under these agreements, the Corporation has not
undertaken to make up for any deficit created if the value of inventories falls below the amount of the advances.
Under buyback agreements, the Corporation is committed to financial institutions to purchase equipment held by
certain stores and financed by finance leases not exceeding five years and loans not exceeding eight years. For
finance leases, the buyback value is linked to the net balance of the lease at the date of the buyback. For equipment
financed by bank loans, the minimum buyback value is either set by contract with financial institutions or linked to the
loan balance at the buyback date. As at September 28, 2024, financing related to the equipment amounted to $45.2
($14.2 as at September 30, 2023).
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 77 -
No liability has been recorded in respect of these guarantees for the years ended September 28, 2024 and
September 30, 2023 and historically, the Corporation has not made any indemnification payments under such
agreements.
Claims
In the normal course of business, various proceedings and claims are instituted against the Corporation. The
Corporation contests the validity of these claims and proceedings and at this stage, the Corporation does not believe
that these matters will have a material effect on the Corporation's financial position or on consolidated earnings.
However, since any litigation involves uncertainty, it is not possible to predict the outcome of these claims or the
amount of potential losses. No accruals or provisions for contingent losses have been recognized in the Corporation’s
annual consolidated financial statements.
In May 2019, two (2) proposed class actions relating to opioids were filed in Ontario and in Québec by opioid end
users against a large group of defendants including, in Québec, a subsidiary of the Corporation, Pro Doc, and, in
Ontario, Pro Doc and Jean Coutu Group. In December 2023, the Ontario Superior Court of Justice dismissed the
class action against Pro Doc, Jean Coutu Group and the distributor defendants. As plaintiff did not appeal the
decision, this decision is therefore final. In April 2024, the Quebec Superior Court authorized the class action, the
authorization process being merely a procedural step and the judgment in no way decides the case on the merits.
In February 2020, a proposed class action relating to opioids was filed in British Columbia by opioid end users against
a large group of defendants including subsidiaries of the Corporation, Pro Doc and Jean Coutu Group. In April 2021,
a proposed class action relating to opioids was filed in Alberta by the City of Grande Prairie (Alberta) and the City of
Brantford (Ontario). That proposed class action, amended in late November 2024, is made against multiple
defendants, including the Corporation, Pro Doc and Jean Coutu Group. In September 2021, multiple defendants,
including Pro Doc and Jean Coutu Group, were served with a proposed class action relating to opioids and filed by
the Peter Ballantyne Cree Nation and the Lac La Ronge Indian Band, in Saskatchewan. The allegations in these
proposed class actions are similar to the allegations contained in the proposed class action filed by the Province of
British Columbia in August 2018 against numerous manufacturers and distributors of opioids, including subsidiaries of
the Corporation, Pro Doc and Jean Coutu Group. All these proposed class actions contain allegations of breach of the
Competition Act, of fraudulent misrepresentation and deceit, and negligence. The Province of British Columbia seeks
damages (unquantified) on behalf of all federal, provincial and territorial governments and agencies for expenses
allegedly incurred in paying for opioid prescriptions and other healthcare costs that would be related to opioid
addiction and abuse while the Québec claim and the British Columbia proposed claim filed by opioid end users seek
recovery of damages on behalf of opioid end users in general. The City of Grande Prairie, on its behalf and on behalf
of all Canadian municipalities and local governments, seeks damages which are unquantified in relation to public
safety, social service, and criminal justice costs allegedly incurred due to the opioid crisis. The Peter Ballantyne Cree
Nation and the Lac La Ronge Indian Band are attempting a similar recourse, claiming unquantified damages from
multiple defendants on their own behalf and on behalf of all Indigenous, First Nations, Inuit and Metis communities
and governments in Canada. The Corporation believes these proceedings are without merits and that, in certain
cases, there is no jurisdiction. No provisions for contingent losses have been recognized in the Corporation’s annual
financial statements.
In 2017, the Canadian Competition Bureau began an investigation into the supply and sale of commercial bread
which involves certain Canadian suppliers and retailers, including the Corporation. Based on the information available
to date, the Corporation does not believe that it or any of its employees have violated the Competition Act. Proposed
class-action lawsuits have also been filed against the Corporation, suppliers and other retailers. On December 19,
2019, the Québec Superior Court granted the application for authorization to institute one of these class actions, the
authorization process being merely a procedural step and the judgment in no way decides the case on the merits. On
December 31, 2021, the Ontario Superior Court of Justice partially certified another of these class actions. The
Corporation is contesting all these actions at the certification and on the merits. No provisions for contingent losses
have been recognized in the Corporation’s annual consolidated financial statements.
During the 2016 fiscal year, an application for authorization to institute a class action was served on Jean Coutu
Group by Sopropharm, an association incorporated under the Professional Syndicates Act of which certain franchised
drugstore owners of the Jean Coutu Group are members. The application seeks to have the class action authorized
in the form of a declaratory action seeking amongst others (i) to set aside certain contractual provisions of the Jean
Coutu Group’s standard franchise agreements, including the clause providing for the payment of royalties on sales of
medication by franchised establishments; (ii) to restore certain benefits; and (iii) to reduce certain contractual
obligations. On November 1, 2018, the Québec Superior Court granted the application for authorization to institute a
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 78 -
class action, the authorization process being merely a procedural step and the judgment in no way decides the case
on the merits. The Corporation contests this action on the merits. No provisions for contingent losses have been
recognized in the Corporation's annual consolidated financial statements.
23.
RELATED PARTY TRANSACTIONS
The Corporation has significant interest in the following subsidiaries:
Names
Country of
incorporation
Percentage of
interest in the capital
Percentage of
voting rights
Subsidiaries
Metro Richelieu Inc.
Canada
100.0
100.0
Metro Ontario Inc.
Canada
100.0
100.0
The Jean Coutu Group (PJC) Inc.
Canada
100.0
100.0
McMahon Distributeur pharmaceutique Inc.
Canada
100.0
100.0
Pro Doc Ltée
Canada
100.0
100.0
RX Information Centre Ltd.
Canada
100.0
100.0
Metro Québec Immobilier Inc.
Canada
100.0
100.0
Metro Ontario Real Estate Limited
Canada
100.0
100.0
Metro Ontario Pharmacies Limited
Canada
100.0
100.0
Adonis Group Inc.
Canada
100.0
100.0
Phoenicia Group Inc.
Canada
100.0
100.0
Première Moisson Group Inc.
Canada
100.0
100.0
Metro Manufacturing Group Inc.
Canada
100.0
100.0
In the normal course of business, the following transactions have been entered into with related parties:
2024
2023
Sales
Accounts
receivable
Sales
Accounts
receivable
Companies controlled by an executive or a member of
the Board of Directors
44.0
3.4
41.7
3.1
44.0
3.4
41.7
3.1
Compensation for the principal officers and directors was as follows:
2024
2023
Compensation and current benefits
7.5
7.3
Post-employment benefits
1.0
1.5
Share-based payment
7.8
8.9
16.3
17.7
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 79 -
24.
MANAGEMENT OF CAPITAL
The Corporation aims to maintain a capital level that enables it to meet several objectives, namely:
•
Maintaining an adequate credit rating to obtain an investment grade rating for its term notes.
•
Paying total annual dividends representing a target range of 30% to 40% of the prior fiscal year's net earnings,
excluding non-recurring items.
In its capital structure, the Corporation considers its stock option and PSU plans for key employees and officers. In
addition, the Corporation's stock redemption plan is one of the tools it uses to achieve its objectives.
The Corporation is not subject to any capital requirements imposed by a regulator.
The Corporation's Fiscal 2024 annual results regarding its capital management objectives were as follows:
•
a BBB credit rating confirmed by S&P and BBB High/Stable by DBRS (BBB/positive in 2023);
•
a dividend representing 29.3% of the previous year net earnings, excluding non-recurring items (29.8% in 2023).
25.
FINANCIAL INSTRUMENTS
FAIR VALUE
The book and fair values of financial instruments, other than those with carrying amounts which were a reasonable
approximation of their fair values, were as follows:
2024
2023
Book value
Fair value
Book value
Fair value
Other assets
Assets measured at amortized cost
Loans to certain customers (note 14)
47.1
47.1
43.9
43.9
Debt (note 16)
Liabilities measured at amortized cost
Revolving Credit Facility
35.4
35.4
39.9
39.9
Series J Notes
298.8
298.8
288.9
288.9
Series G Notes
450.0
453.1
450.0
421.0
Series K Notes
300.0
314.5
300.0
281.0
Series B Notes
400.0
462.7
400.0
418.7
Series D Notes
300.0
310.6
300.0
276.4
Series H Notes
450.0
418.9
450.0
366.9
Series I Notes
400.0
317.8
400.0
273.4
Loans, nets of deferred financing costs
40.1
40.1
36.8
36.8
2,674.3
2,651.9
2,665.6
2,403.0
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 80 -
Fair value measurements hierarchy
Fair value measurements of those assets and liabilities recognized at fair value in the consolidated statements of
financial position or whose fair value is presented in the notes to the consolidated financial statements are classified
in accordance with the following hierarchy:
•
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
•
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either
directly (i.e., as prices) or indirectly (i.e., derived from prices);
•
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The fair value of foreign exchange forward contracts and prepaid equity forward contracts are classified as fair value
measurement in Level 1, as they are valued using quoted prices in active markets for identical instruments.
The fair value of loans to certain customers and loans payable is equivalent to their carrying value since their interest
rates are comparable to market rates. The Corporation classified the fair value measurement in Level 2, as it is
derived from observable market inputs.
The fair value of notes represents the obligations that the Corporation would have to meet in the event of the
negotiation of similar notes under current market conditions. The Corporation classified the fair value measurement in
Level 2, as it is derived from observable market inputs.
The fair value of bond forwards and interest rate swaps are classified the fair value measurement in Level 2, as they
are valued using industry standard models and observable market information.
INTEREST RATE RISK
In the normal course of business, the Corporation is exposed primarily to interest rate risk as a result of loans and
receivables that it grants, as well as the revolving credit facility and loans payable that it contracts at variable interest
rates.
The Corporation keeps a close watch on interest rate fluctuations and, if warranted, uses derivative financial
instruments such as interest rate swap contracts.
On November 30, 2021, the Corporation issued through a private placement Series J unsecured senior notes in the
aggregate principal amount of $300.0, bearing interest at a fixed nominal rate of 1.92%, maturing on December 2,
2024. In conjunction with this offering, Metro entered into a $300.0 interest rate swap effectively locking in a floating
rate of interest of 11 basis points (0.11%) over the 3-month bankers' acceptance rate over the life of the Series J
Notes. As at September 28, 2024, the balance of the Series J unsecured senior notes was $298.8 ($288.9 as at
September 30, 2023), reflecting an increase in fair value adjustments relating to interest rate swaps designated as fair
value hedges of $9.9 ($3.8 increase in 2023). The balance of the interest rate swap, recorded in other liabilities, was
$1.3 ($12.8 as at September 30, 2023). The Corporation has established a hedge ratio of 1:1 for the hedging
relationships as the underlying risk of the interest rate swap is identical to the hedged risk component.
There is an economic relationship between the hedged item and the hedging instrument as the terms of the interest
rate swap match the terms of the Series J notes (i.e., notional amount, maturity, payment and reset dates).
The hedge ineffectiveness can arise from:
•
Different interest rate curve applied to discount the hedged item and hedging instrument;
•
Differences in timing of cash flows of the hedged item and hedging instrument;
•
The counterparties’ credit risk differently impacting the fair value movements of the hedging instrument and
hedged item.
For the year ended September 28, 2024, a $1.6 decrease ($1.2 increase in 2023) was recorded in operating
expenses related to hedge ineffectiveness.
On February 6, 2023, the Corporation issued through a private placement Series K unsecured senior notes in the
aggregate principal amount of $300.0, bearing interest at a fixed nominal rate of 4.66%, maturing on
February 7, 2033. In anticipation of this issuance, on November 14, 2022, the Corporation entered into a bond
forward contract designated as cash flow hedge on a component of a highly probable future debt issuance in the
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 81 -
amount of $250.0 that effectively locked-in a 10-year fixed interest rate of 2.996%. As at September 28, 2024, the
carrying amount of the hedging instrument's cash flow reserve was a debit balance of $1.6 ($1.8 debit balance as at
September 30, 2023) and there was no change in the fair value of the derivative for the current year as it matured in
2023 ($3.0 decrease in 2023). In Fiscal 2024, $0.1 ($0.1 in 2023) has been reclassified from Consolidated
Statements of Comprehensive income to our Consolidated Statements of Net Income. The Corporation has
established a hedge ratio of 1:1 for the hedging relationships as the underlying risk of the bond forward is identical to
the hedged risk component.
There is an economic relationship between the hedged item and the hedging instrument as the terms of the bond lock
match the terms of the fixed rate loan (i.e., notional amount, maturity, and payment dates).
The hedge ineffectiveness can arise from:
•
Different interest rate curve applied to discount the hedged item and hedging instrument;
•
Differences in timing of cash flows of the hedged item and hedging instrument;
•
The counterparties’ credit risk differently impacting the fair value movements of the hedging instrument and
hedged item.
As at September 28, 2024, there was no hedge ineffectiveness.
CREDIT RISK
Loans and receivables / Guarantees
The Corporation sells products to consumers and retailers in Canada. When it sells products, it gives retailers credit.
In addition, to help certain retailers finance business acquisitions, the Corporation grants them long-term loans or
guarantees loans obtained by them from financial institutions. Hence, the Corporation is subject to credit risk.
To mitigate such risk, the Corporation performs ongoing credit evaluations of its customers and has adopted a credit
policy that defines the credit terms to be met and the required guarantees. As at September 28, 2024 and
September 30, 2023, no customer accounted for over 10% of total loans and receivables.
To cover its credit risk, the Corporation holds guarantees over its clients' assets in the form of deposits, movable
hypothecs on the Corporation stock and/or second hypothecs on their inventories, movable property, intangible
assets and receivables.
In recent years, the Corporation has not recognized any material losses related to credit risk.
As at September 28, 2024, the maximum potential liability under guarantees provided amounted to $0.3 ($0.5 as at
September 30, 2023) and no liability had been recognized as at that date.
Financial assets at fair value through profit and loss
With regard to its financial assets at fair value through profit and loss, consisting of foreign exchange forward
contracts and a prepaid equity forward contract, the Corporation is subject to credit risk when these contracts result in
receivables from financial institutions.
In accordance with its financial risk management policy, the Corporation entered into these agreements with major
Canadian financial institutions to reduce its credit risk.
As at September 28, 2024 and September 30, 2023, the maximum exposure to credit risk for the foreign exchange
forward contracts and the prepaid equity forward contracts was equal to their carrying amounts.
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 82 -
LIQUIDITY RISK
The Corporation is exposed to liquidity risk primarily as a result of its debt, lease liabilities and trade accounts
payable.
The Corporation regularly assesses its cash position and feels that its cash flows from operating activities are
sufficient to fully cover its cash requirements as regards its financing activities. Its revolving credit facility and its
Series J, G, K, B, D, H and I Notes mature only in 2024, 2027, 2033, 2035, 2044, 2047 and 2050, respectively. The
Corporation also has an unused authorized balance of $564.6 on its revolving credit facility.
Undiscounted cash flows (capital and interest)
Accounts
payable
Facility and
loans
Notes
Lease
liabilities
Total
Maturing under 1 year
1,645.9
20.0
402.0
326.8
2,394.7
Maturing in 1 to 10 years
—
58.7
1,533.2
1,374.6
2,966.5
Maturing in 11 to 20 years
—
12.0
904.4
149.4
1,065.8
Maturing over 20 years
—
27.3
1,286.2
13.7
1,327.2
1,645.9
118.0
4,125.8
1,864.5
7,754.2
FOREIGN EXCHANGE RISK
Given that some of its purchases are denominated in foreign currencies and that it has, depending on market
conditions, US borrowings on its revolving credit facility, the Corporation is exposed to foreign exchange risk.
In accordance with its financial risk management policy, the Corporation could use derivative financial instruments,
consisting of foreign exchange forward contracts and cross currency interest rate swaps, to hedge against the effect
of foreign exchange rate fluctuations on its future foreign-denominated purchases of goods and services and on its
US borrowings. As at September 28, 2024 and September 30, 2023, the fair value of foreign exchange forward
contracts was insignificant and there were no cross-currency interest rate swaps outstanding.
OTHER PRICE RISK
During the third quarter of Fiscal 2023, the Corporation entered into prepaid equity forward contracts to economically
hedge a portion of the price risk driven by fluctuations in the fair value of our DSU awards and cash-settled PSU
awards. These contracts are not designated as hedging instruments for accounting purposes. The prepaid equity
forward contracts are hybrid instruments containing an embedded derivative component and a non-derivative
financial asset host component. These instruments are recorded at fair value in other assets in our Consolidated
Statements of Financial Position and changes in fair value are recorded as operating expenses in our Consolidated
Statements of Net Income.
26.
EVENTS AFTER THE REPORTING PERIOD
On November 27, 2024, the Corporation issued through a private placement Series L unsecured senior notes in the
aggregate principal amount of $500.0, bearing interest at a fixed nominal rate of 3.998%, maturing on November 27,
2029. On December 2, 2024, the Corporation redeemed all of the Series J notes, bearing interest at a fixed nominal
rate of 1,92%, in the amount of $300.0 that matured on the same day.
27.
APPROVAL OF FINANCIAL STATEMENTS
The consolidated financial statements for the fiscal year ended September 28, 2024 (including comparative figures)
were approved for issue by the Board of Directors on December 11, 2024.
Notes to consolidated financial statements
September 28, 2024 and September 30, 2023
(Millions of dollars, unless otherwise indicated)
- 83 -
- 84 -
- 85 -
- 86 -
DIRECTORS AND OFFICERS
Board of Directors
Pierre Boivin(3)
Michel Coutu
Marc Guay(1)(2)
Brian McManus(1)(2)
Montréal, Québec
Montréal, Québec
Oakville, Ontario
Beaconsfield, Québec
Chair of the Board
Lori-Ann Beausoleil(1)(3)
Stephanie Coyles(1)(3)
Eric La Flèche
Pietro Satriano(1)
Mississauga, Ontario
Mississauga, Ontario
Town of Mount-Royal, Québec
Winnetka, Illinois
President and Chief Executive
Officer
Maryse Bertrand(2)(3)
Geneviève Fortier(2)
Christine Magee(2)(3)
(1) Member of the Audit Committee
Westmount, Québec
Blainville, Québec
Oakville, Ontario
(2) Member of the Human Resources
Committee
François J. Coutu
(3) Member of the Governance and
Corporate Responsibility Committee
Montréal, Québec
Management Team of METRO INC.
Eric La Flèche
Carmen Fortino
Christina Bédard
Karin Jonsson
President and Chief Executive
Officer
Executive Vice President, National
Supply Chain and Procurement
Vice President, Continuous
Improvement
Vice President, Corporate Controller
François Thibault
Richard Pruneau
Genevieve Bich
Frédéric Legault
Executive Vice President, Chief
Financial Officer and Treasurer
Executive Vice President, Québec
Vice President, Human Resources
Vice President and Chief Information
Officer
Marc Giroux
Lyne Jetté
Guillaume Duchesne
Simon Rivet
Executive Vice President and Chief
Operating Officer - METRO
Senior Vice President, National
Procurement
Vice President, Application Systems
Vice President, General Counsel
and Corporate Secretary
Jean-Michel Coutu
Michel Avigliano
Dan Gabbard
Alain Tadros
President, Pharmacy Division
Vice President, Real Estate and
Engineering
Vice President, Logistics and
Distribution
Vice President and Chief Marketing
Officer and Digital Strategy
Paul Bravi
Marie-Claude Bacon
Executive Vice President, Ontario
Vice-President, Public Affairs and
Communications
SHAREHOLDER INFORMATION
The corporate information, annual and quarterly reports, the annual information form, and press releases are available on
our website: www.corpo.metro.ca
Les renseignements sur la Société, les rapports annuels et trimestriels, la notice annuelle et les communiqués de presse sont disponibles sur Internet à
l’adresse suivante : www.corpo.metro.ca
Head office
11011 Maurice-Duplessis Blvd.
Montréal, Québec H1C 1V6
Tel: (514) 643-1000
Transfer agent and
registrar
TSX Trust Company
Auditors
Ernst & Young LLP
Annual meeting
The Annual General Meeting of
Shareholders will be held in
hybrid mode on January 28, 2025
at 10:00 a.m.
Stock listing
Toronto Stock Exchange
Ticker Symbol: MRU
DIVIDENDS*
2024 FISCAL YEAR
Declaration date
Record date
Payment date
January 27, 2025
April 15, 2025
August 12, 2025
September 29, 2025
February 13, 2025
May 7, 2025
September 4, 2025
October 23, 2025
March 11, 2025
May 27, 2025
September 23, 2025
November 11, 2025
* Subject to approval by the Board of Directors
- 87 -