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Ladies and gentlemen, thank you for standing by. Welcome, and thank you for joining the analyst and press call Q1 2021/2022 Results Presentation. [Operator Instructions] The presentation will be followed by a question-and-answer session. Please be aware that the Q&A session will be in English and not be translated. All questions need to be asked in English. [Operator Instructions] I would now like to turn the conference over to Dr. Steffen Greubel, CEO, Metro AG. Please go ahead.
Good morning, everyone. Hello. I'm together here with my colleague, Christian Baier, CFO of METRO, and we would like to welcome you to this Q1 2021/2022 results call. We are happy to present to you, both analysts and journalists today together, how we performed so far. So the call structure is going to be that I'm going to walk you through the highlights of Q1. Then Christian is going to take over the financial session. And then at the end, we will have proper time to have -- to answer your questions in the Q&A session. So let's directly jump into content, into my 3 highlights of the first quarter of the financial year. First, I mean, most probably you've all participated in our Capital Market Day end of January. So our growth strategy sCore was presented. And to remind everybody, sCore stands for growth in the core business of METRO and, of course, our ambitious target. So sCore is all about sharpening our wholesale focus on professional customers and significantly expand the multichannel business model, develop new businesses to, at the end, better meet the needs of the professional customers. In addition, we have 3 sustainability focal points, which is the achievement of the climate neutrality by 2040, avoiding plastic and food waste and continue to expand the range of our sustainable products. Why now? We see that we are still living in an attractive market. It's 1 trillion out-of-home consumption in the markets where we are operating. We expect the markets to grow again after the pandemic is behind us, and there's a lot of good signs that this is going to be soon the case. And still, we are living in a very fragmented industry where we do have the possibilities to streamline and to consolidate. So it's a very good opportunity at the moment. We are at the right starting position, and I'm very happy that I can present you an already good momentum towards our growth plans. Therefore, my second point, there is no concept in waiting. The execution is ongoing. It's in full swing. The strategy is not only on PowerPoint. It's also in reality progressing. We can give you already some of the highlights for the Q1 on the top line today and also give you details of 3 of the strategic relevant topics, investments in FSD space, investments in sales force and the rollout of digital offerings. And we see, and that's my third point, that the investments that we already made are paying off, yes. We continue to accelerate growth. The total sales of the Q1 exceeded pre-pandemic levels and the EBITDA is close to it. And this is also not only reflected in our numbers, but it's also reflected in the customer feedback. So customer satisfaction that we are measuring constantly is going up, and market share gains are continuing to be improved. So overall, we are well on track so far. So let me walk you through some of the details. So let's start with the cornerstones of our business model and the long-term ambition that we have communicated in the Capital Market Day. We are convinced of our strong multichannel mix with stores, FSD and digital. And we're going to continue to strengthening every single part of it as well as this entire machinery as the entire system. By 2030, we aim to achieve more than EUR 40 billion sales and exceeds EUR 2 billion in EBITDA by increasing the store sales by 1.2x. The FSD sales, by more than tripling. And marketplace, we want to increase 60x the marketplace sales. So there is ambitious goals, but there is a clear measures behind. There's a clear program behind clear priorities, which you can see on the next page. So overall, it's all about having a fundamentally clear value proposition, the focus as a wholesaler, and this is resulting in 80% of sales with a strategic customer in the HoReCa and Trader customers. We need to streamline therefore the assortment. We need to imply the wholesale or apply the wholesale pricing and the entire wholesale look and feel needs to be worked on. We need to grow. As I said, the multichannel is our key business model, the multi-channel per se. That means driving the network transformation, optimizing store base allocation, invest in FSD, infrastructure, both out of store and also in dedicated depots.Then second, we need to push digital tools penetration, tools that make ordering for the delivery, which is our M-Shop solution and in-store shopping, which is the M Companion app, easier. And then we need to expand also digital solution for our customers. That's the DISH family. That's how we call it DISH family. And this is going to be the next strategic sCore priority. Rollout of the online marketplace. I was mentioning it. We will roll that out to 2 to 3 additional countries every year. This year, this fiscal year, is going to be Italy and Portugal. So this will be enabled by the growing of our own brand. We are aiming more than 35% own brand. This is going to give our brand a higher visibility, the product of the own brand higher visibility on shelf and it's beneficial for customers because they're especially designed for them and for METRO because we are also enjoying better prices with our own brands. Second, and it's very important since we are moving from a pull model to a multichannel model, so we will have push sales elements in there as well. We want to long term double our sales force and also work on the efficiency of the sales force to give them the opportunity to spend more time with the customers, more time selling instead of taking just the orders. And then, of course, and I was mentioning that, and this is a fundament for everything which we are doing. We keep on investing in sustainability, especially climate neutrality by 2040 in sustainable assortment, especially of our own brands and the reduction of waste. So the Capital Market Day's presentation was on the 26th of January, so just 2 weeks ago. But I can give you already on some of the KPIs updates. So let's talk network transformation, one of the key strategic priorities. 6 additional out-of-store locations in Russia, Germany and Ukraine have been added in the Q1 of this fiscal year. The sales force has increased 250 people. 250 sales force are now on board in the first quarter, and the marketplace rollout is in full swing. We are enjoying 90% higher traffic than the Q1 the year before. The efficiency is also increasing. The conversion rate went up 1 percentage points and the number of orders have tripled compared to Q1 of the year before. DISH family digital solutions for customers, we have increased the DISH subscription for DISH bundle such as DISH starter, DISH professional or DISH premium from overall 20,000 subscriptions to 22,000. This is a net value. So it's already including the churn, so this is a solid increase of 10% net. And so you see the strategy execution is already in full swing. We are not only moving top line figures, but also moving strategic input KPIs in the right direction. And then -- and that's something that we are very proud and happy to communicate that our sales momentum also in this year continues like we ended actually the last quarter of the last fiscal year. As you can see on the chart, the Q4 of the last year was already a 2-digit growth and also significantly above pre-pandemic level, and this trend exactly continues. So October, plus 14% against previous year; November, plus 30% against previous year; December, plus 17% against previous year. Overall, this is equaling roughly 20% against previous year and EUR 7.6 billion in sales, and this is roughly altogether, 6% above pre-pandemic levels. So this is a good evidence for our strategy. And this is not only external effects, as you can see on the move of the input of the -- on the improvement of the input KPIs. This is also the result of our daily work and of the execution of our strategy, not only in 2030 but also as of now. And churn is also good, 20% better than the year before, roughly at pre-pandemic level. So overall, top line figure growth momentum, grabbing the opportunity that is out there in the market. We have a lot of confirmative evidence in the Q1 and business still holds strong. And then when we're looking a little bit down the road, temperatures are rising, restrictions are lifting. So we could hope that this trend is also continue even further. So my take away for you, the adoption of the business model pays off and the effect lasts and gives us a strong tailwind. I was already mentioning and it's not only the financial performance, it's also our customer feedback that is quite motivating. We have a growing customer satisfaction. We measure that by our Net Promoter Score, NPS. It's 6 percentage points better in the HoReCa customer group, and it's 1 percentage point better in the trading customer group. It's supported by mainly 2 aspects: number one, availability. So we are having better availability than last year but also better availability than in the year before the last year. So -- and this despite all those global supply chain challenges. So that has been a real difference in the way our customers sort of rely on us and therefore increases their loyalty. Multichannel is the second one. When you look at the channel of FSD, one of our growth cylinders for the future, it's not that we are only expanding FSD. We are also improving it. We are also improving it. We are improving the quality of it, and we can measure it by a better 8 percentage points customer satisfaction for the FSD in particular. So we are happy not only with the growth speed, not only with the development of the strategic KPIs, but we are also happy with the positive and encouraging feedback our customers are giving to us. And of course, we're all seeing the effects of inflation. So we could also see that in some cases, this higher price perception might lead to deterioration in the coming quarters. Nevertheless, we are constantly working on that. But overall, on these 3 key topics, customer feedback, KPIs and output, we think it was a very strong quarter, and we have quite some confidence that we continue in that same direction. So before I hand over to Christian, let me close my part with a quick summary. So number one, ambition. We are talking a lot about ambition. Our ambition is high. We will not only significantly accelerate the growth speed in our company but we will also significantly change our business profile, and we are doing that in this very moment already. The opportunity is now. There is no concept in waiting. Our multichannel business model is unique, and this puts us exactly now in the moment into an excellent positioning to achieve our growth targets and to win market share. And then execution. We are already in full execution mode with full force. So it's not only on PowerPoint. It's really in reality, and we will further intensify our efforts. The strong first quarter growth shows that we already made good progress. Sales are above pre-pandemic levels and earnings are also developing positively. Talking about earnings, let me hand over to Christian, who gives you a broader financial perspective on our business. Thank you very much.
Yes. Thank you, Steffen, and good morning, everyone. As Steffen has mentioned, we are focusing very much on the execution of our communicated strategy. And in order to ensure that we are on the right track there, we need to measure the progress in a very consistent and continuous manner. As we have shown in our CMD, we do that first and foremost with a set of commercial KPIs that are the leading ones from our perspective. Steffen has just commented on the NPS development, which is one of the key leading KPIs and indicators whether we are performing properly with our customers. In addition, sales with our strategic customers have increased by 60% for HoReCa and 7% for Trader. And this results in total sales with strategic customers above pre-COVID levels. Also from a multichannel perspective, we have grown significantly with FSD at plus 64% and on the marketplace with a threefold increase. Lastly, and also as mentioned by Steffen, we have made already now progress on the network transformation where you have seen from a CapEx program, there is more to come in subsequent periods. The development of these commercial KPIs then really translates into the key financials. And there, also referring to the CMD, we are very much committed to a transparent and simple way of reporting our progress to give full visibility mainly on 3 accounts. The first one is that we will focus our reporting on sales on total sales. So this time for the last time in the appendix, we provide like-for-like sales numbers just for your reference. Secondly, we continue to show EBITDA on an adjusted basis in order to track the real operational development. And this figure, therefore, excludes real estate gains and transformation costs of portfolio measures. You will see in the appendix the adjustments and some of the quality of earnings that have been there in previous quarters in a very transparent manner. On the third account, very importantly, we have now amended our free cash flow definition to a real comprehensive one that represents the funds available for debt repayment payment of dividends or M&A and therefore, fully comprehensive, very much that can be taken from the cash flow statement and can be then directly translated into net debt development. On the back of that, let's now look into the financial performance, where we see that the momentum continues. The quarter gives us a real good start on our full year guidance, but it also further boosts our conviction that we are on the right track. With 19% of sales growth, we have shown a significant improvement that is really driven by our multichannel model, not only the stores that are growing, but also the strong growth mentioned in FSD and the marketplace. This, in turn, led to an EBITDA increase of roughly EUR 140 million to EUR 521 million and a doubling of the EPS to EUR 0.54. The free cash flow in the new definition now reaches EUR 283 million. Let's look at some details where the overall group performance is really built on the strong regions that you see here. This is the first quarter in the updated segment structure, whereby we have merged the previous segments, Eastern Europe and Asia into 1 segment that is called East. There are no consolidation effects between the segments. Nonetheless, we have updated the key financials file for you on our website. So let's now look into the numbers in the various segments. In Germany, reported sales have increased by 1% versus PY, and this is by HoReCa sales that are growing faster than the market that overcompensated the slight decrease in Trader and SCO sales. On the EBITDA side, we grew to EUR 83 million, and this is a result of good margin development, but also strict cost management. Turning to the segment West. Sales have significantly increased there by 36%, reaching EUR 3 billion and hence, also exceeding pre-pandemic levels. This is driven especially by France, Italy and Spain that have contributed with significant double-digit growth rates and that also resulted eventually in EBITDA that increased to EUR 202 million. In Russia, we see a very consistent performance across the many, many previous quarters, and we have shown sales in local currency increasing by 8%. While the reported sales increased by 18% to EUR 0.8 billion, this is due to positive currency effects. The sales growth overall was carried by HoReCa and Trader from a strategic customer group perspective and also from a channel driven by strong FSD sales. The adjusted EBITDA at constant currency increased by EUR 6 million compared to the previous year's quarter. This development was mainly driven by strong sales and the good margin development. In the segment East, sales in local currency increased by 17% and are above pre-COVID levels. When we look at the reported sales, they grew slightly less by 15% to EUR 2.4 billion due to negative currency effects. Overall, almost all countries contributed to this positive development with obviously Turkey achieving the highest sales growth, which is only partly due to inflation, but more importantly, driven by significant volume increases the colleagues have been able to achieve. The adjusted EBITDA increased to EUR 140 million, where Turkey, the Czech Republic and Poland were 3 countries that are particularly to mention from a strong development perspective. In the last segment, the segment Others, adjusted EBITDA amounted to EUR 15 million and decreased compared to the previous year. This also results from further investments into digitalization in the current year, as also elaborated on in the CMD. The adjusted EBITDA in this respect also benefited from the license revenue from the partnership with Wumei that we have been accounting for roughly 1.5, 2 years now and which will continue to accrue until April 2023. The strong results of our segments are also reflected in the continued market outperformance in key HoReCa countries. Again, on this chart, as consistently over the last couple of quarters, we show 5 countries here, but there are many more that perform about in the same way and outperforming the markets in a strong manner. So this shows that also in Q1, our development remained above the market compared to pre-pandemic levels. And this is a remarkable understanding, given that you see that in many of the countries, the hospitality market is not yet back to the pre-pandemic levels. However, as hard lockdowns are being avoided, which is great for our business, we see our local FSD competition is also returning, and that is a great challenge, but also a great ambition for us to also be very strong from a market share perspective during that period and even increase it in the long term continuously. After having looked now at the individual segments and countries, let's look at the group results, where we have achieved the mentioned 19% FX-adjusted sales growth, reaching EUR 7.6 billion and hence exceed the pre-pandemic levels. Not only all segments but also all channels have contributed to that significantly. Store sales increased to EUR 6.2 billion while FSD increased very significantly to EUR 1.4 billion and reached a delivery sales share of 18% in a quarter that usually is not that strongly driven by FSD. Metro market sales are at EUR 15 million in Q1 compared to EUR 6 million in the previous year. There, it's important to keep the definition in mind. This is the P&L sales, while the marketplace sales. So basically, the volume that goes over our platform, excluding VAT, reached EUR 31 million, a strong development of the team, and it shows the momentum that we are continuing to deliver. So just to remind you, we started our marketplace in Germany in 2019 only at the very end and then also in Spain in 2021. And we are adding 2 more countries, as Steffen mentioned, with Portugal and Italy this year, and we expect, therefore, the momentum, not only in the individual countries, but also from an expansion of the footprint to continue. The growth that we have seen in the first quarter was also strongly driven by our strategic customers. As I mentioned, HoReCa sales grew double digit in all segments and very, very significantly than for the overall group. The sales recovery was also reflected in the earnings eventually as the adjusted EBITDA reached EUR 521 million compared to EUR 376 million in the previous year. When we look at the total EBITDA, so also including the transformation cost and real estate gains, we have achieved EUR 528 million due to a reversal of accruals primarily by CFF Philippines and Japan and also a small real estate gains from selling a property in Turkey. So let's now move further down the P&L, below EBITDA, where depreciation is stable and in line with the previous year. As a result of the EBITDA growth and the stable D&A has increased compared to PY. The net financial result is slightly decreasing driven by an adverse exchange rate development in Turkey, and the tax expense increases due to the improved EBIT as you would expect. In summary, the strong sales development and EBITDA growth led to doubling the EPS and compared to PY to now EUR 0.54. So let's eventually move to the cash flow perspective, where we are starting with the operating cash flow taken from the overall cash flow statement as published in our quarterly statement. There, the strong growth is driven by EBITDA and a positive change in net working capital of plus EUR 72 million. This compares to an improvement of EUR 222 million in last year. So strong improvement also on the net working capital side. In terms of the investments, there is no significant change. And there, you should also keep in mind for further periods that we are continuing to increase our investments in the way that we have described in the capital markets, so this is a number that, over the next few quarters, but more importantly, in the longer term, will increase as we are absolutely convinced that these investments will drive growth on the top line, but also from an EBITDA and cash flow perspective over time. In terms of the interest, there is a stable development. And when you look at the other position here, this is mainly driven by a positive contribution from hedging activities. So all in all, this leads to the mentioned before, EUR 283 million of free cash flow comparing to a negative EUR 75 million in the previous year quarter 1. And therefore, in line of the comprehensive free cash flow definition, this also corresponds to a quite significant reduction in net debt. So while we have seen a strong improvement in free cash flow in the Q1, we confirm our full year expectation of a broadly stable net debt versus 2021. And we expect, as I mentioned, increased investments and also some seasonal effects to normalize. So let me summarize also with a bit of an outlook. So we look back at the strong Q1 that fits very well our full year expectations. We have guided for the full year to expect 3% to 7% sales growth. And with this ambition, we target to be back to pre-COVID sales levels. We have achieved high sales growth in Q1, however, also comparing to a weak Q1 over the last year. Compared to '19/'20, i.e., pre-pandemic levels, the sales in Q1 have grown by roughly 6%. The same is true for adjusted EBITDA, where we recorded a sharp increase in Q1 this year, however, following a Q1 last year, as you see on the chart with a somewhat sharp decline. If you wanted to compare those numbers to '19/'20, we would have shown roughly a EUR 25 million increase in adjusted EBITDA from an FX adjusted basis. If you look at the remainder of the year, you can see starting from Q2, but more importantly, from Q3 and Q4 that the comparison base becomes progressively harder as we did have a significant catch-up effect than in later spring and summer during last year where there was just a significant renaissance of all the gastronomy. In this year, we expect that to happen a bit more gradual because we see already today that restaurant business is going better than we have seen in previous quarters. So in summary, we have achieved a good Q1, and we are very satisfied with the results. However, we are currently expecting to come out really towards the upper end of our guidance range, which makes us confident what we need to ensure to keep in mind also the situation from the previous year against we need to perform well, and we are very confident to do so. So both of us, Steffen and I, as well as the whole management team, we continue to focusing on executing our strategy, and we are looking forward to sharing our progress with you in the quarters to come. There, you can expect from us that we continuously update you on the progress in the execution of our strategy, and this will also include the commercial KPIs such as the Net Promoter Score, the own brand share and also, over time, the very important digital sales share that makes us lift the multichannel advantage. This concludes our presentation for today. And now Steffen and I are very happy to take your questions.
[Operator Instructions] And the first question is from the line of Volker Bosse from Baader Bank.
Volker Bosse, Baader Bank. Congratulations on the great start into the new fiscal year. I would have -- I would like to start with 3 questions. My highlight of the reporting is -- or one of the highlights is the strong gross margin improvement in the Q1 by 75 basis points. Could you share a bit more light on how did you reach this impressive figure given that we have an underlying rise of input costs, rising sourcing costs? So that would be the first question. And second question is, yes, for clarification, 20% sales growth, strong number, HoReCa, plus 60%. How did the other groups perform means Traders and small companies, I think you call it? Do you have here the full light on the sales split by customer group? And third question would be on your guidance. Yes, the year is young, and the second half will be more challenging. However, given the strong start and the indications for the second quarter, your full year guidance looks a bit shy. Do you really expect sales to decline in the second half in order to come back to the range which you guide for the full year? So just to get your view, is it just conservative? Or is it really a negative effect in regards to sales for whatever reasons which we have to take into account?
Yes. Thank you, Volker, for your questions. Let me take them one by one. On the gross margin development, thank you. Yes, I think we are pushing there heavily a couple of elements that are to be respected there. Certainly, the mix in light of the good development on the HoReCa side, which is one of the customer groups that has the best gross margin is already 1 factor. And then what you mentioned before, there is quite some volatility in the market. where we, from a contractual point of view, we are obviously well positioned with respect to the negotiation on our contracts that we have in place. We are doing from our view, also a smart way of forward buying and other elements in order to be well positioned in a slightly inflatory environment. And we are also able to hand over relevant parts of some of the price increases that obviously also we have to face to our customers. very importantly there, in order to be well positioned from a price perception point of view. We do that with a key grain of salt and with very proactive decision-making in that respect. So price perception is one of the key factors, although we are able to push through quite some of the price increases and thereby, the gross margin improvement comes through. If you look at the 3 key customer groups, HoReCa Trader and SCO, you can roughly speak about HoReCa being at the 60% growth, Trader at roughly plus 7% and SCO, broadly flat. This results in the overall 19% growth rate. And from a full year guidance perspective, as I mentioned in my speech, yes, we do expect to be at the higher end of the guidance corridor. And it is still very important that what we have seen now in the Q1 is very consistent with our expectations. It's very important to also look at the second half year where there is a more difficult comparison base to run against, given that I mentioned before, it was a disruptive stop of the gastronomy business in the last year, and it was an equally disruptive basically positive explosion of that business when they were opened again. So we do not expect that significant catch-up effect in the second half of the year. And then when we look more into the profitability side of things, we expect we grow more with the FSD perspective. where at this stage, we are still slightly slower from a profitability point of view. Over time, as we continue scaling on FSD, we will significantly improve productivity, but that's more for the periods to come. And I think the last 1 to be mentioned, and you can also look that up. We have provided that information in the appendix and there is some onetime income that we have shown all along the last year that provided a bit tailwind in the last year and this year a bit of headwind. So overall, full expectation that we are running at the higher end of the guidance corridor. But in light of the still relatively volatile market that we see out there where we are performing well, we are very confident that the guidance that we have put out is the proper corridor.
The next question is from the line of Caron from Kepler Cheuvreux.
Fabienne Caron from Kepler Cheuvreux. Three follow up if I can. The first one, following up on Volker's questions on the guidance, but more on the EBITDA side. Christian, I just understand what you said. But even if I adjust for the EUR 50 million one-off last year, it looks as if you're going for a 10% roughly EBITDA decline year-on-year, is it not a bit too cautious? So I'm trying back on this side. I'm sorry. The second question would be, can you remind me what inflow, cash inflow you expect from real estate transaction in the cash flow for the full year? And the last question will be on Russia. Can you remind me if the cash in Russia stays in Russia or if it comes back to Germany?
Yes. Thank you, Fabienne. Very happy to comment 1 more time on the guidance perspective. From an EBITDA view and as mentioned, there have been a couple of these onetime incomes. And overall, I think in the past year, we have seen, as mentioned before, that significant buying also in very attractive categories when people were coming back to the gastronomy and mentioning that we would expect to be at the higher end of the guidance corridor. It's not that we are basically targeting a complete 0 line but with a little bit of wiggle room there going forward. And we are confident that this is an ambitious and good target that we continue pushing, especially being relevant to our customers and building the market share that will be very important to execute also overall on our strategy. With respect to the real estate perspective, from an inflow view, probably this year, we are expecting roughly between EUR 150 million and EUR 200 million. as also broadly stated in the Capital Markets Day. And we expect from an EBITDA perspective EUR 100 million roughly to come in, in this year. Your question with respect to Russia, we are very well positioned from that cash perspective. There is, in many periods, a continued flow between the group and Russia itself. Very important to keep in mind, Russia itself is quite cash generative and therefore is standing on its own feet. And probably, the question is a bit pointing towards any sort of geopolitical situations. We are very well prepared not only from a cash and cash movement perspective, but also from other points of view. So very confident that we are well set up there.
Okay. Just a follow up on EBITDA, is it a corridor for EBITDA? I thought the target was to be EBITDA similar than last year. So you tell me it will be above, then it's not a corridor, right?
That's entirely true. Fabienne, if you allow me to be a bit splitting hairs, I think on PY does not mean that it's exactly the 0.1. We basically see that from a sales perspective, we are rather towards the upper end of the corridor and from an EBITDA perspective, given that on PY level is also a bit of an implicit corridor, we expect to be probably above the 0 line from an EY -- EBITDA perspective.
The next question is from the line of Andrew Gwynn from Exane BNB Paribas.
One of my questions has been asked, which obviously about EBITDA. But just on the other 2, you mentioned during the prepared remarks that you're seeing some of the local food delivery operators coming back in as lockdowns have eased. Is that relatively modest? Or is that something we should have in mind through the rest of the year? And then the second question, just really on food inflation, so just helping us understand that uplift versus a pre-pandemic base. Just whether or not there's a substantial amount of food inflation in the numbers? Or is that just beginning to pick up?
So let me -- thank you very much, Andrew. Let me start with the first one. If I got the question right, so what is sort of the local competition, local food delivery, how are they impacted by the crisis, how do they stand the situation in comparison to us if that's correct. Did I get that right?
You commented that it was reopening, so it was just to understand how substantial that was.
Yes. So of course, since those competitors are quite sort of small, you don't actually see that in the use if they run into problems. But overall, what we get from feedback and also from the visits in the market, is that with our multichannel business model, we are superior to their performance in the moment. So they don't usually have any digital offerings. They don't usually have any store, where customers also can come without minimum order quantities and for their sort of rapid needs. So in the moment, our multichannel business model leads us to the conclusion that we are superior to those small companies without any digital offering or any multichannel business model. But as you can imagine, it's not so much written in the news because those people are really, really small. So that's rather observations that you do when you're traveling with cell ships or anything like that. And then in terms of food inflation, and this is a bit coming back to the question that Christian already answered. Of course, there is inflation and suppliers coming up with requests for increased prices. But overall, we know how to handle that inflation. We know that from experiences that we do have in Turkey or other high-inflation countries. And then we are managing the inflation by our forward buying and so on, but you can expect that we see roughly like around 5% coming actually in terms of inflation for the food.
So is that an expectation for the full year? And presumably, in your Q1, food inflation was probably a bit lower.
That's hard to say. That's what we just have now in our books. You also have to bear in mind that a lot of the inflation is also coming with some sort of crop results, harvest results that could be different in that year. So that's quite hard actually to predict.
[Operator Instructions] We have a follow-up question from the line of Caron from Kepler Cheuvreux. Caron, you are now live.
Yes, sorry. Can you give us a feeling regarding the foodservice split per region in the quarter will be my first question. And my second question would be regarding the tax rate. I know, Christian, you gave us tax rate for the full year. We always see it's a very high tax rate. I was just wondering if there's some opportunities going forward to improve the tax rate of Metro.
Yes. Maybe let me take -- or let me ask a quick question on the first one. We didn't understand or hear it properly. Fabienne, if you could just repeat that.
Yes. I was wondering if you could give us the foodservice split per region.
Yes. Okay. Then let me just have a quick one on the second question with respect to the tax rate. First of all, yes, we have given the total number for this year, given that in the soft guidance in December, and that's also broadly the expectations that we would see for this year. We have given that in absolute terms because indeed, as you mentioned, the percentage rate at this stage is still a little bit subdued given the still ongoing COVID impact to a certain extent. What are we doing in order to continuously improve our overall tax rate to in the long term when we talk 2030 to the roughly 30% to rather below and to take that gradually down there. It is -- we are very strongly working together with financial authorities in Germany and all the members in the respective countries. On the transfer pricing perspective, we are making good progress there. We have also already adjusted quite some of the transfer pricing elements in adjustments and discussions with all the financial authorities involved. So I think that's 1 thing that over time should bring our tax rate to a good level. The second piece is to further strengthen the German tax group, where most importantly, we have significant tax loss carried forward that we can take on board there, and that is being driven by 2 things. One is further continuously improving our German business overall, which is heavily driven; and secondly, also improving the efficiency of our headquarter from that overall perspective where we have done our reorganization a year ago. So that should drive over time that view. And also the countries that are, at this stage, loss-making where we have only a few, if we turn them into positive development, this will turn also the P&L taxes and the ratio, especially into a better rate. If we now look at the view from the perspective of the FSD share in the various countries, when you look at a broad range basically between 10% and solid 21%, 22%, that's the rough number. In total, we are talking 18% here in Q1, but the range is between roughly 10% to roughly 22%. And that last number is gearing rather towards the segment West and towards the segment East then.
There are no further questions at this time, and I hand back to Dr. Steffen Greubel for closing comments.
So thank you very much, everybody. I hope you are as well, equally excited about the results in the first quarter as we are. Hope to hear and see you again soon, and I wish everybody a good day, and stay healthy. See you then. Go out eating. Bye-bye.
Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.