Performance

4. PERFORMANCE INDICATORS

Financial Performance Indicators

The most significant performance indicators of the REWE Group's operating units are revenue and EBITA. Net debt is included at the Group level. These key figures are reported under notes 2 and 3.

The cash flow statement shows changes in cash and cash equivalents less overdraft facilities during the financial year. A distinction is drawn between changes resulting from operating activities, investing activities and financing activities.

Change in cash and cash equivalents
in million €20182017
Cash funds at beginning of period651.6575.8
 Cash flows from operating activities, continuing operations1,486.11,300.2
 Cash flows from investing activities, continuing operations-1,786.3-1,903.5
 Cash flows from financing activities, continuing operations284.5619.7
 Cash flows from continuing operations-15.716.4
 Cash flows from discontinued operations0.063.5
 Change in cash funds related to changes in the scope of consolidation0.40.0
 Currency translation differences-1.5-4.1
Cash funds at end of period634.8651.6
Cash funds at the end of the period, discontinued operations0.00.0
Cash funds at the end of the period, continuing operations634.8651.6
 of which: cash and cash equivalents639.2653.4
 of which: bank overdrafts-4.4-1.8

For additional explanations, please see note 38 "Cash Flow Statement" in the notes to the Combined Financial Statements.

Non-financial Performance Indicators

Employees

On an annual average, the REWE Group had 234,017 employees in 2018 (previous year: 224,931), of which 6,351 (previous year: 6,317) were trainees.

The increase in the number of employees is attributable primarily to the first-time inclusion of REWE Dortmund SE & Co. KG (see note 4 "Acquisitions") and UAB Palink, Vilnius, Lithuania, which was fully consolidated for the first time on 1 August 2018.

As an international trading and tourism group we rely on qualified employees. So that we continue to be considered an attractive employer in the competition for qualified employees, the REWE Group makes targeted investments in its current and future employees. The following action areas play a central role:

Values and culture

The REWE Group wants long-term commitments from its employees and offers them a motivating work environment. This includes fair work conditions, attractive social benefits and offers that are adapted to the different phases of the employee's life. Fair work environments are based on valuing diversity and a commitment to equal opportunity – these are core values for the REWE Group's corporate culture. The appreciation of employees through appropriate compensation with attractive additional benefits (such as our employee discount) is also a material component of a fair work environment.

Training and professional development

The REWE Group offers school leavers initial vocational training in sales and distribution, logistics and administration. These programmes offer them real future prospects. Apprentices who excel are guaranteed full-time, permanent positions after completion of their apprenticeship.

In order to promote the potential and individual development of employees in the best manner possible, the REWE Group continuously expands its personnel development measures and offers all its employees and executives an extensive offering of internal continuing education. As part of this effort, the Company endeavours to recruit as many as possible specialists and managers from its own ranks and to retain qualified and motivated employees long-term. In addition to numerous classroom-based courses, we also offer our employees at our headquarters and in our stores the opportunity to complete training courses online.

Health and safety

Occupational health management is an important element of the REWE Group's internal social policy. This helps to strengthen employees' responsibility for their own health. At the same time, we are making efforts to continuously improve working conditions.

Be it ergonomic work stations or accident prevention, the safety and health of our employees has the highest priority for us. We assist the responsible managers in preparing their risk assessments for the purpose of determining the physical and mental demands of the job, and provide them with advice on setting up work stations. In addition, we place great value on the prevention of violence (particularly offering training on how to react in the event of a robbery) as well as reducing musculoskeletal strain and optimising employees' workplace habits (e.g., when lifting, carrying, pushing, sitting). Following the principle "demand and promote", we offer our employees various programmes on promoting a healthy lifestyle and mitigating environmental risk factors. Moreover, we work closely with the occupational health service to address the topic of psychological health (e.g. consultations or a telephone hotline).

Work-life balance

Be it adult care for family members or childcare: we help our employees to balance their careers and families by offering family-oriented services which fit with each stage of life.

A family-friendly HR policy is important to the REWE Group in order to gain and retain employees. That is why we offer on-site kindergartens at headquarters or for our regional employees the national child and adult care services in cooperation with awo lifebalance GmbH in the regions, for example. A good work-life balance is becoming a decisive factor for many people when selecting an employer. That is why many divisions of the REWE Group have been certified by undergoing the "career and family" audit by berufundfamilie Service GmbH. Numerous models are used in the REWE Group that allow employees to organise their work individually and flexibly.

Whether employees themselves are suffering from severe illness, if they have lost a loved one, if they have a family member requiring care or are facing other private issues, personal problems can cause considerable stress and have a significant impact on an employee's working life. The REWE Group supports the "LoS!" pilot project to offer employees quick and practical assistance in critical life situations.

Sustainability

Sustainability at the REWE Group is firmly anchored in both the Company's strategy and the corporate organisation. The Chairman of the Management Board, Mr Lionel Souque, is responsible for setting the sustainability strategy of the entire REWE Group.

Four strategic pillars – "Green Products", "Energy, Climate and the Environment", "Employees" and "Social Involvement" – were introduced in 2008 to implement the sustainability strategy. Within these pillars, the Company has identified action areas that cover all of the issues relevant to the REWE Group.

In 2016, a strategic process was implemented by the food retail segment in Germany and at DER Touristik to review the organisation and focus of the REWE Group's commitment to sustainability, and to adapt this where necessary. The aim was to better integrate activities into the sales lines' existing business processes in order to anchor sustainability even more firmly in the Company. As part of the strategy process at DER Touristik, the five following pillars of sustainability were redefined: "Environment and Nature", "Customers and Products", "National Partners", "Employees" and "Society". The four pillars of sustainability for the food retail sector in Germany were confirmed and the action areas were revised.

a) Green Products

The goal of the "Green Products" pillar is to make more sustainable product ranges available and to offer these to consumers at the stores. The "Green Products" pillar's action areas therefore include "Expanding sustainable product ranges" and the demand for "Social standards in the supply chain". "Product quality and safety" and "Biodiversity" is also addressed.

The action areas for the German food retail sector were redefined as part of the sustainability strategy. These action areas are now called "Fairness", "Conservation of resources", "Animal welfare" and "Diet".

The REWE Group consistently follows its objective of increasing the share of sustainable store brands and brand-name products by using the PRO PLANET label for store brand products which, in addition to high quality, also have positive ecological and/or social characteristics, by expanding the organic product line and through its product line of regional products as well as various raw materials-related guidelines.

b) Energy, Climate and the Environment

Three action areas have been identified in the "Energy, Climate and the Environment" pillar: "Energy Efficiency", "Atmospheric Emissions" and "Conservation of Resources".

By 2022, the REWE Group aims to reduce greenhouse gas emissions per square metre of sales area by half compared to 2006 levels. The 2017 carbon footprint report shows that a reduction of 40.3 per cent has already been attained. In addition, electricity consumption per square metre of sales area will be reduced by 7.5 per cent between 2012 and 2022. The coolant-related greenhouse gas emissions per square metre of sales area will be reduced by 35 per cent between 2012 and 2022.

c) Employees

The satisfaction and performance capability of employees are a core element of the REWE Group's strategic human resources management. Accordingly, the following action areas have been identified for the "Employees" pillar: "Fair work conditions", "Human resources development", "Health management and occupational safety", "Life-phase oriented HR policy" and "Diversity and equal opportunity".

The new action areas were defined for the German food retail sector as part of the sustainability strategy as follows: "Values and culture", "Training and professional development", "Health and safety", "Work-life balance" and "Diversity and equal opportunity".

Various initiatives have been implemented in all action areas in order to increase employee satisfaction and dedication. Examples include promoting employees across all levels of the Group's hierarchy as part of our systematic career and succession planning programme, continually developing measures to achieve a work-life balance, promoting integration and inclusion, and stepping up efforts to increase the number of female executives.

d) Social Involvement

As a major corporate group and in its cooperative tradition, the REWE Group feels obligated to be engaged socially and supports numerous national and international social projects. The action areas under the "Social Involvement" pillar are: "Healthy Nutrition and Exercise", "Opportunities for Children and Young People", "Handling Food Responsibly" and "Biodiversity and Environmental Protection". In addition, the following preamble was formulated for the food retail sector in Germany: "REWE and PENNY promote non-profit organisations and projects, as well as organisations dedicated to consumer education".

One commitment of particular significance to the REWE Group is to support local food bank initiatives. For instance, for more than 19 years now, the Company has been one of the primary sponsors of more than 900 "Tafel" food banks across Germany and a member of the Bundesverband Deutsche Tafel e.V.

Sustainability Activities

The core of the REWE Group's sustainability activities is the active integration and sensitisation of all relevant stakeholder groups, consumers in particular. The sales lines oversee customer relations, for instance by providing information in the form of weekly flyers, on its website or as part of Sustainability-related initiatives. Manufacturers of brand-name products are also motivated to make their offerings more sustainable. For instance, the REWE Group is a proud supporter of the "Germany's most sustainable products" competition, where consumers can vote online to determine the winners. The winners receive the German Sustainability Award that was handed out in December 2018 together with the German Sustainability Award Foundation. As a retail and tourism company, the REWE Group's business activities have an impact on biodiversity, which for years the REWE Group has demonstrated a commitment to preserving. For instance, since 2010 we have been planting areas of blossoming plants and installed nesting aids in apple orchards. The benefits of this work were published in 2018. Efforts to monitor the populations of wild bees revealed a significant increase in the number of species of wild bees in the surveyed areas compared to 2010.

These and other activities undertaken by the REWE Group are covered in detail in the REWE Group's annual sustainability report.