If the recovery from the pandemic wasn''t enough to think about... With a presence in Russia, Ukraine and Turkey, things are complicated at Metro but when you overlay cost increases that are in absolute terms, multiple times bigger than the profit pool, plus reopening back and forth, it''s safe to say there''s a lot going on. All are extremely difficult to model with a high degree of confidence so when the shares are expensive and free cash flow minimal in our view, Metro still isn''t a stock for us. We remain Underperform, holding our TP at EUR5.5. A provision release takes some of the shine off the pre-released beat Having pre-announced a Q2 beat (calendar Q1), there shouldn''t have been much of note in Metro''s results. However, in the detail we find that a significant part of the beat was in the fairly opaque ''others'' line and included a ''low double-digit million euro'' provision release (Metro only partially adjusts earnings). We believe it takes some of the shine off what seemed a solid quarter, all things considered. Cost inflation at a rate that is multiple times profit From EUR28bn of revenue, we estimate Metro will make about EUR100m of net income this year, most of which will be gains on property sales. Not everything between revenue and net income will be inflationary, but when cost increases could be near EUR2bn, can we be sure inflation is passed through cleanly? Our margin assumptions and guidance say yes, in the main. But our confidence is limited given Metro derives most of its EBIT selling into relatively discretionary expenditure at hotels, restaurants, and caterers in Western Europe and Russia. The pandemic recovery could have flattered the new strategy, but it seems secondary now The group''s recently announced strategy update seems sensible on paper (at its core, follow the professional consumer with more food service delivery) but though there''s nuance, we believe it''s pretty similar to what''s gone before. All else equal,...