Accelerating sales growth in Q3: +2.1% (like-for-like) New advances in the Carrefour 2022 transformation plan

Transcription

1 Accelerating sales grwth in Q3: +2.1% (like-fr-like) New advances in the Carrefur 2022 transfrmatin plan Acceleratin in sales grwth t +2.1% like-fr-like in the third quarter (vs +0.7% in H1), ntably in France (+1.6%) and in Brazil (+5.1%), reflecting: Better mmentum in France, driven by an imprved cmmercial perfrmance in all frmats and better market trends Strngly accelerating grwth in Brazil, supprted by an imprved cmmercial perfrmance and a return t slight fd inflatin; ttal grwth was als driven by the rapid expansin f Atacadã Fd e-cmmerce sales grwing abve 30% New advances in the rll-ut f the «Carrefur 2022» plan: Rll-ut f the mnichannel ffer: Opening f new Drives and pedestrian Drives; extensin f hme delivery ffer; cntinued rll-ut f single entry-pint merchant websites Acceleratin f the revamp f the in-stre cmmercial prpsitin: Cntinued cmmercial investments; acceleratin f the plan t reduce selling area in hypermarkets; launch f Darty shp-inshp tests in France Sustained pace f expansin in grwth frmats: Mre than 300 stre penings in cnvenience and 14 Atacadã penings in Brazil ver the past nine mnths Implementatin f the purchasing alliances with Système U and Tesc Prgress in the transfrmatin f rganizatins: Exit f the ex-dia stres frm the Grup s scpe at end-july; transfer f 5 hypermarkets t lease management cntracts in France in September; clsing f the vluntary departure plan cvering 2,400 psitins at headquarters in France Further prductivity and cst-reductin initiatives: Significant prgress in selectivity and prductivity f investments, allwing the Grup t carry ut its investment prgram while cntaining capex, estimated at between 1.7 billin and 1.8 billin in 2018 Cncrete actins t prmte the fd transitin fr all: Success f the Act fr Fd internatinal campaign; acquisitin f the SBi chain, specialized in rganic prducts The cntinuing revamp f the mnichannel cmmercial prpsitin and financial discipline, in line with the Carrefur 2022 transfrmatin plan, strengthen the Grup s grwth ptential and Free Cash Flw generatin. Sales inc. VAT ( m) Q3 LFL Ttal variatin At current At cnstant Grup 21, % -2.8% +2.7% France 10, % +2.1% +2.1% Eurpe 5, % -1.6% -1.3% Latin America 3, % -15.8% +11.7% Asia 1, % -3.4% -2.6% PAGE 1

2 Carrefur 2022 transfrmatin plan: New advances that cnfirm gd executin mmentum During the third quarter, the Grup made further significant advances in the "Carrefur 2022" plan, cnfirming the rapid implementatin f its ambitius and far-reaching transfrmatin plan. Many prjects are cnducted in parallel, ntably: Cntinued rapid deplyment f the mnichannel ffer: Mre than 30% grwth in fd e-cmmerce sales The grup is cntinuing its digital strategy and deplying its mni-channel ffering. Fd e-cmmerce sales grew by mre than 30% in the third quarter. The deplyment f single entry-pint websites in each cuntry cntinues. After Brazil, Pland and Rmania in the first half and Italy in Q3, all cuntries will have a single merchant website by the end f the year. The develpment f nline rder preparatin tls cntinues. They aim t ptimize the rate f service, speed and cst f rder preparatin. In France, rder preparatin platfrms (PPC) pened in 2017 and in H are gaining mmentum and shwing encuraging results. The Grup is als deplying hybrid slutins, cmbining in-stre picking with a dedicated cmpact preparatin platfrm in the stre reserves. Pick-up and delivery services are grwing: 55 new Drives in France in Q3 (785 at the end f September, f which 16 pedestrian Drives); grwing cverage f standard and express hme delivery services; launch f a new Drive and deplyment f Click & Cllect in Brazil. In China, e-cmmerce sales are grwing strngly, thanks t the success f the "O2O" ffering, which has been extended t new partners. Revamp f the in-stre cmmercial prpsitin Cmmercial investments aiming at strengthening the Grup's price cmpetitiveness cntinued in the third quarter. The verhaul and dwnsizing f assrtments is als prgressing with: The develpment f the number f private-label and Carrefur Quality Line SKUs Massificatin f nn-fd ranges amng Grup cuntries and simplificatin f assrtments t cncentrate n high-rtatin prducts Expanding the range f rganic prducts in several cuntries, cmbined with the rll-ut f dedicated in-stre areas; in France, the new rganic cncept is already rlled ut in 85% f the hypermarket stre netwrk Shp-in-shps f hme appliances will be tested with Darty in France and Gme in China in the furth quarter. The adaptatin f the selling area and typlgy f stres t the catchment area is accelerating, with reductins in hypermarket sales area and cnversins f hypermarkets int Cash & Carry stres: In France: Abut 10,000 sqm in hypermarkets have already been reallcated, ntably t utlets r hybrid rder preparatin platfrms fr nline rders. Anther 40,000 sqm are the bject f advanced studies. This reductin in selling area chiefly cncerns the nn-fd area In Belgium: Five hypermarkets will be cnverted int supermarkets in Nvember In Italy: Reductin f 45% f the sales area f ne hypermarket and clsure f anther unit in Q3 In Argentina: Cnversin f 12 hypermarkets int Maxi stres at end-octber In Brazil: A first hypermarket has been cnverted t the Atacadã banner during the quarter PAGE 2

3 Cntinued expansin in grwth frmats Openings cntinued in grwth frmats with cnclusive results: Cash & Carry: Fur Atacadã penings in the quarter and cnfirmatin f the target f 20 new stres in 2018; cnfirmatin f target f 16 new Maxi stres in Argentina, f which 12 cnversins at end- Octber Cnvenience: Mre than 300 new stres have been pened since the start f the year, f which 126 in the quarter Implementatin f purchasing alliances with Système U and Tesc At the end f the review perid by the cmpetitin authrities, Carrefur and Système U began the peratinal implementatin f the "Envergure" purchasing rganizatin in September, while the partnership with Tesc fr internatinal purchasing was implemented in early Octber. The gains related t these tw agreements are expected frm 2019 nwards. Cntinued rganizatinal transfrmatin Organizatinal transfrmatin initiatives cntinued in the third quarter, ntably with the exit frm the Grup's scpe f all ex-dia stres at the end f July, the mve t lease management cntracts f five hypermarkets in France in September and the clsing in September f the vluntary departure plan at headquarters in France, cvering 2,400 psitins. In Argentina, the scial plan was cmpleted, with the clsure during the summer f ne hypermarket and six supermarkets and the departure f 750 emplyees within the framewrk f the vluntary departure plan. In Belgium, the effective departure f 1,000 emplyees n a vluntary basis will take place between Nvember 2018 and June Cntinuing cst reductin initiatives and rapid prgress in investment ptimizatin Initiatives t reduce csts and ptimize inventries cntinued in the third quarter. The prject t reinfrce selectivity and prductivity f investments has exceeded initial bjectives. This allws Carrefur t carry ut its investment prgram while cntaining capex, estimated at between 1.7bn and 1.8bn in Actins in line with Carrefur s ambitin: Be the leader in the fd transitin fr all A Fd Orientatin Cmmittee was created in September t advise the grup in its ambitin t be the leader in the fd transitin fr all. Cmpsed f experts cmmitted t all issues f the fd transitin, its missin is t supprt Carrefur in transfrming its mdel, t participate in cncrete prjects related t the fd transitin and t make practive prpsals. It will meet n Octber 19th fr a first wrking sessin. Launched in September, the internatinal Act fr Fd campaign has met with great success. Rlled ut in every cuntry, it presents Carrefur's cmmitments and cncrete actins in favr f fd quality. The Grup cmpleted the acquisitin f the SBi chain, which is the starting pint fr the deplyment f a netwrk f stres dedicated t rganic prducts. At the same time, Greenweez cmpleted the acquisitin f Planeta Huert t extend t Spain and Prtugal the grup's presence in nline distributin f rganic prducts. In France, 140 partnership cntracts were signed with farmers t supprt their cnversin t rganic farming. PAGE 3

4 Mrever, the deplyment f Blckchain technlgy cntinues with its intrductin t 12 Carrefur Quality Lines by the end f the year, in France and internatinally (Belgium, Italy and China). On Octber 8, the grup als annunced that it was ne f the funding members f the IBM Fd Trust platfrm. This platfrm is expected t accelerate the deplyment f Blckchain technlgy t new prduct lines and build partnerships with internatinal brands. First dispsals f nn-strategic real estate assets As part f its bjective f selling 500m f nn-strategic real estate assets, the grup has already cncluded several transactins fr a ttal f nearly 60m. The target f dispsing f 100m f nn-strategic real estate assets in 2018 is cnfirmed. The actual dispsals culd take place at the beginning f 2019, taking int accunt prcedural deadlines. THIRD-QUARTER 2018 SALES INC. VAT: Acceleratin vs the first half Carrefur's sales in the third quarter f 2018 amunted t 21,087m, up + 2.7% at cnstant. After taking int accunt an unfavrable currency effect f -5.5%, mainly due t the depreciatin f the Brazilian Real and the Argentine Pes, sales were dwn -2.8% at current. On a like-fr-like basis, sales rse + 2.1% in the quarter, an acceleratin cmpared t the first half like-fr-like grwth f + 0.7%. Ttal grwth at cnstant (+2.7%) als includes a calendar effect (-1.0%), the cntributin f petrl sales (+1.3%), as well as the effect f penings (+1.2%) and clsures (-0.7%). France psted +1.6% grwth in LFL sales, a sharp imprvement ver H1 (H1: -0.1% LFL). All frmats cntributed t this trend: hypermarkets (stable LFL), supermarkets (+2.6%) and ther frmats (+4.7%). Over the third quarter, the grup reduced its LFL perfrmance gap with the market and als benefited frm better market trends. Fd in particular cntributed t this trend, while nn-fd markets remained negative. Eurpe (-1.5% LFL) psted a similar trend t the first half: In Spain (-2.7% LFL), the Grup was penalized by an envirnment that remained very cmpetitive in the third quarter amid difficult nn-fd markets Italy (-4.4% LFL) shwed a slight dwnturn cmpared t the first half (H1: -3.6% LFL), in slwing markets that were in decline in the third quarter. A new cuntry CEO was appinted in early Octber. His missin is t accelerate the transfrmatin f Carrefur Italy Belgium (+0.5% LFL) significantly imprved its perfrmance cmpared t the first half (H1: -2.0% LFL), which had been impacted by peratinal disruptins Grwth als cntinued in Rmania (+4.0% LFL). In Pland (+2.7% LFL), gd cmmercial dynamics limited the impact f the Sunday ban Latin America (+9.7% LFL) significantly imprved its mmentum cmpared t the first half (H1: +6.4% LFL), bth in Brazil and in Argentina. In Brazil, Carrefur psted strng grwth f +5.1% n a like-fr-like basis. Mmentum imprved significantly cmpared t the first half (H1: +1.9% LFL). After the first-half fd deflatin, the market saw a return t slight inflatin starting in June. Driven by an increase in vlumes, Atacadã psted strng sales mmentum (+6.2% LFL), cnfirming nce again the mdel s attractiveness. The cntributin f expansin accelerated (+6.0% in Q3) thanks t 14 new penings since the start f the year (including ne hypermarket cnversin) Carrefur Retail als accelerated t +2.5 % LFL grwth vs +0.5% in H1, supprted by e-cmmerce Slid mmentum cntinued in financial services, ntably driven by the grwth f the Atacadã card (1.4 millin cardhlders at end-september) PAGE 4

5 In Argentina (+28.6% LFL), amid a cmplex macrecnmic cntext, the cntinuatin f Carrefur's cmmercial initiatives, particularly in favr f purchasing pwer, is reflected in an acceleratin f grwth, driven by a significant increase in vlumes. Mmentum is als imprving in Asia (-2.8% LFL). In China (-4.8% LFL vs -6.4% in H1), Carrefur s perfrmance is driven by the rapid develpment f nline activity, which benefits frm the develpment f new partnerships. In Taiwan, mmentum remains steady at + 1.4% LFL. A SOLID FINANCIAL STRUCTURE Carrefur benefits frm a slid balance sheet that was strengthened since the start f It is rated BBB+ with a negative utlk by Standard & Pr's and Baa1 with a stable utlk by Mdy's. In the first half, the Grup successfully carried ut tw bnd issues fr an amunt exceeding 900m, cnfirming the quality f the Carrefur Grup's signature. In additin, the Grup has undrawn credit facilities frm its banking partners fr 3.9bn maturing in 2022 and FINANCIAL OUTLOOK In the third quarter f 2018, the grup psted accelerating sales mmentum, reflecting a gradual imprvement in its business mdel. At the same time, new milestnes were achieved in the implementatin f the Carrefur 2022 plan, cnfirming the slid transfrmatin dynamic at wrk within the grup. These elements reinfrce management's cnfidence in the relevance f the Carrefur 2022 plan, which supprts the Grup's ambitin: T be the leader in the fd transitin fr all. In the cming quarters, Carrefur will cntinue t implement the transfrmatin plan at a sustained pace, including new advances in its mnichannel ffer (ntably Drives, pedestrian Drives and finalizing the implementatin f single e-cmmerce websites), the acceleratin f the revamp f the in-stre cmmercial prpsitin and reinfrced peratinal efficiency (csts, investments and inventries). The grup cnfirms all its targets, ntably: A cst-reductin plan f 2bn n an annual basis by 2020 The dispsal f nn-strategic real estate assets fr 500m by bn f fd e-cmmerce sales in bn in sales f rganic prducts in 2022 Thanks t prgress achieved in terms f selectivity and prductivity f its investments, the grup is able t carry ut its investment prgram while cntaining Capex, estimated at between 1.7bn and 1.8bn in 2018 CONTACTS Investr Relatins Anne-Sphie Lanaute and Antine Parisn Tel: +33 (0) Sharehlder Relatins Tel: (tll-free in France) Grup Cmmunicatin Tel: +33 (0) PAGE 5

6 APPENDIX Applicatin f the IAS 29 nrm, related t the hyperinflatin situatin in Argentina The impacts f the IAS 29 accunting nrm relative t "Financial Reprting in Hyperinflatinary Ecnmies" are being quantified and analyzed, pending the clarificatin f the parameters that will be retained lcally. As such, Q3 sales are nt restated. THIRD-QUARTER 2018 SALES INC. VAT Sales inc. VAT ( m) Variatin ex petrl ex calendar LFL Organic Ttal variatin inc. petrl at cnstant at current France 10, % 0.7% 2.1% 2.1% Hypermarkets 5, % -0.6% 0.3% 0.3% Supermarkets 3, % 1.0% 3.2% 3.2% Cnvenience/ther frmats 1, % 4.5% 6.1% 6.1% Other cuntries 10, % 3.5% 3.2% -7.0% Other Eurpean cuntries 5, % -1.3% -1.3% -1.6% Spain 2, % -2.3% -1.7% -1.7% Italy 1, % -5.4% -5.7% -5.7% Belgium 1, % -0.2% -1.3% -1.3% Pland % 4.3% 3.2% 2.1% Rmania % 6.8% 7.6% 6.1% Latin Amerca 3, % 12.7% 11.7% -15.8% Brazil 3, % 9.2% 8.1% -12.5% Argentina % 26.7% 26.8% -29.7% Asia 1, % -3.5% -2.6% -3.4% China 1, % -7.0% -6.6% -7.6% Taiwan % 4.0% 6.0% 5.7% Grup ttal 21, % 2.3% 2.7% -2.8% Variatins ex calendar and ex petrl are presented in relatin t the restated 2017 sales, i.e. excluding sales f ex-dia stres that exited the Grup s scpe in the third quarter. PAGE 6

7 NINE-MONTH 2018 SALES INC. VAT Sales inc. VAT ( m) Variatin ex petrl ex calendar LFL Organic Ttal variatin inc. petrl at cnstant at current France 29, % -0.5% 1.3% 1.3% Hypermarkets 15, % -1.6% 0.0% 0.0% Supermarkets 9, % -0.3% 1.7% 1.7% Cnvenience/ther frmats 4, % 3.1% 5.1% 5.1% Other cuntries 33, % 2.9% 3.2% -6.5% Other Eurpean cuntries 17, % -0.9% 0.0% -0.2% Spain 6, % -1.5% 0.8% 0.8% Italy 3, % -4.1% -3.9% -3.9% Belgium 3, % -1.6% -1.9% -1.9% Pland 1, % 3.4% 3.0% 3.3% Rmania 1, % 7.7% 8.3% 6.0% Latin America 11, % 10.5% 10.1% -14.2% Brazil 9, % 6.9% 6.6% -12.3% Argentina 1, % 25.4% 25.4% -22.2% Asia 4, % -4.2% -4.0% -7.4% China 3, % -7.5% -7.6% -10.3% Taiwan 1, % 3.8% 4.5% -0.4% Grup ttal 62, % 1.5% 2.4% -3.0% Variatins ex calendar and ex petrl are presented in relatin t the restated 2017 sales, i.e. excluding sales f ex-dia stres that exited the Grup s scpe in the third quarter. PAGE 7

8 EXPANSION UNDER BANNERS THIRD QUARTER 2018 Thusands f sq. m Dec 31, 2017 June 30, 2018 Openings/ Stre enlargements Acquisitins Clsures/ Stre reductins Ttal Q change Sept. 30, 2018 France 5,764 5, ,557 Eurpe (ex France) 5,599 5, ,571 Latin America 2,408 2, ,471 Asia 2,736 2, ,661 Others 1 1,111 1, ,143 Grup 17,618 17, ,403 STORE NETWORK UNDER BANNERS THIRD QUARTER 2018 N f stres Dec. 31, 2017 June 30, 2018 Openings Acquisitins Clsures/ Dispsals Transfers Ttal Q change Sept. 30, 2018 Hypermarkets 1,376 1, ,373 France Eurpe (ex France) Latin America Asia Others Supermarkets 3,243 3, ,261 France 1,060 1, ,062 Eurpe (ex France) 1,756 1, ,743 Latin America Asia Others Cnvenience stres 7,327 6, ,976 France 4,267 3, ,937 Eurpe (ex France) 2,446 2, ,433 Latin America Asia Others Cash & carry France Eurpe (ex France) Latin America Asia Others Grup 12,300 11, ,979 France 5,718 5, ,389 Eurpe (ex France) 4,704 4, ,675 Latin America 1,014 1, ,022 Asia Others DEFINITIONS 1 Africa, Middle East and Dminican Republic. PAGE 8

9 LFL sales grwth: Sales generated by stres pened fr at least twelve mnths, excluding temprary stre clsures, at cnstant, excluding petrl and calendar effects. Organic sales grwth Like fr like sales grwth plus net penings ver the past twelve mnths, including temprary stre clsures, at cnstant. PAGE 9