Carrefour Sa · EURONEXT:CA
Carrefour Sa — Non-Deal Roadshow (December 2010)
40 slides from Carrefour Sa's roadshow presentation, December 2010
Slide 1: Carrefour Step ahead December 2010
<6 Carrefour Step ahead °( > December 2010
Slide 2: Agenda
Agenda • Carrefour turnaround process • Reinventing hypermarket • Leadership in all markets • Conclusion 2
Slide 3: Carrefour turnaround process
Carrefour turnaround process Reinventing hypermarket Leadership in all markets Conclusion Sous‐titre 3
Slide 4: 7 initiatives to drive growth & margins fueled by a 3 pillar strategy
7 initiatives to drive growth & margins… • Revitalize Carrefour brand • Improve price image • Reinvent the hypermarket Shareholder • Share best practices and innovation value creation • Redefine the Group organization • Revamp our operating model • Improve purchasing practices … fueled by a 3 pillar
Slide 5: Transformation Plan fully on track
Transformation Plan fully on track COMMITMENT 2009 2010 YEAR TO 2012 DATE DELIVERY • Cost reduction € 2.1 billion € 590m € 236m • Purchasing savings € 1 billion € 50m € 168m • Inventories ‐ 7 days ‐ 2.3 days (1) ‐ 0.6 days (1) • Market Share Improvement +30bp (2) +60bp (3) in France (1) At constant
Slide 6: Strengthening a first class brand
Strenghthening a first class brand • Rebranding all of our formats and improving consistency BRAND • Communication alignment for all countries around the “Positive” concept • Optimized communication and marketing efficiency 6
Slide 7: Delivering what the customer wants
Delivering what the customer wants • Improved price positioning • Optimized mix: low prices / promotion / loyalty PRICE IMAGE • Enhanced price communication in stores and in media 7
Slide 8: Cross fertilization
Cross fertilization • Competence centers created BEST PRACTICES • First implementation of best practices IMAGE 8
Slide 9: New tasks
New tasks • Clear role assigned to Corporate HQ • Key Business Units as accountable P&L entities ORGANIZATION • Improved cost efficiency • New tasks for stores’ managers 9
Slide 10: Exchanging the best operating practices
Exchanging the best operating practices • Delivering planed cost reduction • Improved operating model Operating costs EFFICIENCY through end‐to‐end, back‐office cutting plan (€m) 2 100 and inventory management (1) • SG&A pooling 1 500 1) • China, Spain & Poland on ( 1 090 front stage for best practi
Slide 11: A 4 step approach to better buy
A 4 step approach to better buy • A new relationship with manufacturers • More efficient & PURCHASING pooled purchasing, bn1 € target by 2012 • European non‐food category management Global Sourcing 11
Slide 12: Reinventing hypermarket, a key pillar to success
Reinventing hypermarket, a key pillar to success • Reinventing our economic model • Delighting our customers Shareholder • Enhancing our efficiency value creation • Enriching our culture & developing people engagement 12
Slide 13: Reinventing hypermarket
Carrefour turnaround process Reinventing hypermarket Leadership in all markets Conclusion Sous‐titre 13
Slide 14: Three levers to reinvent the hypermarket
Three levers to reinvent the hypermarket DELIGHT EFFICIENCY CULTURE & PEOPLE 14
Slide 15: Delight the customer
DELIGHT Delight the customer • Improve price competitiveness • Offer enhanced services and fast and friendly check‐out experience • Be the reference in Fresh Products • Become the specialist in selected categories • Bring product discovery and innovation 15
Slide 16: Space and consumer needs changes
Space: + 40% Space: # Consumer Space : Space +33% +needs: Space 40% Consumer :‐200 +155%+ 10% Space Space : +Space : : + 3% %: ‐5%needs : Services % #+5% Consumer needs: + 10% # ###Consumer Consumer SKUs Consumer Needs: : ‐ Needs: # Consumer Consumer 13% Nursury Needs: Needs: +20%+15% +150% Needs: +
Slide 17: Efficiency: front & back end productivity
EFFICIENCY Front & Back end productivity Less out of stock • Check‐outs in France & Spain (in 2010, in %) • New check‐outs performances • Self service & Scan Lib 10.1 • The blue line 7.8 • End to end supply chain W28 W33 • Dry grocery cross‐docking • Centralized ordering • New forecasting tool and t
Slide 18: Culture & people
DELIGHT CULTURE & PEOPLE Develop talents to implement strategy • People engagement • Leading with our values • Investment in training • Focus on customer care and friendliness • Dedicated roll‐out teams • Real customer culture • Incentives • Execution to satisfy customers 18
Slide 19: Differentiate: leveraging best practices
Leveraging best practices DIFFERENTIATE to build the best planet store El Pinar Alcobendas Ecully Vénissieux Mt St Jean • One new store in Spain in November 19
Slide 20: Scope & roll out of our planet
Scope & roll out of our planet 100 % of our 500 hypermarkets in: France – Spain – Belgium – Italy- Greece 2009 sales ex-VAT ex petrol (€ bn) 29.9 245 255 Stores converted Stores remodeled (70% of sales) (30% of sales) Transformation completed by early 2013 20
Slide 21: Results…
Results… Sales evolution by pole, mid September 200 275 180 173 160 140 131 132 128 126 124 120 118 100 80 Beauty Bio Market Frozen Baby Home Electronics Clothing (France) (France) (France) (France) (France) (Belgium) (Spain) (Spain) 21 Year before Planet 1st weeks
Slide 22: …remain encouraging after several months
…remain encouraging after several months Like for like growth, through mid November +15.5% +6.8% +7.7% +6.3% +6.1% +3.2% +2.9% Sales Traffic PFT PGC Bazar EPCS Textile TOTAL 22
Slide 23: Roll out plan over 2010-2013
Roll out plan over 2010‐2013 Capex per hypermarket Planned capex ramp‐up 2010 – 2013 in €m (in €m) 145 c.€1,500m ~ €1.9m 680 30% ~ €4.2m 635 70% 40 2010 2011 2012 2013 Total 23
Slide 24: To convert/remodel all 500 hypermarkets in the G5
To convert/remodel all 500 hypermarkets in the G5 Scope of remodeling 100 = 500 stores 51% 51% 255 stores 500 stores 500 stores 49% 49% 245 stores Total 24
Slide 25: Key financials of hypermarket reinvention
Key financials of hypermarket reinvention TARGET TIMING Number of hypermarkets 500 2010 – early 2013 Capex € 1,500m 2010‐2013 Incremental LFL sales ex. inflation +18% 2010‐2015 Incremental LFL sales CAGR ~ +3.2% 2010‐2013 ~ +3.4% 2010‐2015 Incremental ACDA (€m) ~650 2015 Incremental FCF (€m) ~ 550 2
Slide 26: Leadership in all markets
Carrefour turnaround process Reinventing hypermarket Leadership in all markets Conclusion Sous‐titre 26
Slide 27: Being a leader in emerging countries
Being a leader in emerging countries • Brazil • continue Atacadao expansion, accelerate discount roll‐out • new management, external audit & specific action plan • Argentina and Colombia • continue expansion, Atacadao roll‐out • China • 33 hypermarkets, 110 HD stores in 2010 • acquisition of 51% of
Slide 28: Brazil, where we are
Brazil, where we are • Laying Carrefour’s foundations on a sound basis • Carrefour has mandated an external audit in Brazil • The one‐off charges that will be recorded for 2010 will reach €550 million • These one‐off charges are composed of depreciation and inventory adjustments, provisions for labo
Slide 29: Brazil: Accounting adjustments
Brazil: Accounting adjustments • Final estimate is now 550 M € Detail Detail of of accounting accounting adjustments adjustments in in late late November November (( M M €) €) Accounting adjustments 30% November 2010 50 550 75 Other adjustments 35 280 Assets depreciation Uncollectible supplier rebat
Slide 30: Conclusion
Carrefour turnaround process Reinventing hypermarket Leadership in all markets Conclusion Sous‐titre 30
Slide 31: Conclusion
Conclusion • Continuing focus on the flawless execution of our 3‐year Transformation Plan • Continued expansion in priority markets • Disciplined financial strategy to improve shareholder returns • On track to achieve our 2013‐2015 objectives • Roll‐out of the reinvented hypermarket 31
Slide 32: Shareholder value creation at the heart of Carrefour strategy
Shareholder value creation at the heart of carrefour strategy TRANSFORMATION PLAN Customer/consumer Operations To drive Enhance client culture Improve operating To drive growth & innovation effectiveness & efficiency profit • Share best practices • Revitalize the Carrefour and innovation brand • Red
Slide 33: Appendix
Appendix Sous‐titre 33
Slide 34: Carrefour Q3 2010 sales
Sales update Carrefour Q3 2010 sales 34
Slide 35: Solid growth in Q3 driven by emerging markets
Solid growth in Q3 driven by emerging markets • Solid sales growth in Q3 • Total sales inc. petrol, VAT and currencies of €25.6bn, up 6.7% • Increase in sales ex petrol at constant exchange rates, up 1.9% • Sales ex petrol LFL stable at +0.1% • +70bp market share growth in France for Carrefour banne
Slide 36: Q3 2010 sales up 1.9% ex-petrol at constant exchange rates
Q3 2010 sales up 1.9% ex‐petrol at constant exchange rates Q3 sales inc. VAT at constant Q3 sales inc. VAT at current exchange rates (€m) exchange rates (€m) Excluding 2009 22,077 2009 22,077 petrol +1.9% +6.2% 2010 22,496* 2010 23,451 2009 24,009 2009 24,009 Including petrol +2.6% 2010 24,633* 2010
Slide 37: Resilience in France, improving trends in Europe, accelerating growth in Latin America and Asia
Resilience in France, improving trends in Europe, accelerating growth in Latin America and Asia Change in LFL sales excluding petrol (%) 0.2 Q1 2010 France (1) 0.9 Q2 2010 0.2 Q3 2010 (2.4) Europe (1) (6.5) (3.8) 8.9 Latin America (1) 5.5 7.6 1.6 Asia (1) 1.7 3.4 (2.3) Hard Discount (2.5) (0.5) 37 (
Slide 38: Mid year 2010 flat net financial debt
Mid year 2010 flat net financial debt (€m) 12 months to June 2010 Opening net debt (11,322) Cash flow 3,344 Change in WCR and others (239) Capex (1,989) Free Cash Flow 1 116 Acquisitions (127) Disposals 240 Others (210) Cash Flow after investments and disposals 1,019 Dividends & Treasury shares (1)
Slide 39: Mid year 2010 solid financial structure
Mid year 2010 solid financial structure H1 2009 H1 2010 Net debt at close (€m) 11,322 11,264 ACDA/ Financial costs (trailing 12 months) 8.1x 7.4x Net debt / ACDA (trailing 12 months) 2.4x 2.4x Gross cash flow / net debt (trailing 12 months) 31.5% 29.7% Gearing 110% 100% 39
Slide 40: Mid year 2010 sound liquidity position
Mid year 2010 sound liquidity position • Successful completion of a new €1.75bn 5‐year syndicated credit facility • High back‐up liquidity with €3.25bn syndicated facility maturing in 2012 and 2015 • Undrawn • No financial covenants • Successful €1.0bn bond issue and structured financing for €750m,