Slide 1: 2018 Results
2018 Results February 28th, 2019
Slide 2: Carrefour 2022
01 Carrefour 2022 Alexandre BOMPARD Chairman & CEO
Slide 3: Powerful transformation dynamic launched in 2018
Powerful transformation dynamic launched in 2018 Concrete actions to become the leader in the food SATISFYING RESULTS transition for all Sales Construction of a growth model +1.4% LFL • Rapid revamp of the in-store commercial proposition supported by partnerships Recurring Operating Income • Speedy
Slide 4: Upwards revision of several targets
Upwards revision of several targets New ambition in the construction of a growth model FINANCIAL OUTLOOK • Simplification of assortments: Target raised to a reduction of -15% (vs -10%) €2.8bn cost by 2020 reduction plan • New objective of 400,000 sq.m sales area reduction worldwide by 2022 on an ann
Slide 5: Leader in the food transition for all
Leader in the food transition for all ACCELERATING GROWTH IN SALES OF ORGANIC PRODUCTS: €1.8BN IN 2018 DEVELOPMENT OF THE ORGANIC OFFER • Broadening of the assortment of organic products FOOD QUALITY • Continued deployment of blockchain technology to Carrefour Quality Line (FQC) PRODUCT LINES • More
Slide 6: Construction of a growth model (1/2)
Construction of a growth model (1/2) MAJOR REVAMP OF IN-STORE COMMERCIAL PROPOSITION • Reduction of assortments: c.-6% globally in 2018 • New Financial services Objective raised to a -15% reduction of assortments by 2020 (vs -10%) COMMERCIAL INVESTMENTS TO REINFORCE COMPETITIVENESS • Price investmen
Slide 7: Construction of a growth model (2/2)
Construction of a growth model (2/2) « RETAILTECH », IMPLEMENTATION OF NEW TECHNOLOGIES • Key digital partnerships: Google, Tencent, Sapient • New technologies: Scan & Go rolled-out, ongoing deployment of self check-out Opening of Carrefour Digital Hub in March 2019 CONTINUED ROLL-OUT OF THE OMNICHA
Slide 8: Culture of operational efficiency and financial discipline
Culture of operational efficiency and financial discipline €1,050MN COST SAVINGS ACHIEVED IN 2018 ORGANIZATIONS HAVE BECOME SIMPLER AND MORE AGILE • Voluntary departure plans closed in France, Argentina and Belgium • Full exit of ex-Dia stores completed MORE INDUSTRIALIZED AND EFFICIENT APPROACH • S
Slide 9: Financial analysis
02 Financial analysis Matthieu MALIGE CFO
Slide 10: 2018 key figures
2018 key figures Sales Recurring operating income €1,905m (post IAS 29) +1.4% LFL €1,938m (pre IAS 29) +€93m i.e. +4.6%(1) Adjusted net income, Group share Free cash flow ex. exceptional items growing to €802m growing +15% to €1,088m (vs €773m reported in 2017) (vs €950m reported in 2017) 2018 RESUL
Slide 11: FY 2018 Sales: A new year of LFL growth
FY 2018 Sales: A new year of LFL growth Acceleration in H2 at +2.0% LFL (vs +0.7% in H1) CHANGE IN FY 2018 GROSS SALES – (in % and €m) +1.4% -0.9% +0.8% +2.5% -5.3% +1.4% -0.1% -2.8% (248) +0.3% -1.6% +8.9% -3.7% France Europe LatAm Asia €89.8 €87.6 bn bn €85.2 €84.9 bn bn FY 2017* LFL ex Calendar E
Slide 12: Negative FX impact, mainly due to BRL evolution
Negative FX impact, mainly due to BRL evolution 2018 CURRENCY Evolution Brazilian Real -16.2% Argentine Peso -40.4% -€161m negative FX impact(1) Polish Zloty -0.1% on 2018 ROI Romanian Leu -1.8% Chinese Yuan -2.3% Taiwanese Dollar -3.6% 2018 RESULTS – 28/02/2019 (1) FX evolution pre-IAS 29 vs. 2017
Slide 13: 2018 ROI growing +€93m (at constant exchange rates)
2018 ROI growing +€93m (at constant exchange rates) Evolution 2017 2018 2018 reported pre-IAS 29 at constant FX post-IAS 29 (€m / %) Net sales (in €bn) 78.9 76.2 +1.4% LFL 76.0 Gross margin from recurring operations 23.1% 22.5% 22.5% as a % of net sales Total distribution costs (€mn) (1) (14,641) (1
Slide 14: Successful implementation of cost-reduction program
Successful implementation of cost-reduction program: €1,050mn achieved in 2018 COST-SAVINGS OBJECTIVE RAISED TO €2.8BN BY 2020 COGS Distribution costs Cost-savings plan €2bn €2.8bn First gains recorded from joint Reduction in 2018 (at 18.0% vs purchasing within Carrefour 18.6%) Further gains from
Slide 15: Restructuring initiatives well underway
Restructuring initiatives well underway Key initiatives Status Achievements Savings recognition Voluntary departure plan Voluntary departure plan (c.2,400 HQ France FTE) completed ahead of schedule in Started in H2 2018 Sept. 2018 273 ex-Dia stores to be removed All stores sold or closed at end Ex-D
Slide 16: France: ROI drop in 2018 as anticipated
France ROI drop in 2018 as anticipated 2017 (in €m) 2018 % change reported Net sales 35,835 35,615 -0.6% LFL +0.3% ex petrol, ex calendar ROI 692 466 -32.6% ROI margin 1.9% 1.3% -62bp Broadly stable sales year-on-year in a persistently competitive market ROI drop in 2018 as anticipated : • Sales gro
Slide 17: Other European countries
Other European countries Stable recurring operating income margin % change % change (in €m) 2017 2018 at current at constant FX FX Net sales 21,112 21,076 -0.2% +0.0% LFL -1.6% ex petrol, ex calendar ROI 677 664 -1.9% -1.7% ROI margin 3.2% 3.2% -5bp -5bp Tough market environment Overall stable sales
Slide 18: Latin America
Latin America Strong commercial momentum and improved profitability % change % change 2018 2018 (in €m) 2017 at current at constant Pre-IAS 29 Post-IAS 29 FX FX Net sales 16,042 14,007 -12.7% +11.0% 13,809 LFL +8.9% ex petrol, ex calendar ROI 715 800 +11.9% +33.8% 767 ROI margin 4.5% 5.7% +125bp +92
Slide 19: Asia
Asia Significant improvement in recurring operating income % change % change (in €m) 2017 2018 at current at constant FX FX Net sales 5,907 5,501 -6.9% -4.1% LFL -3.7% ex petrol, ex calendar ROI 4 45 +€41mn +€43mn ROI margin 0.1% 0.8% +74bp +75bp Solid growth of e-commerce and adaptation of commerci
Slide 20: Adjusted net income, Group share, from continuing operations of €802mn
Adjusted net income, Group share, from continuing operations of €802mn 2017 2018 (in €m) reported Recurring operating income 2,006 1,905 Net income from associates and JVs 4 14 Non-recurring income and expenses, net (1,310) (1,161) Mainly related to Carrefour 2022 transformation initiatives EBIT 700
Slide 21: A stable full-year normative tax rate at 31.4%
A stable full-year normative tax rate at 31.4% 2017 2018 (in €m) reported Income before taxes 255 496 Non-recurring income and expenses, net (1,310) (1,161) Income before taxes (excl. non-recurring income and expenses) 1,565 1,657 The 30 bp decrease mainly reflects a Full-year normative tax rate (1)
Slide 22: Non-recurring income and expenses reflecting transformation initiatives
Non-recurring income and expenses reflecting transformation initiatives 2017 2018 (in €m) reported Related to Carrefour 2022 transformation Restructuring costs (279) (727) initiatives, notably in France, Belgium and Argentina Impairment and asset write-offs (1,039) (202) Results from asset disposals
Slide 23: Free Cash Flow generation at €1,088m (excl. exceptional items)
Free Cash Flow generation at €1,088m (excl. exceptional items) 2017 2018 (in €m) reported EBITDA 3,636 3,469 Income tax paid (588) (513) Cash impact of non-recurring items (320) (452) Mainly related to cash-out of Carrefour 2022 transformation initiatives Others (incl. financial result) (76) (256) G
Slide 24: Reduced inventories and well-controlled capex
Reduced inventories and well-controlled capex Better inventory management in most geographies Inventory (in €m) • Inclusion of cash objectives in bonus schemes 6,690 -€255m • Supply chain: Optimization of flows 6,435 • Assortment rationalization • Strong decrease in non-food -8%(300) 6,135 • Decreas
Slide 25: Globally stable net debt
Globally stable net debt €165m improvement inc. a €452m cash out related to exceptional item (mainly restructuring) 636 (206) (233) (3) (235) €3,743m €3,785m €3,578m Dec 31, 2017 FCF Dividends Cost of net Others Dec 31, 2018 Forex Dec 31, 2018 Net Debt financial debt Net Debt at Net Debt at constant
Slide 26: Successful refinancing operations in 2018
Successful refinancing operations in 2018 Debt redemption schedule (in €m) Successful operations in 2018: • March 2018: 4.00% 3.88% Issuance of $500 million non-dilutive cash-settled convertible bond, swapped 1.75% 1.75% 1.75% in euros with a maturity of 6 years 1.25% and a zero coupon 0.49% 0.51% •
Slide 27: Dividend of €0.46 per share
Dividend of €0.46 per share Dividend of €0.46 (stable vs 2017) Representing a Payout of c.45% Payment in shares total amount of c.€350m of adjusted net income, Group or in cash proposed to the share General shareholders’ meeting on June 14, 2019 2018 RESULTS – 28/02/2019 27
Slide 28: Upwards revision of several targets
Upwards revision of several targets New ambition in the construction of a growth model FINANCIAL OUTLOOK • Simplification of assortments: Target raised to a reduction of -15% (vs -10%) €2.8bn cost by 2020 reduction plan • New objective of 400,000 sq.m sales area reduction worldwide by 2022 on an ann
Slide 29: Appendix
& Appendix
Slide 30: Net sales and recurring operating income per region
Net sales and recurring operating income per region NET SALES RECURRING OPERATING INCOME Variation Variation Variation Variation 2017 2018 2017 2018 at constant at current at constant at current reported pre-IAS29 reported pre-IAS29 (in €m) exch. rates exch. rates exch. rates exch. rates France 35,8
Slide 31: Net sales and recurring operating income per region
Net sales and recurring operating income per region NET SALES RECURRING OPERATING INCOME Variation Variation Variation Variation 2017 2018 2017 2018 at constant at current at constant at current reported post-IAS29 reported post-IAS29 (in €m) exch. rates exch. rates exch. rates exch. rates France 35
Slide 32: IAS 29 impact on P&L
IAS 29 impact on P&L 2018 2018 IAS 29 impact (in €m) Pre-IAS 29 Post-IAS 29 Net sales 76,199 (198) 76,000 Net sales, net of loyalty program costs 75,459 (198) 75,261 Other revenue 2,658 (2) 2,656 Total revenue 78,117 (200) 77,917 Cost of good sold (60,985) 136 (60,850) Gross margin from recurring op
Slide 33: 2018 income statement
2018 income statement 2017 2018 (in €m) reported Net sales 78,897 76,000 Net sales, net of loyalty program costs 78,253 75,261 Other revenue 2,722 2,656 Total revenue 80,975 77,917 Cost of good sold (62,760) (60,850) Gross margin from recurring operations 18,214 17,067 SG&A (14,641) (13,668) Recurri
Slide 34: Adjusted net income, Group share
Adjusted net income, Group share 2017 2017 2018 2018 reported reported (in €m) (in €m) EBITDA (1) 3,636 3,469 Net income from continuing (363) (43) operations Recurring operating income 2,006 1,905 Minority share of net income Net income from associates and JVs 4 14 169 216 from continuing operation
Slide 35: Adjusted net income, Group share
Adjusted net income, Group share 2017 2018 (in €m) reported Net income, Group share (531) (561) Restatement for non-recurring income and expenses (before tax) 1,310 1,161 Restatement for exceptional items in net financial expenses 21 48 Tax impact(1) (10) (43) Restatement on share of income from min
Slide 36: Earnings per share
Earnings per share 2017 2018 (€ per share) reported Net income from continuing operations 0.70 (0.34) Net income from discontinued operations (0.00) (0.39) Net income, Group share (0.70) (0.73) Adjusted net income, Group share 1.02 1.04 Weighted average number of shares pre-dilution (in millions)(1)
Slide 37: Stores under banners at end 2018
Stores under banners at end 2018 Hypermarkets Supermarkets Convenience Cash & Carry Total (#) France 247 1,056 3,918 144 5,365 Spain 205 114 748 21 1,088 Italy 51 412 605 15 1,083 Belgium 40 451 303 0 794 Poland 89 152 609 0 850 Romania 35 261 51 13 360 Others 32 386 195 0 613 Other European countri
Slide 38: FY 2018 gross sales
FY 2018 gross sales Change at current Change at LFL Organic growth Gross sales exch. rates inc. constant exch. ex. petrol ex. petrol Group total (post-IAS 29) (in €m) petrol rates inc. petrol ex. calendar ex. calendar France 39,903 +1.1% +1.1% +0.3% -0.7% Hypermarkets 20,759 -0.1% -0.1% -1.4% -2.0%
Slide 39: Disclaimer
This presentation contains both historical and forward- looking statements. These forward-looking statements are based on Carrefour management's current views and assumptions. Such statements are not guarantees of future performance of the Group. Actual results or performances may differ materially