Slide 1: 1H 2002 results
1H 2002 results 1 1H 2002 RESULTS
Slide 2: 1H 2002 P&L key figures
1H 2002 P&L key figures (m €) 1H 2002 1H 2001 var Sales 33 090.4 33 467.0 -1.1% On constant exchange rates, sales increased 3.0%. EBITDA 1 921.6 1 892.3 1.5% On constant exchange rates, EBITDA increased 3.6%. EBIT 1 084.9 1 038.8 4.4% The impact of exchange rates on the EBIT is negligible. Recurring
Slide 3: Summary
Summary • The environment • Carrefour’s priorities • 1st half results • 2002 prospects 3 1H 2002 RESULTS
Slide 4: The environment
The environment • Sluggish environment in the 1H : Low growth in Europe Crisis in Latin America Growth in Asia • Stronger Euro; Argentinean Peso and Brazilian Real declines • Financial markets turmoil 4 1H 2002 RESULTS
Slide 5: Currency changes
Currency changes 2001 2002 2001 2002 4 3.8 3.5 3.3 3 2.5 2.8 2 1.5 2.3 1 1.8 0.5 0 1.3 Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec US Dollar / ARG peso US Dollar / BRZ real EURO / US dollar 2001 2002 1 0.96 0.92 0.88 0.84 0.8 Jan Feb Mar Apr Ma
Slide 6: Impact of currency changes 1H 2002
Impact of currency changes 1H 2002 Impact on sales : - 4.1% Impact on shareholders equity : - 16.2% 994 33 467 8 671 477 -1 407 33 090 - 464 7 278 - 1 371 SH EQ Chge exl. Dividends Currencies SH EQ 12/01 Currencies impact 06/02 SALES 1H 01 Chge Currencies SALES 1H 02 and excl.currencies impact divid
Slide 7: Markets performance (base 100)
Markets performance (base 100) 130 Carrefour Eurostoxx 50 CAC 40 Dow Jones 120 Nasdaq 110 100 90 80 70 60 50 40 30 1/5/2001 3/16/2001 5/25/2001 8/3/2001 10/12/2001 12/21/2001 3/1/2002 5/10/2002 7/19/2002 7 1H 2002 RESULTS
Slide 8: Summary
Summary • The environment • Carrefour’s priorities • 1st half results • 2002 prospects 8 1H 2002 RESULTS
Slide 9: Carrefour's priorities
Carrefour’s priorities • Gain of market shares in most countries and formats Sales • New stores : 10 hypermarkets, 29 supermarkets, 107 HD consolidated or under franchise • Maintain costs to 2001 absolute level Costs • Optimisation of SG&A • Simplification of headquarters • Improve working capital b
Slide 10: Sales: examples of discount and marketing
Sales : examples of discount and marketing • Freeze on all “ controlled products” (private brands + budget items) in French hypermarkets after the Euro-introduction 28% of sales • Regular use of the “Ticket + Champion” promotions in French supermarkets 40% tickets returned Loyalty card Iris Champion
Slide 11: Sales: examples of discount and marketing
Sales : examples of discount and marketing • Greece : Aggressive pricing in hypermarkets + 1 “spot” product per week Sales : + 13.9% • Greece : new Champion Marinopoulos banner Loyalty card Kerdokarta launched in Sept 01 reaches 42% of sales in 06/02 (440 000 cardholders) Sales : + 12.4% • Spain : d
Slide 12: Sales: examples of new concepts
Sales : examples of new concepts • New tableware corner in Polish hypermarkets Non food sales : + 14.0% • Development of non-food concepts in former Continent French hypermarkets Non food sales : + 6.1% + New concepts in Carrefour Carre Sénart, (opened 27th August) • Revamping of fresh food departme
Slide 13: Sales: reactivity, simplification example: Brazilian hypermarkets
Sales : reactivity, simplification example : Brazilian hypermarkets • Increase in number of leaflets, more frequent (3 days weekly on fresh food, “spot” operations 3 times a week) • Strong promotions (food and non food) • Pricing : focus on 1 000 grocery items on a monthly basis • Creation of new no
Slide 14: Sales: reactivity, simplification example: Brazilian hypermarkets
Sales : reactivity, simplification example : Brazilian hypermarkets • Merchandise Redefinition of assortments per store size and customer type (average reduction of 1000 products) ; Increased regional assortments (800 to 1000) ; 90,0 C.H. Guadalupe C.H. Belford Roxo 80,0 • Management 70,0 Duque de C
Slide 15: Carrefour's priorities
Carrefour’s priorities • Gain of market shares in most countries and formats Sales • New stores : 10 hypermarkets, 29 supermarkets, 107 HD consolidated or under franchise • Maintain costs to 2001 absolute level Costs • Optimisation of SG&A • Simplification of headquarters • Improve working capital b
Slide 16: Costs: optimization of SG&A action plans in all countries
Costs : optimization of SG&A action plans in all countries Development of GNX bids SG & A (consumables) : 19% • Bids undertaken : x 3 vs 2001 • Purchases : x 2 vs 2001 (Goods + consumables) • Gain of 11% vs 2001 Goods : 81% 16 1H 2002 RESULTS
Slide 17: Costs: optimization of SG&A action plans in all countries
Costs : otimization of SG&A action plans in all countries TAIWAN HEADQUARTER COSTS SG & A Taiwan % sales 2001 2002 Personnel costs 0.7% 0.6% • Optimization of personnel costs Other SG & A 0.3% 0.3% • Renegotiation of all services contracts Depr. and rents 0.3% 0.2% • Reduction of headquarter costs 1
Slide 18: Costs: simplification of headquarters
Costs : simplification of headquarters Spain • Integration of administrative and commercial management systems completed • Reorganization of accounting departments (EDI, scanning) France • Pursuit of headquarters overheads adaptation • Simplification of structures • Optimization in main Divisions 18
Slide 19: Carrefour's priorities
Carrefour’s priorities • Gain of market shares in most countries and formats Sales • New stores : 10 hypermarkets, 29 supermarkets, 107 HD consolidated or under franchise • Maintain costs to 2001 absolute level Costs • Optimisation of SG&A • Simplification of headquarters • Improve working capital b
Slide 20: Cash: optimisation of operating working capital
Cash : optimisation of operating working capital • Improvement of cash from operations June 2002 over June 2001 : € 171m in 1H • 2nd half : action plans must be continued : - Confirm first improvements - Reinforce priority of cash management - Develop best practices on non-food 20 1H 2002 RESULTS
Slide 21: Cash: operating working capital
Cash : operating working capital (improvement in days of Cost of Goods Sold) June 01 June 02 Chge Inventories - 40.9 - 38.6 + 2.3 Receivables - 25.5 - 22.9 + 2.6 Payables + 83.2 + 79.7 - 3.5 Total + 16.8 + 18.2 + 1.4 21 1H 2002 RESULTS
Slide 22: Summary
Summary • The environment • Carrefour’s priorities • 1st half results • 2002 prospects 22 1H 2002 RESULTS
Slide 23: 1H 2002 Profit and Loss
1H 2002 Profit and Loss (m €) 1H 2002 % 1H 2001 Sales 33 090.4 -1.1 33 467.0 On constant exchange rates, sales increased by 3.0%. Commercial margin 7 228.5 -1.4 7 333.6 % of sales 21.8% 21.9% Personnel costs (3 196.9) -2.3 (3 271.0) Total SG&A (personnel costs + other SG&A) decreased from 17.7% of s
Slide 24: 1H 2002 Profit and Loss
1H 2002 Profit and Loss (m €) 1H 2002 % 1H 2001 Depreciation (810.7) (1.8) (825.5) Depreciation and provisions decreased 2.0%. Provisions (26.0) (7.5) (28.1) EBIT 1 084.9 4.4 1 038.8 EBIT margin (% sales) 3.3% 3.1% Financial expenses fell mainly due to a lower Financial costs (283.3) -17.3 (342.7) a
Slide 25: 1H 2002 Profit and Loss
1H 2002 Profit and Loss (m €) 1H 2002 % 1H 2001 Tax (241.9) 12.3 (215.4) Group tax rate slightly decreases from 30.9% to 30.2%. Equity accounted companies 2001 included Cora, Equity acctd cies 43.8 (19.5) 54.4 Picard over three months and Metro France. Minorities (45.6) 24.3 (36.7) Net profit Gp sh.
Slide 26: 1H 2002 Profit and Loss
1H 2002 Profit and Loss (m €) 1H 2002 % 1H 2001 The non recurring items include : -the gains on disposal of shopping malls in France Non recurring items 59.1 ns 121.2 and Italy for €120 million, -extraordinary costs linked to the Euro transfer Minorities 1.0 ns 5.0 for - €31 million Net profit Group
Slide 27: Accounting principles
Accounting principles 1. Cautious debt management 2. Rigorous depreciation and amortization methods 3. Off balance sheet items 27 1H 2002 RESULTS
Slide 28: Accounting principles: Cautious debt and exchange rates management
Accounting principles Cautious debt and exchange rates management • 90% of total debt is directly managed by the Group Treasury division (only 10% in countries, mostly with partnerships, with regular follow-up) • 96% of debt in Euro • No speculation on exchange rates : all Group commercial and finan
Slide 29: Accounting principles: Rigorous depreciation and amortization methods
Accounting principles Rigorous depreciation and amortization methods • Intangible assets are all amortized, without any exception, over periods going from 20 years (retail business concerns ) to 40 years (goodwills on strategic acquisitions = Comptoirs Modernes, GB, GS, Norte…). • Goodwills are neve
Slide 30: Accounting principles: Clear off-balance sheet items
Accounting principles Clear off-balance sheet items • No potential acquisition off-balance sheet. • No pension funds for employees. Commitments on employee retirement benefits are accounted through the P&L. • Off balance sheet items only include : - Lines of credit available + commitments given by t
Slide 31: Summary
Summary • The environment • Carrefour’s priorities • 1st half results • 2002 prospects 31 1H 2002 RESULTS
Slide 32: 2002 prospects: confirmation of objectives
2002 prospects confirmation of objectives 2001 2002 Sales 7.2% around +5.0% on ct exch. rates EBIT margin 4.1% 4.3% to 4.4% (EBIT / sales) Interest cover 7.0x > 8.0x (EBITDA / Financial result) EPS (€) 1.70 1.87 to 1.95 +10% to +15% Return on capital employed * 7.6% > 8.5% * (EBIT after goodwill amo
Slide 33: 2002 prospects: 2H sales
2002 prospects 2H sales • Improvement in like-for-likes in big countries • Acceleration of expansion New openings (consolidated) 1H 01 2H 01 1H 02 2H 02 Hypermarkets 12 20 10 31* Supermarkets 28 36 14 43 Hard Discount 68 140 68 146 108 196 92 220 • Perimeter impact (12 hypermarkets in Spain) -0.6% -
Slide 34: 2002 prospects: France
2002 prospects France Hypermarkets • 1 new hypermarket : Carré Sénart • Innovation : development of concepts (Carré Sénart) • Extension of discount policy : “back to school” : 500 basic items cheaper than in 2001, “3 for 2” : promotion on national brands and private labels • Anniversary marketing ba
Slide 35: 2002 prospects: Europe
2002 prospects Europe Spain : Pursuit of commercial policy focused on fresh and non food offer, strong communication and private brands. Belgium : Recovery in line with plans Italy : Market share gains in each catchment area, increase of results thanks to centralization of logistics and purchases Gr
Slide 36: 2002 prospects: Latin America
2002 prospects Latin America Hypermarkets Brazil : confirm the strong rebound of sales + 2 additional openings Supermarkets Brazil : pursuit of plan to ensure successful turnaround • Reinforcement of price image : Daily check on competitors + immediate reaction in store Decentralization of assortmen
Slide 37: 2002 prospects: Latin America
2002 prospects Latin America Argentina Same strategy as during 1H in hypermarkets : deep discount, focus on availability of basic food products, management of inflationary environment Continue remodelings of Norte supermarkets (40 completed at the end of August); Good performance in Buenos Aires and
Slide 38: 2002 prospects: Asia
2002 prospects Asia : 125 hypermarkets at year end China Reorganization of legal entities approved : re-launch of expansion 3 new stores opened since May : 30 stores in total, including 1st store in Guangzhou Taiwan Aggressive discount to continue to gain market shares in a tough economic environmen
Slide 39: 2002 prospects: Conclusion
2002 prospects Conclusion • 1H shows good execution of Group priorities for 2002 • 2002 objectives confirmed : Sales around +5% on constant exchange rates EPS : +10% to +15% • Latin American currencies impact significantly sales and equity, but only marginally results • 2002 priorities will remain g
Slide 40: Appendices
Appendices 40 1H 2002 RESULTS
Slide 41: Consolidated net sales per format / zone
Consolidated net sales per format / zone million € France Europe Americas Asia Total % sales Hypermarkets 8 864 5 933 2 235 2 315 19 347 58.5% Supermarkets 3 413 2 192 702 0 6 307 19.1% Hard discount 814 1 718 78 0 2 611 7.9% Other 3 570 1 256 0 0 4 826 14.5% Total 16 661 11 099 3 015 2 315 33 090 1
Slide 42: Sales incl VAT per format / zone
Sales incl VAT (incl. franchisees and partners) per format / zone – million € France Europe Americas Asia Total % sales Hypermarkets 11 133 7 623 2 615 2 593 23 964 58.1% Supermarkets 6 255 3 723 844 0 10 822 26.2% Hard discount 888 1 958 94 0 2 940 7.1% Other 2 601 950 0 0 3 551 8.6% Total 20 877 1
Slide 43: P&L 1st H 2002
P&L 1st H 2002 million € 1H 02 %sales 1H 01 % sales chge (%) Sales 33 090 100.0 33 467 100.0 -1.1 Gross margin 7 229 21.8 7 334 21.9 -1.4 SG&A (5 662) (17.1) (5 916) (17.7) -4.3 Other income 355 1.1 474 1.4 -25.1 EBITDA 1 922 5.8 1 892 5.7 + 1.5 Depreciation & provisions (837) (2.5) (854) (2.6) - 2.
Slide 44: Store network (exc. franchisees and partners)
Store network (exc. franchisees and partners) Hyper Super Hard Disc C&C Conv. Total Argentina 23 129 237 389 Brazil 77 124 33 234 Chile 4 4 Colombia 5 5 Mexico 20 20 AMERICAS 129 253 270 652 China 26 26 Korea 22 22 Japan 3 3 Taïwan 27 27 Indonesia 9 9 Malaisia 6 6 Singapor 1 1 Thaïland 16 16 ASIA 11
Slide 45: Stores under banners (incl. franchisees and partners)
Stores under banners (incl. franchisees and partners) Hyper Super Hard -disc C&C Conv. Total Argentina 23 129 242 394 Brazil 77 124 33 234 Chile 4 4 Colombia 5 5 Mexico 20 20 AMERICAS 129 253 275 657 China 29 29 Korea 22 22 Japan 3 3 Taïwan 27 27 Indonesia 9 9 Malaisia 6 6 Singapor 1 1 Thaïland 16 1