Slide 1: Full year 2006 results
Full year 2006 results 8 March 2007
Slide 2: Agenda
Full year 2006 results Agenda Our vision and our convictions 2006: our growth model is taking shape Key 2006 figures 2007 – 2008: armed to be clear market leader 2007 – 2008: we will do whatever is necessary to win the game 2
Slide 3: Our vision and our convictions
Our vision and our convictions
Slide 4: Our view of the retail industry
Our view and our convictions Our view of the retail industry The food retail industry in mature European markets is characterised by low growth and deflation Adding new m² is a necessary source of growth Regional and local consolidation is accelerating A strong brand is key 4
Slide 5: The main elements of our strategy have already been defined
Our view and our convictions The main elements of our strategy have already been defined We reinforce our commitment to the strategy we defined in 2005 – 2006 2 priorities: ■ Customers ■ Growth 5
Slide 6: Our strategy is focused on customers…
Our view and our convictions Our strategy is focused on customers… Our priority is gaining volume and winning market share Choice (assortment) and services are key points of differentiation Low prices and strong promotions are non negotiable and basic customer requirements 6
Slide 7: … and growth
Our view and our convictions … and growth Accelerating new m² in growth markets Widening the scope in terms of new countries Participating proactively in regional and local consolidation 7
Slide 8: 2006: our growth model is taking shape
2006: our growth model is taking shape
Slide 9: We achieved our main objectives in 2006
2006: our growth model is taking shape We achieved our main objectives in 2006 2006 targets 2006 results Sales growth on constant exchange rates 2006 > 2005 +6.4% vs +4.3% Activity Contribution > 0% +3.4% Net debt Down Reduction of €481m France food market share* Gain +0.5% New store openings 1,000
Slide 10: Acceleration of sales growth on constant exchange rates
2006: our growth model is taking shape Acceleration of sales growth on constant exchange rates 8 % + 6.4% 6 + 4.3% + 4.0% 4 2 0 2004 2005 2006 10
Slide 11: Further acceleration in like-for-like sales
2006: our growth model is taking shape Further acceleration in like-for-like sales Growth % 2004 2005 2006 Group like-for-like, excluding petrol 0.0% -0.1% 1.1% Group like-for-like, including petrol 0.8% 0.9% 1.2% Organic expansion 3.2% 2.7% 2.6% External growth 0.0% 0.7% 2.6% Sales growth on consta
Slide 12: We doubled the number of hypermarkets openings compared to 2001-2004
2006: our growth model is taking shape We doubled the number of hypermarkets openings compared to 2001 - 2004 110 103 x2 90 82 70 52 50 44 44 38 30 2001 2002 2003 2004 2005 2006 12
Slide 13: 1.2m new m² opened outside France in 2006
2006: our growth model is taking shape 1.2m new m² opened outside France in 2006 versus 0.8m m² in 2004 ‘000 new m² 2004 2005 2006 France 209 266 170 Europe 510 843 713 Latin America 13 156 150 Asia 271 197 326 Total ex France 794 1,196 1,189 International contribution 79% 82% 87% 13
Slide 14: All our formats contributed to food market share gains in France
2006: our growth model is taking shape All our formats contributed to food market share gains in France Overall, +1.1% market share gains in France in the period 2005-2006 Gains due to volume increases 0,8 % 0,6 0,5 0,4 0,1 0 2003 2004 2005 2006 -0,4 -0,6 -0,8 Food market share evolution Carrefour G
Slide 15: Our sales driven model is beginning to work
2006: our growth model is taking shape Our sales driven model is beginning to work 8% 6% 4% 2% 0% 2002 / 2001 2003 / 2002 2004 / 2003 2005 / 2004 2006/2005 -2% -4% -6% Net sales EBIT * EBITDA * *EBIT and EBITDA are under IFRS from 2004 15
Slide 16: Key 2006 figures
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Slide 17: Our results were in line with our strategy
Key 2006 figures Our results were in line with our strategy € Million 2006 2005 Change Net sales 77,901 73,060 +6.6% ACDA* 4,845 4,582 +5.7% Activity Contribution 3,258 3,152 +3.4% Non recurring income (expenses) 15.9 (20.8) Na EBIT 3,274 3,132 +4.6% Net result before discontinued activities 1,857 1
Slide 18: All regions contributed to an increase in sales
Key 2006 figures All regions contributed to an increase in sales Change on constant exchange € Million 2006 2005 Change rate France 37,212 35,577 +4.6% +4.6% Europe 29,850 28,102 +6.2% +6.7% Latin America 5,928 5,075 +16.8% +12.5% Asia 4,911 4,306 +14.0% +12.4% Total 77,901 73,060 +6.6% +6.4% 18
Slide 19: Growth in ACDA was broadly in line with sales
Key 2006 figures Growth in ACDA was broadly in line with sales € Million 2006 2005 Change Net sales 77,901 73,060 +6.6% Commercial income 17,740 16,569 +7.1% SG&A* 12,895 11,986 +7.6% ACDA 4,845 4,582 +5.7% Depreciation 1,587 1,430 + 11.0% Activity Contribution 3,258 3,152 +3.4% *SG&A: staff costs +
Slide 20: Lower logistics costs, and improved margin mix, offset investment in pricing
Key 2006 figures Lower logistics costs, and improved margin mix, offset investment in pricing € Million 2006 2005 Change Commercial income 17,740 16,569 +7.1% Commercial margin % 22.8% 22.7% 20
Slide 21: We kept a firm grip on expenses
Key 2006 figures We kept a firm grip on expenses € Million 2006 2005 Change SG&A (excluding rents) 12,023 11,222 +7.1% SG&A excluding rents as % of sales 15.4% 15.4% Rents 871 765 +14.0% Depreciation & provisions 1,587 1,430 +11.0% Asset costs (rents & depreciation) 2,458 2,195 +12.0% Asset costs (r
Slide 22: Activity Contribution was up
Key 2006 figures Activity Contribution was up € Million 2006 2005 Change Activity Contribution 3,258 3,152 +3.4% Activity Contribution as % of sales 4.2% 4.3% Activity Contribution grew, but at a lower pace than sales, mainly due to price investment and faster growth in m² 22
Slide 23: France: margins remained under control while we invested in price
Key 2006 figures All regions contributed to an increase in Activity Contribution: France France: margins remained under control while we invested in price Sales +4.6% Activity France Commercial income Contribution +5.0% +0.3% SG&A and depreciation +6.3% 23
Slide 24: Europe: growth in Activity Contribution driven by sales and cost control
Key 2006 figures All regions contributed to an increase in Activity Contribution: Europe Europe: growth in Activity Contribution was driven by increase in sales and good cost control Sales +6.2% Activity Europe Commercial income Contribution +6.0% +5.5% SG&A and depreciation +6.0% 24
Slide 25: Latin America: strong rise in Activity Contribution
Key 2006 figures All regions contributed to an increase in Activity Contribution: Latin America Latin America: strong rise in Activity Contribution as sales increased significantly Sales +16.8% Latin Commercial income Activity America Contribution +18.1% +21.8% SG&A and depreciation +17.8% 25
Slide 26: Asia: strong growth in new m²; Taiwan underperformance
Key 2006 figures All regions contributed to an increase in Activity Contribution: Asia Asia: strong growth in new m²; Activity Contribution impacted by Taiwan underperformance Sales +14.0% Activity Commercial income Contribution Asia +17.4% +5.4% SG&A and depreciation +19.8% 26
Slide 27: Financial costs were up, tax rate broadly stable
Key 2006 figures Financial costs were up, tax rate broadly stable € Million 2006 2005 Change Financial costs (480) (450) +6.6% Tax charge (810) (785) +3.2% Tax rate 29.0% 29.3% Minorities (163) (150) +9.2% Associates 36 51 -29.2% Net result before discontinued activities 1,857 1,797 +3.3% (Group Sha
Slide 28: Our cash flow supports our plans for growth
Key 2006 figures Our cash flow supports our plans for growth € Million 2006 2005 Cash Flow 3,586 3,582 Cash Flow from operations, before impact of divested 3,697 3,595 businesses Capex (3,368) (3,026) Free Cash Flow 101 722 Cash Flow after investments and disposals 1,436 1,132 Net debt closing (6,30
Slide 29: Our key financial ratios remain solid
Key 2006 figures Our key financial ratios remain solid € Million 2006 2005 Change Net debt at year-end 6,309 6,790 (481) ACDA / Financial costs 10.1x 10.2x - Gearing 60% 72% na Cash Flow / Net debt 57% 53% na 29
Slide 30: Summary
Key 2006 figures Summary All our regions contributed to growth in sales, ACDA and Activity Contribution Our commercial margin is slightly up, reflecting lower logistics costs and a better management of the margin mix, offsetting the impact of our price investments Stronger expansion programme and th
Slide 31: 2007 – 2008: armed to be clear market leader
2007 – 2008: armed to be clear market leader
Slide 32: The three engines for growth
2007 – 2008: armed to be clear market leader The three engines for growth Multi-format, single brand, strategy Overhaul of our commercial model Acceleration of new m² in growth markets 32
Slide 33: Our multiformat / single brand strategy
Engine 1 : multi-format, single brand strategy Our multiformat / single brand strategy Our multiformat strategy enables us to better meet customer needs A strong brand is fundamental Carrefour’s brand enables us to capitalise on growth faster 33
Slide 34: Development of a multi-format / single brand strategy
Engine 1 : multi-format, single brand strategy Development of a multi-format / single brand strategy 2006 2007 Spain: 82 Carrefour Express Belgium Brazil: 34 Carrefour Bairro Poland Poland, Turkey: tests Turkey France: conversion Argentina of a HyperChampion under the Carrefour banner 34
Slide 35: Reinforcing own-label
Engine 1 : multi-format, single brand strategy Reinforcing own-label FRANCE SPAIN More choice in growth More choice in growth categories categories Further strengthening of Buy-One-Get-One-Free type pricing in 2007 of promotions 35
Slide 36: The three engines for growth
2007 – 2008: armed to be clear market leader The three engines for growth Multi-format, single brand, strategy Overhaul of our commercial model Acceleration of new m² in growth markets 36
Slide 37: Our objectives in rethinking our dry grocery model
Engine 2: overhaul of our commercial model Our objectives in rethinking our dry grocery model Offer more choice and more innovation in growth categories Improve our margin mix Maximise product availability to our customers Strengthen our price image by reinforcing our low price strategy and its comm
Slide 38: The tools we are using to reengineer our dry grocery model
Engine 2: overhaul of our commercial model The tools we are using to reengineer our dry grocery model Development of a retail strategy together with our suppliers Reallocation and optimisation of space Massification of own-label purchasing Development of Shelf Ready Packaging Creation of specialist
Slide 39: Progress made rolling out our dry grocery model in 2006
Engine 2: overhaul of our commercial model Progress made rolling out our dry grocery model in 2006 An international project Priority to mature markets Initial phase of roll-out in 6 Business Units Roll-out of 66 points of sale, of which: 16 hypermarkets in France 28 supermarkets in France 39
Slide 40: First results from our dry grocery model
Engine 2: overhaul of our commercial model First results from our dry grocery model Freeing up space: Growth in the number gain of shelf square Price cuts of SKUs meters Like-for-like growth in test stores higher than regional average New means to invest further in prices while maintaining a stable
Slide 41: Roll out of the new dry grocery model in 2007-2008
Engine 2: overhaul of our commercial model Roll out of the new dry grocery model in 2007- 2008 Roll-out in around 700 points of sale at the end of 2008, of which: Our 218 hypermarkets in France Around 300 supermarkets in France 41
Slide 42: Our objectives in rethinking our non-food model
Engine 2: overhaul of our commercial model Our objectives in rethinking our non-food model Improve the attractiveness of our banners by building a ‘specialist’ offer: relevant assortments and innovation Improve customer flow within the store Manage better the product life cycle Optimise margin mix 4
Slide 43: The tools we are using to reengineer our non-food model
Engine 2: overhaul of our commercial model The tools we are using to reengineer our non-food model Working more closely with our main vendors Reallocating and optimising m² more efficiently Remodelling the back office: supply chain, global sourcing, category management Reinforcing the professionalis
Slide 44: The calendar for the roll out of our non-food model
Engine 2: overhaul of our commercial model The calendar for the roll out of our non-food model 2006: 10 test stores in France, Spain, Belgium, Italy 2006: specific agreements with key partners: BCBG-Max Azria, Disney, Mattel… 2007: beginning of the roll-out 44
Slide 45: The three engines for growth
2007 – 2008: armed to be clear market leader The three engines for growth Multi-format, single brand, strategy Overhaul of our commercial model Acceleration of new m² in growth markets 45
Slide 46: Opening more stores in growth markets
Engine 3: acceleration of new m² in growth markets Opening more stores in growth markets The number of new hypermarkets in markets outside France, Spain, Belgium and Italy has increased significantly in 2005 - 2006 120 100 x2 80 60 87 72 40 33 28 41 20 0 2002 2003 2004 2005 2006 France Belgium, Spai
Slide 47: Opening more m² in growth markets
Engine 3: acceleration of new m² in growth markets Opening more m² in growth markets The number of new m² opened outside France, Spain, Belgium and Italy has also increased significantly on the period 2005 - 2006 Thousands m² 1 600 1 200 727 767 800 417 468 458 400 0 2002 2003 2004 2005 2006 France
Slide 48: Contribution to Group ACDA in growth markets has increased
Engine 3: acceleration of new m² in growth markets The contribution to Group ACDA in growth markets has increased between 2004 and 2006 25% 21% 17% 20% 15% 10% 5% 0% 2004 2006 48
Slide 49: ROCE in growth markets has also improved
Engine 3: acceleration of new m² in growth markets ROCE in growth markets has also improved 12,0% + 4 points 10,5% 10,0% 8,0% 6,4% 6,0% 4,0% 2004* 2006 ROCE = Activity Contribution / (Average Capital Employed + Average net debt) * Under IFRS 49
Slide 50: We will further accelerate in growth markets in 2007
Engine 3: acceleration of new m² in growth markets We will further accelerate in growth markets in 2007 The group will open at least 1.5 million new m² ¾ Countries outside G4 (France, Italy, Belgium, Spain) will open at least 1 million new m² per annum We are studying and developing new sources of g
Slide 51: Summary
2007 – 2008: armed to be clear market leader Summary The three engines for growth: Our multi format / single brand strategy The overhaul of our commercial model An increasing exposure to growth markets The key to success: speed of execution 51
Slide 52: 2007 – 2008: we will do whatever is necessary to win the game
2007 – 2008: we will do whatever is necessary to win the game
Slide 53: Concluding observations
2007 – 2008: we will do whatever is necessary to win the game Concluding observations We require clear market leadership to sustain the growth which our business model is capable of generating We must use all of our resources, and leverage all our competitive advantages, to secure this leadership We
Slide 54: 2007 – 2008 sales outlook
2007 – 2008: we will do whatever is necessary to win the game 2007 – 2008 sales outlook Within the current competitive environment, we anticipate sales growth in 2007 at least as strong as in 2006 With regards 2008, our achievements in 2006, as well our forecasts for 2007, give us confidence that we
Slide 55: 2007 - 2008 outlook for Activity Contribution
2007 – 2008: we will do whatever is necessary to win the game 2007 - 2008 outlook for Activity Contribution For 2007, Activity Contribution will grow, although at a slower pace than sales, reflecting our determination to consolidate our low price leadership and to accelerate our expansion plan For 2
Slide 56: Full year 2006 results
Full year 2006 results 8 March 2007 56
Slide 57: Appendices
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Slide 58: Profit and loss account summary
Appendices Profit and loss account summary € Million 2006 2005 Change Net sales 77,901.1 73,059.5 +6.6% Other revenues 1, 042.1 989.4 +5.4% Cost of sales (61, 203.6) (57,480.2) +6.5% Commercial Income 17,740.1 16,568.7 +7.1% SG&A (12,894.8) (11,986.5) + 7.6% ACDA* 4,845.3 4,582.2 +5.7% Activity cont
Slide 59: Key operating ratios
Appendices Key operating ratios € Million 2006 2005 Change Net sales 77, 901.1 73,059.5 +6.6% Other revenues 1,042.5 989.4 +5.4% Commercial margin 22.8% 22.7% SG&A as % of sales (16.6%) (16.4%) ACDA as % of sales 6.2% 6.3% Depreciation/ Amortisation as % of sales (2.0%) (2.0%) Activity Contribution
Slide 60: Balance sheet summary in millions of euros
Appendices Balance sheet summary in millions of euros ASSETS LIABILITIES Shareholders Intangible + Equity fixed assets + financials 9386 10503 Provisions & 2536 Deffered tax 2551 27632 28531 6790 6309 Net debt Net trade Inventories 12574 12829 payables 6110 6051 Bank loans Bank loans 3464 3943 refin
Slide 61: Cash Flow summary
Appendices Cash Flow summary € Million 2006 2005 Net debt opening (6,790) (6,770) Cash Flow 3,586 3,582 Change in working capital (101) 40 Cash flow before impact of discontinued activities 3,697 3,595 Impact of discontinued activities (227) 153 Cash flow from operations 3,460 3,775 Capex (3,368) (3
Slide 62: Activity Contribution regional split
Appendices Activity Contribution regional split € Million 2006 2005 Change France 1,718 1,713 +0.3% Europe 1,208 1,144 +5.5% Latin America 161 133 +21.8% Asia 171 162 +5.4% Total 3,258 3,152 +3.4% 62
Slide 63: Sales, ACDA and AC growth per region
Appendices Sales, ACDA and AC growth per region % growth 2006 vs. 2005 Sales ACDA AC France +4.6% +3.4% +0.3% Europe +6.2% +5.3% +5.5% Latin America +16.8% +21.5% +21.8% Asia +14.0% +12.1% +5.4% Total +6.6% +5.7% +3.4% 63
Slide 64: Details of the calculation of EPS
Appendices Details of the calculation of EPS 2006 Under IFRS 5 Published EPS 2005 EPS EPS 2005 Change EPS before discontinued activities 2.64 2.57 2.58 2.5% EPS from discontinued activities 0.58 (0.52) (0.53) Ns EPS including discontinued activities 3.22 2.05 2.05 57% • EPS is based on the net resul
Slide 65: Discontinued activities
Appendices Discontinued activities Discontinued activities amounted to €411.2m in 2006 Discontinued activities €m 2006 Korea disposal impact 430 Puntocash disposal impact 17.3 Other disposals impact (36.1) Total 411.2 65
Slide 66: Consolidated store network (December 2006)
Appendices Consolidated store network (December 2006) 66
Slide 67: Consolidated net sales per format / zone 2006
Appendices Consolidated net sales per format / zone 2006 Million € France Europe Americas Asia Total % Sales Hypermarkets 19,752 16,468 4,843 4,827 45,890 58.9% Supermarkets 7,981 5,041 541 0 13,563 17.4% Hard discount 2,504 4,008 489 84 7,085 9.1% Other 6,975 4,333 56 0 11,363 14.6% Total 37,212 29
Slide 68: Stores under banners (December 2006)
Appendices Stores under banners (December 2006) 68
Slide 69: Sales incl. VAT under banners per format / zone
Appendices Sales incl. VAT under banners per format / zone € Million France Europe Americas Asia Total % Sales Hypermarkets 24,061 21,658 5,806 5,567 57,093 58.7% Supermarkets 13,744 8,764 664 - 23,172 23.8% Hard discount 2,850 5,594 658 97 9,199 9.5% Other 5,069 2,705 1 0 7,776 8.0% Total 45,725 38
Slide 70: Expansion in 2005 and 2006 per zone and per format in sqm
Appendices Expansion in 2005 and 2006 per zone et per format in sqm 2005 2006 France France 13% 18% Asia Asia 13% Europe 24% Europe 52% 58% Americas 11% Americas 11% Convenience C&C Convenience 9% 2% 6% C&C 2% Hard discount Hard discount 25% 21% Hypermarket 48% Hypermarket 54% Supermarket 20% Superm
Slide 71: Estimated calendar impact in France in 2007 (%)
Appendices Estimated calendar impact in France in 2007 (%) 3,3 2,2 1,9 1,6 0,3 (0,1) (0,6) (0,8) (2,0) (1,7) (1,8) (4,2) Jan Feb March April May June July Aug Sept Oct Nov Dec 71