Slide 1: H1 2018 Results
H1 2018 Results July 26th 2018
Slide 2: First significant advances in the Carrefour 2022 transformation plan
FIRST SIGNIFICANT ADVANCES IN THE CARREFOUR 2022 TRANSFORMATION PLAN
Slide 3: H1 2018: Strong momentum for Carrefour 2022
H1 2018: Strong momentum for Carrefour 2022 OMNICHANNEL RAPIDLY RAMPING-UP REVAMPED COMMERCIAL PROPOSITION ● Rapid implementation of food e-commerce proposition ● Adaptation of the sales area/store formats in all countries: − Renewed and simplified front websites (1 single site ● Simplification of a
Slide 4: Rapid implementation of leading e-commerce services in all countries
Rapid implementation of leading e-commerce services in all countries Key initiatives to enhance Carrefour’s e-commerce proposition ● Single Carrefour entry point already available in 7 countries ORDER − carrefour.fr live in Q4 2018 as planned ● Non-food marketplace already available in 5 countries ●
Slide 5: In-depth reshaping of commercial proposition on track in H1
In-depth reshaping of commercial proposition on track in H1 PRICE COMPETITIVENESS ● First investments in price competitiveness implemented in H1 OPTIMISATION OF STORE NETWORKS ● Hypermarkets: ● Acceleration of expansion in Cash & Carry − Sales area reduction underway and convenience ● Closure of los
Slide 6: Key strategic partnerships signed
Key strategic partnerships signed Strategic partnerships were signed in H1 First benefits expected in H2 2018, with ramp-up in 2019 PURCHASING DIGITAL ADD-ON INVESTMENTS H1 2018 RESULTS ─ 6
Slide 7: All components of the efficiency plan are on track
All components of the efficiency plan are on track EFFICIENCY PLAN Organization Cost savings Capex Inventory transformation STATUS H1 ACHIEVEMENTS All plans signed Implementation €520m -39% -€175m in progress H1 2018 RESULTS ─ 7
Slide 8: H1 2018 key figures: Growth in ROI and strong growth of free cash flow
H1 2018 key figures: Growth in ROI and strong growth of free cash flow RECURRING NET SALES OPERATING INCOME +0.7% LFL +€36m (1) +5.8% (1) FREE CASH FLOW EX. EXCEPTIONAL ITEMS NET DEBT(2) growing by improving by +€418m €1,465m 1) At constant FX vs. reported H1 2017 l 2) As of 30 June 2018 vs. 30 June
Slide 9: Financial Analysis
FINANCIAL ANALYSIS
Slide 10: Ex-Dia stores accounted for as discontinued activities as from January 1st
Ex-Dia stores acccounted for as discontinued activities as from January 1st Rapid progress in the disposal and closure process of 273 ex-Dia stores All stores sold or closed at end July 2018 Ex-Dia stores accounted for as discontinued activities as from January 1st (IFRS 5 standard) Rapid implementa
Slide 11: H1 2018 sales marked by improved trends in Q2
H1 2018 sales marked by improved trends in Q2 H1 2018 Gross sales evolution – (in €m and %) +1.1% +0.3% +0.7% +2.2% +0.7% +0.4% +0.1% -3.0% €42.7 bn +0.9% +0.4% -5.2% €41.4 bn Q1 Q2 H1 2017 H1 2018 Store H1 2018 Calendar Acquisitions/ Petrol H1 2018 Forex H1 2018 openings/ Disposals at constant LFL
Slide 12: Negative FX impact, mainly due to BRL evolution
Negative FX impact, mainly due to BRL evolution Currency H1 2018 evolution1 -5.2% negative FX impact in Brazilian Real -16.9% H1 2018 sales Argentine Peso -34.3% Polish Zloty +1.2% Romanian Leu -2.5% -€60m negative FX impact in Chinese Yuan -3.5% Taiwanese Dollar -7.1% H1 2018 ROI (1) FX evolution v
Slide 13: H1 ROI growing +€36m (at constant exchange rates)
H1 ROI growing +€36m (at constant exchange rates) Gross margin decrease due to mix effect, market competitiveness and commercial investments Distribution costs down -70bps ● Improvement in all geographies ● Cost reduction plan delivering strong performance in H1 H1 2017 Evolution at H1 2018 constant
Slide 14: Ahead of schedule on cost reductions: €520m achieved in H1
Ahead of schedule on cost reductions: €520m achieved in H1 COGS Distribution costs Objective STATUS €2bn H1 ACHIEVEMENTS > First gains recorded in H1 > Strong contribution to total cost reduction in H1 thanks to: > Purchasing alliances signed with Tesco internationally, − Demand control/challenge Sy
Slide 15: France: Commercial activity still under pressure
France: Commercial activity still under pressure H1 2017 % (in €m) reported H1 2018 change Net sales 17,307 17,150 -0.9% LFL -0.1% ex petrol, ex calendar ROI 199 110 -44.8% ROI margin 1.2% 0.6% -60bp > Broadly stable sales year-on-year in a persistently competitive market > ROI drop: − Pressure on g
Slide 16: Other European countries: Slight growth in recurring operating income
Other European countries: Slight growth in recurring operating income % change % change at current at constant (in €m) H1 2017 H1 2018 FX FX Net sales 10,010 10,093 +0.8% +1.0% LFL -1.5% ex petrol, ex calendar ROI 149 152 +1.9% +2.2% ROI margin 1.5% 1.5% 0bp > Overall sales growth, contrasted trends
Slide 17: Latin America: Strong commercial momentum and improved profitability
Latin America: Strong commercial momentum and improved profitability % change % change at current at constant (in €m) H1 2017 H1 2018 FX FX Net sales 8,075 6,976 -13.6% +8.6% LFL +6.4% ex petrol, ex calendar ROI 293 319 +8.8% +28.0% ROI margin 3.6% 4.6% +90bp +60bp > Brazil: − Atacadao: LFL sales ac
Slide 18: Latin America: Interruption in food deflation in June
Latin America: Interruption in food deflation in June FOOD INFLATION (IPCA) – FOOD AT HOME INDEX EVOLUTION (JAN 2017 – JUNE 2018) 6.5% 4.6% 4.3% 1.0% 3.0% 2.5% 1.1% 0.1% -4.0% -2.8% -0.6% -4.5% -4.5% -3.9% -3.8% -3.8% -3.1% -4.3% -4.7% -5.2% -5.1% -4.9% -5.3% -5.3% Jan Feb Mar Apr May Jun Jul Aug Se
Slide 19: Asia: Recurring operating income improvement despite difficult trends in China
Asia: Recurring operating income improvement despite difficult commercial trends in China % change % change at current at constant (in €m) H1 2017 H1 2018 FX FX Net sales 3,135 2,851 -9.0% -4.3% LFL -3.9% ex petrol, ex calendar ROI 12 32 +€20mn +€22mn ROI margin 0.4% 1.1% +70bp > China sales impacte
Slide 20: Adjusted net income, Group share, from continuing operations of €131mn
Adjusted net income, Group share, from continuing operations of €131mn H1 2017 (in €m) reported H1 2018 Recurring operating income 621 597 Net income from associates and JVs 13 (6) Mainly related to Carrefour 2022 transformation initiatives launched in H1 Non-recurring income and expenses, net (150)
Slide 21: All restructuring processes are well underway
All restructuring processes are well underway Savings recognition Key Initiatives Status Next steps phasing ● Implementation underway > Starting in H2 2018 HQ ● Voluntary departure plan ● Full completion expected by > Full-year effect France Signed year end in 2019 > Ex-Dia scope ● 273 ex-Dia stores
Slide 22: Most restructuring costs accounted for in H1
Most retructuring costs accounted for in H1 – related cash-out mostly in H2 H1 2017 (in €m) reported H1 2018 Related to the transformation initiatives Restructuring costs (102) (693) announced in H1, notably in France, Belgium and Argentina Impairment and asset write-offs (31) (44) Non-recurring exp
Slide 23: A tax expense reflecting a normative half-year tax rate of 34.7%
A tax expense reflecting a normative half-year tax rate of 34.7% H1 2017 (in €m) Reported H1 2018 The +0.5 pts increase mainly reflects a Half-year normative tax rate (1) 34.2% 34.7% greater weight of Brazil in Group pre- tax income in H1 2018 vs H1 2017 Normative tax expense (132) (154) Non income-
Slide 24: Focus on Free Cash Flow generation: +€418m
Focus on Free Cash Flow generation: +€418m (excl. exceptional items) H1 2017 Variation at (in €m) reported H1 2018 current FX EBITDA 1,431 1,373 (58) Financial result (58) (37) 21 Cash impact of non-recurring items (126) (193) (67) Other (including tax paid) (268) (195) 73 1. Working capital Gross c
Slide 25: Better inventory management in most geographies -€175m
1 Better inventory management in most geographies INVENTORY - (in €m) Key levers -€175m Assortment rationalization and better 6 845 management of inventories 6 670 371 Inclusion of FCF objectives in managers’ 6 299 incentive schemes Supply chain: Optimization of flows H1 2017 H1 2018 Forex H1 2018 r
Slide 26: Capex reduced by 39% thanks to greater productivity and selectivity
Capex reduced by 39% thanks to greater 2 productivity and selectivity of investments INCREASED SELECTIVITY & PRODUCTIVITY Full remodelings H1 2018 capex ex. Cargo and hypermarket extensions down €349m or 39% at current FX Cost per unit ● Capex reduction through better productivity and selectivity St
Slide 27: €427mn net debt improvement in last 12 months
€427mn net debt improvement in last 12 months excluding FX impact and Brazil IPO proceeds €427m improvement Incl. a €345m cash out related to exceptional items (mainly restructuring) €7,720m €7,293m (107) (283) €6,255m (246) 1 019 (239) 1 321 June 30 2017 FCF Dividends Cost of net Others June 30 201
Slide 28: Successful refinancing operations conducted in H1
Successful refinancing operations conducted in H1 On March 27, 2018, issuance of $500 million DEBT REDEMPTION SCHEDULE – (in €m and %) non-dilutive cash-settled convertible Bond, swapped in euros with a maturity of 6 years and a 5.25% zero coupon 4.00% 3.88% 1.75% 1.75% 1.25% 0.49% 0.51% On June 5,
Slide 29: 57% take-up of scrip dividend
57% take-up of scrip dividend PAYMENT AND SETTLEMENT ON JULY 13, 2018 (H2) DIVIDEND PAID IN CASH DIVIDEND PAID IN SHARES 57% TAKE-UP RATIO €152m CASH-OUT IN H2 equivalent to €200m Total dividend: €352m H1 2018 RESULTS ─ 29
Slide 30: Transformation plan targets confirmed
Transformation plan targets confirmed > €5bn of food e-commerce sales in 2022 > €5bn in sales of organic products in 2022 > A cost reduction plan of €2bn by 2020 on full-year basis > Disposal of non-strategic assets for €500m by 2020 > Annual capex of €2bn Carrefour 2022 transformation plan progress
Slide 31: Appendix
APPENDIX
Slide 32: Adjusted net income, Group share
ADJUSTED NET INCOME, GROUP SHARE H1 2017 H1 2017 (in €m) reported H1 2018 (in €m) reported H1 2018 EBITDA (1) 1,431 1,373 Net income from continuing 148 -521 operations Recurring operating income 621 597 Minority share of net income from -69 112 Net income from associates and JVs 13 -6 continuing op
Slide 33: H1 2018 Income Statement
H1 2018 INCOME STATEMENT H1 2017 (in €m) reported H1 2018 Net sales 38,526 37,071 Net sales, net of loyalty program costs 38,228 36,728 Other revenue 1,354 1,309 Total revenue 39,582 38,037 Cost of good sold -30,762 -29,816 Gross margin from recurring operations 8,821 8,221 SG&A -7,419 -6,884 Recurr
Slide 34: Net sales and recurring operating income per region
Net sales and recurring operating income per region NET SALES RECURRING OPERATING INCOME Variation at Variation at Variation at Variation at H1 2017 constant current H1 2017 constant current (in €m) reported H1 2018 exch. rates exch. rates reported H1 2018 exch. rates exch. rates France 17,307 17,15
Slide 35: Adjusted net income, Group share
ADJUSTED NET INCOME, GROUP SHARE H1 2017 (in €m) reported H1 2018 Net income from continuing operations, Group share 78 (861) Restatement for non-recurring income and expenses (before tax) 150 785 Restatement for exceptional items in net financial expenses 17 6 Tax impact(1) (84) (19) Restatement on
Slide 36: Earnings per share
EARNINGS PER SHARE H1 2017 (€ per share) reported H1 2018 Net income from continuing operations 0.11 (0.83) Net income from discontinued operations (0.00) (0.30) Net income, Group share 0.10 (1.13) Adjusted net income, Group share 0.21 0.17 Weighted average number of shares pre-dilution (in millions
Slide 37: Stores under banners at end H1 2018
STORES UNDER BANNERS1 AT END H1 2018 (#) Hypermarkets Supermarkets Convenience Cash & Carry Total France 248 1,059 3,939 144 5,390 Spain 204 111 676 19 1,010 Italy 53 407 601 16 1,077 Belgium 45 445 294 0 784 Poland 89 151 590 0 830 Romania 32 235 52 9 328 Others 32 400 195 0 627 Other European coun
Slide 38: H1 2018 Gross sales
H1 2018 GROSS SALES Change at current Change at constant LFL Organic growth Gross sales exch. rates inc. exch. rates inc. ex. petrol ex. petrol (in €m) petrol petrol ex. calendar ex. calendar France 19,207 +0.9% +0.9% -0.1% -1.1% Hypermarkets 9,845 -0.1% -0.1% -1.6% -2.2% Supermarkets 6,391 +0.9% +0
Slide 39: Q2 2018 Gross sales
Q2 2018 GROSS SALES Change at current Change at constant LFL Organic growth Gross sales exch. rates inc. exch. rates inc. ex. petrol ex. petrol (in €m) petrol petrol ex. calendar ex. calendar France 9,869 +0.9% +0.9% -0.1% -0.9% Hypermarkets 5,022 +0.2% +0.2% -1.0% -1.4% Supermarkets 3,293 +0.4% +0.
Slide 40: Disclaimer
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 m