Carrefour: 2012 Full-Year Results

  Carrefour: 2012 Full-Year Results

                 Growth in sales and net income, Group share
                       Strengthened financial structure

Business Wire

BOULOGNE-BILLANCOURT, France -- March 7, 2013

Regulatory News:

Carrefour (Paris:CA)

2012 key figures

  *Growth in sales: +0.9% to €76.8bn, driven by emerging markets
  *Resilient Recurring Operating Income of €2,140m, with France up by 3.5%
    and Latin America up by 14.2%
  *Significant rise in Net Income, Group share: €1,233m (vs. €371m in 2011),
    including capital gains from disposals
  *Improved free cash flow
  *Strong improvement in financial structure: net debt of €4.3bn, an
    improvement of €2.6bn
  *Proposed dividend of €0.58 per share, payable in cash or shares, in line
    with the payout policy announced in March 2012

(€ million)                                       2011 ^1  2012 ^2  Var.
                                                                 
Sales ex. VAT                                     76,067   76,789   +0.9%
Recurring Operating Income before D&A (EBITDA)     3,748     3,688     -1.6%
EBITDA Margin                                     4.9%     4.8%     
Recurring Operating Income                        2,197    2,140    -2.6%
Recurring Operating Margin                         2.9%      2.8%
Net income from continuing operations, Group      -1,865   113      
share
Net Income, Group share                           371      1,233    x 3.3
                                                                       
Free Cash flow                                    215      279      
Net debt at close                                 6,911    4,320    -€2.6bn
Net debt/ EBITDA                                   1.8x      1.2x
                                                                       

2012: A refocused and strengthened Group

  *Refocusing of the Group on countries where it holds leading positions and
    has a multi-format profile

       *After the sale by Carrefour of its stake in their joint venture to
         Marinopoulos, its Greek partner becomes the exclusive Carrefour
         franchisee in Greece, Cyprus and the Balkans
       *Singapore : Closure of the Group’s two stores
       *Disposal of Colombian operations to Cencosud for a total
         consideration of €2bn
       *Disposal of Malaysian activities to Aeon for €250m
       *Disposal of Carrefour‘s stake in its Indonesian unit to its partner
         CT Corp for €525m. CT Corp becomes Carrefour’s exclusive franchisee
         in the country

  *Strengthening of operations in France, Brazil and Argentina

       *Global consolidation of Guyenne & Gascogne as of June 1, 2012
         following the success of the tender offer
       *Finalization of the financial services partnership with Itaú Unibanco
         in Brazil
       *Acquisition of 129 Eki stores in Argentina, consolidating Carrefour’s
         leadership in the country

2012 performance by zone

             Sales ex. VAT                          Recurring Operating
                                                       Income
                                           Change at
                                           constant
€ million     2011 ^3  2012    Change  exch.      2011    2012   Change
                                           Rates,      ^3
                                           including
                                           petrol
                                                                
France         35,179    35,341   +0.5%    +0.5%       898      929     +3.5%
Europe         21,536    20,873   -3.1%    -2.7%       640      509     -20.6%
Latin          13,551    14,174   +4.6%    +12.1%      532      608     +14.2%
America
Asia           5,801     6,400    +10.3%   +0.5%       187      168     -10.3%
Global                                        -61     -74    
functions
Total         76,067   76,789  +0.9%   +1.6%      2,197   2      -2.6%
                                                                ,140
                                                                        

France

In France, sales were up 0.5%, with food sales holding up well. The price
repositioning had only a slight impact on commercial margin thanks to an
improved mix between everyday prices, promotions and loyalty. SG&A were lower
both in value and as a percentage of sales. Recurring operating income rose
3.5% to €929m.

Europe

In Europe, sales decreased by 2.7% at constant exchange rates (-3.1% at
current exchange rates), reflecting the decline in consumption, particularly
in southern Europe. Belgium continues to record growing sales. Recurring
operating income in the zone amounted to €509m, a decrease of 20.6%, largely
explained by the economic context in Spain and Italy. In Spain, investment in
prices was not fully compensated by the significant reduction in SG&A.

Latin America

Sales growth in Latin America remained strong (+12.1% at constant exchange
rates and +4.6% at current exchange rates), supported by solid performances in
LFL in Brazil and Argentina. Commercial margin increased. Recurring operating
income increased sharply by 14.2% to €608m.

Asia

Overall, sales in China and Taiwan grew by 0.5% at constant exchange rates
(+10.3% at current exchange rates). The commercial margin was resilient.
Continued productivity gains did not fully offset the increase in distribution
costs linked to expansion and wage inflation in China. Recurring operating
income was down by 10.3% to €168m.

2012 results: Key points

Income Statement

  *Sales increased by 1.6% at constant exchange rates vs. 2011 restated for
    disposals. At current exchange rates, the change was +0.9%.
  *Recurring operating income was stable at constant exchange rates and down
    by 2.6% to €2,140 at current exchange rates, due to the following:

       *Stable gross margin from current operations at 22.1% of sales.
       *SG&A costs under control, up by 1.3%, +10 bp as a percentage of
         sales.

  *The Group’s operating income reached €1,434m vs. a loss of €140m in 2011
    after accounting for non-current expenses amounting to €707m in 2012.
    Capital gains on asset disposals of €234m partially offset €285m of
    restructuring costs, €236m of asset impairments and €419m of other costs,
    largely due to a revaluation of provisions.
  *Net income, Group share improved significantly to €1,233m vs. €371m in
    2011.

       *Net income from recurring operations, Group share stood at €113m, due
         to the following:

            *An increase in net financial expenses of 25.1% to €882m, largely
              due to an exceptional expense of €216m linked to our management
              of interest rate position.
            *A decrease in tax charge to €388m, down 58.3% vs. 2011. The
              effective income tax rate (restated for exceptional items) comes
              out at 35.7%.

       *Net income from discontinued operations, Group share, amounted to
         €1,120m, mainly linked to the asset disposals closed in 2012.

Cash flow statement & debt

  *Free cash flow was €279m, including:

       *Cash flow from operations (excluding discontinued operations) of
         €2,180, down by 8%, mainly due to cash outflows linked to preexisting
         tax litigation and restructuring.
       *A slight increase in working capital requirements, improving compared
         to 2011, thanks to better operating working capital after a
         significant gain in days of inventories.
       *Capital expenditure, constrained at €1,547m, down by 27% vs. 2011. A
         third of the investments went towards growth in emerging market,
         stable compared to 2011 in volume.

  *Changes in the Group’s scope generated a net cash inflow of €2bn in 2012:

       *The impact of discontinued activities, principally the disposals of
         our activities in Colombia and Malaysia, is a cash inflow of €1,960m.
       *The disposal of Altis led to a cash inflow of €153m.
       *The acquisition of the shares of Guyenne & Gascogne’s parent company
         generated a cash outflow of €96m.

  *The net cash outflow linked to the dividend payment amounted to €137m, as
    around 60% of the 2012 dividend was paid out in Carrefour shares.
  *Net debt improved by €2.6bn to €4,320m at December 31, 2012, strengthening
    the Group’s financial structure. The net debt over EBITDA ratio
    significantly improved to 1.2x in 2012 vs. 1.8x in 2011.

Proposed dividend of €0.58 per share

The Board of Directors decided at its meeting on March 6, 2013 to submit for
approval to the Annual General Meeting to be held on April 23, 2013 a dividend
of €0.58 per share for the year ending December 31 2012, payable in cash or in
Carrefour shares.

The proposed dividend amounts to a payout ratio of 45% of net income, Group
share, adjusted for exceptional items, in line with the policy set out in
March 2012.

2013 Priorities

  *Development of the multi-local, multi-format model

       *France: Continued action plans in all formats, with priority given to
         improvement of the offer and of price perception, store
         refurbishments, Drive roll-out and multi-channel development
       *Europe: Adaptation of the offer and costs to face the tough economic
         environment
       *Emerging markets: Continued expansion in Latin America and Asia
       *New momentum in the development of real estate assets

  *Decentralization and empowerment

       *Simplify structures and decision-making process
       *Re-empower stores
       *Place the client at the core of the business

  *Continued strict financial discipline

       *Stable dividend payout policy
       *Controlled increase of capital expenditure (expected between €2.2bn
         and €2.3bn in 2013)
       *Control of working capital

                                    AGENDA
                        Q1 2013 sales: April 18, 2013
                    Annual General Meeting: April 23, 2013

                                  APPENDICES

                                                                
CONSOLIDATED INCOME STATEMENT
                                                                  
(in millions of euros)                            2011^4    2012      % change
                                                                      
Sales, net of taxes                               76,067    76,789    +0.9%
Loyalty program                                   -810      -662      -18.3%
Other revenues                                    2,224     2,333     +4.9%
Total Revenues                                    77,481    78,460    +1.3%
Cost of sales                                     -60,673   -61,523   +1.4%
Gross margin of current operations                16,809    16,937    +0.8%
SG&A                                              -13 060   -13 249   +1.4%
Current operating incomes before D&A (EBITDA)     3 748     3 688     -1.6%
Depreciation & amortization                      -1 552   -1 548   -0.3%
Recurring operating income (ROI)                 2 197    2 140    -2.6%
Non-current income and expenses                   -2 337    -707      -69.8%
Operating income                                  -140      1 434
Financial expenses                                -705      -882      +25.1%
Profit before tax                                 -845      552
Income tax                                        -931      -388      -58.3%
Companies accounted for by the equity method      64        72        +13.0%
Net income from continuing operations             -1,713    235
Net income from discontinued operations           2,116     1,081
Net income                                       404      1,316    
Of which Net income – Group share                 371       1,233
Of which net income from continuing operations    -1,865    113
Of which net income from discontinued             2,237     1,120
operations
Attributable to non-controlling interests         33        83
Of which net income from continuing operations    153       122
Of which net income from discontinued             -120      -39
operations

                                                        
MAIN RATIOS
                                                         
                                                   2011^4   2012
Gross margin from current operations / Net sales   22,1%    22,1%
SG&A / Net sales                                   17,2%    17,3%
Recurring operating income / Net sales             2,9%     2,8%
Operating income / Net sales                       -0,2%    1,9%
                                                            

                                                                    
CONSOLIDATED BALANCE SHEET
                                                                     
(in millions of euros)                                        2011    2012
ASSETS
Intangible assets                                              9,706    9,409
Tangible assets                                                13,771   11,509
Financial investments                                          1,713    1,509
Deferred tax assets                                            745      752
Investment properties                                          507      513
Consumer credit from financial-services companies – long       2,236    2,360
term
Non current assets                                             28,676   26,052
Inventories                                                    6,848    5,658
Trade receivables                                              2,782    2,144
Consumer credit from financial-services companies – short      3,384    3,286
term
Tax receivables                                                468      520
Other receivables                                              969      795
Current financial assets                                       911      352
Cash and cash equivalents                                      3,849    6,573
Current assets                                                 19,211   19,328
Assets held for sale                                           44       465
TOTAL                                                          47,931   45,844
                                                                        
LIABILITIES
Shareholders equity, Group share                               6,618    7,487
Minority interests in consolidated companies                   1,009    874
Shareholders equity                                            7,627    8,361
Deferred tax liabilities                                       586      580
Provisions for contingencies                                   3,680    4,000
Borrowing – long term                                          9,513    8,983
Bank loans refinancing – long term                             419      1,966
Non current liabilities                                        14,198   15,529
Borrowings – short term                                        2,159    2,263
Trade payables                                                 15,362   12,925
Bank loans refinancing – short term                            4,482    3,032
Tax payables & others                                          1,319    1,040
Other debts                                                    2,785    2,422
Current liabilities                                            26,106   21,682
Liabilities related to assets held for sale                    0        273
TOTAL                                                          47,931   45,844
                                                                        

                                                                    
CONSOLIDATED CASH FLOW STATEMENT
                                                                     
(in millions of euros)                                        2011 ^5   2012
                                                                        
NET DEBT OPENING                                              -7,998    -6,911
Gross cash flow (ex. discontinued activities)                 2,381     2,180
Change in working capital                                     -240      -42
Impact of discontinued activities                             207       -171
Cash flow from operations (ex. financial services)            2,348     1,967
Capital expenditures                                          -2,119    -1,547
Asset disposals (business related)                            131       153
Change in payables to fixed asset suppliers                   191       -166
Impact of discontinued activities                            -336     -127
Free Cash Flow                                               215      279
Financial investments                                         -71       -209
Proceeds from disposals of subsidiaries and from other        385       240
tangible & intangible assets
Others                                                        -61       34
Impact of discontinued activities                             1,482     1,960
Cash Flow after investments                                   1,950     2,304
Dividends paid by Carrefour                                   -708      -137
Dividends paid to minorities and others                       -87       -115
Acquisition and disposal of investments without change of     -13       -9
control
Treasury shares                                               -126      0
Others                                                        93        420
Impact of discontinued activities                             206       122
Consumer credit impact                                        -229      7
NET DEBT CLOSING                                              -6,911    -4,320
                                                                        

                                                               
CHANGES IN SHAREHOLDER EQUITY
                                                                 
                                     Total           Shareholders’   Minority
(in millions of euros)              shareholders’  equity,        interests
                                     equity          Group share
At December 31, 2011                 7,627           6,618           1,009
Net income for the year              1,316           1,233           83
Other comprehensive income after     -362            -354            -8
tax
Share-based payments                 9               9               0
2011 dividends                       -257            -137            -121
Change in capital and additional     194             188             6
paid-in capital
Impact of changes in perimeter and   -167            -72             -95
other movements
At December 31, 2012                 8,361           7,487           874
                                                                     

                                                                
NET INCOME, GROUP SHARE, ADJUSTED FOR EXCEPTIONAL ITEMS
                                                                  
(in millions of euros)                           2011 ^6  2012     % change
Net income, Group share                           371       1,233     x 3.3
Restatement for non-current income and expenses   2,337     707
(before tax)
Restatement for exceptional items in net          151       284
financial expenses
Tax impact of restated elements                   (172)     (122)
Restatement for exceptional items recorded in     (5)       (1)
income tax
Minority interest on restated elements            419       (60)
Restatement of Net income from discontinued       (2,337)   (1,120)
operations
Net income, Group share, adjusted for             864       921       +6.6%
exceptional items
                                                                      

                                                          
PRO FORMA H1 2011 AND H1 2012 INCOME STATEMENT (UNAUDITED)
                                                           
(in millions of euros)                           H1 2011 ^7   H1 2012 ^7
                                                              
Sales, net of taxes                              37,042       37,285
Loyalty program                                  -449         -373
Other revenues                                   1,062        1,169
Total Revenues                                   37,654       38,081
Cost of sales                                    -29,658      -30,051
Gross margin of current operations               7,996        8,030
SG&A                                             -6,417       -6,526
Recurring operating income before D&A (EBITDA)   1,579        1,504
Depreciation & amortization                     -778        -764
Recurring operating income (ROI)                801         740
Non-current income and expenses                  -829         -63
Operating income                                 -28          677
Financial expenses                               -319         -326
Profit before tax                                -347         351
Income tax                                       -469         -122
Companies accounted for by the equity method     24           23
Net income from continuing operations            -793         253
Net income from discontinued operations          552          -273
Net income                                       -241         -21
                                                              

                                                          
PRO FORMA H2 2011 AND H2 2012 INCOME STATEMENT (UNAUDITED)
                                                           
(in millions of euros)                           H2 2011 ^7   H2 2012
                                                              
Sales, net of taxes                              39,025       39,504
Loyalty program                                  -361         -289
Other revenues                                   1,162        1,164
Total Revenues                                   39,827       40,379
Cost of sales                                    -31,015      -31,472
Gross margin of current operations               8,813        8,907
SG&A                                             -6,643       -6,723
Recurring operating income before D&A (EBITDA)   2,170        2,184
Depreciation & amortization                     -774        -784
Recurring operating income (ROI)                1,396       1,400
Non-current income and expenses                  -1,508       -644
Operating income                                 -112         757
Financial expenses                               -386         -556
Profit before tax                                -498         201
Income tax                                       -462         -266
Companies accounted for by the equity method     40           49
Net income from continuing operations            -920         -18
Net income from discontinued operations          1,564        1,354
Net income                                       645          1,337
                                                              

                                                               
PRO FORMA RECURRING OPERATING INCOME BY REGION (UNAUDITED)
                                                                
H1 2011 Recurring operating income (in          Reported         Restated ^8
millions of euros)                               August 30, 2012
France                                           299               295
Europe ex. France                                220               218
Latin America                                    222               205
Asia                                             121               106
Global functions                                 -24               -23
Total                                            838               801
                                                                   

H2 2011 Recurring operating income (in          Reported         Restated ^8
millions of euros)                               August 30, 2012
France                                          606              604
Europe ex. France                                425               423
Latin America                                    360               328
Asia                                             117               81
Global functions                                 -40               -38
Total                                            1,468             1,396
                                                                   
FY 2011 Recurring operating income (in          Reported         Restated ^8
millions of euros)                               August 30, 2012
France                                           905               898
Europe ex. France                                645               640
Latin America                                    582               532
Asia                                             238               187
Global functions                                 -64               -61
Total                                            2,306             2,197
                                                                   

H1 2012 Recurring operating income (in        Reported         Restated ^8
millions of euros)                             August 30, 2012
France                                        279              275
Europe ex. France                              150               148
Latin America                                  245               232
Asia                                           116               105
Global functions                               -20               -19
Total                                          769               740
                                                                 
                                                                 
H2 2012 Recurring operating income (in                        Reported
millions of euros)                                               March 7, 2013
France                                                           654
Europe ex. France                                                361
Latin America                                                    376
Asia                                                             62
Global functions                                                 -55
Total                                                            1,400
                                                                 
                                                                 
FY 2012 Recurring operating income (in                        Reported
millions of euros)                                               March 7, 2013
France                                                           929
Europe ex. France                                                509
Latin America                                                    608
Asia                                                             168
Global functions                                                 -74
Total                                                            2,140
                                                                 

                       2012 DIVIDEND PAYMENT PROCEDURE

The ex-dividend date has been set as May 2, 2013. The period during which
shareholders may choose the option of the payment of dividend in cash or in
shares will begin May 2, 2013 and end May 23, 2013, included. Payment of the
cash dividend and settlement of the stock dividend will occur on June 7, 2013.

DEFINITIONS

  *Gross margin from current operations

Gross margin from current operations is the difference between the sum of net
sales, other income, reduced by loyalty program costs and the cost of goods
sold. Cost of sales comprises purchase costs, changes in inventory, the cost
of products sold by the financial services companies, discounting revenue and
exchange gains and losses on goods purchases.

  *Recurring Operating Income Before Depreciation and Amortization (EBITDA)

Recurring Operating Income Before Depreciation and Amortization (EBITDA) is
defined as the difference between the gross margin from current operations and
sales, general and administrative expenses. It excludes non-recurring items as
defined below.

  *Recurring Operating Income (ROI)

Recurring Operating Income is defined as the difference between the gross
margin from current operations and sales, general and administrative expenses,
depreciation and amortization.

  *Operating Income (EBIT)

Operating Income (EBIT) is defined as the difference between gross margin from
current operations and sales, general and administrative expenses,
depreciation, amortization and non-recurring items

Non-recurring income and expenses are certain material items that are unusual
in terms of their nature and frequency, such as impairment, restructuring
costs and expenses related to the revaluation of preexisting risks on the
basis of information that the Group became aware of during the accounting
period.

  *Free Cash Flow

Free cash flow is defined as the difference between funds generated by
operations, the variation of working capital requirements and capital
expenditures.

DISCLAIMER

This press release 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
from those in such forward-looking statements as a result of a number of risks
and uncertainties, including but not limited to the risks described in the
documents filed with the Autorité des marchés financiers as part of the
regulated information disclosure requirements and available on Carrefour's
website (www.carrefour.com), and in particular the Annual Report (Document de
référence). These documents are also available in English language on the
company's website. Investors may obtain a copy of these documents from
Carrefour free of charge. Carrefour does not assume any obligation to update
or revise any of these forward-looking statements in the future.

^1 In accordance with IFRS 5, income and expenses from discontinued activities
(Greece, Singapore, Colombia, Malaysia and Indonesia) have been reclassified
on the line “Net income from discontinued operations” of the consolidated
income statement in 2011 and 2012.
^2 The 2012 social and consolidated accounts were approved by the Carrefour
Board of Directors, which met on March 6, 2013. The accounts were audited by
the Group’s auditors.
^3 In accordance with IFRS 5, income and expenses from discontinued activities
(Greece, Singapore, Colombia, Malaysia and Indonesia) have been reclassified
on the line “Net income from discontinued operations” of the consolidated
income statement in 2011 and 2012.
^4 In accordance with IFRS 5, income and expenses from discontinued activities
(Greece, Singapore, Colombia, Malaysia and Indonesia) have been reclassified
on the line “Net income from discontinued operations” of the consolidated
income statement in 2011 and 2012.
^5 In accordance with IFRS 5, cash flows from discontinued activities (Greece,
Singapore, Colombia, Malaysia and Indonesia) have been reclassified on the
line “Impact of discontinued activities” of the consolidated cash flow
statement in 2011 and 2012.
^6 In accordance with IFRS 5, income and expenses from discontinued activities
(Greece, Singapore, Colombia, Malaysia and Indonesia) have been reclassified
on the line “Net income from discontinued operations” of the consolidated
income statement in 2011 and 2012.
^7 In accordance with IFRS 5, income and expenses from discontinued activities
(Greece, Singapore, Colombia, Malaysia and Indonesia) have been reclassified
on the line “Net income from discontinued operations” of the consolidated
income statement in 2011 and 2012.
^8 In accordance with IFRS 5, income and expenses from discontinued activities
(Greece, Singapore, Colombia, Malaysia and Indonesia) have been reclassified
on the line “Net income from discontinued operations” of the consolidated
income statement in 2011 and 2012.

Contact:

Carrefour
Investor relations:
Réginald Gillet, Alessandra Girolami, Matthew Mellin
Tel : +33 (0)1 41 04 26 00
or
Shareholder relations:
Céline Blandineau
Tel : 0 805 902 902 (n° vert en France)
or
Group Communications
Tel : +33 (0)1 41 04 26 17
 
Press spacebar to pause and continue. Press esc to stop.