Carrefour: 2014 First Half Results: Continued Growth

  Carrefour: 2014 First Half Results: Continued Growth

                         Organic sales growth of 4.3%

               Increase in Recurring Operating Income of +13.8%

        Strong increase in adjusted net income, Group share of +16.7%

Business Wire

BOULOGNE-BILLANCOURT, France -- July 31, 2014

Regulatory News:

Carrefour (Paris:CA):

Strong profit growth at constant exchange rates in first half 2014

  *Net sales of €35.9bn, up +4.3%^1, highest organic growth rate in five
  *Growth in Recurring Operating Income: up +13.8%^2 to €833m
  *Rise in net income, Group share, adjusted for exceptional items: up
    +16.7%^3 to €274m
  *Increase in gross cash flow of +41.6% to €1.3bn (+1.9% excluding

Europe: Growth of +7.8% in Recurring Operating Income

France: New half of improved profitability

  *Further organic sales growth: +1.9%
  *Traffic up in all formats
  *Growth in Recurring Operating Income for the 4^th consecutive half: +6.9%

Other European Countries: Further improvement in profitability

  *Overall stability in sales with growth in Spain, Belgium and Romania
  *Recurring Operating Income up +19.3%

Emerging markets: Growth of +19.2% in Recurring Operating Income

  *Excellent sales performance and increased profitability in Brazil and
  *Stable sales in Asia

Investments up, two tactical acquisitions

  *Continued investments at €818m, in line with our catch-up, remodeling and
    network expansion policy
  *Signing of agreements to acquire the activities of DIA France and 53
    supermarkets in northern Italy, reinforcing our multiformat strategy

^1 Ex petrol ex calendar.
^2 At constant exchange rates.
^3 Adjusted net income: See in appendix.

First half 2014 key figures^1

                              H1 2013              Variation at   Variation at
(€M)                        restated  H1 2014  constant      current
                                                   exch. rates    exch. rates
Net sales                   36,446    35,870   +3.4%         -1.6%
Net sales ex petrol         32,480    32,119   +4.3%         -1.1%
Recurring Operating
Income before D&A           1,488     1,515    +6.6%         +1.8%
EBITDA Margin               4.1%      4.2%                  
Recurring Operating         772       833      +13.8%        +7.9%
Recurring Operating         2.1%      2.3%                  
Adjusted net income,        235       274                   +16.7%
Group share
Net debt at close           5,894     7,324                 +€1.4bn

Breakdown by zone of first half 2014 net sales and recurring operating income

            Net sales                                 Recurring Operating Income
                                             Variation                     Variation   Variation
              H1 2013    H1       Organic    at          H1 2013    H1     at          at
(€M)        restated  2014    growth^2  current    restated  2014  constant   current
                                             exch.                         exch.       exch.
                                             rates                         rates       rates
France        16,947    17,005  +1.9%     +0.3%       482       515   +6.9%      +6.9%
Other         9,176      9,173    -0.1%      0.0%        36         43     +19.3%      +19.1%
Europe        26,123     26,178   +1.1%      +0.2%       518        558    +7.8%       +7.7%
Latin         6,953      6,454    +16.8%     -7.2%       217        247    +33.2%      +13.4%
Asia          3,370      3,237    +0.2%      -3.9%       98         83     -11.9%      -15.2%
Emerging    10,323    9,691   +11.2%    -6.1%      315       330   +19.2%     +4.8%
Global                                         -61       -55   +9.6%      +10.2%
Total       36,446    35,870  +4.3%     -1.6%      772       833   +13.8%     +7.9%

^1 The H1 2014 social and consolidated accounts were approved by the Carrefour
Board of Directors, which met on July 30^th, 2014. The accounts were submitted
to a limited review by the Group’s auditors.

Figures for the first half 2014 and the comparative first half 2013
information presented in this document take into account the classification of
certain activities in accordance with IFRS 5 – Assets held for sale and
discontinued operations.

^2 Excluding petrol and calendar.

Further growth in Recurring Operating Income (+13.8% at constant exchange
rates) and in adjusted net income, Group share (+16.7%)

Income statement

In H1 2014, Carrefour recorded solid net sales growth. Net sales were up 4.3%
on an organic basis. At current exchange rates, sales were down 1.6%. Europe
and Emerging Markets both recorded sales growth: +1.1% and +11.2%

Recurring Operating Income grew once again and reached €833m, up +13.8% at
constant exchange rates (+7.9% at current exchange rates), driven by both
Europe (+7.8%) and Emerging Markets (+19.2%).

In France, recurring operating income was €515m, up +6.9%, an increase of +20
basis points (bp) in gross margin, which reached 3.0% of sales. This
performance is mainly explained by an improved gross margin as a result of
decreased shrinkage and cost savings from logistics. Profitability was good in
all formats.

In Other European countries, recurring operating income stood at €43m, up
+19.3% at constant currencies. Operating margin was slightly up at 0.5% of
sales. While maintaining constant attention to price positioning, the gross
margin improved. In Spain and in Belgium, profitability increased. Italy
continued rolling out its action plans and intensified its commercial
investments linked to the football world cup in the half.

Strong growth in Latin America continued with recurring operating income of
€247m, up +33.2% at constant exchange rates. Operating margin stood at 3.8%,
up +70bp. This increase reflected excellent like-for-like sales in Brazil and
Argentina and a better gross margin.

In Asia, recurring operating income was €83m. Gross margin held up well. Amid
a more frugal consumption environment and a decrease in shopping card
activity, China continued its expansion to build up its long-term position.
Taiwan improved its performance.

Net non-recurring income stood at €264m and mainly reflected the capital gain
linked to the contribution of assets to property company Carmila. Net income
from continuing operations, Group share, was €474m and reflected:

  *A decrease of €131m in financial expenses, reflecting the better cost of
    funding and the €119m non-recurring expense linked to the bond buyback in
    the first half 2013
  *A stable effective tax rate

Net income, Group share, was €441m.

Adjusted net income, Group share, stood at €274m, an increase of +16.7%.

Cash flow and debt

Cash flow from operations rose by +41.6%. Adjusted for exceptional items and
discontinued operations, it increased by +1.9%, in line with the increase in
EBITDA, to €1,252m (vs €1,229m in the first half of 2013).

Carrefour continued to invest in remodeling and expansion with capital
expenditure of €818m. The change in payables to fixed asset suppliers led to a
use of €382m. Change in working capital excluding exceptional items, stable
versus the prior year, was a cash-out of €2,488m.

Free cash flow was -€2,412m, reflecting the seasonality of the business.

Acquisitions and disposals led to a net total cash-out of €186m, partly
explained by the creation of Carmila. The cash dividend paid by Carrefour was
a limited €149m, as 65% of shareholders opted for a dividend payment in
shares. Financial expenses decreased by €27m to €192m.

Net financial debt as at June 30^th, 2014 was €7.3bn.

H1 2014 highlights

  *In April, creation of Carmila, a company dedicated to enhancing the value
    of the shopping centers adjacent to Carrefour hypermarkets in France,
    Spain and Italy and in which Carrefour holds a 42% stake.
  *Acquisition in June of DIA France, comprising more than 800 stores
    totaling nearly 550,000 m² and 2.3 billion euros of sales under banners in
    2013. This transaction, which remains subject to the approval of the
    relevant antitrust authorities, should contribute to the growth of
    Carrefour’s multiformat store network in France.
  *Acquisition of 53 supermarkets located in northern Italy in June, with a
    combined sales area of 58,000 m² and net sales of around 300 million euros
    in 2013. This acquisition will strengthen Carrefour’s multiformat strategy
    in Italy. The completion of the transaction is subject to the approval of
    the relevant antitrust authorities.

Staying the course on 2014 priorities

Carrefour is staying the course. The priorities announced at the annual
results presentation in March are reaffirmed:

  *Continue action plans in all countries aiming at continuous improvement of
    our offer and price image to enhance the shopping experience, notably in
    our three largest markets, France, Brazil and Spain but also in Italy
  *Accelerate multi-channel roll-out

       *Revamp and convergence of our websites in France, gradual broadening
         of our offer
       *Continued development of click & collect

  *Continue structural projects including:

       *Revamp of the supply chain in France
       *IT rationalization

  *Enhance the attractiveness of our sites in France, Spain and Italy by
    capitalizing on the creation of Carmila
  *Accelerate store remodelings and relaunch multi-format expansion

       *Investments of between €2.4bn and €2.5bn in 2014
       *Intensification of the remodeling plan
       *Continued long-term growth in emerging markets, particularly in China
         and Brazil

  *Maintain strict financial disciplineContacts


Consolidated Income Statement

(€M)                                          H1 2013   H1 2014  Variation
Sales, net of taxes                           36,446    35,870   -1.6%
Sales, net of taxes and loyalty               36,159    35,564   -1.6%
Other revenues                                1,184     1,192    +0.7%
Total Revenues                                37,342    36,757   -1.6%
Cost of sales                                 -29,357   -28,686  -2.3%
Commercial income                               7,986      8,071     +1.1%
SG&A                                          -6,498    -6,556   +0.9%
Recurring operating incomes before D&A        1,488     1,515    +1.8%
Depreciation & amortization                   -716      -682     -4.7%
Recurring operating income                    772       833      +7.9%
Non-current income and expenses               489       264      -45.9%
Operating income                              1,261     1,097    -13.0%
Financial expenses                              -401       -269      -32.8%
Profit before tax                               860        828       -3.8%
Income tax                                      -298       -300      +0.6%
Companies accounted for by the equity         25        9        -62.7%
Net income from continuing operations         588       537      -8.5%
Net income from discontinued operations       368       -33      
Net income                                    955       504      -47.2%
Of which Net income – Group share               902        441
Of which net income from continuing             526        474
operations, Group share
Of which net income from discontinued         376       -33
operations, Group share
Of which Net income – Non-Controlling           53         63
Interests (NCI)
Of which net income from continuing             61         63
operations, NCI
Of which net income from discontinued         -8        0
operations, NCI

Calculation of adjusted net income, Group share

(€M)                                          H1 2013   H1 2014  Variation
Net income from continuing operations,        526       474      -9.8%
Group share
Restatement for non recurring income and      -489      -264    
expenses (before tax)
Restatement for exceptional items in net        139        11
financial expenses
Tax impact^1                                    70         40
Restatement on share of income from
minorities and companies consolidated by      -11       13       
the equity method
Adjusted net income, Group share              235       274      +16.7%

^1 Tax impact of restated items (non recurring income and expenses and
financial expenses) and non recurring tax items.

Main ratios

                                        H1 2013   H1 2014
Commercial margin                        21.9%     22.5%
Recurring operating income / Net sales     2.1%       2.3%
Operating income / Net sales             3.5%      3.1%

Consolidated Balance Sheet

(€M)                                             June 30^th,   June 30^th,
                                                   2013            2014
Intangible assets                                  9,131           9,108
Tangible assets                                    10,966          11,227
Financial investments                              1,418           2,541
Deferred tax assets                                854             944
Investment properties                              422             319
Consumer credit from financial-services          2,372         2,413
companies – long term
Non-current assets                               25,164        26,553
Inventories                                        5,595           5,902
Trade receivables                                  2,390           2,281
Consumer credit from financial-services            2,968           3,373
companies – short term
Tax receivables                                    936             735
Other receivables                                  946             1,041
Current financial assets                           409             361
Cash and cash equivalents                        3,834         2,030
Current assets                                   17,079        15,723
Assets held for sale                             739           12
TOTAL                                            42,981        42,288
Shareholders equity, Group share                   7,838           8,158
Minority interests in consolidated companies     767           783
Shareholders’ equity                             8,605         8,941
Deferred tax liabilities                           532             537
Provisions for contingencies                       3,608           3,734
Borrowing – long term                              8,496           6,626
Bank loans refinancing – long term               1,781         1,954
Non current liabilities                          14,416        12,851
Borrowings – short term                            1,640           3,089
Trade payables                                     11,219          10,868
Bank loans refinancing – short term                2,895           3,079
Tax payables & others                              1,090           1,156
Other debts                                      2,634         2,298
Current liabilities                              19,478        20,490
Liabilities related to assets held for sale      482           7
TOTAL                                            42,981        42,288

Consolidated Cash Flow Statement

(€M)                                                      H1 2013   H1 2014
NET DEBT OPENING                                          - 4,320   - 4,117
Gross cash flow (ex. discontinued activities)             907       1,284
Change in working capital                                   - 2,440    - 2,571
Impact of discontinued activities                         - 28      0
Cash flow from operations (ex. financial services)        - 1,561   - 1,287
Capital expenditures                                        - 620      - 818
Change in net payables to fixed asset suppliers (inc.       - 91       - 378
Asset disposals (business related)                          54         75
Impact of discontinued activities                         - 23      - 5
Free Cash Flow                                            - 2,240   - 2,412
Financial investments                                       - 35       - 268
Proceeds from disposals of subsidiaries and from other      539        82
tangible & intangible assets
Others                                                      91         -68
Impact of discontinued activities                         441       0
Cash Flow after investments                               - 1,204   -2,667
Dividends/ capital increase                                 - 164      - 198
Acquisition and disposal of investments without change      - 11       - 122
of control
Cost of net financial debt                                  - 219      -192
Others                                                      - 8        37
Impact of discontinued activities                           35         -16
Consumer credit impact                                    -2        -50
NET DEBT CLOSING                                          - 5,894   - 7,324

Changes in Shareholder Equity

                                    Total           Shareholders’   Minority
(€M)                              shareholders’  equity,        interests
                                    equity          Group share
At December 31, 2013              8,597          7,844          754
Total comprehensive income for    560            483            77
H1 2014
2013 dividend                     -199           -149           -50
Impact of scope changes and       -18            -20            2
At June 30, 2014                  8,940          8,158          783


Organic sales growth

Like for like sales growth plus net openings over the past twelve months,
including temporary store closures.

Commercial income

Commercial income 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
rate gains and losses on goods purchased.

Recurring Operating Income Before Depreciation and Amortization (EBITDA)

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

Recurring Operating Income

Recurring Operating Income is defined as the difference between commercial
income and sales, general and administrative expenses, depreciation and

Operating Income (EBIT)

Operating Income (EBIT) is defined as the difference between commercial income
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

Free Cash Flow

Free cash flow is defined as the difference between funds generated by
operations (before net interest costs), the variation of working capital
requirements and capital expenditures.


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 (, 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.


Investor Relations
Réginald Gillet, Alessandra Girolami, Matthew Mellin
Tel : +33 (0)1 41 04 26 00
Shareholder Relations
Tel : 0 805 902 902 (toll-free n° in France)
Group Communications
Tel : +33 (0)1 41 04 26 17
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