Regulatory News:

Carrefour (Paris:CA):

  Fourth quarter 2017   Full-year 2017

Sales
inc. VAT
(€m)

   LFL*   Total variation

Sales inc.
VAT (€m)

   LFL*   Total variation
       

At current
exchange
rates

 

At constant
exchange
rates

   

At current
exchange
rates

 

At constant
exchange
rates

France 10,706 +1.5% -0.5%   -0.5% 40,096 +0.8% -0.1%   -0.1%
Other countries 12,621   +2.1%   +0.1%   +4.7% 48,144   +2.2%   +5.6%   +5.1%
Group 23,328   +1.9%   -0.2%   +2.3% 88,240   +1.6%   +3.0%   +2.7%

*ex petrol and ex calendar and at constant exchange rates

A difficult full-year 2017

2017 Sales: Total growth of +2.7% at constant exchange rates

  Sales inc. VAT (€m)   LFL*   Total variation
   

At
current
exchange
rates

 

At
constant
exchange
rates

Group   88,240 +1.6% +3.0%   +2.7%
France 40,096 +0.8% -0.1%   -0.1%
Other countries   48,144 +2.2% +5.6%   +5.1%
Europe 23,566 +1.3% +5.0% +4.9%
Latin America 18,021 +6.1% +10.9% +8.9%
Asia   6,557 -3.7% -4.7%   -3.3%

*ex petrol and calendar effects of -0.2% and -0.5% respectively, at constant exchange rate

Carrefour posted sales of €88,240m in full-year 2017, representing total growth of +3.0%. At constant exchange rates, sales were up +2.7%.

The Group’s like-for-like growth was +1.6% in 2017, to be compared with like-for-like growth of +3.0% in 2016. This evolution notably reflects a slowdown in food sales growth that was particularly marked in the second half. Food sales in Brazil grew at a far slower pace in 2017, impacted by food deflation since the month of June while food inflation had been high in 2016, in particular in the second half. Food sales in France and in Europe in 2017 showed broadly similar trends to 2016.

Non-food sales improved on a like-for-like basis in 2017 vs 2016. Brazil benefited from a revision of its non-food commercial proposition. In France, apparel benefited from a revision of its product lines and its commercial policy.

In France, total sales are slightly up, by +0.8% like-for-like in 2017. In a highly competitive environment, Carrefour’s commercial momentum was similar to that of 2016.

In a toughening competitive environment in Europe, like-for-like growth in the full year stood at +1.3%, notably reflecting improved trends in Northern Europe.

The slowdown in like-for-like growth in Latin America (+6.1% in 2017 vs +13.5% in 2016) reflects food deflation in Brazil in the second half, to be compared with double-digit inflation in 2016, as well as high inflation in Argentina in a context that remains challenging.

Sales trends in Asia improved over the year, at -3.7% (vs -5.0% in 2016).

Outlook for recurring Operating Income and Free Cash Flow (non-audited estimates)

Recurring Operating Income for full-year 2017 should stand at about €2.00bn, a drop of -15% at current exchange rates.

This full-year evolution notably reflects:

  • strong commercial pressure, particularly in France,
  • an increase in distribution costs in our main markets,
  • an increase in depreciation after a period of significant investments,
  • a more difficult situation in Argentina.

The full-year Recurring Operating Income also includes sources of losses that continue to weigh on profitability, notably the ex-Dia store network for about -€150m.

Free cash flow in full-year 2017, excluding exceptional items, should stand around €950m vs. €1,039m in 2016.

Capital expenditure in the full year should stand at €2,145mn ex Cargo.

FOURTH QUARTER 2017 SALES:

LIKE-FOR-LIKE GROWTH OF +1.9%

  Sales inc. VAT (€m)   LFL*   Total variation
   

At current
exchange
rates

 

At
constant
exchange
rates

Group   23,328 +1.9% -0.2%   +2.3%
France 10,706 +1.5% -0.5%   -0.5%
Other countries   12,621 +2.1% +0.1%   +4.7%
Europe 6,509 +0.4% +3.4% +3.3%
Latin America 4,673 +5.9% -2.4% +8.4%
Asia   1,439 -3.0% -5.4%   -0.7%

*ex petrol and calendar effects of -0.3% and -0.6% respectively, at constant exchange rates

Carrefour’s fourth-quarter 2017 sales stood at €23,328m, up +1.9% like-for-like, an improvement over the previous quarter (+0.5%), principally linked to activity in France.

In a persistently competitive environment, France posted like-for-like growth of +1.5% vs -0.9% in the third quarter, reflecting more favorable momentum in all formats and successful Black Friday and year-end campaigns. Sales at hypermarkets, up +0.7% like-for-like, also benefited from the Carrefour Anniversary campaign, which took place in October this year instead of in September, as in 2016.

Europe’s performance (+0.4% like-for-like and +3.4% in total at current exchange rates) was in line with that of Q3:

  • In Spain, like-for-like sales were down -0.6%. This evolution reflects a high comparable base and continued competitive pressure in this market. Total growth was +6.0%, notably taking into account the Eroski stores acquired and integrated in the first half;
  • Like-for-like sales in Italy were down -1.1%. This evolution reflects strong comparables over the past two years, notably supported by the momentum of store remodelings and the roll-out of clusterization in supermarkets, as well as a toughening competitive environment;
  • Like-for-like sales in Belgium were up +0.8%;
  • Sales in Poland were up by +1.9% on a like-for-like basis despite a high comparable base in Q4 2016. The strong momentum continued in Romania, with sales up +7.8%.

In Latin America, like-for-like sales were up +5.9%:

  • In Brazil, like-for-like sales rose +1.4%, impacted by food deflation that continued in the fourth quarter (of around -5%) while Q4 2016 saw food inflation of +13%.
    In this context, Atacadão’s like-for-like sales still posted 2.2% growth, with higher volumes, notably thanks to an excellent Black Friday campaign. Like-for-like sales at Carrefour Retail were broadly stable at -0.1%.
  • Like-for-like sales in Argentina increased by +23.2%, a level close to the country’s inflation rate.

In Asia, sales were down -3.0% on a like-for-like basis. China posted a like-for-like sales drop of -5.4%, in line with trends observed over the past quarters, while favorable trends continued in Taiwan, where like-for-like sales rose for the twelth consecutive quarter, by +3.5%.

AGENDA

  • Presentation of the transformation plan: January 23, 2018
  • Full-year 2017 results: February 28, 2018 (conference call after market close)
  • First-quarter 2018 sales: April 11, 2018

VARIATION OF FULL-YEAR 2017 SALES INC. VAT

The Group’s sales in the full year stood at €88,240m. In the period, currencies had a favorable effect of +0.3%. The petrol effect was a favorable +0.2% and the calendar effect was an unfavorable -0.5%.

   

Sales
inc. VAT
(€m)

  

Variation ex petrol ex
calendar

  

Total variation inc.
petrol

  LFL   Organic

At constant
exchange
rates

  

At current
exchange
rates

France   40,096 +0.8%   -0.3% -0.1%   -0.1%
Hypermarkets 20,783 -0.5%   -1.0% -0.2%   -0.2%
Supermarkets 12,824 +0.9% -1.0% -1.4% -1.4%
Convenience/other formats 6,489 +4.7% +3.6% +2.8% +2.8%
                 
Other countries   48,144 +2.2%   +4.1% +5.1%   +5.6%
                 
Other European countries   23,566 +1.3%   +2.0% +4.9%   +5.0%
Spain 9,609 +0.4% +1.1% +7.2% +7.2%
Italy 5,510 +0.9% +0.1% +0.5% +0.5%
Belgium 4,375 +0.3% +0.2% -0.2% -0.2%
Poland 2,062 +3.6% +6.0% +5.5% +8.2%
Romania 2,010 +7.7% +12.9% +20.2% +18.0%
                 
Latin America   18,021 +6.1%   +9.8% +8.9%   +10.9%
Brazil 14,526 +3.0% +7.6% +6.7% +13.0%
Argentina 3,495 +17.6% +18.4% +18.1% +2.9%
                 
Asia   6,557 -3.7%   -2.6% -3.3%   -4.7%
China 4,619 -5.5% -5.0% -5.7% -9.0%
Taiwan 1,938 +1.2% +4.1% +3.1% +7.3%
                 
Group total   88,240 +1.6%   +2.2% +2.7%   +3.0%

EVOLUTION OF FOURTH-QUARTER 2017 SALES INC. VAT

Group sales stood at €23,328m. Currencies had an unfavorable -2,5% effect. The petrol effect was an unfavorable -0.3% and the calendar effect was an unfavorable -0.6%.

 

Sales
inc. VAT
(€m)

  

Variation ex petrol ex
calendar

  

Total variation inc.
petrol

LFL   Organic

At constant
exchange
rates

 

At current
exchange
rates

France 10,706 +1.5%   +0.6% -0.5%   -0.5%
Hypermarkets 5,757 +0.7%   +0.1% 0.0% 0.0%
Supermarkets 3,303 +1.0% -0.9% -2.9% -2.9%
Convenience/other formats 1,647 +5.6% +5.2% +2.9% +2.9%
               
Other countries 12,621 +2.1%   +3.9% +4.7%   +0.1%
               
Other European countries 6,509 +0.4%   +1.3% +3.3%   +3.4%
Spain 2,681 -0.6% +0.4% +6.0% +6.0%
Italy 1,457 -1.1% -1.4% -1.3% -1.3%
Belgium 1,189 +0.8% +1.2% +0.3% +0.3%
Poland 612 +1.9% +3.8% +3.5% +7.3%
Romania 570 +7.8% +10.4% +9.4% +6.6%
               
Latin America 4,673 +5.9%   +9.3% +8.4%   -2.4%
Brazil 3,745 +1.4% +5.8% +4.9% -2.7%
Argentina 928 +23.2% +23.2% +23.0% -0.9%
               
Asia 1,439 -3.0%   -2.3% -0.7%   -5.4%
China 1,019 -5.4% -5.4% -3.9% -9.1%
Taiwan 419 +3.5% +6.4% +8.5% +5.0%
               
Group total 23,328 +1.9%   +2.4% +2.3%   -0.2%

EXPANSION UNDER BANNERS – FOURTH-QUARTER 2017

Thousands of sq. m  

Dec. 31,
2016

  

Sept. 30,
2017

  

Openings/
Store
enlargements

   Acquisitions  

Closures/
Store
reductions

  

Total Q4
2017
change

  

Dec. 31,
2017

France   5,719   5,752   35   -   -23   12   5,764
Europe (excluding France) 5,449 5,584 87 - -72 15 5,599
Latin America 2,335 2,386 25 - -2 22 2,408
Asia 2,758 2,730 7 - -2 6 2,736
Others1   920   986   125   -   -   125   1,111
Group   17,181   17,438   279   -   -99   180   17,618

STORE NETWORK UNDER BANNERS – FOURTH-QUARTER 2017

N° of stores  

Dec 31,
2016

  

Sept 30,
2017

  

Openings

   Acquisitions  

Closures/
Disposals

   Transfers  

Total Q4
2017 change

  

Dec 31,
2017

Hypermarkets   1,480   1,515   23   -   -10   -   13   1,528
France   243   247   -   -   -   -   -   247
Europe (excluding France) 439 459 6 - -5 - 1 460
Latin America 334 342 3 - - - 3 345
Asia 374 370 - - -5 - -5 365

Others1

   90   97   14   -   -   -   14   111
Supermarkets   3,212   3,201   92   -   -21   1   72   3,273
France 1,065 1,060 3 - -3 - - 1,060
Europe (excluding France) 1,777 1,752 50 - -18 1 33 1,785
Latin America 150 147 1 - - - 1 148
Asia 38 47 11 - - - 11 58
Others1   182   195   27   -   -   -   27   222
Convenience   7,072   7,269   198   -   -139   -1   58   7,327
France 4,219 4,275 65 - -73 - -8 4,267
Europe (excluding France) 2,312 2,412 100 - -65 -1 34 2,446
Latin America 468 494 28 - -1 - 27 521
Asia 27 37 4 - - - 4 41
Others1   46   51   1   -   -   -   1   52
Cash & carry   171   171   1   -   -   -   1   172
France 143 143 1 - - - 1 144
Europe (excluding France) 13 13 - - - - - 13
Asia 2 2 - - - - - 2
Others1   13   13   -   -   -   -   -   13
Group   11,935   12,156   314   -   -170   -   144   12,300
France 5,670 5,725 69 - -76 - -7 5,718
Europe (excluding France) 4,541 4,636 156 - -88 - 68 4,704
Latin America 952 983 32 - -1 - 31 1,014
Asia 441 456 15 - -5 - 10 466
Others1   331   356   42   -   -   -   42   398

1 Africa, Middle East and Dominican Republic.

DEFINITIONS

LFL sales growth: Sales generated by stores opened for at least twelve months, excluding temporary store closures, at constant exchange rates.

Organic growth: Sales plus net openings over the past twelve months, including temporary store closures, at constant exchange rates.

Sales under banners: Total sales under banners, including sales by franchisees and international partnerships.