Significantly improved performance,
intensification of transformation initiatives
Regulatory News:
Carrefour (Paris:CA):
- Increase in sales, recurring operating income (ROI) and free
cash-flow:
- Acceleration in Group
like-for-like sales growth in Q2: +3.9% (+3.2% in Q1)
- Increase in recurring
operating income of +4.5% (+€27m) at constant exchange rates, to
€618m1
- Improvement of +€282m in free
cash-flow excluding exceptional items and discontinued
operations1
- Intensification of transformation plan initiatives in the
first half of 2019:
- The ambition to be the leader
in the food transition for all has been included as the Group’s
raison d'être in its bylaws
- Carrefour reinforces its
attractiveness by increasing investments in price competitiveness,
the revamp of its offer, services and digital
- The Group is accelerating the
transformation of its store formats – notably hypermarkets –, the
expansion of growth formats and the deployment of innovative
commercial concepts
- With the launch of the "Act
for Change" program, Carrefour is mobilizing employees in favor of
the transformation dynamic and placing customer satisfaction at the
center of everyone's actions and objectives
- Sale of a controlling stake in Carrefour China to Suning.com
and disposal of Cargo to Argan as part of the program to divest of
non-strategic real estate assets
- Confirmation of the Carrefour 2022 transformation plan
targets
Alexandre Bompard, Chairman and Chief Executive Officer,
declared: ”Carrefour is showing a clear improvement in
performance, half-year results are growing. This strong momentum is
accompanied by an intensification of our transformation plan. We
are multiplying concrete initiatives to better serve our customers:
We are investing in prices to support their purchasing power, we
are offering them a more extensive range of services and more
innovative formats. To mark our commitment to ensuring that
everyone has access to a healthy diet, we have made the food
transition for all our raison d'être.”
H1 2019 KEY FIGURES
H1 20181 IFRS 5 pre-IAS 29
pre-IFRS 16
H1 20191 IFRS 5 pre-IAS 29
pre-IFRS 16
Variation
H1 2019 IFRS 5 post-IAS 29
post-IFRS 16
(in €m)
Sales inc. VAT
39,244
38,793
+3.5% LFL
38,849
Recurring operating income
(ROI)
602
618
+4.5%, +€27m constant
FX)
624
Recurring operating margin
1.7%
1.8%
+6bp
1.8%
Adjusted net income, Group
share
135
179
+€44m
155
Free cash-flow excl.
exceptional items
and discontinued
operations
(2,088)
(1,806)
+€282m
(1,350)
Net debt (incl.
discontinued operations)
(5,970)
(5,958)
+€122m
(constant FX)
(5,958)
Note: (1) IFRS 5 (China reclassified as discontinued
operations), pre-IAS 29 (hyperinflation in Argentina) and pre-IFRS
16 (accounting for leases)
CARREFOUR 2022: LEADER IN THE FOOD TRANSITION FOR ALL
Raison d’être and “Act for Change“
Carrefour's ambition to be the leader in the food transition
for all, a pillar of the Carrefour 2022 transformation plan, is
now included as a raison d'être in the Group's bylaws. This
ambition takes form through new concrete actions:
- Organic sales continue their strong momentum, with growth above
+25% in Q2 2019, driven by new customer gains
- Carrefour supports farmers in their conversion to organic
farming. The Group is ahead of schedule, with more than 300 support
contracts already signed in France since 2018 (including +96 in H1
2019)
- Carrefour introduced the "CSR and Food Transition Index" (score
of 104% in 2018) to monitor the performance of its CSR strategy and
the implementation of the food transition
- New packaging for Carrefour-branded products will feature the
Nutriscore nutrition labeling system
- Carrefour signed a partnership in May with Loop, offering
everyday products in sustainable and returnable packaging
Carrefour is implementing an international "Act for
Change" program, making employees the main actors of the
Group’s transformation. The goal is to be simpler, more open and
more collaborative. This program places the food transition and
customer satisfaction at the center of each employee's actions and
objectives.
Construction of a sustainable growth
model, introduction of innovative formats
Multiplication of initiatives to improve competitiveness:
Carrefour is intensifying its efforts to better meet consumer needs
and favor purchasing power.
- Starting in February 2019, Carrefour launched the "Loyalty
rewards" and "Large Brand rewards" in all its formats and channels
in France, in order to reward customer loyalty
- In April, the Group launched the "Unbeatable Prices" in
hypermarkets on 10 everyday fruits and vegetables
- In May, Carrefour proposed "Saturday fuel at cost" in
hypermarkets and supermarkets
- From June, Carrefour is offering "Unbeatable Prices" on 500 key
FMCG products. This offer is valid all year. The Group undertakes
to reimburse twice the difference if the consumer finds a similar
product for a lower price in the catchment area
- In Europe, Carrefour invested heavily in prices. It launched
the "Prezzo Ribassato" campaign in Italy (5,000 products) and
"Unbeatable" campaign in Spain on fresh products. The Group has
also invested in prices of organic products in Belgium
- In Brazil, in addition to the repositioning of hypermarkets
that began last year, Atacadão invested in prices to strengthen
competitiveness
- These initiatives are accompanied by significant investments in
non-price competitiveness in order to improve the product offering,
especially with the development of high quality Carrefour-branded
products, and deploy an omnichannel reference service
Accelerating the overhaul of the hypermarket: Carrefour
has systematized and internationalized the adaptation of
hypermarkets in favor of more compact formats, specifically adapted
to their catchment area.
- The Group reduced under-productive selling space by almost
100,000 sqm at the end of June 2019 (of which around 30,000 sqm in
H1 2019 and 65,000 sqm in 2018), excluding China. The selling space
is reallocated to dedicated e-commerce preparation areas, outlets
and the shopping mall
- In France, the Avignon store reopened in April after its
transformation: reduction of sales area and assortments, racking,
lower prices, etc. Further tests of new concepts will start soon in
other stores
Highlighting food expertise and significant adaptation of the
non-food offer: The Group has undertaken the overhaul of its
assortments, particularly in favor of Carrefour-branded products,
which post positive sales momentum.
- Carrefour continues the reduction of its product range, in
particular to improve the readability of the offer. The target is a
-15% reduction by 2020 globally, of which -8% has already been
achieved at June 30, 2019
- In H1 2019, the Group made new commitments regarding the
quality of products under Carrefour brands (removal of additives,
roll-out of blockchain technology), expanded its product ranges, in
particular organic and veggie, and improved the in-store visibility
of these products
- Carrefour continues to roll out new merchant concepts (e.g.
Plural Beauty) and has introduced new hubs bringing together all
services to improve the quality and fluidity of customer
service
Accelerated deployment of the omnichannel ecosystem:
Carrefour's strong digital investments resulted in another increase
of more than +30% in e-commerce food sales in Q2 (excluding
China).
- Carrefour inaugurated a new Order Preparation Platform on the
outskirts of Paris in early January; another opening is planned in
the autumn south of Paris
- Carrefour opened its 100th pedestrian Drive in France in July
(compared with 62 at the end of March). In total, the Group
operates 1,501 Drives worldwide (+155 in H1), excluding China
- The Group is deploying home delivery throughout France, with
the goal of providing the service in all urban areas whose
population exceeds 10,000 inhabitants by 2022
- Brazil’s e-commerce sales are showing strong growth momentum,
notably in food, leveraging the success of the partnership with
Rappi
- Carrefour announced in July a partnership with Glovo in 4
countries (France, Spain, Italy and Argentina) to offer a
30-minutedelivery service
Investments in innovative and growth formats
- In France, the Group strengthened its position as a market
leader in organic products, notably with the opening of 8 new Bio
Experience areas in hypermarkets in H1 (13 to date)
- The So.bio banner, whose acquisition has been finalized, opened
in July the largest organic store in Paris, on the rue de Sèvres
(800 sqm, 10,000 SKUs)
- Since June, the first "Carrefour Bon Appétit" restaurant in
Paris offers a range of high-quality products, to eat on site or to
take away
- In Brazil, the Group continues to capitalize on the success of
the Cash & Carry format, with the inauguration of 5 Atacadão in
Brazil in Q2 2019, after 4 in Q1 (target of 20 new Atacadão stores
over the year is confirmed)
- In Argentina, 11 stores were converted to Maxi in H1, bringing
the total to 27
- The Supeco Cash & Carry supermarket format continues to
expand in Europe with 3 openings in Spain and Romania in H1,
bringing the total to 41 stores
- In all geographies, Carrefour is expanding its convenience
store portfolio with the opening of 228 new stores in H1 2019,
including 138 openings in Q2
Culture of operational efficiency and
financial discipline
Transformation of organizations: Within a profoundly
revamped Carrefour ecosystem, the group has embarked on new
initiatives to make its organizations more flexible and
agile.
- In France, the transformation plan includes the reduction of
sales areas and the simplification of store organization
- A labor agreement (GPEC) was signed in March to promote
internal mobility and the professional evolution of employees
- To support employees whose job is more specifically affected, a
Collective Contractual Severance (RCC) agreement was signed in
mid-May, with effective implementation as of June 3, 2019.
Departures can be programmed until December 2022 for End of Career
Leaves
- In Italy, agreements involving a reduction of 590 jobs at
headquarters and in hypermarkets were signed with the social
partners. These departures will be voluntary and internal
redeployment solutions will be studied
- In Belgium, the 1,000 departures under the voluntary departure
plan were finalized at the end of June
Operational efficiency and financial discipline:
Carrefour is continuing its cost-saving drive across all
geographies while strengthening the selectivity and productivity of
its investments.
- Excluding China, the Group achieved €470m in cost savings in H1
2019, vs €460m in H1 2018, leading to a total of €1.4bn to date, on
track to achieve the 2020 objective
- Carrefour recorded the first benefits of purchasing
partnerships in France and internationally:
- In France, Envergure purchasing gains (Système U) started
becoming visible from March, when the annual round of supplier
negotiations ended
- With Tesco, negotiations on the product categories with highest
potential for Carrefour are gradually gaining momentum
- Carrefour is pursuing the implementation of an industrialized
approach in the redesign of operational processes and purchasing of
goods not for resale. The Group has already achieved average
savings of 20% in 4 categories: lighting, tiles, cold furniture and
trolleys
CHANGES IN SCOPE
Carrefour China: Carrefour announced on June 25, 2019 the
signing of an agreement to sell 80% of Carrefour China to the
Chinese group Suning.com. This cash transaction values Carrefour
China at an enterprise value of €1.4bn. The agreement provides
liquidity windows for the residual stake of 20%.
Closing of the transaction is subject to approval by Chinese
competition authorities and other customary conditions. It should
be effective by the end of 2019.
The China operations have been accounted for as discontinued
operations, as of January 1, 2019, in accordance with IFRS 5. The
IFRS 5 standard provides that the classification as discontinued
operations is also applied to the 2018 historical data for the
income statement and cash-flow statement.
Cargo Property Assets: Carrefour announced on July 10,
2019, the signing of agreements to sell the entire capital of Cargo
Property Assets to Argan, a listed property company specializing in
logistics real estate. This transaction would be carried out under
favorable conditions and would allow Carrefour to crystallize the
value of the Cargo assets.
The transaction values the real estate assets held by Cargo
Property Assets at €900m excluding transfer tax. Carrefour would
receive a remuneration equivalent to about €290m for its 32% stake,
about 80% of which in cash and 20% in Argan stock. Carrefour would
thus hold about 5% of Argan’s share capital.
The completion of the transaction is subject to the approval of
Argan shareholders and other customary conditions. It should be
effective by the end of 2019.
This transaction would contribute to achieving the objective
to sell €500m of non-strategic real estate assets by 2020,
as part of the Carrefour 2022 plan. At the end of July 2019,
including Cargo, the Group has already concluded several
transactions amounting to more than €490m.
FIRST-HALF 2019 RESULTS
The IAS 29 and IFRS 16 standards have been applied from July 1,
2018 and January 1, 2019 respectively. The H1 2018 accounts are
therefore officially pre-IAS 29 and pre-IFRS 16, unlike the H1 2019
accounts which are post-IAS 29 and post-IFRS 16. For the sake of
clarity and comparability, the comments on the income statement
(IFRS 5) relate to pre-IAS 29 and pre-IFRS 16 data. Details of the
income statement (IFRS 5) for H1 2019 post-IAS 29 and post-IFRS 16
are available in appendix of this press release.
On a like-for-like basis (LFL), second-quarter gross sales
grew by +3.9%. Group sales inc. VAT amounted to €19,974m, an
increase of +3.4% at constant exchange rates. After taking into
account a -2.8% unfavorable exchange rate effect, mainly due to the
depreciation of the Brazilian Real and the Argentine Peso, the
total variation in sales at current exchange rates was +0.5%. A
sequential acceleration in LFL growth can be observed in most
geographies. In France and Europe, sales in June benefited from
exceptional weather conditions in the last days of the month.
On a like-for-like basis (LFL), first-half gross sales grew
by +3.5%. Group sales inc. VAT amounted to €38,793m, an
increase of +2.1% at constant exchange rates. After taking into
account an unfavorable -3.3% exchange rate effect, the total
variation in sales at current exchange rates is -1.2%.
Gross margin stood at 22.0% of net sales. Price
investments weighed on gross margin, while purchasing gains, lower
logistics costs and the better performance of financial services
enabled its stabilization.
Distribution costs represented 18.4% of net sales. They
benefited from the cost reduction plan and included costs related
to new stores and new customer services, notably in digital.
Group EBITDA reached €1,311m, i.e. a stable margin of
3.8%.
The Group's recurring operating income (ROI) amounted to
€618m, up +€27m (+4.5%) at constant exchange rates (the currency
effect is a negative -€11m, notably due to the depreciation of the
Brazilian real). Operating margin is slightly up by +6bps to
1.8%.
In the first half of 2019, non-recurring income amounted
to €(593)m. It notably reflects the costs related to the
reorganization plans in the various countries for an amount of
€342m, as well as €194m of other non-current items mainly related
to provisions for tax litigation in Brazil.
Net income, Group share amounted to €(399)m and includes
the following items:
- Net financial expenses of €(129)m, an improvement of
€18m following refinancing operations carried out under more
favorable conditions
- Income tax expense of €(193)m versus €(173)m last year. This
tax expense reflects a normalized tax rate of 33.4% (vs
34.4% in H1 2018), excluding non-recurring income and taxes not
assessed on pre-tax income
- Net income from discontinued operations, Group share
amounted to €(26)m, principally including China
Adjusted net income, Group share improved by €44m, to
€179m vs €135m in H1 2018.
OPERATING PERFORMANCE BY GEOGRAPHY
France: Growth in recurring operating
income
In a market that remains very competitive, sales in
France in the first half were up +0.8% on a like-for-like
basis vs H1 2018. The trend in the second quarter (+0.7% LFL) was
broadly in line with the first quarter (+1.0% LFL). Performance in
food (+1.9% LFL in Q2) was satisfactory, while non-food continued
to be difficult (-7.1% LFL in Q2).
- Price investments continued in all formats and channels. After
February's Rewards programs, Carrefour launched the "Unbeatable
Prices" campaign on 10 fruits and vegetables in April, an
initiative expanded in June to 500 flagship FMCG products
- Growth momentum in organic, e-commerce and convenience formats
remained strong
- Reductions and reallocations of under-productive non-food sales
areas in hypermarkets continued, in line with the plan
France's recurring operating income in H1 2019 was €116m,
up +€6m (+5.3%), after three years of deterioration. This ROI
improvement reflects:
- Momentum in cost reduction and organizational
transformation
- Investments in price competitiveness and in the attractiveness
of Carrefour’s offer, services and digital
Europe excluding France:
Intensification of the transformation plan
In Europe excluding France, sales were down -0.7% on a
like-for-like basis in H1 2019, reflecting a sequential improvement
in trends in the second quarter (stable LFL in Q2 vs -1.5% in Q1)
in most countries.
In Q2 2019, performance remained mixed between Western Europe
(Spain, Italy, Belgium) and Eastern Europe (Poland and
Romania):
- In Spain (stable LFL in Q2), Carrefour rolled out its
strategic actions: Strengthening of digital, fresh, organic and
Carrefour-branded products). A new country CEO arrived in June to
accelerate the transformation
- In Italy (-2.2% LFL in Q2), the market remained under
pressure with a difficult macroeconomic and competitive context.
The Group is implementing the transformation plan presented in
February. LFL sales reflected investments in competitiveness
- In Belgium (-1.6% LFL in Q2), Carrefour’s performance
suffered from a market that deteriorated during the quarter, in a
context of low inflation and strong competition
- Growth continued in Poland(+5.7% LFL in Q2) and
Romania (+3.8% LFL in Q2)
Recurring operating income of the Europe excluding France
zone amounted to €119m in H1 2019, compared with €152m in H1 2018.
This drop reflected:
- A soft commercial performance in competitive markets
- Significant investments to redynamize business, particularly in
Italy in a context of market deterioration, mitigated by cost
reductions
Latin America: Acceleration in sales
growth and robust profitability
In Latin America, sales in the first half were up +15.2%
on a like-for-like basis (+15.9% in Q2), reflecting strong
commercial momentum.
In Brazil, Q2 sales were up +12.9% at constant exchange
rates, including sustained +7.7% like-for-like growth, and a +5.3%
contribution from openings. Food inflation has been slowing since
May.
- Atacadão's LFL growth improved sequentially to +7.6% in Q2
compared to +6.8% in Q1. The Group opened 5 new Atacadão in Q2 (+9
in H1)
- The continued growth of Carrefour Retail (+8.0% LFL in Q2) is
supported by the repositioning of hypermarkets initiated in 2018,
good performance in convenience, food transition initiatives and
strong e-commerce sales. This was the highest quarterly increase of
the last five years
- Strong growth in financial services continues with an increase
in billings of +28.6% in Q2 and the increase in the number of
cardholders (+517,000 cards issued in Q2, including +261,000
Atacadão cards)
In Argentina, where LFL growth reached +50.5% in Q2 2019,
the transformation plan continues to bear fruit. Beyond high food
inflation in the country, Carrefour posted an improvement in
traffic and volumes. A new country CEO arrived in July 2019.
At constant exchange rates, Latin America’s recurring
operating income increased by +€61m (+19.2%) in H1. Recurring
operating income reached €368m and was up in both countries.
Asia: Solid growth
The Asia zone corresponds to Carrefour Taiwan's activity,
given China's classification as discontinued operations under IFRS
5.
Taiwan's H1 2019 sales increased +0.8% LFL, reflecting a
return to growth in the second quarter (+3.0% LFL).
At constant exchange rates, Asia’s recurring operating
income increased +8.7%. ROI reached to €41m, i.e. an improvement of
+23bp in operating margin, at 4.2%.
CASH-FLOW AND DEBT
H1 2019 cash-flow statement (IFRS 5) is pre application of IAS
29 and IFRS 16 standards. Details of the cash-flow statement (IFRS
5) for H1 2019 post-IAS 29 and post-IFRS 16 are available in
appendix of this press release.
In the first half of 2019, the Group posted an improvement in
free cash-flow adjusted for exceptional items and
discontinued operations of +€282m, from €(2,088)m to
€(1,806)m.
- The change in working capital requirements improved by
+€143m
- Inventory reduction continued (-€41m at constant
exchange rates, -€72m at current exchange rates)
- Other working capital requirement items benefitted from
the increase in purchasing volumes, linked to more sustained
activity than in H1 2018, as well as a positive calendar effect on
trade payables
- Investments continued to benefit from selectivity and
productivity measures and stood at €628m in H1 2019 (excluding
China). They increased by +€81m compared to H1 2018, driven by the
launch of new strategic projects, including new business concepts,
digital and expansion of growth formats
Free cash-flow was slightly down by -€43m at
€(2,262)m, notably impacted by €269m exceptional cash-outs in H1
2019 linked to the reorganization plans in various countries.
H1 2019 balance sheet is post application of IFRS 5, IAS 29 and
IFRS 16 standards.
Net financial debt (including discontinued operations)
was stable at €(5,958)m at June 30, 2019, vs €(5,970)m in June 30,
2018.
IFRS 16
Since January 1, 2019, Carrefour has applied IFRS 16, which
concerns the principles of accounting for leases, and replaces IAS
17 - Leases and its interpretations. The Group opted for the
simplified retrospective approach. Thus, the 2018 Consolidated
Financial Statements will not be restated. The consolidated
financial statements for the first half of 2019 have been
established in accordance with IFRS 16 accounting rules.
The Group recognized an IFRS 16 lease liability of €4.3bn
(excluding China) and an IFRS 16 right-of-use asset of
€4.2bn (excluding China), at June 30, 2019.
DIVIDEND
Following the decision of the Shareholders' Meeting of June 14,
2019, shareholders were given the option of receiving the €0.46 per
share dividend in cash or in Group shares. At the end of the option
period ended July 5, 2019, shareholders having elected to receive
the 2018 dividend payment in shares represented 70.44% of
Carrefour's shares. Of the €359m in dividends, €106m was paid in
cash on July 11, 2019 and €253m was paid in the form of 17,096,567
new shares.
ENHANCED LIQUIDITY AND SOLID BALANCE-SHEET
In May 2019, Carrefour issued bonds in the amount of €500m with
an eight-year maturity. The success of this operation, largely
over-subscribed, attests to the strong confidence of bond investors
in Carrefour’s signature. Following this transaction and the
€1,000m bond redemption in May 2019, the maturity of the debt was
extended to 3.9 years in June 2019, compared to 3.6 years in
December 2018.
In addition, Carrefour successfully amended and extended two
credit facilities for a total amount of €3.9bn, incorporating an
innovative Corporate Social Responsibility (CSR) component, thus
completing the first
CSR-based bank credit operation in the European retail
sector.
Carrefour benefits from a solid balance sheet. This is an
important asset in the context of the fast-changing food retail
sector.
At June 30, 2019, the Group was rated Baa1 negative outlook by
Moody's and BBB stable outlook by Standard & Poor's.
OUTLOOK
Carrefour is confident in the ongoing transformation momentum.
It will continue in the second half in an uncertain macroeconomic
and market environment.
Carrefour reaffirms its ambitions and confirms the financial
targets of the Carrefour 2022 plan:
- A cost-reduction plan of €2.8bn on an annual basis by 2020
(€2.6bn excluding China)
- €5bn in food e-commerce sales in 2022 (€4.2bn excluding
China)
- €5bn in sales of organic products in 2022 (€4.8bn excluding
China)
- The disposal of non-strategic real estate assets for €500m by
2020
Operational targets are also confirmed:
- Reduction of 400,000 sqm of hypermarket sales area worldwide by
2022 (350,000 sqm excluding China)
- -15% reduction in assortments by 2020 (-15% excluding
China)
- Carrefour-branded products accounting for one-third of sales in
2022 (one-third excluding China)
- 3,000 convenience store openings by 2022 (2,700 excluding
China)
The Board of Directors of Carrefour met on July 25, 2019 under
the chairmanship of Mr. Alexandre Bompard and approved the
condensed consolidated financial statements for the first half of
2019. These accounts have been reviewed by the statutory
auditors.
APPENDIX
Application of IFRS 5 standard
On June 23, 2019, the Group signed an agreement to sell 80% of
its subsidiary Carrefour China. This agreement will result in the
loss of control of the subsidiary if the conditions precedent are
lifted.
As of June 30, 2019, all the assets and liabilities of this
subsidiary fall within the scope of IFRS 5 and have been
reclassified as held for sale.
In addition, Carrefour China is considered as a discontinued
operation in accordance with the provisions of IFRS 5. As a
result:
- The subsidiary’s net income is presented on a separate line of
the income statement entitled "net income from discontinued
operations." For comparison purposes, first-half 2018 net income
has also been reclassified on this line
- In the cash flow statement, all flows relating to this
subsidiary are presented on the "impact of discontinued operations"
lines. First-half 2018 data has been similarly restated
Carrefour announced on July 10, 2019 the signing of agreements
to sell the entire capital of Cargo Property Assets to Argan, a
listed property company specializing in logistics real estate.
Cargo's property, plant and equipment have been reclassified as
assets held for sale from April 1, 2019.
Application of IFRS 16 - Principles of Accounting for
Leases
IFRS 16, which replaces IAS 17 – Leases and the related
interpretations as from January 1, 2019, sets out the principles
for recognizing leases and introduces major changes in the
accounting for leases by lessees, since it eliminates the
distinction for lessees between operating and finance leases.
Under IFRS 16, all leases are to be brought onto the statement
of financial position by recognizing a right-of-use asset and a
lease liability corresponding to the present value of the lease
payments due over the reasonably certain term of the lease. IFRS 16
therefore affects the presentation of lease transactions in the
income statement (with rental expense replaced by a depreciation
expense and interest expense) and in the statement of cash flows
(lease payments, representing payment of interest and repayment of
the outstanding liability, will impact financing cash flows).
The Group has opted for the simplified retrospective approach as
of January 1, 2019. Thus, the first half and full year 2018
consolidated financial statements are not restated. The
consolidated financial statements for the first half of 2019 have
been established in accordance with IFRS 16 accounting rules.
Application of IAS 29 - Accounting treatment of
hyperinflation for Argentina
In Argentina, the cumulative inflation rate over the last three
years is greater than 100%, according to a combination of indices
used to measure the country's inflation (inflation of wholesale
prices and consumer prices having exceeded the 100% threshold), and
no significant decrease in inflation is expected in 2019 in a
context in which, moreover, the Argentine peso has depreciated.
As a result, the criteria of the IAS 29 norm are fulfilled and
according to a consensus shared by the AMF and ESMA, Argentina is
considered a hyperinflationary economy within the meaning of IFRS
as of July 1, 2018.
The impact on H1 2019 revenue is presented in the table
below:
Sales incl. VAT (€m)
2018(1)
LFL(2)
Calendar
Openings
Scope and others(3)
Petrol
2019 at constant rates
Forex
2019 at current rates
IAS 29(4)
2019 at current rates post-IAS
29
Q1
19,378
+3.2%
-1.7%
+1.3%
-0.8%
-1.1%
+0.9%
-3.7%
18,819
-29
18,789
Q2
19,866
+3.9%
+1.0%
+1.2%
-0.8%
-1.7%
+3.4%
-2.8%
19,974
87
20,061
H1
39,244
+3.5%
-0.3%
+1.2%
-0.8%
-1.4%
+2.1%
-3.3%
38,793
56
38,849
Notes: (1) restated for IFRS 5; (2) excluding petrol and
calendar effects and at constant exchange rates; (3) including
transfers; (4) hyperinflation and currencies
Historical sales variation on a like-for-like (LFL) basis,
excluding China
By quarter
Q1 2017
Q2 2017
Q3 2017
Q4 2017
Q1 2018
Q2 2018
Q3 2018
Q4 2018
Q1 2019
Q2 2019
+2.1%
+3.4%
+0.8%
+2.2%
+0.9%
+1.4%
+2.5%
+2.4%
+3.2%
+3.9%
Half-year
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
+2.8%
+1.5%
+1.1%
+2.4%
+3.5%
Full-year
2017
2018
+2.1%
+1.8%
Second-quarter 2019 sales inc. VAT
The Group's sales amounted to €19,974m pre-IAS 29. Foreign
exchange had an unfavorable impact in the second quarter of -2.8%,
largely due to the depreciation of the Argentine Peso and the
Brazilian Real. Petrol had an unfavorable impact of -1.7%. The
calendar effect was a favorable +1.0%. The effect of openings was a
favorable +1.2%. The impact of the application of IAS 29 was
+€87m.
Sales inc. VAT (€m)
Variation ex petrol ex
calendar
Total variation inc.
petrol
LFL
Organic
at current exchange
rates
at constant exchange
rates
France
9,715
+0.7%
-0.5%
-1.6%
-1.6%
Hypermarkets
4,949
-1.1%
-1.8%
-1.5%
-1.5%
Supermarkets
3,259
+2.5%
+0.1%
-1.0%
-1.0%
Convenience / other formats
1,508
+2.7%
+2.6%
-2.9%
-2.9%
Other countries
10,259
+6.4%
+7.6%
+2.6%
+8.3%
Other European
countries
5,722
+0.0%
-0.4%
+0.6%
+0.9%
Spain
2,317
-0.0%
-0.1%
+0.4%
+0.4%
Italy
1,293
-2.2%
-4.0%
-2.2%
-2.2%
Belgium
1,029
-1.6%
-3.3%
-2.8%
-2.8%
Poland
534
+5.7%
+5.3%
+8.1%
+8.7%
Romania
549
+3.8%
+8.2%
+8.3%
+10.5%
Latin America (pre-IAS
29)
4,066
+15.9%
+19.5%
+5.2%
+19.6%
Brazil
3,471
+7.7%
+12.7%
+10.0%
+12.9%
Argentina (pre-IAS 29)
595
+50.5%
+47.6%
-15.9%
+48.8%
Asia
470
+3.0%
+4.7%
+5.6%
+4.1%
Taïwan
470
+3.0%
+4.7%
+5.6%
+4.1%
Group total (pre-IAS
29)
19,974
+3.9%
+3.9%
+0.5%
+3.4%
IAS 29(1)
87
Group total (post-IAS
29)
20,061
Variations excluding the calendar and petrol effects and total
variations including petrol are presented in relation to 2018 sales
restated for IFRS 5.
Note: (1) hyperinflation and foreign exchange
First-half 2019 sales inc. VAT
The Group's sales amounted to €38,793m pre-IAS 29. Foreign
exchange had an unfavorable impact of -3.3% in the first half of
the year, largely due to the depreciation of the Argentine Peso and
the Brazilian Real. Petrol had an unfavorable -1.4% impact. The
calendar effect was virtually neutral at -0.3%. The effect of
openings was a favorable +1.2%. The impact of the application of
IAS 29 was +€56m.
Sales inc. VAT (€m)
Variation ex petrol ex
calendar
Total variation inc.
petrol
LFL
Organic
at current exchange
rates
at constant exchange
rates
France
18,750
+0.8%
-0.2%
-2.4%
-2.4%
Hypermarkets
9,608
-0.5%
-1.0%
-2.4%
-2.4%
Supermarkets
6,262
+2.0%
-0.3%
-2.0%
-2.0%
Convenience / other formats
2,880
+2.7%
+2.5%
-3.1%
-3.1%
Other countries
20,043
+5.7%
+6.9%
+0.0%
+6.5%
Other European
countries
11,080
-0.7%
-1.1%
-1.3%
-1.0%
Spain
4,478
-1.4%
-1.2%
-0.7%
-0.7%
Italy
2,508
-3.0%
-4.8%
-4.9%
-4.9%
Belgium
2,015
-1.0%
-2.6%
-3.1%
-3.1%
Poland
1,028
+4.4%
+4.0%
+2.3%
+4.0%
Romania
1,051
+3.6%
+7.6%
+5.8%
+7.8%
Latin America (pre-IAS
29)
7,946
+15.2%
+18.8%
+1.3%
+17.6%
Brazil
6,777
+7.2%
+12.0%
+5.6%
+10.9%
Argentina (pre-IAS 29)
1,169
+49.9%
+47.4%
-17.9%
+47.7%
Asia
1,017
+0.8%
+2.4%
+5.0%
+2.8%
Taïwan
1,017
+0.8%
+2.4%
+5.0%
+2.8%
Group total (pre-IAS
29)
38,793
+3.5%
+3.7%
-1.2%
+2.1%
IAS 29(1)
56
Group total (post-IAS
29)
38,849
Variations excluding the calendar and petrol effects and total
variations including petrol are presented in relation to 2018 sales
restated for IFRS 5.
Note: (1) hyperinflation and foreign exchange
Consolidated income statement – H1 2018 bridge
H1 2018 reported pre-IAS 29
pre-IFRS 16
IFRS 5 China impact
H1 2018(1) IFRS 5 pre-IAS 29
pre-IFRS 16
IAS 29 impact
H1 2018 IFRS 5 post-IAS 29
pre-IFRS 16
(in €m)
Gross sales inc. VAT
41,439
(2,195)
39,244
(250)
38,994
Net sales
37,071
(1,924)
35,147
(200)
34,947
Net sales, net of loyalty
program costs
36,728
(1,867)
34,861
(200)
34,662
Other revenue
1,309
(110)
1,199
(4)
1,195
Total revenue
38,037
(1,977)
36,060
(204)
35,856
Cost of goods sold
(29,816)
1,492
(28,324)
143
(28,181)
Gross margin
8,221
(485)
7,736
(61)
7,675
As a % of net sales
22.2%
22.0%
22.0%
SG&A
(6,884)
440
(6,444)
62
(6,382)
As a % of net sales
18.6%
18.3%
18.3%
Recurring operating income
before D&A (EBITDA)(2)
1,373
(45)
1,328
1
1,329
EBITDA margin
3.7%
3.8%
3.8%
Depreciation and amortization
(740)
50
(690)
(2)
(692)
Recurring operating income
(ROI)
597
5
602
(1)
601
Recurring operating margin
1.6%
1.7%
1.7%
Income from associates and joint
ventures
(6)
-
(6)
-
(6)
Recurring operating income
including income from associates and joint ventures
591
5
596
(1)
595
Non-recurring income and
expenses
(785)
20
(765)
13
(752)
Operating income
(194)
25
(169)
12
(157)
Financial expense
(149)
2
(147)
18
(129)
Finance costs, net
(121)
2
(119)
5
(113)
Net interests related to leases
commitment
-
-
-
-
-
Other financial income and
expenses
(28)
(0)
(28)
13
(16)
Income before taxes
(342)
27
(316)
30
(286)
Income tax expense
(179)
5
(173)
(2)
(176)
Net income from continuing
operations
(521)
32
(489)
28
(462)
Net income from discontinued
operations
(229)
(32)
(261)
-
(261)
Net income
(750)
-
(750)
28
(722)
of which Net income, Group
share
(861)
-
(861)
29
(833)
of which Net income from
continuing operations, Group share
(633)
30
(603)
29
(574)
of which Net income from
discontinued operations, Group share
(229)
(30)
(259)
-
(259)
of which Net income,
Non-controlling interests
112
-
112
(1)
111
of which Net income from
continuing operations, Non-controlling interests
112
2
113
(1)
112
of which Net income from
discontinued operations, Non-controlling interests
-
(2)
(2)
0
(2)
Net Income, Group share,
adjusted for exceptional items
131
4
135
15
150
Depreciation from supply chain
(in COGS)
(36)
-
(36)
-
(36)
Note: (1) H1 2018 IFRS consolidated accounts; (2) Recurring
EBITDA excludes depreciation from supply chain activities which is
booked in cost of goods sold and excludes non-recurring items
Consolidated income statement – H1 2019 bridge
H1 2019 IFRS 5 pre-IAS 29
pre-IFRS 16
IFRS 16 impact
IAS 29 impact
H1 2019(1) IFRS 5 post-IAS 29
post-IFRS 16
(in €m)
Gross sales inc. tax
38,793
-
56
38,849
Net sales
34,841
-
44
34,885
Net sales, net of loyalty
program costs
34,505
-
44
34,549
Other revenue
1,227
(24)
1
1,204
Total revenue
35,732
(24)
45
35,752
Cost of goods sold
(28,054)
4
(37)
(28,086)
Gross margin
7,678
(20)
8
7,667
As a % of net sales
22.0%
22.0%
SG&A
(6,397)
395
(13)
(6,015)
As a % of net sales
18.4%
17.2%
Recurring operating income
before D&A (EBITDA)(2)
1,311
464
(4)
1,770
EBITDA margin
3.8%
5.1%
Depreciation and amortization
(664)
(353)
(12)
(1,029)
Recurring operating income
(ROI)
618
23
(17)
624
Recurring operating margin
1.8%
1.8%
Income from associates and joint
ventures
(1)
-
-
(1)
Recurring operating income
including income from associates and joint ventures
616
23
(17)
622
Non-recurring income and
expenses
(593)
(2)
(16)
(610)
Operating income
23
21
(33)
12
Financial expense
(129)
(64)
28
(165)
Finance costs, net
(108)
-
(4)
(112)
Net interests related to leases
commitment
(8)
(60)
8
(60)
Other financial income and
expenses
(13)
(4)
24
7
Income before taxes
(106)
(43)
(5)
(153)
Income tax expense
(193)
-
2
(192)
Net income from continuing
operations
(299)
(43)
(4)
(345)
Net income from discontinued
operations
(23)
(22)
-
(45)
Net income
(322)
(64)
(4)
(390)
of which Net income, Group
share
(399)
(57)
(2)
(458)
of which Net income from
continuing operations, Group share
(373)
(40)
(2)
(415)
of which Net income from
discontinued operations, Group share
(26)
(18)
-
(43)
of which Net income,
Non-controlling interests
77
(7)
(2)
68
of which Net income from
continuing operations, Non-controlling interests
74
(3)
(2)
70
of which Net income from
discontinued operations, Non-controlling interests
3
(4)
-
(2)
Net Income, Group share,
adjusted for exceptional items
179
(30)
6
155
Depreciation from supply chain
(in COGS)
(30)
(88)
0
(118)
Notes: (1) H1 2019 IFRS consolidated accounts; (2) Recurring
EBITDA excludes depreciation from supply chain activities which is
booked in cost of goods sold and excludes non-recurring items
Consolidated income statement – FY 2018 bridge
2018 reported pre-IAS 29
pre-IFRS 16
IAS 29 impact
2018 reported post-IAS 29
pre-IFRS 16
IFRS 5 China impact
2018(1) IFRS 5 post-IAS 29
pre-IFRS 16
(in €m)
Gross sales inc. VAT
85,164
(248)
84,916
(4,144)
80,772
Net sales
76,199
(198)
76,000
(3,646)
72,355
Net sales, net of loyalty
program costs
75,459
(198)
75,261
(3,532)
71,728
Other revenue
2,658
(2)
2,656
(219)
2,438
Total revenue
78,117
(200)
77,917
(3,751)
74,166
Cost of goods sold
(60,985)
136
(60,850)
2,838
(58,012)
Gross margin
17,131
(64)
17,067
(913)
16,154
As a % of net sales
22.5%
22.5%
22.3%
SG&A
(13,719)
51
(13,668)
847
(12,821)
As a % of net sales
18.0%
18.0%
17.7%
Recurring operating income
before D&A (EBITDA) (2)
3,481
(14)
3,469
(66)
3,403
EBITDA margin
4.6%
4.6%
4.7%
Depreciation and amortization
(1,474)
(20)
(1,494)
99
(1,395)
Recurring operating income
(ROI)
1,938
(33)
1,905
32
1,937
Recurring operating margin
2.5%
2.5%
2.7%
Income from associates and joint
ventures
14
-
14
-
14
Recurring operating income
including income from associates and joint ventures
1,952
(33)
1,919
32
1,952
Non-recurring income and
expenses
(1,159)
(2)
(1,161)
32
(1,129)
Operating income
793
(35)
758
64
823
Financial expense
(318)
56
(262)
4
(258)
Finance costs, net
(233)
0
(233)
5
(228)
Net interests related to leases
commitment
-
-
-
-
-
Other financial income and
expenses
(85)
56
(29)
(0)
(30)
Income before taxes
475
21
496
69
565
Income tax expense
(537)
(2)
(539)
10
(529)
Net income from continuing
operations
(62)
19
(43)
79
36
Net income from discontinued
operations
(301)
-
(301)
(79)
(380)
Net income
(363)
19
(344)
0
(344)
of which Net income, Group
share
(582)
21
(561)
(0)
(561)
of which Net income from
continuing operations, Group share
(280)
21
(259)
72
(187)
of which Net income from
discontinued operations, Group share
(301)
-
(301)
(72)
(373)
of which Net income,
Non-controlling interests
219
(2)
216
-
216
of which Net income from
continuing operations, Non-controlling interests
219
(2)
216
7
223
of which Net income from
discontinued operations, Non-controlling interests
-
-
-
(7)
(7)
Net Income, Group share,
adjusted for exceptional items
779
23
802
31
833
Depreciation from supply chain
(in COGS)
(69)
(1)
(70)
-
(70)
Notes: (1) FY 2018 IFRS consolidated accounts; (2) Recurring
EBITDA excludes depreciation from supply chain activities which is
booked in cost of goods sold and excludes non-recurring items
Geographic breakdown of first-half 2019 net sales and
recurring operating income
H1 2019 (pre-IAS 29 and pre-IFRS 16) vs
H1 2018 (pre-IAS 29 and pre-IFRS 16)
Net sales
Recurring operating
income
(in €m)
H1 2018
IFRS 5
pre-IAS 29
pre-IFRS 16
H1 2019
IFRS 5
pre-IAS 29
pre-IFRS 16
Variation at constant
exchange
rates
Variation at current
exchange
rates
H1 2018
IFRS 5
pre-IAS 29
pre-IFRS 16
H1 2019
IFRS 5
pre-IAS 29
pre-IFRS 16
Variation at constant
exchange
rates
Variation at current
exchange
rates
France
17,150
16,789
(2.1%)
(2.1%)
110
116
5.3%
5.3%
Europe (ex-France)
10,093
9,988
(0.7%)
(1.0%)
152
119
(21.6%)
(21.5%)
Latin America
6,976
7,090
16.8%
1.6%
319
368
19.2%
15.3%
Asia
927
974
2.8%
5.0%
37
41
8.7%
11.0%
International
17,996
18,052
6.2%
0.3%
508
528
6.3%
4.0%
Global functions
(16)
(26)
67.8%
66.5%
TOTAL
35,147
34,841
2.2%
(0.9%)
602
618
4.5%
2.6%
H1 2019 (post-IAS 29 and post-IFRS16)
vs H1 2018 (pre-IAS 29 and pre-IFRS 16)1
Net sales
Recurring operating
income
(in €m)
H1 2018
IFRS 5
pre-IAS 29
pre-IFRS 16
H1 2019
IFRS 5
post-IAS 29
post-IFRS 16
Variation at constant
exchange
rates
Variation at current
exchange
rates
H1 2018
IFRS 5
pre-IAS 29
pre-IFRS 16
H1 2019
IFRS 5
post-IAS 29
post-IFRS 16
Variation at constant
exchange
rates
Variation at current
exchange
rates
France
17,150
16,789
(2.1%)
(2.1%)
110
120
9.2%
9.2%
Europe (ex-France)
10,093
9,988
(0.7%)
(1.0%)
152
126
(17.3%)
(17.3%)
Latin America
6,976
7,134
18.7%
2.3%
319
362
14.1%
13.5%
Asia
927
974
2.8%
5.0%
37
40
6.4%
8.7%
International
17,996
18,096
7.0%
0.6%
508
528
4.1%
3.9%
Global functions
(16)
(25)
58.4%
57.1%
TOTAL
35,147
34,885
2.5%
(0.7%)
602
624
3.6%
3.6%
1 H1 2019 IFRS consolidated accounts
Consolidated income statement - H1 2019 vs H1 2018
H1 2018(1) IFRS 5 pre-IAS
29 pre-IFRS 16
H1 2019 IFRS 5 pre-IAS 29
pre-IFRS 16
Variation at constant exchange
rates
Variation at current exchange
rates
H1 2019(1) IFRS 5 post-IAS
29 post-IFRS 16
(in €m)
Net Sales
35,147
34,841
+2.2%
(0.9%)
34,885
Net sales, net of loyalty
program costs
34,861
34,505
+2.0%
(1.0%)
34,549
Other revenue
1,199
1,227
+5.7%
+2.3%
1,204
Total revenue
36,060
35,732
+2.2%
(0.9%)
35,752
Cost of goods sold
(28,324)
(28,054)
+2.0%
(1.0%)
(28,086)
Gross margin
7,736
7,678
+2.9%
(0.8%)
7,667
As a % of net sales
22.0%
22.0%
+16bp
+3bp
22.0%
SG&A
(6,444)
(6,397)
+3.4%
(0.7%)
(6,015)
As a % of net sales
18.3%
18.4%
+22bp
+3bp
17.2%
Recurring operating income
before D&A (EBITDA)(2)
1,328
1,311
+0.3%
(1.3%)
1,770
EBITDA margin
3.8%
3.8%
(7bp)
(2bp)
5.1%
Depreciation and amortization
(690)
(664)
(2.5%)
(3.8%)
(1,029)
Recurring operating income
(ROI)
602
618
+4.5%
+2.6%
624
Recurring operating margin
1.7%
1.8%
+4bp
+6bp
1.8%
Income from associates and joint
ventures
(6)
(1)
(10.4%)
(75.6%)
(1)
Recurring operating income
including income from associates and joint ventures
596
616
+4.6%
+3.4%
622
Non-recurring income and
expenses
(765)
(593)
(610)
Operating income
(169)
23
12
Financial expense
(147)
(129)
(165)
Finance costs, net
(119)
(108)
(112)
Net interests related to leases
commitment
-
(8)
(60)
Other financial income and
expenses
(28)
(13)
7
Income before taxes
(316)
(106)
(153)
Income tax expense
(173)
(193)
(192)
Net income from continuing
operations
(489)
(299)
(345)
Net income from discontinued
operations
(261)
(23)
(45)
Net income
(750)
(322)
(390)
of which Net income, Group
share
(861)
(399)
(458)
of which continuing
operations
(603)
(373)
(415)
of which discontinued
operations
(259)
(26)
(43)
of which Net income,
Non-controlling interests
112
77
68
of which continuing
operations
113
74
70
of which discontinued
operations
(2)
3
(2)
Net Income, Group share,
adjusted for exceptional items
135
179
155
Depreciation from supply chain
(in COGS)
(36)
(30)
(118)
Notes: (1) IFRS consolidated accounts; (2) Recurring EBITDA
excludes depreciation from supply chain activities which is booked
in cost of goods sold and excludes non-recurring items
Consolidated balance sheet
(in €m)
June 30, 2018
pre-IAS 29 pre-IFRS 16
June 30, 2019
IFRS 5
post-IAS 29 post-IFRS 16
ASSETS
Intangible assets
9,365
9,410
Tangible assets
12,376
11,311
Financial investments
1,283
1,443
Deferred tax assets
737
770
Investment properties
383
312
Right-of-use asset
-
4,226
Consumer credit from
financial-service companies - Long-term
2,468
2,406
Other non-current assets
1,714
1,755
Non-current assets
28,327
31,633
Inventories
6,301
5,848
Trade receivables
2,756
2,752
Consumer credit from
financial-service companies - Short-term
3,434
4,163
Tax receivables
859
895
Other assets
939
884
Current financial assets
202
316
Cash and cash equivalents
1,993
1,522
Current assets
16,484
16,380
Assets held for sale
61
2,452
TOTAL
44,872
50,465
LIABILITIES
Shareholders' equity, Group
share
8,439
8,277
Minority interests in
consolidated companies
1,954
2,157
Shareholders' equity
10,393
10,434
Deferred tax liabilities
474
598
Provision for contingencies
3,747
3,991
Borrowings - Long-term
6,350
6,215
Lease liabilities - Long-term
-
3,495
Bank loans refinancing -
Long-term
2,347
1,878
Non-current
liabilities
12,918
16,178
Borrowings - Short-term
2,100
1,624
Lease liabilities -
Short-term
-
822
Trade payables
12,373
11,619
Bank loans refinancing -
Short-term
3,046
3,975
Tax payables and others
1,161
996
Other debts
2,872
2,773
Current liabilities
21,552
21,808
Liabilities related to assets
held for sale
9
2,046
TOTAL
44,872
50,465
Consolidated cash flow statement
(in €m)
H1 2018
IFRS 5
pre-IAS 29 pre-IFRS 16
H1 2019
IFRS 5
post-IAS 29 post-IFRS 16
NET DEBT AT OPENING
(3,425)1
(3,510)
Gross cash flow (continuing
operations)
925
1,263
Change in working capital
(2,289)
(2,159)
Impact of discontinued
operations
(60)
(9)
Cash flow from
operations
(1,423)
(904)
Capital expenditure
(547)
(628)
Change in net payables to fixed
assets suppliers
(249)
(196)
Net asset disposals
38
62
Impact of discontinued
operations
(38)
(23)
Free cash flow
(2,219)
(1,689)
Free cash flow excluding
exceptional items and discontinued operations
(2,088)
(1,350)
Financial investments
(158)
(73)
Proceeds from disposals of
subsidiaries
14
74
Others
(22)
(59)
Impact of discontinued
operations
5
1
Cash flow after
investments
(2,380)
(1,746)
Capital increase
36
45
Dividends paid
(31)
(60)
Acquisition/disposal of
investments without change in control
-
-
Treasury shares
42
-
Cost of net financial debt
(109)
(112)
Operating leases payment incl.
interests
(24)
(496)
Others
(79)
(79)
NET DEBT AT CLOSE
(5,970)
(5,958)
Note: (1) Adjustments linked to the first application of the
IFRS9 standard – Financial instruments as of January 1, 2018
EBITDA to free cash-flow bridge
(in €m)
H1 2018(1) IFRS 5 pre-IAS 29
pre-IFRS 16
H1 2019 IFRS 5 pre-IAS 29
pre-IFRS 16
Variation
IFRS 16 impact
IAS 29 impact
H1 2019(1) IFRS 5 post-IAS 29
post-IFRS 16
EBITDA
1,328
1,311
(17)
463
(4)
1,770
Income tax paid
(236)
(231)
5
(231)
Financial result (excl. cost of
debt and interest related to leases obligations)
(28)
(13)
15
20
7
Cash impact of restructuring
items
(92)
(269)
(177)
(5)
(274)
Others
(48)
(9)
38
(9)
Gross cash-flow (excl.
discontinued)
925
789
(135)
463
11
1,263
Change in working capital
(2,289)
(2,146)
143
(2)
(10)
(2,158)
Discontinued operations
(60)
(126)
(66)
117
(9)
Operating cash-flow (incl.
exceptional items and discontinued)
(1,423)
(1,482)
(59)
577
1
(904)
Capital expenditure
(547)
(628)
(81)
(628)
Change in net payables to fixed
asset suppliers
(283)
(183)
100
(183)
Net asset disposals
(business-related)
73
54
(18)
(5)
50
Discontinued operations
(38)
(23)
14
(23)
Free cash-flow
(2,219)
(2,262)
(43)
573
1
(1,689)
Free cash-flow from continuing
operations, excl. exceptional items
(2,088)
(1,806)
282
456
1
(1,350)
Operating leases payment (incl.
interests) (financial lease IAS 17)
(21)
(24)
(3)
(24)
Operating leases payment (incl.
interests) net of financial sub-lease payment received
n.a.
n.a.
n.a.
(456)
8
(448)
Cost of debt
(109)
(108)
1
(4)
(112)
Net free cash-flow
(2,349)
(2,394)
(45)
116
5
(2,273)
Net free cash-flow from
continuing operations, excl. exceptional items
(2,218)
(1,938)
280
(1)
5
(1,934)
Exceptional items and
discontinued operations(2)
131
456
325
(117)
339
Notes: (1) IFRS consolidated accounts; (2) Discontinued
operations, restructuring, Cargo capex cashed out (€38m in H1 2018
and €29m in H1 2019) and others
Change in shareholders’ equity
(in €m)
Total shareholders'
equity
Shareholders' equity, Group
share
Minority interests
At December 31, 2018
11,286
9,169
2,117
Adjustments linked to the
first-time application of IFRS 16
(9)
(9)
-
At January 1, 2019
11,278
9,161
2,117
Total net income over the
period
(424)
(508)
84
Dividends
(405)
(359)
(46)
Impact of scope and others
(15)
(17)
3
At June 30, 2019
10,434
8,277
2,157
H1 2019 net income, Group share, adjusted for exceptional
items
H1 2018
H1 2019
(in €m)
reported pre-IAS 29 pre-IFRS
16
IFRS 5 pre-IAS 29 pre-IFRS 16
IFRS 5 post-IAS 29 pre-IFRS
16
IFRS 5 pre-IAS 29 pre-IFRS 16
IFRS 5 post-IAS 29 post-IFRS
16
Net income, Group
share
(861)
(861)
(833)
(399)
(458)
Restatement for non-recurring
income and expenses (before tax)
785
765
752
593
610
Restatement for exceptional items
in net financial expenses
6
6
6
10
10
Tax impact1
(19)
(26)
(26)
16
16
Restatement on share of income
from companies consolidated by the equity method
6
6
6
-
-
Restatement on share of income
from minorities
(14)
(14)
(14)
(67)
(67)
Restatement for net income of
discontinued operations, Group share
229
259
259
26
43
Adjusted net income, Group
share
131
135
150
179
155
2018
(in €m)
reported pre-IAS 29 pre-IFRS
16
IFRS 5 post-IAS 29 pre-IFRS
16
Net income, Group
share
(561)
(561)
Restatement for non-recurring
income and expenses (before tax)
1,161
1,129
Restatement for exceptional items
in net financial expenses
48
48
Tax impact1
(43)
(68)
Restatement on share of income
from companies consolidated by the equity method
(46)
(46)
Restatement on share of income
from minorities
(58)
(49)
Restatement for net income of
discontinued operations, Group share
301
380
Adjusted net income, Group
share
802
833
Note: (1) Tax impact of restated items (non-recurring income and
expenses and financial expenses) and non-recurring tax items
Expansion under banners (excluding China) – First-half
2019
Thousands of sqm
Dec. 31, 2018
March 31, 2019
Openings/ Store
enlargements
Acquisitions
Closures/ Store
reductions
Total Q2 2019 change
June 30, 2019
France
5,546
5,548
10
5
-15
0
5,549
Europe (ex France)
5,598
5,593
66
-
-104
-38
5,555
Latin America
2,510
2,534
27
-
-12
16
2,549
Asia
980
979
1
-
-0
1
980
Others(1)
1,223
1,246
44
-
-
44
1,291
Group
15,858
15,900
148
5
-131
23
15,924
Store network under banners (excluding China) – First-half
2019
# stores
Dec. 31, 2018
March 31, 2019
Openings
Acquisitions
Closures/ Disposals
Transfers
Total Q2 2019 change
June 30, 2019
Hypermarkets
1,172
1,176
5
0
-3
-
+2
1,178
France
247
248
0
0
-
-
-
248
Europe (ex France)
452
453
0
0
-2
-
-2
451
Latin America
189
189
0
0
-1
-
-1
188
Asia
160
160
0
0
-
-
-
160
Others(1)
124
126
5
0
-
-
+5
131
Supermarkets
3,319
3,322
39
10
-23
-
+26
3,348
France
1,056
1,055
1
10
-2
+1
+10
1,065
Europe (ex France)
1,776
1,770
25
0
-19
-1
+5
1,775
Latin America
147
148
2
0
-1
-
+1
149
Asia
73
72
2
0
-1
-
+1
73
Others(1)
267
277
9
0
-
-
+9
286
Convenience stores
7,002
6,984
138
0
-71
-1
+66
7,050
France
3,918
3,914
44
0
-34
-1
+9
3,923
Europe (ex France)
2,511
2,496
93
0
-37
-
+56
2,552
Latin America
516
517
0
0
-
-
-
517
Asia
2
2
0
0
-
-
-
2
Others(1)
55
55
1
0
-
-
+1
56
Cash & Carry
379
385
7
0
-
+1
+8
393
France
144
145
0
0
-
-
-
145
Europe (ex France)
49
50
1
0
-
+1
+2
52
Latin America
173
177
5
0
-
-
+5
182
Asia
-
-
0
0
-
-
-
-
Others(1)
13
13
1
0
-
-
+1
14
Group
11,872
11,867
189
10
-97
-
+102
11,969
France
5,365
5,362
45
10
-36
-
+19
5,381
Europe (ex France)
4,788
4,769
119
0
-58
-
+61
4,830
Latin America
1,025
1,031
7
0
-2
-
+5
1,036
Asia
235
234
2
0
-1
-
+1
235
Others(1)
459
471
16
0
-
-
+16
487
Note: (1) Africa, Middle East and Dominican Republic
DEFINITIONS
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.
Net free cash-flow
Net free cash flow is defined as the difference between funds
generated by operations (after net interest costs), the variation
of working capital requirements, capital expenditures and operating
leases payment (incl. interests).
Like for like sales growth
Sales generated by stores opened for at least twelve months,
excluding temporary store closures, at constant exchange rates,
excluding petrol and calendar effects and excluding IAS 29
impact.
Organic sales growth
Like for like sales growth plus net openings over the past
twelve months, including temporary store closures, at constant
exchange rates.
Gross margin
Gross margin 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 comprise 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 (ROI)
Recurring Operating Income is defined as the difference between
gross margin and sales, general and administrative expenses,
depreciation and amortization and provisions.
Recurring Operating Income Before Depreciation and
Amortization (EBITDA)
Recurring Operating Income Before Depreciation and Amortization
(EBITDA) excludes depreciation from supply chain activities which
is booked in cost of goods sold and excludes non-recurring items as
defined below.
Operating Income (EBIT)
Operating Income (EBIT) is defined as the difference between
gross margin 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
pre-existing risks on the basis of information that the Group
became aware of during the accounting period.
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 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
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190725005538/en/
Investor Relations Selma Bekhechi, Anthony Guglielmo and
Antoine Parison Tel: +33 (0)1 64 50 79 81
Shareholder Relations Tel: 0 805 902 902 (toll-free in
France)
Group Communication Tel: +33 (0)1 58 47 88 80
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