Clear improvement in results in 2019
Ambitions of the Carrefour 2022 plan revised
upwards
Regulatory News:
Carrefour (Paris:CA):
- Clear improvement in 2019 results, notably driven by France
and Latin America:
- Acceleration in sales growth
to +3.1% on a Like-for-Like (LFL) basis (vs +1.8% in
2018)
- Recurring operating income
(ROI) of €2,088m, an increase of €145m (+7.4%) at constant exchange
rates and comparable accounting standards vs 2018
- ROI in France up by
+15.6%1
- Net income, Group share, up
significantly to €1,314m vs €(582)m in 20181
- Increase in net income, Group
share, adjusted for exceptional items to €905m, up +€101m (+13%) vs
20181
- Improvement of 17% in free
cash-flow excluding exceptional items to €1,301m vs €1,115 M€ in
20181
- Net financial debt reduced by
c. €1bn at constant exchange rates, to €2.6bn at end-December
2019
- Building on the first successes of its transformation plan,
Carrefour is completing and revising upwards its targets:
- Improvement in the Group’s
Net Promoter Score® (NPS®) of +15 points over the 2020-2022 period,
or +23 points since the launch of the plan, reflecting Carrefour’s
priority on customer satisfaction
- Three-year cost savings plan raised to €2.8bn (vs €2.6bn) on an
annual basis by end-2020. €2.0bn achieved to date (€1,030m in
2019). Cost-saving dynamic will continue beyond 2020
- New target of €300m in additional disposals of non-strategic
real estate assets by 2022
- All other targets
confirmed
Alexandre Bompard, Chairman and Chief Executive Officer,
declared: “The Carrefour 2022 plan is generating solid results
and sets the Group on a profitable growth trajectory. These results
are visible in our financial performance and in all our strategic
priorities: the pace of expansion of our growth formats is
accelerating, organic and Carrefour-branded products are gaining
ground, we are outperforming the market in food e-commerce and our
price competitiveness is improving. This momentum is reflected in
improving customer satisfaction, which is more than ever at the
heart of our priorities. We assert our leadership in the food
transition for all, and raise or confirm all the Carrefour 2022
targets.”
2019 KEY FIGURES
2018 IFRS 5 pre-IAS 29
pre-IFRS 16
2019 IFRS 5 pre-IAS 29
pre-IFRS 16
Variation
2018 (2) IFRS 5 post-IAS
29 pre-IFRS 16
2019 (2) IFRS 5 post-IAS
29 post-IFRS 16
(in €m)
Sales inc. VAT
81,020
80,735
+3.1% LFL
80,772
80,672
Recurring operating income
(ROI)
1,971
2,080
+7.4%, +€145m (constant
FX)
1,937
2,088
Recurring operating margin
2.7%
2.9%
+16bp
2.7%
2.9%
Net income, Group
share
(582)
1,314
+€1,896m
(561)
1,129
Adjusted net income, Group
share
804
905
+13% / +€101m
826
861
Free cash-flow excl.
exceptional items
and discontinued
operations
1,115
1,301
+17% / +€186m
1,115
2,229
Net financial debt (incl.
discontinued operations and excl. IAS 17 impact)
3,510
2,615
-€895m / -€965m (constant FX)
3,510
2,615
Note (1) IFRS 5 (China reclassified as
discontinued operations), pre-IAS 29 (hyperinflation in Argentina)
and pre-IFRS 16 (accounting for leases); (2) IFRS consolidated
accounts
2019: SUCCESS OF NUMEROUS INITIATIVES SUPPORTING SUSTAINABLE
AND PROFITABLE GROWTH
Leader in the food transition for
all
Carrefour has established itself as a leader in the food
transition for all, thanks to the multiplication of concrete
actions around food quality and traceability, the development of
organic products, the support of agricultural sectors, the
reduction of food waste, limiting plastic packaging, animal
welfare, etc.
Group sales of organic products grew by more than +25%, i.e.
€2.3bn in 2019 (€1.8bn in 2018). The Group confirms its target
of €4.8bn in organic sales in 2022.
Carrefour exceeded its targets on the “CSR and Food
Transition” index, with an overall achievement rate of 114% in
2019. This index makes it possible to monitor the performance
of the Carrefour Group’s CSR strategy and implementation of the
food transition. This result reflects in particular that Carrefour
is ahead of plan in the reduction of greenhouse gas emissions, the
development of agroecology, the reduction in the use of packaging
and the promotion of diversity within its teams.
Priority to customer satisfaction,
supporting a sustainable and profitable growth model
The growth of the Net Promoter Score® (NPS®) in all
countries reflects the priority given by Carrefour to customer
satisfaction. This progression over time clearly contributes to the
improvement in LFL sales in most of the Group's geographies. At the
end of December 2019, the Group's NPS® was up +8 points since the
start of the plan. Carrefour aims to increase NPS by another +15
points over the 2020-2022 period, or +23 points since the launch of
the plan.
More competitive and attractive
offer
Carrefour has now reached a satisfactory level of price
competitiveness in several key geographies. The Group also
continues to invest:
- In France, Carrefour has improved its price positioning:
- Repositioning on permanent prices: “Unbeatable” prices on more
than 500 key Fast-Moving Consumer Goods (FMCG) since June 2019
- Strengthening loyalty schemes with the new “Market Loyalty
Premium” launched in January 2020 in supermarkets (10% discount
every day on fresh products such as fruits and vegetables, butcher,
fishmonger, flowers and plants; 15% discount for Pass
cardholders)
- In Belgium, Carrefour has invested in prices in all formats,
via price cuts on 1,000 products, launched in November 2019, both
on national brands and Carrefour-branded products
- In Italy, Carrefour rolled out in September 2019 the "Prezzo
ribassato" permanent price reduction campaign (5,000 products) to
the whole territory
These initiatives are accompanied by significant investments in
non-price competitiveness, in order to improve the product
offering (broadening the range and improving the quality of
Carrefour-branded products) and deploying a benchmark omnichannel
service.
Carrefour has thoroughly revised its offer to assert its food
expertise. After having reduced its assortments by -10.1% at
end-December 2019, the Group confirms its target of a -15%
reduction by 2020.
The Group is also developing its range of Carrefour-branded
products, whose penetration rate increased by two points in
2019. Carrefour plans to achieve one-third of its sales via
Carrefour-branded products by 2022.
The hypermarket format performed well in a number of key
geographies. It is being adapted and benefits from new investments
in France. Carrefour is continuing to reduce under-productive sales
areas, mainly in non-food, which reached nearly 115,000 sq. m at
end-December 2019 (including nearly 55,000 sq. m in France), and
confirms its ambition with a global target of a reduction of
350,000 sq. m by 2022.
Sizeable investments in digital are again reflected in an
increase of more than +30% in food e-commerce sales in 2019.
Sales reached €1.3bn in 2019 compared to €1.0bn in 2018 (excluding
China). Carrefour is continuing to roll out its omnichannel
offering and confirms its target for food e-commerce sales of
€4.2bn in 2022.
Sustained pace of
expansion
With 1,042 new convenience stores and 40 new Atacadão stores
since the start of the plan, Carrefour is reinforcing its presence
in growth formats. The Group is again planning to open 20
Atacadão stores in Brazil in 2020 on top of the acquisition
of 30 Makro stores and confirms its target of 2,700
convenience store openings worldwide by 2022.
Operating efficiency and financial
discipline
In 2019, Carrefour continued the profound transformation and
simplification of organizations.
Carrefour achieved €1,030m in savings in 2019, i.e. €1,960m
since the start of the plan.
This solid momentum now makes it possible to raise the
cost-reduction target to €2.8bn on an annual basis by end-2020 (vs
€2.6bn). Carrefour will continue the powerful cost reduction
dynamic in all regions beyond 2020.
To achieve this target, the Group will further industrialize
its operational processes and will continue to develop its
expertise in purchasing of goods not for resale. In
addition, pooled negotiations within the Group and
purchasing alliances, particularly with Système U and Tesco,
should continue to bear fruit.
Finally, having achieved its target of disposing of €500m of
non-strategic real estate assets one year ahead of plan, the Group
announces a new target of disposing of an additional €300m of
non-strategic real estate assets by 2022.
RATIONALIZATION AND STRENGTHENING OF THE BUSINESS
PORTFOLIO
Following the divestments of Dia France and Carrefour China,
the sale of Rue du Commerce marks a significant step forward in the
rationalization of the portfolio and the exit from loss-making
activities
- Finalization on September 26, 2019 of the sale in cash of 80%
of Carrefour China to Chinese group Suning.com, in an
agreement that provides liquidity windows for the sale of the
remaining 20% stake
- Finalization on October 15, 2019 of the sale of Carrefour’s
stake in Cargo Property Assets to Argan, in exchange for
€231m in cash and a stake of around 5% in Argan. Sale by Carrefour
in December of Argan ordinary shares for a total amount of
approximately €80m
- Announced sale of Rue du Commerce to Shopinvest on
November 8, 2019, as part of Carrefour's refocusing on food.
Operation subject to the usual conditions precedent; closing
expected at the end of the first half of 2020
Grupo Carrefour Brasil has signed an agreement with Makro
Atacadista SA to acquire 30 Cash & Carry stores in Brazil,
accelerating the expansion of its growing Atacadão format. The
acquisition involves 30 stores (including the real estate of 22 of
those, which are fully-owned, and another 8 rented stores) and 14
gas stations, located in 17 states across Brazil. The transaction
is valued at BRL 1.95bn, to be paid in cash. Closing of the
transaction remains subject to certain customary conditions,
notably including agreement by the owners of the rented properties
and approval by CADE, Brazil’s anti-trust authority.
INCOME STATEMENT
The IAS 29 and IFRS 16 standards were applied respectively from
July 1, 2018 and January 1, 2019. The 2018 accounts are therefore
post-IAS 29 and pre-IFRS 16, unlike the 2019 accounts, which are
post-IAS 29 and post-IFRS 16. For the sake of readability and
comparability, the comments on the (IFRS 5) income statement relate
to pre-IAS 29 and pre-IFRS 16 numbers. The detailed (IFRS 5) 2019
income statement post-IAS 29 and post-IFRS 16 is available in the
appendix to this press release.
Group sales inc. VAT were up 3.1% on a like-for-like basis
(LFL). The Group's sales inc. VAT stood at €80,735m pre-IAS 29,
an increase of +2.1% at constant exchange rates. After taking into
account an unfavorable exchange rate effect of -2.4%, the total
variation in sales at current exchange rates amounted to -0.4%. The
impact of the application of the IAS 29 standard was -€63m.
Gross margin stood at 22.3% of net sales, down -9bp, due
to price investments, offset by purchasing gains, lower logistics
costs and improved performance in financial services.
Distribution costs were down at 17.5% of net sales vs
17.7% in 2018. They benefited from the cost savings plans and
include the costs associated with new stores and new services
offered to customers, notably in digital.
Group EBITDA reached €3,485m, or a margin of 4.8%, up
+10bp.
The Group’s recurring operating Income (ROI) reached
€2,080m (or €2,088m post-IAS 29 and post-IFRS 16), an increase of
+€145m (+7.4%) at constant exchange rates (the currency effect was
an unfavorable -€36m, notably due to the depreciation of the
Brazilian Real). Operating margin increased by + 16bp, to 2.9%.
- In France, recurring operating income stood at €539m, up
+15.6% vs 2018. All formats contributed to this improvement.
Operating margin increased to 1.6% compared to 1.3% in 2018. This
increase reflects:
- On the one hand, the dynamics of lower costs, transformation of
organizations and improvement of purchasing conditions, both for
goods for resale and not for resale
- On the other hand, investments in price competitiveness and in
the attractiveness of the offer, services and digital
- In Europe (ex-France), recurring operating income stood
at €647m vs €664m in 2018. This evolution reflects:
- A solid performance in Spain and in Eastern Europe, where the
commercial model confirms its attractiveness
- Sluggish growth in Italy and Belgium where substantial
investments in competitiveness have been made, partly offset by
more significant cost reductions in the second half with the
completion of the departure plans
- In Latin America, recurring operating income grew by
+10.0% at constant exchange rates to €844m. Operating margin of
5.7% was stable, reflecting a commercial strategy favoring volume
growth. The impact of the application of the IAS 29 standard was
-€31m
- In Argentina, recurring operating income is growing and is now
in positive territory, confirming the turnaround initiated in
2018
- In Brazil, with strong sales growth, ROI is up by +6.5% at
constant exchange rates. This reflects the success of commercial
initiatives at Carrefour Retail and Atacadão, as well as fast
growth in financial services
- In Taiwan (Asia), profitability improved again with
recurring operating income growing to €85m vs €77m in 2018,
representing an increase in operating margin to 4.3% vs 4.2% in
2018. This increase reflects good growth momentum, expansion and
tight cost control
Non-recurring income and expenses stood at €(920)m. It
notably reflects the costs related to reorganization plans in the
various countries in the amount of €550m, as well as €308m of other
non-current expenses mainly related to provisions for tax
litigation in Brazil, already booked in H1 2019.
Net income, Group share reached €1,314m vs €(582)m in
2018. It includes the following items:
- Net financial expenses of €(271)m, an improvement of
+€43m as a result of refinancing operations carried out under more
favorable conditions and the capital gain on the disposal of Argan
shares
- Income tax expense of €(505)m, vs €(527)m the previous year.
This tax expense reflects a normalized tax rate of 31.2% (vs
31.3% in 2018), excluding non-recurring income and taxes not
assessed on pre-tax income
- Net income from discontinued operations, Group share,
amounted to €1,121m and essentially includes the capital gain from
the disposal of operations in China
Adjusted net income, Group share, improved by +€101m, to
€905m vs €804m in 2018.
IMPROVEMENT IN ADJUSTED FREE CASH-FLOW
2019 cash-flow (IFRS 5) is before application of IAS 29 and IFRS
16. The details of 2019 cash-flow (IFRS 5) post-IAS 29 and
post-IFRS 16 are available in the appendix to this press
release.
In 2019, the Group posted an improvement of +€186m in its
free cash-flow adjusted for exceptional items and discontinued
operations, increasing from €1,115m to €1,301m.
Free cash-flow stood at €582m in 2019, down slightly by
-€54m vs 2018, impacted by €719m cash-out (vs €478m in 2018)
related to restructuring charges and other non-recurring items. It
includes the following items:
- EBITDA up by +€69m
- Change in working capital requirement down by -€100m
- At December 31, inventories increased temporarily
(+€196m) due to more difficult business conditions than expected in
December. On average in 2019, they were well-controlled and
decreased slightly
- Among the other working capital requirement items, trade
payables increased on higher purchasing volumes and a positive
calendar effect, while social debt decreased, reflecting workforce
reduction
- Capex up +€160m to €1,725m in 2019, compared to the low
point in 2018. These investments notably reflect the launch of new
strategic projects, in particular the rollout of new commercial
concepts, digital and the expansion of growth formats. They
continued to benefit from selectivity and productivity
measures
STRONG DECREASE IN DEBT AND ENHANCED LIQUIDITY
2019 balance sheet is post-IAS 29 and IFRS 16.
Net financial debt decreased by c.€1bn at constant
exchange rates to €2,615m as of December 31, 2019, compared to
€3,510m as of December 31, 2018 (excl. IAS 17 impact), thanks to
improved cash-flow and disposals.
Shareholder equity, Group share, was up by €771m, at
€9,940 at December 31, 2019 vs €9,169m at December 31, 2018.
Carrefour has reinforced its solid balance sheet in 2019.
This constitutes an important asset in the context of the
fast-changing food retail sector.
At December 31, 2019, the Group was rated Baa1 with negative
outlook by Moody’s and BBB with stable outlook by Standard &
Poor’s.
The Group’s liquidity has been reinforced over the
year:
- In May 2019, Carrefour issued bonds in an amount of €500m with
an eight-year maturity. The success of this issue, which was
significantly oversubscribed, attests to the great confidence of
bond investors in Carrefour’s signature
- In November 2019, Carrefour redeemed bonds for a nominal amount
of €327m, including €198m of 2020 bonds and €129m of 2021
bonds
- Following these operations and the €1,000m bond that came due
in May 2019, debt maturity remained stable at 3.5 years at the end
of December 2019
- In June 2019, Carrefour also 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
STABLE DIVIDEND
The dividend proposed for the 2019 financial year amounts to
€0.46 per share, stable compared to the 2018 financial year.
This dividend will be proposed in cash or shares, at the
shareholder’s choice, and will be submitted to the approval of the
General Shareholders’ Meeting on May 29, 2020.
For the dividend payment in new shares, the issue price would
represent 95% (vs. 90% last year) of the average opening prices
quoted on the regulated market of Euronext Paris during the 20
trading days preceding the date of the General Shareholders’
Meeting, minus the amount of the dividend, and rounded upward to
the nearest euro cent.
NEW AMBITIONS AND OTHER TARGETS CONFIRMED
Carrefour reaffirms its ambitions and announces new
targets for the Carrefour 2022 plan:
- Improvement in the Group NPS of +15 points over 2020-22 period,
i.e. +23 points since the start of the plan
- Cost-reduction plan increased to €2.8bn on an annual basis by
2020 (compared to €2.6 billion previously)
- New target of €300m in additional disposals of non-strategic
real estate assets by 2022, after the achievement one year ahead of
plan of the initial target of disposals of €500m
The financial targets are confirmed:
- €4.2bn in food e-commerce sales in 2022
- €4.8bn in sales of organic products in 2022
Operational targets are also confirmed:
- Reduction of 350,000 sq. m of hypermarket sales area worldwide
by 2022
- -15% reduction in assortments by 2020
- Carrefour-branded products accounting for one-third of sales in
2022
- 2,700 convenience store openings by 2022
FIRST-HALF 2020 AGENDA
- Carrefour Brazil Investor Day in Sao Paulo: During the week of
March 30, 2020
- First-quarter 2020 sales: April 28, 2020
- General Shareholders’ Meeting: May 29, 2020
- Thematic event on customer satisfaction in Madrid: June 25,
2020
The Carrefour Board of Directors met on February 26, 2020 under
the chairmanship of Alexandre Bompard and approved the consolidated
financial statements for the 2019 financial year. These accounts
have been audited and the certification report is being issued.
APPENDIX
Discontinued operations and restatement of comparative
information
On September 26, 2019, the Group divested control of its
Carrefour China subsidiary. As Carrefour China represents a
separate major geographic area of operations, it is considered as a
discontinued operation in accordance with IFRS 5. Accordingly:
- Net income for the subsidiary is shown on a separate line of
the income statement, "Net income from discontinued operations." To
enable a meaningful comparison, its net profit for 2018 was
reclassified on this line
- All cash-flow relating to this subsidiary are shown on the
“Impact of discontinued operations” lines in the consolidated
statement of cash flows. Data for 2018 were similarly restated
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, impacting financing cash-flows).
The Group has opted for the simplified retrospective approach as
of January 1, 2019. Thus, the full-year 2018 consolidated financial
statements were not restated. The consolidated financial statements
for full-year 2019 have been established in accordance with IFRS 16
accounting rules.
On December 16, 2019, the IFRS IC published its decision in
response to a request for clarification. Carrefour did not apply
this decision when preparing its Consolidated Financial Statements
at December 31, 2019, since it is currently analyzing the potential
impacts of the guidance. In view of the large number of leases
entered into by the Group in the countries in which it does
business, and the publication of this decision late in the
financial year, the Group has not had so-called “sufficient time”
to analyze the decision and precisely determine its impacts.
Application of IAS 29 – Accounting treatment of
hyperinflation for Argentina
The impact on 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
Q3
20,055
+2.3%
+0.5%
+1.1%
-0.9%
-1.4%
+1.5%
-0.8%
20,199
(204)
19,996
Q4
21,721
+3.1%
+0.0%
+1.1%
-1.0%
-0.6%
+2.5%
-2.4%
21,743
85
21,828
Full-year
81,020
+3.1%
-0.0%
+1.2%
-0.9%
-1.2%
+2.1%
-2.4%
80,735
(63)
80,672
Notes: (1) restated for IFRS 5 and pre-IAS
29; (2) excluding petrol and calendar effects and at constant
exchange rates; (3) including transfers; (4) hyperinflation and
currencies
Consolidated income statement – 2018 bridge
(in €m)
2018 pre-IAS 29 pre-IFRS
16
IAS 29 impact
2018 post-IAS 29
IFRS 5 China impact
2018 (1) IFRS 5
post-IAS 29 pre-IFRS 16
2018 IFRS 5 pre-IAS 29
pre-IFRS 16
Gross sales inc. VAT
85,164
(248)
84,916
(4,144)
80,772
81,020
Net sales
76,199
(198)
76,000
(3,646)
72,355
72,553
Net sales, net of loyalty
program costs
75,459
(198)
75,261
(3,532)
71,728
71,926
Other revenue
2,658
(2)
2,656
(219)
2,438
2,439
Total revenue
78,117
(200)
77,917
(3,751)
74,166
74,366
Cost of goods sold
(60,985)
136
(60,850)
2,838
(58,012)
(58,148)
Gross margin
17,131
(64)
17,067
(913)
16,154
16,218
As a % of net sales
22.5%
22.5%
22.3%
22.4%
SG&A
(13,719)
51
(13,668)
847
(12,821)
(12,872)
As a % of net sales
18.0%
18.0%
17.7%
17.7%
Recurring operating income
before D&A (EBITDA)(2)
3 481
(13)
3,469
(66)
3,403
3,415
EBITDA margin
4.6%
4.6%
4.7%
4.7%
Depreciation and amortization
(1 474)
(20)
(1,494)
99
(1,395)
(1,376)
Recurring operating income
(ROI)
1,938
(33)
1,905
32
1,937
1,971
Recurring operating margin
2.5%
2.5%
2.7%
2.7%
Income from associates and joint
ventures
14
-
14
-
14
14
Recurring operating income
including income from associates and joint ventures
1,952
(33)
1,919
32
1,952
1,985
Non-recurring income and
expenses
(1,159)
(2)
(1,161)
32
(1,129)
(1,127)
Operating income
793
(35)
758
64
823
858
Financial result
(318)
56
(262)
4
(258)
(314)
Finance costs, net
(233)
0
(233)
5
(228)
(228)
Net interests related to leases
commitment
-
-
-
-
-
-
Other financial income and
expenses
(85)
56
(29)
(0)
(30)
(86)
Income before taxes
475
21
496
69
565
544
Income tax expense
(537)
(2)
(539)
10
(529)
(527)
Net income from continuing
operations
(62)
19
(43)
79
36
17
Net income from discontinued
operations
(301)
-
(301)
(79)
(380)
(380)
Net income
(363)
19
(344)
0
(344)
(363)
Of which Net income, Group
share
(582)
21
(561)
(0)
(561)
(582)
of which Net income from
continuing operations, Group share
(280)
21
(259)
72
(187)
(208)
of which Net income from
discontinued operations, Group share
(301)
-
(301)
(72)
(373)
(373)
Of which Net income,
Non-controlling interests
219
(2)
216
-
216
219
of which Net income from
continuing operations, Non-controlling interests
219
(2)
216
7
223
225
of which Net income from
discontinued operations, Non-controlling interests
-
-
-
(7)
(7)
(7)
Net Income, Group share,
adjusted for exceptional items
779
23
802
24
826
804
Depreciation from supply chain
(in COGS)
(69)
(1)
(70)
-
(70)
(69)
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 income statement – 2019 bridge
(in €m)
2019 IFRS 5 pre-IAS 29
pre-IFRS 16
IFRS 16 Impact
IAS 29 Impact
2019 (1) IFRS 5 post-IAS 29
post-IFRS 16
Gross sales inc. VAT
80,735
-
(63)
80,672
Net sales
72,450
-
(53)
72,397
Net sales, net of loyalty
program costs
71,705
-
(53)
71,651
Other revenue
2,525
(34)
0
2,491
Total revenue
74,230
(34)
(53)
74,142
Cost of goods sold
(58,098)
10
34
(58,054)
Gross margin
16,131
(25)
(19)
16,088
As a % of net sales
22.3%
22.2%
SG&A
(12,700)
786
8
(11,906)
As a % of net sales
17.5%
16.4%
Recurring operating income
before D&A (EBITDA)(2)
3,485
942
(10)
4,417
EBITDA margin
4.8%
6.1%
Depreciation and amortization
(1,351)
(722)
(21)
(2,093)
Recurring operating income
(ROI)
2,080
40
(31)
2,088
Recurring operating margin
2.9%
2.9%
Income from associates and joint
ventures
2
-
-
2
Recurring operating income
including income from associates and joint ventures
2,082
40
(31)
2,090
Non-recurring income and
expenses
(920)
(106)
(4)
(1,030)
Operating income
1,162
(66)
(35)
1,060
Financial result
(271)
(115)
47
(338)
Finance costs, net
(221)
-
7
(214)
Net interests related to leases
commitment
(16)
(106)
16
(107)
Other financial income and
expenses
(33)
(8)
25
(17)
Income before taxes
891
(181)
12
722
Income tax expense
(505)
5
(4)
(504)
Net income from continuing
operations
387
(176)
8
219
Net income from discontinued
operations
1,122
(30)
-
1,092
Net income
1,508
(205)
8
1,311
Of which Net income, Group
share
1,314
(194)
9
1,129
of which Net income from
continuing operations, Group share
193
(170)
9
32
of which Net income from
discontinued operations, Group share
1,121
(24)
-
1,097
Of which Net income,
Non-controlling interests
194
(12)
(1)
182
of which Net income from
continuing operations, Non-controlling interests
194
(6)
(1)
187
of which Net income from
discontinued operations, Non-controlling interests
0
(6)
-
(5)
Net Income, Group share,
adjusted for exceptional items
905
(42)
(2)
861
Depreciation from supply chain
(in COGS)
(54)
(181)
(0)
(235)
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 income statement - 2019 vs 2018
(in €m)
2018 IFRS 5 pre-IAS 29 pre-IFRS
16
2019 IFRS 5 pre-IAS 29
pre-IFRS 16
Variation at constant exchange
rates
Variation at current exchange
rates
2018 (1) IFRS 5 post-IAS 29
pre-IFRS 16
2019 (1) IFRS 5 post-IAS 29
post-IFRS 16
Gross sales inc. VAT
81,020
80,735
2.1%
(0.4%)
80,772
80,672
Net Sales
72,553
72,450
2.1%
(0.1%)
72,355
72,397
Net sales, net of loyalty
program costs
71,926
71,705
2.0%
(0.3%)
71,728
71,651
Other revenue
2,439
2,525
5.7%
3.5%
2,438
2,491
Total revenue
74,366
74,230
2.1%
(0.2%)
74,166
74,142
Cost of goods sold
(58,148)
(58,098)
2.1%
(0.1%)
(58,012)
(58,054)
Gross margin
16,218
16,131
2.2%
(0.5%)
16,154
16,088
As a % of net sales
22.4%
22.3%
2bp
(9bp)
22.3%
22.2%
SG&A
(12,872)
(12,700)
1.7%
(1.3%)
(12,821)
(11,906)
As a % of net sales
17.7%
17.5%
(7bp)
(21bp)
17.7%
16.4%
Recurring operating income
before D&A (EBITDA)(2)
3,415
3,485
3.4%
2.0%
3,403
4,417
EBITDA margin
4.7%
4.8%
6bp
10bp
4.7%
6.1%
Depreciation and amortization
(1,376)
(1,351)
(1.0%)
(1.8%)
(1,395)
(2,093)
Recurring operating income
(ROI)
1,971
2,080
7.4%
5.6%
1,937
2,088
Recurring operating margin
2.7%
2.9%
14bp
16bp
2.7%
2.9%
Income from associates and joint
ventures
14
2
14
2
Recurring operating income
including income from associates and joint ventures
1,985
2,082
1,952
2,090
Non-recurring income and
expenses
(1,127)
(920)
(1,129)
(1,030)
Operating income
858
1,162
823
1,060
Financial result
(314)
(271)
(258)
(338)
Finance costs, net
(228)
(221)
(228)
(214)
Net interests related to leases
commitment
-
(16)
-
(107)
Other financial income and
expenses
(86)
(33)
(30)
(17)
Income before taxes
544
891
565
722
Income tax expense
(527)
(505)
(529)
(504)
Net income from continuing
operations
17
387
36
219
Net income from discontinued
operations
(380)
1,122
(380)
1,092
Net income
(363)
1,508
(344)
1,311
of which Net income, Group
share
(582)
1,314
(561)
1,129
of which continuing
operations
(208)
193
(187)
32
of which discontinued
operations
(373)
1,121
(373)
1,097
of which Net income,
Non-controlling interests
219
194
216
182
of which continuing
operations
225
194
223
187
of which discontinued
operations
(7)
0
(7)
(5)
Net Income, Group share,
adjusted for exceptional items
804
905
826
861
Depreciation from supply chain
(in COGS)
(69)
(54)
(70)
(235)
Net Income, Group share,
adjusted for exceptional items, per share
1.04
1.14
1.07
1.09
Weighted average number of shares
pre-dilution (in millions)
775.1
791.5
775.1
791.5
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
Geographic breakdown of 2019 net sales and recurring
operating income
2019 (pre-IAS 29 and pre-IFRS 16) vs
2018 (pre-IAS 29 and pre-IFRS 16)
Net sales
Recurring operating
income
(in €m)
2018 IFRS 5 pre-IAS 29 pre-IFRS
16
2019 IFRS 5 pre-IAS 29
pre-IFRS 16
Variation at constant exchange
rates
Variation at current exchange
rates
2018 IFRS 5 pre-IAS 29 pre-IFRS
16
2019 IFRS 5 pre-IAS 29
pre-IFRS 16
Variation at constant exchange
rates
Variation at current exchange
rates
France
35,615
34,765
(2.4%)
(2.4%)
466
539
15.6%
15.6%
Europe (ex-France)
21,076
20,999
(0.1%)
(0.4%)
664
647
(2.5%)
(2.7%)
Latin America
14,007
14,718
16.8%
5.1%
800
844
10.0%
5.4%
Asia
1,855
1,968
3.2%
6.1%
77
85
8.0%
11.0%
International
36,938
37,686
6.5%
2.0%
1,542
1,576
4.5%
2.2%
Global functions
-
-
-
-
(38)
(35)
(5.6%)
(7.2%)
TOTAL
72,553
72,450
2.1%
(0.1%)
1,971
2,080
7.4%
5.6%
2019 (post-IAS 29 and post-IFRS 16) vs
2018 (post-IAS 29 and pre-IFRS 16)1
Net sales
Recurring operating
income
(in €m)
2018 IFRS 5 post-IAS 29 pre-IFRS
16
2019 IFRS 5 post-IAS 29
post-IFRS 16
Variation at constant exchange
rates
Variation at current exchange
rates
2018 IFRS 5 post-IAS 29 pre-IFRS
16
2019 IFRS 5 post-IAS 29
post-IFRS 16
Variation at constant exchange
rates
Variation at current exchange
rates
France
35,615
34,765
(2.4%)
(2.4%)
466
547
17.3%
17.3%
Europe (ex-France)
21,076
20,999
(0.1%)
(0.4%)
664
657
(0.9%)
(1.1%)
Latin America
13,809
14,665
23.4%
6.2%
767
833
11.4%
8.6%
Asia
1,855
1,968
3.2%
6.1%
77
83
4.9%
7.8%
International
36,740
37,632
8.9%
2.4%
1,509
1,573
5.7%
4.3%
Global functions
-
-
-
-
(38)
(32)
(13.8%)
(15.3%)
TOTAL
72,355
72,397
3.3%
0.1%
1,937
2,088
8.8%
7.8%
Note: (1) IFRS Consolidated accounts
Consolidated balance sheet
(in €m)
2018 reported post-IAS 29
pre-IFRS 16
2019 reported post-IAS 29
post-IFRS 16
ASSETS
Intangible assets
9,444
9,429
Tangible assets
12,637
11,370
Financial investments
2,650
2,753
Deferred tax assets
723
823
Investment properties
389
312
Right-of-use asset
-
4,388
Consumer credit from
financial-service companies – Long-term
2,486
2,283
Other non-current assets
379
569
Non-current assets
28,709
31,927
Inventories
6,135
5,867
Trade receivables
2,537
2,669
Consumer credit from
financial-service companies – Short-term
3,722
4,007
Tax receivables
853
838
Other assets
887
738
Current financial assets
190
252
Cash and cash equivalents
4,300
4,466
Current assets
18,624
18,838
Assets held for sale
46
37
TOTAL
47,378
50,802
LIABILITIES
Shareholders' equity, Group
share
9,169
9,940
Minority interests in
consolidated companies
2,117
1,736
Shareholders' equity
11,286
11,675
Deferred tax liabilities
541
655
Provision for contingencies
3,521
3,297
Borrowings – Long-term
6,936
6,303
Lease liabilities – Long-term
-
3,660
Bank loans refinancing –
Long-term
1,932
1,817
Tax payables and others – Long-term
-
335
Non-current liabilities
12,930
16,066
Borrowings – Short-term
1,339
997
Lease liabilities –
Short-term
-
912
Trade payables
14,161
13,646
Bank loans refinancing –
Short-term
3,582
3,712
Tax payables and others – Short-term
1,142
1,095
Other debts
2,938
2,649
Current liabilities
23,162
23,012
Liabilities related to assets
held for sale
-
49
TOTAL
47,378
50,802
Consolidated cash-flow statement
(in €m)
2018 reported post-IAS 29
pre-IFRS 16
2018 IFRS 5 post-IAS 29 pre-IFRS
16 excl. IAS 17 impact1
2019 IFRS 5 post-IAS 29
post-IFRS 16
NET DEBT AT OPENING
(3,728)2
(3,426)2
(3,510)
Gross cash-flow (continuing
operations)
2,248
2,221
3,286
Change in working capital
(54)
(55)
(149)
Impact of discontinued
operations
(86)
(59)
109
Cash-flow from
operations
2,108
2,108
3,247
Capital expenditure
(1,611)
(1,560)
(1,725)
Change in net payables to fixed
assets suppliers
(53)
(46)
99
Net asset disposals
194
192
98
Impact of discontinued
operations
(2)
(57)
(33)
Free cash-flow
636
636
1,686
Free cash-flow excluding
exceptional items and discontinued operations
1,088
1,115
2,229
Financial investments
(193)
(211)
(110)
Proceeds from disposals of
subsidiaries
22
22
441
Others
15
12
208
Impact of discontinued
operations
15
36
13
Cash-flow after
investments
494
494
2,238
Capital increase
89
89
75
Dividends paid
(235)
(235)
(223)
Acquisition/disposal of
investments without change in control
(0)
(0)
-
Treasury shares
42
42
-
Cost of net financial debt
(233)
(209)
(214)
Operating leases payment incl.
interests
-
(45)
(999)
Others
(215)
(220)
17
NET DEBT AT CLOSE
(3,785)
(3,510)
(2,615)
Notes: (1) Finance lease liabilities
recognized in accordance with IAS 17 for €275m at December 31, 2018
were reclassified in lease commitments; (2) Adjustments linked to
the first application of the IFRS 9 standard – Financial
instruments as of January 1, 2018
EBITDA to free cash-flow bridge
(in €m)
2018 IFRS 5 pre-IAS 29 pre-IFRS
16
2019 IFRS 5 pre-IAS 29
pre-IFRS 16
Variation
IFRS 16 Impact
IAS 29 Impact
2019 (1) IFRS 5 post-IAS 29
post-IFRS 16
2018 (1) IFRS 5 post-IAS 29
pre-IFRS 16
EBITDA
3,415
3,485
69
942
(10)
4,417
3,403
Income tax paid
(505)
(499)
6
-
0
(499)
(502)
Financial result (excl. cost of
debt and interest related to leases obligations)
(86)
(33)
52
(8)
25
(17)
(30)
Others (incl. cash impact of
restructuring items)
(620)
(614)
6
-
-
(614)
(650)
Gross cash-flow (excl.
discontinued)
2,204
2,338
134
934
14
3,286
2,221
Change in working capital
(35)
(135)
(100)
1
(14)
(149)
(54)
Discontinued operations
(59)
(67)
(8)
176
-
109
(59)
Operating cash-flow (incl.
exceptional items and discontinued)
2,110
2,136
26
1,111
-
3,247
2,108
Capital expenditure
(1,565)
(1,725)
(160)
-
-
(1,725)
(1,560)
Change in net payables to fixed
asset suppliers
(46)
106
152
(7)
-
99
(46)
Net asset disposals
(business-related)
192
98
(94)
-
-
98
192
Discontinued operations
(57)
(33)
23
-
-
(33)
(57)
Free cash-flow
636
582
(54)
1,103
-
1,686
636
Free cash-flow from continuing
operations, excl. exceptional items
1,115
1,301
186
927
-
2,229
1,115
Exceptional items and
discontinued operations(2)
(478)
(719)
(241)
176
-
(543)
(478)
Operating leases payment (incl.
interests) (financial lease IAS 17) – Excl. China
(42)
(42)
(0)
-
-
(42)
(42)
Operating leases payment (incl.
interests) net of financial sub-lease payment received – Excl.
China
-
-
-
(927)
-
(927)
-
Operating leases payment (incl.
interests) – China
(3)
(2)
1
(176)
-
(178)
(3)
Cost of debt
(228)
(221)
7
-
7
(214)
(228)
Net free cash-flow
363
317
(46)
-
7
324
363
Net free cash-flow from
continuing operations, excl. exceptional items
844
1,038
194
-
7
1,045
844
Notes: (1) IFRS consolidated accounts; (2)
Discontinued operations (o/w ex-Dia for €88m in 2018 and €116m in
2019), restructuring (€308m in 2018 and €580m in 2019), Cargo capex
cashed out (€71m in 2018 and €35m in 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 comprehensive income over
the period
990
855
134
Dividends
(242)
(106)
(136)
Impact of scope and others
(350)
30
(380)
At December 31, 2019
11,675
9,940
1,736
2019 net income, Group share, adjusted for exceptional
items
2018
2019
(in €m)
IFRS 5 pre-IAS 29 pre-IFRS 16
IFRS 5 post-IAS 29 pre-IFRS 16
(1)
IFRS 5 pre-IAS 29 pre-IFRS 16
IFRS 5 post-IAS 29 post-IFRS 16
(1)
Net income, Group
share
(582)
(561)
1,314
1,129
Restatement for non-recurring
income and expenses (before tax)
1,127
1,129
920
1,030
Restatement for exceptional items
in net financial expenses
47
48
23
23
Tax impact(2)
(66)
(68)
(113)
(106)
Restatement on share of income
from companies consolidated by the equity method
(46)
(46)
(13)
(17)
Restatement on share of income
from minorities
(49)
(49)
(104)
(100)
Restatement for net income of
discontinued operations, Group share
373
373
(1,121)
(1,097)
Adjusted net income, Group
share
804
826
905
861
Note: (1) IFRS consolidated accounts; (2)
Tax impact of restated items (non-recurring income and expenses and
financial expenses) and exceptional tax items
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 (LFL)
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
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Investor Relations Selma Bekhechi, Anthony Guglielmo et
Antoine Parison +33 (0)1 64 50 79 81
Shareholder Relations 0 805 902 902 (toll-free in
France)
Group Communication +33 (0)1 58 47 88 80
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