New game plan
1
Introduction & Summary – Lars Olofsson
• First‐Half Highlights
• Midway through the Transformation Plan: Achievements • H1 2011: Lessons Learned
• New Game Plan, New Team
Results Review – Pierre Bouchut
New game plan, pursuing our strategic priorities – Lars Olofsson
• FRANCE ‘RESET’ – New Commercial Strategy and Action Plan – Noël Prioux
• PLANET – Progress Update
• ADJUSTING – to new context in Southern Europe
• GROWTH MARKETS – Brazil and China Update
Conclusion – Lars Olofsson
2
Introduction & Summary
Lars Olofsson
3
Key financial highlights
Sales up 2.3% (+1% ex currency, petrol and calendar), driven by Growth Markets (+10%) EBITDA down 9.5% (‐60bp), negatively impacted by France, Greece and Italy…
…which offset solid performance in Spain, Belgium & Growth Markets Current Operating Income of €772m, down 22% (‐70bp), in line with our 13 July guidance
€884m non‐recurring items, of which €496m for impairment in Italy
Capex up 15%, focused on Planet and G4 transformation
Solid financial structure with net debt/EBITDA ratio of 2.3x
4
Key business highlights
Overall environment characterized by major price hikes from suppliers and worsening economic environment in Southern Europe during Q2
Unsatisfactory execution of Group strategy in France
Disappointing performance in Italy and Greece
Resilient performance in Spain
Encouraging recovery in Brazilian hypermarkets
Confirmed turnaround in Belgium, Poland and Taiwan
Carrefour Planet rollout underway: 13 stores across Europe in Q2
Spin‐off of DIA completed
5
Mid‐way through the Transformation Plan: Achievements
HYPERMARKET REINVENTION: ROLLING OUT
Planet: from 6 pilot stores to the launch of industrial roll out
COST SAVINGS: DELIVERED
€1.3bn of cost reductions achieved since launch of Plan
BRAND REVITALIZATION: ON TRACK
Carrefour branded offer repositioned and enriched assortment
BEST PRACTICE SHARING: UNDERWAY
Competence centers created to share best practices throughout the group
6
H1 2011: Lessons learned
FRANCE
Too much, too quickly
● New head for France in place
Unsatisfactory execution of strategy
● Action plan implemented Intensifying price competition due to commodity price hikes
● New commercial strategy Over‐focus on market share to regain momentum
focused on enhanced price competitiveness and sustainable traffic gains
7
H1 2011: Lessons learned
ENVIRONMENT
Duration and depth of downturn in Europe and commodity price hikes severely affecting consumption
ORGANIZATION
Built‐in rigidities in our processes and complexity of our organization
• Slower GDP forecast in Europe
• Adjusted Capex and further cost savings in Europe
• Timeline on purchasing savings and inventory reduction revised
• Reinforced executive team • Better coordinate plans, processes
and people
• Adjust speed of implementation
• Enhance predictability through improved internal controls
8
Decisive actions to regain momentum
• New game plan
France “Reset”
Adapting to the new context in Europe
• New Team
• Pursuing strategic priorities Continue delivering on Transformation Plan Focus on growth levers:
Emerging Markets Planet Carrefour brand
Step change to meet our Strategic Goal: Sustainable, Profitable Growth
9
Introducing the New Team
Reinforced Executive Team: Continuity and change
ZONES
• Noël PRIOUX, France
• Thomas HUBNER, Europe
• Pierre BOUCHUT, Emerging Markets & Financial Services
• Thierry GARNIER, China & Taiwan
FUNCTIONS
• Pierre‐Jean SIVIGNON, Finance & Control
• Jean‐Christophe DESLARZES, Human Resources
• Jose‐Carlos GONZALEZ HURTADO, Commercial & Marketing
• Eric LEGROS, Group Merchandise 10
Pierre Bouchut
11
Summarized H1 P&L €m
H1 2010 (1)
H1 2011
Var.
Net Sales
38,710
39,607
2.3%
EBITDA (2)
1,855
1,679
(9.5%)
Current operating income
989
772
(22.0%)
Non‐recurring items
(353)
(884)
150.1%
Operating income
636
(112)
(117.5%)
(349)
(342)
(2.2%)
(270)
(79)
(258)
(84)
(4.4%)
6.3%
(238)
(490)
105.8%
Net income from disc. operations
85
680
Net income, Group share
97
(249)
na
302
153
(49.3%)
Net financial expenses
Interest expenses
Other financial expenses
Income tax
Net income, Group share, Adjusted for exceptional items
(1) Adjusted as per DIA deconsolidation, Thailand deconsolidation and restated as per Brazil
(2) Excluding the depreciation of the assets of our integrated supply chain operations (€50m in H1 2011 and €37m in H1 2010)
12
Sales growth in a challenging environment
€39,607m
Change in net sales (1) (2)
(in %)
€38,710m
H1 2010 sales
+0.2
101.0
+0.1
+0.9
Like for like
Ex petrol
Organic expansion & acquisitions (2)
H1 2011 sales at constant exchange rates ex petrol ex calendar impact
102.3
+1.1
Petrol impact
Fx Impact H1 2011 sales
(1) Adjusted as per IFRS 5, Thailand and DIA have been retroactively deconsolidated
(2) The variation between the reported 2.7% increase in H1 sales including VAT is mainly explained by an increase in the value added tax in several European countries: Spain, Greece, Poland and Romania. This 0.4% difference has been included in the “Organic expansion & acquisitions” column.
13
Sales growth driven by emerging markets
Evolution €m
H1 2010
H1 2011
France
16,806
17,073
1.6%
‐0.2%
Europe
11,989
11,517
‐3.9%
‐4.6%
Latin America
6,463
7,298
12.9%
11.6%
Asia
3,452
3,719
7.7%
6.7%
38,710
39,607
2.3%
1.0%
Total
Evolution
at constant exch. rates ex petrol
14
Decrease in commercial margin in a tougher competitive environment
8,494
Commercial
income
(€m)
20 bp decrease in commercial margin as a % of sales ex petrol (‐40bp inc. petrol)
8,428
Tough competitive environment in Europe, notably in France
Commercial
margin
as a % of sales
21.4%
21.8%
Strong rise in commodity prices
Positive impact of €42m from logistics gains
23.4%
Ex petrol
Commercial margin
as a % of sales
H1 2010
23.6%
H1 2011
15
Stable underlying SG&A as a percentage of sales
€m
H1 2010
H1 2011
Change
SG&A including asset costs
(7,439)
(7,722)
+3.8%
As a % of sales
19.2%
19.5%
+30bp
SG&A (excluding asset costs)
(6,149)
(6,381)
+3.8%
As a % of sales
15.9%
16.1%
+20bp
Asset costs (rents & depreciation)
(1,290)
(1,341)
+3.9%
3.3%
3.4%
+10bp
As a % of sales
Adjusted for the end of the Loi Fillon benefits and other non‐
recurring elements, underlying SG&A costs as a % of sales are stable
16
SG&A (ex. asset costs) up despite significant cost savings Change in SG&A excluding asset costs
(€m)
75
(195)
25
€6,381m
158
€6,149m
169
SG&A ex. asset costs
H1 2010
Cost inflation (salaries, “Loi
Fillon”, etc.)
Expansion and transformation
Additional operating taxes
(1) The incidence of foreign exchange differences was neutral on H1 SG&A costs
Other & Forex (1)
Cost savings
SG&A ex. asset costs
H1 2011
17
Efficiency gains on all fronts
€m
H1 2011
Operating cost savings
42
Logistics cost savings
Total cost reductions
Of which G4
Of which Rest of the World
195
236
Store operations
51
Support functions
33
Other SG&A
86
Cost reductions
66
Total cost reductions
236
18
France: unsatisfactory sales and EBITDA performance
17,073
Net sales
(€m)
EBITDA (1)(2)
(€m and % of sales)
Current Operating
Income before Group overhead
(€m and % of sales)
CAPEX
(€m)
H1 2010
Net sales broadly stable ex petrol (+1.6% inc. petrol)
16,806
728 4.3%
881
5.2%
344
2.0%
547
3.3%
+1.6%
EBITDA down 17.4% reflecting: • A decrease in commercial margin due to rise ‐17.4%
‐37.1%
Current Operating Income down 37%
292
239
in supplier tariffs
• Impact of operational issues (out‐of‐stock, textile, fresh food pricing)
• Increase in operating costs in French hypermarkets
+22%
CAPEX up 22% mainly focused on IT and start‐up phase of Planet
23,000 gross new sqm, 12,000 net sqm
H1 2011
(1) Unallocated headquarter costs of €76 m in H1 2010 and €73m in H1 2011 (2) excluding logistic depreciation of €12m in H1 2010 and €36 m in H1 2011
19
Europe: EBITDA weighed down by Greece and Italy Net sales
11,517
(€m)
EBITDA (1)(2)
11,989
435
3.8%
535
4.5%
(€m and % of sales)
‐3.9%
‐18.8%
Net sales down 4.6% ex petrol at constant exchange rates (‐3.9% including petrol and currency)
EBITDA margin down 70bp reflecting: • decline in sales of €472m • decrease in commercial margin
• strong grip on operating costs overall
• deteriorating profitability in Greece and Italy
Current Operating
Income before Group overhead
(€m and % of sales)
CAPEX
(€m)
H1 2010
168
1.5%
243
2.0%
‐30.7%
Ex. Greece and Italy, broadly flat EBITDA and Current Operating Income up 6%
246
166
H1 2011
Current Operating Income margin down 50bp
+48%
CAPEX up 48%, boosted by Carrefour planet rollout
145,000 gross new sqm, 46,000 net sqm
(1) Unallocated headquarter costs of €76m in H1 2010 and €73m in H1 2011 (2) excluding logistic depreciation of €22m in H1 2010 and €11m in H1 2011
20
Latin America: Solid sales and profit growth
7,298
Net sales
(€m)
6,463
+12.9%
Net sales up 11.6% at constant exchange rates and ex petrol (+12.9% including currency): • strong growth at Atacadao EBITDA (1)(2)
(€m and % of sales)
Current Operating
Income before Group overhead
(€m and % of sales)
CAPEX
(€m)
H1 2010
356 4.9%
295
4.6%
205
2.8%
159
and in Argentina
+20.6%
+29.2%
2.5%
156
197
‐21%
21% increase in EBITDA
Current Operating Income up 29.2% at current exchange reflecting strong Brazil (+48% at current exchange rates, +42% at constant)
CAPEX down 21% reflecting Atacadao openings backend loaded in 2011
35,000 gross new sqm, 30,000 net sqm
H1 2011
(1) Unallocated headquarter costs of €76m in H1 2010 and €73m in H1 2011 (2)excluding logistic depreciation of €3m inH1 2010 and €3m inH1 2011
21
Asia: Rise in sales and EBITDA 3,719
3,452
+7.7%
Net sales up 6.7% ex petrol and at constant exchange rates
(+7.7% including petrol and currency)
233
6.3%
220
6.4%
+6.2%
EBITDA up 6.2% reflecting:
Net sales
(€m)
EBITDA (1)
(€m and % of sales)
Current Operating
Income before Group overhead
(€m and % of sales)
128
3.4%
118
3.4%
H1 2010
increase of 2.7% at current exch. rates
• Confirmed turnaround in Taiwan
+8.7%
67
CAPEX
(€m)
• Resilient performance in China with an 56
+19%
CAPEX up 19%
35,000 gross new sqm; 3,000 net sqm
H1 2011
(1) Unallocated headquarter costs of €76m in H1 2010 and €73m in H1 2011
22
Transformation Plan: cost reduction on track
2009 – 2012 targets and achievements for operating cost savings, ex DIA (€m)
1,870
On track on operating cost savings:
• €236m achieved in H1 2011
• Target of €480m for 2011
Main cost reduction drivers
• Logistics savings • Contract renegotiation with third parties
• Energy, recycling and other SG&A reduction
1,135
1,300
1,065
860
485
570
2009
2010
Targeted
H1 2011
2012
Achieved
23
Transformation Plan: on track on cumulative purchasing gains despite lost momentum in H1
2009 – 2012 targets and achievements for purchasing gains, ex DIA (€m)
850
No further purchasing savings booked in H1 2011 in a context of:
• Tough negotiations • Tough price competition • Strong rises in commodity prices
356
335
335
250
40
40
2009
2010
Targeted
H1 2011
2012
Achieved
24
Personal Financial Services: Continued solid growth of all KPIs
Number of cards (millions)
Savings accounts (€m)
1,824
14.2
13.7
+3.7%
1,779
Consumer Credit Outstanding (€m)
Insurance premiums (€m)
133
5,708
5,551
+2.5%
+2.8%
128
H1 2010
+4.0%
H1 2011
Launch of “Carrefour Banque” brand in H1
Brazil: New partnership agreement with Itau Unibanco 25
Personal Financial Services: +15.5% in Current Operating Income Net Banking income evolution (€m)
Current Operating Income (1) (€m)
532
181
+12.5%
473
Breakdown of Personal Finance Services contribution (%)
H1 2011
Geographical breakdown (%)
Rest of the World Other contribution 5% Insurance
Banking 77%
+15.5%
157
H1 2010
18%
(1) 37%
France 33%
30%
(mainly Brazil, Colombia and Argentina)
Europe (mainly Spain & Belgium)
(1) Before unallocated headquarter costs and including financial services commissions, warrantee revenues and cost saving generated by the reduction in fees as compared to competing payment cards
26
Carrefour Property: Downward adjustment in rents to be in line with market practice France, Spain, Italy, and HO (€m)
H1 2010
H1 2011
Var.
362
344
‐4.9%
Of which Carrefour tenants
336
317
‐5.7%
Of which external tenants
25
27
5.9%
EBITDA
337
325
‐3.4%
Current Operating Income (1)
160
151
‐5.7%
Net rents ‐ Total
(1) Current Operating Income pre‐group overhead
27
€884m non‐recurring charges (22)
(39)
(884)
16
(79)
(244)
(516)
Impairment (1)
Operating tax expense (2)
Transformation (3)
Restructuring
(1) Impairment: mainly linked to Italy
(2) Allowances for tax litigation in France, Brazil and equity tax in Colombia
(3) Transformation: mainly linked to the implementation of our cost cutting measures
Net capital gains / losses
Other
Total
28
Slight improvement in inventory turn
H1 2011 inventories up €48m
vs. H1 2010 (€m)
6,494
6,447
H1 2010
H1 2011
Improvement in inventory turn
(days of COGS down 0.7)
37.7
H1 2010
37.0
H1 2011
29
CAPEX up with focus on Planet and remodelling
H1 2011 CAPEX (€m) up 15% vs. H1 2010
659
Remodelling /
Maintenance
New space
More CAPEX allocated to Carrefour Planet in Europe and IT in France
659
761
France
36%
38%
Europe
25%
761
39%
51%
42%
32%
Latin America
IT
32%
19%
17%
H1 2010
H1 2011
Asia
30%
20%
9%
9%
H1 2010
H1 2011
30
Net debt reduced by €770m
(€m)
12 months to June 2011 (1)
Opening net debt (11,424)
Gross Cash flow
3,405
Change in WCR and others
Remodelling and maintenance capex
Operating Free cash flow
Expansion capex
(363)
(1,306)
1,736
(629)
Free cash flow
1,108
Acquisitions
(178)
Disposals
222
Thailand cash‐in
808
Dividends & Treasury shares (2)
Consumer credit impact
Others
Net debt at close
(895)
(98)
(197)
(10,654)
(1) Restated in accordance with IAS 8 for Brazil
(2) Including €778m share buy‐back
31
Key cash flow figures proforma ex‐DIA
12 months to June 2011 (€m)
Reported
Proforma ex‐DIA
Gross cash Flow
3,405
2,974
Operating free cash flow
1,736
1,573
Free cash flow
1,108
944
10,654
9,798
Net debt at close
32
Sound financial structure
12 months to 30 June 2010
(with Dia)
12 months to 30 June 2011
(excl. Dia)
11,424
9,798
EBITDA / Interest expenses
9.1x
8.5x
Net debt at close / EBITDA
2.4x
2.3x
Gross cash flow / net debt at close
29.1%
30.4%
Gearing
103.6%
110.7%
A stable outlook
A3 negative outlook
A‐ stable outlook
BBB+ stable outlook
Baa1 negative outlook
BBB+ negative outlook
Net debt at close
Rating agencies
S&P
Moodys
Fitch
33
Sound liquidity position
Debt redemption schedule (€m)
1,260
2012
1,450
2013
1,500
2014
1,351
2015
600
2016
2017
250
Thanks to an excellent liquidity position, no transactions necessary in debt capital markets
Short‐term liquidity ensured through low levels of French commercial paper (c. €621m)
Commercial paper program backed‐up by two undrawn syndicated credit facilities totaling €3.25bn and maturing in 2012 and 2015 with no financial covenants
2018
2019
2020
2021
1,000
1,000
Well diversified bond redemption profile, no refinancing concentrations
Next bond redemption due in April 2012 (€264m)
34
New game plan,
pursuing strategic priorities
Lars Olofsson
35
France ‘‘Reset’’: New commercial strategy and action plan
Lars Olofsson – Noël Prioux
36
France
Diagnosis: Too much, too quickly
Many critical steps in our Transformation…
Change in category and pricing management
Change in commercial dynamics
New IT systems for stores and merchandise
Head‐office move and rationalization
Planet concept launch and implementation
Unwanted side‐effects
Unsatisfactory execution
37
France
Our 3‐pillar action plan to rebuild momentum
1.
Adjust
2.
Rebuild
3.
Accelerate
• Organization and IT Systems
• Hypermarket commercial mix (price ‐ promotion ‐
loyalty)
• Carrefour branded products
• Out‐of‐stocks
• Planet deployment
• Expansion / Carrefour Drive
• E‐commerce
• Cost savings
38
France
Simplify head office systems and processes
Adjust Hypermarket organization
Intensify focus on non‐
food assortment & profitability
1 ‐ Adjust organization
Focus on merchandise and supply chain Simplified interaction between head‐office and stores
Differentiated organization depending on store size and requirements. More responsibility for the store manager
Creation of a dedicated non‐food merchandise department
39
France
1 ‐ Adjust out‐of‐stocks
Diagnosis
Action Plan
Excessive level of out‐of‐stocks
Dedicated task force
•7% in food
•Improve inventory management in intermediate warehouses
•18% in non food
•Reduce in‐store IT glitches
•Better coordination between merchandise and store management Objectives
30% decrease in out‐of‐stocks by September 2011
50% decrease in out‐of‐stocks by end 2011
40
France
1 ‐ Adjust Planet deployment
Diagnosis
Action Plan
• Significant outperformance compared to non converted stores…
Improved execution, new timeline
• …despite suboptimal execution • Concept not fully implemented
• Absence of specific commercial program
• Overly drastic reduction in some product categories
• Priority in H1 to IT deployment before store rollout
•Full deployment by 2013 as planned •First wave moved from June to September to benefit from adjustments
•26 stores instead of 40 initially planned in 2011, 14 moved back to early 2012
•Specific Carrefour Planet event and seasonal commercial program
41
France
2. Rebuild: hypermarket commercial mix
Diagnosis
• Over‐focus on short‐term growth and market share at the expense of longer‐term competitiveness and profitability
• Proliferation of overly costly and complex promotions 2010 commercial investments
9%
Loyalty investments
61%
Promotional investments
• Costly and promotion‐driven loyalty program
30%
Price investments
Carrefour
42
France
2. Rebuild: hypermarket commercial mix
Action Plan
A step change in execution
•Targeted price investment to improve price competitiveness in dry grocery •Drive Carrefour branded growth
•Reinforce customer communication
Promotions
• Price • Carrefour brand
Food pricing
•Financed by • rebuilt loyalty program
• fewer but more impactful promotions
• gains on non‐food Short term negative impact on sales to gain a sustainable profitable growth
platform
Carrefour brand
Targeted
loyalty
Non food
Source
Investment
43
France
2. Rebuild: hypermarket commercial mix
44
France
2. Rebuild: hypermarket commercial mix
45
France
3. Accelerate: Carrefour‐branded products
Action Plan
• Carrefour brand relaunch beginning in September 2011 •
•
•
•
Innovations
Renovations
Price realignment
New visual identity
• Specific communication plan
• Targeting 40% Carrefour brand participation (vs. 25% in 2011)
46
France
3. Accelerate: Expansion, Drive, Internet
Action Plan
• Expansion: • Boost smaller formats’ expansion
• Grow selling space in line with market mainly through franchise and convenience
• Drives at year‐end: • 22 hypermarkets • 24 supermarkets
• Internet: • Launch of the Carrefour/Pixmania website in November
47
France
Conclusion
France ‘Reset’
• A decisive step change:
Consistent implementation of new commercial strategy
Priority to rigorous execution over speed
• A comprehensive action plan to:
Unleash the full potential of Carrefour Planet
Reap benefits of Non‐Food strategy implementation
Simplify processes and systems
Enhance competitiveness Regain lost ground on drives and e‐business
Short term negative sales impact on the way to profitable growth
48
Planet deployment update
49
Planet
Strong sales and traffic growth in four model stores*
Sharply improved performance in the 4 Planet model stores
Sales growth
Traffic evolution
Market share evolution
+180bp
14.3%
10.9%
13.3%
18.8%
+9.7%
Since
opening
H1 2011
Since opening
17%
H1 2011
Before opening
After opening
• Encouraging profitability improvement driven by:
Volume growth
Lower labor costs as a % of sales despite additional services
• Further upside through: Non‐food gains New store operating model
* Four model stores FRANCE ‐ Venissieux – SPAIN ‐ El Pinar – Mostolles – BELGIUM ‐ Mont St Jean.
50
Planet
Updated plan Initial plan 2010
Fine tuning and optimization of the concept
Rollout of Carrefour Planet: slight adjustment in phasing
2011
Rollout from April
6 Carrefour Planet pilot stores in G3
98 Carrefour Planet in G4 and Greece
4 model stores
82 Carrefour Planet: 27 in France – 43 in Spain –
9 in Belgium‐ 2 in Italy –
1 in Greece
51
Planet
Updated plan Initial plan 2010
Fine tuning and optimization of the concept
Carrefour Planet rollout: pragmatic adjustments
2011
Rollout from April
2013
Completion
Completion
6 Carrefour Planet pilot stores in G3
98 Carrefour Planet in G4 and Greece
Total 503 hypermarkets:
241 Carrefour Planet
262 renovated hypermarkets
4 model stores
82 Carrefour Planet: 27 in France – 43 in Spain –
9 in Belgium‐ 2 in Italy –
1 in Greece
Total 464 hypermarkets:
221 Carrefour Planet
243 renovated hypermarkets
52
Adapting to new
context: Southern Europe
53
Southern Europe
Adapting to new context • Greece:
Conversion of remaining DIA stores to Carrefour banner
Freeze on further expansion
Capex reduction with conversion of 10 Planet (vs. 14 initially planned) and no investment in remodelling (vs. 23 initially planned) by 2013
• Italy:
Adapted commercial strategy, price repositioning underway
Ongoing banner conversion for convenience
Capex reduction with 43 hypermarkets converted/ remodelled (vs 53 initially planned) by 2013
• Spain:
Ongoing cost optimization
Capex optimization with 103 stores remodelled rather than converted to Planet (vs 89 initially planned) by 2013
54
Pursuing our leadership ambition in Growth Markets
55
Reinforcing leadership in key countries
Growth Markets
• Reinforcing leadership in growth markets with:
475 new stores to be opened in 2011, for total of c. 583 000 new gross sqm
Planned FY Capex of €900m, up 20% vs. 2010
Development of new formats (e‐commerce, Carrefour Express)
Expand Atacadao throughout Latin America
New stores under banners 2011
Hypers
Atacadao
Supers
Convenience
Latin America
2
22
3
69
Asia
31
Eastern Europe
9
58
246
Franchise (ME, Dom Tom)
9
20
3
2
34
Total
51
81
318
3
475
Cash & Carry
96
1
22
Total
32
313
56
Growth Markets
Brazil: Strong commitment, strong performance
Net sales (€m)
• 2nd largest country for the Group, representing 14% of Group sales
+16.2%
5,455
Current Operating Income (€m)
+48.2% (+60bp)
4,695
• Carrefour No1 food retailer
• Continued strong growth at Atacadao
H1 2010 H1 2011
H1 2010 H1 2011
Near double digit LfL growth in H1 2011
17 new stores planned in 2011
• Positive results from hypermarket turnaround plan
57
Growth Markets
Brazil : A positive turnaround in hypermarkets
Hypermarket turnaround plan drives sales and profit growth in 2011
• Return to Lfl growth thanks to:
Commercial dynamics
Store renovations
Fixing the basics
• Strong rebound in profitability thanks to:
Head‐office downsizing
New store operating model
Purchasing improvements
Store closures & Transformations to Atacadao
58
Growth Markets
China: Consolidate our leadership
Net sales (€m)
•
5th‐largest country for the Group, representing 6% of Group sales
+10.1%
2,251
2,044
• No1 international banner • Solid growth in H1 2011 supported by ongoing expansion
H1 2010 H1 2011
• Simplified partnership structure
• Pursuing sustained and profitable expansion: 23 new stores in 2011
• Inflationary pressure on consumption likely to continue in H2
59
60
New game plan to rebuild momentum
• Implementing a new game plan…
France “Reset”
Adapting to the new context in Europe
• … While pursuing our strategic priorities
Pursue Transformation Plan Focus on growth levers: Emerging Markets, Planet, Carrefour brand
“Biting the bullet” in 2011: Group Current Operating Income ‐15% ex DIA
Rebuilding momentum in 2012 to deliver long term sustainable profitable growth
61
APPENDICES
62
Restatement of HY 2010 Current Operating Income
(€m)
(98)
(28)
20
1,096
Reported H1 2010 Current Op.Income
989
Hard discount restatem.
Thailand
restatem.
H1 2010
Brazil
restatem.
Restated H1 2010 Current Op.Income
63
Summary income statement
€m
H1 2011
H1 2010
Change
Sales excl. VAT
39,607
38,710
2.3%
Loyalty impact
(451)
(377)
19.5%
Sales excl. VAT without fidelity impact
39,156
38,333
2.1%
Other income
1,100
1,020
(31,763)
(30,925)
8,494
8,428
(6,869)
(6,605)
1,625
1,823
(10.9)%
Current Operating Income
772
989
(22.0)%
Current Operating Income as a % of sales excl.VAT
1.9%
2.6%
Non‐recurring income (expenses)
(884)
(353)
Operating income
(112)
636
Financial expense
(342)
(349)
Income Tax
(490)
(238)
Net income from recurring operations – Group share
(927)
63
679
84
(249)
97
Cost of goods sold
Gross margin from current operations
S&GA
Current Operating Income before D&A and provis.
Impact of discontinued operations– Group share
Net income – Group share
0.8%
64
Key operating ratios
€m
H1 2011
H1 2010
Change
Sales excl. VAT
39,607
38,710
2.3%
Other income
1,100
1,020
7.9%
Gross margin from current operations as a % of sales
21.4%
21.8%
SG&A as a % of sales
(17.3%)
(17.1%)
Current Operating Income before D&A and
provisions as a % of sales
4.1%
4.7%
D&A / provisions as a % of sales
(2.2%)
(2.2%)
Current Operating Income
as a % of sales
1.9%
2.6%
Operating Income as a % of sales
(0.3)%
1.6%
(108.0)%
82.9%
Actual tax rate
65
Summary cash flow statement €m
Net debt, beginning of period
Gross cash flow from operating activities
Change in working capital
Others and Impact of discontinued operations
Cash flow from operating activities
Capital expenditures Others and Impact of discontinued operations
Free cash flow
30 June 2010 (12 months)
(11,424)
3,405
(272)
57
3,190
(1,935)
(148)
1,108
Financial investments
Disposals
(178)
222
Others and Impact of discontinued operations
Cash flow after investing activities Dividends
Treasury shares
297
1,450
(117)
(778)
Others and Impact of discontinued operations
313
Consumer credit companies
(98)
Net debt, end of period
(10,654)
66
Current Operating Income
per region
€m
H1 2011
H1 2010
% change
France
302
503
(40.0)%
AC margin
1.8%
3.0%
Europe
142
213
AC margin
1.2%
1.8%
Latin America
193
152
AC margin
2.6%
2.3%
Asia
135
122
AC margin
3.6%
3.5%
Total
772
989
AC margin
1.9%
2.6%
(33.3)%
27.4%
10.8%
(22.0)%
67
Growth in sales, EBITDA, and Current Operating Income
Sales
EBITDA
Current Operating Income
1.6%
(21.2)%
(40.0)%
Europe excl. France
(3.9)%
(18.5)%
(33.3)%
Latin America
12.9%
17.0%
27.4%
Asia
7.7%
7.3%
10.8%
Total
2.3%
(10.9)%
(22.0)%
% growth – H1 2011 vs. H1 2010
France
68
EPS calculation
H1 2010 EPS H1 2011 EPS
€
EPS before discontinued activities
0.02
(1.41)
EPS from discontinued activities
0.12
1.03
EPS including discontinued activities
0.14
(0.38)
EPS is based on the net result before discontinued activities (group share)
To calculate EPS, we have used the weighted average number of shares: 684,200,616 in H1 2010 and 659,181,759 in H1 2011
69
Consolidated store network June 2011
HYPER
SUPER
FRANCE
Spain
Belgium
Greece + Cyprus
Italy
Poland
Turkey
Romania
EUROPE
205
166
46
39
58
84
27
23
443
573
108
41
227
215
186
212
35
1,024
Argentina
Brazil
Colombia
LATIN AMERICA
72
187
73
332
109
49
China
Taiwan
Indonesia
Malaysia
Singapore
India
ASIA
185
60
67
24
2
TOTAL
158
CONVENIENCE
CASH & CARRY
TOTAL
6
784
282
87
490
451
270
239
58
1,877
8
224
166
12
398
12
46
8
4
58
227
244
77
548
185
63
81
24
2
1
356
3
14
1
338
17
0
1,318
1,772
456
1
19
3,565
70
Stores under Group banners (incl. franchisees and partners) June 2011
HYPER
SUPER
CONVENIENCE
CASH & CARRY
TOTAL
FRANCE
Spain
Belgium
Greece + Cyprus
Italy
Poland
232
172
46
39
61
84
974
113
439
255
433
186
3,244
42
213
572
812
97
137
4,587
327
698
866
1,319
367
Turkey
Romania
Others
27
23
61
212
35
127
EUROPE
513
1,800
Argentina
Brazil
Colombia
LATIN AMERICA
72
187
73
332
109
49
China
Taiwan
Indonesia
Malaysia
Singapore
India
ASIA
185
60
67
24
2
TOTAL
158
68
1,804
46
8
4
58
13
2
15
229
58
256
4,132
227
244
77
548
3
14
8
338
17
8
1
1
1,415
2,949
5,114
153
185
63
91
32
2
1
364
9,631
71
72