2017 FULL YEAR RESULTS. February 28,

Transcription

1 2017 FULL YEAR RESULTS February 28,

2 Disclaimer This presentation contains both historical and forward-looking statements. These forward-looking statements are based on Carrefour management's current views and assumptions. Such statements are not guarantees of future performance of the Group. Actual results or performances may differ materially from those in such forward-looking statements as a result of a number of risks and uncertainties, including but not limited to the risks described in the documents filed with the Autorité des Marchés Financiers as part of the regulated information disclosure requirements and available on Carrefour's website ( and in particular the Annual Report (Document de Référence). These documents are also available in the English language on the company's website. Investors may obtain a copy of these documents from Carrefour free of charge. Carrefour does not assume any obligation to update or revise any of these forward-looking statements in the future. February 28,

3 01 INTRODUCTION ALEXANDRE BOMPARD CHAIRMAN & CEO February 28,

4 02 FY 2017 FINANCIAL RESULTS MATTHIEU MALIGE CFO February 28,

5 2017 Key Figures: A difficult year NET SALES EBITDA (1) RECURRING OPERATING INCOME ADJUSTED NET INCOME, GROUP SHARE FREE CASH FLOW EX. EXCEPTIONAL ITEMS NET DEBT (2) 78,897m 3,636m 2,006m 773m 950m 3,743m up +1.6% LFL vs +3.0% in 2016 down -6.4% down -14.7% down -25.0% down (90)m an improvement of 788m (1) EBITDA: Recurring operating income before depreciation and amortization (including supply chain depreciation) (2) As of 31 December 2017 February 28,

6 Total FY 2017 sales: +2.6% growth at constant exchange rates in a challenging environment FY 2017 NET SALES EVOLUTION (in m and %) 76.6 bn +1.6% +0.6% +2.2% -0.5% +0.8% +0.2% +2.6% +0.3% +2.9% 78.9 bn FY 2016 LFL Store FY 2017 ex petrol openings/ organic ex calendar closures ex petrol ex calendar Calendar Acquisitions/ Petrol FY 2017 Disposals at constant fx rates Forex FY 2017 at current fx rates February 28,

7 Pressure on gross margin and higher costs (in m) Evolution Net sales 76,645 78, % Gross margin from recurring operations 17,985 18, % As a % of net sales 23.5% 23.1% -38bps Total operating costs (15,634) (16,209) (575) +3.7% As a % of net sales -20.4% -20.5% -15bps Recurring operating income (ROI) 2,351 2,006 (345) -14.7% As a % of net sales 3.1% 2.5% -52bps Depreciation & amortization (inc. supply chain depreciation) (1,535) (1,630) (95) +6.2% As a % of net sales -2.0% -2.1% -6bps Recurring operating income before D&A (EBITDA) (1) 3,886 3,636 (250) -6.4% As a % of net sales 5.1% 4.6% -46bps (1) EBITDA: Recurring operating income before depreciation and amortization (including supply chain depreciation) February 28,

8 Positive FX impact on ROI in 2017, mainly due to BRL evolution Currency FY 2017 evolution Brazilian Real +6.5% + 58m positive FX impact in 2017 on ROI Argentinean Peso -12.9% Polish Zloty +2.5% 5,0 4,5 of which + 44m attributable to the BRL (1) Romanian Leu -1.7% 4, average Chinese Yuan -3.6% 3, average ,0 Taiwanese Dollar +3.9% 2,5 January June December (1) + 59m positive impact in H1 and - 15m negative impact in H2 February 28,

9 France: Margin pressure reflecting a highly competitive environment (in m) % change Net sales 35,877 35, % LFL ex petrol, ex calendar +0.8% ROI 1, % ROI margin 2.9% 1.9% -94bp Tough commercial momentum throughout the year in a persistently challenging competitive environment D&A increase of 42mn 2017 ROI includes c. (150)m losses linked to ex-dia stores February 28,

10 Other European Countries: Operating margin slightly down, reflecting contrasting performances (in m) % change at current FX % change at constant FX Net sales 20,085 21, % +5.1% LFL ex petrol, ex calendar +1.3% ROI % -4.8% ROI margin 3.5% 3.2% -34bp Total growth of +5.1%, notably taking into account the 27 Eroski stores acquired and integrated in 2017 Margins holding up well in Northern Europe Southern Europe affected by a tough competitive environment February 28,

11 Latin America: Performance in Brazil offset by difficulties in Argentina (in m) % change at current FX % change at constant FX Net sales 14,507 16, % +8.3% LFL ex petrol, ex calendar +6.1% ROI % -7.0% ROI margin 4.9% 4.5% -44bp Argentina recorded operating losses in 2017 linked to the difficult economic situation Brazil s profitability growth reflects in particular : o continued improvement at Atacadão o negative impacts of the change in regulation on consumer credit and start-up costs linked to the launch of the Atacadão card February 28,

12 Asia: Improvement of profitability confirmed in H2 (in m) % change at current FX % change at constant FX Net sales 6,176 5, % -3.2% LFL ex petrol, ex calendar -3.7% ROI n.a. n.a. ROI margin -0.9% 0.1% +101bp Asia back to positive ROI in 2017 Action plans in China are bearing fruit, in particular through significant cost reduction Continued profitability improvement in Taiwan thanks to a strong commercial and operating performance February 28,

13 Adjusted net income, Group share, of 773mn (in m) Recurring operating income 2,351 2,006 Net income from associates and JVs Non-recurring income and expenses, net EBIT 1, Net financial expenses Income before taxes 1, Income tax expense Effective tax rate 34.6% 242% Consolidated Net income Reflects a 700mn goodwill impairment in Italy Reflects a 70mn decrease in net financial expenses due to the deleveraging of the Group Deferred tax assets depreciated notably in Argentina and on ex- DIA scope Excluding exceptional items, a normative tax rate of 39%, slightly above previous years Net income, Group share Net income from continuing operations, Group share Minority interests Adjusted net income, Group share 1, February 28,

14 Non-Recurring Income: Includes impairment and write-offs (in m) Restructuring costs (154) (279) Reorganization plans in several countries Impairment and write-offs of goodwill (5) (707) Impairment and write-offs of Property and equipment and intangible assets (125) (333) Others (88) 7 A 700mn impairment of Italian goodwill Mainly reflecting the depreciation of assets related to the ex-dia network Non-recurring income and expenses, net (372) (1 310) February 28,

15 2017 FREE CASH FLOW (in m) EBITDA 3,886 3,636 Financial result (109) (116) Cash impact of non-recurring items (360) (320) Other (including tax paid) (453) (548) Gross cash flow 2,964 2,653 Change in working capital Discontinued activities Operating cash flow 3,305 2,843 Capital expenditure (ex. Cargo) -2,492-2,145 Net capital expenditure (Cargo) Change in net payables to fixed asset suppliers Asset disposals (business-related) Free cash flow Impact of Cargo Impact of exceptional items Free cash flow from continuing operations, excluding exceptional items 1, February 28,

16 2017 Net Debt: 788M improvement 4,531m ,743m Including Cargo and restructuring costs Including the Eroski acquisition 2016 Net Debt FCF ex exceptionals Exceptional Items Cost of net financial debt Dividends Brazil IPO FX impact Others 2017 Net Debt February 28,

17 Credit Rating and Debt Maturity DEBT REDEMPTION SCHEDULE (in m and %) 5.25% 1.75% 4.00% 3.88% 1.75% 0.00% 0.75% 1.25% On June 14 th, 2017, issuance of $500mn non-dilutive cash-settled convertible bonds swapped in euro with a maturity of 6 years and a zero coupon 1,000 1,000 1,000 1, During 2017, 1,250mn of bonds reached maturity At end December 2017, debt maturity stood at 3.9 years Credit rating unchanged at 31 December 2017: BBB issuance Average annual coupon February 28,

18 Unchanged Payout Policy: Dividend of 0.46 per share Dividend of 0.46 (-34% vs 2016) proposed to the General Shareholders meeting on June 15, 2018 Payout of 45% of adjusted net income, Group share, in line with our distribution policy Payment in shares or in cash February 28,

19 OUTLOOK 2018, a pivotal year in the Group s transformation FY 2018 technical effects Group results for 2018 will remain closely linked to the evolution of foreign exchange rates (BRL in particular) Depreciation should continue to increase in 2018 given the investment levels of the past years and despite greater discipline and a Capex budget of 2bn starting in Deploy a simplified and open organization Achieve productivity and competitiveness gains Create an omnichannel universe of reference Overhaul the offer to promote food quality Faster decision-making process Implementation of the previously-announced departure plans at headquarters Target of shedding 273 ex-dia stores from our scope Achievement of first cost savings (as part of the 2bn savings plan), and investments in commercial competitiveness Capex spending of 2bn Acceleration in the Cash and Carry format, notably with: 20 new Atacadão stores in Brazil 16 hypermarkets to be converted to the Maxi format in Argentina Full revamp and launch of the single e-commerce platform in France, Carrefour.fr 15 new French cities to offer home delivery and 10 new cities to offer one-hour delivery 170 new Drives in France Launch of the first concrete actions to revamp and develop our offer in fresh and organic products and our own brands February 28,

20 Q&A February 28,

21 APPENDIX February 28,

22 2017 INCOME STATEMENT (in m) Net sales 76,645 78,897 Net sales, net of loyalty program costs 76,054 78,253 Other revenue 2,720 2,722 Total revenue 78,774 80,975 Cost of good sold -60,789 62,760 Gross margin from recurring operations 17,985 18,214 SG&A -14,147 14,641 Recurring operating income before D&A (EBITDA) (1) 3,886 3,636 Depreciation and amortization -1,487-1,567 Recurring operating income (ROI) 2,351 2,006 Recurring operating income (ROI) including income from associates and joint ventures 2,315 2,010 Non recurring income and expenses ,310 EBIT 1, Financial expense Income tax expense Minority interests Net income from continuing operations, Group share Net income from discontinued operations, Group share Net income, Group share Adjusted net income, Group share 1, Note : (1) Recurring operating income before depreciation and amortization (including supply chain depreciation) APPENDIX February 28,

23 NET SALES AND RECURRING OPERATING INCOME PER REGION NET SALES RECURRING OPERATING INCOME (in m) Variation at constant exch. rates Variation at current exch. rates Variation at constant exch. rates Variation at current exch. rates France 35,877 35, % -0.1% 1, % -32.9% Other European countries 20,085 21, % +5.1% % -4.9% Latin America 14,507 16, % +10.6% % +0.6% Asia 6,176 5, % -4.4% n.a. n.a. International 40,768 43, % +5.6% 1,365 1, % +2.3% Global functions (45) (83) n.a. n.a. TOTAL 76,645 78, % +2.9% 2,351 2, % -14.7% APPENDIX February 28,

24 ADJUSTED NET INCOME, GROUPE SHARE (in m) Net income from continuing operations, Group share 786 (531) Restatement for non-recurring income and expenses (before tax) 372 1,310 Restatement for exceptional items in net financial expenses Tax impact (1) -179 (8) Restatement on share of income from minorities and companies consolidated by the equity method 22 (19) Adjusted net income, Group share 1, Note : (1) Tax impact of restated items (from non-recurring income and expenses and financial expenses) and non-recurring tax items APPENDIX February 28,

25 EARNINGS PER SHARE ( per share) Net income from continuing operations 1.06 (0.70) Net income from discontinued operations Net income, Group share 1.01 (0.70) Adjusted net income, Group share Weighted average number of shares pre-dilution (in millions) (1) Note : (1) Non significant dilutive impact in 2016 APPENDIX February 28,

26 2017 Capex of 2.1bn (ex Cargo) 2,145m (ex Cargo) 2017 investments moving towards the normative level of 2.0bn (1) BREAKDOWN OF CAPEX BY NATURE 21% 27% 20% 32% BREAKDOWN OF CAPEX BY REGION 24% 8% 30% 38% Remodeling Maintenance France Europe Expansion IT & omnichannel Latin America Asia (1) As announced in the transformation plan February 28,

27 SIGNIFICANT DECREASE IN NET DEBT (in m) Opening net debt (December 31) Free cash flow Acquisitions Disposals Others Discontinued operations 16 3 Cash flow after acquisitions and disposals Dividends paid by parent company Dividends paid to non-controlling interests Capital increase Cost of net financial debt Disposal of treasury shares Acquisitions/disposals of investments without change in control Other changes in net borrowings Closing net debt (December 31) -4,531-3,743 February 28,

28 STORES UNDER BANNERS 1 AT END 2017 Hypermarkets Supermarkets Convenience Cash & Carry Total France 247 1,060 4, ,718 Spain Italy ,068 Belgium Poland Romania Others Other European countries 460 1,785 2, ,704 Argentina Brazil Latin America ,014 China Taiwan Others Asia Others (2) Total 1,528 3,273 7, ,300 Notes : (1) including franchisees and partners; (2) Maghreb, Middle East and Dominican Republic APPENDIX February 28,