Solid sales growth of +6.2%Recurring
operating income of €621m
Regulatory News:
Carrefour (Paris:CA):
- Net sales up +6.2% to €38.5bn,
reflecting the combination of a good like-for-like performance and
the effect of expansion:
- Opening of 352 stores under banners in
the half, of which 290 convenience stores, mainly in Europe
- Successful integration of the Eroski
stores in Spain and Billa stores in Romania
- Recurring operating income (ROI) of
€621m, down 12.1% at current exchange rates, resulting in an
operating margin of 1.6%, notably reflecting:
- A 70 basis point drop in operating
margin in France, due to a strongly competitive and promotional
market and the increase vs. H1 2016 of losses at ex-DIA stores
- An increase in losses in Argentina,
where the economic recovery is taking time to materialize
These results also reflect:
- A pause in profitability improvement in
Other European Countries, notably linked to the non-recurring
impact of integrating acquisitions
- A first improvement in operating
profitability in Asia
- Margin holding up well in Brazil,
despite lower contribution from financial services, notably linked
to a regulatory change on consumer credit
- Free cash flow excluding exceptional
items and Cargo of -€2,587m vs. -€2,106m in H1 2016, due to a
short-term variation in working capital requirements
- Successful stock market listings of
Grupo Carrefour Brasil and Carmila in July 2017
- Carrefour’s new management team is
fully focused on improving the Group’s performance and adapting to
the rapid and far-reaching evolutions within the industry.
Management will come back to the market by the end of the
year.
First-half 2017 key figures
(in €m) H1 2016
H1 2017 Variation
Variation at constant exchange rates at current exchange
rates
Gross sales 40,552 43,053 +3.3%
+6.2% Net sales 36,289 38 526 +6.2% Recurring operating
income before D&A (EBITDA) 1,448 1,431 -7.0% -1.2% EBITDA
margin 4.0% 3.7%
Recurring operating income (ROI) 706
621 -21.5% -12.1% ROI margin 1.9% 1.6%
Adjusted net income, Group share 235 154
-34%
Net debt at closing 7,367 7,72 +€353m
H1 2017 SALES INC. VAT: Solid sales in the first half
Carrefour’s first-half sales including VAT stood at €43,053m, up
+6.2%. Over the period, currencies had a favorable effect of +2.8%
while petrol had a favorable effect of +0.5%. Carrefour’s
first-half sales grew by +2.6% on an organic basis, with a
contribution from emerging markets that remains solid at +6.4%
despite a slowdown of inflation in several countries, and an
increase of 1.1% in Europe, including France.
In the second quarter, Carrefour’s total sales grew by +6.1%,
and by +2.8% like-for-like.
In France, sales grew this quarter by +0.8% on a reported
basis and +1.9% like-for-like. In Other European countries,
second-quarter sales once again increased sharply, by +8.6% in
total and +3.4% like-for-like.
In Latin America, second-quarter sales were up +6.9%
like-for-like and +20.0% in total, including a favourable +8.9%
currency effect. This good performance was achieved in the context
of a strong slowdown of food inflation in Brazil and a challenging
economic environment that continued to weigh on consumption in
Argentina.
In Asia, second-quarter sales were down by -2.3% in total
(-4.7% on a like-for-like basis). China posted a drop in
like-for-like sales of -6.6% and like-for-like sales in
Taiwan improved for the tenth consecutive quarter by +0.6%,
on the back of a high comparable base.
First-half 2017 results: Recurring Operating Income of
€621m
Income statement
Group Recurring Operating Income (ROI) stood at €621m and
adjusted EBITDA1 stood at €1,431m, slightly down by -1.2% at
current exchange rates and -7.0% at constant exchange rates.
In France, the Group continued to roll out its
multiformat and omnichannel strategy in the first half of 2017. ROI
stood at €199m, representing an operating margin of 1.1% (-70bps
year-on-year). This evolution takes into account higher promotional
investments in a very competitive environment, as well as targeted
price adjustments in certain stores to improve Carrefour’s
competitiveness. France’s operational performance was also impacted
by the increase vs. H1 2016 of losses at ex-DIA stores.
In Other European countries (excluding France), ROI stood
at €149m, with operating margin slightly down by 10bps to 1.5%.
This variation includes the impact of the transformation and
integration of Eroski stores in Spain and Billa stores in
Romania.
In Latin America, first-half ROI rose to €293m, up +7.5%,
while operating margin stood at 3.6% (down 60bps). In Brazil, the
profitability of our distribution activities continued to increase,
while financial services were impacted by a change in regulation on
consumer credit as well as by start-up costs linked to the launch
of the Atacadão card. The consumption environment remained very
difficult in Argentina, marked by pressure on volumes and high
inflation, impacting the Group’s margin.
In Asia, the first half saw an improvement in
profitability, with ROI of €12m vs. an operating loss of €7m in H1
2016. The Group is reaping the benefits of the action plans
implemented in China, in particular in terms of cost reduction, in
a very competitive environment marked by rapidly-changing consumer
habits. In Taiwan, sales growth continued and operating margin
posted further improvement.
In the first half of 2017, non-recurring income was a charge of
€150m, principally attributable to reorganization costs in various
countries. This compares to a charge of €114m in H1 2016. Net
income from continuing operations, Group share, stood at €79m,
including the following elements:
- a share of Net income from companies
accounted for by the equity method that improved sharply by
€33m;
- Stable net financial
expenses;
- An effective tax rate that stood
at 37.5% vs. 31.3% in H1 2016.
Net income, Group share, stood at €78m. Adjusted mainly for
non-recurring income, net income Group share stood at
€154m.
Cash flow and debt
In H1 2017, gross cash flow stood at €976m vs. €1,088m in
H1 2016. Working capital requirements went from -€2,052m in
H1 2016 to -€2,517m in H1 2017.
Total capex stood at €991m vs. €1,057m in H1 2016.
Excluding Cargo, capex was €904m, down by €64m year-on-year.
Free cash flow stood at -€2,736m, reflecting the seasonality of
our business. Excluding Cargo and exceptional items, free cash
flow stood at -€2,587m.
Dividend payments this year will occur in H2. Investments
linked to Cargo resulted in a cash inflow in the
« Capital increase » line and accounted for most of
it.
In total, net financial debt at June 30, 2017 stood at
€7.7bn, also reflecting the seasonality of our business.
2017 outlook
Groupe Carrefour 2017 sales will grow by 2% to 4% at constant
exchange rates in the full year.
Our 2017 results will be impacted by our H1 performance and an
operating environment that will remain difficult in H2 in some
countries. At current exchange rates, our full year 2017 ROI
evolution vs 2016 should be roughly in line with the evolution we
saw in H1 2017.
Carrefour will strengthen its financial discipline, with
investments reaching between €2.2bn and €2.3bn in the full year
(excluding Cargo Property), vs. the initial forecast of €2.4bn. The
Group aims to reach free cash flow in 2017 at the same level as in
2016.
Carrefour’s new management team is fully focused on improving
the Group’s performance and adapting to the rapid and far-reaching
evolutions within the industry. Management will come back to the
market by the end of the year.
Agenda
- Q3 2017 sales: October 18, 2017
APPENDIX
First-half 2017 sales inc. VAT
The Group posted sales of €43,053m. In the half, currencies had
a favorable impact of +2.8%, largely due to the appreciation of the
Brazilian Real. Petrol prices had a favorable impact of +0.5%.
Calendar had an unfavorable effect of -0.6%.
Total sales inc. VAT (€m) Change at current
exchange rates inc. petrol Change at constant
exchange rates inc. petrol LFL inc. petrol
LFL ex petrol ex calendar Organic growth ex
petrol. Ex calendar France 19,348
+0.8% +0.8% +2.1%
+1.3% +0.1% Hypermarkets 9,859 +0.0%
+0.0% +0.6% -0.5% -1.0% Supermarkets
6,333 +0.3% +0.3% +2.5% +2.0% +0.0% Convenience /other formats
3,156 +4.2% +4.2% +6.1% +5.6% +3.9%
International 23,706 +11.0%
+5.6% +2.2% +2.8%
+4.6%
Other European countries
11,163 +6.1% +6.0%
+2.2% +2.2% +2.8% Spain 4,413
+6.9% +6.9% +1.6% +1.5% +2.0% Italy 2,719 +2.0% +2.0% +3.2% +2.7%
+1.6% Belgium 2,127 -0.3% -0.3% +0.0% +0.3% +0.1%
Latin America 9,057 +25.2%
+10.0% +6.1% +7.3%
+11.3% Brazil 7,305 +30.0% +8.4% +3.7%
+5.0% +9,9%
Asia 3,485
-3.3% -4.4% -5.8%
-4.3% -2.9% China 2,482 -8.4%
-6.5% -7.4% -6.0% -5.1%
Group total 43,053 +6.2%
+3.3% +2.1% +2.1%
+2.6%
Total sales under banners including petrol stood at €52.1bn in
the first half of 2017, up +4.9% at current exchange rates.
Second-quarter 2017 sales inc. VAT
The Group posted sales of €21,759. Currencies had a favorable
impact of +1.8%, largely due to the appreciation of the Brazilian
Real. Petrol prices had an unfavorable impact of -0.3%. Calendar
impact was a favorable +0.3%.
Total sales inc. VAT (€m)
Change at current exchange rates inc. petrol
Change at constant exchange rates inc. petrol LFL
inc. petrol LFL ex petrol ex calendar
Organic growth ex petrol ex calendar France
9,942 +0.8% +0.8%
+2.0% +1.9% +0.7%
Hypermarkets 5,012 +0.8% +0.8%
+1.5% +0.5% -0.1% Supermarkets 3,280 -0.3%
-0.3% +1.8% +1.9% -0.2% Convenience/Other formats 1,650 +3.1% +3.1%
+3.9% +6.7% +5.1%
International 11,817
+11.1% +7.6% +3.8%
+3.4% +5.4%
Othere European countries 5,778
+8.6% +8.4% +3.7%
+3.4% +4.2% Spain 2,302 +9.4% +9.4%
+2.5% +2.6% +3.1% Italy 1,392 +4.3% +4.3% +5.1% +3.9% +3.1% Belgium
1,101 +2.2% +2.2% +2.2% +2.4% +2.3%
Latin America 4,540
+20.0% +11.1%
+7.2% +6.9% +10.9% Brazil
3,638 +23.2% +9.5% +4.8%
+4.5% +9.4%
Asia
1,499 -2.3%
-3.5% -4.5% -4.7%
-3.7% China 1,036 -8.0%
-5.9% -6.2% -6.6% -6.4%
Group total 21,759
+6.1% +4.4% +3.0%
+2.8% +3.3%
Total sales under banners stood at €26.3bn in the second quarter
of 2017, up +5.2% at current exchange rates.
First-half 2017 net sales and Recurring Operating Income by
region
Net sales Recurring Operating Income
(in €m)
H12016
H12017 Variation at
constantexchange rates Variation at currentexchange rates
H12016
H12017 Variation at
constantexchange rates Variation at currentexchange rates
France
17,179 17,307 +0.7% +0.7%
312 199 -36.1% -36.1% Other
Europeancountries
9,428 10,010 +6.0% +6.2%
155
149 -3.7% -3.9%
Europe 26,607 27,317
+2.6% +2.7% 467 348 -25.4%
-25.4% Latin America
6,453 8,075 +9.4% +25.1%
273 293 -15.5% +7.5% Asia
3,229 3,135
-4.3% -2.9%
-7 12 n/a n/a
Emerging countries
9,682 11,209 +4.8% +15.8% 266
306 -9.9% +15.1% Global functions
-26
-33 TOTAL
36,289 38,526 +3.2%
+6.2% 706 621
-21.5% -12.1%
First half 2017 consolidated income statement
(in €m) H1 2016
H1 2017 Net sales
36,289 38 526 Net sales, net of
loyalty program costs 36,017 38 228
Other revenue 1,275 1 354
Total revenue
37,292 39 582 Cost of goods sold
-28,860 -30 762
Gross margin 8,432
8 821 SG&A -7,006 -7,419
Recurring operating income before D&A (EBITDA)
1,448 1,431 Depreciation and amortization
-720 -781
Recurring operating income (ROI)
706 621 Recurring operating income
including income from associates and joint ventures
686 633 Non-recuring income and expenses
-114 -150 Operating income
572
484 Financial expense -248 -247 Income before
taxes
324 236 Income tax expense
-101 -89
Net income from continuing operations
222 148 Net income from discontinued
operations -28 -1
Net income 194
147 Of which Net income- Group share
129 78 Of which Net income from continuing
operations - Group share 158 79 Of which Net income
from discontinued operations – Group share -28 -1
Of which Net income – Non-Controlling interests (NCI)
65 69 Of which Net income from continuing
operations - NCI 65 69 Of which Net income from
discontinued operations – NCI - -
Adjusted net
income, Group share 235
154
First-half 2017 consolidated balance sheet
(in €m) June 30, 2016
June 30, 2017
ASSETS Intangible assets 9,719 9,985 Tangible
assets 12,676 13,236 Financial investments 3,018 2,744 Deferred tax
assets 880 841 Investment properties 357 332 Consumer credit from
financial services companies – long term 2,261 2,477 Other
non-current assets - 276
Non-current assets
28,911 29,892 Inventories 6,553 6,863
Trade receivables 2,159 2,636 Consumer credit from financial
services companies – short term 3,789 3,655 Tax receivables 1,287
886 Other asssets 1,052 995 Current financial assets 218 252 Cash
and cash equivalents 1,688 1,615
Current
assets 16,745 16,902 Assets held
for sale 43 20 TOTAL
45,700 46,814 LIABILITIES Shareholders
equity, Group share 9,745 9,753 Minority interests in consolidated
companies 1,549 1,526
Shareholders’ equity
11,294 11,279 Deferred tax liabilities
533 549 Provisions for contingencies 3,188 2,937 Borrowings – long
term 7,161 6,586 Bank loans refinancing - long term 2,091
2,574
Non-current liabilities 12,974
12,646 Borrowings – short term 2,112 3,001 Trade
payables 12,198 12,784 Bank loans refinancing – short term 3,179
2,774 Tax payables and others 1,188 1,084 Other debts 2,732
3,233
Current liabilities 21,408
22,876 Liabilities related to assets held for sale
23 14 TOTAL 45,700
46,814
First-half 2017 consolidated cash flow statement
(en €m) H1 2016
H1 2017 NET DEBT
OPENING -4,546 -4,531 Gross cash
flow 1,088 976 Change in working capital -2,052
-2,517 Impact of discontinued activities -11 -1
Cash flow from operations (ex. financial services)
-975 -1,541 Capital expenditures (ex Cargo)
-968 -904 Capital expenditures (Cargo) -89 -85 Change in net
payables to fixed asset suppliers -295 -262 Asset disposals
(business related) 69 56 Impact of discontinued activities 0
0
Free cash flow -2,259
-2,736 Free Cash Flow from continuing operations,
excluding Cargo and exceptional items -2,106
Financial investments -136 -143 Proceeds from
disposals of subsidiaries 7 11 Others 19 -63 Impact of discontinued
activities 5 1
Cash Flow after investments
-2,363 -2,929 Capital increase 140 90
Dividends paid by parent company -121 0 Dividends paid to
non-controlling interests -60 -84 Acquisition/disposal of
investments without change of control 0 -57 Treasury shares -4 -2
Cost of net financial debt -181 -191 Others -233 -15 Impact of
discontinued activities 0 0
NET DEBT AT CLOSE
-7,367 -7,720
Change in shareholders’ equity
(in €m)
Total shareholders’ equity
Shareholders’ equity Group share Minority
interests At June 30, 2016 11,294
9,745 1,549 Total comprehensive income
679 563 116 Dividends (650) (523)
(127) Impact of scope changes and others (44)
(32) (12)
At June 30, 2017 11,279
9,753 1,526
First-half 2017 net income, Group share, adjusted for
exceptional items
(in €m) H1 2016
H1 2017 Net income from
continuing operations, Group share 158
79 Restatement for non-recurring income and expenses (before
tax) 114 150 Restatement for exceptional items in net
financial expenses 7 17 Tax impact1 Tax impact of restated items
(non-recurring income and expenses and financial expenses) and
non-recurring tax items. -48 -84 Restatement on share of income
from minorities and companies consolidated by the equity method
4 -6
Adjusted net income, Group share
235 154
1 Tax impact of restated items (non-recurring income and
expenses and financial expenses) and non-recurring tax items.
EXPANSION UNDER BANNERS – Second-quarter 2017
Thousands of sq. m.
Dec 31,2016
March 31, 2017 Openings/Store
enlargements Acquisitions Closures/
Store reductions Total Q2 2017 change
June 30, 2017 France 5,719 5,727
22 2 -7 17 5,744 Europe (ex France)
5,449 5,529 56 55 -66 45 5,574 Latin America 2,335 2,358 9 - -4 5
2,363 Asia 2,758 2,755 2 - -29 -27 2,727 Others2 920
939 27 - -9 18 958
Group
17,181 17,308 116
57 -115 57 17,366
NETWORK UNDER BANNERS – Second-quarter 2017
N° of stores
Dec. 31, 2016 March 31,
2017 Openings Acquisitions
Closures/ Disposals Transfers Total
Q2 2017 change June 30, 2017 Hypermarkets
1,480 1,503 6
8 -9 -1 4
1,507 France 243 246 - -
- 1 1 247 Europe (ex France) 439 454 2 8 -4 -2
4 458 Latin America 334 337 1 - - - 1 338 Asia 374 374 - - -4 - -4
370 Others1 Africa, Maghreb, Middle-East and Dominican Republic.
90 92 3 - -1 - 2
94
Supermarkets 3,12
3,194 23 1 -22
-2 0 3,194 France 1,065
1,060 3 1 -1 -4 -1 1,059 Europe (ex France) 1,777 1,758 13 - -20 2
-5 1,753 Latin America 150 149 - - - - - 149 Asia 38 41 2 - - - 2
43 Others2 182 186 5 - -1
- 4 190
Convenience 7,072
7,106 167 - -96
3 74 7,180 France 4,219
4,220 46 - -32 3 17 4,237 Europe (ex France) 2,312 2,337 104 - -63
- 41 2,378 Latin America 468 473 13 - -1 - 12 485 Asia 27 29 3 - -
- 3 32 Others2 46 47 1 - -
- 1 48
Cash & carry
171 170 1 -
- - 1 171 France
143 142 1 - - - 1 143 Europe (ex France) 13 13 - - - - - 13 Asia 2
2 - - - - - 2 Others2 13 13 - -
- - - 13
Group 11,935
11,973 197 9
-127 - 79 12,052
France 5,670 5,668 50 1 -33 - 18 5,686 Europe (ex France) 4,541
4,562 119 8 -87 - 40 4,602 Latin America 952 959 14 - -1 - 13 972
Asia 441 446 5 - -4 - 1 447 Others2 331 338 9
- -2 - 7 345
1 Africa, Maghreb, Middle-East and Dominican Republic.
Definitions
Like for like sales growth
Sales generated by stores opened for at least twelve months,
excluding temporary store closures, at constant exchange rates.
Organic sales growth
Like for like sales growth plus net openings over the past
twelve months, including temporary store closures, at constant
exchange rates.
Sales under banners
Total sales under banners including sales by franchisees and
international partnerships.
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.
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 preexisting risks on the basis of information that
the Group became aware of during the accounting period.
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.
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.
1 Recurring operating income before amortization and
depreciation (including logistics amortization)
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170830005986/en/
CarrefourInvestor RelationsMathilde Rodié,
Anne-Sophie Lanaute and Louis Igonet, Tel : +33 (0)1 41 04 28
83Shareholder relations, Tel : 0 805 902 902 (toll-free in
France)Group communication, Tel : +33 (0)1 41 04 26 17
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