Accelerating sales growth in France and
international activitiesRecurring Operating Income up by
+9.8%1Six fold increase in net income from continuing
operationsIncrease in proposed dividend to €0.62 per
share
Regulatory News:
Carrefour (Paris:CA)
Strong growth in Group earnings at constant exchange
rates
- Sales ex. VAT of €74.9bn, up +2.5% ex
petrol
- Growth in Recurring Operating Income:
+9.8% to €2,238m
- Net income from continuing operations,
Group share, multiplied by 6.3 times to €949m
Europe: Growth of 11.3% in Recurring Operating Income
France: Improvement in all formats
- Return to organic sales growth ex
petrol: +1.0%
- Improved price perception, increased
customer satisfaction, higher footfall
- Strong growth in Recurring Operating
Income: +30%
Other European Countries: Rebound in the second half
- Significant recovery in Europe in the
second half, particularly in Spain
Emerging markets: Growth of 8.5% in Recurring Operating
Income
- Remarkable increase in organic sales in
Brazil and in Argentina, where Carrefour consolidated its leading
position in food
- Faster organic growth in Asia, where
Carrefour continued its expansion
Pick-up in investments and strengthened financial
structure
- Investments of €2.2bn, up +44%
- 10% improvement in indebtedness ratio
to 1.1x
- Net debt reduced by €203m to €
4.1bn
Dividend growth
- Increase in proposed dividend to €0.62
per share, payable in cash or shares
2013 key figures2
(€M)
2012pro forma
2013
Variation atconstantexch. rates
Variation atcurrentexch. rates
Sales ex. VAT 75,673 74,888
+2.0% -1.0% Sales ex VAT ex petrol
67,481 66,911 +2.5% -0.8% Recurring
Operating Income before D&A (EBITDA) 3,642 3,669
+4.3% +0.7% EBITDA Margin 4.8% 4,9%
Recurring Operating Income (ROI)
2,124 2,238 +9.8%
+5.3% Recurring Operating Margin 2.8% 3.0%
Net income from continuing
operations, Group share 150 949
x 6.3 x 6.3 Net income, Group share
1,259 1,263 +0.1% +0.3%
Net debt at
close 4,320 4,117
-€203m Net debt / EBITDA 1.2x
1.1x
2013 highlights
- Creation of a company comprising 172
shopping malls adjacent to our hypermarkets in France, Spain and
Italy to enhance the commercial attractiveness of our sites
- Constitution of a joint venture with
CFAO to develop stores in West and Central Africa
- Reorganization of our partnerships with
Sabanci Holding in Turkey and Majid Al Futaim Holding in the Middle
East
2013 performance and highlights by zone
Sales ex. VAT Recurring Operating
Income
(€M)
2012pro forma
2013
Organicgrowth3
Totalgrowth
2012pro forma
2013
Variationat constantexch.
rates
Variation at currentexch. rates
France 35,341
35,438 +1.0% +0.3%
922
1,198 +29.9% +29.9% Other
Europe 19,786
19,220 -2.8% -2.9% 503
388
-22.9% -22.8%
Europe 55,127 54,658
-0.3% -0.8% 1,425 1,586 +11.3%
+11.3% Latin America 14,174
13,786 +12.3%
-2.7% 607
627 +18.6% +3.2% Asia 6,373
6,443
+2.2% +1.1% 179
131 -25.8% -27.0%
Emerging
markets 20,547 20,229 +9.1%
-1.5% 786 757
+8.5% -3.7% Global functions
(87)
(106)
-22.4% -22.1%
Total 75,673
74,888 +2.3% -1.0% 2,124
2,238 +9.8% +5.3%
Europe (inc. France): Growth of +11.3% in Recurring Operating
Income
France: Improvement in all formats
In 2013, France returned to ex. petrol organic sales growth
(+1.0%), with improved performance in all its formats: +0.7% in
Hypermarkets, +0.6% in Supermarkets and +4.0% for other formats
including convenience. Carrefour also posted LFL growth in all its
formats.
The various activities saw enhanced attractiveness, with steady
improvement both in hypermarkets and supermarkets in price
perception, increased footfall and number of transactions, as well
as an improvement in overall customer satisfaction.
The multi-year store renovation program was launched with 49
hypermarkets and 83 supermarkets renovated in 2013. France also
launched the overhaul of its supply chain and IT rationalization is
underway. Carrefour is also continuing to implement the action
plans launched in 2012.
Recurring Operating Income at €1.2bn recorded very strong growth
of +30% or +80 basis points in operating margin to 3.4% of sales.
All formats contributed to this performance which constitutes the
third consecutive half of year-on-year growth. This increase is
attributable to:
- Improved gross margin as a result of an
improved balance between everyday low prices, promotions and
loyalty programs and lower shrinkage
- Good control of operating costs
Other European countries: Rebound in the second half
Organic sales growth improved markedly in the second half,
particularly in Spain. Spain thus continued its recovery and posted
quarterly LFL growth in the fourth quarter for the first time since
2008 while in Italy the environment remained difficult.
Over the year, gross margin increased with constant attention to
price positioning. Growth in operating costs was contained.
Recurring operating income stood at €388m.
Profitability improved in the second half with an increase in
operating margin of 10 basis points to 3.5% of sales, demonstrating
the effectiveness of the operating model.
Emerging markets: Growth of +8.5% in Recurring Operating
Income at constant exchange rates
Latin America
Carrefour posted very strong organic sales growth of +12.3 % on
an already high comparable base of +12.5% in 2012. In 2013,
profitability increased in the region, with an acceleration in the
second half.
Carrefour posted excellent performance in Brazil in all formats:
Hypermarkets continued to improve their performance while Atacadão
consolidated its leadership, with expansion bringing its store
network to almost 100 outlets at year end. Argentina managed a
complex situation remarkably well in a context of regulatory price
freeze and wage inflation.
Asia
Carrefour posted faster organic sales growth (+2.2% versus +0.2
% in 2012). Gross margin held up well in the year amid a slowdown
in consumption in the fourth quarter. China continued the build-up
of its long-term position with the opening of 20 hypermarkets,
bringing the total to 236 stores at year-end. Carrefour also signed
a credit card agreement with China CITIC Bank.
Analysis of 2013 full-year results
Income statement
- Sales ex. VAT increased by 2.0%
at constant exchange rates. Taking currency effects into account,
the variation was -1.0%.
- Recurring Operating Income
amounted to €2,238m, up 9.8% at constant exchange rates, with:
- A rise in recurring operating
margin, to 22.5% of sales, an improvement of 50 bps.
- A contained rise in SG&A
costs.
- The Group’s Operating Income was
up by 63% year-on-year to €2,382m after taking into account a net
profit from non-recurring items of €144m.
- Net income, Group share, rose
slightly to €1,263m.
- Net income from recurring
operations, Group share stood at €949m, up sharply, reflecting
the following items:
- Financial expenses of €722m,
down by €161m due to a drop of €60m in interest expense and lower
exceptional items.
- An effective tax rate of
38%.
- Income from discontinued operations,
Group share stood at €314m, primarily due to the net positive
impact from the Group’s disposals. In 2012, income from
discontinued operations, Group share was €1,109m.
Cash flow and debt
- Cash flow from operations
excluding exceptional items and discontinued operations was stable
at €3.0bn
- The change in working capital
requirements was stable.
- Capital expenditure rose
sharply, as anticipated, to €2.2bn, up 44%. As a result, free
cash flow excluding exceptional items and discontinued
operations stood at €1,091m, a decrease of €198m.
- The cash-out linked to exceptional
items stood at €1.1bn. It includes an outflow of €119m related
to the 2013 bond buy-back, with the remainder attributable to the
settlement of past claims. As a result, free cash flow stood
at €26m in 2013.
- The Group’s refocusing, primarily due
to the sale of our stakes in MAF Hypermarkets and Indonesia,
generated a cash inflow of about €1bn.
- The net cash outflow related to
dividend payments amounted to €108m, as 72% of our 2013
dividend was paid in shares.
- At €428m, the cost of net financial
debt started to drop, down by €60m versus 2012.
- In summary, net financial debt
fell to €4.1bn, a decrease of €203m, reflecting the strengthening
of the Group’s financial structure.
Proposed dividend of €0.62 per share
The Board of Directors, at its meeting on March 4, 2014, decided
to propose to shareholders at the next General Assembly on April
15, 2014 a 2013 dividend of €0.62 per share payable in cash or
Carrefour shares.
This proposed dividend amounts to a payout ratio of 46% of net
income, Group share, adjusted for exceptional items, in line with
the policy set out in March 2012.
2014 priorities
Refocused on the markets in which it holds leading positions and
with a strengthened financial structure, Carrefour is staying the
course in a low-growth environment, marked by currency
volatility.
Mid-way through its three-year plan, Carrefour will focus in
2014 on the following operational priorities:
- Continue action plans in all
countries aiming at continuous improvement of its offer and
price image to enhance the shopping experience, notably in its
three largest markets, France, Brazil and Spain
- Accelerate multi-channel
roll-out
- Revamp and convergence of our websites
in France, gradual broadening of our offer
- Continued development of click &
collect
- Implement new structural
projects including:
- Revamp of the supply chain in
France
- IT rationalization
- Enhance the attractiveness of our
sites in France, Spain and Italy by capitalizing on the
creation of a shopping mall company
- Accelerate store remodelings and
relaunch multi-format expansion
- Investments of between €2.4bn and
€2.5bn in 2014
- Intensification of the remodeling
plan
- Continued long-term growth in emerging
markets, particularly in China and Brazil
- Maintain strict financial
discipline
Calendar
First quarter 2014 sales: April 10, 2014 before market
opening
General Shareholders’ Assembly: April 15, 2014
APPENDIX
Consolidated Income Statement
(€M)
2012pro forma
2013 Variation
Sales, net of taxes
75,673 74,888 -1.0%
Sales, net of taxes and loyalty 75,021
74,299 -1.0% Other revenues 2,309
2,375 +2.9%
Total Revenues
77,330 76,675 -0.8% Cost of
sales (60,659) (59,828) -1.4% Commercial income 16,671 16,847 +1.1%
SG&A (13,028) (13,178) +1.1%
Recurring
operating incomes before D&A (EBITDA) 3,642
3,669 +0.7% Depreciation &
amortization (1,518) (1,432) -5.7%
Recurring operating income (ROI) 2,124
2,238 +5.3% Non-current income and expenses
(660) 144 -121.9%
Operating income
1,465 2,382 +62.6%
Financial expenses (883) (722) -18.3% Profit before tax 581 1,660
Income tax (380) (631) +65.9% Companies accounted for by the equity
method 72 30 -58.8%
Net income from
continuing operations 273 1,058
+287.7% Net income from discontinued operations
1,069 306 -71.4%
Net income
1,342 1,364 +1.7% Of which
Net income – Group share 1,259 1,263 Of which net
income from continuing operations, Group share 150 949 Of which net
income from discontinued operations, Group share 1,109
314
Of which Net income – Non-Controlling Interests
(NCI) 83 101 Of which net income from continuing
operations, NCI 123 109 Of which net income from discontinued
operations, NCI (40) (8)
Main ratios
2012pro forma
2013
Commercial margin
22.0%
22.5%
Recurring operating income / Net sales
2.8%
3.0%
Operating income / Net sales
1.9%
3.2%
Consolidated Balance Sheet
(€M) 31 December 2012
31 December 2013
ASSETS Intangible assets 9,409 9,044 Tangible
assets 11,509 11,109 Financial investments 1,509 1,642 Deferred tax
assets 919 931 Investment properties 513 313 Consumer credit from
financial-services companies – long term 2,360 2,381
Non-current assets 26,219 25,419
Inventories 5,658 5,738 Trade receivables 2,144 2,213 Consumer
credit from financial-services companies – short term 3,286 3,221
Tax receivables 520 715 Other receivables 789 841 Current financial
assets 352 359 Cash and cash equivalents 6,573 4,757
Current assets 19,322 17,844
Assets held for sale 465 301
TOTAL 46,006 43,564
LIABILITIES Shareholders equity, Group share 7,181 7,844
Minority interests in consolidated companies 866 754
Shareholders’ equity 8,047 8,597
Deferred tax liabilities 580 521 Provisions for contingencies 4,475
3,618 Borrowing – long term 8,983 7,550 Bank loans refinancing –
long term 1,966 1,765
Non current liabilities
16,004 13,454 Borrowings – short term
2,262 1,683 Trade payables 12,925 12,854 Bank loans refinancing –
short term 3,032 3,145 Tax payables & others 1,040 1,045 Other
debts 2,422 2,763
Current liabilities
21,681 21,489 Liabilities related to assets
held for sale 273 24 TOTAL
46,006 43,564
Consolidated Cash Flow Statement
(€M)
2012pro forma
2013 NET DEBT OPENING (6,911)
(4,320) Gross cash flow (ex. discontinued activities)
2,643 2,038 Change in working capital (29) (283)
Impact of discontinued activities (161) (27)
Cash
flow from operations (ex. financial services)
2,453 1,728 Capital expenditures (1,504)
(2,159) Change in net payables to fixed asset suppliers (inc.
receivables) (171) 371 Asset disposals (business related) 151 117
Impact of discontinued activities (164) (31)
Free
Cash Flow 765 26 Financial
investments (209) (57) Proceeds from disposals of subsidiaries and
from other tangible & intangible assets 240 542 Others 33 2
Impact of discontinued activities 1,961 493
Cash
Flow after investments 2,790 1,005
Dividends/ capital increase (251) (206) Acquisition and disposal of
investments without change of control (9) (11) Treasury shares 0 0
Cost of net financial debt (488) (428) Others 420 (159) Impact of
discontinued activities 122 54 Consumer credit impact 7
(52)
NET DEBT CLOSING (4,320)
(4,117)
Changes in Shareholder Equity
(€M)
Total
shareholders’equity
Shareholders’ equity,Group
share
Minority interests At December 31, 2012
8,047 7,181 866 Total
comprehensive income 979 914 64 2012 dividend
(209) (108) (101) Impact of scope changes and
others (220) (144) (76)
At December 31,
2013 8,597 7,844 754
Net income, Group share, adjusted for exceptional
items
(€M)
2012pro forma
2013 Variation
Net income from continuing
operations, Group share 150 949
x 6.3 Restatement for non recurring income and
expenses (before tax) 660 (144) Restatement
for exceptional items in net financial expenses 284 175
Tax impact4
(178) (42) Restatement on share of income from companies
consolidated by the equity method (29) (8)
Net income, Group share, adjusted for exceptional
items 886 929 +4.9%
2013 dividend payment procedure
The ex-dividend date has been set as April 24, 2014. The period
during which shareholders may choose the option of the payment of
dividend in cash or in shares will begin April 24, 2014 and end May
15, 2014, included. Payment of the cash dividend and settlement of
the stock dividend will occur on May 28, 2014.
Definitions
Organic sales growth
Like for like sales growth plus net openings over the past
twelve months, including temporary store closures.
Commercial income
Commercial income 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 comprises purchase costs, changes in
inventory, the cost of products sold by the financial services
companies, discounting revenue and exchange gains and losses on
goods purchases.
Recurring Operating Income Before Depreciation and
Amortization (EBITDA)
Recurring Operating Income Before Depreciation and Amortization
(EBITDA) is defined as the difference between the commercial income
and sales, general and administrative expenses. It excludes
non-recurring items as defined below.
Recurring Operating Income (ROI)
Recurring Operating Income is defined as the difference between
the commercial income and sales, general and administrative
expenses, depreciation and amortization.
Operating Income (EBIT)
Operating Income (EBIT) is defined as the difference between
commercial income 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 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.
1 At constant exchange rates.
2 The 2013 social and consolidated accounts were approved by the
Carrefour Board of Directors, which met on March 4, 2014. The
accounts were audited by the Group’s auditors.
Figures for 2013 and the comparative 2012 information presented
in this document take into account the classification of certain
activities in accordance with IFRS 5 – Assets held for sale and
discontinued operations as well as the retrospective application of
the amended standard IAS 19 – Employee benefits.
3 Excluding petrol.
4 Tax impact of restated items (non recurring income and
expenses and financial expenses) and non recurring tax items.
Investor Relations:Réginald Gillet, Alessandra Girolami,
Matthew MellinTel : +33 (0)1 41 04 26 00Shareholder
RelationsTel : 0 805 902 902 (toll-free n° in France)Group
CommunicationsTel : +33 (0)1 41 04 26 17
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