- Net sales of €37.7bn, up +5.2% (+2.9%
on an organic basis)
- Growth in Recurring Operating Income:
€726m, +2.6% at constant exchange rates
- Strong growth in adjusted net income,
Group share: €233m, up by +17.5%
- Strong improvement in free cash flow,
up by +€496m
Regulatory News:
Carrefour (Paris:CA):
Growth in Europe: Solid first-half in France, acceleration in
Spain
France: Ramp-up of multiformat
- Third consecutive year of sales growth:
+3.4% in total and +1.8% on an organic basis
- All formats contributed to organic
sales growth
- Stable operating margin excluding the
tax hike on retail sales areas (Tascom), the integration of DIA and
the transfer to Carmila of rental income from shopping malls
Other European countries: Sharp improvement in profitability
- Return to organic sales growth with a
notable acceleration in Spain
- Encouraging trends in Italy, the
overall profitability of the other European countries
increased
- More than three-fold growth in
Recurring Operating Income to €122m
Emerging markets: Further profit growth momentum
- Excellent performance in Latin America
with growth in recurring operating income of +26.3%
- Consolidation of leading position in
food retail in Brazil
- Amid a tough trading environment,
Carrefour is adapting its model in China; return to growth in
Taiwan
Continued investments and acceleration of multiformat
expansion
- Sustained investments of €804m to bring
up to standards, modernize and develop our store network
- Continued expansion with the net
opening of 316 convenience stores, 83 supermarkets and 14
hypermarkets; continuing development in e-commerce
- Integration of the DIA stores in
France
First-half 2015 net sales and recurring operating
income
(€m)
Net sales Organic
growth
Recurring operating
income
Proforma variation at constant exchange
rates1
Variation at constant exchange rates Europe 26,943
+1.3% 444 +15.8% +0.4% Emerging
markets 10,795 +6.8% 346 +7.3%
+7.3% Global functions
-63
Total
37,739 +2.9% 726
+13.5%
+2.6%
___________________________1 Adjusted for the integration of
DIA, the impact of the Tascom increase and the transfer to Carmila
of rental income from shopping malls
First-half 2015 key figures1
(€m) H1 2014restated for IFRIC 21
H1
2015 Variation at constant exchange rates
Variation at current exchange rates
Net sales
35,870 37,739
+3.9% +5.2% Net sales ex petrol
32,119 34,337 +5.4%
+6.9%
Recurring Operating Income before D&A
(EBITDA)2
1,416 1,488 +4.6%
+5.1% EBITDA margin 3.9% 3.9%
Recurring Operating
Income (ROI) 717 726
+2.6% +1.3% Recurring
operating margin 2.0% 1.9%
Adjusted net income, Group
share 198 233
+17.5%
Net debt at
close 7,324 6,654
-€670m
Further growth in Recurring Operating Income (+2.6% at
constant exchange rates) and in adjusted net income, Group share
(+17.5%)
Income statement
In the first half of 2015, Carrefour posted significant sales
growth. Net sales were up by +5.2% at current exchange rates
and by +2.9% on an organic basis. All regions posted reported sales
growth at current exchange rates, with Europe up by +2.9% and
Emerging Markets up by +11.3%.
Recurring Operating Income (ROI) grew once again to
€726m, a +2.6% increase at constant exchange rates (+1.3% at
current exchange rates), up both in Europe (+0.4%) and in Emerging
Markets (+7.3%).
In France, ROI stood at €321m. Operating margin in France
was stable compared to first-half 2014, when adjusted for the
integration of DIA, the increase in the tax on retail sales areas
and the transfer to Carmila, upon its creation in 2014, of rental
income from shopping malls. DIA’s transformation plan started in
the second quarter.
In Other European countries, ROI rose sharply, to €122m
vs €36m in the first half of 2014. While paying constant attention
to price positioning, gross margin improved. Operating margin was
up by 90 bp to 1.3% of sales. This performance was largely driven
by the continuing recovery in Spain and an improvement in Italy.
Operating margin improved in all countries.
Latin America continued to grow strongly, with ROI up by
+26.3% at constant exchange rates to €296m. This improvement
reflected excellent like-for-like sales in Brazil and Argentina,
combined with good performance at gross margin level. SG&A
included the increase in energy costs in Brazil. Operating margin
stood at 4.1%, up 30 bp.
________________________1 The first-half 2015 consolidated
accounts were approved by the Carrefour Board of Directors, which
met on July 29th, 2015. The accounts underwent a limited review
process by the Group’s auditors.The first-half 2014 and first-half
2015 information presented in this document takes into account the
classification of certain activities in accordance with IFRS 5 –
Assets held for sale and discontinued operations.2 Recurring
operating income before depreciation and amortization (which
includes depreciation of supply chain activities for €17m in H1
2014 and €22m in H1 2015).
In Asia, ROI stood at €50m. Gross margin held up well. In
China, amid a slowing consumption environment, we are executing our
action plan as part of our long-term strategy. In Taiwan, Carrefour
is accelerating the roll-out of its multiformat strategy. Within
this context, sales returned to growth for the first time in over
two years and ROI improved.
In the first half of 2015, net non-recurring items amounted to
an expense of €16m, vs a gain of €264m in 2014, essentially linked
to the capital gain from the contribution of assets to Carmila.
Net income from continuing operations, Group share, stood at
€230m, and reflected:
- A slight drop in financial
expenses, mainly reflecting continued low interest rates in
Europe, partly offset by rising interest rates elsewhere
- A stable effective tax rate
Net income, Group share, stood at €218m.
Adjusted principally in 2014 for the capital gain linked to
the creation of Carmila, Net income, Group share, stood at €233m
and grew by +17.5%.
Cash flow and debt
Free cash flow improved sharply by +€496m compared to H1
2014. It stood at -€1,917m, reflecting the seasonality of our
business.
This variation principally stemmed from:
- A sharp improvement in working capital
requirements of +€348m
- An improved variation in fixed-asset
supplier payables of €121m vs the previous year
- A stable level of capex, as the Group
continued its investments to bring up to standards and develop its
store network
- A slight increase in gross cash
flow
Net financial debt at June 30, 2015 was €6.7bn, down by
€670m compared with June 30, 2014. It benefited from:
- The improvement in free cash-flow
described above
- The sale of part of our treasury shares
in March 2015, which generated a cash-in of €369m
- The sale of an additional stake in
Carrefour Brazil to Península Participações, whose stake now stands
at 12%
- And, in 2015, the shift of the dividend
payment to the second-half (€394m for its cash component)
Staying the course on 2015 priorities
Carrefour is staying the course. The 2015 priorities announced
during the publication of our annual results in March are
reaffirmed.
- Continue implementing action
plans in all countries aiming at continuous improvement of
our offer and price image to enhance our customers’ shopping
experience
- Accelerate multi‐format
expansion
- Continue targeted expansion in our key
markets
- Gradual integration of DIA France’s
stores
- Continued opening of convenience
stores, notably in Brazil and China
- Develop our multi‐channel offer,
supported by our physical store network
- Revamp and convergence of our websites
in France, gradual broadening of our offer
- Continued roll‐out of click &
collect
- Development of e‐commerce activities in
several countries
- Continue structural projects
including:
- Revamp of the supply‐chain in
France
- IT rationalization
- Evolution of our model in China
- Continue store remodelings
- Continue the program to bring stores up
to standards
- Modernize our store network
- Enhance the attractiveness of our
sites by capitalizing on property company Carmila in France,
Spain and Italy
- 2015 outlook maintained
- Total investments, including DIA
France, of between €2.5bn and €2.6bn
- Increased free cash flow
- Continued strict financial discipline:
maintain BBB+ rating
APPENDIX
Impact of IFRIC 21 on Recurring Operating Income
Comparative information for 2014 has been restated1 to reflect
the application of IFRIC 21 – Levies. The application of IFRIC 21
has no impact on the full year recurring operating income.
2014 Recurring
Operating Income(€m)
First-half 2014
Published
Restated
France 515 406 Europe ex. France
43 36 Latin America 247
247 Asia 83 83 Global Functions
-55 -55
Total
833 717
Second-half 2014
Published Restated France
756 865 Europe ex. France
382 389 Latin America 438
438 Asia 14 14 Global Functions
-37 -37
Total
1,554 1,670
Full year 2014(no impact from
restatement)
Published Restated France
1,271 1,271 Europe ex. France
425 425 Latin America 685
685 Asia 97 97 Global functions
-92 -92
Total
2,387 2,387
___________________________1 In accordance with IFRIC 21 –
Levies, that was adopted for use in the European Union on June
13th, 2014 and is applicable for annual periods beginning on or
after June 17th, 2014. This interpretation defines the obligating
event that gives rise to the recognition of a liability to pay a
levy.
First-half 2015 sales and Recurring Operating Income by
region
Net sales Recurring Operating
Income (€m) H1 2014restated for IFRIC 21
H1
2015 Organic growth Variation at current
exchange rates H1 2014restated for IFRIC 21
H1
2015
Proformavariation at
constant exchange rates1
Variation at constant exchange rates Variation at
current exchange rates France 17,005
17,587
+1.8% +3.4% 406
321 -2.2%
-20.9% -20.9% Other Europe 9,173
9,356 +0.3%
+2.0% 36
122 +244.3% +244.3% +244.1%
Europe
26,178 26,943 +1.3% +2.9%
442
444 +15.8% +0.4% +0.4% Latin America 6,454
7,257 +15.5% +12.4% 247
296 +26.3%
+26.3% +20.0% Asia 3,237
3,538 -9.7% +9.3% 83
50 -49.5% -49.5% -40.2%
Emerging markets
9,691 10,795 +6.8%
+11.3%
330 346 +7.3%
+7.3% +4.8% Global functions
-55
-63 Total
35,870 37,739 +2.9%
+5.2% 717
726 +13.5%
+2.6% +1.3%
______________________________1 Adjusted for the integration of
DIA, the impact of the Tascom increase and the transfer to Carmila
of rental income from shopping malls
Consolidated Income Statement
(€m) H1 2014published H1 2014restated for
IFRIC 21
H1 2015 Variationvs restated
Net sales
35,870 35,870
37,739 +5.2% Net sales net loyalty program
costs 35,564 35,564
37,470 +5.4% Other revenue 1,192
1,192 1,247
+4.6% Total revenue
36,757 36,757
38,718 +5.3% Cost of goods sold
-28,686 -28,688 -30,024
+4.7% Gross
margin 8,071 8,068
8,694 +7.8% SG&A -6,556
-6,669 -7,227
+8.4% Depreciation and
amortization -682 -682 -740
+8.5% Recurring operating income
833 717 726 +1.3%
Recurring operating income including income from associates
and joint ventures 842
726 761 +4.8% Non-recurring
income and expenses 264 264 -16
-106.0% Operating income 1,106
991 745 -24.9% Financial
expense -269 -269 -264
-1.9% Income before taxes 837
721 481 -33.3% Income tax
expense -300 -260 -165
-36.4% Net income from continuing operations
537 462 316
-31.6% Net income from discontinued operations
-33 -33 -12
-63.7% Net income
504 428 304
-29.1% Of which Net income – Group share 441
365 218 Of which net income from continuing
operations, Group share 474 399 230 Of which net income from
discontinued operations, Group share -33 -33
-12
Of which Net income – Non-Controlling Interests
(NCI) 63 63 85 Of which net income from
continuing operations, NCI 63 63 85 Of which net income from
discontinued operations, NCI - - -
Recurring operating income before
D&A (EBITDA)1
1,532 1,416 1,488
+5.1%
___________________________1 Recurring operating income before
depreciation and amortization (which includes depreciation of
supply chain activities for €17m in H1 2014 and €22m in H1
2015).
Calculation of adjusted net income, Group share
(€m) H1 2014 restated for
IFRIC 21
H1 2015 Variation
Net income from
continuing operations, Group share 399
230 -42.2% Restatement for non
recurring income and expenses (before tax) -264
16 Restatement for exceptional items in net financial
expenses 11 31
Tax impact1
40 -28 Restatement on share of income from minorities and companies
consolidatedby the equity method 13 -16
Adjusted net income, Group share
198 233 +17.5%
Main ratios
H1 2014restated for
IFRIC 21
H1 2015 Gross margin / Net sales 22.5%
23.0% Recurring operating income / Net sales
2.0%
1.9%
___________________________1 Tax impact of restated items (non
recurring income and expenses and financial expenses) and non
recurring tax items.
Consolidated Balance Sheet
(€m) June 30, 2014
June 30, 2015
ASSETS Intangible assets 9,108 9,607
Tangible assets 11,227 12,162 Financial investments 2,541 2,793
Deferred tax assets 894 816 Investment properties 319 307 Consumer
credit from financial-services companies – long term
2,413 2,579
Non-current assets
26,503 28,263 Inventories 5,902 6,503 Trade
receivables 2,281 2,379 Consumer credit from financial-services
companies – short term 3,373 3,396 Tax receivables 773 1,108 Other
receivables 1,043 929 Current financial assets 361 410 Cash and
cash equivalents 2,030 1,800
Current
assets 15,763 16,525
Assets held for sale 12
78 TOTAL 42,278
44,865 LIABILITIES Shareholders equity, Group
share 8,163 9,249 Minority interests in consolidated companies
783 1,095
Shareholders’ equity
8,946 10,344 Deferred tax liabilities
537 509 Provisions for contingencies 3,734 3,435 Borrowing – long
term 6,626 7,288 Bank loans refinancing – long term
1,954 1,569
Non current liabilities
12,851 12,802 Borrowings – short term 3,089
1,575 Trade payables 10,876 12,096 Bank loans refinancing – short
term 3,079 3,630 Tax payables & others 1,132 1,138 Other debts
2,298 3,229
Current liabilities
20,474 21,668 Liabilities related to
assets held for sale 7 51
TOTAL 42,278 44,865
Consolidated Cash Flow Statement
(€m) H1 2014 restatedfor IFRIC 21
H1
2015 NET DEBT OPENING -4,117
-4,954 Gross cash flow (ex. discontinued activities)
1,168 1,180 Change in working capital -2,454 -2,104
Impact of discontinued activities 0 21
Cash
flow from operations (ex. financial services)
-1,287 -904 Capital expenditure -818 -804
Change in net payables to fixed asset suppliers (inc. receivables)
-382 -261 Asset disposals (business related) 79 53 Impact of
discontinued activities -5 0
Free Cash
Flow -2,412 -1,917 Financial
investments -268 -57 Proceeds from disposals of subsidiaries and
from other tangible & intangible assets 82 1 Others -68 1
Impact of discontinued activities 0 0
Cash
Flow after investments -2,667
-1,971 Dividends / Capital increase -198 -62 Acquisition and
disposal of investments without change of control -122 208 Cost of
net financial debt -191 -185 Treasury shares -20 369 Others 57 67
Impact of discontinued activities -16 0 Consumer credit impact
-50 -127
NET DEBT CLOSING
-7,324 -6,654
Changes in Shareholders’ Equity
(€m)
Total shareholders’ equity
Shareholders’ equity, Group share Minority
interests At December 31, 2014
10,228 9,191 1,037 Total
comprehensive income for H1 2015 222 140
82 2014 dividend -562 -492 -70
Treasury stock (net of tax) 335 335 0
Impact of scope changes and others 121 76
46
At June 30, 2015 10,344
9,249 1,095
Definitions
Organic sales growth
Like for like sales growth plus net openings over the past
twelve months, including temporary store closures.
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 comprises 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
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 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.
NB: Organic sales variations are ex petrol, ex calendar. 2014
numbers are restated for IFRIC 21.
View source
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Investor RelationsAlessandra Girolami, Mathilde Rodié and
Matthew MellinTel: +33 (0)1 41 04 28 83orShareholder
RelationsTel: 0 805 902 902 (toll-free in France)orGroup
CommunicationTel: +33 (0)1 41 04 26 17
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