Strong improvement in free cash flow
Lower debt
Continued investments in multiformat
Regulatory News:
Carrefour (Paris:CA):
Increase in net sales: €76.9bn, +3.0% on an organic
basis
- Faster growth in Europe, notably in
Spain and Italy; all formats grew in France again this year
- Excellent performance in Latin America
in a more difficult environment
Growth in Recurring Operating Income: €2,445m, +7.0% at
constant exchange rates, +11.5% proforma1
- In Europe, all countries, including
France, posted an increase in their operating margin. ROI in Europe
was up almost 10%1
- Profitability in Emerging Markets
continued to improve, illustrated by a sharp increase in ROI in
Latin America (+23.5% at constant exchange rates)
Marked rise in adjusted net income, Group share: €1,113m,
+7.1%
Improved financial structure; continued investments in
multiformat and omnichannel transformation
- Free Cash Flow excluding exceptional
items of €951m, strongly up vs 2014
- Net debt reduced by €408m, to
€4.5bn
- Sustained investments of €2.4bn in the
modernization of our store network and multiformat expansion, with
1,123 store openings, of which 850 convenience stores
- Integration of DIA stores in
France and acquisition of Billa supermarkets in Romania
- Digital ramp-up throughout the company
and acquisition in France of Rue du Commerce
Proposed dividend: €0.70 per share, in cash or shares
1 At constant exchange rates and excluding the integration of
DIA, the increase of the Tascom tax on selling space and the
transfer to Carmila of rental income from shopping malls
Key figures (m€) 2014 2015
Variationat constant exch. rates
Variationat current exch. rates
Net sales 74,706
76,945 +4.1% +3.0% Organic growth
+3.0% Recurring Operating
Income before D&A (EBITDA) 3,803 3,955 +6.7% +4.0%
Recurring
Operating Income (ROI) 2,387 2,445
+7.0% +2.4% ROI including income from
associates and joint ventures
2,423
2,489 +7.2% +2.7% Adjusted net
income, Group share
1,040 1,113
+7.1% Free cash flow (continuing
operations, excluding exceptional items) 664
951 +€287m Net debt at
close 4,954 4,546
-€408m Net debt/EBITDA 1.3x 1.1x
Further growth in ROI (+7.0% at constant exchange rates,
+11.5% proforma) and in adjusted net income, Group share
(+7.1%)
Income statement
In 2015, Carrefour recorded a significant increase in sales.
Net sales were up by +4.1% at constant exchange rates and by
+3.0% on an organic basis. All regions reported sales growth at
current exchange rates, with Europe up by +2.7% and Emerging
Markets up by +3.8%.
Recurring Operating Income (ROI) grew once again to
€2,445m, up +7.0% at constant exchange rates (+2.4% at current
exchange rates), increasing both in Europe (+9.9% proforma) and in
Emerging Markets (+9.2% at constant exchange rates).
In France, ROI stood at €1,191m. Operating margin in
France was up compared to 2014, after adjusting for the integration
of DIA, the increase in the tax on sales space and the transfer to
Carmila upon its creation in 2014 of rental income from shopping
malls. The transformation plan of DIA stores accelerated as planned
during the second half.
In Other European countries, ROI rose sharply, to €567m
vs €425m in 2014, up +33.4%. In 2015, commercial margin improved,
reflecting the positive impact of our various action plans.
Operating margin was up by 70 bp to 2.9% of sales. This performance
was largely driven by the continuing recovery in Spain and
improvement in Italy. Operating margin improved in all
countries.
Latin America continued to grow strongly, with an
increase in ROI of +23.5% at constant exchange rates, to €705m.
This improvement reflected excellent LFL sales growth in Brazil and
Argentina, combined with an improvement in commercial margin.
SG&A included the increase in energy costs in Brazil. Operating
margin stood at 4.9%, up 20 bp.
In Asia, ROI stood at €13m. In China, amid an economic
slowdown and rapidly-changing consumer needs, we are continuing the
repositioning of our model. In Taiwan, sales returned to growth for
the first time in over two years, driven by the roll-out of our
multiformat model and the modernization of some hypermarkets, and
ROI was up.
In 2015, non-recurring income was a net expense of €257m,
principally linked to reorganization costs in various countries.
This compares to a gain of €149m in 2014, essentially linked to the
capital gain from the contribution of assets to Carmila. Net
income from continuing operations, Group share, stood at €977m,
including the following elements:
- A drop in financial expenses,
largely attributable to lower interest costs for €52m. This drop
resulted from the combination of continued low interest rates in
Europe, partly offset by higher interest rates elsewhere;
- A broadly stable effective tax
rate.
Net income, Group share, stood at €980m. When adjusted
mainly for non-recurring income, net income, Group share, stood at
€1,113m, up by +7.1%.
Cash flow and debt
In 2015, free cash flow improved sharply and stood at
€687m vs €306m in 2014. This variation principally stemmed
from:
- A sharp improvement in gross cash
flow which stood at €2,733m vs €2,504m in 2014;
- Working capital requirements
represented an inflow of €81m in the year, vs €19m last year;
- An improved variation of fixed-asset
supplier payables, which constituted an inflow of €136m, while
business-related asset disposals generated an inflow of
€104m;
- Continued capex of €2.4bn to
bring up to standards, modernize and develop our store
network.
Adjusted for exceptional items, free cash flow from continuing
operations reached €951m, sharply up vs 2014.
Net financial debt at December 31, 2015 stood at €4.5bn,
a reduction of €408m compared to December 31, 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 €394m;
- The sale of an additional stake in
Carrefour Brazil to Península Participações in April 2015.
Peninsula’s stake now stands at 12%.
2016 priorities
Carrefour is continuing its transformation, with strong
ambitions for its multiformat model, which allows it to offer
its clients a shopping experience adapted to their evolving
aspirations and to changing consumption habits.
The world’s most multi-format retailer, Carrefour continues
to invest in expansion. In 2016, the Group will continue
opening stores in its different formats, notably in convenience, at
a sustained pace. In France, the conversion of the DIA store
network is proceeding according to plan, with another 500 stores to
be transformed in 2016.
Carrefour is also investing for sustainable growth. The
Group continues to modernize its stores in all countries and to
enhance the attractiveness of its sites by capitalizing on Carmila.
Carrefour is making further headway in its structural projects,
including the revamp of its supply-chain and IT rationalization in
several countries. The repositioning of its model in China is one
of Carrefour’s priorities.
Carrefour is accelerating its digital transformation as it
pursues its omnichannel ambition. This ambition capitalizes on
Carrefour’s physical store network and on the development of
e-commerce services in all Group countries. In France, the
acquisition of Rue du Commerce will allow us to enrich our offer
via a marketplace.
In 2016, Carrefour will maintain its financial
discipline:
- Total investments of between €2.5bn and
€2.6bn
- Constant focus on free cash flow
generation
- Maintain BBB+ rating
Agenda
- Q1 2016 sales: April 15, 2016
- Shareholders’ Assembly: May 17,
2016
APPENDIX
Geographic breakdown of sales and Recurring Operating
Income
Net sales Recurring operating income
(€m)
2014
2015
Organic
growth 1
Variation at current exch. rates
2014
restated2
2015
Proforma variation3
Variation at constant exch. rates Variation at
current
exch.
rates
France
35,336 36,272 +1.1% +2.6%
1,271
1,191 +1.8% -6.4% -6.4% Other European countries
19,191 19,724 +1.2% +2.8%
425
567 +34.2% +33.4% +33.4%
Europe 54,527
55,996 +1.2% +2.7% 1,697 1,758
+9.9% +3.6%
+3.6% Latin America
13,891
14,290 +15.7% +2.9%
660 705
+23.5% +23.5% +6.9% Asia
6,288 6,659
-9.5% +5.9%
97 13 -87.6% -87.6% -87.0%
Emerging Markets 20,179 20,949 +7.6%
+3.8% 757 718 +9.2% +9.2%
-5.2%
Global functions
(67) (31)
TOTAL 74,706
76,945 +3.0% +3.0%
2,387
2,445 +11.5% +7.0% +2.4%
1 Ex petrol and ex VAT
2 Cf appendix page 6
3 At constant exchange rates and excluding the integration of
DIA, the increase of the Tascom tax on sales space the transfer to
Carmila of rental income from shopping malls
Adjustments to Recurring Operating Income
Comparative information for 2014 has been restated to reflect
the application of IFRIC 21 – Levies. There is no impact on 2014
full-year recurring Operating Income. Comparative information for
2014 and the first half of 2015 has also been adjusted for head
office cost allocations.
Recurring operating
income (€m)
First half 2014
Reported Restated for IFRIC 21
Adjusted for cost allocation France 515 406
406 Europe excluding France 43 36 36
Latin America 247 247 229 Asia 83
83 83 Global functions -55 -55
-37
Total 833 717
717 Second half 2014 Reported
Restated for IFRIC 21 Adjusted for cost
allocation France 756 865 865 Europe
excluding France 382 389 389 Latin America
438 438 430 Asia 14 14 14
Global functions -37 -37 -29
Total
1,554 1,670 1,670
Full-year 2014 Reported
Restated for IFRIC 21 Adjusted for cost
allocation France 1,271 1,271 1,271 Europe
excluding France 425 425 425 Latin America
685 685 660 Asia 97 97 97
Gobal functions -92 -92 -67
Total
2,387 2,387 2,387
First-half 2015 Reported Adjusted
for cost allocation France 321 321 Europe
excluding France 122 122 Latin America 296
291 Asia 50 50 Global functions -63
-58
Total 726 726
Consolidated income statement
(€m) 2014
2015 Net
sales 74,706 76,945 Net sales
net of loyalty program costs 74,097
76,393 Other revenue 2,221 2,464
Total
revenue 76,318 78,857 Cost of goods
sold (59,270) (60,838) Gross margin 17,049 18,019 SG&A
(13,281) (14,105)
Recurring operating income before
D&A (EBITDA) 3,803 3,955
Depreciation and amortization (1,381) (1,470)
Recurring operating income (ROI) 2,387
2,445 Recurring operating income including income from
associates and joint ventures 2,423
2,489 Non-recurring income and expenses 149
(257) Operating income 2,572 2,232 Financial expense
(563) (515) Income before taxes 2,010 1,717 Income tax expense
(709) (597)
Net income from continuing
operations 1,300 1,120 Net income
from discontinued operations 67 4
Net income
1,367 1,123 Of which Net income –
Group share 1,249 980 Of which net income from
continuing operations, Group share 1,182 977 Of which net income
from discontinued operations, Group share 67 4
Of
which Net income – Non-controlling interests (NCI) 118
143 Of which net income from continuing operations NCI 118
143 Of which net income from discontinued operations NCI 0
0
Net income, Group share, adjusted for exceptional
items 1,040 1,113
Consolidated balance sheet
(€m) December 31, 2014
December 31, 2015 ASSETS Intangible assets 9,543
9,510 Tangible assets 12,272 12,071 Financial investments 2,810
2,725 Deferred tax assets 759 744 Investment properties 296 383
Consumer credit from financial-services companies – long-term
2,560 2,351
Non-current assets
28,240 27,784 Inventories 6,213 6,362 Trade
receivables 2,260 2,269 Consumer credit from financial-services
companies – short-term 3,420 3,658 Tax receivables 1,136 1,168
Other receivables 853 705 Current financial assets 504 358 Cash and
cash equivalents 3,113 2,724
Current assets
17,500 17,245 Assets held for
sale 49 66 TOTAL
45,789 45,095 LIABILITIES Shareholders’
equity, Group share 9,191 9,633 Minority interests in consolidated
companies 1,037 1,039
Shareholders’ equity
10,228 10,672 Deferred tax liabilities
523 508 Provisions for contingencies 3,581 3,014 Borrowing –
Long-term 6,815 6,662 Bank loans refinancing – long-term
1,589 1,921
Non-current liabilities
12,508 12,106 Borrowings – short-term 1,757
966 Trade payables 13,384 13,648 Bank loan refinancing – short-term
3,718 3,328 Tax payables & others 1,172 1,097 Other debts
3,022 3,244
Current liabilities
23,052 22,282 Liabilities related to assets
held for sale 1 34 TOTAL
45,789 45,095
Consolidated Cash Flow Statement
(€m) 2014
2015 NET
DEBT OPENING (4,117) (4,954) Gross
cash flow (ex. discontinued activities) 2,504 2,733 Change in
working capital 19 81 Impact of discontinued activities 86
3
Cash flow from operations 2,609
2,818 Capital expenditure (2,411) (2,378) Changed in
net payables to fixed asset suppliers (inc. receivables) (17) 136
Asset disposals (business related) 124 104 Impact of discontinued
activities 2 7
Free Cash Flow
306 687 Financial investments (1,336) (85)
Proceeds from disposals of subsidiaries and from other tangible
& intangible assets 236 109 Others (5) (28) Impact of
discontinued activities 11 0
Cash Flow after
investments (789) 682
Dividends/Capital increase (214) (474) Acquisition and disposal of
investments without change of control 311 208 Treasury shares (18)
384 Cost of net financial debt (399) (347) Others 287 (44) Impact
of discontinued activities (16) 0
NET DEBT
CLOSING (4,954) (4,546)
Changes in Shareholders’ Equity
(€m)
Total shareholders’ equity
Shareholders’ equity,Group share
Minorityinterests At December 31, 2014
10,228 9,191 1,037 Total
comprehensive income for 2015 1,123 980 143
2014 dividend (488) (390) (98) Impact of scope
changes and others (191) (148) (43)
At
December 31, 2015 10,672 9,633
1,039
Net income, Group share, adjusted for exceptional
items
(€m) 2014
2015 Net
income from continuing operations, Group share
1,182 977 Restatement for non-recurring income
and expenses (before tax) (149) 257 Restatement for exceptional
items in net net financial expenses 3 65
Tax impact 1
(10) (159) Restatement on share of income from minorities and
companies consolidated by the equity method 14 (27)
Net income, Group share, adjusted for exceptional items
1,040 1,113
2015 dividend payment procedure
The ex-dividend payment date has been set at May 23, 2016. The
period during which shareholders may opt for the dividend payment
in cash or shares will begin on May 23, 2016 and end on June 10,
2016, included. Payment of the cash dividend and settlement of the
stock dividend will occur on June 21, 2016.
1 Tax impact of restated items (non-recurring income and
expenses and financial expenses) and non-recurring tax items.
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 (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 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.
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CarrefourInvestor RelationsAlessandra Girolami, Mathilde
Rodié and Matthew Mellin, +33 (0)1 41 04 28 83orShreholder
Relations0 805 902 902 (toll-free in France)orGroup
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