Acceleration of organic sales growth
Further growth in Recurring Operating
Income, up by +10.6%
Net income from continuing operations up by
+24.6%
Increase in proposed dividend to €0.68 per
share
Regulatory News:
Carrefour (Paris:CA):
New growth in Group earnings at constant exchange
rates
- Sales ex. VAT of €74.7bn, up +3.9%(1)
on an organic basis
- Growth in Recurring Operating Income:
+10.6%(2), to €2,387m
- Net income from continuing operations,
Group share: +24.6%, to €1,182m
Europe: Growth of +7.0% in Recurring Operating Income
France: Further growth in profitability
- Organic sales growth: +1.2% ;
growth in all formats, highlighting the dynamism of our
multi-format model
- Increase in Recurring Operating
Income : +6.1%
Other European countries: Rise in profitability for the third
consecutive half
- Significant improvement in sales trends
in 2014
- Growth in Recurring Operating
Income : +9.6%, attesting to the continuing recovery, notably
in Spain
Emerging Markets: Growth in Recurring Operating Income of
+14.9%
- Another remarkable year for Brazil and
Argentina, which posted combined growth in Recurring Operating
Income of +23.2%
- China : Evolution of our model in
a frugal consumption environment
Increased investments, acceleration of our multi-format model
and strategic partnership in Brazil
- Continuation of our program to bring up
to standards, modernize and develop our store network
- Acceleration of our
multi-format model: Acquisition of DIA France and of 70 stores
in Northern Italy; first convenience store openings in Brazil and
China
- Creation of Carmila to improve the
shopping experience and enhance the value of shopping malls
adjacent to Carrefour hypermarkets in France, Spain and Italy
- Strengthened local presence: Peninsula
acquires 10% of our Brazilian operations
- Purchasing cooperation agreement with
Cora to strengthen our competitiveness for the benefit of our
clients
Dividend growth
- Increase in proposed dividend: €0.68
per share, payable in cash or shares
________________________________
(1) Ex. petrol ex.calendar.
(2) At constant exchange rates.
2014 key figures(1)
(€M) 2013
2014
Variation at constant exchange rates
Variation at current exchange rates
Sales ex VAT 74,888
74,706 +2.9% -0.2% Sales ex VAT
ex petrol 66,911 67,237 +3.9%
+0.5% Recurring Operating Income before D&A (EBITDA)
3,669 3,768 +5.9% +2.7% EBITDA margin
4.9% 5.0%
Recurring Operating Income (ROI) 2,238
2,387 +10.6% +6.7%
Recurring Operating Margin 3.0% 3.2%
ROI including income from associates and
joint ventures 2,267 2,423
+10.8% +6.9% Net income from
continuing operations, Group share 949
1,182 +24.1% +24.6%
Adjusted net income, Group share 929
1,040 +11.9%
Net debt at close 4,117
4,954 +€0.8bn Net
debt/EBITDA 1.1x 1.3x
2014 sales and Recurring Operating
Income by zone
Sales excluding VAT Recurring
Operating Income
(€M)
2013
2014
Organicgrowth(2)
Variation at current
exchange
rates
2013
2014
Variation at constant
exchange
rates
Variation at current exchange rates France
35,438
35,336 +1.2% -0.3%
1,198 1,271
+6.1% +6.1% Other Europe
19,220 19,191
-0.3% -0.2%
388 425 +9.6% +9.6%
Europe 54,658 54,527 +0.6% -0.2%
1,586 1,696 +7.0% +7.0% Latin America
13,786 13,891 +18.1% +0.8%
627
685 +23.2% +9.4% Asia
6,443 6,288
-1.8% -2.4%
131 97 -24.8% -25.5%
Emerging markets 20,229 20,179 +11.5%
-0.2% 757 782 +14.9% +3.4%
Global functions
(106) (92)
+12.7% +12.7%
TOTAL
74,888 74,706 +3.9% -0.2%
2,238 2,387 +10.6%
+6.7%
________________________________
(1) The 2014 social and consolidated
accounts were approved by the Carrefour Board of Directors, which
met on March 4, 2015. The accounts were audited by the Group’s
auditors.
(2) Ex. petrol.
Further growth in Recurring Operating Income (+10.6% at
constant exchange rates) and in net income from continuing
operations, Group share (+24.6%)
Income statement
In 2014, the Group’s sales growth accelerated. Sales ex.
VAT rose by +3.9% on an organic basis. At current exchange
rates, the variation was -0.2%. Europe and Emerging Markets posted
sales growth of respectively +0.6% and +11.5%.
Recurring Operating Income (ROI), at €2,387m, was up
+10.6% at constant exchange rates (+6.7% at current exchange
rates), rising both in Europe (+7.0%) and in Emerging Markets
(+14.9%).
In France, ROI reached €1,271m, up +6.1%, representing a
20bps improvement in operating margin, to 3.6% of sales. This
increase is partly attributable to an improvement in commercial
margin linked to a drop in shrinkage and to logistics gains.
Profitability is solid in all formats.
In Other European Countries, ROI increased by +9.6% at
constant exchange rates, to €425m. Operating margin stood at 2.2%,
a 20bps improvement. In the second half, operating margin increased
by 30bps, marking the third consecutive half in which profitability
improved. Commercial margin was higher. Spain’s profitability
continued to recover. In Italy, sales trends improved in the second
half thanks to the continued implementation of our action plans. In
the rest of Europe, profitability held up well, with a continued
improvement in Belgium.
Latin America recorded another strong performance, with
ROI at €685m, up +23.2% at constant exchange rates. Operating
margin stood at 4.9%, up by +40bps. This reflects excellent
like-for-like sales in Brazil and Argentina and a solid commercial
margin.
In Asia, ROI stood at €97m. Commercial margin held up
well. Carrefour’s model is evolving in an environment that remains
marked by frugal consumption and a drop in sales of shopping cards.
Activity in Taiwan is robust.
Net non-recurring income stood at €149m, mainly
reflecting the capital gain linked to the contribution of assets to
property company Carmila. Net income from continuing operations,
Group share, stood at €1,182m and reflected:
- A drop of €159m in financial
expenses, reflecting lower financing costs and the
non-recurring nature of the €119m charge linked to the bond buyback
in the first half of 2013
- An effective tax rate of 35.3%
(vs. 37.4% in 2013). The underlying tax rate is in line with that
of 2013.
Net income, Group share stood at €1,249m.
Adjusted net income, Group share, reached €1,040m, a rise of
+11.9%.
Cash flow and debt
Cash flow from operations was €2,504m, compared to
€2,039m in 2013.
Working capital was an inflow of €18m, improving from
2013.
Carrefour continued its investments in order to bring up
to standards, modernize and develop its store network, with capex
of €2.4bn.
As a result, free cash-flow in 2014 stood at €306m
compared to €26m in 2013.
Acquisitions and disposals led to a net total cash-out of
€1.1bn, reflecting the acquisition DIA France and the creation of
Carmila.
The net cash outflow related to 2013 dividend payments
cashed out in 2014 stood at €149m, as 65% of our shareholders chose
to receive their dividend in shares. Financial expenses
decreased €29m to €399m.
Net financial debt at December 31, 2014 was €4,954m.
2014 highlights
- In April, creation of Carmila, a
company dedicated to enhancing the value of the shopping centers
adjacent to Carrefour hypermarkets in France, Spain and Italy, and
in which Carrefour holds a 42% stake.
- Acquisition of DIA France,
comprising more than 800 stores totaling nearly 550,000m² and
€2.3bn of sales under banners in 2013. This transaction was
completed on December 1, 2014 and will make a significant
contribution to the growth of Carrefour’s multi-format network in
France.
- Acquisition of 53 supermarkets in
Northern Italy, with a combined sales area of 58,000m² and net
sales of around €300m in 2013. The stores started being integrated
in the fourth quarter of 2014. We also acquired 17 Il Centro
convenience stores. These transactions strengthen Carrefour’s
multi-format strategy.
- Strengthening of local ties in
Brazil, by welcoming Península into the capital of our
Brazilian subsidiary with a 10% stake. This transaction allows
Carrefour to benefit from the widely-recognized local retail
experience of its new shareholder in order to continue developing
its multi-format model.
- Purchasing cooperation agreement
between Carrefour and Cora/Supermarchés Match, establishing a
long-term partnership with no equity ties. This agreement will
enhance the competitiveness of the banners involved for the benefit
of consumers. This partnership took effect on January 1, 2015.
Proposed dividend of €0.68 per share
The Board of Directors, at its meeting on March 4, 2015, decided
to propose to shareholders at the next General Assembly on June 11,
2014 a 2014 dividend of €0.68 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.
2015 priorities
Carrefour is staying the course in an environment that remains
uncertain. In the third year of its plan, the group will focus in
2015 on the following operational priorities:
- Continue implementing action
plans aiming at continuous improvement of our offer and price
image to enhance our customers’ shopping experience in all
countries
- Accelerate multi-format
expansion
- Continue targeted expansion in our key
markets
- Gradual integration of DIA France’s
stores
- Continued opening of convenience stores
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,
Spainand Italy
2015 outlook
- Total investments, including DIA
France, of between €2.5bn and €2.6bn
- Increased free cash flow
- Continued strict financial discipline:
maintain BBB+ rating
Agenda
- General Shareholders’ Assembly: June
11, 2015
APPENDIX
Consolidated Income Statement
(€M)
2013
2014
Variation
Sales, net of taxes
74,888 74,706
-0.2% Sales, net of taxes and loyalty
74,299 74,097
-0.3% Other revenues 2,375 2,221
-6.5%
Total revenues
76,675 76,318
-0.5% Cost of sales (59,828)
(59,270) -0.9% Commercial income 16,847
17,049 +1.2% SG&A
(13,178) (13,281) +0.8%
Recurring
Operating Income before D&A (EBITDA)
3,669 3,768 +2.7%
Depreciation & amortization (1,432)
(1,381) -3.5%
Recurring Operating Income (ROI)
2,238 2,387
+6.7% Recurring Operating Income including income from
associates and joint ventures 2,267
2,423 +6.9% Non-current income
and expenses 144 149
+3.2% Operating income 2,412 2,572
+6.7% Financial expenses (722)
(563) -22.1% Profit before tax
1,690 2,010 +18.9% Income tax
(631) (709) +12.4%
Net income
from continuing operations 1,058
1,300 +22.9% Net income from
discontinued operations 306 67
NA
Net income 1,364
1,367 +0.2% Of which Net
income – Group share 1,263 1,249 Of which net
income from continuing operations, Group share 949 1,182 Of which
net income from discontinued operations, Group share
314 67
Of which Net income, Non-Controlling
Interests (NCI) 101 118 Of which Net income from
continuing operations, NCI 109 118 Of which Net income from
discontinued operations, NCI (8) 0
Main ratios
2013
2014 Commercial
margin
22.5% 22.8% Recurring Operating Income/Net
sales
3.0% 3.2% Operating income/Net sales
3.2% 3.4%
Consolidated Balance Sheet
(€M) December 31, 2013
December 31, 2014 ASSETS Intangible assets 9,044
9,543 Tangible assets 11,109 12,272 Financial investments 1,642
2,810 Deferred tax assets 881 759 Investment properties 313 296
Consumer credit from financial-services companies – long-term
2,381 2,560
Non-current
assets 25,369
28,240 Inventories 5,738 6,213 Trade receivables 2,213 2,260
Consumer credit from financial-services companies - short-term
3,221 3,420 Tax receivables 715 1 136 Other receivables 841 853
Current financial assets 359 504 Cash and cash equivalents
4,757 3,113
Current assets
17,844 17,500
Assets held for sale 301
49 TOTAL 43,514
45,789 LIABILITIES Shareholders’
equity, Group share 7,925 9,191 Minority interests in consolidated
companies 754 1 037
Shareholders’ equity 8,679
10,228 Deferred tax liabilities 521 523
Provisions for contingencies 3,618 3,581 Borrowing – Long-term
7,550 6,815 Bank loans refinancing – Long-term
1,765 1,589
Non current liabilities
13,454 12,508 Borrowings
– Short-term 1,683 1,757 Trade payables 12,854 13,384 Bank loans
refinancing – Short-term 3,145 3,718 Tax payables & others 913
1,172 Other debts 2,763 3,022
Current liabilities 21,358
23,052 Liabilities related to assets held
for sale 24 1
TOTAL 43,514
45,789
Consolidated Cash Flow
Statement
(M€) 2013
2014
NET DEBT OPENING (4,320)
(4,117) Gross cash flow (ex. discontinued activities)
2,039 2 504 Change in working capital (284) 18 Impact of
discontinued activities (27) 86
Cash flow from operations (ex. financial services)
1,728 2,608 Capital
expenditures (2,159) (2,411) Change in net payables to fixed asset
suppliers (inc. receivables) 371 (17) Asset disposals (business
related) 117 124 Impact of discontinued activities
(31) 2
Free Cash Flow
26 306 Financial investments
(57) (1,336) Proceeds from disposals of subsidiaries and from other
tangible & intangible assets 542 236 Others 2 (5) Impact of
discontinued activities 493 11
Cash Flow after investments
1,005 (789) Dividends/Capital increase
(206) (214) Acquisition and disposal of investments without change
of control (11) 311 Treasury shares 0 (18) Cost of net financial
debt (428) (399) Others (159) 287 Impact of discontinued activities
54 (16) Consumer credit impact (52)
1
NET DEBT CLOSING
(4,117) (4,954)
Changes in Shareholder Equity
(€M)
Total shareholders’ equity
Shareholders’ equity, Group
share
Minority interests At December 31, 2013
8,679 7,925
754 Total comprehensive income for 2014 1,367
1,249 118 2013 dividend
-219 -149 -70 Impact of scope change
and others 402 166 236
At December 31, 2014 10,228
9,191 1,037
Calculation of adjusted net income,
Group share
(€M)
2013
pro forma
2014 Variation
Net income
from continuing operations, Group share
949 1,182 +24.6%
Restatement for non-recurring income and expenses (before tax)
(144) (149) Restatement for exceptional items in net financial
expenses 175 3
Tax impact(1)
(42) (10) Restatement on share of income from minorities and
companies consolidatedby the equity method (8)
14
Adjusted net income, Group
share 929 1, 040
+11.9% ________________________________
(1) Tax impact of restated items
(non-recurring income and expenses and financial expenses) and
non-recurring tax items.
2014 dividend payment procedure
The ex-dividend date has been set at June 17, 2015. The period
during which shareholders may choose the option of the payment of
dividend in cash or shares will begin June 17, 2015 and end July 7,
2015, included. Payment of the cash dividend and settlement of the
stock dividend will occur on July 17, 2015.
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 pre-existing 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.
Investor Relations:Alessandra Girolami, Matthew Mellin,
Mathilde RodiéTel: +33 (0)1 41 04 28 83orShareholder
Relations:Tel: 0 805 902 902 (toll-free in France)orGroup
CommunicationsTel: +33 (0)1 41 04 26 17
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