Strong growth in organic sales:
+2.9%
ROI growth for the eighth consecutive half:
+5.3% at constant exchange rates
Adjusted net income, Group share up
+0.6%
Regulatory News:
This version includes changes in the
headings in tables on pages 5 and 6.
Half-Year 2016 Results: Carrefour Continues
Its Profitable Growth Momentum
Carrefour (Paris:CA):
Sales inc. VAT of €40.6bn in H1 (€20.5bn in Q2): Further
growth in organic sales
- Resilient sales in France and Europe in
a more difficult consumption environment, notably marked by
unfavorable weather conditions
- Very strong growth in emerging markets,
driven by Latin America and Taiwan
Recurring Operating Income of €706m in H1: Strong operational
performance
- Operating margin held up well in
France, stable at 1.8%
- Strong growth in Other European
countries, with a 30bp rise in operating margin
- Growth in profitability in Latin
America, with a 12.3% rise in ROI
Investments to support the multiformat and omnichannel
model
- Openings of 305 convenience stores, 97
supermarkets, 5 cash & carry stores and 3 integrated
hypermarkets in H1
- Digital-channel development in all the
Group’s countries
- First contribution of Rue du Commerce
in France
- Creation of Cargo, a real estate
company dedicated to logistics controlled by Carrefour and
co-financed with third parties
- Accelerated pace of DIA store
conversions in France with 260 stores converted in H1. 412 stores
are now under Carrefour banners; the conversion of the 648 stores
will be completed as planned at end-2016
2016 objectives
- Investments1 of between €2.5bn and
€2.6bn
- Increased free cash flow1 and stable
year-end net debt vs. end-2015
- Continued strict financial discipline:
maintain BBB+ rating
1 Ex. Cargo
H1 2016 sales and results
Key H1 2016 figures
€m
H12016
Variationatconstantexchangerates
Sales inc. VAT 40,552 +2.0% Net sales 36,289
+2.2% Organic growth +2.9% Recurring
Operating Income before D&A (EBITDA) 1,448 +3.4%
Recurring
Operating Income (ROI) 706
+5.3% Adjusted net income, Group share
235
H1 2016 sales and Recurring Operating Income
(€m)
Sales inc. VAT Net sales
Organicgrowth
RecurringOperatingIncome
Variation at constant
exchange rates
Europe 29,714 26,607 -0.3% 467 +5.0% Emerging markets 10,838
9,682 +10.1% 266 -6.0% Global functions
-26
Total 40,552
36,289 +2.9% 706
+5.3%
H1 2016 sales inc. VAT: Solid first-half sales
Sales inc. VAT stood at €40,552m. In the first half, currencies
had an adverse effect (-6.1%), as did petrol prices (-1.0%).
In the first half, Carrefour recorded further sales growth, up
+2.9% on an organic basis. Emerging markets posted double-digit
growth while sales in Europe were stable, impacted by a sluggish
consumption environment.
In H1 2016, France posted sales inc. VAT of €19,196m,
slightly down on a like-for-like basis, but on the back of three
consecutive years of LFL growth in H1.
Sales in international markets stood at €21,356m in H1
2016, up +5.3% like-for-like. Sales in Other European countries
were up +2.2% on a like-for-like basis. Latin America continued its
strong momentum and posted further LFL sales growth of +14.5% in
the half. In Asia, LFL sales were down 5.4%.
First-half 2016 results: Further growth in ROI (+5.3% at
constant exchange rates) and adjusted net income (+0.6%)
Income statement
The Group’s Recurring Operating Income (ROI) stood at
€706m, up +5.3% at constant exchange rates.
In Europe, ROI was up +5.0% to €467m. Operating margin in France
was stable at 1.8% of sales. In Other European countries, ROI
posted double-digit growth and operating margin increased by 30
basis points, driven notably by strong performances in Spain and
Italy.
Latin America turned in another strong performance, with its ROI
up +12.3% at constant exchange rates to €273m. Brazil’s
profitability continued to improve, driven by strong LFL sales
growth.
In Asia, ROI was impacted by the transformation of our model in
China in a context marked by the rapid evolution of consumer
expectations. In Taiwan, sales growth continued and operating
margin improved.
In the first half of 2016, non-recurring income was a net
expense of €114m, principally attributable to reorganization costs
in various countries. This compares to an expense of €16m in H1
2015. Net income from continuing operations, Group share,
stood at €158m, including the following elements:
- A decrease in financial expenses
for €16m,
- An effective tax rate of 31.3%
vs. 34.3% in H1 2015.
Net income, Group share, stood at €129m. When adjusted mainly
for non-recurring income, the Group share of net income is €235m,
up +0.6%.
Cash flow and debt
In H1 2016, gross cash flow stood at €1,088m vs. €1,180m
in H1 2015. Working capital requirements improved by €179m,
from -€2,232m in H1 2015 to -€2,052m in H1 2016.
Total capex reached €1,057m, up vs. H1 2015. Excluding
Cargo, capex was €968m, reflecting a better distribution over the
year between the two halves. These investments included the planned
acceleration of the conversion of DIA stores to Carrefour
banners.
Free cash flow stood at -€2,259m, reflecting the seasonality of
our business. Excluding Cargo and exceptional items, free cash
flow stood at -€2,106m.
Dividend payments in cash amounted to €121m in H1 2016.
In 2015, the dividend had been paid in H2. The creation of
Cargo resulted in an inflow in the “Capital increase” line
and accounts for most of it.
In total, net financial debt at June 30, 2016 stood at
€7.4bn, reflecting once again the seasonality of our activity. Net
debt at end-2016 is expected to be globally stable vs. its level at
31 December 2015.
2016 roadmap
Carrefour is continuing its transformation, with strong
ambitions for its multiformat and omnichannel model, offering its
clients a shopping experience adapted to evolving consumption
habits.
Carrefour, the world’s most multiformat retailer, continues to
expand. In 2016, the Group will continue opening stores in its
different formats. In France, the conversion of the DIA store
network is proceeding according to plan.
Carrefour, to grow sustainably, continues to modernize its
stores in all countries and to enhance the attractiveness of its
sites by capitalizing on Carmila, a company dedicated to the
revitalization of Carrefour shopping malls in France, Spain and
Italy. Carrefour is making further headway in the revamp of its
supply-chain and IT rationalization in several countries.
The transformation of its model in China continues and is well
advanced.
Carrefour continues its digital evolution, supported by its
physical store network and the development of e-commerce services
in all Group countries.
Agenda
- Q3 2016 sales: October 19, 2016
APPENDIX
First-half 2016 sales inc. VAT
The Group posted sales of €40,552m. In the half, currencies had
an unfavorable impact of6.1%. Petrol prices had an impact of -1.0%
overall and -1.5% in France. Calendar impact was estimated at
+0.3%.
Totalsales inc.
VAT(€m)
Change
atcurrentexchangerates
inc.petrol
Change
atconstantexchangerates
expetrol
Organicgrowth ex petrolex
calendar
LFL ex petrolex calendar
France 19,196
-2.4% -0.9% -1.5%
-0.5% Hypermarkets 9,857 -3.5%
-1.7% -2.1% -1.9% Supermarkets
6,267 -2.4% +1.4% -1.1% +1.6%
International
21,356 -5.7% +6.0%
+6.2% +5.3%
Other Europeancountries
10,518 0.0%
+1.3% +1.5% +2.2% Spain
4,129 +0.3% +1.8% +1.6%
+2.0% Italy 2,666 -0.5% +0.2%
+2.0% +2.9% Belgium 2,132
+0.4% +0.3% -0.1% +0.2%
Latin America 7,234
-11.3% +17.8% +17.9%
+14.5% Brazil 5,619 -6.8%
+15.9% +15.9% +11.5%
Asia 3,605
-9.3% -5.4% -5.3%
-5.4% China 2,708 -12.8%
-9.0% -8.9% -8.8%
Group
total 40,552 -4.2%
+3.0% +2.9% +2.9%
Total sales under banners including petrol stood at €49.6bn in
the first half of 2016, up +1.7% at constant exchange rates.
Second-quarter 2016 sales inc. VAT
The Group posted sales of €20,499m. In the second quarter,
currencies had an unfavorable impact of 5.4%. Petrol prices had an
impact of -1.0% overall and -1.2% in France. Calendar impact was
estimated at -0.1%.
Total salesinc.
VAT(m€)
Change
atcurrentexchangerates
inc.petrol
Change
atconstantexchangerates
expetrol
Organic growthex petrolex
calendar
LFL ex petrolex
canlendar
France 9,861 -3.0%
-1.8% -2.1%
-0.9% Hypermarkets 4,970 -4.8% -3.2% -3.5%
-3.1% Supermarkets 3,275 -2.0% +1.9% -0.5% +2.5%
International 10,638
-5.0% +5.6%
+6.3% +5.3%
Other Europeancountries
5,322 -0.8%
+0.4% +0.7%
+1.2% Spain 2,105 0.0% +1.1% +0.9% +0.7% Italy 1,334 -2.3%
-1.6% -0.1% +1.4% Belgium 1,077 -0.5% -0.5% -0.7% -0.5%
Latin
America 3,783 -7.5%
+17.3% +18.7%
+15.5% Brazil 2,954 -1.0% +15.7% +17.3%
+13.1%
Asia 1,533 -12.2%
-5.6% -5.3%
-6.0% China 1,127 -15.5% -9.2% -8.7%
-9.3%
Group total 20,499
-4.1% +2.3%
+2.6% +2.7%
Total sales under banners including petrol stood at €25.0bn in
the second quarter of 2016, up +0.8% at constant exchange
rates.
First-half 2016 net sales and Recurring Operating Income by
region
Net sales Recurring
Operating Income
(€m)
H12015
H12016
Organicgrowth1
Variationat currentexchangerates
H12015
H12016
Variationat constantexchangerates
Variationatcurrentexchange rates
France
17,587 17,179 -1.5% -2.3%
321 312 -3.0% -3.0% Other Europe
9,356
9,428 +1.5% +0.8%
122 155 +26.0% +26.6%
Europe 26,944 26,607 -0.3% -1.2%
444 467 +5.0% +5.2% Latin America
7,257 6,453 +17.9% -11.1%
296
273 +12.3% -7.8% Asia
3,538 3,229 -5.3%
-8.7%
50 -7 n/a n/a
Emerging markets
10,796 9,682 +10.1% -10.3% 346
266 -6.0% -23.2% Global functions
-63
-26 TOTAL
37,739 36,289 +2.9%
-3.8% 726 706
+5.3% -2.8%
1Ex petrol, ex calendar.
First-half 2016 consolidated P&L
(€m) H1 2015
H1
2016 Net sales 37,739
36,289 Net sales, net of loyalty program costs
37,470 36,017 Other revenue
1,247 1,275
Total revenue 38,718
37,292 Cost of goods sold -30,024 -28,860
Gross margin 8,694 8,432 SG&A
-7,227 -7,006
Recurring operating income before
D&A (EBITDA) 1,488 1,448
Depreciation and amortization -740 -720
Recurring operating income (ROI) 726
706 Recurring operating income including income
from associates and joint ventures 761
686 Non-recurring income and expenses
-16 -114 Operating income
745
572 Financial expense -264 -248 Income before taxes
481 324 Income tax expense -165
-101
Net income from continuing operations 316
222 Net income from discontinued operations
-12 -28
Net income 304
194 Of which Net income – Group share
218 129 Of which Net income from continuing
operations, Group share 230 158 Of which Net income from
discontinued operations, Group share -12 -28
Of which Net income – Non-Controlling Interests (NCI)
85 65 Of which Net income from continuing operations,
NCI 85 65 Of which Net income from discontinued operations, NCI
- -
Adjusted net income, Group share
233 235
First-half 2016 consolidated balance sheet
(€m) June 30, 2015
June 30, 2016 ASSETS Intangible assets 9,607 9,719
Tangible assets 12,162 12,676 Financial investments 2,793 3,018
Deferred tax assets 816 880 Investment properties 307 357 Consumer
credit from financial-services companies – long term 2,579
2,261
Non-current assets 28,263
28,911 Inventories 6,503 6,553 Trade
receivables 2,379 2,159 Consumer credit from financial-services
companies – short term 3,396 3,789 Tax receivables 1,108 1,287
Other receivables 929 1,052 Current financial assets 410 218 Cash
and cash equivalents 1,800 1,688
Current
assets 16,524 16,745
Assets held for sale 78
43 TOTAL 44,865
45,700 LIABILITIES Shareholders equity, Group share
9,249 9,745 Minority interests in consolidated companies
1,095 1,549
Shareholders’ equity
10,344 11,294 Deferred tax liabilities
509 533 Provisions for contingencies 3,435 3,188 Borrowing – long
term 7,288 7,161 Bank loans refinancing – long term 1,569
2,091
Non-current liabilities
12,802 12,974 Borrowings – short term
1,575 2,112 Trade payables 12,096 12,198 Bank loans refinancing –
short term 3,630 3,179 Tax payables & others 1,138 1,188 Other
debts 3,229 2,732
Current liabilities
21,668
21,408 Liabilities related to assets held
for sale 51 23 TOTAL
44,865 45,700
First-half 2016 consolidated cash-flow statement
(€m) H1 2015
H1
2016 NET DEBT OPENING -4,954
-4,546 Gross cash flow 1,180 1,088 Change in working capital
-2,232 -2,052 Impact of discontinued activities 21
-11
Cash Flow from operations (ex. financial
services) -1,031 -975
Capital expenditures (ex Cargo) -804 -968 Capital expenditures
(Cargo) - -89 Change in net payables to fixed asset suppliers -261
-295 Asset disposals (business related) 53 69 Impact of
discontinued activities 0 0
Free Cash
Flow -2,044 -2,259 Free
Cash Flow from continuing operations, excluding Cargo and
exceptional items -1,930
-2,106 Financial investments -57 -136 Proceeds from
disposals of subsidiaries 1 7 Others 1 19 Impact of discontinued
activities 0 5
Cash Flow after
investments -2,098 -2,363
Capital increase 8 140 Dividends paid by parents company 0 -121
Dividends paid to non-controlling interests -70 -60 Acquisition/
disposal of investments without change of control 208 0 Treasury
shares 369 -4 Cost of net financial debt -185 -181 Others 68 -233
Impact of discontinued activities 0 0
NET
DEBT AT CLOSE -6,654 -7,367
Changes in shareholders’ equity
(€m)
Total shareholders’
equity
Shareholders’ equityGroup
share
Minorityinterests
At December 31, 2015 10,672
9,633 1,039 Total comprehensive income
for H1 2016 194 129 65 2015
dividend -181 -121 -60 Impact of
scope changes and others 609 104
505
At June 30, 2016 11,294
9,745 1,549
First-half 2016 net income, Group share, adjusted for
exceptional items
(€m) H1 2015
H1
2016 Net income from continuing operations, Group share
230 158 Restatement for non
recurring income and expenses (before tax) 16 114 Restatement for
exceptional items in net financial expenses 31 7
Tax impact 1
-28 -48
Restatement on share of income from
minorities and companies consolidatedby the equity method
-16 4
Adjusted net income, Group share
233 235
1 Tax impact of restated items (non-recurring income and
expenses and financial expenses) and non recurring tax items.
EXPANSION UNDER BANNERS – Second-quarter 2016
In Q2 2016, Carrefour opened or acquired 145,000 gross sq.
m.
Thousands of sq.
m.
Dec 31, 2015
March 31,2016
Openings/Storeenlargements
Acquisitions
Closures/Storereductions
Total Q22016 change
June 30,2016
France 5,668 5,676 23 6 -5 24 5,700 Europe (ex France) 6,039 5,959
37 -651 -615 5,344 Latin America 2,258 2,262 19 -4 16 2,278 Asia
2,734 2,708 28 -9 19 2,728 Others2 828 862 32
-7 25 887
Group
17,526 17,466 139
6
-6751
-530 16,936
NETWORK UNDER BANNERS – Second-quarter 2016
In Q2 2016, Carrefour opened or acquired 227 stores, mainly
convenience stores (183).
No. of stores
Dec 31, 2015
March 31,2016
Openings
Acquisitions
Closures/Disposals
Transfers
Total Q22016 change
June30,2016
Hypermarkets 1,481 1,480
12
-50
-38 1,442 France 242 242
242 Europe (ex France) 489 484 -49 -49 435 Latin America 304 304 3
3 307 Asia 369 369 4 -1 3 372
Others2
77 81 5
5 86
Supermarkets 3,462 3,455
29 3
-347 16
-299 3,156 France
1,003 1,016 1 3 16 20 1,036 Europe (ex France) 2,096 2,067 24 -346
-322 1,745 Latin America 168 168 0 168 Asia 29 31 2 -1 1 32 Others2
166 173 2
2 175
Convenience 7,181 7,042
183
-288 -16
-121 6,921 France
4,263 4,241 58 -36 -16 6 4,247 Europe (ex France) 2,464 2,336 109
-249 -140 2,196 Latin America 404 414 11 -3 8 422 Asia 8 8 5 5 13
Others2 42 43
0 43
Cash & carry 172 174
-6
-6 168 France 142 143 0
143 Europe (ex France) 18 19 -6 -6 13 Others2 12
12
0 12
Group
12,296 12,151
224 3
-6911
-464 11,687 France 5,650
5,642 59 3 -36 26 5,668 Europe (ex France) 5,067 4,906 133 -650
-517 4,389 Latin America 876 886 14 -3 11 897 Asia 406 408 11 -2 9
417 Others2 297 309 7
7
316
1 The termination of the franchise contract in Greece has led to
the removal of 538 stores and 568,000 sq.m. from the perimeter.2
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 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 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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Investor RelationsAlessandra Girolami and Mathilde
RodiéTel: +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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