Carrefour - 2017 Registration Document

1 PRESENTATION OF THE CARREFOUR GROUP Strategy of the Carrefour group CARREFOUR | 2017 REGISTRATION DOCUMENT 11 Overhaul the offer to promote food quality 1.1.3.4 Carrefour’s ambition is to offer all consumers – every day and everywhere – quality, healthy food at a reasonable price. To become the leader in food quality for all, Carrefour will act proactively in respect of three main objectives. Become the first choice for fresh food Carrefour is setting an ambitious target for traditional fresh food in every country with, in France, one million additional consumers by 2022. To achieve this target, Carrefour is implementing a support plan for the upstream part of the agri-business sector, for the benefit of the consumer. The plan provides for: Carrefour Quality Lines to represent 20% of sourcing by 2020 in ● France; the launch of an agroecology plan in 2018; ● promotion of local products, by ensuring their predominance in ● certain areas; doubling the number of employees trained in fresh food in ● France in 2018; generalisation of blockchain technology to improve product ● traceability starting in 2018. Take the lead in broadening access to organic products Carrefour is positioning itself as the leader in the democratisation of organic products and aims to increase its sales in this segment to 5 billion euros by 2022 from 1.3 billion euros currently. In order to provide financial and sustainable support for the conversion by farmers to organic farming, Carrefour has launched a partnership with WWF ® with the creation of specific WWF ® labelling. The Carrefour Foundation will also finance organic farming projects. GROUP ORGANIC PRODUCT SALES 2017 2022 ~€1.3bn €5bn x4 To increase the accessibility of organic products, Carrefour will expand sales areas dedicated to organic products in its stores and increase its range of organic products. The Group is also strengthening its online organic offering by accelerating the development of its specialised Greenweez banner. Carrefour will use its pricing, promotion and loyalty policies to encourage the democratisation of organic products. To better inform its customers, the Group is launching a campaign to raise awareness in its stores and on its websites. Use Carrefour products to spearhead the promotion of food quality for all Carrefour-branded products will play a key role in achieving the Group’s ambition in terms of food quality, in particular through a wider range and greater price attractiveness. The Group intends for its own-brand products to generate one third of sales by 2022. This is one of the priorities of the company’s strategy, which justifies the redoubling of initiatives to create original and very qualitative Carrefour-branded products, covering both ingredients and recipes. Carrefour is thus making a profound change by launching a new quality policy that notably involves the standardisation of controls and the rapid elimination of controversial substances. The Group will also reduce private label packaging by 5% by 2020. Co-construction with customers is a strong development pillar supporting the company's private labels, as is strengthened traceability of the products they include. SHARE OF CARREFOUR PRODUCTS (as a percentage of Group sales) 25% 33% 2017 2022 Financial policy 1.1.3.5 With “Carrefour 2022”, the Group is launching a profound transformation plan aiming at profitable and sustainable growth. Carrefour’s growth will be fuelled by its leadership in the food sector, as well as the development of a leading and price-competitive omni-channel offering. As of 2018, the Group is launching a powerful efficiency plan aimed at generating 2 billion euros in full-year cost savings by 2020. In addition, in order to improve its free cash flow generation, Carrefour will actively manage its working capital requirement, notably through the optimisation of inventory levels, as well as more efficient investments. Investments will be stepped up for the Group’s strategic priorities and should represent 2 billion euros per year as of 2018. Finally, Carrefour’s objective is to maintain a solid financial structure. The Group wishes to maintain its dividend policy, with a payout ratio of between 45% and 50% of adjusted net income, Group share.