Carrefour - 2017 Registration Document

1 PRESENTATION OF THE CARREFOUR GROUP The Carrefour group in 2017 CARREFOUR | 2017 REGISTRATION DOCUMENT 23 France The Carrefour group’s share of the French market, across all formats, stood at 21.4% (1) . In 2017, it was the country’s leading food retailer, with 5,718 stores under its banners at year-end, in four formats: 247 Carrefour hypermarkets, 1,060 Carrefour Market supermarkets, 4,267 convenience stores operating primarily under the Carrefour City, Carrefour Contact, Carrefour Express and Carrefour Bio banners, and 144 Promocash cash & carry outlets. The Group’s integrated network included a total of 1,038 stores: 214 hypermarkets, 456 supermarkets, 364 convenience stores and four cash & carry stores. Carrefour operates in mainland France and, through a number of long-standing partnerships, in the French overseas territories. A total of 147 stores are operated under Group banners in the French overseas territories: 14 hypermarkets, 29 supermarkets, 101 convenience stores, and three cash & carry stores. Carrefour in France opened or acquired 222 stores under Group banners in 2017, including two hypermarkets, 11 supermarkets, 207 convenience stores and two cash & carry stores, representing a total of 68,000 sq.m. of gross sales area. Net sales totalled 35.8 billion euros. Like-for-like sales excluding petrol and the calendar effect rose by a further 0.8% in France during the year, buoyed by sales of food products. Hypermarkets saw a 0.5% decline in like-for-like sales excluding petrol and the calendar effect, whereas supermarkets enjoyed a 0.9% increase and other formats (mainly convenience stores) gained 4.7%. Recurring operating income, which totalled 692 million euros, declined by 32.9%, for an operating margin that represented 1.9% of net sales. The decline was primarily attributable to strong competitive pressure. In France, operational investments (excluding Cargo) totalled 821 million euros, representing 2.3% of net sales. Other European countries In Europe (excluding France), Carrefour was operating 4,704 stores under Group banners at the end of 2017. These included 460 hypermarkets, 1,756 supermarkets, 2,446 convenience stores and 42 cash & carry stores. Carrefour operates in five integrated countries: Belgium, Spain, Italy, Poland and Romania. The integrated store base included 1,493 units, of which 415 hypermarkets, 757 supermarkets, 279 convenience stores and 42 cash & carry stores. Over the year, Carrefour opened or acquired 493 stores under its banners, gaining an additional 370,000 sq.m. of gross sales area. These included 37 hypermarkets, 86 supermarkets, 363 convenience stores and seven cash & carry outlets. Net sales in Europe totalled 21.1 billion euros in 2017, an increase of 5.1% at current exchange rates. For the third consecutive year, all of the European country operations reported like-for-like growth. Mixed performances were recorded during the year, with recurring operating income totalling 677 million euros, down 4.9% at current exchange rates, for an operating margin of 3.2%. Operating margin held firm in Northern Europe but declined in Southern Europe, which was also affected by a very competitive environment and increased selling expenses in Spain. Carrefour has had a presence in Spain since 1973 and is the country’s second-largest grocery retailer and the leading hypermarket operator. At the end of 2017, the Group’s multi-format network included 203 hypermarkets, 119 supermarkets, 654 convenience stores and 17 cash & carry stores. Net sales increased 7.3% to 8.6 billion euros. Carrefour’s business in the country is solid and based on a multi-format strategy complemented by a multi-channel strategy. The Group also continued to integrate the Eroski hypermarkets in 2017, with 27 stores rebranded during the year. Present in Italy since 1993, Carrefour ranks fifth in a fragmented grocery market and holds strong regional positions, particularly in the Aosta Valley, Piedmont, Lazio and Lombardy. It manages a network comprising 54 hypermarkets, 407 supermarkets, 591 convenience stores, and 16 cash & carry stores. Net sales increased 0.5% to 4.9 billion euros in 2017. As was the case in every country, Carrefour teams strengthened the Group’s multi-format personality by continuing to cluster stores. In Belgium , Carrefour ranks among the country’s top three retailers and is the leading multi-format group with 45 hypermarkets, 445 supermarkets and 296 convenience stores. Net sales stood at 4.0 billion euros in 2017, stable compared to 2016. Carrefour has been operating in Poland since 1997 with a network of stores under its banners that includes 89 hypermarkets, 151 supermarkets and 656 convenience stores. Net sales in the country totalled 1.8 billion euros, an increase of 5.5% at constant exchange rates. In 2017, Carrefour’s multi-format model was strengthened through the opening of 92 convenience stores. In Romania , where Carrefour has been operating since 2001, the Group manages 33 hypermarkets, 228 supermarkets, 53 convenience stores and nine cash & carry stores. Net sales in the country totalled 1.8 billion euros, an increase of 20.8% at constant exchange rates. One of the highlights of 2017 was a strengthening of the multi-format model through the transformation of 86 Billa supermarkets, which consolidated Carrefour’s share of the Romanian market and broadened its national footprint. The Group is also present in other European countries through partnerships, such as in Turkey with the Sabanci Group. Carrefour has a total of 638 stores under banner in Turkey, of which 36 hypermarkets, 406 supermarkets and 196 convenience stores. Operational investments in Europe (excluding France) totalled 636 million euros in 2017, representing 3.0% of net sales. Market share by value – Nielsen Scantrack panel of FMCG and self-service fresh produce consumers in France, over a 52-week period ending (1) December 31, 2017 (hypermarkets, supermarkets, discounters, convenience stores and drive).