Carrefour - 2017 Registration Document

PRESENTATION OF THE CARREFOUR GROUP Strategy of the Carrefour group 2017 REGISTRATION DOCUMENT | CARREFOUR 1. 8 Achieve productivity and competitiveness gains 1.1.3.2 Carrefour needs to create headroom to improve its efficiency and competitiveness in the interest of serving its customers. This implies a significant reduction in its cost base and a more effective investment policy focused on its growth drivers. A powerful cost reduction plan of 2 billion euros on a full-year basis by 2020 SYSTEMATIC COST DISCIPLINE TOTAL SAVINGS (as of 2020, on a full-year basis) Indirect purchasing Contract pooling (Group) Systematic renegotiations Increased controls on spending Supply chain Operational efficiency Overhead costs Organisation simplification Direct purchasing Purchasing pooling Assortment rationalisation (~-10%) INCREASED COST DISCIPLINE WILL ENABLE CARREFOUR TO INVEST IN ITS PRICE COMPETITIVENESS €2.0bn Continuous productivity improvement The cost reduction plan focuses on four main areas: the optimisation of direct purchasing : revamp of the product ● offering by reducing assortment size by more than 10% and pooling of purchasing to take advantage of the Group’s presence in more than 30 countries; the rationalisation of indirect purchasing : strict management of ● expenditure and specifications and policy of systematic renegotiation of historical contracts by dedicated teams across the Group; the reduction of logistics costs : greater focus on the operational ● efficiency of the supply chain; the reduction of structural costs: simplification of headquarters ● organisations. The first three areas will represent the vast majority of the 2 billion-euro annual savings target for 2020. Plan to reduce the number of ex-Dia stores by 273 Certain ex-Dia stores are experiencing great difficulties because they are not adapted to their catchment area since their conversion to Carrefour banners, reason why the Group plans to divest 273 ex-Dia stores. A search for buyers was launched store by store and, in the absence of buyers, these stores will be closed. The company is committed to engaging in constructive, quality social dialogue and will systematically give preference to alternative job offers within the Group for the concerned employees. More efficient, targeted investments The “Carrefour 2022” plan provides for annual investments of 2 billion euros starting in 2018 . These investments are rightsized to maintain the Group’s assets and implement its transformation ambitions. Investment projects will from now on be chosen with greater selectivity and implemented with efficient processes. Investments dedicated to the Group’s growth drivers will increase significantly. This means a significant increase in IT, digital and supply-chain investments aimed at creating an omni-channel food offering through the automation of order preparation platforms. Finally, in terms of real estate strategy, Carrefour will dispose of 500 million euros of non-strategic assets over the next three years. Efficiency in support of price competitiveness The strict cost control and resource allocation discipline, which will be maintained over the long-term, aims to provide leeway notably to invest in commercial competitiveness, a priority for the Group.