Q3 2019 Sales October 22, 2019 - Carrefour Group

Page created by Ricky Hale
 
CONTINUE READING
Q3 2019 Sales October 22, 2019 - Carrefour Group
Q3 2019 Sales

   October 22, 2019
Q3 2019 Sales October 22, 2019 - Carrefour Group
Q3 2019 Highlights

ANOTHER QUARTER OF GROWTH                                      RAPID EXECUTION OF 2022 PLAN

 Group LFL sales up +2.3%                                       Carrefour continues the overhaul of its model to
                                                                support sustainable and profitable growth
 Return to growth in Spain (+1.5% LFL)
                                                                Multiple initiatives for customer satisfaction: Net
 Good commercial momentum in Latin America                      Promoter Score® (NPS®) rolled out across the Group,
 (+12.8% LFL), driven by the highest LFL growth at              versatility and greater availability of employees
 Carrefour Retail in Brazil in five years
                                                                Revamp of the price-promotion-loyalty equation to
 Sales in France slightly decreased (-0.9% LFL) reflecting a    favor Every Day Low Price (EDLP) and loyalty. Continuation
 high comparable base (Q3 2018: +1.6% LFL), reduced             of price investments
 promotional intensity and price investments, notably in
 hypermarkets                                                   Broadening of assortment of Carrefour-branded
                                                                products, notably in the organic range
 Food e-commerce sales growth above +30%
                                                                Acceleration in the transformation of store formats
                                                                (in particular the hypermarket), further expansion of
                                                                growth formats and development of digital

                                                                ® Net Promoter, Net Promoter System, Net Promoter Score, NPS and the NPS-related emoticons
     Q3 2019 SALES – 22/10/2019                                 are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc   2
Q3 2019 Sales October 22, 2019 - Carrefour Group
01

Carrefour 2022
Recent initiatives
Q3 2019 Sales October 22, 2019 - Carrefour Group
Leader in the food transition for all

CONCRETE ACTIONS TO STRENGTHEN LEADERSHIP

                                 DEVELOPING ORGANIC PRODUCTS
                                 • Organic products sales up +25% in Q3 2019
                                 • Carrefour consolidates its leadership position in France
                                 • Own assortment now above 1,000 SKUs, of which 750 Carrefour Bio-branded

                                 SUPPORTING AGRICULTURAL SECTOR
                                 • More than 440 contracts to support conversion to organic farming signed since
                                   2018, Group ahead of its target
                                 • Agreement to support milk producers by purchasing 30 million liters of mountain milk
                                   per year in France

                                 IMPROVING QUALITY
                                 • Reformulation of more than 600 Carrefour products since start of the year (1,200
                                   since plan launch), withdrawing numerous controversial substances
                                 • Roll-out of blockchain technology throughout Carrefour Quality lines: Camembert
                                   de Normandie is the 11th FQC product in France and 22nd in the world to benefit from this
                                   technology

    Q3 2019 SALES – 22/10/2019                                                                                                 4
Q3 2019 Sales October 22, 2019 - Carrefour Group
Construction of a sustainable and profitable growth model (1/2)

                                   PRIORITY GRANTED TO CUSTOMER SATISFACTION
                                   • NPS® generalization and incorporation into the variable remuneration scheme of
                                     Carrefour’s management
                                   • First tangible results in Spain, Argentina and Poland

                                   INITIATIVES TO IMPROVE PRICE AND NON-PRICE COMPETITIVENESS
Customer satisfaction              • France: Revamp of the commercial equation, to shift focus from promotions to EDLP
                                     (Unbeatable prices) and loyalty (Loyalty premium)
                                   • Italy: Extension of the “Prezzo Ribassato” campaign across the country (5,000 products)
                                   • Investments in private label offer and omnichannel services

                                   SHOWCASING FOOD EXPERTISE AND ADAPTING NON-FOOD
                                   • Reduction and simplification of assortments: -9.3% at end-September
                                   • Discontinuation of some unprofitable non-food categories, such as jewelry

Carrefour-branded products         • Expansion of Carrefour-branded products offer: Launch of 300 new products in Q3

      Q3 2019 SALES – 22/10/2019                                                                                               5
Q3 2019 Sales October 22, 2019 - Carrefour Group
Construction of a sustainable and profitable growth model (2/2)

                                   PROFOUND REVAMP OF HYPERMARKETS
                                   • Reduction of underproductive sales area: 110,000 sqm at end-September
                                   • Revamp of French hypermarkets: Roll-out of a new compact concept in the Dijon and
                                     Flins-sur-Seine stores

                                   ACCELERATION IN E-COMMERCE
                                   • Food e-commerce sales up more than +30% in Q3

Dijon, France                      • Inauguration of a new order preparation platform in South of Paris
                                   • Opening of the 1,000th Drive in France and 126th Pedestrian Drive
                                   • Acquisition of a 49% stake in a Brazilian fintech
                                   • Launch of express delivery in 9 cities in 4 countries with Glovo

                                   INVESTMENTS IN INNOVATIVE AND GROWTH FORMATS
                                   • Continued roll-out of dedicated Bio Experience organic areas
                                   • Opening of the first 2 Supeco in France
                                   • Opening of 134 new convenience stores
                                   • 3 new Atacadão openings in Brazil
                                   • Conversion of 9 stores into Maxi banner in Argentina
Supeco, France

      Q3 2019 SALES – 22/10/2019                                                                                         6
Q3 2019 Sales October 22, 2019 - Carrefour Group
Operational efficiency and financial discipline

CONTINUED ACTIONS TO IMPROVE OPERATIONAL PERFORMANCE AND TRANSFORM ORGANIZATIONS

                                 ORGANIZATIONAL TRANSFORMATION
                                 • Hypermarket transformation plan in France
                                      • Implementation of the Collective Contractual Severance has started with more than
                                        2,600 planned departures out of a total of 3,000
                                 • Process well underway in Italy involving a reduction of 590 jobs

                                 OPERATIONAL EFFICIENCY AND FINANCIAL DISCIPLINE
                                 • First benefits of purchasing partnerships in France and internationally
                                      • In France, Envergure purchasing gains (Système U) progressing in line with
                                        expectations
                                      • With Tesco, partnerships in the product categories with highest potential for
                                        Carrefour are gradually gaining momentum: 24 global agreements with international
                                        brand suppliers
                                 • Industrialized approach for purchasing of goods not for resale
                                      • Progress on new categories this quarter including self-checkout, computers,
                                        automobile fleet in France

                                 SOLID BALANCE SHEET, FURTHER STRENGHTENED

    Q3 2019 SALES – 22/10/2019                                                                                              7
Q3 2019 Sales October 22, 2019 - Carrefour Group
02

Financial analysis
Q3 2019 Sales October 22, 2019 - Carrefour Group
Q3 2019 Sales: Another quarter of growth, +2.3% LFL

                                                         +1.1%       -0.9%
                       +2.3%                  +0.5%                             -1.4%
                                                                                         +1.5%      -0.8%
                                                                                                            +0.7%            €(204)m

             -0.9%    +0.4% +12.8% +2.3%
             France   Europe   LatAm   Asia

                                                                                          €20.4               €20.2
  €20.1                                                                                                                                  €20.0
                                                                                           bn                  bn
   bn                                                                                                                                     bn

 Q3 2018                  LFL                 Calendar   Openings     Scope,    Petrol   Q3 2019    Forex    Q3 2019          IAS 29    Q3 2019
 restated              ex petrol                                     closures               at              at current                 at current
for IFRS 5                ex                                        and other            constant            FX rates                   FX rates
                       calendar                                      effects*            FX rates            pre-IAS                   post-IAS
                                                                                         pre-IAS                29                         29
                                                                                            29

      Q3 2019 SALES – 22/10/2019                                                                              * Including transfers              9
Q3 2019 Sales October 22, 2019 - Carrefour Group
France
Tough comparable base, price investments and reduced promotional intensity

                                                                                                                                Convenience &
Q3 - in €m                            Total Sales                  Hypermarkets                   Supermarkets
                                                                                                                                other formats

Sales inc. VAT                            9,768                          4,941                          3,220                          1,608

Total variation                          -3.2%                           -4.7%                          -2.2%                          -0.9%

LFL ex. petrol ex.
                                         -0.9%                           -3.6%                         +1.5%                          +2.2%
calendar*

*Q3 2019 calendar effect is estimated at +0.6% for France overall, +0.5% for hypermarkets and +0.6% for supermarkets. Petrol had a -1.8% impact overall in
  France.

     Weaker and competitive market; strong comparable base (+1.6% LFL in Q3 2018)
     Stable food sales while non-food sales were down -6.7% LFL
     Hypermarkets (-3.6% LFL) impacted by: Strong comparable base, reduction of promotional intensity, investments in EDLP
     (Unbeatable prices), development of Carrefour-branded products (with lower prices), reduction of under-productive non-food
     sales area and discontinuation of certain categories
     Supermarkets (+1.5% LFL): Good performance over strong comps (+2.6% LFL)
     Convenience & others (+2.2% LFL): Good momentum on already strong comps (+4.7% LFL). Expansion plan well
     underway
     Significant achievements in organic and food e-commerce, both strategic priorities

            Q3 2019 SALES – 22/10/2019                                                                                                                       10
Other European countries
Best LFL growth since the launch of the Carrefour 2022 plan

Q3 - in €m                  Total Sales                Spain                 Italy             Belgium                Poland             Romania

Sales inc. VAT                   5,832                 2,512                1,221                1,015                  523                  561

Total variation                 +0.5%                 +1.6%                -2.9%                 -2.9%               +5.9%                 +5.2%

LFL ex. petrol
                                +0.4%                 +1.5%                -2.3%                 -2.8%               +6.2%                 +2.8%
ex. calendar*

*Q3 2019 calendar effect is estimated at +0.5% for the Other European countries as a whole (+0.3% in Spain, +0.1% in Italy and +1.9% in Belgium).
Petrol had a -0.0% impact overall (-0.4% in Spain, +0.4% in Italy).

     Spain (+1.5% LFL): First LFL sales growth since Q2 2017, reflecting the strong focus on customer satisfaction

     Italy (-2.3% LFL): Resilient performance in a competitive and decreasing market. Transformation plan underway

     Belgium (-2.8% LFL): Difficult and declining market. Acceleration of food transition initiatives with good results. High comps
     (Q3 2018: +0.5% LFL)

     Poland (+6.2% LFL): Record growth, thanks to strong customer focus

     Romania (+2.8% LFL): Continued growth

            Q3 2019 SALES – 22/10/2019                                                                                                              11
Latin America
Continued strong momentum

Q3 - in €m                          Total Sales                    Brazil           Carrefour Retail              Atacadão               Argentina**

Sales inc. VAT                           4,026                    3,436                     1,095                    2,341                     590

Total variation                       +11.4%                    +13.0%                    +11.8%                   +13.6%                    +3.0%

LFL ex. petrol ex.
                                      +12.8%                     +3.8%                     +8.8%                    +1.8%                   +58.7%
calendar*

 *Q3 2019 calendar effect is estimated at +0.3% for Latin America overall (+0.3% in Brazil and -0.3% in Argentina). Petrol had a -0.8% impact overall.
** pre-IAS 29

    Brazil (+3.8% LFL): Slowdown of food-at-home inflation by c. -3pp in Q3 vs Q2
      • Highest quarterly LFL growth in the last 5 years at Carrefour Retail (+8.8% LFL) thanks to successful repositioning of
        hypermarkets, strong performance of convenience, e-commerce and non-food
      • Atacadão sales up at +9.0% at constant-FX, with +6.9% contribution from openings (12 new stores YTD). LFL
        remained robust (+1.8% LFL) despite inflation slowdown, esp. in agricultural commodities
      • Financial services: Record increase in billings (+30.6% in Q3)

    Argentina (+58.7% LFL):
      • Continued growth in traffic and volumes
      • Ability to cope with the crisis environment, strengthened leadership position

             Q3 2019 SALES – 22/10/2019                                                                                                                  12
Asia
Growth in Taiwan

Q3 - in €m                                                           Total Sales     Taiwan

Sales inc. VAT                                                            574         574

Total variation                                                         +5.3%        +5.3%

LFL ex. petrol ex. calendar*                                            +2.3%        +2.3%

*Q3 2019 calendar effect is estimated at -0.6% in Taiwan. No petrol sales in Asia.

    Solid performance of Taiwan (+2.3% LFL), with successful campaigns during two major events, Da Paï Paï and Ghost
    Festival

    Disposal of 80% of Carrefour China completed on September 26, 2019

            Q3 2019 SALES – 22/10/2019                                                                                 13
Ambitions confirmed

 Operational targets                                                           FINANCIAL OUTLOOK

                                                                                  €2.6bn cost
  • Reduction of 350,000 sqm hypermarket sales area worldwide by 2022
                                                                                 reduction plan
                                                                                on an annual basis by 2020

  • -15% reduction in assortments by 2020

                                                                                 €4.2bn of food
  • Carrefour-branded products accounting for one-third of sales in 2022        e-commerce sales
                                                                                        in 2022

  • 2,700 convenience stores openings by 2022
                                                                                 €4.8bn sales in
                                                                                organic products
                                                                                         in 2022

                                                                                 Disposal of non-
                                                                               strategic real estate
                                                                                assets for €500m
                                                                               already achieved in
                                                                                       2019

    Q3 2019 SALES – 22/10/2019                                                                               14
Appendix

 October 22, 2019
Q3 2019 gross sales

                                                    Change at current   Change at constant        LFL       Organic growth
                                      Gross sales
                                                     exch. rates inc.     exch. rates inc.    ex. petrol      ex. petrol
                                        (in €m)
                                                         petrol               petrol         ex. calendar    ex. calendar
France                                   9,768            -3.2%               -3.2%             -0.9%           -2.4%
Hypermarkets                             4,941            -4.7%               -4.7%             -3.6%           -4.2%
Supermarkets                             3,220            -2.2%               -2.2%             +1.5%           -1.9%
Others, inc. convenience                 1,608            -0.9%               -0.9%             +2.2%           +2.1%
Other European countries                 5,832            +0.5%               +0.7%             +0.4%           +0.0%
Spain                                    2,512            +1.6%               +1.6%             +1.5%           +1.2%
Italy                                    1,221            -2.9%               -2.9%             -2.3%           -3.4%
Belgium                                  1,015            -2.9%               -2.9%             -2.8%           -4.8%
Poland                                    523             +5.9%               +6.2%             +6.2%           +6.0%
Romania                                   561             +5.2%               +7.1%             +2.8%           +7.4%
Latin America (pre-IAS 29)               4,026           +11.4%               +16.0%            +12.8%          +16.5%
Brazil                                   3,436           +13.0%               +8.4%             +3.8%           +8.6%
Argentina (pre-IAS 29)                    590             +3.0%               +56.4%            +58.7%          +56.6%
Asia                                      574             +5.3%               +2.5%             +2.3%           +3.1%
Taiwan                                    574             +5.3%               +2.5%             +2.3%           +3.1%
Group total (pre-IAS 29)                20,199            +0.7%               +1.5%             +2.3%           +2.2%
IAS 29 impact                            -204
Group total (post-IAS 29)               19,996

         Q3 2019 SALES – 22/10/2019                                                                                          16
Nine-month 2019 gross sales

                                                    Change at current   Change at constant        LFL       Organic growth
                                      Gross sales
                                                     exch. rates inc.     exch. rates inc.    ex. petrol      ex. petrol
                                        (in €m)
                                                         petrol               petrol         ex. calendar    ex. calendar
France                                  28,518            -2.7%               -2.7%             +0.2%           -1.0%
Hypermarkets                            14,549            -3.2%               -3.2%             -1.6%           -2.1%
Supermarkets                             9,482            -2.1%               -2.1%             +1.9%           -0.8%
Others, inc. convenience                 4,487            -2.3%               -2.3%             +2.5%           +2.4%
Other European countries                16,912            -0.7%               -0.4%             -0.4%           -0.7%
Spain                                    6,991            +0.1%               +0.1%             -0.4%           -0.3%
Italy                                    3,728            -4.3%               -4.3%             -2.8%           -4.4%
Belgium                                  3,030            -3.0%               -3.0%             -1.6%           -3.3%
Poland                                   1,551            +3.5%               +4.7%             +5.0%           +4.7%
Romania                                  1,612            +5.6%               +7.6%             +3.3%           +7.6%
Latin America (pre-IAS 29)              11,972            +4.5%               +17.1%            +14.5%          +18.1%
Brazil                                  10,213            +8.0%               +10.0%            +6.0%           +10.8%
Argentina (pre-IAS 29)                   1,759           -11.9%               +50.8%            +53.1%          +50.7%
Asia                                     1,590            +5.1%               +2.7%             +1.3%           +2.6%
Taiwan                                   1,590            +5.1%               +2.7%             +1.3%           +2.6%
Group total (pre-IAS 29)                58,992            -0.5%               +1.9%             +3.1%           +3.2%
IAS 29 impact                            -148
Group total (post-IAS 29)               58,844

         Q3 2019 SALES – 22/10/2019                                                                                          17
Q3 technical effects

                                         Calendar   Petrol   Forex

France                                    +0.6%     -1.8%      -

Hypermarkets                              +0.5%     -1.0%      -

Supermarkets                              +0.6%     -1.1%      -

Others, inc. convenience                  +0.7%     -5.9%      -

Other European countries                  +0.5%     -0.0%    -0.2%

Spain                                     +0.3%     -0.4%      -

Italy                                     +0.1%     +0.4%      -

Belgium                                   +1.9%       -        -

Poland                                    +0.3%     -0.1%    -0.4%

Romania                                    -0.2%    -0.0%    -1.9%

Latin America                             +0.3%     -0.8%    -4.5%

Brazil                                    +0.3%     -0.5%    +4.6%

Argentina                                  -0.3%      -      -53.3%

Taiwan                                     -0.6%      -      +2.7%

Group total                               +0.5%     -1.4%    -0.8%

            Q3 2019 SALES – 22/10/2019                                18
Stores under banners at end Q3 2019

(#)                                      Hypermarkets   Supermarkets   Convenience   Cash & Carry                        Total

France                                       248           1 068          3 927          145                             5 388
Other European countries                     452           1 775          2 599          55                              4 881
Spain                                        205            109           791            23                              1 128
Italy                                        51             410           614            14                              1 089
Belgium                                      40             442           301             0                               783
Poland                                       89             152           640             0                               881
Romania                                      35             262            46            18                               361
Others                                       32             400           207             0                               639
Latin America                                188            149           522            185                             1 044
Argentina                                    88             97            399             7                               591
Brazil                                       100            52            123            178                              453
Asia                                         171            81             3              0                               255
Taiwan                                       64             68             0              0                               132
Others                                       107            13             3              0                               123
Others(1)                                    136            293            56            14                               499

Total                                       1,195          3,366          7,107          399                            12,067

                                                                                               (1) Africa, Middle-East and Dominican Republic

            Q3 2019 SALES – 22/10/2019                                                                                                  19
This presentation 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

Disclaimer
             particular the Annual Report (Document de Référence).
             These documents are also available in the 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.
You can also read