TODAY'S THE NEW EXPERIENCES OF THE AUCHAN GROUP - Ceetrus

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TODAY’S
#2015 ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT

ENTREPRENEUR
THE NEW
EXPERIENCES
OF THE AUCHAN GROUP
TODAY'S THE NEW EXPERIENCES OF THE AUCHAN GROUP - Ceetrus
CONTENTS

  2        2015 KEY FIGURES             4   2015 HIGHLIGHTS

                                             6
                                             MESSAGE
                                             FROM
                                             VIANNEY
                                             MULLIEZ

  10          A RENEWED GOVERNANCE

                                             78
  18              LEARN ABOUT
                  THE NEW EXPERIENCES
                  OF THE AUCHAN GROUP
                                             FINANCIAL AND EXTRA-
                                             FINANCIAL STATEMENTS
TODAY'S THE NEW EXPERIENCES OF THE AUCHAN GROUP - Ceetrus
PROFILE

   THE SAGA
OF THE AUCHAN
    GROUP
  IS A LONG AND
 BEAUTIFUL STORY
 At the very outset, there is the customer and our desire
 to provide universal access to the best products at fair
 prices: our history of being responsible discounters.
 The economic environment, the new competition, the
 emergence of the digital technologies have shaken up
 and posed challenges for the business world. Each of
 the Auchan Retail, Immochan and Oney Banque
 Accord businesses have risen to those challenges and
 have responded boldly and innovatively: our history
 of being audacious retailers. Today’s consumers are
 changing and the customer experience is becoming
 increasingly important; markets are moving and the
 world is opening up. Our teams innovate, reinvent
 themselves, look to the future: the entrepreneurs of
         today and tomorrow are in the making.

                                    AUCHAN HOLDING I 2015 ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT I 1
TODAY'S THE NEW EXPERIENCES OF THE AUCHAN GROUP - Ceetrus
2015 KEY FIGURES
                              TH                                          PRESENT
                               WORLDWIDE                                  IN
                               FOOD
                               RETAILER                                   16
                                                                          COUNTRIES

                     (Source: Deloitte – 2016)

                Conquering
                and interconnected
                businesses

                3,836                                       The best generator
AUCHAN RETAIL

                hypermarkets and
                convenience stores under                    of traffic to our retail
                the banners in 16 countries,                and living spaces

                                                            379
                170 drive outlets, e-commerce,
                m-commerce, click & collect
                                                 IMMOCHAN

                46.6
                million customers pass
                                                            shopping centres
                                                            managed in 12 countries,
                                                            i.e. 2.5 million sqm

                                                            €633
                through the checkouts every
                week

                €52.7                                       million in revenue

                billion in consolidated
                revenue excluding taxes                     €6.9
                                                            billion in asset value
TODAY'S THE NEW EXPERIENCES OF THE AUCHAN GROUP - Ceetrus
337,800
                                    3 COMPLEMENTARY BUSINESSES:
                                   Auchan Retail (hypermarkets,
                                   convenience stores and e-commerce),
EMPLOYEES                          Immochan (commercial property)
OF WHICH                           and Oney Banque Accord (banking).
166,700
ARE EMPLOYEE
SHAREHOLDERS
                                                                   BANK

                                                   HYPER
                                                                                        REAL ESTATE

                                            DRIVE         SUPER                               CONVENIENCE
                                                                                                 STORE

               Simplify
               and enhance
                              250
BANQUE
ACCORD

               the customer
               experience     partners
ONEY

               8.1
               million
                              €387
                              million in
               customers in   net banking
               11 countries   income

                                              AUCHAN HOLDING I 2015 ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT I 3
TODAY'S THE NEW EXPERIENCES OF THE AUCHAN GROUP - Ceetrus
GROUPE AUCHAN
                                 REORGANISES
                                 INTO
                                 3 AUTONOMOUS
                                 BUSINESSES
                                 In 2015, Groupe Auchan reorganised to give
                                 rise to 3 more autonomous businesses:
                                 Auchan Retail, bringing together all food
                                 retailing formats in each country with
                                 a view to providing strategic coherence
                                 at the national level, Immochan and Oney
                                 Banque Accord. With a threefold objective:
                                 simplify its structures to increase its
                                 flexibility and to improve its customer
                                 focus; sustainably improve the performance
                                 of each business in a rapidly changing
                                 world; enhance their appeal to attract new
                                 talents and modernise more quickly.

     2015                        Through this ambitious structural and
                                 managerial reorganisation project, Auchan
                                 Retail, Immochan and Oney Banque Accord

HIGHLIGHTS                       have embarked on the process of
                                 developing a sustainable business model.

       PRODUCTS
                                                    its success was immediate and
       ATAK: 10 SUCCESSFUL                          spectacular. In 2015, ATAK served
       YEARS                                        2.4 million customers each week
       In 2005, Auchan Retail launched ATAK,        in its 176 stores, and expects to step up
       its discount convenience store concept,      its growth to reach more than
       in the Moscow area. Through its simple       400 stores by 2020, expand into
       and differentiated positioning (constantly   4 new cities and, most importantly
       low prices, a close relationship with its    of all, become the No. 1 retailer
       customers, a pleasant purchasing             in the heart of its customers!
       experience and a high-quality offering),
TODAY'S THE NEW EXPERIENCES OF THE AUCHAN GROUP - Ceetrus
INNOVATION                                                                                  HUMAN RELATIONS

IMMOCHAN IN THE SPOTLIGHTS                                                                 ETHICAL ISSUES
AT THE MAPIC AWARDS                                                                        After publishing an ethics charter
For the 1st time, Immochan was rewarded with a MAPIC Award! The Alegro                     laying down the principal rules
Setúbal shopping centre stood out from the 110 candidates from 27 different                of conduct, compliance and
countries put forward by international property experts, to be awarded                     vigilance that are a necessary part
the 2015 prize for the Best Shopping Centre Extension/Renovation. Barely                   of trading responsibly, the Auchan
a year after opening, Alegro Setúbal, which was already a great success                    Retail, Immochan and Oney
with 8 million visitors, has snapped up an international award.                            Banque Accord businesses set up
                                                                                           a cross-divisional ethics committee
                                                                                           in their main countries of
                                                                                           operation. The committee’s first
                                                                                           discussions and question and
MULTICHANNEL
                                                                                           answer sessions were held in the
4 AWARDS FOR ONEY                                                                          2nd half of 2015.
BANQUE ACCORD
In 2015, Oney Banque Accord
won a number of trophies, proof
                                                                                            SOCIAL RESPONSIBILITY
of its expertise: AccordAvenir,
Oney Banque Accord France’s                                                                €230 MILLION
savings product, received the                                                              FOR THE PLANET
                                              RETAIL
Argus d’or in the “Multi-asset                                                             Auchan Retail has set itself the
Funds” category and its “Garantie             AUCHAN RETAIL                                worldwide objective of reducing
Tranquillité” warranty extension,             STRENGTHENS ITS                              its electricity consumption by 20%
sold at ElectroDépôt stores,                  PARTNERSHIPS WITH                            between now and the end of
received the Argus d’or for the               SYSTÈME U AND                                2018. After testing and validating
best affinity insurance product.              METRO                                        its method in Spain, the business
Oney Banque Accord France                     In 2014, Auchan Retail innovated             began an ambitious energy
received the Grand Prix des                   in the mass retail landscape by              efficiency programme by
Trophées Innov’Acteurs for its open           entering into 2 major purchasing             analysing the situation in detail
innovation initiative and Oney                partnerships: with Système U                 and then establishing a road map.
Banque Accord Portugal was                    in France, and with Metro                    A worldwide investment budget
named the 4th best Portuguese                 internationally. In 2015, on the             of €230 million has been
business in terms of creating a               back of this success, Auchan                 allocated to the implementation
happy working environment.                    Retail invested further in these             of this ground-breaking strategy.
                                              2 partnerships. In February, it
                                              announced its decision to form
                                              an alliance with Système U based
                                              on a common purchasing strategy
                                              and on identifying synergies. In
                                              September, it entered into national
               MORE THAN                      partnerships with Metro in France,

               400
               HYPERMARKETS
                                              Romania and Poland. In both
                                              cases, the parties expressed their
                                              desire to join forces to improve
                                                                                                     DISCOVER ALL
               MANAGED BY SUN ART             purchasing in order to sell at                         THE 2015 HIGHLIGHTS ON
               RETAIL GROUP IN CHINA          lower prices…                                          WWW.GROUPE-AUCHAN.COM

  Telex / Auchan.fr, 5th most popular e-commerce website among French Internet users during the Christmas holidays.

                                                                         AUCHAN HOLDING I 2015 ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT I 5
TODAY'S THE NEW EXPERIENCES OF THE AUCHAN GROUP - Ceetrus
MESSAGE FROM VIANNEY MULLIEZ

                                OUR BUSINESSES
                                ARE COMMITTED
                                TO SUSTAINABLE
                                 PERFORMANCE
                ver since it was founded             the new innovative and distinctive busi-     end of 2015, Groupe Auchan there-
                54 years ago, the Auchan             ness models. This involved more than         fore created 3 stand-alone busi-
                group has grown each                 1,000 managers from across the com-          nesses within Auchan Holding: Auchan
year and is proud to now employ more                 pany, from all businesses and from all       Retail, focused on local customers,
than 330,000 people, who work                        countries. Together, we clearly identi-      through its 3 formats, hypermarkets,
each day to improve the purchasing                   fied both our strengths and those areas      convenience stores and e-commerce;
power and quality of life of as many                 that required improvement.                   Immochan, a leading commercial
customers as possible.                                                                            property business; and Oney Banque
At the beginning of 2015, we                         This analysis confirmed that we needed       Accord, the financial partner of more
launched a large-scale, dynamic and                  to make some swift changes by plac-          than 8.1 million private customers and
collaborative listening initiative in con-           ing customers and employees at the           250 retail partners.
j u n c t i o n w i t h G r o u p e A u c h a n ’s   heart of our decisions, with a view to
Executive Committee. Its purpose was                 growing sustainably and profitably.          Each of these 3 businesses will now focus
to enable us to remain attuned to new                                                             on its specific area of expertise, its own
consumption habits and the fast-moving               We decided to extensively restructure        territory, and develop and implement, for
digital and technological revolutions                the business by focusing on simplifica-      its customers and employees, a powerful
that have increased competition from                 tion, flexibility, openness, collaborative   forward-looking vision that capitalises on
businesses who are more adapted to                   working and professionalism. At the          its strengths.
TODAY'S THE NEW EXPERIENCES OF THE AUCHAN GROUP - Ceetrus
VIANNEY MULLIEZ
CHAIRMAN OF THE SUPERVISORY BOARD
              OF AUCHAN HOLDING

     Our results
    for the year
  bear witness
   to the effort
    we put into                     While this ambitious restructuring pro-
                                    ject was quickly taking shape, we
                                                                                 making progress in all countries and
                                                                                 have developed ambitious
  carrying out                      were simultaneously working on the           programmes on good nutrition that is
  an extensive                      relevance of our product offering,
                                    increasing our purchasing volumes
                                                                                 affordable, healthy and environmen-
                                                                                 tally friendly, on responsible sourcing
reorganisation                      through new partnerships, the develop-       (textiles, fish, farmed products,

     while fully                    ment of our Audace non-food brands,
                                    the opening of 120 new sales outlets
                                                                                 palm oil, wood, etc.) and on reducing
                                                                                 ecological footprints (energy effi-
   meeting our                      and improving our profitability.             ciency, the circular economy, etc.).
                                                                                 For their part, our 6 business founda-
      economic                      Our results for the year bear witness        tions have continued to extend their
    objectives.”                    to the effort we put into carrying out
                                    the restructuring while fully meeting
                                                                                 reach, particularly the Auchan Youth
                                                                                 Foundation, which this year celebrates
                                    our economic objectives. We have             its 20th anniversary.
                                    also increased our focus on sustaina-
                                    ble development initiatives, in line         All those actions reinforce the pride of our
                                    with the commitment we made to the           teams who contribute to responsible those
                                    Global Compact principles. We are            and sustainable economic growth.

                                                                    AUCHAN HOLDING I 2015 ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT I 7
TODAY'S THE NEW EXPERIENCES OF THE AUCHAN GROUP - Ceetrus
AUCHAN HOLDING’S MANAGEMENT BOARD

                             BENOÎT LHEUREUX
                             GENERAL MANAGER OF IMMOCHAN

                                Immochan met its targets and
                             ended 2015 with a solid balance sheet,
                             allowing us to look to the future with
                             peace of mind and giving us the energy
                             to speed up our business transformation.”

   JEAN-PIERRE
   VIBOUD
   GENERAL MANAGER
   OF ONEY BANQUE
   ACCORD

      2015 was
   an excellent
   year for
   Oney, with
   significant
   increases in
   the number of
   customers and
   partners, and
   notable growth
   in customer
   loans.”
WILHELM HUBNER
CHAIRMAN OF AUCHAN HOLDING’S MANAGEMENT BOARD
AND GENERAL MANAGER OF AUCHAN RETAIL

   With overall 2015 results in line with
our forecasts and solid fundamentals,
                                                                                    A NEW
our businesses are going to move up                                                 ORGANIZATION
a gear in 2016.”                                                                    Vianney Mulliez,
                                                                                    chairman of
                                                                                    the Supervisory Board
                                                XAVIER DE                           of Auchan Holding
                                                MÉZERAC
                                                GENERAL SECRETARY
                                                OF AUCHAN HOLDING
                                                                                    3 autonomous
                                                   Our                              businesses,
                                                                                    each with its own
                                                commercial
                                                                                    governance
                                                activity has                        structure:
                                                been solid and                      Auchan Retail:
                                                our revenue                         food retailer, organised
                                                has grown,                          by country around
                                                despite our                         its 3 formats:
                                                firms being                         hypermarkets,
                                                significantly                       convenience stores,
                                                                                    e-commerce.
                                                reorganized.”                       Non-executive chairman:
                                                                                    Vianney Mulliez,
                                                                                    General Manager:
                                                                                    Wilhelm Hubner.
                                                                                    Immochan:
                                                                                    retail real estate.
                                                                                    Non-executive chairman:
                                                                                    Vianney Mulliez,
                                                                                    General Manager:
                                                                                    Benoît Lheureux.
                                                                                    Oney Banque Accord:
                                                                                    Financial and
                                                                                    non-financial services.
                                                                                    Non-executive chairman:
                                                                                    Xavier de Mézerac,
                                                                                    General Manager:
                                                                                    Jean-Pierre Viboud.

                                                       AUCHAN HOLDING I 2015 ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT I 9
JOINT INTERVIEW

    THEY BUILD
  TOMORROW’S
        CROSS-
      CHANNEL
         RETAIL
  WILHELM HUBNER, GENERAL MANAGER OF AUCHAN RETAIL,
     BENOÎT LHEUREUX, GENERAL MANAGER OF IMMOCHAN
             AND JEAN-PIERRE VIBOUD, GENERAL MANAGER
         OF ONEY BANQUE ACCORD, DISCLOSE US HOW.

       What was the reason                 how to react swiftly and relevantly to
    behind re-structuring each             meet the needs of our local customers.
        of the businesses?                 This meant that we needed to work as
                                           closely as possible with each catchment
Wilhelm Hubner: Our businesses have        area. That is why we decided to create       Benoît Lheureux: By making each of us
developed very quickly over the last       Auchan Retail and bring together all our     more independent, the new structure
20 years, with fantastic successes such    distribution channels in one business,       gives Immochan the chance to progress,
as the acquisition and restructuring of    structured by country. We mutually           to develop a new business vision and
the Real hypermarkets in Eastern           benefit from considerable brand equity,      new ambitions. Our professionalism,
Europe, successful store openings in       in-depth know-how in cross-channel           our unique features, our potential and
Russia and China and the formation of      retailing, a more efficient business plan,   our know-how are well known. We
purchasing partnerships, both at a         and a food and non-food offering, to         have all the tools needed to succeed
national and international level. At the   improve the lives of the customers who       and can capitalise on our historic
same time, our size made us less           come to do their shopping in our stores      advantage of being Auchan’s and its
responsive and we had to rediscover        each year.                                   businesses’ preferred partner.
AUCHAN
                                                                                   Auchan Retail is now organized by
                                                                                   country to better offer each local
                                                                                   customers the best experience possible

                                                                RETAIL
                                                                                   whatever retail channel they choose:
                                                                                   hypermarket, convenience store,
                                                                                   e-commerce.

                                                                                   Auchan Retail has 332,900 employees(1)
                                                                                   and a consolidated revenue excl. taxes
                                                                                   of €52.7 billion(2).

                                                                                                           What are the ambitions
                                                                                                         of each of the 3 businesses?

                                                                                                    Wilhelm Hubner: Auchan Retail is now
                                                                                                    an alliance of triumphant, interconnected,
                                                                                                    multichannel and multi-format businesses,
                                                                                                    with a presence in 14 countries.
                                                                                                    Triumphant, because the customer is at the
                                                                                                    heart of everything we do and our busi-
                                                                                                    ness strategy. In each of the countries in
                                                                                                    which we operate, we wish to become,
                                                                                                    or remain, one of the leading retailers.
                                                                                                    Our offering, our formats, the strength of
       Our goal is                                                                                  our cross-channel retailing and, of course,
                                                                                                    our relationships with our customers,
      to serve our                                                                                  which must be faultless and personalised,
       customers                                                                                    through the appropriate use of data, are
                                                                                                    the foundations on which we are building
      impeccably                                                                                    our pre-eminence.

     and become                                                                                     Benoît Lheureux: Immochan has reaf-
     increasingly                                    Jean-Pierre Viboud: New competitors,
                                                                                                    firmed its ambition to be the best driver of
                                                                                                    traffic to all retail and living spaces.
   omni-channel,                                     new attitudes, new regulations – Oney’s        Thanks to larger teams, our recognised
    thanks to our                                    business is undergoing profound
                                                     change. A number of years ago, we
                                                                                                    expertise and skill, each site receives our
                                                                                                    full attention so that we can create even
    multichannel                                     decided to take the opportunity to rein-       more value for the business. We intend to

       and multi-                                    vent the business with a view to acceler-
                                                     ating our growth. This new structure
                                                                                                    reinforce our status as an innovative busi-
                                                                                                    ness by proposing a unique shopping
           format                                    allows us to be more flexible, more
                                                     innovative, more responsive and more
                                                                                                    experience in lifestyle and experience
                                                                                                    centres that have their own personality
       structure.”                                   open, and enables us to grow even              and provide personalised services, mainly
                                                     more quickly.                                  under the Aushopping brand.
(1) Average full-time equivalent employees
    – as at 31 December 2015 – consolidated scope.
(2) As at 31 December 2015.

                                                                                      AUCHAN HOLDING I 2015 ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT I 11
JOINT INTERVIEW

                                                                                  IMMOCHAN
                                                                                              Immochan is one of
                                                                                              the leading commercial
                                                                                              real estate companies
                                                                                              in Europe, with
                                                                                              379 shopping centres
                                                                                              managed in 12 countries.

                                                                                              Immochan has
                                                                                              750 employees(1)
                                                                                              and revenue(2)
                                                                                              of €633 million.

                                                                                                            What have been
                                                                                                       the main messages since the
                                                                                                     reorganisation was announced?

                                                                                                    Wilhelm Hubner: There are many: new
                                                                                                    appointments in all countries, new indi-
We are                                                                                              cators have been developed and we
                                                                                                    have worked on our offering. For me,
consolidating                                                                                       that is the most important sign: we are
                                                                                                    moving fast. For we have simplified our
our position                                         Jean-Pierre Viboud: Our business mind-         structure and made it identical in all
as the best                                          set and our innovative DNA make us a
                                                     unique player in our market. The cus-
                                                                                                    countries, with a very short manage-
                                                                                                    ment line, in order to save time: the
generator                                            tomer experience is key to the customer        restructuring is only the first step in
of traffic                                           relationship of the future. Moving away
                                                     from the customer’s and trader’s needs to
                                                                                                    adapting our formats and our offering,
                                                                                                    connecting our brands and winning
to our living                                        improve the customer experience is             new customers.

spaces and                                           Oney’s primary focus for innovation. It is
                                                     positioning itself at all stages of the cus-     What is your outlook for 2016?
have all tools                                       tomer’s journey: welcoming them into the
                                                     store, the drive outlet, online, biometric     Wilhelm Hubner: Each country has
at our disposal                                      authentication, digital signatures on the      developed its road map and our suc-
to progress                                          Internet and in store, payment and financ-
                                                     ing solutions, electronic payments, insur-
                                                                                                    cess will be based on the sum of each
                                                                                                    country’s ambitions. At the beginning of
even further.”                                       ance, data mining and data science and         t h i s y e a r, t h e n e w M a n a g e m e n t
                                                     payment security. Our ambition is clear:       Committee met with all teams: I have
                                                     continue to form partnerships and sup-         absolute confidence in their determina-
                                                     port an ever greater number of customers       tion, their motivation and the strength of
                                                     in meeting their objectives.                   their business projects.
(1) Average full-time equivalent employees
    – as at 31 December 2015 – consolidated scope.
(2) As at 31 December 2015.
Benoît Lheureux: 2016 is a key year            to redefine our fundamental purpose,
                                                                 for Immochan, as it is celebrating its         our role and our identity, through our
                                                                 40th anniversary. It is an opportunity to      innovative, shared and open Vision
                                                                 celebrate our successes, our teams and         2030 initiative, with a view to develop-
                                                                 our customers, but also to plan for the        ing even further.
                                                                 future and look towards the next
                                                                 40 years. We are clear about the               Jean-Pierre Viboud: 2016 brings a
                                                                 development of the business and are            whole host of new opportunities to
                                                                 going to accelerate the redevelopment          make progress and to accelerate our
                                                                 of our sites: fully digitalising shopping      growth. We are going to expand our
Our business                                                     routes and behaviour; improving our            use of new technologies, increase the
mind-set and                                                     experiential and service proposal, in
                                                                 addition to our retail offering; and fully
                                                                                                                ser vices offered to customers and
                                                                                                                develop new business models. We are
our innovative                                                   anchoring our shopping centres in their
                                                                 surroundings and their ecosystem. In
                                                                                                                going to become more involved in envi-
                                                                                                                ronments that are similar to ours, such as
DNA make us                                                      short, turn our sites into sustainable and     Fintech, start-ups and grandes écoles
a unique player                                                  attractive living spaces. We are going         (elite higher education establishments),
                                                                                                                but we are also going to re-energise our
in our market.”                                                                                                 relationships with our customers and
                                                                                                                trading partners. This flexibility has been
                                                                                                                the key to our success for a number of
                                                                                                                years and is the strength that is etched
                                                                                                                into our DNA.
                                                                                              ONEY BANQUE

                                                                                                                 Oney offers its 8.1 million
                                                                                                                 customers and 250 business
                                                                                                                 partners its expertise
                                                                                                                 in electronic payments,
                                                                                                                 payment methods,
                                                                                              ACCORD

                                                                                                                 consumer credit, insurance,
                                                                                                                 fraud management and using
                                                                                                                 customer data to benefit
                                                                                                                 the business.

                                                                                                                 Oney has 2,350 employees(1)
                                                                                                                 and net banking income
                                                                                                                 of €387 million(2).
(1) Average full-time equivalent employees – as at 31 December 2015 – consolidated scope.
(2) As at 31 December 2015.

                                                                                                  AUCHAN HOLDING I 2015 ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT I 13
FINANCIAL OVERVIEW

      2015 CONSOLIDATED RESULTS
      OF AUCHAN HOLDING

                                                                          97.2% Auchan Retail

                     €54.2                                                1.2% Immochan
                                                                          0.8% Oney Banque
                     BILLION                                              Accord
                                                                          0.8% Other activities

                      +1.5%
                                          REVENUE EXCLUDING TAXES
              2015                 54.2   BY ACTIVITY

              2014               53.4
                                                                    35.3% France
              2013        48.1
                                                                    18.3% Western
                                                                    Europe excluding
                                                                    France
               CONSOLIDATED REVENUE                                 19.4% Central
               EXCLUDING TAXES                                      and Eastern
                                                                    Europe
                                                                    27.0% Asia

                                          REVENUE EXCLUDING TAXES
                                          BY GEOGRAPHICAL AREA

                     €62.5
                      BILLION                       65%
               REVENUE INCLUDING TAXES    OF CONSOLIDATED REVENUE
               FOR THE CHAINS             GENERATED INTERNATIONALLY
22.3% France
                                                                                                                                                                   17.3% Western
                                                                                       81.5% Auchan Retail                                                         Europe excluding

    €1,877                                                                             17.8% Immochan                                                              France
                                                                                       0.4% Oney Banque                                                            28.6% Central
                                                                                                                                                                   and Eastern Europe
                                                                                       Accord
                                                                                                                                                                   31.6% Asia
           MILLION                                                                     0.3% Other activities
                                                                                                                                                                   0.3% Africa

GROSS CURRENT INVESTMENTS                                  GROSS CURRENT INVESTMENTS                                                   GROSS CURRENT INVESTMENTS
                                                           BY ACTIVITY                                                                 BY GEOGRAPHICAL AREA

           €2,683                                                                €1,181                                                            €2,216
                MILLION                                                             MILLION                                                               MILLION
2015                      2,683                                     2015               1,181                                            2015                         2,216

2014               2,613                                            2014          1,120                                                 2014                     2,178

2013                   2,636                                        2013                       1,304                                    2013               2,051

EBITDA(1) (+2.7%)                                                   OPERATING PROFIT FROM                                               CASH FLOWS FROM OPERATIONS
                                                                    CONTINUING OPERATIONS (+5.5%)                                       (+1.7%)

               €718                                                                €518                                                             €1,743
                MILLION                                                             MILLION                                                               MILLION
2015         718                                                    2015         518                                                    2015             1,743

2014                  800                                           2014               587                                              2014                1,833

2013                           835                                  2013                               767                              2013                             3,164

NET PROFIT FROM CONTINUING                                          PROFIT FOR THE YEAR ATTRIBUTABLE                                    NET FINANCIAL DEBT
OPERATIONS (–10.3%)                                                 TO OWNERS OF THE PARENT                                             (–4.9%)
                                                                    (–11.9%)

(1) Operating profit from continuing operations excluding other operating profit and expenses and excluding depreciation, amortisation and impairment.

                                                                                                                      AUCHAN HOLDING I 2015 ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT I 15
CSR OVERVIEW

          SOCIAL
          The business is fully committed to acting in a manner that is socially responsible towards its professional,
          passionate and respected employees. Diversity, innovation, work-sharing programmes, internal promotions
          and quality of working life are all cornerstones of business development.

                                                                              337,800
                                                                              EMPLOYEES
                                                                              (CONSOLIDATED SCOPE – AVERAGE FULL-TIME
                                                                              EQUIVALENT – 31/12/2015)

                                             46,840
                                             PERMANENT
                                             APPOINTMENTS

            5.2                              8,097
            MILLION TRAINING                 DISABLED EMPLOYEES
            HOURS PROVIDED                   IN THE WORKFORCE

            12,985                           48%                              166,700
            MEETINGS HELD
            WITH EMPLOYEE
                                             OF GROUPE
                                             AUCHAN’S MANAGERS
                                                                              EMPLOYEE
            REPRESENTATIVES                  ARE WOMEN                        SHAREHOLDERS

00
ENVIRONMENTAL
The fight against global warming and the preservation of biodiversity are at the heart of our policies
and activities. We are seeking innovative energy-saving and resource-efficient solutions to fulfil
this ambition. Lastly, by labelling carbon-free products, we can offer customers environmentally-friendly
alternatives at discount prices.

                  457
                  KWH/SQM
                  AVERAGE ELECTRICITY
                  CONSUMPTION RATE IN
                  RELATION TO HYPERMARKET
                  SALES AREA

                                                  58%
                                                  OF WASTE RECYCLED
                                                  ON AVERAGE

                  10,381
                                                                                    695
                                                  BY HYPERMARKETS

                  ORGANIC PRODUCT
                  LISTINGS SOLD                                                     HYPERMARKETS HAVE
                  BY HYPERMARKETS                                                   SELF-DISCOUNT
                  AND SUPERMARKETS                                                  DEPARTMENTS

SOCIAL
Progress cannot be achieved in isolation. Maintaining sustainable relationships with suppliers and
producers, and seeking dialogue with stakeholders, play an important part. Expressing solidarity at a local
level gives volunteer employees a stake in the various programmes and foundations that offer a sponsorship
framework that has been thought through and monitored over time.

                  173
                  NON-PROFIT
                  PROJECTS
                                                                                    3,515
                                                  19                                OWN-BRAND
                  SUPPORTED BY THE                                                  PRODUCTS LABELLED
                  AUCHAN, SIMPLY AND                                                IN BRAILLE
                                                  MILLION MEAL
                  IMMOCHAN FOUNDATIONS
                                                  EQUIVALENTS DISTRIBUTED

                  €1.9
                                                  IN THE FORM OF FOOD
                                                  ITEMS BY AUCHAN FRANCE
                                                  TO FOOD BANKS
                                                                                    199
                                                                                    SCI SOCIAL AUDITS
                  MILLION ALLOCATED                                                 CONDUCTED IN THE PLANTS
                  TO SUCH PROJECTS                                                  THAT MANUFACTURE
                                                                                    AUCHAN'S OWN-BRAND
                                                                                    PRODUCTS

                                                                    AUCHAN HOLDING I 2015 ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT I 17
DISCOVER THE
AUCHAN GROUP’S
NEW EXPERIENCES

                      #PRODUCTS
                      TODAY’S
                      ENTREPRENEUR
              1       TAKES CARE OF
                      ITS CUSTOMERS
                      P. 21

          #RETAIL
       TODAY’S
 ENTREPRENEUR                     2
  RISES TO NEW
      BUSINESS
    CHALLENGES
            P. 31
                                                     3

                                      #INNOVATION
                    TODAY’S ENTREPRENEUR
                       INNOVATES TO MAKE
                          HIS CUSTOMERS’
                              LIVES EASIER
                                             P. 39
#INTERNATIONAL
                TODAY’S ENTREPRENEUR
                      KNOWS THERE IS
                  NO FUTURE WITHOUT
                           EXPANSION
                                     P. 71

                                             7
            6

#GOOD PRACTICES
TODAY’S
ENTREPRENEUR                          5
DOES ALL HE
CAN TO REDUCE
HIS IMPACT ON
THE ENVIRONMENT
P. 55

                                                          #HUMAN RELATIONSHIPS
                                                          TODAY’S
                                                          ENTREPRENEUR
                                                          COUNTS ON HIS TEAMS
        4                                                 TO BE CO-AUTHORS
                                                          OF A WONDERFUL
                                                          STORY
                                                          P. 65
                           #MULTICHANNEL
                           TODAY’S
                           ENTREPRENEUR
                           THINKS DIGITAL
                           AND GLOBAL
                           EXPERIENCE
                           P. 47

                                                 AUCHAN HOLDING I 2015 ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT I 19
THE AUCHAN GROUP'S EXPERIENCES

                      Open innovation, the sharing economy,
                      generations Y and Z looking for pleasant
                      experiences and responsible social com-
                      mitment, etc. As today’s entrepreneurs,
                      but also and most importantly those of
                      tomorrow, the Auchan Retail, Immochan
                      and Oney Banque Accord businesses are
                      constantly reflecting, along with their
                      employees and customers, on changing
                      uses and behaviours, the shopping expe-
                      riences of the future, the desire to change
                      the way we consume and the reasons for
                      choosing their banners over others. Make
                      way for disruptive ideas! Discover the
                          Auchan group’s new experiences.
TODAY’S
#PRODUCTS

ENTREPRENEUR

TAKES
CARE OF ITS
CUSTOMERS
REPORT

                                            THE PRIMARY RESPONSIBILITY OF THE AUCHAN RETAIL BUSINESSES
                                                 IS TO OFFER THEIR MILLIONS OF REGULAR CLIENTS A DIVERSE
                                              AND ACCESSIBLE RANGE OF PRODUCTS THAT CONTRIBUTES TO
                                                           A BALANCED DIET AND TO THE JOY OF EATING.

ENJOY LIFE
  TO THE FULL
Quality products for everyone                   reworking recipes for own-brand prod-        petitive prices. Similarly, Auchan Retail is
The public are becoming increasingly            ucts, offers on locally sourced, fresh and   working, in all countries, on showcasing
sensitive to the impact their diet has on       seasonal produce, growth in different        its growing range of organic produce.
their own health and on the health of           sectors and showcasing the relevant          In 2015, Auchan Retail Ukraine entered
their children. That is why Auchan Retail       offering.                                    into a partnership with a supplier of
has prioritised this concern and placed                                                      green salad which enabled it to show-
it at the heart of its “responsible dis-        All the vitamins you need                    case a unique range in a country where
counting” offering. The implementation          Making the fruit and vegetable ranges        this product is not widely eaten. The
of this initiative in all countries of opera-   more accessible is a key factor in ena-      business also introduced a fresh pro-
tion relied on shared experience and a          bling each customer to follow a healthy      duce logistics platform that allowed it to
framework of broad guidelines, essen-           diet that reflects his/her needs and that    better coordinate this initiative. In Russia,
tial elements of the policies that needed       keeps a number of diseases at bay. The       2015 also saw a significant review of
to be pursued and developed. Each               French and Chinese hypermarkets have         the fruit and vegetable offering through
business was asked to position itself in a      set up a stall dedicated to 10 or so fruit   sourcing products of higher quality and
number of areas: employee training,             and vegetable lines offered at ultra-com-    greater freshness.
The “del árbol a tu
mesa*” seasonal
fruits on sale in                                                                        Auchan Retail
the Auchan Retail                                                                        Hungary’s customers
hypermarkets in                                                                          can now discover
Spain are selected                                                                       the precise origin
in the field and                                                                         of high-quality
delivered directly                                                                       meat using a QR
to the store.                                                                            code located on the
Partnerships that                                                                        product packaging.
support local                                                                            About 6 to 8 animals
employment                                                                               arrive at the factories
and win-win                                                                              before being delivered
relationships                                                                            to stores, as part of a
with SMEs are                                                                            partnership entered
encouraged.                                                                              into with pig farmers.
In 2015, 671 tonnes
of fruit were sold
in the Spanish
stores.
* From the tree to the house.

                  To help customers with food
                  intolerances or those seeking to follow
                  healthy eating regimes, Auchan
                  Production is developing own-brand
                  product ranges without salt, sucrose,
                  gluten or lactose and is reworking
                  certain recipes for other products to
                  reduce the content of those ingredients.

                                                             AUCHAN HOLDING I 2015 ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT I 23
CASE

                              MAKING
                         AUCHAN’S BEST
                             PRODUCTS
                            ACCESSIBLE
                                TO ALL
                           WHILE GOOD FOOD IS A KEY DIFFERENTIATING FACTOR FOR AUCHAN
                                 RETAIL, THE DEVELOPMENT OF A STRONG OFFERING THROUGH
                                THE BEST AUCHAN FOOD PRODUCTS AND AUDACE NON-FOOD
                                PRODUCTS ALLOWS IT TO SERVE ITS CUSTOMERS AND RESPOND
                                                         TO THEIR NEEDS AS BEST IT CAN.

                   or some decades, food retailers have lost, vey the values   and the identity of the different labels.
                   in the non-food sector, sig-                                 This product expertise allows the pro-
                   nificant market shares to                                    ducer to move up the value chain to
       large specialist retailers. With the                                     buy closer to the producer or the manu-
       development of its Audace brands,
                                                 The innovative and             facturer, buy in larger volumes and
       Auchan Retail is repositioning itself in high-quality   products         develop a shared supply chain.
       the market and is using them to set          offered by each             Auchan Retail is thus cutting its upfront
       itself apart from its competitors.         Audace brand will             costs, optimising its purchase prices
                                                  make a significant            and limiting its production risks, reaffirm-
       The best offering at the best              contribution to the           ing its status as a responsible dis-
       price                                                                    counter, both in food and non-food
       It all begins with establishing a
                                                   Auchan promise.”             retailing. Beyond its commercial suc-
                                                    Jean-Denis Deweine,
       multi-channel offering, designed with       corporate Product Director,  cess, this joint development strategy is
       the help of experts to cater to custom-           Auchan Retail          being emulated internally and all teams
       ers’ needs. The offering is made up of                                   are now proud and keen to sell these
       products that have been specifically designed or modi- products to the best of their abilities by displaying them
       fied, and that are offered by strong brands which con- more prominently in store.
A segmented brand strategy
With a long history in textiles, Auchan Retail’s product
management team implemented this strategy in 2014
to take up the challenge of moving from being a pur-
chaser of products from wholesalers, traders or
importers, to becoming the designer of its own prod-
ucts and collections. 18 months later, this challenge is             THE SHOW
about to be met. The Audace brands have proved
worthy of their name: they dare to do things differ-                 OF THE AUDACE
e n t l y, t h e y d a r e t o a l w a y s d o m o r e f o r o u r
customers.
                                                                     BRANDS
For all non-food markets, 6 key brands have been                     In 2015, Auchan Retail organised the 1st internal
chosen. Auchan Retail’s offering is today focused                    showcase for its own-brand products and the Audace
around the brands In Extenso (textiles), Qilive (house-              brands, Auda’city. Over more than 5,000 sqm,
hold equipment), Actuel (decoration), Cup’s (sport/                  hypermarket and supermarket shelves were
leisure), Airport (travel) and Cosmia (perfume). Each                recreated as a setting for the show and enabled
of these brands has the same goal: to design and                     the purchasing, sales and in-store teams from
offer, at a good price and at the right time, products               all countries to discover the 8,000 product lines
that are becoming reasons in their own right for peo-                that constitute the best of Auchan. Its objective was
ple to visit our sales outlets…                                      to ensure that everyone left with a better
From 2016 onwards, this strategy should become                       understanding of the products on offer and the best
even more visible in store: the number of products                   way of displaying them to clients on the shelves.
sold under the Audace brands will grow considerably
to cover, little by little, all areas in the relevant
markets.
                                                                     A MARKET
                                                                     AS HUGE
The best of Auchan, here and everywhere
In food, the “Auchan Export Partners” project is devel-
oping, through “Marketplace”, the importation and
exportation of the best own-brand products so that
                                                                     AS THE WORLD
they are available to everyone, everywhere.                          “Marketplace” is an online catalogue offering
The Auchan Retail brands offer their customers a                     4,000, principally food-related, products from all
unique range of products and services, and support                   Auchan countries. Consumer products, liquids, wines
partner SMEs in exporting their products, thereby                    and frozen products – each item has its own identity
encouraging their economic growth and helping them                   form. In all countries, the teams can now consult,
to find new partners and explore new openings.                       in their own language, the products and sales events
After Luxembourg, France also joined the initiative in               offered by all countries, access technical and logistical
2015, offering with a real success a permanent                       information, choose ranges in a collaborative manner,
range of nearly 200 Portuguese products in hyper-                    input their estimated volumes… This tool is one
markets in Île-de-France. The aim is to expand this                  of the keys to success behind the growth in trade
initiative to all countries.                                         between the different Auchan countries.

                                                                           AUCHAN HOLDING I 2015 ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT I 25
HIGHLIGHTS

                                                                SIMPLY MARKET
                                                                SPAIN INVESTS IN
                                                                LOCAL PRODUCE
                                                                Spanish customers are
                                                                increasingly demanding produce
                                                                that is local, fresh and seasonal
                                                                along with regional grocery
                                                                products. Simply Market has
                                                                decided to focus on local produce
                                                                to an even greater degree.
                                                                2 specialist purchasing teams
                                                                have therefore been created to
                                                                ensure a constant high-quality
                                                                supply chain. Communication
                                                                with the customer has also been
                                                                improved by putting a greater
                                                                emphasis on the products’ origins.
                                                                Lastly, Simply Market joined the
                                                                Basque government’s initiative
                                                                to promote farm produce and

                      SIMPLY MARKET
                                                                fish from the Basque Country
                                                                and now offers products from

                      POLAND:                                   65 local producers and larger
                                                                Basque manufacturers in its
                      WINNING THE                               33 regional stores.

                      PREFERENCE FOR
                      LARGE FAMILIES                            IN TAIWAN,
                                                                THE IN EXTENSO
                      Since Simply Market distinguishes         COLLECTION RECEIVED
                                                                A STAR’S WELCOME
                      itself from its competitors by
                                                                To showcase the spring/summer
                      discounting in convenience stores,        2015 In Extenso collection and
                      and bases its offering on fresh, local,   raise its profile in the textiles
                                                                sector, RT Mart staged its
                      good value produce, the firm decided,
                                                                1st fashion show in the Taiwanese
                      in October 2015, to become a partner      capital. In front of more than
                      of the “Large Family Card”                300 people, including journalists,
                                                                local celebrities and employees,
ALCAMPO           ,
                      programme, launched by the Polish
                      government to help families with
                                                                16 models unveiled the new
THE CHEAPEST                                                    “Ocean Style” collection on the
NATIONAL
HYPERMARKET           more than 3 children. These families      catwalk. This also provided an
                                                                opportunity to reward the young,
BANNER TO             now benefit from an additional
GO SHOPPING                                                     talented designers who won the
ACCORDING TO          10% discount on all purchases made        “In Extenso 2015” competition,
THE ORGANISATION      in store. The business has thus been      organised in partnership with
DE CONSOMMATEURS                                                a design school. The hypermarkets
ET USAGERS            able to strengthen its image of being
                                                                then offered the designs on their
(ORGANISATION
OF CONSUMERS          convenient and offering                   shelves, resulting in an increase
AND USERS) IN 2015.   attractive prices.                        in sales of more than 30%!
AUCHAN RETAIL ROMANIA,                                partners to profit from its international presence
                  AMBASSADOR OF THE BEST                                by promoting the country’s most representative
                  PRODUCTS                                              products, produced locally, in all its shops
                  “România Accelereazã” (“Romania is                    outside Romania. In all, a range of
                  accelerating”) is the name of the programme           300 products from around 100 producers
                  launched by Auchan Retail Romania in                  will be included in the programme. Italy
                  October 2015. As a local business, proud of           and Taiwan are already taking part and will
                  its local ties, the brand wants to allow its SME      soon be followed by other countries.

                                                                                                     AUCHAN
                                                                                                     UKRAINE:
                                                                                                     A LARGE
                                                                                                     PRODUCT
                                                                                                     RANGE AT
                                                                                                     THE BEST
                                                                                                     PRICES
                                                                                                     This year, Auchan
                                                                                                     Ukraine has again
                                                                                                     proved to be the retailer
                                                                                                     offering the best prices
                                                                                                     to all Ukrainians.
                               HUI SHANG, AUCHAN'S                                                   Against a difficult
                                                                                                     backdrop of high
                               AND RT MART CHINA’S                                                   inflation, decreasing
                               REGIONAL PRODUCT                                                      purchasing power and
                               BRAND                                                                 consumption, average
                                                                                                     sales prices in Auchan
                               China, a great gastronomic country, boasts
                                                                                                     hypermarkets have in
                               a truly rich diversity of regional dishes and                         general increased at a
                               local products. These products now have                               rate below the level of
                               their own dedicated brand and will be                                 inflation. At the same
                               showcased in all Auchan and RT Mart                                   time, economic issues
                               hypermarkets. Under the “Hui Shang”                                   have caused several
                               brand, which in Chinese means “bringing                               suppliers of low-priced
                               together gastronomy from every region”,                               products to close.
                               and using a design reflecting the country’s                           The purchasing
                               traditional culture, the 2 businesses                                 department has
                               have developed unique products allowing                               therefore worked hard
AUCHAN RUSSIA,                                                                                       to identify new suppliers
                               their customers to find the flavours of their
2015 BEST                      region wherever they go. The range of
                                                                                                     so that a large selection

RETAILER                       20 or so products should expand in 2016
                                                                                                     of these products can
                                                                                                     continue to be offered
AT THE “RETAIL                 to include more than 100 items.
BUSINESS RUSSIA                                                                                      and thus can answer
2015” INTERNATIONAL                                                                                  the customers’
SUMMIT.                                                                                              expectations.

                                                                     AUCHAN HOLDING I 2015 ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT I 27
HIGHLIGHTS

SIMPLY MARKET
COMMITS TO PRODUCERS
Simply Market signed a partnership
agreement with 4 cooperatives
representing hundreds of farmers
of Charolais cattle and 4 abattoirs.
Demanding specifications, checks
at every stage, monitoring of
the butchery – everything is checked!
Its aim: continue to provide better
quality to customers using a process
that applies to all points
in the supply chain, from the farm
to the shop floor.

ATAK RUSSIA:
10 YEARS OF BEING
“LOCAL” AND “CHEAP”                                TRANSFORMING ALL
                                                   WISHES INTO PRODUCTS…
To celebrate its 10th anniversary
with its customers, ATAK organised
an outstanding commercial event.
Over a period of 3 weeks, a festive
                                                   “Let’s join forces so that all wishes are transformed
atmosphere reigned in all stores and               into products”: this was the slogan of the
the promotions were a fitting way                  2nd Produce and Innovation show, organised
to celebrate this milestone! It was
a real success for the banner,
                                                   by Auchan Production, to showcase for an internal
which demonstrated once more                       audience, but also to a number of loyal customers,
to its customers that it could keep its            660 new products, 150 of which were chosen to be
promise: cheap and local! All stores
went through a real increase
                                                   sold in store. In food and in non-food, Auchan
in revenue, but also in clients                    Production has highlighted the expertise of its teams
and articles, that far exceeded                    in offering truly innovative products that reflect
expectations!
                                                   new trends such as gluten-free, reduced sugar
                                                   and salt, and in responding to the needs and
                                                   expectations of customers.

                             AUCHAN RETAIL ITALY                              comments, etc.). Analysis of the results
                             LISTENS TO ITS CUSTOMERS                         enabled new food and non-food ranges to
                             TO BETTER SERVE THEM                             be designed and put on the shelves as early
                             After its 2014 price repositioning, Auchan       as October. Between now and May 2016,
                             Retail Italy undertook an extensive overhaul     more than 35% of the product ranges will
                             of its offering in 2015 to win back its          have been reworked. Early results are very
                             customers and better serve them. In May,         positive, particularly in non-food ranges:
                             an extensive customer feedback programme         customer feedback is encouraging and
                             began (in-store interviews, review of customer   the number of items sold per basket is rising.
IMMOCHAN:
                                                                                       THE QUALITATIVE
                                                                                       BIG JUMP
RUSSIA:                                                                                In order to remain attuned
                                                                                       to customers’ and partner
THE “FOOD                                                                              businesses’ changing
CHAIN” PROJECT                                                                         expectations, Immochan
                                                                                       launched “Aushopping”
IS LAUNCHED                                                                            in 2015. This quality label
                                                                                       in customer services
There were a number of factors                                                         represents an ambitious
underlying Auchan Retail Russia’s         THE FARMING                                  transformation programme
decision to launch its food chain         TREASURES OF                                 for its shopping centres.
                                          AUCHAN RETAIL                                The business is committed
project, beginning with beef and pork
                                          HUNGARY!                                     to improving the quality
products. These included a desire         In its 19 hypermarkets in                    of its shopping centres in
to strengthen its local foothold          Hungary, Auchan Retail                       an initiative that will have
by supporting farming SMEs, growing       launched a promotional                       an impact on all aspects
                                          drive focused on local                       of the customer experience:
its range of in-store meat products       products: “Our farming                       the atmosphere, services,
and adapting it to customer               treasures”. Its aim: to offer                events, trade and digital
preferences, while at the same time       customers seasonal fruits                    experience. A multitude
                                          and vegetables at the store                  of special features will make
guaranteeing high-quality produce.        entrance, local bakery                       the visitor feel welcome,
Long-term agreements have been            products and, new this year,                 valued and looked after.
signed with 40 farmers in the Tambov      meat from its Farmhouse                      8 shopping centres in
and Voronezh regions, in the south-       Pork project – all in all,                   France and 1 in Romania
                                          a total of 300 products.                     have already received this
west of the country, and construction     The initiative was a great                   label and it will gradually
work has begun on a meat processing       success, as much with                        be extended to all sites.
factory in Tambov. The aim is to          customers as with the
                                          70 local producers who were
process, between now and 2020,            able to use the initiative
up to 70,000 tonnes of meat per year.     to publicise their businesses.
Poultry, fish and fruit and vegetables
are 3 other areas that Auchan Russia
is hoping, in time, to develop in other
regions in the country.

                                                           AUCHAN HOLDING I 2015 ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT I 29
AUCHAN PRODUCTION
ALIMENTAIRE
– ALL ABOUT OWN-BRAND PRODUCTS
                                                  AUCHAN PRODUCTION ALIMENTAIRE
                                                  ACCOUNTS FOR 1 OUT OF EVERY 3 FOOD
                                                  PRODUCTS SOLD, ALMOST 2 BILLION
                                                  PRODUCTS SOLD WORLDWIDE EVERY YEAR.
                                                  BUT HOW ARE THESE PRODUCTS CREATED?

                                                              Development
                                                              and production
                                                               The product’s characteristics are
                   It all begins here!                         defined. The recipes suggested
                   We continuously keep          by suppliers, mainly SMEs, are then tested and
                                                 the best is selected by an independent panel
  CUSTOMER NEEDS

                   an eye on market
                                                 of customers. Final specifications are then
                   developments to
                                                 drawn up jointly with the chosen supplier
                   decipher innovations          and production can then begin.
                   and anticipate
                   customer needs,                            Packaging
                   and this enables us                        and sustainable design
                   to select products                           Packaging is essential since,
  IDENTIFYING

                   for development                              as well as containing information
                                                                on how the product should be
                   or adaptation.                               consumed, it displays the
                   An Auchan product             product’s brand image, allowing customers
                   is always defined             to find it easily on the shelves. At the same
                   by reference to the           time, we conduct a detailed environmental
                   leading national              impact assessment of all aspects of
                                                 the product and the packing and endeavour
                   brand, both in terms          to reduce them as far as possible.
                   of price (20% to 30%
                   less) and quality                          Quality control
                   (it must be at least                        It is of critical importance
                   as well regarded as                         that our products comply with
                                                               regulations and customer safety,
                   the national brand).
                                                 and that they meet with our customers’
                                                 satisfaction! The whole year long,
                                                 independent laboratories carry out upwards
                                                 of 30,000 assessments and more than
                                                 300,000 consumers are putting our
                                                 products to the test.

                   We do all this so that, in the end, there is only one thing our
                   customers want to do: find and buy more and more Auchan
                   products in our stores!
TODAY’S
#RETAIL

ENTREPRENEUR
RISES TO
NEW BUSINESS
CHALLENGES
REPORT

  Auchan Retail
  and Système U are
  convinced that they
  can join forces to
  build a new
  sustainable and
  economically viable
  business to benefit
  their customers, their
  employees, their
  economic partners
  and, more generally,
  their local
  environment.
IN AN ECONOMIC ENVIRONMENT THAT REMAINS
                                                       BLEAK, AUCHAN RETAIL FRANCE AND SYSTÈME U
                                                 ENTERED INTO EXCLUSIVE NEGOTIATIONS TO FURTHER
                                                THEIR PARTNERSHIP AND FORM A LASTING ALLIANCE.

        AUCHAN
13 FEBRUARY 2015:

RETAIL AND
SYSTEME U FURTHER
      DEVELOP
THEIR PARTNERSHIP
The alliance of two responsible retailers                               A decisive alliance
In September 2014, Auchan Retail France and Système U                   Together, Auchan Retail and Système U are committed to
announced their purchasing partnership. Faced with declining            becoming a major player in the French hypermarket and con-
household food consumption and an environment of deflation,             venience sector. They wish to develop a network that offers
the 2 groups, sharing the same values and the same conception           optimal national geographic coverage and the best concepts in
of their job as responsible retailers, paying attention at their cus-   each format and distribution channel, and replicate their origi-
tomers, their suppliers and society in general, have drawn on a         nal models throughout the French economic landscape and
shared approach to their business and entered into exclusive            thereby develop their brands, U and Auchan, in a balanced
negotiations to further develop their partnership. The objective is     and energetic fashion. This alliance is subject to the approval of
to form an alliance based on a common, more in-depth purchas-           the French Competition Authority, due in 2016.
ing strategy and on identifying synergies in different areas.

                                                                                   AUCHAN HOLDING I 2015 ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT I 33
CASE

                                   NEW
                           PARTNERSHIPS
                                   NEW
                          OPPORTUNITIES
                          BY ENTERING INTO PURCHASING PARTNERSHIPS AT BOTH NATIONAL
                              AND INTERNATIONAL LEVELS, AUCHAN RETAIL HAS SUCCEEDED
                     IN INCREASING ITS PURCHASING POWER, SO THAT IT IS NOW AMONGST
                     THE MOST SIGNIFICANT IN EUROPE. A STRATEGIC MOVE AT A TIME WHEN
                                                PRICE REMAINS THE DECISIVE CRITERION.

                          bleak economic environment,              particularly where purchasing is concerned. In order
                          tougher competition, price wars,         to participate and sell at ever cheaper prices, we
                          sector concentration… Like many of       must know how best to take advantage of our interna-
       its rivals, Auchan Retail operates in increasingly diffi-   tional presence, and conduct mass purchasing so that
       cult environments. In the eurozone especially, defla-       we are on an equal footing with the large suppliers
       tion is destroying value and the prospects for growth       of national and international brands.
       are slim. It is against this backdrop that the business     That is why, in 2014, Auchan Retail signed its first
       has undertaken its policy of forming partnerships with      partnership agreements: with Système U in France,
       other distributors, with a view to consolidating and        initiating the transformation of the French competitive
       therefore improving purchasing terms.                       landscape, with Sisa in Italy, and also at an interna-
                                                                   tional level with Metro Group.
       A winning strategy
       Act locally, act globally… Retailers today must gain        In 2015, the business continued with the same strategy,
       strength in these two dimensions if they are to achieve     signing a partnership agreement in Spain with
       sustainable development and success. Locally                Desarrollo de Marcas SA, a subsidiary of the Euromadi
       because everyday shopping requires us to remain             Ibérica SA group, then announcing its intention to
       close to our customers. The main keys to our success        strengthen its partnership(1) with Système U in France
       are our teams’ proximity to customers and the fact          and, lastly, by furthering its arrangement with Metro
       that they work as closely as possible to each catch-        Group by signing national cooperative purchasing
       ment area. But shopping is now a globalised activity,       agreements in respect of France, Poland and Romania.
SEPTEMBER 2015
                                                                                                                AUCHAN RETAIL AND METRO,
                                                                                                                PARTNERS AT ALL LEVELS
                                                                                                                In November 2014, Auchan Retail and Metro Group
                                                                                                                began their collaboration at the international level.
                                                                                                                In 2015, the 2 groups decided to extend their
                                                                                                                collaboration to the local level in France, Romania
Results on a par with expectations                                                                              and Poland, 3 of their key markets, starting in
Through these partnerships, Auchan Retail has reposi-                                                           September 2015. Metro Group entrusted the
tioned itself, in all respects, among the biggest mass                                                          purchasing negotiations for products from large
retailers. In France, Auchan and Système U now have                                                             national and international brands to Auchan Retail’s
close to a 21% market share, on a par with their                                                                central purchasing department, via an agency
main competitors. In Italy, Auchan Retail’s central pur-                                                        arrangement. Each party will, however, continue to
chasing department is consolidating, alongside Sisa,                                                            pursue its own commercial strategies independently
its leading position in the 5 most populated regions in                                                         of the other party, especially the creation of its
the country and, by virtue of the new partnership                                                               product ranges and the development of its pricing
signed in 2015 with the C3 consortium, will become                                                              and promotions policies.
one of the 3 largest Italian purchasing departments.
Internationally, the agreement signed with Metro
Group has granted access to new suppliers and has
enabled the range of products in store to be                                                                    JANUARY 2015
expanded. Thanks to all those partnerships, the
                                                                                                                ALCAMPO, SIMPLY MARKET
Group’s purchasing power has doubled.
As well as the change in scale, these partnerships have
                                                                                                                AND EUROMADI: SPAIN’
given rise to very tangible advances: our purchasing                                                            WINNING TRIO
competitiveness has increased by aggregating our                                                                Desarrollo de Marcas SA, a subsidiary of Euromadi
needs and we can offer our customers in all countries                                                           Ibérica SA, will now handle negotiations for Alcampo
the best products at the best prices in all our stores.                                                         and Simply Market’s own-brand products in Spain.
Although these improvements have already been                                                                   At present, Auchan Retail has an assortment of
made, the effects should continue to be felt in the                                                             3,500 food, hardware and cosmetic items, which it
years to come. The national agreements signed with                                                              retails at 56 Alcampo hypermarkets and 291 Simply
Metro Group, and the proposed alliance with                                                                     supermarkets. Euromadi is the leading central
Système U (1) will become fully effective in 2016.                                                              purchasing and multi-sector services department in
What is more, Auchan Retail will continue to look for                                                           Europe, and its market share in food, cosmetics and
any opportunity with complementary partners who                                                                 hardware products now exceeds 20% in Spain.
have similar values.
(1) Auchan Retail and Système U notified their project of alliance to the French antitrust authorities. Their answer is expected for June 2016.

                                                                                                                           AUCHAN HOLDING I 2015 ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT I 35
VOX POP

              AUCHAN RETAIL
               SHARPENS ITS
          FORMATS TO CATER
          TO ITS CUSTOMERS’
              BUYING HABITS
                               FROM THE LARGE HYPERMARKET TO THE CONVENIENCE STORE, FROM
                                      THE BRICKS AND MORTAR SHOP TO E-COMMERCE AND EVEN
                              M-COMMERCE, AUCHAN RETAIL OFFERS, IN ALL COUNTRIES, SHOPPING
                                        EXPERIENCES THAT MATCH ITS CUSTOMERS’ EXPECTATIONS,
                                            VIA MODERN, DYNAMIC AND ATTRACTIVE BANNERS.

Multichannel retailing, a                 and for our customers, Auchan Retail         The latter, which are very popular with
strategic focus for Auchan Retail         has made multichannel and multi-for-         consumers in Russia and Romania,
In all countries, Auchan Retail, like     mat retailing its main strategic focus for   were launched in Ukraine and Spain
Immochan and Oney Banque Accord,          winning over customers.                      in 2015, and in China under the Hi!
is endeavouring to offer each local                                                    Auchan brand.
customer the best experience possible,    Complementary                                Lastly, the shopping routes in many
whatever retail channel he wishes         and attractive banners                       countries have increased with the
to use. Keeping your customers satis-     While Auchan Retail is principally           advent of e-commerce solutions; for
fied on a daily basis does not simply     known for its large hypermarkets,            example, China has continued to
involve offering the lowest prices or     which have been remarkably success-          develop Feiniu, its e-commerce website
a varied, appropriate range of prod-      ful in Eastern Europe and Asia, and for      launched at the end of 2013 and, in
ucts: it also, and most importantly,      its supermarkets, under the Simply           2015, acquired Fields, an online food
involves of fering your customers         Market and ATAK banners, the busi-           retailer.
a number of different retail channels     ness has also developed a number of          Every effort has thus been made to
under their preferred brand, whether      other formats.                               attract local shoppers using brands that
that be hypermarkets, convenience         A2pas in France and, in 2015,                are appropriate, attractive and com-
stores or online.                         V Shage ot Vas in Russia and Simply          plementary and that offer products that
In addition to a total quality approach   City in Italy; the Lillapois drugstores in   are best suited to offering each shop-
that offers each customer a high level    Italy; Auchan City, small hypermarkets       per, at a local level, the best possible
of service and products that are rele-    of about 5,000 sqm, which are better         shopping solution. And this is how
vant and differentiating, designed with   suited to today’s consumption habits…        Auchan will win over local shoppers.
I like coming to Auchan because there
                is a lot of choice and it’s cheap. I’m also
                getting to know the shop well, which saves
                me time when I’m looking for products.
                And when I can’t find them, the staff are
                always very willing to help me.”
                Zhang Yan, Shanghai, China

I have been an Alcampo
customer for 20 years.
At the outset, I went there
once a month and I only
bought non-perishable
products. Today, I do almost
my entire weekly shop there,
and that is because
of the variety of products
and brands but also because
of the quality of the
customer service.”
Evangelina de Lucas,
Madrid, Spain

                                                                                                     Why do I like
                                                                                                     Auchandirect?
                                                                                                     Because I can do my
                                                                                                     shopping whenever
                                                                                                     and from wherever
                                                                                                     I like. And the main
                                                                                                     benefit: I can have my
                                                                                                     shopping delivered to
                                             Why Simply? I have been                                 my home, even in the
                                             a customer for as long as                               evening or at the
                                             I can remember – I know the                             weekend! I am a fan!”
                                             people and they recognise                               Jeanne V.,
                                             me; it’s like being at home.                            Paris, France
                                             Also, I can find everything
                                             here and it’s cheap… I’ve even
                                             found some new products
                                             in the delicatessen section,
                                             in the fish section and
                                             the beer aisle… I like that!”
                                             Lisa Z., Milan, Italy

                                                                     AUCHAN HOLDING I 2015 ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT I 37
EURAUCHAN
                                                                   A UNIQUE, MULTICHANNEL,
                                                                   MULTI-FORMAT, MULTI-PRODUCT
                                                                   AND MULTI-CLIENT CENTRAL
                                                                   PURCHASING DEPARTMENT.

                  At the service of its clients: hypermarkets
                  (Auchan, Hyper U and Schiever),
                  convenience stores (Simply Market,                          €19                   BILLION
                                                                                                    OF PURCHASES
     WHO FOR?

                  Super U, A2pas), e-commerce websites
                  (Auchan.fr, Auchandirect), Drive outlets
                  (Auchandrive, U-Drive, Chronodrive),
                  catering (Logista, Metro) and other brands
                  (le Furet du Nord, etc.).

                  Eurauchan enables a large number
                  of suppliers, in a single negotiation,
                  to access more than 2,000 sales outlets
                  and different distribution channels in                                Each business
                  France with a buyer who has the same                                  sends its product
                  market share as Carrefour and Leclerc.                                requirements
                                                                    HOW DOES IT WORK?   to the negotiators.

450
EMPLOYEES
                                                                                        Each negotiator
                                                                                        contacts different
                                                                                        suppliers, finds
                                                                                        a product solution
                                                                                        for each of its clients
                                                                                        and negotiates the
                                                                                        purchasing terms.

With its 22 internal and external clients,
Eurauchan has now positioned itself as one
of the leading European central negotiators
and purchasing departments. By virtue                                                   Each business
of its independence, it enables its clients                                             decides on its
to gain a competitive advantage, to grow                                                trading policy and
or to offer cheaper prices, and this is achieved                                        distributes the
by buying in increased volumes and on                                                   products throughout
optimised negotiation and purchasing terms.”                                            its network.
Frédéric Wantz,
Eurauchan Director and Purchasing Director, Auchan Retail France
TODAY’S
#INNOVATION

ENTREPRENEUR
INNOVATES TO
MAKE HIS CUSTOMERS’
LIVES EASIER
REPORT

5.4
BILLION ITEMS OF
CUSTOMER DATA
HANDLED BY ONEY
BANQUE ACCORD
EACH MONTH
WITH A VIEW TO
EVALUATING AND
SIMPLIFYING
THE CUSTOMER
EXPERIENCE.
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