Carrefour - 2017 Registration Document

4 MANAGEMENT’S DISCUSSION AND ANALYSIS AS OF DECEMBER 31, 2017 Consolidated sales and earnings performance CARREFOUR | 2017 REGISTRATION DOCUMENT 175 Non-recurring income and expenses, net Non-recurring income and expenses correspond to certain provided for in prior periods, based on information that came to material items that are unusual in terms of their nature and the Group’s attention during the reporting year. frequency, such as impairment charges, restructuring costs and provision charges recorded to reflect revised estimates of risks Non-recurring items represented a net expense of 1,310 million euros in 2017. The detailed breakdown is as follows: (in millions of euros) 2017 2016 Net gains on sales of assets 22 39 Restructuring costs (279) (154) Other non-recurring items (13) (127) Non-recurring income and expenses net before asset impairments and write-offs (271) (242) Asset impairments and write-offs (1,039) (130) Impairments and write-offs of goodwill (707) (5) Impairments and write-offs of tangible and intangible assets (332) (125) NON-RECURRING INCOME AND EXPENSES, NET (1,310) (372) As in 2016, gains on disposals of assets in 2017 primarily related to sales of various individually non-material assets. Restructuring costs recognised in 2017 concerned plans to streamline operating structures in several of the Group’s countries. Restructuring measures primarily concern France (particularly costs relating to the overhaul of supply chains), Italy, Argentina, China (store closure plan), and Spain (plan to integrate the hypermarkets acquired from Eroski). The expense recognised in 2016 mainly includes the residual impact of integrating the Dia France stores acquired in late 2014, as well as costs relating to the overhaul of supply chains in France. In defining its transformation plan, the Group reviewed its financial trajectories and adjusted certain assumptions underlying financial projections for its operations in Italy. The impairment tests carried out on this basis (see the accounting principles in Note 6.3 to the Consolidated Financial Statements) led the Group to recognise a 700 million-euro impairment loss against goodwill allocated to its Italian operations. This impairment loss has no impact on cash flow. outlook for an improvement in the profitability of certain loss-making stores, including stores which the Group intends to sell or close in 2018 within the scope of the transformation plan announced on January 23, 2018 (particularly former Dia stores in France). In addition, 30 million euros’ worth of assets were written off during the year (2016: 33 million euros). Impairment was also recognised against non-current assets other than goodwill in an amount of 302 million euros, primarily in France, China and Italy. This impairment reflects a decline in the In 2016, impairment losses against non-current assets other than goodwill totalled 93 million euros and chiefly concerned assets of loss-making stores, mainly in China. Other non-recurring income and expenses amounted to a net expense of 13 million euros in 2017, compared with an expense of 127 million euros in 2016, mainly relating to the tax on retail space in France (TaSCom), which resulted from a change in the accounting treatment of said tax. A description of non-recurring income and expenses is provided in Note 5.3 to the Consolidated Financial Statements. Operating income The Group ended 2017 with operating income of 700 million euros, versus 1,943 million euros in 2016.