Carrefour - 2017 Registration Document

4 MANAGEMENT’S DISCUSSION AND ANALYSIS AS OF DECEMBER 31, 2017 First-quarter 2018 sales CARREFOUR | 2017 REGISTRATION DOCUMENT 185 First-quarter 2018 sales 4.5 First-quarter 2018 sales of 20,776 million euros, up +2.6% at constant exchange rates and up 0.4% on a like-for-like basis, penalized by: Less favorable markets overall in Europe , notably due to adverse ● weather conditions impacting more specifically non-food and hypermarkets; Continued sharp food deflation in Brazil ; ● Persistently strong competitive pressure in the Group’s main ● markets. Sales inc. VAT (in millions of euros) LFL* Total variation At current exchange rates At constant exchange rates GROUP 20,776 +0.4% (2.4)% +2.6% France 9,489 (0.1)% +0.9% +0.9% Other countries 11,287 +0.7% (5.1)% +4.0% Europe 5,538 (0.8)% +2.9% +2.8% Latin America 3,978 +4.5% (11.9)% +9.1% Asia 1,771 (3.9)% (10.9)% (4.5)% Excluding petrol and calendar effects of +0.2% and +1.3% respectively at constant exchange rates. * First-quarter 2018 sales inc. VAT: like-for-like growth of 0.4% Carrefour’s first-quarter 2018 sales stood at 20,776 million euros, up 2.6% at constant exchange rates. Taking into account an unfavorable currency effect of -5.0%, principally due to the depreciation of the Brazilian Real, the total variation of sales at current exchange rates was -2.4%. On a like-for-like basis, first-quarter 2018 sales were up +0.4%, impacted by less dynamic markets in Europe, continued food deflation in Brazil, strong competitive pressure in the Group’s main markets, but also by operational disruptions in France and Belgium. In France , sales were up +0.9% in total (down 0.1% like-for-like) in a less favorable market than in the previous quarter and in a persistently competitive environment. Supermarkets and convenience posted solid sales momentum with like-for-like growth over the quarter. Hypermarket sales were affected by adverse weather conditions and operational disruptions. Europe posted a +2.8% increase in total sales at constant exchange rates (and a 0.8% decrease like-for-like) with contrasting performance in food between countries, reflecting divergent market dynamics. In Spain , total sales growth was +4.4%, driven by the strong ● performance of the stores acquired from Eroski which were integrated over the course of 2017. Like-for-like sales were down -0.6%, in line with trends in the second half of 2017 despite a less dynamic food market; In Italy , amid a persistently difficult consumption environment ● and tougher competitive pressure, total sales were down 0.9% and like-for-like sales decreased by -3.2%. This evolution reflects a challenging comparable base over the past two years, boosted by the roll-out of supermarket clusterization and the extension of shopping hours in some stores to 24 hours a day; Sales in Belgium were down -0.4% in total and -1.6% ● like-for-like, notably impacted by operational disruptions; In Poland , total sales were up +5.7% at constant exchange rates ● (-0.8% like-for-like), while strong momentum continued in Romania , with sales growth of +10.6% at constant exchange rates and +7.7% like-for-like, driven by an increase in volumes. In Latin America , total sales rose by +9.1% at constant exchange rates and by +4.5% on a like-for-like basis: In Brazil , like-for-like sales posted a slight increase of +0.4%. At ● Carrefour Retail, food sales are more resilient than in previous quarters despite strong deflation; non-food sales continued to post a double-digit increase on high comparables. Atacadão’s sales increased by +0.5% like-for-like, also penalized by food deflation. Regarding financial services, total billings with the Group’s credit cards were up +37.5% in the quarter and Banco CSF’s credit portfolio rose by +23.6%. In Argentina , like-for-like sales were up +21.2%, reflecting the ● country’s inflation. Volumes continued to gradually increase. Finally, in Asia, sales were down by -4.5% at constant exchange rates and -3.9% like-for-like, in line with trends in previous quarters. Like-for-like sales in China decreased by -6.6% in a competitive environment marked by the increasing share of the e-commerce channel, notably during the Chinese New Year celebrations. Positive trends continued in Taiwan , where like-for-like sales grew for the thirteenth consecutive quarter, by +3.3%.