Carrefour - 2017 Registration Document

PRESENTATION OF THE CARREFOUR GROUP The Carrefour group in 2017 2017 REGISTRATION DOCUMENT | CARREFOUR 1. 24 Latin America Carrefour has been operating in Latin America since opening its first store in Brazil in 1975 and has become one of the continent’s leading retailers. Carrefour is expanding its banners in two growth markets: Argentina and Brazil. The network comprises 1,014 units, of which 193 hypermarkets, 147 supermarkets, 521 convenience stores and 153 cash & carry stores. In 2017, the network was expanded with the opening of 11 new Atacadão stores and 49 convenience stores in Brazil, and the addition of four convenience stores in Argentina. These new stores added 78,000 sq.m. of gross sales area. Net sales in Latin America totalled 16 billion euros in 2017, an increase of 8.3% at constant exchange rates. Sales rose by 10.6% at current exchange rates thanks to a favourable currency effect. Recurring operating income came to 715 million euros, a decline of 7.0% at constant exchange rates and an increase of 0.6% at current exchange rates. The operating margin ratio stood at 4.5%, a decrease on the prior year that was due mainly to operating losses in Argentina directly related to macroeconomic conditions. Brazil turned in a good operating performance despite the sharp fall in food prices, with increased profitability led by the confirmed success of the Atacadão model. In Brazil , Carrefour is the leading grocery retailer, with 103 hypermarkets, 41 supermarkets, 119 convenience stores and 146 cash & carry stores at end-2017. Net sales in Brazil totalled 13.2 billion euros, up 6.3% at constant exchange rates. One of the key events that shaped 2017 for Carrefour in Brazil was its initial public offering in July. Carrefour’s multi-format profile was enhanced by the gradual expansion of the Express and Atacadão banners, the hypermarket renovation programme and the development of the non-food e-commerce site. These initiatives are helping to offer customers new shopping experiences, while also revitalising drugstores and service stations. Carrefour has been operating in Argentina since 1982 and is the leading grocery retailer thanks to its multi-format presence. It manages a network comprising 90 hypermarkets, 106 supermarkets, 402 convenience stores, and seven cash & carry stores under the Maxi banner. Net sales totalled 2.8 billion euros in 2017, an increase of 17.2% at constant exchange rates. Operational investments in Latin America amounted to 526 million euros in 2017, representing 3.3% of net sales. Asia Present in Asia since 1989, Carrefour has operations in China and Taiwan, as well as in Indonesia through franchising. The regional network comprises 466 stores under Group banners, including 365 hypermarkets, 58 supermarkets, 41 convenience stores and two cash & carry stores. A total of 39 stores were opened during the year, adding a further 39,000 sq.m. of sales area. Net sales in Asia totalled 5.9 billion euros, down 3.2% at constant exchange rates. Recurring operating income came to 4 million euros in 2017, versus a loss of 58 million euros in 2016. The increase reflects the success of action plans rolled out in China, in particular as regards cost savings, despite a still highly competitive environment marked by rapidly changing consumer habits. In Taiwan, growth in sales remained strong and operating margin continued to widen. Carrefour has been present in China since 1995 and is a leading player in grocery retail. Net sales in the country totalled 4.1 billion euros, a decline of 5.6% at constant exchange rates. The Group is continuing to build its long-term position with the implementation of a local action plan that includes the closure of inefficient stores, a more selective expansion programme, and the development of convenience stores and online retailing. At the end of 2017, Carrefour had 259 stores in the country, including 220 hypermarkets and 39 convenience stores. In Taiwan , the Carrefour network includes 64 hypermarkets and 50 supermarkets. Net sales totalled 1.9 billion euros in 2017, an increase of 3.1% at constant exchange rates. The opening of several supermarkets and the development of online food sales are the main initiatives being led to strengthen Carrefour’s multi-format and multi-channel profile in Taiwan. Carrefour also has a presence in Indonesia through a partner franchisee, which operated 81 hypermarkets, eight supermarkets, two convenience stores and two cash & carry outlets at end-2017. Operational investments in Asia totalled 164 million euros in 2017, representing 2.8% of net sales. Other regions Carrefour also operates 398 stores with local franchisee partners in Africa, the Middle East, and the Dominican Republic in various formats, including 111 hypermarkets, 222 supermarkets, 52 convenience stores, and 13 cash & carry stores. In 2017, Carrefour continued to expand its banner base by supporting its partners outside Europe and in the French overseas territories, with a total of 59 new sales outlets opened during the year. In the Middle East, for example, the Majid Al Futtaim group consolidated its multi-format expansion with the opening of ten hypermarkets, 21 supermarkets and four convenience stores. In Africa, the CFAO Retail Group inaugurated its second store in Abidjan, Ivory Coast and the first Carrefour Market shopping centre in Douala, Cameroon.