Carrefour: 2012 Full-Year Results

Thu Mar 7, 2013 1:30am EST

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Growth in sales and net income, Group share
Strengthened financial structure 


BOULOGNE-BILLANCOURT, France--(Business Wire)--
Regulatory News: 

Carrefour (Paris:CA) 

2012 key figures

* Growth in sales: +0.9% to €76.8bn, driven by emerging markets 
* Resilient Recurring Operating Income of €2,140m, with France up by 3.5% and
Latin America up by 14.2% 
* Significant rise in Net Income, Group share: €1,233m (vs. €371m in 2011),
including capital gains from disposals 
* Improved free cash flow 
* Strong improvement in financial structure: net debt of €4.3bn, an improvement
of €2.6bn 
* Proposed dividend of €0.58 per share, payable in cash or shares, in line with
the payout policy announced in March 2012

 (€ million)                                           2011 1    2012 2    Var.     
                                                                                    
 Sales ex. VAT                                         76,067    76,789    +0.9%    
 Recurring Operating Income before D&A (EBITDA)        3,748     3,688     -1.6%    
 EBITDA Margin                                         4.9%      4.8%               
 Recurring Operating Income                            2,197     2,140     -2.6%    
 Recurring Operating Margin                            2.9%      2.8%               
 Net income from continuing operations, Group share    -1,865    113                
 Net Income, Group share                               371       1,233     x 3.3    
                                                                                    
 Free Cash flow                                        215       279                
 Net debt at close                                     6,911     4,320     -€2.6bn  
 Net debt/ EBITDA                                      1.8x      1.2x               
                                                                                    


2012: A refocused and strengthened Group

* Refocusing of the Group on countries where it holds leading positions and has
a multi-format profile

* After the sale by Carrefour of its stake in their joint venture to
Marinopoulos, its Greek partner becomes the exclusive Carrefour franchisee in
Greece, Cyprus and the Balkans 
* Singapore : Closure of the Group`s two stores 
* Disposal of Colombian operations to Cencosud for a total consideration of €2bn

* Disposal of Malaysian activities to Aeon for €250m 
* Disposal of Carrefour`s stake in its Indonesian unit to its partner CT Corp
for €525m. CT Corp becomes Carrefour`s exclusive franchisee in the country

* Strengthening of operations in France, Brazil and Argentina

* Global consolidation of Guyenne & Gascogne as of June 1, 2012 following the
success of the tender offer 
* Finalization of the financial services partnership with Itaú Unibanco in
Brazil 
* Acquisition of 129 Eki stores in Argentina, consolidating Carrefour`s
leadership in the country

2012 performance by zone

                     Sales ex. VAT                                        Recurring Operating Income              
 € million           2011 3      2012        Change      Change at        2011 3          2012            Change  
                                                         constant                                                 
                                                         exch. Rates,                                             
                                                         including                                                
                                                         petrol                                                   
                                                                                                                  
 France              35,179      35,341      +0.5%       +0.5%            898             929             +3.5%   
 Europe              21,536      20,873      -3.1%       -2.7%            640             509             -20.6%  
 Latin America       13,551      14,174      +4.6%       +12.1%           532             608             +14.2%  
 Asia                5,801       6,400       +10.3%      +0.5%            187             168             -10.3%  
 Global functions                                                         -61             -74                     
 Total               76,067      76,789      +0.9%       +1.6%            2,197           2 ,140          -2.6%   
                                                                                                                  


France

In France, sales were up 0.5%, with food sales holding up well. The price
repositioning had only a slight impact on commercial margin thanks to an
improved mix between everyday prices, promotions and loyalty. SG&A were lower
both in value and as a percentage of sales. Recurring operating income rose 3.5%
to €929m. 

Europe

In Europe, sales decreased by 2.7% at constant exchange rates (-3.1% at current
exchange rates), reflecting the decline in consumption, particularly in southern
Europe. Belgium continues to record growing sales. Recurring operating income in
the zone amounted to €509m, a decrease of 20.6%, largely explained by the
economic context in Spain and Italy. In Spain, investment in prices was not
fully compensated by the significant reduction in SG&A. 

Latin America

Sales growth in Latin America remained strong (+12.1% at constant exchange rates
and +4.6% at current exchange rates), supported by solid performances in LFL in
Brazil and Argentina. Commercial margin increased. Recurring operating income
increased sharply by 14.2% to €608m. 

Asia

Overall, sales in China and Taiwan grew by 0.5% at constant exchange rates
(+10.3% at current exchange rates). The commercial margin was resilient.
Continued productivity gains did not fully offset the increase in distribution
costs linked to expansion and wage inflation in China. Recurring operating
income was down by 10.3% to €168m. 

2012 results: Key points 

Income Statement

* Sales increased by 1.6% at constant exchange rates vs. 2011 restated for
disposals. At current exchange rates, the change was +0.9%. 
* Recurring operating income was stable at constant exchange rates and down by
2.6% to €2,140 at current exchange rates, due to the following:

* Stable gross margin from current operations at 22.1% of sales. 
* SG&A costs under control, up by 1.3%, +10 bp as a percentage of sales.

* The Group`s operating income reached €1,434m vs. a loss of €140m in 2011 after
accounting for non-current expenses amounting to €707m in 2012. Capital gains on
asset disposals of €234m partially offset €285m of restructuring costs, €236m of
asset impairments and €419m of other costs, largely due to a revaluation of
provisions. 
* Net income, Group share improved significantly to €1,233m vs. €371m in 2011.

* Net income from recurring operations, Group share stood at €113m, due to the
following:

* An increase in net financial expenses of 25.1% to €882m, largely due to an
exceptional expense of €216m linked to our management of interest rate position.

* A decrease in tax charge to €388m, down 58.3% vs. 2011. The effective income
tax rate (restated for exceptional items) comes out at 35.7%.

* Net income from discontinued operations, Group share, amounted to €1,120m,
mainly linked to the asset disposals closed in 2012.

Cash flow statement & debt

* Free cash flow was €279m, including:

* Cash flow from operations (excluding discontinued operations) of €2,180, down
by 8%, mainly due to cash outflows linked to preexisting tax litigation and
restructuring. 
* A slight increase in working capital requirements, improving compared to 2011,
thanks to better operating working capital after a significant gain in days of
inventories.
* Capital expenditure, constrained at €1,547m, down by 27% vs. 2011. A third of
the investments went towards growth in emerging market, stable compared to 2011
in volume.

* Changes in the Group`s scope generated a net cash inflow of €2bn in 2012:

* The impact of discontinued activities, principally the disposals of our
activities in Colombia and Malaysia, is a cash inflow of €1,960m. 
* The disposal of Altis led to a cash inflow of €153m. 
* The acquisition of the shares of Guyenne & Gascogne`s parent company generated
a cash outflow of €96m.

* The net cash outflow linked to the dividend payment amounted to €137m, as
around 60% of the 2012 dividend was paid out in Carrefour shares. 
* Net debt improved by €2.6bn to €4,320m at December 31, 2012, strengthening the
Group`s financial structure. The net debt over EBITDA ratio significantly
improved to 1.2x in 2012 vs. 1.8x in 2011.

Proposed dividend of €0.58 per share 

The Board of Directors decided at its meeting on March 6, 2013 to submit for
approval to the Annual General Meeting to be held on April 23, 2013 a dividend
of €0.58 per share for the year ending December 31 2012, payable in cash or in
Carrefour shares. 

The proposed dividend amounts to a payout ratio of 45% of net income, Group
share, adjusted for exceptional items, in line with the policy set out in March
2012. 

2013 Priorities

* Development of the multi-local, multi-format model

* France: Continued action plans in all formats, with priority given to
improvement of the offer and of price perception, store refurbishments, Drive
roll-out and multi-channel development 
* Europe: Adaptation of the offer and costs to face the tough economic
environment 
* Emerging markets: Continued expansion in Latin America and Asia 
* New momentum in the development of real estate assets

* Decentralization and empowerment

* Simplify structures and decision-making process 
* Re-empower stores 
* Place the client at the core of the business

* Continued strict financial discipline

* Stable dividend payout policy 
* Controlled increase of capital expenditure (expected between €2.2bn and €2.3bn
in 2013) 
* Control of working capital

AGENDA
Q1 2013 sales: April 18, 2013
Annual General Meeting: April 23, 2013

APPENDICES

                                                                                     
 CONSOLIDATED INCOME STATEMENT                                                       
                                                                                     
 (in millions of euros)                              20114      2012       % change  
                                                                                     
 Sales, net of taxes                                 76,067     76,789     +0.9%     
 Loyalty program                                     -810       -662       -18.3%    
 Other revenues                                      2,224      2,333      +4.9%     
 Total Revenues                                      77,481     78,460     +1.3%     
 Cost of sales                                       -60,673    -61,523    +1.4%     
 Gross margin of current operations                  16,809     16,937     +0.8%     
 SG&A                                                -13 060    -13 249    +1.4%     
 Current operating incomes before D&A (EBITDA)       3 748      3 688      -1.6%     
 Depreciation & amortization                         -1 552     -1 548     -0.3%     
 Recurring operating income (ROI)                    2 197      2 140      -2.6%     
 Non-current income and expenses                     -2 337     -707       -69.8%    
 Operating income                                    -140       1 434                
 Financial expenses                                  -705       -882       +25.1%    
 Profit before tax                                   -845       552                  
 Income tax                                          -931       -388       -58.3%    
 Companies accounted for by the equity method        64         72         +13.0%    
 Net income from continuing operations               -1,713     235                  
 Net income from discontinued operations             2,116      1,081                
 Net income                                          404        1,316                
 Of which Net income - Group share                   371        1,233                
 Of which net income from continuing operations      -1,865     113                  
 Of which net income from discontinued operations    2,237      1,120                
 Attributable to non-controlling interests           33         83                   
 Of which net income from continuing operations      153        122                  
 Of which net income from discontinued operations    -120       -39                  


                                                                     
 MAIN RATIOS                                                         
                                                                     
                                                     20114    2012   
 Gross margin from current operations / Net sales    22,1%    22,1%  
 SG&A / Net sales                                    17,2%    17,3%  
 Recurring operating income / Net sales              2,9%     2,8%   
 Operating income / Net sales                        -0,2%    1,9%   
                                                                     


                                                                                     
 CONSOLIDATED BALANCE SHEET                                                          
                                                                                     
 (in millions of euros)                                            2011      2012    
 ASSETS                                                                              
 Intangible assets                                                 9,706     9,409   
 Tangible assets                                                   13,771    11,509  
 Financial investments                                             1,713     1,509   
 Deferred tax assets                                               745       752     
 Investment properties                                             507       513     
 Consumer credit from financial-services companies - long term     2,236     2,360   
 Non current assets                                                28,676    26,052  
 Inventories                                                       6,848     5,658   
 Trade receivables                                                 2,782     2,144   
 Consumer credit from financial-services companies - short term    3,384     3,286   
 Tax receivables                                                   468       520     
 Other receivables                                                 969       795     
 Current financial assets                                          911       352     
 Cash and cash equivalents                                         3,849     6,573   
 Current assets                                                    19,211    19,328  
 Assets held for sale                                              44        465     
 TOTAL                                                             47,931    45,844  
                                                                                     
 LIABILITIES                                                                         
 Shareholders equity, Group share                                  6,618     7,487   
 Minority interests in consolidated companies                      1,009     874     
 Shareholders equity                                               7,627     8,361   
 Deferred tax liabilities                                          586       580     
 Provisions for contingencies                                      3,680     4,000   
 Borrowing - long term                                             9,513     8,983   
 Bank loans refinancing - long term                                419       1,966   
 Non current liabilities                                           14,198    15,529  
 Borrowings - short term                                           2,159     2,263   
 Trade payables                                                    15,362    12,925  
 Bank loans refinancing - short term                               4,482     3,032   
 Tax payables & others                                             1,319     1,040   
 Other debts                                                       2,785     2,422   
 Current liabilities                                               26,106    21,682  
 Liabilities related to assets held for sale                       0         273     
 TOTAL                                                             47,931    45,844  
                                                                                     


                                                                                                          
 CONSOLIDATED CASH FLOW STATEMENT                                                                         
                                                                                                          
 (in millions of euros)                                                                 2011 5    2012    
                                                                                                          
 NET DEBT OPENING                                                                       -7,998    -6,911  
 Gross cash flow (ex. discontinued activities)                                          2,381     2,180   
 Change in working capital                                                              -240      -42     
 Impact of discontinued activities                                                      207       -171    
 Cash flow from operations (ex. financial services)                                     2,348     1,967   
 Capital expenditures                                                                   -2,119    -1,547  
 Asset disposals (business related)                                                     131       153     
 Change in payables to fixed asset suppliers                                            191       -166    
 Impact of discontinued activities                                                      -336      -127    
 Free Cash Flow                                                                         215       279     
 Financial investments                                                                  -71       -209    
 Proceeds from disposals of subsidiaries and from other tangible & intangible assets    385       240     
 Others                                                                                 -61       34      
 Impact of discontinued activities                                                      1,482     1,960   
 Cash Flow after investments                                                            1,950     2,304   
 Dividends paid by Carrefour                                                            -708      -137    
 Dividends paid to minorities and others                                                -87       -115    
 Acquisition and disposal of investments without change of control                      -13       -9      
 Treasury shares                                                                        -126      0       
 Others                                                                                 93        420     
 Impact of discontinued activities                                                      206       122     
 Consumer credit impact                                                                 -229      7       
 NET DEBT CLOSING                                                                       -6,911    -4,320  
                                                                                                          


                                                                                                      
 CHANGES IN SHAREHOLDER EQUITY                                                                        
                                                                                                      
 (in millions of euros)                                Total             Shareholders`    Minority    
                                                       shareholders`     equity,          interests   
                                                       equity            Group share                  
 At December 31, 2011                                  7,627             6,618            1,009       
 Net income for the year                               1,316             1,233            83          
 Other comprehensive income after tax                  -362              -354             -8          
 Share-based payments                                  9                 9                0           
 2011 dividends                                        -257              -137             -121        
 Change in capital and additional paid-in capital      194               188              6           
 Impact of changes in perimeter and other movements    -167              -72              -95         
 At December 31, 2012                                  8,361             7,487            874         
                                                                                                      


                                                                                                 
 NET INCOME, GROUP SHARE, ADJUSTED FOR EXCEPTIONAL ITEMS                                         
                                                                                                 
 (in millions of euros)                                          2011 6     2012       % change  
 Net income, Group share                                         371        1,233      x 3.3     
 Restatement for non-current income and expenses (before tax)    2,337      707                  
 Restatement for exceptional items in net financial expenses     151        284                  
 Tax impact of restated elements                                 (172)      (122)                
 Restatement for exceptional items recorded in income tax        (5)        (1)                  
 Minority interest on restated elements                          419        (60)                 
 Restatement of Net income from discontinued operations          (2,337)    (1,120)              
 Net income, Group share, adjusted for exceptional items         864        921        +6.6%     
                                                                                                 


                                                                           
 PRO FORMA H1 2011 AND H1 2012 INCOME STATEMENT (UNAUDITED)                
                                                                           
 (in millions of euros)                            H1 2011 7    H1 2012 7  
                                                                           
 Sales, net of taxes                               37,042       37,285     
 Loyalty program                                   -449         -373       
 Other revenues                                    1,062        1,169      
 Total Revenues                                    37,654       38,081     
 Cost of sales                                     -29,658      -30,051    
 Gross margin of current operations                7,996        8,030      
 SG&A                                              -6,417       -6,526     
 Recurring operating income before D&A (EBITDA)    1,579        1,504      
 Depreciation & amortization                       -778         -764       
 Recurring operating income (ROI)                  801          740        
 Non-current income and expenses                   -829         -63        
 Operating income                                  -28          677        
 Financial expenses                                -319         -326       
 Profit before tax                                 -347         351        
 Income tax                                        -469         -122       
 Companies accounted for by the equity method      24           23         
 Net income from continuing operations             -793         253        
 Net income from discontinued operations           552          -273       
 Net income                                        -241         -21        
                                                                           


                                                                         
 PRO FORMA H2 2011 AND H2 2012 INCOME STATEMENT (UNAUDITED)              
                                                                         
 (in millions of euros)                            H2 2011 7    H2 2012  
                                                                         
 Sales, net of taxes                               39,025       39,504   
 Loyalty program                                   -361         -289     
 Other revenues                                    1,162        1,164    
 Total Revenues                                    39,827       40,379   
 Cost of sales                                     -31,015      -31,472  
 Gross margin of current operations                8,813        8,907    
 SG&A                                              -6,643       -6,723   
 Recurring operating income before D&A (EBITDA)    2,170        2,184    
 Depreciation & amortization                       -774         -784     
 Recurring operating income (ROI)                  1,396        1,400    
 Non-current income and expenses                   -1,508       -644     
 Operating income                                  -112         757      
 Financial expenses                                -386         -556     
 Profit before tax                                 -498         201      
 Income tax                                        -462         -266     
 Companies accounted for by the equity method      40           49       
 Net income from continuing operations             -920         -18      
 Net income from discontinued operations           1,564        1,354    
 Net income                                        645          1,337    
                                                                         


                                                                                              
 PRO FORMA RECURRING OPERATING INCOME BY REGION (UNAUDITED)                                   
                                                                                              
 H1 2011 Recurring operating income (in millions of euros)    Reported            Restated 8  
                                                              August 30, 2012                 
 France                                                       299                 295         
 Europe ex. France                                            220                 218         
 Latin America                                                222                 205         
 Asia                                                         121                 106         
 Global functions                                             -24                 -23         
 Total                                                        838                 801         
                                                                                              


 H2 2011 Recurring operating income (in millions of euros)    Reported            Restated 8  
                                                              August 30, 2012                 
 France                                                       606                 604         
 Europe ex. France                                            425                 423         
 Latin America                                                360                 328         
 Asia                                                         117                 81          
 Global functions                                             -40                 -38         
 Total                                                        1,468               1,396       
                                                                                              
 FY 2011 Recurring operating income (in millions of euros)    Reported            Restated 8  
                                                              August 30, 2012                 
 France                                                       905                 898         
 Europe ex. France                                            645                 640         
 Latin America                                                582                 532         
 Asia                                                         238                 187         
 Global functions                                             -64                 -61         
 Total                                                        2,306               2,197       
                                                                                              


 H1 2012 Recurring operating income (in millions of euros)    Reported            Restated 8      
                                                              August 30, 2012                     
 France                                                       279                 275             
 Europe ex. France                                            150                 148             
 Latin America                                                245                 232             
 Asia                                                         116                 105             
 Global functions                                             -20                 -19             
 Total                                                        769                 740             
                                                                                                  
                                                                                                  
 H2 2012 Recurring operating income (in millions of euros)                        Reported        
                                                                                  March 7, 2013   
 France                                                                           654             
 Europe ex. France                                                                361             
 Latin America                                                                    376             
 Asia                                                                             62              
 Global functions                                                                 -55             
 Total                                                                            1,400           
                                                                                                  
                                                                                                  
 FY 2012 Recurring operating income (in millions of euros)                        Reported        
                                                                                  March 7, 2013   
 France                                                                           929             
 Europe ex. France                                                                509             
 Latin America                                                                    608             
 Asia                                                                             168             
 Global functions                                                                 -74             
 Total                                                                            2,140           
                                                                                                  


2012 DIVIDEND PAYMENT PROCEDURE

The ex-dividend date has been set as May 2, 2013. The period during which
shareholders may choose the option of the payment of dividend in cash or in
shares will begin May 2, 2013 and end May 23, 2013, included. Payment of the
cash dividend and settlement of the stock dividend will occur on June 7, 2013. 

DEFINITIONS

* Gross margin from current operations

Gross margin from current operations is the difference between the sum of net
sales, other income, reduced by loyalty program costs and the cost of goods
sold. Cost of sales comprises purchase costs, changes in inventory, the cost of
products sold by the financial services companies, discounting revenue and
exchange gains and losses on goods purchases.

* Recurring Operating Income Before Depreciation and Amortization (EBITDA)

Recurring Operating Income Before Depreciation and Amortization (EBITDA) is
defined as the difference between the gross margin from current operations and
sales, general and administrative expenses. It excludes non-recurring items as
defined below.

* Recurring Operating Income (ROI)

Recurring Operating Income is defined as the difference between the gross margin
from current operations and sales, general and administrative expenses,
depreciation and amortization.

* Operating Income (EBIT)

Operating Income (EBIT) is defined as the difference between gross margin from
current operations and sales, general and administrative expenses, depreciation,
amortization and non-recurring items 

Non-recurring income and expenses are certain material items that are unusual in
terms of their nature and frequency, such as impairment, restructuring costs and
expenses related to the revaluation of preexisting risks on the basis of
information that the Group became aware of during the accounting period.

* Free Cash Flow

Free cash flow is defined as the difference between funds generated by
operations, the variation of working capital requirements and capital
expenditures. 

DISCLAIMER

This press release contains both historical and forward-looking statements.
These forward-looking statements are based on Carrefour management's current
views and assumptions. Such statements are not guarantees of future performance
of the Group. Actual results or performances may differ materially from those in
such forward-looking statements as a result of a number of risks and
uncertainties, including but not limited to the risks described in the documents
filed with the Autorité des marchés financiers as part of the regulated
information disclosure requirements and available on Carrefour's website
(www.carrefour.com), and in particular the Annual Report (Document de
référence). These documents are also available in English language on the
company's website. Investors may obtain a copy of these documents from Carrefour
free of charge. Carrefour does not assume any obligation to update or revise any
of these forward-looking statements in the future. 

1 In accordance with IFRS 5, income and expenses from discontinued activities
(Greece, Singapore, Colombia, Malaysia and Indonesia) have been reclassified on
the line "Net income from discontinued operations" of the consolidated income
statement in 2011 and 2012.
2 The 2012 social and consolidated accounts were approved by the Carrefour Board
of Directors, which met on March 6, 2013. The accounts were audited by the
Group`s auditors.
3 In accordance with IFRS 5, income and expenses from discontinued activities
(Greece, Singapore, Colombia, Malaysia and Indonesia) have been reclassified on
the line "Net income from discontinued operations" of the consolidated income
statement in 2011 and 2012.
4 In accordance with IFRS 5, income and expenses from discontinued activities
(Greece, Singapore, Colombia, Malaysia and Indonesia) have been reclassified on
the line "Net income from discontinued operations" of the consolidated income
statement in 2011 and 2012.
5 In accordance with IFRS 5, cash flows from discontinued activities (Greece,
Singapore, Colombia, Malaysia and Indonesia) have been reclassified on the line
"Impact of discontinued activities" of the consolidated cash flow statement in
2011 and 2012.
6 In accordance with IFRS 5, income and expenses from discontinued activities
(Greece, Singapore, Colombia, Malaysia and Indonesia) have been reclassified on
the line "Net income from discontinued operations" of the consolidated income
statement in 2011 and 2012.
7 In accordance with IFRS 5, income and expenses from discontinued activities
(Greece, Singapore, Colombia, Malaysia and Indonesia) have been reclassified on
the line "Net income from discontinued operations" of the consolidated income
statement in 2011 and 2012.
8 In accordance with IFRS 5, income and expenses from discontinued activities
(Greece, Singapore, Colombia, Malaysia and Indonesia) have been reclassified on
the line "Net income from discontinued operations" of the consolidated income
statement in 2011 and 2012.

Carrefour
Investor relations:
Réginald Gillet, Alessandra Girolami, Matthew Mellin
Tel : +33 (0)1 41 04 26 00
or
Shareholder relations:
Céline Blandineau
Tel : 0 805 902 902 (n° vert en France)
or
Group Communications
Tel : +33 (0)1 41 04 26 17 



Copyright Business Wire 2013

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