* 2012 operating profit 2.140 bln eur vs poll avg 2.061 bln
* Plans 2013 capex of 2.2-2.3 bln vs 1.547 bln in 2012
* CEO says not planning Brazil listing or more country exits
* Shares hit 1-1/2 year high
By Dominique Vidalon
PARIS, March 7 Carrefour pledged more
cash to renovate and expand stores under new boss Georges
Plassat's revival plan for Europe's largest retailer after an
asset-selling spree last year reduced debt.
Carrefour said 2012 core profit fell less than analysts had
feared as a robust Latin American business helped cushion
falling demand in austerity-hit Spain and Italy while the core
French business showed further signs of recovery.
Carrefour, which sold 2.8 billion euros ($3.64 billion) of
assets last year to raise cash for investments and shore up its
balance sheet, also quashed speculation it might seek to float
its Brazilian business or exit more non-strategic countries.
"Retailers who do not invest are doomed," Plassat told a
news conference on Thursday. "Today, we have the financial means
to conduct an investment policy."
Shares in the world's second-biggest retailer behind
Wal-Mart rose to 1-1/2 year highs, gaining 5 percent
before easing to 22.20 euros, up 3.8 percent, as of 1507 GMT.
Carrefour has been struggling for years, partly due to its
reliance on hypermarkets, which have been losing out as
time-pressed shoppers buy more goods locally and online and
prefer to buy general merchandise in specialist stores.
The previous management's key response was Carrefour Planet,
a costly revamp of European hypermarkets that was halted last
year as it failed to yield the necessary results.
This decision cut capital expenditure by 27 percent to 1.547
billion euros in 2012, about 2 percent of sales, down from 2.3
billion in 2011, a level analysts have said barely covered the
cost of maintaining existing stores.
Carrefour said on Thursday it was back on the offensive on
capex and would invest 2.2 billion to 2.3 billion euros this
year, beating analysts' expectations of 1.955 billion.
Investments would be evenly spread between renovating and
expanding stores, and focused on France, Brazil and China.
In France alone, which makes over 40 percent of group sales,
about 150 out of 220 hypermarkets needed remodelling in the next
three years. Carrefour will work on 50 this year, Plassat said.
Under his recovery plan, retail veteran Plassat, who became
CEO in May 2012, has also vowed to cut costs, improve price
competitiveness and simplify product offerings, notably in the
troubled non-food sector.
He has also promised to give store managers more autonomy
after years of mainly central planning to make them more
reactive and innovative.
This "change in culture" was a key part of a strategy to win
back clients amid fierce competition, notably from more
de-centralised unlisted French rivals such as Leclerc or Systeme
Carrefour said full-year operating profit fell to 2.14
billion euros, topping the average estimate of 2.061 billion in
a Thomson Reuters I/B/E/S analyst poll.
Finance Chief Pierre-Jean Sivignon told a conference call
Carrefour was still bracing for a difficult economic climate in
2013 but that the improvement seen in the group's results in
France in the second half of 2012 was sustainable.
Carrefour shares are up 70 percent since bottoming out last
July and are up 14 percent this year, welcome news for top
stakeholder Blue Capital, controlled by LVMH CEO
Bernard Arnault, and U.S. investment fund Colony Capital.
For some analysts, Carrefour's valuation multiples already
factor in an improving commercial performance in France.
The stock trades at 14.4 times 12-month forward earnings,
against 13.9 times for smaller French rival Casino and
11.1 times for Tesco and the European sector.
To raise cash to defend positions in western Europe, China
and Brazil, and strengthen its balance sheet, Carrefour has
raised 2.8 billion euros from selling units in Indonesia,
Colombia and Malaysia.
The sale strategy, similar to actions taken by European
peers Tesco and Metro, allowed Carrefour to cut net
debt by 2.6 billion euros to 4.32 billion by end-2012.
Plassat said there were "no plans to exit more countries on
He also dismissed speculation that Carrefour could list its
Brazilian wholesale unit Atacadao or any business in Brazil,
which is its second-largest market after France.