Earnings Release • Oct 26, 2022
Earnings Release
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Alexandre Bompard, Chairman and CEO, declared: "In an environment marked by many uncertainties and inflation that is taking hold in Europe, Carrefour is demonstrating its ability to adapt and the robustness of its model. The Group is continuing its strong momentum of market share gains in all its key geographies, starting with France. We are demonstrating agility as consumers increasingly adapt their purchasing behavior to the new inflationary environment. In Brazil, the integration of Grupo BIG is progressing at a very swift pace, and we are accelerating store conversions. Carrefour is thus continuing to move ahead with confidence and is raising its cash generation target for 2022."
| Third-quarter 2022 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Total variation | |||||||||
| Sales inc. (2) LFL VAT (€m) |
At current exchange rate |
At constant exchange rate |
|||||||
| France | 10,547 | +6.6% | +6.7% | +6.7% | |||||
| Europe | 6,374 | +8.6% | +8.7% | +9.0% | |||||
| Latin America (pre-IAS 29) | 6,583 | +24.6% | +64.4% | +49.6% | |||||
| Group (pre-IAS 29) | 23,504 | +11.3% | +19.0% | +16.1% | |||||
| (3) IAS 29 |
225 | ||||||||
| Group (post-IAS 29) | 23,729 |
Notes: (1) Source: NielsenIQ RMS data; (2) Excluding petrol and calendar effects and at constant exchange rates; (3) Hyperinflation and foreign exchange in Argentina
NB: Carrefour Taïwan is accounted for as discontinued operations, in accordance with the IFRS 5 accounting standard
In markets that now seem to be settling into a lasting inflationary context, Carrefour maintained solid commercial momentum in the third quarter, thanks to a particular focus on customer satisfaction. This momentum has been materialized by continuous gains in market share in the Group's key countries, particularly in France, Spain and Brazil. Combined with a competitive commercial policy adapted to the challenges of the moment, as well as great discipline in terms of costs, it has allowed the Group to live up to the commitment made at the start of the year: protect the purchasing power of its customers while consolidating its economic model.
In the face of inflation, the Group has observed in recent months an acceleration in the shift in purchasing behavior that began in Europe in the second quarter. This is reflected in particular by more fragmented spending, with lower average basket and higher shopping frequency, as well as by an increase in sales of products with a lower unit value. These trends are particularly clear in European countries where the pressure on purchasing power is greatest, such as Spain and Romania.
In this context, Carrefour continues to offer concrete answers to customers with:
Group sales increased +11.3% LFL in Q3 (+12.2% LFL in food, +6.4% LFL in non-food), reflecting solid commercial dynamics and the relevance of our multi-format and omnichannel model in an inflationary context.
| LFL | Q3 2022 |
|---|---|
| France | +6.6% |
| Europe | +8.6% |
| Latin America | +24.6% |
| Group | +11.3% |
In France, Q3 2022 sales were up +6.6% LFL (+7.8% LFL in food and -2.2% LFL in non-food). Market share continued to increase over the quarter (+0.3 points in value and +0.5 points in volumes in Q3) 1 , notably in hypermarkets and convenience stores. Hypermarkets benefitted from their attractiveness in terms of offer, price and promotion. Convenience stores were particularly dynamic, driven by the resumption of tourism in big cities.
Store network transformation continues: All 43 stores scheduled for 2022 (16 hypermarkets and 27 supermarkets) have been converted to lease-management. On October 19, 2022, the Group announced a new wave of 41 additional store conversions (16 hypermarkets and 25 supermarkets) in 2023.
1 Market share based on NielsenIQ RMS data for FMCG-Fresh excluding wine for the 13-week period ending 02/10/2022 for Carrefour France vs the total French retail market (Copyright © 2022, NielsenIQ)
In Europe, LFL sales were up +8.6% versus Q3 2021, with an increase in all countries:
In Latin America sales increased +24.6% LFL in Q3.
Grupo BIG's integration continued at a rapid pace. After Carrefour Brazil reorganized its governance and management structure, it signed agreements to sell 14 stores, as required by the local antitrust authority (CADE) as part of the acquisition process, for a total consideration of R\$443m. In parallel, the Group is accelerating store conversions to Carrefour and Atacadão banners. To date, 15 stores have been converted (of which 7 in Q3); They have been delivering above expectations since reopening. The Group now expects at least 50 store conversions by end-2022, significantly above the 35 initially anticipated.
Based on the good operating performance recorded in the third quarter and the expected continuation of the trends observed recently through the end of the year, the Group now anticipates that net free cash flow generation will be comfortably above €1 billion in 2022.
In Q3, Carrefour continued its ambitious CSR policy with concrete initiatives, notably in terms of:
● Climate and energy: Carrefour was the first large-scale retailer to partner with EcoWatt, a charter drafted by electricity network operator RTE through which the Group undertakes to reduce its electricity consumption on an ad hoc basis in case of high demand on the network, thus participating in the effort to reduce consumption in France. On October 20, 2022, Carrefour also signed the EcoGaz charter and committed to reducing its gas consumption in case of network overheating and to widely promote everyday eco-friendly actions
In order to structurally reduce energy consumption, Carrefour is implementing energy sobriety plans, in particular in countries where energy price inflation is highest. In France, Carrefour announced a 20% reduction in energy consumption by 2024, with a €320m investment plan. Carrefour Belgium also set a 20% reduction target
Carrefour will present its new strategic plan on November 8, 2022 in Massy.
Investor Relations Sébastien Valentin, Anthony Guglielmo and Louise Brun Tel: +33 (0)1 64 50 79 81 Shareholder Relations Tel: 0 805 902 902 (toll-free in France) Group Communication Tel: +33 (0)1 58 47 88 80
On July 19, 2022, Carrefour Group announced the signing of an agreement to sell its 60% stake in Carrefour Taiwan to Uni-President Group. This agreement will result in the loss of control of Carrefour Taiwan, subject to the approval of the Taiwanese competition authorities and other customary closing conditions.
As a result, as of October 26, 2022, all of Carrefour Taiwan's assets and liabilities fall within the scope of IFRS 5 and have been reclassified as held for sale.
| Quarter | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Q1 2020 | Q2 2020 | Q3 2020 | Q4 2020 | Q1 2021 | Q2 2021 | Q3 2021 | Q4 2021 | Q1 2022 | Q2 2022 | Q3 2022 |
| +7.9% | +6.5% | +8.7% | +8.9% | +4.6% | +3.8% | +1.0% | +0.7% | +3.5% | +7.8% | +11.3% |
| Half-year | Full year | |||||
|---|---|---|---|---|---|---|
| H1 2020 | H2 2020 | H1 2021 | H2 2021 | H1 2022 | 2020 | 2021 |
| +7.2% | +8.8% | +4.2% | +0.8% | +5.7% | +8.0% | +2.5% |
| Sales | Variation ex petrol ex calendar |
Total variation inc. petrol | |||
|---|---|---|---|---|---|
| inc. VAT (€m) |
LFL | Organic | At current exchange rate |
At constant exchange rate |
|
| France | 10,547 | +6.6% | +5.1% | +6.7% | +6.7% |
| Hypermarkets | 5,114 | +5.0% | +2.6% | +5.1% | +5.1% |
| Supermarkets | 3,470 | +6.3% | +4.6% | +5.3% | +5.3% |
| Convenience / Other formats | 1,964 | +10.8% | +12.8% | +14.2% | +14.2% |
| Other European countries | 6,374 | +8.6% | +7.9% | +8.7% | +9.0% |
| Spain | 3,008 | +8.7% | +9.2% | +12.2% | +12.2% |
| Italy | 1,086 | +7.1% | +0.7% | +1.2% | +1.2% |
| Belgium | 1,053 | +5.2% | +5.1% | +4.3% | +4.3% |
| Poland | 555 | +18.5% | +19.2% | +11.4% | +15.6% |
| Romania | 672 | +8.8% | +11.2% | +11.8% | +11.3% |
| Latin America (pre-IAS 29) | 6,583 | +24.6% | +27.8% | +64.4% | +49.6% |
| Brazil | 5,551 | +11.5% | +14.9% | +64.8% | +41.4% |
| Argentina (pre-IAS 29) | 1,031 | +91.3% | +93.3% | +62.3% | +93.1% |
| Group total (pre-IAS 29) | 23,504 | +11.3% | +11.0% | +19.0% | +16.1% |
| (1) IAS 29 |
225 | ||||
| Group total (post-IAS 29) | 23,729 |
Note : (1) hyperinflation and foreign exchange
| LFL change excl. petrol and calendar |
Q3 2020 | Q3 2021 | Q3 2022 |
|---|---|---|---|
| France | +3.8% | -0.3% | +6.6% |
| Hypermarkets | +2.5% | -2.8% | +5.0% |
| Supermarkets | +4.9% | +2.2% | +6.3% |
| Convenience / Other formats | +5.4% | +2.5% | +10.8% |
| Other European countries | +1.9% | -1.2% | +8.6% |
| Spain | +6.3% | -2.3% | +8.7% |
| Italy | -8.0% | +0.8% | +7.1% |
| Belgium | +5.4% | -5.4% | +5.2% |
| Poland | -1.4% | +0.9% | +18.5% |
| Romania | +0.0% | +5.9% | +8.8% |
| Latin America | +28.4% | +7.3% | +24.6% |
| Brazil | +26.0% | -1.8% | +11.5% |
| Argentina | +41.4% | +57.0% | +91.3% |
| Group total | +8.7% | +1.0% | +11.3% |
| Calendar | Petrol | Foreign exchange |
|
|---|---|---|---|
| France | +0.0% | +1.5% | - |
| Hypermarkets | +0.1% | +2.3% | - |
| Supermarkets | -0.1% | +0.8% | - |
| Convenience / other formats | -0.2% | +1.0% | - |
| Other European countries | -0.2% | +0.7% | -0.3% |
| Spain | -0.1% | +1.8% | - |
| Italy | -0.2% | +0.7% | - |
| Belgium | -0.8% | - | - |
| Poland | +0.1% | -3.7% | -4.3% |
| Romania | +0.2% | +0.0% | +0.4% |
| Latin America | -0.1% | -1.3% | +14.8% |
| Brazil | +0.0% | -1.3% | +23.4% |
| Argentina | -0.2% | - | -30.8% |
| Group total | -0.1% | -0.1% | +2.9% |
| Sales | Variation ex petrol ex calendar |
Total variation inc. petrol | |||
|---|---|---|---|---|---|
| inc. VAT (€m) |
LFL | Organic | At current exchange rates |
At constant exchange rates |
|
| France | 30,513 | +2.7% | +1.7% | +6.3% | +6.3% |
| Hypermarkets | 14,916 | +1.1% | -0.2% | +5.2% | +5.2% |
| Supermarkets | 10,131 | +0.9% | -0.7% | +3.9% | +3.9% |
| Convenience / Other formats | 5,466 | +10.0% | +11.6% | +14.6% | +14.6% |
| Other European countries | 18,127 | +4.4% | +3.8% | +5.8% | +6.1% |
| Spain | 8,302 | +5.7% | +6.2% | +11.1% | +11.1% |
| Italy | 3,223 | +4.1% | -2.2% | -0.4% | -0.4% |
| Belgium | 3,106 | -2.4% | -2.4% | -2.7% | -2.7% |
| Poland | 1,635 | +13.0% | +13.6% | +9.2% | +12.2% |
| Romania | 1,861 | +5.8% | +8.3% | +7.8% | +8.2% |
| Latin America (pre-IAS 29) | 16,864 | +23.2% | +26.4% | +54.4% | +38.8% |
| Brazil | 14,161 | +12.9% | +16.4% | +54.2% | +31.1% |
| Argentina (pre-IAS 29) | 2,703 | +76.1% | +77.5% | +55.2% | +77.7% |
| Group total (pre-IAS 29) | 65,504 | +7.6% | +7.4% | +15.4% | +12.5% |
| (1) IAS 29 |
328 | ||||
| Group total (post-IAS 29) | 65,832 |
Note : (1) hyperinflation and foreign exchange
| LFL change excl. petrol and calendar |
9M 2020 | 9M 2021 | 9M 2022 |
|---|---|---|---|
| France | +2.9% | +2.6% | +2.7% |
| Hypermarkets | -0.1% | +1.5% | +1.1% |
| Supermarkets | +5.7% | +5.4% | +0.9% |
| Convenience / Other formats | +6.2% | +0.5% | +10.0% |
| Other European countries | +4.2% | -1.6% | +4.4% |
| Spain | +7.5% | -1.2% | +5.7% |
| Italy | -4.4% | -4.8% | +4.1% |
| Belgium | +9.2% | -3.2% | -2.4% |
| Poland | +0.9% | +1.8% | +13.0% |
| Romania | +2.3% | +4.1% | +5.8% |
| Latin America | +22.2% | +11.2% | +23.2% |
| Brazil | +16.4% | +3.9% | +12.9% |
| Argentina | +53.9% | +45.3% | +76.1% |
| Group total | +7.7% | +3.1% | +7.6% |
| Calendar | Petrol | Foreign exchange |
|
|---|---|---|---|
| France | +0.3% | +4.3% | - |
| Hypermarkets | +0.2% | +5.2% | - |
| Supermarkets | +0.4% | +4.2% | - |
| Convenience / Other formats | +0.1% | +2.7% | - |
| Other Europeans countries | +0.1% | +1.6% | -0.3% |
| Spain | +0.3% | +3.0% | - |
| Italy | +0.1% | +1.7% | - |
| Belgium | -0.3% | - | - |
| Poland | +0.2% | -1.6% | -3.0% |
| Romania | +0.0% | +0.0% | -0.5% |
| Latin America | +0.0% | -0.3% | +15.6% |
| Brazil | +0.0% | -0.1% | +23.1% |
| Argentina | +0.1% | - | -22.5% |
| Group total | +0.2% | +2.1% | +2.9% |
The impact on Group sales is presented in the table below:
| Sales inc. VAT (m€) |
(1) 2021 |
(2) LFL |
Calendar | Scope and (3) others |
Petrol | 2022 at constant rates pre-IAS 29 |
Forex | 2022 at current rates pre-IAS 29 |
(4) IAS 29 |
2022 at current rates post-IAS 29 |
|---|---|---|---|---|---|---|---|---|---|---|
| Q1 | 16,451 | +3.5% | -0.5% | +1.0% | +3.4% | +7.5% | +1.6% | 19,539 | +23 | 19,562 |
| Q2 | 17,390 | +7.8% | +1.0% | +1.8% | +3.0% | +13.6% | +4.1% | 22,462 | +80 | 22,542 |
| H1 | 33,842 | +5.7% | +0.3% | +1.4% | +3.2% | +10.6% | +2.9% | 42,001 | +103 | 43,104 |
| Q3 | 17,726 | +11.3% | -0.1% | +4.9% | -0.1% | +16.1% | +2.9% | 23,504 | +225 | 23,729 |
| 9M | 51,568 | +7.6% | +0.2% | +2.6% | +2.1% | +12.5% | +2.9% | 65,504 | +328 | 65,832 |
Notes: (1) Restated for IFRS 5; (2) Excluding petrol and calendar effects and at constant exchange rates; (3) Including transfers; (4) Hyperinflation and foreign exchange
| Thousand of sq. m | Dec. 31 2021 |
June 30 2022 |
Openings/ Store enlargements |
Acquisitions | Closures/ Store reductions/ Disposals |
Q3 2022 change |
Sept. 30 2022 |
|---|---|---|---|---|---|---|---|
| France | 5,586 | 5,605 | +13 | +3 | -5 | +10 | 5,615 |
| Europe (ex Fr) | 5,908 | 5,907 | +65 | - | -21 | +43 | 5,951 |
| Latin America | 2,790 | 3,982 | +25 | - | -67 | -41 | 3,941 |
| (1) Others |
1,551 | 1,453 | +166 | - | - | +166 | 1,619 |
| Group | 15,835 | 16,947 | +269 | +3 | -93 | +179 | 17,126 |
| N° of stores | Dec. 31 2021 |
June 30 2022 |
Openings | Acquisitions | Closures/ Disposals |
Transfers | Total Q3 2022 change |
Sept. 30 2022 |
|---|---|---|---|---|---|---|---|---|
| Hypermarkets | 1,062 | 1,054 | +8 | - | -1 | - | +7 | 1,061 |
| France | 253 | 253 | - | - | - | - | - | 253 |
| Europe (ex Fr) | 457 | 457 | +3 | - | -1 | - | +2 | 459 |
| Latin America | 184 | 183 | - | - | - | - | - | 183 |
| (1) Others |
168 | 161 | +5 | - | - | - | +5 | 166 |
| Supermarkets | 3,574 | 3,975 | +68 | - | -26 | - | +42 | 4,017 |
| France | 1,043 | 1,039 | +1 | - | -1 | - | - | 1,039 |
| Europe (ex Fr) | 1,926 | 1,958 | +60 | - | -12 | - | +48 | 2,006 |
| Latin America | 151 | 535 | - | - | -13 | - | -13 | 572 |
| (1) Others |
454 | 443 | +7 | - | - | - | +7 | 450 |
| Convenience stores | 8,368 | 8,468 | +118 | +13 | -80 | - | +51 | 8,519 |
| France | 4,330 | 4,370 | +43 | +13 | -20 | - | +36 | 4,406 |
| Europe (ex Fr) | 3,430 | 3,485 | +67 | - | -60 | - | +7 | 3,492 |
| Latin America | 558 | 564 | +8 | - | - | - | +8 | 572 |
| (1) Others |
50 | 49 | - | - | - | - | - | 49 |
| Cash & carry | 440 | 454 | +6 | - | - | - | +6 | 460 |
| France | 147 | 148 | - | - | - | - | - | 148 |
| Europe (ex Fr) | 12 | 12 | - | - | - | - | - | 12 |
| Latin America | 259 | 271 | +6 | - | - | - | +6 | 277 |
| (1) Others |
22 | 23 | - | - | - | - | - | 23 |
| Soft discount (Supeco) | 108 | 117 | +4 | - | -2 | - | +2 | 119 |
| France | 26 | 32 | +1 | - | - | - | +1 | 33 |
| Europe (ex Fr) | 81 | 85 | +3 | - | -2 | - | +1 | 86 |
| Latin America | 1 | - | - | - | - | - | - | - |
| (1) Others |
- | - | - | - | - | - | - | - |
| Group | 13,552 | 14,068 | +204 | +13 | -109 | - | +108 | 14,176 |
| France | 5,799 | 5,842 | +45 | +13 | -21 | - | +37 | 5,879 |
| Europe (ex Fr) | 5,906 | 5,997 | +133 | - | -75 | - | +58 | 6,055 |
| Latin America | 1,153 | 1,553 | +14 | - | -13 | - | +1 | 1,554 |
| (1) Others |
694 | 676 | +12 | - | - | - | +12 | 688 |
Note: (1) Asia, Africa, Middle East, Dominican Republic
Free cash flow corresponds to cash flow from operating activities before net finance costs and net interests related to lease commitment, after the change in working capital, less net cash from/(used in) investing activities.
Net free cash flow corresponds to free cash flow after net finance costs and net lease payments
Sales generated by stores opened for at least twelve months, excluding temporary store closures, at constant exchange rates, excluding petrol and calendar effects and excluding IAS 29 impact.
Like for like sales growth plus net openings over the past twelve months, including temporary store closures, at constant exchange rates.
Gross margin corresponds to the sum of net sales and other income, reduced by loyalty program costs and cost of goods sold. Cost of sales comprise purchase costs, changes in inventory, the cost of products sold by the financial services companies, discounting revenue and exchange rate gains and losses on goods purchased.
Recurring Operating Income corresponds to the gross margin lowered by sales, general and administrative expenses, depreciation and amortization.
Recurring Operating Income Before Depreciation and Amortization (EBITDA) also excludes depreciation and amortization from supply chain activities which is booked in cost of goods sold.
Operating Income (EBIT) corresponds to the recurring operating income after income from associates and joint ventures and non-recurring income and expenses. This latter classification is applied to certain material items of income and expense that are unusual in terms of their nature and frequency, such as impairment of non-current assets, gains and losses on sales of non-current assets, restructuring costs and provisions recorded to reflect revised estimates of risks provided for in prior periods, based on information that came to the Group's attention during the reporting year.
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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 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.
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