Carrefour records strong half-year performance

By Nicholas Robinson contact

- Last updated on GMT

Sales have improved for French supermarket group Carrefour
Sales have improved for French supermarket group Carrefour

Related tags: Generally accepted accounting principles

Dominant France-based supermarket chain Carrefour has reported strong sales in its half-year results.

Sales excluding VAT were up by 1.4% to €36.5bn and margins improved through a recurrent operating income, with earnings before interest and tax (EBITA) rising by 7.7%.

However, company sales across the board were not positive and net sales in France dropped by 0.3% on last year, while sales in other parts of Europe slumped by 4.5%.

Carrefour’s sales strength has come from the Latin American market, which grew 13.3% on last year and the Asian market, which grew by 2.7% on the previous year.

The future

Looking forward, Carrefour has said it will be focusing business plans around the “toughening consumption trends worldwide and exchange rate volatility”.

The company also said priorities were a reiteration of those disclosed in March and it will therefore continue to develop its multi-local multi-format model. It said power will be “decentralised”​, as decision processes are simplified and restructured. Clients will be “placed at the core of the business”​ and stores will be “re-empowered”,​ it said.

Finally, Carrefour will continue to be strict in its financial practices as it pushes out a “stable dividend payout policy” and controls the increase of capital expenditure, which is expected to be between €2.2bn and €2.3bn this year.

Meanwhile, Shore Capital city analysts Darren Shirley and Clive Black said they could see the company becoming a “more focused and disciplined business”,​ but added there was much work to do in order to keep the company profitable.

They said: “We sense, though, that steady progress, after a period of turmoil, is what the market is looking for from the company and that is what it is getting; so we would be reasonably warm to this update.”

The best bits

Company highlights from 2013 so far have seen several improvements in the group’s liquidity position, including:

  • A new bond issue of €1bn in May (1.75% coupon, maturity 2019).
  • Bond buybacks for €1.3bn in June on 2014, 2015 and 2016 maturities. 
  • Renewal of syndicated loans amounting to €4.15bn.

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