20/10/2021 - Carrefour SA: Earnings Document

Q3 2021 sales inc. VAT

October 20, 2021

Q3 2021 sales up by +4.0% (+0.8% LFL)

Solid growth on an exceptional comparable base (+9.2% LFL over 2 years)

Confirmed guidance of FY 2021 net free cash-flow

comfortably above €1bn

• Solid performance in Q3: Continued sales growth (+4.0% on a reported basis and +0.8% LFL), after record growth in Q3 2020 (+8.4% LFL)
• Over two years1, LFL sales growth reached +9.2%, in line with the Q2 2021 trend
• In France (-0.3% LFL and +3.5% over 2 years), Carrefour confirmed its market share gain momentum in the quarter2

• 1. Good underlying dynamics in hypermarkets, temporarily impacted in the second part of the quarter by the introduction of the sanitary pass in large shopping malls
• In Brazil: Continued strong momentum over 2 years (+24.2% LFL), on a high comparable base
• 1. Atacadão (+2.7% LFL and +28.4% over 2 years): Relevance of the model and good execution

• 1. Carrefour Retail (-13.3% LFL and +13.2% over 2 years): Solid growth over 2 years. Q3 2021 impacted by lower non-food sales on an exceptional comparable base
• In Europe (ex-France): Carrefour Spain (-2.3% LFL and +3.9% over 2 years) continued to gain market shares. Italy returned to growth (+0.8% LFL and -7.2% over 2 years) notably thanks to an improvement in customer satisfaction
• Continued food e-commerce sales growth: +19% in Q3, +100% over 2 years. Carrefour will present its digital strategy and opportunities during its Digital Day on November 9, 2021

Alexandre Bompard, Chairman and CEO, declared: "We posted another quarter of growth at Group level, despite a very high comparable base, and continued to gain market share in most of our countries. Our trajectory is very solid and demonstrates our ability to generate structural growth thanks to our strong customer-centric approach, good control over our operations, notably in digital, and impactful strategic initiatives. Our net free cash-flow objective for FY 2021, which was raised in July, is confirmed. With these favorable dynamics, its robust balance sheet, and thanks to the commitment of its teams, Carrefour is attractive and on the offensive, for the benefit of its customers and its shareholders."

Note: (1) sum of Q3 2020 LFL and Q3 2021 LFL; (2) based on NielsenIQ RMS data

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Q3 2021 sales inc. VAT					October 20, 2021
THIRD-QUARTER 2021 FIGURES
				Third-quarter 2021
			Sales inc.		Total variation
			LFL1	At current	At constant
			VAT (€m)
				exchange rates	exchange rates
	France	9,882	-0.3%	+2.1%	+2.1%

IAS 292		112
Group (post-IAS 29)	20,581

THIRD-QUARTER 2021 SALES INC. VAT

In a context still marked by the Covid-19 pandemic and evolving sanitary conditions across its different markets, the Group's third-quarter activity confirmed its good commercial momentum. Carrefour continued to gain market share in the vast majority of its countries, thanks to the improvement in customer satisfaction, which is at the heart of the Carrefour 2022 strategic plan. The Group's expansion also continues at a steady pace, thanks to numerous organic openings as well as the successful integration of recent acquisitions. E-commerce sales continued to grow on extremely high comparables. The Group will provide a comprehensive presentation of its digital strategy during its Digital Day, which will be held in Paris on November 9.

On a like-for-like (LFL) basis, third-quarter sales inc. VAT were up +0.8%. The Group's sales inc. VAT reached €20,468m pre-IAS29, an increase of +4.6% at constant exchange rates. This increase includes a favorable petrol effect of +2.0% (reflecting an increase in oil prices and higher volumes). After taking into account an unfavorable exchange rate of -0.7%,due to the weakness of the Argentine peso, the total sales variation at current exchange rates amounted to +4.0%. The impact of the application of IAS 29 was +€112m.

In France, Q3 2021 revenue was down -0.3% on a LFL basis (+0.8% LFL in food and -7.1% LFL in non-food) in a declining market, given a high comparable base. Hypermarkets were temporarily impacted by the introduction of the sanitary pass, restricting access to large shopping malls from mid-August to the end of September. Excluding the impact of the sanitary pass, LFL growth in France is estimated at +0.5% in Q3. Market share continued to improve over the quarter, with gains in most formats3. On a two year stack4, reported LFL growth reached +3.5%.

• Hypermarkets:Good resilience (-2.8% LFL in Q3/-0.3% over 2 years), given a high comparable base (+2.5% LFL in Q3 2020) and the temporary impact of the introduction of the sanitary pass
• Supermarkets(+2.2% LFL in Q3/+7.1% over 2 years) maintained their good momentum and continued to gain market share3
• Convenience(+1.2% LFL in Q3/+6.5% over 2 years) remained well oriented. Carrefour continued the expansion of this growth format with +63 openings in the third quarter
• Promocash's activities posted sustained LFL growth of +8.5%, thanks to the recovery of sales to bars and restaurants
• Non-foodsales remained up by +2.7% on a LFL basis over 2 years (+9.9% LFL in Q3 2020)

1. Excluding petrol and calendar effects and at constant exchange rates
2. Hyperinflation and foreign exchange in Argentina
3. Market share based on NielsenIQ RMS data for total food and non-food sales for the 13-week period ending 26/09/2021 for Carrefour Group, Carrefour Supermarkets, Carrefour Convenience and Carrefour Drive vs the French total retail market (Copyright © 2021, NielsenIQ)
4. Sum of Q3 2020 LFL and Q3 2021 LFL

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Q3 2021 sales inc. VAT

October 20, 2021

• Food e-commercein France grew again strongly this quarter (+19%), a growth of +72% vs 2019. Carrefour continues to deploy many initiatives in this field, notably the recent acquisition of a minority stake in Cajoo, a French pioneer in quick commerce

In Europe, LFL sales were down -1.2% compared to Q3 2020, but up +0.6% over two years. This reflects situations that were not uniform across countries:

• In Spain (-2.3% LFL/+3.9% over 2 years), the market was marked by strong out-of-home consumption benefitting convenience formats at the expense of hypermarkets, to which Carrefour is particularly exposed. In this context, the Group continued to gain market share. Supersol's integration continued successfully
• In Italy (+0.8% LFL/-7.2% over 2 years), sales growth returned to positive territory. The Group is starting to benefit from the restructuring and recovery plan initiated by the new management, with a sharp NPS increase, driven by a strong improvement in price perception
• In Belgium (-5.4% LFL/stable over 2 years), the performance reflects the declining market, marked by deflationary pressures on food and a high comparable base, as the summer period in 2020 benefited from high domestic tourism in the sanitary context
• In Poland (+0.9% LFL/-0.5% over 2 years), the Group maintained positive momentum
• In Romania (+5.9% LFL/+5.9% over 2 years), the trend remained very solid, in the wake of an excellent second quarter. Carrefour successfully launched a new loyalty program in the country

In Latin America, LFL sales increased by +7.3%, and by +35.7% over two years.

• In Brazil (-1.8% LFL/+24.2% over 2 years), LFL sales decreased slightly in Q3, given an exceptionally high comparable base. Over 2 years (+24.2% LFL), the trend marked an acceleration compared to H1 (+18.6% LFL). Q3 sales were up +7.7% at constant exchange rates thanks to a contribution from openings and acquisitions of +8.4% and a positive petrol effect of +1.1%. The currency effect was a favorable +2.1%. o Atacadão's sales were up +14.3% at constant exchange rates in Q3 2021 with a continued increase in LFL sales (+2.7% LFL/+28.4% over 2 years) on a very high comparable base (+25.8% LFL in Q3 2020). This confirms the strength of Atacadão's model, which proved able to accelerate strongly its expansion (+48 stores over the last 12 months, including Makro) while
  improving the performance of the existing store network
  o Carrefour Retail'ssales were down in Q3 (-13.3% LFL/+13.2% over 2 years), due to a drop in non-food sales given an exceptionally high comparable base (+44% LFL in Q3 2020). Over two years, sales grew both in food and in non-food
  o Food e-commerceaccelerated in Q3, with growth of +53%, notably driven by the rapid ramp- up at Atacadão; cash & carry now represents more than half of food e-commerce sales in Brazil o Financial servicescontinued the recovery initiated at the beginning of the year; billings were up
  +26% in Q3, notably thanks to the success of the Atacadão credit card
• In Argentina (+57.0% LFL/+98.4% over 2 years), Carrefour confirmed its excellent momentum, in a persistently high inflationary environment. Carrefour largely outperformed the market, thanks to record growth excluding inflation, driven by an increase in volumes despite a declining market

In Taiwan (Asia), Q3 sales were up +16.8% at constant exchange rates, thanks notably to the integration of Wellcome stores. LFL sales were down -5.2%(-4.5% over 2 years), impacted by the sanitary measures that penalized important festive events in the country. Wellcome stores, whose conversion to Carrefour banners will be finalized in November, significantly outperform when converted.

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Q3 2021 sales inc. VAT

October 20, 2021

FURTHER DISPOSALS OF NON-STRATEGIC REAL ESTATE ASSETS

As part of its plan to dispose €300m additional non-strategic real estate assets by 2022, the Group sold the real estate of 7 hypermarkets in Spain in September, through a sale & lease-back agreement with Realty Income, for €93m.

To date, the Group has disposed an additional €250m of non-strategic real estate assets.

FURTHER TRANSFORMATION OF THE OPERATING MODEL

In October, Carrefour Italy announced, as part of a broad recovery plan, an acceleration of its transformation, that notably includes the transfer to a franchising model of over 50 stores in 2021 and 25 in the first quarter of 2022.

In France, the Group will have transferred 10 hypermarkets and 44 supermarkets to lease-management this year. A new program of 43 stores (16 hypermarkets and 27 supermarkets) was announced, with the first transfers expected starting in March 2022.

LIMITED IMPACT OF INFLATIONARY PRESSURES EXPECTED IN 2021

The Group pays particular attention to the dynamics of inflation, notably regarding energy and food prices. The impact of the increase in commodity prices has had a limited impact on the Group's performance to date, as it benefits from contracts negotiated for the whole year for most of its purchases in Europe, including goods not for resale. For now, the Group does not anticipate any material effect of inflation on its full-year 2021 performance.

NET FREE CASH FLOW OBJECTIVE CONFIRMED

In this context, and given its good operational performance in the third quarter, the Group confirms its net free cash-flow generation objective for 2021, which continues to be expected comfortably above the initial objective of €1bn.

AGENDA

∙ Digital Day : November 9, 2021

CONTACTS

Investor Relations
Sébastien Valentin, Anthony Guglielmo and Antoine Parison	Tel: +33 (0)1 64 50 82 57
Shareholder Relations	Tel: 0 805 902 902 (toll-free in France)
Group Communication	Tel: +33 (0)1 58 47 88 80

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Q3 2021 sales inc. VAT

October 20, 2021

APPENDIX

Share capital decrease by way of cancellation of treasury shares

On October 20, 2021, the Board of Directors, pursuant to the authorization granted by the Extraordinary Shareholders' Meeting, decided to decrease the share capital of Carrefour S.A. by way of cancellation of 12,252,723 treasury shares representing approximately 1.6 % of the share capital.

These shares were repurchased from August 2, 2021 to September 13, 2021 within the framework of the €200 million share buyback program decided by the Board of Directors on July 28, 2021.

After the cancellation of these shares, the outstanding number of Carrefour S.A. shares will be 775,895,892 and the number of treasury shares will hence be 9,457,539, representing approximately 1.2 % of the share capital. The number of shares carrying voting rights will thus stand at 766,438,353.

Third-quarter 2021 sales inc. VAT

The Group's sales amounted to €20,468m pre-IAS 29. Foreign exchange had an unfavorable impact in the third quarter of -0.7%, due to the depreciation of the Argentine Peso. Petrol had a favorable impact of +2.0%. The calendar effect was a favorable +0.1%. The effect of openings was +0.9%. The effect of acquisitions was +2.1%. The impact of the application of IAS 29 was +€112m.

				Variation ex petrol ex			Total variation inc.
		Sales	calendar			petrol
		inc. VAT						at current		at constant
		(€m)	LFL		Organic
							exchange		exchange
									rates		rates
France		9,882		-0.3%		-2.0%			+2.1%		+2.1%
Hypermarkets	4,867		-2.8%	-3.3%	-0.2%	-0.2%
Supermarkets	3,295		+2.2%	-2.4%	+2.7%	+2.7%
Convenience /other formats	1,720		+2.5%	+2.7%	+8.0%	+8.0%
Other European countries		5,864		-1.2%		-1.7%			+0.9%		+1.4%
Spain	2,681		-2.3%	-2.2%	+3.9%	+3.9%
Italy	1,073		+0.8%	-3.5%	-2.5%	-2.5%
Belgium	1,010		-5.4%	-5.4%	-5.1%	-5.1%
Poland	499		+0.9%	+1.7%	+0.1%	+2.9%
Romania	601		+5.9%	+7.3%	+5.5%	+7.3%
Latin America (pre-IAS29)		4,005		+7.3%		+10.2%			+10.8%		+14.7%
Brazil	3,369		-1.8%	+2.1%	+9.7%	+7.7%
Argentina (pre-IAS 29)	636		+57.0%	+56.9%	+16.9%	+56.6%
Asia		718		-5.2%		-5.6%			+22.3%		+16.8%
Taiwan	718		-5.2%	-5.6%	+22.3%	+16.8%
Group total (pre-IAS29)		20,468		+0.8%		+0.3%			+4.0%		+4.6%
IAS 29(1)	112
Group total (post-IAS 29)	20,581

Note: (1) hyperinflation and foreign exchange

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