SOURCE: Carrefour SA

October 12, 2005 11:41 ET

Carrefour Announces 3rd Quarter Sales Including VAT

Paris, France -- (MARKET WIRE) -- October 12, 2005 --

                            October 12th 2005 
 

   Despite a very weak economic environment, improving like for likes in
 France, tactical acquisitions, and faster organic growth, have led to an
        increase in Q3 pro forma group sales ex-currency of 5.1%
                         (+7.2% inc. currency) 
      Sales in France increased 2.4%. Carrefour continues to win food
                              market share
                Sales outside France increased by 8.3%


                             THIRD QUARTER 2005                     
                                                                      
           Sales    Like   Expansion     Total     Currencies   Total 
           Incl.     for                  Ex.                         
            VAT     like      (%)       Currency      (%)        (%)  
           (mEUR)   (%)                   (%)                         
                                                                      
  FRANCE   10 085   1.9       0.5         2.4         0.0        2.4  
  EUROPE   7 887    0.3       5.8         6.1         1.1        7.1  
  ex Fce                                                              
  LATIN    1 663    2.3       8.7         11.0        21.1      32.0  
  AMERICA                                                             
  ASIA     1 642    0.5       13.7        14.2        4.5       18.7  
                                                                      
  TOTAL    21 276   1.2       3.9         5.1         2.0        7.2  

                                                                      
                                 9 MONTHS 2005                        
                                                                      
           Sales     Like   Expan      Total     Currencies    Total  
           Incl.     for    -sion       Ex.                           
            VAT     like             Currency        (%)        (%)   
           (mEUR)    (%)     (%)        (%)                           
                                                                      
  FRANCE   28 996    0.7     0.5        1.2          0.0        1.2   
  EUROPE   22 650    0.7     4.4        5.1          1.0        6.1   
  ex Fce                                                              
  LATIN    4 456     4.8     5.5       10.3         11.7        22.0  
  AMERICA                                                             
  ASIA     4 635     3.7     14.2      17.9          1.2        19.2  
                                                                      
  TOTAL    60 738    1.2     3.2        4.4          1.2        5.6   

 
* In the third quarter, Carrefour pro forma group sales, including
  VAT, but ex-currency, grew 5.1%. Including currency, sales grew 7.2%.
  On reported Q3 2004 numbers, sales growth was 2.7% ex currency and
  4.7% including currency respectively (Mexico, Japan, Prodirest, the
  Czech Republic and Slovakia have been deconsolidated as of the 1st
  January 2005).
 
* In France, Carrefour continues to deliver food market share gains.
  In the quarter, we gained 0.4% market share in hypermarkets and 0.3%
  share overall, according to Secodip. Year to date, we have won 0.2%
  in hypermarkets, 0.3% in hard discount and 0.1% in convenience
  stores. Supermarket share is stable. Despite continued deflation,
  strong volume growth in food and petrol inflation enabled
  hypermarkets to register a 2.4% increase in like for like sales.
  Supermarket like for likes, while still negative, showed an
  improvement on Q2.
 
* The trading environment in Europe remains challenging. However,
  despite weak market volumes and deflation, sales trends are stable
  quarter on quarter. Sales in the region increased 6.1% in the
  quarter, with like for likes increasing 0.3%.
 
* We confirm that we will open around 1.4 million square metres of
  new space in 2005 through organic growth and through tactical
  acquisitions. In Q3, we opened 524 new stores under banner,
  accounting for 480 000 m2 of new space. This included 22
  hypermarkets, 135 supermarkets, 169 hard discount stores and 195
  convenience stores. We now have 11 833 stores in our portfolio.
 
* We have continued our efforts to clean up and upgrade our portfolio
  of assets. At the end of the quarter, we announced our intention to
  swap our activities in the Czech Republic and Slovakia for Tesco's
  activities in Taiwan.
 
* Despite a tough economic and competitive environment, we continue
  to follow a consistent and determined pricing strategy. The market
  remains very difficult, with little sign of improvement in the
  foreseeable future. Against this background, we remain committed to
  doing what is necessary to reinforce our price competitiveness and to
  win market share in all our markets, as we have been doing since the
  beginning of this year.


* FRANCE
                                  THIRD QUARTER 2005                  
                      Sales          Like for     Expansion    Total  
                      (mEUR)           like          (%)        (%)   
                                       (%)                            
  FRANCE              10 085           1.9           0.5        2.4   

  Hypermarkets        5 214            2.4           0.0        2.4   
  Supermarkets        2 112            -0.3          0.9        0.6   
  Hard discount        568             -2.4          4.9        2.5   
  Others              2 191            3.8           0.1        4.0   
 
                                                                      
                                   9 MONTHS 2005                    
                      Sales          Like for     Expansion    Total  
                      (mEUR)           like          (%)        (%)   
                                       (%)                            
  FRANCE              28 996           0.7           0.5        1.2   

  Hypermarkets        15 086           1.4           0.0        1.4   
  Supermarkets        6 161            -1.6          2.3        0.7   
  Hard discount       1 776            -0.8          5.0        4.2   
  Others              5 974            1.5           -1.2       0.3   

In France, like for like sales trends in hypermarkets and supermarkets have improved versus Q2. A consistent and determined pricing strategy has driven food market share gains for the group year to date.

In France, sales rose 2.4% in the quarter on a pro forma basis stripping out the contribution of Prodirest, which has been deconsolidated from the 1st January 2005, but not including the contribution from the 101 Penny Market stores which were acquired from Rewe in June. The closing of this transaction has not yet been finalized.

Hypermarket sales grew by 2.4%. With no new stores in the period, this consisted wholly of like for like sales growth. Excluding petrol, like for like sales increased by 0.5% despite a negative calendar effect of 0.3%.

This increase was mainly due to an increase in the value of the average basket of 0.9%. The trend in the number of customer transactions declined slightly, down 0.4% in Q3 and broadly flat on a calendar-adjusted basis.

Supermarket sales in the quarter were up 0.6%. Like for like sales, including petrol, fell slightly by 0.3%, representing a significant improvement on the -2.4% recorded in Q2. Excluding petrol, like for like sales fell 3.6%. This compares to -5.3% in Q2.

Over the quarter, Champion has made progress implementing its multi year program to expand and to upgrade its store portfolio. 6 new stores were acquired and 20 stores were extended to accommodate a wider range of non-food. Non-food sales increased 10.6% over the quarter. We are on track to extend 100 stores by the year end.

ED grew sales by 2.5% in the quarter. Like for likes fell by 2.4%. We opened 14 stores in the quarter.

Convenience stores same-store sales fell 0.1% excluding petrol. At the end of the quarter, there were 1 651 convenience stores in our portfolio, an increase of 1 versus the end of Q2 2005.

Overall, in France in Q3, we opened 48 000 m2 of new space, of which hypermarkets accounted for 2 000 m2 and supermarkets 16 000 m2.

 
* EUROPE
                                 THIRD QUARTER 2005                   
                Sales    Like   Expansion    Total     Curren   Total 
                          for                 Ex.       cies          
                (mEUR)   like      (%)      Currency             (%)  
                         (%)                  (%)       (%)           
  EUROPE ex     7 887    0.3       5.8        6.1       1.1      7.1  
  Fce                                                                 

  Spain Total   3 458    3.1       1.5        4.6       0.0      4.6  
  Hypermarkets  2 206    5.1       3.2        8.3       0.0      8.3  
  Supermarkets   239     -9.9     -11.8      -21.7      0.0     -21.7 
      Hard       724     1.1       3.3        4.4       0.0      4.4  
   discount                                                           
    Others       290     9.5      -2.4        7.1       0.0      7.1  

  Italy Total   1 624    -3.3      5.3        2.0       0.0      2.0  
  Hypermarkets   675     -4.5      4.6        0.1       0.0      0.1  
  Supermarkets   505     -2.8      1.2        -1.6      0.0     -1.6  
    Others       444     -1.5     11.2        9.7       0.0      9.7  

  Belgium       1 142    -0.8      0.3        -0.5      0.0     -0.5  
  Total                                                               
  Hypermarkets   588     -0.5      0.0        -0.5      0.0     -0.5  
  Supermarkets   260     -2.1      2.2        0.0       0.0      0.0  
    Others       293     -0.1     -0.7        -0.8      0.0     -0.8  

     Other      1 664    -1.4     21.9        21.9      20.5    26.5  
   countries                                                          
                                                                      
                                    9 MONTHS 2005                     
                Sales   Like  Expansion   Total    Currencies   Total 
                        for                Ex.                        
                (mEUR)  like             Currency     (%)        (%)  
                                (%)                                   
                        (%)                (%)                        
  EUROPE ex    22 650   0.7     4.4        5.1        1.1        6.1  
  Fce

  Spain Total   9 746   3.3     1.6        4.9        0.0        4.9  
  Hypermarkets  6 134   4.9     3.0        7.9        0.0        7.9  
  Supermarkets   659    -6.8   -12.0      -18.8       0.0       -18.8 
      Hard      2 172   1.8     3.0        4.8        0.0        4.8  
   discount                                                           
    Others       782    8.5     -0.1       8.4        0.0        8.4  

  Italy Total   4 862   -1.7    3.5        1.8        0.0        1.8  
  Hypermarkets  1 983   -1.3    3.2        1.8        0.0        1.8  
  Supermarkets  1 593   -2.3    3.1        0.7        0.0        0.7  
    Others      1 286   -1.4    4.7        3.3        0.0        3.3  
                                                                      
  Belgium       3 441   -1.1    1.2        0.1        0.0        0.1  
  Total                                                               
  Hypermarkets  1 771   -0.8    0.0       -0.8        0.0       -0.8  
  Supermarkets   808    -0.6    3.6        3.0        0.0        3.0  
    Others       862    -2.2    1.6       -0.6        0.0       -0.6  
                                                                      
     Other      4 600   -1.1    15.0      13.9        5.9       19.8  
   countries                                                          

Sales trends across Europe remained stable versus Q2 in a challenging economic environment. Spain continued to grow strongly. We gained market share in all our major markets, reinforced by tactical acquisitions in markets such as Italy, Poland and Turkey.

Overall, sales in Europe grew 6.1% in the period on constant exchange rates and on a pro forma basis, stripping out the contributions of the Czech Republic and Slovakia, which have been deconsolidated from the 1st January 2005, but including the acquisitions made in Cyprus, Turkey, and Italy which were consolidated as of Q3.

Sales in Spain increased 4.6%, the same rate of growth as in Q2. Hypermarkets recorded like for like sales growth of 5.1% in the quarter. Dia meanwhile increased like for like sales by 1.1%. The sales performance of supermarkets, however, was again impacted by radical action taken to eliminate the operating loss reported in 2004. This has involved the transfer of 5 supermarkets to the Maxi Dia concept and 11 "mini-hypermarkets" to the Carrefour banner by the end of August.

In Belgium, hypermarket like for likes were down 0.5% and supermarket like for likes fell by 2.1% as a result of on going efforts to reinforce price image. Overall, like for like sales in Belgium were down 0.8%. Both hypermarkets and supermarkets gained market share in the period.

Italy remains the most challenging market in Europe. Nonetheless, we were again able to increase market share in hypermarkets despite a fall in like for like sales of 4.5%. Supermarket like for likes fell 2.8%.

Elsewhere in Europe, in Greece, Poland and Turkey, we continued to show strong growth with sales up 16.0%, 29.7% and 60.1% respectively. We are committed to reinforcing our already strong presence in these markets through faster organic growth and tactical acquisitions even though the challenging market environment weighs on like for like sales in the short term.

8 hypermarkets, 129 supermarkets, 123 hard discount stores and 179 convenience stores were opened in the quarter.

 
* LATIN AMERICA
                                THIRD QUARTER 2005                    
             Sales    Like   Expan     Total     Currencies    Total  
                       for   Sion       Ex.                           
             (mEUR)   like           Currency        (%)        (%)   
                      (%)     (%)      (%)                            
  LATIN      1 663    2.3     8.7      11.0         21.1        32.0  
  AMERICA                                                             

  Brazil     1 113    -1.5    8.4       6.9         28.7        35.6  
  Total                                                               
  Argentina   391     13.0    4.3      17.3          4.2        21.5  
  Total                                                               
  Colombia    159     -1.1   23.5      22.4         13.8        36.2  
  Total
 

                                  9 MONTHS 2005                       
            Sales    Like   Expansion    Total     Currencies   Total 
                      for                 Ex.                         
            (mEUR)   like      (%)      Currency      (%)        (%)  
                     (%)                  (%)                         
  LATIN     4 456    4.8       5.5        10.3        11.7      22.0  
  AMERICA                                                             

  Brazil    2 941    2.5       4.3        6.9         17.1      24.0  
  Total                                                               
  Argentina 1 080    12.1      1.5        13.6        -2.0      11.6  
  Total                                                             
  Colombia   436     -0.3     26.6        26.3        12.6      38.8  
  Total                                                               

Latin America once again showed strong sales growth, despite a difficult economic environment in Brazil. This was due to an acceleration of organic growth in Brazil and Colombia as well as continued strong like for like growth in Argentina.

Sales in Latin America increased 11.0% on constant currency on a pro forma basis, stripping out the contribution of Mexico, which has been deconsolidated from the 1st January 2005. Like for like sales in the region increased 2.3%.

In Brazil, sales from new square metres increased 8.4%. In addition to three new hypermarkets opened organically since the beginning of the year, we acquired from Sonae in June 10 hypermarkets formerly operating under the BIG banner and located in the Sao Paulo area. The sales from these hypermarkets have been consolidated on transfer to the Carrefour banner. So far, nine have become Carrefour hypermarkets. Like for like sales in Brazil fell by 1.5%, reflecting in part the cannibalization effect from the acceleration of new store openings. Hypermarket like for likes fell 1.4% while supermarket like for likes fell by 7.2%.

Colombia grew constant currency sales by 22.4%, reflecting accelerating organic growth in the country (We expect to open 6 stores this year versus 4 in 2004). We are committed to building rapidly a leadership position in Colombia even if in the short term this holds back like for like sales growth because of internal cannibalisation.

Like for like sales growth in Argentina was stable versus Q2 (+13.0% versus +12.9%). Like for like sales growth in supermarkets and hypermarkets was 18.1% and 8.1% respectively. Dia also showed strong like for likes, up 13.9%.

3 hypermarkets and 21 hard discount stores were opened in Latin America in the quarter.

 
* ASIA
                               THIRD QUARTER 2005                     
            Sales   Like   Expansion     Total     Currencies   Total 
                     for                  Ex.                         
            (mEUR)  like      (%)       Currency      (%)        (%)  
                    (%)                   (%)                         
  ASIA      1 642   0.5       13.7        14.2        4.5       18.7  

  China      511    1.1       18.3        19.3        2.2       21.6  
  Total                                                               
  Taiwan     385    -0.4      9.7         9.3         5.6       14.8  
  Total                                                               
  Korea      416    -1.6      10.9        9.3         13.5      22.8  
  Total                                                               
  Other      330    3.4       14.9        18.2        -4.1      14.2  
  countries

                                  9 MONTHS 2005                       
            Sales   Like   Expansion     Total     Currencies   Total 
                     for                  Ex.                         
            (mEUR)  like      (%)       Currency      (%)        (%)  
                    (%)                   (%)                         
  ASIA      4 635   3.7       14.2        17.9        1.2       19.2  

  China     1 501   3.9       24.6        28.5        -3.2      25.2  
  Total                                                               
  Taiwan    1 031   2.4       8.4         10.8        3.1       13.9  
  Total                                                               
  Korea     1 157   4.8       5.7         10.5        11.9      22.3  
  Total                                                               
  Other      946    3.9       15.3        19.2        -6.6      12.6  
  countries

In Asia, we have rationalized our portfolio, announcing our intention to reinforce key markets such as Taiwan through acquisition, and maintained a high level of organic growth with 30% of the group's new organic square metres in Q3 having opened in the region.

As a result of our efforts, pro forma sales grew 14.2% on constant exchange rates, stripping out the contribution of Japan, which has been deconsolidated from the 1st January 2005 following the franchise agreement with Aeon in March. Like for like sales growth was 0.5%.

China grew like for likes by 1.1%. This reflects strong growth in food volumes offset by a decline in non-food sales as a result of the timing of two key public holidays.

Korea and Taiwan both saw an increase in the number of customer transactions as consumers responded positively to the roll out of new commercial models. However, further significant price investments caused the value of the average basket to decline and, as a result, there was a small decline in like for likes, down 1.6% and 0.4% respectively.

Like for like sales in Indonesia grew strongly, up 7.9%. Like for likes were down in Thailand by 2.0%. Here, a significant increase in the price of petrol, linked to the reduction of government subsidies, caused a substantial decline in customer transactions. The value of the average basket, however, increased as customers spent more per trip. (A similar reduction of government subsidies in Indonesia is likely to take effect in Q4).

11 hypermarkets and 11 hard discount stores were opened in Asia in the quarter.

 
* NETWORK OF STORES UNDER BANNERS - Q3 2005
                                                                      
                 June    Openings    Additions    Disposals/    Sept 
                 2005                              Transfers    2005  
  HYPERMARKETS    887       16           6            -13        896  
  France          216                                            216  
  Europe ex       354        4           4            -13        349  
  Fce                                                                 
  Latin           139        2           1                       142  
  America                                                             
  Asia            178       10           1                       189  

  SUPERMARKETS   2 404      18          117           -13       2 526 
  France         1 024                   6            -4        1 026 
  Europe ex      1 161      18          111           -9        1 281 
  Fce                                                                 
  Latin           211                                            211  
  America                                                             
  Asia             8                                              8   

  HARD           5 088      119          50           -37       5 220 
  DISCOUNT                                                            
  France          658       14                         1         673  
  Europe ex      3 673      73           50           -32       3 764 
  Fce                                                                 
  Asia            201       11                                   212  
  Latin           556       21                        -6         571  
  America                                                             

  CONVENIENCE    2 850      37          158           -34       3 011 
  STORES                                                              
  France         1 650      12           4            -15       1 651 
  Europe ex      1 200      25          154           -19       1 360 
  Fce                                                                 

  CASH AND        177        3                                   180  
  CARRY                                                               
  France          130        3                                   133  
  Europe ex       47                                             47   
  Fce                                                                 

  TOTAL            11       193         331           -97         11  
  COUNTRIES       406                                            833  
  Total France   3 678      29           10           -18       3 699 
  Total Europe   6 435      120         319           -73       6 801 
  ex Fce                                                              
  Total           906       23           1            -6         924  
  Americas                                                            
  Total Asia      387       21           1                       409  
 

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