Carrefour Sa

Good evening to all of you. Thank you for joining today's call to present our performance for the first half of 2024. Before giving numbers, I'd like to provide context about our current situation. The current economic context is mixed. In Brazil, we see more positive consumption trends with higher food inflation and lower interest rates. On the other hand, consumer spending in Europe remains low, even though inflation rates have stabilized. People keep shopping more frequently, but buying fewer items each time with a focus on promotions. In addition, adverse weather conditions across most European countries have significantly impacted traffic in hypermarkets on the sales of non-food items or seasonal products. Some factors seem to fuel a gradual recovery in purchasing power. In particular, real wage growth should ultimately result in giving households more budget flexibility. The French National Institute of Statistics forecasting a growth of 0.9% in 2024 after only 0.3% in 2023. However, many uncertainties remain regarding how fast these factors will translate into consumption. Against this backdrop, since last February, we have delivered strong results in our two main geographies. In France, Despite the still tense consumption landscape, we achieved a good performance. Our pricing strategy, progressively deployed category by category, has allowed us to restore a good level of competitiveness, putting us back to where we were before the waves of high inflation. This shift is already well perceived by customers as reflected in a positive trend in net promoter score and in our market shares in volume. As planned, we manage these price investments without compromising our profitability. Besides, we have completed the acquisition of hypermarket chain Cora on supermarket chain Match from the Louis Deleuze Group. This acquisition will enhance our commercial dynamism bring in talented teams, and create strong synergies thanks to a network of robust and highly complementary assets. In Latin America, our recovery is accelerating and boosting our profitability. Supported by a better economic environment and higher food inflation, we delivered strong performance, increasing our ROC by plus 46% in the first half, reaching €366 million. This performance comes from all our formats and the ramp-up of converted stores. Apacado is outperforming the market and continuing to deliver impressive growth. This demonstrates the relevance of our commercial model, with new services being rolled out in an increasing number of stores. Retail and Sam's Club also achieved very good performance. In addition, e-commerce contributed significantly to this commercial result, with gross merchandise value rising by plus 45%. Besides, we generated substantial synergies amounting to 2.3 billion CHF by the end of June, which is higher than our initial goal of 2 billion, and we achieved this 18 months ahead of schedule. We believe that the integration has not yet reached its full potential. Progress of converted stores will continue to yield results. Therefore, we are raising our synergy target to 3 billion reais by 2025. Meanwhile, in Argentina, we have maintained a good performance thanks to a strong commercial dynamic and disciplined cost management. Moving on to our global recurring operating income, it has increased by 6.2%. This growth reflects our solid achievements in Brazil and France, the acceleration of our cost savings, reaching €580 million, and the more mixed performance in other parts of Europe. In European countries, We faced the conjunction of a low commercial dynamic in hypermarkets due to unfavorable weather across many regions, impacting non-food sales and generating less traffic in stores, combined with a lot of negative factors specific to each country on our price investments. Turning now to free cash flow, our performance is in line with last year. Over the last 12 months, we generated more than 1.6 billion euros. This level confirms our ability to maintain a very high level of cash generation and keeps us on track to reach our goal by 2026. Our strong results also extend to our corporate social responsibility policy. Our index reached 107% in the first half of the year. We continue to progress in several key areas with our biggest progress being on our climate change goals. 47 suppliers among our top 400 have now committed to a WAP 1.5 trajectory by 2026. Besides, we have reduced our scope one and two emissions by 49% from 38% at the end of 2023. As part of the CSR strategy, we also partnered with Green Yellow to install and operate photovoltaic power equipment in about 350 of our hypermarket and supermarket car parks in France. Green Yellow's expertise will enable us to achieve our goal of using 100% renewable electricity by 2030. Behind these results, this first half has highlighted three of our key achievements that will ensure future growth and accelerate our transformation. First, our growth Our growth is driven by two engines now operating at full capacity. Our private label products now representing 37% of our total food sales. On the other end, our digital transformation with e-commerce gross merchandise volume increased by 30% compared to the first half of 2023, particularly boosted by strong dynamics in France and even more so Brazil. Besides, retail media keeps developing. Unlimited is progressing rapidly, now being active in 13 countries across Europe and Latin America, on services servicing about 30 food and non-food retailers. More importantly, Unlimited has now built the second largest client database after Amazon in Europe, growing from 40 million to 160 million addressable customers in one year. Non-food retailers provide a more comprehensive view of customers, and allowing for better targeting. These are strong assets, which give us a lot of confidence in unlimited potential. Second, we are also very active in rolling out our successful formats. We are now operating at the Cadeau in France, with our first store open in June. And in Brazil, we have opened three smaller stores to reach new customers called Atacadinho. Regarding franchising, we are expanding and attracting new franchises, adding a total of 166 new stores in the first half in France. We expect 200 new stores to open in the second half, which would lead to a record number of franchises opening in one year. demonstrating the strong appeal of our franchise model. We are also forming new partnerships with retail banners, such as Marché Frais. Last, one of our strengths is the ability of our team to simultaneously manage multiple integration projects, which is crucial for reinforcing our presence in our key geographies. This has been demonstrated through successful integrations in Brazil, in France, Spain, and Romania over the last year. In this regard, 2024 will be definitely one of the most active years for growth. For all these reasons, we look at the second half of the year with confidence, and we are confirming our objectives for growth in EBITDA, recurring operating income, and free cash flow in line with the CAFOR 2026 plan trajectory. Finally, with just two days until the opening ceremony, let me say a last word on the Games. This event is a unique opportunity for our brand and our engagement. We are proud to be the first retailer to partner with the Games, providing a unique showcase for our brand on a global stage. Additionally, this partnership is fantastic for the engagement of our teams with multiple sport-related initiatives, which boosted cohesion and enthusiasm. The Games are also an occasion to leave a lasting legacy, reinforcing our mission of making sustainable food accessible to everyone, and our dedication to supporting disabled persons on making our society more inclusive. To wrap up, I would like to thank our teams and franchise partners who make all these transformations possible. Our performance is the result of their exceptional commitment and their expertise. Thank you for your attention. I will now hand over to Mathieu.

Thank you, Alexandre, and good afternoon to everyone. It's a pleasure to be with you all to cover our H1 2024 financial results in detail. Let's start our review with Q2 sales on slide seven of the presentation. Total sales for the quarter reached 22.7 billion euros, increasing by 8.9% at constant currency. Group like-for-like sales were up 10.8%. Expansion and M&A had a negative contribution of 0.2% over the quarter, mainly due to the transfers to franchise and lease management in France. Petrol contributed negatively for minus 0.8%, and the calendar effect was a negative 1%, reflecting the timing of Easter in March this year versus April last year. Forex had a strong and favorable impact on total sales growth of minus 11.7% over the quarter, essentially reflecting the depreciation of the Argentinian peso and the Brazilian era. In total, reported revenue was down minus 2.9% in Q2. Before getting into more detail on our different markets, let's have a look at food inflation in Europe. After a sharp and regular slowdown most after months in each of our European countries, food inflation stabilized over the last three months at low single-digit levels. On a month-to-month basis, you can see that prices have remained relatively flat in France over the last 12 months. Let's now detail France on slide 9. In Q2, the market was marked by the slowdown in food inflation and still negative food volumes. In H1, Carrefour has implemented an aggressive price investment policy with no particular reaction from competitors to date. As a consequence, Carrefour France competitiveness has substantially improved. and is now back to where it was before the wave of high inflation. This has been well perceived by consumers as reflected by an increase in NPS and market share dynamics, which stabilized in volume terms at the end of the quarter. In this context, like-for-like sales were down 2% in the first half. In Q2, adverse weather conditions impacted our sales, notably non-food and the traffic in hypermarkets. This resulted in a decrease of minus 3.5% of like-for-like sales over the quarter. At profit level, we managed to offset the price investment thanks to a reinforced cost reduction dynamic. We also benefited from the contribution to profit of the strategic initiatives of the Carrefour 2026 plan, including the increase of sales of Carrefour branded products, the conversion to franchise, and the continuous improvement of the profitability of digital activities. Thanks to this, Carrefour France kept growing profitability, both in absolute terms and in percentage of sales. Over the first half, recurring operating income was up 6.2% at 286 million euros, with a 14 bps increase in operating margin to 1.6%. Moving on to slide 10 and our performance in Europe. Our European markets also experienced slowing food inflation over the first half. In most of our markets, the impact of the past high inflation wave is still present. Consumption trends are sluggish, with volumes still under pressure. Our Western European markets were also marked by adverse weather conditions, especially compared to last year, impacting seasonal non-food and traffic in the hypermarkets. On top of this, we had a number of country specifics which led to a recurring operating income down to 84 million euros in H1. Recurring operating income decreased in all our European markets except Belgium, which was up. Country specifics include the following. In Spain, in order to reinforce our price competitiveness in the country, we invested in price across H1, which had a direct impact on sales and profitability. The profitability of financial services was also down on lower interest margin. Italy suffered from the decrease in sales and the promotional market, but maintained its competitiveness. Like-for-like numbers for Belgium are blurred by comps. We had delivered a record high level of performance in H1 2023 on the back of large disruption at one of our key competitors, which had strongly lifted sales up 12% in Q2 last year. We are now back on a normalized situation and the underlying performance is satisfactory, both in terms of top line and margin. Recurring operating margin was slightly up in Belgium. Romania was a slight decrease in like-for-like sales, reflecting some stabilization in volumes, offsetting the drop in inflation. June was actually quite strong, Romania being the country with favorable weather conditions. In parallel, we are actively integrating the core hypermarkets we acquired last year with some temporary costs related to stock conversions affecting recurring operating income in H1. Last, Poland faced highly competitive markets. To conclude on Europe, as various negative drivers were either one-offs or temporary, we believe that recurring operating income trend of H1 should not replicate in H2. The situation is clearly different in Brazil, where a number of signals have now turned to green, as you can see on slide 11. The Brazilian market as a whole has improved, with both volumes and prices in positive territory. In this context, Carrefour Brazil delivered solid figures, which were lifted by our self-help initiatives. Atacadao, which accounts for more than 70% of total revenue in the country, delivered a strong Q2 sales growth of 7.4% like for light, a clear acceleration versus Q1. The rollout of service corners in AT stores today and a very efficient commercial strategy towards B2B customers were incremental to the performance, together with a ramp-up of converted big stores, which delivered a solid plus 21.4% like for light growth during the quarter, maturing as expected. Retail also posted solid numbers with like-for-like sales in positive theory at plus 2.3% over the quarter with strong performance in non-food. We keep optimizing the retail portfolio with conversions of Carrefour stores to Atacadao and Sam's Club and the closure of non-profitable stores, mostly supermarkets. In total, we see margins improving in the retail format. All other business lines are also well-oriented. Sam's Club keeps growing, with seven new stores added over the last 12 months, of which three in Q2, and sounds like follow-up growth driven by a 25% increase in active members. E-commerce keeps growing strongly, with GMV 41.3% in Q2 driven by Atacadao. Banco Carrefour delivered a solid increase in billing and credit portfolio, while the delinquency rate kept improving regularly since Q2 last year, thanks to an efficient credit-granting strategy. At the same time, we get increasing benefits from the integration of Groupe Obigue. The stores converted to Atacado generated an EBITDA margin of 3.6%, which materially contributed to the overall margin enhancement in the cash and carry formats. Ex-Grupo Big stores have now all been converted to the Atacado or Cat4 banners for a year. They have all ramped up and are now outperforming their historical numbers and delivering positive commercial synergies. These commercial synergies add up to the cost synergies, which have already been actively implemented since the completion of the transaction in May 2022. As a consequence, as of June 24, Groupo Big Synergies have reached a run rate level of 2.3 billion reals. This is above our initial target of 2 billion and is achieved 18 months ahead of target. As we keep optimizing costs further and as sales keep picking up in the converted stores, we are confident that by the end of 2025, we will reach at least 3 billion reals of synergies. Regarding Argentina, like-for-like sales were up 233% in Q2. Once again, Carrefour demonstrated the strength of its model as the country faces hyperinflation. Thanks to strict cost discipline, recurring operating income remained broadly stable at €51 million. Moving on to our global P&L on slide 14. Groups recurring operating income increased by 6.2% in the first half to 743 million euros. Gross margin was down 37 basis points to 19.4%, while strong price investments throughout H1 and transfer to franchise in France were the key drivers of this decrease. Distribution costs represented 15.1% of sales a significant reduction of 53 basis points versus last year as we delivered strongly on our cost savings plan with 580 million euros in each one. This is in line with our objective of 1.2 billion euros for the full year, which we revised upwards last April. All this leads to an increase of 11 basis points in groups operating margin to 1.8% driven by Brazil and France. Moving on to the bottom part of our P&L on slide 15. Non-recurring expenses reached 126 million euros, 60 million euros lower than last year, mainly on lower reorganization plans launched this semester. Net financial charges increased significantly in H1 to 430 million euros. As you can see, cost of debt and interest expenses related to these commitments increased only marginally. The main driver behind the increase is the impact of IAS 29 hyperinflation accounting in Argentina. Given the strong variation in inflation and forex, this first half, the impact is significant, mainly non-cash and exceptional in nature. Net income from discontinued operations of €761 million in H1 2023 corresponds to the capital gain on the sale of Carrefour Taiwan. Bottom line, net income, group share, adjusted for discontinued operations and exceptional items, reached €313 million compared to €306 million in H1 last year. Net free cash flow. On slide 16 was roughly stable compared to H1 last year at minus 1.7 billion euros. Let me highlight the key moving parts. The BDA increased by 64 million euros. Change in working capital improved by 149 million euros, notably driven by a recurring reduction in inventory, especially in non-food. Asset disposals decreased by 15 million euros. net cost of debt was roughly stable. Over the last 12 months, we generated 1.6 billion euros in net free cash flow. We confirmed that the full year number should be in line with the initial growth trajectory towards the objective of above 1.7 billion euros in 2026. We provide on slide 17 net free cash flow excluding real estate, capex, and disposals. Carrefour was a net seller of real estate for 112 million euros in H1 2024, compared to 141 million euros in H1 2023. Keep in mind the strong seasonality of real estate CapEx, which are geared to the second half. Excluding real estate, H1 2024 net free cash flow improved by 8 million euros. I will now complete this H1 financial review with a few words on net financial debt, which was slightly up. Our net free cash flow over the last 12 months was 1.6 billion euros, as you see on the slide. Share buyback is quite high, at 915 million euros over the last 12 months, reflecting the seasonality of implementation. This compares to 700 million euros for full year 2024. We had 145 million euros of cash out for M&A. It includes the acquisition of Supercore in Spain and X Casino Stores in France. Forex and others notably include the impact of the devaluation of the Argentinian peso in December 2023, as already presented in the full year release. This completes my presentation. I thank you for your attention. Alexandre and I are now available to take your questions.

Thank you. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To answer your question, please press star 1 1 again. We will now take the first question. From the line of Sridhar Mahakali from UBS, please go ahead.

Hi, good evening, Alexander, Matthew. Thanks for taking my questions. I've got three. If it's easier, I'll just go one by one, perhaps. I think we're all trying to understand how we should read the first half into what the failure outcome is likely to be. So just help us understand, is it reasonable to assume a similar growth in percentage terms, 6% or so in ROI for the second half also? And from a SHAPE point of view, would that still be driven by France? That's the first question. Do you want me to go through the other two or?

Yeah, please go ahead with your other two.

Okay. So the second one is, I mean, you've talked about Europe first half profit trend should not be assumed for second half. But I guess, can you talk about why that isn't representative, given you've commented on lots of markets where you seem to have embarked on a wave of price investments in first half that probably carries on into second half? And maybe while you're addressing it, if you could just maybe quantify the financial services impact in Spain or quota costs so we can see what are the one-offs in there and what model I'm going forward. And lastly, just on Free cash flow outlook. If you could give us a sense of what we should expect from real estate disposals for the full year, if you have any thoughts that you could share. I know it's a bit premature, but any thoughts there would be helpful. I think last year was like $470 million or something. So if you could help there, that would be great. Thank you.

I would take the first two.

To answer the first one, what I can tell you is that we confirmed the objective at the beginning of the year, for four years. 2024, which means positive growth in absolute terms for EBITDA, ROC, and net free cash flow in line with Tier 4 2026 plan trajectory. As far as the recurring operating income consensus is concerned, I think it's consistent with what we see for the rest of the year. So it means that in France, we confirm that profitability should be slightly growing in full year 2024, as we saw in H1. This is in line with the outlook we gave for 2024 earlier this year. In Europe, and I would come back to your question about Europe, as we showed, there were a lot of specifics country by country in this month. and particularly in Q2. So we don't extrapolate to H1, and we are more constructive for H2. And for Brazil, considering the normalization of the conditions with positive food inflations, with volumes, with more normal competitive landscape, and a lot of self-help with the group of big synergies ramping up, we are confident that profitability in Brazil is still on the ramp-up phase. If I come back one second more precisely to Europe, there were a first time I mentioned that because the first time it has a real impact on our business. The weather conditions were particularly adverse in Q2 in our European country. It has penalized our seasonal product categories, beverage, seasonal non-food, and it has penalized our traffic in hypermarkets, which were, of course, more affected than other formats. We are also investing in prices across all markets, and there are Specific elements by country, for instance, Romania has been temporarily backed by the integration of Cora Romania, with one of costs recorded in the recurring operating income. Belgium in this semester faced very high particular comps related to the performance of our main competitor last year. So there are really specific elements accounting for the performance in H1, and we are more positive for H2.

Got you. If I could just very briefly follow up, please. Does that mean you think the full year consensus ROI of $2.5 billion reflects what you are expecting? in the second half to be a recovery. Is that fair? Just reading from what you're saying.

Yeah, well, as usual, we don't point to any specific number, but indeed, we think that when we see where the consensus is, it's consistent, as Alexandre says, with what we see internally for the rest of the year. Let me answer your third question regarding Netflix cash flow outlook and and real estate disposals. Well, obviously, real estate disposals depends on opportunities that we may find in the market to divest at the right economic conditions. That being said, we have an active portfolio rotation politics in place years after years. So we know that last year, was particularly strong with a good opportunity we had from back in Brazil. It could be a little lower this year. We see how H2 plays out, but it will remain in the same order of magnitude. We have no specific operation in mind or that we would be working on. Again, we've provided you, as we did last year, the real estate capex and the real estate disposals so that you can compute the net free cash flow excluding these terms. You may remember that we were, over the past few years, quite neutral with the level of divestments being equal to the level of capex. Now, on the outlook for the cash flow and the guidance, as we said, we think that we maintain our guidance to come back on the trajectory, the material trajectory for 2024 that we shared with you as part of the strategic plan. We're at 1.6 over 12 months, which is probably a little above the curve. You may remember we had a particularly strong H2 last year, so with a more normal H2 for this year that we anticipate, we think that we should be in line with our expectation for the end of the year.

Thank you.

Thank you. We will now take the next question from the line of Isabel de Breva from Morgan Stanley. Please go ahead.

Hello. Thank you for taking my questions. My first question is just to come back on the question of the consensus. So when you say that your expectations are consistent with the $2.5 billion, does that mean that you're happy with the $2.5 billion? Or do you mean that you do expect the second half profit to be up year on year? Because the consensus currently has second half profit up 12% year on year. So I just wasn't sure how to understand your comment there. That's my first question. Then my second question is on Europe. Could you break out the drivers in a bit more detail? So you have called out integration costs of Cora, the bank impacts in Spain. Could you also share with us the energy cost reversals Because I guess the main aim would be to try to work out what's happening in your underlying business, cleaned up for all of these moving parts, so we can understand the true competitive position of the business. And then my last question is, again, on Europe. You talked about the competitive landscape and the price investments. Are these price investments self-funded by your efficiency schemes and the Eureka program, or are the price investments currently exceeding your self-help levers?

Thank you very much, Isabelle, for your question.

So, well, you know, I think our position is quite clear on the full-year consensus. You know, and we're not going to detail it quarter by quarter. We think that in terms of the full-year picture, it is consistent with what we see internally for the rest of the year. Then I'll let you make your computation, Alexandre, and so to Shredda. on what were the main dynamics that we were seeing on a region-by-region basis.

To come back to your question on Europe, it's always quite particular to speak about Europe as it was a completely homogenous country for us. As you know, there are different countries, we have different positioning, they have a different role in our portfolio of countries. It's always not easy not to talk of Europe as a whole, but to try to continue the discussion we had before with Cheda. What is common in the countries? I talked about weather conditions. We can speak about investing in prices across our market. To answer your last question, Investing in prices across the market means that we finance that by our cost economy plans. That's the way, as you know, we do that. We offset the investment by the acceleration of our cost-saving plans. It's the case in France and the case in Europe, exactly the same type of dynamic. And after your question about cleaning up things, it's very complicated to answer. You're right. We begin to have in this first semester better science about energy. As we told you through the last two years, it was the first semester where we have a more positive dynamic for us. Widespread in all the countries except Belgium. But in the meantime, there are other trends, like, for example, the acceleration of cost of transportation. And that's part of our business. So energy is part of our business. Transport is part of our business. So we can't really clean something because there are other elements. So to conclude, what we have is that we have faced specific elements in each one. Competitive landscape is usual. We know this competitive landscape. We have to invest. We have invested in Spain particularly. In Spain, for example, there has been a specific element which was related to the financial services. We are more confident about H2. We finance our investments by our cost savings, and that's why we We are confident about our capability to deliver a better performance in H2 in Europe.

Thank you. OK. Thank you.

Sorry. We will now take the next question. We can come back to Isabelle next. Next question is from Frederick Wild. Please go ahead.

Good evening, Alexander, Matthew and Sebastian and team. So first question for me, please, is whether you have any sense of the scale of the weather impact as you've moved through the quarter. And I guess the second question related to that is when you've seen better weather, I think, you know, some has come in June and now particularly in July as well. How has the consumer responded to that and how have your sales responded to that, both in France and across those European geographies, particularly Spain. And then finally, could I just get a sense of how to triangulate the half-two margin in Europe, please? You said there was quite a few one-offs affecting it in half-one. But I mean, is it realistic to think that as those exit and as you managed to offset the price cuts, as you were saying, with the savings program, that we can deliver a flat margin in Europe in the second half? Thank you.

Thank you, Frederic. I will take the first. You know, I think it's the first time in my retail career I mention weather, not because I need it, but because it has had a real impact, a major impact on our business in the majority of our European countries, to not say all the European countries, because it has really affected some key categories for us at this moment of the year. Beverages, seasonal non-food, you imagine the consequence of this weather on the seasonal products that we usually retail. And it has all the more affected the hypermarket and the traffic in hypermarket, which were, of course, more penalized than any format. And we need this product to have a good traffic in hypermarket. Our customers, we are not looking for them because of the weather. So it has had a huge impact. And for example, in Italy, to tell you a word about the weather still, last year, the second quarter was incredibly warm. and incredibly positive for this type of product. This year has been extremely bad, and it has had the consequence. That's why we mention it, and that's why it has had an impact. As you can imagine, I'm not a meteorologist, even if I would dream of, but I think that the impact on the second part of the year wouldn't be, and to be honest, couldn't be the same.

As far as your second question is concerned, Frederic, on the opportunity margin in H2, so there's a number of specifics. We've been covering that earlier in our discussion, and so we think that they will not replicate in the second half. The integration costs for Kohai and Romania are mostly behind us. So that's good news. There's a number of other specifics including the bank in Spain where we're more constructive. And then, you know, there is the uncertainty of the market. As we said, in terms of a framework, purchasing power is progressively restoring. with salaries inflating higher than general inflation. So that's good news. Volumes are still under pressure in this first half, but they are progressively normalizing. So that is positive for the second half, but we'll have to see at what speed all this materializes. So one-offs, positive dynamics, but quite uncertain. So we'll see. how to give you a precise guidance on Europe at this stage.

Thank you. You're not the only one suffering from the weather this summer, so thanks for that.

Thank you. We will now take the next question from the line of William Woods from Bernstein. Please go ahead.

Hi, good evening. Thank you for taking the question. The first one is just on France. Do you think you've done all the price investments that are necessary to not just stabilize market share, but to improve market share? The second one is on Brazil and the consumer. Could you give us some more details on what you're seeing, apart from just volume stabilizing, that gives you confidence that we're going to see an inflection in the Brazilian consumer? And then the final one is just some of your peers have commented on inflation started to kick upwards with some commodity prices increasing across different categories. Are you seeing any evidence that inflation might start to take upwards in the second half?

Thanks. Thank you.

Of course, you're right. We have invested significantly in France. And we are now back to our price positioning before the inflationary peak. We believe that we are investing in the right amount. We have decreased price by 10% on average on more than 2,000 products since the beginning of the year. And we have also developed local initiatives on top of the national waves. This investment have not triggered any major reaction from our competitors, which leads to a real improvement, a material improvement of our positioning in the market, as you can see in all public price indices. What is very important for us is that these price investments have translated quickly in a clear improvement in price perception from our customers. with improvement in MPS driven by price image, and it has also translated into stabilization of market share in volume, starting P5, P6, and P7, and constantly increasing. So growing the market share in volume was our first objective towards the stabilization of the overall market share, and we are very pleased with that. Of course, for the moment, our market share in value is penalized by the depth of our price investment, and we would continue to invest across the entire year, continuing to offset the impact of price investment, thanks to our cost-saving initiatives and the benefits from our strategic initiatives. On your second question about Brazil, I would say there's a combination of two positive points. First, there are macroeconomic data points to continue the improvement. We clearly see positive things about food inflation, which is normalized, about volumes, about the competitive landscape that is also normalized. And we see this macro as a combination of positive elements and, which is more important for us, our strategic initiatives keep bearing fruit. As we told before, all the formats work well. At the CADAO, it's a remarkable dynamic. We are very pleased with SAMS. We are very pleased with Carrefour Retail. Banks is working well. So I would say all the elements are gathered to continue the same dynamic that we recorded in the first two quarters. Concerning inflation, what we do see for the moment is is a very low single-digit inflation, which means, of course, that some products continue to accelerate more. For example, it's the case of cacao. But in majority, we see food inflation limited. It's really a normalization. We expected that. And that's what we see in the market for the second half.

Understood. Thank you very much.

Thank you.

Thank you. We will now take the next question from the line of Francois Degarde from Côte d'Azur. Please go ahead.

Good evening. Thank you for taking my question. Two, if I may. The first is about the market share and the P7 published yesterday night. Is it fair to assume circa 60 basis points contribution from one week of CORA match in this market share release? If you could specify, have you had any contribution of casino stars? I know it's very small, but a bit of that would be helpful. And the second question is about Unlimited. Do you see this venture still in its infancy and developing phase? or do you already witnessing some substantial error from the retail media? This is it for me.

Thank you.

Okay, thank you.

On the contact piece set, Yes, you're right. We published yesterday, the contract published yesterday showed a plus 20 market share gaining value for us on plus 14 volume. These numbers include CORA on match for one week out of four. So excluding CORA on match, our market share was in line with the previous period of the table in volume. Related to retail media, as you probably see in my introduction, we are very enthusiastic by the dynamic. Of course, we are still in moments of development and it's really normal because the European market is less mature or more fragmented and so it's really a story of growth and momentum of growth but the fact to have been able in one year exactly to develop in 28 states countries and to have developed many verticals other than food is very positive for us. We clearly do believe that we can be and we will be the leader in Europe behind Amazon, of course, on that. Today, all these partners gathered in several geographies represent a total of more than 2.2 billion page views per month, 160 million customers, which means three or four times the size of Carrefour in Europe. Of course, it's a sector of innovation. We were the first player to launch partnerships on advanced TV as well as with platforms like YouTube. So it's really an era of development, of growth, of conviction of partners, of extension of geography in geography where we are not. And we are very enthusiastic with that and very satisfied with the pace of development from the place we have already in this market.

Thank you very much. Clearly, it means that. an investment phase and you have that benefit yet in H1 of substantial airway contribution from retail media?

Yes, of course. It's really an investment phase. It's still a small market, as you know, in Europe compared to the size it has in the US. But we see all the reasons possible that this market would develop in the next years.

Thank you very much.

Thank you.

We will now take the next question from the line of Monique Pollard from Citigroup. Please go ahead.

Hi.

Thank you for taking my questions. I had three, please, as well. The first one is just on the French margin. You commented in the presentation that the drivers of that French margin improvement You talk about the e-commerce transfer, police management, and franchise, and retail media. So just trying to understand if you can give us any color on the scope that retail media has had on the margin improvement there, and also any color on e-commerce. So is it that it's getting less unprofitable in France, the e-commerce, and that's what's driving the improvement on the e-commerce side? The second question I had was on Brazil. You mentioned the online growth particularly strong there, 46% GMV growth. Online now 10% penetration of revenues. Can you comment on whether that business, the Brazilian e-commerce business, is profitable? And then the final question I had was just on the price investments in France. Obviously, as you say, this is having a really positive impact. You've seen it on the net promoter scores. You haven't seen a big competitive response. So given how strong the French margin was, and if that continues to be strong, could you look to kind of over-invest in price in the second half, or would you just take that benefit through to profitability, given you're not seeing much competitive response?

Thank you very much.

So on the French margin build-up, so you're right that there's a number of elements which allowed us, you know, despite the sales trends and despite the quite aggressive price investments policy that we have implemented slightly grow the operating margin. Clearly, the first element is the cost savings. Cost savings is very dynamic. We have increased the target for the year. We've delivered about half of the objective at mid-year, so there is already an increase in dynamics of cost savings in France. Then, specifically to your question, e-commerce for now several semesters is improving its profitability level in France with quite high level of growth, as you saw. It is really contributing to improving the profitability. The switch to franchise and news management is also helping. We've had now many stores, you know, ways after ways over these years, which have been transferred. And we know that once the stores are transferred, they do ramp up with the energy of the entrepreneur and the efficiency of running the stores. And so now we have a big map. It's about 30% of the hypermarket portfolio, which has been switched to these management and franchise over the past few years, which are ramping up and improving their performance. Private levels is also a plus. And retail media is positive, but as Alexandre said, it's small. But the good news is that it starts to contribute. It is fairly limited in terms of magnitude, but it starts to contribute.

On your question about price in France, as I said, our prices investments have spread across the entire year. As Mathieu mentioned, we have the discipline to protect our financials, which gives us this flexibility to keep investing, and that's exactly what we announced at the beginning of the year, and that's exactly what we will do throughout the year. Concerning e-commerce in Brazil, I think it's one of the most impressive achievements of the last year. We have a very good dynamic, as you've seen, with an increase by 45 or 46%, which is very important, is that now Atacadao is central in this growth. And what is very important is that we are profitable on e-commerce in Brazil. So it means that this growth is profitable for us and we will of course accelerate in the next month.

Thank you. Thank you. We will now take the last question from the line of Cedric from Stifel. Please go ahead.

Good evening, Alexandre and Mathieu. Just two small follow-ups for me, please. So first one on the Spanish financial service business. It's a business you rarely comment on. We don't have too many comments. I was just interested, curious about the weight of this business in the Spanish operations and kind of the impact you've seen in the first half that you don't expect in the second half. It would be very helpful. And the second one, more generally, on potential cost savings considering European markets which are different by nature versus France. What kind of flexibility do you still have at this stage on cost savings in Europe versus France? Thank you very much.

Thank you very much, Cédric. Well, it's hard to, we don't disclose specifically, you know, the financial services on a country by country basis. I'm not going to do that tonight. But, you know, we mentioned just a few elements in which, you know, impacted the profitability of Spain in H1. And so the bank is one. It's not a huge impact, but it's visible. Again, we think that we have a very good management of the cost of risk in Spain, so this is good news. The production of credit is good as we control the granting of credit. We've had some pressure on the financial margin, but we were more constructive on that part. Then on costs in Europe, you know, it's really, and it's been the case for several years now, it's really, you know, many plans at very operational levels which are being rolled out, implemented. And so, you know, I think we've demonstrated quite a good control of these programs. We clearly accelerated the dynamic throughout the group, including in Europe, since the beginning of the year. That led us to revise our objective and to deliver an upward number in this H1 versus what we delivered in the first half in previous years. So, you know, still good reservoir, still good dynamics. There is no one country which stands out, you know, as having more or less potential than the other. It's still quite widespread.

Thank you, Mathieu.

Okay. Thank you very much for this discussion. I wish you a very good summer and see you very soon on the good Paris Olympic and Paralympic Games. Thank you. Bye-bye. Bye-bye.