Carrefour Sa

Good day and thank you for standing by. Welcome to the Council Q3 2025 Sales Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 and 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Mathieu Malige, CFO. Please go ahead, sir.

Thank you. Good afternoon to all of you and thank you for attending our 2025 Q3 sales call. I'm here with Sébastien Valentin, Head of Investor Relations and our IR team. Before we get into the numbers, I would like to remind you that Carrefour's operations in Italy are now accounted for as discontinued operations in accordance with the IFRS 5 accounting standard. As a reminder, the key restated figures for 2024 and H1 2025 were posted a few weeks ago and are available in the finance section of our website. Let me start with a few key highlights before we get into the details of our third quarter sales. This quarter, we delivered positive like-for-like growth across France, Europe, and Latin America, resulting in the total group sales up 2.1% on a like-for-like basis. That performance was clearly driven by food sales up 2.9% like-for-like over the quarter at group level. Throughout the quarter, we continued to see dynamic markets in Europe, notably in France, and Spain. In France, the positive momentum initiated in the second quarter is confirmed, driven by growth in both volume and value, despite a demanding comparison base linked to the Olympic Games in July and August 2024. FMCG market share is stable over the quarter with a sequential improvement that I will comment on in a minute. notably in view of the latest data released this afternoon by world panel by numerator X Cantar. Over the quarter, Carrefour legacy stores have continued on a positive trend across all formats, in particular in hypermarkets and proximity. French hypermarkets, excluding Cora, reap the benefits of two years of price investments and improved operating excellence. Q3 like-for-like at plus 0.5% is similar to Q2. Food like-for-like even accelerated in Q3 at plus 1.7% versus 1.2% in Q2. In Spain, the food commercial trend is still strong and similar to the one of Q2. On the other hand, in Brazil, we observe a general slowdown and negative volumes in the cash and carry market since May, as high interest rates are affecting the purchasing power of customers. Atacadao outperforms its market again. The group also sustained a robust performance in e-commerce with GMV up 18% year-on-year in Q3. In parallel, Carrefour continued to progress on its strategic review with a few initiatives during the quarter. Firstly, the disposal of Carrefour Italy is progressing and is expected to close by the end of the year. Secondly, Concordis has successfully launched its international expansion with the integration of the German group RTG International, bringing the alliance total revenue to over 125 billion euros. Finally, the group has refinanced 1.4 billion euros out of the 1.5 billion euros of BRL denominated debt. The refinancing of the remaining 100 million euros is currently underway. As already mentioned, we estimate this refinancing will deliver a positive impact of 100 million euros in net free cash flow and net income for the full year 2026, and 20 to 25 million euros already this year. Although this is a sales call, I can share that operating performance has been good and cost savings at the end of September are in line with the annual target of 1.2 billion euros, which is confirmed. On that basis, we confirm our financial targets for the year. I will not walk you in detail through page three, which is straightforward. Just highlighting that expansion and M&A is negative 0.6% over the quarter, which includes perimeter adjustments in Brazil after the divestment of Nacional and Bonpresso stores. Also highlighting that Forex at minus 2.8% is far less negative than it was in H1 or Q2, as BRL has appreciated against the euro in Q3. and parity is almost stable since the beginning of the year. Moving on to more details on the performance of France on slide four. The improvement observed in the French market in Q2 confirmed this quarter, with robust food consumption holding up well, particularly in September. The latest data issued by World Panel by Numerator that just came out on the FMCG market shows growth of 2% in P10, reflecting a sound improvement after summer. In the solid market, Carrefour gained 30 basis points in market share, reflecting strength in hypermarkets of 10 basis points. The success of our commercial initiatives around Carrefour's anniversary in September and the initial ramp-up of the ex-CoRa stores. With the supportive market backdrop and improving commercial dynamics, like-for-like sales were up 0.7% in Q3 and 1.6% excluding CoRa unmatched, continuing the positive like-for-like trend from Q2 despite two days of national strike in September 2019. which we estimate weighed in on like-for-like sales by around 20 basis points over the quarter. This performance was driven by food sales growing at plus 1.5% like-for-like with positive volumes in a rational market environment. Let me flag that proximity posted another strong quarter despite high historicals relating to the Olympics. 75 new proximity stores were open during the quarter. On slide five, we detail the commercial transformation implemented at Cora, which is now completed. All Cora stores have been converted to Carrefour's banner, benefiting from its brand awareness. The alignment of prices to Carrefour's level is clearly visible and resulted in an improvement of our price image. Carrefour branded products have been rolled out and now represent 28% of food sales, an increase of eight points compared to September 2024. Carrefour's promotional framework has been deployed across Xcora stores, implementing a more regular and dense promotional agenda. And finally, the loyalty program, Le Club Carrefour, is now active throughout the network with 1.7 million new active members from the ex-Koha stores. While this negatively impacts our top line in the short term, we already see clear signs of improvements with a gradual acceleration in the number of tickets and improved customer perception. In parallel, we continue to build up the synergies related to the integration of Koha and Match in line with our roadmap, and we confirm our target of €130 million by 2027. Moving on to Europe, on slide 6. CAFO posts another quarter of growth, driven by a sound performance on Spain and Belgium under a supportive consumer environment, offsetting soft trends in Poland and Romania. In Spain, we have a solid momentum in a still supportive market, food sales grew at 2.4% like for like in the quarter, in line with Q2 growth, which stood at 2.9%, 2.9% like for like. Carrefour continued to improve its price positioning, which drove the NPS up by two points. In Belgium, like for like sales increased by 2.1%, outlining a solid commercial momentum driven by positive volumes despite a competitive market. In Romania, the group managed to post a slightly positive performance despite a context of degrading consumer confidence following the austerity measures implemented from July. Finally, the Polish market still remains highly competitive, which weighs on our performance. Nevertheless, our commercial initiatives are well perceived as evidenced by the strong increase in NPS up six points. Let's move on to Latin America on slide seven. In Brazil, since May, the market is marked by a difficult backdrop with record high interest rates impacting strongly consumer purchasing power, notably in the cash and carry market with negative volumes, whereas retail seems more protected. In this context, Atacadao like-for-like remains above the like-for-like of the cash and carry market, but suffers from mid-single-digit negative volumes. Our retail segment remains solid. Carrefour Retail posted a strong performance on both hypermarkets at plus 3.3% like-for-like and supermarkets at plus 4% like-for-like with volume growth and managing to grow the NPS by four points. Carrefour's overall retail, reported like-for-like, was moderated by the slowdown in non-food e-commerce, as Carrefour Brazil prioritized profitability over volume in its non-food digital operations. E-commerce continued to show work growth, or overall e-commerce GMV accelerated by 36% in Q3, boosted by a plus 62% surge in online food sales. Financial services also showed solid momentum with the credit portfolio up 17% in spite of reinforced selective measures in place. Finally, one word about Argentina, where Carrefour's commercial momentum shows market share gains in an environment still shaped by negative volumes on the back of pressure on purchasing powers. Finally, let's move to slide eight for closing remarks. All in all, this quarter confirms the strength and consistency of Carrefour's performance across its key markets. Firstly, a sustained momentum in France and Spain, with French hypermarkets performing particularly well, driven by food. Secondly, in Brazil, we continued to outperform a difficult market. Finally, we are moving ahead on all our strategic initiatives. Overall, we confirm our 2025 objectives of slight growth in EBDA, recurring operating income, and net free cash flow. I thank you for your attention. Sébastien and I are now happy to take your questions.

Thank you. To ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. We will now go to the first question. And your first question today comes from the line of Frederick Wild from Jefferies. Please go ahead.