Carrefour Sa

Good day and thank you for standing by. Welcome to the CAR4 half-year 2026 results 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, please press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please note that today's conference is being recorded. I would now like to turn the conference over to your speaker, Mr. Alexandre Bompard, Chairman and CEO of Carrefour. Please go ahead.

Thank you. Good evening, everyone. Bonsoir à tous. And thank you for joining us today to discuss our first half of 2026. This semester was marked by the elaboration of our new strategic plan, Carrefour 2030. that we had carefully and extensively prepared with all our teams. It has also been a very active semester in terms of communication and investor engagement around the plan. We intensified our dialogue with shareholders on the broader financial community, including through the CSR Capital Market Day we had on June the 16th. The feedback? We received from the investment community has been very encouraging and I'm not referring only to the share price performance since February. Investors have welcomed our sharper operational focus on our core markets, our investment program to modernize our stores, and our tech roadmap notably through our partnership with Vision and the broad deployment of AI. Our objectives in terms of price competitiveness, market share gains, and financial performance are well understood. We also recognize that expectations have now shifted from the strategy itself to its execution. And that's exactly where our focus is today. Execution has started at a high pace. Let me share a few first examples. With the support of Concordis and the proceeds of our performance plans, we invested in our competitiveness and customers' purchasing power. We accelerated the rollout of new in-store fresh areas, fresh concessions, and we opened the first match with a distinctive fresh offer. We pursued our expansion agenda in proximity stores, particularly in France and Spain. We deployed Vusions AI technology with connected wireless cameras and real-time out-of-stock alerts, leading to added sales and productivity improvements in our first hypermarkets equipped. We also completed the disposals of Carrefour Romania as part of our geographical focus. Looking at our results, we delivered a solid performance. Sales were up thanks to good commercial dynamics and driven by a strong e-commerce. Our club program is meeting great success with new members enhancing traffic and fueling our data lake. Our recurring operating income is growing driven by our three main countries. Total net free cash flow is up versus H1 2025 and EPS is up 18%. Based on these metrics on the business trends in our core markets, we confirm all our financial targets for the year. Looking at our performance by geography. In France and Spain, despite a volatile environment, markets held up well overall. In France, our sales were up across all formats, supported by our consistently improved price positioning and the increase of our Net Promoter Score. We also see a positive dynamic since the beginning of the summer. Former Cora stores' sales were up 5% in Q2, doubling versus Q1. And we kept strong cost discipline. As a consequence, recurring operating income increased by 14% compared with the first half of 2025. In Spain, we confirmed our positive momentum in the second quarter. We continued to invest in pricing competitiveness. We benefited from sustained growth in fresh product hypermarkets. We expanded our network of convenience stores, which continue to grow at a solid pace and confirms the relevance of the model. Profitability was up 7% in the country. In Brazil, in a macroeconomic environment that remains complex, we recorded an improvement in sales, turning back to positive territory in Q2 2026, with encouraging momentum at the beginning of the summer. Atacadao's performance improved, notably supported by the commercial initiatives launched by our new general manager. Our other banners held up well, and we also launched a cross-banner loyalty program to strengthen our customer ecosystem. Our profitability remained resilient, with recurring operating income increasing by 6% driven by a solid cost discipline. In other countries, we confirmed our positive trajectory in Belgium with a return to market share gains. In Poland, the environment remains highly competitive, but we continue to reduce costs and reshape our footprint with a clear focus on our best performing stores. In Argentina, The consumer environment has been challenging, which weighted on our operating performance and on our banking activities. The new general manager that I have appointed has reshuffled our commercial model, with encouraging results as June recorded the first positive volumes since December 2023. Overall, we look at the second half of the year with confidence. We will reinforce our positive momentum and execute our plan with consistency in the amelioration of our price competitiveness, continued acceleration on fresh with the opening of new match frequency, further deployment of vision on our AI roadmap, maintain cost discipline, Acceleration in store modernization to support our format, our customer experience, and our long-term rules. ACSR on food transition index at 107%. At the same time, we will maintain a high level of dialogue with our investors. We will notably hold our third Capital Markets Day this year, which will be dedicated to hypermarkets on 17th of November. Thank you for your attention. I'll now hand over to Matthieu for more details on our financial performance.

Thank you, Alexandre, and good afternoon to everyone. It's a pleasure to be with you all to cover our 2026 first half financial results in detail. Before we get into the numbers, I would like to remind you that following completion of the divestment of Carrefour Romania at the end of June, Carrefour Romania is a are deconsolidated as of July 1st in our accounts. For H1-2026, Carrefour's operations in Romania are accounted for as discontinued operations in accordance with the IFRS 5 accounting standard. Let's start on slide 5 to the presentation with the details of our Q2 sales. Total sales for the quarter reached €22.7 billion. Group like-for-like sales were up 1.9% over the quarter despite high comps in Q2 2025 linked to a strong activity in France and Spain in June 2025. The scope effect had a negative contribution of minus 0.8% over the quarter, notably due to the sale of six hypermarkets in France as antitrust remedies following the acquisition of Cora Unmatch. Petrol added 1.3 percentage points to the growth and the calendar effect was a negative minus 0.6%. Forex had a favorable impact on total sales growth of 1.1% over the quarter, essentially reflecting the appreciation of the Brazilian real. In total, reported revenue was up 2.8% in Q2. Moving on to slide six with more details on the performance of France. Activity remained dynamic in the second quarter with like-for-like sales up 1% in a market where food consumption held up well, notably in volume terms with continued growth. As was the case in Q1, all formats posted positive like-for-like sales growth in Q2. Former Cora and Match stores are accelerating their like-for-likes month after month, reflecting the success of the transformation of the commercial model. They reported plus 4.6% like-for-like in Q2 after 2.6% in Q1. Recurring operating income grew by 13.8% in the first half of the year, with a margin expansion of 16 basis points, reaching 1.5% of sales. The group managed to offset its price investments as well as higher energy and transportation costs due to the crisis in the Middle East and successive heat waves thanks to continued optimization of operational efficiency and cost reduction initiatives. We're also satisfied with the outcome of the negotiations with Concorde. Cora and Match operating profit slightly improved over the semester benefiting from positive volumes and the end of integration costs but was penalized, as you said Juan last year, by the lower margin of the Carrefour commercial model which was implanted over the summer 2025. Let's turn to slide seven with the impact of key operating initiatives of this first semester in France. Carrefour France continued to improve its price competitiveness with three new waves of price decreases in March, April, and June, each covering more than 500 SKUs in different categories of products with an average price reduction of 8%. For the 50th anniversary of Carrefour branded products, a basket of 200 SKUs sold at cost price was also introduced, meeting great success with customers. As a result, Carrefour hypermarkets now hold second place in terms of price positioning in France as per Nielsen's DistribriNet index. These investments have been well perceived by consumers as reflected by a two-point increase in NPS in France. At former Cora stores, NPS was up 15 points, reflecting the attractiveness of the new commercial model with lower prices More Promotions, and Extended Private Labels. Overall, Carrefour had a stable market share over this first semester. Regarding the initiatives of Carrefour 2030, the rollout is unfolding as planned. We strengthened our leadership in the convenience format with 234 new stores opened in H1. We also reinforced our market share in e-commerce, both in home delivery and click and collect. New commercial concepts are being deployed in hypermarkets, notably dedicated fresh areas or growth verticals like Tara Pharmacy. Three hypermarkets and two supermarkets were transferred to lease management. We confirmed the targets for the full year, 15 hypers and 40 supers. These various operating initiatives are resonating well with customers, and an additional 300,000 members joined our loyalty program. Let's move to slide eight with a focus on Spain, where the group experienced strong momentum in the second quarter with like-for-like sales up 2.2%. Market conditions are still supportive with positive volumes and a slight inflation. In that context, Spain delivered a solid performance in food with a 2.3% like-for-like increase in sales, notably were all driven by strong growth in fresh products in hypermarkets where we maintain constant focus on quality, availability, and affordability. Over the semester, Carrefour Spain continued to invest in its customers' purchasing power with several campaigns, including unbeatable pricing and dedicated operations for members of the loyalty program, which attracted close to 500,000 new members to pass the 11 million members threshold. At the same time, customer satisfaction kept improving with NPS up four points in Q2. In line with its expansion plan, Carrefour Spain grew its footprint in convenience stores with 78 stores opened in H1. Finally, e-commerce progressed well with an increase in GMV of plus 8.4% in Q2. This strong commercial momentum translated into an improvement in profitability both in absolute terms and in percentage of sales. Overall, the first half, over the first half, recurring operating income was at 7.3% at 177 million euros with a 14 bps increase in operating margin to 3.3%. Turning to slide 9 with the performance in Brazil. High interest rates continued to weigh on consumer purchasing power. In this still complex macroeconomic environment marked by negative volumes, Carrefour outperformed its market. The group recorded an improvement in sales, with Like for Like turning back to positive territory at plus 0.4%, with an increase of plus 0.5% at Atacadao. The retail segment posted a sequential improvement with hypers up plus 2.5% like for like. Retail like for like was penalized by non-food e-commerce operations as Carrefour Brazil slowed down this activity to prioritize its profitability. The financial services segment performed well with a 13% increase in the credit portfolio. Carrefour Brazil increased its recurring operating income by 5.8% over the semester to reach €359 million. Margin also improved in H1 and was up 9 basis points thanks to a well-calibrated commercial equation and strict cost discipline. In the second half of 2026, we expect to see continued stabilization in our volumes and further cost optimization. Moving on to slide 10 to mention a few key initiatives.