Good day, and thank you for standing by. Welcome to the Carrefour Q3 2024 Sales Webcast and Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one 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, Chief Financial Officer. Please go ahead.
Thank you. Good afternoon to all of you, and thank you for attending our 2024 Q3 sales call. I'm here with Sébastien Valentin, our Head of Investor Relations. Let me start with a few key highlights before we get into the details of our third quarter sales. The quarter was marked by a sequential improvement in activity, excluding Argentina. Total group sales were up 8.8% on a like-for-like basis, reflecting a positive inflection in most markets. Like-for-like sales growth was supported by the sound execution of our strategic pillars and tangible signs of better consumption trends in France and Europe. Over the quarter, we saw an overall improvement in volume trends in most European markets. There were also encouraging signs of trading up. These notably included a pickup in sales of both national brand and organic products, which had been pressured through the high inflationary period.
Month after month, consumer confidence indices keep rising. They are now at their highest level since the beginning of the inflation crisis. The key strategic initiatives of our 2026 plan continue to progress well, with notably another growth of our Carrefour branded products. They represented 36% of food sales this quarter, versus 35% last year. Regarding e-commerce, GMV grew 20% in Q3 on the back of strong historicals at +30% in Q3 2023, driven by Brazil. Another highlight of the quarter was our continued investments in competitiveness in France and other Europe. Consumers have perceived the positive impact of our pricing policy on their baskets. Our price image improved sharply. Our group Net Promoter Score increased by five points versus last year. These price investments are supported by the good execution of our cost savings plan.
As a reminder, we announced last April the reinforcement of our cost reduction dynamics with a new target of EUR 1.2 billion for 2024, versus EUR 1 billion initially. We confirm this objective today. In light of these elements, we confirm our financial targets for full year 2024, i.e., an increase in both EBITDA and recurring operating income, and a net free cash flow in line with the Carrefour 2026 plan trajectory. Let's now dive into Q3 numbers, starting on slide 3 with group sales. Total sales for the quarter reached EUR 23.98 billion , increasing by 12.9% at constant currency. Group like-for-like sales were up 8.8%. Expansion and M&A had a positive contribution of 5.5% over the quarter, mainly thanks to the consolidation of Cora and Match.
Petrol contributed negatively for -1.2%, mainly driven by lower volumes. The calendar effect was slightly negative, at -0.2%. Forex had a strong and favorable impact on total sales of -11.4% over the quarter, essentially reflecting the depreciation of the Brazilian real and Argentine peso. In total, reported revenue was up 1.5% in Q3. Moving on to more details on the performance in France on slide four. Like-for-like sales were down 3% in Q3, mainly reflecting our continued price investments over the quarter, on top of the full impact of cumulative price decreases in H1 and Q4, 2023.
The - 6.1% like-for-like in hypermarket is mainly explained, first, by the depth of our price investments, which were particularly material in the format, and second, by lower promotions on HPC in the market, following the Descrozaille law, during the back-to-school period, a period traditionally intense for such promotions. Again, in Q3, there was roughly no reaction from competitors to our price investments. As a result, Carrefour France competitiveness is now back at its best level since 2020. This is better and better perceived by customers, as highlighted by a clear improvement in price image and an increase in French NPS by five points. The quarter was also marked by a significant increase of our market share in value, notably driven by the consolidation of Cora and Match.
In volume terms, our market share has been stable since May on a comparable basis. So things are going globally per ton in France, and we confirm our ambition to stabilize or slightly grow profitability in the country over the full year. Moving on to Europe, on slide 5. As for France, we decided to strengthen our price competitiveness in all our European markets. After some expected pressure on sales in H1, we started to see a sequential improvement in activity in Q3, with like-for-like sales down -1.5% in Q3, versus -2.7% in Q2, and a solid exit rate. As in France, customer purchasing patterns improved in most countries, with a better dynamic in volumes. In Spain, like-for-like sales turned positive in September, both on food and non-food, with positive volumes on FMCG products.
Like-for-like trajectory in Italy improved on the back of reinforced price competitiveness. Besides, we kept transforming our store portfolio with ongoing sale and franchise deals of convenience stores, and the first two transfers of hypermarkets to lead management in the country. Belgium faced high comps, mostly related to the opening of Delhaize stores on Sundays, following their transfer to franchise last year. In Romania, Carrefour posted solid momentum, with positive volumes over the quarter. Cora stores are progressively ramping up as planned. Last, the Polish market was still highly competitive over the quarter. We recently announced the appointment of a new CEO in the country. His first mission is to recreate a positive dynamic and restore momentum for Carrefour in Poland. Let's move on to Latin America on slide 6.
The quarter was marked by a strong performance across all formats in Brazil, with a market which remains well-oriented, with continued improvement in volumes, a mid-single digit food inflation, and solid consumption trends. In this context, like-for-like sales were up 5.8%. Atacadão posted an increase in like-for-like sales of +5.6%, outperforming the cash and carry market. Commercial initiatives continue to bear fruits, notably the rollout of service corners, now present in 151 stores. Converted big stores delivered a strong +14% like-for-like growth in Q3, on the back of particularly high comps, with 22% like-for-like in Q3, 2023. Commercial momentum at Carrefour Retail accelerated over the quarter, with sales up 7.1% like-for-like, compared to 2.3% in Q2.
This improvement is a result of the adjustment of the commercial strategy, alongside the development of a tailored offer for B2B customers. Sam's Club's performance continued to be well-oriented, with like-for-like sales up 3.2%, supported by a 35% increase in active members over the quarter. Reported sales were actually up 16.9%, including the expansion impact related to 11 openings since Q3, 2023. E-commerce GMV grew strongly, with a 21% increase in Q3, driven by food sales. Last, Q3 showed another strong performance at Banco Carrefour, supported by the diversification of the offering and the continued capture of new clients at converted stores. A quick word about Argentina, where Carrefour's performance was once again particularly strong, in an environment shaped around pressure on consumption and a fast slowdown in inflation.
A few words on our EUR 700 million share buyback program on Slide 7. The program is almost over for the year. We have already repurchased 41.9 million shares up to October seventeen, for a total amount of EUR 616 million. The total net number of outstanding shares amounts to 652.3 million shares. In summary, the conjunction of the continued progress in the execution of our Carrefour 2026 plan, better price positioning, and the encouraging signs of a positive evolution of consumers' purchasing behavior bodes well for the end of the year. The sequential improvement of the activity in Q3 in most European countries is confirmed in October, and so has the strong commercial momentum in Brazil.
Altogether, with a more favorable market share dynamic, we are well positioned and approach the end of the year with confidence. On this basis, we confirm all our financial objectives for the full year. 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 one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. We will now go to the first question. One moment, please. Your first question comes from the line of Izabel Dobreva from Morgan Stanley. Please go ahead.
Hello, good evening. Thank you for taking my questions. My first question is on the like-for-like of hypermarkets in France, which was declined by 6%. My question is, what is your outlook for the rest of the year? Should we expect it to stay negative at the Q3 run rate, so -3 X non-food in Q4? Is that, is that the outlook? And then linked to this, how should we think about the organic margin development in France in the second half, given the like-for-like development in hypermarkets? My second question is on Brazil. Could you talk a little bit about the penetration of installment payments at Atacadão, and how has this evolved sequentially in the quarter? And what do you see in terms of incremental sales gained from this initiative?
Then my final question is a quick one on your net finance costs. Could you update us on your thinking there, in terms of net finance costs for the full year, given the now likely increases in interest rates in Brazil?
Thank you very much, Izabel. So first on the hypermarket in France, and you had a, you have a continuation on the margin outlook for France. So first, let's come back on the sales dynamic behind the number. So first, as I said, a minute ago, we have had significant price investments over the past 12 months, specifically on the hypermarket format. So clearly, we have a cumulative effect of all the price investments, which get to a sort of peak in Q3. Then, there's been, as you know, the back-to-school campaign is typically very promotional, and it will be on HPC products.
And so we have reduced, I mean, we and the market has reduced promotional intensity on this category, which, which is negative in the market since the implementation of the law. And so that has been a negative versus sales last year. Then last year, in September, we had our 60th birthday at Carrefour, and so that was also a time of highly promotional period. So that's for the trend, and we'll see. It's too early to give you an outlook on the sales trend for the end of the year.
Again, just highlighting that consumption trends are improving, volume trends in the markets are improving, that our price image and price perception has regularly improved, that we have implemented further price decrease over the course of the summer, and so we know that it takes a little bit of time for these to be well perceived by by consumers. But we think that we have, overall, a good positioning of our commercial offering for the French business. Let me now turn to the second part of your first question, is how does that you know relate to our outlook for the second half?
So, again, our ambition, and I confirmed that in my speech a minute ago, is to stabilize or slightly grow profitability in France for the full year, so we confirm today this ambition. You remember that there was a slight pickup in profitability in H1 in France. We think that, you know, the dynamic of the business in H2, in terms of recurring operating income, should be similar to what we experienced in H1. It's a little too early. We know that we have very important weeks for business ahead of us.
It's too early to know if it will be stable or slightly growing in H2, but that's where we see the trend. Let me now come to your second question, which relates to installments in Brazil. So, installments, three times installments in Brazil, have been implemented earlier in the year. They've been implemented actually by all the market, all competitors, and so it's become sort of new normal to offer the service. So, Atacadão has offered the service as well. Then it has grown a little bit, it's low to mid-single digit as a percentage of sales. Obviously, we need to offer the service, then we don't necessarily need to promote the service to the consumers that are coming to the stores.
So it's still early days, but it's not gaining traction, it seems to be under control. Then your last question is on the net finance cost. Well, nothing specific there. We touched upon it in July. Nothing specific. You're right, there's a little bit of interest rates increase in Brazil with the central bank, which has increased the rates and further increase, which are forecast for the end of the year. On the contrary, we have some decrease of rates in euro, and we have some, not only have, you know, long-term bonds, we do have long-term bonds, but we also have short-term financing, which is more on a variable rate basis. So nothing significant to report on the net finance costs for the year versus what we discussed in July.
Thank you. We will now go to the next question. And your next question comes from the line of Monique Pollard from Citi. Please go ahead.
Oh, hello. Afternoon, everyone, thank you for taking my questions. Three hopefully quick ones, if I can. The first was just on the cost saves. Obviously, you've confirmed the guidance, on the EUR 1.2 billion cost saves for the year, but just wondered if you could give us an update on where you are year to date versus the 580 that were achieved during the first half? The second question was on Cora and Match. Just if you could give us an indication of how much market share you think those banners have lost over the past year, and whether there is still some market share leakage you're seeing under those, as you integrate. And then finally, again, on France, obviously, you talked about, on a sort of organic basis, being back to stable volume.
Just when you think you might get to the point of taking some organic market share in France, given that the price perception is now starting to feed through to the customers?
Thank you, very much, Monique, for your questions. So first on the cost savings, so we don't report on a quarterly basis on the cost savings, but we reported on a half-year basis, it was, as you rightly pointed, EUR 580 million, so roughly half of the EUR 1.2 billion. So, you know, that the dynamic over the summer was quite good. It has continued, as I said earlier, in Q3, so we're very happy with this. That's very important in our model as you've all very well understood, where we've invested substantially in our competitiveness. And we can, you know, confirm our commitments on our profits outlook, thanks to the strong contribution of this cost savings.
So, things progressed as we had planned in Q3 on the cost savings and the confirmation of the full number. So on Cora and Match, I think that they slightly lost, but, you know, it's probably available in the public contact data before we took over. They were relatively stable, maybe - 0.10% or something like that, but relatively stable. Their performance is relatively consistent with what we see in our formats. Maybe sometimes a little better. We think that the fresh offer that they have is particularly appealing to consumers. You know, that's something that we want to capitalize on. And then over the past few weeks, but just a handful of weeks, they're starting to be converted. So, since 1st September , the stores start to receive the Carrefour private label products.
And, you know, it's a supplier by supplier discussion. And then, we're also changing the banners. We will be done with this, we're about halfway and will be done at the end of November. And as we change the banner, the stores benefit from all the promotional activity of Carrefour. That's a positive for these stores. Last question is on, you know, the dynamics of market share and a little bit volume market share in France. You know, but when will it turn positive? Hard to know. You know, we're doing everything we can to turn our market share volume from stable to positive. We think that a number of conditions are met for this to happen.
First is our price image, then is our, you know, store execution, which is also included in the NPS in terms of, you know, how the store is run and how we interact with the consumers. And so all that ends up in the NPS and so it's +5 points, as I said earlier. So, and our competitiveness is the best since 2020 , as I said, and most of you know that, in 2021 and 2022, Carrefour gained market share for two years in a row. So we think that we have now, you know, aligned a number of conditions for this to happen. So, let's give our consumers a little more time for that, for them to totally perceive all the efforts that we have done and adapt their shopping habits to come more frequently to Carrefour.
Thank you. Your next question comes from the line of François Digard from Kepler Cheuvreux. Please go ahead.
Thank you. Good afternoon, Mathieu. Three questions, if I may. About the non-food sales, you explained it was linked to the end of this quarter of the promotions in HPC. On that particular part of the business, what kind of long-term pace do you see in the future? That's my first question. The second question, when you said in H1 to expect profitability normalization in H2 in Europe, were you contemplating the kind of figure you just posted in Q3? And last question, about the tax impact of the fiscal law discussed in France currently, do you expect the impact to be in the EPS of 2025-2026 or 2024-2025 ?
Because some of French companies recently shared a view on that during the Q3 calls, and some of them are guiding to an impact in 2024 or not in 2025, like I saw it previously. Thank you.
Thank you, François. On your question on HPC. At Carrefour, HPC is food. I know we don't eat hygiene products, but it's reported in the food line.
Maybe on non-food, my question was more on non-food, yeah.
Okay, sorry, I thought it was on HPC. So, just to finish on HPC. So, less promotion in Q3, but more generally, since the implementation of the law in 1st March , the market is negative, -3 , I think since the beginning of the year, and -6 since the implementation of the law. I think it's, you know, probably one time effect, and once we have lapped this product category to more normal trends. On non-food, dynamic is negative. It's been negative for a while. Obviously, non-food is more a discretionary consumption as you will see on specialized retailers.
So the trend is negative. At group level, it's you know, it's excluding Argentina on hyperinflation, it's slightly negative on bazaar and textile and slightly positive on electrical. Hard to know when you know, when these trends change. Clearly, purchasing power is progressively being restored. We start to see signs positive signs on the food consumption. It's likely that at some point, it it also positively impacts the non-food consumption. The second question is on the profitability of Europe for the second half. So as you rightly said, so profitability was down in H1.
We flagged a few elements, notably price investments, adverse weather in Q2, notably, and then the integration cost in Romania, so the one-offs obviously will not replicate in H2. As far as the price investments are concerned, we have continued these price investments over the summer, but at the same time, we see positive market dynamics in terms of volume, so that doesn't. Notably, since September, we've already, that's why we flagged it in our communication tonight. We've already had July and August, this Q3, and then a different trend in all our European countries, and notably in Spain, since the beginning of September, and that continues in October.
So better volume, as I said in my speech, so that's positive. Well, all in, given, you know, notably the additional price investments that we've made in the market, I think that the recurring operating margin will probably, or recurring operating income will probably still be under pressure in H2, but clearly to a much lesser extent than what it was in H1. Then on your third question relating to tax, it's all work in progress. And for those of you who followed the discussions at the parliament, there's a number of, you know, new proposals which are coming up every hour.
So it's hard to see precisely where it will land. On the timing of the tax, you know, if the tax, the additional income tax, is applied on the 2024 results by law, then it will impact our 2024 EPS. Then the cash impact will probably be in 2025, but the P&L and so EPS impact will be in 2024. But again, I don't know what will be the final project of the government.
Thank you.
Thank-
Thank you. We will now take the next question, and the next question comes from the line of Rob Joyce from BNP Paribas. Please go ahead.
Hi, good afternoon. Thanks very much for taking the questions. I'm afraid three from me as well. Just on the French market, I guess I'm still struggling a little bit. It sounds like your tone is pretty positive. I look at the sort of external data, and I see sort of market potentially in deflation, volume still under pressure, non-food, maybe a lead indicator, still tracking -6 . I'm just wondering, is that positivity really just coming from organic sales picking up, or is there something more you're seeing that we can't see in the external data? Second one is also on France, just on the French margin comments. Is that French margin excluding the impact of the Cora Match acquisition, that sort of flat to small up? And, and what sort of...
Can you remind us what sort of, EBIT, impact you're expecting from Cora Match in the 2024 numbers? And then the final one, I had to ask it, somebody did on consensus. I think we've got EBIT now looking about 2.42 on, Visible Alpha. I'm just wondering if you think that is about the right number, or does that move a bit further, given your comments on Europe, just now? Thanks very much.
Thank you, Rob, for your questions. So first on the dynamic of France. So what we see again is that volumes are improving progressively. Just w hen looking at it, there is quite different data. It doesn't happen that frequently, but when you look at Kantar, Nielsen and Circana, they have slightly different numbers. So I won't point to a specific number, but what they all agree on is that the volume trends is improving month after month and quarter after quarter since the depth of the inflationary crisis. So we think that that's good.
When we combine this with the trading up that we see again on organic product, on national brand, we see also fresh that there's a positive trend on fresh products, and we know that they're a little more expensive. That's positive. Then our numbers obviously don't reflect that, because of all our price investments that we have implemented into the market for the past three months. On your second question relating to the outlook for the year in France and the Cora impact. So my earlier comments are excluding Cora.
We shared back in July one page, and we've actually included it again tonight in the deck. That's page 16 of the slides that we've shared with you tonight, on how we see. So that's the slides that we shared with everyone back in July. We think that Cora will be, you know, marginally negative on the profitability of France. Again, marginally, given the small numbers are at stake. Just to recap, so the Cora itself in terms of operating performance will be slightly positive, because the businesses are progressing well, and they're delivering positive performance.
But then there will be a number of one-offs, which will weigh in the recurring operating income, relating to the conversion and integration of Cora and Match. We said that about half of the OpEx one-off will impact 2024 , and the other half will impact 2025 , mainly in H1 2025 . So, the consolidation and integration of Cora will be marginally negative again, marginally, so I don't think it should change the global picture for France. Then, last question on the consensus for the group on a full year basis. You know, when we so I won't point to a specific number w e never do that.
But when we look at it, we think that the underlying assumptions seem consistent with what we see for the rest of the year. So that's for group and then for France, we commented. And so you heard in my speech, a tone of confidence for the end of the year. Again, consumer confidence going in the right direction, the volume trends, price positioning, and then our cost saving program answered to that earlier, which is progressing well. That's the grounds for confident tone for the end of the year.
Thank you very much.
Thank you. As a reminder, if you would like to ask a question, please press star one and one on your telephone keypad. We will now go to our next question, and your next question comes from the line of Sreedhar Mahamkali from UBS. Please go ahead.
Hi, Mathieu, Sébastien, good evening. Thanks for taking my questions. Really a couple, I think most have been done. Maybe just in terms of hypermarkets, are you able to give us anything on traffic that's sort of giving you some of this confidence and the better volume performance you're indicating? If you could share anything there, that would be very helpful. Secondly, just in terms of the sale and leaseback transaction we've seen in Brazil, and more broadly, anything you can point us to in terms of what we should expect for property disposal contributions to the free cash flow? That would be very helpful for modeling purposes. Thank you very much.
Thank you, Sreedhar . Well, nothing specific on traffic a gain, most important is the volumes of products. Maybe additional comment is that we've been positive in some months in France in Q3 in terms of volume of products sold, which is something that had not happened for quite some time. And that's obviously a combination of better volumes in the market and of our you know stabilization of market share in volume terms. Then on the sale and leaseback, which was announced, just to make sure everyone's seen that, yesterday.
So I think it's 15 Atacadão real estate, which was sold to a local investor, Guardian Real Estate, for 700, I think, something [audio distortion] . The cap rate is 8%, which, given where interest rates are in Brazil, which we think is an interesting value proposition. We seize the opportunity. Well, in terms of, you know, full-year number for real estate, I don't-- I think we'll be, you know, in the kind of magnitude of divestments as we've had over the past few years. Again, our strategy is to regularly rotate our assets, depending on the opportunities we have.
And in parallel to these real estate divestments, we have real estate investments every year, and they will also probably be in the same dynamic as we have every year. So nothing specific on the volume of real estate asset rotation for me.
Thank you. There are currently no further questions. I will hand the call back to you for closing remarks.
Many thanks to all of you. Thank you for your questions and attending this call. That we can close, and so we'll gather again in this format on February 19th for our full year results, and since then, we'll probably have the pleasure to see you again, a number of you. Many thanks, and good evening.
Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.