Carrefour: 2014 First Half Results: Continued Growth

Regulatory News:

Carrefour (Paris:CA):

Strong profit growth at constant exchange rates in first half 2014

• Net sales of €35.9bn, up +4.3%¹, highest organic growth rate in five years
• Growth in Recurring Operating Income: up +13.8%² to €833m
• Rise in net income, Group share, adjusted for exceptional items: up +16.7%³ to €274m
• Increase in gross cash flow of +41.6% to €1.3bn (+1.9% excluding exceptionals)

Europe: Growth of +7.8% in Recurring Operating Income

France: New half of improved profitability

• Further organic sales growth: +1.9%
• Traffic up in all formats
• Growth in Recurring Operating Income for the 4^th consecutive half: +6.9%

Other European Countries: Further improvement in profitability

• Overall stability in sales with growth in Spain, Belgium and Romania
• Recurring Operating Income up +19.3%

Emerging markets: Growth of +19.2% in Recurring Operating Income

• Excellent sales performance and increased profitability in Brazil and Argentina
• Stable sales in Asia

Investments up, two tactical acquisitions

• Continued investments at €818m, in line with our catch-up, remodeling and network expansion policy
• Signing of agreements to acquire the activities of DIA France and 53 supermarkets in northern Italy, reinforcing our multiformat strategy

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¹ Ex petrol ex calendar.
² At constant exchange rates.
³ Adjusted net income: See in appendix.

First half 2014 key figures¹

Breakdown by zone of first half 2014 net sales and recurring operating income

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¹ The H1 2014 social and consolidated accounts were approved by the Carrefour Board of Directors, which met on July 30^th, 2014. The accounts were submitted to a limited review by the Group’s auditors.

Figures for the first half 2014 and the comparative first half 2013 information presented in this document take into account the classification of certain activities in accordance with IFRS 5 – Assets held for sale and discontinued operations.

² Excluding petrol and calendar.

Further growth in Recurring Operating Income (+13.8% at constant exchange rates) and in adjusted net income, Group share (+16.7%)

Income statement

In H1 2014, Carrefour recorded solid net sales growth. Net sales were up 4.3% on an organic basis. At current exchange rates, sales were down 1.6%. Europe and Emerging Markets both recorded sales growth: +1.1% and +11.2% respectively.

Recurring Operating Income grew once again and reached €833m, up +13.8% at constant exchange rates (+7.9% at current exchange rates), driven by both Europe (+7.8%) and Emerging Markets (+19.2%).

In France, recurring operating income was €515m, up +6.9%, an increase of +20 basis points (bp) in gross margin, which reached 3.0% of sales. This performance is mainly explained by an improved gross margin as a result of decreased shrinkage and cost savings from logistics. Profitability was good in all formats.

In Other European countries, recurring operating income stood at €43m, up +19.3% at constant currencies. Operating margin was slightly up at 0.5% of sales. While maintaining constant attention to price positioning, the gross margin improved. In Spain and in Belgium, profitability increased. Italy continued rolling out its action plans and intensified its commercial investments linked to the football world cup in the half.

Strong growth in Latin America continued with recurring operating income of €247m, up +33.2% at constant exchange rates. Operating margin stood at 3.8%, up +70bp. This increase reflected excellent like-for-like sales in Brazil and Argentina and a better gross margin.

In Asia, recurring operating income was €83m. Gross margin held up well. Amid a more frugal consumption environment and a decrease in shopping card activity, China continued its expansion to build up its long-term position. Taiwan improved its performance.

Net non-recurring income stood at €264m and mainly reflected the capital gain linked to the contribution of assets to property company Carmila. Net income from continuing operations, Group share, was €474m and reflected:

• A decrease of €131m in financial expenses, reflecting the better cost of funding and the €119m non-recurring expense linked to the bond buyback in the first half 2013
• A stable effective tax rate

Net income, Group share, was €441m.

Adjusted net income, Group share, stood at €274m, an increase of +16.7%.

Cash flow and debt

Cash flow from operations rose by +41.6%. Adjusted for exceptional items and discontinued operations, it increased by +1.9%, in line with the increase in EBITDA, to €1,252m (vs €1,229m in the first half of 2013).

Carrefour continued to invest in remodeling and expansion with capital expenditure of €818m. The change in payables to fixed asset suppliers led to a use of €382m. Change in working capital excluding exceptional items, stable versus the prior year, was a cash-out of €2,488m.

Free cash flow was -€2,412m, reflecting the seasonality of the business.

Acquisitions and disposals led to a net total cash-out of €186m, partly explained by the creation of Carmila. The cash dividend paid by Carrefour was a limited €149m, as 65% of shareholders opted for a dividend payment in shares. Financial expenses decreased by €27m to €192m.

Net financial debt as at June 30^th, 2014 was €7.3bn.

H1 2014 highlights

• In April, creation of Carmila, a company dedicated to enhancing the value of the shopping centers adjacent to Carrefour hypermarkets in France, Spain and Italy and in which Carrefour holds a 42% stake.
• Acquisition in June of DIA France, comprising more than 800 stores totaling nearly 550,000 m² and 2.3 billion euros of sales under banners in 2013. This transaction, which remains subject to the approval of the relevant antitrust authorities, should contribute to the growth of Carrefour’s multiformat store network in France.
• Acquisition of 53 supermarkets located in northern Italy in June, with a combined sales area of 58,000 m² and net sales of around 300 million euros in 2013. This acquisition will strengthen Carrefour’s multiformat strategy in Italy. The completion of the transaction is subject to the approval of the relevant antitrust authorities.

Staying the course on 2014 priorities

Carrefour is staying the course. The priorities announced at the annual results presentation in March are reaffirmed:

• Continue action plans in all countries aiming at continuous improvement of our offer and price image to enhance the shopping experience, notably in our three largest markets, France, Brazil and Spain but also in Italy
• Accelerate multi-channel roll-out
  • Revamp and convergence of our websites in France, gradual broadening of our offer
  • Continued development of click & collect
• Continue structural projects including:
  • Revamp of the supply chain in France
  • IT rationalization

• Enhance the attractiveness of our sites in France, Spain and Italy by capitalizing on the creation of Carmila
• Accelerate store remodelings and relaunch multi-format expansion
  • Investments of between €2.4bn and €2.5bn in 2014
  • Intensification of the remodeling plan
  • Continued long-term growth in emerging markets, particularly in China and Brazil
• Maintain strict financial disciplineContacts

APPENDIX

Consolidated Income Statement

Calculation of adjusted net income, Group share

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¹ Tax impact of restated items (non recurring income and expenses and financial expenses) and non recurring tax items.

Main ratios

Consolidated Balance Sheet

Consolidated Cash Flow Statement

Changes in Shareholder Equity

Definitions

Organic sales growth

Like for like sales growth plus net openings over the past twelve months, including temporary store closures.

Commercial income

Commercial income is the difference between the sum of net sales, other income, reduced by loyalty program costs and the cost of goods sold. Cost of sales comprises purchase costs, changes in inventory, the cost of products sold by the financial services companies, discounting revenue and exchange rate gains and losses on goods purchased.

Recurring Operating Income Before Depreciation and Amortization (EBITDA)

Recurring Operating Income Before Depreciation and Amortization (EBITDA) is defined as the difference between commercial income and sales, general and administrative expenses. It excludes non-recurring items as defined below.

Recurring Operating Income

Recurring Operating Income is defined as the difference between commercial income and sales, general and administrative expenses, depreciation and amortization.

Operating Income (EBIT)

Operating Income (EBIT) is defined as the difference between commercial income and sales, general and administrative expenses, depreciation, amortization and non-recurring items.

Non-recurring income and expenses are certain material items that are unusual in terms of their nature and frequency, such as impairment, restructuring costs and expenses related to the revaluation of preexisting risks on the basis of information that the Group became aware of during the accounting period.

Free Cash Flow

Free cash flow is defined as the difference between funds generated by operations (before net interest costs), the variation of working capital requirements and capital expenditures.

Disclaimer

This press release contains both historical and forward-looking statements. These forward-looking statements are based on Carrefour management's current views and assumptions. Such statements are not guarantees of future performance of the Group. Actual results or performances may differ materially from those in such forward-looking statements as a result of a number of risks and uncertainties, including but not limited to the risks described in the documents filed with the Autorité des marchés financiers as part of the regulated information disclosure requirements and available on Carrefour's website (www.carrefour.com), and in particular the Annual Report (Document de référence). These documents are also available in English language on the company's website. Investors may obtain a copy of these documents from Carrefour free of charge. Carrefour does not assume any obligation to update or revise any of these forward-looking statements in the future.