CORRECTING and REPLACING: Half-Year 2016 Results: Carrefour Continues Its Profitable Growth Momentum

Regulatory News:

This version includes changes in the headings in tables on pages 5 and 6.

Half-Year 2016 Results: Carrefour Continues Its Profitable Growth Momentum

Carrefour (Paris:CA):

Sales inc. VAT of €40.6bn in H1 (€20.5bn in Q2): Further growth in organic sales

• Resilient sales in France and Europe in a more difficult consumption environment, notably marked by unfavorable weather conditions
• Very strong growth in emerging markets, driven by Latin America and Taiwan

Recurring Operating Income of €706m in H1: Strong operational performance

• Operating margin held up well in France, stable at 1.8%
• Strong growth in Other European countries, with a 30bp rise in operating margin
• Growth in profitability in Latin America, with a 12.3% rise in ROI

Investments to support the multiformat and omnichannel model

• Openings of 305 convenience stores, 97 supermarkets, 5 cash & carry stores and 3 integrated hypermarkets in H1
• Digital-channel development in all the Group’s countries
• First contribution of Rue du Commerce in France
• Creation of Cargo, a real estate company dedicated to logistics controlled by Carrefour and co-financed with third parties
• Accelerated pace of DIA store conversions in France with 260 stores converted in H1. 412 stores are now under Carrefour banners; the conversion of the 648 stores will be completed as planned at end-2016

2016 objectives

• Investments¹ of between €2.5bn and €2.6bn
• Increased free cash flow¹ and stable year-end net debt vs. end-2015
• Continued strict financial discipline: maintain BBB+ rating

¹ Ex. Cargo

H1 2016 sales and results

Key H1 2016 figures

H1 2016 sales and Recurring Operating Income

H1 2016 sales inc. VAT: Solid first-half sales

Sales inc. VAT stood at €40,552m. In the first half, currencies had an adverse effect (-6.1%), as did petrol prices (-1.0%).

In the first half, Carrefour recorded further sales growth, up +2.9% on an organic basis. Emerging markets posted double-digit growth while sales in Europe were stable, impacted by a sluggish consumption environment.

In H1 2016, France posted sales inc. VAT of €19,196m, slightly down on a like-for-like basis, but on the back of three consecutive years of LFL growth in H1.

Sales in international markets stood at €21,356m in H1 2016, up +5.3% like-for-like. Sales in Other European countries were up +2.2% on a like-for-like basis. Latin America continued its strong momentum and posted further LFL sales growth of +14.5% in the half. In Asia, LFL sales were down 5.4%.

First-half 2016 results: Further growth in ROI (+5.3% at constant exchange rates) and adjusted net income (+0.6%)

Income statement

The Group’s Recurring Operating Income (ROI) stood at €706m, up +5.3% at constant exchange rates.

In Europe, ROI was up +5.0% to €467m. Operating margin in France was stable at 1.8% of sales. In Other European countries, ROI posted double-digit growth and operating margin increased by 30 basis points, driven notably by strong performances in Spain and Italy.

Latin America turned in another strong performance, with its ROI up +12.3% at constant exchange rates to €273m. Brazil’s profitability continued to improve, driven by strong LFL sales growth.

In Asia, ROI was impacted by the transformation of our model in China in a context marked by the rapid evolution of consumer expectations. In Taiwan, sales growth continued and operating margin improved.

In the first half of 2016, non-recurring income was a net expense of €114m, principally attributable to reorganization costs in various countries. This compares to an expense of €16m in H1 2015. Net income from continuing operations, Group share, stood at €158m, including the following elements:

• A decrease in financial expenses for €16m,
• An effective tax rate of 31.3% vs. 34.3% in H1 2015.

Net income, Group share, stood at €129m. When adjusted mainly for non-recurring income, the Group share of net income is €235m, up +0.6%.

Cash flow and debt

In H1 2016, gross cash flow stood at €1,088m vs. €1,180m in H1 2015. Working capital requirements improved by €179m, from -€2,232m in H1 2015 to -€2,052m in H1 2016.

Total capex reached €1,057m, up vs. H1 2015. Excluding Cargo, capex was €968m, reflecting a better distribution over the year between the two halves. These investments included the planned acceleration of the conversion of DIA stores to Carrefour banners.

Free cash flow stood at -€2,259m, reflecting the seasonality of our business. Excluding Cargo and exceptional items, free cash flow stood at -€2,106m.

Dividend payments in cash amounted to €121m in H1 2016. In 2015, the dividend had been paid in H2. The creation of Cargo resulted in an inflow in the "Capital increase” line and accounts for most of it.

In total, net financial debt at June 30, 2016 stood at €7.4bn, reflecting once again the seasonality of our activity. Net debt at end-2016 is expected to be globally stable vs. its level at 31 December 2015.

2016 roadmap

Carrefour is continuing its transformation, with strong ambitions for its multiformat and omnichannel model, offering its clients a shopping experience adapted to evolving consumption habits.

Carrefour, the world’s most multiformat retailer, continues to expand. In 2016, the Group will continue opening stores in its different formats. In France, the conversion of the DIA store network is proceeding according to plan.

Carrefour, to grow sustainably, continues to modernize its stores in all countries and to enhance the attractiveness of its sites by capitalizing on Carmila, a company dedicated to the revitalization of Carrefour shopping malls in France, Spain and Italy. Carrefour is making further headway in the revamp of its supply-chain and IT rationalization in several countries.

The transformation of its model in China continues and is well advanced.

Carrefour continues its digital evolution, supported by its physical store network and the development of e-commerce services in all Group countries.

Agenda

• Q3 2016 sales: October 19, 2016

APPENDIX

First-half 2016 sales inc. VAT

The Group posted sales of €40,552m. In the half, currencies had an unfavorable impact of
6.1%. Petrol prices had an impact of -1.0% overall and -1.5% in France. Calendar impact was estimated at +0.3%.

Total sales under banners including petrol stood at €49.6bn in the first half of 2016, up +1.7% at constant exchange rates.

Second-quarter 2016 sales inc. VAT

The Group posted sales of €20,499m. In the second quarter, currencies had an unfavorable impact of 5.4%. Petrol prices had an impact of -1.0% overall and -1.2% in France. Calendar impact was estimated at -0.1%.

Total sales under banners including petrol stood at €25.0bn in the second quarter of 2016, up +0.8% at constant exchange rates.

First-half 2016 net sales and Recurring Operating Income by region

¹Ex petrol, ex calendar.

First-half 2016 consolidated P&L

First-half 2016 consolidated balance sheet

First-half 2016 consolidated cash-flow statement

Changes in shareholders’ equity

First-half 2016 net income, Group share, adjusted for exceptional items

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

EXPANSION UNDER BANNERS – Second-quarter 2016

In Q2 2016, Carrefour opened or acquired 145,000 gross sq. m.

NETWORK UNDER BANNERS – Second-quarter 2016

In Q2 2016, Carrefour opened or acquired 227 stores, mainly convenience stores (183).

¹ The termination of the franchise contract in Greece has led to the removal of 538 stores and 568,000 sq.m. from the perimeter.
² Maghreb, Middle East and Dominican Republic

Definitions

Like for like sales growth

Sales generated by stores opened for at least twelve months, excluding temporary store closures, at constant exchange rates.

Organic sales growth

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

Sales under banners

Total sales under banners including sales by franchisees and international partnerships.

Gross margin

Gross margin 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 (ROI)

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

Recurring Operating Income Before Depreciation and Amortization (EBITDA)

Recurring Operating Income Before Depreciation and Amortization (EBITDA) excludes depreciation from supply chain activities which is booked in cost of goods sold and excludes non-recurring items as defined below.

Operating Income (EBIT)

Operating Income (EBIT) is defined as the difference between gross margin 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 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.

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