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Carrefour reports rise in 2019 income and plans more cost savings in 2020

By Amanda Cooper

Europe’s biggest supermarket chain maintains profitable growth trajectory

French supermarket chain Carrefour reported a near-8 per cent rise in operating income in 2019. This was thanks to strong performance in France and Latin America, and raised its targets for cost-saving and real-estate sales.

Europe’s largest retailer said recurring operating profit reached €2.088bn (£1.78bn, $2.26bn) in 2019, up from €1.937bn the previous year and in keeping with the company’s previous guidance of €2.090bn.

Carrefour, which is in the middle of a five-year cost-cutting programme, said it would now target annual cost savings of €2.8bn, up from €2.6bn, by the end of this year. It added that it had already achieved €2.0bn in savings and said it would continue to save costs beyond this year.

“The Carrefour 2022 plan is generating solid results and sets the group on a profitable growth trajectory,” said Alexandre Bompard, Carrefour chairman and chief executive. “We assert our leadership in the food transition for all, and raise or confirm all the Carrefour 2022 targets.”

In addition to its cost-savings programme, Carrefour said it was now targeting sales of non-strategic real-estate assets of €300m by 2022, having completed €500m in sales a year ahead of schedule.

As it fights off competition from online retailers and other supermarket chains, Carrefour said it planned to reduce the size of its global hypermarket sales area by 350,000 sq m by 2022, while planning to open 2,700 convenience stores.

The company kept its annual dividend unchanged at €0.46 a share. Carrefour shares were last down 0.3 per cent at €16.02 a share in Paris.

On a regional basis, Carrefour said recurring operating income declined in Europe, down around 2.6 per cent to €647m, while in Latin America, ROI rose by 10 per cent to €844m, led by gains in Brazil.

Free cash flow, excluding exceptional items, rose 17 per cent to €1.301bn in 2019 while capital expenditure rose to €1.725bn and should remain around that level in 2020.

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