Solid growth in sales and Activity Contribution in First Half 2008

PARIS--(Marketwire - August 29, 2008) - Carrefour (PARIS: CA):
 
--  Sustained sales growth: +8.5% at constant exchange rates (+8.0% at
    current exchange rates)
--  Strongest First Half growth since 2005: Activity Contribution up 5.5%
    to EUR1,404m
--  Net income from recurring operations, Group share, up 1.2% to EUR750m
--  A sound financial structure to support growth: cash flow to net debt
    ratio of 16.7% versus 16% in H1 2007
 
Our First Half performance underscores:
    --  The group's resilience, as demonstrated in the challenging economic
        and consumer environment in France and Western Europe
    --  The relevance of our multi format and single brand strategy
    --  The excellent performance in Carrefour's growth markets*
 
We confirm our 2008 objectives:
 
    --  Sales growth at constant exchange rates of 7%
    --  Growth in Activity Contribution broadly in line with sales
    --  Operating free cash flow of EUR1.5bn
 
On 26 August 2008, the Carrefour Board of Directors reviewed and drew up
the consolidated financial statements for the First Half of 2008.
 
S1
Consolidated income statement (mEUR )            S1 2008  2007**     Var.
                                                 -------- -------- -------
Sales exc. VAT                                     41,948   38,845    +8.0%
ACDA **                                             2,303    2,154    +6.9%
                                                 -------- -------- -------
Activity contribution                               1,404    1,331    +5.5%
                                                 -------- -------- -------
Non-recurring income (expenses)                        85       56
EBIT (Activity Contribution after non-recurring
 items)                                             1,489    1,387    +7.4%
                                                 -------- -------- -------
Net income from recurring operations - Group
 share                                                750      741    +1.2%
                                                 -------- -------- -------
 
* Growth markets: markets other than France, Spain, Italy and Belgium
** ACDA = Activity Contribution before Depreciation and Amortization
 
Commenting on these results, José Luis Durán, Carrefour's Chief Executive
Officer, said:
"These are Carrefour's best first half results since 2005. This strong
performance attests to the relevance of our multi format single brand
strategy on an international scale. The Group has robust fundamentals, with
a business model focused primarily on food, a balanced portfolio of
formats, leading positions in the countries where it operates, and a sound
balance sheet. These strengths, along with our competitive advantages such
as the power of our brand and our real estate potential, give us the means
to forge ahead and create greater value.
In an uncertain and challenging environment, the implementation of the
operational action plan we announced in July makes me confident that we
will achieve our 2008 objectives."
 
(1) Our results in H1 2008 demonstrate that our international multi-format,
single-brand strategy is paying off
 
    --  Sales rose 8.0% in H1 (8.5% at constant exchange rates)
        to EUR41,948m:
        --  All regions contributed to sales growth, with growth markets
            recording a strong performance.
        --  In France, our multi-format approach, with good like-for-like
            performance at supermarkets (+5.9%), hard discount (+2.5%) and
            convenience stores (+2.7%), enabled us to offset lower
            hypermarket sales (-0.9%).
        --  Sales in the rest of Europe grew faster than in H1 2007, thanks
            to strong dynamics in Spain (8.3% of total growth), stable
            performance in Italy (+1.4%) and a significant contribution
            from European growth markets (+21.7% at constant exchange
            rates).
        --  Sales in Latin America grew strongly once again (+41.8%),
            supported by the integration of Atacadao.
        --  In Asia, sales at constant exchange rates showed the same
            vigorous growth as in H1 2007, despite the impact in China of
            the April and May events.
        --  Overall, sales in our growth markets increased by 25.5%.
 
Change at
                                                                 constant
                                            H1     H1              exch.
Regional breakdown of net sales (EUR m)   2008   2007   Change     rates
                                          ------ ------ -------  ---------
France                                    18,351 18,126    +1.2%      +1.2%
Europe                                    15,677 14,478    +8.3%      +8.1%
Latin America                              4,936   3,48   +41.8%     +42.2%
Asia                                       2,985   2,76    +8.1%     +16.3%
                                          ------ ------ -------  ---------
Total                                     41,948 38,845    +8.0%      +8.5%
                                          ------ ------ -------  ---------
 
--  Activity Contribution was up 5.5% to EUR1,404m.
        --  Commercial margin, as a percentage of sales, was broadly stable
            at 22.4%. It was up slightly in France, practically unchanged
            elsewhere in Europe, and down slightly in our growth markets,
            due mainly to the integration of Atacadao.
        --  General and administrative expenses (excluding rents) decreased
            significantly as a percentage of sales (-20bp), reflecting both
            the impact of Atacadao and our efforts to reduce costs.
        --  Asset costs, as a percentage of sales, were slightly up.
 
Activity Contribution (EUR m)               H1 2008    H1 2007     Change
                                           ---------  ---------  ---------
Sales excl. VAT                               41,948     38,845       +8.0%
Commercial income                               9,38       8,75       +7.2%
SG&A                                           (7077)     (6596)      +7.3%
                                           ---------  ---------  ---------
ACDA                                           2,303      2,154       +6.9%
                                           ---------  ---------  ---------
Depreciation                                    (899)      (823)      +9.2%
                                           ---------  ---------  ---------
Activity Contribution
 after IFRS 2 adjustment                       1,404      1,331       +5.5%
                                           ---------  ---------  ---------
 
--  Growth in Activity Contribution was characterized by:
        --  Little change in France (-0.8% to EUR695m), despite a EUR41m
            charge resulting from a change in method for calculating
            employee profit-sharing.
        --  Good resilience in the rest of Europe, with Activity
            Contribution rising 1.5% to EUR443m. Spain's contribution
            decreased slightly, reflecting a major promotional campaign in
            the First Half, Italy showed moderate progress and other
            markets in Europe turned in significantly higher results.
        --  Our growth markets (including the European growth markets
            described above) booked a strong performance. Activity
            Contribution was up 30% to EUR330m, with Brazil (+78%),
            China (+17%), and Greece (+33%) performing particularly well.
 
Regional breakdown of Activity Contribution
 (EUR m)                                          H1 2008  H1 2007  Change
                                                 -------- -------- -------
France                                                695      701    -0.8%
Europe                                                443      436    +1.5%
Latin America                                         147       84   +75.3%
Asia                                                  119      110    +8.0%
                                                 -------- -------- -------
Total                                               1,404    1,331    +5.5%
                                                 -------- -------- -------
 
--  Net income from recurring operations, Group share, rose 1.2%
        to EUR750m:
        --  Financial expense increased by EUR31m. This mainly reflects a
            rise in the Group's average debt (from EUR9.4bn to EUR10.2bn)
            resulting from acquisitions carried out in 2007, share
            buy-backs and the increase in interest rates over the period.
        --  The lower Group tax rate (26.4% in H1 2008 versus 28.9% in
            H1 2007) is mainly attributable to low taxation of the capital
            gain booked by Carrefour on disposal of the Merter property in
            Turkey. This transaction also had a strong impact on minority
            interests, up 121.9% in H1 2008.
        --  The higher contribution from associates is mainly due to the
            first-time Half Year consolidation of MAF Hypermarkets, our
            partner in the Middle East.
 
Consolidated Income statement (EUR m)       H1 2008    H1 2007     Change
                                           ---------  ---------  ---------
Activity Contribution                          1,404      1,331       +5.5%
Non recurring income (expenses)                   85         56
EBIT                                           1,489      1,389       +7.4%
Financial costs                                 (279)      (248)     +12.7%
Income tax                                      (319)      (329)
Tax rate                                        26.4%      28.9%
Associates                                        16          2
Minorities                                      (157)       (71)    +121.9%
                                           ---------  ---------  ---------
Net income from recurring operations -
 Group share                                     750        741       +1.2%
                                           ---------  ---------  ---------
 
--  Robust financial structure:
        --  Our financial ratios are sound:
            --  Cash flow / net debt is 16.7%, versus 16% in H1 2007.
            --  Activity Contribution before depreciation and amortisation
                compared to financial expenses was 8.2x versus 8.7x in
                H1 2007.
        --  Cash flow is up 12.2% to EUR1.8bn.
        --  Free cash flow showed a decrease of EUR373m, due mainly to
            merchandise treasury :
            --  Cash flow from merchandise treasury was boosted in H1 2007
                by a highly favourable calendar effect (about EUR350m in
                France).
            --  Payment terms to suppliers were further affected by the
                implementation of the law in Spain designed to shorten
                payment terms (around EUR100m).
        --  Capital gains from disposals totalled EUR604m, up from EUR232m
            in H1 2007. To a large extent, this figure reflects real estate
            disposals in Turkey and Bulgaria, as well as the cash in from
            our business units in Switzerland and Slovakia.
        --  Net debt at the end of the period was EUR11bn.
 
Simplified Cash Flow statement (EUR m)                 H1 2008    H1 2007
                                                      ---------  ---------
Cash flow                                                 1,838      1,637
Free cash flow                                           (2,156)    (1,783)
Acquisitions                                               (207)     (1021)
Disposals                                                   604        232
                                                      ---------  ---------
Net debt closing                                        (11,008)   (10,212)
                                                      ---------  ---------
 
Key financial ratios                                   H1 2008    H1 2007
                                                      ---------  ---------
Net debt at year-end (EUR m)                             11,008     10,212
ACDA / Financial costs                                     8.2x       8.7x
Gearing                                                    96.9%      96.5%
Cash flow / Net debt                                       16.7%      16.0%
                                                      ---------  ---------
 
(2) Objectives for 2008 and roll-out of our operational action plan
 
      --  Confirmation of 2008 objectives announced in July:
 
  --  Sales growth of 7% at constant exchange rates
  --  Growth in Activity Contribution broadly in line with sales growth
  --  Generation of EUR1.5 billion in free cash flow from operations
      in 2008
 
      -- Implementation of our five-point operational action plan :
 
  1.  Stepped-up commercial activity at hypermarkets in France
Our sales plan is based on campaigns in support of consumer purchasing
power. Here are a few examples:
  --  A large-scale programme to cut prices on 300 products, mainly
      national brands, by as much as 20%, with prices frozen until the end
      of the year.
  --  Weekly campaigns to boost sales of fresh produce.
  --  Strong promotional campaigns around seasonal events (e.g. a
      10% back-to-school discount).
  --  Joint programmes with our financial services arm, with for example
      the option for loyalty cardholders to pay in three instalments at no
      extra charge.
 
  2.  Accelerated deployment of Carrefour Market
150 Champion stores will be switching over to the new Carrefour Market
banner by the end of 2008, instead of the 100 initially planned. Carrefour-
label products will be available to customers at all of the 1,050
supermarkets even before full conversion, and should account for 80% of all
own-brand goods sold in supermarkets by year-end.
 
  3.  Tighter screening of capital allocation and cost reduction plan
More capital (EUR200m) will be redirected towards investments that generate
higher value, such as opening stores in growth markets and brand
convergence.
We have taken steps to save about EUR100m on Group-level operating costs by
the end of the year in order to more than offset the additional costs
generated by the Taxe d'Aide au Commerce et à l'Artisanat (TACA - Small
Businesses Support Tax) in France, as well as the communication and
marketing expenses for our plan to boost hypermarket business in France.
 
  4.  Accelerated store openings in our growth markets
In 2008, nearly 70% of new sales area is scheduled to be opened in our
growth markets. They will account for a rising share of our total
portfolio, thereby further shifting the Group's centre of gravity.
 
  5.  Use of Carrefour Property as an operational lever
Carrefour Property became operational in the First Half of 2008. The team's
mission is (i) to identify opportunities for new sites for all the group's
formats in which Carrefour Property operates; (ii) to develop more actively
the management of shopping malls to improve their attractiveness and
positioning; and (iii) to make optimal use of our existing sales area, by
reducing or increasing the size of stores, on a case by case basis.
 
Publication of Q3 2008 sales: 23 October 2008
 
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Tel: (33) 1 55 63 39 00
 
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