Carrefour Eyes More Savings As 2020 Core Profits Rise
Carrefour has unveiled new cost savings and cash flow targets, after Europe's largest retailer said it had achieved its goal of €3 billion in cost cuts by 2020.
The French food retailer, whose possible takeover by Canada's Alimentation Couche-Tard unravelled last month after opposition from the French government, also reported a 16.7% rise in 2020 recurring operating profit to €2.173 billion at constant exchange rates.
Its 2020 sales grew 7.8% on a like-for-like basis to €78.6 billion, Carrefour's best performance in at least 20 years.
Carrefour also said it would propose a dividend of 0.48 euros per share, a 4.3% hike from 2019.
This reflected strong sales in the key markets of Brazil and France, with food retailers across the world benefiting from stronger demand as more consumers stay at home during the COVID-19 crisis.
"In a crisis which is accelerating changes underway, our group reached a watershed," commented chief executive Alexandre Bompard. "Three years ago, the Carrefour 2022 plan marked a first turning point for our group. Three years of flawless roll- out of our transformation have established a growth model that is based on customer satisfaction and new consumer trends.
"Today, this model ensures the sustainable dynamism of our sales and the profitability of our group, and allows us to generate significant financing capacity to continue our development. Our 2020 results are evidence of this."
Carrefour said it now targeted €2.4 billion in additional cost savings on an annual basis by 2023 and net free cash flow generation above €1 billion per year from 2021.
Carrefour is in the middle of a five-year plan to cut costs and jobs, as well as boost e-commerce investment in order to lift profits and sales and tackle competition from e-commerce giant Amazon.
In France, where Bompard has made reviving flagging sales at hypermarket stores a priority, operating profit rose 13.2% to €629 million on sales that rose 3.6% like for like. All store formats in France, including hypermarkets, saw sales rise.