Carrefour Sees First-Half Core Profit Rise, Unveils Extra Share Buybacks
Carrefour has unveiled plans to buy back an extra €200 million worth of shares, reflecting confidence in its turnaround plan, and said it had started a review of its assets as part of its future strategy.
Chairman and CEO Alexandre Bompard told analysts on Wednesday that digital expansion would play a key role in the future plan and that Carrefour would detail the main drivers of its online strategy at a Digital Day on 9 November in Paris.
Europe's largest retailer also said it now targeted net free cash flow generation comfortably above €1 billion in 2021.
Carrefour, whose potential takeover by Canada's Couche-Tard unraveled in January, said group operating profit rose 11.2% in the first six months of the year, compared to the same period in 2020, to €740 million at constant exchange rates.
The performance reflected cost cuts and strong second-quarter sales growth of 4.7 % in France, making up for a more subdued performance in Brazil where a surge in COVID cases hit consumer spending power.
Like food retailers worldwide, Carrefour has benefited from the pandemic as lockdowns have forced people to eat at home.
In the core French market, sales at large hypermarkets grew 4.3% like-for-like, confirming their good momentum. "We are convinced that hypermarkets have a future," Bompard said.
Carrefour is in the midst of a five-year plan it launched in January 2018 to cut costs and boost e-commerce investment to improve profits and sales, as it seeks to tackle competition from online rivals such as Amazon.
In May, it reappointed Bompard for another three years, to lead the second leg of the turnaround.
"We are beginning to think about our new strategic plan. A review of assets is a normal process ... We are at an early stage and no decision has been made," Bompard said when asked about the possible divestiture of some foreign subsidiaries.
The group, which delivered cost savings of €430 million in the first half of 2021, kept all its other operational and financial objectives under its Carrefour 2022 strategic plan.
The €200 million in additional share buybacks complements a previously announced €500 million buyback that will be completed at the end of July.