Carrefour

PARIS — Carrefour SA, which implemented a massive overhaul in late January as it seeks to face up to the changing retail environment, has reported a net loss of 531 million euros for 2017.

This compared with net income of 746 million euros a year earlier for the ailing retailer, the world’s second-largest after Wal-Mart Stores Inc., which also cut its dividend proposal by 34 percent to 0.46 euros.

“The 2017 results that we are presenting today demonstrate the necessity of implementing without delay Carrefour’s transformation plan,” stated chairman and chief executive officer Alexandre Bompard.

During a conference call with analysts and journalists, Bompard continued, “2018 is the first year of our five-year plan and a pivotal year in the transformation we are initiating,” he said.

Plans to simplify Carrefour’s organizational structure should be in place before the end of this year, he said, and negotiations with suppliers to enable productivity and competitivity gains are under way. Plans for ramping up omnichannel are ongoing, he said, without revealing details further than those unveiled in January, including extended delivery options in France and a single online identity for its domestic online business.

Carrefour is ramping up its investments in digital sixfold, as reported, planning to pump 2.9 billion euros in its omnichannel capacities over the next five years.

This year, Carrefour expects to see ongoing depreciation from its investments of the past few years as well as currency headwinds, particularly in Brazil, have a continued negative effect on profits, Matthieu Malige said.

On the upside, he said, “We will have the first gains, notably, on the cost-savings plan.…We want to invest into our competitiveness a big portion of our cost savings.”

For 2017, Carrefour’s recurring operating income dropped 14.7 percent to 2.01 billion euros, in line with guidance the firm gave in January when it announced its revenues for the year.

The results were impacted by increased competitive pressure in France, a rise in distribution costs, the difficult economic situation in Argentina and costs related to its former Dia activity.

In France, which weighed particularly heavily on profits, recurring operating income fell 32.9 percent to 692 million euros, which included a loss of 150 million euros related to Dia’s business, now up for sale or to be liquidated as part of the turnaround plan. In the rest of Europe, recurring operating income fell 4.9 percent to 677 million euros, weighed down by the competitive environment in Southern Europe, the retailer said.

Latin America’s recurring operating income increased 0.6 percent to 715 million euros, driven by improvements in Brazil, although losses in Argentina weighed on the region overall. In Asia, meanwhile, profitability improved in the second half on the back of ongoing restructuring in China, with recurring operating income for the year of four million euros, compared with an operating loss of 58 million euros in 2016. “Our action plans in China are beginning to bear fruit,” Malige commented.

Net sales for 2017 increased 2.9 percent to 78.9 billion euros, Carrefour said.

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