Financial report : Carrefour
Yi LI Yuhuan CHEN FEI XU Matthieu GRACIEUX Nicolas CHAPACOU

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Table of Contents

1) 2) 3) 4) 5) 6) 7) 8)

Business Description .................................................................................................. 3 Market Summary ....................................................................................................... 5 Strategy and Competitive Positioning ......................................................................... 9 Risks ........................................................................................................................ 13 Financial analysis ..................................................................................................... 15 Forecast, Valuation and Recommendations .............................................................. 17 Appendix ................................................................................................................. 19 Sources .................................................................................................................... 22

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1) Business Description
- Carrefour SA operates hypermarkets, supermarkets, convenience stores, cash and carry stores, and hypercash stores worldwide. The company also operates food and non-food e-commerce Websites. Its hypermarkets offer food products; and non-food products comprising clothing products, electronic goods, household appliances, multimedia products, furniture, and decorative products. - The company’s supermarkets provide a range of food products and selected non-food products. Its convenience stores offer ready-to-eat products and daily purchases, as well as a range of services; and cash and carry stores and hypercash stores provide food and non-food products, and products for use in catering. - The company operates food and non-food business through its e-commerce portal carrefour.fr. As of December 31, 2012, the company operated 9,994 stores under its banners. Carrefour SA was founded in 1959 and is headquartered in Boulogne-Billancourt, France. - The current and pending investors are Axon Partners Group, Blue Capital, Colony Capital, LLC, Comet BV, Groupe Arnault SAS (Nicolas Bazire), Koor Industries Limited (TASE:KOR), Mezzanine Management Finanz- und Unternehmensberatungs GmbH, Societe Generale, Securities Investments.
Stock Quote and Chart (Currency: EUR) Last (Delayed) Open Previous Close Change on Day Change % on Day Day High/Low 52 wk High/Low Volume (mm) Beta 5Y 28.45 Market Cap (mm) 28.43 Shares Out. (mm) 28.40 Float % 0.05 Shares Sold Short (mm) 0.2% Dividend Yield % 28.45/ 28.40 Diluted EPS Excl. Extra Items 28.47/ 18.50 P/Diluted EPS Before Extra 0.03 Avg 3M Dly Vlm (mm) 0.70 20,386.5 717.8 85.6% 2.1% 0.57 49.43x 2.19

Delayed Quote** | Last Updated on Nov-26-2013 03:00 AM (GMT-5)

ENXTPA:CA - Common Stock

(Sources: Capital IQ) 3

Key Professionals Name Plassat, Georges Sivignon, Pierre-Jean Thoumyre, Hervé Humbert, Etienne Tassan, Franck Brouaux, Marie-Noelle Deslarzes, Jean-Christophe Cubillo, Juan de la Pena, Javier Fleury, Didier Folache, José Maria Geoffroy, Christophe Key Board Members Name Plassat, Georges Bazin, Sébastien M. Title Chairman and Chief Executive Officer Vice Chairman of the Board, Member of Accounts Committee and Member of Remuneration Committee Honory Chairman Independent Director and Chairman of Remuneration Committee Independent Director and Chairman of Nominations Committee Independent Director and Chairman of Accounts Committee Senior Independent Director Non Independent Director Non Independent Director and Member of Nominations Committee Non Independent Director Independent Director, Member of Accounts Committee and Member of Remuneration Committee Independent Director Title Chairman and Chief Executive Officer Chief Financial Officer Group and France Chief Information Officer Director of Investor Relations Group General Counsel Executive Communications Director Chief Human Resources & Organisation Officer Head of Food Marketing Head of Operational Department -Dia Europe Head of Operational Department - Russia General Manager of Europe (Excl France ) Head of Sales (Consumer Electronics & Appliances, Hard Goods and Textiles)

Halley, Robert Breton, Thierry de Montesquiou, Bertrand Ralli, Georges De Seze, Amaury-Daniel Arnault, Bernard Bazire, Nicolas Bonnafé, Jean-Laurent Brillet, René Edelstenne, Charles

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2) Market Summary
- Carrefour is the first retailer in Europe and the second in the World after Walmart. Carrefour is thus an international company with its batch of strengths and weaknesses, opportunities and threats, and all the environmental factors which impact on the Carrefour’s business.

SWOT Analysis:
• Strengths

- It is one of the largest hypermarket chains in the world and account for many shares in the market. It is also a large supermarket, hypermarket and department store under one roof. At the same time, it owns Private Label brands. - There is a strong presence in the international market. There are hard discounts given on products for the customers. The turnover is very high. The quality of product is also high. The Carrefour group currently has over ten thousands stores around 34 countries. • Weaknesses

- Carrefour has a poor relations with the central government, as a single store style tends management mode, so that Carrefour opaque on procurement and personnel management, resulting in poor quality of management, lack of supervision and the quality of some of the procurement of goods, and ultimately the consumer the lowest Carrefour loyalty. - At the same time, its tense relations with suppliers, damage Carrefour's imageThere is limited global penetration compared to international retail brands • Opportunities

- It has a good brand image so could leverage on that. The accessibility of stores was increased by improving distribution channels. It has global tie-ups and international presence. - The extension of their markets is very open to new borders and the expansions in their most of their countries are still possible in order to gain market shares. • Threats

- The competition was increased in France and globally from rival. There are weak infrastructure accommodating supermarket, hypermarket and department store. - The threat of the expansion of Walmart across the countries of South America or even in the Commonwealth countries is still possible.

•

Summary of the SWOT

- Carrefour is an old large international retail company now present in multiple areas around the world. The mains objectives of Carrefour will be to assure their expansion across new borders and gain market shares every years in order to success their goal to be the “Benchmark” of the retail world.

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- Carrefour set up many stores all over the world, the table illustrate the sales in different countries. Countries France Brazil Spain Italy China Belgium Argentina Poland Evolution of GDP in 2012 0.00% 0.90% -1.40% -2.40% 7.80% -0.30% 1.90% 1.90% CA HT produced by the Evolution of household Carrefour group in the consumption in 2012 areas -0.40% 3.10% -2.10% -4.20% 14.30% -0.30% 4.40% 0.80% 35.3Md€ 11.3Md€ 8.0Md€ 5.1Md€ 4.8Md€ 3.9Md€ 2.9Md€ 1.8Md€

PEST Analysis
• Political environment

- The environmental protection system, as well as the international free trade regime provides a good environment for the development of the supermarket industry, multinational retail companies is easier to enter the Chinese market to further accelerate the pace of in short, the vast region of relatively stable political environment laid a good foundation for freedom of international trade. • Economic environment

- Firstly, retail market analysis data show that the growth in major developed countries and regions is decreasing, the growth of emerging market is optimistic. Since 2008, overall retail sales growth rate of the retail world gradually decline from 4.1% in 2008 to 1.5% in 2009. This impact is mainly manifested in both developed countries, the economy of major developing regions still grew by 1.9% in 2009. - Secondly, the growth of different kinds of goods retailing, the U.S. health-care pharmaceuticals sales is optimistic. - Thirdly, the development of online retail is rapid. U.S. online retail sales overall growth rate has exceeded the growth rate of traditional retail. In 2008, U.S. online retail sales grew by 4.6%, and this corresponds with the overall retail sales fell 0.6 %. • Social environment

- Different cultures have significant impact on the local supermarket. On March 9, 2006, Carrefour issued a statement that named "formal confirmation of the withdrawal of Carrefour Korea". In 2007, Wal-Mart also quit Korea, where have called it a "Korean-style death", mainly because of the failure of cultural integration.

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- Overall, the impact on the development of supermarket chains over the core of the culture industry factors include: buying habits and lifestyle, cities, towns and rural change and disposable income. • Technical environment

- Supermarket chains rely on computerized information systems to achieve business connections and data analysis, for example, POS systems use a scanner to read the product's Universal Product Code, processing transactions and credit card payments. - Inventory Management Project can track products in the supply chain, a few large supermarkets try to use RFID technology to monitor goods movement.

Porter’s Competitive Analysis

Power of Consumers

Alternatives P&S

Carrefour

Direct Competition

Power of Supplier

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•

Direct Competitors

- There are two kinds of competition in the Carrefour’s universe. The direct competition represent by the others retailers on each markets (for example: Taiwan-Tsingao / France-Leclerc, etc.) and for the rank. Actually Carrefour is the second retail brands in the world after Walmart but before Tesco.

Company Wal-Mart Carrefour

Total Asset 1707.06$ 515.53$

Cost 4050.46$ 859.63$

Net Sales 3046.57$ 680.98$

Net Profit 148.48$ 37,56$

Company Wal-Mart Carrefour

Gross Profit Margin 25% 20%

Goodwill 16.126billion$ 114.73billion$

Ranking 1 22

Company Wal-Mart Carrefour

Sales in 2009 36.6billion$ 38.2billion$

Number of supermarket 156 175

Sales in 2009 42.0billion$ 40.0billion$

Number of supermarket 182 215

•

Power of Suppliers

- Carrefour is always in relation with its suppliers in order to obtain the best prices possible. It is also because Carrefour provides special locals foods which are from the locals exploiters around the stores. • Power of Consumers

- Due to the competition that Carrefour is confronted, the company has to open its mind and sometimes follow the trend of the market (as in example: in France now the basic consumers see the retail brands as a cheap way to get basic stuff). • Alternatives Services/Products

- People in Europe are changing their habits they now frequent less hypermarket to prefer the local supermarket.

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3) Strategy and Competitive Positioning
Vision Statement
“Carrefour aims to be the benchmark in modern retailing in each of its markets” - Carrefour has got a main global strategy based on Glocal process. To think in a global way but adapt every firms to it market.

Marketing Strategy
- The marketing strategy of Carrefour is divided in two mains parts. The 4P demarches of Carrefour - The first part is the “4 Ps”, is divided in four areas: the price, the product, the placement and the promotion. As an international company Carrefour has got different version for the price and the promotion of the products. • Price

- In general the price is adapted to the market. In example in France after the crisis Carrefour called a new general director (L.Olofsson) to be in charge of the recovery of the sales and the supremacy of Carrefour on the French market. - His strategy was based on a concentration on the fidelity of their consumers by providing prices adapted to the public in every place (so not necessary low prices): this strategy failed and M.Olofsson was fired and replaced by Georges Plassat. - The new director of the firm implemented a new strategy based on the reduction of the basic costs, providing promotion every day and not only for the usual celebrations and finally develop a communication campaign in order to push forward the new positioning of the company: “Low Price – Higher Quality”. • Promotion

- The promotion is also different between the different markets. In example in Taiwan the promotion is very specific to the market, is about seven Carrefour promotion strategies which can be singled out. - These are credit card strategy/loyalty or membership card, aggressive pricing strategy, everyday low cost for selected products, coupon system strategy, specific product promotion week strategy per regions, special price by season, specific event promotion strategy and private brand promotion strategy (Carrefour’s products). • Placement

- Carrefour is present in thirty four (34) countries and has got more than ten thousands (10,102) retail stores around the world. The placement of the hypermarkets of Carrefour is divided in four

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areas: Europe (mainly of them in France), Asia (mainly in China), South America (mainly in Brazil and Argentina) and Africa (mainly in Morocco). - Carrefour has all the resources it needs to cater to the diverse requirements of its customers, whether they live in an urban or rural environment, whether they be individuals or professional clients, in France or abroad. Always focused on meeting their needs, Carrefour continued to expand and renovate its stores in 2012. • Product

- Products are the core business. Their offer conception is based on unchanging principles, a wide selection, the lowest prices and irreproachable quality. To cater to the needs of the customers throughout the world, Carrefour refine their offer so that they can provide a variety of fresh products, products from local suppliers, major-brand products, essential non-food items, the best innovations and daily commercial services. - Fresh products: A major attraction for the stores, fresh products involves all the attention and expertise of their employees. In all of its store formats, Carrefour offers a wide selection of highquality fresh products in areas that have been specially designed to make shopping enjoyable: large market stalls, easy-to-reach items and regional products – all selected to please their customers and support local economic development. - Local products Carrefour has always given priority to products sourced locally, in example. Products from the country in which they are sold. More than 75% of all Carrefour food products come from local suppliers. Carrefour is seeking to strengthen this approach and give its store managers (particularly in hypermarkets) more decision making power so that they can select and offer their customers a very local selection of products sourced from producers located close to stores. - Everyday products: In the dry grocery, beverage and health & beauty departments, Carrefour offers a combination of products from consumers’ favourite brands and Carrefour brands. In all the countries in which it operates, the Group applies an aggressive strategy of everyday low prices and attractive discounts on the products that are popular with customers. - Non-food products: The non-food sections are organized into categories meeting customers’ basic needs: small household goods, apparel, and home appliances (photo equipment, DVDs, sound and multimedia equipment). Carrefour products and the major brands make up an offer that has something for everyone and every budget. As consumer habits change, Carrefour is adapting its offer and working on value for money and the style of its non-food products, increasing the generalist dimension of its hypermarkets, offering supermarket customers the local services they expect and developing an innovative and competitive offer on the Internet. - Commercial services: From financing solutions to leisure activities, or from health and beauty care products to petrol, Carrefour’s services can be found throughout shopping centres and store car parks, meeting customers’ needs with the same commitment: high-quality products at the best possible prices. - The products are adapted to the different countries where Carrefour is present. The product strategy follow the main strategy of Glocalisation: Think Global but act Local. In example In French 10

the bakery section is very developed but in Asian country not so much or even very poor. In order to satisfy the consumers Carrefour provide a wide selection of product (with the lowest price and the best quality possible).

The STP Demarche - The second part will be the STP demarche. It will be composed by the segmentation, the targeting and the positioning. - The Carrefour Group’s operating segments consist of the countries in which it conducts its business through consolidated stores. Countries located in the same region are considered as having similar characteristics and have been combined to create four geographical segments: France / Rest of Europe / Latin America / Asia. - The Targeting of Carrefour is global from the students to the large family. Every kind of product has got a very width range of products with different segmentation in order to touch everybody. - The Positioning of Carrefour changes between the countries. In France after be the most expensive hypermarket very specialized in create a loyalty to the consumers Carrefour changed to be known as the others retails brands: a “low price – high quality” retail chains.

Financial Strategy
- After the financial analysis the main global objectives for Carrefour are to augment their financial discipline in order to reach a stable dividend policy, limiting the growth of the CAPEX and contain the Working Capital Requirement. - In order to pursue their multi-local and multi-format development, Carrefour concentrates their resources in countries where they have strong strategic positions, they give themselves the means to achieve their objectives and they adapt their investments in expansion. They will thus allocate more resources to renovating their stores, particularly in France. - Carrefour will have to maintain their expansion in order to not giving back a loss at the end of the year as in 2011. Carrefour needs a constant expansion and growth of their markets and markets shares.

Summary of the Strategy
- The main global objectives for Carrefour are the continuing of development of its multilocals and multiformat, a maintaining of strict financial discipline and decentralizing and empowering. - In France, Carrefour has to continue action plans across all formats, giving priority to improving the offer and pricing image, refurbishing stores, and developing drive-through and a multi-channel approach. - In Europe, Carrefour has to align the offer and cost base with the challenging economic environment.

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- In Emerging Market, Carrefour has to continue its expansion in Latin America and Asia throughout the creation of new stores and raise the amount of sales. - Maintain a strict financial discipline by applying to a stable dividend policy, limiting the growth in capital expenditure according to the budget allocated, and containing the working capital requirement. - Carrefour has to decentralize and empower by simplifying the decision making structures and processes, by handle back the power to store and allowing them to take the initiative, and by putting the customer at the heart of the business.

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4) Risks
Investment risks •
Operational risks

- Increase of competition in France. The past years saw an increase of the competition among the retailers across the world, for example in France, Carrefour is confronted with Leclerc, Monoprix, Auchan, and others small retailers across the country. - There is also a change of mind of French customers about how to do the shopping. Before, French people went to hypermarket & supermarket every week and now they trend to visit the big supermarket once a month and they go shopping several times a week in neighbor retailers.

•

Rising labor cost

- Nowadays due to the increase of the level of salary, the cost of labor increases at the same time. Carrefour is a typical hypermarket; it needs a lot of staff to operate the whole company. So the worker’s salaries can be a large sum of money, which is a fixed cost that the company cannot avoid. • Depending on French market

- Although Carrefour has already gone global to set many subsidiaries in many counties around the world, it still depend its business a lot on domestic market. The quantities of subsidiaries in France are twice to three times more than the subsidiaries built in other counties. And also its business focuses more on Europe, it sets the subsidiaries in several Asian counties and American counties but there are not many subsidiaries in Africa. Due to the stinging competition in European market, there are not many advantages for Carrefour.

Structure risks
•

Weak Infrastructure accommodating supermarket, hypermarket and department store

- The infrastructure of the Carrefour is always the same style around the word. There are no big significant innovations of the infrastructure for many years. The layout of the whole hypermarket is not scientific at all. Moreover, due to its big size, the hypermarket usually set up in suburbs. It is not convenient for people to buy things. Once people go there to buy something, it will take them a long time. So maybe hypermarket of this type cannot adapt to the fast rhythm of live today.

Market risks
• Lacking of global penetration compared with other international retail brands.

- Carrefour lack of global penetration compared with other international retailers around the world, for example Walmart. It depend its business a lot on domestic market. Nowadays there are strong connections between counties around the world. If a company really wants to succeed, it must take actions to go global and to do the research of countries in different continents.

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•

There are Limitations to expand the market in domestic country

- The competition of retailers in France is extremely competitive and the market is nearly saturated. It is quite difficult for Carrefour to expand the market in domestic country. Concerning its running pattern, it has little chance to succeed in domestic market. Carrefour really needs to make strategies to solve these problems. • Customers are not loyal.

- Carrefour is only a retailer. Although now it already has produced its own products, the goods sold in Carrefour have no differentiations compared with the products sold in other retailers. So it can not attract the customers, usually the consumers are not loyal. The lake of customer’s loyalty is a big risk for Carrefour. That means Carrefour cannot depend on the products to attract people, it only can depend on the format of sale. It is quite a big challenge for the company. • There is no advantage of price compared with other competitors.

- Although the goods sold in Carrefour are not expensive. There is no big advantage for Carrefour compared with other retailers. The price of most of the products are fixed, it is so hard for Carrefour to make the discount otherwise the turnover cannot cover the costs. Moreover, due to the increase of the salary, people care less about the price than before, sometimes people willing to go to the small retailers nearby because it is more convenient and people can save a lot of time.

Economic risks
• There is a decrease of sales volume because of the bad condition of economy in France.

- Nowadays the condition of economy is not optimistic in France. The purchasing power in France is not strong, so there is a decrease of the sales volume. The company does not make lots of net profits. But the costs of running the company do not decrease, so the retailers like Carrefour do not profit a lot.

Political risks
• Lack of governmental assistance

- The government in France cannot give assistance to international and multinational companies, so it has to deal with the export barriers itself in foreign countries. Sometimes it can be quite difficult. To expand the market in other countries, the company must make the complete survey about the market in the target country and also to obey the foreign regulations. • Foreign government restrictions & national export policies

- Usually the government restrictions and the policies can influence the international companies and multinational companies a lot. It is an important factor that must be taken into account. Carrefour should make strategies according to different countries’ policy situations. So that will be a big risk for Carrefour to invest in other countries.

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5) Financial analysis
- Carrefour highly rely on hypermarkets, which have been losing out as time-pressed shoppers buy more goods locally and online and prefer to buy general merchandise in specialist stores. And under the effect of economy crisis from 2008, it has recovery plan, has vowed to cut costs, improve price competitiveness and simplify product offerings, notably in the troubled non-food sector. - In this case in 2012, it has decided to cut capital expenditure by 27 percent to 1.547 billion euros and Carrefour sold 2.8 billion euros ($3.64 billion) of assets to raise cash for investments. Investments would be evenly spread between renovating and expanding stores, and focused on France, Brazil, China and India.

Income statement
- It is obvious that EBIT in 2011 was negative which mainly due to the high level of depreciation and amortization. Because it invested into more shops such as in china it added 29 hypermarkets. And for open more shops it is necessary to give more income tax to the government. Especially for brazil and France whose income tax rate is 34%. - Thus the data of income tax was higher (-1,002,000) than other years. In this case the number of earning after tax was low. We need to know in order to invest into market we should rent storefront and pay for some extraordinary items. Hence in 2011 and 2012 extraordinary items after tax was higher.

Balance sheet
- In asset aspect, it is not an overstatement that in 2008 and 2012 there were more cash. Due to the economy crisis (begun in 2008) there had bad situation from 2009 to 2011. In this case company was willing to do short term investment because it has less risk. But in 2012 benefit from its recovery plan thing become better and better. - In liabilities aspect, it is same that under the economy crisis retained earning between 2009 and 2011 was low. And we could find that in 2012 their other long term debt was relatively high. It is mainly because in this year Carrefour explored its market and invested in many places. They implement it by borrowing money from bank not by using their equity.

Cash Flow Statement
- Due to the fact that company vowed to cut costs and cut capital expenditures, cash from operating activities declined throughout 5 years. And Carrefour encourage to investment in 2012 thus there were a positive data of cash from operating activities.

Main ratios
- In 2013 their net sales declined 5.38% than 2012 while the whole industry presents a blooming trend. - For their profitability aspect, ROE shows how well a company uses investment funds to generate earnings growth. ROEs between 15% and 20% are generally considered good, Carrefour possess 15

17.48%. ROCE tells us how much profit we earn from the investments the shareholders have made in their company. A higher ROCE indicates more efficient use of capital. ROCE should be higher than the company’s capital cost. 8.3% is lower than peer median’s. Other figure like EBITDA/Sales EBIT/Sales and Net income/Sales all are below the average number. That is to say in 2012 Carrefour does not have a dominant advantage in profit. - For capital structure, debt/asset ratio is not high（24.53%）, meaning that its assets are financed more through equity rather than debt. It is obvious that financial debt equity ratio (gearing leverage) is a bit high (150.21%). firm's activities are funded by owner's funds versus creditor's funds. - A high ratio usually indicates that the business has a lot of risk because it must meet principal and interest on its obligations. It would be a risk. It is more vulnerable to downturns in the business cycle because the company must continue to service its debt regardless of how bad sales are. - Net debt/EBITDA is 1.44 higher than many firms; this ratio takes into account a company's ability to decrease its debts. In sum up relatively high level long term debt is a potential risk. In addition for equity/asset ratio which is also belongs to long term ratio. - A high ratio means that the corporation is mostly owned by its shareholders, if this ratio below 0.70 generally makes it difficult for a corporation to borrow money, due to concerns about its solvency and 16.33% is quite low and have a distance with average number. This would be a risk for Carrefour to borrow money from others. - In conclusion, in 2012 Carrefour did not make efficient use of capital. And for investment they used more debt rather than equity, now they have a risk to borrow money from others.

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6) Forecast, Valuation and Recommendations
DCF Method
- This forecast is calculated thanks to the DCF method. Here are the main data used to calculate the DCF value, the planned cash flow, the value per share, etc…

LTA EQ LTD STFD Cash in Hands

25 300 000 8 361 000 8 983 000 2 263 000 6 573 000

i% TxR Béta j Rm Rf Rj NFD

5% 34% 1,745 9% 4% 12% 4 673 000

3%

- The WACC is equal to 9% and the infinity growth rate equal to 5%. Thanks to that and the planned cash flow from 2012 to 2017, we were able to calculate the DCF value which is equal to 22 917 840 thousands €. - After that, we obtained a value per share of 25,20€ by dividing the Equity value of the company with the number of share.

EQ value in thousand € Value of the firm - Net financial debt =

k 22 917 840,35 4 673 000 18 244 840,35

k Number of share Value per share in €
723 984 192

25,20

- The market value is actually approximately equal to 28,69€. According to these data calculated, we can see that the value per share is clearly inferior to the actual market value. Our recommendations would be to not buy shares because of the inferiority of the value per share. - The chart below shows the forecast coming from the website Infinancials. According to it, we can see that the value per share is a little superior to the actual market value, so the recommendation is to buy shares because of the superiority of the value per share.
Forecast and Valuation of Infinancials Value of the firm coming from Infinancials - Net financial debts = EQ value in thousand € Value per share in €

25 535 791,00 4 673 000 20 862 791,00 28,82

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Recommendations - According to the calculations, we recommend to not buy shares of Carrefour and to sell ng the ones you have because the value is going to decrease in some years. Multiples Valuation Method
- The chart below from Capital IQ shows the principal ratios used in the multiples valuation method s of Carrefour for the years 2012 to 2017.
ENXTPA:CA (Current Fiscal Year End: Dec-31-2013) Based on Market Price TEV/REV FY FY FY FY FY FY 2012 2013 2014 2015 2016 2017 0,41x 0,42x 0,41x 0,39x 0,38x 0,37x TEV/EBITDA 8,27x 8,55x 8,00x 7,44x 7,06x 6,58x Price/Earnings 19,06x 20,84x 17,56x 15,16x 14,83x 14,27x PEG 1,30x 1,42x 1,19x 1,03x 1,01x 0,97x

- The chart below is the multiples valuation method applied by comparing Carrefour with some international competitors established on the same kind of segments.

- We can see that Carrefour is in the third position behind Wal Mart and Tesco about the market four Wal-Mart capitalization and the enterprise value. Comparing to the other companies on the chart, Carrefour has the lowest EV/Net sales and the second lowest EV/EBITDA. Wal Mart is clearly the most powerful Wal-Mart leader with the best ratios in these two categories. - Tesco hasn’t the best ratios of the chart but it is clearly one of the leader companies, it can be seen thanks to its huge enterprise value and market capitalization. - In our opinion, Wal-Mart and Tesco are the strongest international competitors of Carrefour. Mart - According to the charts, Carrefour is currently trading at 8,55x 2013 TEV/EBITDA and 20,84x 2013 P/E. The TEV/EBITDA and P/E multipliers are decreasing since 2014 to 2017 where a least, it at becomes a very important decrease. - We can see that all the multipliers in the chart are decreasing during the years since 2014.

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7) Appendix
Income Statement
Fiscal Year End Period Report Type Report Currency Conversion rate EUR to EUR Display Currency (Thousands) 31 Dec 12 12 M C EUR 1 EUR 31 Dec 11 12 M C EUR 1 EUR 31 Dec 10 12 M C EUR 1 EUR 31 Dec 09 12 M C EUR 1 EUR 31 Dec 08 12 M C EUR 1 EUR 31 Dec 07 12 M C EUR 1 EUR 31 Dec 06 12 M C EUR 1 EUR 31 Dec 05 12 M C EUR 1 EUR 31 Dec 04 12 M C EUR 1 EUR 31 Dec 03 12 M C EUR 1 EUR

INCOME STATEMENT
Net Sales Total Revenues Cost of goods & services R & D expense Selling, Gen. & Admin. Costs EBITDA Depreciation & Amortization Operating Income after D&A Exceptional Expenses EBIT Net Interest Before Tax Earnings Income Tax Earnings after Tax Minority Interests Extraordinary Items after Tax Net Profit Ordinary Dividends

2012
76 127 000 78 460 000 -75 474 000 0 N/A 2 962 000 -1 762 000 1 200 000 0 1 200 000 -873 000 552 000 -388 000 164 000 -83 000 1 081 000 1 233 000 -411 344

2011
80 455 000 82 764 000 -79 351 000 0 N/A 3 137 000 -3 872 000 -735 000 0 -735 000 -743 000 -1 238 000 -1 002 000 -2 240 000 -33 000 2 580 000 371 000 -353 255

2010
89 325 000 91 513 000 -87 532 000 0 N/A 3 983 000 -2 147 000 1 836 000 0 1 836 000 -648 000 1 179 000 -697 000 482 000 -136 000 52 000 433 000 -733 682

2009
85 359 000 87 379 000 -83 029 000 0 N/A 4 381 000 -2 677 000 1 704 000 0 1 704 000 -635 000 1 094 000 -638 000 456 000 -110 000 -57 000 327 000 -761 295

2008
86 966 800 88 225 100 -83 192 400 0 N/A 5 041 700 -2 265 800 2 775 900 0 2 775 900 -610 400 2 213 500 -743 100 1 470 400 -266 900 16 200 1 271 800 -761 295

2007
82 148 500 83 457 700 -78 374 000 0 N/A 5 078 700 -1 740 500 3 338 200 0 3 338 200 -550 100 2 812 100 -806 900 2 005 200 -179 800 430 900 2 299 400 -761 295

2006
77 901 100 78 943 600 -74 098 200 0 N/A 4 845 400 -1 587 000 3 258 400 15 900 3 274 300 -479 600 2 794 700 -810 200 1 984 500 -163 400 411 300 2 268 200 -726 050

2005
74 496 800 75 508 100 -70 859 300 0 N/A 4 660 700 -1 486 100 3 174 600 -20 400 3 154 200 -454 600 2 699 600 -793 900 1 905 700 -146 100 -374 200 1 436 000 -704 903

2004
72 668 000 72 974 900 -67 912 100 0 N/A 5 023 200 -1 643 900 3 379 300 0 3 379 300 -432 300 2 809 700 -836 400 1 973 300 -93 600 -319 300 1 661 800 -662 813

2003
70 486 200 70 746 800 -65 684 800 0 N/A 4 999 000 -1 556 600 3 442 400 0 3 442 400 -469 700 2 787 700 -846 200 1 941 500 -110 700 -318 000 1 620 000 -529 945

Cash Flow Statement

CASH FLOW
Net Profit Cash From Operating Activities Cash From Investing Activities Cash From Financing Activities Exchange Rate Effect Net Change Cash Capital Expenditures Free Cash Flow

2012
552 000 1 973 000 337 000 546 000 -132 000 2 724 000 -1 547 000 426 000

2011
-1 238 000 2 119 000 -398 000 -1 170 000 27 000 578 000 -2 330 000 -211 000

2010
1 179 000 2 736 000 -2 307 000 -343 000 -115 000 -29 000 -2 122 000 614 000

2009
1 095 000 3 484 000 -2 384 000 -3 164 000 48 000 -2 016 000 -2 137 000 1 347 000

2008
2 214 000 4 887 000 -2 596 000 -1 028 000 -110 000 1 153 000 -2 918 000 1 969 000

2007
2 812 000 3 913 000 -3 491 000 45 000 0 467 000 -3 069 000 844 000

2006
2 795 000 3 468 000 -2 033 000 -1 485 000 14 000 -36 000 -3 368 000 100 000

2005
2 700 000 3 749 000 -2 617 000 -542 000 -59 000 531 000 -3 026 000 723 000

2004
1 509 100 4 247 600 -2 146 600 -2 564 500 -26 600 -490 100 -2 563 700 1 683 900

2003
1 737 600 3 754 500 -1 966 000 -1 242 200 -154 500 391 800 -2 717 300 1 037 200

19

Balance Sheet
BALANCE SHEET - ASSETS
Cash & Equivalent Short Term Investments Accounts Receivable Stocks Inventories Prepayment & Advances Other Current Assets Total Current Assets Long Term Investments Fixed Assets Revaluation Of Fixed Assets Accumulated Depreciation Net Property Plant & Equipment Goodwill & Intangibles Leasing & Investment Properties Other Long Term Assets Total Assets

2012
6 573 000 404 000 1 093 000 5 658 000 1 884 000 4 181 000 19 793 000 1 509 000 27 966 000 0 0 11 509 000 9 409 000 513 000 3 111 000 45 844 000

2011
3 849 000 939 000 1 206 000 6 848 000 2 386 000 4 026 000 19 254 000 1 713 000 30 867 000 0 0 13 771 000 9 705 000 507 000 2 981 000 47 931 000

2010
3 271 000 1 866 000 1 004 000 6 994 000 2 550 000 4 525 000 20 210 000 1 798 000 33 726 000 0 0 15 297 000 12 930 000 536 000 2 879 000 53 650 000

2009
3 301 000 2 063 000 990 000 6 670 000 2 254 000 3 989 000 19 267 000 1 515 000 32 114 000 0 0 15 043 000 12 556 000 455 000 2 717 000 51 553 000

2008
5 317 000 259 000 779 000 6 891 000 3 195 000 3 558 000 19 999 000 1 741 000 30 401 000 0 0 14 809 000 12 418 000 346 000 2 769 000 52 082 000

2007
2 511 000 1 669 000 863 000 6 867 000 3 371 000 4 096 000 19 377 000 1 555 000 29 439 000 0 0 14 751 000 12 847 000 500 000 2 902 000 51 932 000

2006
1 990 000 1 724 000 955 000 6 051 000 3 420 000 3 206 000 17 346 000 1 528 000 27 624 000 0 0 13 736 000 11 890 000 455 000 2 578 000 47 533 000

2005
1 756 000 1 984 000 1 103 000 6 110 000 3 138 000 3 129 000 17 220 000 1 642 000 26 947 000 0 0 13 401 000 11 097 000 463 000 2 427 000 46 250 000

2004
988 500 1 941 800 3 058 700 6 243 200 683 000 928 500 13 843 700 1 564 000 24 976 400 0 0 12 897 300 9 896 500 0 775 300 38 976 800

2003
831 900 2 588 500 3 182 200 5 690 700 1 042 100 1 186 000 14 521 400 1 455 700 23 123 000 0 0 12 255 000 10 197 800 0 633 400 39 063 300

BALANCE SHEET - LIABILITIES
Accounts Payable Short Term Debt Current Portion Of Long Term Debt Other Current Liabilities Other Liabilities Total Current Liabilities Long Term Debt Total Long Term Interest Bearing Debt Minority Interest (Balance Sheet) Deferred Tax Provisions Other Long Term Debt Total Liabilities & Debt Redeemable Prefered Shares Preferred Shares Common Stock/Shares Participation Shares Additional Paid In Capital Legal Reserves Shareholders' Reserves Retained Earnings Other Equity Book Value - Shareholders' Equity Total Liabilities & Equity

2012
16 322 000 0 2 263 000 0 3 370 000 21 955 000 8 983 000 8 983 000 874 000 580 000 3 999 000 1 966 000 38 357 000 0 0 1 773 000 0 0 0 4 481 000 1 233 000 0 7 487 000 45 844 000

2011
19 393 000 0 2 159 000 0 4 554 000 26 106 000 9 513 000 9 513 000 1 009 000 586 000 3 680 000 419 000 41 313 000 0 0 1 698 000 0 0 0 4 549 000 371 000 0 6 618 000 47 931 000

2010
20 859 000 0 2 715 000 0 4 907 000 28 481 000 10 365 000 10 365 000 979 000 560 000 3 188 000 493 000 44 066 000 0 0 1 698 000 0 0 0 7 453 000 433 000 0 9 584 000 53 650 000

2009
18 124 000 0 2 018 000 0 6 894 000 27 036 000 9 794 000 9 794 000 801 000 496 000 2 520 000 592 000 41 239 000 0 0 1 762 000 0 0 0 8 261 000 327 000 0 10 314 000 51 553 000

2008
21 588 000 0 2 709 000 0 4 131 000 28 428 000 9 506 000 9 506 000 791 000 424 000 2 320 000 451 000 41 920 000 0 0 1 762 000 0 0 0 7 164 000 1 272 000 0 10 162 000 52 082 000

2007
21 289 000 0 3 247 000 0 4 311 000 28 847 000 8 276 000 8 276 000 1 107 000 462 000 2 147 000 430 000 41 269 000 0 0 1 762 000 0 0 0 6 638 000 2 299 000 0 10 663 000 51 932 000

2006
20 445 000 0 2 474 000 0 3 527 000 26 446 000 7 532 000 7 532 000 1 017 000 280 000 2 256 000 516 000 38 047 000 0 0 1 762 000 0 0 0 5 491 000 2 269 000 0 9 486 000 47 533 000

2005
20 185 000 0 2 895 000 0 3 340 000 26 420 000 7 628 000 7 628 000 1 001 000 226 000 2 325 000 264 000 37 864 000 0 0 1 762 000 0 0 0 5 224 000 1 436 000 0 8 386 000 46 250 000

2004
19 921 700 0 0 0 0 19 921 700 9 513 400 9 724 200 699 900 470 800 1 274 200 0 32 090 800 0 0 0 0 0 0 0 6 886 000 0 6 886 000 38 976 800

2003
18 721 800 0 0 0 0 18 721 800 11 070 500 11 312 300 821 000 483 800 1 165 100 0 32 504 000 0 0 1 790 300 0 486 700 0 0 4 282 300 0 6 559 300 39 063 300

20

Growth and Profitability

Capital Structure and Asset Utilization

21

8) Sources
4 traders.com: http://www.4-traders.com/CARREFOUR-4626/financials/ Carrefour.com : http://www.carrefour.com/sites/default/files/FY_2012_UK.pdf Boursorama.com : http://www.boursorama.com/bourse/profil/resume_societe.phtml?symbole=1rPCA London Stock Exchange.com: http://www.londonstockexchange.com/exchange/prices-andmarkets/stocks/exchange-insight/technical-analysis.html?fourWayKey=FR0000120172ZZEUREQS Infiancials.com: http://www.infinancials.com/ Capital IQ.com: https://www.capitaliq.com/home.aspx Mbaskool.com: http://www.mbaskool.com/brandguide/lifestyle-and-retail/4308-carrefour.html Wikiwealth.com: http://www.wikiwealth.com/swot-analysis:carrefour-group Studymode.com: http://www.studymode.com/subjects/carrefour-pest-analysis-page4.html Papercamp.com: http://www.papercamp.com/group/carrefour-pest-analysis/page-0 Techbusiness.me: http://www.techbusiness.me/files/carrefourwalmart.pdf Euromonitor.com: http://www.euromonitor.com/carrefour-sa-in-retailing/report Foxbusiness.com: http://www.foxbusiness.com/news/2013/03/07/carrefour-on-capex-offensiveunder-revival-plan/

22