Carrefour S.A.

Good evening to all of you. Thank you for being with Matthieu and me on this call to analyze our half year results.

Before we get into numbers, I would like to step back for a minute and focus on the key value creation levers we activated for our shareholders over the half. We can sort them into 3 categories.

First, our operating performance, which supported a strong growth dynamic and translated into a consistent sequence of market share gains month after month across all formats. Second, our ability to seize emerging opportunities as evidenced by our quick expansion in growth formats such as convenience stores, discount and cash and carry and our booming online sales.

We most recently proved this ability with the launch of Carrefour Links, our new retail media platform, which offers significant opportunities for value creation. Last, our disciplined capital allocation policy.

Thanks to our transformation over the past 4 years, we have turned our model into a strong cash-generative machine. This gives us all flexibility to reimburse in our core business and strengthen competitiveness.

At the same time, we can reinforce our strategic market positions as we did with the acquisition of Grupo BIG in Brazil. We can also reward our shareholders.

This is how we drive our business, and we will carry on along these lines going forward. As a matter of fact, and in view of our strong cash generation prospects, we are announcing today an additional EUR 200 million share buyback program to complement our EUR 500 million program.

This means that since the beginning of the year, combining the full cash ordinary dividend and our share buyback programs, we will return more than EUR 1 billion or 8.3% of our current market capitalization. Coming back to our numbers.

Once again, they are solid despite a mixed half on macroeconomic environment. Looking at our top line, we delivered steady structural growth in our retail activities.

Q2 growth continued to be robust. And as a result, we posted a strong 3.9% like-for-like growth in H1 in the face of an already strong H1 2020 base.

Interestingly enough, our growth is driven by what raised some concerns a few years ago, France, hypermarkets and especially French hypermarkets. In France, momentum is picking up again, and we report the best market share trend in at least 4 years with an increase of more than 50 basis points in market share over the quarter, driven by hypermarket.

But it is not -- this is not specific to France. Across our key geographies, hypermarkets are trending upwards and they gained market share when normalized for restrictive measures.

This format presents positive prospects for the future, thanks to a renewed offer, a strong customer focus and the key role in our click-and-collect and home delivery activities. Looking at profits, our recurring operating income reached EUR 740 million.

This is an 11% improvement at constant exchange rates, reflecting our strong operational performance. Turning now to cash generation.

We are well on track to meet our commitments as we have significantly improved our free cash flow, up more than EUR 200 million over the half. This increase follows 2 consecutive years of progress.

And we are confident that at the end of 2021, we will land comfortably above EUR 1 billion and set another record in terms of cash generation for Carrefour. This is a solid set of figures we are unveiling today.

Allow me to say that they are the results of long-standing decisions as well as great teamwork. The transformation journey we started 4 years ago is bearing fruit and still moving forward fast.

And the prime example of this is our digital transformation. We were a brick-and-mortar business, but we have met the challenge to turn the digital revolution into a massive opportunity to grow our business.

Our food e-commerce sales dynamic has more than doubled over the past 2 years, while we continue to experience fast growth at 26% in H1. In the fast-changing online landscape, we are also making a new and exciting move.

We were about to take -- we are about to take a significant stake in Cajoo, French pioneer in quick commerce and daily grocery delivery in less than 15 minutes. As part of a larger partnership, we will help them optimize their model and continue their exponential growth.

More globally, digital will be one of the strongest growth drivers for Carrefour over the midterm. We have set new ambitions for ourselves in digital, putting together new road maps for our tech, data and e-commerce strategies.

We will be happy to present them in detail to the investment community at our Digital Day that will be held in Paris on November 9, hopefully physically. All of this leaves me with one feeling, confidence, for now and for the future.

Looking at our prospect for H2, we know that despite the health on economic uncertainty of the period, our model is resilient, our financial situation is healthy and our balance sheet is strong. This provides us with the means to achieve our ambitions.

I'm also very optimistic for Carrefour in the longer term. The crisis will strongly accelerate trends that have already been rising for a few years and which have been anticipating for some time.

An increase in our flexibility with more people consuming at home, a digital boom for which we are now well positioned, growing attractive opportunities formats in which we are expanding and a growing trend towards organic, healthy and environmentally friendly products that are our purpose. We are progressing rapidly on our ambitions as evidenced by our full transition index value for H1, which has reached a high 119%.

Bearing all that in mind, we continue to capitalize on our strategy to create more value for our shareholders and for all our stakeholders. Thank you for your attention.

I will now hand over to Matthieu.

Thank you, Alexandre. Good evening to all of you.

Let's start our H1 financial review with revenue on Slide 8 of the presentation. Like-for-like sales were up 3.6% in Q2 following a solid plus 4.2% in Q1.

As a result, H1 like-for-like revenue growth reached 3.9%, which constitutes a solid performance on the back of a high comparable base. As a matter of fact, revenue was up 7% like-for-like in H1 last year in the particular context of the first lockdown measures.

So in H1, we experienced an average like-for-like sales growth of 5.5% over 2 years. As you can see on this page, our sales growth momentum is strong at historic levels.

This results from the dynamic market and from our continuous efforts on the ground to improve customer satisfaction, leading to consistent gains in market share. In more detail on next slide on Q2 revenue.

Sales for the first quarter reached EUR 19.7 billion, increasing by 8.3% at constant currency. Besides the satisfactory like-for-like performance, expansion and M&A contributed for 1.3%.

Petrol sales picked up sharply with the rise in oil price and the easing of sanitary measures in Europe against a very favorable comparable base. In H1 last year, travel was vastly constrained by lockdowns, border closures and limitations on travel distance.

However, please keep in mind that increases in petrol sales translate only marginally into profits. ForEx was a negative 3% over the quarter, primarily due to the erosion of the Argentine peso and the Brazilian real.

In total, revenue was up 5.2% in Q2. Moving on to Slide 10.

The group's recurring operating income for the half reached EUR 740 million, up 11.2% or EUR 81 million at constant exchange rates. This increase is particularly satisfactory for 2 aspects.

First, it compares to a strong 29% increase last year, which implies close to 45% cumulated profit increase over 2 years. Second, it means a solid outperformance compared to the 5.2% revenue growth at constant currency, reflecting good operating leverage.

Gross margin reached 21.4%, down 39 basis points. This is driven by the change in mix of integrated versus franchise stores, by price investments, by the negative comps effect related to the pause in promotions during lockdown last year and, to a lesser extent, by an increase in petrol sales, which generate low margins.

These effects were partly offset by purchasing gains. Distribution costs were down 32 basis points to reach 16.3% of sales.

The decrease, thanks to the fast implementation of our incremental cost-cutting plan which offset costs related to expansion or to the conversion of newly acquired stores as well as new services offered to customers in digital. The overall increase in recurring operating income relied on positive contributions from all business lines, retail operations, financial services, other services and B2B sales in Europe, which all improved significantly.

This was achieved despite a negative impact of minus EUR 31 million linked to the consolidation of recent acquisitions, Makro, Bio c' Bon, Supersol and Wellcome, which are under conversion to Carrefour banners in H1. As you can see on Slide 11, France was particularly strong in Q2 with 4.7% like-for-like revenue growth and 5.4% over 2 years.

Our market share increased by 0.5 points over the quarter with outperformance in all formats. Hypermarkets kept delivering sound revenue growth at plus 4.3% like-for-like, driven by strong commercial performance based on the 555 method which supports customer satisfaction and operational excellence.

Hypers gained market share against their competitive set with plus 0.5 points and against the wider retail sector in the country. Supermarkets also delivered strong revenue growth with a 7% like-for-like increase in Q2, which comes after a solid 4.3% growth in Q2 last year.

Supers also consolidated their market share over the quarter. The situation was a bit more subdued for convenience stores, down 3% like-for-like in Q2.

This is on the back of double-digit growth last year for the segment, which was the main beneficiary of the strict lockdown measures. Over 2 years, top line momentum remains high with a 9.4% like-for-like improvement versus Q2 '19.

In this proximity format as well, Carrefour stores outperformed their peers during the quarter. As we said earlier, France was the main driver of the group's recurring operating income performance in H1.

Operating profit grew by 45%, and operating margin improved by 32 basis points at 1.1%. This was helped by strict cost discipline and comes despite the fact that we resume promotions and catalog actions that were temporarily cut last year during strict lockdown.

Moving on to Europe. As you can see, Spain and Belgium posted negative sales number in Q2 due to high historicals of plus 9.8% and 15.9%, respectively, in Q2 2020.

Both remain well oriented on a 2-year basis with plus 7.1% cumulative sales growth for Spain and plus 9.2% for Belgium. Poland and Romania faced the opposite situation with much easier comps as sales growth was negative last year.

Business picked up clearly in Q2 with the progressive easing of sanitary measures and the reopening of shopping malls last May. Italy remains challenging, but our relative performance improved month after month.

The new management team in place has put strong emphasis on customer satisfaction and operating excellence. This rapidly translated into steady improvement in NPS and price perception.

Note that we delivered positive like-for-like revenue growth in Italy in June. Europe recurring operating income improved by a solid 13% in H1, reflecting a 27 basis point increase in margin.

This is a sound performance as it comes on top of a plus 59% increase in recurring operating income in H1 last year. Over 2 years, recurring operating income in Europe has increased close to 80%.

The situation showed contrast in Latin America. Our sales in Brazil remained at a satisfactory level with strong 18.3% growth accumulated over 2 years, supported by both Atacadão and Carrefour Retail.

This solid 2-year trajectory reflects steady market share gains and a sound commercial dynamic in a difficult sanitary and economic context. On a year-on-year basis, Atacadão grew revenue by 10.2% like-for-like, its fourth consecutive quarter of double-digit like-for-like growth.

The brand enjoys strong recognition across the whole country and today stands as the benchmark in the competitive cash and carry segment in Brazil. Carrefour Retail posted a 11.4% decrease in like-for-like sales, which is almost purely linked to a 25% drop in nonfood sales against a 52% increase in Q2 last year.

Over H1, we completed the conversion of the 29 macro stores in Brazil. We are particularly pleased with the situation of macro as stores reopened twice as fast as planned and experienced a much faster ramp-up than anticipated.

Revenue is now expected to double over the next 4 years versus the initial target of a 60% increase. And EBITDA will reach run rate breakeven as soon as this year, way ahead of initial schedule.

This new evidence of our capacity to integrate acquisitions is very satisfying, even more so in the context of the upcoming Grupo BIG acquisition. As you know, we are currently in the antitrust review process.

We expect closing to materialize next year. Our Argentine business keeps improving, gaining market share, growing volumes and recurring operating income in a tough market environment shaped around hyperinflation.

Recurring operating income for the region was marginally negative, down 0.8% at constant ForEx in H1. It was primarily a function of the nonfood sales drop at Carrefour Retail in Brazil and the high comparable base as H1 recurring operating income was up 27% last year.

A few words on Taiwan now. The country had remained something of a safe haven in the COVID world last year.

But unfortunately, it started being affected at the beginning of this year. The local government took drastic actions to limit the impact with strict sanitary measures that affected our operation.

In that context, like-for-like sales were down minus 1.4% in Q2. Total sales increased by more than 20% at constant exchange rate following the integration of the Wellcome convenience stores.

They enjoy strong revenue and earnings growth as soon as they are converted to the Carrefour banner. The conversion process should be completed at the end of 2021, in line with the initial plan.

Recurring operating income for Taiwan reached EUR 47 million in H1 versus EUR 49 million last year and EUR 40 million 2 years ago. Moving on to the bottom part of the P&L on Slide 15.

Nonrecurring charges reduced significantly versus last year. They amounted to EUR 41 million in H1.

On the positive side, the sale of 60% of Market Pay generated a capital gain of EUR 230 million. We also booked a capital gain on the real estate asset transaction in Brazil for EUR 81 million.

On the negative side, we provisioned EUR 260 million of restructuring costs, mainly as part of our plan to transform our head office in France. The net financial charge reached minus EUR 132 million, a lower number than last year, mostly thanks to efficient liability management, including lower cost of refinancing.

Taxes also decreased sharply linked to the fall of the CVAE rates in France and the depreciation of the Brazilian real over the period. The normative tax rate also decreased to 30.6%, thanks to the decrease of corporate tax in France and the geographical mix of earnings.

Bottom line, our earnings per share for the half increased by 34% versus H1 last year to EUR 0.42. Net free cash flow on Slide 16 improved by more than EUR 200 million in H1 versus H1 last year.

Let me highlight the key variations. Gross cash flow improved by EUR 316 million with a lower level of cash tax, as explained a minute ago, and a strong reduction in cash, cost of restructuring and exceptional items, as we had guided last February.

Change in working capital deteriorated by EUR 139 million. This is due to the fact that inventories had reached a very low level last December on the back of a very successful sales performance during the festive period.

So we bought more inventory in H1 than last year. We also raised CapEx to EUR 539 million in H1 as planned.

As I said before, we anticipate CapEx for the full year to increase versus last year and come back to normalized levels of EUR 1.5 billion to EUR 1.7 billion per year. We can confirm that CapEx will be in that range for the full year 2021.

Over the last 12 months, we generated close to EUR 1,260,000,000 of net free cash flow. We are satisfied with this performance.

We are confident that the full year number will be comfortably over the EUR 1 billion we had set as a target at the beginning of the year. A few words on net debt now.

Our net debt stood at EUR 5.5 billion on June 30, 2021, versus EUR 5.2 billion a year ago. The change in net debt is explained by the following key elements: net free cash flow, which was EUR 1,259,000,000 over the last 12 months, as we just saw; the full cash dividend paid to our shareholders had an impact of EUR 383 million, to which we add all dividends paid to minority shareholders in our subsidiaries for a total dividend payment of EUR 497 million; 90% of the EUR 500 million share buyback program was completed by end June for EUR 443 million; and net M&A, including acquisitions and disposals, represented a cash-out of EUR 426 million.

This leaves Carrefour with a very solid financial situation and probably one of the strongest balance sheets in the industry. Our credit profile remains strong, as acknowledged by Moody's and Standard & Poor's, which both reiterated their strong investment-grade ratings.

Moody's actually upgraded its outlook from negative to stable on its Baa1 long-term rating. Before turning to questions, I would like to say a word on our capital allocation policy on which we've had many questions from investors since the beginning of the year.

Over the past 3 years, we substantially improved our economic model. It is now highly cash-generative, thanks to operational excellence in servicing customers and rigorous cost discipline.

We have been able to strongly optimize CapEx level over the past 4 years to a normalized level of EUR 1.5 billion to EUR 1.7 billion per year or roughly 2% of sales, which we believe is the right level to support and transform our operations. Going forward, incremental cash surpluses will be allocated between M&A and returns to shareholders.

On the M&A side, our policy is very selective and focused on value creation. The BIG acquisition is a perfect example, a strategic move in Brazil, firmly consolidating our leadership in a key market with high synergies expected and at a very accretive post-synergy acquisition multiple.

As for return to shareholders, we completed our EUR 500 million share buyback a couple of weeks ago. We acquired close to 29.5 million shares or 3.6% of the share capital whose cancellation was approved by the group's Board of Directors today.

We have confidence in our dynamics. We have ample liquidity.

And buying our own shares is a good allocation of our capital. Hence, the complementary EUR 200 million buyback program that we announced today.

Total cash returned to shareholders so far in 2021 amounts to more than 8% yield. Thank you for your attention.

The floor is now yours for questions.

Two questions, if I can. So first, just on the immediate grocery acquisition.

I'm just wondering what the motivation is there. Just talk a little bit more about the partnership and whether or not you think actually it's going to be mass market.

Or is it really just a sort of experiment at this stage? And then second one, just coming back to the capital allocation, some reports in the press that you may contemplate the sale of assets.

That's a slight change to what you spoke about at the full year results. I'm just wondering if you could elaborate a little bit more on that.

Thank you, Andrew. So you're right, we announced that we take a -- we decide to invest in Cajoo and to be a large investor in this asset.

The logic is very simple. As you know, we have decided to put a strong focus for the last 3 years on home delivery.

We wanted to be the leader on home delivery. And we are the leader in France on home delivery with more than 25% of the market share.

Consequently, we try to be present in all the segments of home delivery, delivery at D+1, delivery a day on the -- today, delivery express also, which Carrefour own service. And we want also to be present in this new segment which is quick commerce.

It allows Carrefour to pursue its ambitions. It's a new step in this ambition.

We do believe that quick commerce is a long-term trend. Of course, it was born during the confinement.

But we do think that it would be more and more rooted in consumer habits, particularly in urban cities. And as the leader in home grocery delivery, we want to be capable to take this trend.

We joined with the team of Cajoo. They are very good entrepreneurs.

Of course, they remain the largest shareholder. We will try to combine them with ourselves to help them to accelerate their development.

And in the meantime, it's a great opportunity for us to be present at the beginning on this new trend. And that's the logic of this move.

On your second question on disclosure -- on disposals, sorry, obviously, as you know, we begin to think about the new strategic plan. And consequently, review of assets is a normal process in this moment.

We think about the position of our international subsidiaries. What could be a consolidation?

What could be the type of alliances? Is there any investments possible?

We think about all that. We are at an early stage in this process.

No decision has been made. We know that there are synergies and sharing of best practices with all these countries, but we want to have a global review of all these assets to have a complete overview and to have a very professional overview of all our countries.

We are very pragmatic, very value-driven. There is no disposal on the agenda today.

No decision has been made. But we are thinking in the logic of the building of the new strategic plan.

Okay. That's very clear.

And just on cash, could you just quantify the investment? Is it sort of tens of millions?

Or is it even bigger? I don't know.

Sorry.

Yes, it's low tens of millions. So it's a small amount, but we think it's a promising project.

Three quick one from my side, if I may. At this time last year, I remember you were talking in France about a EUR 70 million negative impact coming from bank, travel and ticketing.

I was wondering if you could shed some light on what has been the movement if we come back to a normalized level for these divisions. The second question would be, can you remind us the weight of online in France and how profit has developed over H1?

And the last question is more midterm regarding the load that is coming [indiscernible]. Could you share your view with us?

And should we expect that this loan may enable inflation to be passed through a system, which has always been an issue in France?

Fabienne, thank you for your questions. I will take the first 2 ones.

So you're right, last year, we had quite different profiles of profit evolution between retail and the other services, which you're right, include ticketing, include car rental, include travel agencies. And so we flagged these various trends.

We also commented on these trends this semester. We have a progression of retail operations again on top of already high growth last year, and that's a good news.

We also have a rebound of our other activities. That applies to the other activities like travel agencies, ticketing and so on.

They are indeed rebounding. Notably, since the end of the quarter, I would say, second half of the second quarter, when a number of sanitary constraints were lifted, we had an increase on travel.

We had a new events, which were created. And so that was positive.

It is also the case for financial services, which also see their profitability increase versus last year on the first half. We still have mixed evolution of our portfolio of credit with a very strong dynamic as you saw in Brazil.

It is still more slow in Europe. But cost of risk is very well under control.

We have some operating cost savings. Consequently, the profitability of the financial services is growing again in H1 and participate to the growth.

On the online activity in France, I don't have the number off top of mind, but it's probably 4%, 5% of sales that are generated online now. As you saw, strong growth on top of already strong growth last year.

So we've been sharing with you that we thought that e-commerce had made a quantum leap during the COVID crisis and that this market would just keep growing from where it was, keep growing on a very high base. And this is what we are delivering in France and actually in all geographies.

As we said already last year, and this is obviously reinforced as time passes, we now have a profitable dynamic of business in e-commerce, meaning more volume means more profit. Consequently, again, this semester, the online growth generates growth in profit and participate to the ROC growth that we experienced in the semester.

On your third question, Fabienne, we are aligned with the initial spirit of the law, which is to protect farmers. And we are also in favor of more transparency at Filière Qualité.

And we work on that with our Filière Qualité for a long time. And so it's something we are very, very used to.

But as you know, it's the -- I don't know, I think it's the 15 law in 16 years. So we have had a new law every year or so for the past 15 years.

So we had a very strong adaptability. The tax is still in discussion.

It has been voted by the French National Assembly, but it has not been examined by the Senate. It would be in September this year.

We, of course, don't know the final version. There could be some changes probably because nobody knows how to apply the law, how it is today written.

But let's hope that the legislative process would able to have a more comprehensive, understandable tax in order to fill the objective, which is the development of farmers, which is to produce transparency and which is to create a global ecosystem from the farmers to the retailers. And I think there's still work to do on the tax, but I hope that the Senate would highly contribute to that.

Yes, gentlemen, I have 2, if I may. The first one is really about best practices.

Maybe you could tell us what you are most proud of across in terms of synergies across borders. You were mentioning a potential review of your countries going into the next plan.

It would be interesting to know what is working best between the countries because that has been a structural weakness of Carrefour in the past. And maybe you can tell us what are the main achievements you are proud of and what is still missing.

You were mentioning also some purchasing gains in your introduction. Maybe it has something to do also with that.

And the second one, in terms of online development, could you maybe give us a road map of the countries, we have some ideas with Brazil and France, but the countries where you are still maybe a little behind and could accelerate pretty quickly with some -- also some synergies potentially in the ways you can use the business and your learnings from -- already from France and Brazil in other countries like Spain, Italy, Belgium, et cetera? Maybe you could tell us where you stand and where you want to go online in these countries.

Thank you, Cedric. When I joined the group 4 years ago, one of my main objective was to -- that we behave as a group, that the countries behave as a whole -- as a unique group, that we share this practice, that we partner, that we have the same ambition, that we try to develop common services.

And it was my obsession knowing that it was not the best point for Carrefour. The reality today, and I think that you measure that, is that it is the case.

It's the case -- because we have a new generation of managers in all the countries, they are all obsessed with the customer satisfaction, with the 555, with operational excellence, with this willingness every day to serve and to improve the customer satisfaction. Of course, it's the case of Rami in France, it's Alexandre de Palmas in Spain, Christophe Rabatel in Italy, Stéphane Maquaire in Argentina.

All the managers are really obsessed by the customer satisfaction by this 555. In the meantime, we have tried to put income on a certain number of services to act as a global group.

Of course, it's the case for the purchasing. You know that by half.

But it's also to have real expertise, group expertise common for all the countries on data, on IT, on tech. We all know that a certain number of our countries doesn't have the [indiscernible] expertise to be experts on that.

Now we have some sort of expertise. They are common for the whole group.

We built a global partnership with strategic partners on tech, for example. And that's something which is -- which has become very natural for the group.

All the managers contribute to that. The level of collaboration between the CEO of countries on the group is very, very strong.

Each day, we have discussion. We have many workshops on many items in order to develop that on the consequences that the general level is growing.

We all know that in a certain number of countries, we are better and we try to export best practices on every aspect, and it's really something that works. And I think it's a collective pride for all the team to be -- to act today as a group as a unique team.

And it's something that contribute to the good momentum we are today.

On your second question, Cedric, regarding online. I think you know very well the philosophy of the plan.

It was really a global plan that we launched. And so when we said in 2018 that we would accelerate on digital, on commerce and would commit a very high level of investments to that, we basically started the dynamics in all geographies.

At that point in time, you had the markets which had already started. I think France was one.

And Carrefour was clearly behind competition in terms of drive and e-commerce activity. And we had other countries where the market was less mature and where we could start with the right timing.

That puts us in a position today, for instance, in Brazil, you mentioned Brazil, to have -- and in Spain, it's the same, to have a market share in digital, which is above our brick-and-mortar market share. So in parallel to this, we've had a community, and it is really impressive to see it work, of leaders coming from all our geographies which work in common to identify the new trends, who identified what's going on, who have discussions with partners locally and globally together in order to identify new trends and invest quickly in these new trends.

We've become a leader in the home delivery in France. We launched [indiscernible].

We are now moving on quick commerce. I think it shows that this community is on top of all trends.

We are now in the second trend, which I think is about innovation. It's about taking leadership.

It's not about catching up and implementing a basic and working e-commerce footprint. It's about taking innovation, taking leadership and capturing the value out of this e-commerce market.

So I think that's where we are and that are some lines among many others that we will develop during the Digital Day in November.

I guess 3 from my side as well. But maybe first, a slightly medium-term question, Matt or Alex.

I think the Carrefour 2022 is sort of [ then period ] is fast approaching. I guess what should investors look forward to beyond this plan?

You're clearly signaling review of assets, which is likely part of that. What other aspects are you hoping to cover?

And when will we get a glimpse of the sort of succeeding strategic plan? I guess that's the first question.

Second one, if you can elaborate a little bit on FCF guidance, and probably it's for Matthieu, striking change in the guidance there. What do you see as comfortably above EUR 1 billion?

I guess is it -- should we be seeing the additional EUR 200 million buyback as a hint for that much better free cash flow? I guess any clarification there could help us think about what you might be able to do next year.

And then finally, just to quickly follow up on Fabienne's question on nonretail impact, please. I think in the second half, you had further impact, another EUR 20 million in France and EUR 90 million in Europe.

How should we think about recovery of those in the second half versus any -- so the sustained drag from the acquisitions, you've referred to EUR 31 million. I mean should we be seeing further similar drag of EUR 30 million?

And how should we think about that EUR 20 million in France and EUR 90 million in Europe in terms of nonretail impacts?

Thank you for your first question. I try to be sure because I can speak about that for hours.

And I'm sure we'll have many, many opportunities to discuss about that in the future. And it's a bit early to speak about the next plan.

We still have to deliver all the ambitions of this plan. As you mentioned, we can be pleased with the level of performance we have with the fact that we reached the objective, that we behave as a group, that we are back in the ways, that the customer satisfaction is increasing.

And all these conditions are essential to build the new strategic plan. On this new strategic plan, maybe you feel in our words in our announcement today that digital would be highly central.

We have a huge ambition. We are back in the game.

We were brick-and-mortar, and we use now technology as an asset. I think we are in advance on many aspects on retail.

That's why we have decided to give you a comprehensive view on this Digital Day in November because we want to present you and to have a discussion with you about the main achievements, the ambitions, the view we have about our role on our new platform, Carrefour Link, on how we use the data to improve day after day the quality of the operations, on the role we can play, on the ambition we have on e-commerce, on all these aspects. Of course, the level of ambition we have is very huge, and that's why we continue to make any acquisitions such as Cajoo today.

So of course, it will be a central element in the next plan. And for the rest, we have many ideas.

We work a lot. We will try to be ready at due time.

And we will have a global discussion about all that with you.

On your second question -- Sreedhar, well, I think you understood the message behind the complementary EUR 200 million share buyback program. It's a message of confidence, I think, on -- after this first half, sales trends is positive.

Profitability is going in the right direction, in particular, in France. And cash generation is posting strong growth versus last year.

So we are confident. In terms of capital allocation, I don't think we've changed -- or I think we've kept the same line.

But probably as quarters' past, you see us implementing this capital allocation policy. And so it's clear.

It's -- once we have implemented our CapEx program, it's a permanent arbitrage between M&A, selective M&A, as I said in my speech, and buybacks. So it's a permanent at the arbitrage.

So yes, let's be clear that one should expect further share buybacks in the future. I think it's a fair assessment.

On the other activities and the building of the profit, yes, the other activities, as I said to Fabienne, are contributing positively to the EBIT growth. It really depends on the sanitary environment and constraints associated to that.

We know that with the Delta variant, we have volatility in the situation. So we'll see how H2 develops.

In terms of M&A, we've had a number of acquisitions that started to be consolidated in this first half. I think it is quite typical.

And the number of stores that we both had very limited or no activity was the case of the macro stores, which was basically an asset deal. So we had to pay the rent.

We had to hire the teams. We had to make a launch campaign.

And then only after that, we reopened the stores and started to generate turnover. So we'll have the sort of launch or first consolidation and relaunch and transformation dynamic in H1.

Clearly, it will decrease over time as growth. I think that the stores are converted and they ramp up in terms of sales and profitability.

Should we be looking for a substantially smaller headwind from this in the second half is what I was worried.

Yes, I'm pointing then. We'll see how the second half develops.

But I think it's been particularly important in the first half because we consolidated all these acquisitions in 1 semester. So now they're all being converted, and so it should reduce over time.

I have 3, actually. The first one, you -- so your working capital variation slightly deteriorated in H1, and you explained why.

How do you explain -- expect, sorry, working capital will trend in the second half? Do you expect this to revert in the second half, so we expect a positive working capital for the full year?

Second question is you mentioned price investment also to explain your gross margin contraction in H1. Could you elaborate on which countries you invested in prices?

I think Atacadão mentioned some price investment. But are there any other countries than Brazil where you also invest in prices, I mean, for instance, in France?

And last question, I think also you mentioned during the presentation some provisions, restructuring provisions regarding your headquarter in France. I mean could you elaborate a bit on this?

Because I thought that you already implemented a layer plan in France at the hypermarket, but also headquarter level as well. So is there a need to further restructure your central operation in your headquarters?

I will start with your second question, Nicolas, on the provisions and on the headquarter. You're right.

I think it was back in 2018. We had the transformation plan for the head of us in France.

It was successfully implemented. We are -- we have matched actually the course of the first semester a new social plan for the head of us in France.

And one knows that head [indiscernible] is was very big, 4 or 5 years ago. And we've identified opportunities to optimize to get inefficiencies to have more fluidity among the teams.

And this is why we are going through this process. So I think you got it perfectly right.

It's the second time we are taking actions on that area.

On price investments, Nicolas, in fact, we are investing everywhere. The objective is to improve our competitiveness quarter-after-quarter in all our geographies.

So as you know, in a certain number of countries, we are lagging behind the competition as we were in better position, but we try to continue to work on our competitiveness, on our pricing strategy in all the countries. We have made great improvements we are capable today to use efficiently that is to adapt our pricing strategy with much more valuability based on the elasticity that was not the case 4 years ago, listening with obsession to customers in all our geographies.

We identified many levers to improve price perception. We look today where we have to put the emphasis in the different countries.

So we have professionalized our price policy. We continue to use more and more data.

And it's the case in all the geographies, knowing that our starting position was not -- is not exactly the same. But for example, of course, in France, we continue to invest.

We continue to develop new initiatives, try to be close to the expectations for our customers, and that's the way we will continue in the future to fuel our price image, which is absolutely central for us.

And I did not address your working capital question, Nicolas, coming on it now. So you're right.

You perfectly understood the H1 situation. As far as H2 and medium-term trend is concerned for working capital, I will really repeat what I said in the full year results, I said that for this year and for the medium term, working capital should be a positive contributor to our cash flow.

We have grown in business. We have the ability to maintain our inventories under very strict control, and we'll use them all the time.

So I have not changed the direction that I think we have the specific situation that we explained to you here, but no change in the medium term.

Okay. Maybe one very last question, if I may, for you, Matthieu, pretty technical, but I saw your restructuring charges have declined quite significantly in H1.

There is also a decline in net financial charges also in the first half. Can we extrapolate this H1 trend to the full year?

I mean, could you help us, could you give guidance based regarding the evolution of the restructuring charges and net financial charges for the full year?

Well, exceptional is exceptional. So I'm going to be very, very precise here.

You'll see what happens in H2. What is sure is what has been -- what occurred in H1 is here.

I don't see that being reverted we have some divestments, capital gains, that's behind us, and so we will keep that for the year. In terms of net financial expenses, we have a number of -- we have structural aspects, which is the reducing of the cost of financing, which is a trend that we've been implementing for now 4 years.

We've also had a number of specifics in H1 a number of smaller capital gain, ForEx gains and I mean small things. So I think it's probably a strong decrease in net financial expenses in the first half, probably stronger than on a recurring basis.

So that's what I see.

I've got 2. It would be great to kind of understand a little bit more around the cost cutting, the EUR 430 million that you achieved in the half.

Where is it coming from? Is it from kind of COGS or SG&A?

And I suppose, do you expect to kind of have to continue to have some provisions like the restructuring provisions that we just discussed to achieve consistent cost cutting into the future. And then the second one is on the stickiness of the hypers post pandemic.

Do you still see that long-term growth sticking. And if you stripped out some of the online growth that's in those hypers, what would your commentary be on the underlying performance of the stores.

Yes. Thank you, William.

On the cost cutting, it's -- well, it's pretty much the same dynamics as we've had for now close to 3.5 years. This new cost savings program is really the continuation of the previous cost savings program.

So we have about half of the cost cuttings, which are coming from COGS, the other half is coming from SG&A. As far as SG&A are concerned, we have a number of improvements, which do not need any exceptional provisions, exceptional cash as to be implemented, namely changes in processes, renegotiations with suppliers that doesn't need a one-off cost to be done.

And we have some improvement of organizations that we implement regularly, I think we have a big plan today in France, as we discussed earlier, which is not in the savings yet. We have the provision, but we don't have the savings.

That plan will be implemented a little bit in the second half, probably much more in 2022 and the bulk in 2023. So we're also engaging actions so that this cost-cutting dynamics has the momentum through time.

On your question on hypermarkets, you probably know that we have the conviction that hypermarket has -- will for sure. We need a confirmative transformation plan on the hypermarket because for adding this, for sure, we have to think and to work on every aspect of the hypermarket, which means to work on the offer in the hypermarket.

We knew that we had a huge potential for improving the quality of -- on food and fresh and on vegetables. We have the capability to improve the quality of food offers we have.

We are also to think about the role we should play on the nonfood. We did believe that we were not at all [indiscernible] nonfood that there was room for improving the attractiveness of our offers.

That's why we have worked on the seasonable product, that's why we have worked on in-and-out that we have wide spread in all Europe. We have also -- we have the conviction that the organization of our hypermarket should be improved.

We have led different processes, as before and now the top project and the leadership. We think also that the link between hypermarket and digital could be improved, could be professional, that's why we use our dense store networks as fulfillment base for both click-and-collect and for delivery.

So you understand that we work on all aspects. And we had a new element since last year, which is the obsession of the operational excellence and customer satisfaction.

The obsession of the NPS, the obsession of the 555. And on the [indiscernible] all his teams have worked a lot for a year in order to be closer to the customer to understand, to listen to the customer and to improve every aspect of our operations, which means pricing execution, cleanliness of stores, reliability of the assortment, freshness of food and vegetables and [indiscernible] of the team, waiting time at the checkout control.

And this plan is working. That's why we are now capable for almost all your -- to gain market share.

You probably analyze that we gained market share against all of our competitors today in hypermarket. That is the sign that we are back in the game, that we have a huge potential due to this operational excellence.

And that the combination of these 2 elements, the structural transformation of the hypermarket and the offer and the organization and the link with the e-commerce. And except the operational experience and the customer satisfaction that is the combination for a winning format for hypermarket.

That's why we believe in the future. That's why we demonstrate now quarter after quarter that the performance of the hypermarket is better.

It's the case in France. It's the case in Spain.

It's the case in the majority of our countries. Because this policy is widespread in all our countries.

Just on Europe, actually, can you provide us with a bit more color on the profitability. So you mentioned already Spain and you said that you had quite a strong improvement in Spain, but can you give us also a sense of what happened in Italy, Belgium, Poland and Romania, just in the trajectory of the profitability for these countries, it will be quite helpful.

The second one actually is on Brazil. If I look at the retail performance, excluding Atacadão, I understand that nonfood was challenging.

You have tough comps. But given the strong food inflation, is there any explanation why the performance in Q2 was so weak, I would say, except for nonfood.

Can you potentially explain a bit more what happened there in Q2? And what are you expecting going forward?

One last question, I will have a try, but is there any consensus that you will be willing to share, especially on the recurring operating profit, that would be helpful, too.

Thank you, Xavier. Well, we're not going to detail the profitability by geography.

Just highlighting that I think, 2 ideas. The first one is that Spain, which is very core and important country for us has a very positive trend.

Although it had very high historicals, we have a positive dynamics. In terms of sales over 2 years, market share we're improving.

We have good cost dynamics. The financial services operations are also performing well.

So overall, it's a country that keeps going in the right direction. Then the other countries, it's really about where they were last year and what was the growth.

So I think you can refer here to my comments on the top line that I made on my speech that the main trend, but then it is small countries. So I think the most important item is Spain.

In Brazil, you're right, so leaving Atacadão aside. So nonfood I don't think we can say it's underperforming.

We had a 52% growth last year were minus 20% something. So it's a fantastic growth over 2 years.

We had a fantastic growth in nonfood before COVID. You may remember that because we've done a very good job on working on the categories, on changing the assortment, on changing the level of service.

That is working and that is also working over 2 years. Coming on the food market, you're right, the food dynamic is quite low at Carrefour.

First, the level of inflation that you see is ready for raw materials. So we have, in fact, a much lower inflation on packaged goods, which is more what Carrefour sells.

And then we have a market, which is negative, food market, which is negative in Q2 on the back of very high historicals as well. But what we know is that in food, the FMCG, we are gaining market share in new Carrefour banners in Q2 in Brazil.

So we're satisfied with the performance and have really no worry on that path. On the -- then your last question on the full year consensus.

Well, obviously, we're in a trend where we have a lot of volatility, notably due to the sanitary situation. But I think overall, we're comfortable with the full year recurring operating income consensus as it stands.

We understand the transformation is powerful. The performance is solid.

So all in, we are confident in the context that we all know.

I've got 2 questions from my side, if I may. The first one is on food inflation.

Actually, as all for the manufacturers already flagged the upcoming price increases. Do you know how to food and fight inflation will at only pass this price hikes on the costs emerging in France and also abroad?

And my other question is more on the Cajoo. Do you have a co-option to, let's say, only acquire the one company?

And what's your view on the quick e-commerce? Is it really complement to deliver and also it's partnerships?

Or is it let's say, supplement of these partnerships?

Thanks for your questions. Considering the inflation, as you know, we see very different threats and depending on geographies.

In Latin America, we have very strong food inflation starting in Q2 last year. It remains above general inflation.

And of course, it has a consequence on volume. But that's really limited to Latin America.

It's not what we see in France. In Europe, we see limited food inflation in Europe.

If we focus on France, FMCG prices are, as you know, negotiated within the framework of annual negotiations from November to February. So prices are therefore effective for the year, which gives us some visibility on the -- probably defer the inflation that the inflation that could happen after.

We are starting to see a little bit of pressure from industrial and prudent waste prices. And there may be a little bit of inflation at some point of time.

But we see that as a digital segment on the limited phenomenon, it could also be a positive in our industry. We really see that as a limited phenomenon for Europe and particularly for France.

The second part of your question on Cajoo. We see, of course, a multiplication of way of delivery.

We see many players entering the market. You mentioned [indiscernible].

You mentioned [indiscernible]. So there are many players.

And the objective for us since the beginning is to be present with an offer on all the services. That's why we put the emphasis at the beginning of the plan.

That's why we were the first and we are the leader on [indiscernible]. That's why we decided to put the emphasis on delivery, working from automated proportion platforms, but also today, more and more for micro-fulfillment centers linked to what we saw hypermarket or supermarket.

And that's why we take the decision also to try to have performance answers on Express. Delivery Express, but also now quick commerce, you know that quick commerce is now 115 minutes.

And we see in many geographies and when you see the importance of this market in some big cities that this market of a small assortment in less than 15 minutes is growing. We don't know exactly, and it's impossible and it wouldn't be honest to say we see the market at this level in 6 or 11 or 12 months.

But we see this market growing. And more important for us, we want to be capable to sell to our customers and to our best customers.

In the [indiscernible], we have the answers to your needs and to your expectations. And we have created the capabilities to performance services on all these expectations.

And that's the logic of the partnership with Cajoo. The manager of Cajoo remains the first shareholder.

We don't have any call. We want them to be perfect on something else.

We want them to act on something else and we are [indiscernible] the development of Cajoo, I mean the building of this partnership, Cajoo and Carrefour.

I'll try and make it as short as possible. Just 2 on my side.

The first one, and apologies if I missed it from the press release, but from the provisions that you took associated with financial services last year, is there -- has there been any unwinding in the first half of this year. That's my particularly given that you said that the cost of risk was actually quite strong in terms of management.

So that's my first question. And then the second question.

So impressive amount of cost savings achieved in the first half. Just if you have any comments you can make with respect to input cost inflation and how you're managing this.

Sorry, can you repeat your second question on inflation, Maria?

Input cost inflation, so across the different types of commodities, but also across logistics. So if you have any -- if it's something that you've been dealing with and what type of comments you can make on the pipe of this?

Okay, clear. So first question on the cost of risk in the financial services.

Well, it's like taking back of provisions, but very, very limited the -- we had booked, as I said, in the full year release that we had booked the right level of provisions. We think that the environment is still uncertain.

So we did not take any big position. We see absolutely no weakening of the credit quality, hence, the position, which is more a wait and see, I would say, position to see exactly how the market evolves.

On the cost inflation, we -- well, we see a little bit of tensions, but it's fairly limited, as you saw in our cost line. The cost is decreasing as a percentage of sales.

So it's not a big thing as we speak. We'll see how that develops in the second half.

But so far, it's fairly limited.

Thank you so much for your questions and for the discussion. I wish you a good summer on the -- see you at and talk to you at the next Q3 and after at our Digital Day on November 9.

Thank you very much. Bye-bye.