Carrefour S.A.

Pierre-Jean Sivignon - CFO

Edouard Aubin - Morgan Stanley Cedric Lecasble - Raymond James Jerome Samuel - HSBC John Kershaw - Exane Fabienne Caron - Kepler Cheuvreux Sreedhar Mahamkali - Macquarie Nicolas Champ - Barclays Xavier Le Mene - Bank of America

Welcome to our conference call to present our 2014 Third Quarter and Nine Months Sales Numbers. I'm Pierre-Jean Sivignon the CFO of Carrefour.

I'm joined on this call by our investor relations team Reginald Gillet, Alessandra Girolami, Sondra Livinec and Matthew Mellin. I would like to take this opportunity to share with you that Reginald will be moving to China at the end of this month to take over responsibility for financial control and Alessandra will take over as Head of Investor Relations.

I would like to congratulate Reginald for his promotion, thanking for his contribution over the past three years and wishing good luck in this new challenge. And I would like to add that incidentally it's Thursday today so Happy Birthday Reginald.

As to Alessandra all of you already know her well and I'm sure that you will join me in congratulating her for this well-deserved promotion. As always we have issued a press release this morning and I invite you to go to our website and download the presentation to which I will be referring during this call.

After the presentation we will be happy to take your questions. Overall Carrefour posted another solid quarter of organic growth in sales further confirming the momentum in our business.

Sales were up in the third quarter with organic growth of 2.8% ex-petrol. This brings group organic growth to a strong 3.8% for the first nine months of 2014.

Let me add that this performance took place in an overall context of slow inflation impacting all of our markets with the exception of Argentina and to a lesser extent Brazil. French operations continue to deliver growth while international markets posted both positive like for like and strong organic sales growth in the quarter.

Throughout Europe including France sales were affected by unseasonably cooler and rainy weather. In Latin America both Brazil and Argentina turned in an excellent performance.

Finally in Asia a continued expansion in China partially offset the continuing frugal consumption environments in which we’re operating. I will now run you through the main highlights of our Q3 and nine months sales performance before turning over the floor to your questions.

I will begin with slide 2 of this presentation. The growth -- third quarter sales of €21.1 billion were up 2.8% on an organic basis excluding calendar and petrol.

Overall these represents a solid performance not only because of the environments in which we’re operating but also because it comes on top of already strong comparables. Let me highlight that the 2.8% of organic growth is composed of positive like for like of 1.6% and the net impact of new store openings for 1.2%.

This performance stems from continued good performance in food while non-food sales remained resilient this quarter. As the slide indicates this quarter three external elements at a combined unfavorable impact of 3% on those sales.

First, an unfavorable currency impact of 1.9% mainly resulting from the Argentine Peso. Second, the drop in petrol prices which cost us 1% at group level, lastly a broadly new for [ph] calendar effect of minus 0.1%.

In order to provide a clear picture of operating performance the numbers I will comment later on my speech will be adjusted for these three factors. On slide 3, we look at the group’s performance over the nine months of the year.

Reported sales in the period reached €61.4 billion. On the like for like basis excluding calendar and petrol, sales were up 2.7%.

When adding the 1.1 impact of store openings organic sales for the first nine months were up 3.8%. Let’s now turn to slide number 4, sales growth continued once again this quarter both in France and in international markets when adjusted for petrol and calendar.

In France, sales were up 0.2% on an organic basis. Reported sales were down 1.1% as they were impacted 1.5% by the drop in fuel prices.

I will comment in greater deals on France on the next slide. In international markets organic sales ex-petrol and calendar were up 5% this quarter.

Reported sales were up 0.8% despite an unfavorable 3.6% impact from currencies. Let me now provide you with further details on the regional basis starting with France on slide number 5.

France delivered another quarter of growth with organic sales up 0.2%. This performance was achieved in a quarter that was characterized by persistently tough competitive environments and unseasonably cool and rainy weather in July and August.

As you might know these two months were the rainiest on record since 1959 was twice the average amount of precipitation. I would also like to highlight that fruits and vegetable prices this summer were significantly lower than the previous year as a result of the better harvest this year than in 2013.

Keep in mind that fruits and vegetables account for 6% of in-store sales in hyper markets and 8% as far as super markets are concerned. Excluding the calendar impact, organic sales at hyper markets were down 0.2% ex-petrol.

Dry grocery sales were positive this quarter as they have been over the last eight quarters. Excluding the previously mentioned impact of fruits and vegetable prices overall food sales would have been positive.

Non-food sales were resilient and were also impacted by unusual weather in each of the three months this quarter, certain seasonal categories such as camping and sporting goods, barbecues, gardening tools and apparel were particularly affected. I should note that customer traffic was at again in hyper markets building upon increase which began in the second quarter of 2013.

Once again this quarter we delivered on our lowest cross-campaign called guaranteed lowest price. This consistency is a key factor behind Carrefour improved price perception in a highly competitive market.

This guarantee was also extended to some 200 back to school products. Organic sales at super-markets were down 1.1% on an ex-petrol, ex-calendar basis excluding the previously mentioned food and vegetable price impact or like for like super-market sales would have been flat.

Traffic was flat at super-market this quarter reflecting the impact of the poor weather conditions. Smaller formats saw strong organic growth of 5.1% excluding petrol and calendar.

In addition all our balance continued to increase the attractiveness this quarter which we measure through improving customer satisfaction and price perception. For over two years now we have stayed the course on the price fronts and we will continue to do so.

We continued the roll-out of price of click and collect sites. We opened a total of 70 drives so far this year bringing the total network to 480 units at early of September.

Let us now turn to the other European countries from slide number 6. As a whole the other European countries posted a 1.6% drop in organic sales.

In Spain excluding calendar and petrol like for like sales were down 1.2% both food and non-food sales were resilient this quarter despite unfavorable conditions and the impact of fruits and vegetable sales price. Italy posted organic sales down 4.8%.

Let me remind you that in Q2 we run a strong promotional event linked to the World Cup. Non-food sales were positive for the second consecutive quarter.

As far as food is concerned underlying trends improved on the back of tougher comparables. Let me add that in Italy we received the approval of the competition authorities for the Billa acquisition last week.

The closing of this transaction enables us to reinforce our multi-format strategy in Northern Italy where we hold strong positions. Belgium posted another quarter of growth with organic sales up 1.3% Romania posted like for like and organic sales growth in the quarter, while Poland recorded stable like for like's.

I should note that taken as a whole, non-food sales in Europe were positive once again this quarter, an encouraging sign in today's environment. Let's now turn on slide 7 to Latin America where both Brazil and Argentina turned in excellent performances.

Organic sales in this region were up 18.5% this quarter. The strong depreciation of the Argentinean peso versus the euro led to an adverse currency impact of 10.6% year on year.

Despite these impacts reported sales were up 6.9%. In Brazil organic sales were up 12.8% with like for like of 7.7% excluding petrol and calendar.

Both hypermarkets and Atacadao posted solid numbers. This is a good performance given the strong comparable base that was supported by inflation in 2013.

In Brazil our overall mix is largely focused on food, which clearly supports our growth today. In a further effort to address the needs of today's Brazilian consumers we are further expanding our multi-format model in that country.

In August we opened our first convenient express store with more openings in the coming months. Moreover, this month we inaugurated the first Supeco store in the country, a complimentary format to the bigger Atacadao stores.

Let me remind you that Atacadao is present in almost all states in Brazil that is I think 25 out of 26 states, providing it an excellent reach in terms of customer base. I would also note that the hypermarkets that we have now renovated this year in Brazil as part of our ongoing program to revitalize our stores have enjoyed a significant and encouraging sales uplift.

Argentina posted 34.6% organic sales growth excluding calendar, of which 30.5% was like for like. This performance was helped by high inflation.

The general price freeze which was loosened in June 2013 still applies today to 330 staple products. On slide 8, we move to Asia where organic sales were down 3.3% excluding calendar.

The unfavorable currency impact was a more muted 0.5% this quarter. Organic sales, excluding calendar fell by 3.7% in China on the back of tougher comparables.

The environment continues to be affected by the slowdown in discretionary spending, particularly for non-food and agro sales. Lower discount redemption and the lower price of important staple products such as pork and cooking oil, also impacted our sales there.

China also faced its own weather issues including cooler than average temperatures in the East. Our continued expansion in the country helped to partly offset this and contributed 4.5% of growth this quarter.

At the same time we continue to develop our own logistic capabilities in the Shanghai region. This will enable us to support the launch of our Masons [ph] convenience store network which we are about to test very shortly with our first store in Shanghai.

In Taiwan organic sales excluding calendar were down 2.2%. In conclusion on slide number 9 what are the key takeaways of this third quarter?

Overall, Carrefour posted a solid performance in the third quarter of 2014 showing sustained momentum. Our organic sales grew by 2.8% and our nine month sales grew by 3.8% on an organic basis.

This quarter once again demonstrates firstly the relevance of our multi-format model, leveraging our food offer, second, the benefits of reinvesting in our assets, thirdly, the consistency of our assets over time, fourthly, the continued loyalty of our customers. In this context we are staying the course on our 2014 operational priorities.

I will thank you for your attention. And, of course, as usual I will be happy to take your questions with the team around me.

Just two questions from me on France. So clearly the French market is difficult, but Pierre-Jean do you think the market is on balance today substantially more difficult than it was in the first half when you look at the macro inflation competitive landscape?

And do you see any competitor behaving irrationally? And I guess my second question on France is that if we could get your take on the recently announced bank groups among your competitors.

To what extent is it an issue potentially for Carrefour? And could we expect Carrefour to make an announcement in that area?

You mean an announce in the area of --?

Setting up a bank group with one of your peer competitors yes.

Bank group okay, understood. All right, okay.

France, consumption third quarter is it more or less difficult at the beginning of the year? I think a couple of things on this third quarter.

I think we very rarely dwell on the weather, but we had to in this third quarter. I think it was indeed the rainiest since 1959.

And it did impact, especially July/August. I think September was probably different but might have been a bit the other way round actually, but definitely impacted significantly July and August.

I think that's one element to keep in mind. The other element to keep in mind is indeed the price of fresh produce.

And when we say fresh produce we really mean there fruits and vegetables and we should restrict it to this. The reason for this we try to analyze a bit more detail then we could only find one specific reason which is that the harvest of 2013 had been of a low quality putting pressure obviously on price on the way up in that year, which obviously created a bit of a mismatch between this year when you compare unit prices to last year.

And I gave you in the speech obviously the kind of impact that had on our numbers in Q3. And I mentioned as well that this extended as well to the rest of Europe to some extent in particular Italy and Spain.

But actually it did impact as well countries like Belgium. So those are elements which were very much Q3 specific.

Now if you look at the way we have behaved as Carrefour in that context, definitely as I mentioned our dry groceries number were positive. I think that's obviously very important.

Secondly, traffic was positive in hyper, that's obviously very important. And I made as well some comments on price perception which obviously is something as you know which is very crucial in the way we've managed in the last two years.

So now to your point is the market more difficult? I would say that we are certainly in the context where the competition is fierce.

There is nothing new there. Are we seeing anything irrational?

That's not for me to comment on this. I can only talk about Carrefour and there I think our game has been a game of complete consistency.

And I am almost in a way getting a little bit dull in repeating for now almost three year's what I've said q-to-q which is that you know very well our strategy, we delivered on the price promise of 500 key items. I will add that in this third quarter we complimented this with 200 extra seasonal products.

In this particular case we added 200 cleaning products and 200 consumer electronic products at the end of September 2014. So we kind of complimented this particular list.

And as you know we are very competitive on an extra extended product list of 2,000 SKUs. And this is a game which has been pretty much constant I would say for now almost three years and we've stuck to this, and this has led to the kind of numbers I described and detailed for the third quarter.

That's as much frankly as I can tell you on France for this third quarter. Now on your question related to the agencies or to the consortium.

I don't know how you want to actually call these various tie-up announcements. Well, firstly I'm not going to comment on the move made by our competitors, but one thing I will say that simply always keep in mind that Carrefour is and will remain the largest integrated buyer of national branded products for the -- which are coming from the large international suppliers, which the central buying organizations address and of course this will be all the more true once we will have integrated DIA, once the relevant authorities will have approved this particular acquisition which is not the case yet.

The second point obviously I will add is that of course we will continue to grow our store network organically, because we will obviously on top of that renovate our store network. And you have been kept well aware of this with the remodeling programs that we've gone through on both hypers and supers.

And I want to add as well that we've had some new franchisees joining our network in the last few months as you probably know, which is probably as well a signal that our capabilities in the domain of purchasing are respected by the inside of the industry. So that's as much as I can tell you.

Are we going to make now announcements of this? Obviously if we were to make announcements I obviously wouldn't be in the position to tell you anything today.

But probably the answer on this one is the first part of my answer.

I have three questions. The first one France, you know last week at the LSA Conference (indiscernible) said that it prepared a surprise towards the end of the year.

So how do you see the Christmas period? And have you planned any specific marketing campaign for the end of the year?

A second question, in France have the first two weeks of October confirmed the better trend seen in September? And the last question on Spain what's your view on the competitive environment?

And have you seen any signs of ease of freight [ph] competition in particular from Mercadona?

Okay. I think -- I can't comment on the announcement made by one of our competitors.

Are we preparing anything special for the end of the year? When we do things like this we usually do not announce it in advance.

But I have nothing special. We have our regular obviously events, which are announced in our stores.

Some of them of course relates to the Christmas period. But nothing particular to say on what one of our competitors has mentioned at the LSA conference and certainly no specific comments to make on sales besides the fact that we will have our regular events which are customary for this particular part of the year as far as France is concerned.

You are asking me the trends in the first two weeks of October. I would be happy to give you the trends but we have that rule which we try to -- we are a bit old-fashioned, we try to stick to those rules and we normally do not update, we normally do not give you a trading update during quarters.

And I very much would like to stick to this because I think that's a rule we've kept. I think we've told that many, many times and I think frankly as far as I'm concerned we should continue to stick to this right?

I would like to do it but I will not because I think we should stick to the rules there. Thirdly, I think Spain -- I think you might be the one who asked me the question last quarter.

As far as Spain is concerned there it's a game of consistency. You remember three years ago that was at the time of Planet [ph], we basically didn't really develop Planet in Spain.

But you probably remember that we told you that we extracted from that concept a bit of the best stuff, especially in the domain of fresh products. And we invested money, a low level of money but still we invested money in a number of stores on the back of those fresh concepts in our stores.

And that has certainly helped us to turn around Spain and we've continued to invest in our stores in Spain consistently over these last three years. And I'm sure that has actually helped us in the turnaround of Spain.

The other thing you should keep in mind in Spain, and that's an important part of the answer to your question. We are one of the players in Spain with a genuine multi-format strategy because if you look at our portfolio in Spain it's of course made of hypermarkets, you know that.

You know that we have a very good hand of supermarkets, in particular in the region of Madrid. And now we have more than 10 Supeco stores and that's up and running and this is a format which is clearly giving us satisfaction.

Still early to comment on this, but now we have 10 stores and we have now those stores in various parts of Spain which enables us of course to get a bit more feed on -- a little bit more feedback as well from this experience, so again a consistency there. And not only the economy like in the rest of Europe but I think that this genuine multi-format strategy in that country makes us, when you compare it to the probably two key competitors that you have in mind, a bit of a different animal in that specific country right.

I think that is Spain. And I hope I have answered your three questions.

I have three questions please. I'm a little bit -- I was looking at the store count numbers for Asia and it's showing that you have 44 large [ph] stores in Asia and at the same time you're showing a contribution to the organic growth in Asia from store expansion.

So am I missing something or are you expecting that to reverse next year? The second question is the like for like's in China are clearly not getting better yet.

And as such what kind of sales performance would you need to see before you reconsider your strategy similar to what Tesco has done last year? And the third thing is you mentioned a few times traffic but I didn't see it in the press release or in the presentation.

So just to make sure that I understood correctly you're saying in supermarkets and hypermarkets you see better traffic year-over-year this quarter than last year. Thank you.

Okay. Well first question I think was on the stores.

You keep in mind that we had a bit of a one-off element in Asia with the closing of India. You know we had five cash and carry stores in our Indian business.

And we made, as I said, a specific press release to say that we had decided to exit India at this point. And we quoted the fact that basically the legislation there was not something at this particular point of time where we could see obviously a way to settle the business there.

We might come back there but at this particular point of time I think that's where we stand. So that's obviously a big part of the one-off explanation for the lower footprint in Asia.

Now the other part of the answer is as we had announced I think with the Q2 results we are doing a bit of trimming of our portfolio in China. We have about 240 stores now in China.

Historically we had shut very few of them, actually a handful of them, probably less than five. And we've closed two stores this quarter.

So nothing to write home about, a bit of trimming of the portfolio which certainly makes sense after 20 years of presence there just about and of course a very modest history of shutting stores in that specific country. You're third question relates to the level of like for like, which might make us reconsider our attitude in China.

I think, well first of all I think let's really look at the situation. And since you mentioned one of our competitors who pulled out, again we do not comment on competitors.

The only thing I will say is that the situation of our group is extremely different from the one of the competitors you mentioned for one simple reason which is let alone talking about retail or real estate strategy in that country was significantly different because keep in mind that out of 240 stores it's only a very small handful of stores which we own, so we have absolutely no real estate position in that country. It's a very modest handful of stores which we own.

Secondly, as a result of that and we've said that quite a few times in the past, we have actually built up a strong long-term position using accordingly a very limited capital employed and you probably have heard me in previous calls that we were talking about a few tens of millions of euros, so really something which is almost negligible given the size of a group like Carrefour. So again there is obviously to build on the long-term potential of that country.

We have a very strong banner with 20 years of existence. We capitalize on strength such as the role we play in food safety and I will add that there we have and operate 48 food safety laboratories in that country, out of which four are very large.

And let me tell you that these 48 compare to 38 last year, so we've added 10 laboratories in a country where food safety as you know is quite crucial. And we've invested in that domain since the very beginning, we were actually awarded the prize for best food safety company in China, in the food retail sector.

So I think maybe one extra thing, which I said in my speech but I will come back to it, because that's new and that's important for the future there. We continue to develop our own logistic capabilities in Shanghai because in that country as well we want obviously to enhance our multi-format strategy and these newly developed logistic capabilities will enable us to support the launch of our nascent convenience store network which we're about to test very shortly with the first store in Shanghai.

I think that's what I can tell you on China. Now, on traffic in France, I think, yes, you are totally correct, in the speech I gave you two specific numbers, first the traffic in the hypermarket was up for the sixth quarter in sequence, so that's absolutely factual.

And as far as supers are concerned the traffic was flat. But I qualified there that obviously, as you know, proximity stores such as in particular, supermarkets are more impacted normally by weather conditions and accordingly we had a flat traffic year-on-year, q-to-q, but I think there you have to keep in mind that the weather was extremely rainy in July and August and this might have been an explanation there.

Okay? So that's the point on the traffic in France.

Pierre-Jean, a follow-up on the perishable situation which was very tough in July and August. We had better statistics for (indiscernible) in France in September.

You say it's a cyclical phenomenon. When do you think perishables would have a neutral effect, if it's not already the case on your top line?

That's the first question, if you could elaborate a little bit on that. And the second one is on Brazil, would it be possible to have an updated breakdown of your sales between Atacadao and your hypermarkets?

And maybe give us some flavor of the uplift in sales in hypers once they were invited. Thank you very much.

Okay, perishables. Now I think this is -- it's an important question, we spent quite a bit of time to try to understand it because we had had a bit of a, I would say -- I wouldn't say conflicting but hybrid answers, we had answers such as, you know, Russia's embargo stopping obviously products from going to Russia and accordingly creating a bit of a surplus of offer in Q3, that's one thing we had and we had as well, as I just mentioned, the fact that the crop -- the harvest in obviously 2013 had been difficult accordingly pushing up prices, having looked at that in as much detail as we could we came up with the feeling, but obviously you might have your information, but certainly from the inside of our own purchasing departments, we came up with the answer being that the biggest part of the answer being the pressure on prices in 2013 on the back of a poor harvest that year.

Let me add though that some of that impact was obviously reversed in September. So we had July, August very much impacted, September seeing a little bit of a correction.

I can't tell you more, obviously that means our business was reset and that's the way you have to look at our numbers in terms of perspective, so clearly that's why said if you had excluded this impact on numbers it would have been certainly different from both hyper, supers and a couple of other countries. But I can't obviously predict those prices but certainly I can give you my best understanding of the cause for what took place in July and August.

Now, your next question and again let me repeat, it's only fruits and vegetables I don't extend it to the rest of fresh. Going now to the question on Brazil, well Atacadao is a bit more than 50% of our sales, the numbers were good so you have obviously to read from those numbers that both hypers and Atacadao delivered.

I won't give you the split because we don't give it normally so I won't give it this time more than I gave it previous quarters, they both delivered. The one thing you have to keep in your mind is that we have in that country something very important which is a multi-format strategy.

We have hypers, we have Atacadao and keep in mind, we rarely talk about that, we have supermarkets as well. And in this country we will be opening as well now a convenience store because we have just opened our first two Express convenience stores in Sao Paulo and we are even testing our first Supeco.

So that means that we are capable of leveraging our food offer not only on a variety of formats, which of course is a plus in this particular context in Brazil and keep in mind as well that now we are present in 25 out of 26 states by Atacadao and I can even tell you that we've just approved a store in the 26th state which will make us in the quarters to come present all across Brazil. I think that's probably the answer to the good number for this particular quarter in a country which has a lower GDP as you know very well.

A question on France please. Can you disclose the contribution of Drives and if not, there was a number circulating in there I think highlighting that your Drive sales could be only €200 million, so because I found the figures quite low, can you comment on that?

And the second one is to come back on the performances of the other formats in France, quite strong although we could have expected the convenience stores to have been impacted by the weather conditions too, so if you can comment on that? And finally, give us an update on the number of remodeled stores, both hypers and supers.

Thank you.

Okay, Drives, yes I saw that, well I shouldn't say 'I', we saw here in Carrefour those numbers. Now I can tell you that, I won't give you the number, it's too small, it's growing very fast but it definitely is too small.

It's no secret that we started late in this game but what I can tell you is that as at the end of September our numbers were already north of the number mentioned by, I think was it LSA, I think for the whole year. So as at today we are, as at today meaning end of September, we were already north of that number which was quoted, so that's probably not an answer but at least some answer.

It's growing fast but obviously too slow still to our taste for the reason of having started late. I gave you the number of Drives we've added to the fleet in the speech so I will not come back to that.

Your second question was on the other format, why is it that the other formats and I understand other formats as the convenience stores. Well I think two things, it's a format which has been quite dynamic, it's a format which has been growing as well in terms of fleet, we have silently added some stores to that fleet so it's a healthy and growing fleet and it's been doing well.

And, if anything, I would say it has gone there as well through some innovation, we rarely talk about it but our convenience stores have gone through renovation as well. And maybe I will say, if one category of store would have been a little bit helped by the weather, let's be honest when it rains sometimes the shoppers they want to go to something as close to where they are and maybe we, to the reverse of the others, maybe we were a bit helped there, but I can't say that for sure.

But since I told you we have been a little punished on the first two maybe we've been helped a little bit on this particular format because it's so much closer to where you live and you have obviously to spend less time under the rain. I think the number of remodels now, I think we normally update you on this so I will because I always give you that information and I will obviously continue to do so.

So hypers, in 2013, 49 hypers were renovated and this year which is now 2014, 35 hypers have been renovated and we have, as we speak 10 of them which are being impacted by works in the month of September and those stores absolutely outperform. I would say that for hypers it's a bit of a different kind of rhythm.

On Supers we see it almost on the day, on hypers it takes a little bit more time because you make your existing shoppers quite happy but then of course you need to spend a bit of extra time to tell the shoppers that you had lost and that you want to claw back to come back. And that takes a little bit more time but now we're doing this and we know how to make it work.

So that's for hypers. On the Supers I think we’re on a rhythm where 36 Supers will -- no excuse me, on Supers it's 60 Supers which year-to-date have been remodeled with a so-called new market concept, which when you add-up to basically the ones which have been done in the last two years this is now 165 supermarkets out of a fleet which you know is about 1000 of them, which are under the new market concept and that includes of course some of our franchisees.

And let me say, but we've said that in previous calls that this yearly renovation rhythm is of course expected to continue in the years to come.

Just to follow-up on the buying power expectation for 2015 given the arguably more equilibrium with four big fairly even buying groups, except less integrated some than others. How do you think that will affect your ability to buy?

Secondly, can you please just give us a bit more flavor on the macro backdrop in Brazil? Certainly it feels like it's slowing and one of your competitors has clearly seen weaker performance, perhaps partly self-inflicted but talk to any evidence of slowdown you may or may not be seeing.

And finally I think you've said on the (indiscernible) that you're comfortable with the full year profit expectation of €2.38 billion, can you just confirm that and say how comfortable you are around that.

The buying power of 2015, hard for me to comment on this, I think I gave you my best answer. Our organization was and still remains before the integration of DIA, the strongest integrated, and I think the important word in my answer is the word “integrated” central purchasing agency on what is really the key subject which is the purchase of national brand products from the, obviously the various industrial players.

This position, if and when the integration of DIA is confirmed which is something we expect between now and the end of the year can only be reinforced. And John, the other thing you should keep in mind is what matters there is not strictly the mere size it's as well the dynamic and the growth, I think that's something that you need to obviously integrate in your thinking process.

So that's something which obviously is important from that perspective. I added two more elements two question ago, one is that of course we plan to continue to organically grow our business and obviously there we use ammunition such as the remodeling of our stores, we've discussed that.

And lastly I mentioned that it's known in the industry, some names from the independents have joined our ranks in the last few months and I would assume that these people are probably the best judge to decide if our purchasing capabilities are good or bad. I think that's not for me to answer this but at least that's a fact.

Now your second question is on Brazil. I think it's well documented that the GDP of Brazil started slowing in 2013 so that's very well known.

It is and it has actually, it was forecast to slow further in 2014 and it has, that's a fact as well. You have to combine that to an element of uncertainty because of the political transition which is currently in motion and of course you all know that we will be expecting the results of the election I think in a bit more -- in a week and a half from now, right?

I think it's expected on the October 26, I'm told here in the room. So obviously this will play definitely a role depending on the outcome.

Now what about Carrefour? I think in the case of Carrefour let's keep in mind that we have a very strong food capability and it's in two ways.

A, it's strong because we are capable of offering food across a number of banners, I told you that and it's often ignored when we look at the portfolio of Carrefour, we have hypers, we have supers, we have Atacadao and now we are adding two extra formats. But you can look at the matrix in a different way, you can look at it in a geographical manner and we are present as well and that's very seldom referred to and mentioned, we are present in 25 out of 26 of the states of Brazil which is as you know, most of the continent.

So it's almost present in a dual matrix way which enables us definitely to leverage our presence on the food side at a time, for instance the middle class maybe who used to shop in one place at a particular price, might have the possibility in Carrefour for national brands to shop the same product maybe at a different price point. I think those are elements which matters.

Now on discretionary, yes of course there is a bit less obviously appetite during this period, but as you could see in our overall numbers the first part of my answer definitely helps certainly to offset at least some of the second part of the answer. Your last question John was on the consensus, so yes in the first call this morning I did have the question on the consensus, so I will obviously repeat what I said this morning.

The current median 2014 consensus for the recurring operating income stands at €2.38 billion and it is by-the-way a number which is unchanged to the dot versus the number at the end of Q2. This number is then broadly unchanged compared to the last time we spoke which was exactly a quarter ago and we continue to believe that it remains reasonable.

Of course I will make the same comment I made, exactly the same comment I made a quarter ago, is that given the importance obviously of the fourth quarter in our mix this is obviously based on the recent prevailing exchange rates, obviously because as you know very well, the importance of cross rates to the euro does matter. So that's the answer John on that one.

Two questions, first to continue on Brazil, Pierre-Jean can you remind us the weight of non-food and the like-for-like you have now. And how are you confident that food will not slow in the coming quarters?

And my second question would be on non-food in general. Did I understand it correctly that you said non-food sales was positive in Europe but it was negative in France?

I'm not sure I got it correctly. Thank you.

Two things, the mix, food/non-food overall for Brazil is 20%/80%, okay? That's 20% of course for non-food but I'm sure you got that and 80% for food.

Will food hold? You know I would love to tell you it has held.

Clearly, as you could see in Q3. We are offering, I won't repeat a third time what I just said two times, we are offering it on a variety of formats from obviously higher price to lower price.

We are extending this number of formats. But I can't tell you, it's obviously in this context a real plus to be a strong food player and to be able to play the keyboard obviously on various keys, but I can't guide you there because I am not in a position to.

I can only say that food by definition is a very primary need and we've seen that in a number of countries in our history obviously across the portfolio of Carrefour. Your second question was related to non-food in Europe and did I say that non-food was positive in Europe?

I think the answer is, yes, I said that it was Europe I think excluding France I think. And for France I said that it was slightly negative, we I think used the word resilience where I said slightly negative/resilient, but then keep in mind that we had a difficult comp and that's for France now.

Fabienne, just keep in mind that it's always difficult obviously to really quantify but the rainy July/August on the back obviously barbecues and else, you know the whole saga, that does obviously include some non-food element, that element is not strictly food-related so that has a non-food dimension there as far as France is concerned. Sorry, I interrupted you, go ahead.

Three questions as well from me. Firstly, Pierre-Jean we've seen a few announcement in terms of the franchisees that have joined Carrefour, but it is perhaps -- we've not seen some, perhaps some were not announced.

So it will be great if you were able to somehow indicate how much of annual sales these franchisees might add perhaps to 2015. So that would be very helpful to understand what changes we can think of for 2015 in terms of sales.

Secondly, are you able to give us an update on IT and supply chain projects in France, what has happened over the past three months here in these two important projects? And finally, in Italy we have seen the reversal from Q2 to Q3 which you have flagged already but you sound more optimistic here referring to improvement in underlying food sales.

What are you actually looking at when you talk about underlying food sales, if you can elaborate there that will be very helpful, thank you.

Okay Sreedhar, I think unfortunately on your first one -- it's not for me to give you numbers, I will let Georges Plassat comment on that maybe at year-end. But yes it's a fact that some franchisees have decided -- excuse me, some independents have decided to join our ranks as obviously part of our franchise portfolio, that's a fact and it's significant enough for me to mention it.

But I won't give you the square footage, Georges Plassat might decide to mention it at year-end. I will let him decide to make that announcement or not, but I will leave it at that.

I was only referring to this because since the question on our purchasing capabilities was asked, almost three times, at some point I think, and it's obviously a very important question so I fully appreciate you ask that question. But the reason why I mentioned some of these guys joins us, you know, usually these guys they know right because they belong to the industry and I was only mentioning this that maybe we could see that as a sign that our organization from the perspective which was put on the table three times maybe our organization is one which is credible.

On IT and supply chain, no Sreedhar -- just like the trading update, we try to stick to some simple rules. We will not answer questions related to income statement in this call.

I'm sure you can have questions with the team, they will definitely answer that off the call I think not that I want to stay away from this, not at all, but we try to keep it off the call as a rule, at least off the revenue call because this is what we are in today. Italy, now, Q2/Q3, yes I think Q3, well obviously negative like for like, so how could I call this a good number?

It isn't a good number but why do we see some encouragements and thank you for noticing it. A, now two quarters in a row where non-food is definitely positive, so as you know and we've discussed that many times Sreedhar, as part of reinventing the various countries we've worked on in the past, we've always spent quite a bit of tie on the various sub-categories of non-food.

If you go back to our calls on France, two years, actually three years ago, in those days we were discussing non-food very much and when we started working on the revamping plan of Italy, which is something which was now started a year and a quarter ago. Definitely we started implementing on textile, on general merchandise and very much on electronics revamping plan.

And these revamping plans are starting to deliver to some extent, nothing to write home about, but yes I do see some encouragement with two successive quarters of positive like for like on non-food in Italy. Now on food, encouraging trend means that basically we there have clearly closed the gap with our competitors.

You see the way we track Italy internally is we measure how our food like for like behaves vis-a-vis the ones of our very specific competitors in the regions where we are present in Italy, and you know those regions they are very, very well-known and I won't describe them again, we can describe that offline if you want more details on Italy. But in these three specific parts of Italy where we have strong positions there we now deliver like for likes which are still negative because as you know Italy is a very tough place in terms of consumption these days, but now we’re at par with our competitors which means that we've done a little bit of homework in the last year, not enough definitely not enough, but certainly we’re starting signs of the work which has been done now for as I said five quarters.

So these are the specific answers to that question Sreedhar.

Three questions if I may regarding Belgium and Poland. Belgium, you posted satisfying performance in Q3, is there any evidence that the market is getting better or did you benefit from disruption at one of your competitors, did you get market shares in Belgium?

Second, two questions for Poland actually where you also posted satisfying performance in Q3. Could you elaborate on this stable like for like sales performance in Poland, despite I think continuing or decelerating food inflation.

And the third question regarding Poland, do you see any consolidation opportunities given the difficulties of some of your competitors in this country? Thank you.

Okay market shares in Belgium, no I don't think, I would love to tell you we've gained market share but I don't think we have. I think we've just performed well in Belgium and if you look at our track record in Belgium for probably three quarters I would say, I think it has been and probably even more than that but the last three have been quite decent.

It's not been an easy market Belgium but, yes, we've been doing well. Why is that?

I would say it's a country where Carrefour went through the real tough work four years ago. I think to the credit of the management of Carrefour Belgium.

We went through the very tough exercise of resetting our business. I would say three to four years ago, and that's probably what explains that we can manage a decent job in the Belgium market of today.

The other thing is there as well we are multi-format, as you know, we have a business which is made of hypers but we have as well a strong proximity network and, of course we have a strong franchise network as well in that country. So the combination of all this, consistency in terms of approach, stable management as well, all those elements probably explains why we've performed decently in Belgium.

But maybe the most important part of the answer would be that we've pooled the hard work four years ago. On Poland, yes, thank you for noticing it, it's rarely commented on this call.

We had a better quarter because that's a territory where I think it's been a little bit more difficult the last couple of quarters, you are correct, the inflation has slowed so that doesn’t help, that's totally factual. It's a country by the way which remains, as you probably all know very promotional, so there we've had broadly flat like for like.

In Poland we've gone back to the basics, it's one of those countries where we've reworked the non-food part of the portfolio; we've reintroduced a focus on fresh products. We made a small acquisition, as you probably remember which added an element of offer to a portfolio in the domain of fresh, those were proximity stores.

And again, a consistent strategy with a stable management I think nothing really to write home about in Poland. But yes, thanks for mentioning it, I think it was a good quarter -- well it was a better quarter in Poland, good is a strong word, it was a better quarter.

I think I have the time to take one last question I'm told by the team here, so one last question please.

Just two questions if I may. The first one, China, can you confirm that you are gaining market share or not actually in China?

Because you talk about the economy and the slowdown but are you gaining market share or not in China would be my first question. The second one, which would be the last one, I understand that you don't want to comment, of course you know the recent trend, but you had last year a very strong anniversary campaign because it was the 50th anniversary or Carrefour last year.

So strong comps, does that mean that going forward we can expect potentially Q4 to be a bit more (indiscernible).

Okay, market share in China, I think market share in China -- China is not even a country it's a continent. I think the way we track it, we track it on four regions because market share at the Chinese level doesn’t mean much for a number of reasons.

So in the four regions which we track we are basically stable in two regions out of four and I think we might be marginally down in the other two. I think not much but a little bit and, as you know, we've trimmed up our portfolio of stores this quarter and the openings have been pretty much moved to the latter part of the year.

So that might have played a role. So I wouldn't say -- no drastic change in market share in China but if you want to have the details between the specific four regions I'll let the team region-by-region, A, tell you the way we track it and B, give you a little bit more flavor on this one.

But I would say all-in-all, no, no major change there. On the, obviously the fact we will get the anniversary of the anniversary, if I may say because that's essentially your question, yes, it is true, yes, we will have on Q4 to swallow what was the 50th anniversary and yes it's something we'll have to look at but I will not comment on that because that would put me in a position to guide you on Q4 and guide you on obviously in a way and give you a bit of a trading update.

But I'll stick to my rules. But this anniversary on anniversary was something we were very well aware of.

I think that's the best answer I can give to you still sticking to the principal I just depicted. Okay?

Okay I think, it's been an hour and ten minutes so it's been a bit of a longer call than usual, but anyway good questions. Thank you for your interest, thank you for your questions.

As usual the team is now absolutely available to answer anything we might not have answered in these questions and looking forward to see most of you probably in the months to come on the road or in subsequent meetings. Thank you very much and goodbye.