1 A Service Strategic Preview: Q1 January – March April 2013 GILDAS AITAMER Retail Analyst STEPHEN SPRINGHAM Senior Retail Analyst

2 Analyst Comment: Strategic Preview: Carrefour Q1 “Carrefour is likely to post a performance in line with previous quarters, with Brazil representing the bulk of growth. While China is believed to have improved over the past quarter, we think that it will be too early to see the changes undertaken in that market filtering through to create meaningful improvements in like- for-like sales. “In Europe, we expect sales to be hampered by Spain and Italy, while the domestic market should see results in line with the previous quarter. Like-for-likes in convenience stores are likely to be impacted by the strong performance registered last year and so will consequently suffer by comparison. As for hypermarkets, general competitive pressures (such as the significant price cut programme operated by rival Casino) are likely to hold back possible improvements from Carrefour’s own EDLP commitment.” “Carrefour is likely to post a performance in line with previous quarters, with Brazil representing the bulk of growth. While China is believed to have improved over the past quarter, we think that it will be too early to see the changes undertaken in that market filtering through to create meaningful improvements in like- for-like sales. “In Europe, we expect sales to be hampered by Spain and Italy, while the domestic market should see results in line with the previous quarter. Like-for-likes in convenience stores are likely to be impacted by the strong performance registered last year and so will consequently suffer by comparison. As for hypermarkets, general competitive pressures (such as the significant price cut programme operated by rival Casino) are likely to hold back possible improvements from Carrefour’s own EDLP commitment.” GILDAS AITAMER Retail Analyst “It may not be acutely apparent in the Q1 trading figures, but Carrefour is slowly getting its house back into order. The structural reorganisation of the domestic hypermarket operations into regional (and sub-regional) divisions is a fairly radical but necessary step. But profitability remains under pressure in the short term as the aggressive price stance by its competitors leaves Carrefour with no option but to invest in price. There are also question marks as to the pace of roll- out and execution of its Drive format – a potentially high growth channel, but to date unprofitable. “With the divestment programme now largely complete (only a couple of markets remain in the spotlight), the international business is a leaner operation with scope to invest and grow. As Georges Plassat has already alluded to, we firmly expect Brazil and China to be the main international markets of focus going forward and welcome any further guidance on strategy in these two countries.” “It may not be acutely apparent in the Q1 trading figures, but Carrefour is slowly getting its house back into order. The structural reorganisation of the domestic hypermarket operations into regional (and sub-regional) divisions is a fairly radical but necessary step. But profitability remains under pressure in the short term as the aggressive price stance by its competitors leaves Carrefour with no option but to invest in price. There are also question marks as to the pace of roll- out and execution of its Drive format – a potentially high growth channel, but to date unprofitable. “With the divestment programme now largely complete (only a couple of markets remain in the spotlight), the international business is a leaner operation with scope to invest and grow. As Georges Plassat has already alluded to, we firmly expect Brazil and China to be the main international markets of focus going forward and welcome any further guidance on strategy in these two countries.” STEPHEN SPRINGHAM Senior Retail Analyst

1.Expectations for the Quarter 2.France: Q1 Strategic Changes 3.Global: Q1 Strategic Changes 4.Outlook 5.What’s new at Planet Retail Strategic Preview: Carrefour Q1

4 While we are expecting a slight improvement in France, like-for-likes will be impacted by the stronger results (and tougher comparables) of Q Actual Like-for-Like Sales Projected Like-for-Like Sales

5  We expect Carrefour to post slightly improved results in Q1, despite the contraction in consumer spending across Europe in general. While the divestment phase is reportedly over, we will also be looking for an update on possible divestments of non-core markets such as the ‘problem child’ of Turkey and underperforming Taiwan.  In its home market, Carrefour is likely to post negative like-for-likes given the high figures recorded in the same quarter last year. We expect hypermarket like-for-likes to have slowed over Q1 due to increased competition from the likes of Casino’s Géant hypermarkets, which have invested in substantial price cuts, and the absence of a revival in consumption generally.  Even so, we remain confident the recovery plan will drive positive performance in the longer term. With a sustained low price campaign in its domestic market and an end to divestments – with the one remaining question mark over Turkey - this quarter has perhaps been less flamboyant, but more effective, with Carrefour undertaking a major back-office reorganisation aimed at improving its supply chain, efficiencies and flexibility.  We are expecting Brazil to remain the main growth engine, boosted by increases in the minimum wage and consumer credit. We are looking for evidence of Plassat’s supposed improvements in China, where structural and management changes are likely to have impacted operations. We are hoping for updates on plans for India, where Carrefour has reportedly been in touch with the government and where rival Auchan is now moving ahead. A slight improvement expected for Europe’s largest retailer this quarter.