(AOF) – Figure of mass distribution in Brazil, Abilio Diniz died at the age of 87 in Sao Paulo. This billionaire, second shareholder of Carrefour via his family holding Peninsula, owned 8.83% of the French distributor’s shares at the end of 2022. He had sat on its board of directors since 2016 while co-chairing the strategic committee. He was also vice-president of Carrefour in Brazil. “Abilio Diniz nourished a singular passion for France and one of its flagships, Carrefour, of which he was an unwavering ally,” reacted on X, Alexandre Bompard, the CEO of Carrefour.
Last year, Forbes estimated the Brazilian billionaire’s fortune at $2.4 billion (€2.2 billion).
Carrefour will deliver its annual results tomorrow, Tuesday February 20.
AOF – LEARN MORE
Key points
– Leading European food distributor and second worldwide;
– Activity of €90.8 billion concentrated on three major markets, France for 46% of sales, the rest of Europe -Belgium, Spain, Italy, Poland, Romania- for 28% and Latin America -Brazil and Argentina -for 26%;
– Ambition to become world leader in food transition with focus on fresh and organic products (eating healthy, local and accessible to all) and rebalancing of activity in Latin America and Europe (Brazil, France and Spain;
– Capital marked by the strong presence of 5 shareholders: the Moulin family, also owner of Galeries Lafayette (12.91% of shares and 17.75% of voting rights), Peninsula Europe (7.61% and 11.83% ), Cervina Europe (4.99% and 7.67%) and Bunt (3.17%), with the 16-member board of directors headed by Alexandre Bompart, chairman and CEO;
– Controlled financial situation which will be strengthened in 2023 by the sale of Taiwanese establishments: net debt of €3.4 billion and free self-financing of €1.3 billion.
Challenges
– 2023 strategy based on 3 pillars:
–
€2.7 billion in annual investments, compared to €2 billion in 2022, free self-financing of more than €1.7 billion and cumulative cost savings of €5 billion (including €1 billion in 2022),
– positioning on products accessible to customers: own brand at 40% of revenues vs. 33% in 2022, acceleration of discount store formats: more than 470 Atacadão in Brazil and 1
time
opening of Atacadão in France in 2023,
– exploitation of non-commercial assets: joint company with Publicis to become number 1 in Europe in retail media and development of real estate via mixed projects in France and the 1
time
property from South America to Brazil;
– “Data-centric, digital first” innovation strategy around 4 axes: acceleration of e-commerce, rise of data & retail media, digitalization of financial services and distribution operations
– €2.8 billion in investments in information systems,
– strategic partnerships for the Carrefour Links platform
-30% of multi-channel customers and €10 billion in e-commerce revenue in 2026 vs. €4.2 billion in 2022)
;
– “Act for food” 2025 environmental strategy aiming for carbon neutrality in 2050:
– reduction of indirect emissions by 35% in 2025 and 40% of direct emissions,
– obligation to 100 1
ers
suppliers to adopt a 1.5 C trajectory by 2026,
– €8 billion in sales in sustainable food products including €500 million of plant origin and 50,000 sustainable agriculture partners vs. 30,000,
– issuance of “green” loans and, from 2023, employee shareholding plan to finance CSR projects;
– From. 2017, continued gains in market share in the 3 key countries (Brazil, France and Spain, i.e. 8/10ths of current operating income);
– Savings in equity via rental management and franchising of hypermarkets and supermarkets in France.
Challenges
– Long-lasting impact of inflation in transport, energy and food materials, offset by cost savings, the strengthening of Carrefour brand products, very accessible product ranges and loyalty programs;
– Confirmation of the success of the integration of the Brazilian Grupo BIG: after conversion of 59 stores to the Carrefour brand, finalization of the total program in 2023 and confirmation of 2 billion Brl of total synergies in 2025;
– After an 8.5% growth in sales, 2023 objective of an improvement in the operating margin and free self-financing;
– Dividend of €0.56 and share buyback program of €800 million.
Find out more about the “mass distribution” sector
Two major challenges for the sector
The turnover of distribution brands increased by 6.6% in the third quarter of 2022 according to the IRI panelist. Such a performance had not been recorded since the confinements of 2020. However, since the end of September, volumes have declined following the increase in prices. The results of French players, rather spared until now, should therefore suffer. Moreover, in the United States, Walmart and Target have issued warnings about their results.
Another challenge: logistical disorganization. According to NielsenIQ data, the out-of-stock rate increased further on the shelves to reach 5.8% at the end of October. This represents a shortfall of 3.5 billion euros since the start of the year. According to Système U, these disorders have never been observed for more than fifty years. The reasons are multiple: both climatic, geopolitical, logistical, inflationary, and also linked to the behavior of consumers, who stock certain items. On the other hand, the strike in the refineries seems to have had little impact because the brands managed to organize themselves.