rationale - carrefour of the proposed transactions ... before €30m of logistic depreciation. ......

2

Rationale of the proposed transactions

Presentation of the proposed transactions

• 100% DIA spin‐off

• 25% Carrefour Property spin‐off

The new profile of Carrefour

Q&A

33

Presentation of the two proposed transactions

4

100% spin‐off of Dia

Simplification of the group’s organization Focus on our core brand & operations

A transaction that supports our strategy

The right alignment of factors• Limited synergies between Carrefour and DIA• Opportunity to develop Carrefour branded discount offer• Dia ready for independence• Attractive option for shareholder value

5

Dia is a strong and autonomous international Hard Discount player with limited interactions with Carrefour

The transaction will enable Carrefour to:

– Fully focus on Carrefour’s transformation plan

– Make its flagship brand the core priority

– Allow further development of Carrefour Discount & Carrefour convenience stores

none

Loyalty program Synergies

Human resources Synergies

none

Supply chain Synergies

none

IT Synergies

none limited

Purchasing & brandedproductsSynergies

Sharpening our focus on the Carrefour Brand and Banner


6

Benefits for Carrefour Benefits for Dia

Have full command of its own strategy and unleash its growth potential

Focus on its core brand and operating performance

Create value for Carrefour shareholders


7

25% spin‐off of Carrefour Property

Reveal embedded value of our real estate

A transaction that supports our strategy

The right alignment of factors• Right approach for real estate• Right expertise now in place• Right market conditions

Better manage our real estate assets

8

A partial spin‐off of Carrefour Property would enable Carrefour to :

– Focus on its retail business management

– Support group competitiveness through development projects on existing and new sites

– Instill market discipline and transparency while keeping control of strategic assets

– Crystallize, unlock and develop value of its real‐estate assets in France, Spain and Italy with a dedicated team of investment professionals

A logical step in Carrefour’s Real estate strategy

– Optimize value creation through alignment of Carrefour Property KPIswith real estate metrics

A listed Carrefour Property makes an attractive investment alternative in the European retail real estate sector


9


Benefits for Carrefour retail operations

Benefits for Carrefour Property operations

Become a leading operator in Europe with unique development opportunities

Drive more traffic to G3 sites and focus on its retail business

Improve value creation for Carrefour and its shareholders

Make sites more competitive and crystallize embedded value by leveraging on Carrefour’s

landbank & operations in G3

10

2011 priorities Focusing on the Carrefour Banner through the full demerger of Dia

11

A Full Demerger of Dia with Limited Carve‐out Impacts

Transaction structure


Financial structureFinancial structure

(1) Exc. treasury shares. (2) Before €30m of logistic depreciation.

Full demerger of Dia

Extraordinary distribution in July of a dividend to Carrefour shareholders in the form of Dia shares representing 100% of Dia share capital (1)

Key financialsKey financials2010 net sales of €9,588m (pro forma)

2010 EBITDA of €504m (2) (pro forma)

Carve‐out impact

Carve‐out impact

One‐off costs of c. €100m (including tax for internal reorganization, new financing, transaction fees, etc.)

Additional standalone back‐office functions required for Dia of c. €20m

Potential purchasing disynergies on national brand of c. €25m at Diaand c. €10m at Carrefour

Carrefour and Dia will maintain partnership for private labels in Europe to maintain synergies of c. €10m at Dia and c. €35m at Carrefour

Pro forma net financial debt of c. €625m as of 31/12/2010

Pro forma net financial debt / EBITDA (2) of c.1.2x as of 31/12/2010

12

A Pure HD Player with a Proven & Resilient Business Model

Dynamic store management2 A pure player in hard discount

3

4

1 #3 worldwide and #1 in emerging markets

A flexible ownership model

Proximity

Attraction

# of stores: 6,373

(1) Breakdown based on company owned & company operated stores excluding franchises

Breakdown of sales by brandProximity (1)

70%

Attraction (1)

30%

• Over 6,300 operated stores, mostly (90% (1)) rented• Dual format strategy with flexible local

management• Ongoing remodeling (c. 50% already

accomplished(1)) of traditional stores to Dia Market / Dia Maxi new formats

• #1 price image• Assortment: 3,000 SKUs per store• Dedicated supply chain• Strong private label recognition• Fresh food offer

• Exposure to both mature and emerging economies: Spain, Portugal, France, Brazil, Argentina, Turkey and China Integrated

stores

Franchised stores

Dia National Brands

13

Dia: #3 Hard Discount Player Worldwide and #1 in Emerging Markets

Sales (€bn) # Stores Since Ranking

€4.1bn 2,766 1979

€0.8bn 539 1993

€2.5bn 936 Integration of Ed in 2000

€1.0bn 408 2001

€0.6bn 448 1997

€0.4bn 890 1999

€0.2bn 386 2003 ns

€9.6bn 6,373Total

A worldwide leader with a solid geographic footprint in advanced and emerging economiesA worldwide leader with a solid geographic

footprint in advanced and emerging economies

1

2

3

1

1

2

14

Leading positions in Iberia, France and Emerging Markets

Sales (€bn) EBITDA (1) # Stores

€4.9bn €372m 3,305


€2.5bn €96m 936


€2.1bn €37m 2,132

France•Dia is the second Hard Discount network in France•Business model evolution towards franchise combined with conversion of Ed brand to Dia

Iberia•Mature markets in which Dia’s leading competitive position enables the company to generate recurring cash flows•Development plans through store modernization and transformation

Emerging markets•Leading position in emerging markets where the hard discount market is promising•Strong experience in emerging markets since 1997

52%

26%

22%

Sales

EBITDA

20132010

Iberia France Emerging

(1) Before €30m of logistic depreciation

15

Dia: a Strong Autonomous Model with Limited Interactions with

Carrefour

BrandBrandDia: independent brand vs. Carrefour

Own loyalty program with 21 million members

Supply chainSupply chain Independent supply chain fully managed by Diac. 40 warehouses in 7 countries

Autonomous in‐house and low cost I.T. systemInformation systemInformation system

ManagementManagementIndependent executive and operations management

based in Madrid and in local subsidiaries

PurchasingPurchasing

Autonomous purchasing and limited synergies with Carrefour c. €(25)m of disynergies on national brands at Dia and c. €(10)m at Carrefour Cooperation in Europe on private label with maintained

synergies of c. €10m at Dia and c. €35m at Carrefour

SG&ASG&AStand‐alone back‐office functions required

for Dia with an additional yearly cost of c. €(20)m

16

Financial Structure Post Spin‐off

NET DEBTOF DIA

NET DEBTOF DIA

New credit facility to be set up

Ongoing discussions with a pool of banksFINANCINGFINANCING

Capital structure well‐adapted for business environment

Pro forma net debt position of c. €625m as of end of 2010

Pro forma Net debt/EBITDA(1) of c.1.2x as of end of 2010


17

Net Sales

2010PF

Current operating income

€m – PROFORMA PROFIT & LOSS STATEMENT

Recurring Cash Flow

As a % of sales 5.3%

9,588

504

228

353

As a % of sales 2.4%

EBITDA(1)

Strong Performance of DIA operationsIn challenging market conditions

Net income adjusted for non recurring items c.110

Free Cash Flow 186

€m – PROFORMA NET FINANCIAL DEBT

Net debt c. 625

Net debt/EBITDA ratio c.1.2x

CAPEX 291


Growth +3.9%

18

Over 2,000 franchised stores Largest franchise network in Spain

Attractive hard discount segmentwith positive market dynamics

Attractive hard discount segmentwith positive market dynamics

Double‐digit growth of hard discount sales

# 3 worldwide leader in Hard Discountand #1 in Emerging Markets

# 3 worldwide leader in Hard Discountand #1 in Emerging Markets

Nearly €10bn salesAmong top 3 players in each market

Strong franchise expertise with low capital requirements

Strong franchise expertise with low capital requirements

Resilient operating margin and cash flow Continued strong expansion

Resilient operating margin and cash flow Continued strong expansion

Solid 3‐pillar geographic footprint with key leadership positions

Solid 3‐pillar geographic footprint with key leadership positions

Resilient markets:• Iberia: established leadership• France: banner conversionGrowth Markets• Emerging markets

Dia: a Unique International Hard Discount Pure Player

An experienced management teamAn experienced management team An average of 20 years of experience in retail


CAGR 2006‐2010 2010PF(before proforma adjustments)

Sales: + 6% EBITDA(1): €504mEBITDA: + 8% CAPEX: €291m

Flexible model adapted to local catchment areaA dual format strategy with local approachA dual format strategy with local approach

1919

2011 priorities A proposed new step in Carrefour’s Real

Estate strategy

20

Real Estate gross asset value(1/2) (GAV) as of end 2010 (€bn)

60% of GAV contributed to “New”Carrefour Property

“New” Carrefour Property:60% of total GAV

Hypermarkets(2) and supermarkets in France and hypermarkets(2) in Spain and in Italy

Other Europe(4/5)

“New” Carrefour Property (2/3)

(G3)

Asia (5/6)Total Carrefour (1/2)

17.2

10.4 (7)

2.7

0.9 3.2

Latin America (5)

Notes1 Excluding transfer duties and taxes. Unaudited figures. Management estimates except for “New Carrefour Property”2 Assets including stores and shopping malls3 Based on independent property appraisals as of December 2010. Unaudited figures4 Includes Poland and Romania and other French companies co‐owned with third parties5 Based on management estimates. Retail assets only. Group share. Excluding DIA6 Pro Forma from the disposal of assets in Thailand7 Average rental yield (excluding transfer duties and taxes) of 6.5%, as per independent appraisal

21

Listing Carrefour Property: a new step in Carrefour’s Real Estate strategy

Notes(1) Listed company, 99.5% owned by Carrefour(2) A portion of the tax impact will be offset by the use of existing tax credit



Merger/contribution of the French, Spanish and Italian Real Estate subsidiaries to Carrefour Property Development(1) (to be renamed Carrefour Property)

Distribution early July 2011 of an extraordinary dividend to Carrefour shareholders in the form of shares of Carrefour Property, representing c. 25% of Carrefour Property’s share capital

It is envisaged that the transaction will be submitted to Carrefour and Carrefour Property Development boards of directors at the end of April 2011. The transaction would require tax ruling in Spain and Carrefour shareholders’ approval

Carrefour Property would not opt for the “SIIC” regime

Carrefour Property would exit the group tax consolidation scope

One‐off estimated tax impact for Carrefour between €200m and €250m(2)

Tax considerations

Tax considerations

Very limited separation costs (expected at c. €5m related to reorganization of legal and corporate departments)

Pro Forma impacts

Pro Forma impacts

22

Listing Carrefour Property: a new step in Carrefour’s Real Estate strategy

Key financials1

Key financials1

Financial structureFinancial structure

Net rental income 2010PF: €676m, EBITDA 2010PF: €629m

Net current cash flow (EPRA earnings (2) ) 2010PF: €309m

Dividend target: 80% of EPRA earnings

Net debt 2010PF: €4.7 ‐ €4.9bn (intra‐group financing at arm’s length conditions)

40% to 45% loan to value target for 2011E ‐2015E, in line with SIIC listed peers

3/4 of the French supermarkets portfolio (2010 gross asset value: €1.4bn) earmarked for disposal to fund Carrefour Property’s development in the coming years

Notes1 Pro Forma for decrease in rents in Spain and Italy starting in 2011, and additional structure costs 2 EPRA means European Public Real Estate Association. EPRA earnings: recurring earnings from core operational activities

(corresponding to: EBITDA – net financial interest – current taxes – minor other adjustments)

23

A pure play property company in Europe, fully dedicated to retail Real Estate

FranceHypers(€5.1bn)

22% 49%

16%

6%

France Supers1(€1.6bn)

Spain(€2.3bn)

Italy (€0.7bn)

Key figures: 2010 Pro FormaThe “new” Carrefour Property

Gross asset value (€10.4bn)3

Notes1 3/4 of the French supermarkets portfolio earmarked for disposal over the business

plan period2 Shopping malls contribution included in hypermarkets3 Excluding transfer duties and taxes

FranceHypers(€321m)

26%47%

21%

6%

France Supers1

(€142m)

Italy (€42m)France

(Hypers)

France(Supers)

Spain(Hypers)

Italy(Hypers)

Net rents (€676m)2 Rental yields (6.5% avg.)2/3

Spain (€171m)

Shopping malls (€0.7bn)

7%

Gross lettable area: 4.3 million sqm in 915 sites within G3

161 hypermarkets in France €5.1bn GAV and 1.5m sqm

602 supermarkets1 in France €1.6bn GAV and 1.1m sqm

114 hypermarkets in Spain €2.3bn GAV and 1.1m sqm

29 hypermarkets and 9 supermarkets in Italy€0.7bn GAV and 0.2m sqm

Shopping malls and retail park €0.7bn GAV and 0.4m sqm

7.5%

6.8%

6.1%

Average: 6.5%

6.2%

24

Pipeline 2011E‐2015E (€2bn)

16%

84%33% 53% France

Spain

Italy

Shopping malls

Stores

27%52%

21%

Committed(land secured

and administrative authorizations obtained)

Controlled(land secured without full

administrative authorizations)

Stores Shopping malls

A €2.0bn pipeline offering c.10% yield

Identified (ongoing discussions without exclusivity)

1.1

0.3

France Spain Italy

26%

74%

6%

94%

15%85%

0.6

StatusGeographic breakdown

14%

Pipeline 2011E‐2015E breakdown (€2bn)

Type

9.2%

Average expected yield on cost(1)

9.0%

12.8%

France

Spain

Italy Avg. yield on cost: c. 10%

Significant land‐bank enabling the implementation of financially attractive developments

9.2%

9.0%

12.8%

(1) Expected rents divided by expected CAPEX

25

€676m

€770m€820m

Net rents: guidance 2015 (€m)

Focused on growth and asset diversification

92% 70%

30%8%

2015E

Impact of disposal of French

supermarkets2

PipelineRent

indexation

2010PF

+€65m1

+€200m

(€120m)

Notes1 Rent indexation assumptions: France (stores and shopping malls: 1.75%); Spain (stores and shopping malls: 1.75%);

Italy (stores: 1.75%; shopping malls: 1.33%)2 3/4 of the French supermarkets portfolio earmarked for disposal over the business plan period

Stores Shopping malls

A progressive diversification of business with pipeline completion and assuming disposal of French

supermarkets2

26

Gross rental income

EBITDA

€m

Net income

As a % of gross rental income

As a % of net rental income

€bn

Net rental income

€bn

Gross asset value² 10.4

4.7 ‐ 4.9Net Debt

5.5 – 5.7EPRA NAV3

Loan to value 45% ‐ 47%

Strong cash flow generation and sound capital structure

(€m)

(€bn)

Net current cash flow (EPRA earnings (1) )

97%

700

676

629

182

93%

309Target dividend pay‐out (EPRA earnings) 80%

Estimated 2010PF

Estimated 2010PF

Notes1 EPRA means European Public Real Estate Association. EPRA earnings: Recurring earnings from core operational activities (corresponding to:

EBITDA – net financial interests – Current taxes – minor other adjustments)2 Excluding transfer duties and taxes 3 Before deferred tax on latent capital gain (other than the planned sale of 3/4 of French supermarkets, Carrefour Property does not plan any other major

disposal, notably of hypermarkets)

27

Contemplated allocation of responsibilities between Carrefour

and Carrefour Property

Carrefour Property

Carrefour Property

Experienced management team – 307 professionals

Carrefour Property Carrefour

Property

Expansion DevelopmentAsset

managementProperty

Management

Implementation of strategies aiming at increasing asset value Identification of both investment and disposal opportunities

Structuring of the financial and technical operationsExecution of development projects from design to opening

Development of the group’s franchise

Operating of the facilitiesManagement of shopping malls tenants Rent collection

G3G3

Rest of the world

Rest of the world

28

Duration of hypermarket

leases

Duration of hypermarket

leases

12‐year initial fixed duration periodSequential renewal options to the benefit of Carrefour, totaling 71‐80 years of leases in France and Spain and 21‐30 years in ItalyGradual maturities to smooth out expiration dates, between 2081‐2090 in France and Spain and 2031‐2040 in ItalyStarting from 2011, decrease in rents in Spain and Italy, corresponding to €(48)m(1) Pro Forma impact in 2010

Fixed rents indexed on: • ILC (Indice des Loyers Commerciaux) in France • IPC (Índice de Precios de Consumo) in Spain• IPC (Indice dei prezzi al consumo) in Italy

Rents revised at market value at the occasion of the second lease renewal (ie. in a c.20‐year timeframe)

Triple net rents, in line with best market practices• Recurring works and repairs, including those related to article 606 of the French Civil Code(2) (heavy work), to be paid by Carrefour

One‐off heavy work identified by technical audits (estimated at c. €290m3) to be paid and performed by Carrefour Property

RentsRents

Charges and

conditions

Charges and

conditions

Secured lease agreements for both Carrefour Property and Carrefour

Notes1 Gross rent impact: €40m in Spain and €8m in Italy 2 Or similar concept in Spain and Italy3 Expenses incurred over a period of 7 years and already deducted from appraised GAV

29

Envisaged governance: arm’s length relationship between Carrefour and

Carrefour Property

Board of DirectorsBoard of Directors

Interactions between Carrefour

Property and Carrefour

Interactions between Carrefour

Property and Carrefour

Chairman: Carrefour representative

12 members with a 3‐year mandate: 6 Carrefour representatives (incl. the Chairman), 4 independent members, 1 Blue Capital representative and the CEO

Casting vote granted to the Chairman

Audit and Remuneration Committees

• 3 members: 2 independent members and 1 representative from Carrefour. Presidency: independent member

• Specific mission of the Audit Committee: review of the contractual relationships between Carrefour Property and Carrefour

Coordination Committee (6 members, 50/50 between Carrefour Property and Carrefour): Monitoring the implementation of lease contracts, management of information flow

Development Committee for each country (6 members, 50/50 between Carrefour Property and Carrefour): Monitoring the execution and achievement of development targets at country level

Reciprocal priority right regarding new development projects

Pre‐emption right granted to Carrefour in case of an hypermarket disposal

Carrefour will maintain rights to expand its stores notably for drive‐in concepts

30

Carrefour Property, a unique equity story

Note1 % of EPRA earnings

€2.0bn pipeline, 10% yield on costTarget 30% of shopping mall net rental

income in 2015E

The leading pure‐play property company in Europe fully dedicated to retail Real Estate, benefiting from

the Carrefour global franchise

The leading pure‐play property company in Europe fully dedicated to retail Real Estate, benefiting from

the Carrefour global franchise

2010 gross asset value: €10.4bn, in France, Italy and Spain

100% retail

Experienced management team delivering value across the whole Real Estate value chain

Experienced management team delivering value across the whole Real Estate value chain

More than 300 professionals Average of 15 years experience in real

estate for top management

Pipeline of projects offering superior risk‐adjusted returns and diversifying the tenant base

Pipeline of projects offering superior risk‐adjusted returns and diversifying the tenant base

An attractive dividend potentialAn attractive dividend potentialHigh cash flow / dividend generation (target dividend pay‐out1 of 80%)

Core portfolio long‐term leased to Carrefour with secured inflation‐indexed cash flow

Core portfolio long‐term leased to Carrefour with secured inflation‐indexed cash flow

€628m of net rental income in 2010PF collected from Carrefour and indexed

A sound financial profileA sound financial profileTarget LTV 2011E‐2015E in line with

peers (between 40%‐45%)

Clear and balanced governance between Carrefour Property and Carrefour

Clear and balanced governance between Carrefour Property and Carrefour

Compliance with AFEP‐MEDEF governance recommendations with

clear long term agreements

3131

Proposed spin‐off execution and timetable

32

BEFORE (1)BEFORE (1)

CARREFOUR PROPERTY

SHAREHOLDERS

CARREFOUR PROPERTY

SHAREHOLDERS

AFTER (1)AFTER (1)

25% 100%

CARREFOUR SHAREHOLDERSCARREFOUR SHAREHOLDERS

CARREFOUR CARREFOUR

75%

DIACARREFOUR PROPERTY

100% 100%

CARREFOUR PROPERTY

Proposed Legal Structure

DIA SHAREHOLDERS

DIA SHAREHOLDERS

DIA

100% 100%

CARREFOUR SHAREHOLDERSCARREFOUR

SHAREHOLDERS

Spin‐off through distribution of a special dividend in kind

Dia would be listed on the Madrid stock exchange

Carrefour Property would remain listed on the Euronext Paris stock exchange

Note1 Simplified organisation chart

33

Special distribution in kind of Dia shares

Carrefour shareholders would receive Dia shares

StructureStructure

Tax impactTax impact

ListingListing Madrid Stock Exchange

DIACARREFOUR PROPERTY

Merger/contribution of the French, Spanish and Italian Real Estate subsidiaries to Carrefour Property Developement(1) (CPD)

Special distribution to Carrefour shareholders of c. 25% of Carrefour Property share capital

Carrefour shareholders would receive Carrefour Property shares

Shareholders taxed according to standard dividend distribution regime

Euronext Paris

Transaction subject to Carrefour’s EGM approval

Employee representatives to be consultedRequirementsRequirements

Transaction subject to tax ruling in Spain and Carrefour and CPD EGM approvals scheduled in June 2011

Employee representatives to be consulted

Proposed Transaction Structure

Notes1 Listed company, 99.5%

owned by Carrefour

Carrefour would hold c. 75% and intends to retain control in the long term

Two listed companies with no capital links between them

Shareholders taxed according to standard dividend distribution regime

34

Proposed Timetable of the Two Transactions

March 3•FY 2010 results announcement

March 3•FY 2010 results announcement

Start of May•Ruling in Spain•Submission of the contribution appraiser report

Start of May•Ruling in Spain•Submission of the contribution appraiser report

Beginning of July•Distribution of Dia shares to Carrefour shareholders and listing of Dia

Beginning of July•Distribution of Dia shares to Carrefour shareholders and listing of Dia

May 18/19• AMF clearance of Document E

• Investor Day

May 18/19• AMF clearance of Document E

• Investor Day

End of June• CNMV expected approval of the securities note of the prospectus after Carrefour AGM

End of June• CNMV expected approval of the securities note of the prospectus after Carrefour AGM

Beginning of July•Distribution of Carrefour Property shares to Carrefour shareholders

Beginning of July•Distribution of Carrefour Property shares to Carrefour shareholders

May 18• CNMV expected approval of the registration document of the prospectus

May 18• CNMV expected approval of the registration document of the prospectus

June 21•Carrefour AGM•Spin‐off approvals

June 21•Carrefour AGM•Spin‐off approvals

MarchMarch MayMay JulyJulyJuneJuneAprilApril

End of May/ June•AMF clearance of documents for the special distribution in kind

End of May/ June•AMF clearance of documents for the special distribution in kind

June 23• Carrefour Property AGM: Merger and contributions approvals

June 23• Carrefour Property AGM: Merger and contributions approvals

Early March• Submission of Prospectus to CNMV

Early March• Submission of Prospectus to CNMV

May 19• Investor DayMay 19• Investor Day

35

The new profile of

36

€101.1 billion in salesInc. taxes, under Group banners 2010

TURNOVERTURNOVER

Operationsin 33 countries(18 integrated countries)31% emerging markets

9,564 stores (inc. franchisees)1,401 hypermarkets

11th largest employerin the world: around 411,000employees worldwide

N°2 retailerWorldwideN°1 European retailer

GEOGRAPHIC SPREAD

GEOGRAPHIC SPREAD

STORESSTORES

EMPLOYEESEMPLOYEES

MARKETPOSITIONMARKETPOSITION

A more focused anddynamic Carrefour

Carrefour Proformaafter spin‐off

Carrefour’s footprint: N°1 or 2 in 12 of 17 (1) countries

N° 1 and 2 leading positions N° 3 and 4 market positions (1) : 18 countries including INDIA

38

Carrefour Brand and banners

Concentration on core operating performance

Determined execution of transformation plan

FOCUSED

Unleashing potential of Carrefour‐branded products

Reinvigorating Western Europe through Planet roll out

Strong emerging market profile


DYNAMIC

39


TO BECOME THE PREFERRED RETAILERFOR OUR CUSTOMERS

FOR OUR SHAREHOLDERS

FOR OUR EMPLOYEES

41

2011 Agenda

DecOct Nov

April 14

Q1 sales

March 3

2010 Full Year Results

July 13

Q2 sales

August 31

2011 Half Year Results

June

Analyst Days

October 13

Q3 sales

Feb Mar May Jun Jul Aug SepAprJan

May 19

Investor Day Dia& Property

June 21

AGM

rationale - carrefour of the proposed transactions ... before €30m of logistic depreciation. ......

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