Consolidated Financial Statements as of December 31, 2019...Consolidated statement of cash flows (1)...

Consolidated Financial Statements

as of December 31, 2019

Carrefour group – Consolidated Financial Statements as of December 31, 2019 - 2 -

Contents

Consolidated income statement page 3

Consolidated statement of comprehensive income page 4

Consolidated statement of financial position page 5

Consolidated statement of cash flows page 6

Consolidated statement of changes in shareholders’ equity page 8

Notes to the Consolidated Financial Statements page 9


Consolidated income statement

The comparative consolidated income and cash flow statement information presented in this report has been restated to reflect the classification of Carrefour China in discontinued operations in accordance with IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations. These restatements are described in Note 5. On December 31, 2018, the integrated convenience stores business in France was classified in discontinued operations in accordance with IFRS 5. The Group applied IFRS 16 – Leases and IFRIC 23 – Uncertainty over Income Tax Treatments from January 1, 2019. Data presented for the comparative period was not restated, as allowed for by the transitional provisions of IFRS 16. Argentina is classified as a hyperinflationary economy within the meaning of IFRSs. IAS 29 – Financial Reporting in Hyperinflationary Economies is therefore applicable to the Consolidated Financial Statements for the year ended December 31, 2019. Comparative data for 2018 have also been adjusted for hyperinflation.

The Consolidated Financial Statements are presented in millions of euros, rounded to the nearest million. As a result, there may be rounding differences between the amounts reported in the various statements.

Details of earnings per share calculations are provided in Note 14.6.

(in € million) Notes 20192018 restated

IFRS 5% change

Net sales 7.1 72 397 72 355 0.1%

Loyalty program costs (746) (627) 19.0%

Net sales net of loyalty program costs 71 651 71 728 (0.1)%

Other revenue 7.1 2 491 2 438 2.2%

Total revenue 74 142 74 166 (0.0)%

Cost of sales 7.2 (58 054) (58 012) 0.1%

Gross margin from recurring operations 16 088 16 154 (0.4)%

Sales, general and administrative expenses, depreciation and

amortisation7.2 (13 999) (14 216) (1.5)%

Recurring operating income 2 088 1 937 7.8%

Net income from equity-accounted companies 10 2 14 (88.8)%

Recurring operating income after net income from equity-

accounted companies2 090 1 952 7.1%

Non-recurring income and expenses, net 7.3 (1 030) (1 129) (8.8)%

Operating income 1 060 823 28.9%

Finance costs and other financial income and expenses, net 15.6 (338) (258) 31.1%

Finance costs, net (214) (228) (6.2)%

Net interests related to leases commitment (107) -

Other financial income and expenses, net (17) (30) (42.7)%

Income before taxes 722 565 27.9%

Income tax expense 11.1 (504) (529) (4.8)%

Net income from continuing operations 219 36 511.4%

Net income / (loss) from discontinued operations 5 1 092 (380) 387.4%

Net income / (loss) for the year 1 311 (344) 480.8%

Group share 1 129 (561) 301.4%

of which net income / (loss) from continuing operations 32 (187) 117.0%

of which net income / (loss) from discontinued operations 1 097 (373) 394.0%

Attributable to non-controlling interests 182 216 (16.0)%

of which net income from continuing operations - attributable to

non-controlling interests187 223 (16.3)%

of which net loss from discontinued operations - attributable to non-

controlling interests(5) (7) (23.5)%

Basic earnings per share, in € 20192018 restated

IFRS 5% change

Net income / (loss) from continuing operations - Group share - per share 0.04 (0.24) 116.6%

Net income / (loss) from discontinued operations - Group share - per share 1.39 (0,48) 387.9%

Net income / (loss) - Group share - per share 1.43 (0.72) 297.2%

Diluted earnings per share, in € 20192018 restated

IFRS 5% change

Diluted net income / (loss) from continuing operations - Group share - per share 0.04 (0.24) 116.6%

Diluted net income / (loss) from discontinued operations - Group share - per share 1.38 (0.48) 387.6%

Diluted net income / (loss) - Group share - per share 1.42 (0.72) 297.0%


Consolidated statement of comprehensive income

These items are presented net of the tax effect (see Note 14.4).

(1) In 2019, exchange differences on translating foreign operations mainly result from the reversal of positive translation adjustments at Carrefour

China (i.e., 160 million euros) further to its sale in September 2019, and to a lesser extent from the depreciation of the Brazilian real. In 2018,

exchange differences on translating foreign operations mainly reflected the depreciation of the Brazilian real and, to a lesser extent, the

Argentine peso.

(2) Remeasurement of the net defined benefit liability recognised in 2019 reflects the decrease in discount rates applied for the eurozone, from

1.60% at December 31, 2018 to 0.75% at December 31, 2019. In 2018, these discount rates had increased, from 1.44% at December 31,

2017 to 1.60% at December 31, 2018.

(in € million) Notes 2019 2018

Net income / (loss) - Group share 1 129 (561)

Net income - Attributable to non-controlling interests 182 216

Net income / (loss) for the year 1 311 (344)

Effective portion of changes in the fair value of cash flow hedges 14.4 (5) (3)

Changes in the fair value of debt instruments through other

comprehensive income14.4 (0) (6)

Exchange differences on translating foreign operations (1) 14.4 (207) (446)

Items that may be reclassified subsequently to profit or loss (212) (454)

Remeasurements of defined benefit plans obligation (2) 13.1/14.4 (110) 50

Changes in the fair value of equity instruments through other

comprehensive income1 0

Items that will not be reclassified to profit or loss (109) 50

Other comprehensive loss after tax (321) (404)

Total comprehensive income /(loss) 990 (748)

Group share 855 (849)

Attributable to non-controlling interests 134 101


Consolidated statement of financial position

ASSETS

(in € million) NotesDecember 31,

2019

December 31,

2018

Goodwill 8.1 7 976 7 983

Other intangible assets 8.1 1 452 1 461

Property and equipment 8.2 11 370 12 637

Investment property 8.4 312 389

Right-of-use Assets 9.2 4 388 -

Investments in companies accounted for by the equity method 10 1 246 1 374

Other non-current financial assets 15.5 1 507 1 275

Consumer credit granted by the financial services companies – portion more than one year 7.5 2 283 2 486

Deferred tax assets 11.2 823 723

Other non-current assets 7.4 569 379

Non-current assets 31 927 28 709

Inventories 7.4 5 867 6 135

Trade receivables 7.4 2 669 2 537

Consumer credit granted by the financial services companies – portion less than one year 7.5 4 007 3 722

Other current financial assets 15.2 252 190

Tax receivables 7.4 838 853

Other assets 7.4 738 887

Cash and cash equivalents 15.2 4 466 4 300

Assets held for sale 37 46

Current assets 18 875 18 670

TOTAL ASSETS 50 802 47 378

SHAREHOLDERS’ EQUITY AND LIABILITIES

(in € million) NotesDecember 31,

2019

December 31,

2018

Share capital 14.2 2 018 1 973

Consolidated reserves (including net income) 7 921 7 196

Shareholders’ equity, Group share 9 940 9 169

Shareholders’ equity attributable to non-controlling interests 14.5 1 736 2 117

Total shareholders' equity 11 675 11 286

Borrowings - portion more than one year 15.2 6 303 6 936

Lease commitments - portion more than one year 9.3 3 660 -

Provisions 12 3 297 3 521

Consumer credit financing – portion more than one year 7.5 1 817 1 932

Deferred tax liabilities 11.2 655 541

Tax payables - portion more than one year 7.4 335 -

Non-current liabilities 16 066 12 930

Borrowings - portion less than one year 15.2 997 1 339

Lease commitments - portion less than one year 9.3 912 -

Suppliers and other creditors 7.4 13 646 14 161

Consumer credit financing – portion less than one year 7.5 3 712 3 582

Tax payables - portion less than one year 7.4 1 095 1 142

Other payables 7.4 2 649 2 938

Liabilities related to assets held for sale 49 -

Current liabilities 23 061 23 162

TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES 50 802 47 378


Consolidated statement of cash flows

(1) Restatements made to reflect the classification of cash flows relating to discontinued operations in accordance with IFRS 5

are detailed in Note 5.

(2) The change in working capital is set out in Note 7.4.

(3) Acquisitions mostly include operational investments in growing formats, the Group’s digitisation and the roll-out of a

leading omni-channel offering.

(4) This item mainly reflects the acquisition of a majority interest in the capital of So.bio (transaction described in Note 3.2.1). In 2018, this item mainly reflects the acquisition of a minority interest in the capital of Showroomprivé and a majority

interest in the capital of Quitoque.

(5) In 2019, this item mainly reflects the sale of the subsidiary Carrefour China (see Note 2.2).

(6) In 2019, this item mainly reflects the sale of distribution centres owned by the subsidiary Cargo Property Assets (see Note

2.3).

(7) In 2019 and 2018, this item mainly corresponds to the share capital of the subsidiary Cargo Property Assets, subscribed

and paid up during the period by third-party investors (non-controlling interests) prior to its sale (see above).

(8) Corresponds to cash dividends paid to shareholders who chose not to reinvest their dividends (see Note 2.7).

(in € million) 20192018 restated

IFRS 5

INCOME BEFORE TAXES 722 565

CASH FLOWS FROM OPERATING ACTIVITIES

Taxes (499) (502)

Depreciation and amortisation expense 2 328 1 437

Gains and losses on sales of assets 26 (29)

Change in provisions and impairment 287 486

Finance costs, net 214 228

Net interests related to leases 107 -

Net income and dividends received from equity-accounted companies 101 37

Impact of discontinued operations (1) 114 (115)

Cash flow from operations 3 400 2 107

Change in working capital requirement (2) 56 113

Impact of discontinued operations (1) (5) 56

Net cash from operating activities (excluding financial services companies) 3 452 2 276

Change in consumer credit granted by the financial services companies (205) (168)

Net cash from operating activities - Total 3 247 2 108

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisitions of property and equipment and intangible assets (3) (1 725) (1 560)

Acquisitions of non-current financial assets (24) (23)

Acquisitions of subsidiaries and investments in associates (4) (86) (189)

Proceeds from the disposal of subsidiaries and investments in associates (5) 338 1

Proceeds from the disposal of property and equipment and intangible assets (6) 347 169

Proceeds from the disposal of non-current financial assets 103 20

Change in amounts receivable from disposals of non-current assets and due to suppliers

of non-current assets (3)84 (21)

Investments net of disposals - subtotal (964) (1 602)

Other cash flows from investing activities (30) 9

Impact of discontinued operations (1) (20) (21)

Net cash used in investing activities (1 013) (1 613)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from share issues to non-controlling interests (7) 75 89

Dividends paid by Carrefour (parent company) (8) (106) (152)

Dividends paid by consolidated companies to non-controlling interests (116) (82)

Change in treasury stock and other equity instruments 0 42

Change in current financial assets (9) (2) (39)

Issuance of bonds (9) 930 1 758

Repayments of bonds (9) (1 530) (744)

Net financial interests paid (236) (240)

Other changes in borrowings (9) 131 (89)

Payments related to leases (10) (905) -

Net interests related to leases (10) (98) -


Net cash from financing activities (1 987) 529

Net change in cash and cash equivalents before the effect of changes in exchange rates 247 1 023

Effect of changes in exchange rates (81) (315)

Net change in cash and cash equivalents 166 708

Cash and cash equivalents at beginning of year 4 300 3 593

Cash and cash equivalents at end of year 4 466 4 300


Consolidated statement of cash flows

(9) Note 15.2 provides a breakdown of total borrowings. Changes in liabilities arising from financing activities are detailed in

Note 15.4.

(10) In accordance with IFRS 16, effective from January 1, 2019 (see Note 4), payments under leases along with any related

interest are shown in financing cash flows.


Consolidated statement of changes in shareholders’ equity

(1) At December 31, 2019, the share capital was made up of 807,265,504 ordinary shares (see Note 14.2.1).

(2) The Group applied IFRS 9 – Financial Instruments for the first time from January 1, 2018. In light of the Group’s chosen transition approach,

comparative data have not been restated and the impact (net of tax) resulting from the first-time application of the standard was recognised in

equity at January 1, 2018.

(3) The Group applied IAS 29 – Financial Reporting in Hyperinflationary Economies for the first time from January 1, 2018. In light of IAS 21,

comparative data have not been restated and the impact (net of tax) resulting from the first-time application of the standard was recognised in


(4) The 2017 dividend distributed by Carrefour S.A., totalling 352 million euros, was paid:

- in cash for 152 million euros; and

- in new shares for 200 million euros (corresponding to the aggregate par value of the new shares for 36 million euros and premiums for

164 million euros).

Dividends paid to non-controlling interests in 2018 came to 90 million euros and related mainly to the Brazilian and French subsidiaries.

The 2018 dividend distributed by Carrefour S.A., totalling 359 million euros, was paid:

- in cash for 106 million euros; and

- in new shares for 253 million euros (corresponding to the aggregate par value of the new shares for 43 million euros and premiums for

210 million euros).

Dividends paid to non-controlling interests in 2019 came to 136 million euros and related mainly to the Brazilian and French subsidiaries.

(5) Change in capital and additional paid-in capital in 2018 primarily concerned the new share issued by Cargo Property Assets to third-party

investors (non-controlling interests) in the second half of the year.

(6) The Group applied IFRS 16 – Leases for the first time from January 1, 2019. In light of the Group’s chosen transition approach, comparative

data have not been restated and the impact resulting from the first-time application of IFRS 16 (detailed in Note 4) has been recognised in


(7) For Group share data, the translation reserve in 2019 essentially reflects the transfer of exchange differences with a credit balance recognised by Carrefour China for a negative 130 million euros (see Note 2.2). Other consolidated reserves and net income recognised in 2019 relate to

the remeasurement of the net defined benefit liability following the decrease in discount rates applied for the eurozone.

(8) For data relating to non-controlling interests, the effect of changes in the scope of consolidation and other movements in 2019 essentially relates to the removal from the scope of consolidation of non-controlling interests in Cargo Property Assets (negative 442 million-euro impact)

and in Carrefour China (positive 70 million-euro impact) – see Notes 2.2 and 2.3.

Share

capital (1)Translation

reserve

Fair value

reserve

Other

consolidated

reserves and

net income

Shareholders' equity at December 31, 2017 1 937 (885) (24) 9 032 10 059 2 099 12 159

IFRS 9 first application adjustments (2) (141) (141) (119) (259)

IAS 29 first application adjustments (3) 237 237 0 237

Shareholders' equity at January 1, 2018 1 937 (885) (24) 9 129 10 155 1 980 12 136

Net income / (loss) for the year 2018 - - - (561) (561) 216 (344)

Other comprehensive income / (loss) after tax - (333) (5) 50 (288) (115) (404)

Total comprehensive income / (loss) 2018 - (333) (5) (510) (849) 101 (748)

Share-based payments - - - 6 6 1 6

Treasury stock (net of tax) - - - 42 42 - 42

2017 dividend payment (4) 36 - - (189) (152) (90) (242)

Change in capital and additional paid-in capital (5) - - - (15) (15) 113 98

Effect of changes in scope of consolidation and other movements - - - (17) (17) 12 (6)

Shareholders' equity at December 31, 2018 1 973 (1 219) (30) 8 445 9 169 2 117 11 286

IFRS 16 first application adjustments (6) (9) (9) - (9)

Shareholders' equity at January 1, 2019 1 973 (1 219) (30) 8 436 9 161 2 117 11 278

Net income / (loss) for the year 2019 - - - 1 129 1 129 182 1 311

Other comprehensive income / (loss) after tax (7) - (162) (3) (109) (274) (47) (321)

Total comprehensive income / (loss) 2019 - (162) (3) 1 020 855 134 990

Share-based payments - - - 10 10 0 10

Treasury stock (net of tax) - - - - - - -

2018 dividend payment (4) 43 - - (149) (106) (136) (242)

Change in capital and additional paid-in capital 2 - - (2) - 12 12

Effect of changes in scope of consolidation and other movements (8) - - - 19 19 (392) (373)

Shareholders' equity at December 31, 2019 2 018 (1 381) (33) 9 335 9 940 1 736 11 675

Non-controlling

interests

Total

Shareholders’

equity

(in € million)

Shareholders’ equity, Group share

Total

Shareholders’

equity, Group

share


Notes to the Consolidated Financial Statements


Note 1: Basis of preparation of the Consolidated Financial Statements page 10

Note 2: Significant events of the year page 12

Note 3: Scope of consolidation page 15

Note 4: Impact of changes in accounting policies page 19

Note 5: Discontinued operations and restatement of comparative information page 23

Note 6: Segment information page 26

Note 7: Operating items page 28

Note 8: Intangible assets, property and equipment and investment property page 38

Note 9: Leases page 44

Note 10: Investments in equity-accounted companies page 48

Note 11: Income tax page 50

Note 12: Provisions and contingent liabilities page 53

Note 13: Number of employees, employee compensation and benefits page 55

Note 14: Equity and earnings per share page 65

Note 15: Financial assets and liabilities, finance costs and other financial income

and expenses page 69

Note 16: Off-balance sheet commitments page 85

Note 17: Subsequent events page 86

Note 18: Fees paid to the Auditors page 86

Note 19: List of consolidated companies page 87



NOTE 1: BASIS OF PREPARATION OF THE CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements for the year ended December 31, 2019 were approved for

publication by the Board of Directors on February 26, 2020. They will be submitted to shareholders for final approval at the Annual General Meeting.

Carrefour (the “Company”) is domiciled in France. The Consolidated Financial Statements for the year ended December 31, 2019 reflect the financial position and results of operations of the Company and its subsidiaries (together the “Group”), along with the Group's share of the profits and losses and net assets of associates and joint ventures accounted for by the equity method. The presentation currency

of the Consolidated Financial Statements is the euro, which is the Company’s functional currency.

1.1 Statement of compliance

In accordance with European Regulation (EC) 1606/2002 dated July 19, 2002, the 2019 Consolidated

Financial Statements have been prepared in compliance with the International Financial Reporting Standards as adopted by the European Union as of December 31, 2019 and applicable at that date, with 2018 comparative information prepared using the same standards.

International accounting standards comprise International Financial Reporting Standards (IFRSs), International Accounting Standards (IASs), IFRS Interpretations Committee (IFRS IC) Interpretations and Standing Interpretations Committee (SIC) Interpretations.

All of the standards and interpretations endorsed by the European Union are published in the Official Journal of the European Union, which can be accessed in the EUR-Lex.

At December 31, 2019, the standards and interpretations adopted by the European Union were the same as those published by the IASB and applicable at that date.

1.2 Changes of accounting policies

The accounting policies used to prepare the 2019 Consolidated Financial Statements are the same as

those used for the 2018 Consolidated Financial Statements, expect for the following standards, amendments and interpretations, whose application is mandatory as of January 1, 2019:

IFRS 16 – Leases: the impacts of IFRS 16 on the Consolidated Financial Statements are described in Note 4;

IFRIC 23 – Uncertainty over Income Tax Treatments: the impacts of IFRIC 23 on the Consolidated Financial Statements are described in Note 4;

Amendments to IFRS 9 – Prepayment Features with Negative Compensation: these amendments had no material impact on the Consolidated Financial Statements;

Amendments to IAS 28 – Long-term Interests in Associates and Joint Ventures: these amendments had no material impact on the Consolidated Financial Statements;

Amendments to IAS 19 – Plan Amendment, Curtailment or Settlement: these amendments had no material impact on the Consolidated Financial Statements;

IFRS Annual Improvements – 2015-2017 Cycle: these amendments had no material impact on the Consolidated Financial Statements.



Adopted by the European Union but not early adopted by the Group

Standards, amendments and interpretations Effective date

Amendments to IAS 1 and IAS 8 – Definition of Material January 1, 2020

Amendments to IFRS 9, IAS 39 and IFRS 7 – Interest Rate Benchmark Reform January 1, 2020

Amendments to References to the Conceptual Framework in IFRS Standards January 1, 2020

Not yet adopted by the European Union

Standards, amendments and interpretations Effective date(1)

Amendments to IFRS 10 and IAS 28 – Sales or Contribution of Assets between an Investor and its Associate or Joint Venture

Application deferred indefinitely by the IASB

Amendments to IFRS 3 – Definition of a Business January 1, 2020

IFRS 17 – Insurance Contracts January 1, 2021

(1) Subject to adoption by the European Union.

The Group is currently analysing the potential impacts of applying IFRS 17. It does not expect the application of the other standards, amendments or interpretations to have a material impact on its Consolidated Financial Statements.

1.3 Use of estimates and judgement

Preparation of Consolidated Financial Statements involves the use of Group Management estimates and assumptions that may affect the reported amounts of certain assets, liabilities, income and expenses, as well as the disclosures contained in the notes. These estimates and assumptions are reviewed at regular intervals by Group management to ensure that they are reasonable in light of past experience and the current economic situation. Depending on changes in those assumptions, actual results may differ from current estimates. In addition to using estimates, Group management exercises his judgement when

determining the appropriate accounting treatment of certain transactions and activities and how it should be applied.

The estimates and judgements applied for the preparation of these Consolidated Financial Statements mainly concern:

• measurement of rebates and commercial income (see Note 7.2.1);

• useful lives of operating assets (see Note 8);

• definition of cash-generating units (CGUs) for the purpose of impairment tests on non-current

assets other than goodwill (see Note 8.3);

• recoverable amount of goodwill, other intangible assets and property and equipment (see Note 8.3);

• measurement of right-of-use assets and lease commitments in accordance with IFRS 16 – Leases (see Note 9);

• measurement of impairment of loans granted by the financial services companies (see Note 7.5.1), as well as provisions for credit risk on loan commitments (see Note 12.1);

• measurement of fair value of identifiable assets acquired and liabilities assumed in business combinations (see Note 3.1);

• recognition of deferred tax assets and some tax credits (see Note 11) and determination of uncertainties in income taxes under IFRIC 23 (see Note 11.4);



• measurement of provisions for contingencies and other business-related provisions (see Note 12);

• assumptions used to calculate pension and other post-employment benefit obligations (see

Note 12.1);

• determination of the level of control or influence exercised by the Group over investees (see Notes 3 and 10).

1.4 Measurement bases

The Consolidated Financial Statements have been prepared using the historical cost convention, except

for:

• certain financial assets and liabilities measured using the fair value model (see Note 15);

• assets acquired and liabilities assumed in business combinations, measured using the fair value model (see Note 3.1);

• non-current assets held for sale, measured at the lower of carrying amount and fair value less costs to sell.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly

transaction between market participants at the measurement date. In accordance with the hierarchy defined in IFRS 13 – Fair Value Measurement, there are 3 levels of inputs:

• Level 1 inputs: unadjusted quoted prices in active markets for identical assets or liabilities;

• Level 2 inputs: models that use inputs that are observable for the asset or liability, either directly (i.e., prices) or indirectly (i.e., price-based data);

• Level 3 inputs: inputs that are intrinsic to the asset or liability and are not based on observable market data for the asset or liability.

Argentina is classified as a hyperinflationary economy within the meaning of IFRSs. IAS 29 – Financial Reporting in Hyperinflationary Economies is therefore applicable to the Consolidated Financial

Statements for the year ended December 31, 2019; data for the comparative period presented have also been adjusted for inflation.

NOTE 2: SIGNIFICANT EVENTS OF THE YEAR

2.1 Simplification of the organisation as part of the “Carrefour 2022” transformation plan

In 2019, the following transformation plans were announced for France and Italy:

• On May 15, 2019, Carrefour Hypermarchés France signed a majority mutually agreed termination arrangement with its trade unions, and had approved almost 3,000 dossiers by the end of that year. The agreement notably concerns shutting down the jewellery department,

moving the multimedia department to self-service, and automating the petrol stations.

• On February 15, 2019, Carrefour Italy announced its transformation plan for 2019-2022 to the

trade unions. The plan sets out several operational measures, such as opening several hundred stores in the Market and Express formats, stepping up the e-commerce business, updating the hypermarket model and reducing surface area on a targeted basis in some supermarkets. The plan also details reorganisation measures leading to a significant reduction of the number of head office employees and sales teams, particularly at hypermarkets.

These transformation plans were rolled out in 2019. Most of the corresponding provisions remaining at December 31, 2019 (see Note 12.1) will be utilised in 2020.

2.2 Sale of Carrefour China

On June 23, 2019, the Group announced that it had signed an agreement to sell an 80% equity interest

in Carrefour China to Chinese group Suning.com. The sale took effect on September 26, 2019, following approval from the Chinese competition authorities.



With a presence in China dating back to 1995, the company Carrefour China operates a network of 210 hypermarkets and 24 convenience stores. In 2018, it generated net sales of 3.6 billion euros and EBITDA of 66 million euros.

The final sale price for the 80% interest in Carrefour China was 4.8 billion renminbi, corresponding to 615 million euros at September 26, 2019. A disposal gain of around 1.15 billion euros was recognised within net income from discontinued operations in 2019.

The agreement signed with Suning.com gives several liquidity windows for this residual 20% stake:

• During the 90 days following the second anniversary of the transaction date (September 26, 2019), the Group may exercise a put option to sell its residual 20% interest to Suning.com at a

price equal to 20% of equity as calculated at the date of the sale of the 80% interest, i.e., 20% of 6 billion renminbi, representing 153 million euros at the exchange rate as of December 31, 2019;

• At the end of this period and for a period of 90 days, Suning.com may exercise a call option to

purchase the residual 20% interest held by Carrefour at a price equal to 20% of equity as calculated at the date of the sale of the 80% interest;

• During the three years following the third anniversary of the transaction date, Carrefour may

exercise a put option to sell its residual 20% interest to Suning.com at market value;

• During the three years following the fourth anniversary of the transaction date, Suning.com may exercise a call option to purchase the residual 20% interest held by Carrefour at market value.

As the options exercisable from the second anniversary of the transaction have virtually the same characteristics and a fixed exercise price, it is considered virtually certain that they will be exercised and that consequently, the Group effectively sold its entire equity interest in Carrefour China on September

26, 2019. A financial receivable has therefore been recognised in this respect in the consolidated statement of financial position (within “Other non-current financial assets”) for 1.2 billion renminbi. The euro amount will be impacted by fluctuations in the EUR/RMB exchange rate, which will be taken to finance costs and other financial income and expenses (within “Other financial income and expenses”).

For more details on the impacts of this sale on the Consolidated Financial Statements for the year ended December 31, 2019, see Note 5.

2.3 Sale of Cargo Property Assets

During the spring of 2019, the Group began the process to sell its subsidiary Cargo Property Assets, which owns 22 distribution centres in France. A preliminary agreement to sell the subsidiary’s entire share capital was signed on July 10, 2019 with Argan, a listed property company, and the sale took effect on October 15, 2019. The subsidiary’s assets comprise property and equipment with a net carrying amount of 577 million euros at the effective date of the sale.

The sale price attributable to the Group amounted to 288 million euros (corresponding to 32%). The price was settled in cash for 231 million euros and in the acquirer’s listed shares for 57 million euros, representing around 5% of Argan’s capital following the transaction.

For accounting purposes, the disposal gain was adjusted for the impact of applying IFRS 16 to sale and

leaseback transactions (all non-current assets have been re-leased by the Group). A post-IFRS 16 disposal gain was recognised in 2019 for approximately 45 million euros before tax within non-recurring operating income.

In early December 2019, the Group sold virtually all of its stake in Argan held through private placements with institutional investors for 80 million euros, resulting in an additional 24 million-euro gain included in finance costs and other financial income and expenses. Following this transaction the Group held 0.2% of Argan’s share capital, which it sold in February 2020.

2.4 Unilateral promise given by Shopinvest to buy Rue du Commerce

On November 8, 2019, the Group announced that it had received a firm offer from Shopinvest for the acquisition of 100% of the share capital of Rue du Commerce. Following this operation, Rue du Commerce will join Shopinvest, an e-commerce group founded in 2011, which operates a portfolio of 11 websites, including 3 Suisses.



The divestment project has been submitted to the employee representative bodies of Rue du Commerce and remains subject to other customary closing conditions at December 31, 2019.

In accordance with IFRS 5, the subsidiary's assets and liabilities were classified within assets held for

sale and related liabilities from August 2019, and measured at the lower of their net carrying amount and fair value less costs to sell. In light of the financial terms of the unilateral promise given by Shopinvest, these assets were written down in full at December 31, 2019 against non-recurring operating income.

2.5 Securing the Group’s long-term financing

On May 7, 2019, Carrefour carried out a new 500-million euro eight-year 1.00% bond issue due May 2027. The issue’s settlement date was May 15, 2019.

On May 22, 2019, Carrefour redeemed 1 billion euros worth of six-year 1.75% bonds.

The two issues consolidated the Group’s long-term euro financing, kept the average maturity of its bond debt stable (at 3.5 years at December 31, 2019 and 2018), and further reduced its borrowing costs.

In June 2019, Carrefour amended and extended two credit facilities for a total amount of 3.9 billion euros, incorporating an innovative Corporate Social Responsibility (CSR) component in the

first CSR-linked credit transaction in the European retail sector.

The first credit facility (“Club deal”) was completed with a syndicate of eight banks for a total of 1.4 billion euros. The second credit facility (“Syndicated facility”) was negotiated with a syndicate of 21 banks for a total of 2.5 billion euros. Both facilities fall due in June 2024 and each can be extended twice for a further one-year period at Carrefour’s request.

These two operations are part of Carrefour’s strategy to secure its long-term financing sources, extending the average maturity of these facilities from 3.1 years to 4.5 years.

On January 7, 2019, Brazilian subsidiary Atacadão also issued short-term debentures in two tranches, for 200 and 700 million reals respectively (around 45 and 160 million euros). The first tranche matured and was redeemed on March 8, 2019. The second tranche with an initial maturity of January 6, 2020

was redeemed early on November 28, 2019.

On November 18, 2019, the Brazilian subsidiary issued long-term debentures in three tranches, for 450, 350 and 200 million reals respectively (around 100, 80 and 45 million euros), maturing in June 2022,

June 2024 and June 2026 respectively.

2.6 Bond buyback program

On November 14, 2019, Carrefour launched a partial bond buyback program covering the following bond tranches:

• 1 billion euros worth of 4.00% bonds maturing on April 9, 2020 (ISIN XS0499243300) (the “2020 bonds”);

• 1 billion euros worth of 3.875% bonds maturing on April 25, 2021 (ISIN XS0529414319) (the “2021 bonds”).

At the end of the buyback program, bonds representing a total nominal amount of 326,775,000 euros had been tendered to and accepted by Carrefour, including 198,085,000 euros worth of 2020 bonds and 128,690,000 euros worth of 2021 bonds.

The buyback was settled on November 26, 2019. On completion of the buyback, the residual nominal amount outstanding amounted to 801,915,000 euros under the 2020 bonds and 871,310,000 euros

under the 2021 bonds.

This operation reflects Carrefour’s dynamic debt management strategy aimed at optimising its borrowing costs and debt/equity structure.



2.7 2018 dividend reinvestment option

At the Annual Shareholders’ Meeting held on June 14, 2019, the shareholders decided to set the 2018 dividend at 0.46 euros per share with a dividend reinvestment option.

The issue price of the shares to be issued in exchange for reinvested dividends was set at 14.78 euros per share, representing 90% of the average of the opening prices quoted on Euronext Paris during the 20 trading days preceding the date of the Annual Shareholders’ Meeting, less the net amount of the dividend of 0.46 euros per share and rounded up to the nearest euro cent.

The option period was open from June 24 to July 5, 2019. At the end of this period, shareholders owning 70.44% of Carrefour’s shares had elected to reinvest their 2018 dividends.

July 11, 2019 was set as the date for:

• settlement/delivery of the 17,096,567 new shares corresponding to reinvested dividends, representing a total capital increase including premiums of 253 million euros;

• payment of the cash dividend to shareholders who chose not to reinvest their dividends, representing a total payout of 106 million euros.

NOTE 3: SCOPE OF CONSOLIDATION

3.1 Accounting principles

Basis of consolidation

The Consolidated Financial Statements include the financial statements of subsidiaries from the date of acquisition (the date when the Group gains control) up to the date when the Group ceases to control the subsidiary, and the Group's equity in associates and joint ventures accounted for by the equity method.

(i) Subsidiaries

A subsidiary is an entity over which the Group exercises control, directly or indirectly. An entity is controlled when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The Group considers all facts and circumstances when assessing whether it controls an investee, such as rights resulting from contractual arrangements or substantial potential voting rights held by the Group.

The profit or loss of subsidiaries acquired during the year is included in the Consolidated Financial Statements from the date when control is acquired. The profit or loss of subsidiaries sold during the year or that the Group ceases to control, is included up to the date when control ceases.

Intra-group transactions and assets and liabilities are eliminated in consolidation. Profits and losses on transactions between a subsidiary and an associate or joint venture accounted for by the equity method are included in the Consolidated Financial Statements to the extent of unrelated investors’ interests in the associate or joint venture.

(ii) Associates and joint ventures

Entities in which the Group exercises significant influence (associates), and entities over which the Group exercises joint control and that meet the definition of a joint venture, are accounted for by the equity method, as explained in Note 10 “Investments in equity-accounted companies”.

Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control of those policies.

Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.

(iii) Other investments

Investments in companies where the Group does not exercise control or significant influence over financial or operating policy decisions are qualified as available-for-sale financial assets and reported under “Other non-current financial assets”. The accounting treatment of these investments is described in Note 15 “Financial assets and liabilities, finance costs and other financial income and expenses”.

Business combinations

Business combinations, when the Group acquires control of one or more businesses, are accounted for by the purchase method. Business combinations carried out since January 1, 2010 are measured and recognised as described below, in accordance with the revised IFRS 3 – Business Combinations.



• As of the acquisition date, the identifiable assets acquired and liabilities assumed are recognised and measured at fair value.

• Goodwill corresponds to the excess of (i) the sum of the consideration transferred (i.e., the acquisition price) and the amount of any non-controlling interest in the acquiree, over (ii) the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. It is recorded directly in the statement of financial position of the acquiree, in the latter's functional currency, and is subsequently tested for impairment at the level of the cash-generating unit (CGU) to which the acquiree belongs, by the method described in Note 8.3. Any gain from a bargain purchase (i.e., negative goodwill) is recognised directly in profit or loss.

• For each business combination on a less than 100% basis, the acquisition date components of non-controlling interests in the acquiree (i.e., interests that entitle their holders to a proportionate share of the acquiree’s net assets) are measured at either:

– fair value, such that part of the goodwill recognised at the time of the business combination is allocated to

non-controlling interests (“full goodwill” method), or

– the proportionate share of the acquiree's identifiable net assets, such that only the goodwill attributable to

the Group is recognised (“partial goodwill” method).

The method used is determined on a transaction-by-transaction basis.

• The provisional amounts recognised for a business combination may be adjusted during a measurement period that ends as soon as the Group receives the information it was seeking about facts and circumstances that existed as of the acquisition date or learns that more information is not obtainable, or at the latest 12 months from the acquisition date. Adjustments during the measurement period to the fair value of the identifiable assets acquired and liabilities assumed or the consideration transferred are offset by a corresponding adjustment to goodwill, provided they result from facts and circumstances that existed as of the acquisition date. Any adjustments identified after the measurement period ends are recognised directly in profit or loss.

• For a business combination achieved in stages (step acquisition), when control is acquired the previously held equity interest is remeasured at fair value through profit or loss. In the case of a reduction in the Group's equity interest resulting in a loss of control, the remaining interest is also remeasured at fair value through profit or loss.

• Transaction costs are recorded directly as an operating expense for the period in which they are incurred.

At the IFRS transition date, the Group elected to maintain the accounting treatment for business combinations applied under previous accounting standards, in line with the option available to first-time adopters under IFRS 1 – First-time Adoption of International Financial Reporting Standards.

Changes in ownership interest not resulting in a change of control

Any change in the Group's ownership interest in a subsidiary that does not result in control being acquired or lost is qualified as a transaction with owners in their capacity as owners and recorded directly in equity in accordance with IFRS 10 – Consolidated Financial Statements. It is shown in cash flows from financing activities in the statement of cash flows.

Translation of the financial statements of foreign operations

The Consolidated Financial Statements are presented in euros.

An entity’s functional currency is the currency of the primary economic environment in which the entity operates. The functional currency of Group entities is the currency of their home country.

The financial statements of entities whose functional currency is not the euro and is not the currency of a hyperinflationary economy are translated into euros as follows:

- assets and liabilities are translated at the period-end closing rate;

- income and expenses are translated at the weighted average exchange rate for the period;

- all resulting exchange differences are recognised in “Other comprehensive income” and are taken into account in the calculation of any gain or loss realised on the subsequent disposal of the foreign operation;

- items in the statement of cash flows are translated at the average rate for the period unless the rate on the transaction date is materially different.

In both 2019 and 2018, Argentina was classified as a hyperinflationary economy within the meaning of IAS 29 (see Note 1.4).

Translation of foreign currency transactions

Transactions by Group entities in a currency other than their functional currency are initially translated at the exchange rate on the transaction date.

At each period-end, monetary assets and liabilities denominated in foreign currency are translated at the period-end closing rate and the resulting exchange gain or loss is recorded in the income statement.

Intra-group loans to certain foreign operations are treated as part of the net investment in that operation if settlement of the loan is neither planned nor likely to occur. The gain or loss arising from translation of the loan at



each successive period-end is recorded directly in “Other comprehensive income” in accordance with IAS 21 – The Effects of Changes in Foreign Exchange Rates.

Non-current assets and disposal groups held for sale and discontinued operations

If the Group expects to recover the carrying amount of a non-current asset (or disposal group) principally through a sale transaction rather than through continuing use, it is presented separately in the consolidated statement of financial position under “Assets held for sale” in accordance with IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations. Liabilities related to non-current assets held for sale are also reported on a separate line of the consolidated statement of financial position (under “Liabilities related to assets held for sale”). Following their classification as held for sale, the assets concerned are measured at the lower of their carrying amount and fair value less costs to sell and they cease to be depreciated or amortised.

All the assets and liabilities of the discontinued operation are presented on separate lines on each side of the statement of financial position after eliminating intra-group items.

A discontinued operation is a component of the Group that has been either disposed of or classified as held for sale, and:

- represents a separate major line of business or geographical area of operations; and

- is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; or

- is a subsidiary acquired exclusively with a view to resale.

It is classified as a discontinued operation at the time of sale or earlier if its assets and liabilities meet the criteria for classification as “held for sale”. When a component of an entity is classified as a discontinued operation, comparative income statement and cash flow information is restated as if the entity had met the criteria for classification as a discontinued operation on the first day of the comparative period.

3.2 Main changes in scope of consolidation

3.2.1 Transactions carried out in 2019

Sale of Carrefour China

See Note 2.2.

Sale of Cargo Property Assets

See Note 2.3.

Acquisition of So.bio

On July 18, 2018, Carrefour announced that it had acquired So.bio, a chain of retail stores specialised in organic products (12 outlets in France at December 31, 2019). This acquisition was subject to approval

by the relevant anti-trust authorities. On February 28, 2019, the transaction was approved by the anti-

trust authorities.

In accordance with IFRS 3 – Business Combinations, the Group measured the assets acquired and liabilities assumed at the acquisition date. Based on these provisional measurements, provisional goodwill in the amount of 37 million euros was recognised in the consolidated statement of financial position at December 31, 2019 in respect of the So.bio acquisition.

The revenue and profit attributable to So.bio recorded in the consolidated statement of comprehensive

income for the period was not material.



3.2.2 Transactions carried out in 2018

Strategic partnership with Showroomprivé

On January 11, 2018, Carrefour announced that it had signed a strategic agreement with Showroomprivé, Europe's second-largest online private sales player. This partnership is part of both groups' strategy of developing a leading omni-channel offering, and notably covers areas such as sales, marketing, logistics and data.

In order to seal the partnership, Carrefour acquired 16.9% of Showroomprivé's share capital (13.7% of its voting rights) on February 7, 2018. This took the form of an off-market acquisition of the block of

shares owned by Conforama, a Steinhoff group subsidiary, at a price of 13.5 euros per share, for a total amount of around 79 million euros, paid in full during the first half of 2018.

In December 2018, Carrefour acquired newly issued Showroomprivé shares at a price of 2.5 euros per share, representing a total investment of 11 million euros.

Following these transactions, Carrefour holds 20.5% of Showroomprivé’s share capital (representing 17.7% of its voting rights). The founders have retained 33.1% of the capital and 42% of the voting rights. These respective percentages remained unchanged at December 31, 2019.

Since the Group exercises significant influence over Showroomprivé in light of its representation on the company's Board of Directors, the shareholding acquired on February 7, 2018 was recognised in the Consolidated Financial Statements from the same date using the equity method of accounting. The equity method was still deemed the appropriate method to account for Showroomprivé following the December 2018 share issue and was also used in 2019.

Acquisition of Quitoque

On March 15, 2018, Carrefour acquired a majority stake in the Quitoque start-up, a leading player in

home-delivered meal kits and a French pioneer in the Foodtech industry. In accordance with IFRS 3 –

Business Combinations, following the evaluation of the assets acquired and liabilities assumed carried out by the Group, provisional goodwill of 36 million euros was recognised in the consolidated statement of financial position at December 31, 2018 in respect of the Quitoque acquisition. The final amount of goodwill recognised at December 31, 2019 was 36 million euros. The revenue and profit attributable to Quitoque recorded in the consolidated statement of comprehensive income for the period was not

material.

Acquisition of Planeta Huerto

On September 28, 2018, Carrefour announced that its subsidiary, Greenweez, Europe’s leading online distributor of organic products, had acquired Planeta Huerto. Based in Alicante, Spain, Planeta Huerto was created at the end of 2011 by the Sanchez brothers. In seven years, it has established itself as the undisputed leader in Spain and Portugal in online sales of organic, healthy and sustainable products. The revenue and profit attributable to Planeta Huerto recorded in the consolidated statement of

comprehensive income for the period was not material.

3.3 Scope of consolidation at December 31, 2019

The list of consolidated companies (subsidiaries and associates) is presented in Note 19.

The Group reviewed its analyses of control over subsidiaries in which it is not the sole investor, in light of changes in facts and circumstances during the year, and particularly those transactions described in Note 3.2. Based on its review, there were no changes in the type of control exercised over these subsidiaries.

3.4 Net income/(loss) from discontinued operations In 2019, net income from discontinued operations amounted to 1,092 million euros, corresponding mainly to the gain on the sale of Carrefour China to China’s Suning.com on September 26, 2019 (see Note 2.2). Net income from discontinued operations also includes the net income of Carrefour China in



the first nine months of 2019. This net income is reported on a separate line in accordance with IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations, together with the comparative 380 million-euro loss for 2018 (see Note 5), which essentially reflects the impact of discontinuing the

integrated convenience stores business in France in that year.

NOTE 4: IMPACT OF CHANGES IN ACCOUNTING POLICIES

The Group applied IFRS 16 – Leases and IFRIC 23 – Uncertainty over Income Tax Treatments from January 1, 2019.

A description of the main changes in accounting policies as a result of applying these standards and the

impacts of these changes are summarised below.

• Changes resulting from the application of IFRS 16 led to a net positive impact of 5.0 billion euros on total assets, including a negative impact of 9 million euros on equity. The Group has chosen to apply IFRS 16 using the simplified retrospective approach from January 1, 2019. Data presented for the comparative period was not restated, as allowed for by the transitional provisions of IFRS 16.

• The application of IFRIC 23 has not led to changes in the methods used to assess tax

uncertainties used by the Group to date. However, tax risks relating to income tax, previously classified in provisions, are now shown on a separate line under current or non-current tax payables, depending on whether they fall due within or after one year (in accordance with the decision published by the IFRS IC in September 2019). These provisioned tax risks amounted to 459 million euros at December 31, 2018 (392 million euros at December 31, 2017) - cf. note 7.4.5.

The table below summarises the impact of applying IFRS 16 and IFRIC 23 on the opening statement of

financial position in the Consolidated Financial Statements for the year ended December 31, 2019:

ASSETS

(in € million)December 31,

2018

IFRS 16 first

application

impacts

IFRIC 23 first

application

impacts

January 1, 2019

Goodwill 7 983 7 983

Other intangible assets 1 461 (41) 1 420

Property and equipment 12 637 (367) 12 270

Investment property 389 389

Right-of-use Assets - 5 244 5 244

Investments in companies accounted for by the equity method 1 374 1 374

Other non-current financial assets 1 275 191 1 466

Consumer credit granted by the financial services companies – portion more than one year 2 486 2 486

Deferred tax assets 723 723

Other non-current assets 379 (26) 353

Non-current assets 28 709 5 000 - 33 709

Inventories 6 135 6 135

Trade receivables 2 537 2 537

Consumer credit granted by the financial services companies – portion less than one year 3 722 3 722

Other current financial assets 190 42 232

Tax receivables 853 853

Other assets 887 (17) 870

Cash and cash equivalents 4 300 4 300

Assets held for sale 46 46

Current assets 18 670 25 - 18 694

TOTAL ASSETS 47 378 5 025 - 52 403



4.1. IFRS 16 – Leases

This note details the impacts of the first-time application of IFRS 16 – Leases on Carrefour’s Consolidated Financial Statements. These impacts do not take into account the IFRS IC’s decision of

December 16, 2019, the impacts of which are currently being analysed by the Group (see point iv). The IFRS 16 accounting policies applied to the Consolidated Financial Statements for the year ended December 31, 2019 are described in Note 9.

i) Impacts recognised at January 1, 2019, date of the first-time application of IFRS 16

The Group has chosen to apply IFRS 16 using the simplified retrospective approach from January 1, 2019. The 2018 Financial Statements have not been restated.

At January 1, 2019, the amount of lease commitments represents the present value of lease payments

due over the reasonably certain term of the lease.

The amount of right-of-use assets represents the amount of lease commitments, adjusted where necessary for leasehold rights and for any prepaid lease payments or lease incentives receivable from the lessor and recognised at December 31, 2018. This figure also includes a provision for dismantling where applicable. Right-of-use assets are adjusted for any onerous leases.

The discount rate used at January 1, 2019 is the incremental borrowing rate (the weighted average incremental borrowing rate at January 1, 2019 is 4.62% at consolidated level and 3.26% excluding

Carrefour China) as calculated over the initial term of each lease. This was calculated for each country using a risk-free yield curve and a spread (the same spread is used for all subsidiaries in a given country).

Leases concern:

• mainly property assets, both used directly by the Group and sub-let to third parties, such as store premises sub-let to franchisees and retail units located in shopping malls and shopping

centres;

• to a lesser extent, vehicles; as well as

• a few warehousing and storage contracts with a lease component.

SHAREHOLDERS’ EQUITY AND LIABILITIES

(in € million)December 31,

2018

IFRS 16 first

application

impacts

IFRIC 23 first

application

impacts

January 1, 2019

Share capital 1 973 1 973

Consolidated reserves (including net income) 7 196 (9) 7 188

Shareholders’ equity, Group share 9 169 (9) - 9 161

Shareholders’ equity attributable to non-controlling interests 2 117 2 117

Total shareholders' equity 11 286 (9) - 11 278

Borrowings - portion more than one year 6 936 (230) 6 706

Lease commitments - portion more than one year - 4 272 4 272

Provisions 3 521 54 (459) 3 116

Consumer credit financing – portion more than one year 1 932 1 932

Deferred tax liabilities 541 541

Tax payables - portion more than one year - 382 382

Non-current liabilities 12 930 4 096 (77) 16 949

Borrowings - portion less than one year 1 339 (45) 1 294

Lease commitments - portion less than one year - 984 984

Suppliers and other creditors 14 161 (2) 14 160

Consumer credit financing – portion less than one year 3 582 3 582

Tax payables - portion less than one year 1 142 77 1 219

Other payables 2 938 (1) 2 937

Liabilities related to assets held for sale - -

Current liabilities 23 162 937 77 24 176

TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES 47 378 5 025 - 52 403



The leased assets’ reasonably certain period of use is determined based on:

• the inherent characteristics of the different types of assets (stores, logistics warehouses, administrative buildings) and the country concerned by the lease. In the case of leased store

premises, the characteristics taken into account include the store’s profitability, any recent capital expenditure in the store and the existence of significant termination penalties in the case of integrated or franchised stores;

• a portfolio approach for leased vehicles with similar characteristics and periods of use. Four portfolios have been identified, corresponding to company cars, cars and vans for rental to customers, trucks and light commercial vehicles.

Reconciliation of off-balance sheet commitments at December 31, 2018 with IFRS 16 lease commitments at January 1, 2019

Applying IFRS 16 also impacts the following items in the Consolidated Financial Statements:

• at the transition date, right-of-use assets and lease commitments relating to leases previously

classified as finance leases under IAS 17 are written back at their carrying amount immediately

before the date of first-time application. Right-of-use assets relating to leases previously classified as finance leases represent 367 million euros, while finance lease liabilities represent 275 million euros;

• leasehold rights are now included as part of the initial measurement of the right-of-use assets. Reclassifications were made in the opening statement of financial position in this respect for 41 million euros;

• prepaid lease payments and lease incentives to be recognised over the lease term, which were initially shown in other assets and other liabilities, are now included in right-of-use assets;

• right-of-use assets have been derecognised and financial receivables recognised in respect of sub-letting arrangements granted over the residual period of the leases concerned. Recognition of these receivables had a negative impact of 9 million euros on opening equity.

At January 1, 2019, right-of-use assets relate to the following asset categories:

(in € million)

Operating leases commitments as a lessee at December 31, 2018 3 569

Contracts not accounted for in accordance with IFRS 16 exemptions (95)

Differences in duration determined under IFRS 16 related to termination and extension options which are

reasonably certain2 301

Non discounted leases commitments under IFRS 16 at January 1, 2019 5 775

Discount impact (793)

Discounted leases commitments under IFRS 16 at January 1, 2019 4 981

Finance leases liability under IAS 17 at December 31, 2018 275

Total lease commitments at January 1, 2019 5 256

including leases commitments - Portion less than one year 984

including leases commitments - Portion more than one year 4 272

(in € million)Right of Use

Assets

Land & Buildings 4 970

Equipment, fixtures and fittings 116

Investment property 158

Total 5 244



ii) Impact on segment information

At January 1, 2019, segment assets and liabilities increased in all regions following the application of IFRS 16:

iii) Practical expedients adopted by the Group at January 1, 2019

The Group applied the following practical expedients upon the first-time application of IFRS 16:

• use of a single discount rate for a portfolio of leases with reasonably similar characteristics. This approach was applied to vehicle fleets;

• use of its assessment of whether leases are onerous by applying IAS 37 – Provisions,

Contingent Liabilities and Contingent Assets immediately before the date of first-time application as an alternative to testing right-of-use assets for impairment at January 1, 2019. Right-of-use assets were adjusted by the amount recognised in respect of any provisions for onerous leases (leases at above-market rates) immediately before the date of first-time application;

• exclusion of initial direct costs from the measurement of right-of-use assets at the date of first-

time application;

• use of hindsight, such as in determining the lease term if the contract contains options to extend or terminate the lease.

The Group also chose not to review contracts to determine whether or not they contained a lease at the transition date. Accordingly, contracts not identified as leases under IAS 17 and IFRIC 4 before the date of first-time application were not reviewed. This practical expedient applies to all contracts entered into before January 1, 2019.

iv) IFRS IC decision of December 16, 2019

On December 16, 2019, the IFRS IC published its decision in response to a request for clarification on the following matters:

• determination of the enforceable period of an automatically renewable lease, or of an indefinite-term lease, that may be terminated by one of the parties subject to a specified notice period. The issue to be clarified concerned the notion of penalties on which the definition of the

enforceable period is based;

• the relationship between the useful life of non-removable leasehold improvements and the lease term under IFRS 16.

The IFRS IC:

• concluded that the economics of a lease (rather than just the legal form) should be taken into account to determine the enforceable period of a lease;

• provided clarification on the relationship between the lease term under IFRS 16 and the useful life of non-removable leasehold improvements.

Carrefour did not apply this decision when preparing its Consolidated Financial Statements at December 31, 2019, since it is currently analysing the potential impacts of the guidance. In view of the large number of leases entered into by the Group in the countries in which it does business, and the publication of this decision late in the financial year, the Group has not had sufficient time to analyse the decision and precisely determine its impacts.

(in € million) Group France EuropeLatin

AmericaAsia

Global

Functions

Right-of-use assets 5 244 1 265 2 252 240 1 251 235

Lease commitments 5 256 1 255 2 433 241 1 100 228



The Group’s analyses are focusing in particular on leases:

• that are automatically renewable or can be cancelled at any time;

• that concern underlying assets (stores, warehouses) such as non-removable leasehold

improvements and installations whose residual net carrying amount at the end of the IFRS 16 lease term could represent a significant penalty (within the meaning of the IFRS IC’s decision) for the Group. These cases could lead to an increase in the term of the corresponding leases under IFRS 16 and/or to an adjustment of the useful life of non-removable leasehold improvements and installations.

The Group’s analyses take account of the specificities of different store formats (convenience stores,

supermarket and hypermarkets), as well as the particular characteristics of each different region.

Once these analyses and certain peer discussions have been finalised, the Group will be able to determine whether or not this IFRS IC decision modifies its current application of IFRS 16. In particular, these analyses could call into question IFRS 16 assessments of the term of “3/6/9“-type leases in

France. The Group has several hundreds of these types of leases, for which it currently determines the lease term in accordance with the view expressed by the ANC in February 2018 (see Note 9.1).

In compliance with the rules laid down by the local stock market regulator, our Sao Paolo-listed

subsidiary Atacadão had to measure its IFRS 16 lease commitments in light of this decision when preparing its Consolidated Financial Statements for the year ended December 31, 2019. The impact of this measurement is not material at the Group level and has not been taken into account. Based on the principle of applying consistent accounting policies in the Consolidated Financial Statements and pending the results of the analyses currently in progress, the Group’s consolidated IFRS 16 lease commitments at December 31, 2019 were measured using the same principles as those applied in its opening statement of financial position at January 1, 2019.

4.2. IFRIC 23 – Uncertainty over Income Tax Treatments

IFRIC 23 clarifies how to apply the recognition and measurement requirements in IAS 12 – Income Taxes when there is uncertainty over applicable tax treatments.

The application of IFRIC 23 has not led to changes in the methods used to assess tax uncertainties used by the Group to date. However, tax risks relating to income tax, previously classified in provisions, are

now shown on a separate line under current or non-current tax payables, depending on whether they fall due within or after one year (in accordance with the decision published by the IFRS IC in September 2019). These provisioned tax risks amounted to 459 million euros at December 31, 2018 (392 million euros at December 31, 2017), including a 77 million-euro portion due in less than one year and a 382 million-euro portion due in more than one year.

NOTE 5: DISCONTINUED OPERATIONS AND RESTATEMENT OF COMPARATIVE INFORMATION

On September 26, 2019, the Group ceded control of its subsidiary Carrefour China (see Note 2.2). As Carrefour China represents a separate major geographic area of operations, it is considered a discontinued operation in accordance with IFRS 5. Accordingly:

• net income for the subsidiary is shown on a separate line of the income statement, “Net income/(loss) from discontinued operations”. To enable a meaningful comparison, its net income for 2018 was reclassified on this line;

• all cash flows relating to this subsidiary are shown on the “Impact of discontinued operations” lines in the consolidated statement of cash flows. Data for 2018 were similarly restated.



Main consolidated income statement aggregates for Carrefour China, classified as held for sale in 2019 and 2018 in accordance with IFRS 5, are as follows:

(1) The figures shown for 2019 include the earnings of Carrefour China up to September 26, 2019 and the impacts of applying IFRS 16 from January 1,

2019.

5.1 Impact on the 2018 consolidated income statement of the IFRS 5 restatement applied to Carrefour China

(in € million) 2019 (1) 2018

Net sales 2 610 3 646

Gross margin from recurring operations 649 913

Sales, general and administrative expenses, depreciation and amortisation (644) (946)

Recurring operating income / (loss) 5 (32)

Operating income / (loss) 6 (64)

Loss before taxes (57) (69)

Income tax expense (7) (10)

Net loss for the period (64) (79)

(in € million)2018

published

IFRS 5

reclassification

2018 restated

IFRS 5

Net sales 76 000 (3 646) 72 355

Loyalty program costs (740) 113 (627)

Net sales net of loyalty program costs 75 261 (3 532) 71 728

Other revenue 2 656 (219) 2 438

Total revenue 77 917 (3 751) 74 166

Cost of sales (60 850) 2 838 (58 012)

Gross margin from recurring operations 17 067 (913) 16 154

Sales, general and administrative expenses, depreciation and amortisation (15 162) 946 (14 216)

Recurring operating income 1 905 32 1 937

Net income from equity-accounted companies 14 - 14

Recurring operating income after net income from equity-accounted

companies1 919 32 1 952

Non-recurring income and expenses, net (1 161) 32 (1 129)

Operating income 758 64 823

Finance costs and other financial income and expenses, net (262) 4 (258)

Finance costs, net (233) 5 (228)

Other financial income and expenses, net (29) (0) (30)

Income before taxes 496 69 565

Income tax expense (539) 10 (529)

Net income (loss) from continuing operations (43) 79 36

Net loss from discontinued operations (301) (79) (380)

Net loss for the period (344) - (344)

Group share (561) - (561)

of which net loss from continuing operations (259) 72 (187)

of which net loss from discontinued operations (301) (72) (373)

Attributable to non-controlling interests 216 - 216

of which net income from continuing operations -

attributable to non-controlling interests216 7 223

of which net loss from discontinued operations -

attributable to non-controlling interests0 (7) (7)



5.2 Impact on the 2018 consolidated cash flow statement of the IFRS 5 restatement

applied to Carrefour China

(in € million) 2018 publishedIFRS 5

reclassification

2018 restated

IFRS 5

INCOME BEFORE TAXES 496 69 565

CASH FLOWS FROM OPERATING ACTIVITIES

Taxes (513) 11 (502)

Depreciation and amortisation expense 1 536 (99) 1 437

(Gains)/losses on sales of assets (29) 0 (29)

Change in provisions and impairment 488 (3) 486

Finance costs, net 233 (5) 228

Net income and dividends received from equity-accounted companies 37 - 37

Impact of discontinued operations (141) 26 (115)

Cash flow from operations 2 107 0 2 107

Change in working capital requirement 115 (1) 113

Impact of discontinued operations 55 2 56

Net cash from operating activities (excluding financial services companies) 2 276 0 2 276

Change in consumer credit granted by the financial services companies (168) - (168)

Net cash from operating activities 2 108 0 2 108

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisitions of property and equipment and intangible assets (1 611) 50 (1 560)

Acquisitions of non-current financial assets (3) (19) (23)

Acquisitions of subsidiaries and investments in associates (190) 2 (189)

Proceeds from the disposal of subsidiaries and investments in associates 1 - 1

Proceeds from the disposal of property and equipment and intangible assets 172 (2) 169

Proceeds from the disposal of non-current financial assets 20 - 20

Change in amounts receivable from disposals of non-current assets and due to

suppliers of non-current assets(28) 6 (21)

Investments net of disposals (1 639) 37 (1 602)

Other cash flows from investing activities 13 (3) 9

Impact of discontinued operations 13 (34) (21)

Net cash from/(used in) investing activities (1 613) 0 (1 613)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from share issues to non-controlling interests 89 (0) 89

Dividends paid by Carrefour (parent company) (152) - (152)

Dividends paid by consolidated companies to non-controlling interests (82) - (82)

Change in treasury stock and other equity instruments 42 - 42

Change in current financial assets (45) 6 (39)

Issuance of bonds 1 758 - 1 758

Repayment of bonds (744) - (744)

Net financial interests paid (245) 5 (240)

Other changes in borrowings (89) 0 (89)


Net cash from/(used in) financing activities 529 0 529

Net change in cash and cash equivalents before the effect of changes in

exchange rates1 023 0 1 023

Effect of changes in exchange rates (315) - (315)

Net change in cash and cash equivalents 708 0 708

Cash and cash equivalents at beginning of the period 3 593 - 3 593

Cash and cash equivalents at end of the period 4 300 - 4 300

of which cash and cash equivalent from continuing operations at the end of the

period4 300 (211) 4 089

of which cash and cash equivalent from discontinued operations at the end of the

period- 211 211



NOTE 6: SEGMENT INFORMATION

Accounting principles

IFRS 8 – Operating Segments requires the disclosure of information about an entity’s operating segments derived from the internal reporting system and used by the entity’s chief operating decision-maker to make decisions about resources to be allocated to the segment and assess its performance. Group’s operating segments consist of the countries in which it conducts its business through the integrated store network, as each country's results are reviewed monthly by the Group's Chief Executive Officer who is the chief operating decision-maker within the meaning of IFRS 8.

Countries located in the same region are considered to have similar characteristics and have been combined to create four geographical segments, as allowed by IFRS 8. These segments are:

• France;

• Europe (excluding France): Spain, Italy, Belgium, Poland and Romania;

• Latin America: Brazil and Argentina;

• Asia: Taiwan (China was sold in September 2019 and is shown in discontinued operations in 2019 and in 2018 as restated).

The income and expenses of certain support entities are allocated to the various countries proportionately to the services provided to each, with any unallocated income and expenses reported under “Global functions”.

Segment assets include goodwill, other intangible assets, property and equipment, investment property, right-to-use assets and “other segment assets”, corresponding to inventories, trade receivables, consumer credit granted by the financial services companies and other assets. Segment liabilities comprise lease commitments, suppliers and other creditors, consumer credit financing and other payables.

Segment capital expenditure corresponds to the acquisitions of property and equipment and intangible assets (other than goodwill) reported in the statement of cash flows.

The disclosures in the tables below have been prepared using the same accounting policies as those applied to prepare the Consolidated Financial Statements.

6.1 Segment results

(1) In 2019, recurring operating income before depreciation and amortisation does not include lease expenses under contracts now accounted for in

accordance with IFRS 16, excluding exemptions (see Note 4).

(2) In 2019, recurring operating income does not include lease expenses under contracts now accounted for in accordance with IFRS 16, excluding

exemptions. However, it includes depreciation charged against the corresponding right-of-use assets (see Note 4). In all, the net impact of applying

IFRS 16 is a 40 million-euro increase in 2019 recurring operating income. Recurring operating income in Latin America takes into account a

2019 (in € million) Total France EuropeLatin

AmericaAsia

Global

Functions

Net sales 72 397 34 765 20 999 14 665 1 968 -

Other revenue 2 491 824 667 855 84 61

Recurring operating income before

depreciation and amortisation (1)4 417 1 551 1 537 1 114 209 5

Recurring operating income (2) 2 088 547 657 833 83 (32)

Capital expenditure 1 725 875 366 420 47 17

Depreciation and amortisation expense (3) (4) (2 328) (1 004) (880) (281) (126) (37)

2018 restated IFRS 5 (in € million) Total France EuropeLatin

AmericaAsia

Global

Functions

Net sales 72 355 35 615 21 076 13 809 1 855 -

Other revenue 2 438 843 695 756 79 65

Recurring operating income before

depreciation and amortisation (5)3 403 1 185 1 122 983 138 (26)

Recurring operating income (2) 1 937 466 664 767 77 (38)

Capital expenditure (5) 1 560 683 385 429 43 19

Depreciation and amortisation expense (4) (5) (1 465) (719) (458) (216) (61) (12)



31 million-euro negative adjustment resulting from the application of IAS 29 in Argentina, compared to a 33 million-euro negative adjustment in 2018

(see Note 1.4).

(3) In 2019, depreciation and amortisation expense includes depreciation charged against right-of-use assets under contracts now accounted for in accordance with IFRS 16, excluding exemptions (see Note 4).

(4) Including the depreciation and amortisation relating to logistics equipment included in the cost of sales.

(5) CSI, responsible for IT project development for France, has been included in the “France” region since January 1, 2019. To enable a meaningful

comparison with 2019 segment results, the figures recorded by CSI in 2018 were reclassified from “Global functions” to the “France” region in 2018

segment results table. This led to the reallocation of (i) recurring operating income before depreciation and amortisation for 90 million euros, (ii) capital expenditure for 147 million euros, and (iii) depreciation and amortisation expense for 90 million euros.

6.2 Segment assets and liabilities

At December 31, 2019, assets and liabilities no longer include Carrefour China following its sale in September 2019 (see Note 2.2).

(1) Segment assets include right-of-use assets recognised following the application of IFRS 16 from January 1, 2019, representing 5,244 million euros at

that date (see Note 4).

(2) Leasehold rights and assets held under finance leases, previously recognised in other intangible assets and other property and equipment, are

included in right-of-use assets following the application of IFRS 16 from January 1, 2019. These represented 41 million euros and 367 million euros,

respectively, at January 1, 2019 (see Note 4).

(3) Segment liabilities include lease commitments (more than one year and less than one year portions) recognised following the application of IFRS 16

from January 1, 2019. Segment liabilities amounted to 5,256 million euros at January 1, 2019, including a more than one year portion of 4,272 million

euros (of which 230 million euros relating to finance leases recognised in accordance with IAS 17) and a less than one year portion of 984 million

euros (of which 45 million euros relating to finance leases recognised in accordance with IAS 17) (see Note 4).

(4) CSI, responsible for IT project development for France, has been included in the “France” region since January 1, 2019. To enable a meaningful

comparison with segment assets and liabilities at December 31, 2019, the figures recorded by CSI in 2018 were reclassified from “Global functions” to

the “France” region in the table of segment assets and liabilities at December 31, 2018. This led to the reallocation of other intangible assets for 431

million euros, property and equipment for 5 million euros, other segment assets for 161 million euros and other segment liabilities for 154 million euros.

December 31, 2019 (in € million) Total France EuropeLatin

AmericaAsia

Global

Functions

ASSETS

Goodwill 7 976 4 955 2 507 450 63 1

Other intangible assets (2) 1 452 646 551 172 20 64

Property and equipment (2) 11 370 4 908 3 281 2 806 373 2

Investment property 312 11 139 110 52 -

Right-of-use Assets (1) 4 388 1 417 2 074 265 419 213

Other segment assets 16 971 8 328 3 216 4 638 270 519

Total segment assets 42 470 20 264 11 768 8 442 1 197 800

Unallocated assets 8 332

Total Assets 50 802

LIABILITIES (excluding equity)

Segment liabilities (3) 27 492 12 607 7 897 5 418 1 040 531

Unallocated liabilities 11 635

Total Liabilities 39 127

December 31, 2018 (in € million) Total France EuropeLatin

AmericaAsia

Global

Functions

ASSETS

Goodwill 7 983 4 901 2 508 467 107 1

Other intangible

Consolidated Financial Statements as of December 31, 2019...Consolidated statement of cash flows (1)...

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