Carrefour CA
Q4 2012 Earnings Call Transcript
Transcript Call Date 03/07/2013

Georges Plassat - Chairman and CEO: So good morning and welcome. I will try and repeat the same thing again. Pierre-Jean Sivignon and myself, this is the second time that we have been going through this exercise together; the presentation of our annual accounts because he is going to make the presentation of everything that is essential and useful to the understanding of our results in terms of figures. After that, I will try to add something, something more dynamic perhaps in terms of our professional content so that you can understand where we are going and after that we will go to the usual question and answer session and we will try and answer your questions together depending on their nature. So once again thank you for being here with us and I will hand over straight away to Pierre-Jean Sivignon.

Pierre-Jean Sivignon - CFO: Good morning everybody. Before we look in detail at our financial results for 2012, I wanted to make a few introductory remarks and I wanted to draw your attention to certain numbers of significant operations which have had an impact on the period and which have also had an impact on the profile of the Group as a whole.

During the year 2012, the Group refocused its activities, so just to concentrate its resources on its multi format strategy in the mature countries, where we have a leadership position and in the emerging countries which have great potential for the growth. Two of these operations took place during the first half year and the three others during the last quarter of 2012.

During the first half year, we announced the reorganization of our partnership with the Marinopoulos Group in Greece. Carrefour disposed of whole of its 50% holding in our common subsidiary with the Marinopoulos Group and its now Marinopoulos which becomes the exclusive franchisee for the Carrefour banner in Greece, Cyprus, Bulgaria and Albania and some other Balkan countries too. This transaction was approved by the competent authorities on the 8th August last year.

We’ve also sold our activity in Singapore and we had two stores there and we took the decision to close those stores when the leases ran out because we considered the growth potential was inadequate. We’ve also disposed of our business in Colombia. This was in October last. This was sold to Cencosud, the Chilean group for a value of EUR2 billion. This transaction was approved at the end of November 2012.

Furthermore in October last, we sold our business in Malaysia to the Japanese group, Aeon. The disposal of the operations bought in EUR250 million and that transaction was finalized once again in October 2012.

Finally, we announced the sale of our 60% holding in Carrefour Indonesia last November. We sold this to our local partner, the CT Corp Group for a value of EUR525 million. The Carrefour banner remains present in Indonesia, because the CT Corp becomes exclusive franchisee in this country. The transaction was approved by the local authorities in mid-January of 2013.

In accordance with IFRS 5 standards, income and expenses from the discontinued activities in these five countries have been reclassified as net income from discontinued operations in 2012. In order to make comparisons easier, we have restated the income statement for 2011 on a like-for-like basis.

At the same time, we've strengthened our presence in three significant countries; France, Brazil and Argentina. In France, we've consolidated our position in the southwest by launching friendly takeover bid for the shares of our longstanding partner, Guyenne & Gascogne. We have therefore consolidated Guyenne & Gascogne as from the 1st of June. The six hypermarkets and the 28 supermarkets belonging to Guyenne & Gascogne, which were previously franchises, are now part of our consolidated network.

What's more, we have finalized our partnership with Itau Unibanco in Brazil concerning the financial services activities. This partnership with Itau Unibanco, which let me remind you, is the largest private bank in Brazil, enables Carrefour to develop its offering of financial services and insurance in Brazil while creating synergies.

Furthermore, we have strengthened our presence in Argentina, thanks to the acquisition of 129 Eki stores, (E-K-I) stores. These stores were reopened during the third quarter of 2012.

Now, once we have gone through these preliminaries, we can move on to the detailed examination of our performance in 2012.

Here then are the key figures for 2012 on this slide. First of all, net sales are up by 0.9% at EUR76.8 billion. Our commercial income is stable overall in terms of the percentage of turnover. In volume terms, it is up 0.8%.

Our EBITDA has gone down by 1.6% to EUR3.688 billion, and the current operating income has gone down by 2.6%. It now amounts to EUR2.14 billion.

The Group share of net profit has gone up considerably EUR113 million. The net income from discontinued operations is EUR1.12 billion and, consequently, the net income group share as a whole now amounts to EUR1.233 billion. That is to say three times higher than in 2011.

The Group's net debt at closure has gone down by one-third compared to 2011, it's now EUR4.3 billion. At the end of 2012, the ratio net debt over EBITDA that’s the traditional ratio which can (turn) this type of performance is now 1.2 at the end of the period.

Let's now have a closer look at these figures beginning with net sales. On this graph, you can see the way our sales have developed between 2011 and 2012. On a like-for-like basis, the increase in sales is 1%. When we look at the positive effect of expansion 0.6% and the negative impact of exchange rate differences 0.7%, our net sales in 2012 amount to EUR76.8 billion, that is up by 0.9%.

As you can see on the next slide, our net sales including fuel are supported essentially by the emerging markets this year. Our sales have gone up in Latin America by 4.6% at current exchange rate, 12.1% if we look at constant exchange rate.

In Asia, the sales have gone up by 10.3% at current exchange rates. If we correct exchange rate variations, the rise is 0.5%. In Europe, the economic situation is difficult particularly in Southern Europe and that has led to a drop of 3.1% in our sales at current exchange rates 2.7% if we correct the variations in exchange rates. In France, our sales have gone up 0.5%.

We will comment on our performance region-by-region in just a moment, but first of all, let's have a look at our commercial margin. The commercial margin has risen by 0.8% in mass and is stable in terms of percentage of sales at 22.1%. The comparison, of course, is with 2011. In the first and the second half years, this stability is due to an increase in the emerging countries combined with a slight drop in France and in Europe.

Now, let's have a look at our SG&A. SG&A, including the cost of assets have increased by 1.3% in 2012. Asset costs in volume terms increased by 3.1%. This reflects the increase essentially in rents due to our expansion and you know that expansion has continued essentially in China and Brazil. Apart from asset costs, overheads are stable as a percentage of turnover. There is inflation, notably, wage inflation and there is the cost of expansion. So these have been overall offset by cost savings made by our people in various different countries. We should note that costs have been particularly well-controlled in the second half year, where the increase is only 0.6% and there is therefore a drop in terms of percentage of sales.

Let's now have a look at our performance in the different regions. In France, our net sales including fuel rose by 0.5%. The second half of the year was better than the first half. The trends in our hypermarkets, sales improved and there were robust performances of the other formats.

Our recurrent operating income increased by 3.5% in value terms, amounting to EUR929 million. In percentage of sales, ROI, our recurring operating income is stable compared to 2011; it represents 2.6% of sales. This ROI improved in the second half year where it increased by 8.4%. The year was noteworthy for the various commitments we made in terms of guaranteed low prices, but our commercial margin benefited from a better balance between standard prices, special offers, and loyalty programs and therefore the impact on this was very low.

Over the whole year, still for France, SG&A went down slightly in volume terms and as a percentage of sales, more particularly in the second part of the year and this despite the impact of the various different government measures, which have been decided on over the last two years.

In France, the efforts that we've made to control costs, notably, concerning advertising costs, combined with the increase in sales have led to an increase in our ROI in the second half year, that was slightly better than our expectations.

We shall continue with these efforts in the long-term. We still have a lot of work to do there, of course, because of the market conditions with which you are familiar.

In Europe, then apart from France, here our sales including fuel for the year is down 13.1% before tax and at current exchange rates in the second half year, the economic situation had an impact on consumption and nondiscretionary expenses. This was particularly true in Southern Europe.

Our ROI is down by 20.6% for the year and this has been affected, of course, by the economic environment. It's essentially Spain and Italy which explain this drop.

In the second half year, consumption in Italy slowed down and there was an intensification of special offers here. In both these countries, price investments and targeted special offers are continuing in order to try to respond to the needs of consumers as best we can.

In terms of SG&A, we had to face up to increases in costs, particularly energy costs (initially). In this context the Group has reduced its volume costs overall and we should mention Spain particularly in this context. We are continuing to adapt our offering and our costs in this environment which remains extremely difficult. I would like to add that in Belgium, we continued to have a good level of performance and this confirms the upturn in our sales and our profitability in this country.

Turning now to Latin America, on this slide, we have robust performance in 2012. Sales are up 4.6% and the ROI has increased by 14.2%. In the second half year, the Group noted a slight acceleration of these trends compared to the first half of the year, increased therefore both in sales and in ROI. All our formats in Brazil have made a contribution to this good level of performance. In the zone as a whole, the commercial margin has resisted well, the costs reflect considerable wage inflation in Argentina and of course, there's also the continuing expansion of Atacadao in Brazil.

Now in Asia, the net sales at constant exchange rate is up by 10.3%. At a constant exchange rate, sales are overall stable in China and in Taiwan. In China, we've increased our market share towards the end of the year in most of the regions where we are present.

In the Asian zone as a whole, the commercial margin has held up well over to year, although there was a slight sign of weakening in the second half year. Distribution costs are up. This is due to wage inflation and also (and above all) because of continuing expansion in China. The local team has done a lot of work here to control costs and part of the increase has been offset by gains in productivity. Productivity, which has been improved in this country, we remain, therefore, confident that we have a good business model in China during this period of political transition which the country is going through. Overall, in Asia, the ROI is down by 10.3% (on) the year.

Let's now look at the improvement in our EBITDA between 2011 and 2012, and let's look at it in terms of the two half years. Over the year, we have an EBITDA which amounts to EUR3.688 billion, a drop of 1.6%. The margin remains robust at 4.8% of sales. This performance benefits from the increase of 0.7% recorded in the second half year, which offsets the loss or a drop at least in the first half year as you can see on the graph.

I'd like to draw your attention to a number of factors here concerning EBITDA. You can see these summed up here on this slide. First of all, 32% of our EBITDA comes from the emerging countries, that's an increase compared with the 30% of 2011. It's the same zones as you can see on the slide, which generates the highest margins 5.8% in Latin America, 5.5% in Asia. Europe represents 26% of the Group's EBITDA has suffered a loss over the year, but what's important is the good resistance in the second half year.

Finally, in France of course this is the largest section 42% of our EBITDA. France has a margin of 4.4%, which is stable compared to 2011 and which has been supported essentially by better performance in the second half year.

On the next two slides, I want to show you our business in terms of financial services and insurance, which now represent approximately 18% of the ROI of the Group for 2012. Growth has continued for all the key indicators relating to this line of business. Restated to take account of divestments, the number of cards circulating note it was 14.6 million units, that's up 9.3% compared to 2011.

Outstanding credit has increased by 0.6% and now amounts to EUR5.9 billion and the insurance premiums are up by 5.2% to EUR294 million. Where is that number of commercial developments during this year? Let me give you a few examples. In France, we have continued the rollout of the Carrefour Bank brand. We also launched a savings account offering, which was welcomed by consumers and we can now offer consumers for example, improved interest rates depending on their in-store purchases.

In the emerging markets, we have finalized our partnership with Itau Unibanco in Brazil, as I said earlier, and we have reached new commercial agreements, including one signed with E.Sun Bank in Taiwan, in Asia therefore.

On this slide we highlight the leading indicators for our financial services business. In 2012, the net banking income is up by 1.0% and now amounts to more than EUR1 billion, and the ROI amounts to EUR399 million, more or less stable compared to 2011. That shows that our model is extremely resilient and has held up well in this difficult economic environment.

You can also see the distribution of the ROI by line of business and in terms of geographical zones. Banking represents 77% of ROI and insurance 4%. The remainder comes from warranty extensions sold in our stores and from costs savings on card processing.

The result is equally distributed between France 33%, Europe 32% and the other markets 35%. This mix is well-balanced; distribution is overall unchanged compared to 2011.

Let's now move on to our net income statement. Our net income has improved considerably. It now amounts to EUR552 million. This includes nonrecurring items, which totaled EUR707 million. I'll go into them in some more detail.

First of all, asset disposals amount to EUR234 million. In large part, this represents the sales of our participation in Altis and the various property sales recorded in France.

Secondly, asset impairments, which amount to EUR236 million. These are mostly tangible assets. Thirdly, the costs of restructuring, which amount to EUR285 million and which concern essentially Europe. Finally, the other elements, non-recurring items, which represent EUR419 million, most of this sum concerns the update of provisions.

I should make it clear that the cash impact of these non-recurring items should amount to approximately EUR300 million in coming years.

Let's move on now to financial expenses, EUR882 million for 2012. I would like to distinguish two categories here. First of all, the net cost of financial debt, EUR486 million. The average financial debt is down slightly, down from EUR8.7 billion in 2011 to EUR8.4 billion in 2012. Financial expenses have gone up by 5%. This is explained by the rate structure of our debt. We essentially have fixed interest debt.

Secondly, in this category, I would like to highlight two elements. First of all, among the other financial expenses, the interests and penalties for late payments have gone down by 50%, thanks to the resolution of a certain number of disputes in 2012. Secondly, we have an exceptional item of EUR216 million. This is linked to our management of our debt structure in the context of the reduction of Group debt that won't have any cash impact.

Let's move on now to the next part of our income statement. Overall, and as I said earlier, the net income Group share amounts to EUR1.233 billion. This is a little bit improvement compared to 2011.

Taxes amount to EUR388 million in 2012 and that's a significant drop compared to the EUR931 million of 2011. Let me remind you the tax burden in 2011 included an exceptional provision of EUR268 million and the effective tax rate restated amounts to 35.7% effective tax rate.

The share of companies accounted for by the equity methods amounts to EUR72 million when we take into account minority interests, which are down because of the overall consolidation of Guyenne & Gascogne. The net income group share amounts to EUR113 million for continuing operations and that's a significant improvement compared to the loss of the previous year.

The net income from discontinued operations amounts to EUR1.12 billion, essentially that is due to the restructuring of the Group's activities in 2012.

(Technical difficulty) which now brings me to our operating working capital. The situation has improved by 0.4 days of cost of goods sale and is now at 30.4 days in overall. The inventory turnover has improved to five days and this is mainly due to our three main markets France, Spain and Brazil. Turnover in inventory has also improved in Asia, mainly because of the positioning of the Chinese New Year this year. Supplier liabilities have gone down 5.6 days and this is mainly due to Spain and France.

Now CapEx, you will remember that in 2012 we had a constrained limited investment environment. It went down from EUR2.119 billion to EUR1.547 billion. This is mainly due to the fact that we have had a fewer remodeling and improvement in day-to-day management, mainly in France and in Europe and also because the comparison basis was pretty high in 2011, because of IT investment.

Now this being said, in 2012, we have however maintained the level of CapEx in value in CapEx related to expansion and we have rolled out these investments in Latin America and Asia. Overall, we have opened 133 consolidated stores in 2012, 36 hypermarkets including 18 in China and 10 in Atacadao, and Brazil 30 supermarkets, full cash & carrys, and 63 convenience stores. If you included the franchise, franchise stores we opened 706 stores in 2012, 53 hypermarkets, 83 supermarkets, 11 cash & carrys, and 559 convenience stores. Over 2013, we expect to see an increase in CapEx to reach somewhere between EUR2.2 billion and EUR2.3 billion.

Now free cash flow. Free cash flow for 2012 was EUR279 million and if you restate it for divestments and disposals over the last two years, free cash flow from continued operations goes from EUR344 million in 2011 to EUR578 million in 2012 i.e., an increase by 68%.

The variation, free cash flow is supported positively by the two elements that we've mentioned, the actual working capital requirements are related to the operational needs and also limited investment to the tune of EUR1.5 billion. Now this more than offsets the drop in self-financing capacity resulting from EBITDA and also the disbursements related to dispute settlement.

Finally, the divestment of real-estate led to an increase in EUR153 million being cashed in. Now, debt, we reduced our net debt by EUR2.6 billion, indeed cash flow was EUR2 billion, meaning a cash flow after CapEx and divestments were EUR2.3 billion. The Guyenne & Gascogne acquisition meant a EUR96 million disbursement for the parent company that we now control, then the disposal of Altis led to cashing in EUR153 million. Then, disposing all of our business in Colombia and Malaysia led to an increase in cash worth EUR1.96 billion.

Moreover, the drop in net debt was supported by the new dividend payout policy announced in March 2012 and the fact that 60% also of our shareholders chose to have their dividends paid in shares. Net disbursement in this respect was worth EUR137 million.

In conclusion, net financial debt is now EUR4.32 billion as (appears in) 2012, which clearly illustrates the significant improvement in the financial structure of our Group.

In December, Carrefour issued a five-year bond and the issuance was worth EUR1 billion and the coupon is 1.875% – below 2% over five years. Now, after that the four-year bond issue worth EUR500 million made in January 2012, this enables us to extend the maturity of our debt and in the longer run to reduce the level of financial expenses.

We now have a confirmed credit line for three years' worth EUR1.1 billion that was negotiated in April last year plus the cash from disposals. This has led Carrefour to increase its liquidity position to 2012, which undoubtedly is a great asset in the current environment.

Finally, our bond repayment structure is very balanced over time. As you will see, the next repayments are due in May 2013 to the tune of EUR750 million on a coupon worth 3.625% and then EUR700 million repayment in December 2013 with a 6.625% coupon.

For 2012, the Board decided to submit to the AGM, to be held on 23rd of April, next a stable distribution level of net income, group share adjusted for exceptional items worth 45%. This leads to a dividend of EUR0.58 per share. Dividend, which will be paid in cash or in shares as the shareholders choose and the payment will be affected on 7 June.

So to wrap up, I'd say that the efforts made by our teams are multi-format structure, are diverse geographical footprint that has enabled us to take up the difficult challenge of the economies in Europe and in China. In this environment financial performance was pretty good in 2012, it included an increase in sales due to emerging countries, an increase in net income group share and also a strong reinforcement of the financial structure of our Group, thanks to its refocusing.

In 2013, we will obviously not let up on our efforts despite the difficult environment. We will go on maintaining financial discipline. We'll focus on stable distribution, investments which will be on the rise, but within bounds of reasons and we will focus on costs and working capital.

Now I'll give the floor to Mr. Plassat.

Georges Plassat - Chairman and CEO: Thank you. I think sir that your presentation is both honest and remarkably accurate, which isn’t always the case in (indiscernible) Now to add to what Mr. Sivignon has said, I'd like to put flesh on the bones. Can I maybe remind you that about a year ago, you and our shareholders were involved in our review of the situation at Carrefour.

Now we have gone on analyzing and reviewing the situation over the last 12 months and I think we can safely say there is a real vibe. At managerial level, we have really asked more questions and given firm answers. Indeed if we've been so successful in the past, we clearly wouldn't be in the position we're in today. So management has come to the conclusion that we must focus on decentralization and responsibilization. You can't at the same time criticize the fact that the system is too centralized and then not increase accountability on the ground. Now, this also went hand-in-hand with an improvement in our financial position with the disposal, the disposals that we introduced to you. It meant that we had a less of – we're scattered in terms of geography. We pulled out from countries where we clearly weren't going to become leaders; indeed, we feel that in all of the countries where we operate, we want to be in the top two. What it also means is that it protects us in a way when we will be having to handle a new liquidity risk phase. So this initial phase is coming to a close. We've now got the questions and we will try and address them. We'll move on to delivery.

Now, our Group over the last few years has experienced many difficulties, so much so that in fact we are not very active. We seem to be mulling over the past and putting forward old answers even in those fields where we have some real problems, IT, for instance, and logistics. That was never really at the heart of what we did in Carrefour and Promodes before the merger and after.

So what we need to do now is get down to business. We must first and foremost put the customer at the heart of our approach. Wherever we operate, we have to deal with local competitors who have a closer relationship with customers, who are often very much decentralized, much more so than we are in the handling of the market and they have a greater local empathy than we do. I mentioned that last year, you'll remember. So again, we really have to put the customer back at the heart of our business and that requires decentralization, the sensible organized decentralization, (which decentralizes it) all the same and it also means that the store managers have to be able to adapt to the local environment without a negative impact on our business.

Now, as we know, the Company is a multi-format company and will remain being so, and our customers are pretty much doing the same. Some of them – some of the cooperative competitors in France, for instance, have very well-established local roots and we need to handle that issue. So decentralization is something we have to go along with. We'll have to roll it out sensibly over time, make sure that people are accountable for what they do and make sure that it is acceptable to all. So we have to apply this new discipline. The old practices and behaviors have to be adjusted, and again, we have to have this constant concern for our customers. So we are really going to have a bottom-up evolution here.

Now, it might seem superficial, but in fact, it's basic and vital and it's a cultural issue. It's a behavioral issue.

Now, once you've said that, you really mean that company – that the organization and the individuals have to get involved. So what we want to do is shift from structural approach to organizational approach. If we have structured, it means that the constraints are being imposed and centralization emerges. What we want is organization flexibility, people who can work together without geographical or divisional constraints.

Things are happening in many countries, and it seems to be going in the right direction. Now in some countries, where we have most recent business, obviously they don't have to adjust quite so much because they are still in the learning curve. But in France, for instance, we will have to change. We'll have to shorten the structures and refocus them. We'll have to focus on the operational intelligence of individuals, making sure that there is an adequate intelligence and make sure that we go beyond individual footprints (and fugal) grounds.

Now, I think that this means that we will have to introduce a novel practices in logistics, in product management and in IT. There will be no choice. We'll also have to get our staff to go back and meet the customer. Obviously, I think the things are happening and I believe that our staff can do so if they have the right tools to do so. So, we'll have to have the right tools.

Thirdly, and I must say I am convinced about this, we have to increase diversity. Now, in all the countries, we have operations. There are some countries where we have very good results. In Brazil, for instance, over the course of one year they managed to get 50% of women in the Executive Board. Are they almost going to reach the 60% limits? I hope not. We have to remain sensible.

Anyway if you look at Romania or Poland, for instance, it's fascinating to look at these women working in senior management. People who are very bright, very thorough in the way they operate and work. I think that this will clearly contribute to changing this mindset, this centralizing mindset.

So we have to go on working on all these issues. If you look at the number of female store managers in China, it's still very impressive, it's still true so in Spain. When I was in Spain 10 or 12 years ago, it wasn't the case and clearly macho men have pulled back from there and there is another country which is very impressive. Also in a way they are very set in their ways about diversity; France, Italy and Argentina. Argentina, well, we know about the gauchos, don't we? But France and Italy, there does seem to be something sort of backwards in what we are doing.

Now 70% of our customers are, in fact, female customers, so I think it might just make sense to have them come into contact with women and not just at the cash desk. So managing our teams is vital. So much so in fact that in the incentives for senior management, there is a criterion on personal development and career development.

We know that over the last four for five years there has been something of a decline in the staff base in our Company. If we make the right choices, we can hire people who are not encumbered by the past and can help us push forward. So individual staff members, that's something that HR managers really have to focus on, on a day-to-day basis to help us change our business.

Now if we look at the assets also, the Company's assets, I think we have tremendous assets here. We have somewhere around EUR25 billion or EUR26 billion worth of assets, so given the market value, we clearly have something to do. What do we need to do? Well, I think that we should get started something that will cover the next, what two or three years maybe and work on remodeling. I think it makes a lot of sense to remodel our stores rather than have all-out expansion or development. There is program of remodeling in France for this year, one on Brazil too, and everyone has to get involved.

The fact that we have had CapEx over the last two years, and to have had CapEx – limited CapEx over the last two years was sensible and vital given the state of the balance sheet, but we now need to really boost our CapEx now on remodeling or we'll pay a very – we'll pay very (dearly) for it four or five years down the line.

As I said, a number of countries have already got started. Brazil is probably one of the countries where we need to do more. Over the last year, Argentina started remodeling or updating its stores. In China in some of the larger towns and cities, we have to do something or else we'll be outdated compared to competition. So we're not talking about spending money, we are talking about investing here. The fact there is that even on CapEx there was something of a problem and if you don't invest when you're a retailer, you are doomed. Does investing mean taking risks? Yes. But not investing is an even greater risk.

Expansion; that's the next one. We have to boost our expansion. Expansion is too often tactical or constrained, and the people who do expansion don't have enough of a strategic relationship with their management, so we have to have a sensible thought through structured expansion program. If we want to do that, we need to start investing in it now, quite simply because it will only pay out two or three years from now. We need to do something in France, in Brazil. We need in China to have people who are able to analyze the market. We don't quite yet know how to manage multi-format in China, for instance.

Then making the most of our non-store assets, that's another question. We do have a very impressive real-estate assets, which have been left (follow) for too long. We need to work with outside partners and increase the value of these lands and real estate properties either by maybe developing some of the land.

Most of our stores are now in urban or suburban areas and still have significant plots of land that are undeveloped or underdeveloped. So this obviously will require significant investment, but will necessarily, I believe support our commercial approach and feed into the increase of profitability related to our real estate investments.

Now we know that up until things changed in Carrefour, ownership of the land surrounding our stores actually accounted for 30% or 35% of our income. So, we have to remember that. So again we have to make sure that we can properly maintain and protect the site as a whole if you got a Carrefour banner, the entire shopping area has to be up to scratch.

So, we have to be very good, because we can't just manage properly our stores and manage abysmally badly our properties. So, I think some – (enough) real estate, but IT now. IT is also something that requires a strategic management. We can't just spend our time taking up questions and requests and be tactical about the way we manage our IT. We have to have a strategic approach to it and we have to start from the supply chain. We have to make sure that there is a clear integration of purchasing, logistics and stores. So purchasing in fact nowadays is too heavy in the system too prevalent. We have to make sure that people can now start managing flows and not inventories. This will take time. This is particularly true for France, of course. In Brazil, the time is probably right to start thinking about these issues. I feel that if our Group isn't sensible in the way we do that and applies the rules, then we will lose the game.

So we have to stay focused on what we do and do it effectively. IT, as I said, is one of the assets of our Company. This being said I remained confident. I think that in France and Spain and in Brazil, what people are trying to do is to keep in check the application peoples. People who have led to clear – have clearly messed up the relationship within these people and within the Company. We have to be careful but we have to do something.

So IT, again, is clearly one of our assets, and there again we have to professionalize IT management. There is no reason why there should be pressures on IT implementation and in fact the people who are often exercising pressure are not able to turn or to demand this or that from IT. IT, its real function, is not just to service and the same goes for logistics. Logistics, yes, is a back-office function, but it's just as instrumental in creating value. So we have to do something and make sure that we can produce or identify added value over the next two or three years.

Now, let's move on to our products to what we sell. Indeed, that is obviously the heart of our business. But if you look at the selection of products, we have. Well, it's true that we sometimes have difficult negotiation rounds with our supplier. Commodities have gone up, the companies that we are working with or competing with are also subjected to the same pressure. The smaller companies sometimes feel that we are something of an overbearing presence. I think that we have to look at combining our purchasing power with the larger stakeholders, but also making sure that we strike a balance between concentration of purchasing power and also diversification.

Now, I have also said many number of times that we have to make sure that we have local suppliers also for a fresh produce, which means that in fact we have – we truly have fresh produce for our customers, but also we create work indirectly in the environment, immediate environment in which we operate. This is something that was done in the past, sometimes neglected, but I think that we are coming back to it and all of these sort of industries, in fact, all of these sectors, when they are supported, feed into our customer base. I'll remind you also that in France there will be 750,000 square meters of food stores being opened in France. So there is real competition out there and we have to have what it takes to draw people to us.

Now, again something that's true across the world, we have to sell quality products. We can't drag quality down below what Carrefour believes in. That's true in food stuffs, but also in non-food products. I think clearly, it's the end of a period where people bought small things on the cheap or low quality. This is true for instance of the fact that in garments, people want better quality products, better cut, better shape, the right colors in terms of fashion for instance and in doing so, we'll overcome what happened over the last few years. Now in general goods, too often over the last few years, we've focused on seasonal offerings rather than constant offerings.

Now having a seasonal presentation is interesting in the short-term, but the amounts purchased have always been excessive and there wasn't always enough consultation with stores, and in fact, we were purchasing stuff that wasn't being sold in stores. So, we have to come back on it, introduce basic products, bring back brands, sometimes own brands when it make sense, but not always and reduce seasonal products. We've seen that our non-food products, if we have the right brands, the right reference brands, it's a great asset for us. So products offering, a standard offering, supporting fresh and regional produce industries these are things that will make sure that we have a stable customer base in hypermarkets. Sometimes people have wondered whether hypermarkets are dead, probably not, but unless you actually murder it.

We have to get back to basics in other words and this is true for service as well. It's obvious that the disappearance of a certain number of specialties in hypermarkets has led to a drop in the quality of our offering and in other fields, it's true that we remained bound by ways of thinking, which have been very costly and have led to losses, so we want to make better use of our resources, fewer losses and for the same cost we can restore contact with the client, the pleasure of serving the client and also the quality of products, which is something we've lost sight of.

Along with this, we can talk about communication. We've always invested a great deal in (male) shops that represented about 50% more than our competitors in all countries. That's not a figure I have just invented. We've checked all this and the number of operations too has been 25% or 30% higher than our competitors. So we need to think about this, because the productivity of our investment in advertising is essential.

That's what I wanted to say then talking about our offering and talking about everything that goes along with this. The great thing is that we should improve our price competitiveness. There is no alternative to that.

Money, money is not important frankly. Money is not interesting in itself. Today we possess the means to implement our policy, my way of reinvestment, now that's essential. When we look at the level of depreciation of Carrefour compared to Carrefour, factoring the size element, well, the answer is that, over the last five or six years, we haven't really invested a great deal, unless the situation that cannot continue.

All our competitors, I will name them, but they've all carried out the same analysis and they've reached the same conclusions. They are going to attack, they are going to increase investment in their home markets and they are all in the same situation. So I hope that we've learned this lesson, we've understood this, we must consider money as something that is to be used and the results that we obtained in 2012 are not brilliant, they are not even good compared with what we forecast. But we have reconstituted a cash reserve and we must now make use of this.

My conviction is that the crisis, everybody talks about the crisis and it's true, we are (embroiled) in a crisis, in Spain, in Italy today, you can see that local demand is going down very strongly and in the Eastern European countries too and notably Poland, which is an important subcontractor for Germany and in Germany too consumption is going down and then in China for political reasons there is a follow period in terms of decision making because the new government needs to be appointed and then even in Brazil too. There the way growth has developed, the growth rate has gone down from 7% to less than 2% always a fact, but this is not as serious so that provides you rephrase up to this and during this period it would be an error not to invest. We must to reinvest, that all. That's what money is for. Money is for reinvesting in order to create profit for our shareholders, not in the short-term, but in the medium-term. The Company in view of its size, in view of its image, which is being turnaround in France, thanks to our price policy which has been implemented over the last year and a half along with effective communication, all this has two merits.

First of all, it reminds people that Carrefour does offer good prices because Carrefour is classified by everybody as the number two in terms of price, not far behind the number one. But in terms of image we are still number three. So we've improved our price image because of our pricing policy and thanks to our communication which demonstrates that everybody can go in for a dialectic on prices when they want to. But we've seen that this has led other people to copy us. Of course, this means that this surprise factor will very quickly become an everyday unshared factor. But Carrefour is, in fact, very well positioned in terms of price. This is undeniable and our low price policy, our price positioning policy will continue.

That's what I needed to say. All these are issues at stake for our group. How can we reinvest? How can we be dynamic in terms of our offering? How can we decentralized decision-making to the grassroots? All these are the essential issues to ensure that our accounts will continue to be in the black and that we shall continue to generate adequate cash flow. Okay, that's my point of view.

Now another point that I want to look at with you is the question of the Internet and e-commerce in general. We are, I think, lagging behind here, although at one time we were one of the leaders. It's a sector in which there is not much of a premium in terms of being the leader. It's a very open market, and I believe that companies which are very fragmented in terms of their physical geographical implantation will have advantages over the others for all series of reasons. A lot of people want their produce to be delivered in places, which are not necessary their homes, they want to be able to decide on the date, for example, when they're going to pick up their products that generates visits to the stores. We should be able to take advantage of that in terms of customer relationship because we offer them a service. This opens up our offering. All this needs to be thought about and managed. We have two or three models, we have (e-shop), we have Carrefour.fr; and we have the partnership with Pixmania, which finally is not all that profitable.

The direction we want to follow is that of one code one consumer, a single code. For example, for the Pass Card, but today the consumer needs another code for the Drive, another code for consumer.fr. If there is one field where our convergence in terms of the brand can play a role, it's this one. We must implement this policy and we are setting up a team to do this. We already have a good basis, but this is a job we need to do. We need to make use of experts and we need to decentralize this to our actual sites. We must implement this one code one consumer policy. We must produce the number of clicks necessary.

About 25% of consumer attempts to shop online are abandoned, why, well because when you bought your bread and your butter and you can't find the cheese, you give up and 25% is a very high abandonment rate. We must try to solve this problem. I don't believe that the Internet offers the solution to everything. Let's be quite clear about this. There is going to be excess capacity here to a very high degree. The system works in urban areas, where the young population or it works in more distant areas, areas which are more distant from towns with a more elderly population, but where they don't have local outlets. So we need to look at all this. We should consider this as a service we offer to our clients. It's a marginal contribution to sales in stores, but I'm sure that if it's done properly, it can play a part, but we mustn't expect this to be a miracle. The French sites which are important on the Internet have high sales figures but their profitability is not good, and in this field, competition is only just beginning. So, one code one consumer and a very precise calculation of the product mix that we offer.

The other aspect to all this is Drive shopping. A lot of people are very keen on this. It doesn't require any new legal authorizations. Some people who have gone for this in a big way, we have to – in fact, we have a lot of stores now with drive-in facilities. The profitability of this formula is not clear. Nobody is really making money. The only people who announced their results are listed companies, those who are obliged to announce their results. Others are tending to put up smoke screens. So we need to look at Drive shopping as a model in itself.

We need to look at the method, the product mix, the pricing policy, the availability of deliveries and we need to work on this and get going. It is not too late. I think we have something like (140) which we'll open up this year. We have a network which is already highly significant. We're not making money in this way at the present time, but all this is something for the future. These are opportunities, but they require hard work. We can't work on this on the back of an envelope just in a couple of minutes. It's not just a question of setting aside another storage area in the store. We want to do some really hard work on all this. I think that all this being said, I've covered the major points in operational terms. I know that this is not new as far as you are concerned, but I am not necessarily somebody who believe in innovation for its own sake. What's important is to move on from thinking to acting. This phase of execution has to be done by people, by individuals, and that means taking on new expertise in some cases. It's not simply a question of looking at past methods which are no longer adapted, neither to our size nor to our geographical situation.

So, looking ahead this need to get down to action. This is a more demanding phase because as I said this implies business skills, patience and discipline. Patience; patience is extremely important. But I am convinced that the Group has all the cards in its hand to continue to move forward into the second phase. The third phase would be the phase of development and we need to prepare for this right from today. When we talk about the impact of development, first of all, you've got to implement development. We need to renew our contacts with real estate developers, for example. We're too strongly vertical in our organization. But there too if we work well, we should be able to ensure the growth of the Company from 2015, 2016 onwards.

What else can else can we look at during 2013? Well, the economic situation is not likely to improve in the world context. We have to be aware of this. Secondly, there are industrial relations, risks. I hope that today will be contained and well-managed. Unemployment, though, is going up everywhere, in Northern Italy the unemployment rate is now 15%. In Southern Italy, unemployment is at record levels 40%, 45% and that's new. In the past, it was the north that led the way, but now the north is affected too. Similarly in Spain, Catalonia, (Naval) a Basque Country which were previously developed areas. They come to us, stands still too. So, this is a problem that we have to face up to everywhere, but we're not alone. This situation will affect everybody. We just have to be better than the others.

On the third point, which I am sure you have noted is that the exception level of provisions in this group which was significant and of course justified, that level of provisions should come down over the next two years. So, this will lead to reduction in exceptional items and exceptional expenses and we will make use of that money to improve our business, and of course in part to improve our profit, and we need to look around and dust out some of the dusty corners, but I want to be quite clear on this with everybody. We have something like EUR4 billon in terms of provisions in our accounts today. Out of this EUR4 billion, EUR1.5 billion are going to be used this year that will correspond to a cash outflow and these are not simply ghosts or skeletons in the cupboards. This is a reality for our company, but in two to three years' time I think we can say that the situation will be considerably better and we should be able to look ahead to better profits and better results for our shareholders, so we should be able to improve the overall situation, get above the waterline. So I think we can be confident in the future, despite many of the things we've said. The Board has decided to retain the same payout level and to improve the dividend in order to thank our shareholders for their loyalty, for having stuck with us and to encourage them to continue to stick with us.

So that's what I wanted to say. We can perhaps now open the floor to questions.

Transcript Call Date 03/07/2013

Unidentified Analyst - CIC securities: (Indiscernible). I have four questions for you. You're going to significantly increase your investment this year. Can you give us some indications about the priorities in terms of the expansion and remodeling, particularly considering France, Brazil and China? Second question, what do you mean by priorities? France, Brazil, China, I'm talking about the distribution of priorities between remodeling and expansion. My question concerns that. Secondly concerning real estate operations, you have talked about improving the environment around your stores. Would you go so far as to sell off some of the property that you own today, some of your hypermarkets?

Unidentified Company Speaker: Let me say straight away no. No. A clear answer before you go on with rest of your question. So what is a real estate operation, which doesn't involve selling property? Well, look you have 14 hectors around the supermarket. What happens there, there are countless grazing in the countryside or they are covered with concrete, but they are not used. Don't you think we can do something useful with that land? I don't think whether I'm clear on this. What I'm saying is true. What I'm saying is true. What I'm saying is perfectly true. We have assets, some quite remarkable assets which are owned and valued. They don't make significant contribution to our income and that's been true for some years. That's the result of allowing this land to remain fallow. There has been a lack of professionalism in our approach to real-estate, so we have the possibility of generating certain value there, but not by selling off these assets.

Unidentified Analyst - CIC securities: My last two questions, one concerns the negotiations on crisis. Retail distributors have been accused by industry of having been too aggressive, can you give us some indication of what you've managed to obtain from your suppliers in terms of increases or drops in rates for years to come for 2013. And then you said, you weren't satisfied with your partnership with Pixmania, so are you going to break away from that partnership or renegotiate it?

Unidentified Company Speaker: I didn't say I wasn't satisfied, I said it wasn't brilliant in terms of profitability, that's not the same thing, okay? That's all I want to say, I don't have any other comments on that particular company with whom we have an agreement, I'm saying it's not particularly brilliant, that's all we'll stop. Concerning rates then, now we are not going to give you and you don't expect me to give you in mathematical terms details about our relationship with our suppliers. What I can note though is that there have been some quite – let's say, strong expressions of opinion by some of the associations which represent parts of this environment, what we can say is that there has been considerable attention in the relationship between suppliers and retailer distributors because of the rises in commodity prices over the last few years, particularly last year. Then of course there is very strong competitive pressure, particularly in France because of the increase in square meters devoted to sales, and all this leads to confrontation. We are now in the final phase of our negotiations, which as is the case every year have been conducted in what I could call a very virile environment. I don't need to go into details about this. We're not here to play party games, but our teams have done a remarkable job and we have now reached the final phase of these negotiations and I think that along with our friends, the suppliers, the manufacturers in general, we have achieved a relationship after these negotiations which will be perfectly serene. There are always people who get excited. You know, this perfectly well.

Unidentified Analyst - CIC securities: And my other question investment and your priorities?

Unidentified Company Speaker: I think we need to do both at the same time. I'm not going to give you precise figures here. I'll try and please you by answering your question, Mr. (indiscernible). In terms of expansion, well, it's already simple, we have something like one-third of our investment which is going to be devoted to maintenance. This needs to be conducted on a more robust scale. We have approximately 40% devoted to expansion and because this is part of our CapEx too, it's one of the ways of managing assets. We have our IT investment in our information systems that expansion is about 1.5 times what we spend on maintenance, in terms of capital investment. And if we add remodeling then we're talking about a 50-50 split. Okay, I hope that that enables you to work things out. 50% for expansion, 50% for what we can call remodeling or updating. Okay, thank you for the question.

Daniela Fernandes - Valor Economico: Daniela Fernandes, Valor Economico in Brazil. My questions relate to Brazil. I have several questions, in fact. First of all, Mr. Plassat, can you give us some details about a possible listing of Atacadao on the stock market, if that's done what will be the mode of introduction? Then is Carrefour planning to implant Atacadao in other countries, particularly in Europe and then going back to this question of expansion. I like you to give us some more details please, about expansion in Brazil. Are you going to open other store formats in Brazil if so, which and when generally speaking how many stores do you plan to open this year in Brazil? I'd like you to give us some more concrete details about this expansion in Brazil, which you mentioned? I'd also like you to talk about your plans concerning the development of financial services in Brazil. I've almost finished and how much are you going to invest in concrete terms in Brazil this year and in what? I presume the resources will come from some of these provisions that you were talking about some of this EUR4 billion? Then to conclude, we've heard about the changes in Casino and the exit of certain people from Casino, now will there be a new negotiation with Carrefour? Is there a question of a new shareholder there for Casino, isn't that something that can be envisaged.

Georges Plassat - Chairman and CEO: Thank you very much for all these questions. Atacadao, first of all, an IPO, this is a little bird that's been flattering around in disguise in Brazil for a long time, but there is absolutely no basis to any of these rumors. We are not thinking in terms of an IPO for Atacadao. It takes time. You take time to prepare this, but we have no thoughts in this direction. We are not preparing an IPO. This is not something which is in our sights for the moment. I hope that's a very clear and straightforward answer. We know that a lot of people are interested in this idea, the idea of launching Atacadao, floating Atacadao, but, no, this is not one of our plans. We have various activities in Brazil. We have a substantial position in Brazil, Atacadao is one of the branches of Carrefour. It has brilliant results, but we don't want to consider it as being a separate element. It's part of our activity in Brazil. So there is no plan here to go public. Second question then, in Europe would we make use of the Atacadao banner in Europe? No, we have installed a model of the Atacadao (type) in Morocco with local partners. That operation involved buying out former Metro stores and converting them. The result is quite extraordinary. I think we have more than doubled the planned figures; maybe we can have confirmation of that. This is a model, which is extremely interesting, which could be very useful, particularly in countries where the infrastructure for supplying local businesses, (indiscernible) cafes, stores and so on doesn't really exists, are we going to implant Atacadao as such in Europe. For the moment, we have no plans of that sort, but thinking of what we can do along the lines of Atacadao in order to develop our activities. There the answer is, yes. In Spain for example, we have reactivated a brand which belong to (Continenti, the Sapaco) brand, we have three stores, the last has just opened in Seoul. This is an attempt to rationalization and optimization of costs and therefore sales prices making use of the supermarket model from 1,500 to 2,000 square meters. We are working on this, in our own way, at our own speed. There are other people who are familiar with Atacadao and its principles, local buying, very attractive stores with a very strong identity particularly in food and we have those people working with us. Extension in Brazil, yes, Atacadao is continuing with its road book. We have regular opening planned, but for the rest, I have no further comment to add. That's it, I've dried up.

Daniela Fernandes - Valor Economico: But don't you believe that it deserves it?

Unidentified Company Speaker: I quite agree with. Now let's be clear about this. We're not alone in all this. We're not alone in Brazil. I can't make any disclosures here concerning precise strategic plans. What I can say is that Brazil is a company which is very successful for us. We've managed to turnaround Carrefour very successfully. The income is increasing. Atacadao is expanding. Here again, we have important substantial real estate assets. All these things are aspects that we are looking at in order to work out how we can maintain a sustainable presence in Brazil. You also asked a question about I believe our partnership with (Itau. With Itau), we are redeveloping, let say a financial services products. This is a wonderful local bank. We know that credit was quite strictly controlled in Brazil and we believe that things will become a little more flexible in terms of consumer credit in the future, so as not to slowdown the upturn in the economy, so I think things are quite favorable there. Now, Mr. (Dennis) you talked about this gentleman. I can't talk about what I consider to be a part of people's private business between Mr. Dennis and a local company. There was a question of his investing in retail. Might he turn back to Carrefour because there were negotiations whereby he might have become a shareholder at Carrefour? Could that happen again? Might similar discussions be possible at the present time? We don't envision anything like this. This is a longstanding story. It's a novel, isn't it, but it is for the moment, just a story with no basis. Mr. Dennis is somebody who still have links with the Company which is ran for some time, but when he is free, when he becomes independent might he not then become well when if and so on and he might be free, yes, oaky and that could interest Carrefour? I really don't know madam. I can't say. No, Frankly I have no comment to make on this. We are not familiar with the situation and this is not something, which is currently in our pipeline, it's not part of our thinking although of course, he is a very nice person, I believe so anyway, what do you think?

Unidentified Company Speaker: Well, maybe you know him. To say that I know him, yes, but everybody knows him. We know that he is a remarkable businessman and I have nothing more to say (Mr. Denis) is a free agent. He manages his own affairs. I know that this is generating a lot of buzz in Brazil, but that's all I have to say on that. Thank you very much for your question.

Unidentified Analyst - CIC securities: Three questions please. If I could get a comment on French margins? So it's a good improvement in the second half, 23 basis points or something along those lines. You've talked about some cutbacks on advertising expenditure driving that and flat commercial margin. How do you see that evolving in 2013? Do you think these drivers are sustainable to see another improvement in French margin in 2013? Secondly, I didn't quite catch it in translation. You talked about combining purchasing power. Can you expand a little bit on it? Are you trying to change the way you buy in France or are you trying to join in some sort of consortium in terms of some of your buying requirements? Can you just expand on the combining purchasing power point you made? A financial question for Pierre-Jean. Can you talk about a little bit in terms of where you are in the tax reassessment provisions and if that does come down substantially – if that has come down substantially then should we assume a big reduction in other financial expenses that you've reported for the last few years?

Unidentified Company Speaker: About the French margin level, yes it's sustainable without compromising our competitivity, yes, it is, because we have still a lot to be done in terms of buying processes, assortments, and distribution, simple. Yes.

Unidentified Analyst - CIC securities: Can we expect another increase in 2013…?

Unidentified Company Speaker: When we say sustainable, it doesn't mean that we are not expecting another increase. You were talking about sustainability; I'm answering your question, sustainable, yes. Then working on the assortment itself, working – that mix between own branded products and national brands. Working about the extension or the reduction of certain families in order to address better their request and the need of our clients, we think it's sustainable and we hope will more than sustainable, of course, because sustainability has a particularity that when you start being sustainable, it could become a little less sustainable, a little more growing, but we are not here to make any promises. I prefer to answer you, yes, it is sustainable. Then, if it is sustainable in ratio, the base will be determinant, are we going to grow in sales or not, but the sustainability in ratio is there. Okay, what do we mean by combing buying? Combining buying, did I say combining buying? Maybe…

Unidentified Analyst - CIC securities: I think here there was some reference to combining purchasing power?

Unidentified Company Speaker: Yes, it was mainly for the non-food for example. We don't want any more to make forecasts that volumes we could eventually do through central buying. We want to ask the stores to decide more and more the volume they need to sell and then the combination of these volumes will be much more efficient and pertinent in terms of results, because if you buy too much, you lose a lot of money by trying to sell the goods at the end of the season. If you combine correctly the needed volumes, you adjust your orders, you negotiate good price, too, and you have no money to lose at the end of the process. This is being more synchronized and combined, but we are already combining the buying. Taxes is for you.

Pierre-Jean Sivignon - CFO: Actually, you asked two questions, right? There was one question on financial expenses, financial cost and then another question on tax. So I'll start with the financial expenses. Actually you saw on the slide that we have split them in three categories, and I should handle them in those three in that order. The financial expenses which are the direct results of our (debt), that will be, I would say, a slow lending, reason being that for the next two years we have high coupon to pay on our bonds, right. You know that we will have significant installments, and both in 2013 and 2014 once we have got rid of those two coupons which are at fixed rate, then things will start – come down starting early 2015. So for that portion, I would say it will be a slow evolution, '13, '14, early '15 and then there will be a real drop. I think that's the best way to describe that particular one. The second section in financial cost is what we call the other financial cost. In there, we gave you a little bit of detail in the presentation. So I'll let you go to the chart. The point I want to mention in there is there is an amount related to interest for late payments. That amount has come down in 2012, right, we have actually disclosed that, has come down from EUR150 million down to EUR84 million. This is a (slow), I would say, lending as we gradually solved the issues of the past, right. So there you will see a gradual lending of issues related to the past. The third capture there is related to an exceptional charge of EUR216 million, that's a one-off, right. This is essentially a non-cash one-off which won't reappear. So that one is gone for good and you don't have to include it in your projection for years to come, okay. So that's for financial expenses. As far as the tax, yes, for corporate tax, as well as indirect tax we're working hard there as well on the settling what needs to be settled, as well as of course improving processes in order not to create and trigger extra an additional risks. I'm not going to go in too detail by countries for reasons which I'm sure you'll fully appreciate. But all-in-all, we expect those amounts to gradually come down both in terms of P&L impact and cash outflow, right. But I think it will be lending over the next two to three years, which will be gradual, but definitely in a right direction. I think that's as much as I can tell you on that particular one.

Jaime Vasquez - JPMorgan: It's Jaime Vasquez from JPMorgan. One question for Pierre-Jean on working capital there was a big reduction in supplier days of six days, which often a very good inventory management. Should we expect that supplier reduction to continue into 2013? I think you mentioned Spain and France. Is there a deliberate policy to shorten payment terms? A couple of questions for Mr. Plassat. Can you give more color on the opportunity to reduce wastage? You I think just now mentioned the opportunity to reduce markdowns in non-food and I guess wastage in food. Can you perhaps compare within the Carrefour Group the best-in-class country with a worst-in-class to give us some help there? Finally, you mentioned the aim to become top two in every country. I think you're far from being there in Poland, how will you deal with that?

Unidentified Company Speaker: Your last question please?

Jaime Vasquez - JPMorgan: You mentioned the importance of being number two, top tow in every country. How will you deal with how far you are from that position in Poland?

Georges Plassat - Chairman and CEO: I'll take these three questions if you don't mind. So in terms of stocks, yes, we have been reducing the level of stocks of about six days as you said. This is a good thing, but we are not there to only reduce stocks, we have to care not to be generating ruptures. So the mix between this level of reduction and the impact of sales is extremely important, but we were right to do it. It was included in the incentives of our people and they have done it. This is not – it's substantial, it's welcome due to our cash benefits, but this is not a long-term (durable fact), we will not gain six days every year. We have to maintain this level, if we can improve it, we will. And I'm sure within the non-food we have opportunities by buying better, adjusting much better the volumes. We certainly will have a reduction of days of stock, but this is not a key point for the medium and long-term. Second question you were asking to me was about the wastage. Here we have substantial resources. It can be delivered by practices. You don't reduce wastage only by deciding to reduce wastage, because you will – you could have the same consequences then reducing the number of stocks. So its practice is, producing in fresh regularly following the day, buying better, buying fresher and all these things is – absolutely it's a key point in the retail today. Shrinkage is becoming an enormous problem. At the ecological level, okay, at the citizenship point of view, and as a financial consequences. So we have a substantial benefit in gaining in the level of wastage, substantial. It was – Noel, we will confirm. It was one of the main problems for the last three years. Generating a huge wastage in a lot of segments. Your last point about Poland. In Poland, we are today three, four companies more or less at the same level in sales. The leader is well known. I'm not going to give his name here. He has to make his own presentation. Then you have three, four companies that are still challenging, the position of becoming the first or the second. So, my vision is that even after the acquisition by (indiscernible), the combination of both is still at the same level than we are today. So I think (Poland) will enter maybe within one year, two years in consolidation process.

Edouard Aubin - Morgan Stanley: Edouard Aubin, Morgan Stanley. A question for Pierre-Jean Sivignon, about provisions; the EUR4 billion provision in 2012, that's almost third of your market cap, so can you maybe not quite, okay – can you tell us more about the breakdown for Nature? If I understand rightly, there will be EUR1.5 billion in disbursements in 2013, can you tell us that and confirm it? Then on your net debt for 2013, should we expect an increase in debt at year's end?

Pierre-Jean Sivignon - CFO: Provisions, we'll be publishing the numbers on the website, in fact, it's spilt in three ways. First of all, you got very long-term expenses related to pension and as provisions for risks and insurance and technical risks that's about the third of the EUR4 billion, so the recurring provisions in any company in our line of business. Then you've got the other two-thirds, provisions for restructuring, that's in the note, you will find it mainly for two countries. Then the rest as I said is general provisions in case of risk and in fact, the numbers there haven't really increased, they have increased about EUR200 million. We are provisioning a variety of risks. We consider that this is accurate, but in fact, we have realized that over time these provisions don't necessarily lead to a disbursement in cash .So that's our best guess as things stand today. Now the EUR1.4 billion in outlay in cash, I can't confirm that that's not a number we have said or stated, I don't think we've ever given a number what I can tell you is that we will have, yes, disbursement in cash for next year, for this year, but it's difficult to plan. If it were easy to plan, the provisions would be easier to forecast also. So, there will be disbursement in cash for 2013, couple hundred million euros, but I can't give you an actual figure, we don't know, but obviously, you will be informed if and when it happens. On debt, I can't give you any guidance on that. What I can do however, as we've done in previous years and quarters is to say that, we are focusing on our BBB+ model and that's our yardstick.

Unidentified Company Speaker: In 2012 for instance the measures we took were in that framework, so it really is a model more than an amount that I can direct you to.

John Kershaw - Exane BNP Paribas: John Kershaw from Exane. Perhaps just following on the last one first, because perhaps it was in the translation, but the translation said that you would pay EUR1.5 billion cash from (the issue). So, perhaps expanding on that, do you need to delever more, because you takeout for – you've got obviously EUR2 billion plus of litigation claims, which are still to be addressed, so that's the first point. Secondly, can you perhaps – you've talked in big picture terms very (indiscernible), can you help us understand perhaps on the hypermarket format in France, how you are going to particularly address the non-food performance and give us some more color there. Then finally, in terms of self-help, perhaps you've talked about sustainable margins in France, perhaps give us a bit more color on why you think the sustainable margin maybe particularly the Europe?

Unidentified Company Speaker: No, we don't need any more deleverage, so the answer is very clear, we don't need any more deleverage, first of all. Second non-food, I thought I had some answers given previously by the non-food. There is no miracle to be done about non-food. Non-food is a key point for hypermarkets, because if hypermarkets slowdown their offer of the surface of the non-food, they will decline. There is an example, well known example that shows that by reduction of surface and offer the global model is suffering. The non-food is a good reason to come to the hypermarkets, because if you don't have any more non-food it's easy to understand that you can go to food stores in one hand and to other formats in another one. So I maintain non-food is a key point. The answer is to work much more about permanent offer responding to all the needs of a regular, normal client, introducing in certain clusters, brands that have disappeared in the last four-five years unfortunately and that they have to come back because they are referenced in the clusters, do better in terms of relationship between price and quality, mainly in our own offer, textile, bazaar and so on, and be extremely professional when people are coming to buy electro domestic, because most of the people coming today are asking precise questions, they have already seen by Internet the different models, the different prices and they want to have a confirmation by a talk in the stores. More than 40% coming in the stores today to buy electro domestic are conforming that they have seen the models, they understood the description done on the e-commerce model and they just want to have a confirmation locally to decide to buy, okay. So, non-food is still an opportunity for us. We have to do it better and there is no reason to cancel the non-food in hypermarkets. This is my vision. As you know, if Drive are developed, it's easy to understand that a woman having already ordered by Internet to take (his) basket by the Drive, she can go freely in the hypermarket to buy little other things. It's not any more a pain. She will be traveling easily, if she want to buy books, she want to (closets, closets) will not be linked with the sausage and you understand what I mean, it could be a real opportunity if we do it well.

Unidentified Analyst - CIC securities: (Indiscernible) first of all, the litigation claims, obviously you say you don't need to delever more, but perhaps back to the EUR1.5 billion clarification and just in terms of margin in (another year)?

Pierre-Jean Sivignon - CFO: I got it. Yes, I think you refer to the number which was mentioned by Georges Plassat in his speech right, I think that's a number. I think you should see the EUR1.5 billion, which was mentioned there should be seen as a max, right, I think it's not a guidance. It's a maximum amount. As I just answer I think to the question which came, a minute ago I stand by what I said. That amount is not forecastable for reasons which I'm sure you appreciate us than by that and the EUR1.5 billion which was mentioned in the opening speech that should be consider as a maximum, I think that's where we should leave it at. Of course, we'll keep you informed on those amounts as they come out of course right.

Fabienne Caron - Kepler: Fabienne Caron, Kepler. Three questions, one for Mr. Sivignon. Sir, you didn't answer (Jaime's) question about suppliers in the working capital requirement. What can we expect in 2013?

Pierre-Jean Sivignon - CFO: Look if you reducing inventories, it's more than likely that they can go down on suppliers. So if you've got inventory levels stable, yes, exactly it's not going to be – there won't be much of an impact. Can we ask you what the CapEx will be for France? Are we talking about 50 hypers per year, over three years EUR600 million? I mean what is it? EUR700 million, EUR800 million, EUR1 billion, you tell me?

Unidentified Company Speaker: Look, we will spend what it takes and what we need. (Indiscernible).

Unidentified Company Speaker: Look, to try and answer your question, we'd have to look at CapEx per square meter. Obviously, on 15,000 square meter, store is not quite the same thing. It's not entirely proportionate but sort of. 10,000, 15,000, 18,000 square meters, look at those, imagine you need to change the lamping, the floors, the (cash stores), the back office, we'll spend whatever. But can you tell us more, Madam. Maybe I wasn't listening. She says, I know you. Yes, I said you didn't – weren't listening, 50% for maintenance – 50% maintenance and (indiscernible) and 50% on expansion. In France, okay, I will give you a little hint here, because it's not guidance as such, but in France – CapEx for France will be about proportionate and in line with what France accounts for business in France.

Fabienne Caron - Kepler: Is it EBIT or EBITDA, you tell me which is more relevant?

Unidentified Company Speaker: I will say EBITDA then.

Fabienne Caron - Kepler: You haven't spoken about supermarkets in France. Decentralization, does that also apply?

Unidentified Company Speaker: Supermarkets are not quite the same thing as hypermarket. In supermarkets, the vertical approach to offering or product offering management is necessary quite simply because you don't have what it takes to do otherwise. But in supermarkets, there has already been an adjustment to the product offering to local products. We were there with Noel, we were in a store recently and we saw that the store managers were also remarkably interested in the locals – or locally sourced produce. But, again, it's not there that we have the most difficult task in increasing accountabilities of managers.

Jerome Samuel - HSBC: Jerome Samuel, HSBC. Sorry to come back to CapEx. But can you maybe tell us how many hypermarkets you need to remodel or renovate in France, two-thirds of your stores?

Unidentified Company Speaker: About 150, yes, 150 out of 220 hypermarkets. So we need to sustain this, but not rush into it.

Jerome Samuel - HSBC: So you are saying over the next three years?

Unidentified Company Speaker: Yes, that's it. I think we've got – is it 35, 35 we're working on for this year. I mean, we are thinking about 50. Again, we won't rush into it. We want to do it properly, and if we can't remodel 50 properly, we'll only have 40. Every ones, there are bids and plans and planning and whatever you want. So yes, it will take three years, but that's all right.

Jerome Samuel - HSBC: Decentralization, you are talking about decentralization in hypermarkets, supermarkets and in countries (as much, Plassat).

Unidentified Company Speaker: We want the country managers to really be accountable and run their business properly and on the whole they do that. But we have to give them the possibility to do that job properly. We don't want to breathe down the neck all the time, but we will increase internal auditing. That's the flipside to decentralization. There will be very stringent controls on tax, on IT, on assets and negotiation of contracts quite simply because we need to know, we want to know what's happening and that's the flip side of accountability. We want to know, but country managers also want to know, what's happening.

Jerome Samuel - HSBC: My question was related to franchises. Will you maybe increase franchises on supermarkets and greater?

Unidentified Company Speaker: Now it's true that for the moment franchise stores are mainly convenient stores and supermarkets. Now giving hypermarkets or having franchise hypermarkets, we've had a couple of those, but it has never really been much of a core strategy for the group, so no.

Unidentified Analyst - CIC securities: CIC securities, yes, over there. Two questions, on net financial debt at years end, can I make sure that it wasn't including the EUR500 million from Indonesia, just always have – I am a bit suspicious about IFRS restatement, and then Asia there seems to have been a specific increase in profitability between H1 and H2 in France and Europe and Latin America, there is still has 60 basis point decrease in Asia over H2, but in fact last year H2 2011 was already pretty bad with minus, what was it minus 130 basis points on operational margin. Can you maybe just review the situation in Asia-Pacific, which seems to be the only region where there has been a worsening of the situation?

Georges Plassat - Chairman and CEO: It wasn't quite as bad as you think, but it was worse than we expect or would have wanted. Now in China, there is a phase of what you could call stabilization in the economy, right everyone knows that, you just need to read the papers, but that's okay. We know that there is a clear change in policy in organizations and that would lead to a long-term plan and as is usually the case in China. Now everyone in China is really involved in this. It's at the local level, the country level, the political phase everyone. So obviously it's going to take some time. Now whenever the Chinese undergo something like that then the outgoing government doesn't do anything to prejudge the situation and the incoming government takes a bit of time to get right around it, so stability. Now in China, obviously we have to manage a number of things. It's not a walk down the garden path, competition is lively, consumers have slowed down their increase in purchase volumes, but everywhere in every company it's had the exact same impact now, so if you follow a retail, I don't want to comment on what my competitors are experiencing, but you just have to look at their numbers. Now as Pierre-Jean said, even in a difficult market environment, Carrefour's market share have gone ongoing up. Now on the recurring operating income and this 130 basis points that you mentioned. Some of it is due to an increase in wages and also some of it to a slight worsening of the commercial margin because of competition. The next question goes to Pierre-Jean.

Pierre-Jean Sivignon - CFO: Yes, well, the Chinese New Year for 2011 was in fact earlier in the western year than it was this year. Remember that in 2011, at the end of 2011, Chinese New Year was just early in February, so we had to increase our inventories very significantly at the end of 2011 and it wasn't the case in 2012, because the new Chinese New Year was in fact in mid-February. So the end of you inventory levels were very different so much lower in 2012 than in 2011. Purchasing much lower in 2012 than in 2011 and therefore the drop was very different and we are talking about maybe EUR10 million and this obviously explains the drop in margin between H2 2011 and H2 2012. Now the other question about debt and cash in Indonesia, I think you are quite right and you've read the papers right. The operation was closed in January 2013, so the cash related to the operation will be included in January 2013, actually no it has already being (cached) in. We have got it in our accounts now. But it's not in the end of year accounts from last year.

Unidentified Analyst - CIC securities: (Indiscernible), Freelance Journalist. I have three questions. I'd like to know what decision you've taken concerning convergence of your balance. Secondly, when would you be able to present a new formula for the hypermarket in order to relaunch your non-food sales? Finally, how many hypermarkets are losing money in 2012 in France?

Unidentified Company Speaker: Concerning convergence, I think I've already answered that question. Convergence is not really an issue for me anymore. It should never have been an issue in the first place. Our stores have the Carrefour banner Planet has come down – we've taken down the Planet signs at Carrefour hypermarkets. Most of our supermarkets are now Carrefour markets. Franchise owners have accepted that decision and we also have a Carrefour brand on our convenience stores. We've tested the impact of using Carrefour when it's added to market and when we have the logo on some reopened stores and frankly, the results are not yet significant, but I can see Noel giving me a little sign there. There, that's the answer, zero. We even have some clients, because we've carried out surveys, we surveyed our customers in our remodel supermarkets. There are some who haven't even seen that the Carrefour sign had been taken down and when we showed them, they said, Oh yes, but we saw the logo. So the idea is not – we're not going to impose this on the people running the franchises. You must never force people to do things. We are installing Carrefour on the supermarkets. These are remaining Carrefour supermarkets, but it represents a branch of business, which is different so much than for convergence. Your second question concerns, oh, yes, hypermarkets losing money in France? No, well you've seen that our hypermarkets are now back in profit. I'm not going to give you more of details, but the Company as a whole is doing well. Last question, we know there was a third one, the date when you will present your new hypermarket formula, because you think we're going to restart the Planet business. You want us to go up to the moon and come back with the horse and carriage, no. We're going to develop our stores as they need to be developed. We have no spectacular answers to give you, we have no particular claims to make here, we are not being pretentious, we're going to continue to work normally and regularly in our stores, but there will be new big bang in the Planet sense.

Marc De Speville - Redburn: Marc De Speville, Redburn. I have two questions. The first concerns a topic which is dear to your heart Mr. Plassat that is people. What has become the crazy people or the (anesthetized) people that you talked about six months ago? In other words, how far of the first, the crazy guys stopped the anesthetized people from waking up and doing what they should be doing. Do you expect the crazy guys to become the same, or do you expect them to go away is there going to be a clear out or will it be an in-house revolution? Second question concerning non-food, can you give us an idea of the timing of the platform changes, which are I think necessary, because for the moment customers simply can't know when a non-food product ordered online will actually be delivered?

Unidentified Company Speaker: Yes, you are quite right. Okay, the crazy guys (on the) anesthetized you've them all together, I see in the (global) portrait of the company. So the crazy guys, I think, they are a fewer of them. Maybe somebody was going to give me a list at the beginning of the year, and the anesthetized people, well you know that little by little we are emerging from operations after a long period of under anesthetic, but I think that things are getting back to normal. The key to this is simplifying the organization, simplifying the processes and also looking at the IT issue. That goes back to your first question concerning the orders, people who didn't know when they will be delivered. But IT is in the heart of all this. Maybe IT drove some people crazy, maybe others put them to sleep, but the key to all this, let me explain this more clearly. We are going to move towards the situation where we have an IT platform for Carrefour which will be the same for the hypermarkets and the supermarkets. The stupid decision was to bring together a lot of things, which had nothing to do with one another in a mixed situation where the identifier simply didn't work. So we are beginning to work on this now in the hypermarkets. This is a system that has been adopted. It is named after a little girl from (Attila) we are moving on to something that's sounds more gentle and which should simplify things. But there are still people who stick their heads up from time to time, but the essential objective is to get all these people back to work. We need to simplify the structures, make ourselves more agile that will be the final solution. But let me repeat what I said earlier. We are not running a tobacco store. We have the same sort of problems as you do in the school system. This is a big system. You have to get people moving. You have to show them proof that things are changing. So we have a new organization structure, which is under preparation for France with fewer layers, all this is underway. That will be announced I think during the month of March with the backing of the people who run the business in France, who are very enthusiastic, but all this takes time. You can force things through or you can work progressive and I've always preferred dialog and conviction and if you can't convince people, then you have to act. But all this is underway.

Unidentified Analyst - CIC securities: (indiscernible), Financial Times. Have you finished moving out of certain countries or are there one or two countries remaining which you will be moving out of?

Unidentified Company Speaker: I think you already asked this question. Didn't I already give you the answer? We have no other exits planned. I think that what we've done has been well done, but this is (another) issue. There are some countries where we have some strategic options to look at and it's up to us to run the business properly and to adopt the proper strategies.

Unidentified Analyst - CIC securities: I see less however with my left eye, the lighting is not so good. I have two questions concerning organization. You just talked about the future organization in France. In its future organization, is the decision to split the French hypermarkets into three separate networks; small, medium and large, is that going to be implemented and there are lots of rumors about this?

Unidentified Company Speaker: Lot of rumors, I know, yes. That's the question. I will answer your question, yes.

Unidentified Analyst - CIC securities: Second question are you satisfied with the organization of your Drive system which works on picking basis in the store in the hypermarket and the supermarkets, which is perhaps not the most effective method. It's not really efficient. Are you going to maintain that model or you are going to move towards more industrial models as it work for collecting the goods?

Unidentified Company Speaker: First question, we need to change the organizational structure of hypermarkets in France. We've organized ourselves now in terms of areas within which there will be small and medium and large-sized stores. We need to do this in order to have a link with our purchasing centers in order to define the product mix, but the organization we have today large hypermarkets, medium hypermarkets, small hypermarkets, that will not be maintained, because in terms of agronomics, this is a problem when we look at logistics and the possibility of organizing joint operations. It has merits. The main merit was to show that we had three different types of hypermarkets with their own problems in terms of products mix and pricing, but we need to get back in toward organization in terms of geographical areas and catchment areas. The second question concerning Drive, yes, we need to attack this from professional point of view. We need to look at this model, the picking system works well in supermarkets, that's understandable. Because in the afternoon people have time they can do this properly. In the hypermarkets we need, as you say, a more industrial model. I think, we have about two so far. The last two when are they? So we need to look at the Drive system and in order to do this we need somebody who is responsible just for this. Who looks into the model in detail, who gets the necessary documentation together and then makes recommendation concerning organization, pricing, product mix and so on. So does that answer the question? If you want the Drive to move onto the one code per consumer system, then obviously, all this needs to be linked to the e-commerce system, because the Drive system is in fact e-commerce where you go and pick up your own goods, rather than having them delivered.

Unidentified Analyst - CIC securities: (Indiscernible) from Reuters. I wanted to come back to this question of decentralization, which is already, I think, well underway in France in the hypermarkets. Can you talk about the impact this has already had, what signs you've had impact on traffic, have there been any tangible positive results from this decentralization already.

Unidentified Company Speaker: All these things are difficult to measure. It would be very pretentious to say that this process, which is underway, will in just a few months produce a result, which we can see in terms of numbers, but the feedback we've had is that people there want this, they were asking for this and so it's going to be a bottom up approach. What we need to do now is to ensure that between the people at the grassroots who are asking for capacity, particularly in IT terms, but the IT platform needs to have the capacity necessary, this is being changed, this is being done and then the people working in the system have to accept this, but we are on a rising tide as it work. If there are any obstacles we'll overcome them. But, yes, I think the message has got across very clearly, it's been understood. It was a message people were waiting for, they were demanding it, but as in all large organizations, there are problems with (nurture) and there are obstacles, but the movement is well underway.

Unidentified Analyst - CIC securities: Two questions if I may. (Indiscernible) Asset Management. You talked about incentives for store managers in this context of decentralization. Can you give us more explanations, how is this compensation system going to change, I think previously it was based on sales and on stocks, so this system is going to change – not really in 2013 and 2014? Then the second question concerning non-food, are the categories which you would like to move out of, particularly cyclical products or products with a short shelf-life like electronics or there are certain categories that you wish to get out of in the non-food sector?

Unidentified Company Speaker: Let me repeat concerning non-food, we don't want to abandon non-food. If we allow this idea to circulate, then little by little we shall destroy the overall interest of coming to hypermarkets. So the answer is obviously no. But concerning certain zones, concerning the size of the stores, concerning the competitive situation, obviously, are offering a change, but there is nothing new to this which will continue to modulate the offering. Now concerning incentives, that's a genuine issue. Incentives are being reviewed top-down. Within the Company, we are trying to integrate more qualitative incentives. Why? Well, because the quantity-based incentives, which previously were virtually the only ones available, gave rise to behavior which didn't always suite the commercial interests of a company. It also left to one side, a whole sector of the organization which needs to be looked at, particularly the development of people and changes to the organization. So these incentives are now being modified. They have already been modified for country heads. They are also being modified for the top management of the Company and people will in future very correctly incentivized in a different way in the past with more quality criteria, but which are just as demanding as the quantity-based criteria. All this is underway, all this is being set up. What you need to understand is that you can't fix goals for people, you can't fix objectives which are going to be the basis for the incentive if the resources are not available in the store, and this is where we came up against the problem of IT. Once again, that's something which is being solved. Normally this should be done in 2013. I'm talking about the IT platforms in the stores. It is a three-year program, if you take three years. I'm repeating this maybe this is the answer I gave to (Asia) and Brazil, too.

Unidentified Company Speaker: Do you want to take the question from Citigroup? This is a question for the whole assembly here, and how do we know that it is Citigroup? Do we know their telephone number? That's something new. That's the first time in 40 years that it is happened to me. Any other questions first of all?

Nicolas Shao - Barclays: (Nicolas Shao), Barclays. Can you come back to what has been reported by LSA last week, concerning that the point that you wanted to call full time on the situation with LeClerc. Are you saying that the period when Carrefour was more expensive than LeClerc is now over? You said you were number two in terms of price positioning in France? Does this mean that you want to align your prices with those of the LeClerc? Secondly, could you talk a bit about your promotional activities in France and their intensity? Have you looked at the situation last year? Are you now satisfied with the mix between the various different types of promotions and special offers and so on? Thirdly, Turkey, we've understood that you don't want to quit this country. You said you don't want to quit any countries, but your current partner didn't seem to be too happy with you. Have you got together? Have you papered over the cracks? Can you talk about your situation with (indiscernible) group and the options that you're looking at there?

Unidentified Company Speaker: First question. The first question was the price positioning with respect to the LeClerc. Look, we can't line up our offering with a simple mirage, no, that's the truth. We have looked into all this. We have looked at the way our competitors put together their price indices and we haven't done this on our own. We've looked at the people the way they work, the way they do this today. We are familiar with all their methods. Secondly, LeClerc, while this is their own playground, they have been talking about this for 40 years. They have said that they were the cheapest and everybody has believed them, but it is not true. Now they defend themselves by saying that we include special offers in our price comparisons, but that's not true either. So between the dialectics and the truth there is a whole world and that world has a name, it is price positioning and price image. The price image of Carrefour has improved quite rightly. This is justified and I'm very happy with that result. Okay, we maybe second behind LeClerc in terms of LeClerc, but the gap is very, very narrow in product mix that it contains 100,000 or so SKUs. That's my answer. Then, obviously, yes, we had to say that we were putting it into the truce because these were people who didn't behave correctly towards their competitors. You can't attack a competitor. You should mind your own business and manage your own company and leave the others to get on with theirs. There are various corporative movements which are not listed on the stock exchange, they don't have the same constraints. They talk about our bad practices, so called, they talk about our cumbersome organization. This is what they have been saying at least in some private organizations, but all this comes on the record very quickly. So if you say that we are putting it into the truce, yes, but we should get on with our own business. It's surprising that they should be so vindictive ever since, so we've become competitive in price terms once again, but that's not my problem. Okay. Concerning the special offers, yes, it's true that we are reviewing the mix between special offers, loyalty problems and particularly the standard products. All this takes time, but this is something that's underway, and we'll certainly give rise to satisfaction. I am talking about our techniques in terms of promotion. Once the share of sales which are represented by special offers, that is higher figure than that of our main competitors that's what I can say. Normally, it should decline very slightly with an injection of the difference of the level of our standard prices. That's what we want to do. Turkey was your other question. Well, you are giving me news about our partners, thank you very much. As far as I am concerned, the situation is still the same, that's all I can say. This seems to worry you. Why? What's the problem? We own 60% of the Company. You are aware of this. We have the majority holding in the Company in Turkey, and so it's reasonable that in Turkey we should devote some thinking into the appropriate strategy.

Operator: Al Johnston, Citigroup.

Alistair Johnston - Citigroup: Just want to circle back on two questions, which have been asked already. But on the provision release, whether it be EUR1.5 billion or EUR 200 million or whatever, what will those provisions relate to? Is it the tax provisions and the settlement of those, or is it provisions from restructuring or is it different types of provisions? That's my first question. The second question, just on the subject of provisioning, is the EUR419 million, which is listed in the nonrecurring items, again does that relate to tax audits again? Those are my two questions.

Pierre-Jean Sivignon - CFO: I think on your first question, the amounts will relate the various types of risks and I – of course, some of it will be tax, some of it will be social. I think we can't really disclose that because, first of all, as we speak, I don't know it. I think the envelope of the maximum cash outflow has been disclosed and the various types of risks, I can't. You know the three types of risks, it will be on those three categories, but I can't really forecast between the various categories. Now for the amounts which has been booked and I know you are not talking outflows, I understand you're talking about what has been posted as a debit in the income statement of this year. Yes, the bulk of it, were related to tax.

Alistair Johnston - Citigroup: Just to come back on that. I am a little bit confused, the implied interest on tax provisions, is that the EUR180 million or is that within the EUR419 million? You talked about Asia and Latin America, you talked about the use of that money. You talked about investment of stores, you talked of reduction of debt, what are you going to do precisely?

Unidentified Company Speaker: Do you think I know today very precisely, what are we going to do with this money. The first aim is to reduce the net debt of the Company so that we don't find ourselves at the moment of relaunch with any liquidity problems. The markets as you know are very concerned about this. Secondly, we are going to give ourselves the means to take a more offensive attitude perhaps, but I can't disclose our strategy for the use of these funds today.

Alistair Johnston - Citigroup: (Indiscernible).

Unidentified Company Speaker: I'm sorry the question can't be heard by the interpreters. Sustainability, why do you use this English word in French? You doubt the sustainability of our margins in Europe and why do you put them in doubt? Yes, it is our Company, it's our Group, if we can't achieve sustainability of its margins in Europe in this difficult situation, who else can do it for us? That's my answer, but I believe you talked about our commercial margin or our margin in terms of ROI, or in terms of ROI. Now let me give you another factor that we forgot to mention maybe. You know there are some new measures particularly in France. I think it's the CICE, the tax credit for companies, that's an excellent decision. The net contribution of this CICE will be less good than the overall contribution, because there are other issues, which reduce the impact, but all this is extra margin for maneuver in a difficult economic situation and that was the reason that this measure was decided on. So I think that we shall meet our targets in terms of the sustainability of our ROI, okay? I'm not making any further commitment with that, but that's our mission. Our mission is to get through this difficult period with reinvestment, to restructure our business, with new attractiveness in terms of our stores, with new basic review of our product mix, we are going to work on logistics too, all this is going to be done in the next two years. So, yes, I'm confident about the sustainability of our ROI.

Unidentified Company Speaker: Well, look, thank you all very much. Thank you for coming along here today. I hope that we've managed to pass on to you our convictions concerning the year to come. Personally, I'm certain that we shall come back next year with some good quality information and maybe it'll turn out that things are even more complicated than we expected last year. Okay, thank you all for coming along. Thank you very much.