By Dominique Vidalon
PARIS (Reuters) -Carrefour on Wednesday unveiled plans to buy back an extra 200 million euros worth of shares, reflecting confidence in its turnaround plan, and said it now targeted net free cash flow generation comfortably above 1 billion euros in 2021.
Europe’s largest retailer, which delivered cost savings of 430 million euros ($507.7 million) in the first half of 2021, kept all its other operational and financial objectives under its Carrefour 2022 strategic plan.
Carrefour, whose potential takeover by Canada’s Couche-Tard unravelled in January, said group operating profit in the first six months of the year rose 11.2% from the same period in 2020 to 740 million euros ($873.7 million) at constant exchange rates.
The performance reflected cost cuts and strong second-quarter sales growth of 4.7 % in France, which made up for a more subdued performance in Brazil, where a surge in COVID cases has hit consumer spending power.
Carrefour also said it had entered exclusive negotiations to buy a minority stake in the startup Cajoo, a French specialist of everyday grocery delivery under 15 minutes.
“While the sanitary and macroeconomic context remains uncertain, the group is moving forward with great serenity towards achieving its objectives, both for full-year 2021, which will be another record year in terms of cash generation, and for the medium term,” Chairman and CEO Alexandre Bompard said.
Carrefour is in the midst of a five-year plan it launched in January 2018 to cut costs and boost e-commerce investment to improve profits and sales, as it seeks to tackle competition from online rivals such as Amazon.
Carrefour and food retailers worldwide have benefited in the pandemic as lockdowns have forced people to eat at home.
In the core French market, sales at large hypermarkets grew 4.3% like-for-like, confirming their good momentum.
The 200 million euros additional buybacks complements a previously announced 500 million euros share buyback that will be completed at the end of July.
($1 = 0.8470 euros)
(Reporting by Dominique Vidalon, Editing by Sarah White and Keith Weir)
