Carrefour aims for higher free cash flow by focusing in the medium term on core markets and cost savings

By Joshua Kirby

Carrefour SA presented a plan on Tuesday to step up investment and maintain annual share buybacks through higher profits, helped by increased cost savings over the next few years.

French grocer targets annual net free cash flow of more than 1.7 billion euros ($1.70 billion) by 2026, boosted by an increase in annual investments to more than 2 billion euros , compared to approximately 1.7 billion euros currently. This year, the company is aiming for an FCF of more than 1 billion euros.

The focus will be on developing the e-commerce channel – with a target of over €10 billion in gross merchandise value by 2026 – as well as key markets in Europe and Latin America, said Crossroads. The company will also focus on increasing sales of its private label products, which are expected to reach 40% of food revenue by 2026, up from 33% this year.

Cost savings should come through a focus on efficiency, including in operations and in purchasing, Carrefour said.

The expected increase in cash will be used in part for an annual buyback policy, Carrefour said, as well as a dividend paid each year, rising by at least 5% per year. The company could also consider medium-sized acquisitions in the markets where it operates.

Write to Joshua Kirby at [email protected]; @joshualeokirby

Christy J. Olson