FRANCE: Auchan Showing Signs Of Recovery

Auchan has reported slightly improved first half sales figures, driven by better trading in key markets.

For the period to 30 June, the group’s overall turnover edged up 0.8% to €26.11bn, thanks to solid sales activity in almost all countries in which it operates (11 of which showed revenue growth at constant exchange rates). Performance was lifted by the opening of 62 outlets during the period, mainly in China, Russia, France and Italy, whilst organic sales rose 1.1%.

Its core Auchan Retail division, which operates 969 hypermarkets, 2,612 convenience stores and e-commerce activities in 16 countries, saw turnover increase 0.7% to €25.37bn. Organic growth came in at 1.1%, underpinned by store expansion (+1.8%) which offset a decline in like-for-like sales of 0.7%.

Auchan said that performance in French hypermarkets had improved following recent strategic initiatives, whilst its recovery in Spain and Portugal continued with both markets seeing “strong” like-for-like growth. Its added that Italy was showing “encouraging” signs of improvement.

In Poland, Auchan completed the overhaul of the former Real hypermarkets to its Auchan banner with the country seeing strong growth in customer numbers and product sales. In Russia, Auchan’s revenue declined due to the negative economic climate and significant exchange rate effects, although the group reaffirmed its plans to invest significantly in the country.

And in China, despite slower economic growth, revenue increased by 4.4% at constant exchange rates, driven by expansion (11 hypermarkets), whilst its RT Mart banner in Taiwan also saw a rise in revenue.

The group’s EBITDA edged up 0.1% to €1.04bn, although operating profit from continuing operations slipped 13.2% to €296m due to increased expenses.

Commenting on the results, Auchan’s Chairman said: “”2016 is a year of re-foundation for Auchan Holding and in this context the first-half results are encouraging. After completely overhauling the group in 2015, we are concentrating in 2016 on the appropriation by all our employees of our new governance approach, and the new spirit of conquest that is now our driving force.

“During this first half of the year, we have seen encouraging signs which confirm our strategic choices. In a few months, Auchan Retail, Immochan and Oney will have reviewed their business plan, and will be on track to pursue the development of a successful and sustainable economic model and achieve their ambitious targets.”