By Nathan Vifflin
(Reuters) -Europe's biggest food retailer Carrefour (EPA:CARR) said on Monday it was expecting greater financial benefits from the acquisition of the Cora and Match retailers than previously, despite higher costs than anticipated.
WHY IT’S IMPORTANT
Carrefour said the upside comes from better performance in stores, as well as cost optimizations, despite higher than anticipated integration costs. The group plans to put Cora hypermarkets under the Carrefour banner before the end of 2024, while Carrefour products will be available at both Cora and Match from September 2024.
KEY QUOTES
"With the acquisition of the Cora and Match banners, Carrefour is carrying out its largest operation in France in more than twenty years and is consolidating its leadership in food distribution on its domestic market", Alexandre Bompard, chairman and CEO of Carrefour, said in a statement.
"This operation consolidates Carrefour's position in the food distribution market in France, with 60 Cora hypermarkets and 115 Match supermarkets, mainly located in the Grand East and Northern regions of France, where Carrefour has historically had little presence."
BY THE NUMBERS
Carrefour said it sees an additional contribution to earnings before interest, tax, depreciation and amortisation (EBITDA) of 130 million euros ($139.4 million) at an annualized rate by 2027, against 110 million euros originally.
The group said the integration costs, mainly distributed between 2024 and 2025, are now expected at 250 million euros instead of 200 million euros initially anticipated.
CONTEXT
Nearly a year ago, Carrefour said it would buy, in cash, the French stores of Cora and Match from rival Louis Delhaize. The enterprise value of the operation was estimated at 1.05 billion euros, and included the purchase of 55 hypermarkets and 77 supermarkets.
($1 = 0.9326 euro)