- Auchan . com
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- Auchan . com
2007 Report on activity 3 6 8 10 12 14 16 17 24 28 31 34 Interview with Supervisory Board Chairman Vianney Mulliez, and Board of Directors Chairman Christophe Dubrulle Our international presence Sustained growth: Balanced business sector development Innovative retailing: A high-quality relationship with every customer 186,000 employees: Making human relations a priority Sustainable retailing: Accepting our social and environmental responsibilities Four core businesses: Structured by business sector Hypermarkets Supermarkets Immochan Banque Accord Organization chart INTERVIEW 3 Vianney Mulliez, Chairman of the Supervisory Board Christophe Dubrulle, Chairman of the Board of Directors What are your views on 2007? Vianney Mulliez : 2007 was a relatively stable year in which our like-for-like revenue grew by 2.8%, and by 5.8% overall. The year was also characterised by a high level of investment, which was up by 45% to over €1.7 billion. Naturally, that has had its effect on the figures for the year, but it gives us a solid foundation for sustainable long-term growth. In 2007, the Group modified its governance structure, replaced some of its senior management teams, developed in-house synergies and updated its corporate plan. All these changes reflect our commitment to building on our strengths and improving the way our business sectors interact as part of boosting our ability to grow. Christophe Dubrulle : Our financial results for 2007 were mixed, with good performances from some countries, like the Central European states and China, and some business sectors, like banking and retail real estate. In Western Europe, our hypermarkets and supermarkets suffered from rather muted economic growth. Nevertheless, I would like to take this opportunity of congratulating our French hypermarkets. Their net income for the year as a whole may have been down on the previous year, but they did well to get back on the path to growth from September onwards. In our mature national markets, households are increasingly preoccupied with affordability, and retail is one of the first to feel the effects. Paradoxically, regulation prevents us from being able to bring consumers the full potential benefits of our expertise. On the other hand, our customers in those countries where we arrived more recently are appreciating how effective our business model is at creating value and improving their quality of life. In purely business terms, the year was a constructive one: we continued to invest in new markets, like telephony, and alternative retailing formats, like Internet sales. We also continued during the year with the process of dramatically transforming our supermarket business via the Simply Market project. Free translation from a French language original. << Accelerating our long-term growth >> ACCELERATING OUR 4 LONG-TERM GROWTH How is international growth progressing? Vianney Mulliez : In addition to our continuing organic growth, there were three major international developments in 2007. In Morocco, the disposal of our holdings in Marjane and Acima to ONA has enabled us to redeploy our human and financial resources, and has contributed to reducing our borrowings. The partnership agreements signed with the Furshet Group in Ukraine and the Enka Group in Russia mark a turning point in our growth in Eastern Europe. Vianney Mulliez 4 core businesses: 413 hypermarkets (1) 708 supermarkets (fully-consolidated), 267 shopping centres managed by Immochan, 5.4 million Banque Accord customers 12 186,000 countries and region employees (2) €36.7 €44.2 billion (3) of consolidated revenue before tax (+5.8%) (4) billion of revenue including tax for the chains (5) (+6.7%) (4) Christophe Dubrulle : We now operate over 70 hypermarkets and supermarkets in Central and Eastern Europe. In 2008, we plan to add the 14 Russian stores of the Ramstore chain, and to open 30 or so new stores, including our first hypermarkets and shopping centres in Ukraine. In China, we now have over 100 hypermarkets, when you include the RT Mart chain, and in 2007, Banque Accord became the first French bank to issue a payment card here. In 2007, we opened more than 50 hypermarkets and supermarkets in our international markets, adding 320,000 m2 of retail floor space to our total. Immochan also enjoyed strong organic growth, opening 15 shopping centres during the year. The proportion of our business conducted in international markets therefore continued to grow in 2007, reaching a new high of 48% of global revenue. This success is the result of the strategy we have been pursuing for nearly 10 years, and we expect to see the pace of growth accelerate in coming years. Have you stepped up your efforts in terms of sustainable development? Christophe Dubrulle : Behaving responsibly as a company is a fundamental value of Auchan, and we’ve recently reaffirmed that in our new Corporate Vision for customers and employees. We are more conscious than ever of the fact that our growth must be economically effective, socially equitable and ecologically flawless. In human resources, for example, we have introduced an employee shareholding scheme in China this year, and will do so in Russia next year. This important commitment reflects the convictions of our employees, our customers and our business partners, and constitutes an essential adaptation for the future. This year, the Group will also be introducing a series of sustainable development initiatives to accelerate the exchange of good practice between our business sectors and activities. What are your priorities in the short term? Christophe Dubrulle : In terms of growth, we are planning a sustained programme of store openings in 2008, with over 50 hypermarkets and 35 supermarkets. More particularly, we look forward to a successful start-up in Ukraine, and changing the branding of Ramstore outlets in Russia. Wherever possible, Immochan will be providing the foundations for this growth. We own 79% of our malls, which makes us one of the very few retailers to benefit from this distinct advantage. 5 Banque Accord plays a vital role in our growth as a Group by supporting our customers and securing their loyalty. In the eurozone, it is also paving the way for the introduction of the Single Euro Payments Area. Also in the short term, we will complete our development of the Simply Market concept, and continue with its rollout. Lastly, the future of retailing will depend largely on innovation and the way in which our sales channels complement one another, from shopping in-store to ordering over the Internet, drive-in collection and home deliveries and services. This is the reason why we are already experimenting and developing the expertise we need to become a major player in this respect. How do you see the future of the Group over the longer term? Christophe Dubrulle : Accelerating our organic growth rate will be the most important source of growth for us, because it is more affordable, more profitable and more in line with our values. The way we do business will continue to adapt unflinchingly to technological change and new consumer expectations. These aims are central to our Corporate Vision, and are shared by our 186,000 employees, whose professionalism is the cornerstone of our success. Vianney Mulliez : As an independent company, the policies of the Auchan Group reflect a long-term commitment built on essential values that protect us from the need to respond to short-term imperatives. One of our great strengths is our financial stability, as reflected in the continuing Standard & Poor’s rating for both the Group and Banque Accord: A in the long term and A1 in the short term. Our borrowings are reasonable, at 1.3 year cash flow and 30% of equity. Our highly decentralised internal operational structure and successful sales policies are both built on clear fundamental values: the accountability and professionalism of our people, discount in every price quartile, continuous range improvements and dynamic sales policies. These fundamentals, which fit perfectly with the way we sell our products today, can also be adapted to meet new requirements, new consumer market segments and new retailing methods. Building synergies between business sectors by creating a research and development centre, for example, should help us even further in that direction. For all these reasons, we look forward to the future with great confidence. (1) 408 of which are included in the consolidated accounts (404 fully-consolidated and 4 accounted for using the equity method) (2) Average full-time equivalent workforce. (3) 48% of which was generated from international markets. (4) Growth in continuing operations. (5) 426 hypermarkets and 2,156 supermarkets and minimarkets. (6) Recurring operating income before other recurring operating income and expenses, depreciation, amortisation and provisions. (7) Financial debt, less cash and cash equivalents, plus or minus derivative financial instruments/equity capital. Christophe Dubrulle €2,070 €762 €962 €1,564 30% million of EBITDA (6) (–2.5%) million of net income from continuing operations (+1.1%) million of net income attributable to equity holders of the parent (+28.8% / +0.8% excluding income from disposals) million from cash flows (–1.8%) from operations of gearing ratio (7) 6 OUR INTERNATIONAL 4 core businesses in 12 countries and region 413 hypermarkets (1), 708 integrated supermarkets, 267 shopping centres managed €36.7 billion of revenue before tax. France 121 Auchan hypermarkets Italy 46 integrated hypermarkets, including 5 Les Halles d’Auchan stores €14.9 billion of consolidated revenue before tax including 45 Auchan stores 7 Auchan hypermarkets owned by the Schiever Group 417 supermarkets 295 integrated (217 Atac, 69 Simply Market, 3 Easy Marché, 1 Fredi and 5 Eurobounta), 40 franchised stores (38 Atac and 2 Simply Market) and 82 Atac associated with the Schiever Group 103 shopping centres managed by Immochan (including 3 managed under contract) Banque Accord: 2.9 million customers Alinea: 15 stores 68,000 employees Spain 48 Alcampo hypermarkets 123 Sabeco and Simply supermarkets (integrated) and 117 associated Aro Rojo minimarkets 29 shopping centres managed by Immochan Banque Accord AccordFin 17,100 employees Portugal 19 hypermarkets 17 Jumbo and 2 Pão de Açucár 8 shopping centres managed by Immochan (including 2 managed under contract on behalf of Auchan Portugal) Banque Accord Crediplus 6,800 employees 5 franchised hypermarkets owned by AZ SpA, including 2 operated under the Auchan brand 1,479 supermarkets 270 Sma, Simply Market and Punto Sma (integrated), 470 franchised and 739 associated 45 shopping centres managed by Gallerie Commerciali Italia (2) (including 3 managed under contract) Banque Accord Accord Italia 18,600 employees Luxembourg 1 Auchan hypermarket 1 shopping centre managed by Immochan 610 employees Poland 22 Auchan hypermarkets (3) 10 supermarkets 8 Elea and 2 A-tak 17 shopping centres managed by Immochan Banque Accord Accord Finance 11,300 employees Hungary 10 Auchan hypermarkets 9 shopping centres managed by Immochan Banque Accord Accord Magyarorszàg 4,700 employees PRESENCE 7 At 31 December 2007 by Immochan, 5.4 million Banque Accord customers, Russia 18 Auchan hypermarkets 10 Atak supermarkets 16 shopping centres managed by Immochan (including 11 managed under Ukraine First Auchan hypermarket (5) and first Immochan shopping centre (5) openings scheduled for Spring 2008 Banque Accord : operations begin in 2008 contract on behalf of Auchan Russia) Banque Accord operated under the Auchan brand Mainland China 20 Auchan hypermarkets (6) 85 RT Mart hypermarkets (6) 20 shopping centres (6) managed by Immochan Banque Accord Banque Accord Accord Consulting BA Finans 15,000 employees Romania 4 hypermarkets (4) 39,600 employees Accord Intermed Consumer Finance 2,700 employees at 31/12/07 Taiwan 19 RT Mart hypermarkets (7) 19 shopping centres managed by Immochan (including 4 managed under contract) 4,300 employees t t t tt ttt tt t t (1) 408 of which are included in the consolidated accounts (404 fully-consolidated and 4 accounted for using the equity method). (2) G.C.I. is owned 51% by Immochan International and 49% by Simon Property Group. (3) 18 are wholly-owned, the remaining 4 being owned by Schiever Polska, a company owned 50/50 by Auchan and Schiever. (4) Partnership with MGV Distri-Hiper: a 29% holding accounted for using the equity method. (5) Partnership with Furshet and its shareholders, under which 66% of the hypermarkets and 50% of the shopping centres are owned by the Auchan Group, which also owns a 21.2% equity holding in Ukrainian supermarket operator Furshet. (6) Partnership with Ruentex: 67.2% of Auchan hypermarkets and 32.8% of RT Mart hypermarkets are held directly or indirectly by the Auchan Group. (7) Of which 14 are included in the consolidated accounts and 5 are managed under a management and supply contract. 8 SUSTAINED GROWTH Balanced business sector development 5 39 15 million m2 of retail floor space hypermarkets opened in 2007 shopping centres opened in 2007 Organic growth + 326,000 m2 of additional retail floor space in hypermarkets and supermarkets, and 262,000 m2 in shopping centres. China In 2007, Banque Accord became the first European bank to issue a payment card in China, in partnership with Shenzhen Development Bank. 2 external growth projects in Eastern Europe A triple partnership agreement was signed in Ukraine with the Furshet Group for the development of hypermarkets and shopping centres and the acquisition of an equity holding in the Furshet supermarket chain. In Russia, Auchan has signed an agreement with the Enka Group covering the operation of 14 hypermarkets. During 2007, the Group consolidated its positions in its traditional markets of Western Europe, where it added 19 hypermarkets and supermarkets and entered new markets and retail formats. Group growth accelerated in its more recent development regions of Central Europe, Eastern Europe and China, with the opening of 32 new hypermarkets and the signature of two major agreements in Russia and Ukraine. STRONGER ORGANIC GROWTH In 2007, a sustained policy of internal growth was pursued in the Group’s targeted development regions of Europe and China. 39 hypermarkets were opened during the year: 16 in Europe (7 in Western Europe and 9 in Central and Eastern Europe), and 23 in China (5 Auchan and 18 RT Mart). 13 additional integrated supermarkets were opened in Europe. The European Simply Market chain expanded to 191 outlets, with 140 stores opened or refurbished in 2007. Some 40 hypermarkets and supermarkets were also enlarged during the year. By the end of 2007, the two business sectors had together added 326,000 m2 of retail floor space. Immochan, the Group’s Real Estate subsidiary, grew strongly during the year, opening 15 shopping centres (1) and extending a further 6 to add over 1,250 units totalling 262,000 m2 of retail floor area. At the end of 2007, the Group owned 1,121 integrated sales outlets (413 hypermarkets and 708 supermarkets) and managed 267 shopping centres in 12 countries. Growing alongside Auchan hypermarkets, Banque Accord became the first French bank to issue a payment card in China at the start of 2007, and began operations in Romania. The bank launched a contactless card in France at the end of the year, and a number of new partnership agreements were signed with the chains. AGREEMENTS IN UKRAINE AND RUSSIA Two major agreements were signed with local partners during the year. A triple partnership agreement was signed in Ukraine in March 2007 with the Furshet retail group, under which two companies were established: one to develop the Auchan hypermarket brand (owned 66% by the Auchan Group), and the other to develop shopping centres (owned 50% by the Auchan Group). A 21.2% equity stake was also taken in Furshet supermarkets, which will continue to be managed by the Ukrainian group. The country’s first Auchan hypermarket will open in Kiev in Spring 2008. In Russia, the Auchan and Enka groups signed an agreement in December to operate 14 Ramstore hypermarkets – 9 in Moscow and 5 elsewhere in the country. All will adopt the Auchan brand in the first half of 2008. The Auchan Group sold its 49% holding in the Moroccan companies Marjane and Acima to ONA in August 2007. (1) Including 4 managed under contract. 9 Franchise operations also continued to grow during the year. 2 Auchan hypermarkets were opened in Calabria following the signature of an agreement covering 3 existing hypermarkets and 3 new shopping centres at the start of the year. In France, 7 Auchan hypermarkets were operated in association with the Schiever Group, which transferred its Gueugnon (France) Atac store to the Auchan brand at the end of the year. A total of 510 supermarkets were operated under franchise, and a further 938 with associates, in 3 countries (France, Spain and Italy). In Italy, Sma signed a synergy-development partnership with CRAI, an association of independent retailers. The new partnership became operational at the beginning of 2008. During the year, Auchan France signed an agreement with drink and snack foods distributor Européenne Food. ROUTES TO GROWTH In 2007, the company continued to test new and innovative retail formats offering effective routes to growth. More specifically, it was able to exploit opportunities created by the emergence of new markets. Following on from France in 2006, Auchan Italy became a virtual mobile telephony operate in 2007, in partnership with Wind. At the start of 2008, the chain also signed an agreement with Italcogim Energie to market gas and electricity supplies. Online sales continued to grow in a variety of formats. In Portugal, the @Jumbo e-commerce site went online in Lisbon and its surrounding region in February, before being rolled out to the rest of the country in October. In France, Auchandirect reported a good performance, and launched its services in the Lyon region. In 2008, these will be extended to Toulouse (April) and Lille (at the end of the year). GrosBill, the low-price online and in-store technology opened 2 new stores in Lille and Lyon during the year to increase its total number of outlets to 5. Alinea, the 15-store home furnishings and decoration launched is own e-commerce site in 2007. Chronodrive, the web site that lets customers place their orders online for later collection, has opened a third collection point at Orvault-Nantes in France. More openings are planned for 2008, at Hallennes-lez-Haubourdin (opened in January), Basse-Goulaine and Ballainvilliers–La Ville du Bois. Following the openings at Plaisir and Roncq, AuchanDrive now operates locations alongside 4 hypermarkets, and the chain will continue to grow in 2008, with around 20 new sites due to open. Since the end of 2007, the concept has been under test in Turin under the DriveAuchan name. In Taiwan, RT Mart introduced a new web-based ordering format for its DriveThru brand at the start of 2008. Our discount formats also grew during the year. In France, the Les Halles d’Auchan discount food chain opened its 5th store at Blanc-Mesnil. The home decoration chain Little Extra opened its 2nd outlet at Thiais, and plans 5 more in 2008. On the other hand, the Au Marché Vrac ultra-discount test project closed at the end of the year after delivering unsatisfactory financial performance. 191 Simply Market supermarkets Controlled borrowing In 2007, borrowing remained under tight control at 30% of equity ; a level equivalent to 1.3 year of cash flows from operations. In July 2007, the Group launched a €650 million bond issue to fund an earlier bond with a 2008 maturity date. Banque Accord launched a €200 million during the year, and maintained its S&P rating (A in the long-term and A1 in the short-term). Increased synergies between the 4 business sectors Synergies between the Group’s business sectors and between the chains are being exploited in areas such as transport, energy, marketing, purchasing (especially clothing), household appliances and homewares. International synergies have also begun to be exploited in indirect purchases. This trend will accelerate in 2008 in areas such as sustainable development. Standard & Poor’s rating for the Group A in the long-term, and A1 in the short-term. 10 INNOVATIVE RETAIL A high-quality relationship with every customer 1.4 billion customer checkouts Auchandirect This web site was voted the best “Food Product” site by web shoppers in the first Favor’i Awards sponsored by FEVAD (1). Although economic growth remains sustained in China and Russia, the Group has had to address a lacklustre economic climate in Western Europe. As a result chiefly of rises in raw materials costs, purchasing power is a constant preoccupation, and competitive price pressures remain very strong, particularly in France and Italy. In all our markets, discounting has been accompanied by improved control of costs and expenses. These tensions have impacted on the financial results achieved by the business, and despite customer numbers and sales have grown in Western Europe, the number of items sold fell slightly. DYNAMIC RETAILING All our chains continue to develop distinctive ranges, which they update and adapt to suit new consumer trends and specific local needs, but they all share a single objective: to develop a local retailing style that puts customers at the centre of everything. For example, our supermarkets play to their food retailing strengths, whilst our hypermarkets are recognized as offering the best discounts and unrivalled and unbeatable seasonal offers. Banque Accord is bringing forward financial products tailored to the needs and expectations of its customers, and Immochan shopping centres continue to host a full range of innovative businesses and brands. Price positioning In 2007, our chains consolidated their leading status in terms of price positioning. Auchan Products Club Created by Auchan France for its customers, this club now has some 18,000 members. Price positioning is the lynchpin of chain retailing policy, and continues to be improved in all countries through the inclusion of broad ranges of value-line and range-entry products. Some chains, like Auchan in Romania and Russia, have adopted overall discount concepts, and our Simply Market supermarkets offer permanently low prices. Banque Accord offers the lowest rate payment cards, revolving credit and personal loans in the market. The price reductions made by our chains are recognised and appreciated by consumers, and especially those of Alcampo in Spain and Auchan in Poland, where initiatives have been publicly praised by consumers and the media. SUCCESSFUL OWN-BRANDS The valuable contribution they make to building a broad, high-quality product range has ensured the continued growth of own-brand products, which are taking an increasing share of the market. In France, Auchan has created the Auchan Product Club for its best customers. In Western Europe, our chains are committed to encouraging healthy eating, and some products offered in France, Spain and Portugal also have Braille labels. (1) The French Federation of Distance Selling Companies. ING The Auchan brand will continue to grow in Romania and Hungary during 2008, and RT Mart in Taiwan will also be launching an own-brand range. The design of Auchan products relies on close partnerships with manufacturers. In Italy, Auchan brand products are supplied by 366 companies, 95% of which are Italian companies. Our chains are also developing their own ranges of regional and sustainablyproduced foods, and the introduction over a hundred organic products by Auchan France is an excellent illustration of this policy. All our countries and business sectors apply quality standards. In 2007, the Quality Department for international products was expanded, and now conducts company audits. These will be extended to include all food and non-food ranges. NEW MARKETS By addressing high-growth markets and building on new distribution channels, the Group has been able to capitalise on opportunities and remain at the forefront of retailing innovation. In France, Auchan has increased online sales via Auchan.fr, with a broad range of homewares and leisure goods. Auchan Télécom is making a considerable mark on the mobile phone market with the introduction of new services, including a WAP portal and mobile Internet product. Auchan in Italy will be launching its first telephony products in the first half of 2008. Our European chains are also involved in the health and wellbeing sector, and are introducing health areas into their hypermarkets in selected European countries. These new areas offer non-prescription medication in Portugal and Hungary and optician services in France and Italy. Auchan Hungary has continued with the deployment of garden centres and service stations. Auchan has also been piloting car sales in a number of stores In Italy and Romania. Banque Accord has launched its Flouss.com international money transfer card, and developed new sales channels, like direct channel and e-finance in France with its FlexPay by Oney solution. PERSONALISING CUSTOMER RELATIONS AND LOYALTY Developing new services also delivers real added-value when it comes to securing customer loyalty, and personalising the customer relationship has been a particular focus in Europe. Store loyalty programmes enable personalised offers to be tailored for every customer. Previously structured around its products, the Banque Accord Customer and Sales Service changed its focus to its customer types during 2007. Having decided to build a completely new version of its banque-accord.fr web site, the bank is basing its design and functionality on customer recommendation and feedback. All our chains are committed to saving the time of our customers and making their lives easier, which is also the aim of the customer trails created by Immochan. In France, Auchan and Simply Market test-marketed ranges of personal services during the year. Banque Accord handled the first-ever contactless card transaction in France at the Auchan hypermarket at Englos as part of the Group’s efforts to speed up checkout through-times. Lastly, Self Checkout lanes have been introduced in selected Group hypermarkets and supermarkets in Europe. 11 10,000 Auchan-brand products offered in France Sourcing The quality of our retail ranges relies on international sourcing. Two liaison offices were opened during 2007 in Ho Chi Minh City in Vietnam and Dhaka in Bangladesh. In Italy, Intermedia, the purchasing centre used by Auchan and other retailers became the Number 2 in the Italian market, following the arrival of Metro Italia Cash & Carry. Auchan International The Group’s international suppliers’ service provider Auchan International is now fully operational. Its results improved significantly during the year as a result of exploiting inter-chain synergies and revising its processes. A non-food Auchan Production unit was introduced in Europe at the beginning of 2008, and shared specifications will be defined for the suppliers of Auchan-branded products. 12 186,000 EMPLOYEES Making human relations a priority +17,000 employees in 2007 3.4 million hours of training: 7.5% more than in 2006 Corporate vision To improve the purchasing power and the quality of life for the greatest number of customers every day, with the help of responsible, professional, committed and respected employees. Employee shareholding in China Shares in the company have been offered successfully to the employees of Auchan China, with a take-up rate of 99.4%. At the end of 2007, 110,000 shareholders in 8 countries held 13% of Group equity through Valauchan mutual funds. An initial employee shareholding scheme test phase will be launched in our Russian hypermarkets in 2008 hypermarkets, and Banque Accord will develop its own employee shareholding scheme in France through the Valaccord fund. Internal opinion polls Conducted regularly amongst all employees in all the Group’s chains, these polls are conducted to identify areas for improvement and measure progress. In 2007, the Group workforce increased by 17,000 employees (1). Approximately 1,500 new jobs were created in Western Europe, 8,000 in China and more than 7,500 in Central and Eastern Europe. At the end of 2007, the company employed 186,000 people in its 4 core businesses under 150+ job profiles. GROWTH AND DEVELOPMENT IN JOB PROFILES AND CORE BUSINESSES The Group continually reviews its job description and manpower requirements as part of planning for the growth and development of its core businesses. The availability of highly-professional people is a strategic factor in supporting organic growth, especially in international markets, and supporting the start-up of new areas of business. Our people are also essential in the process of conveying the company’s expertise and values. In 2007, 245 expatriate employees supported the Group’s international growth. Immochan continued its policy of planning ahead to forecast its manpower requirements in each job profile. In our mature countries and markets, adapting the way we work to meet the needs of new consumer behaviour patterns inevitably means making changes to our job profiles and organizational structures. In France, whilst maintaining an internal promotion rate identical to the previous year, Auchan began a selective and experimental project to recruit sector managers from outside the company, and was the first retailer to use Second Life as a communication channel. Auchan France also continued its forward management of manpower, with the result that 643 people have either changed job or location within the company since September 2006. During the year, Atac signed a second Horizon Emploi et competences mobility, training and personal career planning support agreement. The Banque Accord Cap Clients initiative has introduced change management training in France, and employee loyalty in Poland. AN AMBITIOUS TRAINING POLICY: OVER 239,000 EXTRA HOURS DELIVERED In 2007, our people received 3.4 million hours of training. Job-specific training is a priority in the process of preparing our teams in fast-growing countries and businesses. Auchan Russia has set up its own training centre and launched a programme of job- and product-specific course. In France, 37 buyers received training at the recently created college. Portugal, Italy and Spain all saw an increased emphasis on e-learning in 2007. Over 100 modules are already available in Italy, and with some 140 sessions on offer, every Alcampo employee now has a training course tailored to his or her own job profile. Immochan holds specialist welcome sessions for all its new employees. Every time Auchan Portugal opens a new store, it works with the regional employment and job training organisation to provide the appropriate services. Auchan Hungary used a technical university to train 238 employees in 2007; 62 were promoted. (1) Workforce employed in continuing operations. 13 One of the cornerstones of our company is its commitment to high-quality management. Our dedicated management training programme was again expanded in 2007, and a first intake of 26 executives of the Group’s “high flyers” received training during the year. In Portugal, an “Under 35” programme was launched for 25 “high flyers” aged under 35. Atac also continued with its Cap 3 initiative during the year, training over 150 store managers and regional managers and publishing a manual of shared management techniques. Alcampo in Spain and Sma in Italy have developed special programmes for new store managers. ENCOURAGING RESPONSIBILITY AND AUTONOMY These training courses, combined with the commitment to involving employees via participative hands-on management, contribute to making a real difference. Alcampo has achieved its objective of setting up a progress group for each department of the store, and every one of its employees is now contributing to one of the 1,000+ groups created. Auchan Poland alone has 400. In Romania, “segment experts” now have responsibility for ordering and on-shelf pricing. Designed to encourage the acceptance of responsibility, these policies have helped to raise levels of internal promotion. Falling rates of absenteeism and staff turnover, both of which are below the industry average, reflect the level of satisfaction amongst our teams. Manager training Some 15 training programmes were implemented during the year, involving 200 senior managers. Provided in partnership with French Schools of Management (ESCP-EAP, EM Lyon and EDHEC), they are designed to support the company’s key strategic plans and provide managers with the practical skills required to achieve our corporate challenges. An advanced FIRE (2) course for country finance directors and management controllers is now operational. Promoting full-time status From the start of 2008, Auchan France will be offering every parttime employee the option to switch to full-time working if they wish. RESPONSIBLE EMPLOYMENT POLICIES REWARDED Faithful to its core values of trust, sharing and progress, the company takes a proactive approach to improving working conditions, reducing job uncertainty by providing full-time jobs wherever possible and encouraging the inclusion of people who may otherwise have been excluded from work. In 2007, the Group received official recognition from many official bodies for its voluntary policies in these areas. In March 2008, Auchan France announced the introduction of optional full-time employment status for those employees wishing to make the change. This new measure will be introduced in all Auchan locations by the end of 2009. This programme will be introduced gradually, beginning in September 2008. In Russia, Auchan and Atak have developed a range of services for their employees, including medical assistance. The Pão de Açúcar-Auchan Foundation in Portugal plans to create 7 company creches; the first is due to open at the end of 2008. For over 10 years now, Atac in France has been committed to employing disabled people, and signed its third National Disabled Employment Programme Agreement in 2007. At Noyelles-les-Vermelles (France), Simply Market has been working with local and regional authorities to recruit ten people in major hardship. In Spain, Sabeco has extended its recruitment sources and has joined the Empresa y Sociedad (Business and Society) Foundation, which works to encourage the recruitment of people from underprivileged backgrounds. (2) FInance for REtail. (3) Centros Especiales de Empleo (Spanish Confederation of Special Employment Centres). (4) Confederación Española de Personas con Discapacidad Física y Orgánica (Spanish Coordinating Confederation of People with Physical Disabilities) Rewarding initiative The inclusive recruitment policy implemented by Alcampo has received many accolades, including awards from the Fondation Randstad, CONACEE (3) and COCEMFE (4). Auchan Portugal received a special commendation from Equality Equals Quality, which rewards good practice in ensuring equality of opportunity for men and women in the workplace. For the fifth consecutive year, Auchan Portugal received official government recognition as one of the country’s Top 10 socially-responsible companies. Auchan Portugal has set itself the target of recruiting 100 disabled people by 2010. In China, 3.2% of Auchan employees are disabled, compared with the legally-required minimum level of just 1%. 14 SUSTAINABLE RETAIL Accepting our social and environmental responsibilities 5 directions for action: social responsibility towards our customers, employees, suppliers, the environment and society as a whole Auchan France joined, at the beginning of 2008, with other leading retailers and the FCD (1) in signing an agreement with the country’s Ministry for Ecology setting out a 5-year commitment to sustainable development. Alcampo, became the first Spanish chain to offer its customers reusable bags manufactured from a material derived from potato starch, which is totally recyclable and biodegradable. Simply Market is selling a fabric “bag for life” called Ecosimply. Immochan : has been focussing on raising awareness of environmental issues 32 of its shopping centres in France have hosted and provided space for the Fondation Nicolas Hulot Défi pour la terre (Earth Challenge) programme. In Italy, a Casa Amica dell’Ambiente (Environmentally Friendly House) has been displayed in a succession of shopping centres. In every part of its business, the Group always seeks to act as a responsible company for the benefit of our customers, employees, suppliers, the environment and society as a whole. In Western Europe, our chains make a formal statement of their commitments every year in the form of “Responsible Company” reports. Auchan Italy published its first social responsibility report at the end of 2007. Group-level coordination of these initiatives will be introduced in 2008. HEALTHY EATING PROGRAMMES Auchan is committed to improving quality of life for the greatest number of customers every day. Our chains take pride in offering a broad range of products of impeccable quality to suit all household budgets. In Western Europe, they are also committed to the promotion of healthy eating. In France, Auchan introduced its Bien se nourrir pour mieux vivre (Feed good for better life) healthy eating programme two years ago, and in 2007 signed a charter with the French Ministry for Health, Youth and Sport setting out 9 commitments for progress in nutrition, validated by a committee of experts. In Spain, Alcampo has launched its own healthy eating programme called Alimentamos tu Salud (Feed Your Health). Other initiatives are also underway in Italy and Portugal, with China due to follow suit in 2008. REDUCING OUR ENVIRONMENTAL IMPACT Waste management, optimised usage of natural resources, the promotion of highquality environmentally-friendly products and services and the architectural integration of our retail sites are all Group commitments to environmental protection. Alternative reusable solutions are now being offered in France following the discontinuation of disposable plastic bags. These alternative solutions are encouraged in all European countries. Work on waste management continues around the Group. The recycling rate is now 55% at Auchan France and a poster campaign under the banner Recycler, c’est gagner (Recycling to win) is now being run to raise employee awareness at Atac. In Portugal, nearly 70% of all waste we produce is now recycled. In terms of natural resources and energy, the annual amount of electricity consumed by Auchan France fell by 6% in 2007. In China, Auchan has introduced a programme designed to deliver energy and water savings. In order to reduce its consumption of paper, Banque Accord and its subsidiary Oney have ceased producing account statements and launched the e-statement. Photovoltaic and solar heating panels have been installed on store roofs in Portugal. In 2008, Sabeco will be the empresa amiga (partner company) of the Saragossa universal exhibition on the theme of Water and Sustainable Development. (1) Fédération des Entreprises du Commerce et de la Distribution (French Retail and Distribution Industries Federation). ING In logistics, the Group uses river and rail transport wherever possible, and especially in Europe for products imported in bulk. In France, Atac has begun using rail to transport fruit and vegetables from south-western France and Provence, and intends to extend the scheme to include other areas of production in 2008. PARTNERS: FROM NORTH/SOUTH TRADE TO LOCAL SMEs Auchan cares about the social conditions under which the products it sells are manufactured. In 2007, we conducted 89 initial or follow-up social audits in 10 countries, with particular focus on Asia. Auchan France continues its involvement in the Social Clause Initiative working group, and as part of improving the effectiveness and monitoring of each audit the emphasis in 2007 was on training the social auditors of the inspection companies. To facilitate its work on European systems convergence, the Group has joined the GSCP (2) of the CIES (3). In 2008, it will also deploy its internal control systems to social manufacturing conditions. In Italy, a new code of commercial ethics will be introduced in 2008. In Portugal, 98% of Auchan suppliers have already signed it. The range of fairtrade products has been significantly expanded in Western Europe. Our chains are also working with supplier SMEs to build their ranges. In China, these smaller companies represent 20% of suppliers, whilst in Hungary, 250 of the 500 food suppliers Auchan works with are SMEs. In France, Auchan will launch a portal for very small enterprises, and has begun work on facilitating trade with Auchan Italy. A DAILY COMMITMENT TO SOCIAL SUPPORTIVENESS At national and local levels, all our chains act as socially-responsible companies, providing regular and sustained support for charities of all kinds, such as the Telethon in Italy, the Red Cross and IUVE Foundation in Spain, SOS Children’s Villages in Hungary. In 2007, Alcampo signed an agreement with the Lealtad (Loyalty) Foundation, which analyses the good governance of NGOs and charities. In France, Atac and Simply Market organised the second Quartier d’Énergie (Energised Community) event and raised €300,000 for the 500 local charities present. Many initiatives have been launched in support of children and young people. Every year, Auchan Portugal helps over 50,000 children in need, through 350 institutions, and its employees provide their personal support via the Pão de AçúcarAuchan Foundation. In France, the Fondation Auchan pour la Jeunesse (Auchan Youth Foundation) increased the number of projects it supports from 25 to 33 in 2007. Of the increased number, 11 focus on the Group’s two new action initiatives: support for schools and healthy eating. In Italy, Auchan has funded the opening of a second family centre with Amici dei Bambini. In Russia, our hypermarkets are providing support for orphanages. One Atak supermarket in Moscow is officially a “social” store, since it offers reduced prices to disadvantaged customers. (2) Global Social Compliance Programme. (3) International Committee of Food Retail Chains. 15 89 social audits conducted in 10 countries 50,000 children in need have been helped by Auchan Portugal Auchan Italy is working with 2,450 of the countries SMEs by helping them to export their products to other European countries where the Group has a presence. Having run similar programmes in France and Hungary, the company ran an “Auchan Made in Italy” campaign in Russia during the year. Initiative rewarded Our chains have received widespread recognition for their initiatives, most notably Alcampo in Spain and Auchan in Portugal, which has been SA 8000-certificated since the end of 2006. In France, Auchan was the lead partner of the Social and Environmental World Forum in Lille. Banque Accord: combating overindebtedness Banque Accord has been working for several years now on the prevention of overindebtedness. The bank jointly funded and participated in the third Microcredit Week organised by the ADIE, of which Atac is also a partner. Structured by business sector At 31 December 2007 SUPERMARKETS HYPERMARKETS 12 countries and region 413 hypermarkets, 408 of which are included in the consolidated accounts (404 integrated and 4 in Romania accounted for using the equity method) and 5 RT Mart stores in Taiwan, which are operated under management and supply contracts €29.0 billion of consolidated revenue before tax (+6.7%), 48% of which was generated in international markets 79% of Group revenue, of which 93% was generated in Europe (52% in France) 156,000 employees 7 Auchan hypermarkets in France operated in association with the Schiever Group 5 hypermarkets (including 2 Auchan) operated under franchise in Italy 5 countries 708 integrated supermarkets €6.7 billion of consolidated revenue before tax, 52% of which was generated in international markets 18 % of Group revenue 27,500 employees 1,448 franchised or associate supermarkets and minimarkets in Italy, France and Spain REAL ESTATE 12 countries and region 267 shopping centres managed by Immochan (244 wholly-owned or leased and 23 managed under contract) 1.45 million m2 leased in shopping malls €393 million (1) in revenue (+19.4%) (2), 45% of which was generated in international markets 350 employees 9 countries 5.4 million customers, 2.9 million of whom are in France BANK 16 FOUR CORE BUSINESSES €7.4 billion in payments made using Banque Accord cards €60 million in operating income (+5.1%) 1 400 employees … as well as Alinea (home furnishings and decoration) and new concepts, such as e-commerce web sites (Auchandirect, GrosBill, Auchan.fr and @Jumbo), distance shopping (Chronodrive, AuchanDrive.fr and DriveAuchan.it), Little Extra… (1) Inc. revenue invoiced to Group companies. (2) +14.6% excluding the building-selling activity, which began in 2007. YPERMARKETS 17 A year of progress for our hypermarkets For our hypermarkets, 2007 was a year of tension over prices, with pressure coming from increased competition and the impact of rises in raw materials costs on the price of food products. In Europe particularly, purchasing power remained a central concern for most households. Despite this unfavourable business environment, our hypermarkets were able to report a 6.7% rise in revenue for the year at €29 billion (52% generated in France and 48% from international markets). The contribution made by hypermarkets to total Group revenue rose to 79%. 18 A year of progress for our hypermarkets 413 hypermarkets (408 of which are included in the consolidated accounts) in 12 countries and region 156,000 employees (FTE) €29.0 79 billion of consolidated revenue before tax (+6.7%), 48% of which was generated in international markets % of Group revenue France : partnership with Européenne Food Européenne Food will build its ranges with the Auchan central purchasing function and will use its warehouses under affiliation and supply contracts. Auchan brand products will then be offered in the convenience stores and distribution channels supplied by Européenne Food. GOOD PERFORMANCES UNDER SOMETIMES UNFAVOURABLE MARKET CONDITIONS In 2007, hypermarket revenues rose in all countries, with the exception of Italy, where they remained stable. However, Auchan was able to increase its market shares in this country, despite particularly challenge economic conditions, and against a background of continued falls in food consumption and fierce competition. In France too, Auchan had to cope with an economic environment disrupted by political change, changes in commercial legislation, food price inflation and evermore fierce competition. The good performances achieved at the end of the year allowed the chain to report total revenue before tax of €14.9 billion, reflecting a rise of 2.5% on the previous year. Nevertheless, net income for the year was lower as a result of pressure on margins. Spain and Portugal experienced a concentration amongst major retailers in 2007. In Spain, there was also a slowdown in consumption as a result of significantly higher household debt levels. Despite these economic conditions, revenue was up at Alcampo. Downward pressure on prices remained very strong in Portugal, where many stores were affected by competitor openings. Although household purchasing power was reduced by tax rises, Auchan was still able to increase its revenue and its total customer base. Sustained economic growth in Central and Eastern Europe. Growth in Russia was the highest seen since 2003, which allowed household income to rise substantially. However, competition became more serious in St. Petersburg, as well as in other Group operating countries. In Poland, where early parliamentary elections played their part, Auchan gained market share and saw revenues rise. In Hungary, the economy remained difficult as a result of government restrictions and the rise in raw materials costs, but neither influence prevented Auchan from increasing both its revenue and its customer base. Our operations in Romania got off to a very good start during the year. 2007 was a good year for Auchan in China, where growth remained strong. We also saw the first signs of a recovery in household consumption in Taiwan. The work done on prices and product ranges by RT Mart over the last 18 months returned the chain to revenue growth during the year. 19 SUSTAINED ORGANIC GROWTH In 2007, the company applied a policy of sustained organic growth and signed two major agreements in Eastern Europe. The 400-hypermarket barrier was broken, and the year ended with a total of 413 stores. During the year, 30 existing stores were expanded, and 39 new ones were opened. 30 hypermarkets were expanded in Western Europe, including Nice, Dieppe, SaintOmer and Viry-Noureuil in France (where the Fontaine Le Comte hypermarket was also transferred to Poitiers), Alfragide and Aveiro in Portugal, Olbia in Italy and the Luxembourg store. 7 hypermarkets were opened: 1 in France, 1 in Spain, 2 in Portugal and 3 in Italy. In France, Les Halles d’Auchan opened its 5th store, at Le Blanc Mesnil. During the year, Auchan signed a partnership agreement with drink and snack foods distributor Européenne Food. At Gueugnon, an Atac supermarket operated by the Schiever Group transferred to the Auchan brand at the end of the year; the Schiever Group now operates 7 hypermarkets under the Auchan brand. Alcampo strengthened its positions in and around Madrid with the opening of its 12th store at Colmenar Viejo; the company now operates 48 hypermarkets in Spain. In Portugal, 2 Jumbo hypermarkets were opened at Viseu and Torres Vedras, bringing the total number of outlets to 19. Italy continued to grow at a sustained rate during the year, opening 3 hypermarkets, including its 4th store in Rome (Porta di Roma). The Cinisello store in Milan reopened after completion of a 2-year expansion programme. At the end of the year, Italy’s 45th integrated Auchan hypermarket opened at Nola (Naples). In Calabria, the chain signed a 9-year franchise agreement at the start of 2007 with AZ SpA, a company owned by the local retail chain Noto SpA. Two Auchan-branded hypermarkets were opened during the year at Rizziconi and Corigliano. A 3rd store will open at Catanzaro in 2008. Beginning in 2008, the 3 other existing stores will gradually be converted to the Auchan brand. 2008 will also see the total number of Auchan integrated and franchised hypermarkets exceed 50 for the first time. Logistics development continues for non-food sectors, and a second fresh produce distribution centre has been opened in Rome. The opening of 9 stores in Central and Eastern Europe brings the number of Auchan hypermarkets in this region to 54. In Poland, Auchan has a presence at Rumia, northwest of Gdansk, and Schiever Polska opened its 4th hypermarket at Raciborz. A second distribution centre has been opened at Wolborz. MGV DistriHiper, the Group’s partner in Romania, opened 3 Auchan hypermarkets in TarguMures and Cluj-Napoca in the centre of the country, and in Pitesti, 100 kilometres west of Bucharest. At Timisoara, a store opened with a temporary brand and format will be converted into an Auchan-branded hypermarket in 2008. In Russia, 4 hypermarkets were opened in Samara, Rostov-on-Don, Krasnodar and Novosibirsk. At the end of 2007, the Group signed an agreement with the Turkish group Enka covering the operation of 14 Ramstore hypermarkets (9 in Moscow and 5 elsewhere in Russia), 13 of which are leased and 1 wholly-owned. 93 39 % of revenue generated in Europe (52% in France) new hypermarkets opened in 2007: 16 in Europe and 23 in China Western Europe: 8 new stores scheduled to open in 2008: 1 in Sanlúcar de Barrameda (Cadiz), Spain, 1 in Monza (Milan), Italy and 6 in Portugal, including 1 Jumbo at Matosinhos (Porto) and 5 Pão de Açúcar. Ukraine: the first Auchan hypermarkets will open here in Kiev and Donetsk during 2008. 4 new hypermarkets will also be opening in Romania, 2 in Poland, 1 in Hungary and 6 in Russia. In the first half of 2008, the 14 Ramstore hypermarkets will change identity to Auchan, bringing the total number of Auchan hypermarkets operating in these 5 countries to over 80. 20 A year of progress for our hypermarkets 105 hypermarkets in China China: growth set to accelerate in 2008 2008 should see the opening of 10 Auchan hypermarkets, including 1 in Beijing and 9 around Shanghai, as well as 20 RT Mart stores. One RT Mart will also be opened in Taiwan. Under the partnership agreement signed with the Furshet Group in Ukraine at the beginning of 2007, a new company has been formed to develop Auchan hypermarkets here. The Group owns 66% of the company, Furshet 19% and Furshet Chairman Igor Balenko, 15%. Auchan will open its first hypermarket in Kiev in spring 2008, with a second planned later in the year at Donetsk, 700 kilometres East of Kiev. In China, the 100-hypermarket (20 Auchan and 85 RT Mart) barrier was broken during the year. Auchan opened 5 hypermarkets, including 2 in Changzhou (Lanlin and Wuxing) and 1 in each of Chengdu, Zhangjiagang and Jiaxing. The Tianjin store was closed as a result of poor performance and development restrictions. RT Mart opened 18 hypermarkets during the year, and closed 1 for expansion. Lastly, in Morocco, the Auchan Group has sold its 49% holding in Marjane (14 hypermarkets) to ONA. CUSTOMER SATISFACTION All our chains share the same ambition to deliver higher customer satisfaction through discounted prices, broad, modern, relevant product ranges and a totally different shopping experience. They operate as adventurous retailers and rise to the challenges of commerce to build innovative and constantly-updated ranges. The world of hypermarket retailing changes all the time, so proximity to customers is absolutely essential. For its own-brand products, Auchan France has set up an in-store brand club for its employees and best customers. Listening more closely to customers and responding to their expectations makes a real difference; a difference that was recognised with awards once again in 2007, especially in Poland and Hungary. MAKING DISCOUNT A PRIORITY Auchan Poland receives 3 awards. Auchan Poland was awarded the Gold Standard, Superbrands and Master of Commerce awards by Mastercard. In Hungary, the chain won the ANEE (1) award. In Luxembourg, Auchan was awarded the Prix du Meilleur Choix (Best choice award) by consumers at the first CLC (2) Golden Ticket Awards. The mission of hypermarkets is to improve purchasing power for the greatest number of customers. It is the ambition of every store to be the best discount retailer in its own catchment area. In 2007, our chains confirmed their status amongst the leaders on price in both Europe and China. This status is particularly acknowledged in Poland, where Auchan was voted the country’s cheapest chain for the fourth year in succession by the weekly publication Polityka. In Spain, the aggressive pricing policy adopted by Alcampo has kept the chain at the head of the market, and was rewarded by the country’s leading independent consumer association, the OCU (3). Our chains are offering an increasing number of value-line products, with an average of 1,500 items and generating between 5% and 6% of revenue. Approximately 200 European hypermarkets have introduced self-discount departments bringing together low-price everyday products. In Russia, Auchan extended its range of value-line products to over 400, over a quarter of which were introduced during the year. In 2007, they represented nearly 6% of sales. In China, consumer prices reached their highest level for 10 years, with the result that value products made an increasing contribution to revenue and sales volume. (1) Hungarian National Association of Entrepreneurs and Employers. (2) The Luxembourg Trade Federation. (3) Organización de Consumidores y Usuarios. 21 Once again, the many sales promotions run during the year gave our hypermarkets the opportunity to amaze their customers with innovative products and discount prices. Auchan in Italy ran a campaign offering “never before seen” items, like scooters and hot tubs. In Russia, it was garden equipment and fur coats (including mink for the first time ever), in Taiwan the promotions included scooters, wine and air conditioning units and in Spain it was a technology show. In France, the “50% Cashback” and “25-Day” offers were particularly successful. Regular promotions, like the birthday, back-to-school and Christmas campaigns are landmarks of a successful year. Now a traditional strength, these seasonal events proved as popular as ever, and were introduced for the first time in Taiwan during 2007. A BROAD RANGE OF RELEVANT HIGH-QUALITY PRODUCTS For its customers, Auchan is the chain that offers maximum choice. In France, the company adopted a new slogan during the year: “La vie Auchan, elle change la vie” (Auchan life changes your life), and the chain continued the process of refreshing its product ranges. Tailored to suit local preferences and changing consumer tastes and aspirations, they are refined and adapted throughout the year. The same applies in Russia, where ranges are replaced several times a year. Auchan also focused more on fresh fish, bakery and bulk products during the year. Over the last two years, Taiwan has also been doing a lot of work on its fresh products, especially fruit, vegetables and meat. Ranges include a broad choice of own-brand products. These are proving consistently successful and account for an increasing proportion of revenue. In Western Europe, Auchan Portugal offers 4,500, and Auchan France 10,000. In 2007, 400 new items were added in Spain and 600 in Italy. Product packaging has also been revised. Depending on country, they generate between 10% and 14% of revenue. Following on from France, the Mmm! premium food brand was launched in Spain and Italy during the year. The Auchan brand will be launched in Hungary during 2008. In Taiwan, RT Mart plans to develop its own range of 300 own-brand products. In France, Auchan will be launching a 35-product range of baby food products. Every one of our hypermarkets is committed to assembling a product range that suits local preferences. Promotional campaigns are also run for these products, as in Spain, where Alcampo launched a promotion featuring 180 products local to the Valencia region, with the support of over 70 local companies and the regional authority. Our chains have also developed their own ranges of regional products, like the 100+ products in the Italian Sapori delle Regioni range, all of which are produced by SMEs and showcase the “Made in Italy” endorsement. Ranges produced using sustainable production methods are also being expanded. Examples include the 150-product Filiera Controllata in Italy and the 140 Vida Auchan products in Portugal. This range will continue to grow in 2008, This range will continue to grow in 2008, and 40 contracts have already been signed with SMEs to create 50 new regional products from local farms and guaranteed animal 1.13 billion people passed through our hypermarket checkouts in 2007 Initiatives to defend the purchasing power of consumers. Following increases in raw materials costs, agreements have been signed in Italy with the country’s local authorities and consumer bodies to freeze the prices of selected products. In Lombardy, for example, this freeze applies to 100 own-brand products from the end of October 2007 to May 2008. In Russia, an agreement was signed in October by retailers and producers to freeze the prices of 6 staple food products for 3 months. Healthy eating programmes As part of its ongoing Bien se nourrir pour mieux vivre (Feed good for better life) healthy eating programme Auchan France has applied nutritional information labelling to its own-brand products and has reformulated the recipes of nearly 500 items. In Italy, 200 Auchan products now carry nutritional information labelling, and this initiative will soon be extended to the entire brand. In Spain, Alcampo has launched its own Alimentamos tu Salud (Feed Your Health) programme. 22 A year of progress for our hypermarkets 20,000 product lines offered by @Jumbo Local and regional products … In France, Auchan Poitiers offers 200 of these from more than 40 suppliers. In Portugal, Jumbo Alfragide and Almada have created dedicated areas for organic produce from small regional suppliers. In Viseu, there is now a sales area specifically for fresh produce from the local region. In Torres Vedras, a partnership has been created with local fruit and vegetable suppliers. In Italy, Porta di Roma is working with 80 food suppliers from the Lazio region. Hyper@: our mobile Internet service This no-strings-attached prepaid product allows users to log on the Internet anywhere they like using a SIM card and a modem connected to the USB port of their computer. welfare producers. Other products will also be added, especially organic ones, the first of which were launched at the beginning of 2008 to supplement the 700+ organic items already marketed by Auchan. Our chains in Italy, France and Spain have also continued to develop own-brand organic ranges, with France already offering nearly 100 items. Auchan Hungary offers 200 organic products, and, Auchan Poland began marketing Polish “o!eco” organically-labelled products in 2007. On average, every Auchan hypermarket in France offers its customers 121 fairtrade products (12 of which are Auchan-branded), and which generate annual revenue of nearly €11 million. In Portugal, our stores market around 40 fairtrade grocery products, and Alcampo in Spain held its 4th fairtrade week during the year. In Italy, Auchan launched a range of 9 products in partnership with Fairtrade. Ensuring product safety and quality remains a priority for the Group. The food preparation and sales processes used in 15 Alcampo hypermarkets in Spain are now ISO 9001:2000 quality-certified. In Italy, 6 hypermarkets have been awarded ISO 45011 services certification for their quality procedures, and Auchan was one of the first retailers in the country to secure ISO 9000 certification for its Quality and Safety Department. Auchan Hungary audits its suppliers twice a year. In Poland, Auchan has implemented the HACCP system and conducts monthly checks in all its stores, and has increased the frequency of supplier audits in China. INNOVATION AND ALL THE LATEST DEVELOPMENTS Our chains lead the market by creating new retailing channels and tapping into fast-growing markets. In Portugal, the @Jumbo shopping site launched in 2007 already offers 20,000 food products. In France, Auchan has developed online sales of household appliances and leisure goods on its Auchan.fr web site. Auchan Télécom has created its own WAP portal with Mobivillage, and Hypersûr, a fixed monthly mobile call package that can be topped up at any time. The Group’s first mobile Internet product, Hyper@, was launched at the end of the year. Following the signature of a mobile operator’s agreement with Wind, Auchan will offer its first telephony product in Italy from the first half of 2008. Box, the technology brand created by Auchan Portugal and located alongside 14 of Jumbo’s 19 hypermarkets, has introduced a completely new concept. Car sales were tested during the year in Romania and Italy. New service stations were opened in Spain, Italy, Portugal and Hungary, where Auchan was the first chain to provide 24-hour service by introducing card payment terminals (in 4 of its 7 stations). 8 of the 10 Hungarian hypermarkets (including Kecskemét since 2007) now have a garden centre attached. Following a test phase, discount garden centres have also been opened in France at Saint Omer and Viry-Noureuil, and the concept will be introduced in ten other stores in 2008. At Poitiers, a new jewellery concept offers broader ranges, which now include major brands. With 5 new openings in 2007, in-store jewellery centres are 23 now up and running in 15 Italian stores. 15 hypermarkets, including 5 in 2007, have also introduced Rist’auchan bar areas within their retail floor space.. New financial products and services were created during the year in cooperation with Banque Accord. In Spain, Alcampo has worked with AccordFin to introduce banking areas, and is testing the gift card concept in 5 of its stores in Galicia. Auchan Hungary has launched a range of car insurance products in partnership with Accord Magyarország. In Europe, our store chains have moved into the booming health sector. Health & Wellbeing areas have been introduced into our Portuguese stores, offering parapharmaceutical products and non-prescription medications. Already in place in 11 stores in 2007, they will become a feature of all Jumbo hypermarkets in 2008. The stores at Alberfalva and Szigetszentmiklós in Hungary have also opened Health sections, following removal of the restrictions that previously governed sales of non-prescription medications and therapeutic products. In Spain, a new parapharmacy was opened at Colmenar during the year, to be followed by other stores in the country in 2008. Auchan Italy has also brought forward its deployment to include 23 in 2007; the total has since risen to 26. Following 13 introductions in 2007, some 70 stores in France now have Health & Beauty areas. A Wellbeing area has also been created in our Luxembourg store. Optician services continue to be developed in Italy and France, where they are now offered in 35 and 20 stores respectively. 2008 will see the installation of the first 3 in Portugal. CUSTOMER RECEPTION AND SERVICES THAT MAKE ALL THE DIFFERENCE The quality of reception offered to every customer is fundamental to our business. As part of improving its service levels, Auchan Russia has, for example, set up store customer reception committees. An in-depth study on personalising customer relations was conducted in Europe in 2007. Customer loyalty is supported by a series of dedicated programmes designed to appeal to shoppers. In France, nearly 10 million customers are now Waaoh or Accord cardholders. In Italy, new Accord cardholders receive special offers, whilst in Hungary, Auchan offers cardholders a 10% discount during the anniversary period. Customer satisfaction also relies heavily on the quality of the services offered. More particularly, our chains are continually developing new solutions that customers save time. In Portugal, customers can now buy mobile phone call time at the checkout. In France, 2 hypermarkets are now testing a range of 30 domestic services offered in the form of a virtual card carrying entitlement to a certain number of hours of services. 10 million customers in France are now Waaoh or Accord cardholders Health areas In Portugal and Hungary, these new areas offer customers nonprescription medication. France: the Auchan commitment… Auchan has formalised its customer commitments into 4 central themes: purchasing power, choice, easier shopping and healthy eating. Every store also displays the Group’s social and environmental commitments. SUPERMARKETS Differing levels of performances from our supermarkets Although Spain and Poland had a satisfactory year despite increased competition, and Russia reported a good performance, the economic and competitive environments remained difficult in France and Italy during 2007… and supermarket performance reflected that. Slightly down on a like-for-like basis, revenue before tax for the year was stable at €6.7 billion, and contributed 18% of total Group revenue. The attraction of the Simply Market model in Western Europe was amply demonstrated during the year, with most of those supermarkets that had adopted the brand reporting growth in sales and customer volumes, which in turn helped them to retain or increase market share. 25 PROGRESSIVE DEPLOYMENT OF THE SIMPLY MARKET CONCEPT In 2007, our supermarkets in Western Europe continued to refine the various Simply formats and progressively expand the chain. Some 20 stores were opened during the year, and a further 120 stores converted. The year ended with a total of 191 Simply stores, or 28% of all the integrated supermarkets. A second franchised store in France also adopted the brand. Alongside progressive and paced deployment of the standard format, testing of other options continued during the year. A so-called “Attraction” model is being tested in 5 stores in France, 2 in Spain (Fraga and Guadalajara) and 7 in Italy. An ultra-local format was also developed in all 3 countries: 2 stores in France, 2 in Spain and 43 in Italy opted for this format in which the product mix is designed for a more urban lifestyle. The fact that this brand has got off to such a good start demonstrates the relevance of this new business model. Further development will be done in 2008, with the focus on finalising the financial structure of the three formats and the continued deployment of the chain in all three countries. 2008 will also see the creation of around 20 new stores in France and Italy. Ten stores were also enlarged in 2007, with the result that the three countries together now have nearly 50,000 m2 of additional retail floor space. At the beginning of 2008, Sabeco also acquired 5 Tic-Tac stores in and around Barcelona; these will make the change to Simply Market in 2008. In Italy, Sma opened 3 distribution centres and signed a 10-year agreement with CRAI, an association of independent retailers with 3,000 stores, which will now join our purchasing centre. Synergies will be exploited wherever possible, including own-brands. In France, the Chilly-Mazarin fresh produce distribution centre was relocated during the year to a 7,700 m2 facility. The process of centralising non-food products at Amiens began during the year, and will be followed by the construction of a new distribution centre in 2008. In Poland, our supermarket business has been refocused on the Warsaw region and the south of the country. Although 6 stores were either sold or closed during the year, 2 Elea supermarkets were opened in Siemianowice (north of Katowice) and Warsaw. The Krakow, Czestochowa and Wroclaw stores were remodelled, and will be joined by 5 new openings in 2008. In Russia, 5 Atak supermarkets were opened in and around Moscow during the year. The chain now has 10 stores and plans to double that total in 2008. Lastly, the Auchan Group sold its 49% holding in the Moroccan company Acima (22 supermarkets) to ONA during the year. 2,156 supermarkets in 5 countries: 708 are integrated, 510 are franchised and 938 are associated €6.7 18 billion of consolidated revenue before tax, 52% of which was generated in international markets % of Group revenue Simply Market, operates 191 supermarkets: 92 in Italy, 69 in France and 30 in Spain. The chain offers permanently low prices in 3 store formats. Most products are offered on a selfservice basis and grouped by product family in a modern, colourful and welcoming atmosphere. 26 Differing levels of performances from our supermarkets 27,500 employees (FTE) Nearly 252,000 hours of training... 47,000 more hours than in 2006 In France, over 7,500 employees received 147,000 hours of training. The retail concept testing policy This has also been applied in 9 Easymarché, Eurobounta and Fredi stores in France, and 2 “7d” convenience stores in Spain. INVESTMENT IN HUMAN RESOURCES The progressive deployment of Simply Market is accompanied by ongoing investment in human resources. The success of this new business model relies essentially on its adoption by supermarket teams and their readiness to adapt to new working methods. When making the transition to the new brand, employees follow a comprehensive and intensive training programme designed to introduce them to new areas of the business and help them progress to multiskilled status. Under the French Horizon Emploi et Compétences agreement, checkout operators have, for example, completed a commercial employee training course or workshop. The chain is also continuing its Cap 3 training programme for managers. New Simply Market store management teams also receive training in sustainable development; a course attended by nearly 300 people in France during 2007. This programme will be extended to all managers in 2008/2009, and will also be adapted for staff. Simply Market is committed to a strong environmental ethic. It does not offer its customers disposable plastic bags, and its trolleys and baskets are all manufactured from recycled plastic. In Spain, its is also selling a fabric “Ecosimply” bag for just €1, which is refunded to loyalty cardholders after the bag has been used 4 times. The chain’s first “green” store opened in France at the beginning of 2008. GETTING CLOSER TO EVERY CUSTOMER The work done over many years on clarifying our ranges began to pay off in 2007. Our chains are now developing ranges to suit local needs, and are therefore getting closer to their customers. Consistent with their focus on food products, they are now focusing on the fresh market produce that is the key strength of Simply Market. In Poland, Elea is gradually adapting its business model in this direction, whilst in Russia, the Atak concept and all its product ranges have been refined and adapted to meet the needs of local consumers. Our chains are also committed to offering their customers innovative services. In France, a Simply Services personal services call centre has been introduced for loyalty cardholders. Atac has also implemented new sales initiatives for these cardholding customers, offering them 5% off own-brand products on weekdays and 10% off the store’s flagship ranges between Friday and Sunday. In Italy, our stores have launched a new loyalty system that allows customers to collect points towards insurance products, like car insurance. New checkout systems have also been developed. In Paris, the ultra-local urban format offers 4 checkout options: self-scanning, automated checkout, basket-only checkout and traditional checkout. Self checkout is also available in Italy, and the system will be tested in Poland in 2008. In all 3 countries where the chain operates, Simply Market launched its own web sites in 2007. Sabeco also launched a new version of its customer web site, featuring more functions and a stylish facelift. 27 PERMANENTLY LOW PRICES The trading environments in all our operating countries are fiercely competitive, and prices are the main battleground. The mission of Simply Market supermarkets is to offer permanently low prices, supported by product promotions, instant bargains and seasonal special offers. This policy allows the chain to be consistently one of the cheapest in the market. In Spain, Sabeco and Simply are well-known for their aggressive pricing. In Russia, Atak also applies a policy of permanently low prices, and in 2007, developed its own value-line and range-entry products, which now contribute over 12% of revenue. The same policy has been implemented in Poland, where over 70% of the 1,200+ products offered by Elea are range-entry lines. The strategy is clearly a successful one, because the chain now tops the Polish supermarket rankings in terms of price positioning. STRONG OWN-BRAND RANGES Simply Market is building its success on strong ranges of own-brand products, which now represent nearly 40% of all self-service food lines in France. Over 2,500 Auchan brand products are offered in Italy, and nearly 1,200 in Spain. In both countries, they account for over 12% of food sales and up to 14% of fresh produce sales. The Mmm! premium food range is also marketed in France, Italy and Spain. Our chains are also developing locally-sourced ranges in partnership with local SMEs and producers. In Spain, 27% of the range is made up of regional products; a percentage that rose further in 2007. In Madrid, the “From Madrid to Sabeco” marketing campaign was organised in partnership with the regional government authority. In Italy, Sma offers over 700 typically-local specialities sourced from some 190 suppliers. New food safety initiatives have also been implemented, for example in Spain, where a traceability plan tracks products from distribution centre to store. In Italy, an International Food Standard (IFS) agreement was signed, defining the benchmark standards for own-brand product suppliers. The range of sustainably-produced products was also enhanced during 2007. In Spain, the Organic and Eco ranges developed by the Group were extended. In France and Italy, the Simply supermarket range also includes fairtrade products, with stores in France stocking around sixty Ethiquable-branded items, for example. This range is promoted in-store in a dedicated area presenting all the responsible trade products stocked, as well as the socially-supportive initiatives undertaken by the brand. In Spain, Sabeco and Simply Market have developed their ranges in partnership with Intermón Oxfam. 304 billion people passed through our supermarket checkouts in 2007 Simply Market : opened its first “green” supermarket on Leuville sur Orge during the year. This new store has addressed environmental concerns at every stage of its design. Its timber-framed structure is clad with high-performance insulation, it generates electricity from photovoltaic cells, the hot water for its washrooms and laboratories is solarheated, lighting is provided by low energy bulbs and solar-powered lighting columns, all rainwater is recovered and treated, it stands in grounds planted with 120 trees and 780 shrubs, and has 2 recharging points for electrically-powered vehicles. In Italy, 540 value-line products and 2,540 Sma/Auchan own-brand products together generated approximately 17% of annual revenue. MMOCHAN Accelerating growth in real estate In a retail real estate market that remains dynamic and little affected, in Europe at least, by the US subprime crisis, Immochan had an excellent year in 2007, with revenue up 19.4% (1) to €393 million. International markets contributed 45% of revenue in 2007. These excellent performances were supported by dynamic organic growth, good progress in existing malls and the development of new types of retail business park. Vacancy rates continued to fall during the year, accounting for just 2.7% of the available floor area. (1)14.6% excluding the real estate buildingselling activity, which began in 2007 29 SUSTAINED DEVELOPMENT In 2007, Immochan created 262,000 m2 of retail floor space in its shopping centres, and added thirty new specialist superstores in its retail parks. Following its transfer, the new Poitiers Porte Sud shopping centre in France houses 55 shops and a strip mall of 10 midsize units. The expansion during the year of the Plaisir, Illkirch and Cambrai shopping centres created over 150 retail units and 17 specialist superstores in retail parks. Plans to create local shopping malls around supermarkets came to fruition at the beginning of 2008, with the opening of Simply Market at Leuville sur Orge, complete with 650 m2 of surrounding shopping mall. In Italy, GCI consolidated its position as retail real estate leader after a year of strong growth, chiefly in the form of large shopping centres: the company opened nearly 500 shopping mall units in 2007. Reopened after 2 years of closure for construction work, the Cinisello Balsamo shopping centre now offers shoppers a hundred shops and 4 midsize units. Constructed in partnership with Interporto Campano SpA, the Vulcano Nola project near Naples features 155 shops and 15 midsize units. Lastly, GCI has partnered Lamaro Appalti SpA to open Italy’s largest shopping centre at Porta di Roma (Rome). The centre, which is the third largest in Europe, is built around an Auchan hypermarket. GCI now manages 45 shopping centres and over 2,000 mall unit leases covering over 460,000 m2 of retail floor space. In Spain, the opening of the El Ventanal de la Sierra shopping centre at Colmenar (Madrid) has created around sixty shop units and a strip mall. The company is also working on restructuring its older malls. A major project got off the ground in Portugal during the year with the restructuring of Lisbon’s Alfragide shopping centre; the 120 units feature 8 brands new to this country. 2007 in Poland saw the opening of the Rumia shopping centre on the outskirts of Gdansk, featuring 100 retail brands including 10 market-leading superstore chains. The first strip malls were introduced in Bielsko Biala and Wroclaw during the year. 3 shopping centres managed under contract were opened in Russia during the year in the cities of Krasnodar, Novosibirsk and Rostov-on-Don (the latter two in partnership with Ikea). Following the partnership agreement signed at the beginning of 2007 with Ukraine’s Furshet Group, a new shopping centre development company was formed during the year; the Auchan Group owns 50% of the equity in the new venture. Its first shopping centre is due to open in spring 2008, and a real estate team is now being recruited. At the end of 2007, Immochan managed 1,600 retail units in Central and Eastern Europe. Retail business park development continues in Poland and Hungary. Lastly, Immochan continues to support the growth of Auchan in Asia. The 5 shopping centres opened by Auchan China in 2007 contain over 270 retail units. (2) 244 wholly-owned or leased, and 23 managed under contract (3) 1,143,000 m2 wholly-owned, 146,000 m2 leased and 159,000 m2 managed under contract (m2 managed under partnerships recognised 100% in the accounts) (4) Inc. revenue invoiced to Group companies 267 350 1.45 €393 shopping centres managed by Immochan (2) in 12 countries employees (FTE) million m2 of shopping malls (3) of which 63% are in international markets million in revenue for 2007 (4) An additional 262,000 m2 created in shopping malls: over 200,000 m2 in Western Europe (including 136,000 m2 in Italy under partnership agreements), over 30,000 m2 in Central and Eastern Europe and nearly 30,000 m2 in Asia. 30 Accelerating growth in real estate 4 15 business sectors: developing, marketing, operating and managing property shopping centres opened (1): 6 in Western Europe, 4 in Central and Eastern Europe and 5 in Asia Expanded teams: 50 new employees in 2007 Quality policy Satisfaction surveys were conducted regularly amongst customers and chains in France, Poland and Spain, with others to follow soon in Italy and Hungary. In France, for example, over 22,000 customers were interviewed, and 3 waves of surveys were conducted amongst retail chains. Many new construction and refurbishment projects are scheduled for the years ahead. Following on from France, Poland and Portugal in 2007, the shared real estate management software package will be deployed in Spain and Hungary in 2008. This sustained level of business growth requires more people, and in 2007, dedicated teams were formed to manage the largest shopping centres in France, Portugal and Italy. DYNAMIC, INNOVATIVE RETAILING Immochan’s stated aim of “Creating and enhancing shopping destinations in the heart of the community” reflects its commitment to creating shopping centres that are welcoming, friendly places enjoyed by the 1.7 billion shoppers who visit them every year. The “customer trail” concept which guide them to every stage of the shopping experience is deployed in some 30 sites in France, and is progressively being introduced in other countries, including in 2007 Spain (Logroño, Alcala and Colmenar), Poland (Rumia) and Portugal (Alfragide). The ability of retail centres to attract shoppers relies on the presence not only of market-leading, innovative brands retailers, but also dynamic local retailers. Every year, Immochan selects and hosts new partner brands and chains. In Spain, 52 brands located for the first time in Immochan malls in Spain: 11 were international chains, 17 were Spanish and 24 were local retailers. At Rumia in Poland, Immochan welcomed 16 new brands, 6 of which were new to Poland. Events also made their contribution to attracting shoppers to our malls. Those in France and Italy hosted a number of environmental campaigns, including the Fondation Nicolas Hulot’s Défi Pour la Terre campaign, which visited 32 shopping centres in France, recruiting some 95,000 new members. In Italy, 10 GCI shopping centres hosted the Amore per l’Ambiente (Love the environment) travelling exhibition, which distributed 135,000 information leaflets per day. Also in Italy, an exhibition organised in partnership with the Robert F. Kennedy Foundation presented portraits of leading human rights activists by photographer Eddie Adams in 12 shopping centres, attracting nearly 4 million visitors. INTEGRATING WITH THE ENVIRONMENT Immochan addresses environmental issues right from the design stage. Its priorities include making best use of natural resources and integrating every centre sensitively into its environment, both architecturally and in terms of its surroundings. In Italy, for example, the Renzo Piano-designed Vulcano Buono shopping centre at Nola (Naples) echoes the contours of nearby Vesuvius. Having formalised its commitments in the form of a charter published in 2006, and appointed an environment manager in 2007, Immochan will continue to build on its environment policy in coming years, and do so in synergy with the company’s other activities. (1) 12 new, including 2 in Italy (in partnership and managed under contract), 1 in Spain, 1 in Poland, 3 in Russia (managed under contract) and 5 in China, as well as 3 redevelopments (in France, Italy and Portugal) ANQUE ACCOR 31 Sustainable performances from our banking core business Against a background of crisis in the financial markets and intensified competition in certain countries and markets, Banque Accord had a good year in 2007, and was able to achieve the targets it set itself. Net banking income rose by 17.9%, and operating profit by 5.1% to end the year at €60 million. During the year, 830,000 new customers opted for cards issued by Banque Accord, bringing the bank’s total number of customers to 5.4 million. Card payments rose by 9% to €7.4 billion, and the hypermarkets proportion of revenue generated by these card payments also continued to rise. 32 Sustainable performances from our banking core business 5.4 million Banque Accord customers in 9 countries, including 2.9 million in France 1,400 employees (FTE) €7.4 billion in revenue generated by sales of Banque Accord products and services (total revenue) Contactless payment cards Introduced at the end of 2007, the Banque Accord-Auchan-MasterCard PayPass™ allows shoppers to pay for purchases of under €25 in just a few seconds without entering a PIN. Standard & Poor’s rating: A (long-term) and A1 (short term). CONTINUED GROWTH In 2007, Banque Accord began operations in China and Romania, having established a presence in both during 2006. Payments cards were launched successfully in both markets. In China, the Visa card introduced at the start of 2007 was rolled out in all Auchan hypermarkets, with applications breaking all records. September saw the Auchan Accord – Mastercard launched in Romania. In Italy, a Cityper-Accord card was tested in the 14 stores on the Adriatic coast, and will now be extended to all stores in the chain. In 2008, Banque Accord will begin operations in Ukraine, and launch mobile payments in China. By the end of the year, Banque Accord had become one of the leading French issuers of contactless cards, with the launch of the co-branded Banque AccordAuchan- MasterCard PayPass™. Following the initial test phase in the Auchan hypermarket at Englos, the card will be deployed in all the other stores of the Lille region and partner chains in Quarter 2 of 2008, before being rolled out nationally in a sequenced programme due to complete in 2009. Designed as a complement to the facilities offered by international payments cards, it allows shoppers to pay for purchases under €25 in just a few seconds. The card is simply passed over a PayPass™ reader with no need to enter a PIN. New banking facilities have been opened in Auchan shopping centres to support the business growth of Banque Accord: examples in France included Perpignan, Nice and Le Havre. All three have already returned excellent performances. Similar facilities have also been introduced in 6 Alcampo hypermarkets in Spain, with all the other stores in the chain due to follow suit between now and 2009. Bank branch openings also continued in Russia and Poland, where deployment of the Auchan Points Card (POK) was completed in all Auchan hypermarkets at the start of 2007. In total, there are now 980 finance areas in place in 9 countries. Banque Accord has also got together with its Spanish partner bank Santander to form Santander Financements, a new force in car finance in France. As part of funding its growth, Banque Accord proceeded during the year with a new €200 million bond issue to a broad range of European investors. The confirmation by Standard & Poor’s of their rating for the bank (A in the long-term and A1 in the short term) reflects the financial stability of the Group’s banking core business at a time when the financial markets are in crisis. MANY NEW PARTNERSHIPS In France, Banque Accord signed its first non-retail partnership in 2007, with the launch of a co-branded card in association with MACSF Financement, which provides finance for healthcare professionals. Designed specifically for its members, the new card is accepted by the MasterCard network and the online shopping mall Cashmax; it also gives holders 1% cashback on all card purchases. 33 Banque Accord has introduced the first international money transfer card to be issued in France, working in partnership with the Franco-Moroccan company Sencillo. Co-branded by Banque Accord, Flouss.com and MasterCard, the card allows users to transfer up to €6,000 per year to friends and family outside France. The cost of transfer is around half that of traditional channels. In France, the Fontenay money transfer centre opened at the end of 2006 was joined by a second one in Lille during the year. These centres allow customers to send and receive cash worldwide, regardless of whether or not they have a bank account. The same service is also offered by 11 Alcampo hypermarkets in Spain. These money transfer and currency exchange services have also been made available in all our Russian stores. Lastly, the Group’s banking core business is also supporting the development of other retail chains as part of strengthening its international presence. Partnership agreements have been signed with Leroy-Merlin in Russia and Poland (where a cobranded Visa card has also been launched), Norauto in Poland and Decathlon in Spain, Hungary and Russia. Decathlon in France now accepts the Accord card. CardOps, the Banque Accord electronic payments processor processor handled nearly 500 million transactions in 2007, and is working with a raft of retail chains, including Auchan, Grosbill and Alinea. In Portugal, it manages the electronic payments aspects of the @Jumbo online sales web site, which came online at the start of the year. With 3.5 million gift cards sold (with a value of €110 million), CardOps is the leading gift card operator in France. It also launched the Alcampo gift card in Spain during the year. Its in-depth experience in electronic payments processing means that, in 2008, Banque Accord will have all the resources required to support its partner chains in their international growth, and especially those operating with in the Single European Payments Area (SEPA)(1)). INNOVATIVE NEW PRODUCTS 2007 saw the introduction and launch of innovative new products. Following on from the successful introduction of personal loans in Hungary, these products were launched in Poland during the year. Car insurance was also launched in the Hungarian hypermarkets. In Romania, Accord Romania offered car finance products tailored to the local market to support car sales via Auchan hypermarkets. Dealership car finance is also under development in France via Santander Financements, a new venture in which Banque Accord holds an equity stake. Oney.fr, the online presence of Banque Accord, now gives its customers the opportunity to spread payment for their cash purchases. Despite hikes in central bank interest rates, the rates offered by Banque Accord continue to be amongst the lowest in the market in most countries. The bank’s Visa and Mastercard products are also the cheapest in those countries where they are offered. (1) Single Euro Payments Area. 5o0 million transactions processed by CardOps +17.9% net banking income +5.1% operating profit CardOps, leads the French gift card market with 3.5 million cards sold in 2007. New banque-accord.fr web site The design of the new site is based on feedback and suggestions from the bank’s customers. A series of new functions have been introduced, like online account statements, financial illustrations and online finance quotes. Customers visiting the site are helped and guided by Béa, the online virtual advisor. The banque-accord.fr and Oney.fr web sites logged 12 million hits in 2007. 34 ORGANIZATION CHA legal Supervisory board Vianney Mulliez, Chairman Daniel Bacrot Jean-Bernard Guillebert François Leclercq Arnaud Mulliez, AUSSPAR Representative Louis Mulliez Muriel Van der Wees Board of directors Christophe Dubrulle, Chairman of the Board Benoist Cirotteau, Chairman Supermarkets Jérôme Guillemard, Chairman Banque Accord Benoît Lheureux, Chairman Immochan, Development and Human Resources Xavier de Mézerac, Finance Director Group support services Patrick Bodin, Management control manager Henri Mathias, Support services manager Thierry Martin, Development deputy manager Marie-Hélène Boidin-Dubrule, Communication manager with responsibility for sustainable development issues operational HYPERMARKETS Christophe Dubrulle, Chairman and General Manager France Arnaud Mulliez, Chairman Henri Mathias, Vice-Chairman Philippe Baroukh, General Manager Luxembourg Philippe Baroukh, Chairman François Remy, General Manager SUPERMARKETS Benoist Cirotteau, Chairman Philippe Saudo, General Manager France Philippe Saudo, Chairman Denis Simon, General Manager BANQUE ACCORD Jérôme Guillemard, Chairman Damien Guermonprez, General Manager France Jean-Pierre Viboud, General Manager Banque Accord France IMMOCHAN INTERNATIONAL Benoît Lheureux, Chairman Eric Deleplanque, General Manager France Hervé Motte, General Manager Immochan France ALINÉA Benoît Lepoutre, Chairman Didier Dubois, General Manager Brigitte Galliez, Insurance Director RT 35 April 2008 Spain Patrick Coignard, Chairman Pedro Alonso, General Manager Portugal Eduardo Igrejas, Chairman Americo Ribeiro, General Manager Italy Philippe Le Grignou, Chairman and Managing Director Patrick Espasa, General Manager Poland François Colombié, Chairman Philippe Gracia, General Manager Hungary Henri Mathias, Chairman Jean-Paul Filliat, General Manager Russia Jean Mailly, Chairman Jean-Pierre Germain, General Manager Romania Régis Mougel, Chairman MGV Distri-Hiper Philippe Le Grignou, Auchan Group Representative Ukraine Jean Mailly, Chairman Gérard Gallet, General Manager China Auchan Bruno Mercier, Chairman Olivier Soulé de Bas, General Manager RT Mart Peter Huang, General Manager Christian Clerc-Batut, Director Taiwan Bruno Mercier, Chairman Jean-François Simon, General Manager Spain Philippe Saudo, Chairman Olivier Tanguy, General Manager Italy Benoist Cirotteau, Chairman and Managing Director Antonello Sinigaglia, General Manager Poland Philippe Saudo, Chairman Yves Lierley, General Manager Russia Philippe Delalande, Chairman Jean-Philippe Grabowski, General Manager Spain Thierry Vinualez, General Manager Accordfin Italy Franck Duprez, General Manager Accord Italia Hungary Kinga Bors, General Manager Accord Magyarország China Tang Loaec, General Manager Accord Consulting Portugal Denis Mardon, General Manager Crediplus Poland Stéphane Schersach, General Manager AccordFinance Russia Julien Cailleau, General Manager BA Finans Italy Gallerie Commerciali Italia (GCI) Hans Mautner, Chairman Benoît Lheureux, Managing Director Edoardo Favro, General Manager Spain Valentin Serrano, General Manager Immochan Spain Poland André-Paul Leclercq, General Manager Immochan Poland Portugal Mario Costa, General Manager Immochan Portugal Hungary Philippe Richard, General Manager Immochan Hungary Russia Michel Chaize, General Manager Immochan Russia – april 2008. Photo credits: Auchan, S. Dhote, C. Richard et C. Waeghemacker. Redaction: Communication Department – Design and production: Communication departement in charge of sustainable development – 92, rue Réaumur – 75002 Paris Tel. : +33 (0)1 58 65 08 08 – Fax : +33 (0)1 58 65 08 15 www.groupe-auchan.com
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