ANNUAL REPORT 2016-2017 Worldreginfo - 2Ccaac94-6F22-47F9-851F-67A9deb31f80 Halle, 15 June 2017
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ANNUAL REPORT 2016-2017 WorldReginfo - 2ccaac94-6f22-47f9-851f-67a9deb31f80 Halle, 15 June 2017 FINANCIAL YEAR 2016/17 Annual report presented to the Ordinary General Meeting of Shareholders of 27 September 2017 by the Board of Directors and Report of the Auditor. The Dutch language version of the annual report is the only official version. Dit jaarverslag is ook verkrijgbaar in het Nederlands. Ce rapport annuel est également disponible en français. WorldReginfo - 2ccaac94-6f22-47f9-851f-67a9deb31f80 1 Together, we create sustainable added value through value-driven craftsmanship in retail WorldReginfo - 2ccaac94-6f22-47f9-851f-67a9deb31f80 2 3 Corporate Financial Intro Who are we? Activities governance report 08 Word from the chairman 22 Colruyt Group: 42 Retail 118 Management, supervision 138 Consolidated income 10 Management report family of companies 70 Wholesale and directorate statement 14 Key figures 24 XTRA, the family of companies 76 Foodservice 120 Responsible/sustainable 139 Consolidated statement of 16 Activities becomes even stronger 82 Other activities corporate governance and comprehensive income 18 In the spotlight 26 Sustainable entrepreneurship 89 Corporate activities remuneration report 140 Consolidated statement of 27 Sustainability in our genes 106 Colruyt Group in figures 131 Share ownership - financial position 29 Product Colruyt shares 141 Consolidated statement 33 Environment of cash flows 37 People 142 Consolidated statement of changes in equity 144 Management responsibility statement 145 Independent auditor’s report 147 Notes to the consolidated financial statements The introduction is based on the Colruyt Group 2016-2017 management report as prepared by the Board of Directors of the company. The content of the corporate governance section forms an integral part of the annual report of the Board of Directors on the separate financial statements of the company for the financial year 2016-2017. WorldReginfo - 2ccaac94-6f22-47f9-851f-67a9deb31f80 4 5 Intro 08 Word from the chairman 10 Management report 14 Key figures 16 Activities 18 In the spotlight WorldReginfo - 2ccaac94-6f22-47f9-851f-67a9deb31f80 7 INTRO • WORD FROM THE CHAIRMAN JEF COLRUYT CHAIRMAN OF THE BOARD OF DIRECTORS OF COLRUYT GROUP BUILDING A MORE SUSTAINABLE FUTURE TOGETHER Last year Colruyt Group continued to grow steadily. Our family between different departments and between diverse retail of companies could continue to count on the confidence of formulas. A collaboration that we crowned this year with the its customers and was also able to attract new customers. launch of our shared loyalty card, Xtra, a milestone in the As a result our Colruyt, OKay and Spar food stores saw history of our group. their combined market share in Belgium rise further to 31,7%. On a group level the revenue rose by 3,4% to almost With the Xtra card we greatly strengthen our ties as a family EUR 9,5 billion, while we registered a good net profit of of companies and moreover we provide greater simplicity in EUR 383,2 million. the life of the customer, true to our group motto ‘Simplicity in retail’. Together with our customers we are continuing to work We were also able to produce these results thanks to continued intensively on improving our private label products, focussing investments, primarily in extra store space and in the on health and welfare. I am also proud that we have launched renovation of our store network. We also continue to invest in some nice social projects with various external partners. For our young retail formulas, convinced as we are of the strength example, together with the Food Banks we provide unsold food of our family of companies. We are also continuing to play the faster and more efficiently to the underprivileged. innovation card. For example, we have developed a unique application for a tailor-made food choice, and our meat- Also on an ecological level we are taking on our responsibility processing company has opened an additional high-technology and continue to invest heavily in renewable energy, in a greener production site of 18.000 m² that is set to supply vegetarian vehicle fleet, in energy-efficient buildings, etc. In order to food and alternative proteins. make more progress here, we have also joined forces with international partners. For example, we have helped develop The expansion of our activities is supported by our employees, a European method to map out the environmental impact precisely 29.255 at the end of the financial year. It gives me of retailers. And we have joined an ambitious European great pleasure that we can continue to recruit people and partnership of companies, universities and research that Colruyt Group is becoming increasingly attractive as an institutions, who together want to sustainabilise the food employer year by year. This illustrates that our company culture chain. works, that people can find a positive environment with us in which they can take advantage of the opportunities offered to With initiatives such as these, we want to help make the develop themselves, both professionally and personally. difference and inspire others as much as possible to build a more sustainable future: customers and suppliers, trade This financial year we also bid farewell to our subsidiary, associations and interest groups, knowledge institutions, Pro à Pro, our foodservice activity in France. I would like to take public authorities, etc. For us it is a great honour that we have this opportunity to sincerely thank the 1.800 employees of recently been able to act as an ambassador of the ‘Sustainable Pro à Pro for the fine path that we have taken together over the Development Goals’ of the United Nations. Call for fiscal and administrative simplification last fifteen years. I am convinced that Pro à Pro - in a rapidly Colruyt Group argues strongly for a simplification of the complex and developing French market - will have the best opportunity with Finally I would like to sincerely thank our customers for their administratively cumbersome Belgian tax system. We are an advocate Metro Group to continue to grow sustainably. I wish them every confidence, our employees for their dedication, our suppliers of a simplified corporation tax with a lower nominal rate and a drastic success. and all other partners for their fruitful collaboration. We simplification of the deduction items, with the preservation of specific are writing the story of Colruyt Group together, a story that incentives for investments, innovation, research and development. That In a time when countries and population groups seem to be continues to focus on sustainable growth, today and in the would positively influence the investment climate and support Belgian increasingly turning inwards, as a retail group we actually future. competitiveness. want to be more “connected”. Indeed, in our pursuit of sustainable entrepreneurship, we are recording the best results with projects that are supported by diverse partners. Our participation in CITRUS, a project that develops technology to optimise freight transport with real time traffic info in order to limit the miles travelled on the road, is a nice example of this. We are thus continuing to build on the close cooperation WorldReginfo - 2ccaac94-6f22-47f9-851f-67a9deb31f80 9 INTRO • MANAGEMENT REPORT 2. CONSOLIDATED INCOME STATEMENT The effective tax rate amounted to 25,5% in 2016/17 (29,9% last year). The decrease is primarily attributable to Revenue rose by 3,4% to EUR 9.493 million in financial year one-off effects related to the disposal of Pro à Pro: MANAGEMENT REPORT 2016/17. The comparable revenue growth amounted to the realisation of tax losses carried forward (EUR 9 million) 2,8%. The difference in revenue growth is attributable to the and the exempt gain on the sale. deconsolidation of Pro à Pro on 1 February 2017. The financial year 2016/17 comprises Pro à Pro’s results from 1 January 2016 Profit for the financial year increased by EUR 17 million to up to and including 31 January 2017 (13 months). EUR 383 million. The net result from the disposal of Pro à Pro Excluding petrol, the comparable revenue increased by totalled EUR 19 million. The comparable net profit (EUR 364 2,5%. The revenue growth was driven by sales price inflation million) was slightly lower than last year (EUR 366 million). 1. OVERVIEW FINANCIAL YEAR 2016/17 – KEY FIGURES AND HEADLINES and sales surface expansion and was partly offset by an unfavourable calendar effect (-0,8%, mainly impact of Easter). 3. INCOME STATEMENT PER SEGMENT Colruyt Group’s market share in Belgium (Colruyt Lowest Prices, (in million EUR) 01/04/2016 - 01/04/2015 - OKay and Spar) expanded from 31,5% last year to 31,7% in the 31/03/2017 31/03/2016 Variance financial year 2016/17. 3.1. Retail Revenue 9.493,5 9.177,5 +3,4% The gross margin improved to 25,4% (25,3% last year). Retail revenue grew by 2,4% to EUR 7.233 million. Retail Gross profit 2.414,5 2.320,9 +4,0% Excluding petrol, the margin rose by 20 basis points, primarily accounted for 76,2% of the consolidated revenue. The Belgian % of revenue 25,4% 25,3% as a result of a milder competitive climate in the first semester. and French retail markets remained competitive in 2016/17. Operating cash flow (EBITDA) 743,7 720,3 +3,3% In the second semester the gross margin was lower than last year as a result of tougher competition and our consistently Revenue of the Colruyt stores in Belgium and Luxembourg % of revenue 7,8% 7,8% applied lowest price policy. climbed 1,4%. The positive impact of sales price inflation Operating profit (EBIT) 493,3 507,2 -2,7% The Colruyt banner continues to offer its customers the lowest was offset by an unfavourable calendar effect (-0,8%).