REGISTRATION DOCUMENT 2017 Annual Financial Report DOCUMENT 1. PRESENTATION OF THE CARREFOUR 5. CONSOLIDATED FINANCIAL STATEMENTS DE RÉFÉRENCE GROUP 5 AS OF DECEMBER 31, 2017 213 1.1 Strategy of the Carrefour group 6 5.1 Consolidated income statement 214 Rapport financier annuel 2016 1.2 History of the Carrefour group 12 5.2 Consolidated statement of comprehensive 1.3 Description of the Group’s business 15 income 215 1.4 The Carrefour group in 2017 21 5.3 Consolidated statement of financial position 216 1.5 Corporate Governance 28 5.4 Consolidated statement of cash flows 218 5.5 Consolidated statement of changes in shareholders’ equity 220 2. CORPORATE SOCIAL RESPONSIBILITY 31 5.6 Notes to the Consolidated Financial Statements 221 2.1 CSR at Carrefour 32 5.7 Statutory Auditors' report on the Consolidated 2.2 Combatting waste 40 Financial Statements 293 2.3 Protecting biodiversity 50 2.4 Supporting our partners 60 2.5 Carrefour’s human resources policy 70 6. COMPANY FINANCIAL STATEMENTS YEAR 2.6 Carrefour’s duty of care plan 88 ENDED DECEMBER 31, 2017 297 2.7 Carrefour’s non-financial results 94 6.1 Balance Sheet at December 31, 2017 298 6.2 Income statement for the year 299 3. CORPORATE GOVERNANCE 109 6.3 Statement of cash flows 300 6.4 Notes to the Company Financial Statements 301 3.1 Corporate governance code 110 6.5 Statutory Auditors' report on the Company 3.2 Composition, conditions of preparation and Financial Statement 316 organisation of the Board of Directors' work 111 3.3 Executive Management and the Group Executive Committee 139 7. INFORMATION ABOUT THE COMPANY 319 3.4 Compensation and benefits granted to Company Officers 142 7.1 Information about the Company 320 3.5 "Comply or Explain" rule of the AFEP-MEDEF 7.2 Information on the capital 324 code 160 7.3 Shareholders 330 3.6 Regulated agreements and commitments 7.4 Stock market information 333 referred to in Articles L. 225-38 et seq. and L. 225-42-1 of the French commercial code 161 3.7 Transactions in the Company’s shares ADDITIONAL INFORMATION 335 carried out by Company Officers 162 8. 3.8 Statutory Auditors' special report on 8.1 Publicly available documents 336 regulated agreements and commitments 164 8.2 Person responsible 336 8.3 Person responsible for the financial information 337 MANAGEMENT’S DISCUSSION AND 4. 8.4 Persons responsible for auditing the Financial ANALYSIS AS OF DECEMBER 31, 2017 171 Statements 337 8.5 Information incorporated by reference 337 4.1 Consolidated sales and earnings performance 172 8.6 Concordance tables 338 4.2 Group financial position 177 4.3 Outlook for 2018 180 4.4 Other information 181 4.5 First-quarter 2018 sales 185 4.6 Parent company financial review 188 4.7 Risk management 192 4.8 Internal control system 204 The elements of the Annual Financial Report are identified in the table of contents using the symbol With a multi-format network of 12,300 stores in over 30 countries, the Carrefour group is one of the world’s leading food retailers. Carrefour serves 105 million customer households worldwide and posted gross sales of €88.24 billion in 2017. The Group has nearly 380,000 employees who contribute every day to making Carrefour the world leader in the This Registration Document food transition for all. was filed with the French financial markets authority (Autorité des marchés financiers – AMF) on April 26, 2018, in accordance with Article 212–13 of the AMF General Regulation. It may be used to endorse a financial transaction in conjunction with a prospectus certified by the AMF. This document has been established by the Issuer and is binding on its signatories. CARREFOUR | 2017 REGISTRATION DOCUMENT 1 CARREFOUR 2022 BECOME THE WORLD LEADER IN THE FOOD TRANSITION FOR ALL DEPLOY ACHIEVE CREATE OVERHAUL A SIMPLIFIED PRODUCTIVITY AND AN OMNI-CHANNEL THE OFFER AND OPEN COMPETITIVENESS UNIVERSE TO PROMOTE ORGANISATION GAINS OF REFERENCE FOOD QUALITY 2 2017 REGISTRATION DOCUMENT | CARREFOUR Le message du Président-Directeur Général “Carrefour has set a strong, universal ambition: to become the world leader in the food transition for all.” Alexandre Bompard Chairman and Chief Executive O cer The Carrefour group is a global food retailer The plan will begin delivering its benefits, in and an extraordinarily powerful company, with an particular through the deployment of a simplified, unparalleled asset portfolio, nearly 380,000 more open organisation and via an initial wave of employees with outstanding expertise in more cost savings and investments to increase than 300 professions, global leadership in food productivity and competitiveness. As a key to and a universally recognised brand. Every year, driving our future success, we will create a leading 105 million customer households visit our banners omni-channel universe for our customers by and four billion transactions are recorded in investing in growth formats and digital capabilities France and abroad, in more than 12,300 stores to become the leader in food e-commerce and and websites. in the Carrefour brand. Lastly, the Group is going Overall, 2017 was a challenging year for to revamp its offering to enhance food quality, so Carrefour, with a slowdown in consolidated like as to provide everyone – every day and for-like sales growth to 1.6%, for a total of everywhere – with quality, healthy food at a €78,897 million excluding VAT, a 14.7% decline reasonable price. in recurring operating income at current Carrefour spearheaded one of the main exchange rates, to €2 billion, and an attributable battles of the 20th century: consumption net loss of €531 million, primarily due to democratisation. It now needs to be at the non-recurring expenses. forefront of one of the major challenges of the st 2017 was also a year of transition in our 21 century, at the crossroads of economic, corporate governance. The new management social, health and environmental issues. team introduced in early 2018 “Carrefour 2022”, The Group has set a strong, universal ambition: an ambitious transformation plan now rolled out to enable customers to consume better, by in all of the Group’s geographies. becoming the world leader in the food transition for all. This ambition embodies the Group’s commitment to serving consumers – an ambition that will enable Carrefour to create value over the long term and attract new customers, while also sustainably consolidating its positions. CARREFOUR | 2017 REGISTRATION DOCUMENT 3 4 2017 REGISTRATION DOCUMENT | CARREFOUR 1 PRESENTATION OF THE CARREFOUR GROUP 1.1 Strategy of the Carrefour group 6 1.1.1 Major changes 6 1.1.2 A renewed ambition 6 1.1.3 “Carrefour 2022” transformation plan 7 1.2 History of the Carrefour group 12 1.3 Description of the Group’s business 15 1.3.1 Geographic footprint 15 1.3.2 Store and website operations 16 1.3.3 Products and services 18 1.3.4 Supply chain operations 19 1.3.5 Property management 19 1.3.6 Simplified organisational chart 20 1.4 The Carrefour group in 2017 21 1.4.1 Highlights of 2017 21 1.4.2 Highlights of Q1 2018 21 1.4.3 Summary of financial and stock market performance 22 1.4.4 Summary of CSR performance 26 1.5 Corporate Governance 28 1.5.1 Board of Directors 28 1.5.2 Group Executive Committee 29 CARREFOUR | 2017 REGISTRATION DOCUMENT 5 1. PRESENTATION OF THE CARREFOUR GROUP Strategy of the Carrefour group 1.1 Strategy of the Carrefour group 1.1.1 Major changes The food retail industry is facing the effects of three major the development of new technologies and new distribution changes. channels. Customer loyalty to a particular brand is no longer automatic, the customer path is less linear and more fragmented. The first major change is the transformation of the competitive landscape. Innovation has given rise to global platforms that offer The third major change concerns food and eating behaviours. almost everything in just a few clicks, highly specialised retailers Consumers will no longer tolerate uncertainty about the quality of that define and dominate certain product categories, startups that the food they eat, and this intolerance will increase over time. They are making things easier for consumers every day, and new are demanding more information, transparency and quality along alliances that are reshaping the market. the entire food chain. The second major change is the shift in customer expectations. The Carrefour group therefore needs to achieve an in-depth Customers have always wanted things to be better, faster and transformation so that the strength, quantity and diversity of its cheaper. However, this trend is now gathering speed because of assets can reveal their true value. 1.1.2 A renewed ambition “Carrefour spearheaded one of the main battles of the 20th century: consumption democratisation. It now needs to be at the forefront of one of the major challenges of the 21st century, at the crossroads of economic, social, health and environmental issues: become the world leader of the food transition for all, by offering consumers – every day and everywhere – quality, healthy food at a reasonable price. To return to a conquering dynamic, we must revamp our model by simplifying our organisation, opening ourselves up to partnerships, improving our operational efficiency, investing in our growth formats, building an efficient omni-channel model and developing our fresh and organic products offering, notably under the Carrefour brand. This is the meaning of the ‘Carrefour 2022’ transformation plan, which the Group and its teams will implement with ambition and determination.” Alexandre Bompard, Chairman and Chief Executive Officer, January 23, 2018.