Carrefour S.A.
Annual Report 2019

Plain-text annual report

“Our mission is to provide our customers with quality services, products and food accessible to all across all distribution channels. Thanks to the competence of our employees, to a responsible and multicultural approach, to our broad territorial presence and to our ability to adapt to production and consumption modes, our ambition is to be the leader of THE FOOD TRANSITION FOR ALL.ˮ Annual Report 2019 ANNUAL REPORT 2019 14 June, 2019 — Carrefour's Shareholders' Meeting approved the adoption of a "raison d'être", which is included in the preamble to the Company's Articles of Association. You can read it on the cover of this annual report. 2 3 CARREFOUR — ANNUAL REPORT 2019T his annual report comes at a time when the COVID-19 pandemic is hitting our societies and economies hard in every country where we operate. In these serious and unprecedented circumstances, the Carrefour group and all its teams are fully mobilized to meet our primary responsibility: feeding the population. This has been our mission for 60 years. And it is the mission we are reinventing through the "Carrefour 2022" plan, by building a new model to serve our customers. Last year, this mission was enshrined in our Company's Articles of Association and became our "raison d'être": to be the leader of the food transition for all. It is with this mission at heart that we have met all of our objectives, both financial and extra-financial, over the course of a 2019 that was rich in many achievements. We have revitalised both our food and non-food offer, strengthened our distribution channels and the complementarity of our formats, and put price competitiveness back at the heart of our commercial policy. Our solid results make Carrefour a more agile, more digital, more resolute company, fully committed to serving its customers in the best possible way. Even today, amid this crisis, we are actively pursuing our mission. We carry it out with the strictest respect for the health of our employees and our customers. We tackle it through a joint effort across the entire food chain, guaranteeing continuity of supply with our partners and supporting our producers. We do this in a spirit of responsibility and solidarity, in order to support those working on the frontline to tackle the crisis, as well as those who are isolated, elderly or frail, and any others who most need support. The year 2020, overshadowed by this crisis, ushers us into uncertain times. But our Group, backed by the exceptional mobilization of its teams and the solid foundations it has successfully built in two years of rapid transformation, will continue to advance its values and to promote a model of growth that is healthy, safe and respectful of the environment. Alexandre Bompard — Chairman and Chief Executive Officer 04 05 5 CARREFOUR — ANNUAL REPORT 2019CARREFOUR TEAMS MOBILISED IN THE FACE OF THE COVID-19 PANDEMIC An annual report usually describes the activity of the past year. But at the time of this publication, the world is in the midst of an unprecedented pandemic affecting our economies and societies. We would therefore like to pay tribute to the exceptional mobilisation of our teams. PROTECTION OF EMPLOYEES AND CUSTOMERS — The Group immediately implemented strong measures to safeguard the health of its employees and customers, which, in most cases, anticipated and went beyond the health rules recommended by the public authorities in each country. The following measures were adjusted daily: a Barrier gestures and social distancing a Reinforcement of disinfection and hygiene protocols a Installation of plexiglass screens at checkouts a Regular supply of hydroalcoholic gel a Providing employees with gloves, full-visor caps, masks and thermometers a Queuing at the store entrance in case of crowds a Ground markers to respect a safe distance a Specific disinfection protocols and quarantine in case of suspected contamination — The proper application of health, hygiene and safety rules has been and continues to be strictly controlled and audited on a regular basis. Working conditions have also been adapted to further protect our teams: a Adaptation of store opening hours a Closure of integrated stores in France on Sundays during the strict lockdown period a Generalisation of teleworking conditions for headquarter employees ENSURE THE CONTINUITY OF FOOD DISTRIBUTION — Carrefour teams mobilized in an exceptional manner to ensure the continuity of food distribution in a context without precedent. The Group has kept the supply chain running smoothly through: a The establishment of plans to secure supply in stores and warehouses, with specific measures for the most sensitive and priority products a The establishment of a crisis unit dedicated to steering the supply chain and working with suppliers to increase direct flows a The rationalisation of supplier ranges (SKU reallocation, new suppliers, etc.), risk mapping, especially of shortages, and the monitoring of alerts a Mobilisation of headquarters teams in the field, on a voluntary basis a The recruitment of 5,000 employees in Brazil to strengthen the store teams — Carrefour has additionally adapted to the very high demand for e-commerce. The Net Promoter Score® (a measurement of customer satisfaction) reached a record level in this segment in France. Among the measures implemented in e-commerce are: a Operations: Immediate implementation of virtual queues on all our websites, versatility of store teams and opening of numerous order preparation points, acceleration of mechanisation and work rotations in warehouses a Services: Development of Carrefour Drive in Spain and Italy and launch of the model in Argentina and Poland, launch of the “Les Essentiels Carrefour” offer deployed in France and Italy, using a dedicated mini-site to make baskets of essential food items available to customers a Delivery partnerships: Signature of contracts with UberEats in France and Glovo in Poland — The Group wishes to express its gratitude to its personnel in the field, in stores, in Drives, and in warehouses, who have contributed to the intense collective effort in this period of crisis. Bonuses, vouchers or other benefits are awarded to these employees in all countries. In France, notably, around 85,000 employees will benefit from a bonus of €1,000 net, representing a total cost of around €85m. MOBILISATION IN FAVOUR OF PURCHASING POWER — Carrefour mobilised to defend its customers’ purchasing power by strengthening its commitments and by freezing prices on thousands of products in all countries, for example on 5,000 Carrefour-branded products and 500 “Unbeatable Price” products in France. NUMEROUS SOLIDARITY ACTIONS — Carrefour is committed to helping hospital and medical staff, as well as the most vulnerable people: a Priority checkouts and time slots have been dedicated to these groups in most stores a New services (taking orders by phone, meal deliveries, etc.) have been specially set up for these groups — The Carrefour Foundation has released €3m for emergency food aid and hospitals, including: a Contribution to the emergency fund of the Assistance Publique-Hôpitaux de Paris Foundation in France to help medical teams in French hospitals and fund medical research to defeat COVID-19 a Support for medical teams at San Carlo and San Paolo hospitals in Italy a Purchase of equipment to help local Red Cross in Poland and Romania — In Spain, Carrefour donated mattresses and beds for makeshift hospitals. In Brazil, Carrefour doubled the food donations made by customers. Carrefour Brazil will in turn distribute the equivalent of 15 million Brazilian reais of food to the families most vulnerable to the virus. — The Carrefour Solidarity team, which usually works with 14 partner associations, has responded to new requests for emergency food and non-food aid from other institutions, such as nursing homes and hospitals. It has also worked to: a Set up a "Solidarity Associations" multi brand platform to provide timely assistance to those working in the field. a Implement the Solidarity Masks operation, led by Alexandre Jardin. In cooperation with the AFNOR platform, our stores have now become relays for the free distribution of masks to the most underprivileged. SUPPORT FOR AGRICULTURAL SECTORS IN THE CRISIS — The health crisis has reduced opportunities for many SMEs in the agricultural/fish and food industries. Carrefour supports players in these sectors and is mobilising to limit the economic impact they face: a Carrefour is committed to wholesalers to support French fishing, by guaranteeing volumes and purchase prices on around 10 major species. a For seasonal products in hypermarkets, Carrefour is committed to sourcing exclusively from French farmers. a The Group was the first retailer to contribute, donating up to €250,000, to the Solidarity Fund for Consumers and Citizens created by "C'est qui le patron?". The fund aims to support people whose self-employed professional activity has been strongly impacted by the crisis (independents, shops, farmers, very small businesses). SOCIAL AND SOCIETAL RESPONSIBILITY MEASURES — In the exceptional context of the pandemic, and in a responsible corporate approach, Alexandre Bompard informed the Board of Directors of his decision to give up 25% of his fixed compensation for a period of two months. In addition, the fixed remuneration of the members of the Executive Committee was frozen for all of 2020, and they were asked to forsake 10% of their fixed remuneration for a period of two months. Finally, the members of the Board of Directors have decided to reduce their directors’ fees by 25% for the current year. The corresponding amounts will be used to finance solidarity actions for Group employees, in France and abroad. In a gesture of social and societal responsibility, the Board of Directors also decided to reduce the dividend proposed for the 2019 financial year by 50%, which will now amount to €0.23 per share. 06 CARREFOUR — ANNUAL REPORT 2019 07 Becoming the leader in THE FOOD TRANSITION FOR ALL, SOMMAIRE WHY? HOW? 12 — To stay ahead of evolving consumption patterns 13 — To bring quality food to everyone 14 — To support the transformation of agricuture 18 — To protect our planet 24 — By serving our customers with passion 28 — By investing in fresh, local and organic products 30 — By providing transparent product information 34 — By guaranteeing accessibility for all 36 — By building a benchmark omnichannel universe 40 — By introducing innovative growth formats and concepts 42 — By conserving the planet’s resources WITH WHOM? 46 — Our business model, generating shared value 48 — With our teams 52 — With our suppliers and our product lines 56 — With our strategic partners 58 — With our customers 59 — With communities 60 — A committed governance 64 — Financial and extra-financial indicators 08 8 CARREFOUR — ANNUAL REPORT 2019 09 9 CARREFOUR — ANNUAL REPORT 2019Becoming the leader in THE FOOD TRANSITION FOR ALL, CHAPTER — 1 WHY? Our society’s current production and consumption methods are reaching their limits. As a leading agent of change, Carrefour is helping to usher in a new distribution model that makes quality food, produced in an environmentally friendly manner, accessible to the greatest number of people, all while supporting the necessary transformation of agriculture and farming. Since December 2019, Carrefour has begun using a spectrophotometric technique (based on colour analysis) for in-ovo selection of laying hens used to produce Carrefour Quality Line eggs. This is a first in France. In this way, laying hens can be selected before they hatch, thus avoiding the need to kill male chicks. 10 CARREFOUR — ANNUAL REPORT 2019 CARREFOUR — RAPPORT ANNUEL 2019 11 11 CHAPTER — 1 Becoming the leader in the food transition for all, why? TO STAY AHEAD OF EVOLVING CONSUMPTION PATTERNS TO BRING QUALITY FOOD TO EVERYONE Concerned about their purchasing power, but also mindful of the health and environmental issues associated with food, consumers are now adopting more responsible purchasing habits, while taking advantage of the new opportunities offered by digital technology. In Europe, consumers are increasingly turning to organic products. Carrefour is working by their side at the epicentre of the movement for sustainable and connected consumer habits. Consumption habits are changing. Health has become a major concern: populations in developed countries are changing their diets, which are too high in calories, sugar, refined starches and animal products. Worldwide, 64% of consumers follow a diet that eliminates or restricts certain ingredients (1). They are also on the hunt for healthier products. In the European Union, the market for organic products nearly quadrupled between 2004 and 2017 (2). Its growth goes hand in hand with a decrease in meat consumption: in France, 35.4% of households have at least one flexitarian and 2.6% at least one vegetarian or vegan (3). Shopping is also becoming a more conscious act: consumers favour short distribution channels as well as local and seasonal products, in order to limit losses and waste. They also want to ensure that producers are fairly compensated, and promote animal welfare and environmental protection. 2.4 billion people in the world have an unbalanced diet (5) 71% of consumers use their smartphone in store (6) 70% of Europeans think organic products are safer (2) 80% of Europeans believe organic foods are better for the environment (2) Sources: 1. Nielsen Global Ingredients and Dining Out Trends. Survey of 30,000 consumers in 63 countries conducted in 2016. 2. Organic Farming in the European Union, 2019 edition. 3. Kantar LinkQ Flexitarism Study, June 2019. 4. Kantar TNS Food 360, 2018 Edition, survey conducted online in 14 countries. 5. Report from the EAT-Lancet Commission: “Healthy food from sustainable production”, 2019. 6. Hub Institute, Hub Report, “The Future of Retail”, 2019. SUPPORTING NEW USES AND PRACTICES — Food consumption is becoming more fragmented: more meals are taken outside, snack breaks are increasing and home delivery is developing rapidly. Shopping channels are also diversifying: consumers are mixing online and in-store shopping, while visiting all types of stores depending on their needs. These changes are amplified by the deployment of digital technology, which delivers even greater flexibility: it is now possible to order purchases in one click, before collecting them at a pick-up location. In-store, smartphones have become a decision-making tool. They allow consumers to check nutritional information, search for promotions and save time at checkout by scanning barcodes and QR codes. Digital is also meeting the growing demand for personalisation. Loyalty card data is already making it possible to deepen customer knowledge and fine-tune customer interactions via SMS or email. Finally, digital technology is responding to the demand for greater transparency about products before purchase, which is expressed by nine out of ten consumers (4): using blockchain technology also provides greater assurances in terms of transparency related to product traceability. As a pioneer in food quality, Carrefour was the first to embrace these major changes and to respond accordingly, both for and with its customers. Enabling everyone, everywhere to have access to healthy food at an affordable price means closing two major gaps – nutritional and geographic – by offering quality products at competitive prices and by strengthening our geographic network of retail outlets. Carrefour has continued to meet this challenge for 60 years. Providing healthy, affordable and accessible food remains a vital issue. Access to healthy, high quality food and access to adequate food for all are respectively the third and fourth priorities expressed by consumers on all five continents (1). Malnutrition started to increase again worldwide in 2015, after a decade of decline. In 2018, more than 820 million people, or 10.8% of the world's population, were undernourished (2) and 2 billion struggled with food insecurity. In France, the share of the population describing its purchasing power as "low" increased from 28% to 31% (3) in one year. When asked which spending categories they would like to dedicate more resources to, 43% of French people identified food in 2019, compared to 29% in 2018, an increase of 14 points. DELIVERING EVEN GREATER PROXIMITY — Physical accessibility is also a key concern for consumers. In all countries, many areas remain isolated: they have a low density of shops compared to large urban areas, forcing residents to travel across great distances to make their purchases. The demand for proximity is strong and responds to a desire for local dynamism, both inside and outside major urban centres. Retail players must therefore develop segmented offers in terms of price, as well as ensure a dense regional network and efficient online services, in order to help reduce the economic and geographic food divide. Working on the frontlines of this effort to bring quality food to the masses since its inception, Carrefour is now reaffirming its commitment with vigour. BALANCING PURCHASING POWER AND FOOD QUALITY It is more than possible to reconcile the demand for healthy food with sustained purchasing power. Studies carried out by WWF France and ECO2 Initiative show that shifting diets towards more plant-based consumption would make it possible to reduce the carbon footprint of food, introduce more certified organic products (AB, Label Rouge, etc.) and satisfy nutritional needs without increasing grocery budgets. The cost of a flexitarian diet, which includes 50% certified organic products, is equal to the average food budget in France (4). Sources: 1. “The challenge of resources”, ELABE study for Veolia carried out in January 2018 among 14,000 people in 28 countries. 2. SOFI report (FAO, WHO, WFP, Unicef), July 2019. 3. Eighth edition of the annual Cofidis CSA barometer, September 2019. 4. "Towards low-carbon, healthy and affordable food", WWF and ECO2 Initiative study, 2017. 12 12 CARREFOUR — ANNUAL REPORT 2019 13 13 11 CARREFOUR — ANNUAL REPORT 2019 CHAPTER — 1 Becoming the leader in the food transition for all, why? TO SUPPORT THE TRANSFORMATION OF AGRICULTURE The current model of intensive agriculture is reaching its limit and straining the environment: in this context, the agricultural transition seems vital. By supporting its suppliers as they convert to more sustainable practices, Carrefour is fully committed to this transformation. In 2050, the Earth is expected to be home to 9.7 billion people, compared to 7.7 billion in 2019, an increase of 2 billion in 30 years (1). To ensure food security for all, world food production will need to increase by 60% by 2050 (2). Intensive and industrial agriculture, which has increased agricultural yields since the 1960s, has reached its limit. Indeed, humans now use more than 70% of the planet's ice-free land. One third of arable land is used to feed livestock and 60% of the grains produced in the world are consumed by animals. Eighty per cent of deforestation is caused by agriculture, in particular by the expansion of lands used to grow soybean for livestock feed and oil palm. In this context, expanding new agricultural lands runs counter to humanity's best interests, especially since current methods deplete arable land. Indeed, land productivity is likely to fall by 30% by 2050 (3). Promoting alternative modes of production now seems essential in order to combat these imbalances. INVENTING A SUSTAINABLE NEW MODEL — Practices that can sustain the full productivity of the land are steadily improving. New sustainable pathways have begun to take shape, including improved irrigation techniques, soil restoration, crop rotation, the elimination of pesticides, more diverse seeds and the feeding of livestock with locally produced food. Several new virtuous agricultural models exist, such as agroecology, permaculture and agroforestry. Organic agriculture, which guarantees a production method that respects the environment and animal welfare, is the most emblematic of agricultural transformation. According to a study by Nature Communications (4), it will be possible to feed more than 9 billion people in 2050 using 100% organic agriculture (without increasing agricultural land and while reducing greenhouse gas emissions). However, two conditions apply: reducing food waste and limiting the consumption of animal products. The Afterres 2050 prospective scenario estimates that a shift towards 50% organic agriculture could feed 72 million French people in 2050 without increasing the amount of arable land. In effect, such a scenario would cut greenhouse gas emissions in half, lessen energy and water consumption in summer, and reduce pesticide use by a factor of three, provided that over-consumption and losses are reduced and that diets change accordingly. SUPPORTING THE BOOM IN ORGANIC AGRICULTURE — The challenge is considerable, given that organic farming currently represents only 1.4% of the Utilised Agricultural Area (UAA) in the world and 7.5% in the European Union (5). Nevertheless, it has grown extremely fast in recent years. Between 2007 and 2017, organic farmland in the European Union almost doubled. It exceeded 13.8 million hectares at the end of 2018 and continues to grow very rapidly, alongside the number of organic farms. In France, between 2017 and 2018, 4,932 farms joined the ranks of organic farming, bringing their number to 41,623, an increase of 13%. Such growth has been accompanied by a record level of recruitment: in 2018, 9.5% of French farms were certified organic. In terms of surface area, a new high-water mark was reached when lands cultivated according to eco-friendly principles surpassed 2 million hectares. Lands in their first year of conversion increased by 31%. The agricultural transformation has begun. Carrefour is an active player in this process: it has been supporting and accompanying suppliers in the agroecology and organic sectors for many years. CARREFOUR FACILITATES RESPONSIBLE AGRICULTURAL PRACTICES BY OFFERING SPECIAL TERMS AND CONDITIONS TO PRODUCERS IN ITS SECTORS. THE ORGANIC MARKET (5) 93 countries regulate organic agriculture as of early 2019 +€100 billion annual sales in global organic market +€40 billion annual sales in the EU organic market €9.7 billion annual sales in French organic market, representing nearly 5% of household consumption Sources: 1. United Nations, World Population Prospects Report 2019, published in June 2019. 2. FAO (www.fao.org/sustainability/background). 3. Elabe study: “What diet in 2049?”, November 2019. 4. “Strategies for feeding the world more sustainably with organic agriculture”, November 2017 (www.nature.com/articles/s41467-017-01410-w#Sec2). 5. L'Agence Bio, “Organic farming in the world”, 2019 edition, “Organic farming in the European Union”, 2019 edition and key figures (www.agencebio. org/your-tools/ key-figures). 14 14 CARREFOUR — ANNUAL REPORT 2019 15 CHAPTER — 1 Becoming the leader in the food transition for all, why? INCREASING REVENUE FROM THE PRICE OF MILK Within the framework of the French General Conference on Food, Carrefour is committed to increasing the price per litre of milk paid to producers, thereby helping to ensure that they receive fair compensation. On 13 February, 2019 Carrefour signed four agree- ments with Lactalis, Sodiaal, Yoplait and Laïta via the "Envergure" joint purchasing centre, created with U Enseigne. The agreements are designed to increase milk revenues for more than 500 million dairy products of the Président, Lactel, La Laitière, Lanquetot, Lepetit, Chaussée aux Moines, Yoplait, Yop, Petits Filous, Perle de Lait, Entremont, Candia and Paysan Breton brands. The four partnerships benefit 28,000 French milk producers. Building on this approach, Carrefour also took advantage of the Livestock Summit on 2 October, 2019 to sign an agreement for the purchase of 30 million litres of mountain milk per year with COOPAL, a cooperative of 403 producers from the Puy-de- Dôme and neighbouring departments, the supplier Orlait and the bottler SLVA. This partnership guarantees a price paid to produ- cers of 385 euros per 1,000 litres, excluding the mountain and quality premiums. Carrefour is thus stepping up its historical sup- port for agricultural production in mountainous areas, via its Carrefour Mountain Milk brand, which it has marketed for 30 years. This dynamic process will continue in 2020. For the second year of the French General Conference on Food, Carrefour signed a global agreement in December 2019 to raise the prices of the national cheese and consumer milk brands produced by Sodiaal. The Group has also committed to increasing the prices of its own Carrefour brand as of this March. The agreement covers a total volume of 400 million litres of milk produced and processed per year, i.e. 10% of Sodiaal's collection. It will enter into effect on 1 March 2020 and will benefit all 20,000 producers in the coo- perative. In less than two years, in the spirit of the French General Conference on Food, Carrefour will have increased the value of more than 2.3 billion litres of milk (milk, cheese, ultra fresh) of national brands and Carrefour brands by a minimum of 30 euros (per 1,000 litres of milk), i.e. 10% of French production. SUPPORTING ORGANIC MILK Carrefour is supporting the conversion to organic production in this sector. Its partnership with WWF France, the Saint-Denis-de-l'Hôtel dairy (LSDH) and the Centre dairy farmers (APLBC) has enabled Carrefour to support 66 milk producers in this process since 2018. How does it work? By paying them an additional €50 per 1,000 litres of milk for two years, then offering three- year contracts at the end of this period. 16 “To give to others what you would like to consume yourself” Céline et Guillaume Julien — Livestock farmers, Le Bouchet-Saint-Nicolas (Haute-Loire) Carrefour team visiting GAEC Julien (Le Bouchet- Saint-Nicolas, Haute-Loire), with representatives of the COOPAL cooperative. The contract signed between Carrefour and COOPAL has enabled an increase in the revenue of Mountain Milk. On 7 May, 2005, our eldest son, Roman*, was born. It was then we realised what gave true meaning to our work, which in turn motivated our choice to opt for compre- hensive livestock farming. 560,000 litres of milk per year is the annual production of GAEC Julien. * Celine and Guillaume are parents of two children, Roman and Clara. They work together on the farm handed down by Guillaume's parents and uncle. They practice "responsible agriculture" by ensuring the food and cereal production on their own farm to feed their 85 Prim'Holstein dairy cows. 17 CARREFOUR — ANNUAL REPORT 2019CHAPTER — 1 Becoming the leader in the food transition for all, why? TO PROTECT OUR PLANET Several decades of using synthetic pesticides are now having a devastating impact on insect populations, especially bees. At the level of marine and ocean ecosystems, the overfishing required to meet growing seafood demand is having destructive effects: 90% of fish stocks are either overexploited or fully exploited. FIGHTING AGAINST FOOD WASTE — Food waste also has a major ecological footprint. Every year, 1.3 billion tonnes of food are lost or wasted worldwide, representing one third of the total food produced and a cost of $750 billion. Fifty-four per cent of this loss takes place upstream, during the production, handling and storage phases after harvest. The remaining 46% is spread over the processing, distribution and consumption stages. In environmental terms, food waste is responsible for the release of 3.3 gigatonnes of greenhouse gases per year, making it the third-largest source of pollution, after the United States and China. Aware of the magnitude of the issues at stake, a majority of people worldwide believe it is necessary to act quickly to solve these ecological, energy and food challenges (2). They understand the impact of intensive agricultural activities on the planet and wish to fight against the imbalances caused by food globalisation, notably by establishing a less intensive model that consumes fewer resources and returns to local production. By reducing the carbon footprint of its activities, implementing its anti-waste actions and committing to its pioneering approach to sustainable agriculture, Carrefour is positioned at the forefront of this new model. Human activities are undermining the Earth's fragile ecosystems and depleting its limited, overexploited resources. From its central vantage point within the agri-food supply chain, Carrefour is working to build a new business model in order to preserve the environment. Preserving the environment is one of the major challenges of the 21st century. Concentrated urban areas and human activity are causing large-scale climate change, posing a threat to the planet's equilibrium and biodiversity. The emission of greenhouse gases into the atmosphere could lead to an increase in global surface temperature of between 1.1°C and 6.4°C over the course of the century, according to the latest IPCC (Intergovernmental Panel on Climate Change) projections. The consequences of global warming are already on display: deteriorating air quality, melting Arctic glaciers, rising sea levels, increased precipitation in high latitudes and water stress in subtropical regions. Over time, the frequency of extreme weather events, such as torrential rains, storms, floods and droughts, is expected to increase significantly. Forests, which are home to 80% of Earth's biodiversity, are shrinking by 13 million hectares per year. More than 75% of the planet's land surface has already been altered in a more or less reversible way, leading to desertification, deforestation, pollution and salinisation. At the current rate, experts at the IPBES (Intergovernmental Platform on Biodiversity and Ecosystem Services) estimate that 95% of the planet's land may deteriorate by 2050, which could provoke massive population displacements. PUTTING AN END TO OVEREXPLOITATION — Agri-food activities have a considerable impact on the planet. The world's food system as a whole accounts for one-third of global greenhouse gas emissions, with agricultural production accounting for about 20% of these emissions. Land degradation results from unsustainable land management linked to intensive agricultural practices. Intensive agriculture also disrupts freshwater ecosystems, which are placed under extreme stress by agricultural irrigation and are polluted by pesticides and fertilisers. What’s more, deforestation linked to agriculture threatens all of the world's major forests: the Amazon, the Cerrado, the Congo Basin, New Guinea, South-East Asia, etc. Agriculture is also one of the main causes of the decline and erosion of terrestrial biodiversity. Of the many species that have already disappeared from the Earth's surface, 75% have fallen victim to overexploitation or intensive agricultural activities. 1/3 of greenhouse gas emissions come from the food industry (1) 13 million hectares of land are deforested every year 75% of the planet’s land surface is degraded (1) 33% of the world’s food is lost or wasted (1) Sources: 1. "The Food Transition: what does it mean? ", Lepac study, December 2019. 2. "The Resource Challenge", ELABE study for Veolia conducted in January 2018 among 14,000 people in 28 countries. 18 18 CARREFOUR — ANNUAL REPORT 2019 19 19 CARREFOUR — ANNUAL REPORT 2019 CHAPTER — 1 Becoming the leader in the food transition for all, why? TO REDUCE PLASTIC PACKAGING As a signatory of national and international pacts on plastic packaging, Carrefour has initiated a number of concrete actions in all the countries in which it operates. Together these efforts have resulted in the reduction of 4,095 tonnes of plastic packaging since 2017. The packaging of organic bananas, cucumbers and tomatoes has been revised, as well as that of fresh mushrooms, which now limits plastic to a simple protective film. The reduction of fruit and vegetable assortments and a rebalanced supply in favour of bulk purchases also strengthens the "fresh quality" image and reduces packaging. “Reducing our plastic footprint is a vital challenge for our society.” Corinne Henry-Munoz — Executive Director Fresh Foods, Carrefour On 16 March, 2019, my daughter took part in the March of the Century for the Climate. She then challenged me by asking what actions I would be willing to take. 10,000 tonnes of packaging eliminated by 2025 is the target set by the Group. In December 2018, Carrefour joined the Global Commitment to the New Plastics Economy initiated by the Ellen MacArthur Foundation, which aims to eliminate unnecessary plastics. In February 2019, Carrefour was one of the founding signa- tories of the National Pact on Plastic Packaging for 2025, which brings together the French Ministry of Ecological Transition and Solidarity, manufacturers, major retailers and non-profit organisations around a concrete action plan to reduce plastic waste and promote the circular economy. In this context, Carrefour has set a target of using 100% reusable, recyclable or compostable packaging for its brands' products by 2025. By 2020, the Group will commit to offering more recyclable packaging for Carrefour organic products in France and to achieve zero plastic for its organic fruit and vegetable departments. Its action plan is based on five principles: a Develop reusable packaging. In Europe, Carrefour has rolled out the "Bring Your Own Container" initiative offering customers the opportunity to bring their own packaging for products from the fish, meat or deli departments. France and Spain will offer reu- sable organic cotton bags for sale starting in 2020. a Eliminate plastic packaging in stores. In addition to its actions with organic vegetables and fruit, Carrefour is working to reduce excess packaging linked to promotional sets and individual por- tions in all departments. Plastic-free packaging is now being tested in bakeries. In the toys, batteries and light bulb categories, 238 tonnes of packaging have already been eliminated as of the end of 2019. a Improve recycling efforts. In every country, Carrefour is carrying out eco-design initiatives. In Brazil, 100% of Carrefour's brand suppliers have undergone a recyclability diagnostic, which has made it possible to substitute more than 5.4 million tonnes of non-recyclable packages and products. In France, the Group is supporting the (RE)SET Retail program, which is working to develop complex packaging formats and will launch its first inno- vations in 2020. a Encourage collection and sorting. Carrefour France has ins- talled RVM (Reverse Vending Machine) terminals in 17 stores to test the collection of PET bottles and aluminium cans. The parti- cipative beverage deposit system, set up with the start-up YOYO, has been extended to 15 stores in the Ile-de-France region. a Integrate recycled materials into proprietary brands. By 2022, 50% of the plastics used for Carrefour brand water bottles will be recycled. 20 Corinne Henry-Munoz with her teams at the logistics platform in Combs-la-Ville (Seine-et-Marne) dedicated to fresh products. 21 CARREFOUR — ANNUAL REPORT 2019Becoming the leader in THE FOOD TRANSITION FOR ALL, CHAPTER — 2 HOW? As the pioneer of a new sustainable and responsible retail model, Carrefour is transforming to work even harder for its customers and food quality, by building a complete omnichannel universe driven by growth in digital services and the development of innovative concepts. 22 22 CARREFOUR — ANNUAL REPORT 2019 23 23 In 2019, Carrefour will operate 1,696 Drive pick-up points worldwide. The Group made 1.3 billion euros in global sales in food e-commerce, up more than 30% year-on-year. CARREFOUR — ANNUAL REPORT 2019 CHAPTER — 2 Becoming the leader in the food transition for all, how? BY SERVING OUR CUSTOMERS WITH PASSION "Serving customers with passion" is one of the four commitments in the Act for Change programme launched by Carrefour in 2019. It places customer satisfaction at the centre of all the Group's actions. Offering the best products and highest service quality is one of Carrefour's main priorities. Listening to customers, anticipating their needs, responding as quickly as possible to their requests and improving their in-store experience at all times lies at the heart of our employees' mission. EVALUATING SERVICE QUALITY — Carrefour uses the Net Promoter Score® (NPS®) (1) tool to measure customer satisfaction. In 2019, its deployment in all countries where the Group operates led to a number of improvements: greater versatility for in-store teams; a reduction in the rate of out-of-stock products; and the introduction of protocols for detecting, tracking and quickly resolving customer complaints. In Taiwan, Argentina and Spain, the 5/5/5 method, 1. Net Promoter®, Net Promoter System®, Net Promoter Score®, NPS® and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichhel and Satmetrix Systems, Inc. based on a set of 15 commitments divided into three categories, was designed to respond quickly and concretely to customer requests. In Spain, it led to the launch of new in-store services for customers, WhatsApp contact numbers for stores and reduced waiting times at checkouts. In France, the Critizr dialogue interface, rolled out at all of the Group's stores, collected nearly 2 million customer responses, enabling store managers to identify areas for improvement. Meetings and discussions, such as in-store Customer Breakfasts and Customer Roundtables, fostered direct dialogue with consumers. The "Oui Attitude" initiative, kicked off in November, encourages Carrefour France employees to say yes to all customer requests and suggestions in every circumstance. OFFERING A FRIENDLY EXPERIENCE — In addition to providing an impeccable service quality, Carrefour ensures the comfort of its customers by making their shopping experience as pleasant as possible. In Spain, the in-store layout has been enhanced to offer new information and relaxation areas: reception, rest and reading areas for adults and games for children, food courts and food halls for all. In Argentina, all hypermarkets have introduced "quiet hours", during which customers with low tolerance to noise, music or strong light can shop in peace. Customers who wish to do so can also organise their birthday party in-store. In Taiwan, Carrefour offers "Fun Table Tour" workshops on healthy cooking and tastings of dishes prepared by chefs. Entertainment and educational workshops on food and retail are also organised for children. CUSTOMER-CENTRIC TRAINING — Listening to and understanding consumers form the backbone of the training courses taken by the Group's employees. In France, the "Proud to Build Customer Loyalty" checkout training and the creation of a Customer Relationship and Services Coordinator position in the hypermarket have helped to strengthen the customer culture. In Romania, a comprehensive customer experience strategy was built in 2019, raising awareness among employees through activities like sharing best practices for in-store teams, customer testimonial workshops and feedback sessions organised for different departments at the head office. The goal of this system is to inform each employee of the role he or she can play at his or her own level to enhance overall customer satisfaction. RISING CUSTOMER SATISFACTION — These initiatives have yielded results: in 2019, customer satisfaction as measured by the Net Promoter Score® (NPS®) improved in all of the Group's locations, with a notable increase in Brazil, Argentina, Poland, Romania and Taiwan. As a result of improved customer satisfaction, in the third quarter of 2019, Poland posted record like-for-like growth, Argentina reported higher volumes and traffic, while Spain reported comparable sales growth for the first time since the second quarter of 2017, returning to growth across all formats. CUSTOMER SATISFACTION LIES AT THE HEART OF ALL OUR ACTIONS AND THE RESHAPING OF OUR MODEL. CARREFOUR IN 2019: 77 million customer households 57 million loyalty cardholders 21 million fans on social media networks +8 points in the Net Promoter Score® (NPS®) 24 24 CARREFOUR — ANNUAL REPORT 2019 25 25 CARREFOUR — ANNUAL REPORT 2019 CHAPTER — 2 Becoming the leader in the food transition for all, how? DEVELOPING CUSTOMER SATISFACTION With the 5/5/5 method, Carrefour implements concrete actions to serve its customers ever more effectively. The customer is at the heart of Carrefour's business. Indeed, it is only by listening to its customers that the Group is able to meet the 21st century challenges facing the retail sector. To make customer satisfac- tion its number one priority, Carrefour initiated a very concrete method in 2019, known as "5/5/5". 5/5/5 promotes a culture of individual and collective com- mitment that unites the Group's employees around a clear objec- tive: meeting customer expectations. This continuous effort to improve Carrefour's processes and tools is achieved by effectively taking into account consumer feedback. The 5/5/5 system enables each store, whatever its format and trading area, to win over its customers by being constantly atten- tive to their needs. Consumers are placed at the centre of the actions of all employees, whether they are at the points of sale – from shelf and checkout staff to store managers – or at head office. This method consists of 15 commitments divided into three categories (trust, service, proximity) designed to remind employees at all times of the steps to be taken to satisfy the cus- tomer. In 2019, the approach was successfully deployed in Spain, Argentina and Taiwan. In Argentina, for example, head office employees assist store teams during seasonal peaks of activity such as Christmas and Easter to better serve customers. Beverages and snacks are also provided to make waiting at the checkout more pleasant. The store managers' business mobile phone numbers are included in the stores' communication mate- rials to reinforce a sense of proximity and quality of service. This is also the case in Spain, where "buzzers" enable customers to ask for help from the teams on the shelves. For its part, Carrefour Taiwan organizes online surveys and invites producers from Carrefour Quality Lines to present healthy products to customers as part of its "farmer's market". The 5/5/5 method is due to be rolled out across the Group in 2020. “My strategy? Customers. My conviction? Never without them.”* Rami Baitieh — Executive Director Spain and member of the Carrefour Executive Committee On 9 May, 2019, on my way to our Madrid headquarters when I first took up the position, a few minutes after my arrival I stopped off at the San Fernando store to meet the teams and listen to our customers. Rami Baitieh meeting customers and teams at the Majadahonda hypermarket (in northwest Madrid). A six-fold increase in sales of guacamole, thanks to a new recipe designed together with customers and adapted to the needs of the food transition +1.7 million tickets sold in the second half of 2019 in Spain. 26 27 * All Carrefour team meetings, training sessions and events in Spain are held in the presence of customers. What's more, the managers' offices are now located in the heart of the sales floor, in response to customer expectations that store teams are always available. It was a request raised by Spanish customers and this improvement is measured by the Net Promoter Score®. CARREFOUR — ANNUAL REPORT 2019CHAPTER — 2 Becoming the leader in the food transition for all, how? BY INVESTING IN FRESH, LOCAL AND ORGANIC PRODUCTS Consumers value and prefer healthy and sustainable eating habits. Carrefour supports them in this approach by offering more selective and responsible products: fresh, local or organic. Promoting the food transition for all means Carrefour must transform its offer. With Act for Food, its global programme of concrete actions to promote better eating, the Group is reducing its ecological footprint while improving the quality of its products. It is accelerating the development of new ranges and overhauling all of its own brands to meet new consumer demands. GUARANTEEING FRESHNESS AND QUALITY — Carrefour is committed to marketing excellent fresh products, which are showcased in store through the expertise of its skilled artisans: market gardeners, bakers, butchers, seafood and cheese sellers. To guarantee the quality of its supplies, the Group works to develop its Carrefour Quality Lines, which offer market-fresh core products that meet strict requirements of traceability, quality and flavour made possible by implementing best farming practices. Carrefour has 726 such Carrefour Quality Lines worldwide, working with nearly 27,800 partner producers. The penetration rate of Carrefour Quality Lines in fresh produce is increasing rapidly: 6.6% in 2019 compared with 5.3% in 2018, with a target of 10% by 2022. With Act for Food, Carrefour has strengthened its commitments for ensuring the quality of the fruit and vegetables it sells: in France, across all store formats, if a customer is not satisfied with the freshness or taste of a product, he or she can take it back to the store and get a refund. PROMOTING LOCAL SOURCING — Throughout the world, the Group's stores are strengthening their offer of local products by sourcing from local farmers and breeders, SMEs and craftsmen located in proximity to customers. In France, each Carrefour hypermarket now works on average with around 100 local producers. This direct sourcing approach offers customers greater choice and enhanced taste while helping to guarantee freshness and high-quality products. Local purchasing is particularly encouraged through the development of local brands such as Reflets de France or Terra d'Italia. Carrefour Belgium has set up a commitment charter with respect to local producers, ensuring 28 28 STRENGTHENING THE VEGETARIAN RANGE In each of the countries where it operates, the Group is developing its vegetarian offering, while raising customer awareness around the need to adopt less meat-heavy diets. To improve the market penetration of its vegetarian products, Carrefour carries national brands and strengthens its own brands in this segment. In Argentina, Carrefour runs ongoing promotional campaigns online, in stores and across social media to promote fruit and vegetable consumption while offering a growing number of new vegetarian products. The first retailer to have launched its own vegetarian range in 2015, Carrefour Veggie, Carrefour is continuing to expand its line to meet the needs of vegetarians, vegans and flexitarians. In France, Carrefour Veggie doubled the number of its items in 2019 to offer around 80 products free of meat, fish and animal fats, as well as any colouring, palm oil, artificial flavouring and GMOs. In Brazil, the range of vegetarian products offered by Carrefour also grew considerably in 2019, increasing the number of references from 21 in 2017 to 130 in 2019. 4 ACT FOR FOOD COMMITMENTS IN FRANCE 01 GUARANTEE 100% ORGANIC PRODUCE GROWN IN FRANCE for its fresh Carrefour Bio brand products 02 ELIMINATE THE USE OF CHEMICAL PESTICIDES Eliminate or reduce the use of chemical pesticides in its produce supply chains 03 DOUBLE THE RANGE OF VEGETARIAN PRODUCTS 04 FOSTER BIODIVERSITY by offering fruits and vegetables from farmers' seeds that they purchase seasonal produce volumes at fair prices, with payment within 30 days. In Poland, Carrefour's formats are supplied within a radius of 100 km on average, and up to 150 km in large urban areas. They promote seasonal products sold directly in-store by local suppliers, such as strawberries from the Polish countryside. Group-wide, nearly 75% of Carrefour's food products are sourced from national suppliers. BEING A LEADER IN ORGANIC PRODUCTS — Demand for organic products is steadily rising across the Group, with sales up by more than 25% to €2.3 billion in 2019. Carrefour is continuing to build a comprehensive distribution network in this segment by expanding the organic spaces in its hypermarkets and supermarkets, rolling out the Carrefour Bio concept in Europe (France, Spain, Belgium and Poland) and acquiring the specialist brand So.bio, which opened its first store in Paris in July 2019. Carrefour is the leader in the organic market in France, with an in-store assortment of over 1,000 own-brand products. In addition, Carrefour is creating new product lines to meet consumer expectations in ever greater detail, such as the My Carrefour Baby Bio baby food range launched in November, which offers a variety of formulas designed for babies from 4 to 23 months. As part of its Act for Food commitments, Carrefour has revised its requirements upwards, in order to propose an offer in line with its objectives and consumer demands. The Group is thus developing an offer that is both organic and responsible (bulk organic, plastic-free products, local products, etc.). It is also expanding its online offering: Greenweez, a Carrefour subsidiary and European leader in the online distribution of organic products, acquired its Spanish competitor Planta Huerto in 2018 before moving into Italy in 2019, with the acquisition of its counterpart Sorgente Natura. CARREFOUR — ANNUAL REPORT 2019 29 29 CARREFOUR — ANNUAL REPORT 2019 CHAPTER — 2 Becoming the leader in the food transition for all, how? BY PROVIDING INFORMATION TRANSPARENT PRODUCT To provide consumers with reliable and reputable information on product composition and origin, Carrefour is increasing the transparency of its nutritional information as well as the traceability of its supply channels and its commitment to animal welfare. Consumers continue to demand greater transparency in their purchases. Located downstream of the retail chain, in direct contact with customers, Carrefour plays a key role in transmitting information about the products it distributes. ROLLING OUT THE NUTRI-SCORE — Carrefour has always taken care to provide its customers with complete and detailed nutritional information on its food products: nutrient intake per portion, fibre content, recommended eating frequency. In 2019, the Group decided to go one step further to help its customers find their way around the shelves quickly and easily by adopting the Nutri-Score, a five-colour logo that ranks products from A to E according to their nutritional profile. Gradually introduced since October 2019 on the packaging of Carrefour-brand products on the shelves of all stores and on the carrefour.fr website, the Nutri-Score will be displayed on 7,000 products in France and Europe, including the Carrefour Bio and Carrefour Veggie ranges, by 2022. Carrefour intends to encourage all players in the food chain to adopt the Nutri-Score, in order to improve the transparency of packaging by using a single system. In this way, the Group supports the efforts of the French public authorities in the area of nutritional education. OPTIMISING NUTRITIONAL QUALITY — Adopting the Nutri-Score is part of a strong and global approach to promote the nutritional quality of products. Since 2018, Carrefour has removed 100 controversial food substances from the recipes of Carrefour-brand products. At the same time, the Group is constantly improving the composition of its own-brand products to optimise their nutritional profile, notably by reducing the sugar content of beverages and the salt content of canned vegetables. Since 2018, Carrefour has redesigned or created more than 2,300 products to meet the highest quality standards. ENSURING TRACEABILITY OF SUPPLY CHAINS — Carrefour is a leader in food traceability. It is the first European retailer to use blockchain technology, which enables the history DEVELOPING "ANIMAL WELFARE" LABELLING Carrefour took part in introducing a new Animal Welfare label. In 2020, Carrefour will provide information on Animal Welfare and farming methods for more than 20 million chickens of the Carrefour, Carrefour BIO, Carrefour Quality Line, Reflets de France and Premiers Prix brands. Carrefour will integrate the results into its products using blockchain technology. Carrefour's free-range chickens from the Auvergne Carrefour Quality Line will be the first to receive this label. of information relating to a product, from its harvest to its placement on shelves, to be shared between all partners in a supply chain, thus guaranteeing maximum transparency for its customers. In 2019, it was rolled out on Carrefour Quality Line micro-filtered fresh whole milk and in September on Camembert de Normandie. Significant progress has also been made in regards to national brands. In April, Carrefour and Nestlé announced that they were giving consumers access to information from Europe's first blockchain for the Mousline brand, thanks to the IBM Food Trust collaborative platform, which enables data exchange between retailers and suppliers. In November, the two groups continued their collaboration by inaugurating the first infant nutrition blockchain. In all, blockchain was deployed on 22 new channels in 2019: Carrefour can now guarantee the traceability of 28 Carrefour Quality Lines. LOOKING AFTER ANIMAL WELFARE — Carrefour is committed to animal welfare. In 2019, the Group launched an animal welfare audit of the 65 slaughterhouses supplying its own brands and the Carrefour Quality Lines, as it had planned to do at the end of 2018. It is also in negotiations to install cameras. The Group has initiated the transformation of its poultry sector, guaranteeing that all eggs from its brands will come from cage-free farms by 2025. By 2026, Carrefour France's own-brand chicken will comply with the European Chicken Commitment's criteria on animal farming conditions. In addition, since September 2019, Carrefour France has marketed chicken eggs from Poulehouse, whose production method does not slaughter laying hens, includes sexing in ovo to avoid breeding male chicks and puts an end to beak trimming. In Brazil, the Group is committed to ensuring the welfare of the pigs that supply three-quarters of the pork sold under its own Sabor Qualidade brand. In collaboration with the NGO World Animal Protection, Carrefour Brazil has set up a differentiated production chain, in accordance with the highest animal welfare standards for pig farms and slaughterhouses. 30 30 CARREFOUR — ANNUAL REPORT 2019 31 31 CARREFOUR — ANNUAL REPORT 2019 CHAPTER — 2 Becoming the leader in the food transition for all, how? BY IMPROVING THE TRANSPARENCY OF OUR OWN BRANDS Offering customers high quality, accessible core products, Carrefour's own brands are spearheading the food transition for all. I ts own brands are set to make up a growing share of Carrefour's product range: by 2022, they should account for a third of in-store sales. In France, their penetration rate already increased by two points in 2019, while the Group recently created a dedicated department to support their deployment. Carrefour's own brands meet the highest quality standards: in 2019, 45,800 analyses were conducted into the freshness and origin of their products in warehouses and stores. These inspec- tions were then supplemented by more than 3,000 consumer focus groups. In addition, 100% of Carrefour brand manufactu- ring sites are certified through the International Featured Standard or British Retail Consortium standards, or audited by the Group. The food transition and better eating also require transparent information on all products purchased. Developing Carrefour's own brands thus goes hand in hand with greater transparency across the Group's food offer, via a new segmentation of its pro- ducts into five categories (see below), which will be represented through distinct visual identities enabling customers to quickly identify these categories. This segmentation will gradually expand to nearly 7,000 products in France and more than 10,000 in Europe. In addition, Carrefour is continuing to implement the key ini- tiative launched in 2019: integrating the Nutri-Score onto the packaging of all Carrefour products in order to help customers make informed nutritional choices when shopping. The Group also shares information on the composition of its products with the independent database Open Food Facts. Thanks to this sys- tem, information on Carrefour products will be available both in-store and online: consumers will be able to check the nutri- tional composition of Carrefour products at any time, in order to make tangible improvements in their diet. 5 CATEGORIES OF OWN BRANDS / 5 MAJOR NUTRITIONAL NEEDS f Carrefour Classic’: the best everyday staples f Carrefour Extra: everyday enjoyment f Carrefour Original: the inspiration of time past f Carrefour Sensation: a multi-sensory and out of the ordinary experience f Carrefour Le Marché: quality fresh products The Quality Line seal spotlights products of the Carrefour Le Marché segment from the nearly 500 Carrefour lines, highlighting the Group's partnerships with the agricultural world. “Good and healthy products at an affordable price. Everyone should have the right to eat well.” Martine Loyer — Food Brands Director, Carrefour On 2 July, 2018, when I joined Carrefour, I decided to commit myself to promoting the food transition for all. 1/3 of sales generated from Carrefour brand products. This is the objective to be achieved by 2022. Martine Loyer visiting the dairy processing site dedicated to ultra-fresh products in Jouy (Yonne). This site produces the yogurts of the new Carrefour Classic’ range. Tests on Carrefour brand products are carried out with consumer focus groups, enabling the Group to measure flavour quality and test innovations. 32 33 CARREFOUR — ANNUAL REPORT 2019CHAPTER — 2 Becoming the leader in the food transition for all, how? BY GUARANTEEING ACCESSIBILITY FOR ALL By adjusting its prices and deploying its network of stores across all territories, Carrefour is working to close the food gap, refusing to accept that part of the population cannot fully benefit from quality products due to cost or physical accessibility. Carrefour is working hard to offer the best products at the best prices. The Group pursues a rigorous pricing policy and develops its own brands and Quality Lines, in order to offer its customers core market products that are high- quality and affordable. Carrefour is also expanding its network of stores with formats that can serve all territories. In France there is, on average, a Carrefour store located less than eight minutes from each home! CONTROLLING PRODUCT PRICES — In 2019, Carrefour made its prices more competitive in its two main areas of operation: Europe and Latin America. The "Prix Imbattables" operation, launched in April in France on 10 everyday fruits and vegetables, was extended in July to more than 500 consumer products, with Carrefour committing to refund twice the difference if consumers find cheaper prices at another store within their catchment area. At the same time, a new multi-channel loyalty programme was launched in February 2019 to help families access quality food (organic, family, baby, pet and Promo+ rewards). It was enhanced in January 2020 by the "Market Loyalty Reward" in supermarkets, which grants a 10% discount on fresh produce, an advantage that is increased to 15% for PASS cardholders. In regards to organic products, Carrefour is recognised for its excellent value for money. According to a study published at the end of August 2019 by the UFC Que Choisir, French consumers making their organic purchases at Carrefour save 30% on average compared to those who buy from other retailers. In Italy, after an initial test period in Turin, the multi-format "Prezzo ribassato" campaign, which offers permanent price reductions on 5,000 products, was extended to the whole country in September. Carrefour also initiated price cuts in Belgium on 1,000 national and own-brand products. In Spain, a "killer prices" campaign was launched in August 2019 to improve the brand's price competitiveness. In Latin America, the Group took strong decisions in favour of its customers' purchasing power, notably by freezing meat prices for three months in Argentina in a context of high local inflation. CONSOLIDATING THE REGIONAL NETWORK — Expanding its regional coverage to ensure maximum proximity to customers is a top priority for Carrefour. The Carrefour Property entity, which manages the Group's real estate projects, identifies the best location for each new store. In Metropolitan France, the Group has 5,274 stores: 47% in urban areas, 10% in suburban areas and 43% in rural areas. Carrefour's various retail formats are designed to meet the lifestyles and consumption needs of all customers, both urban and rural, individuals and professionals. In downtown areas, the Carrefour City and Express stores blend into the fabric of growing urban areas in order to facilitate everyday shopping, 12,225 Carrefour stores spread over more than 30 countries 8 minutes The average time it takes a customer to reach a Carrefour store in France including in suburban neighbourhoods. Carrefour Contact stores are the ultimate neighbourhood store, providing customers with a limited assortment of essential products. In the suburbs, Carrefour accompanies consumer mobility by opening stores as near as possible to where they live: Carrefour hypermarkets or cash & carry stores respond to their need for affordable prices. In rural areas, Carrefour is present with its Market, Proxi and Contact stores, which cover the territory as closely as possible to consumers located further away from large urban areas. Four "New Contact" pilot stores, specially designed for rural or suburban areas, opened in December 2019 in Charente-Maritime, Finistère, Rhône and Pas-de-Calais. This new type of retail format, which offers an expanded organic offer, revamped fresh produce departments and a space for on-site catering, will be rolled out on a wider scale in 2020. Finally, to make the widest possible range of products even more accessible, Carrefour is also developing its e-commerce offer. OFFERING ADAPTED SERVICES — Travel reservations, concert and show tickets, car rentals, photo printing: Carrefour also offers its customers a wide range of other services at the best price, as well as payment and credit solutions adapted to their budgets, enabling them to save money every day when shopping. In France, Italy and Belgium, Carrefour Banque has 2.2 million customers. Launched in September 2019 in France, the new PASS card offers its holders new benefits: a 15% discount on thousands of Carrefour- branded products in all stores. In Spain, the financial services subsidiary SFC, which manages 2.5 million cards for 1.6 million customers, successfully implemented the Carrefour Pay application in the first half of 2019: it already accounts for nearly 10% of PASS transactions. In Brazil, the Group launched the Atacadão card in 2018. With over one and a half million holders, Carrefour is thus the fifth largest card issuer in the country. By acquiring a stake in Ewally, a FinTech specialising in digital financial services, the Group will grant access to new payment facilities for the 45 million Brazilian consumers who do not have bank accounts. 34 34 CARREFOUR — ANNUAL REPORT 2019 35 35 CARREFOUR — ANNUAL REPORT 2019 CHAPTER — 2 Becoming the leader in the food transition for all, how? BY SETTING STANDARD FOR AN OMNICHANNEL UNIVERSE Thanks to an integration of its physical stores and digital services, and supported by state-of-the-art logistics tools, Carrefour offers customers a seamless shopping experience with complementary purchasing options: the possibility of ordering online, then picking up purchases at Drive pick-up points or benefiting from fast home delivery. D igital technology, which is now firmly ingrained in customers' daily lives, is a major area of development for Carrefour. To adapt its offering to new consumer digital habits, the Group is constantly innovating, offering its customers an omnichannel and digital experience, built on synergies between its physical stores, website and the carrefour.fr shopping application. Carrefour's goal is to be able to interact with its customers anytime, anywhere, in order to provide an efficient and personalised service that simplifies their daily shopping experience. ASSERTING A STRONG DIGITAL AMBITION — Devoting 2.8 billion euros over five years to developing its digital services, Carrefour's ambition is to become a world leader in food e-commerce by 2022. The Group already generates worldwide sales of 1.3 billion euros in food e-commerce, up more than 30% compared to 2018. 2019 was a key year in Carrefour's digital transformation process. The Group overhauled all of its interfaces and applications to offer a comprehensive range of services, accessible from a single site in each country, including: drive-up, walk-up, click and collect, next-day delivery and express delivery. Physical stores nonetheless continue to remain central in this context of rapid digitalisation. In addition to their traditional role as a physical distribution channel, they are being redesigned to become assets serving the Group's digital strategy. Positioned at the heart of the Group's multi-channel universe, they serve as preparation and delivery centres, as well as pick-up, return, refund and contact points for customers. ROLLING OUT STATE-OF-THE-ART LOGISTICS TOOLS — In order to support its development in e-commerce, Carrefour is continuing to deploy a state-of-the-art industrial and logistics tool. The Group's various logistics entities mobilise more than 20,000 employees and service providers around the world. They manage the flow of goods and information connecting every link in the chain, from ordering products from suppliers to making them available on store shelves or directly at the customer's premises. In this effort, the Group employs teams and advanced forecasting systems (for supplier order management and inventory management) as well as a network of automated order preparation platforms, equipped with automated sorters and designed to manage the handling of fresh food products. As part of its multi-channel strategy, closely integrating e-commerce and physical stores, Carrefour also relies on semi-robotised in-store order preparation solutions (dark stores). To increase the efficiency and responsiveness of its logistics and shorten delivery times for its online orders, the Group has set up partnerships with specialised operators to manage the last mile. In France, Carrefour also has the largest fleet of non-diesel trucks to transport its products. In January and September 2019, two new order preparation platforms were opened near Paris, bringing the number of order preparation platforms in the country to four. FOSTERING A NEW ECOSYSTEM OF SERVICES — To complete their everyday purchases, consumers prefer practical and time-saving solutions that mix offline and online services. 2019 was marked by the accelerated openings of new Carrefour Drive pick-up points, where customers can pick up their purchases after ordering online. The Group now operates 1,696 of these pick-up points worldwide, with 1,110 in France, including 281 created in 2019. In France, Carrefour is now the leading walk-up chain with 134 walk-up points. Home delivery is also gaining ground. Carrefour has expanded its offer in this area with new express services in many countries. The partnership established in July with Spanish start-up Glovo enables Carrefour to offer home delivery services in only 46   million e-commerce sessions per month, on average 40% growth in home delivery orders in France in 2019 30 minutes in France, Spain, Italy and Argentina. Thanks to its successful collaboration with the Rappi delivery application, Carrefour Brazil posted strong growth in e-commerce sales. In Taiwan, the Group joined forces with Food Panda and Uber Eats and in Poland with Allegro, the largest Polish e-commerce marketplace. Home delivery orders jumped by 40% in France thanks to the connection of 24 new urban areas. The aim is to roll out home delivery of Carrefour products in all French cities with more than 10,000 inhabitants by 2022. 36 36 CARREFOUR — ANNUAL REPORT 2019 37 37 CARREFOUR — ANNUAL REPORT 2019 CHAPTER — 2 Becoming the leader in the food transition for all, how? ACCELERATING EXPRESS DELIVERY As the consumer demand for timesaving and flexible purchasing solutions continues to grow, express delivery services are gaining momentum. In 2019, these services were extended to all the countries in which the Carrefour group operates. “Speed, choice, respect for the environment. Aided by technology, we have a concrete impact on consumers' daily lives.” Sebastian Mejia — Co-founder of Rappi and partner of Carrefour Brazil In May 2019 we launched Rappi, the fast delivery app. My initial motivation remains my driving force today. T he trend initially started in Asia, where two-whee- led delivery is a deep-rooted part of local culture. In 2017, Carrefour became a pioneer in Europe with the launch of Carrefour Delivery Express, a solution designed in-house for the French market. At the same time, the Group’s strong worldwide growth has been closed linked to specialised partnerships with local actors, which allow Carrefour to develop new markets and gain new customers. By 2019, express delivery services were rolled out in all countries where the Group operates, thanks to a web of local partnerships. In France, Italy and Argentina, Carrefour has partnered with Glovo, a Spanish start-up launched in 2015 that offers 30-minute deli- very services in 20 countries around the world. Belgium and Poland joined the Shipto and Szopi delivery service platforms in early 2019. In Romania, the business volume for the Bringo application increased by 102% in 2019, with 323,000 orders placed in 18 cities with an average delivery time of 90 minutes. Since 2018, the Gourmandio app, which was co-built by Carrefour and Bringo, offers express delivery services for their cooked meals, with almost 25,000 orders delivered in 2019 alone. Despite Latin America's relatively late entry to e-commerce, the region is also witnessing a strong breakthrough in express delivery services. In Brazil, Carrefour recorded more than 1.4 mil- lion orders via the Rappi application, offering delivery services within 30-60 minutes. By the end of December 2019, this service was available in 37 cities and is continuing to grow. In Argentina, the Group works with the Rappi, Glovo and Pedidos Ya applications, covering eight cities, and is continuing to forge local partnerships to safeguard operations in this very competitive home delivery market. Carrefour Italy partners with Glovo and Supermercato. In Taiwan, new partnerships with Food Panda and UberEats took over from Honestbee. Carrefour is par- ticularly well positioned to benefit from this rapidly growing mar- ket. The fast delivery application Rappi and Carrefour Brazil entered into a partnership for the sale and delivery of food products. Consumers can choose between a 30-minute express service and one-hour supermarket delivery options, and pay the same price as they would in a physical store, thanks to Rappi's Carrefour-trained professional buyers, who shop for the best items on behalf of the consumer who placed the order. 37 Rappi services in Brazil are available in 37 cities 38 39 Paula Cardoso, e-business director of Carrefour Brazil and Sebastian Mejia, co-founder of Rappi. CARREFOUR — ANNUAL REPORT 2019CHAPTER — 2 Becoming the leader in the food transition for all, how? BY INTRODUCING INNOVATIVE GROWTH FORMATS AND CONCEPTS To better meet the aspirations of its customers in each of its catchment areas, Carrefour is transforming its network of stores and developing innovative formats, which are key growth drivers for the Group. Driving a new dynamic in hypermarkets, expanding its non-food offer through targeted partnerships, responding to the broad diversity of consumption habits by developing a portfolio of diversified and complementary brands: Carrefour is innovating on all fronts. INNOVATING IN STORE — Long known as the Group's traditional format, the hypermarket is now transforming to become even more attractive, modern and welcoming. In 2019, this transformation picked up even more steam. In order to improve the customer experience, part of the hypermarkets' retail space was reallocated to services or the shopping mall, while new specialised high value-added spaces have also been developed. In France, the “Fresh Avenues”, attractive food service areas, propose take-out and in-store meals at store entrances. They were developed in Dijon, Flins-sur-Seine, Marseille and Anglet. The Beauté Plurielle aspirational concept, designed in partnership with L'Oréal to revitalise health & beauty in supermarkets, was introduced in six hypermarkets, where it met with great success. 48 Bio Experience spaces, selling more than 3,000 organic products on surfaces ranging from 500 m² to 600 m², 33 pet shop corners and 22 clearance outlets for non-food products were also created in hypermarkets throughout 2019. To widen its non-food offer and introduce brands usually reserved for specialised networks, Carrefour has committed to developing the shop-in-shop model with partner brands. Regarding household appliances, the two Fnac Darty spaces tested since the end of 2018 in the Ville-du-Bois and Limoges hypermarkets confirmed their potential in 2019. The deployment of some 30 of these spaces is planned. A partnership was also set up with the Aubert children's retail chain: a 280 m² corner offering a range of 4,000 baby hygiene, textile and childcare products opened in November 2019 in the Claye-Souilly hypermarket. ACCELERATING THE MOST PROMISING FORMATS — Consumption habits have become fragmented. In order to adapt, Carrefour is focusing on developing promising new formats with differentiated offers and competitive positioning. Convenience stores have recorded the strongest growth within the Group, with 1,042 store openings since 2018. The development of this format, which is best suited to the specific needs of local customers, is a priority for Carrefour, 1,042 convenience stores opened worldwide since 2018 20 Atacadão store openings in Brazil in 2019 546 new franchised stores joined Carrefour in Italy in 2019 43 new Bio Experience spaces opened in France in 2019 which has set a target of 2,700 openings as part of the Carrefour 2022 plan. Carrefour Italy considerably strengthened its local network in 2019 by signing a franchise agreement with 546 new stores that will operate under the Carrefour Market and Carrefour Express banners in the centre and south of the country, in addition to acquiring 28 Conad outlets in Lombardy. Carrefour is also banking on its low-cost formats. In the third quarter of 2019, the Supeco chain, based on the soft discount supermarket model, opened its first two stores in France, in Valenciennes and Onaing. It offers a selection of the most popular products in the market as well as the possibility to buy in large quantities, all while maintaining a focus on quality. The cash & carry stores, which market a wide range of food and non-food products offered at wholesale prices, presented on pallets and sold individually or in bulk packaging, cater to the needs of professionals and individuals looking for an efficient and low-cost model. This format is very successful in Latin America. In Brazil, 20 new Atacadão were inaugurated in 2019, with the aim of maintaining the same annual opening rate through 2022. In Argentina, the store base continues to transform, with the conversion of 22 hypermarkets to the Maxi format in 2019. The format is also expanding in Europe. The Promocash brand is the local partner of catering professionals throughout France. Organic formats are booming in Europe. With the opening of the first Carrefour Bio in Warsaw, Poland became the fourth country in the Group to open a 100% organic store. Following the acquisition of the specialist So.bio in 2018, Carrefour France opened the largest organic store in Paris (800 m², 10,000 items) under this brand name in July 2019, on Rue de Sèvres. A second outlet opened in Essonne in November. 40 40 CARREFOUR — ANNUAL REPORT 2019 41 41 CARREFOUR — ANNUAL REPORT 2019CHAPTER — 2 Becoming the leader in the food transition for all, how? CONSERVING THE PLANET'S RESOURCES Carrefour is developing a sustainable and environmentally friendly business model that extends throughout its value chain: from sourcing, logistics and stores to its relations across its entire ecosystem. C ombating deforestation, limiting overfishing and food waste, recycling waste, optimising the energy efficiency of its stores, developing alternative modes of transport: Carrefour is taking action on all fronts to safeguard the environment. PROTECTING BIODIVERSITY — With regard to sourcing, Carrefour has set strict environmental compliance rules for its suppliers. The Group is committed to eliminating the deforestation associated with the raw materials contained in its products. As part of its "Zero Deforestation by 2020" policy, Carrefour is focusing on improving the supply chains of four priority raw materials: palm oil, soy, wood/paper, and Brazilian beef. Another 22 sensitive raw materials are subject to additional targeted actions. Carrefour also promotes responsible fishing: in 2018, the Group committed to offering the widest range of sustainable fishing and aquaculture products on the market by 2022. In 2019, 47.5% of Carrefour's branded products were issued in this way. COMBATING FOOD WASTE — Carrefour is committed to reducing its food waste by 50% by 2025. Its stores are deploying solutions to sell products rather than wasting them: repackaging items; offering baskets of unsold goods at low prices in France, Spain, Italy, Belgium and Poland; creating short-term promotions; and deploying aisle displays dedicated to products with a use-by date that has passed. The Group is also introducing anti-waste programs, country by country. In Brazil, the UNICAS range offers fruits and vegetables with minor defects at reduced prices in 74 hypermarkets and supermarkets in the state of Sao Paulo. Taiwan has launched an offer based on the same principle. Carrefour is also finding use in unsold food by donating it to charities, representing the equivalent of 105 million meals in 2019. In Brazil, Spain and France, 100% of hypermarkets have set up partnerships with food banks. LIMITING THE ENVIRONMENTAL IMPACT OF ITS SITES — The Group is working to reduce the environmental impact of its stores, warehouses and platforms. Carrefour is involved in developing and structuring waste sorting and recovery channels in the countries where it operates. It also encourages the implementation of innovative solutions across its store network, including the production of biomethane and compost and the pooling of waste collection. In this way, 66.8% of the waste from Carrefour hypermarkets and supermarkets was recovered in 2019, with a target of 100% by 2025. The Group also takes care to preserve water resources. Carrefour Brazil monitors the water consumption of 100% of its stores in real time and has set up a program to overhaul its hydraulic network in order to combat water scarcity. All of the Group’s countries are planning to set up a Bee Plan by 2020, including the installation of beehives on store roofs to support peri-urban beekeeping. In France, Italy and Spain, the Group has introduced a sustainable and environmentally friendly construction policy, which is supported by BREEAM (Building Research Establishment Environmental Assessment Method) certification. One hundred percent of shopping centres under construction or undergoing expansion have now been BREEAM-certified. FIGHTING CLIMATE CHANGE  — Carrefour has set itself a target of reducing its global CO2 emissions by 40% by 2025 and by 70% by 2050 (compared to 2010 levels). The Group has mobilized all of its countries to improve the energy efficiency of its stores: replacing cold EXPANDING THE BIOMETHANE FLEET Carrefour is expanding its fleet of delivery vehicles running on biomethane, a fuel derived from the recovery of nonconsumable waste from its own stores. These vehicles make it possible to reduce CO2 emissions by 75%, eliminate fine particle emissions and reduce noise pollution by 50%. Carrefour France's fleet includes 300 active biomethane trucks, or 8% of its total fleet, and delivers to Paris, Lyon, Bordeaux and Lille. In 2019, they covered 17 million kilometres, the equivalent of 40 trips from the Earth to the Moon and back, saving around 13,000 tonnes of CO2. production equipment with lower-emission installations, using low-energy LED lighting, increasing the use of renewable energies, etc. Carrefour is also modernizing its logistics fleet by introducing vehicles that run on biomethane, which are less polluting and less noisy. In each country, the supply chain teams work closely with transporters to improve the loading of trucks, optimize the distances travelled and promote alternative modes of transport. Carrefour is also reducing its indirect emissions, i.e. those linked to the products it sells, by supporting its national brand suppliers in adopting a climate commitment and by working to improve its own brand channels. Carrefour Banque also offers savings instruments, the majority of whose assets are invested in companies in the food supply chain selected for their sustainable development practices. 42 42 CARREFOUR — ANNUAL REPORT 2019 43 43 CARREFOUR — ANNUAL REPORT 2019Becoming the leader in THE FOOD TRANSITION FOR ALL, CHAPTER — 3 WITH WHOM? Backed by the commitment of our 321,000 employees, Carrefour's transformation is well underway. Alongside our producers, our suppliers, our partners in the agri-food chain, our customers and various community leaders, we are working together to build a new model. 44 44 CARREFOUR — ANNUAL REPORT 2019 45 45 CARREFOUR — ANNUAL REPORT 2019 OUR BUSINESS MODEL, GENERATING SHARED VALUE CHAPTER — 3 Becoming the leader in the food transition for all, with whom? OUR CHALLENGES f New eating behaviours f Consumer behaviours transformed by digital technology f Duty to provide affordable healthy food f Revisiting the agricultural model f The need to preserve natural resources f More intense competitive pressure f Skills of our employees f Responsible and multicultural approach f Broad geographic footprint f Ability to adapt to production and consumption modes OUR ASSETS Capital and resources FINANCIAL & ECONOMIC CAPITAL f 12,225 stores and 1,696 Drive outlets worldwide f Over 30 host countries f €80.7 billion in gross sales f €2,656 million in other income (finance companies, real estate development, leases) f €86 million in financial income HUMAN & INTELLECTUAL CAPITAL f 321,383 employees worldwide f 300 job families f Worldwide agreement signed with the UNI Global Union f Act for Change managerial programme RELATIONAL CAPITAL f 77 million customer households f 1 worldwide e-commerce site f 57 million loyalty cardholders f 14 international partnerships f 2,600 production facilities in Europe f 27,800 CQL partner producers f Strategic partnerships and alliances f €7.5 million budget allocated by the Carrefour Foundation NATURAL & ENVIRONMENTAL CAPITAL f Fossil and renewable energies f Use of different materials, such as plastic, cardboard, etc. f Use of natural resources from oceans, forests, land and other ecosystems f Water consumption Order fulfilment centres Processing facilities Production facilities Services • Banking and insurance • Travel agency • Vehicle hire Drive Stores Shopping centres Service stations CONSUMERS CATERING PROFESSIONALS Pedestrian Drive Convenience stores and Services (Relais Colis, La Poste, ticket booking) Home delivery Warehouses Cash & Carry Head offices and Carrefour Lab Flow of goods Suppliers’ operations Producers’ operations Integrated and franchised Carrefour operations Creating shared value FINANCIAL & ECONOMIC CAPITAL f €359 million in dividends paid to parent company shareholders f €980 million in income and other taxes f €1,695 million in payroll taxes f €338 million in net finance costs f €424 million in expenses on financial transactions HUMAN & INTELLECTUAL CAPITAL f €7,545 million in wages, salaries and payroll taxes f Employee Net Promoter Score® (NPS®) f 11.6 hours of training per employee per year f 1,941 social audits performed at our suppliers f 32% women among those appointed to key positions in 2019 RELATIONAL CAPITAL f 21 million fans on social media f Net Promoter Score® (NPS®) up 8 points in 2019 f €61,927 million in purchased merchandise and services f 726 Carrefour Quality Lines f 1,000 Carrefour organic product listings f 105 million meals donated to food aid charities f 74 projects supported by the Carrefour Foundation NATURAL & ENVIRONMENTAL CAPITAL f 36% reduction in CO2 emissions (vs. 2010) f 67% of waste recovered and reused f 10% reduction in food waste (vs. 2016) f 48% of tested seafood products are from sustainable sources f 4,095 tonnes of packaging avoided since 2017 46 46 CARREFOUR — ANNUAL REPORT 2019 47 47 CARREFOUR — ANNUAL REPORT 2019 CHAPTER — 3 Becoming the leader in the food transition for all, with whom? WITH OUR TEAMS Carrefour relies on the commitment of its 321,000 employees around the world – 105,000 of whom are based in France – who work in stores, warehouses and head offices. To support its transformation process, the Group has launched the Act for Change programme in each of the countries in which it operates. It aims to enlist all its employees in the food transition. It constitutes the cultural and managerial dimension of Carrefour's transformation plan. The Act for Change programme is based on four commitments, translated into concrete actions. 01 48 48 GROWING AND ADVANCING TOGETHER — This first commitment of Act for Change showcases Carrefour's internal promotion model: it aims to give each employee the opportunity to develop within the Group, to encourage a diversity of backgrounds and to promote cooperation. a Favouring internal promotion. Each country within the Group organises career committees that review the skills and potential of employees in order to anticipate appropriate individual development. In France, more than 700 such committees were organised in 2019. Internal promotion also involves the implementation of learning paths that enable employees to advance into positions of greater responsibility. In Spain, the School for Future Leaders (Escuela de Líderes) trained 180 participants in store management over six months. A similar programme was set up in Argentina, enabling 260 employees to acquire new technical and managerial skills. In Taiwan, the "Carrefour Taiwan Young Talents" programme enables young talents selected at the head office and in stores to acquire a broader vision of the Group's business and work on corporate projects. a Valuing a diversity of backgrounds. Carrefour has committed itself to promoting diversity since 2004, when it signed the Diversity Charter in order to give everyone in all countries the same opportunities for professional development and recruitment. The Group employs 11,885 disabled workers. In France, its stores employ disabled workers at a rate well above the legal threshold of 6%. In Europe, this rate has increased by 20% over the past five years. In 2019, during the European Disability Employment Week (from 18-24 November) and the International Day of Persons with Disabilities (on 3 December), Carrefour stepped up its initiatives to affirm its commitments: handi'réussite (disability success) workshops in France, a communication campaign in Romania, a donation from Fundacion Solidaridad Carrefour for disabled children in Spain, experience-sharing between employees in Taiwan, sign language training in hypermarkets in Italy, etc. Numerous measures are also in place to ensure gender parity within the Group, including a fair pay policy, access to training for all, and arrangements to facilitate work-life balance. Carrefour has 180,086 female employees, or 56% of its workforce. The Group carried out various initiatives to mark the International Day for the Elimination of Violence against Women on 25 November, 2019, including a poster campaign in all languages, the publication of a prevention guide in France and awareness films in Argentina, Spain, Romania and Brazil. 02 SERVING CUSTOMERS WITH PASSION — The second commitment of the Act for Change programme makes customer satisfaction the number one priority for Carrefour employees, with the aim of strengthening service quality. Within this framework, Carrefour is gradually rolling out its 5/5/5 approach, a pragmatic plan to improve customer satisfaction. The "Serving Customers with Passion" commitment and the 5/5/5 approach are detailed on pages 24-25 of this annual report. 11.6 hours of training per employee per year 48% of executive manager positions filled through internal promotion 41.2% of management positions held by women 03 ACTING WITH SIMPLICITY — The third commitment of Act for Change aims to simplify Carrefour's working methods, with an emphasis on smooth and efficient resource management, as well as to encourage exchange, initiative and rapid adaptation. In particular, the Group is gradually reviewing the way its teams organise their work. For the past two years, most of the countries in which Carrefour operates have provided head office employees the means to work remotely when their activity allows for it. In addition, Carrefour encourages the use of technology to limit travel. Other initiatives are also being developed in this area, notably through the increasing use of Google tools within the Group. 04 TAKING PRIDE IN TRANSFORMING OUR BUSINESS — The final commitment of Act for Change aims to train and mobilise employees around issues related to our transformation plan, by encouraging innovation in the service of the food transition, but also by promoting openness to outside ideas and experimentation. The training programmes conducted in 2019, as well as the global "Act for Food Super Heroes" programme, are detailed on page 50. Carrefour's cultural and managerial transformation is assessed using the Employee Net Promoter Score® (ENPS), an employee engagement indicator measured three times a year in all Group geographic areas. CARREFOUR — ANNUAL REPORT 2019 49 49 CARREFOUR — ANNUAL REPORT 2019 CHAPTER — 3 Becoming the leader in the food transition for all, with whom? EMBODYING THE FOOD TRANSITION Carrefour encourages innovation in the service of the food transition by promoting an open approach to outside ideas and experimentation. In order to enlist stores in this process and empower teams in the field, the "Act for Food Super Heroes" programme was launched in 2018 to highlight the initiatives of its most active employees and to share their best practices. Rolled out in all countries where the Group operates, the “Act for Food Super Heroes“ programme helps in-store teams take part in the food transition. It pro- motes the initiatives of employees who are the most involved in the day-to-day activities by encouraging best practice sharing, spotlighting healthy products, and organi- sing events on better eating and cooking, anti-food waste and anti-waste initiatives. The programme has already identified 870 "food transition heroes" and the Group hopes to extend this community to 2,000 employees. Every year, Carrefour holds an event to celebrate the superheroes, so that their solutions can inspire all the Group's teams. On a wider scale, in 2019 Carrefour devoted significant resources to training its employees on the topics of fresh pro- duce and the food transition, thus making it possible to support the launch of the Act for Food programme in stores. In France, new e-learning modules were introduced on the Carrefour Quality Line, hygiene and quality, as well as e-learning product training courses, carried out in partnership with chef-led workshops. The Group also designed two different training courses in organic products. The first, lasting two days, aims to raise awareness about organic food among the employees at the Group's general retail outlets. The second, lasting five days, aims to professionalise teams working at the specialist stores Carrefour Bio and Bio Expérience. In Belgium, nearly 60,000 hours of trai- ning devoted to the food transition and fresh produce were deli- vered to 4,934 employees, in partnership with specific suppliers (Norwegian salmon, apples, oranges) and Carrefour Quality Lines, including training on organic products, blockchain, etc. “Sorting waste, combatting food waste*: everyone can do their part, and that's how we all move forward.” Sarah Fajele Abasse — Master 1 student and interning “manager” at Carrefour Market Bastide (Bordeaux, France) On 22 September, 2018, during operation "Bastide fait sa belle" (Beautifying La Bastide) in Bordeaux, residents mobilised to take part in a vast neighbourhood clean-up and learn about eco-responsible practices. That’s when I decide to take action. Act for Food commitments, concrete action for Sarah and the Carrefour Market Bastide team. Inès, Director of the Carrefour Market Bastide, is a a pioneer within the Group, and one of the very first superheroes of the food transition. As early as 2008, Inès had provided customers with recycling bins in the store. Another project, launched in August 2019, recovered 250 1-litre bottles filled with cigarette butts in the La Bastide district in Bordeaux. 870 superheroes for the food transition. The goal is to reach 2,000 by the end of 2020. 50 51 * Sarah is behind the distribution of anti-waste baskets (products having reached their expiration date) to residents/customers who collect a bottle of cigarette butts. CARREFOUR — ANNUAL REPORT 2019CHAPTER — 3 Becoming the leader in the food transition for all, with whom? WITH OUR SUPPLIERS AND OUR PRODUCT LINES Carrefour contributes to the sustainable agricultural transition by promoting responsible and environmentally friendly practices. STRUCTURING THE ORGANIC COTTON INDUSTRY In 2019, Carrefour worked with more than 4,500 small organic cotton producers in Madhya Pradesh (India) on a ground-breaking project combining product quality, fair compensation for producers and traceability. The Carrefour Foundation supported the installation of organic pesticide production units, thus enabling 2,000 local producers to obtain better yields. This measure has been strengthened by the drilling of 100 wells to irrigate the cotton fields. In addition, around 1,500 farmers received training in organic farming techniques. Through its partner Cotton Connect, Carrefour ensures that producers receive higher compensation compared to conventional cotton. From sowing the cotton plant to the finished product, all stages are recorded to ensure full traceability. The first TEX BIO 100% sustainable cotton collection will be launched in spring-summer 2019. T he Group offers its suppliers a commitment on volumes, over time and at fair remuneration conditions. In this way, Carrefour secures the production conditions for its suppliers across its various product lines. PROMOTING AGRO-ECOLOGY — To promote the development of agro-ecology, the Group has set up three-year contracts with its producers in the Carrefour Quality Lines who develop responsible methods: crop rotation, elimination of soilless crop production, no post-harvest chemical treatment of fruits and vegetables, etc. Carrefour sets rigorous specifications with each producer, covering production methods, taste criteria and environmental protection requirements. More than 3,000 inspections and 1,000 analyses are carried out each year to check compliance with these standards. The Group also supports its suppliers by developing pilot crops and setting up progress plans to expand agro-ecology in its supply chains. Finally, it encourages best practice sharing by organising producer clubs and meetings. Two new Carrefour Quality Lines were created in 2019: one for Label Rouge beef, in partnership with the Cloé and EM2 cooperatives, and one for ASC-certified and GMO-free shrimp, with Custa C and Pescanova. SUPPORTING THE CONVERSION TO ORGANIC — In order to fuel the growth of organic product lines, Carrefour offers specialised support measures to producers in this sector. The Group provides its organic farming suppliers with three to five year contracts, committing to volumes and purchase prices while taking into account their production constraints. Teams from the organic market department meet regularly with these suppliers to ensure that their production matches the Group's expectations. Carrefour also supports producers in the process of converting to organic farming, once again by signing three to five year contracts, enabling them to secure investments through intermediate rates between conventional and organic farming and to offset the impact of reduced productivity on their revenues. These contracts are offered in France, Belgium, Romania and Taiwan. In France, more than 540 organic conversion support contracts were signed in 2019 with farmers, breeders and winegrowers. In Romania, the "We Grow Bio Romania" programme supports producers in the conversion process with administrative procedures, covering all associated costs, and advises them on marketing and sales of their future organic products. The programme benefited 75 farmers in 2019. GUARANTEEING FAIR COMPENSATION — In February 2019, Carrefour signed four agreements with Lactalis, Sodiaal, Yoplait and Laïta to raise milk prices for 28,000 producers, with the aim of guaranteeing fair compensation for its partners in the sector. These agreements were supplemented in October by a commitment to purchase 30 million tonnes of mountain milk. In January 2020, Carrefour also commit, together with Herta, to an increase in prices for the pork sector. In total, the Group has signed more than 1,000 new multi-year agreements with local very small enterprises (VSEs) and small- and medium-sized enterprises (SMEs) in 2019. OFFERING ADAPTED FINANCING — By granting loans through its finance companies, Carrefour supports producers and small- and medium-sized businesses in their agricultural transition process. In June 2019, Carrefour joined forces with several banks to create the first investment structure dedicated to the food transition in the retail sector in Europe. The funds of this new entity, endowed with 3 million euros over three years, are intended to develop suppliers' projects related to the food transition: conversion to organic farming, transformation of farming methods in favour of animal welfare, etc. THE AGRO-ECOLOGICAL BANANA: A FIRST Bananas are the leading product in Carrefour's fruit and vegetable department, selling 140,000 tonnes a year in six countries: France, Spain, Belgium, Italy, Romania and Poland. A three-year project to develop a Carrefour Quality Line agro- ecological banana, positioned between fair trade organic bananas and conventional bananas, was launched in partnership with Cirad (Agricultural Research Centre for Development) and the Group's historical suppliers: Fruidor in the French West Indies and Compagnie Fruitière in Côte d'Ivoire. Starting in 2019, bananas have been produced with fewer insecticides and without chemical inputs. An elimination of chemical pesticides is set for 2022. The project will be financed by the investment structure dedicated to the food transition. 52 52 CARREFOUR — ANNUAL REPORT 2019 53 53 CARREFOUR — ANNUAL REPORT 2019 CHAPTER — 3 Becoming the leader in the food transition for all, with whom? CONTRIBUTING TO THE ORGANIC BOOM Carrefour contributes to the development of the organic sector by supporting farmers, breeders and winegrowers who are starting a conversion process. Professionals already engaged in conversion to organic farming also benefit from the Group's support, in all countries where it operates, particularly in Europe. “Producing and eating organic is a conversion process.” Benoît Soury — Organic Market Director, Carrefour On 2 May 2018, I joined Carrefour, after dedicating 25 years of my career to developing the organic market. Why Carrefour? Through its historic commitment to agricultural sectors, our Group plays a key accelerating role. 25% growth in the sale of organic products in 2019 Benoît Soury, visiting Julien Carle, an organic market gardener in Berles- Bois (Hauts-de-France). "A much more technical agriculture, more connected to the land, is more complex but also more interesting than what we can do in conventional agriculture. It implies a significant mobilization of manpower, but it is the price of quality.” For nearly 30 years, Carrefour has been developing spe- cific know-how concerning organic products and a strong proximity with agricultural industry players. The current approach is therefore fully in line with the histo- rical continuity of Carrefour's actions. In France, by the end of 2019, the Group was supporting 2,000 producers in their organic conversion and development. It is thus actively participating in the creation and development of new organic sectors. For example, while Carrefour France counted only one organic carrot producer among its suppliers in 2018, it now supports six producers in six different production areas. The Group is also working to set up a durum wheat chain to obtain "made in France" organic pasta, which will be marketed under its Carrefour Bio brand. The contractual link between Carrefour and farmers under- going conversion is particularly flexible: production volumes are not strictly fixed but, on the contrary, are adapted to contingen- cies. Carrefour also protects the independence of its partners, refraining from buying more than 40% of any single farmer’s pro- duction. The Group decentralised its organisation in order to focus on the local market, with the Carrefour Bio brand pledging to offer fruits and vegetables grown only in France. Carrefour's 22 war- ehouses are spread throughout the country in order to collect fresh produce, fruit and vegetables as close as possible to their point of production or harvest, thus favouring short distribution channels. In 2020, the Group intends to expand this virtuous approach implemented in France to its other regions, particularly Central Europe, while adapting to the relative maturity of the organic market in each country. In Poland and Romania, countries where the market is still in its infancy, Carrefour is working to set up pro- duction and processing channels, by organising meetings between organic professionals (producers, processors and dis- tributors). 54 55 It takes three years to convert a farm to organic. "We support producers during the first few years of conversion by buying their goods before they are certified.” CARREFOUR — ANNUAL REPORT 2019CHAPTER — 3 Becoming the leader in the food transition for all, with whom? WITH OUR STRATEGIC PARTNERS In order to boost its competitiveness and operational efficiency, Carrefour is stepping up its partnerships with key players in the activities and businesses that are strategic to its development. Carrefour is working with expert partners to develop the most relevant solutions for its customers in every area essential to its transformation: digitalisation of services, traceability of supply chains, combatting waste, enhancing its product offer, optimising purchasing processes, etc. STRENGTHENING DIGITAL AND E-COMMERCE  — To support the digitalisation of its activities, Carrefour is setting up ambitious technology collaborations. The Group was chosen by Google to be its first global food partner. In a shared digital hub of 2,500m2, inaugurated in Paris in March 2019, teams from both companies began their first experiments in the fields of data, artificial intelligence and machine learning techniques by applying them to concrete cases such as anticipating stock shortages. To develop more efficient delivery services, Carrefour has also joined forces with the Glovo platform in four countries (France, Spain, Italy and Argentina), with the Rappi application in Brazil, Food Panda and Uber Eats in Taiwan, the Allegro marketplace in Poland and the Bringo platform in Romania. ENSURING FOOD SAFETY AND TRACEABILITY  — Ensuring transparency around the traceability of the products on its shelves is a key priority for Carrefour, which joined the IBM Food Trust collaborative platform in October 2018. The aim of the platform is to set up a global standard for traceability and food safety between every link in the chain, from producers to sales outlets. Notably, it enables retailers and their suppliers to exchange information using blockchain technology. In this context, Carrefour worked with Nestlé to launch the first blockchain in Europe on a national brand, Mousline, in April 2019. Their collaboration continued in November 2019 on the Guigoz Bio 2 and Bio 3 milk range. COMBATTING WASTE — Tackling environmental challenges calls for collective mobilisation. That is why Carrefour collaborates with other stakeholders to offer new solutions. With the Too Good To Go application, Carrefour wanted to help its customers identify unsold food at low prices. The solution has already been INVIGORATING LOCAL PARTNERSHIPS In all countries where it operates, Carrefour participates in coordinating and strengthening the local economic fabric. In Romania, the Group founded the Varasti cooperative in 2017 with four local producers, located 30 kilometres from Bucharest. It facilitates the sale of locally produced vegetables, contributing to the development of local communities. In 2019, 130 out of 300 families of vegetable farmers in Varasti had become partners of the Group. Carrefour Romania also employs a full-time buyer in the cooperative, in direct contact with each farmer, in order to plan and adjust production according to needs. In 2019, the Varasti cooperative produced 7,200 tonnes of varied, high-quality vegetables – tomatoes, lettuce, greens, eggplant, spinach, etc. – in the Varasti area. In some seasons, the cooperative can cover 100% of Carrefour Romania's vegetable needs. deployed in more than 2,500 Carrefour stores in Europe in 2019. Carrefour, Système U and Veolia teamed up to reduce single-use plastics with the help of (RE)SET, a specialist in circular economy innovations that uses a collaborative methodology to design reusable packaging. Carrefour also signed a partnership in May 2019 with Loop to propose delivery services based on a deposit system in the Paris region. EXPANDING THE NON-FOOD LINES — In France, Carrefour is opening up its hypermarkets by inviting partner brands to set up specialised corners offering branded products: Fnac Darty for household appliances and Aubert for childcare. The Group intends to continue building such partnerships in 2020. Also in its hypermarkets, the Beauté plurielle concept, which combines a chemist space with a range of health and beauty products, was co-developed with L'Oréal to adapt to new consumer trends. It was awarded the Sirius 2019 prize in the Customer Experience category. OPTIMISING PURCHASES — In order to achieve economies of scale and better control its costs, Carrefour has entered into purchasing alliances, which began to bear fruit in 2019. With Tesco, product partnerships with the greatest savings potential for Carrefour are gradually gaining momentum, with 24 global agreements already concluded. In France, the Envergure central purchasing unit, created with System U, continued to record significant progress. 56 56 CARREFOUR — ANNUAL REPORT 2019 57 57 CARREFOUR — ANNUAL REPORT 2019 CHAPTER — 3 Becoming the leader in the food transition for all, with whom? WITH OUR CUSTOMERS WITH COMMUNITIES Consumers are the most important players in the food transition for all. Carrefour listens to their demands, involves them in its innovations and provides them with the tools to act as agents of the food transition. Carrefour is committed to long-term partnerships with community leaders in order to promote sustainable and responsible practices. Sharing these points of view enables the Group to make progress in this direction, through a transparent and inclusive approach. Our customers are committed players in sustainable consumption and have the power to change the game. That is why Carrefour involves them in its actions to improve food quality, preserve the environment and help build the new agri-food model. GIVING CUSTOMERS A VOICE — Carrefour continues to listen even more closely to its customers: in addition to its customer service department, which addresses requests throughout the year, more than 3,100 external panels were set up in 2019. They make it possible to take into account customer feedback by modifying the recipes for certain products. In order to further involve customers in its strategy, the Group also set up online consultation tools on social and environmental issues, such as the "Mission Zero Plastic" citizen consultation on carrefour. com, which received more than 11,000 votes. In Spain and France, Carrefour has set up "Clubs for Concerned Consumers", bringing together more than 100 customers on social media, who receive advance information and regular invitations to store events on various issues. The aim is to create communities of engaged customers to give them a voice and discuss the Group's new projects with them. SUSTAINING THE FOOD TRANSITION — With Act for Food, Carrefour enables everyone to take an active part in the new food transition model. In addition to its in-store events designed for customers, the Group conducts with local NGOs to promote responsible and sustainable practices, evaluate them and take corrective action throughout its supply chains. PROMOTING THE SOLIDARITY-BASED FOOD TRANSITION — The Carrefour Foundation conducts sponsorship projects that support the solidarity-based food transition, founded on three major programmes: anti-waste, sustainable and solidarity-based agriculture, and social commitment. It accompanies, develops and coordinates the initiatives carried out by teams in Belgium, France, Italy, Poland and Romania, and by local foundations like the Carrefour Taiwan Cultural and Educational Foundation, Fundación Solidaridad Carrefour in Spain, Fundación Carrefour Argentina, or the Instituto Carrefour in Brazil. In 2019, 31 projects related to sustainable agriculture were financed by the Carrefour Foundation, receiving more than €3,160,000. special operations such as the Fraich'Kids edutainment programme for children in French schools and the Act for Food travelling caravan, which will visit 40 cities in Spain in 2019. Carrefour France is also developing Experience Boxes that offer customers immersive half-days to discover the daily life of producers: for example, a cheese dairy that produces Carrefour Quality Line Camembert de Normandie AOP or an artisanal Carrefour Bio Breton cider factory In this way, the Group is helping to connect all those involved in the transformation of the agri-food chain. STEPPING UP ITS COMMITMENTS — Carrefour supports its customers' responsible approaches by offering them solutions developed with its partners. To fight against food waste, Carrefour provides its customers with the Too Good To Go application, which uses smartphones to identify unsold food baskets at low prices. In 2019, Too Good To Go was rolled out in 2,624 stores across France, Spain, Italy, Belgium and Poland. Since May 2019, Carrefour has also offered its customers in the Paris Region a practical, zero-waste consumption alternative with Loop, a home delivery platform using a system of deposits and sustainable containers. DECIDING ON FUTURE PROJECTS TOGETHER The crowd-funding platform jeparticipe. carrefour.com, launched in partnership with MiiMOSA, supported 55 agricultural food transition projects through matching donations and interest-bearing loans from 4,500 contributors. Carrefour has invested 1,290,000 euros in 12 projects, for which more than 3 million euros have been raised in total. D ialogue with stakeholders is a constant source of inspiration for the Group, from defining its strategic orientations to implementing its projects on an operational level. COMPARING PERSPECTIVES — Carrefour's corporate social responsibility (CSR) approach is transparent and inclusive: it is reported on and discussed with stakeholders, whose recommendations and critical perspectives enable the Group to improve its approach. Consultations with NGOs, public authorities, customers and investors are organised every year on CSR subjects: in 2019, they focussed on geomonitoring systems and triple-capital accounting. The Group is also committed to responding to a selection of questionnaires from rating agencies. In 2019, Carrefour set up a Food Orientation Committee, which brings together seven committed outside figures to put forward their proposals. They will support the Group in the transformation of its model, focussing on five concrete projects related to the food transition. WORKING ON THE GROUND WITH NGOS — For more than 20 years, Carrefour has built its commitment to protecting human rights, health, safety and the environment worldwide, in partnership with leading NGOs, including the WWF for environmental protection (1998) and the UNI Global Union for working conditions and fundamental freedoms (2001). The Group also became a signatory of the United Nations Global Compact in 2001. In each country, Carrefour involves community leaders in the implementation of its CSR policies, from defining its rules for purchasing raw materials to auditing the labour practices of its suppliers located in high-risk countries, as well as promoting eco-design in its packaging. Carrefour's teams work closely 58 58 CARREFOUR — ANNUAL REPORT 2019 59 59 CARREFOUR — ANNUAL REPORT 2019 CHAPTER — 3 Becoming the leader in the food transition for all, with whom? A COMMITTED GOVERNANCE CARREFOUR'S GROUP EXECUTIVE COMMITTEE — The Group Executive Committee strengthens oversight of the Group and closely monitors the implementation of its transformation plan, focussed on the transition of the food model. Chaired by Alexandre Bompard, it is made up of 15 members, including Group managers and individuals from other backgrounds who bring complementary expertise. François-Melchior de Polignac — Executive Director, Northern and Eastern Europe (Belgium, Poland and Romania) and Chief Executive Officer of Carrefour Belgium Laurent Vallée — General Secretary Guillaume de Colonges — Executive Director, Merchandise, Supply and Formats Marie Cheval — Executive Director Financial Services and Hypermarkets, France Morgane Weill — Executive Director Strategy & Transformation for the Group and France Matthieu Malige — Chief Financial Officer Rami Baitieh — Executive Director, Spain Alexandre Bompard — Chairman and Chief Executive Officer Alexandre de Palmas — Executive Director, Convenience Stores France Dominique Benneteau-Wood — Executive Director, Communication for the Group and France Noël Prioux — Executive Director, Latin America (Brazil and Argentina) Amélie Oudéa-Castéra — Executive Director E-Commerce, Data and Digital Transformation Jérôme Nanty, — Executive Director, Human Resources and Assets for the Group and France Pascal Clouzard — Executive Director, France Gérard Lavinay — Executive Director, Italy 60 60 CARREFOUR — ANNUAL REPORT 2019 61 61 CARREFOUR — ANNUAL REPORT 2019 CHAPTER — 3 Becoming the leader in the food transition for all, with whom? THE CARREFOUR BOARD OF DIRECTORS — A key body in the Group's governance, the Board of Directors approves the Company's strategic direction and oversees its implementation. It considers and takes decisions on major operations. At the end of 2019, it is composed of 18 Directors, including eight independent Directors and two Directors representing employees. Each Director brings high-level expertise and recognised experience in areas of interest to the Carrefour group: international development, market share gain strategy, social and environmental responsibility, etc. COMPOSITION OF THE BOARD OF DIRECTORS ON 31 DECEMBER, 2019 Alexandre Bompard — Chairman and Chief Executive Officer Philippe Houzé — Lead administrator Claudia Almeida e Silva (1) Alexandre Arnaud Nicolas Bazire Jean-Laurent Bonnafé Flavia Buarque de Almeida Stéphane Courbit (1) Abilio Diniz Aurore Domont (1) Charles Edelstenne (1) Thierry Faraut (2) Stéphane Israël (1) Mathilde Lemoine (1) Patricia Moulin-Lemoine Martine Saint-Cricq (2) Marie-Laure Sauty de Chalon (1) Lan Yan (1) SPECIALISED COMMITTEES OF THE BOARD OF DIRECTORS IN 2019 — The Board of Directors has set up five specialized committees responsible for examining questions that it or its Chairman submits for consideration: a Audit Committee President: Stéphane Israël (1) Members: Nicolas Bazire, Philippe Houzé, Mathilde Lemoine (1), Claudia Almeida e Silva (1) a Compensation Committee Members: Nicolas Bazire, Stéphane Courbit (1), Charles Edelstenne (1), Lan Yan (1) a Appointments Committee (3) President: Charles Edelstenne (1) Members: Flavia Buarque de Almeida, Philippe Houzé, Aurore Domont (1), Thierry Faraut (2) a CSR Committee President: Aurore Domont (1) Members: Patricia Moulin Lemoine, Marie-Laure Sauty de Chalon (1), Claudia Almeida e Silva (1), Martine Saint-Cricq (2) a Strategic Committee President: Alexandre Bompard Vice-President: Abilio Diniz Members: Nicolas Bazire, Philippe Houzé, Stéphane Courbit (1) CHANGES IN THE COMPOSITION OF THE BOARD OF DIRECTORS AND ITS SPECIALISED COMMITTEES IN 2019 — The Shareholders’ Meeting of 14 June, 2019 ratified the Board’s appointment of Cláudia Almeida e Silva and Alexandre Arnault as Directors on 22 January and 24 April, 2019, to replace Amélie Oudéa-Castéra and Bernard Arnault, respectively. In addition, the Shareholders’ Meeting of 14 June, 2019 renewed the terms of Flavia Buarque de Almeida, Thierry Breton, Abilio Diniz and Charles Edelstenne as Directors. Thierry Breton stood down from his directorship on 24 October, 2019, following his appointment as Internal Market Commissioner for Europe. — At its meeting on 20 April, 2020, the Board of Directors acknowledged the decisions of Jean-Laurent Bonnafé and Lan Yan not to seek renewal of their terms. In addition, on the recommendation of the Appointments Committee, and with a view to reducing its size, the Board decided against appointing new Independent Directors at the Annual Shareholders' Meeting to be held on 29 May, 2020. On the recommendations of the Compensation Committee, the Board of Directors decided to propose the renewal of the terms of office of Alexandre Arnault and Marie-Laure Sauty de Chalon at the Annual Shareholders’ Meeting to be held on 29 May, 2020. It also proposed the appointment of Mr. Philippe Houzé as Vice-Chairman of the Board of Directors and Mr. Stéphane Israël, Independent Director, as Lead Director. On the recommendation of the Appointments Committee, Cláudia Almeida e Silva (Independent Director) joined the Audit Committee to replace Amélie Oudéa-Castéra, as well as the CSR Committee. Mathilde Lemoine (Independent Director) was appointed Chair of the Compensation Committee to replace Thierry Breton from 23 January, 2020. 18 members, 44% of whom are women (4) 19 meetings of the Board of Directors and Specialized Committees in 2019 THE FOOD TRANSITION ADVISORY COMMITTEE — The Carrefour Food Transition Advisory Committee aims to anticipate changes in food consumption, to achieve commitments to the global Act for Food programme. It is made up of seven experts with multidisciplinary profiles: Lucie Basch — Founder of the start-up Too Good To Go Myriam Bouré — Co-founder of Open Food France Emmanuel Faber — Chairman and CEO of Danone Jean Imbert — Socially and environmentally responsible chef François Mandin — Farmer from Vendée region Caroline Robert — Head of dermatology at the Gustave Roussy Cancer Institute Maxime de Rostolan — Founder of Fermes d'avenir and Blues Bees 90.5% attendance rate at meetings of the Board of Directors and its specialised committees as of 31 December, 2019 50% independence rate of the Board of Directors (4) 1. Independent Director. 2. Director representing employees. 3. The Appointments Committee was renamed the Governance Committee, effective 20 April, 2020. 4. Excluding Directors representing employees. 62 62 CARREFOUR — ANNUAL REPORT 2019 63 63 CARREFOUR — ANNUAL REPORT 2019 KEY FIGURES 2019 Groupe Carrefour 12 225 magasins dans le monde France* 5 274 magasins Belgique 789 magasins Pologne 906 magasins Roumanie 371 magasins FINANCIAL AND EXTRA- FINANCIAL INDICATORS 2019 RESULTS(1) Carrefour's results in 2019 are up sharply, driven in particular by France and Latin America. These results are visible in the Group's financial performance and in all strategic priorities: acceleration of growth formats, development of organic and Carrefour-branded products, outperformance in food e-commerce and improved price competitiveness. This momentum is further reflected in higher levels of customer satisfaction. 80.7billion euros in revenue (inc. VAT), up 3.1% on a like- for-like basis 2,080 million euros in recurring operating income (ROI) 1,314 million euros in net income, Group share Geographic breakdown of sales an increase of 7.4% at constant exchange rates and comparable accounting standards vs. 2018 2.6 billion euros of debt, or a reduction of close to €1bn at constant exchange rates Asia 2.6% Latin America 20.4% Other European countries 28.9% France 48.1% 3,485 million euros in EBITDA, or a margin of 4.8%, up 10bp 1,301 million euros in free cash-flow (excl. exceptional items) 64 1. Data as of 31 December, 2019, IFRS 5, pre-IAS 29 and pre-IFRS 16 Integrated countries / regions Franchised countries / regions China (2) Argentine 597 magasins Brésil 464 magasins Espagne 1 149 magasins Italie 1 089 magasins Taïwan 137 magasins Autres pays 1 449 magasins Pays / régions intégrés Pays / régions franchisés Chine** * France métropolitaine. ** Carrefour a cédé le contrôle de Carrefour Chine courant 2019. L'accord prévoit que les 234 magasins pourront rester sous enseignes Carrefour. 12,225 stores 27,800 partner producers of the Carrefour Quality Lines TOP 2% of global companies leading the fight against climate change (maximum score of A on the CDP Climate Change questionnaire) 321,383 employees, of whom 56% are women +25% growth in sales of organic products +8 point increase in the Net Promoter Score® since 2018 77 million customer households worldwide +30% growth in food e-commerce sales a France (3): 5,274 a Belgium: 789 a Poland: 906 a Romania: 371 a Argentina: 597 a Brazil: 464 a Spain: 1,149 a Italy: 1,089 a Taiwan: 137 a Other countries: 1,449 in more than 30 countries 2. Carrefour ceded control of Carrefour China during 2019. As part of the agreement, the 234 stores will retain the Carrefour name.. 3. Metropolitan France 65 CARREFOUR — ANNUAL REPORT 2019KEY FIGURES 2019 114% Score of the Carrefour CSR and Food Transition Index in 2019. This score was 104% in 2018. This index makes it possible to monitor the performance of the Carrefour group’s CSR strategy and our implementation of the food transition. This result reflects in particular that Carrefour is ahead of plan in the reduction of greenhouse gas emissions, the development of agro-ecology, the reduction in the use of packaging and the promotion of diversity within its teams. OUR PRIORITY SUSTAINABLE DEVELOPMENT GOALS Carrefour supports the 17 Sustainable Development Goals (SDGs) adopted by the United Nations, adhering in particular to seven priority SDGs. Carrefour contributes to the advancement of these SDGs by meeting the concrete objectives of its CSR and Food Transition Index. 01. NO POVERTY 02. ZERO HUNGER a 50% reduction in food waste by 2025 (vs. 2016) a 100% of countries roll out a Healthier Diet action plan by 2022 a 100% of countries implement an annual Act for Food communications programme a 100% of countries roll out a programme focussed on local products and purchasing by 2020 03. GOOD HEALTH AND WELLBEING a Ban controversial substances a Ensure the quality and safety of Carrefour products a Implement an action plan on workplace health, safety and quality of life in all host countries by 2020 05. GENDER EQUALITY a Ensure that women account for at least 40% of appointments to key positions within the Group by 2025 a Obtain GEEIS certification in all countries by 2020 06. CLEAN WATER AND SANITATION 07. AFFORDABLE AND CLEAN ENERGY 08. DECENT WORK AND ECONOMIC GROWTH 09. INDUSTRY, INNOVATION AND INFRASTRUCTURES 11. SUSTAINABLE CITIES AND COMMUNITIES 12. RESPONSIBLE CONSUMPTION AND PRODUCTION a €4.8 billion in sales of organic products by 2022 a 10% Carrefour Quality Lines products in the Fresh Products range by 2022 a Guarantee transparency and traceability of Carrefour products a 100% reusable, recyclable or compostable packaging by 2025 13. CLIMATE ACTION a Reduce our GHG emissions (scope 1 and 2) by 40% by 2025, and by 70% by 2050, compared with 2010 a Get Carrefour’s 30 biggest national brand suppliers to commit to GHG emissions reduction objectives in line with the Science Based Targets Initiative’s 2°C scenario 14. LIFE BELOW WATER a 50% of Carrefour seafood products sold come from responsible fishing by 2020 a Reduction in plastic a 10,000 of packaging avoided by 2025 (starting from 2016) 15. LIFE ON LAND a Recover 100% of waste by 2025 a Roll-out a Sustainable Forests action plan on deforestation-linked products by 2020 a Ensure that all new shopping centre constructions and expansions are certified to BREEAM standards and roll out BREEAM In-Use certification across 75% of sites in France by 2021 16. PEACE, JUSTICE AND STRONG INSTITUTIONS 04. QUALITY EDUCATION 10. REDUCED INEQUALITIES 17. PARTNERSHIPS FOR THE GOALS 66 67 CARREFOUR — ANNUAL REPORT 2019ProductsObjective 2019 Result 20192019 Score 120%1. 4.8 billion euros in sales of organic products by 2022 €2.3 billion €2.3 billion 100%2. 10% Carrefour Quality Lines products within Fresh Products by 20225.7%6.6%116%3. 50% of Carrefour fish sold from sustainable fishing by 202040%47%120%4. Roll-out of a Sustainable Forests action plan on deforestation-linked products by 202068%68%100%5. Save 10,000 tonnes of packaging by 20252,446 tonnes4,095 tonnes167%StoresObjective 2019 Result 20192019 Score 134%6. Reduce food waste by 50% by 2025 (vs. 2016)(7.1)% (9.7)% 136%7. Recover 100% of waste by 2025 70.8% 66.5% 94%8. Reduce CO2 emissions by 40% by 2025 (vs. 2010) (27.2)% (35.8)% 131%9. 2,000 employees identified as “food transition superheroes” in stores by 2020 500 superheroes 870 superheroes 174%CustomersObjective 2019 Result 20192019 Score 93%10. 80% of customers identify the food transition in stores by 2022 56% 66% 118%11. 100% of countries roll out a program focussed on local products and purchasing by 2020 60% 44% 74%12. 100% of countries implement an annual Act for Food communication programme 100%100%100%13. 100% of countries rolling out a Healthier Diet action plan by 2022 70% 56% 79%EmployeesObjective 2019 Result 20192019 Score 108%14. 40% women among those appointed to key positions by 2025 and 100% of countries roll out GEEIS certification by 2020 27%83%32%78%117%93%15. Disabled employees to account for 4% of total Group employees by 2025 3.5%3.8%109%16. 13 training hours per Group employee by 2025 11.5 hours 11.6 hours 101%17. 100% of countries implement an action plan on health/safety/quality of life in the workplace by 2020 75%89%119%GET THE LATEST NEWS ON THE CARREFOUR GROUP AT WWW.CAREFOUR.COM @GroupeCarrefour @Carrefour @Carrefour Carrefour Société anonyme with capital of 2,018,163,760.00 euros 652 014 051 RCS Évry Carrefour head office 93, avenue de Paris TSA 55555 91889 Massy Cedex, France Investor relations investisseurs@carrefour.com Shareholder relations contact@actionnaires.carrefour.com Shareholders’ club Autorisation 93261 92535 Levallois-Perret Cedex Tel: 0 805 902 902 club@actionnaires.carrefour.com Registered shareholders Société Générale Securities Services 32, rue du Champ-de-Tir CS 30812 – 44308 Nantes Cedex 3, France Tel: +33 (0)2 51 85 67 89 Fax: +33 (0)2 51 85 53 42 With a multi-format network of 12,225 stores in more than 30 countries, the Carrefour group is one of the world's leading food retailers. Carrefour serves 77 million customer households worldwide and generated sales of 80.7 billion euros in 2019. It has more than 321,000 employees working to make Carrefour the world leader in the food transition for all, by providing quality food every day, accessible everywhere and at a reasonable price. Project management: Carrefour Group Communications Department – May 2020. Design and production: WordAppeal Photo credits: Lionel Barbe, gettyimages, Nicolas Gouhier, Marcelo Justo, William Lacalmontie, Manuel Fiestas Moreno, Marta Nascimento, Jose Alberto Puertas, © Rappi, Fondation Carrefour, Greenweez, © Carrefour DR. Graphics: Stéphane Jungers. This document, which explores the food transition and reports on Carrefour's activity in 2019, is published at a time when the world is going through an unprecedented pandemic for our economies and societies. The Carrefour group would like to thank all the people who, through their contribution, have made this document possible and, more broadly, the unfailing commitment of all our teams. THANKS. 68 69 69 CARREFOUR — ANNUAL REPORT 2019www.carrefour.com @GroupeCarrefour Société anonyme with capital of 2,018,163,760.00 euros Head office: 93, avenue de Paris – 91300 Massy – France 652 014 051 RCS Évry 70 

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