- Auchan . com

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