By Dominique Vidalon
PARIS (Reuters) - Carrefour
Carrefour said 2012 core profit fell less than analysts had feared as a robust Latin American business helped cushion falling demand in austerity-hit Spain and Italy while the core French business showed further signs of recovery.
Carrefour, which sold 2.8 billion euros ($3.64 billion) of assets last year to raise cash for investments and shore up its balance sheet, also quashed speculation it might seek to float its Brazilian business or exit more non-strategic countries.
"Retailers who do not invest are doomed," Plassat told a news conference on Thursday. "Today, we have the financial means to conduct an investment policy."
Shares in the world's second-biggest retailer behind Wal-Mart
Carrefour has been struggling for years, partly due to its reliance on hypermarkets, which have been losing out as time-pressed shoppers buy more goods locally and online and prefer to buy general merchandise in specialist stores.
The previous management's key response was Carrefour Planet, a costly revamp of European hypermarkets that was halted last year as it failed to yield the necessary results.
This decision cut capital expenditure by 27 percent to 1.547 billion euros in 2012, about 2 percent of sales, down from 2.3 billion in 2011, a level analysts have said barely covered the cost of maintaining existing stores.
Carrefour said on Thursday it was back on the offensive on capex and would invest 2.2 billion to 2.3 billion euros this year, beating analysts' expectations of 1.955 billion.
Investments would be evenly spread between renovating and expanding stores, and focused on France, Brazil and China.
In France alone, which makes over 40 percent of group sales, about 150 out of 220 hypermarkets needed remodeling in the next three years. Carrefour will work on 50 this year, Plassat said.
Under his recovery plan, retail veteran Plassat, who became CEO in May 2012, has also vowed to cut costs, improve price competitiveness and simplify product offerings, notably in the troubled non-food sector.
He has also promised to give store managers more autonomy after years of mainly central planning to make them more reactive and innovative.
This "change in culture" was a key part of a strategy to win back clients amid fierce competition, notably from more de-centralized unlisted French rivals such as Leclerc or Systeme U.
Carrefour said full-year operating profit fell to 2.14 billion euros, topping the average estimate of 2.061 billion in a Thomson Reuters I/B/E/S analyst poll.
Finance Chief Pierre-Jean Sivignon told a conference call Carrefour was still bracing for a difficult economic climate in 2013 but that the improvement seen in the group's results in France in the second half of 2012 was sustainable.
Carrefour shares are up 70 percent since bottoming out last July and are up 14 percent this year, welcome news for top stakeholder Blue Capital, controlled by LVMH
For some analysts, Carrefour's valuation multiples already factor in an improving commercial performance in France.
The stock trades at 14.4 times 12-month forward earnings, against 13.9 times for smaller French rival Casino
To raise cash to defend positions in western Europe, China and Brazil, and strengthen its balance sheet, Carrefour has raised 2.8 billion euros from selling units in Indonesia, Colombia and Malaysia.
The sale strategy, similar to actions taken by European peers Tesco and Metro
Plassat said there were "no plans to exit more countries on the agenda".
He also dismissed speculation that Carrefour could list its Brazilian wholesale unit Atacadao or any business in Brazil, which is its second-largest market after France.
($1 = 0.7692 euros)
(Reporting by Dominique Vidalon; Editing by Christian Plumb and David Cowell)