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Europe’s largest retailer Carrefour said on Thursday it was “highly confident” it could accelerate its turnaround even without a merger with wealthy Canadian suitor Alimentation Couche-Tard.

Carrefour announced further cost cutting and cash flow targets after achieving a goal of €3 billion ($3.6 billion) in savings by 2020, sending its shares up 3%.

The French food retailer, whose possible takeover by Couche-Tard unravelled last month after opposition from the French government, reported a 16.4% rise in 2020 recurring operating profit to 2.173 billion euros and said it scored its best sales performance in 20 years.

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Commenting on the failed Couche-Tard deal, Chief Executive Alexandre Bompard said: “This episode is a positive sign that Carrefour has become attractive once again. My responsibility was to explore this offer but it was cut short by the government.”

He said he was convinced Carrefour could create value and transform its business model, adding: “I am highly confident we can accelerate.”

Global M&A was not essential, he said, but bolt-on acquisitions could be “an additional source of profitable growth”.

In a further sign of its confidence, Carrefour said it would reward investors with a full cash dividend payment instead of a payment in shares. It increased its 2020 dividend by 4.3% to 0.48 euros per share.

HYPERMARKET REVIVAL

Carrefour 2020 sales grew 7.8% on a like-for-like basis to 78.6 billion euros, reflecting strong sales in the markets of Brazil, France, and Spain, as food retailers across the world benefit from the demand generated as lockdowns force consumers to stay at home.

In France, where Bompard has made reviving flagging sales at hypermarket stores a priority, operating profit increased 13.2% to 629 million euros on sales that rose 3.6% like for like.

All store formats in France, including hypermarkets, saw sales rise and Carrefour said French hypermarkets would continue to improve.

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The performance reflected “three years of flawless roll-out of our transformation” that has established a growth model based on customer satisfaction and new trends,” Bompard said.

Carrefour is in the middle of a five-year plan launched in 2018 to cut costs and jobs, as well as boost e-commerce investment to lift profits and sales and tackle competition from e-commerce giant Amazon.

It is also expanding into convenience stores to reduce its reliance on hypermarkets, focusing more on organic products and private labels and last year it sealed a purchasing alliance with British rival Tesco

Carrefour targets 2.4 billion euros in additional cost savings on an annual basis by 2023 and net free cash flow generation above 1 billion euros per year from 2021, having achieved 1.056 billion euros in 2020.

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