Salute e Benessere
Casino Group: Press release - H1 2024
FIRST-HALF 2024
The transformation of the New Casino is underway
Philippe Palazzi, Chief Executive Officer of Casino Group, said:
“As we present these results and the measures we have already implemented, I would like to reiterate that our priority remains the future of all the Group's employees and following through on our commitments.
Since the beginning of April, the new executive management team has been analysing the situation and developing a plan to create economic and social value. Alongside this work, which will deliver medium- and long-term results, I would like to highlight the commitment of our teams, who have already launched a number of transformation initiatives. To improve our economic performance, we have begun streamlining our store network: closing unprofitable stores, converting integrated sites to franchises, carefully selecting our new franchise partners and opening new stores with high potential. Franchisees are central to the Group's project; their success is our success. We strive to embody the very best in convenience retailing .”
SECOND-QUARTER AND FIRST-HALF 2024 TRADING
In H1 2024, consolidated net sales amounted to €4.2bn , down 3.5% on a same-store basis and 5.9% in total after taking into account a -2.4% effect (mainly changes in scope and store network streamlining).
In Q2 2024, net sales amounted to €2.1bn , down 3.1% on a same-store basis and 7.1% in total after taking into account a -3.3% effect (mainly changes in scope and store network streamlining) and the calendar effect (-0.7%).
Net sales under banner
Monoprix
Monoprix recorded growth in net sales of 0.8% over Q2 2024 (+0.8% for the half year) on a same-store basis , reflecting a sequential acceleration in performance for Monop' and Naturalia (respectively +4.2% and +6.6% in Q2 vs. +2.7% and +3.5% in Q1 2024) and the ongoing stability of Monoprix City's performance despite disappointing textile sales due to unfavourable weather conditions in June.
E-commerce supported the trend , with average sales growth of 3.3% in Q2 for Monoprix.fr, Amazon and the THL (Textiles, Home, Leisure) website relaunched in March.
Monoprix continues to support its customers' purchasing power over the first half of the year, through the development of its Access offer (100 low-price private-label essential products) and the overhaul of its M' loyalty programme in April, enabling M' cardholders to enjoy savings of up to €80 a month for free through personalised promotions and offers on private-label products.
The Group is also continuing to modernise its stores , with the reopening of the historic Place Blanche Monoprix in Paris (January) and the Monoprix Saint Michel (June), with a completely redesigned concept adapted to the needs of local neighbourhoods, and the roll-out of the new Naturalia La ferme concept in Pantin (February) and in the 18 district of Paris (April).
Franprix
Franprix reported same-store growth of 0.1% in Q2 2024 (+0.4% for the first half) , with a strong performance in May (+2.7%) offset by a disappointing June (-1.7%) related to unfavourable weather conditions. The banner saw slower sales in the Paris suburbs (-1.6%), but growth of +0.9% and +3.5% in Paris and the provinces, respectively. The banner continued to win new customers over the quarter (customer traffic up by +1.5%) despite a disappointing June (-2.9%).
E-commerce once again followed the trend this quarter , with double-digit growth (+15%) driven by the momentum of marketplace sales (+26%).
Over the quarter, Franprix continued its network expansion and streamlining plan,
with the opening of nine new stores (including seven franchises and one business lease) and the closure of six unprofitable integrated stores.
Franprix reached a significant turning point last June with the launch of its new "oxygen" store concept,
in close collaboration with its franchisees. The aim is to enrich the customer experience (product range, comfortable shopping, enjoyment, conviviality, services) and provide franchisees with a dynamic, high-performance model to retain existing customers and attract new ones. The concept has been tested in three Paris stores since June, with the best version to be shared with franchisees starting in autumn.
Casino
Net sales by Casino brands (Vival, Spar, Petit Casino, etc.) fell by 5.1% on a same-store basis in Q2 2024
(-3.8% over the half year) in an environment that remains disrupted by the ongoing sale of Casino hypermarkets and supermarkets. Net sales were also impacted by a lower performance from seasonal stores and seasonal families (beverages, fresh products,etc.) in June due to unfavourable weather conditions.
The franchise expansion strategy and the streamlining of the store network continued this quarter , with the opening of 53 franchised stores, the conversion of 37 integrated stores to franchise and business lease and the closure of 24 unprofitable integrated stores.
In July, Casino announced (i) the renewal of its partnership with the Sherpa Cooperative
to supply the 119 food stores in the Sherpa network and (ii) the
renewal for five years of its partnership with TotalEnergies to supply more than 1,000 service stations in France.
Cdiscount
Cdiscount sales continue to be automatically impacted by the deliberate strategy of reducing direct sales in order to boost the Marketplace. In Q2,
net sales were down 16.5% on a same-store basis (-18.9% for the first half) , showing a slight sequential improvement. Marketplace GMV accounted for 66.5% of product GMV (65.1% for the first half)
and fell by -1.8% over the quarter, showing a gradual improvement from month to month (-5% in Q1 2024, -4% in April, -1% in May, +2% in June, +7% in July ). Like-for-like GMV is gradually recovering (-9% in Q2 after -12% in Q1) .
Cdiscount rolled out its new brand platform on 24 June 2024, reflecting its promise to increase customers' purchasing power (attractive prices, ongoing promotional offers, display of price comparisons) and its social responsibility commitment (more sustainable consumption, increasing proportion of more responsible products).
FIRST-HALF 2024 RESULTS
The consolidated financial statements of Casino, Guichard-Perrachon for the six months ended 30 June 2024 were approved for publication by the Company's Board of Directors on 29 July 2024. Limited review procedures were performed on the condensed interim consolidated financial statements by the Statutory Auditors. Their limited review report, which contains no reservations or observations, is in the process of being issued.
In H1 2024, consolidated net sales amounted to €4.2bn , down 3.5% on a same-store basis and 5.9% in total after taking into account a -2.4% effect (mainly changes in scope and store network streamlining).
Group adjusted EBITDA came out at €255m (-23.8%), reflecting a margin of 6.1% (-143 bps).
Convenience brands
Adjusted EBITDA for convenience brands fell by €53m over the first half. H1 2023 had benefited from €20m in income, including €10m in sponsorship credits (no additional sponsorship credits were recognised in 2024) and €10m in income spread over the contract between Monoprix and Getir/Gorillas (contract terminated during Q3 2023).
Apart from these one-off effects, EBITDA fell by -€33m, of which:
The convenience brands are focused on reorganising their store networks and business recovery plans (store renovation, making stores more people-focused, customer experience, price cuts), the impact of which will be gradual.
Cdiscount
Adjusted EBITDA was virtually stable, reflecting a +110 bps improvement in the margin (to 6.5%) thanks to the transition to a more profitable model centred on services and the Marketplace. Cost management plans offset lower sales in a market environment that remained difficult in H1.
Other
Lastly, adjusted EBITDA from other subsidiaries (change of -€24m) was heavily impacted by:
Adjusted EBITDA after Group lease payments was €26m , or €233m over a 12-month rolling period
Consolidated EBIT was -€56m (compared with +€17m in first-half 2023).
Other operating income and expenses amounted to an expense of -€609m in H1 2024 (vs. -€41m in H1 2023) including -€449m of asset impairment losses, mainly Franprix goodwill impairment for €422m: impairment indicators are the result of a deterioration in recurring performance compared with forecasts drawn up in 2023.
Underlying net financial income and net profit, Group share
Net financial income of €3,262m was recognised for the period (compared with a net financial expense of
-€218m in H1 2023), an improvement of €3,480m mainly explained by the €3,486m relating mainly to the conversion of debt to equity and the fair value adjustment of reinstated debt. It includes -€9m of financial costs for CB4X (Cdiscount).
Underlying net financial expense came to -€223m (vs. -€218m in H1 2023).
Underlying net profit (loss), Group share, came out at -€349m (vs. -€892m in H1 2023). Underlying net profit (loss), Group share, for H1 2023 was heavily impacted by the -€683m in impairment of deferred tax assets, notably on tax loss carryforwards. Excluding this effect specific to H1 2023, the change in underlying net profit (loss), Group share would be -€140m, mainly due to the change in trading profit described above.
Diluted underlying earnings per share stood at a loss of -€1.49, vs. a loss per share of -€874.72 in H1 2023.
Consolidated net profit (loss), Group share
Net profit (loss) from continuing operations, Group share came out at -€2,549m, compared with -€918m in H1 2023.
Net profit (loss) from discontinued operations, Group share was -€2,511m in H1 2024 (compared with
-€1,313m in H1 2023), resulting from (i) the operating results of HM/SM and GPA up to the date of loss of control, (ii) the impact of HM/SM disposals (€233m excluding interim losses), (iii) the loss on the disposal of Exito (€771m, essentially corresponding to the recycling to income of the negative foreign exchange translation reserve), and (iv) the dilution of Casino's stake in GPA following the March 2024 capital increase (€1,553m, essentially corresponding to the recycling to income of the negative foreign exchange translation reserve).
Consolidated net profit (loss), Group share amounted to €39m vs. -€2,231m in H1 2023.
Free cash flow
In H1 2024, free cash flow stood at -€413 million (-€735m in H1 2023) after payment of €153m in social security and tax liabilities placed under moratorium in 2023. Excluding this non-recurring amount, free cash flow would stand at -€260m.
Financial position at 30 June 2024
Consolidated net debt stood at €1.0bn , down -€0.6bn compared with 31 March 2024, mainly due to disposals. It includes €0.5bn of Quatrim bond debt (stable).
At 30 June 2024, the Group had cash and cash equivalents of €1.1bn , of which €0.7bn was immediately available .
Covenant
It should be noted that, although the calculation is required by the loan documentation from Q1 2024, the covenant is indicative at this time (given the "holiday period"). The scope of the covenant test corresponds to the Group adjusted for Quatrim and, to a lesser extent, the subsidiaries Mayland in Poland and Wilkes in Brazil.
The covenant net debt/covenant adjusted EBITDA ratio is therefore 5.41x. Application will be effective for the first time from 30 September 2025, with an initial required ratio of 8.34x.
FIRST-HALF 2024 HIGHLIGHTS
Completion of the financial restructuring in Q1 2024
All of the transactions provided for in Casino's safeguard plan and the accelerated safeguard plans of its relevant subsidiaries approved by the Paris Commercial Court on 26 February 2024, were implemented on 27 March 2024 :
The completion of Casino's financial restructuring resulted in a change of control of Casino Group in favour of France Retail Holdings S.à.r.l., the Consortium's controlling holding company (an entity ultimately controlled by Daniel Křetínský).
Reverse stock-split and share capital reduction
Casino carried out reverse stock-split transactions between 14 May and 13 June 2024, exchanging 100 existing shares for 1 new share.
The reverse stock-split transactions involved 39,574,044,429 existing shares with a par value of €0.01 each, resulting in a share capital comprised of 395,740,444 new shares with a par value of €1.00 each.
Following the reverse stock-split transactions, Casino launched a reduction in its share capital on 14 June 2024 by reducing the par value of the shares issued from €1.00 to €0.01 per share.
Accordingly, following the share capital reduction on 14 June 2024, Casino's share capital consisted of 395,740,444 shares with a par value of €0.01 each.
At 30 June 2024, Casino's share capital amounted to 400,939,713 shares with a par value of €0.01 each, after the creation of new shares following the exercise of the warrants in June.
Reverse stock-splits of this kind are common following a financial restructuring, and help to reduce the number of shares in circulation and the volatility of the share price. The technical adjustments are purely mathematical and have no impact on the value of Casino shares held by each shareholder.
Loss of control of Grupo Éxito and GPA
Sale of Grupo Éxito
On 26 January 2024, Casino Group announced that it had completed the sale of its 34% direct stake in Grupo Éxito to Grupo Calleja . GPA also tendered its 13% stake in Grupo Éxito to the sale. Casino Group collected
gross proceeds of US$400m from this transaction (€367m excluding fees as of the date of the sale ) , while GPA received gross proceeds of $156m. At 30 June 2024, Groupe Casino no longer held any interest in Grupo Éxito.
Loss of control of GPA
The capital increase of BRL 704 m (around €130m ) was completed on 14 March 2024 , the date on which Casino Group lost control. Following this transaction, the Group holds 22.5% of GPA's capital (compared with 41% previously). This capital increase was accompanied by a change in the entity's governance.
Asset disposals
Sale of hypermarkets and supermarkets (HM/SM)
At 30 June 2024, all HM/SM store disposals represented a net cash inflow (disposal price after partial unwinding of WCR at 30 June 2024 and after direct costs) of around €0.8bn, of which €0.3bn was received in 2023 (disposal of 61 shops at 30 September 2023 and advance payment on the disposal of 71 shops in 2024 under the agreement of 26 May 2023 with Groupement les Mousquetaires).
For H1 2024, the operating losses of HM/SM stores amount to around -€0.3bn (excluding unwinding of WCR). The impact on the Group's cash position for H1 2024 is therefore positive at €0.2bn.
However, cash flow in the coming quarters will be impacted by the following flows from the HM/SM division:
The Group will keep the market informed of the outcome of the HM/SM activities in its next quarterly communications.
Sale of Codim 2
On 22 June 2024, Casino Group signed a unilateral purchase agreement with a view to sell Codim 2 , which operates four hypermarkets, nine supermarkets, three cash & carry stores and two Drive locations in Corsica, with net sales (excluding taxes) €332m in 2023. The transaction is expected to be completed after consultation with employee representative bodies and is subject to approval by the relevant competition authorities.
Sale of GreenYellow
On 28 May 2024, Casino Group announced that it had completed the sale of its residual 10.15% stake in GreenYellow to Ardian and Bpifrance for net cash inflow of €46m . Following this transaction, Casino Group no longer holds any stake in the capital of GreenYellow.
Real estate disposals
The expected sale price is in excess of €200m, to be received on the sale date scheduled for H2 2024, with earnouts subject to completion conditions to be received at a later date.Agreements have also been signed to entrust the real estate management of this portfolio to Casino Group for a period of five years . This transaction will reduce Casino Group's debt toward the bondholders of its subsidiary Quatrim.
Employment Protection Plan project (EPP)
On 24 April 2024, Casino announced the launch of a transformation project and a job protection plan for seven Group companies .
The works councils concerned were convened on 24 April 2024 for a meeting held on 6 May 2024, during which this transformation plan was presented to them and an information and consultation procedure initiated prior to the implementation of an employment protection plan. At the same time, negotiations on the content of the employment protection plan began with the representative trade unions of these companies. The employment protection plan is part of a wider transformation plan that has become essential to securing the Group's long-term future and its recovery. Its implementation would entail a maximum of between 1,293 and 3,267 job losses.
The final impact in terms of job losses will depend on the Group's ability to find buyers for the hypermarkets, supermarkets and logistics platforms that were not sold and that are scheduled for partial or complete closure.
The proposed new organisation is consistent with the refocusing of the Group's activities on convenience formats and the realities of the market. It aims to make the Group more agile in meeting changing consumer expectations and reinvesting in the future in sales outlets and their growth (layout, private labels, local products, price image, etc.). The Group's long-term goal is to restore the quality of the customer experience in its stores and become France's leading convenience store retailer, thanks to its franchisees and integrated teams.
New purchasing partnership
On 24 April 2024, Casino announced it was strengthening its purchasing partnership with Intermarché and extending it to Auchan. This new partnership replaces existing agreements between Intermarché and Casino and deploys new ones between Intermarché, Auchan and Casino. It will enable the retailers to forge and sustain long-term (10-year) partnerships with farming communities and product manufacturers across France. The alliance is also expected to align with the shared commitment to safeguard France's food sovereignty, strengthen each banner's proprietary networks and conduct price negotiations with major manufacturers.
The partnership will be forged in strict compliance with applicable competition law and regulations. Each of the partners will remain completely independent in terms of marketing, pricing and promotions, as well as in the expansion of their store bases.
CSR commitments
Casino Group continued to roll out its CSR action plan in the first half of the year, aimed at:
Combating climate change
Promoting more responsible trade
A responsible employer
Supporting the most disadvantaged
APPENDICES – GROSS SALES
Gross sales under banner
APPENDICES – STORE NETWORK
Store network of continuing operations
BL : Business Lease
APPENDICES – UNDERLYING NET PROFIT
APPENDICES – ACCOUNTING INFORMATION
Consolidated income statement
Earnings (loss) per share
Consolidated statement of comprehensive income
(i) The change in the cash flow hedge reserve in first-half 2024 and first-half 2023 was not material.
(ii) The €6,440 million change in this item in first-half 2024 primarily results from the loss of control of GPA and Éxito, for €4,827m and €1,613m respectively, along with the impact corresponding to the reclassification of the translation reserve of €1,574m and €778m respectively. The positive €676m change in this item in first-half 2023 primarily resulted from the appreciation of the Brazilian and Colombian currencies (representing €145m and €126m, respectively), and the reclassification to profit (loss) of €453m after control of Sendas was relinquished.
Consolidated statement of financial position
Consolidated statement of cash flows
APPENDICES – GLOSSARY
Same-store growth
Same-store net sales include e-commerce sales and sales of merchandise excluding fuel from stores open for at least 12 months. The figure is calculated at constant exchange rates excluding calendar effects.
Gross merchandise volume
Total gross sales corresponds to the total net sales generated by each banner from integrated stores and franchises.
Adjusted EBITDA
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) is defined as trading profit plus recurring depreciation and amortisation expense.
Adjusted EBITDA after lease payments
Adjusted EBITDA after lease payments is defined as adjusted EBITDA less lease payments (including “onerous” lease payments previously shown on the “Other repayments” line of the cash flow statement).
Trading profit (EBIT)
Trading profit (EBIT) is defined as operating profit before (i) items which, by definition, are not included in an assessment of a business unit's recurring operating performance, such as gains and losses on disposals of non-current assets, impairment losses on non-current assets, and income/expenses related to changes in the scope of consolidation and (ii) non-recurring items that would distort analyses of the Group's recurring profitability, (they are defined as significant items of income and expense that are limited in number, unusual or abnormal, whose occurrence is rare. Examples include restructuring costs and provisions and expenses for litigation and risks).
Free cash flow before financial expenses
Free cash flow before financial expenses corresponds to cash flow from operating activities as presented in the consolidated statement of cash flows, less net capex, IFRS 16 rental payments and restated for the effects of the disposal plan and restructuring and conciliation costs in 2023.
Net debt
Net debt corresponds to gross borrowings and debt including derivatives designed as fair value hedge (liabilities) and trade payables - structured programme, less (i) cash and cash equivalents, (ii) financial assets held for cash management purposes and as short-term investments, (iii) derivatives designated as fair value hedge (assets), and (iv) financial assets arising from a significant disposal of non-current assets.
Covenant
The covenant is defined as the ratio between 'covenant net debt' and 'covenant adjusted EBITDA'. The scope of the covenant test corresponds to the Group adjusted for Quatrim and, to a lesser extent, the subsidiaries Mayland in Poland and Wilkes in Brazil.
Covenant adjusted EBITDA
“Covenant adjusted EBITDA” or pro forma EBITDA (depending on the documentation) corresponds to adjusted EBITDA after lease payments, relating to the covenant scope, excluding any impact of scope effects and pro forma restatements corresponding to future savings/synergies to be achieved within 18 months.
Covenant net debt
“Covenant net debt” corresponds to gross debt relating to the covenant perimeter (including borrowings from other Group companies by covenant companies), (i) plus financial liabilities which are, in essence, debts, (ii) adjusted for the average drawdown on the Group's revolving credit lines over the last 12 months (from the date of restructuring) and (iii) reduced by cash and cash equivalents of the entities in the covenant perimeter and by non-deconsolidating receivables relating to operating financing programmes reinstated as part of the restructuring.
Underlying net profit/(loss)
Underlying net profit corresponds to net profit from continuing operations, adjusted for (i) the impact of other operating income and expenses, as defined in the "Significant accounting policies" section in the notes to the consolidated financial statements, (ii) the impact of non-recurring financial items, as well as (iii) income tax expense/benefits related to these adjustments, and (iv) the application of IFRIC 23. Underlying profit is a measure of the recurring profitability of the Group's continuing operations.
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Disclaimer
This press release was prepared solely for information purposes, and should not be construed as a solicitation or an offer to buy or sell securities or related financial instruments. Likewise, it does not provide and should not be treated as providing investment advice. It has no connection with the specific investment objectives, financial situation or needs of any receiver. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. Recipients should not consider it as a substitute for the exercise of their own judgement. All the opinions expressed herein are subject to change without notice.
1 Same-store growth – see definition on page 19 of the appendices
See definitions on page 19 of the appendices
3 See definition on page 19 of the appendices
4 A change in the allocation of net sales was carried out in Q1 2024, consisting of allocating all ExtenC net sales (including the Group's international activities previously presented in the “Other” segment) to the “Casino” and “Franprix” segments. This reallocation stems from a move to present net sales by brand (and no longer by format) in line with the Group's new operational management methods. Data for 2023 have been adjusted accordingly to facilitate comparisons
5 Gross merchandise value
6 Data published by Cdiscount
Change in GMV at 25 July 2024 compared with the prior-year period
8 See page 5
9 See definitions on page 19 of the appendices
10 Including +€18m and +€11m for Quatrim in H1 2023 and H1 2024 respectively
11 See definitions on page 19 of the appendices
12 Including +€14m and +€7m for Quatrim in H1 2023 and H1 2024 respectively
13 Including +€11m and +€5m for Quatrim in H1 2023 and H1 2024 respectively
14 4-installment payment plan for customers
15 Underlying diluted earnings per share includes the dilutive effect of TSSDI deeply-subordinated bond distributions in 2023. In addition, in accordance with
IAS 33, the weighted average number of shares in issue used to calculate earnings per share for 2023 and 2024 has been adjusted to take into account the reverse stock split carried out in H1 2024
16 Before financial expenses - See definition on page 19 of the appendices
17 Net of other financial assets (mainly escrow accounts)
18 The €1,352m amount of the reinstated term loan takes into account the fair value impact determined at the instrument's initial recognition date (March 27, 2024), i.e. +€58m at June 30, 2024.
19 See definition on page 19 of the appendices
20 See definition on page 19 of the appendices
21Casino Finance, Distribution Casino France, Casino Participations France, Quatrim, Segisor and Monoprix.
22€313m of these deferred items were reimbursed (€80m) owing to a cash pledge set up by the Group in favour of URSSAF in H2 2023. Of the €233m, €153m relates to continuing operations
23Excluding restructuring costs directly attributable to Quatrim paid out of the Quatrim segregated account.
24Based on a USD/EUR exchange rate of 1.0905 at 24 January 2024 (ECB).
25Based on a BRL/EUR exchange rate of 0.1844 at 14 March 2024 (ECB).
26 Ten stores, for which the conditions precedent have not been met on time, will be sold on a deferred basis.
27This sale concerns the second group of stores mentioned in the press release of 26 May 2023, the first group of 61 outlets having been sold in full on 30 September 2023.
28 The sale of the remaining 51% controlling interest in a further 66 shops is scheduled for 30 September 2024
29 €45m net of costs
30 Distribution Casino France, Easydis, Casino Services, L'Immobilère Groupe Casino, Franprix Support, Monoprix and AMC
31International affiliate convenience stores include HM/SM affiliates abroad. Leader Price franchises in France are presented within discontinued operations.
32International affiliate convenience stores include HM/SM affiliates abroad. HM/SM stores in France are presented within discontinued operations.
33Other activities include 3C Cameroun.
34 See definition on page 19 of the appendices.
35 Corresponds to the fair value adjustments of converted debts, reinstated debts and share warrants.
36Previously published comparative information has been restated.
37 In accordance with IAS 33.64, earnings per share have been adjusted to take account of capital transactions.
38Previously published comparative information has been restated.
Attachment
2321 Rosecrans Avenue. Suite 2200
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