Casino, Guichard-perrachon Sa · EURONEXT:CO
Casino, Guichard-perrachon Sa — H1 2019 Earnings Presentation
60 slides from Casino, Guichard-perrachon Sa's earnings presentation, Jul 25, 2019
Slide 1: 2019 Half-Year Results
2019 Half-Year Results 25 July 2019 2019 HALF-YEAR RESULT ▪ Thursday 25 July 2019 ▪ 1
Slide 2: Contents
Contents 1 Introduction 2 2019 Half-Year Results 3 Appendices 2019 HALF-YEAR RESULT ▪ Thursday 25 July 2019 ▪ 2
Slide 3: Introduction
Introduction 2019 HALF-YEAR RESULT ▪ Thursday 25 July 2019 ▪ 3
Slide 4: France: H1 2019 highlights
France: H1 2019 highlights ▪ Faster growth in France in Q2 2019 for all banners • France Retail: same-store growth in net sales of 0.7% year-on-year (vs. 0.0% in Q1 2019) and 2.5% over two years (vs. 1.3% in Q1 2019) • Cdiscount: organic growth in gross merchandise volume (“GMV”) of 13.0%* (vs. 9.2%
Slide 5: Good progress on disposal plans in H1 2019
Good progress on disposal plans in H1 2019 Disposal Sale of 26 stores’ real Disposal of R2C Sale of 32 stores’ real Disposal plan of estate assets (Fortress) estate assets (Apollo) of Vindémia non-strategic assets €392m €374m €219m* 2019 19/01 21/01 14/02 15/02 28/02 12/04 22/04 07/06 22/07 24/07 €1
Slide 6: Latin America: H1 2019 highlights
Latin America: H1 2019 highlights ▪ Sale of Via Varejo on 14 June 2019 for €615m by GPA ▪ Project to simplify the structure in Latin America • The Group launched, on 27 June 2019, a project to simplify its structure in Latin America, including the combination of all its activities in the region unde
Slide 7: Project to simplify the structure of the Casino Group in Latin America
Project to simplify the structure of the Casino Group in Latin America After implementation of the project, the Casino Group would directly hold 41.4% of GPA, which itself would control Éxito and its subsidiaries in Uruguay and Argentina. 1 All-cash tender offer launched by GPA for 100% of Éxito’s s
Slide 8: Progress of the strategic plan in France (1/5)
Progress of the strategic plan in France (1/5) Cost savings plan ▪ Cost savings plan of €200m by end-2020, of which €60m achieved in H1 2019 • Optimisation of (banner and corporate) head office expenses and store costs: saving of €29m • Better purchasing conditions for goods not for resale: saving o
Slide 9: Progress of the strategic plan in France (2/5)
Progress of the strategic plan in France (2/5) Rocade plan ▪ The Rocade plan of loss-making store closure and disposals launched end-2018 has been completed at more than half, generating a full-year gain in trading profit of €52m on the integrated stores perimeter ▪ For integrated stores • Disposal
Slide 10: Progress of the strategic plan in France (3/5)
Progress of the strategic plan in France (3/5) Rocade plan – Financial aspects ▪ For integrated stores • Full-year gain in trading profit of €52m: €6m in H1 2019, €19m in H2 2019. Full-year impact on net sales is around €500m for stores already sold or closed, partially offset in terms of gross sale
Slide 11: Progress of the strategic plan in France (4/5)
Progress of the strategic plan in France (4/5) Acceleration in buoyant formats growth ▪ Around 30 premium and convenience stores opened in H1 2019 ▪ Perspectives for H2 2019 • Development of synergies between Monoprix and Franprix urban banners • Plan to open 50 premium and convenience stores in H2
Slide 12: Progress of the strategic plan in France (5/5)
Progress of the strategic plan in France (5/5) GreenYellow ▪ Pipeline of solar projects of 350MWp at end-June 2019 (vs. 150MWp at end-2018) ▪ Perspectives H2 2019 • Objective of 450MWp at end-2019 • Further development of energy performance contracts • New ultra-fast charging solution for electric v
Slide 13: Overview of 2019 guidances
Overview of 2019 guidances ▪ France • + 10% growth in trading profit (excluding property development) • At least €2.5bn from the disposal plan by Q1 2020 and reduction in debt • €0.5bn in free cash flow* excluding disposal plan and Rocade plan ▪ Cdiscount • Strong improvement in EBITDA ▪ GPA • Assaí
Slide 14: Acceleration of the debt reduction plan
Acceleration of the debt reduction plan ▪ The Board of Directors will propose to the 2020 Annual General Meeting the non-payment of dividend in 2020 for the 2019 fiscal year and has decided not to pay a 2020 interim dividend for 2020 fiscal year • This would represent a total cash saving of around €
Slide 15: Half-Year Results
2019 Half-Year Results 2019 HALF-YEAR RESULT ▪ Thursday 25 July 2019 ▪ 15
Slide 16: Key figures for H1 2019
Key figures for H1 2019 In €m Reported Organic Excluding IFRS 16 H1 2018 H1 2019 change change Net sales 17,787 17,841 +0.3% +3.5%* EBITDA 772 663 -14.0% -8.6% Trading profit 437 347 -20.7% -12.1% Trading profit 337 347 +2.9% +12.9% excl. tax credits Underlying net profit, 46 (16) n.m. n.m. Group sh
Slide 17: Q2 2019 net sales – France Retail
Q2 2019 net sales – France Retail Q2 2019 Q1 2019 Net sales Same-store Same-store In €m Reported Organic Same-store change* over Same-store change* Excluding IFRS 16 Q2 2019 change change* change* 2 years change* over 2 years Monoprix 1,143 +1.3% +0.5% +0.2% +1.6% +0.0% +1.2% Supermarkets 790 -1.8%
Slide 18: Q2 2019 net sales – Total France
Q2 2019 net sales – Total France Q1 2019 In €m Q2 2019 Reported Organic Same-store Same-store Excluding IFRS 16 net sales Gross sales change change* change* change* France Retail 4,643 -1.2% -2.4% -1.8% +0.7% +0.0% Cdiscount 412 +11.4% +2.4% +0.0% +0.0% -1.0% Total France 5,055 +0.1% -2.1% -1.6% +0.
Slide 19: France Retail results – H1 2019
France Retail results – H1 2019 In €m Reported Organic Excluding IFRS 16 H1 2018 H1 2019 change change Consolidated net sales 9,310 9,044 -2.9% -1.6%* EBITDA 307 296 -3.6% +1.9% EBITDA margin (%) 3.3% 3.3% -2bps +17bps Trading profit 136 151 +11.3% +22.3% France trading margin (%) 1.5% 1.7% +21bps +
Slide 20: E-Commerce (Cdiscount) results – H1 2019
E-Commerce (Cdiscount) results – H1 2019 In €m Reported Organic Excluding IFRS 16 H1 2018 H1 2019 change change GMV* 1,614 1,752 +8.6% +11.0% Consolidated net sales 876 889 +1.5% -0.5% EBITDA (7) 2 n.m. n.m. EBITDA margin (%) -0.8% +0.2% +96bps +127bps Trading profit (loss) (23) (18) +19.5% +32.5% T
Slide 21: Latin America results – H1 2019
Latin America results – H1 2019 In €m Reported Organic Excluding IFRS 16 H1 2018 H1 2019 change change Consolidated net sales 7,601 7,908 +4.0% +10.1% o/w Grupo Éxito (excl. GPA) 2,038 1,988 -2.5% +4.7% o/w GPA 5,561 5,914 +6.4% +12.0% EBITDA excl. tax credits 372 366 -1.5% +4.2% EBITDA margin 4.9%
Slide 22: Underlying net financial expense – H1 2019
Underlying net financial expense – H1 2019 In €m Excluding IFRS 16 H1 2018 H1 2019 France Retail (72) (89) E-commerce (Cdiscount) (20) (20) Latam Retail (114) (104) o/w Grupo Éxito (excl. GPA Food) (56) (46) o/w Brazil (GPA food) (58) (59) Total (206) (213) ▪ Underlying net financial expense overall
Slide 23: Underlying net profit, Group share
Underlying net profit, Group share* In €m Change at constant Excluding IFRS 16 H1 2018 H1 2019 exch. rates Trading profit and share of profit 437 347 -18.2% of equity-accounted investees Financial expenses (206) (213) +6.6% Income taxes (63) (74) +20.9% Share of net profit of equity-accounted invest
Slide 24: Other operating income and expenses – H1 2019
Other operating income and expenses – H1 2019 Group and France Restructuring costs in France excl. Rocade France In €m ▪ Decline in restructuring costs (excluding Rocade) ▪ Asset impairment losses primarily relate to the disposal plan 115 Latam and E-commerce 93 90 79 49 55 ▪ Decline in other operat
Slide 25: Decrease in inventories and CAPEX, in line with objectives
Free cash flow: France – H1 2019 Decrease in inventories and CAPEX, in line with objectives CHANGE IN WORKING CAPITAL 69 ▪ Change in working capital in the first half is usually impacted by an average negative seasonality effect of -€350m -247 -315 Average: -€350m ▪ Inventory reduction plans proceed
Slide 26: Free cash flow: France – H1 2019
Free cash flow: France – H1 2019 Free cash flow France - 6 months In €m Change Excluding IFRS 16 H1 2018 H1 2019 YoY EBITDA 307 296 -11 Impact mainly related (-) other items (head office expenses, dividends on equity- to the property development (40) (73) -34 whose EBITDA includes €30m accounted inv
Slide 27: France net debt – H1 2019
France net debt – H1 2019 In €m Excluding IFRS 16 H1 2018 H1 2019 France net debt as of 1 January (3,715) (2,709) Free cash flow* + net proceeds from disposal and Rocade plans 150 133 Financial expenses (143) (143) Dividends paid to shareholders and holders of TSSDI deeply-subordinated (204) (218) b
Slide 28: Change in assets classified under IFRS 5 – France
Change in assets classified under IFRS 5 – France Group share of assets in France Disposals classified under IFRS 5* signed New assets but not In €m Decrease recognised completed Excluding IFRS 16 FY2018 in H1 2019 in H1 2019 H1 2019 at 30/06 Asset disposal plan 794 -407 +256 643** 652** Rocade plan
Slide 29: Change in net debt by entity
Change in net debt by entity In €m At At At Change Excluding IFRS 16 30/06/2018 31/12/2018 30/06/2019 YoY France Retail (4,019) (2,709) (2,901) +1,117 E-commerce (Cdiscount) (269) (199) (356) -87 Latam Retail (1,715) (1,056) (1,481) +234 o/w GPA (528) (224) (331) +197 o/w Grupo Éxito (789) (426) (73
Slide 30: Bond maturities
Bond maturities BOND MATURITIES AT 30/06/2019: €5.3bn In €m 850 900 675 744 720 497 444 508 06/08/19 09/03/20 26/05/21 13/06/22 25/01/23 07/03/24 07/02/25 05/08/26 Continuation of gross debt reduction with the bond redemption of €675m (6 August 2019) ▪ Reduction in bond debt of €1.2bn between 30 Jun
Slide 31: Good liquidity position maintained in France
Good liquidity position maintained in France ▪ In France, the Group has €4.4bn in liquidity, €4.4bn liquidity position at 30/06/2019 of which €1.7bn in cash and cash equivalents In €m and €2.7bn in confirmed undrawn credit lines ▪ Confirmed lines are available at any time (€150m had been drawn down
Slide 32: Change in cash & cash equivalents in France – 12 months
Change in cash & cash equivalents in France – 12 months 2,141 +797 1,665 (476) (414) (383) Cash & cash Reduction in bond Outstanding Cash flow including Dividends paid Cash & cash equivalents France debt commercial paper the disposal plan to shareholders and equivalents France 30/06/2018 net of draw
Slide 33: Conclusion
Conclusion ▪ The Group is fully focused on the execution of its strategic plan of debt reduction and simplification of structures ▪ The completion of the disposal plan and the absence of dividend payment in 2020 will enable the Group to accelerate its debt reduction with a net debt target for France
Slide 34: Appendices
Appendices 2019 HALF-YEAR RESULT ▪ Thursday 25 July 2019 ▪ 34
Slide 35: Preliminary comments
Preliminary comments ▪ IAS 29 on the treatment of hyperinflation in Argentina was applied for the closing of the financial statements at 30 June 2019. The H1 2018 figures for Argentina has been restated ▪ In light of the decision made in 2016 to sell Via Varejo, this business was classified as a dis
Slide 36: Impact of IFRS 16
Impact of IFRS 16 ▪ The Group has applied IFRS 16 effective from the beginning of the year. In H1 2019, application of IFRS 16 results in an increase of €463m in EBITDA and €90m to trading profit, and a decrease of €87m in consolidated net profit excluding Via Varejo For the majority of leases, IFRS
Slide 37: Balance sheet impact of applying IFRS 16
Balance sheet impact of applying IFRS 16 Balance sheet impacts (in €bn) Impact at 30 June 2018 Right of use Lease liability Equity* France 3.0 2.7 (0.1) E-commerce (Cdiscount) 0.2 0.2 0.0 Latin America 1.5 1.4 (0.1) Total 4.6 4.3 (0.2) Balance sheet impacts (in €bn) Impact at 31 December 2018 Right
Slide 38: P&L impacts of applying IFRS 16
P&L impacts of applying IFRS 16 P&L impacts (in €m) Other operating Interest income and expense on Profit before Consolidated Impact on H1 2018 EBITDA Depreciation Trading profit expenses lease liability taxes net profit* France 279 (251) 28 - (33) (4) (3) E-commerce 11 (9) 2 - (2) 0 0 (Cdiscount) L
Slide 39: Group P&L with IFRS 16 impact
Group P&L with IFRS 16 impact IFRS 16 H1 2018 IFRS 16 H1 2019 In €m H1 2018 impact Incl. IFRS 16 H1 2019 impact Incl. IFRS 16 Consolidated net sales 17,787 - 17,787 17,841 - 17,841 EBITDA 772 429 1,200 663 463 1,127 Trading profit 437 79 517 347 90 437 Other operating income (137) 1 (136) (308) (75)
Slide 40: Underlying net profit including IFRS 16 (continuing activities)
Underlying net profit including IFRS 16 (continuing activities) H1 2018 IFRS 16 H1 2018 H1 2019 IFRS 16 H1 2019 En M€ Underlying impact incl. IFRS 16 Underlying impact incl. IFRS 16 Trading profit 437 79 517 347 90 437 Other operating income and expenses 0 0 0 0 0 0 Operating profit 437 79 517 347 9
Slide 41: Change in net debt by entity including IFRS 16
Change in net debt by entity including IFRS 16 At At H1 2018 H1 2019 In €m 30/06/2018 30/06/2019 incl. IFRS 16 incl. IFRS 16 France Retail (4,019) (2,901) (4,009) (2,894) E-commerce (Cdiscount) (269) (356) (269) (356) Latam Retail (1,715) (1,481) (1,674) (1,448) o/w GPA (528) (331) (490) (301) o/w G
Slide 42: Reconciliation of reported net profit to underlying net profit
Reconciliation of reported net profit to underlying net profit (continuing activities) Adjust- H1 2018 Adjust- H1 2019 In €m H1 2018 ments underlying H1 2019 ments underlying Trading profit 437 0 437 347 0 347 Other operating income and expenses (137) 137 0 (308) 308 0 Operating profit 301 137 437 3
Slide 43: Underlying minority interests
Underlying minority interests In €m H1 2018 H1 2019 France Retail 4 2 Latam Retail 140 83 o/w Éxito (excl. GPA Food) 19 10 o/w GPA Food 121 73 E-commerce (Cdiscount) (10) (9) Total 133 76 NB: Excluding IFRS 16 2019 HALF-YEAR RESULT ▪ Thursday 25 July 2019 ▪ 43
Slide 44: Consolidated net profit, Group share
Consolidated net profit, Group share In €m H1 2018 H1 2019 Net profit (loss) before taxes 51 (127) Income tax (24) (47) Equity-accounted investees 11 (0) Net profit (loss) from continuing operations 39 (174) o/w Group share (68) (226) o/w attributable to minority interests 107 52 Net profit (loss) f
Slide 45: Share of profit of equity-accounted investees
Share of profit of equity-accounted investees In €m H1 2018 H1 2019 France Retail (4) (7) o/w Mercialys 17 18 o/w FP-LP (26) (26) o/w other 5 1 Latam Retail 15 7 Total 11 (0) 2019 HALF-YEAR RESULT ▪ Thursday 25 July 2019 ▪ 45
Slide 46: Group free cash flow: continuing operations H1 2019
Group free cash flow: continuing operations H1 2019 – 6 months Group free cash flow – 6 months In €m Excluding IFRS16 H1 2018 H1 2019 EBITDA 772 663 (-) other items (head office expenses, dividends on equity-accounted investees) (133) (159) (-) non-recurring items (11) (58) Cash flow from continuing
Slide 47: Group net debt H1 2019
Group net debt H1 2019 – 6 months In €m H1 2018 H1 2019 Group net debt as of 1 January (4,126) (3,421) Free cash flow* (649) (1,017) Financial expenses (297) (257) Dividends paid to shareholders and holders of TSSDI deeply-subordinated bonds (247) (274) Share buybacks and transactions with (135) (90
Slide 48: Breakdown of consolidated net debt at 30 June 2019
Breakdown of consolidated net debt at 30 June 2019 Cash and cash IFRS 5 IFRS 16 Net debt In €m Gross debt equivalents impact Net debt impact incl. IFRS 16 France Retail (5,549) 1,665 982 (2,901) 7 (2,894) Latam Retail (2,934) 1,436 17 (1,481) 33 (1,448) E-commerce (449) 94 0 (356) 0 (356) (Cdiscount
Slide 49: Retail/property CAPEX
Retail/property CAPEX H1 2018 H1 2019 Excluding disposal plan Gross Net Gross Net and Rocade plan (in €m) CAPEX Disposals CAPEX CAPEX Disposals CAPEX France (274) 216 (57) (199) 49 (150) o/w property CAPEX (11) 152 141 (7) 46 39 o/w retail CAPEX (263) 65 (198) (192) 2 (190) E-commerce (34) 6 (28) (3
Slide 50: Breakdown of cash in France by subsidiary
Breakdown of cash in France by subsidiary ▪ Cash position in France: breakdown by entity • The scope includes Casino, Guichard-Perrachon (CGP), the parent company, the French businesses and the wholly-owned holding companies • Within this scope, cash amounted to €1.7bn at 30 June 2019 (€2.1bn at 30
Slide 51: Balance sheet
Balance sheet 31/12/2018 30/06/2019 before IFRS 16 31/12/2018 before IFRS 16 30/06/2019 In €m IFRS 16 impact Incl. IFRS 16 IFRS 16 impact incl. IFRS 16 Goodwill 8,682 0 8,682 8,734 0 8,734 Property, plant and equipment, intangible assets and investment property 9,292 (832) 8,459 9,010 (784) 8,227 Ri
Slide 52: Derivative financial instruments included in other liabilities
Derivative financial instruments included in other liabilities % Maturity Interest Notional at FV at FV at In €m capital date rate 30/06/2019 30/06/2018 30/06/2019 February L3M Forward GPA 2.2% 210 (105) (80) 2020 +2.04% June E3M TRS GPA 2.9% 332 (193) (136) 2020 +1.99% Total 542 (298) (216) NB: val
Slide 53: Puts included in the balance sheet
Puts included in the balance sheet % Value at Value at Exercise In €m capital 30/06/2018 30/06/2019 period Majority-held Various dates Franprix-Leader Price 47 49 franchised stores Monoprix 3 2 Various dates Distribution Casino France 40% 20 18 2023 Cnova NCI puts 2 2 2022 Any time Uruguay (Disco) 1
Slide 54: Off-balance sheet puts
Off-balance sheet puts % Value at Value at Exercise In €m capital 30/06/2018 30/06/2019 period Minority-held Various dates Franprix-Leader Price 1 0 franchised stores Monoprix 14 14 Various dates Total 15 14 2019 HALF-YEAR RESULT ▪ Thursday 25 July 2019 ▪ 54
Slide 55: Main financial KPIs for France – Summary 2019-2021 perspectives
Main financial KPIs for France – Summary 2019-2021 perspectives Scope: France 2019-2021 ▪ EBITDA margin ▪ +0.2pt per year ▪ Trading margin* ▪ +0.2pt per year ▪ Growth in France trading profit* ▪ +10% per year ▪ Retail gross CAPEX ▪ <€350m per year ▪ Free cash flow** ▪ €0.5bn per year ▪ Net debt ▪ Le
Slide 56: Q2 2019 net sales – Group
Q2 2019 net sales – Group Gross sales Q1 2019 Net sales under banner Total net sales Organic Same-store Same-store net In €m Q2 2019 growth growth change* change* sales growth* France Retail 4,643 -1.2% -2.4% -1.8% +0.7% +0.0% Cdiscount 412 +11.4% +2.4% +0.0% +0.0% -1.0% Total France 5,055 +0.1% -2.
Slide 57: Q2 2019 gross sales under banner – France
Q2 2019 gross sales under banner – France Total estimated gross Food sales Change under banner (in €m, excl. fuel) Q2 2019 (excl. calendar effects) Monoprix 1,160 +0.2% Franprix 461 -2.3% Supermarkets 737 -1.9% Hypermarkets 863 +2.7% Convenience & Other 688 +0.9% o/w Convenience 400 +4.1% Leader Pri
Slide 58: France store network at 30 June 2019
France store network at 30 June 2019 FRANCE 31/12/2018 31/03/2019 30/06/2019 Géant Casino Hypermarkets 122 122 113 o/w French franchised affiliates 7 7 6 International affiliates 5 5 5 Casino Supermarkets 442 439 420 o/w French franchised affiliates 104 104 92 International franchised affiliates 19
Slide 59: International store network at 30 June 2019
International store network at 30 June 2019 International 31/12/2018 31/03/2019 30/06/2019 ARGENTINA 27 26 24 Libertad hypermarkets 15 15 15 Mini Libertad and Petit Libertad mini-supermarkets 12 11 9 URUGUAY 89 91 91 Géant hypermarkets 2 2 2 Disco supermarkets 29 29 29 Devoto supermarkets 24 24 24 D
Slide 60: Disclaimer
Disclaimer This presentation contains forward-looking information and statements about Casino. Forward-looking statements are statements that are not historical facts. These statements include financial forecasts and estimates and their underlying assumptions, statements regarding plans, objectives,
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