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Casino, Guichard-perrachon Sa — H1 2010 Earnings Presentation

59 slides from Casino, Guichard-perrachon Sa's earnings presentation, Jul 29, 2010

  1. Slide 1: First-Half 2010 Results

    First-Half 2010 29 July 2010 RESULTS FIRST-HALF 2010 RESULTS 1

  2. Slide 2: Preliminary Notes

    PRELIMINARY NOTES  The financial statements for the six months ended 30 June 2010 prepared by the Board of Directors on 28 July 2010 have been reviewed by the auditors  Super de Boer assets were sold at the end of 2009. 2009 data are restated accordingly  All of the figures in this presentation c

  3. Slide 3: First-Half 2010 Key Figures

    FIRST-HALF 2010 KEY FIGURES % Change vs. H1 2009 Consolidated net sales €13,589m +7.1% +8.2% EBITDA €868m +4.4% bef. CVAE reclassification* EBITDA margin 6.4% vs. 6.3% in H1 2009 +12.0% Trading profit €541m +5.7% bef. CVAE reclassification* Trading margin 4.0% vs. 3.8% in H1 2009 vs. €229m in H1 200

  4. Slide 4: First-Half 2010 Highlights

    FIRST-HALF 2010 HIGHLIGHTS  Sales growth gaining momentum ► Sales (excluding petrol) rose 2.9% on an organic basis in the second quarter after a 2.6% gain in the first and a 0.1% decline in 2009 ► Strong 7.1% reported growth over the first half, lifted by the steep currency gains against the euro 

  5. Slide 5: Second-Quarter Performance

    Second-Quarter Performance Results Outlook & Conclusion Appendices FIRST-HALF 2010 RESULTS 5

  6. Slide 6: Second Quarter Sales Up a Strong 8.5%

    SECOND QUARTER SALES UP A STRONG 8.5% in € millions Analysis of Growth in Sales Growth in Sales Change Currency Organic in scope effect growth Organic (excluding petrol) +8.5% +8.5% +3.8% Reported +5.7% +5.6% -0.9% +2.6% +2.9% 6,431 6,980 -0.1% -1.2% 2009 Q1 2010 Q2 2010 Q2 2009 Q2 2010  Favourable

  7. Slide 7: In France, Sales Trend Improved in the Second Quarter

    IN FRANCE, SALES TREND IMPROVED IN THE SECOND QUARTER Organic Growth Organic Growth by Format (excluding petrol) (excluding petrol) Q2 2010 vs. Q2 2009 Cdiscount +0.2% 2009 +11.9% Autres Q1 2010 Monoprix +7.2% FP/LP Q2 2010 +4.1% Casino SM +3.2% +0.5% -0.9% -1.7% Superettes -5.3% -2.7% Géant Casino

  8. Slide 8: Fast Recovery in Same-Store Sales at Leader Price

    FAST RECOVERY IN SAME-STORE SALES AT LEADER PRICE  Increased footfalls and significant improvement Same-Store Sales in the average basket in the second quarter Q1 Q2  Sales revitalisation initiatives deployed since -1.4% the beginning of the year have been successful: ► Substantial price repositio

  9. Slide 9: Sustained Growth in Franprix Sales

    SUSTAINED GROWTH IN FRANPRIX SALES Same-Store Sales  Same-store sales up 2.0% in the second quarter ► Footfalls and average basket up, attesting to the banner’s 2.0% attractiveness 0.6% Q1 Q2  Sustained deployment of the new concept ► Double-digit growth at renovated stores ► Integrated store base

  10. Slide 10: Satisfactory Performance by the Convenience Formats

    SATISFACTORY PERFORMANCE BY THE CONVENIENCE FORMATS  Monoprix total sales up 4.1% in the second quarter ► Continued satisfactory same-store sales performance: up 1.9% (excluding petrol) ► Market share gains in food; good performance in non-food despite a later start to the summer sales season ► Sus

  11. Slide 11: Géant Casino: Continued Deployment of the Action Plans

    GÉANT CASINO: CONTINUED DEPLOYMENT OF THE ACTION PLANS  Same-store sales (excluding petrol) down 6.9% in the second quarter  In food, gradual reinvestment (from March to June) of purchasing gains ► Tangible improvement in IRI price indices at 30 June (down 3 pts overall, and 2.4 pts in national br

  12. Slide 12: Solid Performance by the Retail-Related Businesses

    SOLID PERFORMANCE BY THE RETAIL-RELATED BUSINESSES Cdiscount  Sustained growth in sales, up 11.9%*  Very good performance in large appliances, small appliances and home electronics  Success of the package pick-up option (around 80 pick-up counters in Géant Casino stores)  Development of the Supe

  13. Slide 13: Strong Growth in International Sales

    STRONG GROWTH IN INTERNATIONAL SALES Growth in International Sales Organic Growth in International Sales Organic +23.6% 11.7% Reported 11.2% 10.0% 9.8% +16.4% +10.6% 4.9% +9.0% Q1 2010 Q2 2010 2006 2007 2008 2009 H1 2010  Sharp gains in currencies against the euro  Faster organic growth in the fir

  14. Slide 14: Strong Momentum in the Two Priority Regions

    STRONG MOMENTUM IN THE TWO PRIORITY REGIONS South America Asia Growth in sales Growth in sales Same store Same store Organic Organic +13.3% +10.5% +10.9% +7.3% +9.1% +5.3% +5.4% +4.6% Q1 2010 Q2 2010 Q1 2010 Q2 2010  Robust same-store sales in South America ► Strong 11.3% growth in GPA sales*, led

  15. Slide 15: Results

    Second-Quarter Performance Results Outlook & Conclusion Appendices FIRST-HALF 2010 RESULTS 15

  16. Slide 16: Preliminary Notes

    PRELIMINARY NOTES  To align data more closely with the Group’s organisation, the Group has changed its segment information in France, which is now presented according to three operating segments: ► Franprix-Leader Price ► Monoprix ► Casino France, which primarily includes Casino’s historical operat

  17. Slide 17: Growth in the Main Indicators

    GROWTH IN THE MAIN INDICATORS Continuing operations Change Change in € millions H1 2009 H1 2010 (reported) (organic) Total trading volume* 17,052 19,699 +15.5% Net sales 12,688 13,589 +7.1% +3.7% Sales margin 3,285 3,445 +4.8% As a % of net sales 25.9% 25.3% -55 bp EBITDA** 802 868 +8.2% +0.4% EBITD

  18. Slide 18: Trading Profit Up 5.7% (Before CVAE Reclassification)

    TRADING PROFIT UP 5.7% (BEFORE CVAE RECLASSIFICATION) in € millions Analysis of Growth in Trading Profit Change Currency Organic CVAE in scope effect growth +12.0% +4.9% +1.5% +6.3% -0.8% 541 483 H1 2009 H1 2010  Reclassifying the CVAE tax under “Income tax” added €31 million* to trading profit  C

  19. Slide 19: Increase in Trading Profit Contribution from International Operations

    INCREASE IN THE TRADING PROFIT CONTRIBUTION FROM INTERNATIONAL OPERATIONS Trading Profit – €m Reported Organic 541 change change 483 194 +34.5% +18.6% International 145 France 338 347 +2.4% -5.5% H1 2009 H1 2010  Strong growth in trading profit from International operations ► Lifted by robust organ

  20. Slide 20: France: Trading Margin Declined on Organic Basis

    FRANCE: TRADING MARGIN DECLINED ON AN ORGANIC BASIS DUE TO SALES REVITALISATION PLANS Trading profit Change in margin (in € millions) H1 2009 Margin H1 2010 Margin (organic) Franprix / Leader Price 132 6.5% 116 5.7% -98 bp Monoprix 59 6.5% 68 7.2% +32 bp Casino France 148 2.6% 163 2.9% -9 bp FRANCE

  21. Slide 21: International Operations: Improved Trading Margin

    INTERNATIONAL OPERATIONS: IMPROVED TRADING MARGIN Trading profit Change in margin (in € millions) H1 2009 Margin H1 2010 Margin (organic) South America 94 3.2% 132 3.7% +25 bp Asia 43 4.9% 55 5.7% +73 bp Other regions 8 n/a 8 n/a n/a INTERNATIONAL 145 3.5% 194 3.9% +30 bp  Improved margin in South

  22. Slide 22: Underlying Attributable Net Profit Up 10.5%

    UNDERLYING ATTRIBUTABLE NET PROFIT UP 10.5% Continuing operations in € millions H1 2009 H1 2010 Change Trading profit 483 541 +12.0% Other operating income and expense 11 (56) Finance costs, net (165) (154) Other financial income and expense (3) (15) Profit before tax 326 316 -3.1% Income tax expens

  23. Slide 23: Change in Working Capital Requirement

    CHANGE IN WORKING CAPITAL REQUIREMENT in € millions XXX H1 2009 H1 2010 Change in  Less cash used by operations in “goods” WCR France  Negative impact of the later start (XX) to the summer sales season (584)  Less reduction in inventory in (716) International operations (electronics in Brazil) Ch

  24. Slide 24: Change in Net Debt Over the Past Six Months

    CHANGE IN NET DEBT OVER THE PAST SIX MONTHS in € millions Dividends Other paid CAPEX Change (255) in WCR (375) 583 (348) (5,368) (4,072) Cash flow (901) Net debt at Net debt at 31 Dec. 2009 30 June 2010 FIRST-HALF 2010 RESULTS 24

  25. Slide 25: A Stronger Balance Sheet

    A STRONGER BALANCE SHEET in € millions 30 June 2009 31 Dec. 2009 30 June 2010 Equity 7,146 7,919 8,326 Net debt 6,003 4,072 5,368 Of which minority shareholder puts 622 80 64 Net debt/equity 84% 51% 65% Net debt/EBITDA* 3.2x 2.2x 2.8x  Sharp increase in equity, reflecting currency gains  €635 mill

  26. Slide 26: Tangible Improvement in the Debt Profile

    TANGIBLE IMPROVEMENT IN THE DEBT PROFILE Bond Maturities(2) (€m) At 30 June 2010 Before and after the February and May 2010 exchanges Before exchange After exchange €1,912m 1,200 1,199 (3) €1,251m 888 719(3) 750 604 677 508 400 210(3) Cash and Confirmed lines 2010 2011 2012 2013 2014 2015 2016 2017

  27. Slide 27: Sustained Gains in Market Value of Listed Subsidiaries

    SUSTAINED GAINS IN THE MARKET VALUE OF LISTED SUBSIDIARIES Share price Market Casino’s Change since Net debt* at Contribution Listed at 27 July value %-owned share 1 Jan. 2010 30 June to Group’s companies 2010 (100%, €m) (€m) (€m) 2010 (€m) EV (€m) Mercialys €25.3 2,330 51.4% 1,197 44 8 1,205 GPA BR

  28. Slide 28: Outlook & Conclusion

    Second-Quarter Performance Results Outlook & Conclusion Appendices FIRST-HALF 2010 RESULTS 28

  29. Slide 29: France: Focus on Driving Faster Sales Growth

    FRANCE: FOCUS ON DRIVING FASTER SALES GROWTH In the first half  Return to sales growth ► Favourable business mix (convenience formats, Cdiscount) ► Upturn in Leader Price sales in the second quarter  Enhanced price competitiveness at Géant Casino and Leader Price ► Purchasing gains from pooling pr

  30. Slide 30: Ongoing Projects to Transform Géant Casino

    ONGOING PROJECTS TO TRANSFORM GÉANT CASINO  Differentiating with private label products ► Maintain the pace of innovation (Espresso capsules, health foods, organic lines) ► Introduction of a line of private-label financial products; in the future, develop Banque Casino’s business in partnership wit

  31. Slide 31: Leader Price: Strengthen the Sales Revitalisation Initiatives

    LEADER PRICE: STRENGTHEN THE SALES REVITALISATION INITIATIVES  Deploy the new store concept ► 31 stores renovated so far ► Objective: entire network renovated by end-2012  Broaden the range of Leader Price brand products ► 90 “innovative” products introduced in the second half (yogurts without thi

  32. Slide 32: International: Drive Faster Growth

    INTERNATIONAL: DRIVE FASTER GROWTH  Leadership positions in countries with high growth potential  Enhancing the banners’ shopper appeal by leveraging the Casino model’s strengths ► Private-labels ► Loyalty / dunnhumby ► Financial services ► E-commerce ► Retail property  Ambitious expansion strate

  33. Slide 33: Partnership Agreement Finalised Between GPA and Casas Bahia

    PARTNERSHIP AGREEMENT FINALISED BETWEEN GPA AND CASAS BAHIA  A major strategic milestone: ► Strengthening GPA’s leadership in Brazil ► Sales incl. VAT c.R$45bn (1) (€20bn), twice as much as in 2008  GPA: a leading food retailer… ► 14.8%(2) market share ► Multi-format/multi-banner portfolio aligned

  34. Slide 34: Operational Excellence Objectives Reaffirmed

    OPERATIONAL EXCELLENCE OBJECTIVES REAFFIRMED  More than €300 million in cost savings over 2009-2010 Cost Savings (in € millions) > 300 180 2009 2010  Inventories reduced by more than 3 days over 2009-2010 Inventory Turnover* (in days of COGS**) 42 -2.3 -1 day 39.7 minimum 2008 2009 2010 * Excludin

  35. Slide 35: Conclusion

    CONCLUSION  First-half results confirm the effective positioning of the Group’s asset portfolio  Casino confirms the objectives set at the beginning of 2010: ► In France, Casino intends to strengthen market share by improving the banners’ price competitiveness and stepping up expansion in the conv

  36. Slide 36: Appendices

    Second-Quarter Performance Results Outlook & Conclusion Appendices FIRST-HALF 2010 RESULTS 36

  37. Slide 37: Changes in Scope of Consolidation

    CHANGES IN SCOPE OF CONSOLIDATION  Consolidation of Ponto Frio by GPA since 1 July 2009  Deconsolidation of Venezuela as of 1 January 2010 FIRST-HALF 2010 RESULTS 37

  38. Slide 38: Simplified Consolidated Balance Sheet

    SIMPLIFIED CONSOLIDATED BALANCE SHEET In € million 30 June 2009 31 Dec. 2009 30 June 2010 Goodwill 6,399 6,447 6,733 Intangibles and property, plant & equipment 7,744 7,653 8,077 Investments in associates 115 177 198 Non-current financial assets 442 415 499 Non-current derivative instruments* 152 17

  39. Slide 39: Cash Flow Statement

    CASH FLOW STATEMENT In € million First-half 2009 First-half 2010 Net debt at beginning of period (4,851) (4,072) Cash flow 570 583 Change in working capital requirement (916) (901) Other* 167 122 Net cash flow from operating activities, after tax (179) (196) Capital expenditure (457) (348) Acquisiti

  40. Slide 40: Consolidated Net Profit

    CONSOLIDATED NET PROFIT In € million H1 2009 H1 2010 Net profit from continuing operations 258 222 Attributable to equity holders 229 173 Attributable to minority interests 29 48 Net profit from discontinued operations 3 (7) Attributable to equity holders 0 (7) Attributable to minority interests 3 0

  41. Slide 41: Definition of Underlying Profit

    DEFINITION OF UNDERLYING PROFIT  Underlying profit corresponds to net profit from continuing operations adjusted for the impact of other operating income and expense (as defined in the “Significant Accounting Policies” section of the notes to the annual consolidated financial statements), non-recur

  42. Slide 42: Reconciliation of Reported Profit to Underlying Profit

    RECONCILIATION OF REPORTED PROFIT TO UNDERLYING PROFIT H1 2009 Adjust- H1 2009 H1 2010 Adjust- H1 2010 In € million ments underlying ments underlying Trading profit 483 0 483 541 0 541 Other operating income and expense, net 11 (11) 0 (56) 56 0 Operating profit 494 (11) 483 485 56 541 Finance costs,

  43. Slide 43: Trading Profit: France

    TRADING PROFIT: FRANCE Change Change In € million H1 2009 H1 2010 (reported) (organic) Net sales 8,530 8,596 +0.8% +1.0% EBITDA 549 554 +0.9% -3.8% EBITDA margin 6.4% 6.4% +1 bp -30 bp Trading profit 338 347 +2.4% -5.5% Trading margin 4.0% 4.0% +7 bp -26 bp FIRST-HALF 2010 RESULTS 43

  44. Slide 44: Trading Profit: International

    TRADING PROFIT: INTERNATIONAL Change Change In € million H1 2009 H1 2010 (reported) (organic) Net sales 4,158 4,993 +20.1% +9.8% EBITDA 253 314 +24.1% +10.0% EBITDA margin 6.1% 6.3% +20 bp +1 bp Trading profit 145 194 +34.5% +18.6% Trading margin 3.5% 3.9% +42 bp +30 bp FIRST-HALF 2010 RESULTS 44

  45. Slide 45: Net Sales by Segment: France

    NET SALES BY SEGMENT: FRANCE Organic Organic Q2 Q2 % H1 H1 % In € million change change 2009 2010 change 2009 2010 change excl. petrol excl. petrol FP - LP 1,006 1,038 +3.2% +3.2% 2,018 2,015 -0.1% -0.1% Monoprix 451 470 +4.1% +4.1% 905 940 +3.8% +3.7% Casino France 2,864 2,863 0% -1.6% 5,607 5,641

  46. Slide 46: Same-Store Sales France

    SAME-STORE SALES FRANCE Q2 2010 H1 2010 Including Excluding Including Excluding petrol petrol petrol petrol Franprix +2.0% +2.0% +1.3% +1.3% Leader Price -1.4% -1.4% -6.1% -6.1% Géant Casino -3.4% -6.9% -2.5% -5.8% Casino supermarkets +2.0% -1.0% +1.8% -1.0% Monoprix +2.0% +1.9% +2.2% +2.1% FIRST-HA

  47. Slide 47: Net Sales by Segment: International

    NET SALES BY SEGMENT : INTERNATIONAL Q2 Q2 Change Change Currency Change In € million 2009 2010 reported in scope impact (organic) South America 1,468 1,878 +28.0% -3.9% +20.9% +10.9% Asia 443 521 +17.8% - +12.3% +5.4% Other segments 199 210 n.a. - - n.a. INTERNATIONAL 2,110 2,609 +23.6% -2.6% +17.2

  48. Slide 48: Same-Store Sales International

    SAME-STORE SALES INTERNATIONAL Q2 2010 H1 2010 Including Excluding Including Excluding petrol petrol petrol petrol South America +9.1% +9.4% +9.8% +10.0% Asia +4.6% +4.6% +5.0% +5.0% FIRST-HALF 2010 RESULTS 48

  49. Slide 49: Trading Profit

    TRADING PROFIT H1 2009 H1 2010 H1 2010 Change In € million CVAE (Organic) Adjusted* Casino France 148 163 142 -2.7% Franprix-Leader Price 132 116 111 -15.3% Monoprix 59 68 64 +8.9% FRANCE 338 347 317 -5.5% South America 94 132 132 +20.1% Asia 43 55 55 +22.1% Other regions 8 8 7 n/a INTERNATIONAL 145

  50. Slide 50: Other Operating Income and Expense

    OTHER OPERATING INCOME AND EXPENSE In € million H1 2010 Capital gains on asset disposals 15 Other operating income and expense (71) Asset impairments (net of reversals) (1) Provisions for restructuring (36) Provisions for litigation and contingencies (25) Other (9) TOTAL (56) FIRST-HALF 2010 RESULTS

  51. Slide 51: Finance Costs, Net

    FINANCE COSTS, NET In € million H1 2009 H1 2010 Income from cash and cash equivalents 15 16 Interest expense on borrowings after hedging* (173) (168) o/w France (115) (114) o/w International (58) (53) Fair value adjustments to indexed bonds** (3) 0 Interest expense on finance lease liabilities (4) (

  52. Slide 52: Other Financial Income and Expense

    OTHER FINANCIAL INCOME AND EXPENSE In € million H1 2009 H1 2010 Change in fair value of derivative instruments (5) (1) excl. hedging instruments* Exchange gains and losses excl. hedging instruments 4 (1) Discounting adjustments (6) (3) Other 5 (10) TOTAL (3) (15) * Fair value adjustments to interest

  53. Slide 53: Average Exchange Rates

    AVERAGE EXCHANGE RATES Q1 Q1 H1 H1 In € million Var. % Var. % 2009 2010 2009 2010 Argentina (ARS / EUR) 0.217 0.188 -13.3% 0.207 0.195 -5.8% Uruguay (UYP / EUR) 0.033 0.037 12.7% 0.032 0.038 20.1% Venezuela (VEF / EUR) 0.356 n/a n/a 0.349 n/a n/a Thaïland (THB / EUR) 0.022 0.022 1.0% 0.021 0.023 7.5

  54. Slide 54: Minority Interests

    MINORITY INTERESTS In € million H1 2009 H1 2010 Mercialys 18 25 FP/LP* (12) 1 Big C 11 13 Exito 5 10 Other 6 (1) TOTAL 29 48 * In the first-half 2009, this amount is stated after the adjustment of profit for the period from 29 April to 31 December 2008 initially allocated to minority interests in th

  55. Slide 55: Share of Profit of Associates

    SHARE OF PROFIT OF ASSOCIATES In € million H1 2009 H1 2010 FP/LP 3 4 Other 0 6 TOTAL 3 10 FIRST-HALF 2010 RESULTS 55

  56. Slide 56: Puts Included in Net Debt

    PUTS INCLUDED IN NET DEBT In €m Value at Value at Exercise Company % capital 31 Dec. 2009 30 June 2010 period Franprix Holding 95%  100% 18(1) 0 Franprix/ Leader Price Holding 75%  100% Leader Price Various Majority-owned franchise stores 50 50 dates At any Uruguay 12 14 time (Devoto)  2021 TOTAL

  57. Slide 57: Off-Balance Sheet Puts

    OFF-BALANCE SHEET PUTS in €m Value at Value at Exercise Company % capital 31 Dec. 2009 30 June 2010 period Monoprix(1) 50%  100% 1,200 1,200 2012-2028 Franprix Minority-owned franchise 194 200 Various dates Leader Price stores Uruguay At any time 49 59 (Disco)  2021 Sendas(2) 57.4%  100% 108 120

  58. Slide 58: Changes in Equity

    CHANGES IN EQUITY in €m TSSDI 720 dividends Other Distribution 214 7,916 (21) 8,326 (143) Profit for (363) 7,7031 919 the period Translation adjustment 7 037 31 Dec. 2009 30 June 2009 FIRST-HALF 2010 RESULTS 58

  59. Slide 59: Number of Stores

    NUMBER OF STORES France 31 Dec. 2009 30 June 2010 Géant Casino 122 124 Casino Supermarkets 390 396 Franprix 789 832 Monoprix 463 479 Leader Price 559 562 Superettes 6,751 6,745 Other 290 301 TOTAL FRANCE 9,364 9,439 International Argentina 49 22 Uruguay 53 53 Venezuela 41 0 Brazil 1,080 1,102 Thaila

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