Casino, Guichard-perrachon Sa · EURONEXT:CO
Casino, Guichard-perrachon Sa — H1 2018 Earnings Presentation
65 slides from Casino, Guichard-perrachon Sa's earnings presentation, Jul 26, 2018
Slide 1: 2018 Half-Year Results
2018 HALF-YEAR RESULTS 26 2018July 2018RESULTS HALF-YEAR (updated • 26 on July32018 September 2018) 1
Slide 2: Contents
CONTENTS 1 Key figures and highlights – H1 2018 2 Business review by banner 3 Financial results 4 Outlook for H2 2018 Appendices 2018 HALF-YEAR RESULTS • 26 July 2018 2
Slide 3: Key figures and highlights – H1 2018
Key figures 1 and highlights – H1 2018 2018 HALF-YEAR RESULTS • 26 July 2018 3
Slide 4: Continuous growth acceleration throughout H1 2018
Continuous growth acceleration throughout H1 2018 Best semester for France Retail Return to strong growth in Latam activity since 2015 in Q2 2018 Same-store growth by quarter Same-store growth in Q1 and Q2 2018 +1.9% +1.8% +1.3% +4.4% +0.6% +0.2% +0.3% +1.9% Q2 2018 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q
Slide 5: H1 2018 Group key figures
H1 2018 Group key figures Change Organic In €m H1 2017* H1 2018 (in% and €m) change** Consolidated net sales 18,439 17,816 -3.4% +4.1% EBITDA 798 773 -3.2% +7.3% Trading profit 450 439 -2.4% +10.3% Trading profit excl. tax credits 320 339 +6.1% +17.3% Underlying net profit, Group share 37 48 +28.6%
Slide 6: First-half performances that support financial objectives for the year
First-half performances that support financial objectives for the year GROUP FRANCE 2018 H1 2018 2018 H1 2018 Guidance Actual Guidance Actual >10% +17% >10% +37% Trading profit Excluding Excluding tax €339m property €114m Organic growth credits development FCF excluding Free cash >€1bn exceptional i
Slide 7: Announcement of an asset disposal plan of €1.5bn in June 2018
Announcement of an asset disposal plan of €1.5bn in June 2018 In-store innovations and digitisation of customer Transformation relationship into a less capital-intensive Partnerships with leading e-commerce players model On-going expansion of the franchise model Process to dispose of €1.5bn of non-c
Slide 8: Progress on the disposal plan of €1.5bn
Progress on the disposal plan of €1.5bn The Group’s objective is to complete half of the €1.5bn asset disposal plan announced on 11 June 2018 this year Taking into account: the definitive disposal of 15% of Mercialys equity through an equity swap with a bank for €213m, the indicative offers re
Slide 9: Deployment of the Group's strategic priorities during the semester
Deployment of the Group’s strategic priorities during the semester 1 2 3 Expansion Strengthened New of the most leadership complementary buoyant formats in digital levers & and omni-channel of profitability Development activated during of new concepts the first half 2018 HALF-YEAR RESULTS • 26 July
Slide 10: Expansion of the most buoyant formats and development of new concepts
Expansion of the most buoyant formats and development of new concepts Key figures – H1 2018 Main accomplishments in H1 2018 PREMIUM +2.4%* growth at Monoprix New integrated and franchise stores opened +1.4%* growth New concepts created at Franprix & Naturalia at Franprix Numerous proximity ser
Slide 11: Strengthened leadership in digital and omni-channel
Strengthened leadership in digital and omni-channel Continuous Acceleration Strengthening of positions leadership in food in non-food e-commerce e-commerce in omni-channel and data Integration Website Partnership transformation Cdiscount corners roll-out Launch Baskets’ Launch International growth d
Slide 12: New complementary levers of profitability activated during the first half
New complementary levers of profitability activated during the first half 1 Purchasing agreements with “Horizon” next-generation France: national brands, Agreement announced in June 2018 purchasing platforms created general expenses, private Agreement for France labels signed in May 2018 in Fr
Slide 13: Excellent trading over the last four weeks in all formats
Excellent trading over the last four weeks in all formats (data as at 19/08/2018) Growth in net sales* Same-store** Monoprix + 2.8 % Franprix + 5.1 % Leader Price + 3.0 % Géant Hypermarkets + 4.4 % Casino Supermarkets + 1.2 % Convenience + 3.8 % France + 3.3 % * Current trading France (4 weeks as at
Slide 14: Business review by banner
2 Business review by banner 2018 HALF-YEAR RESULTS • 26 July 2018 14
Slide 15: Dynamic growth and numerous initiatives for the Group's premium banners in H1
Dynamic growth and numerous initiatives for the Group’s premium banners in H1 Strong growth Outperformance Faster growth in organic products of the Paris region in e-commerce +2.4%* and of Naturalia Organic Dynamic customer Double-digit growth Double-digit growth traffic lifted for e-commerce at Nat
Slide 16: Three new concepts unveiled at Franprix and Monoprix in H1 2018
Three new concepts unveiled at Franprix and Monoprix in H1 2018 Franprix Naturalia Origines New Franprix New Naturalia concept concept New offering of vegetables and bulk products Dedicated to alternative medicines Catering areas, ready to eat meals Team of specialists Freshly cut items di
Slide 17: Growth acceleration among the revitalised banners
Growth acceleration among the revitalised banners Excellent sales New Acceleration dynamic corners deployed in digital +2.9%* Organic Strong growth in food sales, Sharp increase Deployment market shares, in Cdiscount, Organic of Casino Max, and new franchisees and Homeware corners with a basket incr
Slide 18: New concepts in revitalised banners
New concepts in revitalised banners Géant Leader Price New Cdiscount New “Next” concept corners Over 600 different non-food items displayed Fully redesigned retail spaces: fishmonger, in a 300sq.m. dedicated showroom rotisserie, delicatessen, bakery, fine wines A further 300,000 items availabl
Slide 19: Cdiscount: main H1 2018 successes
Cdiscount: main H1 2018 successes 1 Fast growth in B2C offerings & services 2 Dynamic progression of the Marketplace 3 Improved customer experience and faster delivery Continuous expansion of customers that subscribed 4 to “Cdiscount à Volonté” 5 Acceleration of the omni-channel strategy 6 Sustained
Slide 20: Cdiscount: a good performance and market share gains
Cdiscount: a good performance and market share gains Growing contribution of Cdiscount €1,614m corners GMV in H1 2018 Sequential growth Positive impact of “French Days” acceleration +7.5%* Data monetisation revenues – Organic GMV a key driver of profitability – growth up by around 35% 34.4%
Slide 21: Ongoing expansion of cash & carry in Latam and strong recovery in Brazil in Q2
Ongoing expansion of cash & carry in Latam and strong recovery in Brazil in Q2 Sustained Continued Increased robust growth expansion loyalty +24.0%* Organic 200bp market share gain** 4 new stores Successful commercial in Q2, and increased in H1, with a total operations, +7.0%* customer traffic 20 pl
Slide 22: Financial results
3 Financial results 2018 HALF-YEAR RESULTS • 26 July 2018 22
Slide 23: Preliminary comments
Preliminary comments In the first half of 2018, the Casino Group adopted IFRS 15 – “Revenue from Contracts with Customers” with retrospective application to 2017 Adoption of IFRS 15 has mainly led to reclassifications between net sales, other income, overall cost of goods sold and selling expenses
Slide 24: H1 2018 Group key figures
H1 2018 Group key figures Organic In €m H1 2017* H1 2018 Change change** Consolidated net sales 18,439 17,816 -3.4% +4.1% EBITDA 798 773 -3.2% +7.3% EBITDA margin (%) 4.3% 4.3% +1bp +13bp Trading profit 450 439 -2.4% +10.3% Trading margin (%) 2.4% 2.5% +3bp +14bp Impact of tax credits 130 100 -23.1%
Slide 25: H1 2018 Group key figures
H1 2018 Group key figures Underlying profit Change In €m H1 2017* H1 2018 In% and €m Trading profit 450 439 -2.4% Net financial expense (246) (206) -16.0% Income tax (51) (62) +23.1% Share of profit of equity-accounted investees 5 11 nm Net profit from continuing operations 158 182 +14.9% Underlying
Slide 26: France Retail results – H1 2018
France Retail results – H1 2018 Var. In €m H1 2017* H1 2018 Var. organique** Consolidated net sales 9,208 9,310 +1.1% +1.3% EBITDA 281 307 +9.0% +7.3% EBITDA margin (%) 3.1% 3.3% +24bp +19bp Trading profit 110 136 +23.0% +17.3% Retail 78 114 +47.3% +37.4% Property development France 33 21 -34.4% -34
Slide 27: E-Commerce results – H1 2018
E-Commerce results – H1 2018 Organic In €m H1 2017* H1 2018 Change change** GMV*** 1,419 1,614 +13.7% +7.5% Consolidated net sales 835 876 +4.9% +4.8% EBITDA (12) (7) +43.8% +45.3% EBITDA margin (%) -1.4% -0.8% +67bp +69bp Trading profit / (loss) (24) (23) +6.3% +7.4% Trading margin (%) -2.9% -2.6%
Slide 28: Change in E-Commerce EBITDA in H1 2018
Change in E-Commerce EBITDA in H1 2018 E-Commerce EBITDA – E-Commerce EBITDA – H1 2018 vs. H1 2017 Q2 vs. Q1 In €m In €m 2017 H1 2017 H1 2018 +1.0% 2018 4.2 Q1 Q2 -6.7 -0.8% -5.5 -6.5 -12.0 -1.4% -1.4% -1.4% -10.9 -2.3% EBITDA margin EBITDA improved during H1 2018, reflecting optimised gross margi
Slide 29: Latam Retail results – H1 2018
Latam Retail results – H1 2018 Organic In €m H1 2017* H1 2018 Organic change** Consolidated net sales 8,397 7,630 -9.1% +7.3% EBITDA 529 473 -10.6% +6.1% EBITDA margin (%) 6.3% 6.2% -10bp -9bp Trading profit excl. tax credits 234 226 -3.2% +14.8% Trading margin excl. tax credits (%) 2.8% 3.0% +18bp
Slide 30: Underlying net financial result
Underlying net financial result In €m H1 2017 H1 2018 Change France Retail (65) (72) -10.7% E-commerce (18) (20) -14.3% Latam Retail (163) (114) +29.9% O/w Éxito (excluding GPA Food) (65) (56) +13.0% O/w Brazil (98) (58) +41.1% Total (246) (206) +16.0% Underlying net financial result improved by €
Slide 31: H1 2018 other operating income and expenses – Group and France
H1 2018 other operating income and expenses – Group and France In €m H1 2017* H1 2018 % change Other operating income and expenses – (274) (136) -50.2% Group O/w restructuring costs (124) (96) -22.1% Other operating income and expenses – (169) (75) -55.4% France O/w restructuring costs (90) (49) -45
Slide 32: Group free cash flow from continuing operations, 12 months ended 30 June 2018
Group free cash flow from continuing operations, 12 months ended 30 June 2018 12 months ended 30 June 2018 In €m Group Cash flow from continuing operations 1,611 O/w exceptional items (259) Change in working capital 682 Income tax (182) Net cash from operating activities 2,112 Net CAPEX (797) Free c
Slide 33: Change in Group net debt, 12 months ended 30 June 2018
Change in Group net debt, 12 months ended 30 June 2018 In €m Discontinued Continuing operations operations (5,594) 1,573 (232) (82) (5,445) 209 (154) (59) 191 (5,236) (376) (453) (259) FCF of €486m after dividends and financial expenses Net debt at Free cash flow Exceptional Dividends and Net intere
Slide 34: Free cash flow from operations in France, 12 months ended 30 June 2018
Free cash flow from operations in France, 12 months ended 30 June 2018 12 months ended 30 June 2018 In €m France Cash flow from continuing operations 628 O/w exceptional items (203) Changes in working capital 597 Income tax (29) Cash from operating activities 1,196 Net CAPEX (236) Free cash flow fro
Slide 35: Free cash flow and change in net financial debt France, first semester
Free cash flow and change in net financial debt France, first semester €m H1 2017 H1 2018 Change Cash flow from continuing operations 129 175 +47 O/w exceptional items (119) (91) +28 Change in working capital (628) 69 +697 Income tax (51) (37) +14 Net cash from operating activities (550) 208 +758 In
Slide 36: Free cash flow and change in net financial debt France, 12 months
Free cash flow and change in net financial debt France, 12 months ended 30 june 2018 H1 2018 €m FY 2017 Changes (12 months) Cash flow from continuing operations 580 628 +48 O/w exceptional items (231) (203) +28 Changes in working capital (100) 597 +696 Income tax (43) (29) +14 Net cash from operatin
Slide 37: €400m capital reduction of the holding company that controls Brazil
€400m capital reduction of the holding company that controls Brazil, enabling deleveraging of Colombia and France Debt at the Segisor holding company, which is financing the capital reduction, comprises a medium-term loan that will be repaid by future dividends from GPA Taking into account the v
Slide 38: Change in net debt by entity, 12 months ended 30 June 2018
Change in net debt by entity, 12 months ended 30 June 2018 Impact of the Change Segisor capital In €m 30 June 2017 over the period reduction 30 June 2018 France Retail (4,314) +95 +200 (4,019) E-commerce (214) -55 0 (269) Latam Retail (1,706) +187 -200 (1,719) O/w GPA (722) +194 0 (528) O/w Éxito (9
Slide 39: Improved financial profile in France
Improved financial profile in France Maturities of bond debt at 30 June 2018: €5.8bn* In €m 750 200 Tap issue - Jan. 2018 850 900 694 748 527 550 450 514 Bonds 355 2018 2019 2020 2021 2022 2023 2024 2025 2026 Bond buybacks to take advantage of favourable market conditions: €27m worth of 2019, 20
Slide 40: High liquidity position maintained in France
High liquidity position maintained in France Upcoming debt maturities are easily €5.5bn* liquidity position at 30 June 2018 covered by the €5.5bn liquidity position In €m at 30 June 2018: The Group had cash and cash equivalents of €2.1bn in France as of end June 3,313 2,141 €3.3bn in confirmed
Slide 41: Outlook for H2 2018
4 Outlook for H2 2018 2018 HALF-YEAR RESULTS • 26 July 2018 41
Slide 42: Financial outlook for the Group in 2018
Financial outlook for the Group in 2018 The Group confirms its 2018 objectives, and updates them following the asset disposal plan announced in June 2018: For trading profit: In France, it targets in food retail an organic* growth above10% of trading profit excluding property development, led by
Slide 43: Appendices
5 Appendices 2018 HALF-YEAR RESULTS • 26 July 2018 43
Slide 44: Simplified consolidated income statement
Simplified consolidated income statement In €m H1 2017* H1 2018 Net sales 18,439 17,816 Operating profit 176 303 Net finance costs (192) (158) Other financial income and expenses (35) (91) Net profit (loss) from continuing operations (16) 42 O/w Group share (88) (67) Consolidated net profit (loss) (
Slide 45: Reconciliation of reported net profit to underlying net profit
Reconciliation of reported net profit to underlying net profit Restated H1 2017* Restated H1 2018 In €m H1 2017* items underlying H1 2018 items underlying Trading profit 450 0 450 439 0 439 Other operating income (274) 274 0 (136) 136 0 and expenses Operating profit 176 274 450 303 136 439 Net finan
Slide 46: Underlying net profit and EPS
Underlying net profit and EPS H1 2017* H1 2018 Weighted average number of ordinary shares before dilution 110,852,275 108,892,169 Underlying net profit, Group share (in €m) 37 48 Dividends payable on perpetual deeply subordinated bonds (43) (42) (TSSDI) (in €m) Underlying net profit, Group share, at
Slide 47: Underlying minority interests
Underlying minority interests H1 2017 H1 2018 France Retail 2 4 E-commerce (11) (10) Latam Retail 130 141 O/w Éxito (excl. GPA Food) 15 20 O/w GPA Food 115 121 Total 122 135 NB: Underlying minority interests represent the share of underlying net profit attributable to non-controlling interests. This
Slide 48: Share of profit of equity-accounted investees
Share of profit of equity-accounted investees H1 2017 H1 2018 France Retail (0) (4) Latam Retail 5 15 Total 5 11 2018 HALF-YEAR RESULTS • 26 July 2018 48
Slide 49: Franchise partnerships with Casino minority stakes
Franchise partnerships with Casino minority stakes Casino has a number of franchisees in its smaller formats of which some are independent franchisees and other are master franchisees, who are long term business partners, contributing to operational performance and commercial innovation. Since 2
Slide 50: Accounting treatment of operations with franchisees
Accounting treatment of operations with franchisees JV Losses are financed by both Casino and the franchisees in line with their respective share (49%/51%) The impact of losses is fully reflected in Casino Group accounts In the P&L, losses are consolidated through the equity method: 49% of the
Slide 51: CD Supply Innovation (CDSI) – Operations
CD Supply Innovation (CDSI) – Operations CDSI : Operations Casino/Dia International alliance In November 2015, Casino and Dia formed a strategic international alliance covering purchasing and services, resulting in the creation of ICDC Services joint venture. The purpose of the partnership is to i
Slide 52: CD Supply Innovation (CDSI) – Financial structure and impacts
CD Supply Innovation (CDSI) – Financial structure and impacts CDSI : Financial structure The JV has contracted a credit line as a facility of €130m in December 2017, maturing in June 18. In June 2018, this credit line has been reduced to €100m and extended for one year (maturity June 19). It is am
Slide 53: Additional information following questions raised in recent meeting with investors
Additional information following questions raised in recent meeting with investors Cash position of France perimeter: breakdown by entity The scope of France includes Casino Guichard Perrachon (CGP), parent company, French businesses and wholly-owned holding companies The level cash & cash equ
Slide 54: Additional information following questions raised in recent meeting with investors
Additional information following questions raised in recent meeting with investors France – Cash in foreign currencies CGP manages some of its cash in Group operating currencies (notably BRL) and in USD Cash deposits in foreign currencies are done through 100% financial entities owned by CGP,
Slide 55: Additional information following questions raised in recent meeting with investors
Additional information following questions raised in recent meeting with investors Was the H1 2018 working capital improved by the selling of Géant non-food inventories to Cdiscount? As part of our omnicanal strategy, the handling of some non-food categories (mainly Electro) was transferred from G
Slide 56: Additional information following questions raised in recent meeting with investors
Additional information following questions raised in recent meeting with investors Are the good sales performance in July due to a non-recurring event (World Cup)? Our excellent performances in all banners persisted throughout the summer season, as shown by 4s and 8s numbers at end of August. They
Slide 57: Cash-flow statement Group, continuing operations, first semester
Cash-flow statement Group, continuing operations, first semester H1 2017 H1 2018 Net debt at 1 January (3,367) (4,126) Cash flow from continuing operations 582 635 o/w exceptional items (141) (133) Change in working capital (1,871) (867) Income tax (40) (107) Cash from operating activities (1,329) (
Slide 58: Cash-flow statement France, first semester
Cash-flow statement France, first semester H1 2017 H1 2018 Net debt at 1 January (3,200) (3,715) Cash flow from continuing operations 129 175 o/w exceptional items (119) (91) Change in working capital (628) 69 Income tax (51) (37) Cash from operating activities (550) 208 Capital expenditure (352) (2
Slide 59: Change in net debt in France, 12 months ended 30 June 2018
Change in net debt in France, 12 months ended 30 June 2018 In €m (4,314) 1,162 (130) 200 (184) (4,019) (154) (78) 64 (382) (203) FCF of €500m after dividends and financial expenses Net debt Free cash flow Exceptional items Dividends Net interest Share buybacks Other net Cash transfer - Assets held f
Slide 60: H1 CAPEX
H1 CAPEX H1 2017 H1 2018 Gross Net Gross Net In €m CAPEX Sale CAPEX CAPEX Sale CAPEX France (352) 146 (206) (274) 216 (57) O/w Property CAPEX (104) 55 (49) (11) 152 141 O/w Retail CAPEX (248) 91 (157) (263) 65 (198) E-commerce (22) 0 (21) (34) 6 (28) Latam Retail (251) 27 (224) (221) 1 (220) Total (
Slide 61: Simplified consolidated balance sheet
Simplified consolidated balance sheet In €m H1 2018 Goodwill 8,819 Intangible assets, property, plant and equipment, and investment property 10,017 Investments in associates and joint ventures 581 Other non-current assets 1,389 Deferred tax assets 631 Inventories 3,885 Trade and other receivables 2,
Slide 62: Derivative financial instruments included in other liabilities
Derivative financial instruments included in other liabilities % Maturity Interest FV at FV at In €m capital date rate Notional 30/06/2017 30/06/2018 February Libor 3M GPA forward 2.2% 2020 209 (109) (105) +2.04% E3M GPA TRS 2.9% June 2020 332 (200) (193) +1.99% Total (308) (298) These derivative
Slide 63: Puts included in the balance sheet
Puts included in the balance sheet % Value Value Exercise In €m capital at 30/06/2017 at 30/06/2018 period Franprix – Majority-held Several dates 52 51 Leader Price franchised stores Several dates Monoprix 1 3 2022 Distribution Casino April 2023 0 19 France to June 2023 Any time Uruguay (Disco) 1
Slide 64: Off-balance sheet puts
Off-balance sheet puts % Value Value Exercise In €m capital at 30/06/2017 at 30/06/2018 period Franprix – Minority-held 3 1 Several dates Leader Price franchised stores Several dates Monoprix 0 14 2022 Total 3 15 (off-balance sheet) 6 4 2018 HALF-YEAR RESULTS • 26 July 2018 64
Slide 65: 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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