Casino, Guichard-perrachon Sa · EURONEXT:CO
Casino, Guichard-perrachon Sa — H1 2009 Earnings Presentation
61 slides from Casino, Guichard-perrachon Sa's earnings presentation, Aug 27, 2009
Slide 1: 2009 First-Half Results
2009 FIRST-HALF RESULTS * We’re right here 27 August 2009
Slide 2: Preliminary Notes
PRELIMINARY NOTES In the following presentation: First-half 2008 data have been restated in accordance with IFRS 8 – Operating Segments and IFRIC 13 Interpretation – Customer Loyalty Programmes, which have both been applied since 1 January 2009 All amounts concern continuing operations, unless o
Slide 3: First-Half 2009 Key Figures
FIRST-HALF 2009 KEY FIGURES % change vs. H1 2008 -2.6% Consolidated net sales €13,447m €13, 447m -1.0% organic* -5.0% EBITDA €819m €819m -2.0% organic* €488m vs. 6.2% in H1 2008 EBITDA margin 6.1% -6 bp organic* -9.1% Trading profit €488m 3.6% -6.4% organic* vs. 3.9% in H1 2008 Trading margin 3.6% €
Slide 4: Analysis of Reported Net Sales and Trading Profit
ANALYSIS OF REPORTED NET SALES AND TRADING PROFIT Reported net sales Reported trading profit Change Currency Organic Change Currency Organic in scope effect change* in scope effect change * -0.5% -1.1% -2.6% -1.0% -1.5% -1.2% €13,810 -6.4% -9.1% m €13,447 €538m m €488m H1 2008 H1 2009 H1 2008 H1 200
Slide 5: First-Half 2009 Highlights
FIRST-HALF 2009 HIGHLIGHTS Business held up well in the first half Organic growth of +1.3%, excluding petrol and calendar effect, led by: • Resilience of the convenience formats in France… • …and continued strong growth in international markets Steady profitability Rapid implementation of th
Slide 6: Outline: Business Performance
OUTLINE Business Performance Financial Results Strategy and Action Plans Appendices 2009 First-Half Results 6
Slide 7: Sustained growth led by international markets
SUSTAINED GROWTH IN THE FIRST HALF, LED BY CONTINUED STRONG MOMENTUM IN INTERNATIONAL MARKETS… Leadership positions Organic growth* in emerging markets Excluding petrol Market cap. Ranking among Excluding petrol and calendar effect at 25/08/09 retailers 5.2% 5.6% ~ $5.9bn #1 1.3% #1 0.4% ~$2.4bn -1.
Slide 8: Business and margins held up well in France
… WHILE BUSINESS AND MARGINS HELD UP WELL IN FRANCE Trading profit (in €m) H1 08 H1 09 538 Trading margin (%) 488 384 339 4.3% 3.9% 4.0% 3.6% 154 150 3.2% 3.0% Group France International Limited decline in trading profit in France of 11.8% (-9.8% organic*), reflecting A favourable format mix, wi
Slide 9: Marketing strategy, costs and capital employed all on target
MARKETING STRATEGY, COSTS AND CAPITAL EMPLOYED ALL ON TARGET France Targeted price cuts… Marketing Marketing …made possible by improved purchasing conditions strategy Optimised promotions management strategy International Continued deployment of an aggressive marketing strategy Cost-cu
Slide 10: A value-creating property business: Mercialys
A VALUE-CREATING PROPERTY BUSINESS: MERCIALYS First-half performance confirmed the strength of the Mercialys business model Sustained growth in rental income, up 13.2%*, of which 6.3%* organic 2009 targets raised: 15% increase in rental income and cash flow Key milestone achieved in the stra
Slide 11: Outline: France
OUTLINE Business Performance France International Financial Results Strategy and Action Plans Appendices 2009 First-Half Results 11
Slide 12: France: business held up well thanks to convenience formats
FRANCE: BUSINESS HELD UP WELL THANKS TO CONVENIENCE FORMATS Organic growth in net sales - H1 2009 vs. H1 2008 (excluding petrol) Cdiscount +14.9% Monoprix +0.3% -0.6% -1.1% -0.3% -2.4% -3.0% Casino FP/LP Other supermarkets Superettes businesses -8.2% France Géant Casino In a difficult economic env
Slide 13: EBITDA margin stable on an organic basis
EBITDA MARGIN STABLE ON AN ORGANIC BASIS Organic In € millions H1 08 H1 09 % change change* Net sales 9,008 8,530 -5.3% -4.2% EBITDA 589 550 -6.6% -4.2% EBITDA margin 6.5% 6.4% -9 bp +0 bp Trading profit 384 339 -11.8% -9.8% Trading margin 4.3% 4.0% -29 bp -24 bp EBITDA margin stable organically*
Slide 14: Géant Casino: stronger sales dynamics, reduced costs and inventory
GÉANT CASINO: STRONGER SALES DYNAMICS, REDUCED COSTS AND INVENTORY Same-store sales* Q1 09 Q2 09 Improved food sales momentum Total Food Non-food in the second quarter Stepped-up promotional activity -2.4% and targeted price cuts -4.2% Purchasing gains passed on in price cuts -8.6% ¬ -7.4% ¬ -
Slide 15: Convenience formats: a resilient operating model
CONVENIENCE FORMATS: A RESILIENT OPERATING MODEL Satisfactory performance by the convenience formats, with total sales* stable for the period Favourable contribution from Casino Supermarkets’ assertive expansion strategy Firm sales at Monoprix, which benefited from its differentiated positioni
Slide 16: Franprix-Leader Price: stable trading margin
FRANPRIX-LEADER PRICE: STABLE TRADING MARGIN Satisfactory sales performance at Franprix Stable same-store sales Store traffic held firm, demonstrating the banner’s robustness Success of the new concept 7.6% decline in same-store sales at Leader Price Dragged down by the fall in the avera
Slide 17: Cdiscount: still a very strong growth driver
CDISCOUNT: STILL A VERY STRONG GROWTH DRIVER Growth in net sales (in €m) 800 +14.9% ¬ 118 2002 2003 2004 2005 2006 2007 2008 H1 08 H1 09 Cdiscount continued to enjoy robust sales growth with another double-digit gain in the first half (14.9%), led by increased site traffic and a higher conversion
Slide 18: Outline: International
OUTLINE Business Performance France International Financial Results Strategy and Action Plans Appendices 2009 First-Half Results 18
Slide 19: International: growth in main indicators at constant exchange rates
GROWTH IN MAIN INDICATORS AT CONSTANT EXCHANGE RATES Organic In € millions H1 08 H1 09 % change change* Net sales 4,802 4,917 +2.4% +5.0% EBITDA 272 269 -1.4% +2.7% EBITDA margin 5.7% 5.5% -21 bp -12 bp Trading profit 154 150 -2.6% +1.9% Trading margin 3.2% 3.0% -16 bp -10 bp Unfavourable impact o
Slide 20: Sustained growth in South American and Asian markets
SUSTAINED GROWTH IN STRATEGIC SOUTH AMERICAN AND ASIAN MARKETS Organic* growth in net sales Reported trading profit (in €m) H1 09 vs. H1 08 and % organic* growth H1 08 +1.9%* H1 09 7.4% 6.2% +0.9%* 5.0% 154 150 99 93 +1.0%* +12.0%* 41 43 0.7% 14 14 International South Asia Other International South
Slide 21: Brazil: Grupo Pão de Açúcar outperformed the market
IN BRAZIL, GRUPO PAO DE AÇUCAR OUTPERFORMED THE MARKET AND CONTINUED TO EXPAND Strong sales momentum in the first half Total sales up 13.7%*, lifted by robust 11.8%* growth in same-store sales Good performance in both food and non-food segments Double-digit growth in EBITDA Sustained imple
Slide 22: Colombia: Exito preserved margins
IN COLOMBIA, EXITO PRESERVED MARGINS BY TAKING EFFECTIVE ACTION Sales declined by 2.5%* in the midst of a recession Competitive pricing policy maintained Private-label food and non-food offerings expanded Loyalty programme strengthened Banner portfolio further rationalised, with five store
Slide 23: Rapid expansion in Asia under the Big C banner
RAPID EXPANSION IN ASIA UNDER THE BIG C BANNER Thailand: resilience of the dual retailing & property management model Solid 3.9%* growth in net sales, driven by the sustained expansion strategy, with 12 hypermarkets opened in 2008 and 1 in first-half 2009 EBITDA margin stable at a high 9.5%*,
Slide 24: Strong operating performance drove stock prices higher
THE STRONG OPERATING PERFORMANCE DROVE STOCK PRICES SHARPLY HIGHER 170 +64.4% Exito 160 150 +48.8% GPA 140 +18.3% Big C 130 120 +20.7% MSCI 110 MSCI Emerging 100 Markets Index – Food & Staples Retailing 90 80 Jan Feb Mar Apr May Jun Jul Aug 09 09 09 09 09 09 09 09 Significant value created for Cas
Slide 25: Outline: Financial Results
OUTLINE Business Performance Financial Results Strategy and Action Plans Appendices 2009 First-Half Results 25
Slide 26: Moderate decline in EBITDA
MODERATE DECLINE IN EBITDA In € millions H1 08 H1 09 % change Total business volume, excl. VAT* 18,443 18,003 -2.4% Net sales 13,810 13,447 -2.6% Sales margin 3,418 3,364 -1.6% As a % of sales 24.7% 25.0% +26 bp EBITDA** 861 819 -5.0% EBITDA margin 6.2% 6.1% -15 bp Depreciation and amortisation 324
Slide 27: Stable attributable net profit, up 0.8%
STABLE ATTRIBUTABLE NET PROFIT, UP 0.8% In € millions H1 08 H1 09 % change Trading profit 538 488 -9.1% Other operating income and expense (15) 11 Finance costs, net (163) (167) Other financial income and expense 2 (4) Profit before tax 361 329 Income tax expense (89) (71) Share of profit of associa
Slide 28: Change in net debt over the past six months
CHANGE IN NET DEBT OVER THE PAST SIX MONTHS Of which: - Disposals 82 - Acquisitions (64) - Goodwill (33) In € millions (339) 16 Current (193) operating cash Capex (66) Other flow before tax (916) Dividends Tax paid Net interest paid paid (457) (6,003) 803 Change (4,851) in WCR Net debt Net debt at 3
Slide 29: Change in WCR impacted by LME Act
CHANGE IN WCR MAINLY IMPACTED BY THE NON-RECURRING IMPACT ON PAYABLES OF FRANCE’S LME ACT H1 08 H1 09 In € millions Change in WCR excluding ~ LME Act’s (366) impact Change Change in in goodsWCR goods WCR ~ LME (350) Act’s (594) impact (716) Change in accrued taxes, Change Change employee benefits in
Slide 30: Continued strict financial discipline
CONTINUED STRICT FINANCIAL DISCIPLINE 30 June 31 Dec. 30 June In € millions 2008 2008 2009 Equity 7,080 7,031 7,146 Net debt 5,868 4,851 6,003 o/w minority shareholders’ put options 663 626 622 Net debt/Equity 83% 69% 84% Net debt/EBITDA* 3.1X 2.5X 3.1X Debt ratios stable at 30 June 2009 compared
Slide 31: Stronger cash position
STRONGER CASH POSITION At 30 June 2009, the Group had €511m in cash and cash equivalents and more than €1.7bn in confirmed, undrawn and available lines of credit… Cash and cash equivalents €511m (net of overdrafts) Confirmed, undrawn and €1,721m available lines of credit (1) …before the June iss
Slide 32: Sharp increase in market value of listed subsidiaries
SHARP INCREASE IN THE MARKET VALUE OF LISTED SUBSIDIARIES Change Net debt Contribution Share price Market Listed % Group vs. at 30 June to Group at 25 August value subsidiaries interest share (M€) 3 March 2009* enterprise 2009 (100%, €m) 2009 (€m) (€m) value (€m) Mercialys €25.40 2,296 50.9% 1,169 4
Slide 33: Outline: Strategy and Action Plans
OUTLINE Business Performance Financial Results Strategy and Action Plans Appendices 2009 First-Half Results 33
Slide 34: The right business model
THE RIGHT BUSINESS MODEL… In France A structural decline in hypermarket footfalls… • Food: shift towards convenience and discount formats, which are more aligned with social and demographic trends in the customer base • Non-food: shift towards specialty and online retailers …putting downward p
Slide 35: Deployment of the action plans
…WHOSE EFFECTIVENESS WILL BE SIGNIFICANTLY STRENGTHENED THROUGH THE DEPLOYMENT OF THE ACTION PLANS The Group’s action plans will be pursued and stepped up, with three main objectives: Strengthen shopper appeal by: • Developing the private-label offering • Optimising the pricing strategy • Radica
Slide 36: Developing the private-label offering
DEVELOPING THE PRIVATE-LABEL OFFERING The Casino brand has been at the heart of the Group’s marketing strategy since 2005 Casino is now the leader in the private-label segment in France With a percentage of private label products in sales volume* that already exceeds 50%… … and is steadily g
Slide 37: Optimising the pricing strategy
OPTIMISING THE PRICING STRATEGY Optimally allocating marketing resources to: Create value for customers: acquiring and retaining Maximise the Group’s sales and margin By leveraging the expertise of our teams and using effective tools such as dunnhumby, Demandtec and internally developed algo
Slide 38: Transforming in-depth the hypermarket business model
TRANSFORMING IN-DEPTH THE HYPERMARKET BUSINESS MODEL Faster repositioning of the non-food offering Focusing on promising, profitable product families: Home, Leisure, Apparel Scaling back offering in declining, underperforming categories: Multimedia and Large Household Appliances Stepping up
Slide 39: Improving purchasing conditions
IMPROVING PURCHASING CONDITIONS Leveraging new team members and tools to facilitate implementation Pooling purchases for economies of scale Food: synergies between Casino and FP/LP in private-label and value-line products in France, value-line products internationally Non-food: synergies bet
Slide 40: Continuing to deploy operating efficiency improvement plans
CONTINUING TO DEPLOY OPERATING EFFICIENCY IMPROVEMENT PLANS The cost-cutting measures launched in first-half 2009 are delivering satisfying results… …and will gain momentum in 2010 In addition, new initiatives are underway to structurally improve efficiency, particularly in France Lean in-st
Slide 41: Reducing inventory
REDUCING INVENTORY Change in inventory 42.1 40.3 39.1 2,480 Goods inventory (in €m) Rotation (in days of COGS) 2,405 42,1 40,3 2,299 39,1 Jun-08 Dec-08 Jun-09 The Group confirms its objective to reduce inventory By 2 days by end-2009, helping to offset most of the LME Act’s impact on payment ter
Slide 42: Selectively committing capex
SELECTIVELY COMMITTING CAPEX Gross capex (€m) % of net sales 1,221 1,085 ~ 800 ~ 850 4.3% 4.3% 2007 2008 2009e 2010e Disciplined capex management Higher returns required Faster expansion in 2010 (measured in sq.m. and additional sales) In France, focus on the most promising formats Develop
Slide 43: Conclusion
CONCLUSION The Group’s 2009 first-half performance demonstrates the effectiveness of its business model and its ability to adapt to a more challenging environment The Group will step up implementation of action plans to strengthen its banners’ shopper appeal and effectively maintain margins Th
Slide 44: Appendices
OUTLINE Business Performance Financial Results Strategy and Action Plans Appendices 2009 First-Half Results 44
Slide 45: Changes in scope of consolidation and accounting method
CHANGES IN SCOPE OF CONSOLIDATION AND ACCOUNTING METHOD Two franchisees in the Franprix-Leader Price subgroup deconsolidated as from 31 December 2008 Interest in Mercialys reduced to 50.89% from 59.67% IFRS 8 “Operating Segments” and IFRIC 13 interpretation “Customer Loyalty Programmes” applie
Slide 46: Simplified consolidated balance sheet
SIMPLIFIED CONSOLIDATED BALANCE SHEET In € millions 30 June 2008 31 Dec. 2008 30 June 2009 Goodwill 6,430 6,190 6,399 Intangibles and property, plant & equipment 7,611 7,714 7,744 Investments in associates 95 122 115 Non-current financial assets 496 469 442 Non-current derivative instruments* 54 118
Slide 47: Cash flow statement
CASH FLOW STATEMENT First-half First-half In € millions 2008 2009 Net debt at beginning of period (4,410) (4,851) Cash flow 607 570 Change in working capital requirement (895) (916) Other(1) 81 167 Net cash flow from operating activities (207) (179) Capital expenditure (542) (457) Acquisitions (63)
Slide 48: Definition of underlying profit attributable to equity holders
DEFINITION OF UNDERLYING PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT Underlying profit attributable to equity holders of the parent corresponds to net profit from continuing operations adjusted for the impact of other operating income and expense (as defined in the “Significant Accounting
Slide 49: Reconciliation of reported profit to underlying profit
RECONCILIATION OF REPORTED PROFIT TO UNDERLYING PROFIT H1 2008 Adjust- H1 2008 H1 2009 Adjust- H1 2009 In € millions (reported) ments (underlying) (reported) ments (underlying) Trading profit 538 538 488 488 Other operating income (15) 15 0 11 (11) 0 and expense, net Operating profit 522 15 538 500
Slide 50: Analysis of sales
ANALYSIS OF SALES Organic change, In € millions H1 08 H1 09 % change excl. petrol Géant Casino 2,924 2,588 -11.5% -8.2% Convenience stores 3,310 3,241 -2.1% -0.9% Casino Supermarkets 1,654 1,605 -2.9% -0.6% Monoprix 903 905 0.3% 0.3% Superettes 753 731 -3.0% -3.0% Franprix-Leader Price 2,138 2,018 -
Slide 51: Analysis of trading profit
ANALYSIS OF TRADING PROFIT In € millions H1 08 Margin H1 09 Margin FRANCE 384 4.3% 339 4.0% Latin America 99 3.5% 93 3.2% Asia 41 5.3% 43 4.9% Other segments 14 1.2% 14 1.2% INTERNATIONAL 154 3.2% 150 3.0% GROUP 538 3.9% 488 3.6% 2009 First-Half Results 51
Slide 52: Analysis of other operating income and expense
ANALYSIS OF OTHER OPERATING INCOME AND EXPENSE In € millions H1 09 Capital gains on asset disposals 109 of which on distribution of Mercialys shares 139 Other operating income and expense (98) Net asset impairments (6) Provisions for claims and litigation (21) Provisions for contingencies (40) Restr
Slide 53: Analysis of finance costs, net
ANALYSIS OF FINANCE COSTS, NET In € millions H1 08 H1 09 Income from cash and cash equivalents 27 15 Interest expense on borrowings after hedging* (188) (175) of which France (130) (115) of which International (58) (60) Fair value adjustments to indexed bonds 2 (3) Interest expense on finance lease
Slide 54: Analysis of other financial income and expense
ANALYSIS OF OTHER FINANCIAL INCOME AND EXPENSE In € millions H1 08 H1 09 Change in fair value of options* 6 0 Change in fair value of derivative instruments excl. 8 (5) hedging instruments** Exchange gains and losses excl. net financial debt (5) 4 Discounting adjustments (12) (6) Other 5 4 TOTAL 2 (
Slide 55: Average exchange rates
AVERAGE EXCHANGE RATES H1 08 H1 09 % change Argentina (ARS / EUR) 0.208 0.207 - 0.8% Uruguay (UYP / EUR) 0.032 0.032 - 0.9% Venezuela (VEB / EUR) 0.304 0.349 14.9% (x 1,000) Thailand (THB / EUR) 0.021 0.021 4.0% Vietnam (VND / EUR) 0.041 0.044 9.0% (x 1,000) Colombia (COP / EUR) 0.355 0.325 - 8.4% (
Slide 56: Minority interests
MINORITY INTERESTS In € millions H1 08 H1 09 Mercialys 16 18 FP/LP* 16 (12) Big C 11 11 Exito 6 5 Super de Boer 2 3 Other 0 6 TOTAL 51 31 * In 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 intere
Slide 57: Share of profit of associates
SHARE OF PROFIT OF ASSOCIATES In € millions H1 08 H1 09 FP/LP 6 3 Other 1 1 TOTAL 7 4 2009 First-Half Results 57
Slide 58: Puts included in net debt
PUTS INCLUDED IN NET DEBT In € millions Value at Value at Exercise Company % capital 31 Dec. 2008 30 June 2009 period Franprix Holding 95% Æ 100% 420 425* Leader Price Holding 75% Æ100% Franprix-Leader Price Various Majority-owned franchise stores 56 53 dates Exito Carulla Vivero put (77.5% to 100%)
Slide 59: Puts recorded off-balance sheet
PUTS RECORDED OFF-BALANCE SHEET In € millions Value at Value at Company % capital Exercise period 31 Dec. 2008 30 June 2009 Monoprix 50% Æ 100% 1,200* 1,200* 2012-2028 Minority-owned Franprix-Leader Price 236))) 292))) Various dates franchised stores At any time Uruguay (Disco) 49))) 49))) Æ 2021 Se
Slide 60: Change in equity
CHANGE IN EQUITY Of which In € millions - Impact of IFRIC 13 (6) - Share issue 18 2009 261 dividend Translation 11 213 adjustment TSSDI 275 dividends Other Profit for Change in the period (18) scope of 7 037 consolidation (633) 7 146 and puts 7 037 Of which - Minority interests following the sale of
Slide 61: Number of stores
NUMBER OF STORES France 31 Dec. 2008 30 June 2009 Géant Casino 131 128 Casino Supermarkets 401 393 Franprix 702 723 Monoprix 377 389 Leader Price 530 548 Superettes 6,092 6,068 Other 368 285 TOTAL France 8,601 8,534 International Argentina 65 62 Uruguay 52 52 Venezuela 60 42 Brazil 597 603 Thailand
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