Casino, Guichard-perrachon Sa · EURONEXT:CO

Casino, Guichard-perrachon Sa — FY2018 Earnings Presentation

74 slides from Casino, Guichard-perrachon Sa's earnings presentation, Mar 14, 2019

  1. Slide 1: Full Year Results 2018

    FULL YEAR RESULTS 2018 ▪ Thursday 14 March 2019 ▪ 1

  2. Slide 2: Contents

    Contents 1 Introduction 2 Results 3 2019 - 2021 Perspectives 4 Appendices FULL YEAR RESULTS 2018 ▪ Thursday 14 March 2019 ▪ 2

  3. Slide 3: Introduction

    FULL YEAR RESULTS 2018 ▪ Thursday 14 March 2019 ▪ 3

  4. Slide 4: France: 2018 highlights

    France: 2018 highlights Highest organic growth in 5 years and gross sales under banner up 2.8%* Growth in retail trading profit of 15% and improvement in profitability of 0.2pt, in line with previous years Significant progress on the Group’s strategic priorities  Increased focus on a mix of buoyant

  5. Slide 5: Asset disposals: sustained pace since July 2018

    Asset disposals: sustained pace since July 2018 €1.5bn Definitive 2018 2019 asset disposal of 15% disposal plan of Mercialys Sale of Sale of GreenYellow 67 Monoprix 26 stores Other assets capital real estate real estate (discussions at increase assets assets advanced stages) Disposal of R2C €213m €1

  6. Slide 6: 2019-2021 France perspectives: continuation of the positive financial trajectory

    2019-2021 France perspectives: continuation of the positive financial trajectory  Since 2014, the Group has carried out its transformation while improving retail trading profit by 22% per year and margin by 0.4pt per year, and at the same time reducing debt by -65%  The financial perspectives for

  7. Slide 7: Latin America: 2018 highlights

    Latin America: 2018 highlights BRAZIL  11% growth* in 2018  Continued very strong growth of Assaí at 24%* (6th consecutive year of growth above 20%)  Sales growth of 4%** for Multivarejo, driven by new momentum in hypermarkets sales  Acceleration of the digital transformation and of E-commerce (

  8. Slide 8: Results

    FULL YEAR RESULTS 2018 ▪ Thursday 14 March 2019 ▪ 8

  9. Slide 9: Results

    FULL YEAR RESULTS 2018 ▪ Thursday 14 March 2019 ▪ 9

  10. Slide 10: Preliminary comments

    Preliminary comments  In 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 revenue, overall cost of goods sold and selling expenses. Retrospective a

  11. Slide 11: 2018 key figures

    2018 key figures Reported Organic In €m 2017 2018 change change Net sales 37,490 36,604 -2.4% +4.7%* EBITDA 1,900 1,865 -1.9% +6.7% Trading profit 1,213 1,209 -0.3% +9.8% Trading profit excl. tax credits 1,015 1,098 +8.2% +18.0% Underlying net profit, Group share 351 318 -9.4% -2.0%** Underlying dil

  12. Slide 12: France Retail results – 2018

    France Retail results – 2018 Reported Organic  Gross sales under banner up 2.3%* In €m 2017 2018 change change and net sales organic growth of 1.2%** Consolidated net 18,799 19,061 +1.4% +1.2%** • Commercial success in all formats sales EBITDA 882 914 +3.7% +3.8% • Contribution from organic product

  13. Slide 13: Streamlining of the store base and franchise expansion

    Streamlining of the store base and franchise expansion A plan to dispose and close loss-making stores initiated at the end of 2018, most of which will be executed in H1 2019  Self-funded plan: proceeds from the disposals to finance the cost of closures, with a net gain for the Group  For the integ

  14. Slide 14: E-commerce (Cdiscount) results – 2018

    E-commerce (Cdiscount) results – 2018  Increase in the marketplace share of 2.4 points In €m 2017 2018 Change to 34% of GMV*, with a 21% share of GMV* 3,304 3,646 +10.4% “Fulfillment by Cdiscount”, up 30% over the year Consolidated net sales 1,908 1,965 +3.0%  Sharp improvement in monetisation rev

  15. Slide 15: Latin America results – 2018

    Latin America results – 2018 Reported Organic  Latam trading profit excluding tax credits up 22.3% In €m 2017 2018 change change on an organic basis Consolidated 16,782 15,577 -7.2% +8.9%* net sales  In Brazil, excellent performance from Cash & Carry o/w Grupo Éxito (excl. GPA) 4,449 4,153 -6.7% +

  16. Slide 16: Underlying net financial expense – 2018

    Underlying net financial expense – 2018 2017 2018 France Retail (146) (165) E-commerce (Cdiscount) (40) (47) Latam Retail (289) (206) o/w Grupo Éxito (excluding GPA Food) (129) (111) o/w Brazil (GPA Food) (160) (95) Total (475) (418)  In France, treasury products of the Group parent company decreas

  17. Slide 17: Underlying net profit, Group share

    Underlying net profit, Group share* Change at constant In €m 2017 2018 exch. rate Trading profit and share of profit 1,225 1,227 +11.1% of equity-accounted investees Financial expenses (475) (418) -4.5% Income tax (152) (214) +57.8% Underlying net profit from continuing operations 598 595 +11.4% o/w

  18. Slide 18: Underlying diluted earnings per share

    Underlying diluted earnings per share Change at constant 2017 2018 exch. rates Weighted average number of ordinary shares 110,734,374 108,388,996 -2.1% before dilution Underlying net profit, Group share (in €m) 351 318 -2.0% Dividends payable on perpetual deeply subordinated (50) (48) -3.1% bonds (T

  19. Slide 19: Other operating income and expenses – 2018 Group and France

    Other operating income and expenses – 2018 Group and France Other operating income and expenses % In €m 2017 2018 change Group (480) (375) -21.9% o/w Latam and E-commerce (210) (112) -46.5% Sharp decrease in non-recurring expenses for the Latam and E-commerce segments France (271) (263) -2.7% o/w re

  20. Slide 20: Change in net debt by entity

    Change in net debt by entity Impact Change of the Segisor In €m 2017 over the period capital reduction 2018 France Retail (3,715) +806 +200 (2,709) E-commerce (Cdiscount) (194) -5 0 (199) Latam Retail (845) -11 - 200 (1,056) o/w GPA (189) - 34 0 (224) o/w Éxito (655) +29 +200 (426) o/w Segisor 0 0 -

  21. Slide 21: 2018 France net debt

    2018 France net debt In €m 2017 2018 France net debt as of 1 January (3,200) (3,715) Free cash flow* 54 963 Financial expenses (52) (134) Dividends paid to shareholders and holders of TSSDI (379) (400) deeply-subordinated bonds Share buybacks and transactions with non-controlling interests** (209) (

  22. Slide 22: Disposal plan: accelerated execution and new objective of at least €2.5bn

    Disposal plan: accelerated execution and new objective of at least €2.5bn  The Group announced, on 11 June 2018, an asset disposal plan for a total amount of €1.5bn within a year  To date, the various operations constituting the disposal plan are the following: Definitive disposal of 15% of Mercia

  23. Slide 23: Change in assets classified under IFRS 5 – France

    Change in assets classified under IFRS 5 – France Net asset stock France, Group share classified under IFRS 5* In €m 2017 2018 Signed Cashed-in Disposal plan 0 794 >605 605 Others 435 332 149 0 Total 435 1,126 >754 605  €1,126m of assets are classified under IFRS 5, an increase of €691m compared to

  24. Slide 24: Free cash flow France – 2018

    Free cash flow France – 2018 Free cash flow – France Change In €m 2017 2018 YoY EBITDA 882 914 +33 €35m of expenses related to the first stage of the store (-) non-recurring items (231) (220) +11 closure plan, to be financed (-) other items (head office expenses, by the disposals of loss-making (72)

  25. Slide 25: Bond maturities

    Bond maturities Maturities at 31 December 2018: €5.3bn* In €m 850 900 675 744 720 497 444 508 2019 2020 2021 2022 2023 2024 2025 2026  In H2 2018, €348m bond issue redeemed at maturity without refinancing and €128m worth of bond buybacks reduced gross debt by €476m  Group credit rating • Casino ha

  26. Slide 26: Strong liquidity position maintained in France

    Strong liquidity position maintained in France  Upcoming debt maturities will be easily covered by €5bn €5bn liquidity position at 31 December 2018 liquidity position at 31 December 2018 In €m  The Group continues to actively manage its liquidity 2,865 according to the available cash and the ident

  27. Slide 27: 2018 dividend

    2018 dividend 2018 Dividend to be proposed to the Annual General Meeting (in €) 3.12 Interim dividend paid on 5 December 2018 1.56 Balance of the dividend to be paid on 9 May 2019 1.56  A dividend of €3.12 per share for the financial year 2018 will be proposed to the Annual General Meeting of Share

  28. Slide 28: 2019 - 2021 Perspectives

    FULL YEAR RESULTS 2018 ▪ Thursday 14 March 2019 ▪ 28

  29. Slide 29: 2019 Group financial perspectives

    2019 Group financial perspectives France Growth in trading profit +10%  Closures and disposals of loss-making stores (excluding property development)  Horizon purchasing alliance  Cost saving plan  New sources of revenues (Data, Data Center and energy)  Margin mix (organic, fresh food, snacks)

  30. Slide 30: Focus on 2019 France cash flow

    Focus on 2019 France cash flow The Group aims to achieve free cash flow* of €0.5bn in 2019 1. Free cash flow of €0.5bn in 2019 on operations excluding loss-making store disposal and closure plan • Increase in operating cash flow of c.€150m supported by the increase in EBITDA and a decrease in non-re

  31. Slide 31: 2019 France Working Capital

    2019 France Working Capital In 2019, the Group should reduce overstocking related to the “yellow France Working Capital vests” movement (double impact: loss in net sales and overstocking In days of COGS to limit shortages) 41 40 In addition, the Group initiated a plan to reduce inventories, the prim

  32. Slide 32: 2019-2021 Perspectives

    FULL YEAR RESULTS 2018 ▪ Thursday 14 March 2019 ▪ 32

  33. Slide 33: Preliminary comments

    Preliminary comments  The subsidiaries in Latin America have already communicated their respective results and outlook. The two following pages present a short brief of perspectives in Latam which do not replace the companies’ communication  The following slides (post Latam slides) focus exclusive

  34. Slide 34: Latam 2019-2021 perspectives

    Latam 2019-2021 perspectives 1 Grupo Pão de Açúcar 2 Grupo Éxito (excluding GPA) FULL YEAR RESULTS 2018 ▪ Thursday 14 March 2019 ▪ 34

  35. Slide 35: Grupo Pão de Açúcar: Faster profitable growth

    Grupo Pão de Açúcar Faster profitable growth Maintaining strong growth momentum at Assaí and improving profitability  Sustained growth of more than 20%  Further store openings (15-20 in 2019) Revitalising and revamping the other banners  Adaptation of Extra supermarkets to specific niche segments

  36. Slide 36: Grupo Éxito: Furthering the transformation strategy

    Grupo Éxito (excluding GPA) Furthering the transformation strategy Expanding the Cash & Carry format based on the Assaí model in Brazil  Additional Surtimayorista store openings and conversions (10 planned for 2019) Developing innovative new formats  Expansion of Éxito WOW hypermarket formats focu

  37. Slide 37: France 2019-2021 perspectives

    France 2019-2021 perspectives 1 Mix (formats, categories, geographies) 2 E-commerce 3 Digitalisation of customer relationships 4 New businesses: GreenYellow, Data, Data Center 5 Cost saving plans FULL YEAR RESULTS 2018 ▪ Thursday 14 March 2019 ▪ 37

  38. Slide 38: Mix (formats, categories, geographies)

    1 Mix (formats, categories, geographies) 2018 Formats: continued improvement of the format mix more aligned with new consumer trends, which is more profitable and more responsible  More than 60% of net sales generated by 7,500 premium and convenience stores  -11% reduction in hypermarket surface a

  39. Slide 39: Mix (formats, categories, geographies) 2019-2021 perspective

    1 Mix (formats, categories, geographies) 2019-2021 perspective Formats: increase the share of premium and convenience formats Hypermarket as a% Reduce hypermarket share to 15% of total gross sales (vs. 21% in 2018) of total gross sales under banner Continue opening premium and convenience stores wit

  40. Slide 40: Food E-commerce and Monoprix

    2 Food E-commerce and Monoprix 2018 Extension of Monoprix’s food E-commerce home delivery service to cover all customer needs, from express to next-day delivery Monoprix-Amazon partnership for delivery in Paris within two hours  Development of a new Monoprix customer base and acquisition of digital

  41. Slide 41: Non-food E-commerce (Cdiscount)

    2 Non-food E-commerce (Cdiscount) 2018 Strong growth of the marketplace, a major profitability driver, with €1.1bn gross merchandise volume and 48 million products  Growth in B2B services to marketplace vendors (logistics, marketing, financial services)  21% of GMV generated through the Fulfillmen

  42. Slide 42: E-commerce 2019-2021 perspectives

    2 E-commerce 2019-2021 perspectives  Reach 30%* of E-commerce in 2021 (vs. 18%* in Q4 2018)  Achieve €1bn total sales under banner in food E-commerce (vs. €300m** in 2018)  Speed up food E-commerce initiatives among all banners with a unique scheme • Order preparation: the most efficient technolo

  43. Slide 43: Digitalisation of customer relationship

    3 Digitalisation of customer relationship 2018  Ramp-up of a mobile ecosystem of applications totalling more than 10 million downloads Dedicated apps for each banner Casino Max Franprix Monoprix Cdiscount  Development of digital solutions to enhance customer experience • Already c.15% of sales* ge

  44. Slide 44: Digitalisation of customer relationship 2019-2021 perspectives

    3 Digitalisation of customer relationship 2019-2021 perspectives Share of HM/SM sales Increase the penetration of in-store mobile apps generated by Casino Max app users  Reach c.40% of net sales* with Casino Max app users in 2021 (vs. 15% in March 2019 and 25% by the end 40% of the year) 15% March

  45. Slide 45: New businesses: GreenYellow

    4 New businesses: GreenYellow 2018 Acceleration of GreenYellow activity  Solar energy: 190MWp of installed capacity at end-2018  €66m annual energy savings  Energy efficiency: signature of a contract with AccorHotels for the optimisation and energy monitoring of its 1,400 hotels in France Signatu

  46. Slide 46: New businesses: GreenYellow 2019-2021 perspectives

    4 New businesses: GreenYellow 2019-2021 perspectives Consolidate GreenYellow’s leadership position in solar energy  Objective: increase installed capacity to 950MWp by 2021 (vs. 190MWp at-end 2018)  Consolidate leadership position in self-consumption in France by leveraging on partnership with Eng

  47. Slide 47: New businesses: Data and Data Center

    4 New businesses: Data and Data Center 2018 Data (3W.relevanC)  €41m in net sales generated from data-related services  Database with more than 30 million profiles from physical and digital sources  Three business segments: analysis of purchasing behaviours, activation of advertising campaigns an

  48. Slide 48: New businesses: Data and Data Center 2019-2021 perspectives

    4 New businesses: Data and Data Center 2019-2021 perspectives Generate €130m revenues from Data and Data Center by 2021  Data: achieve €100m in net sales by 2021 (vs. €41m in 2018) • Speed up development of core activities • Expand retail search marketing operations (advertising campaigns linked to

  49. Slide 49: Cost saving plans 2019-2021 perspectives

    5 Cost saving plans 2019-2021 perspectives  Cost saving plans totalling €200m vs. 2018, half of which to be achieved in 2019 and the remainder in 2020  Reduction in banner and corporate head office expenses: c.€50m by 2020 • Alignment of fixed costs with changes in the store base • Generalisation

  50. Slide 50: Main operating KPIs for France – Summary

    Main operating KPIs for France – Summary 2019-2021 perspectives 2018 2021 1. Mix  Openings of premium and convenience stores* 300  Hypermarkets total gross sales under banners (share of total) 21% 15%  Net sales of organic products €1.0bn €1.5bn 2. E-commerce  E-commerce** (% of total) 18% 30% 

  51. Slide 51: Main financial KPIs for France – Summary

    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 * Excluding property de

  52. Slide 52: Conclusion

    Conclusion Trajectory of continuous profitability improvement Strengthened financial structure following significant debt reduction Strategy of growth on buoyant segments FULL YEAR RESULTS 2018 ▪ Thursday 14 March 2019 ▪ 52

  53. Slide 53: Appendices

    FULL YEAR RESULTS 2018 ▪ Thursday 14 March 2019 ▪ 53

  54. Slide 54: Appendices

    FULL YEAR RESULTS 2018 ▪ Thursday 14 March 2019 ▪ 54

  55. Slide 55: The Casino Group is pursuing its commitment to social and environmental issues

    The Casino Group is pursuing its commitment to social and environmental issues  The Group is rated A1+ and ranked N°1 in its sector by the non-financial rating agency Vigeo Eiris*  Healthy and responsible products • Enhanced line-up of Casino-brand products guaranteed without pesticide residue • L

  56. Slide 56: Impact of IFRS 16

    Impact of IFRS 16  The Casino Group will apply IFRS 16 – Leases from 1 January 2019 For the majority of leases, IFRS 16 requires recognition of an asset (the right to use the leased item) and a financial liability (representing discounted future lease payments). Operating lease expense is replaced

  57. Slide 57: Reconciliation of GPA’s adjusted EBITDA to GPA’s contribution to consolidated EBITDA

    Reconciliation of GPA’s adjusted EBITDA to GPA’s contribution to consolidated EBITDA 2017 2018 Adjusted EBITDA in BRLm (reported by the subsidiary) 2,894 3,282 Adjusted EBITDA in €m 803 762 Consolidation adjustments in €m (47) (82) EBITDA in €m 756 680 FULL YEAR RESULTS 2018 ▪ Thursday 14 March 2019

  58. Slide 58: Share of profit (loss) of equity-accounted investees

    Share of profit (loss) of equity-accounted investees In €m 2017 2018 France Retail (7) (16) o/w Mercialys 29 30 o/w Franprix - Leader Price (39) (50) o/w other 2 4 Latam Retail 20 33 TOTAL 13 17  Within the Franprix-Leader Price scope, the change in results is explained by the latest stores sales m

  59. Slide 59: Consolidated net profit (loss), Group share

    Consolidated net profit (loss), Group share In €m 2017 2018 Net profit before taxes 286 369 Income tax (48) (204) Equity-accounted investees 13 17 Net profit (loss) from continuing operations 251 182 o/w Group share 108 (45) o/w attributable to minority interest 143 227 Net profit (loss) from discon

  60. Slide 60: Definition of underlying net profit

    Definition of underlying net profit  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

  61. Slide 61: Reconciliation of reported net profit to underlying net profit

    Reconciliation of reported net profit to underlying net profit Change at Adjust- 2017 Adjust- 2018 constant In €m 2017 ments underlying 2018 ments underlying exch. rate Trading profit 1,213 0 1,213 1,209 0 1,209 10.4% Other operating income (480) 480 0 (375) 375 0 n.m. and expenses Operating profit

  62. Slide 62: Underlying minority interests

    Underlying minority interests In €m 2017 2018 France Retail 3 3 Latam Retail 263 279 o/w Éxito (excl. GPA Food) 44 45 o/w GPA Food 220 234 E-commerce (Cdiscount) (20) (5) TOTAL 247 277 FULL YEAR RESULTS 2018 ▪ Thursday 14 March 2019 ▪ 62

  63. Slide 63: Group free cash flow from continuing operations in 2018

    Group free cash flow from continuing operations in 2018 Group free cash flow In €m 2017 2018 Change EBITDA 1,900 1,865 -35 (-) non-recurring items (267) (289) -22 (-) other non-cash items (tax credits for donations, etc.) (93) (2) +90 Cash flow 1,541 1,574 +33 Change in working capital (303) (192) +

  64. Slide 64: Group net debt – 2018

    Group net debt – 2018 In €m 2017 2018 Group net debt as of 1 January (3,367) (4,126) Free cash flow* 179 1,197 Financial expenses (505) (424) Dividends paid to shareholders and holders of TSSDI (444) (491) deeply-subordinated bonds Share buybacks and transactions with non-controlling interests** (12

  65. Slide 65: Property/Retail CAPEX

    Property/Retail CAPEX 2017 2018 Continuing operations Excluding disposal plan Gross Net Gross Net In €m CAPEX Disposal CAPEX CAPEX Disposal CAPEX France (639) 254 (384) (556) 399 (157) o/w property CAPEX (121) 84 (37) (53) 198 145 o/w retail CAPEX (518) 170 (348) (503) 201 (302) E-commerce (69) 0 (6

  66. Slide 66: France – Breakdown of cash by subsidiary

    France – Breakdown of cash 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 €2.1bn at 31 December 2018 (€1.9bn at

  67. Slide 67: Balance sheet

    Balance sheet In €m 2017 2018 Goodwill 9,031 8,690 Property, plant and equipment, intangible assets and investment property 10,629 9,281 Investments in equity-accounted investees 575 500 Non-current assets 1,199 1,275 Other non-current assets 522 553 Inventories 3,815 3,843 Trade and other receivabl

  68. Slide 68: Group cash flow statement

    Group cash flow statement In €m 2017 2018 Net debt as of 1 January (3,367) (4,126) Cash flow 2,002 1,659 Changes in working capital (381) 111 Income tax paid (115) (278) Cash flow from operations, net of income tax 1,506 1,492 Acquisitions of property, plant and equipment, (1,346) (1,313) intangible

  69. Slide 69: Breakdown of consolidated net debt at December 2018

    Breakdown of consolidated net debt at 31 December 2018 Cash and cash In €m Gross debt equivalents IFRS 5 impact Net debt France Retail (5,933) 2,097 1,126 (2,709) Latam Retail (2,673) 1,597 20 (1,056) Latam Electronics 0 0 543 543 E-commerce (234) 36 0 (199) (Cdiscount) TOTAL (8,840) 3,730 1,689 (3,

  70. Slide 70: Derivative financial instruments included in other liabilities

    Derivative financial instruments included in other liabilities % Maturity Interest FV at FV at FV at In €m capital date rate Notional 31/12/2017 31/12/2018 06/03/2019 February Libor GPA forward 2.2% 209 (83) (103) (88) 2020 +2.04% E3M GPA TRS 2.9% June 2020 332 (177) (181) (168) +1.99% TOTAL 541 (26

  71. Slide 71: Puts included in the balance sheet

    Puts included in the balance sheet % Value Value Exercise In €m capital at 31/12/2017 at 31/12/2018 period Majority-held Franprix - Leader Price franchised 47 47 Various dates stores Monoprix 3 3 Various dates Distribution Casino France 40% 0 20 2023 Cnova NCI puts 2 2 2022 Any time Uruguay (Disco)

  72. Slide 72: Off-balance sheet puts

    Off-balance sheet puts % Value Value Exercise In €m capital at 31/12/2017 at 31/12/2018 period Majority-held Franprix - Leader Price franchised 3 1 Various dates stores Monoprix 14 14 Various dates TOTAL 16 15 FULL YEAR RESULTS 2018 ▪ Thursday 14 March 2019 ▪ 72

  73. Slide 73: Exchange rates

    Exchange rates Average Closing exchange rates exchange rates % % 2017 2018 change 2017 2018 change Brazil (BRL/EUR) 3.6054 4.3096 -16.3% 3.9729 4.4440 -10.6% Colombia (COP/EUR) 3.3361 3.4875 -4.3% 3.5809 3.7261 -3.9% (x1,000) Uruguay (UYP/EUR) 32.3625 36.2481 -10.7% 34.4626 37.1754 -7.3% Argentina (

  74. Slide 74: 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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