Total Group sales stood at €12.1 billion in Q2 2013, showing buoyant growth: +40.4%
- Internationally, organic growth* is still sustained (+9.7%) and the full consolidation of GPA has had a favourable impact.
- In France, organic sales* declined (-3.3%), under the impact of the price investment at Casino France, coupled with a progressive increase in traffic and volumes. Growth in e-commerce was sustained
Trading profit up sharply by +51.9% in H1 2013:
- Internationally, operations were highly profitable, especially thanks to excellent performances in Brazil
- In France, trading profit rose slightly in relation to the integration of Monoprix
Net profit from continuing operations, Group share, totalled €594m, (vs. €125m
in H1 2012, i.e. 4.8x)
Net underlying profit, Group share, rose +8.3% to €193m
Jean-Charles Naouri, Chairman and Chief Executive Officer of Casino Group, stated:
“In H1 2013, the Group increased its underlying net income group share by more than 8%. It posted sustained sales growth thanks to its profile’s transformation, strengthened by the acquisition of Monoprix, to its international subsidiaries growth and, in France, to robustness of its proximity and discount banners. In H2, the Group should benefit, in France, from the robustness of Franprix-Leader Price and Monoprix, from price cuts in hypermarkets, which should enable to resume growth in traffic and volumes and internationally from continued expansion.”
First-Half 2013 results: consolidated trading profit up +51.9% and net underlying profit, Group share, up +8.3% to €193M
The Group posted sharp growth in its first-half sales, which increased by +37%. Organic sales growth, excluding petrol and the calendar effect, came out at +2.8%, driven by continued sustained levels of same-store sales and very robust international expansion. The Group’s high-growth markets account for 61% of consolidated first-half sales.
The Group’s trading profit soared +51.9% to €969 million, driven by the full consolidation of GPA and Monoprix, in addition to the excellent progress made in Latin America. The trading margin is high and benefits from the high profitability of the Group’s international operations. The Group’s high-growth markets account for 74% of consolidated first-half trading profit.
Trading profit in France totalled €254 million, up +1.2% on the first half of 2012, including the full consolidation of Monoprix as of the second quarter of 2013.
At Casino France, cost cutting plans, which are rolled-out over the year, have strongly mitigated the impact of sales decline on trading profit. Franprix-Leader Price’s trading margin is stable and improves in organic terms thanks to cost control. Monoprix’s trading margin is increasing.
International trading profit rose very sharply by +84.8% to €715 million. In organic terms, it increased +8.2%. Brazil posted an excellent progression of its operating margin, particularly at Viavarejo. Profitability in Asia remained high, especially thanks to a solid margin from retail activities, in addition to the sound contribution from commercial galleries.
Non-recurring income (other operating income and expense) was positive at €530 million. This notably includes the revaluation of Casino’s stake in Monoprix following the Group obtaining exclusive control and the impact of
the deconsolidation of Mercialys following Casino’s loss of control.
Net finance costs amounted to €309 million. Excluding the effects associated with the scope of consolidation, financial expenses are under control.
Net profit, group share came out to €594 million. Restated for non-recurring items, net underlying profit, group share, totalled €193 million, a +8.3% rise on the first half of 2012.
At 30 June 2013, Group net financial debt totalled €8,856 million; it should decrease over the second half of the year, under the effect of free cash flow seasonality, notably related to the generation of a significant resource in working capital, enabling to reach a net financial debt/EBITDA ratio below 2x.
Second quarter 2013 sales
In the second quarter of 2013, the Group’s consolidated sales rose sharply by +40.4%, under the impact of the full consolidation of GPA and Monoprix, as well as sales growth from all of the Group’s international subsidiaries. Organic growth* stood
at +3% (+1.3% including petrol and calendar effect).The effect of changes in scope was +43.8%. Foreign-exchange rates had an impact of -4.7%, while the petrol effect was ‑0.5%. Finally, the average calendar effect (detailed on page 14) was -1.6%
in France and -0.9% internationally.
In France, organic sales excluding petrol and the calendar effect were in line with Q1 2013 despite the price cuts and the consumption environment
Sales in France rose +7.8% to €4,886 million in the second quarter of 2013, related to the impact of Monoprix’s full consolidation as of Q2 2013.
*Excluding petrol and calendar effect. Organic growth is growth at constant scope of consolidation and exchange rates.
**Excluding the impact of Banque Casino consolidated using the equity method in H1 2012
In France, second-quarter organic growth declined by -3.3% excluding petrol and the calendar effect (compared to a -3.4% drop in Q1 2013), against a backdrop where Casino continued the price-cutting policy it initiated in late 2012.
Sales at Géant and Casino supermarkets were impacted by price cuts initiated in late 2012, with sequential same-store improvement (excluding petrol and the calendar effect) related to improving trends in traffic and volumes.
At Géant, same-store food sales were up sequentially excluding the calendar effect (-5.9% in Q2 2013 compared to -7.7% in Q1 2013), thanks to the impact of improved traffic. Excluding the impact of price cuts, same-store food sales ex-calendar were almost flat in the second quarter. The new price positioning is very competitive.
Casino supermarkets, where price indices are improving*, saw a progressive inflection in volumes, driven by the private label and customer traffic following the price cuts. The banner is also continuing its operational efficiency action plans aimed at increasing its appeal.
Superettes are stepping up the roll-out of the Casino Shop and Shopping formats, notably with the successful conversion of 37 stores in Marseille and more openings in new sales outlets (train stations, airports, motorways, etc.). The banner is also confirming its leading position in supplying food to service stations, supplying more than 1,100 TOTAL stations. The new customer loyalty programme is showing good results. The goal is to roll out the loyalty card to the entire store network on 1 October. The banner continued to streamline the store network.
Business volume at Cdiscount rose substantially by +16.5%. Its own sales rose (+9.6%) and the marketplace already represents 13% of the site’s total business volume as of the end of June. Furthermore, over 10% of the site’s sales were generated via mobile devices as of the end of June.
* Independent panelist
Franprix-Leader Price total sales posted an increase of +3.1% due to the continued expansion of the network and scope effects.
Leader Price posted a +9.4% increase in its total sales, related to the integration of the businesses of several master franchises (81 new stores). The banner is continuing to strengthen its competitiveness and to improve the quality of its fresh product channels, as well as its price image.
Franprix is continuing to strengthen the appeal of its product range based on an increase in the number of Leader-Price private-label products under €1 (superior to 500 products) and on partnerships with local producers.
Monoprix’s organic sales excluding petrol and the calendar effect posted a good performance, with a sequential increase compared to Q1 2013, driven by the improvement in same-store sales and by the sustained expansion of all of its formats. Food sales recorded a good progression. The banner is also benefiting from the success of its commercial repositioning and its new visual identity. Monoprix is continuing its expansion on all formats, particularly at new sales outlets (train stations, motorways). The banner will accelerate its growth in e-commerce.
Internationally, sustained organic growth continued on all markets, which accelerated sequentially (+9.7%* vs. +8.3%* in Q1 2013)
International subsidiaries posted another quarter of strong organic growth at +9.7% excluding petrol and the calendar effect. Total international sales increased by +76.6% to €7,199 million, particularly due to the full consolidation of GPA as of the second half of 2012, despite the negative foreign-exchange effect of -10%, primarily related to the real’s depreciation.
Total international sales accounted for 60% of the Group’s net sales.
Latin American same-store sales grew by +6.7%, excluding petrol and the calendar effect, a sequential progress from Q1 2013 (+5.4%), particularly reflected by GPA’s sustained performance in Brazil. Organic growth was boosted by continued rapid expansion in Brazil and Colombia. In all, sales doubled, primarily under the impact
of the full consolidation of GPA.
In Brazil, GPA posted same-store sales up +10.1%, excluding petrol and the calendar effect.
In food, GPA Food’s same-store net sales rose sharply by +8.4%* (+5.5%* in Q1 2013). Sales were driven by excellent performances from Assaí cash & carry
and Minimercado convenience formats, with redefined concepts. Expansion
was buoyant over the second quarter with the opening of 23 Minimercado Extra stores, three Assaí stores and the opening of the Americas commercial gallery (12,500 m2) in Rio.
In non-food, Viavarejo’s same-store sales posted highly sustained growth of +12% (compared to +7.3% in Q1 2013). E-commerce growth has been very strong (+24.1%), driven by changes to price strategy and product categories rolled out, reinforced services and marketplace launch: Nova.com now represents 16% of Viavarejo sales. Retail operations performed well.
* Excluding petrol and the calendar effect – as a reminder, GPA releases gross sales including calendar effect
Exito’s organic sales growth excluding petrol and the calendar effect was +3.2%, driven by expansion and Uruguay’s excellent performances. Sales initiatives (Megaprima) posted a solid performance against a backdrop of macroeconomic slowdown. The banner confirmed its leading market position in Colombia and Uruguay, and continued its expansion focused on proximity and on the Surtimax discount format, which is continuing to gain market share. Ten stores were opened in Colombia in Q2 2013, including four Surtimax and three Exito Express stores.
In Asia, same-store growth excluding calendar effect totalled +2.2%. Organic growth in sales excluding calendar effect maintained a high level of +9.9%. Total sales grew +11.9%.
Big C posted organic sales growth excluding the calendar effect of +8.9%.
Same-store growth was +3% in Q2, greater than Q1 (+2.4%), related to leading price positioning, the great success of its retail operations and the development of its loyalty card.Expansion on small formats (36 Mini Big C and 15 Pure stores opened) was highly sustained. Income from commercial galleries adjacent to hypermarkets remains very sustained.
Big C Vietnam posted very strong organic sales growth. The banner continued its expansion, opening 2 hypermarkets and 2 adjacent commercial galleries, and confirmed its leadership in price indices and price image.
Perspectives for the second half of 2013
The Group is maintaining its 2013 targets:
- Strong growth in reported sales
- Organic sales and organic trading profit growth
- Maintaining a solid financial structure with a net financial debt/EBITDA ratio below 2x
ANALYST AND INVESTOR CONTACTS
Régine GAGGIOLI – Tel:+33 (0)1 53 65 64 17
+33 (0)1 53 65 64 18
GROUP EXTERNAL COMMUNICATION DEPARTMENT
Tel: +33 (0)1 53 65 24 78
Mob: +33 (0)6 08 54 28 75
Tel: +33 (0)6 71 60 02 02
The first-half 2013 consolidated financial statements drawn up by the Board of Directors on 24 July 2013 have been reviewed by the Statutory Auditors.
This press release was prepared solely for informational purposes and should not be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Similarly, it does not and should not be treated as giving investment advice. It has no connection with the specific investment objectives, financial situation or needs of any receiver. No representation or warranty, express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained in this document. It should not be regarded by recipients as a substitute for the exercise of their own judgement. Any opinions expressed herein are subject to change without notice.
Main changes in the scope of consolidation
- Full consolidation of GPA since 2 July 2012. GPA was proportionately consolidated at 40.3201% as of 30 June 2012.
- Full consolidation of companies owning 21 stores into Franprix Leaderprice
as of July 2012.
- Full consolidation of BARAT into Franprix-Leaderprice from 8 March 2012.
- Full consolidation of HDRIV (RIVIERE) into Franprix Leaderprice from 1 December 2012.
- Full consolidation of DSO and CAFIGE into Franprix Leaderprice from 1 February 2013.
- Full consolidation of PFD (FABRE) into Franprix Leaderprice from 31 December 2012.
- Full consolidation of MONOPRIX since 5 April 2013.
- Deconsolidation of Mercialys on 21 June 2013, the date of the Annual General Meeting during which Casino’s loss of control was noted. As of this date, results have been accounted for using the equity method.
Net underlying profit
Net 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-recurring financial items
Non-recurring financial items include fair value adjustments to certain financial instruments at fair value whose market value may be highly volatile. For example, fair value adjustments to financial instruments that do not qualify for hedge accounting and embedded derivatives indexed to the Casino share price are excluded from net underlying profit.
Non-recurring income tax expense/benefits correspond to tax effects related directly to the above adjustments and to direct non-recurring tax effects. In other words, the tax on underlying profit before tax is calculated at the standard average tax rate paid by the Group.
Underlying profit is a measure of the Group’s recurring profitability.