Press

As a result of the new organization of the Casino group in Latin America, Éxito closed today the acquisition from Casino group of 50% the ordinary voting shares of its subsidiary GPA in Brazil, representing around 18.8% of the total capital of the company, and a 100% stake in Libertad (subsidiary of the Group in Argentina). The transaction was approved by the Shareholders’ general meeting and the Board of Directors of Éxito.

Casino and Éxito agreed on shareholders’ agreements in order to organize the control of GPA. A summary of the contracts related to the transaction is available on the following link: http://old.groupecasino.axome.cc/en/press-releases/shareholders-agreements-for-segisor-wilkes-and-grupo-pao-de-acucar/

With the wealth of its brands and positions in Latin America, this new organization of the activities around Éxito, enables the Group to follow its strategy of growth and profitability at a rapid pace, strengthening its commercial presence in the region.

Éxito obtained on 18 August, 2015, the approval from its Shareholders’ general meeting regarding the acquisition from Casino group of 50% the ordinary voting shares of its subsidiary GPA in Brazil (representing around 18.8% of the total capital of the company), and a 100% stake in Libertad (subsidiary of the Group in Argentina). The transaction was announced on July 30, 2015.

– Strengthened organization, focused on growth drivers,

– Implementation of significant synergies leveraging the respective strengths of the different entities,

– Acquisition by Éxito of 50% of GPA voting shares owned by Casino group and 100% of Libertad in Argentina for a total amount of € 1.7 billion,

– Rebalancing of the Group’s debt structure

Casino Group is changing its organization by regrouping all its operations in Latin America. This new organization will be set up around its Colombian subsidiary Éxito and will enhance the Group’s future growth prospects in Latin America.

Casino Group has entered into a share purchase agreement with Éxito for the disposal to the latter of the following:

• a 50% stake in the French company holding the ordinary voting shares of its Brazilian subsidiary GPA, representing around 18.8% of the total capital,
• a 100% stake in Libertad (subsidiary of the Group in Argentina).

Following this transaction, Éxito will fully consolidate all the Latin American activities of the Casino Group (Brazil, Colombia, Argentina and Uruguay). This entity will cover markets representing 280 million inhabitants and will be a leading retail Group in the region positioned to follow the evolution  of the customers’ needs and seize regional consolidation opportunities. This new organization  will be composed of a unique combination of countries and formats:

• leadership positions of the companies in their main markets: #1 in Brazil, #1 in Colombia and #1 in Uruguay,
• combined 2014 sales of c. € 26.5 billion and EBITDA of € 2.0 billion,
• comprehensive coverage of all customer segments, with specific banners and an expertise in a mix of formats (hypermarkets, supermarkets, convenience, cash & carry, discount and specialised distribution…),
• best-in-class multi-channel network which would enhance e-commerce development thanks to a network of over 2,500 stores.

Casino Group, which owns 54.8% of Éxito, will remain its controlling shareholder and will keep fully consolidating its subsidiaries Éxito and GPA. Depending on market conditions, the Casino Group reserves the possibility to acquire shares of its Latin American subsidiaries in the market over the next months.

Casino and Éxito agreed on shareholders’ agreements in order to organize the control of GPA. The composition of the Board of Directors of GPA will reflect the new ownership structure with the appointment of directors by Éxito. There will be no change in the management structure of GPA as a result of this transaction.

This new organization will create value for all the subsidiaries thanks to the implementation of synergies and best practices with a run-rate impact of €145 million, representing around 0.5% of the combined sales.

55% of the synergies will directly benefit Brazilian operations while 45% will directly benefit Colombian, Argentinean and Uruguayan operations, and these synergies will be implemented by a dedicated committee composed of key executives of Éxito, GPA and Casino Group.

The total transaction value amounts to € 1.7bn, based on a price per GPA share of R$100, implying a premium of 20.6% over the last 3-month average of GPA share price of its preferred shares, and a multiple of 2014 sales of 0.55x for Libertad.

Éxito will finance the transaction by using part of its existing available cash and new credit facilities.

This transaction will lead to rebalancing Casino Group’s debt structure, in a consistent way with the strong cash-flow generation of the Latin American subsidiaries:

• sustainable and optimized balance sheet for Éxito (consolidated net debt close to nil post transaction),
• significant deleveraging at Casino group parent company level (€1.7bn).

The impact on Casino Group’s net income is expected to be neutral when factoring run-rate synergies. The related accretion on Éxito’s net income is expected to be over 5% before synergies and around 30% when factoring run-rate synergies.

The transaction is supported by the Boards of Directors of Casino Group, Éxito and GPA.

The transaction is expected to be completed by end of August 2015. The transaction is subject to the approval of Éxito’s shareholders at a general shareholders meeting which is convened for August 18, 2015.

– Éxito will comment the transaction during the presentation of its half year results at 4pm (CEST / Paris)

Dial-in details: + 70 66 34 65 60 – pin code 83373602

– Casino Group will comment the transaction at 5pm (CEST / Paris)

Dial-in details: +33 1 72 00 09 86 – no pin code

30-07-2015-New-organization-for-the-Group’s-operations-in-Latam1

Group consolidated sales of €23.7bn, up +1.8%

• In France:
  • Return to organic growth in Q2 2015 (+0.4%)
  • The two banners which significantly repositioned their prices, Géant and Leader Price, confirmed their recovery
• Internationally:
  • Strong performance in the food retail business, particularly in Latin America
  • Against a backdrop of macroeconomic slowdown and base effect, Via Varejo reported lower sales, but continued to gain market shares
• E-commerce: Cnova’s gross merchandise volume (GMV) continued to grow (+26.8% at constant exchange rates in H1 2015) driven by the development of marketplaces

Group trading profit of €521m, down compared with H1 2014

• In France, significant residual impact of previous price cuts on the sales margins of Géant and Leader Price; this impact will wane in H2 2015
• Internationally, macroeconomic slowdown and base effect in Brazil affecting the margins of GPA Food and Via Varejo in Q2 2015
• E-commerce: impact of the investments made in Q1 2015 to drive growth (infrastructure, logistics, etc.)

Increasing Net profit Group share of €75m and lower Underlying net profit Group share of €63m.

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Improved activity in France: : Return to growth at Géant and recovery at Leader Price

Increase in food sales in Brazil

Strong growth of the E-commerce business

• In France, improved activity: growth in organic sales (+0.4%) and in same-store sales (+0.1%); customer traffic up +2.4% and volumes up +1.8%
  • Return to growth at Géant: same-store sales up +2.0% driven by increased traffic (+4.0%) and volumes (+5.0%)
  • Recovery at Leader Price: same-store sales by -0.9% compared with -7.1% in Q1; growth in traffic (+7.0%) and market share gain since the beginning of the year (+0.2pt over the most recent Kantar period)

• Internationally:
  • In Latin America:
    • Food sales up by +6.1% on an organic basis: good performance by food banners in Brazil (GPA Food) (+7.3% in organic sales after +7.1% in Q1) supported by traffic growth
    • Via Varejo: decline in sales explained partly by the high comparison base related to the World Cup and partly by the difficult macroeconomic environment in which, Via Varejo made market share gains (+0.7pt to 26.1% year-to-date at the end of May 2015)
  • In Asia, increased volumes and good traffic performance in Thailand, with continued expansion

• E-commerce : GMV increase of +25.8% at constant exchange rates

Starbucks Coffee Company and Casino Restauration (subsidiary of Groupe Casino) today announce a licensed partnership that will open Starbucks stores within Géant Casino Hypermarkets and Casino Supermarkets across France. The first store is expected to open before the end of 2015.

Casino Restauration will be operating full format Starbucks stores alongside Groupe Casino’s grocery sites, offering an unexpected oasis in the busy supermarket setting.  Customers will be able to enjoy the full range of Starbucks drinks and food, served by expertly-trained baristas.

Kris Engskov, president, Starbucks EMEA says: “This new partnership with Casino Restauration means we can deliver a quality Starbucks experience to many more people in convenient locations across France.  Casino Restauration has the perfect network and local expertise to deliver this new growth in the hypermarkets and supermarkets right across the country, where our customers want us to be.  We’re excited to be working together to build beautiful stores and to bring great coffee to more customers in France.”

William Charles CEO of Casino Restauration says: “For more than 40 years, Casino Restauration has been deeply committed to maintaining a constant focus on quality and to fostering continuous innovation to adapt to consumers’ changing tastes, eating habits and expectations. Known throughout France and resolutely committed to offering balanced nutrition at an affordable price, Casino Restauration has been serving families in a friendly atmosphere. We are happy to share our knowledge and working closely with Starbucks to spread the Starbucks stores in our Géant Casino Hypermarkets and Casino Supermarkets in France”.

Starbucks stores will be full store formats within Groupe Casino grocery locations, making premium coffee more accessible for customers and providing an even better shopping experience for many customers across France. The stores will be operated by Casino Restauration, the restaurant operating arm of Groupe Casino. At the moment there are over one hundred Starbucks stores in France out of a total 2200 stores across the Europe, Middle East, and Africa (EMEA) region.

In France, Groupe Casino currently runs 10 416 stores included 127 Géant Casino hypermarkets and 444 Casino Supermarkets.

The Casino group has signed a unilateral purchase undertaking with the Gastronome group (Terrena group) for the acquisition of its subsidiary Gastronome-Luché, which operates a plant in Luché-Pringé, in Sarthe.

It is expected that all 159 employees will be maintained.

This transaction would allow the Casino group to integrate a poultry chain with high quality products and to secure the entire supply chain: origin, quality and traceability.

Group’s total sales: €11.9 billion, up +5.3% and +2.7% on an organic basis

Strong international commercial momentum: total growth of +9.2% and organic growth of +3.7%

• Southeast Asia: strong growth of +25.4%
• Latin America
  • High growth in food sales: +10.2%
  • Near stability in sales of electronic products: -0.8%

France

• Continued improvement in organic sales (-1.3%) despite a price cuts’ carry-over effect of -1.9% and volumes growth of +0.6%
• Solid progress in volumes in most formats

E-commerce:

• Strong growth of Cnova sales: +17.7%
• Sharp increase in gross merchandise volume (GMV): +28.2%(1) driven by the rapid development of marketplaces

• Sales of €48.5bn, up +4.7% on an organic basis
  • In France:
    • End of the pricing repositioning cycle of discount banners (Géant and Leader Price)
    • Satisfactory development of premium and convenience-store banners
  • Internationally: sustained organic growth of the retailing business (+6.8%)
  • E-commerce: strong growth of Cnova (Gross Merchandise Volume up +26.6%)
• Trading profit of €2,231m, up +5.6% on an organic basis
  • In France: impact of price investments primarily at Leader Price
  • Internationally: sharp rise in profitability driven by operational efficiency plans
• Net underlying Profit, Group share of €556m (-3.9% at CER) affected by decided price cuts in France
• Free Cash Flow(1) of €846m, up +6.2% at CER, with an improvement of Cash flow(2) (+9.1% at CER) and well managed Capex
• Net financial debt/EBITDA ratio of 1.8x
• Dividend recommended at the Annual General Meeting on 12 May 2015: 3.12€ per share, unchanged compared to the previous year

The Board of Directors met on 16 February 2015 to approve the consolidated financial statements for 2014. The statutory auditors have completed their audit of the statements and are in the process of issuing their report.

Jean-Charles Naouri, Chairman and Chief Executive Officer of Casino Group stated:

“In 2014, the price cuts decided in France allowed a repositioning of the Group’s discount banners. This process of pricing readjustment is now complete. Traffic and volumes have been positive since the 4th quarter, confirming the relevance of our sales strategy. Internationally, food banners had an excellent year. Cnova is the 6th largest listed worldwide player in E-commerce. For 2015, the Group is confident about its development outlook.”

As exchange rates have negatively impacted the translation into euros of international subsidiaries’ results, activities and operating results’ analysis are presented below on an organic basis (i.e. at constant scope and exchange rates).

Note:
Organic and same-store changes exclude petrol and calendar effects
CER: Constant Exchange Rates
(1) Cash flow + Changes in WCR – Net CAPEX; 2013 data excluding Mercialys
(2) 2013 data excluding Mercialys, consolidated using the equity method since 21 June 2013