(AOF) – At the end of a period of exclusivity which was renewed on April 24 and which ended today, Teract and the Casino group have decided, by mutual agreement, not to continue these discussions, said the distributor this Thursday after the market. The Casino group and Teract nevertheless remain open to discussions on a potential operational partnership, which could relate to bakery, pastry & pastry products and would also include the conclusion of a contract for the development of fruit and vegetable sectors with Teract.
The end of discussions between Teract and the Casino group has no impact on the draft agreement with the Groupement Les Mousquetaires announced on April 24, 2023, which gave rise to the signing of a memorandum of intentions, such as announced on May 26, 2023, which is continuing in accordance with the agreements.
Casino also recalled that the conciliation procedure opened on May 25, 2023 for the benefit of the company Casino Guichard Perrachon and some of its subsidiaries, is following its course according to the planned schedule and the Casino group is continuing in this context the examination of the EP Global Commerce proposal announced on April 24th.
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– Food distribution group created in 1898 present in France, Brazil, Colombia and Uruguay;
– Distributor weighing €30.5 billion organized into 3 branches: France Retail under the Casino, Monoprix, Franprix and Naturalia brands, Latin Retail in Latin America under the Assaï, GPA and Extra brands in Brazil, Exito and Libertad in Colombia, Disco and Deveto in Uruguay and, finally, the new activities – Green Yellow for solar energy and CDiscount for e-commerce;
– Business model based on 5 pillars: a portfolio of buoyant formats in France, the leading food and non-food e-commerce offer, the development of new growth levers, a significant stake in the major players in distribution from Latin America, and strengthening the structure of the group;
– Capital locked at 52.3% by the Rallye holding company (62% of voting rights), itself a subsidiary of Euris, held by Jean-Charles Naouri, Chairman and CEO of the 13-member Board of Directors;
– Financial situation still tense with €5.6 billion in shareholders’ equity and, at the end of June, €2.3 billion in cash against a net debt of €7.5 billion.
– Strategic plan to reduce the share of hypermarkets to 15%, 50% growth in the organic product offering to €1.5 billion, progress in e-commerce and, for new activities, expansion of the network photovoltaics installed and rising data center revenues;
– Dynamic innovation strategy: data management and monetization within RelevanC, cloud offer with ScaleMax, partnerships with Google Cloud and Accenture in distribution, Gorillas in quick-commerce in France and Rappi in Colombia – deployment of the C Discount offer – digitalization of logistics and delivery platforms with Amazon and Ocado;
– Environmental strategy: capitalizing on the “Green Yellow” photovoltaic expertise with a pipeline of 4.5 GWp, reinforced by a fundraising in February, and by its partnerships (Schneider Electric and Amazon web services) – aiming to reduce CO2 emissions by 18% in 2025 and 38% in 2030 (vs 2015);
– Simplification of Latin American assets via a direct holding of 41% in GPA and Assai;
– Continuation of the disposal plan, for an amount of more than €4 billion, with the upcoming sale of Green Yellow;
– Progress in buoyant formats in France, premium and proximity to the Monoprix, Naturalia and Franprix brands, etc. (8% of the French market), in purchasing centers and in the transformation of hypermarkets, formerly Géant Casino, in Super Fresh Casino supermarkets.
– Recurrent speculation on a merger with Alibaba, Amazon and on the intentions of the Czech Kretinski, already holder of 4% of the capital;
– Impacts of the openings of “small” stores in France, of the openings of Assai distributors in Latin America; and, from the 2
half of 2022, of the savings plan of C Discount;
– After a 15% increase in sales and a net loss on 1
semester, 2022 objectives: at 2
semester: 800 openings in convenience formats (Monop’, Franprix, Naturalia, Spar, Vival, etc.), mainly franchises (376 at the end of June) – development of the most buoyant retail and e-commerce activities (Casino Hyper Expenses, Gorillas, Amazon and Ocado partnerships) – over the financial year: high level of profitability and improvement in free cash flow.
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Two major challenges for the sector
The turnover of the retail brands increased by 6.6% in the third quarter of 2022 according to the panelist IRI. Such a performance had not been recorded since the 2020 confinements. However, since the end of September, volumes have been declining following the rise in prices. The results of the French players, rather spared until now, should therefore suffer. Moreover, in the United States, Walmart and Target issued warnings about their results.
Another challenge: logistical disruption. According to data from NielsenIQ, the stock-out rate rose further on the shelves to 5.8% at the end of October. This represents a shortfall of 3.5 billion euros since the start of the year. According to System U, these disorders have never been observed for more than fifty years. The reasons are multiple: both climatic, geopolitical, logistical, inflationary, and also linked to the behavior of consumers, who stock certain items. On the other hand, the strike in the refineries seems to have had little impact because the brands have managed to organize themselves.