A casino supermarket in Paris
PARIS (Reuters) – Casino set its annual target on Friday to reduce its debt and costs, after reporting current operating profit in 2022 down 5.9% after currency impact, reflecting a decline of its main activities in France and a lack of liquidity following weak sales in the fourth quarter.
In addition, Casino and Teract announced Thursday evening the signing of an exclusivity agreement to “create the French leader in responsible and sustainable distribution”.
The title Casino fell by 5.17% to 8.60 euros at 09:05 GMT on the Paris Stock Exchange, among the largest drops in the SBF 120 index, which lost 1.89% at the same time.
Casino, which has sold assets to reduce its debt, reiterated that it aims to finalize the final €400 million tranche of its €4.5 billion disposal plan in France by the end of the year.
The French retailer has also pledged to continue selling its assets in Latin America this year, after announcing earlier this week that it was considering a plan to sell part of its stake in Brazilian supermarket chain Assai. for approximately $600 million to accelerate its deleveraging.
DEBT FIRST
Casino, which ended 2022 with 434 million euros in cash and cash equivalents, said it would not pay a dividend for 2022 to prioritize debt reduction.
At the end of 2022, net financial debt amounted to €6 billion compared to €5.9 billion a year earlier, due to an increase in Assai’s debt related to its expansion plan.
Casino reported annual current operating income (ROC) down 12.1% at constant exchange rates to 1.12 billion euros in 2022, compared to 1.19 billion a year earlier.
This decline is explained by the 9.1% drop in the ROC of retail activity in France, where sales of Geant hypermarkets fell sharply in the fourth quarter of 2022 under pressure from competition.
Casino committed at the end of February, after a drop in turnover from its supermarkets and hypermarkets in France in the fourth quarter of 2022, to invest more in promotions this quarter.
For 2023, in France, Casino is aiming for a cost reduction of 250 million euros in the retail chains, a reduction in inventories of 190 million euros and a decline in its debt.
According to JP Morgan analysts, the group’s results “confirm once again its fight for cash flow generation and debt reduction”.
The agreement reached with Teract is also not likely to reassure investors who, estimates JP Morgan in a note, initially expected the issuance of new shares as well as detailed perspectives on the debt.
According to the exclusivity agreement signed with Teract, an entity controlled by Casino will bring together the distribution activities in France and a second, named TERACT Ferme France, controlled by InVivo, will be in charge of the supply of local agricultural products and in short circuit. , the two companies said in a statement Thursday.
“In order to be able to implement an ambitious growth plan, the new entity would acquire an additional level of equity of around 500 million euros,” the companies said.
(Report Dominique Vidalon, written by Kate Entringer, edited by Blandine Hénault)