(AOF) – Casino announced Monday evening that, through judgments rendered on February 26, 2024, the Paris Commercial Court has decided on its accelerated safeguard plans and those of its subsidiaries concerned. In the absence of suspensive appeal, it is envisaged that all of the operations planned by the financial restructuring will be carried out on March 27, 2024, subject to the approval by the financial markets authority of the prospectus relating to the various issues of securities. provided for by Casino’s accelerated backup plan.
As indicated on several occasions by Casino, the implementation of the capital increases envisaged as part of the financial restructuring plan will result in massive dilution for existing shareholders. They will hold less than 0.3% of Casino’s capital, including around 0.1% for Rallye, and Rallye will lose control of Casino to the consortium made up of EP Equity Investment (Daniel Kretinsky), Fimalac and Attestor). The latter would hold 53.7% of the capital of Casino.
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Key points
– Food distribution group created in 1898 present in France, Brazil, Colombia and Uruguay;
– Distributor worth €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 promising formats in France, the leading food and non-food E-commerce offering, the development of new growth levers, a significant participation in major distribution players from Latin America, and the strengthening of the group structure;
– Capital locked at 52.3% by the holding company Rallye (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 equity and, at the end of June, €2.3 billion in liquidity compared to a net debt of €7.5 billion.
Challenges
– Strategic plan to reduce the share of hypermarkets reduced to 15%, 50% growth in the offer of organic products to €1.5 billion, advancement of e-commerce and, for new activities, expansion of the fleet installed photovoltaics and rise in revenues from data centers;
– Dynamic innovation strategy: management and monetization of data within RelevanC, cloud offering 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 “Green Yellow” photovoltaic expertise with a 4.5 GWp pipeline, reinforced by fundraising in February, and by its partnerships (Schneider Electric and Amazon web services) – aiming to reduce CO2 emissions of 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, amounting to more than €4 billion, with the upcoming sale of Green Yellow;
– Progress in promising formats in France, premium and proximity to the Monoprix, Naturalia and Franprix brands… (8% of the French market), in purchasing centers and in the transformation of hypermarkets, formerly Géant Casino, into Casino Hyper Frais supermarkets.
Challenges
– 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, the openings of Assai distributors in Latin America; and, from the 2
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half-year 2022, of the C Discount savings plan;
– After a 15% increase in sales and a net loss on 1
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semester, 2022 objectives: as of 2
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half-year: 800 openings in local formats (Monop’, Franprix, Naturalia, Spar, Vival, etc.), mainly in franchises (376 completed at the end of June) – development of the most promising retail and e-commerce activities (Casino Hyper Fees, Gorillas, Amazon and Ocado partnerships) – over the financial year: high level of profitability and improvement in free self-financing.
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Two major challenges for the sector
The turnover of distribution brands increased by 6.6% in the third quarter of 2022 according to the IRI panelist. Such a performance had not been recorded since the confinements of 2020. However, since the end of September, volumes have declined following the increase in prices. The results of French players, rather spared until now, should therefore suffer. Moreover, in the United States, Walmart and Target have issued warnings about their results.
Another challenge: logistical disorganization. According to NielsenIQ data, the out-of-stock rate increased further on the shelves to reach 5.8% at the end of October. This represents a shortfall of 3.5 billion euros since the start of the year. According to Système 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 managed to organize themselves.