(AOF) – After starting the session in decline, Casino immediately recovered to settle at the top of the SBF 120 (+ 12.86% to 4.44 euros). But the distributor’s listing was suspended at 10:41 am at the company’s request, pending the publication of a press release and until further notice. The Saint-Etienne distributor confirmed on Tuesday that it had received two offers with a view to strengthening its equity.
The first offer concerns that from a consortium made up of EP Gobal Commerce as, an investment company of Czech billionaire Daniel Kretinsky, and Fimalac, headed by Marc Ladreit de Lacharrière.
The second offer comes from Xavier Niel, Matthieu Pigasse and Moez-Alexandre Zouari, via their 3F investment vehicle created for the occasion.
Candidates for the takeover of the company had until yesterday to file their offers with Casino and its conciliators.
With a view to finding a solution to the financial difficulties encountered by Casino, a conciliation procedure with its creditors was opened on May 25th. Stretching until September 25, it could be extended until October 25.
“These two proposals will be analyzed and presented to the ad hoc committee of the Board of Directors of Casino today, then to the creditors within the framework of a meeting organized on July 5 under the aegis of the conciliators”, it is specified in a Casino press release.
The main terms of each of these proposals will be made public at the end of the meeting with the creditors, ie Wednesday, July 5 after closing.
“No decision relating to these proposals will be taken by the Group’s governance bodies until these proposals have been presented and discussed with the creditors under the aegis of the conciliators”, added the distributor.
In a separate press release, 3F, which intends to invest 900 million euros in the group at the end of the operation, indicated that it wanted to “implement a long-term industrial and commercial project accompanied by reinforced financial resources and a confirmed French anchorage”.
This debt restructuring proposal will result in a significant reduction in the group’s indebtedness (6.4 billion in total debt at the end of 2022, including 4.5 billion for its activities in France), “said the vehicle of investment of the Niel-Pigasse-Zouari trio.
According to a source familiar with the matter, the offer made by the Kretinsky-Fimalac duo results in the injection of 1.39 billion euros into Casino. 900 million will be contributed by EP Global Commerce as and Fimalac while the creditors will have the possibility of supplementing the balance.
Yesterday, Casino announced that it was going to ask “in the coming days” for “grace periods” to freeze the repayment of certain debts or interest, so as not to find itself in default on its debt before the end of the conciliation period. when he must renegotiate it.
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Key points
– 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.
Challenges
– 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.
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, of the openings of Assai distributors in Latin America; and, from the 2
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half of 2022, of the savings plan of C Discount;
– After a 15% increase in sales and a net loss on 1
er
semester, 2022 objectives: at 2
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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.