(AOF) – Casino announced that as of October 25 at midnight, the deadline for committing to subscribe to guaranteed capital increases totaling 275 million euros, the distributor received subscription commitments from the share of creditors for a total amount of approximately 195 million euros, or approximately 71% of the amount to be subscribed.
In accordance with the lock-up agreement of October 5, 2023, the group, the consortium and the initial secured creditors who had committed to guaranteeing the capital increase have decided, in particular with regard to the deadlines and costs additional costs represented by a capital increase with maintenance of the preferential subscription rights of existing shareholders, and on the other hand the latest results of the group to immediately implement the guarantee of the secured creditors concerned relatively for the amount of approximately 80 million euros remaining to subscribe.
Casino will therefore not launch a capital increase with maintenance of preferential subscription rights as part of its restructuring.
Casino recalled that the implementation of the capital increases envisaged as part of the financial restructuring plan, which should be carried out by April 30, 2024 at the latest, will result in massive dilution for existing shareholders and Rallye will lose control. 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.