In a press release published on Friday January 28, the French retailer announced a slight decline of 1.7% in EBITDA growth for retail brands in France (i.e. to around 1.28 billion euros compared to 1.304 billion in 2020). How can this decline be explained and what does it mean?
Monday, January 31 morning at 9am, the action of the Casino group had fallen by 7.30% to 21.07 euros, while the SBF 120 index rose by 0.85%. In question, the warning on the results issued by the Saint-Etienne group on Friday evening, announcing a slight decline in EBIDTA when an increase in this index had been anticipated for the fourth quarter of 2021.
At the same time, Carrefour also posted a decline of 2.66%, taking the opposite view from a CAC 40 up 0.87%). This profit warning from the group headed by Jean-Charles Naouri does not come as a surprise considering the strong pressure currently weighing on large food retailers in France. The announcement of the Casino group is indeed in the context of a more degraded market than expected in France. Due to the OMICRON variant, the health crisis lasts longer than expected, and creates a general climate of uncertainty, particularly with regard to future government measures. This slight decline of the Stéphanois group is also explained by its strong exposure to the convenience store segment in the Paris region, which has experienced a drop in tourist numbers in this context of health crisis. However, the food distribution market experienced a decline of 5.6% in Ile-de-France, (source IRI total PGC FI) where the decrease was less marked nationally (-3.7%) .
It should be noted in this regard that on the scale of the French market, Q4 2021 suffers from a demanding comparison with the fourth quarter of 2020, during which the food distribution market had experienced a rebound with growth of 6% according to Nielsen.
This information comes even though the strategic positioning of the group has recently been praised by observers for its good consideration of market consumption trends. The group headed by Jean-Charles Naouri, for example, has resolutely gotten on the food delivery bandwagon, and in particular fast food delivery, as illustrated by the now operational partnership with Gorillas. As underlined by Jean-Charles Naouri in a long interview granted to Les Echos last January, the Saint-Etienne group also intends to play a leading role on the subject of digital and has notably recently signed an ambitious partnership with Amazon Web Services. In addition, GreenYellow (the energy subsidiary of the Casino group) and RelevanC (another subsidiary specializing in data and digital marketing) have strong growth potential. Finally, the Saint-Etienne group will increasingly benefit from the expansion of convenience stores (a format recognized as increasingly buoyant), the performance of which is likely to have a positive impact on the retailer’s future growth.
Finally, it should be noted that the Casino group will publish the turnover for the fourth quarter and the annual results for 2021 on February 25, 2022.
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