Casino presents its restructuring plan for the 3rd quarter of 2024

The Casino Group is going through a difficult time. Shaken by successive sales and closures, the major retail player has communicated a new secure plan based on three points:

– Disposals of Hypermarkets/Supermarkets finalized in accordance with the announced schedule.

• Sale of 425 stores since September 2023, including 135 in Q3 2024 and 18 as of October 1, 2024.
• The activity of all HM/SM operated by the Group is now virtually stopped, with the remaining stores1 intended to be sold or closed by the end of the year.

– Approval and deployment of Employment Protection Plans.

• Seven agreements signed with trade union organizations and validated by the Administration.
• Implementation of PES in progress (phases of voluntary departures, internal reclassification and first dismissal notifications).

– Quatrim debt reduction.

• Reimbursement of nearly €200 million to holders of Quatrim covered bonds thanks to proceeds from property sales, notably to Tikehau Capital.

A transformation underway

Furthermore, the transformation of the new Casino has been initiated and includes a renewal of strategic partnerships with the creation of the Aura Retail purchasing alliance between Intermarché, Auchan and Casino (for a period of 10 years) and a renewal of the partnerships of supply with the networks of Sherpa stores and TotalEnergies service stations. In addition, the rationalization of the store network continued during the quarter with the closure of 141 unprofitable stores (449 since the beginning of the year), the opening of 50 franchise or lease-managed stores (192 since the beginning of the year). the start of the year), the transfer of 15 franchised or lease-managed stores (76 since the start of the year) and the transfer of 7 franchised stores to integrated or lease-managed stores (12 since the start of the year) ‘year).

Third quarter revenue

In Q3 2024, the Group’s consolidated turnover reached €2.1 billion, down -1.8% on a comparable basis and -5.1% on a published basis after taking into account a scope effect, of the rationalization of the fleet of approximately -3.0% and a calendar effect of -0.3%.

Local brands: Monoprix, Franprix and Casino

Convenience brands (Monoprix, Franprix and Casino) reported a turnover down -0.7%. in comparable data in a degraded market⁽²⁾generally in line with the previous quarter. The Group and its employees mobilized strongly to meet demand during the period of the Paris 2024 Olympic and Paralympic Games, in particular the brands exposed to the Paris region (Monoprix, Franprix) which recorded a clear acceleration in activity during the first half of August. The impact is nevertheless generally neutral over the quarter, the positive effects having been neutralized by the disruptions linked to security and the installations of the opening ceremony and the tests (accessibility of stores), and an early departure of Parisians as well as a lower number of tourists before and after the Olympic period.

Monoprix records comparable growth in its turnover of +0.9% over the quarterreflecting the dynamism of the Monop (+4.4%) and Naturalia (+3.9%) brands and a return to growth at Monoprix City (+0.5%), driven by non-food (+3.6%). %). Non-food sales particularly supported the trend this quarter, both in stores (+14% on textiles) and online (Textile/Home/Leisure sales up +28%). Monoprix continued to gain customers over the period (customer traffic up +1.8%).

Franprix sales fell by -1.2% on a comparable basismainly penalized by a disappointing month of September (-3.7%). The brand is continuing the strategy of improving its price image, including a plan to reduce prices on a selection of 150 best-selling products in September (-0.5 pt on the change in sales at constant volume). The month of September was also impacted by unfavorable weather which penalized sales of seasonal products (-1.9 pt) and the non-renewal of the dilutive “Bibi” commercial operation from September 2023 (-1.9 pt). ). Franprix continued to win customers over the quarter, with a +0.8% increase in traffic.

The turnover of the Casino brands (Vival, Spar, Casino, etc.) shows a comparable variation of -4.5%. over the quarter, in a context still disrupted by the sale of hypermarkets and supermarkets which led to an overhaul of DCF’s logistics plan ⁽³⁾ and a review of the assortment. Sales were also negatively impacted by price reductions for franchise customers and a disappointing month of September (-7.2%) linked to unfavorable weather which resulted in underperformance of stores. seasonal products and families of seasonal products (liquid, fresh, etc.).

Cdiscount up slightly⁽⁴⁾

The main highlight of the quarter is the return to slight growth in overall comparable GMV⁽⁵⁾ (vs -12% in Q1 2024, -9% in Q2 2024) after two years of transformation, notably reflecting an 8% increase in marketplace GMV this quarter, gradually improving quarter after quarter (-4% in Q1 2024, – 2% in Q2 2024). Cdiscount sales (-8.1% on a comparable basis) logically remain impacted by the assumed strategy of rationalizing direct sales in favor of the marketplace, whose GMV reached 67% of Product3 GMV over the quarter (+5 pts vs. Q3 2023). They nevertheless show an expected sequential improvement since the start of the year (-21.1% in Q1, -16.5% in Q2).

Sale of Hypermarkets and Supermarkets (HM/SM)

Over the quarter, the Group sold 135 stores: 131 stores sold to Groupement Les Mousquetaires and Auchan Retail France and 4 supermarkets sold on September 30, 2024 and since passed under the Super U and Lidl brands. The activity of all HM/SM operated by the Group is now virtually stopped, the remaining stores (around twenty stores and 4 logistics platforms) intended to be sold or closed by the end of the year.

Job Protection Plans (PSE)

On April 24, 2024, the Casino group launched a transformation plan to adjust its organization to its new scope, focused on local commerce.. Agreements were signed with the union organizations in the 7 companies concerned and were validated by the Administration. The implementation of these job protection plans is underway in the entities concerned. The number of positions eliminated should be at the top of the range initially announced but the number of layoffs will be significantly lower than the number of positions eliminated thanks to the implementation of voluntary departures (around 400 positions) and internal reclassification ( 1,200 positions currently vacant and open to internal reclassification). Natural departures (retirement, etc.) occurring in recent months also make it possible to reduce the number of planned layoffs or create vacant positions that can be offered for internal reclassification. The Group’s objective is to limit forced departures.

The Group recalls that a provision for restructuring was recorded in the half-yearly consolidated accounts 20241 in continuation of the decision of the Board of Directors of April 24, 2024, in order to cover the estimated costs linked to the PES. These costs are an integral part of the expenses linked to discontinued HM/SM activities.

Finally, the Group will present its Strategic Plan for 2028 on November 14 detailing the recovery plan intended to restore the financial health of the Group and its transformation aimed at making it the leader in local commerce.

⁽¹⁾ A change in the allocation of turnover was made from Q1 2024, consisting of allocating the entire turnover of ExtenC (carrying the Group’s international activities and presented until then in the “Others” segment) to the “Casino” and “Franprix” segments. This reallocation results from a desire to present turnover by brand (and no longer by format) in accordance with the Group’s new operational management methods. The year 2023 has been restated accordingly to be comparable. The change in ExtenC allocation concerns 2.1% of revenue in Q3 2024.

⁽²⁾ Circana data: PGC-FLS (France) revenue down by -1.5%, -0.5% and -1.1% respectively in July, August and September 2024.

⁽³⁾ Distribution Casino France: entity which brought together the activities of HM/SM and the nearby Casino.

⁽⁴⁾ Data published by Cdiscount, with the exception of comparable turnover (-8.1% in Casino contributory view).

⁽⁵⁾ GMV (Gross merchandise value): business volume including tax. Comparable overall GMV: data on a comparable basis exclude Carya and Neosys (sold activities) as well as Géant and Cdiscount Pro (discontinued). GMV Product: GMV of direct sales and marketplace excluding B2C services, other revenues and B2B.