2007 - Groupe Casino

DEUTSCHE BANK GLOBAL CONSUMER
& FOOD RETAIL CONFERENCE
June 18, 2008
2007 FINANCIAL HIGHLIGHTS
% change vs. 2006
Consolidated net sales
€24,972m
+11.0%
EBITDA
€1,799m
+15.3%
4.8%
vs. 4.6% in 2006
€1,196m
+14.7%
€664m
vs. €436m in 2006
+52.4%
€4,410m
vs. €4,390m
in 2006
2.45x
vs. 2.81x
Trading margin
Trading profit
Attributable net profit
Net debt
Net debt/EBITDA
2
A STRONGER PROFITABLE GROWTH PROFILE
SALES BY REGION
ORGANIC SALES GROWTH
2005
Other
International
9
Emerging
markets
12
France
79
2004
11,2%
2007
8
6,4%
27
3,8%
2,3%
65
Q1 08
Group
1,3%
1,8%
France
International

Faster organic growth

Remodelled asset portfolio
• Increased revenue contribution from International operations…
• …refocused on high potential countries (Brazil, Colombia, Thailand)

In France
• Effective differentiation strategy with revenue up 3.1% excluding FP/LP
in 2007
• Sales revitalization plans at Franprix/Leader Price
leading to an upturn in sales as from the fourth quarter
3
A STRONGER PROFITABLE GROWTH PROFILE
OPERATING MARGIN
2005
2007 EBITDA
2007
Other
4,5% 4,8%
5,0% 4,9%
4,5%
Hypermarkets
Franprix
Thailand
3,1%
Colombia
Leader Price
Brazil
Group
France
Mercialys
International
Superettes
Casino SM
Monoprix

An aligned and balanced earnings profile, with 10 main business units
that all make a significant contribution to EBITDA

International trading margin is moving towards the French margin

Stable operating margin in France in a competitive environment
• Favourable impact of brand mix and product mix
• Costs kept under control thanks to Operational Excellence programme
4
FRANCE: FROM MASS MARKET TO PRECISION RETAILING
International: a focused and fast-growing portfolio
Conclusion
Appendices
FRANCE’S THIRD LARGEST FOOD RETAILER

2007 Total Business
Volume (1): €21.2bn

13% market share - food (2)

A balanced business
portfolio covering all
formats

Format
Number of
stores (3)
Hypermarkets
118 (4)
Supermarkets
379
Citymarkets
330
Over 8,000 stores
(1) excl. other activities
(2) source: TNS
(3) at End 07
(4) excl. international affiliates
6
Convenience stores
National
6,040
Convenience stores
Paris area
652
Discount
489
FRANCE: FROM MASS MARKET
TO PRECISION RETAILING

The shopping experience is changing

Lifestyles are increasingly individualised, partly due to changing
socio-demographic trends

New retailing concepts are gaining ground

The product offering needs to be more varied and better
segmented, to keep pace with evolving consumer tastes
and behaviours
7
SHIFTING SOCIO-DEMOGRAPHICS
% OF THE POPULATION
AGED 60 AND OVER
HOUSEHOLD COMPOSITION
43% - 46%
32%
45,0%
21.8%
20.6%
2,5
2.43
40,0%
2.33
35,0%
31.9%
19%
30,0%
17%
2.48
28.5%
29.8%
2,4
2,3
2,2
2.04 - 2.08
25,0%
1990
2000
2008

Greying population

In France, a third of the
population will be over 60
in 2050
2,1
2
20,0%
1980
2,6
1,9
1995 2000
2005
2030
Number of single-person households (%)
Average number of people per household
2050



Source: Insee
8
Families are shrinking
Fewer households with 4 or
more members: 20% in 2007 vs.
24% in 1995
More single-person households
and single-parent families
NEW NON-FOOD RETAILING
CONCEPTS ARE GAINING GROUND


Ongoing development of speciality chains
Market share
2007 vs. 2003
Apparel
White goods
Hypermarkets
- 3.5 pts
- 3.5 pts
Speciality chains
+ 6.7 pts
+ 2.5 pts
Source: TNS
Source: Gfk
Emergence of the Internet as a viable retailing channel
Market share
2007 vs. 2005
DVDs, CDs, books
Food retailers
- 7 pts
Speciality chains
+ 5.4pts
Internet
+ 1.7pt
Source: Gfk
9
Twice as many online buyers
in 2007 compared with 2004:
20 million in Q4 07 vs.
10.6 million in Q4 04
HYPERMARKETS ARE MORE AND MORE
CHALLENGED IN FOOD
French Food Retailing market
Sales breakdown
by format
Same-store sales
CAGR 2001-2007
Supermarkets
34%
13.2%
0.9%
Hypermarkets
51%
Market share
of discount retailers
9%
0.2%
SM
Discount 14%
Supérettes 1%
Source: TNS World Panel- LTM P5 08
HM
>6,500 sq.m
Source: Nielsen
2000
2007
Source: TNS Worldpanel

Hypermarkets are still the dominant food retailing format in France…

… but Supermarkets are structurally outperforming hypermarkets

… and Discounters are rapidly catching up
10
MARKET GROWTH IS BEING
LED BY PRIVATE LABELS…
NATIONAL BRAND AND PRIVATE LABEL
SALES IN HM/SM
144,4
140
130
Private-label sales have
grown 7 times faster
than national brands
120
110
107,5
100
100
90
2000
2001
2002
2003
2004
MN
2005
2006
2007
MDD
PRIVATE LABELS’ SHARE OF HM/SM MARKET
IN VOLUME AND VALUE
37
36
31
26,2
27
26
21
21,2
16
Source: IRI –
Total FMCG YTD June
2000
2001
2002
2003
2004
Volume
Value
11
2005
2006
2007
A SUCCESS BASED ON AN INCREASINGLY SEGMENTED
OFFER ALIGNED WITH CONSUMER EXPECTATIONS
Practical &
Time-Saving
Health & Nutrition
Environmentallyfriendly
Gourmet
12
Fair Trade
TO KEEP PACE WITH A CHANGING MARKET, CASINO HAS
SHIFTED ITS ASSET PORTFOLIO WITH MAJOR ACQUISITIONS
• 1997: acquisition of the Franprix and Leader Price banners
• 1997: acquisition of 21% of Monoprix, a citymarket banner
• 2000: stake in Monoprix raised to 50%
• 2000: acquisition of Cdiscount
13
TODAY, THE GROUP HAS A FAVOURABLE
BUSINESS MIX IN FRANCE (1/2)
1997 CONSOLIDATED SALES:
€10.1bn*
2007 CONSOLIDATED SALES:
€17.9bn*
Other businesses
6%
FP/LP
6%
Superettes
10%
Cdiscount Other businesses
4% 4%
FP/LP
22%
Géant HM
53%
Casino SM
25%
Monoprix
10%
Superettes
9%

Géant HM
34%
Casino SM
17%
A strong presence in the most buoyant formats….
•
Discount, Convenience and e-tailing businesses currently account for
over 60% of sales in France versus just 40% in 1997
* 1997 French GAAP; 2007 IFRS
14
TODAY, THE GROUP HAS A FAVOURABLE
BUSINESS MIX IN FRANCE (2/2)
CONTRIBUTION TO
2007 TRADING PROFIT - FRANCE
Other
2007 OPERATING MARGIN
6.9%
Hypermarkets
5.7%
7%
19%
FP/LP
France: 4.9%
31%
2.7%
43%
Hypermarkets
Convenience
FP/LP
Convenience
31%

which are also the most profitable …
•
The Convenience and Discount formats currently account for 74% of
trading profit generated in France
15
OUR Q1 PERFORMANCE ATTESTS TO THIS
STRONG POSITIONING
ORGANIC SALES GROWTH
Q1 08
2007
18.1%
11.2%
10.1%
8.5%
5.3% 5.8%
4.1%
3.8%
1.7%
1.0%
0.1%
0.1%
1.8%
-2.6%
France



Casino SM
FP/LP Monoprix Superettes Géant Other
Casino businesse
s
Dynamic supermarket banners: Casino SM and Monoprix
Robust sales growth at Franprix/Leader Price (8.5%), confirming
the effectiveness of the two banners’ revitalization plans
Continued strong growth in revenue from Other businesses
16
AN OFFERING FOCUSED ON THE MOST
PROMISING SEGMENTS

Casino is France’s leading retailer in terms
of private-label penetration rates in FMCG
• Private label products > 50% of total Group volumes
• Very high penetration rates across all formats

•
Monoprix: around 30%
•
Géant Casino & supermarkets: > 40%
•
Superettes & Franprix: > 50%
•
Leader Price: 100%
Enhanced and expanded fresh-food section
• New Fruit & Vegetable concept deployed
in the hypermarkets and supermarkets
• “Terre et Saveur” brand strengthened with
the Casino signature
• Development of eco-label product lines
17
MORE PERSONALISED MARKETING
THROUGH DUNNHUMBY

An extensive customer database developed through
the loyalty programme
• 3.7 million card holders (hypermarkets + supermarkets)
• Member of the S’miles network (13 million card holders)

The partnership with dunnhumby is a way to improve our customer
intelligence (lifestyles, expectations, etc.) in order to tailor our value
proposition to each type of shopper in each store
Pricing policy
Assortment
18
Advertising
CONTINUED SUSTAINED EXPANSION IN THE
MOST BUOYANT FORMATS

Maintaining an active expansion strategy for Casino Supermarkets
and Monoprix

Development of the Franprix network
• In the Paris area and the main regional cities
• Target of 1,000 stores in 5 years’ time vs. 652 at end-2007

Accelerated expansion of the Leader Price network
• to double the store base over the next 5 years
(from 489 stores at end-2007)

Deployment of the Alcudia plan for the hypermarkets
• Increase the sites’ critical mass and therefore the footfalls
• By doubling retail space in the shopping centres and optimising assets
19
France: from mass market to precision retailing
INTERNATIONAL: A FOCUSED AND FAST-GROWING PORTFOLIO
Conclusion
Appendices
OUR BANNERS HAVE LEADERSHIP
POSITIONS AND DEEP LOCAL ROOTS
Sales
Sales
#1
€1.5bn
€0.6bn
#1
€2.4bn
#2
€0.1bn
#2
€5.6bn*
#1
€0.3bn
€0.3bn*
#1 in South America
> 1,400 stores (incl. 257 hypers)
* 100% basis
21
DYNAMIC GROWTH IN SOUTH AMERICA AND
ASIA
2007 ORGANIC GROWTH
IN SALES
2006
2006
14,8%
TRADING PROFIT
MARGIN
2007
2007
6,2%
5,3%
11,2%
4,5%
3,9%
9,8%
4,1%
3,3%
5,6%
3,9%
1,7%
International

Asia
Indian
Ocean
International
South
America
Asia
Indian
Ocean
Double-digit organic growth in South America and Asia
•
•

South
America
Solid sales growth at CBD due to a 3.4% increase in same-store sales and an
aggressive expansion strategy - Sustained very strong growth in same-store sales in
Argentina, Venezuela and Uruguay
Sales up 6.4% at Big C (Thailand), led by a dynamic expansion strategy (five
hypermarkets opened in 2007)
Significant improvement in trading profit margin in both priority regions
•
•
South America: positive impact of consolidating Exito & solid margin performance
across the region
Tangible improvement in trading profit margin at BigC
22
EXITO: AN UNDISPUTED MARKET LEADER FOLLOWING
CONSOLIDATION OF CARULLA VIVERO

Exito: Colombia’s leading food retailer
• Pro forma 2007 sales*: €2.4bn
• 42% market share (formal market )
• No. 1 in three formats: hypermarkets, supermarkets and discount
• High 7.8% EBITDA margin (2007)

Integration of Carulla Vivero and gradual leverage of synergies
• Converting the Vivero stores to Exito (7 out of 18 converted)
• Aligning purchasing terms
• Starting the process of optimising head office synergies
• Extending the Exito card to the Vivero banner

Enhancing the value of the property portfolio
• Premium real estate portfolio: 619,000 square meters of selling space (of
which 66% owned)
• Shopping centre development
* consolidation of Carulla Vivero as from 1 February 2007
23
CBD: A MULTI-FORMAT RETAILER

2nd largest food retailer in Brazil
• 2007 total net sales: € 5.6bn
• A multiformat retailer: 575 stores with a strong presence in Sao
Paulo and Rio de Janeiro states
• acquisition of Assai in 2007 has taken CBD into the highly promising
cash and carry segment

Improve competitiveness
• price optimization,
• assortment review,
• development of consumer finance, increase in non food sales...

Improve profitability
• Operating expenses reduction programme
• Restructuring Sendas operations
24
BIG C: THE “THAI” RETAILER

A major retailer in Thailand
• 2007 total net sales : €1.4bn
• N°2 retailer on the large trading formats
• 54 hypermarkets with 514,000 square meters of selling space

Strengthening the competitive edge of Big C brand:
• “thainess’’,
• good price image

Further expansion with 8 openings planned in 2008

Deploying the dual Retailing-Property Management model
• developing and enhancing the value of shopping centres
• Big C has as many shopping centres as hypermarkets
25
INTERNATIONAL: STRENGTHENING
LEADERSHIP POSITIONS

Sustained strong expansion in key countries (Brazil, Colombia and Thailand),
in both conventional and new formats

Faster rationalisation of the banner base in Brazil and Colombia

Additional acquisitions as opportunities arise (e.g.: Assai in Brazil)

Developing, along French lines, a dual Retailing–Property Management model
An increased contribution to sales growth and trading profit
26
France: from mass market to precision retailing
International: a focused and fast-growing portfolio
CONCLUSION
Appendices
SOLID FUNDAMENTALS TO DRIVE FASTER
ORGANIC GROWTH

A well positioned asset portfolio
• A favourable format mix in France
• High growth potential of Franprix and Leader Price banners
• An international geographic footprint refocused on high potential
countries
(Brazil, Colombia and Thailand)

Efficient growth drivers
• In France, implementation of a targeted marketing strategy for each
banner
and ramp-up of differentiation drivers
• In international operations: faster growth and development of the dual
Retailing – Property management model

A more aligned and balanced profitability profile
• International trading margin is converging towards the French margin
• 10 business units, each of them contributing significantly to Group
EBITDA
28
PROPERTY MANAGEMENT: AT THE HEART OF THE
GROUP’S PROFITABLE GROWTH STRATEGY

Property assets, a significant component of the Group’s value: €7.2bn
(end-07)

An active asset optimisation strategy in place since 2005
• Constantly manage the portfolio to sell and lease back mature property…
• …and acquire assets with high value potential

The dual retailing – property development model: a priority for expansion in
international markets
• Helping to increase store traffic and thus supporting the development of the
Group’s retailing activities…
• …while capturing the full value of our property assets

Enhancing the value of existing assets: the Alcudia plan en France
29
2008 OBJECTIVES
Faster organic growth in sales
Further growth in trading profit
30
France: from mass market to precision retailing
International: a focused and fast-growing portfolio
Conclusion
APPENDICES
A STRONGER FINANCIAL POSITION
en millions d'euros
31 Dec. 2005
Equity
31 Dec. 2006
31 Dec. 2007
5,638
5,972
7,124
5,444
Net debt
Of which minority shareholders’ put options 1,031
4,390
4,410
889
706
3,82x
2,81x
2,45x
96%
74%
62%
Net debt / EBITDA
Gearing



Net debt / EBITDA was reduced to 2.45x from 3.82x in 2005 in line with
objectives
Gearing reduced to 62% from 96% in 2005
€2.5bn in assets have been sold since the beginning of 2006
The Group has restored its financial flexibility
and is committed to maintaining strict financial discipline
32
AN ACTIVE ASSET OPTIMISATION STRATEGY
SINCE 2005
Standard
Property
Offices and
Warehouses
Investment
Property
Shopping
Malls
Strategic Property
Stores/Undeveloped Land
Mature or
strategic
properties
2005
Head office
sold
2006
Warehouses
sold
With undeveloped
land or
opportunities for
extension
IPO
Polish store
properties sold
OPCI*
2007
Alcudia
Partnership
w/Whitehall in
Central Eur.
* Related to supermarkets and superette properties in France and store properties in La Reunion
33
PROPERTY ASSETS ARE A SIGNIFICANT
COMPONENT OF THE GROUP’S VALUE
Stores
France
International
€3.9bn
€1.5bn
€5.4bn
€1.3bn
€0.5bn
€1.8bn
€5.2bn
€2bn
€7.2bn
(mainly hypermarkets)
Shopping
malls
Total value has increased since 31 December 2006,
despite the €635m in disposals in October 2007
NB: These estimates are based on appraised values (excluding Mercialys, valued based on market capitalisation) multiplied by
Casino’s stake in the companies concerned
34
PUTS
in €m
Company
% capital
Puts included in net debt
Franprix- Leader
Price
Franprix Holding 95%  100%
& Leader Price Holding 75%  100%
Majority-owned franchised stores
Exito
Carulla Vivero put (77.5% to 100%)
Uruguay (Devoto)
Assai (CBD)
Value
at 31 Dec. 2007
706
420
98
148
11
60%  100%
29
Off-balance sheet puts
1,320
Monoprix (1)
Franprix- Leader
Price
Uruguay (Disco)
50%  100%
850
Minority-owned franchised stores
335
Sendas (CBD) (2)
42.6%  100%
(1)
(2)
44
91
Value based on minimum indexed price. The actual price paid may be higher
Put on CBD accounted for at 34.0%
35