INVESTOR PRESENTATION - Accueil · Investor presentation 3 – In Brazil: share of C&C was >40% of...

Investor presentation

INVESTOR PRESENTATION

September 2017


Summary

I. Group formats are particularly adapted to current consumer

trends

II. In France, most formats perfectly fit new consumer trends

III. Thanks to Cdiscount, a comprehensive multi-channel strategy

IV. Abroad, leading positions in dynamic countries

V. H1 2017 results and financial situation

VI. Perspectives


3

– In Brazil: share of C&C was >40%

of sales as of end-June 2017 vs

24% as of end-2014

– In Colombia, already 2

Surtimayorista large C&C stores

with a plan to have 8 stores by

year-end

Group formats are particularly adapted to

current consumer trends

In France, strong exposure to Proximity, Premium & E-commerce:

In Latin America, fast development of Cash&Carry:

– Proximity banners (Franprix, supermarkets

and small convenience) accounted for

36% of H1 2017 net sales

– Monoprix and Naturalia, our premium

formats contributed to 21% of sales at

end-June 2017

– Our e-commerce sales, made on

Cdiscount’s website, represented 9% of

H1 2017 net sales

Investor presentationInvestor presentation

IN FRANCE, MOST

FORMATS PERFECTLY

FIT NEW CONSUMER

TRENDS


Particularly well-adapted formats across

French banners …

5

Monoprix enjoys high sales and traffic growth, a strong development in urban and organic premium stores, and two-digit growth online

Thanks to the new Mandarine commercial model, Franprix is very well aligned with the needs of urban customers who expect constant innovation, services and renewed product offering

The Proximity model is now stabilized, thanks to renovations (stores and offer) and transfers to franchise, as shown by recent traffic trends

Strong performance in Supermarkets is driven by the upgrade of the

commercial model (new service counters, fresh market areas, …)

In Hypermarkets (Géant), strong improvement of food sales and margin per sqm is the result of the continued adaptation of the commercial model : less non-food, space reduction


… With lower exposure to pricing volatility

6

Well-adapted pricing across banners:

– On differentiated formats : stable and satisfactory pricing (Franprix, Monoprix), with excellent traffic data

– Good traffic on the other formats

As of today, no ambition to move prices upwards or downwards

Less promotional intensity in Casino’s hypermarkets and supermarkets vs. market trends (Kantar)

Efficient, redesigned loyalty programs, already showing very positive effects (Monoprix)


Strong development of the best formats in H1

Acceleration of the continued adaptation of every format to consumers' rapidly changing needs:

– Improvement of each format itself: Franprix into Mandarine, enhanced commercial model for hypermarkets and supermarkets.

– Changes in the share of each format within the French mix (whose overall margin improved: steady expansion of Monoprix and Naturalia

– Increase within each format of the multi-channel share(Home-delivery, click and collect, synergies with Cdiscount …)

Thanks to these continuous adjustments, market share held well over the first semester, without expansion and, for certain formats, despite a decline in sq.m

7


Favourable current trading with

good commercial performances in France

Over the last Kantar period*, the Group gained

+0.1pt market share to reach 11.7%

This performance was driven by a market share

gain of:

– +0.1pt for Monoprix with a better loyalty

– +0.1pt for Géant hypermarkets, with an improvement of +0.7pt in loyalty

The other banners were stable, except Leader Price (-0.1pt related to store closures)

8* Kantar P08 2017, from 10 July to 6 August 2017


THANKS TO CDISCOUNT, A

COMPREHENSIVE MULTI-

CHANNEL STRATEGY


Cdiscount: a key asset in Casino’s

e-commerce strategy

10

Key features of Cdiscount in France (as of H1 2017):

#2 website attracting the highest number of unique visitors in France

Traffic 442 millions visitors

Active customers 8.4 millions

Orders 12.2 millions

GMV 1.5 billion euros

Marketplace share 33.4%


Cdiscount: a recently renewed strategic focus

already delivering good commercial results

New strategic plan launched in the first semester of 2017 to improve assortment and better address customer needs focused on

– Improving product offerings and quality of service

– Strengthening of logistics capacity to provide more products with better exclusive offers while committing to large volume orders

Historical summer sales:

– GMV growth of 16.0%

– Market share gain of 1.9 points on technical goods in July according to Gfk after two months of consecutive gains

The new plan should continue to sustain growth in the coming months

11


Cdiscount as a key contributor to the Group

multi-channel strategy in non-food

Cdiscount now manages both Cdiscount’s and Casino’s home furnishing and household appliance inventories

With now immediate in-store availability for the website:

– Potential presence in corners through Casino’s extensive network of 110 Géantsupercenters and 230 directly owned Casino supermarkets

– Already 1,500 SKUs to be quickly rolled out up to 4,000 SKUs

– Click-&-Collect pick-up reinforced on key categories

In total, 53% of Cdiscount orders were delivered through click&collect in 1H17 (67% of heavy parcels)

12


Group’s banners at the cutting-edge for home

delivery and CRM / customer targeting

13

Delivery on foot within 1 hour & “Leave your cart”concept

Shop & Go

Delivery within 30mins via the Franprix app

Delivery within 3 hours (Leave-at-checkout)

Apps

and websites

Cdiscount

Home

delivery

Drive-through

pick-up and

click & collect

291 click & collect points*

173 click & collect points *

158 drives*

108 drives*

Monoprix.fr

Monoprix&Me app

Leaderprice.fr

Geant.fr

Supercasino.fr

Franprix app

&

* At end-June 2017

Cdiscount Express offer

Immediate availability in Géant and Casino Supermarkets stores

In-store pick-up points

&


ABROAD, LEADING

POSITIONS IN

DYNAMIC COUNTRIES


GPA (Brazil): Success of the Cash&Carryand new digital loyalty program

15

Another excellent performance at end-June for Assai:

– Continued strong expansion dynamics in 2017: 110 stores*

at end-June 2017 and an objective of converting a total

of 16 stores in 2017

– In Q2, +29.2% organic growth* and +13.5%* same-store

growth sustained by strong traffic

– Higher sales multiple and profitability for converted stores

Launch of the "My Discount" digital loyalty program throughout the company:

– Targeting the 12 million card-carrying customers

– Personalised promotions via a mobile application

– An enhanced communication with customers : one million

downloads of the application within the first 10 days

– Segmentation can be performed directly by the

manufacturers

* Data published by subsidiaries


Exito: leader in food retail in Colombia

16

Gradual macro easing expected

– Gradual decrease in interest rates might lower financial expenses and

drive consumption

– Mid-term economic recovery expected

An assertive strategy to adjust the store mix with an ambitious development of the Cash & Carry format:

– Launch of the Cash & Carry format under the Surtimayorista brand in

2016

– Already four stores opened at end of August

– Objective to roll out the format to 8 Surtimayorista* stores by year-end

A leading position in real estate

– A track record of over 10 years in the development and operation of

shopping malls in Colombia : 584,000 sqm* of GLA at end of 2016

– The newly Viva Malls REIT will enable this platform to continue to grow

at an accelerated pace : +120ksqm* of GLA targeted in 2018



Exito: continued strong performance from

other countries

17

Uruguay

– Continuous focus on healthy margin levels

– Pursuit of market share gains

– Development of the convenience format with 10 to 15 Devoto Express* store openings

Argentina

– A strong real estate business with already 160,000 sqm GLA at end 2016*

– Continuous real estate expansion

– Objective to create near to 35ksqm of GLA in the next 2/3years*



H1 2017 RESULTS

AND FINANCIAL

SITUATION


Key figures - H1 2017

19

Total Group sales up 9.7%

France Retail trading profit: €121m vs €85m in H1 2016,

of which €83m for food retail activities

vs €36m in H1 2016

Group trading profit: €466m vs €281m in H1 2016,

of which €336m vs €211m in H1 2016 excluding tax credit

Net underlying profit, Group share of €48m

Group net debt: €5.6bn vs €6.3bn at end-June 2016


Operating profitability by segment

20

FRANCE RETAIL E-COMMERCE LATAM RETAIL

In €m H1 2017 Change H1 2017 Change H1 2017 Change

Consolidated net sales 9,261 +0.0% 871 +2.5% 8,466 +23.8%

EBITDA 292 +9.5% (7) n.s. 529 +59.3%

EBITDA margin 3.2% +27bp -0.8% n.s. 6.2% +139bp

Trading profit 121 +42.9% (19) n.s. 364 +76.4%

Trading margin 1.3% +39bp -2.1% n.s. 4.3% +128bp

Increased profitability in France driven by the food retail business

Operating profit in E-commerce reflects the investments carried out under the strategic plan

Improved profitability in Latin America sustained by Brazil's good performance


Breakdown of consolidated net financial debtat 30 June 2017

21

H1 2016 FY 2016 H1 2017

France (4,027) (3,200) (4,314)

E-commerce (140) 168 (214)

Latam Retail (2,263) (1,032) (1,706)

Latam Electronics 87 697 641

Group (6,343) (3,367) (5,594)


Casino’s upcoming bond maturities

Casino has been rated BB+ (stable outlook) by Standard & Poor’s since 21 March 2016 and BB+ (stable outlook) by Fitch Ratings since 24 April 2017

Average debt maturity was 4.8 years at September 1st 201722

355

697

540

850

550

758

900

450514

2018 2019 20212020 2022 20242023 2025 2026


Strong improvement in value of Group’s Latam

assets

23

MarketCapitalisation at 01/09 (in billion) Price at 01/09 % Var LTM

Grupo Exito (COP) 6,875.2 15,260 +8%

GPA (BRL) 19.2 72 +43%

Via Varejo (BRL) 22.0 17 +166%


PERSPECTIVES


H2 2017 Perspectives – France (1/2)

25

CASINO SUPERMARKETS

Continued roll-out of the commercial

model

Sustained commercial momentum

CONVENIENCE

Deployment of the new concept

and renovation of the offering

in integrated stores

Expansion through franchises

MONOPRIX

Strong multi-channel dynamic

At least 21 new store openings

for a total of more than 50 new stores

by the end of 2017

FRANPRIX

Completion of the new Mandarine

concept roll-out

20 new store openings for a total

of 50 new stores by the end of 2017


H2 2017 Perspectives – France (2/2)

26

CDISCOUNT

Continued re-launch of action plans:

– Improvement of the customer experience

– Increase in the number of references

– Increasingly competitive prices and promotions

– Improvement of delivery conditions

GÉANT

Return to break-even led by:

– Reduction in retail space

– Operational excellence plans

– Increase in sales/sq.m

LEADER PRICE

Pursuit of operational excellence

initiatives


H2 2017 Perspectives – Brazil

27

GPA

Acceleration of cash & carry: objective of 20 new stores over the year,

of which 16 from conversions

Continued plans in hypermarkets and emphasis now on Pão de Açucar stores’

renovations


Perspectives

2017 profitability objectives revised up

– In light of its good H1 2017 results, the Group revises its guidance for the growth in consolidated trading profit up to at least 20%, at 30 June 2017 closing exchange rates

– In France, Casino Group now aims to achieve above 15% growth in food retail trading profit and forecasts a contribution from its property development activities of around 60M€

All plans developed in 2017 should continue to deliver a positive carryover

effect in 2018, through margin enhancement and cost reductions

28


APPENDICES


Monoprix: return to steady growth

30

Accelerated growth over the period:– High growth in same-store sales and traffic– +0.1pt gain in P07 Kantar market share

Resumption of commercial momentum, driven by: – Success of the new loyalty programme, with new members

up twofold– Extension of opening hours

Sustained high level of expansion (+29 new stores opened

in H1 2017):– Good expansion pace of the organic Naturalia concept

(+8 stores)– Continued opening of urban supermarkets (+3 Monoprix

Citymarché stores)

Same-store sales growth

-2.3%

+0.4%+2.1%

+3.6%

T3 2016 T4 2016 T1 2017 T2 2017

Double-digit sales growth on monoprix.fr, driven by food sales

Continued development of cross-channel activities:

291 urban click & collect points

Home delivery within one hour available at 93 stores at end-June

Reserve & collect and same-day delivery for purchases made in-store

and online

MULTI-CHANNEL STRATEGY

Q3 2016 Q4 2016 Q1 2017 Q2 2017


Casino Supermarkets: continuous very good trends

31

Six consecutive quarters of positive same-store growth:

– Same-store sales up 3.2% in Q2 2017

– Growth led by Fresh

Continued roll-out of the commercial model:

– New service counters and success of the fresh market area, including the fresh fish market and meat sourced from selected breeders

– Beauty: new make-up counter concept

– Modernisation and new offer in private-label: ready-to-eat, organic and veggie

Commercial momentum and operational excellence:

– Innovative offerings launched on a continuous basis

– Stronger loyalty programme

– Ambition of excellence in fresh corners


173 click & collect points

111 stores offering delivery within three hours of payment at checkout (“Leave at checkout”)

+2.8% +3.2%+1.9%

+3.2%

T3 2016 T4 2016 T1 2017 T2 2017


Q3 2016 Q4 2016 Q1 2017 Q2 2017


Franprix: excellent performance

32

Very strong sales momentum, with comparable customer traffic up 6.4% in Q2 2017 after rising 4.1% in Q1 2017

A commercial model very well aligned with the needs of urban customers who expect ever more innovation and servicesand a constantly renewed product offering:– New services: mobile payment for home delivery, wifi, portable

checkout system, etc.

– Constantly updated products and new, innovative service counters

– Increase in the proportion of fresh products, development

of the scoop-and-weight, individual and organic products to target

health-conscious customers who want to create less waste

Thanks to the Mandarine concept, a thoroughly modernised store network:– 73% of the store network now at the new concept, with a target

of 100% by end-2017

– Resumption of expansion, with 30 new stores opened in H1 2017


Franprix was named 2017 Cross-Channel Enterprise of the Year at the 2017 LSA Magazine Awards

This Prize awards the banner's overall digital solutions, from express mobile ordering to digital payment

-0.1%

-1.7%

+1.4%

+3.2%

Q3 2016 Q4 2016 Q1 2017 Q2 2017



+1.8%+2.6%

+0.4%

+4.0%

T3 2016 T4 2016 T1 2017 T2 2017

Géant: excellent performance in food and continued adaptation of the commercial model

33

Recovery in same-store growth in Q2 2017:– Increase of 0.8% in Q2 2017 vs -1.9% in Q1 2017

– Continued reduction in retail space, down 1.1% at the end of H1 2017

– Improvement in net sales per square metre of 0.6%, of which 2.3%

in food

– An even stronger improvement in margin per square metre

Excellent performance in food, driven by strong growth in organic products and e-commerce:– Food sales up 4.0% in Q2 2017

– Dynamic fresh market corner

First results of the operational excellence plans in H1 2017:– Customer promise maintained on checkout time

– Improved productivity, led by organisation programmes

– Training of specialists for fresh market roles

Same-store sales growth for food

108 drives

Immediate availability of Cdiscount products in stores

Redesign of the geant.fr site, accessible via mobile: redirection proposed for order and delivery, to stores, drives, or to the Cdiscount website


Q3 2016 Q4 2016 Q1 2017 Q2 2017


Cdiscount: good commercial performance (1/2)

34

In Q2 2017, same-store GMV climbed 11.5%* to reach a marketplace share of 35.0% over the quarter:– Threefold increase in the share of Cdiscount Fulfilment

to the marketplace: 15% in June 2017 from 5% in June 2016

– New services for merchants: aggregation, exchange rates and loans

Doubling of the number of CDAV premium members at end-June 2017 vs end-June 2016

Mobile share of traffic up 8pts on Q2 2016 to 60%

Renewed and accelerated market share gains (Gfk): +1.5 point in May, +2.0 points in June and +1.9 point in July**

Historical summer sales with GMV up +16.0%

As of 1 July 2017, Cdiscountmanages the non-food offerings of Géant hypermarkets and Casino Supermarkets, with products available immediately in store


* Like-for-like: includes adjustments related to i) the sale or closure in 2016 of the specialty sites Comptoir des Parfums, Comptoir Santé and MonCornerDéco,

ii) the voluntary pullback of B2B sales initiated in the 3rd quarter of 2016, iii) the exclusion of TV products, which benefited from the mandatory shift to Digital Terrestrial Television (DTT), and

the Euro football championship in the 1st half 2016 (1.7pt and 2.3pt on GMV and net sales growth, respectively), iv) the impact of 2017 summer sales starting one week later than in 2016

(1.0pt and 0.9pt on GMV and net sales growth, respectively), v) from the perspective of Cnova, Cdiscount sales realized

with Casino clients in France resulting from the multichannel agreement with Casino effective in June 2017, and vi) the leap year impact of 2016.

** Cdiscount's market share in technical goods (consumer electronics and household appliances), according to Gfk, May, June and July 2017.

Website attracting the highest

number of unique visitors in France#2Momentum

Customer traffic

No. of orders

186 208 +11.6%In millions

Q2 2016 Q2 2017

5.2 5.7

Q2 2016 Q2 2017

+8.9%In millions


The number of private-label items has almost

doubled since end-2016

Free express delivery on orders from €10 for CDAV

members

Deployment of same-day delivery in Paris for small

parcels

Opening of two new warehouses in the South

of Paris

Redesign of the mobile site

Improvement in the dedicated customer area

on mobile devices with new functionalities

(returns, claims, etc.)

Improvement in customer service and NPS©*

Cdiscount: assertive relaunch of action plans(2/2)

35* NPS: Net Promoter Score, Bain.

IMPROVEMENT OF THE CUSTOMER EXPERIENCE OPTIMISATION OF DELIVERY CONDITIONS

INCREASING THE NUMBER OF REFERENCES

ON OWN SITE AS WELL AS ON THE MARKETPLACE

EVER MORE COMPETITIVE PRICES

AND PROMOTIONS

70

150

Q4 2016 Q2 2017 Q1 2018


Exito (excluding Brazil)

H1 achievements

36

Synergy plan continues capturing value and advances to

exceed initial guidance of USD$50M at consolidated

recurring operating level

Consistent market share gains in all countries

Strong performance of the cash and carry format in

Colombia

Innovative activities such as marketplace, the fresh model,

loyalty coalition and dual-real estate continuity

Acceleration of cash and carry expansion in Colombia with 7

Surtimayorista stores to be added in 2017



Formats & Channels in Colombia

37

Mu

lti-B

ran

ds

an

d M

ulti-Fo

rma

ts Supermarkets & Conveniencestores• Best in Fresh & Imported

Premium products • Top Experience

A pleasure for

everyday

99 stores

Hypermarkets, Supermarkets& Convenience stores• Value for Money• Customer Service• Food and non-food

261 stores

At your service

Soft Discount & Cash & carry stores

High % of Private Label

Allies

Commercial alliance with

independent storesWhere buying

costs less

203

stores

1,336

E-commerce

• Food & non-food products

• Over 11 million visits YTD17

• Click & Collect in 300 stores

• Mobile App: 22% of on-line sales

• Market Place: 18% of exito.com

sales

• Sales growth of 21% including

market place

• Food products

• Premium & imported

• Market place for non-food

• Over 0.7 million visits YTD17

• Sales growth of 73% including

market place



Current initiatives in Colombia

38

Focused Profitable Expansion– Cash & Carry: 8 stores as a whole by the end of 2017.– Éxito compact stores: in intermediate cities with low cannibalization

risk.– Low-cost Supermarkets: profitable openings of Super Inter and

Surtimax stores.– Allies business model: light CapEx, profitable, strong ROIC.– Franchising: taking advantage of Éxito´s brand power.

Price Strategies– Unbeatable products: quality products at the lowest price.– Private Label: improved and competitive portfolio.– Textile Model: EDLP apparel to democratize fashion and attract traffic.

Differentiation Strategies– Fresh model: quality products at lower prices.– Carulla, the best customer experience.– Healthy Product Portfolio: selected and affordable products.– Omnichannel strategy: physical channels, the strongest retail

ecommerce platform in the country, click and collect, drive-in, home deliveries, apps, digital catalogues and direct sales.



Strategy to Lead the Discount Market

39

A strong response to the new market trend in Colombia

• Positioning Surtimax and Super Inter brands within the discount market.

• Driving the “fresh model “ into the Discount format.

• Development of “Allies” Business Model in Colombia

“Allies” Business Model in ColombiaConquering the traditional channel

Potential MarketNeighborhood stores account for

approximately 53% of total market

Covering the

low-income marketTo conquer new markets before

competitors do

Assortment

optimization1,300 SKUs vs. 5,000 on current

Surtimax stores

Service and Quality

PromiseCompetitive prices, private label

portfolio

Growing TogetherExito as an important contributor of

economic growth (training and

efficiency to each Aliado)

Market

Supply chain

network

Social

Responsibility

“Allies” benefits

• Over 1,300 Aliados.

• Superior service and quality.

• Competitive prices.

• Surtimax &Super Inter brand support.

• Access to credit.

• Participation on sales events.



Complementary businesses

40

A business model based on profitable alliances to monetize the traffic

Over 2.4 million cards issued

Partner agreement with Bancolombia

New Mastercard franchised card

Financial Retail Insurance

24% sales growth

Over 1 million clients

JV with Grupo Sura

Travel

2nd travel agency in Colombia

Over 200 thousand clients

Sales growth of 16%

Mobile

Over 1.2 million users

Mobile Virtual Operator

Non-banking Correpondant

Local & International Money Transfers41% growth in international transfers.

Figures as of Dec 31, 2016



Grupo Éxito’s Real Estate Business

41Real Estate First Initiatives

Development of a Real Estate Business and

development of a Real Estate Business and

Viva Malls

Growth


GPA

Plurality of formats to meet different consumers needs

Extra Pão de Açúcar Convenience

42

Other Business Cash & Carry

Hypermarkets and

supermarkets

Premium supermarkets

Commercial Galleries

Food delivery

Drugstores and

Gas station

# Stores*

Hypermarkets : 119

Supermarkets: 194

# Stores*

Supermarkets: 185

Food Delivery service

# Stores*

Minuto: 77

MiniMercado Extra: 197

Aliados CompreBem: 236

# Stores*

Drugstores: 147

Gas Station: 77

GLA c.260,000 sqm

# Stores*

Assai: 110

37.0%* 15.1%* 2,6%* 5.2%* 40.1%*

* Net Sales and numbers of stores as of June 30, 2017


GPA (Brazil): Strategy to accelerate growth of higher return

businesses, meeting different consumers needs

43

• New commercial dynamics• Focus on the operational productivity • New commercial concepts for the non-food

categories

• Expansion through Premium format• Development of the Aliados Compre Bem

Project• Optimization of operation and continuous

improvement of profitability

• Focus on product and service innovation

• Improve customer satisfaction• New dynamics on CRM platform

• Continuous expansion in a growing segment through new stores

• Conversions plan of underperforming hypermarkets• Efficient control of stores expenses improving

profitability


GPA Multiformat food player building a more balanced portfolio

44

24.0%76.0% 27.8%72.2% 34.9%65.1%

Breakdown of stores under banners by format

256 311 284

388384 379

137137 134

8495 107

2014 2015 2016

Cash&Carry

Hypermarkets

Supermarkets

Convenience

865 stores927 stores 904 stores

Gross sales breakdown (%)

Mulivarejo

Assai


GPA (Brazil)

Strong footprint as a differential competitive advantage

45


GPA (Brazil)

Outlook

46

Strategic priorities:

Focus on and strengthening of Food segment;

Outperform the market in sales growth, supporting market share gains;

Optimization of portfolio: Focus on conversions of Extra Hiper into Assaí;

Continually expanding the Assaí format: Total of 16 conversions and 6 to 8 new

stores, with an average return of over 20%.

Guidance for 2017:

Sales: continued market share gains at both Multivarejo and Assaí;

EBITDA Margin*: around 5.5% in the Food segment, supported by higher profitability

at Assaí and stability at Multivarejo;

CAPEX: around R$1.2 billion

* EBITDA adjusted for Other Operating Income and Expenses


GPA’s ownership structure

47

As of June 30, 2017

INVESTOR PRESENTATION - Accueil · Investor presentation 3 – In Brazil: share of C&C was >40% of...

Documents

Transcript of INVESTOR PRESENTATION - Accueil · Investor presentation 3 – In Brazil: share of C&C was >40% of...