Le Groupe Rallye

Chairman's message

Jean-Charles Naouri - Casino

Jean-Charles Naouri,
Group Casino CEO

Casino Group has moved up in the last five years to attain the rank of the 11th largest food retailer in the world. Revenue has increased by 67% in five years, giving Casino the highest growth rate among leading retailers . This growth was fueled by Casino's choice to prioritize the development of the most buoyant countries and formats. As such, the Casino Group is leveraged by a highly diversified portfolio of franchised outlets established in high-potential markets. The strongest growth drivers over the last five years have been the Brazilian subsidiaries, with 19.5% of average growth and e-commerce with 18.3%. Next are the Colombian and Thai subsidiaries with average revenue growth of 11.7% and 9.8% respectively over the period. In terms of formats, Casino continues to focus on mass retail franchised outlets (hypermarkets, discount and cash & carry stores), quality-oriented, convenience franchised outlets and e-commerce. These formats perfectly match changing consumer trends.
 
The Casino Group's results in 2014 confirm the soundness of this strategy. Revenues were up 4.7% on a same-store basis  compared to 2013, thanks to improved sales for a comparable number of stores in France, a steadily-expanding international presence and the outstanding performance of e-commerce. Current operating income was up 5.6% on a same-store basis. Normalized net income Group share was €556 million, down by 10% due to the impact of currency translation and the decision to cut prices in France.
 
Strengthened by a balanced, diversified profile in high-growth countries and formats, Casino is leveraged by a robust financial structure. Although the Group continued its development strategy in 2014 and made some significant investments, such as raising its stake in GPA and acquiring the Le Mutant discount stores in France and Super Inter in Colombia, its debt level remained under control. Thanks to significant free cash flow which covered the majority of net capital expenditure and dividend payouts, Casino managed to slow the pace of change in net financial debt at €5,822 million, or 1.8 times EBITDA.
 
In 2015, the Casino Group will face numerous challenges: strengthening its leadership on quality-oriented formats, accelerating the expansion of discount and proximity stores, maintaining the momentum of e-commerce and operational discipline. To do so, it relies on the strengths inherent in its new profile. Its international dimension opens up new opportunities to galvanize its teams, exchange best practices, manage evolving talents, and promote a caring management, while creating the right conditions for achieving excellence and improving customer service.
 
Rallye reported consolidated revenue of €49.2 billion, up + 1.3% on 2013. Current operating income totaled €2,235 million in 2014, versus €2,323 million in 2013.
 
Rallye's holding scope reported net financial debt of €2,798 million, including €2,243 million of bond debt and €470 million of non-bond debt.
 
Rallye's investment portfolio was valued at €143 million at the end of 2014, following the disposal of some 15 lines, most of which had generated substantial returns on investment, in addition to two real estate assets.
 
Highlights in 2014 included the filing of a simplified public offering on September 30, 2014 by Rallye to buy Groupe GO Sport shares not yet included in its direct or indirect holdings. The offering, which was declared compliant on October 14, 2014 by the French financial markets authority, was completed at a price of €9.10 per share. It was followed by a squeeze-out implemented on November 5, 2014. Since that date, Rallye holds 100% of the capital and voting rights of Groupe GO Sport.
 
The consolidated revenues of Groupe GO Sport for 2014 amounted to €655.1 million, up by 2.9% on a same-store basis and constant currency basis, with a sequential acceleration during the year.
 
Rallye's liquidity position is highly robust, with almost €1.9 billion in undrawn confirmed credit lines available for immediate use. Bond debt maturity was extended to 4.5 years (versus 3.1 years as at December 31, 2013).
 
Rallye's financial expenses will drop mechanically in upcoming years, following refinancing well below historic cost. In 2015, Rallye expects its financial expenses to improve by at least €40 million.
 
Rallye confirmed its asset valuation strategy, for Casino in particular, together with its goal of reducing its financial expenses.
 
The Board of Directors will propose to the General Meeting of May 19, 2015, a dividend payout of €1.83 per share, stable compared to 2013, which will be paid on May 29, 2015.
 

Jean-Charles NAOURI