Le Groupe Rallye

Message from Jean-Charles Naouri, Rallye's Chairman

Jean-Charles Naouri - Casino

Jean-Charles Naouri

Rallye’s primary asset, accounting for 98% of its consolidated net sales, Casino is one of the world’s leading food retailers. In France, its sales performance is secured by a mix of banners and formats that are well adapted both to the economic environment and to major, lasting social trends. Internationally, its expansion strategy is focused on emerging markets with high growth potential, primarily in Latin America, where its subsidiaries benefit from deep local roots and leadership positions.
For the Casino Group, 2018 was marked by strong sales momentum in
the retail businesses in France. Same-store sales growth was 1.3% and organic growth was 1.2%, with all formats contributing to the increase.
Total gross sales under banner rose by 2.8%(1) over the year. The Casino Group continued to focus on the most buoyant formats, categories and geographies. Over 60% of net sales were generated by the 7,500 premium and convenience stores and around 60% were concentrated in France’s three most dynamic regions(2). This year, net sales of organic products by the various banners and the dedicated Naturalia format represented some €1 billion, representing an increase of more than 16%. The Group pursued the development of its e-commerce business, which accounted for 18%(3) of the business in France, driven by Cdiscount, which reported 9.3%(4) organic growth in gross merchandise volume. Moreover, the acquisition of Ocado technology and Monoprix’s partnership with Amazon Prime now enabled the Group to strengthen its position in food e-commerce.
Outside France, in Latin America, net sales rose 8.9% on an organic basis and 4.5% on a same-store basis in an environment shaped by improved economic conditions. GPA delivered a very good performance, with sales up 10.6% on an organic basis. The pace of organic growth at Éxito (excluding GPA Food) accelerated to 4.2%.
Rallye’s consolidated net sales amounted to €37.5 billion in 2018. Recurring operating income stood at €1,209 million, stable year-on-year.
The net debt of the Rallye holding company totalled €2,899 million at 31 December 2018, versus €2,877 million a year earlier.
In September 2018, Rallye signed a credit facility for an amount of €500 million, increasing the liquidity position to over €2.2 billion.
99% of the holders of 2020 exchangeable bonds exercised their put options, representing a par value of €370 million.
As at 31 December 2018, Rallye’s financial covenants were met with ample headroom. The consolidated EBITDA to consolidated cost of net debt ratio amounted to 4.14x (vs. a covenant at 2.75x), and Rallye’s standalone shareholders’ equity was €1,788 million (vs. a covenant at €1,200 million).
Consolidated net sales for Groupe GO Sport amounted to €885 million, up 9.8% compared with 2017, including a 4.9% increase on a same-store basis and at constant exchange rates. Excluding Courir, consolidated net sales amounted to €494 million, up 5.4% versus 2017 including 3.3% growth on a same-store basis and at constant exchange rates.
Rallye’s recurring cash flow remained slightly positive in 2018 and the Company also benefits from a robust liquidity position, with €1.3 billion worth of undrawn credit lines at 31 December 2018.
Rallye reiterates its strategy to maximize its assets’ value and confirms the strength of its financial structure.
Further to the Board of Directors’ decision of 13 March 2019, at the Shareholders’ Meeting to be held on 15 May 2019 the Company will ask shareholders to approve a dividend of €1.00 per share, unchanged from 2017, to be paid on 22 May 2019.
(1) Total gross sales under banner including Cdiscount.
(2) Île-de-France, Rhône-Alpes and Côte d’Azur regions.
(3) Online sales under the banners and Cdiscount’s GMV.
(4) The organic changes include sales and services at “corners” (stores-within-stores) but exclude sales made in Casino Group hypermarkets and supermarkets, and 1001Pneus (acquired in October 2018). The overall impact of their exclusion represented 1.1 points and 1.7 points for GMV and net sales respectivelyand calendar effect.

Jean-Charles NAOURI