Casino: Business Held up Well in First-Half 2009

SAINT ETIENNE, France--(Business Wire)--
Regulatory News:

Casino (Paris:CO)

* Organic growth of 1.3%, excluding petrol and the calendar effect
* EBITDA margin almost stable on an organic basis
* Resilience of the convenience formats in France, sustained growth in
international markets and rapid implementation of the cost-cutting plan
* Attributable net profit stable at €231 million

"In a challenging environment in the first half, the Group delivered results in
line with its business plan. These results demonstrate the robustness of our
business model and the effectiveness of the action plans deployed by Casino`s
teams, both on the marketing and financial sides.

In France, the Group`s positioning, heavily weighted towards the convenience and
discount formats, represents a solid earnings base, while in international
markets, our leadership positions in Latin America and Southeast Asia constitute
major growth drivers.

In this context, we are speeding up implementation of our strategy and are
confident of meeting our targets." said Jean-Charles Naouri, Casino`s Chairman
and Chief Executive Officer.

KEY FIGURES

Continuing operations (in €m) H1 2008 H1 2009 % change % organic change(2)
restated(1)
Net sales 13,810 13,447 -2.6% -1.0%
EBITDA(3) 861 819 -5.0% -2.0%
EBITDA margin 6.2% 6.1% -15 bps -6 bps
Trading profit 538 488 -9.1% -6.4%
Trading margin 3.9% 3.6% -26 bps -21 bps
Profit attributable to equity holders of the parent 229 231 +0.8%
Cash flow 607 570 -6.1%

(1) Data for 2008 have been adjusted to reflect the application of IFRS 8 and
IFRIC 13 Interpretation (see note 2.4 of the appendix to the consolidated
financial statements).

(2) Based on constant scope of consolidation and exchange rates, and excluding
the impact of disposals to OPCI property mutual funds. Changes in the scope of
consolidation consisted mainly of the deconsolidation of two Franprix-Leader
Price franchisees, while the currency effect primarily concerned the decline in
the Brazilian real and the Colombian peso against the euro.

(3) EBITDA = Earnings before interest, taxes, depreciation and amortisation.

The business continued to grow in first-half 2009 with sales up 1.3% on an
organic basis, excluding petrol and calendar effect, reflecting continued strong
momentum in international markets while revenues and margins held up well in
France.

EBITDA margin was almost stable on an organic basis, thanks to resilient
performances by the convenience formats in France, firm margins in international
markets and rapid implementation of the cost-cutting plan. The decline in
trading profit was limited to 9.1% (6.4% on an organic basis) and was due to
higher depreciation expense. Trading margin was down by a moderate 26 basis
points.

The Group met its targets in terms of marketing strategy, costs and capital
employed, demonstrating the effectiveness of its business model.

A resilient performance in France

In France, sales declined by 4.2% on an organic basis, 2.4% excluding petrol.
The convenience formats (Monoprix, Casino supermarkets, the superettes and
Franprix) continued to perform satisfactorily, attesting to their positioning,
which is well aligned with consumer trends.

EBITDA margin was stable on an organic basis, thanks to firm gross margins
reflecting the favourable impact of format and brand mix and to the rapid
implementation of the cost-cutting plan.

Trading profit was down 11.8% as reported and 9.8% on an organic basis,
primarily due to the increase in depreciation expense that resulted from
expansion of the Casino supermarkets and Monoprix store bases.

* Sales trends at Géant Casino showed tangible improvement in the second
quarter, led by the ramp up of marketing initiatives underway since the end of
March. Operating margin declined, in line with business plan projections. Tight
cost control helped to partly offset the impact of lower sales. The banner
intends to step up its programme of measures to cut costs, reduce inventories
and optimize purchasing conditions. It will also accelerate the repositioning of
the non-food offering on higher margin product families, while continuing to
price the food offering more competitively.
* Sales by the convenience formats were stable overall, excluding petrol and the
impact of terminating affiliate contracts. Operating margins in this segment
remained high, attesting to the operating model`s robustness. Casino
supermarkets` sales were boosted by the banner`s ambitious expansion strategy,
while Monoprix delivered a resilient sales performance that once again
demonstrated the effectiveness of its differentiated positioning. The superettes
took further action to optimise their store base.
* Franprix delivered a satisfactory performance, with stable same-store sales
and sustained footfalls attesting to the banner`s robustness. Leader Price`s
same-store sales decreased by 7.6% mainly due to the decline in the average
basket experienced across the entire discount segment. Combined sales by the two
banners were down by just 1.1%, thanks to the significant contribution of new
stores. Trading margin was stable.
* The other businesses (Mercialys, Cdiscount, Banque Casino, Casino
Restauration) enjoyed another period of expanding sales (up 7.5%) and trading
profit. Cdiscount continued to be a major growth driver, with sales up 14.9%,
while Mercialys once again reported double-digit growth in rental revenue.

Sustained growth in international markets

In international markets, organic sales growth for the period was a strong 5.0%,
led by robust performances in South America and Asia which now account for
nearly 30% of consolidated net sales. Trading profit decreased by 2.6%, due to
the unfavourable impact of the decline in Brazilian real and Colombian peso
against the euro. On an organic basis, however, the period-on-period change was
an increase of 1.9%.

* Sales in South America rose 6.2% on an organic basis, lifted by continued
strong sales momentum at Grupo Pao de Açucar in Brazil, which outperformed the
market and reported double-digit growth in same-store sales. Trading profit rose
0.9% on an organic basis, reflecting firm margins in Brazil and Colombia partly
offset by the impact of strikes in Venezuela.
* The Group continued to expand rapidly in Asia through its Big C banner, with
sales up 7.4% on an organic basis. The region`s margins remained high.

Strict financial discipline

The Group maintained its strict financial discipline during the period, with
debt ratios remaining stable compared with 30 June 2008. Net debt stood at
€6,003 million at 30 June 2009, versus €5,868 million a year earlier, despite
the negative impact of applying the shorter supplier payment terms imposed in
France`s LME Act. Energetic action was taken during the period to reduce
inventories and limit capital expenditure, in line with the business plan.

The Group`s liquidity position was strengthened through the issue of €1.5
billion worth of bonds since the beginning of 2009.

Outlook and conclusion

The Group`s performance in first-half 2009 attests to its ability toadapt to a
more challenging environment, as well as to the effectiveness of its business
model built around:

* A strategic focus on expanding the convenience and discount formats as well as
e-business in France
* A platform of international assets concentrated in high potential markets.
* An assertive strategy to capture the value of property assets.

The Group intends to speed up the implementation of its action plans, with three
main strategic objectives:

1. Strengthen the banners` shopper appeal by:

* Continuing to develop the private label offering
* Optimising the pricing strategy
* Transforming in-depth the hypermarket operating model in France

2. Maintain margins through:

* Improved purchasing conditions
* Ongoing action to cut costs, with the aim of achieving over €300 million in
savings in 2010 (of which €150 million by the end of the current year)

3. Enhance the Group`s financial flexibility by:

* Improving free cash flow(1) generation

* Reducing inventories by the equivalent of 2 days in 2009 and an additional day
in 2010
* Applying a more selective approach to capital expenditure (with gross
expenditure budgeted at around €800 million in 2009 and €850 million in 2010)

* Implementing a €1 billion asset disposal program by the end of 2010.

The Group therefore confirms its objective of improving its net debt/EBITDA
ratio by end-2009 and reducing the ratio to less than 2.2x by the end of 2010.

2009 Investor Calendar

Wednesday, 14 October 2009 (after the close of trading): Third-quarter 2009
sales announcement

(1) Corresponding to current operating cash flow before tax, less routine
capital expenditure, changes in WCR, income tax paid and net interest expense
paid

H1 2009 results

Continuing operations (in €m) H1 2008 restated(1) H1 2009 % change % organic change(2)
Net sales 13,810 13,447 -2.6% -1.0%
- Of which France 9,008 8,530 -5.3% -4.2%
- Of which International 4,802 4,917 +2.4% +5.0%
EBITDA (3) 861 819 -5.0% -2.0%
- Of which France 589 550 -6.6% -4.2%
- Of which International 272 269 -1.4% +2.7%
EBITDA margin 6.2% 6.1% -15 bps -6 bps
- Of which France 6.5% 6.4% -9 bps +0 bps
- Of which International 5.7% 5.5% -21 bps -12 bps
Trading profit 538 488 -9.1% -6.4%
- Of which France 384 339 -11.8% -9.8%
- Of which International 154 150 -2.6% +1.9%
Trading margin 3.9% 3.6% -26 bps -21 bps
- Of which France 4.3% 4.0% -29 bps -24 bps
- Of which International 3.2% 3.0% -16 bps -10 bps
Other operating income and expense, net (15) 11 n.m.
Operating profit 522 500 -4.4%
Finance costs, net (163) (167)
Other financial income and expense, net 2 (4)
Income tax expense (89) (71)
Share of profits of associates 7 4
Profit from continuing operations 280 262
- Attributable to equity holders of the parent 229 231 +0.8%
- Attributable to minority interests 51 31
Profit (loss) from discontinued operations attributable to equity holders of the parent (2) (1)
Net profit attributable to equity holders of the parent 227 230

Underlying profit attributable to equity holders of the parent(4) 223 189 -15.1%

(1) Data for 2008 have been adjusted to reflect the application of IFRS 8 and
IFRIC 13 Interpretation (see note 2.4 of the appendix to the consolidated
financial statements).

(2) Based on constant scope of consolidation and exchange rates and excluding
the impact of disposals to OPCI property funds.

(3) EBITDA = Earnings before interest, taxes, depreciation and amortisation.

(4) See definition in the Appendix.

Appendix - Reconciliation of reported profit to underlying profit

Underlying profit attributable to equity holders of the parent corresponds to
profit from continuing operations adjusted for the impact of other operating
income and expense (as defined in the "Significant Accounting Policies" section
of the notes to the annual consolidated financial statements), non-recurring
financial items and non-recurring income tax expense/benefits.

Non-recurring financial items include fair value adjustments to certain
financial instruments whose market value may be highly volatile. For example,
fair value adjustments to financial instruments that do not qualify for hedge
accounting and embedded derivatives indexed to the Casino share price are
excluded from underlying profit.

Non-recurring income tax expense/benefits correspond to tax effects related
directly to the above adjustments and to direct non-recurring tax effects. In
other words, the tax on underlying profit before tax is calculated at the
standard average tax rate paid by the Group.

Underlying profit is a measure of the Group`s recurring profitability.

In € millions H1 2008 Adjustments H1 2008 (underlying) H1 2009 (reported) Adjustments H1 2009 (underlying)
(reported)
Trading profit 538 538 488 488
Other operating income and expense, net (15) 15 0 11 (11) 0
Operating profit 522 15 538 500 (11) 488
Finance costs, net(1) (163) (2) (166) (167) 3 (164)
Other financial income and expense, net(2) 2 (8) (6) (4) 9 5
Income tax expense(3) (89) (19) (108) (71) (26) (98)
Share of profit of associates 7 7 4 4
Profit from continuing operations 280 (14) 266 262 (26) 236
Attributable to minority interests(4) 51 (8) 43 31 16 47
Attributable to equity holders of the parent 229 (6) 223 231 (42) 189

(1) Finance costs, net are stated before (i) changes in the fair value of the
embedded derivative corresponding to the indexation clause on the bonds indexed
to the Casino share price and (ii) gains realized on the partial redemption of
the bonds. In first-half 2009, these items were respectively an expense of €3
million and income of €0 million (first-half 2008: expense of €13 million and
income of €15 million).

(2) Other financial income and expense is stated before changes in the fair
value of interest rate derivatives not qualifying for hedge accounting,
representing an expense of €9 million in first-half 2009 (first-half 2008:
income of €2 million) and changes in the fair value of share put and call
options, representing €0 million in first-half 2009 and income of €6 million in
first-half 2008.

(3) Income tax expense is stated before the tax effect of the above adjustments
and non-recurring income tax expense/benefits (recognition of tax loss
carryforwards, etc.) In other words, the tax on underlying profit before tax is
calculated at the standard average tax rate paid by the Group.

(4) Minority interests are stated before the above adjustments and, in
first-half 2009, before adjustment of profit for the period from 29 April to 31
December 2008 initially allocated to minority interests for €17 million and
subsequently re-allocated to equity holders of the parent (see Note 17 to the
2008 consolidated financial statements).

CASINO

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