Consolidated Financial Statements…………………………………………………
Total Page:16
File Type:pdf, Size:1020Kb
ANNUAL FINANCIAL REPORT AT 31 DECEMBER 2018 KEY CONSOLIDATED FIGURES ……………………………………………………. ....................................................................... 2 SIGNIFICANT EVENTS…………………………………………………… ......................................................................................... 3 BUSINESS REPORT………………………………………………………………………………… .......................................................................................... 5 CONSOLIDATED FINANCIAL STATEMENTS…………………………………………………. .............................................................................. 20 STATUTORY AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS ............................................... 127 This document is a free translation into English of the original French “Rapport Financier Annuel au 31 décembre 2018”, hereafter referred to as the “Annual Financial Report at 31 December 2018”. It is not a binding document. In the event of a conflict in interpretation, reference should be made to the French version, which is the authentic text. Consolidated Financial Statements - 1 Financial highlights The Casino Group’s key consolidated figures for 2018 were as follows: (€ millions) Reported Organic 2017 2018 change change (1) Consolidated net sales 37,490 36,604 -2.4% +4.7% Gross margin 9,490 9,305 -2.0% (3) EBITDA(2) 1,900 1,865 -1.9% +6.7% Net depreciation and amortisation (688) (656) -4.7% (3) Trading profit 1,213 1,209 -0.3% +9.8% Other operating income and expense (480) (375) +21.9% Net financial expense, o/w: (446) (465) -4.3% Net finance costs (367) (327) +10.9% Other financial income and expenses (78) (138) -75.9% Profit before tax 286 369 +28.8% Income tax (48) (204) n.m. Share of profit of equity-accounted investees 13 17 +36.0% Net profit/(loss) from continuing operations 251 182 -27.6% o/w Group share 108 (45) n.m. o/w Minority interests 143 227 +58.0% Net profit/(loss) from discontinued 47 (21) n.m. operations o/w Group share (7) (9) -33.2% o/w Minority interests 54 (11) n.m. Consolidated net profit/(loss) 298 161 -45.9% o/w Group share 101 (54) n.m. o/w Minority interests 198 215 +8.9% (4) Underlying net profit, Group share 351 318 -9.4% -2.0%(5) (1) Based on a comparable scope of consolidation, constant exchange rates, excluding fuel and calendar effects. (2) EBITDA = Trading profit + amortisation and depreciation expense. (3) Based on a comparable scope of consolidation, constant exchange rates, excluding the effect of hyperinflation. (4) Underlying net profit corresponds to net profit from continuing operations adjusted for the impact of other operating income and expenses, the impact of non- recurring financial items, and income tax expense/benefits related to these adjustments (see p18). (5) At constant exchange rates. Note: Comparative information for 2017 has been restated to reflect the application of IFRS 15, as indicated page 5. Consolidated Financial Statements - 2 Recent events On 24 January 2018, the Casino Group announced a success €200 million bond issue, adding to its existing bond debt maturing in June 2022. The new bond issue raised the total nominal amount of the paper from €550 million to €750 million. On 19 February 2018, Monoprix announced that it was in exclusive negotiations to acquire Sarenza. Following the partnership deals recently signed by the banner, notably with Ocado, this acquisition aims to complete Monoprix’s offering and position it as an omni-channel lifestyle leader (Fashion, Home, Beauty). The planned acquisition is a seamless fit with Monoprix’s digitalisation strategy. Sarenza is a leading online shoe retailer and is among France's favourite online banners. The transaction combines the forces of the Monoprix network, its Fashion, Home and Beauty offerings and its teams with the e-commerce know-how of Sarenza to create a truly unique omni-channel Lifestyle leader. The acquisition of Sarenza was completed on 30 April 2018. On 26 March 2018, the Casino Group announced that Amazon and Monoprix had joined forces to bring grocery items sourced from Monoprix to the customers of Amazon Prime Now service in Paris and the inner suburbs in 2018. The service was officially launched in Paris on 12 September 2018. Grocery items sourced from Monoprix are available on the Amazon Prime Now app and website through a dedicated virtual store. On 3 April 2018, the Casino Group and Auchan Retail announced that they had entered into exclusive talks to build, in compliance with competition rules, a strategic partnership enabling them to jointly negotiate their purchases in France and abroad with their main multi-national food and non-food suppliers. On 11 June 2018, following a review of its business portfolio, the Group announced the launch of an asset disposal plan covering non-core assets, in particular real estate assets, for a value of €1.5 billion. This plan, which complements the planned disposal of Via Varejo, was originally intended to be completed half in 2018 and half in 2019. In fact, the entire plan was completed in January 2019 and, based on indicative offers already received, it has now been increased to at least €2.5 billion with the upcoming disposals due to be completed by Q1 2020. It will enable Casino to pay down its debt more rapidly and pursue the successful deployment of the business model based on innovation, digital solutions and partnerships. On 29 June 2018, the Casino Group, Auchan Retail, Metro and the Schiever Group announced a plan to cooperate in developing new generation central purchasing organisations. The organisations will be set up in France and internationally under the Horizon name and will centralise purchases of both branded and private label products. The Horizon International Services alliance with Auchan Retail, Metro and Dia was officially deployed on 6 March 2019. On 25 July 2018, Casino’s Board of Directors authorised the definitive disposal of a block of Mercialys shares representing 15% of its capital, through a total return swap entered into with CA-CIB which will sell the shares over a period of 2.4 years. On 3 September 2018, the Casino Group noted Standard & Poor’s decision to downgrade its credit rating by a notch to BB with a negative outlook. While observing that Standard & Poor’s had not taken into account the €1.5 billion asset disposal plan, the Group affirmed that the cost of its bond debt and its liquidity position were unaffected by the downgrade. On 28 September 2018, the Casino Group signed a synallagmatic agreement on the sale of 55 Monoprix store properties for a net amount of €565 million. A second synallagmatic agreement was signed on 17 October 2018, for the sale of 14 Monoprix store properties to AG2R La Mondiale for €180 million. On 21 December 2018, the Group announced that the sales had been completed for a total of €742 million. On 12 October 2018, the Casino Group, Tikehau Capital and Bpifrance announced the signing of an agreement for the acquisition by Tikehau Capital and Bpifrance of shares in GreenYellow, Casino's subsidiary dedicated to solar energy and energy efficiency solutions. Consolidated Financial Statements - 3 The transaction was completed on 18 December 2018 through a €150 million capital increase that gave Tikehau Capital and Bpifrance a 24% stake in GreenYellow. On 15 October 2018, the Casino Group announced the signing of a partnership with the Quattrucci family whereby 12 stores specialised in fresh products would join the Casino Group. Since 2019, the stores have been supplied by the Casino Group; seven have been converted to the “Marché frais Géant” banner and the other five to the “Marché frais Leader Price” banner. Consolidated Financial Statements - 4 Business report The comments contained in the Annual Financial Report reflect comparisons with 2017 for profit from continuing operations and in accordance with IFRS 5 are restated for the planned disposal of Via Varejo. In light of the new standards applicable from 1 January 2018, IFRS 15 has been applied for the first time in the 2018 consolidated financial statements and the comparative information for 2017 has been restated on the same basis to permit meaningful year-on-year comparisons. The 2018 financial statements reflect the limited retrospective application of IFRS 9, which relates to financial instruments, and IAS 29, which relates to hyperinflation in Argentina. The prospective application of the amendments to IFRS 2 resulted in the reclassification to non-controlling interests at 1 January 2018 of a €5 million debt in the Latam Retail segment. Organic and same-store changes exclude fuel and calendar effects. Main changes in the scope of consolidation - Acquisition of Sarenza on 30 April 2018 (Monoprix) - Various store disposals and acquisitions during 2018 by Franprix-Leader Price Currency effects: Currency effects were unfavourable in 2018, with the Brazilian real and Colombian peso losing an average -16.3% and -4.3% against the euro, respectively, compared with 2017. Continuing operations (€ millions) Reported Organic 2017 2018 change change (1) Net sales 37,490 36,604 -2.4% +4.7% (2) EBITDA 1,900 1,865 -1.9% +6.7% (2) Trading profit 1,213 1,209 -0.3% +9.8% (3) Underlying net profit, Group share 351 318 -9.4% -2.0% 2018 highlights are outlined below. In France, the retail businesses enjoyed strong sales momentum. 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%(4) over the year. The 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(5). 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% over 2017. The Group pursued the development of its e-commerce business, which accounted for 18%(6) of the business in France, driven by Cdiscount, which reported 9.3%(7) organic growth in gross merchandise volume.