Rallye 2012 annual report – AUTOR ITÉ DES MARCHÉS FINANCIERS The original French version of this translated reference document was filed with the Autorité des Marchés Financiers (AMF) on April 16, 2013, in accordance with Article L.212-13 of the AMF’s General Regulations. It may be used in support of a financial transaction provided that it is accompanied by a Securities Note approved by the Autorité des Marchés Financiers. This document contains all the information on the Annual Financial Report. It was prepared by the issuer and its signatories assume responsibility for it. Rallye French public limited company with share capital of €146,074,734 054 500 574 RCS Paris Registered office: 83, rue du Faubourg Saint-Honoré – 75008 Paris Phone: +33 (0)1 44 71 13 73 – Fax: +33 (0)1 44 71 13 70 Website: http://www.rallye.fr – E-mail: [email protected] Contents Rallye 03 Chairman’s message 145 Individual company financial statements 04 Simplified Group 145 Income Statement organizational chart as of December 31, 2012 and Key figures 146 Balance Sheet 147 Cash Flow Statement 148 Notes to Rallye financial statements 06 Management report 164 Subsidiaries and equity interests 06 Significant events 166 Rallye’s financial statement for the 12 Business review previous five years 17 Financial overview 167 Statutory Auditors’ report on the annual financial statements 21 Outlook 22 Capital and shareholding structure 169 Shareholders’ Meeting 26 Social, societal, and environmental responsibility 169 Draft resolutions 31 Certificate of Presence and Limited Assurance Report by the independent 182 Additional information auditor with regard to social, environmental and societal information 182 General information about Rallye 188 General information about Company capital 33 Corporate governance 196 Stock market information 33 Board of Directors 201 Information about Rallye’s business – Risk management 47 Statutory Auditors 206 Person responsible for preparing 49 Report of the Chairman of Board of Directors the reference document and the annual 56 Report of the Statutory Auditors financial report prepared in accordance with Article 208 Cross-reference table for the reference L.225-235 of the French Commercial document Code, on the report by the Chairman of the Board of Directors of Rallye 210 Cross-reference table for the annual financial report 58 Consolidated Financial Statements 58 Group Consolidated Income Statement 59 Consolidated Statement of Comprehensive Income 60 Statement of Financial Position 62 Cash Flow Statement 63 Statement of changes in consolidated shareholders’ equity 64 Notes to the consolidated financial statements 138 List of principle consolidated companies as of December 31, 2012 143 Statutory Auditor's report on the consolidated financial statements Corporate bodies and Auditors - Board Of dIRECtORs Jean-Charles naouri(1) Chairman of the Board of Directors didier Lévêque Representing Foncière Euris(1) Philippe Charrier(1) Independent Director Jean Chodron de Courcel(1) Independent Director Jacques dumas(1) Director Jean-Marie Grisard Representing Finatis(1) Odile Muracciole Representing Eurisma(1) Gabriel naouri Representing Euris(1) Christian Paillot(1) Independent Director société Matignon diderot(1) André Crestey(1) Non-voting observer (advisor to the Board) |A JE n-ChARLEs nAOURI Chairman of the Board of Directors ExECUtIvE MAnagement didier Carlier Chief Executive Officer franck hattab Deputy Managing Director stAtUtORY AUdItORs Ernst & Young et Autres Represented by Pierre Bourgeois KPMG Audit – department of KPMG sA(1) Represented by Patrick-Hubert Petit (1) Proposed appointment and reappointments to be put to the Ordinary Shareholders’ Meeting of May 14, 2013. 2012 Annual Report | RALLYE 02 Chairman’s message - or the Casino Group, 2012 was a year of great change, in parti- Consolidated revenue at Groupe GO Sport was €675.6 million in cular given the takeover of Grupo Pão de Açúcar in Brazil and the 2012, up 0.7% on a same-store basis and at constant exchange agreement reached with Galeries Lafayette for the acquisition of rates. Courir’s revenue improved for the third year in a row, up 3.2% 50% of Monoprix. This year saw the strengthening of the Group’s pro- on a same-store basis, reflecting the sustainability of its successful f file in high growth markets and in the most profitable formats. These new concept. Revenue for the GO Sport brand in France was down changes mark the implementation of a development strategy based slightly on a same-store basis (-0.6%). GO Sport Poland’s sales on a multi-format, multi-brand, and multi-channel approach as well as improved markedly, up 5.3% on a same-store basis and at constant on a dual model combining “retailing and real estate”. exchange rates. The strong performance in 2012 – including a significant 22.1% 2013 will be a year of rebuilding for Groupe GO Sport, which aims to increase in revenue compared with 2011 – confirms this strategy. consolidate its fundamentals so as to prepare well for the launch of Organic growth was +4%(1) within a context of contrasting consump- a common development strategy for both the Courir and GO Sport tion: definitely strong internationally and not very dynamic in France. banners, a strategy designed to create value, which is based on new The Casino Group’s new scope is the confirmation of an expansion growth drivers, namely franchise and e-commerce. begun several years ago and puts Casino firmly among the leading Rallye’s consolidated revenue was €42.7 billion, up 21.7% compared global retailers in terms of consolidated revenue. In 2012, this is also to 2011. Its current operating income was €2.0 billion, up 29.3%. illustrated by the increased contribution of international business to Net financial debt of companies within the Rallye holding company’s revenue (56%) and current operating income (66%). scope was down €154 million over the year at €2,695 million as of The Casino Group benefits from a solid financial structure, thanks December 31, 2012, in particular due to the disposal of €129 million to its clear strategy, which is based on fundamentals as efficient as in assets from the investment portfolio in 2012. they are well-adapted to the Group’s markets. In 2012, the Group Rallye’s investment portfolio was thus valued at €257 million at the launched a €1.5 billion asset disposal and capital increase program, end of 2012, down €108 million compared to December 31, 2011, of which €1.45 billion was achieved during the fiscal year. Net with the asset disposals being partially offset by a €23 million increase financial debt was stabilized and net borrowings were 1.91x EBITDA, in the value of the portfolio in 2012. an improvement on the announced target of a ratio below 2.2. The Rallye benefits from strong liquidity, with close to €350 million in Casino Group then did two bond issuances for a total of €1.25 billion, available cash and almost €1.9 billion in confirmed, unshown, and the success of which demonstrates the quality of its name. immediately available credit lines. The average maturity of these lines After reaching a key stage in its development in 2012, the Casino was extended to 4.4 years following the renegotiation and renewal of Group intends to draw on these achievements and face ambitious more than €500 million in credit lines. challenges in 2013. Internationally, it plans to take full advantage of its At the General Shareholders’ Meeting on May 14, 2013, the Board of position in strong growth markets. In France, it plans to concentrate Directors will recommend payment of a dividend per share of €1.83, on retailing fundamentals; to continue to expand the convenience stable compared to 2011. An interim dividend of €0.80 per share formats, including the development of the Monoprix concept, which was paid on October 10, 2012. The balance of €1.03 will be paid on is firmly in touch with the current urban situation; and to enhance its May 24, 2013. advantages thanks to the strength of its distribution brands and the fast-growing multi-channel approach. The Group’s performance is based on the operational excellence, which is at the heart of its corporate approach. It is the product of indi- The Casino Group is confident that its activity and profits will grow in vidual and collective efforts which benefit from managerial autonomy 2013, thanks to its improved international profile and the revitalization and the trust placed in our management teams Company-wide, both of retailing in France. in France and abroad. I would like to highlight the excellence work The key events of 2012 for Groupe GO Sport were the €30 million carried out by our teams in the implementation of our action plans. capital increase with preferential subscription rights for shareholders, underwritten by Rallye, and the appointment of a new Chief Executive Officer, Loïc Le Borgne. This appointment marks a new stage in the Jean-ChARLEs nAOURI redimensioning of the Group, in particular by accelerating the com- mercial revitalization of its brands. (1) Excluding fuel and the calendar effect. 03 RALLYE | 2012 Annual Report s implified Group organizational chart as of December 31, 2012 - Rallye 49.04% 89.66% (59.27% of voting rights) (88.89% of voting rights) Investment portfolIo Companies listeD on the stoCk market Key figures of the 2012 P&L (In € millions) 2011 2012 Var. Net sales (continuing operations) 35,057 42,663 +21.7% EBITDA(1) 2,315 2,881 +24.4% EBITDA margin 6.6% 6.8% +15 bp Current operating income (COI) 1,551 2,006 +29.3% COI margin 4.4% 4.7% +28 bp Net profit, Group share 15 245 Net underlying profit(2), Group share 42 72 +71.4% (1) EBITDA = current operating income + current depreciation and amortization expenses.