Annual Report 2015 This Registration Document was fi led with the French Financial Markets Authority on April 19, 2016, in accordance with Article 212-13 of the general regulations of the Financial Markets Authority. It may be used in conjunction with a fi nancial transaction only if accompanied by a transaction note approved by the Financial Markets Authority. This document includes all information relating to the Annual Financial Report. It was prepared by the issuer under the responsibility of the persons who signed it. rallye French Public Limited Company (SA) with share capital of €146 335 578 No. 054,500,574 in the Paris Company and Trade Register Registered offi ce: 83, rue du Faubourg Saint-Honoré -75008 Paris Phone: +33 (0)1 44 71 13 73 – Fax: +33 (0)1 44 71 13 70 Web site: http://www.rallye.fr – E-mail: [email protected] | Contents Administration of the Company .........................................................2 4. Company Financial Statements .............175 Chairman’s message ...........................................................................3 Income statement ............................................................................176 Simplifi ed Group organizational chart .............................................4 Balance sheet ...................................................................................177 ReportManagement Key fi gures ...........................................................................................5 Cash fl ow statement ........................................................................178 Notes to the fi nancial statements ...................................................179 1. Management report .................................... 7 Table of subsidiaries and equity interests ......................................193 Highlights .............................................................................................8 Report of the Statutory Auditors on the fi nancial statements ......194 Business review .................................................................................10 Financial performance of the Company Casino Group simplifi ed organizational chart ................................12 over the last fi ve years .....................................................................196 Financial overview ............................................................................17 Recent Trends and Outlook ..............................................................24 5. Shareholders’ Meeting ............................197 Capital and Shareholding Structure .................................................25 Statutory Auditors’ special report Corporate Governance Risk factors and insurance ................................................................35 on regulated agreements and commitments ................................198 Corporate Social Responsibility .......................................................40 Special report on the items of compensation due or awarded to the Chairman, Report of independent third-party agencies the Chief Executive Offi cer, and the Deputy on the corporate social responsibility information Managing Director for the year ended December 31, 2015 .........201 published in the management report ..............................................51 Board of Directors report to the Extraordinary Shareholders’ Meeting .................................204 2. Corporate Governance - Chairman’s Report .................................... 53 Draft resolutions ..............................................................................205 Code of Corporate Governance ........................................................54 Consolidated Statements Financial 6. Additional information ...........................211 Board of Directors .............................................................................54 Information about the Company ...................................................212 Executive Management .....................................................................71 Stock Market Information ...............................................................218 Internal audit procedures implemented by Rallye .........................82 Person responsible for the Registration Document Audit of the fi nancial statements .....................................................86 and the Annual Financial Report ...................................................220 Statutory Auditors’ Report prepared in accordance Cross-reference table for the Registration Document ..................222 with Article L. 225-235 of the French Commercial Code, on the report by the Chairman of the Board Cross-reference table for the Annual Financial Report ................224 of Directors of Rallye .........................................................................87 Cross-reference table for social, environmental and corporate data ................................................225 3. Consolidated Financial Statements ........ 89 Statements Financial Company Consolidated income statement ......................................................90 Consolidated statement of comprehensive income .......................91 Consolidated statement of fi nancial position .................................92 Consolidated cash fl ow statement ...................................................94 Statement of changes in consolidated shareholders’ equity .........95 Notes to the consolidated fi nancial statements ..............................96 Report of the Statutory Auditors on the Consolidated Financial Statements ...................................173 Shareholders’ Meeting Shareholders’ Additional Information Additional rallye | Annual Report 2015 1 | Administration of the Company BOARD OF DIRECTORS Jean-Charles NAOURI(1) Chairman of the Board of Directors Philippe CHARRIER(1) Independent Director Jean CHODRON de COURCEL(1) Independent Director Jacques DUMAS(1) Director Catherine FULCONIS(1) Independent Director Virginie GRIN Representing Finatis(1) Sophie GUIEYSSE(1) Independent Director | Jean-Charles Naouri, Chairman of the Board of Directors Didier LÉVÊQUE Representing Foncière Euris(1) Odile MURACCIOLE Representing Saris(1) Gabriel NAOURI Representing Euris(1) Jean-Marie GRISARD(1) Christian PAILLOT(1) Non-voting 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 Represented by Catherine Chassaing (1) Reappointments and appointments proposed at the Ordinary Shareholders’ Meeting of May 18, 2016. 2 rallye | Annual Report 2015 Chairman’s message | Chairman’s message n a few years, through Casino, the Rallye group has In 2015, Rallye’s consolidated revenue stood at €46.8 billion, up 1.6% at increased in size and has today become one of the constant exchange rates. Current operating income was €1,445 million. world’s leading retail groups. Th is transformation is The net financial debt of the Rallye’s consolidated holding company the result of strategic choices in the management of was €2,968 million at December 31, 2015, against €2,798 million at its assets, as well as the group’s positioning in high- end 2014. This increase is mainly due to the strengthening of Casino’s Igrowth formats in each of the markets where the Casino capital during the second half, for a total investment of €126 million. Group is present. The cost of Rallye’s net financial debt dropped sharply in 2015 to In France, 2015 was marked by an upturn in the Casino Group’s €112 million compared with €165 million one year earlier. This business. The sales momentum of stores was boosted by price improvement of €53 million is higher than the €40 million target competitiveness and the ability to meet customer expectations. In announced at the beginning of the year and reflects the replacement, 2015, the Casino Group gained market share in France and customer during the previous year, of most of the expensive financing with less traffic rose 1.9%. This performance demonstrates the relevance of costly resources. the positioning of formats, focused on four segments: popular stores Group share of the adjusted net income of Rallye’s continuing (hypermarkets and discount stores), quality brands, convenience operations was €30 million in 2015. outlets and e-commerce. Rallye’s investment portfolio was valued at €102 million at end 2015, Internationally, Casino Group strengthened its position as leader compared with €143 million at end 2014, in particular as a result of net in Latin America and posted excellent performances in Colombia, proceeds of €46 million over the year. Uruguay and Argentina. In Brazil, the Casino Group recorded strong results for GPA Food, driven by the growth of the most dynamic Groupe GO Sport’s consolidated revenue amounted to €680 million in formats. In 2015, the Casino Group’s consolidated revenue increased 2015, up by 3.2 % on a same-store basis and at constant exchange rates. by 1.6% at constant exchange rates. The Group share of adjusted net Gross merchandise volume (GMV) was up sharply, in line with the income amounted to €412 million. growth of all the networks (subsidiaries, associates, e-commerce), and totaled over €830 million in 2015, against €740 million two years ago. Seeking to build its development on solid fundamentals, the Casino Group strengthened its financial position in 2015. The reorgani- Rallye’s liquidity position is very robust, with almost