France-based Casino reported consolidated net sales up by 10.4% (same-store basis) in Q2 driven by strong demand across France and Latin America due to the COVID-19 pandemic. However, the group saw a net loss of €87 m during the first half of the year, mainly due to increased costs.
France: same store sales growth +6.0% driven by convenience and supermarkets
Total net sales decreased by 5.6% to €3.9 bn (excluding Cdiscount) impacted by a downturn in fuel sales and the disposal or closure of loss-making hypermarkets and supermarkets.
However same store sales increased by +6.0% (+7.9% including Cdiscount) led by double digit growth in urban and convenience formats and even a triple digit growth in food ecommerce. Food sales increased by +6.4% with only hypermarkets posting negative sales during the quarter (-1.8%).
Cdiscount: acceleration in gross merchandise volume (GMV) growth
Cdiscount organic growth in GMV went up by +24.8% despite summer sales being postponed to Q3. Sales were driven by direct sales and the marketplace (+39%). During the quarter, Cdiscount attracted one million new customers. The share of the marketplace in the GMV continued to grow during the quarter to reach 46.3% (+6.2 pts).
Latin America: same store sales rise 12.5%, but impacted by unfavorable currency effect
Due to unfavorable currency effects, net sales in Latin America were decreased by 12.5% to €3.44 bn. However, the group posted solid results on a same store basis with sales up by 12.5% at constant currency rate. During the quarter, sales were driven by the performance of Multivajero (+15.8% on a same store basis) and the excellent performance of Assaí in Brazil, which reported organic growth of +26.4%. Despite the movement restrictions in Colombia, Éxito achieved same store sales growth of +6.0%.
Net sales down and consolidated net debt up
In H1 2020, Casino reported net sales down by -€87 m compared to +€19 in H1 2019. This is mainly due to the higher costs and resources needed to face the COVID-19 pandemic. In the same time the group’s consolidated debt continued to grow to €4.8 bn compared to €4.7 bn in H1 2019.
H1 2020 highlights
- Strong resource mobilization and additional costs to maintain operations during the COVID-19 pandemic in challenging conditions. Priority was given to employees and customer safety with many new measures and features implemented to protect them
- Ecommerce operations continue to expand rapidly. New click and collect points for food ecommerce were deployed at urban and convenience formats, alongside new home delivery capabilities, such as the new automated warehouse based on Ocado technology
- The development of digital solutions is accelerating, with self-checkouts being rolled out to more stores. These now represent more than 40% of total checkouts in hypermarkets and supermarkets
- 68 convenience and premium stores opened during H1 in addition to the 213 opened in 2019. Casino is in line with its objective to open 300 new stores by 2021
- Partnerships with non-food retailers Decathlon and Hema are accelerating with the integration of corners in 18 and 79 stores, respectively.
- The data and analytics service provider relevanC continues its development, up by +34% to €44 m, supported by the “relevanC Advertising” platform that should help recruiting new customers
- Disposal of non-strategic assets: Progress has been made with the sale of Leader Price to Aldi France and the sale of the subsidiary Vindemia, the leading retailer in the Indian Ocean region
Outlook for H2 2020 in France
- Growth driven by food ecommerce, Cdiscount and the expansion of urban and convenience format currently performing well
- Maintaining the improvement of profitability thanks to the ongoing cost-saving plans and the development of new activities, such as data and energy
- Generating cash to reduce inventories and better control capex
- Reducing the gross debt via the allocation of all proceeds from the disposal plan and the continuation of the €4.5 bn disposal plan of non-strategic assets