NET SALES - Q3 2018
Increase in net sales of +5.4% on an organic basis and +3.3% on a same-store basis
Accelerated growth in France and Latin America
Success of the Cdiscount marketplace
- In France, sales rose +2.0% on an organic basis and +1.9% on a same-store basis:
- Monoprix: growth of +1.8% on an organic basis and +1.4% on a same-store basis; strong growth in traffic and food; excellent performance by Parisian stores.
- Franprix: organic growth of +4.1% and same-store growth of +2.7%; very robust traffic during the quarter reflecting the banner's positioning.
- Casino Supermarkets[1]: growth of +2.0% on an organic basis and +1.5% on a same-store basis; development of the franchise network.
- Géant hypermarkets1: organic growth of +3.2% and same-store growth of +2.8%; excellent momentum in food and continued market share gains[2]; success of Cdiscount corners.
- Convenience: organic growth of +4.3% and same-store growth of +3.2%; ongoing strong momentum among franchisees and sharp recovery at integrated stores.
- Leader Price: stable organic performance and same-store growth of +1.9%; sequential improvement in traffic and increase in the average basket.
- Cdiscount: gross merchandise volume (GMV) up +9.3%[3] on an organic basis; accelerated growth in the marketplace, representing 36.0%3 of GMV; increase in data monetisation revenues.
- In Latin America, sales were up +10.4% organically and +5.5% on a same-store basis:
- GPA Food: organic growth of +12.6% led by Multivarejo's ongoing recovery and Assaí's very good performance.
- Éxito Group (excluding GPA Food): sequential improvement in organic and same-store sales.
Based on the performance observed to date and the progress of the disposal plan, the Group confirms all its annual objectives.
CHANGE IN NET SALES
BY SEGMENT | Q2 2018 / Q2 2017 change | Q3 2018 / Q3 2017 change | ||||||||
(in € millions) | Q2 2018 | Total growth | Organic growth[4] | Same-store growth4 | Q3 2018 | Total growth | Organic growth4 | Same-store growth4 | ||
France Retail | 4,759 | +0.8% | +1.3% | +1.8% | 4,832 | +2.0% | +2.0% | +1.9% | ||
Cdiscount | 403 | +5.4% | +5.3% | +5.1% | 452 | -3.1% | -3.1% | -3.1% | ||
Total France | 5,162 | +1.1% | +1.6% | +2.1% | 5,284 | +1.5% | +1.5% | +1.4% | ||
Latam Retail | 3,754 | -8.1% | +9.7% | +4.4% | 3,638 | -7.5% | +10.4% | +5.5% | ||
TOTAL GROUP | 8,916 | -3.0% | +5.2% | +3.2% | 8,922 | -2.4% | +5.4% | +3.3% |
2017 and 2018 financial statements prepared in accordance with IFRS 15 and not restated for the application of IAS 29 (see appendices). Pursuant to the 2016 decision to dispose of Via Varejo and in accordance with IFRS 5, Via Varejo (including Cnova Brazil) is still recognised as a discontinued operation.
In Q3 2018, net sales totalled €8.9bn, down -2.4% overall compared with Q3 2017, impacted by an unfavourable currency effect of -7.6%.
Sales increased +5.4% in organic terms and +3.3% on a same-store basis, year on year (yoy). The scope effect was +0.3%, the fuel effect came to +0.3%, and the calendar effect was -0.8%.
- France Retail
Q2 2018 / Q2 2017 change | Q3 2018 / Q3 2017 change | |||||||||
BY BANNER | Q2 2018 | Total growth | Organic growth[5] | Same-store growth1 | Q3 2018 | Total growth | Organic growth1 | Same-store growth1 | ||
Monoprix | 1,129 | +2.9% | +2.1% | +1.4% | 1,049 | +3.3% | +1.8% | +1.4% | ||
Franprix | 416 | +0.0% | +1.0% | +1.3% | 380 | +2.7% | +4.1% | +2.7% | ||
Supermarkets | 805 | +1.0% | +1.6% | +1.5% | 878 | +2.1% | +1.9% | +1.7% | ||
o/w Casino Supermarkets[6] | 762 | +1.0% | +1.4% | +1.4% | 818 | +2.4% | +2.0% | +1.5% | ||
Hypermarkets | 1,174 | +3.0% | +2.8% | +2.5% | 1,256 | +2.2% | +2.2% | +1.8% | ||
o/w Géant2 | 1,117 | +3.5% | +3.2% | +2.8% | 1,191 | +3.2% | +3.2% | +2.8% | ||
o/w food | 772 | +2.0% | +4.0% | +4.3% | 821 | +2.9% | +4.4% | +4.5% | ||
o/w non-food | 122 | -7.4% | -5.4% | -5.2% | 147 | -5.9% | -4.4% | -4.3% | ||
Convenience & Other[7] | 593 | -2.5% | -1.0% | +0.7% | 667 | +1.5% | +2.5% | +3.5% | ||
o/w Convenience[8] | 319 | +1.2% | +3.0% | +0.2% | 390 | +4.4% | +4.3% | +3.2% | ||
Leader Price | 642 | -3.2% | -0.7% | +2.2% | 602 | -1.2% | +0.0% | +1.9% | ||
FRANCE RETAIL | 4,759 | +0.8% | +1.3% | +1.8% | 4,832 | +2.0% | +2.0% | +1.9% |
Total sales in France came to €4,832m in Q3 2018, up +2.0% on an organic basis and +1.9% on a same-store basis.
- Monoprix maintained the solid momentum of previous quarters, with same-store growth of +1.4%. Organic growth, representing +1.8%, benefited from the opening of 10 stores during the quarter, including 9 Naturalia outlets. Sales were particularly strong in Paris thanks to a +6.2% increase in customer traffic in Q3, on a steady climb since Q1. Since 12 September 2018, the banner has been offering its products to Amazon Prime Now customers through a partnership with Amazon. The number of orders placed through this new service has exceeded business plan projections.
- Franprix continued to expand both organically and on a same-store basis, with growth of +4.1% and +2.7%, respectively, over the quarter. Traffic, up +5.3%, was lifted by dynamic tourist activity in Paris in the summer months and the banner's latest innovations, particularly in snacks and restaurant services. Franprix introduced a new concept, "le drugstore Parisien" (beauty, health and well-being), with the first two stores enjoying very robust traffic. In addition, nearly 40 stores are now equipped with technology allowing them to stay open 24/7.
- Casino Supermarkets reported organic growth of +2.0% (with growth of +14.0% among franchisees), and same-store growth of +1.5%. Network expansion and new independent retailers joining the network underscored the banner's appeal. In addition, a new concept store, "Le 4 Casino", was inaugurated in early October near the Champs-Elysées in Paris. An innovation laboratory for the Group, "Le 4 Casino" is inventing the retail experience of the future, serving as a place to eat, relax and shop where digital services enhance the customer experience.
- Géant hypermarkets continued the very positive trend observed over the past several quarters, with growth of +3.2% in organic terms and +2.8% on a same-store basis. This good momentum translated into a 0.1 pt[9] market share gain. Performance was led by food retail, organic products, home equipment and by the attractiveness of Cdiscount corners, which generated additional traffic in stores, leading to a 1 pt outperformance in their net sales. Drive-throughs continued to report double-digit growth thanks to an improved customer experience.
- In Convenience[10], sales advanced +4.3% organically and +3.2% on a same-store basis, reflecting the benefits of a robust tourist season. Franchised stores continued to deliver strong growth, representing +3.0% yoy, while growth at integrated stores made a sharp recovery to +3.7% with the influx of new customers, driven by the renovated promotional policy and offering, featuring more organic products. The Casino Max loyalty and promotions mobile app has now been rolled out to all integrated stores.
- Leader Price maintained its good momentum. Same-store sales grew by +1.9% over the quarter, lifted by the very strong performance of renovated stores, the fresh market category and the offer being redesigned (packaging, the sooa line). Organic sales, stable over the period after several quarters of decline, were impacted by the Leader Price Express store closures that occurred in 2017. The banner continued to roll out the "Next" concept, with 100 stores converted to date.
- Cdiscount[11]
Cdiscount's gross merchandise volume (GMV) totalled €872m, representing growth of +6.1%, of which +9.3%[12] was organic over the quarter. Cdiscount benefited from very strong growth in the marketplace, whose contribution to total GMV rose by +5.3 pts to 36.0%, and in data monetisation revenues, both key profitability drivers for the banner. The transfer of a portion of direct sales to marketplace sales (remunerated by commission) had a very favourable impact on profitability. It had the effect of reducing net sales (by -2.9%), as marketplace sales are recognised in net sales to the extent of the commissions received.
Strategic marketplace expansion led to the achievement of a record performance in Q3. Marketplace GMV rose by +19.5% over the quarter, driven by the Telephony, Home and Computer categories. B2B services such as transport, marketing, financial services and "Fulfillment by Cdiscount", whose contribution to GMV increased by +4.0 pts, developed rapidly. The corresponding revenues more than doubled over the quarter and had a positive impact on profitability. Data monetisation revenues totalled €15m, up +17%, thanks to the proceeds from 3W and RelevanC advertising sales and from B2B2C (Energy, Mobile, etc.) and financial services.
Traffic totalled a very high 216m visits in the quarter, driven mainly by mobile traffic, up +11.3%, which now represents 64.1% of total traffic. Cdiscount consolidated its no. 2 status in terms of unique monthly visitors and is closing in on the no.1 spot, according to Médiamétrie[13]. Cdiscount is continuing to develop its CDAV loyalty programme by adding new services and expanding the assortment of products eligible for express delivery. In addition, Cdiscount is further broadening its value proposition for customers with the launch of new B2C services such as Cdiscount Billetterie (ticketing).
As part of the Group's multi-channel strategy, 14 new Cdiscount corners were rolled out in Géant hypermarkets during the quarter, bringing the total to 35. They now contribute 2.1 pts to total GMV growth.
Cdiscount is continuing to improve its delivery service, extending delivery to additional countries in Europe. Small product delivery is now available in Italy, Germany, Spain and Belgium, and partnerships have been set up to sell Cdiscount products in seven other marketplaces in Eastern Europe.
Key figures(1) | Q3 2017 | Q3 2018 | Reported growth(1;2) | Organic growth(3) |
GMV(4;5) total including tax | 822 | 872 | +6.1% | +9.3% |
o/w direct sales | 522 | 493 | -5.5% | |
o/w marketplace sales | 232 | 277 | +19.5% | |
Marketplace contribution to ecommerce GMV (%) | 30.7% | 36.0% | +527 bp | |
Net sales(5) (in €m) | 518 | 503 | -2.9% | +0.5% |
Traffic (millions of visits) | 203 | 216 | +6.6% | |
Mobile traffic contribution (%) | 61.4% | 64.1% | +271 bp | |
Active customers(6) (millions) | 8.6 | 8.8 | +2.5% |
Cnova provided a detailed report on its Q3 net sales on 12 October 2018.
|
- Latam Retail
Sales at the Group's businesses in Latin America (Éxito Group and GPA Food) continued to accelerate in Q3, up +10.4% on an organic basis and +5.5% on a same-store basis. Consolidated net sales were impacted by an unfavourable currency effect of -17.6%.
- GPA Food posted organic growth in sales of +12.6% and same-store growth of +7.0%[14], even as inflation bounced back to +2.7%[15] in the food categories during the quarter (following -2.8% deflation in Q2 2018).
- Sales at Assaí grew by +25.8% on an organic basis and +8.2%[16] on a same-store basis, lifted by a sharp increase in volumes, customer traffic and market share (+1.9 pts[17]). Assaí now represents 48% of sales, an increase of +4.9 pts compared with 2017. The 19 stores converted to the banner in the last 12 months have significantly contributed to its growth. The other stores posted very robust same-store growth of +7.4%1 for the quarter. Currently, 10 new stores are under construction and 1 is being renovated. The loyal customer base is continuing to expand and nearly half a million customers now hold the Passaí card.
- Multivarejo has been enjoying a sharp recovery since March and its same-store growth, representing +6.0%1 for the quarter, has accelerated further. The banner's market share, up +1.7 pts2 over the period, was higher in all formats. The current strategy focused on promotions and commercial events has paid off, leading to faster growth in volumes and customer traffic.
-
Among the Multivarejo banners, Extra hypermarkets grew by +7.4%[18] on a same-store basis over the period, reflecting an upturn in food sales and double-digit growth in non food sales. Extra supermarkets returned to growth in sales and traffic. The optimization of the store network continues: since the beginning of the year, 10 stores have been transformed to the new concept Mercado Extra and report a double-digit growth, while 13 conversions to the new Compre Bem format are under way. Pão de Açúcar continued to benefit from its unique urban positioning, based on the quality of service and of the assortment, as well as store renovations. Lastly, convenience stores reported a very rapid acceleration in same-store growth, representing +13.1%3, following a sharp rebound in Q2, thanks to a renewed assortment, revised prices and the implementation of promotional programmes.
Food e-commerce enjoyed double-digit growth, driven by the expansion of express and in-store pick-up services. The "Meu Desconto" digital loyalty app, downloaded 6.5 million times, rapidly expanded its customer base. Loyal app users, representing 40% of the customer base, have a basket twice the size of other customers.
- During the quarter, 4 Assaí stores were opened of which 1 Extra hypermarket converted into Cash & Carry. At Multivarejo, the main changes in the network were on Extra supermarkets: 2 stores were closed, 6 stores were converted into Mercado Extra and 13 stores are being converted into the Compre Bem format.
- Sales at Éxito Group (excluding GPA Food) were up on both an organic and same-store basis, with a sequential same-store improvement in Colombia.
GPA provided a detailed report on its Q3 net sales on 15 October 2018.
Éxito Group will provide a detailed report on its Q3 net sales on 14 November 2018.
***
APPENDICES
Main changes in consolidation scope
- Integration of Sarenza as of 30 April 2018 (Monoprix)
Exchange rate
Average exchange rates | Q3 2017 | Q3 2018 | Currency effect |
Brazil (EUR/BRL) | 3.7150 | 4.5974 | -19.2% |
Colombia (EUR/COP) (x 1000) | 3.4932 | 3.4409 | +1.5% |
Uruguay (EUR/UYP) | 33.7317 | 36.9326 | -8.7% |
Argentina (EUR/ARS) | 20.3057 | 37.1183 | -45.3% |
Implementation of IFRS 15
In the first nine months of 2018, the Casino Group applied IFRS 15 - Revenue from Contracts with Customers retrospectively to 2017.
The application of IFRS 15 has led to reclassifications between net sales, other revenues, cost of goods sold and selling expenses.
Net sales (in € millions) | Q1 2017 reported | Q1 2017 restated | Q2 2017 reported | Q2 2017 restated | Q3 2017 reported | Q3 2017 restated |
France Retail | 4,504 | 4,485 | 4,757 | 4,723 | 4,764 | 4,739 |
E-commerce | 469 | 453 | 402 | 382 | 487 | 467 |
Latam Retail | 4,348 | 4,310 | 4,118 | 4,087 | 3,965 | 3,932 |
TOTAL | 9,321 | 9,248 | 9,277 | 9,192 | 9,216 | 9,138 |
The following table describes the standard's impact on 2017 net sales.
Implementation of IAS 29
The contribution of Argentina to Q3 2018 sales (Latam Retail segment) has not been restated under IAS 29 on hyperinflation, given the non-materiality of the impact and the late determination of application procedures.
Gross sales under banner
TOTAL ESTIMATED GROSS FOOD SALES | Q3 | Change (excl. calendar effects) |
UNDER BANNER (in €m, excluding fuel) | 2018 | Q3 2018 |
Monoprix | 1,081 | +5.0% |
Franprix | 431 | +3.1% |
Supermarkets | 831 | +2.8% |
Hypermarkets | 895 | +3.9% |
Convenience & Other | 778 | +2.9% |
of/which Convenience | 477 | +5.5% |
Leader Price | 720 | +1.6% |
FRANCE RETAIL | 4,737 | +3.5% |
TOTAL ESTIMATED GROSS NON-FOOD SALES | Q3 | Change (excl. calendar effects) |
UNDER BANNER (in €m, excluding fuel) | 2018 | Q3 2018 |
Hypermarkets | 160 | -4.9% |
Cdiscount | 652 | +7.2% |
FRANCE RETAIL | 812 | +4.5% |
Store network at period-end
FRANCE | 31 Dec. 2017 | 31 March 2018 | 30 June 2018 | 30 Sep. 2018 | |
Géant Casino hypermarkets | 122 | 123 | 124 | 123 | |
o/w French franchised affiliates | 7 | 8 | 8 | 7 | |
International affiliates | 5 | 5 | 6 | 6 | |
Casino Supermarkets | 433 | 435 | 436 | 439 | |
o/w French franchised affiliates | 106 | 108 | 111 | 101 | |
International franchised affiliates | 17 | 17 | 17 | 17 | |
Monoprix | 789 | 790 | 794 | 797 | |
o/w franchised affiliates | 211 | 214 | 213 | 210 | |
Naturalia | 161 | 162 | 166 | 171 | |
Naturalia franchises | 7 | 7 | 7 | 11 | |
Franprix | 893 | 901 | 902 | 902 | |
o/w franchises | 399 | 413 | 420 | 422 | |
Leader Price | 777 | 773 | 776 | 768 | |
o/w franchises | 377 | 449 | 454 | 414 | |
Convenience | 5,392 | 5,362 | 5,260 | 5,235 | |
Other activities (Restaurants, Drive, etc.) | 606 | 609 | 610 | 598 | |
Indian Ocean | 209 | 214 | 223 | 231 | |
TOTAL France | 9,221 | 9,207 | 9,125 | 9,093 | |
| |||||
INTERNATIONAL | 31 Dec. 2017 | 31 March 2018 | 30 June 2018 | 30 Sep. 2018 | |
ARGENTINA | 29 | 29 | 29 | 28 | |
Libertad hypermarkets | 15 | 15 | 15 | 15 | |
Mini Libertad and Petit Libertad mini-supermarkets | 14 | 14 | 14 | 13 | |
URUGUAY | 88 | 86 | 87 | 88 | |
Géant hypermarkets | 2 | 2 | 2 | 2 | |
Disco supermarkets | 29 | 29 | 29 | 29 | |
Devoto supermarkets | 24 | 24 | 24 | 24 | |
Devoto Express mini-supermarkets | 33 | 31 | 32 | 33 | |
BRAZIL | 1,081 | 1,072 | 1,074 | 1,063 | |
Extra hypermarkets | 117 | 113 | 113 | 112 | |
Pão de Açúcar supermarkets | 186 | 186 | 186 | 186 | |
Extra supermarkets | 188 | 187 | 187 | 173 | |
Assaí (cash & carry) | 126 | 127 | 130 | 134 | |
Mini Mercado Extra & Minuto Pão de Açúcar | 265 | 265 | 265 | 265 | |
Drugstores | 127 | 123 | 123 | 123 | |
+ Service stations | 72 | 71 | 70 | 70 | |
COLOMBIA | 1,852 | 1,847 | 1,912 | 1,897 | |
Éxito hypermarkets | 90 | 90 | 90 | 90 | |
Éxito and Carulla supermarkets | 162 | 163 | 160 | 160 | |
Super Inter supermarkets | 71 | 71 | 73 | 73 | |
Surtimax (discount) | 1,409 | 1,410 | 1,477 | 1,461 | |
o/w "Aliados" | 1,278 | 1,286 | 1,353 | 1,348 | |
B2B | 9 | 9 | 13 | 15 | |
Éxito Express and Carulla Express mini-supermarkets | 111 | 104 | 99 | 98 | |
CAMEROON | 1 | 1 | |||
Cash & carry | 1 | 1 | |||
TOTAL International | 3,050 | 3,034 | 3,103 | 3,077 |
ANALYST AND INVESTOR CONTACTS
Régine Gaggioli - +33 (0)1 53 65 64 17
rgaggioli@groupe-casino.fr
or
+33 (0)1 53 65 24 17
IR_Casino@groupe-casino.fr
PRESS CONTACTS
Casino Group
+33 (0)1 53 65 24 78
directiondelacommunication@groupe-casino.fr
AGENCE IMAGE SEPT
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Grégoire Lucas - gregoire.lucas@image7.fr
Disclaimer
This press release was prepared solely for information purposes, and should not be construed as a solicitation or an offer to buy or sell securities or related financial instruments. Likewise, it does not provide and should not be treated as providing investment advice. It has no connection with the specific investment objectives, financial situation or needs of any receiver. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. It should not be regarded by recipients as a substitute for the exercise of their own judgement. All the opinions expressed herein are subject to change without notice.
[1] Excluding Codim stores in Corsica: eight supermarkets and four hypermarkets.
[2] Kantar market share, in value, measured over the P09 2018 period, on a cumulative basis to date
[3] GMV figures published by Cnova NV and unaudited. The organic changes include sales at Cdiscount corners but exclude sales of technical products and household equipment generated with hypermarket and supermarket customers.
[4] Excluding fuel and calendar effects.
[5] Excluding fuel and calendar effects.
[6] Excluding Codim stores in Corsica: eight supermarkets and four hypermarkets.
[7] Other: mainly Vindémia and Cafeterias.
[8] Convenience banners excluding Leader Price Express. Net sales on a same-store basis include the same-store performance of franchised stores.
[9] Kantar market share, in value, measured over the P08 2018 period.
[10] Convenience excluding Leader Price Express. Net sales on a same-store basis include the same-store performance of franchised stores.
[11] Data presented in this section correspond to those publised by Cnova NV on 12 October 2018 (unaudited)
[12] The organic changes include sales at Cdiscount corners but exclude sales of technical products and household equipment generated with hypermarket and supermarket customers.
[13] June and July 2018 Médiamétrie studies.
[14] Data reported by the subsidiary.
[15] IPCA Food at Home index.
[16] Data reported by the subsidiary.
[17] Nielsen market share data in August 2018.
[18] Growth in gross sales, reported by the subsidiary.