Casino Guichard-Perrachon SA (FRA:CAJ1) (H1 2024) Earnings Call Highlights: Navigating ...

GuruFocus News
4 min read

In This Article:

  • Net Sales: EUR 4.2 billion for the first half of 2024, down 3.5% on a like-for-like basis.

  • Adjusted EBITDA: EUR 255 million, a year-on-year decline of EUR 79 million.

  • EBITDA After Lease Payments: EUR 26 million, a decrease of EUR 86 million compared to the previous year.

  • Net Profit from Continuing Operations: EUR 2.5 billion in the first half of 2024, compared to a loss of EUR 1 billion in the same period last year.

  • Underlying Net Loss: Minus EUR 349 million.

  • Free Cash Flow Deficit: EUR 413 million, including deferred tax and social charge payments.

  • Net Financial Debt: Reduced by EUR 5.1 billion from EUR 6.2 billion last year to EUR 1 billion at the end of June 2024.

  • Liquidity Position: EUR 1.79 billion at the end of June 2024.

  • Debt Maturity Profile: Next material maturity in March 2026, with options to extend.

Release Date: July 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Casino Guichard-Perrachon SA (FRA:CAJ1) has made significant progress in restructuring, including reducing debt by EUR 5 billion and injecting equity.

  • The company has a strong brand presence with a unique geographical footprint, particularly in city centers like Paris, which provides a competitive advantage.

  • Casino's commitment to environmental, social, and governance principles is recognized, with achievements like a 57% reduction in CO2 emissions since 2015.

  • The company has a highly skilled and loyal workforce, which is crucial for its ongoing transformation and recovery efforts.

  • Casino's e-commerce platform, CDiscount, is showing positive growth in its marketplace activity, indicating potential for future expansion.

Negative Points

  • Net sales for the first half of 2024 declined by 3.5% on a like-for-like basis, primarily due to planned reductions in direct sales.

  • Adjusted EBITDA decreased by EUR 79 million year-on-year, impacted by operational expenditure inflation and less favorable margin rates.

  • The company reported a free cash flow deficit of EUR 413 million, influenced by deferred tax and social charge payments from financial restructuring.

  • Casino's financial results were significantly impacted by noncash items, including a EUR 422 million Franprix goodwill depreciation.

  • The company faces challenges in adapting its logistics network and reorganizing operational centers to generate synergies and cost efficiencies.

Q & A Highlights

Q: Could you explain the situation at Franprix and your convenience advantage, especially regarding margins and franchise contracts? A: Philippe Palazzi, CEO, explained that despite challenges, no franchisees have expressed a desire to leave the network. The company is renewing long-term contracts and focusing on a healthier state of operations by being selective with franchisees and store locations. There is no forced margin reset; instead, they are working with franchisees to improve competitiveness and commercial dynamics.

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