2010 REGISTRATION DOCUMENT (3.4 Mo) - Groupe Casino

231 DECEMBER 2010Business ReviewSales in France rose by 1.7% to €17,956 million in 2010 from€17,664 million in 2009. Organic growth stood at 1.8% and 0.6%excluding petrol, compared with falls of 3.8% and 2.7% respectivelyin 2009.Trading profit declined by 4.1% over the period to €769 million. Onan organic basis, trading profit declined 10.5% due to significant priceinvestments at Géant and Franprix-Leader Price.Trading margin narrowed by 26 bp to 4.3% and by 55 bp on an organicbasis, mainly due to a decline in margin at Franprix-Leader Price.Highlights by format were as follows:■ Franprix-Leader Price sales returned to growth, with an increaseof 0.5% to €4,026 million from €4,007 million in 2009.- Leader Price same-store sales made a strong recovery from thesecond quarter of 2010, with a decline of just 1.4% comparedwith 10.8% in the first quarter. The improvement was confirmedin the third and fourth quarters, with growth of 1.1% and 5.6%respectively. This good performance reflects the effectiveness ofthe sales revitalisation plan introduced early in the year, whichled to an increase in footfalls and in the average basket value.Significant price cuts were introduced in the first half, supportedby increased advertising. The second half saw the rollout of anew store concept, the gradual introduction of 250 selectednational brand products and a reinforced Leader Price privatelabel offering. Sales investments were significantly stepped upin the final quarter to build shopper loyalty and consolidate theimprovement in traffic.Expansion also continued apace, with 52 new stores opened in2010, including more than half in the final quarter. In addition,24 stores were closed and two transferred to Franprix under thestore rationalisation plan.- Franprix reported a sustained 6.4% increase in sales, led by thestrong expansion drive. In all, 100 new stores were opened duringthe year, bringing the total to 870. The banner also pursued itsstore renovation programme, with more than 50% of the storebase upgraded to the new concept by the year end. Franprixreported 0.7% growth in same-store sales.- Franprix-Leader Price trading margin stood at 4.1%, down 191 bpon 2009 and 212 bp on an organic basis. The decline stemmedfrom the significant price investment at Leader Price and highercosts, partly as a result of store base expansion.■ Monoprix’s same-store sales rose 2.5% in 2010, lifted by a goodperformance in food sales, and particularly FMCG (1) and refrigeratedproducts. During the second half, Monoprix improved its pricepositioning benefiting from the deployment of dunnhumby. Thebanner also introduced a repackaging programme for its coreprivate label range “M”.The sustained expansion policy also continued across all itsformats, with a total of 27 new stores opened in 2010, including7 Citymarchés, 11 Monop’, 1 Beauty Monop’ and 8 Naturaliaoutlets.Monoprix reported consolidated sales growth of 4.7% to€1,914 million from €1,829 million in 2009, increasing marketshare by 0.1 point.Trading margin stood at 7.3%, up 69 bp and 23 bp on an organicbasis.■Casino France:- Géant Casino hypermarket sales declined by 0.6% comparedwith 2009, to €5,516 million. Excluding petrol, same-store saleswere down 4.4%. The average basket declined by 0.7% andfootfalls contracted by 3.7%.Food sales showed noticeable improvement from one quarter tothe next, as Géant started to feel the benefits of the action plandeployed to strengthen price competitiveness. After cutting pricesin the first half, the banner focused on leveraging promotions andloyalty programmes in the second half. All these initiatives enabledGéant to stabilise its market share at year-end.Non-food sales were down 6.0%. The banner continued torefocus its non-food offer on the most promising categories,such as clothing, home and leisure. Category managementorganisation has now been deployed and is already deliveringtangible benefits in home segments, whose sales were stable inthe final quarter. Major efforts were also made to reduce inventoryand obsolete stocks. Improving non-food performance will be apriority in 2011.- Casino Supermarkets reported 4.0% growth in sales to€3,490 million from €3,355 million in 2009. Growth excludingpetrol sales was 1.7%. Same-store sales held steady excludingpetrol, declining by just 0.1%.The banner stepped up its pace of expansion, opening elevennew supermarkets during the quarter versus three in 2009.The banner’s market share remained stable across the year.- Superette sales amounted to €1,494 million versus €1,506 millionin 2009, a slight decline of 0.8%. This trend improvementcompared with 2009 was mainly due to completion of the storerationalisation programme. Over the year, 321 new sales outletswere opened and 304 closed (excluding wholesale stores).- Other businesses, primarily Cdiscount, Mercialys, Banque Casinoand Casino Restauration, reported 6.8% growth in sales to€1,516 million from €1,420 million in 2009, and organic growthof 9%.This performance was driven mainly by strong momentum atCdiscount, with organic sales growth accelerating in the secondhalf to 18.5% from 10.1% in the first. Household appliances andhome segments made a strong contribution to this growth andCdiscount also continued to expand its offering to new universes,such as toys and jewellery. The pick-up service was also a keysuccess factor. Since 2009, Cdiscount customers have beenable to pick up parcels weighing more than 30 kg from Géanthypermarkets and this service was extended in 2010 to the 1,800integrated Petit Casino stores for parcels weighing less than30 kg. The service will be available throughout the entire superettenetwork in the first half of 2011. Cdiscount outperformed its directcompetitors and strengthened its leadership during the year.Growth in Cdiscount sales amply offset the fall-off in GéantCasino’s non-food sales, enabling the Group to report an increasein consolidated non-food sales for the year.Mercialys reported 11.4% growth in rental income (2) . The “EspritVoisin” programme continued with 7 completions during the year.Mercialys also achieved a new milestone in its value-creationstrategy, with the implementation of an active asset disposalpolicy. A total of 45 mature assets were sold for the sum of€121.5 million (3) , mainly comprising service malls, food stores,single store and restaurant properties and a shopping centre atSaint-Nazaire.- Casino France’s trading margin gained 14 bp to 3.9%. On anorganic basis it was down 15 bp due mainly to lower marginsat Géant following the price cuts. Casino Supermarkets and thesuperettes enjoyed solid profitability. Retail-related businessesreported an increase in trading profit.(1) Fast-moving consumer goods.(2) Data published by the Company.(3) Capital gains on disposal were recognised under “Other operating income” (see notes of the consolidated fi nancial statements).18 Casino Group | Registration Document 2010