2010 REGISTRATION DOCUMENT (3.4 Mo) - Groupe Casino

31 DECEMBER 2010Business Review2Main changes in the scope of consolidation■■■■Consolidation of Globex by GPA since 1 July 2009.Sale of Super de Boer’s assets at the end of 2009; in accordancewith IFRS 5, Super de Boer’s net income has been reclassifiedunder “Discontinued operations” from 1 January 2008.Deconsolidation of the Venezuelan operations since 1 January2010.Consolidation of Casas Bahia by GPA since 1 November 2010.Net salesConsolidated net sales rose by 8.7% to €29,078 million from€26,757 million in 2009.Main currency effectsThe positive 5.0% currency effect reflected the sharp increase inthe Brazilian real, Colombian peso and Thai baht against the euroduring the period.Main scope effectsChanges in the scope of consolidation had a negative impact of 1.0%,with the positive impact of Ponto Frio and Casas Bahia’s consolidationby Grupo Pão de Açúcar (GPA) in Brazil offset by the deconsolidationof the Venezuelan operations.A detailed review of sales growth is presented above, in the sectionson French and International operations.Trading profitTrading profit rose by 7.5% in 2010 to €1,300 million.Reclassification of the CVAE under income tax charge contributed4.9% to growth. The currency effect added 5.9% and changes in thescope of consolidation a further 0.6%.Adjusted for these effects, trading profit decreased by 3.9% on anorganic basis.A detailed review of trading profit is presented above, in the sectionson French and International operations.Operating profitOther operating income and expense represented net incomeof €15 million in 2010, compared with net expense of €37 millionin 2009.The net income of €15 million in 2010 mainly included:■■■■€323 million in gains on asset disposals, including €186 million netgain on the disposal of Cativen shares in Venezuela, €104 millionnet gain on property disposal mainly by Mercialys and €24 milliongain on disposal of Franprix-Leader Price assets;€134 million in restructuring provisions and expense, mainly forCasino France (€84 million), Franprix-Leader Price (€14 million)and Latin America (€18 million);€112 million in provisions for contingencies and litigation (mainlyconcerning tax risks and disputes in various group entities);€97 million in impairment losses, including €69 million in losses onreceivables and accrued income resulting from the correction of prioryear accounting errors in a subsidiary identified at the year-end;■■€33 million in other expense;€67 million gain (corresponding to negative goodwill on theacquisition of Casas Bahia in Brazil. For further details, see note 3.1to the consolidated financial statements).The net expense of €37 million in 2009 mainly included:■■■■■■€146 million in gains on asset disposals (including €139 million ingains on the distribution of Mercialys shares, a €22 million gain onthe disposal of Vindémia’s production assets and a €28 million losson the disposal of the Group’s interest in Easy Colombia);€70 million in provisions for contingencies;€68 million in restructuring provisions and expense, mainly for theconvenience stores and Franprix-Leader Price;€27 million in litigation provisions and expense;€15 million in asset impairment losses;€2 million in other expense (mainly reflecting a €75 millionnon-recurring expense due to a tax amnesty law in Brazil, partiallyoffset by income from a €69 million indemnity linked to thetermination of an exclusivity clause negotiated by GPA).After other operating income and expense, operating profit amountedto €1,314 million in 2010, up 12.1% from €1,173 million in 2009.Profit before taxProfit before tax rose by 15% to €953 million from €828 million in2009, after deducting net financial expense of €362 million comparedwith €345 million in 2009. This total includes:■■finance costs, net of €345 million, stable compared with 2009(€343 million). In France, net finance costs decreased mainly asa result of lower interest rates. In International, the increase innet finance costs was mainly due to expenses related to tradereceivables discounting in the Brazilian non-food operations;other net financial expense of €17 million compared with €2 millionin 2009.Profit attributable to equity holdersof the parentIncome tax expense came to €214 million in 2009 compared with€201 million in 2009. The effective tax rate was 22.4%. Excludingnon-recurring items, the underlying tax rate was 30.9% and 26.4%before the reclassification of CVAE under income tax, versus 27.4%in 2009. The decrease in the underlying tax rate was mainly due togeographical mix.The Group’s share in profits of associates was €13 million comparedwith €6 million in 2009.Profit attributable to minority interests totalled €193 million in 2010compared with €90 million in 2009 (€111 million in 2009 excluding theadjustment of profit for the period from 29 April 2008 to 31 December2008 initially allocated to minority interests in the Franprix-LeaderPrice holding companies).After non-recurring items (mainly the minority interests in Exito’s capitalgain on disposal of Cativen shares and Mercialys’s capital gain onasset disposals), underlying profit attributable to minority interestscame to €144 million, an increase of 30.1% mainly reflecting theincreased profits at Mercialys and Exito.In light of these factors, net profit from continuing operationsattributable to equity holders of the parent rose 3% to €559 million,from €543 million in 2009.Registration Document 2010 | Casino Group21