Casino Group: 2028 Strategic Plan
Casino Group: a strategic plan to
achieve
the best of brands in convenience retailing
Paris, 14 November 2024
- A strategic plan named
"Renouveau 2028", aimed at becoming the best of brands in
convenience retailing.
- Growth drivers based on
three key market segments:
- Being the go-to choice for
day-to-day food shopping;
- Becoming a major player in Quick
Meal Solutions;
- Being the leader in providing new
everyday services.
- To kickstart this transformation,
we will be leveraging five strategic
levers:
- The strength of our brands;
- Our culture of service;
- Our power as a group;
- The energy of our teams;
- Our societal and environmental
values.
- The Group is
aiming to achieve break-even free cash flow before
financial expenses and
dividends1 by
2026. It will invest c.
€1.2bn over the next four years to achieve a
gross merchandise
volume1 of c. €15bn in
2028, representing an increase of c.
€1.9bn compared to 2023.
Defining a Group-wide strategic plan is a first
for Casino Group and such a plan is suitable to each of its brands.
Committed since April 2024 to its financial, managerial and
organisational restructuring plan, the Group is now
entering a new phase of its recovery and development.
The various levers of the 2028 strategic
plan are designed to put Casino Group back on track to profitable
and sustainable growth.
Philippe Palazzi, Chief Executive Officer of
Casino Group, stated: "Today we are
entering a new phase in the Group’s transformation. Along with our
franchisees and brands, our goal is to redefine convenience
retailing to meet new consumer expectations: the right product and
the right service at the right time, close to where you live,
through enjoyable and attentive interactions, at prices suited to
everyone’s means. That is why the Group will be focusing on three
key markets: day-to-day food shopping, Quick Meal Solutions and new
everyday services. Thanks to our unique geographic coverage and the
commitment of our teams, we are building a new model of convenience
retailing attuned to ever-changing
societal trends."
A successfully completed
restructuring
Further to the financial restructuring carried
out successfully in April, Casino has defined several priority
projects aimed at the Group's recovery. It has adapted its
organisation and business to a new scope following the disposal of
all hypermarkets and supermarkets. The Group has accordingly
completed the sale of 425 stores and signed the necessary
agreements to implement employment protection plans. In parallel,
it has reshaped its organisation with a renewed Executive Committee
and a reorganised Purchasing Department, and has pooled
cross-functional services.
The "New" Casino: a more consistent
scope
- A Group
of unique and complementary brands:
Monoprix, Franprix, Casino, Cdiscount, Naturalia, Spar and Vival.
These are strong brands within a Group that now counts some 7,700
stores and 25,000 associates, with a gross merchandise volume of
€13bn (2023).
- A Group focused on
franchising: a virtuous model that the new Casino Group
will use for its continued development and expansion in new
territories.
- A convenience
Group: 42 million people in France live close to a Casino
brand store2. Whether in terms of location,
functionality (the right product at the right time), customer
relationships (human contact) or emotional connection (shared
values), convenience is in the brands' DNA across the Group, which
will be leveraging its know-how to expand.
At the heart of new consumers’
trends
New Casino's positioning fits into a growing
market (sales up +2.3% in urban convenience stores in 2024 and
+1.7% in rural convenience stores according to Consoscopie 2024),
which is rising to meet consumers' demanding expectations. 85% of
French people surveyed claim the word "convenience" has a positive
connotation and 79% of them feel a connection with at least one
brand or banner. 88% feel that "convenience stores provide very
useful services for city dwellers and neighbourhoods" (Obsoco –
September 2024).
Habits have also evolved over time: consumers
now buy food on a more regular basis with a specific objective in
mind (dinner, cocktails with friends, out-of-home catering,
last-minute purchases, day-to-day shopping, etc.). Although the
average household’s annual expenditure on staple products has
increased significantly over the last few years, the average spend
per basket has fallen in tandem with a rise in purchase frequency
(NielsenIQ 2023).
Accelerating in three key markets to
invent the "new convenience"
The Group intends to redefine convenience by
focusing on its three key markets aiming at:
- Being the go-to choice for
everyday food shopping: by offering a quality product
range that meets local needs, working on price image with ranges
tailored to different expectations, developing private-label
assortment and product innovations.
- Becoming a major player in
Quick Meal Solutions, particularly in urban areas, by
offering a range of products suited to all occasions (breakfast,
lunch, snack time, etc.) and increasing our market share relative
to fast-food and takeaway operators.
- Being the leader in
providing new everyday services to strengthen consumer
emotional attachment to our brands and increase customer traffic in
our stores.
The Group will also continue to focus on
affordable fashion, beauty and decoration markets with
Monoprix, and develop its non-food
e-commerce business with Cdiscount.
The Renouveau 2028 plan: five strategic
drivers to return to profitable and sustainable growth
To pursue its transformation, Casino Group will
be relying on five strategic drivers, centred on listening and
maintaining open dialogue with its customers, franchisees,
suppliers, partners and, of course, its employees.
1. Standing out through the strength of our
brands
Casino Group aims to bring together strong,
unique and complementary brands that, together, meet customers'
needs across France. The Group will support the brands' development
and enhance their unique qualities by working on customer
experience and sharing innovations, with aiming at establishing
their long-term positioning.
-
Cultivating each brand's personality and
positioning, both on-line and in-store
- Creating
innovative and unique concepts, such as the "Oxygène" concept
recently launched by Franprix,
- Redefining
pricing policies and developing private-label product ranges to
meet different consumer expectations (entry price, mid-range,
premium, organic and cross-category theme-based product
brands),
- Becoming a
must-see on fashion, beauty and decoration for Monoprix,
- Being the leader
in mass market e-commerce for Cdiscount with its new brand
platform.
-
Tailoring each brand's offering to customer profiles and
regions
- Strengthening
ties with local producers, supporting the "La Ferme France"
initiative.
- Becoming
the preferred partner for innovation
- Being the first
to invest in bringing to market innovative products from local
initiatives and SMEs.
2. Developing our culture of
service
Service, the very essence of the retail
profession, is at the heart of everything Casino does. Each of the
brands will be redefining its relationship with its customers,
franchisees, suppliers, partners and vendors. Casino aims at
creating a truly local ecosystem so that every interaction is a
platform for shared growth.
-
Improving the shopping experience for our
customers by turning every store into a welcoming hub for social
cohesion
- Ensuring better
product availability,
- Offering a range
of services tailored to customers by opening up our stores to
public or private partners (parcel pick-up, key holding, concierge,
etc.),
- Offering a
seamless omni-channel journey.
-
Involving franchisees more closely in concept
development
- Redesigning our
pricing policy,
- Improving
operational efficiency,
- Effectively
selecting, supporting, training our franchisees with a new "First
in Franchise" approach involving all brands to establish a more
competitive value proposition.
-
Contributing to the development of our local
suppliers, VSE/SMEs and vendors
- Supporting
responsible sectors,
- Developing new
services by focusing on data.
3. Leveraging on our power as a Group
By pooling, optimising and strengthening all
support services, the Group will underpin the performance and
growth of its brands. By sharing best practices and fostering
in-depth collaboration between teams, brands will become more
competitive and profitable over the long run.
- Developing synergies
between brands to resume mastered expansion in France and
abroad
- Opening new stores and attracting
franchisees from the competition.
-
Streamlining the store fleet
- Closing unprofitable sites,
- Converting certain integrated sites
into franchise and choosing the brand best suited to the catchment
area,
- Refurbishing and remodelling our
stores in a cost-efficient manner according to the development
potential of each site, as Naturalia has kicked of the roll-out of
the new "La Ferme" concept.
- Cutting costs by optimising
logistics and operating costs of our head offices and
stores
- Improving our
performance
- Increasing bulk purchase volumes
from SMEs and mid-sized suppliers,
- Pooling GNFR3 purchases
(energy and maintenance costs or waste collection,
for example) and monetising our data,
- Joining a powerful France-wide
centralised purchasing office to negotiate with leading producers:
the Aura Retail alliance for food and non-food purchases,
implemented since October.
4. Uniting through the energy of our
teams
Casino Group's renewal is based above all on the
expertise of its teams. Casino will be developing its teams and
structuring the career paths of every individual to support the
collective interest and growth. Within each brand, but also across
the board, Casino will encourage knowledge transfer, cooperation
and innovation to help the Group and its talent pool to grow.
-
Supporting the Group’s transformation by
strengthening its culture, redefining shared values and
anticipating major changes.
- Helping
employees to grow, so that training and knowledge transfer
become levers for individual and joint development.
- Enhancing career
development and mobility between businesses, between brands and
towards franchises, for example through a cross-brand integration
experience and the development of dedicated talent programmes.
- Extending our
training culture to franchisees and their employees through
certified courses and training at specific learning-stores.
-
Promoting a culture of social innovation as a significant
marker for the Group by maintaining responsible social
dialogue, developing an entrepreneurial culture and rolling out
ambitious framework policies.
5. Committed to embodying our societal
and environmental values
Casino Group firmly believes that profitable and
sustainable growth is possible and that its brands have a role to
play in serving customers and society. At the heart of communities,
towns and consumers' daily lives, Casino Group faces many
challenges: energy transition, regional cohesion, fighting against
food waste, waste management, promoting inclusion and diversity,
offering responsible and local products, and creating social
connections. Through its commitments, Casino contributes to the
attractiveness of its brands.
-
Inventing a new form of regional cohesion: as a
retail network, Casino has a social and societal role to play in
developing new services for the most isolated in towns and
villages, ensuring that producers are paid fairly, supporting
entrepreneurial initiatives and working to promote inclusion and
diversity.
- Turning our products into
the benchmark for good and healthy eating: ensuring that
supplier specifications are rigorous, upholding animal welfare and
reducing food waste.
- Focusing on solutions that
safeguard the environment: reducing waste, cutting carbon
emissions and sourcing through the most environmentally friendly
production chains.
Extra-financial indicators
Convenience is at the core of the transformation
of Casino's business model, which aims to return to sustainable
growth by maintaining high standards of social and environmental
responsibility. Casino Group is committed to reducing its carbon
emissions, targeting a +1.5°C pathway by 2030, and will
disclose its new ESG roadmap during the first quarter of 2025.
In particular, we plan to significantly increase the proportion of
green energy in our energy mix by 20284.
Financial objectives for
2028
Growing the business
- The plan's implementation should
enable us to achieve a gross merchandise volume of c.
€15bn, representing a compound average annual
growth rate of +3.7% over the period
2024-2028.
- Although the transfer of certain
stores to the franchise model will automatically reduce revenue,
the CAGR in net sales is expected to be +0.8% over the period
2024-2028.
Boosting efficiency
Given the synergies implemented within the
Group, cumulated savings of c.€600m are expected
over the period 2025-2028, of which €350m have already been
confirmed. The savings will mainly come from:
- Cost rationalisation to adapt to
the new perimeter of the Group,
- Reduction in head office and store
network occupancy costs,
- Pooling of skills and
expertise,
- Synergies of
goods and GNFR purchasing
- Optimisation of logistics.
Growing EBITDA
The aim of the Renouveau 2028 plan is to achieve
adjusted EBITDA after lease
payments5 of c.
€500m in 2028, with gradual growth over the duration of
the plan.
Investment amount allocated over the period
To implement the strategic plan, Casino has
assigned a budget of c. €1.2bn in gross
capex over the period 2025-2028, i.e., c. €300m a year,
half of which for Monoprix.
Improving the level of free cash flow
The aim is to achieve break-even free
cash flow before dividends and financial expenses in 2026,
with an
adjusted EBITDA after lease payments to free cash flow
conversion rate5 of c.
50% in 2028.
Financial position
Since the start of the year, roughly €200m have
been repaid to Quatrim bondholders, financed by proceeds from
property disposals. This very substantial amount was paid down
rapidly after our financial restructuring.
The Group reiterates that most of its debt
matures in March 2027, subject to compliance with its covenant,
which will be tested for the first time in September 2025.
***
This press release contains forward-looking
statements, including, without limitation, statements about Casino
Group (“the Company”) and its plans, strategies, and prospects.
These forward-looking statements are subject to risks and
uncertainties that may change at any time, and, therefore, the
Company’s actual results may differ materially from those that were
expected.
The Company based these forward-looking
statements on its current assumptions, expectations, and
projections about future events. Although the Company believes that
the expectations reflected in these forward-looking statements are
reasonable, it is very difficult to predict the impact of known
factors and it is impossible for us to anticipate all factors that
could affect our proposed results. All forward-looking statements
are based upon information available to the Company as of the date
of this press release.
Important factors that could cause actual
results to differ materially from management's expectations are
disclosed in the Company’s periodic reports and other regulated
information filed with the AMF. Investors are cautioned not to
place undue reliance on such forward-looking statements.
***
Pursuant to the European Commission's
Implementing Regulation (EU) 2016/1055 of 29 June 2016, relating to
the technical procedures for the publication and deferral of inside
information, this press release was communicated to Casino's
authorized distributor for release on 14 november 2024 at 08:30
CET.
***
ANALYST AND INVESTOR
CONTACTS
Charlotte Izabel - cizabel@groupe-casino.fr - Tel:
+33 (0)6 89 19 88 33
Investor Relations - IR_Casino@groupe-casino.fr -
Tel: +33 (0)1 53 65 24 17
PRESS CONTACTS
Casino Group – Communications
Director
Christophe Piednoel - cpiednoel@groupe-casino.fr -
Tel: +33 (0)6 15 19 17 55
Stéphanie Abadie –
sabadie@groupe-casino.fr – Tel: +33 (0)6 26 27 37 05
Press Office -
directiondelacommunication@groupe-casino.fr - Tel: 33 (0)1 53 65 24
78
APPENDICES – GLOSSARY
Gross Merchandise Volume
(GMV)
For e-commerce, GMV (“Gross Merchandise Volume”) corresponds to
sales generated directly on the Cdiscount Group's websites and by
independent sellers on marketplaces. For other retail activities,
it corresponds to sales generated by each brand from integrated
stores and franchise stores, including tax.
Adjusted EBITDA
Adjusted EBITDA (earnings before interest, taxes, depreciation and
amortisation) is defined as trading profit plus recurring
depreciation and amortisation expense included in trading
profit.
Adjusted EBITDA after lease
payments
Adjusted EBITDA after lease payments is defined as adjusted EBITDA
less repayments of lease liabilities and net interest paid on lease
liabilities shown in the cash flow statement.
Free cash flow before dividends and
financial expenses
Free cash flow before dividends and financial expenses corresponds
to cash flow from operating activities as presented in the
consolidated statement of cash flows, less net capex, rental
payments subject to restatement in accordance with IFRS 16 and
restated for the effects of the strategic disposal plan (until
2023), conciliation and financial restructuring.
Adjusted EBITDA after lease payments to
free cash flow conversion rate
The adjusted EBITDA after lease payments to free
cash flow conversion rate is defined as the ratio 'free cash flow
before dividends and financial expenses' and 'adjusted EBITDA after
lease payments'.
1 Refer to definitions in the appendices on page
7
2 Within a 10-minute drive
3 Goods not for resale
4 As part of the request for proposal launched for the energy
supply of its sites in 2025, the Group has decided to select a
proposal including 30% green energy (as defined by the European
definition of green energy)
5 Refer to definitions in the appendices on page 7
- 2024 11 14 - PR - Casino - Strategic Plan
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