French Casino Group strengthens focus on asset sales to reduce debt

The French retailer Casino Group, which faces investor fears about its high debt levels, said is advancing with your exit plan, with the sale of a slice of 15% of your real estate unit Mercialys. The Casino is said to have received indicative offers for other assets that represent 700 million euros, about half of the realization plan of 1.5 billion euros (1.8 billion dollars) in June. The Casino, which announced reduction in net debt and improvements in free cash flow and profit in France in the first half, also kept the financial goals and to deleverage. But the actions of the Casino came to fall 8%, reaching the lowest level since 1997, with concerns about the debt situation of the company. " We are well advanced in the process of asset sales. We are confident that we execute the plan as announced, "said Antoine Giscard d'Estaing, Chief Financial Officer of Casino analysts. The Casino reported that net debt in France was reduced by EUR 295 million, to 4.02 billion euros, while free cash flow has improved thanks to better working capital and inventory management. However, Bruno Monteyne, analyst at Bernstein, said that the reduction of the debt of the Casino does not necessarily reflected the full scenario, while the Invest Securities wrote that the reduction in the levels of indebtedness of the Casino seemed a bit "limited in the light of their annual goals. Casino shares fell almost 40% since the beginning of 2018, in part due to concern about the retailer's debt and your controlling group Rallye and disappointing free cash flow generation in France last year. The Casino, which controls the GPA, added that the first half operating profits reached 439 million euros, a fall of 2,4% compared to last year, with adverse movements in the exchange rate impacting earnings. The group, whose credit was reduced to speculative by Standard & Poor's in March 2016, is under pressure to show they can resume profits in France, where it competes with bigger rivals like Carrefour, while conditions in Brazil remain difficult. Excluding currency effects, the Group's operating profit increased 10,3% in organic terms, while in France, the operating profit of the retail operation rose 17,3%. For 2018, the Casino provides organic growth exceeding 10% in consolidated profit, excluding tax credits, and the French operating profit, excluding real estate.