Bloomberg News

Casino Predicts 2012 Growth After Profit Beats Estimates on Brazil, Asia

February 28, 2012

Casino Guichard-Perrachon SA (CO), the French owner of Franprix and Leader Price stores, reported full- year profit that beat analysts’ estimates and predicted growth in earnings this year as it expands in Latin America and Asia.

Net income rose 6.6 percent to 568 million euros ($763 million), the Saint Etienne, France-based retailer said today in a statement. The average of 12 analysts’ estimates compiled by Bloomberg was for profit of 519 million euros. The company said it aims to increase sales by more than 10 percent in 2012.

Casino forecasts that more than 50 percent of revenue will come from “high-growth” countries this year and confirmed today that it intends to exercise an option in June to gain full control of Brazil’s biggest retailer. The company increased its stake in Cia. Brasileira de Distribuicao Grupo Pao de Acucar to more than 40 percent last year after rejecting a proposal to combine the business with the Brazilian unit of Carrefour SA. (CA)

“In 2012, our group will pursue its profitable growth strategy,” Casino Chief Executive Officer Jean-Charles Naouri said in the statement. “The group is confident it will enjoy growth in its operations and results.”

Online Fashion

Separately, Casino said it reached a deal to buy a minority stake in online fashion retailer Monshowroom.com. The six-year- old e-commerce site had gross sales of more than 20 million euros in 2011 and is profitable, Casino said, without disclosing the price.

Casino rose 0.3 percent to 72.10 euros at 12:20 p.m. in Paris trading, valuing the retailer at about 8 billion euros.

Casino said Pao de Acucar will be fully consolidated within its accounts once it becomes the sole controlling shareholder. The retailer currently shares control of the Sao Paulo-based company with Brazil’s Diniz family. Pao de Acucar has a market value of about 20.4 billion reais ($12 billion).

Casino’s sales advanced 18 percent last year, led by growth in Latin America and Asia, the company said.

So-called trading profit in France, Casino’s largest and domestic market, fell 2.6 percent to 750 million euros. Revenue in the country rose 4.4 percent on higher food sales at Geant superstores and online growth.

Monoprix Stake

Sales at the Monoprix supermarket chain gained 3 percent, the company said. Casino last week ruled out selling its 50 percent stake in Monoprix and said it’s ready to acquire full control from partner Galeries Lafayette SA “at a fair price.” Casino values Galeries Lafayette’s stake at 700 million euros, about half the department-store owner’s estimate.

Acquiring the rest of Monoprix “would make sense for Casino and would have a 5 percent accretive impact based on a price of 1.2 billion euros,” CA Cheuvreux analyst Arnaud Joly said in a note yesterday. “In the short-term, the main risk is to see Monoprix being a bit destabilized by this conflict.”

Casino increased the dividend by 7.9 percent to 3 euros a share, with the option of 50 percent being paid in shares.

The ratio of net debt to earnings before interest, tax, depreciation and amortization was 2.35 in 2011, according to the retailer, which said it aims to keep the ratio below 2.2 times.

Casino said it achieved a plan to dispose of assets worth 1 billion euros last year and aims to raise a further 1.5 billion euros through disposals this year.

To contact the reporters on this story: Andrew Roberts in Paris at Aroberts36@bloomberg.net; Julie Cruz at jcruz6@bloomberg.net

To contact the editor responsible for this story: Sara Marley at smarley1@bloomberg.net


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