GROUPE CASINO: Sustained 6.5% Growth in Third-Quarter 2010 Sales

Regulatory News:

CASINO (Paris:CO):

Ongoing faster organic growth of 3.4% (excluding petrol)
Double-digit growth in international markets
Return to same-store growth for Leader Price

⁽¹⁾ Based on constant scope of consolidation and exchange rates.

Consolidated net sales rose by a reported 6.5% in the third quarter of 2010.

Changes in scope of consolidation – mainly the deconsolidation of Venezuelan operations – had a 3.3% negative impact. The currency effect was a positive 5.7%, reflecting the sharp increase in the Brazilian real, Colombian peso and Thai baht against the euro.
Petrol sales had a 0.7% positive impact on growth for the period. The calendar effect was a slightly positive 0.4% in France and was neutral at a negative 0.1% internationally.

Excluding petrol, organic growth for the period came to 3.4%, confirming the faster pace of growth observed in the previous two quarters.

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In France, sales were up 0.2% on an organic basis (excluding petrol).

• Same-store sales at Leader Price returned to growth, rising by 1.1% (vs 6.1% decline in the first half) thanks to the effectiveness of the banner’s sales revitalisation programme.
• Franprix and Monoprix reported solid gains, with total sales up 4.2% and 5.9%, respectively. Casino Supermarkets and Superettes delivered satisfactory performances.
• Cdiscount enjoyed significantly faster organic growth of 18.1% during the period.
• Géant Casino’s sales fell back 4.1% on a same-store basis (excluding petrol) while the decline in footfalls slowed to 2.8% from 5% in the first half.

International operations enjoyed double-digit organic growth, at 10.2%, reflecting strong momentum in the Group’s key countries (Brazil, Colombia, Thailand and Vietnam) as well as the quality of its asset portfolio.

• South America continued to report very robust organic growth, at 12.8%, led by continued strong advances in same-store sales in Brazil (up 13,1%) and a very satisfactory performance in Colombia.
• In Asia, same-store sales rose 6.5% over the period. Big C in Thailand achieved solid same-store growth, while Vietnam continued to enjoy strong momentum.

Overall, international sales expanded by 17.0% over the period and represented 37% of the consolidated total.

Organic growth continued to gain momentum in the third quarter, confirming the effective positioning of the Group’s asset portfolio, both in France and internationally.

Casino intends to strengthen market share in France by improving the banners’ price competitiveness and speeding up the expansion of the convenience and discount networks.
Internationally, the quality of the Group’s assets is expected to drive strong, profitable growth for 2010 and beyond.

The Group will pursue its €1 billion asset disposal programme and reaffirms its objective of a net debt/EBITDA ratio of less than 2.2x at year-end 2010.

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FRANCE

Sales in France rose 1.3% on an organic basis, with petrol sales adding 1.1% to growth.

• Franprix-Leader Price

Leader Price returned to same-store growth (up 1.1%), confirming the significant improvement in the sales trend observed in the second quarter. Growth was led by a tangible 2.1% increase in footfalls that attested to the effectiveness of sales initiatives implemented during the first half of the year, including measures to improve price competitiveness and stepped-up advertising. Marketing initiatives have been strengthened in the second half. Around 100 national brand products have been introduced in the integrated stores since the end of July and the assortment is being extended to include 250 national brand items, which will be available in all Leader Price stores from mid-October. The new store concept is being rolled out in line with the business plan, with 55 stores converted by end-September. In the first nine months of the year, 23 stores were opened and 18 were closed or rebannered.

Franprix’s same-store sales were stable, rising by 0.1% in the third quarter. The banner opened eight stores during the third quarter (bringing the total since January to 61) and continued to deploy the new store concept (with 152 stores converted in the first nine months of the year).

Total sales for Franprix/Leader Price contracted 3.3%, mainly as a result of the sharp drop in sales to Caillé group, which has been Leader Price’s franchisee in Reunion since the third quarter of 2009.

• Monoprix

Monoprix reported a solid 3.7% increase in same-store sales, led by robust apparel sales and a good performance in food.
A new Citymarché store was opened during the period and expansion of the new store formats continued with the opening of five Monop stores and one Naturalia store, bringing the total number opened since January to 20.
Total sales rose by 5.9%, driven by the tangible contribution of store expansion to growth.

• Casino France

Géant Casino’s same-store sales contracted by 4.1%, excluding petrol. The decline in footfalls slowed to 2.8% in the third quarter from 5% in the second. The average basket was 1.2% lower.

Food sales were down 3.5%, versus 6.9% in the second quarter. Second-quarter price cuts led to a noticeable improvement in price competitiveness, with the banner’s IRI index down 3 points at end-August. The banner will strengthen its competitiveness in the second half of the year by leveraging promotions and loyalty programmes.
On the non-food side, Géant Casino continued to reposition the offer around the most promising categories. As a result, sales in the apparel and home segments were virtually unchanged, while sales of less promising categories, such as DVDs/games/videos and large appliances continued to be carefully scaled back. Non-food sales were down 5.5%.

Excluding petrol, Casino Supermarkets reported a 0.9% increase in same-store sales in the third quarter, versus a 1.0% decline in the first half. Three new stores were opened during the period. Total sales excluding petrol rose by 1.9%.

Superette sales rose by 0.5%, reflecting the ramp-up of the expansion programme and the end of the store-base rationalisation programme. Sixty-three stores were opened during the period, bringing to 265 the total number opened since the beginning of the year.

The Other businesses reported 12.1% organic sales growth, led by the excellent performance of Cdiscount, which enjoyed third-quarter organic growth of 18.1%. Its additional sales largely offset the decline in Géant Casino’s non-food sales.
The Group continued to promote synergies between Cdiscount and its store network. After developing a hypermarket pick-up service for Cdiscount purchases, the Group has started extending the service to Petit Casino superettes for parcels weighing under 30kg since the beginning of July. This initiative will be rolled out to all 1,900 integrated stores by the year-end and to the entire Superette network in first-half 2011.

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INTERNATIONAL

International sales increased by 17.0% over the period.
Changes in scope of consolidation had a 10.2% negative impact, mainly resulting from the 1 January 2010 deconsolidation of Venezuelan operations.
The currency effect was a positive 17.1%, due to the rise in the Brazilian real, Colombian peso and Thai baht against the euro.

Organic growth in international markets remained very high at 10.2%, led by very strong 12.8% growth in South America and a robust 6.2% increase in Asia.

In South America, same-store sales rose by 10.5%, lifted by sustained growth in Brazil and the ongoing improvement of business in Colombia.

• In Brazil, Grupo Pão de Açucar (GPA) reported same-store sales growth of 13.1%. Excluding Globex, GPA’s same-store sales rose 7.8%, reflecting good performances in both food and non-food. Globex same-store sales increased by 28.5%. E-commerce sales grew at a very fast pace, above 60%. GPA total sales grew by 16.9%*.
• In Colombia, the improvement in same-store sales continued in the third quarter, with Exito reaping the benefits of successful hypermarket promotions. The banner opened two stores in the third quarter, bringing to four the total opened since the beginning of the year (of which 1 hypermarket), and stepped-up its programme of store conversions (with 23 completed to date).
• Growth in same-store sales was sustained in Argentina and Uruguay.

In Asia, organic growth remained robust at 6.2%, fuelled by the satisfactory same-store performance of Big C in Thailand and ongoing very strong growth in Vietnam. In Thailand, Big C pursued the development of its new formats, opening two Mini Big C stores and seven Pure stores during the period.
The pace of expansion will move up a gear in the fourth quarter with the opening of three hypermarkets in Thailand (four openings in 2010) and four in Vietnam, bringing the total number of hypermarkets to 14 in this country by end-2010.

In the Indian Ocean, sales were down 0.4% on an organic basis and down 0.8% on a same-store basis.

* Data published by the company.

Main changes in the scope of consolidation

- Ponto Frio has been consolidated by the Grupo Pao de Açucar (GPA) sub-group since 1 July 2009.
- Operations in Venezuela have no longer been consolidated since 1 January 2010.

Store network