2024-03-26 18:07:00
New era for Casino. Placed in accelerated safeguard in October to escape its creditors, the Saint-Etienne distributor will change hands this Wednesday by turning the long page of Jean-Charles Naouri, its future former CEO.
As the Paris Commercial Court ruled two months ago, the group will come under the control of the consortium led by two billionaires, the Czech Daniel Kretinsky and Marc-André Ladreit de Lacharrière, backed by the Attestor investment fund. In return for erasing the debt of 5 billion euros, this trio must inject 900 million euros out of 1.2 billion euros of new money planned to relaunch Casino. The capital increases were launched on Monday and the stock price will be suspended on Wednesday March 27.
At the end of the day, in the wake of the last board meeting of the current management, the board of the new team, chaired by former Secretary of State Laurent Pietraszewski, will ratify not only the crushing of the debt which will going from 7.4 billion euros at the end of 2023 to just over 2.6 billion euros, but also the dilution of the former shareholders in the capital of the new Casino, starting with the first of them, Jean -Charles Naouri, forced to resign without severance pay.
Almost all supermarkets sold
This dilution is enormous since a shareholder who held 1% of Casino’s share capital will now only hold 0.003%, according to the group. Result: the consortium will hold 53.7% of the capital and take control while the current shareholders will only own around 0.3%. As for the creditors, they will recover the balance of the capital, or approximately 46%.
Casino will be nothing more than a shadow of itself. Almost all (288) hypermarkets and supermarkets will in fact be sold by June to Intermarché, Auchan and Carrefour. All that will remain is C-Discount, 1,300 integrated stores (338 Monoprix, 170 Naturalia, 323 Franprix and 493 convenience stores under the Spar, Vival, Le Petit Casino brands), for nearly 7,000 franchise-operated stores.
Relaunch Monoprix, Casino’s priority project
With this slimming regime, Casino will lose stores with a minimum turnover of 4.65 billion euros, or a small third of the 14.2 billion (excluding taxes) generated in 2022 in France. As for the workforce, which amounted to 50,000 employees in France at the end of 2022, the transfer of employees might concern nearly 16,000 people. A figure higher than that put forward by the unions due to a number of stores sold which might be greater than expected. The management has in fact received expressions of interest for several of them which had not yet found a buyer.
A social plan presented in April
These transfers will have serious consequences on support and administrative functions within the group, but also in logistics. The new general director, Philippe Palazzi, formerly of Metro and Lactalis, is working on a social plan which will be presented in April. Although the figures are still being adjusted, they already look high. Recently, the unions mentioned 6,000 positions at risk. Considered consistent by some close to the case, the figure nevertheless constitutes the worst-case scenario. Management is indeed seeking to limit the damage by reinternalizing certain activities previously subcontracted, particularly at the Saint-Etienne headquarters. So much so that some unionists are now counting on “2,000 to 3,000 people,” an inter-union official told La Tribune. Not sure if management will get that far.
These job cuts include the departure of employees from stores which have not found a taker, those from warehouses which are closed or staff from the Saint-Etienne headquarters where 80% of the 1,500 people on permanent contracts (1,800 including fixed-term contracts, interns…) work for the stores that are going to be sold. However, management has made commitments: paying particular attention to Saint-Etienne to limit the social impact, offering severance pay higher than that provided for in the collective agreement and, in addition to the social plan, a departure plan volunteers. While it takes time to negotiate these different plans, the first departures are expected this fall.
Multiply Ebitda by 7 by 2028
The stakes are enormous: the cash flow would be sufficient to last until the end of the year and it is essential for the new management to restore good profitability quickly.
This is what the buyers are aiming for, wishing to multiply the adjusted Ebitda (gross operating surplus) following distributor rents by more than 7 by 2028. Estimated at 126 million euros in 2024, it must increase to 920 million in 2028, according to their forecasts.
The buyers say they are planning 1.6 billion euros in investments by 2028, in particular to “renovate the store base”, and hope to “develop the profitability of the brands” notably through “competitive and stable” prices. expansion through franchising or even “the adaptation of logistics plans.”
Philippe Palazzi, a distribution veteran at the helm of the new Casino
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