PARIS (Reuters) – French retailer Casino on Thursday vowed to boost its profitability and cash flow further this year and push on with its asset disposal plan to reduce debts after reporting a 25% rise in 2020 operating profit partly helped by cost savings.
Chairman and CEO Jean-Charles Naouri said that in the core French market, the goal for 2021 was “sharply improved profitability, continuing the trend established in the second half 2020”.
The priority was to grow, notably thanks to more convenience stores openings and the development of food e-commerce.
Casino achieved a 2020 group operating profit of 1.426 billion euros ($1.74 billion), up 25.2% at constant exchange rates, helped by cost savings and higher sales in top markets France and Brazil.
Total sales rose to 31.9 billion euros, up 8% on a same-store basis.
Food retailers across the world have benefited from the demand generated by the COVID-19 lockdowns, which have forced consumers to stay at home. This has strongly benefited Casino’s convenience stores in city centres and its e-commerce business.
Last week larger domestic rival Carrefour reported a 16.4% rise in 2020 recurring operating profit to 2.17 billion euros and said it had achieved its best sales performance in 20 years.
‘GREATER FLEXIBILITY’
Casino, which also controls Brazil’s Grupo Pao de Acucar, has been selling assets to reduce debt. It said it had lowered its gross debt by 1.3 billion euros to 4.8 billion euros at end-2020, beating a target of 5 billion.
The group has sold 2.8 billion euros in assets, including several hundred discount Leader Price stores to German rival Aldi.
Casino said that in view of the successful development of its activities in France, it had “greater flexibility” in implementing its asset disposal plan, for which it confirmed a target of 4.5 billion euros.
Naouri did not say which assets could be sold nor when Casino planned to complete its asset disposal plan.
“There are formal processes ongoing. Casino’s assets are all profitable, which makes us very confident (on Casino’s ability to deliver on the plan),” he said.
Casino, which will not pay a dividend for 2020, said it was targeting an increase in free cash flow for 2021, having achieved 288 million euros in free cash in 2020.
To boost profitability Casino is banking on monetising client data, savings from purchasing deals and a greater focus on e-commerce, organic food, convenience stores and energy services.
It has been expanding online through a deal to use British online retailer Ocado’s fulfillment platform, while its Monoprix supermarket arm has a deal with Amazon to sell groceries.
($1 = 0.8210 euros)
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