The French companies quoted on the stock markets can be particularly popular for investors that wish to trade on the stock markets. Among these we find a number of large distribution groups such as the Casino Group that we will examine here in detail. In this article you will find information on this company’s shares and an analysis of its share price with the historical charts.
Firstly, as with the majority of its competitors, the Casino Group does present a strong exposure to food crises as well as the consumer purchase power in the countries where it is notably present, particularly in Latin America where the economic crisis is considerable. It is therefore important to take this data into account in your analyses.
We would also carefully follow the results relating to reorganisation and partnership agreements implemented on the French market, notably those relating to Intermarché, Dia and Conforama.
The ability of the group to reduce its debt is also at the heart of its investors’ anxieties. After understanding the group’s fixed objectives you should closely follow the events, year by year, or even each quarter when possible. Apart from this debt reduction objective the company’s financial results are of course extremely important, notably where related to gross operating surplus.
All operations regarding the buying and selling of subsidiaries held by the group worldwide will of course have a significant influence on the share price of the Casino Group and it would therefore be wise to carefully monitor all communications and announcements by the group on this subject.
Finally, it is recommended that you monitor the level of the competition and movements in the market parts of each of the players in the distribution sector worldwide and particularly in the countries where Casino is strongly present.
The Casino Group, also called ‘Casino Guichard-Perrachon’, is one of the leaders in food distribution in France. But its activity is quite varied, mainly in international distribution and in France to a lesser degree, plus the company is also involved in restaurant services and e- commerce.
The Casino Group achieves over 57.4% of its turnover in France but is also present in Latin America and Asia.
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We now propose to discover some of the main competitors of the Casino group in its sector of activity with a quick presentation of the biggest players in this segment in France and in Europe.
First of all, the E.Leclerc retailer cooperative and predominantly food retailer of French origin was created in 1949 with the first shop set up by Edouard Leclerc and today groups together independent shops and employs over 125,000 people. This group owes its success to its strategy of diversifying its activities, notably with mobile telephony since 2007, then energy and others. It is currently the largest French company in this sector in terms of turnover just before Carrefour.
Another major competitor to Casino is the Carrefour group, which specialises in mass retailing and also pioneered the hypermarket concept with the first shop created in 1963. It then became in 1999 the leader of the mass distribution thanks to its merger with Promodès and one of the most important signs in terms of sales throughout the world. The group was founded in 1959 in Annecy and is now present in Europe, South America and Asia as well as in other parts of the world thanks to the establishment of local partnerships. It is also present in other retail formats such as supermarkets, convenience stores and self-service wholesale.
Another retailer cooperative in direct competition with Casino is Système U, which includes Hyper U, Super U, U Express, formerly known as Marché U, and Utile, a network of local shops in urban and rural areas. The group is thus one of the leading food retailers in the French market, with a market share of over 10% in this sector. Currently, the group owns and operates more than 1,575 outlets in France.
Of course, Auchan, which is the supermarket chain of the group of the same name and part of the Mulliez family association, is one of the giants of this sector in France and was created in 1961. The group is also one of the largest retailers in this sector worldwide.
The last competitor to follow for a fundamental analysis of this share price is the Lidl Group which is a German retailer founded in 1930 and currently operates in more than 26 countries in Europe with almost 11,463 shops, of which 3,277 are in Germany. Lidl is part of the umbrella company of the Schwartz Group and is based in Neckarsulm. However, it is often criticised for its working conditions in both France and Germany.
In 2007, the Casino Group had already concluded a partnership with Cencosud for the creation of a joint venture for the development of DIY activities in Colombia and to define a possible extension to this throughout Latin America. This joint venture is owned 70% by Cencosud and 30% by Casino.
In 2013 the Casino Group signed a partnership agreement with the Mutant Distribution Group for the purchase by Leader Price of 47 supermarkets in France through a brand licensing and supply contract.
In 2016 the Casino Group announced the implementation of a strategic partnership with the Bolloré Group for the development of e-commerce in Africa. This agreement was for the creation of a joint venture and a rapid launch of an initial online sales website.
In 2018 Casino strengthened its partnership with the LyfPay Group, a company that offers mobile and multichannel payment solutions, and included a 5% participation in the capital of Lyf structures.
In 2019 the group strengthened its partnership with the Amazon Group that came into being in 2018 which thereby enabled the sale of Monoprix products on the American giant’s online platform.
We can initially note the undeniable advantage represented by the group’s position in the distribution sector on an international level. In fact, the Casino Group is currently one of the largest distributors worldwide. It is also one of the best in this activity sector in France through its various brands such as Casino, Franprix, Leader Price and Monoprix as well as in Brazil with the GPA brand which is currently the most lucrative of the group. We also note that the Casino Group holds the leading position in this activity sector in Colombia. The group is therefore highly present on the international level which is clearly a major advantage that should be taken into account when completing your analyses.
We also greatly appreciate the strategy implemented by the group, notably where related to the French market. The company decided to refocus its commercial activities on local trade which is currently experiencing strong growth particularly in major towns. For this the group has taken total control of the Monoprix brand supermarkets as well as those of Monop’ and Daily Monop’. Casino has also implemented the same type of strategy on some of the foreign markets following its success in France.
The Casino Group has also recently commenced a total reorganisation of its activities which are divided among different sectors. Although the merger of its activities in France still generates more than 42% of its sales the e-commerce activities and its various activities in Latin America, separated into two major parts Latam Retail and Latam Electronics with Viavarejo is also a judicial decision that decreases the risk exposure of the group.
Finally, we are pleased to observe that the financial situation of the group has clearly improved over recent years. Casino has succeeded in reducing the level of its debt, notably by withdrawing from the Asian market and opening the capital of real estate subsidiaries in Colombia. The group also reacted effectively by simplifying its structures on the Brazilian market and in the e-commerce sector with Cnova. The Casino Group has also improved its auto-financing capacity through the purchase of refundable bonds with Monoprix shares. In this manner it has succeeded in reducing its debt by half in less than a year which has reassured numerous investors.
The first weak point we note relating to Casino and its activities concerns the profitability of the French market. The group has experienced some difficulties since 2014 with a decrease in the profitability of certain brands such as Leader price which is still currently in deficit as well as the Géant brand. These two brands have in fact been required to adapt to a price adjustment that has significantly impacted the group and its financial results.
The net global profitability of the Casino Group is also suffering from the consequences of the strong presence of minority interests in subsidiaries abroad. It is therefore strongly recommended to monitor changes in the financial results and the consequences of this phenomenon in the coming years.
Still relating to the Casino Group’s activities abroad, we also bemoan the clear decrease in profits and margins recorded on the Brazilian market. This market has actually suffered from a period of significant economic recession and devaluation that represents a significant setback to the development of Casino and its activities in this country.
Finally, although the group has succeeded in rapidly and significantly improving its financial situation investors continue to show signs of anxiety regarding the ability of this company to reduce its debt over the long term. The company therefore needs to find long term financially viable and reliable solutions to reassure the market and encourage an increase in the share price.
As you may have noted the situation of the Casino Group remains uncertain regarding its future and taking a position over the long term should therefore be carefully considered beforehand.
Casino's shareholding is divided between different types of investor shareholders. Thus, in 2020, the Rallye group is still the majority shareholder of this company with 43.57% of the shares. Next comes the Morgan Stanley Corp group which holds 5.37% of the capital, and the BESA Equity Investment group which holds 4.85% of the shares. 1.10% of the capital of this company belongs to the group's employees and 0.80% is held in treasury stock. The rest of the capital is floating.
Casino is, of course, part of a main stock market index since it is included in the CAC All Shares index. But this company is also included in other secondary stock market indices such as the CAC All Tradable, CAC Mid 60, CAC Mid Small, Next 150 or SBF 120. However, it is not included in the composition of the main benchmark index in France, the CAC 40.
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