RALLYE Investor Presentation November 2016 AGENDA Overview of the - PowerPoint PPT Presentation

RALLYE Investor Presentation November 2016

AGENDA Overview of the Group  Rallye – Financing & Liquidity   Casino : 2016-2017 priorities  Appendices Rallye – Investor Presentation – November 2016 2

GROUP PRESENTATION AS AT JUNE 30, 2016 Listed company RALLYE 50.4% of shares (1) 100% 62.0% of voting rights INVESTMENT PORTFOLIO Diversified investment portfolio Strategic asset made up of both financial Specialist in the sporting investments and real estate Among the global leaders in goods retail industry programmes, valued at € 96m the retail industry as at 06/30/16 (1) 0.7% of which held via an Equity Swap Rallye – Investor Presentation – November 2016 3

CASINO IN FRANCE – INTEGRATED MULTI-FORMAT RETAILER  Well-balanced portfolio between formats : – 39%* of revenues from premium (Monoprix, Casino SM) – 38%* from discount (Géant Casino, and Leader Price) – and 23%* from convenience (Franprix, Casino convenience) – 10,627* stores and € 18.9bn* in sales Differential strategy rolled out across these formats :  Continuing expansion of the Monoprix network – Maintaining competitive price positioning in discount – banners – Qualitative and customer-focused new Franprix commercial concept and deployment of convenience through franchises  In e-commerce: Cdiscount is the No. 2 player in France * As of December 31, 2015 Rallye – Investor Presentation – November 2016 4

CASINO IN SOUTH AMERICA - LARGE SCALE AND POWERFUL RETAIL PLATFORM 4 countries in South America covering 75% of  region’s population  ~300 M potential customers  N ° 1 retailer in Brazil, Uruguay and Colombia  2,606 stores * , Leader in all modern retail segments  Top of class e-commerce retailer in South America : # 6 global pure player by sales Real estate : dual business model with  795,000 m² GLA Largest private employer of South America  with + 200,000 employees* * As of December 31, 2015 Rallye – Investor Presentation – November 2016 5

AGENDA Overview of the Group  Rallye – Financing & Liquidity   Casino : 2016-2017 priorities  Appendices Rallye – Investor Presentation – November 2016 6

NET FINANCIAL DEBT AS AT JUNE 30, 2016 Rallye’s net financial debt stood at € 2,933m as at June 30, 2016 2,968 2,933 At June 30, 2016, Rallye’s gross debt was down to Bond debt Bond debt 1,864 1,829 € 2,922m vs € 3,041m at year end 2015 As at October 28, 2016, Bank debt and Bank debt and private private placements 570 Rallye’s commercial paper 520 placements reached € 243m Drawn credit lines Drawn credit lines 338 413 Commercial paper Commercial paper 268 Other* 143 11 Other* 0 17 Bank overdrafts -73 Cash and cash equivalents December 31, 2015 June 30, 2016 * Other: Accrued interest and IFRS restatements Rallye – Investor Presentation – November 2016 7

A WELL-BALANCED DEBT SCHEDULE, WITH ONLY ONE REDEMPTION IN 2016 AND NONE IN 2017 Bond redemption schedule In € millions Total : € 1,829m 465 389 375 300 300 On October 26, 2016 200 Rallye issued non- dilutive cash-settled bonds exchangeable into Casino Shares 2016 2017 2018 2019 2020 2021 2022 Bond exchangeable into Casino shares: investor put on October 2, 2018 Bank loans and private placements redemption schedule In € millions Total : € 520m 160 150 110 50 50 2016 2017 2018 2019 2020 2021 2022 Private placement Rallye – Investor Presentation – November 2016 8

A STRONG LIQUIDITY POSITION, WITH € 1.8bn OF CONFIRMED AND AVAILABLE CREDIT LINES, € 1.4bn OF WHICH UNDRAWN The average maturity of the € 1,820m of confirmed credit lines stood at 4.5 years at June 30, 2016 : - Since January 1 st 2016, Rallye has extended the maturity of more than € 850m of credit lines - Confirmed credit lines are contracted with about twenty different banks Confirmed credit lines maturity schedule Total : € 1,820m In € millions 783 390 300 257 90 2016 2017 2018 2019 2020 2021 2022 2023 Rallye – Investor Presentation – November 2016 9

AGENDA Overview of the Group  Rallye – Financing & Liquidity   Casino : 2016-2017 priorities  Appendices Rallye – Investor Presentation – November 2016 10

2016 -2017 PRIORITIES I. Lasting recovery in France II. Turnaround in Brazil III. Exito: strong operational results in Colombia, Argentina and Uruguay IV. Simplification of e-commerce activities V. Significant deleveraging and strengthened liquidity Rallye – Investor Presentation – November 2016 11

I. RECOVERY IN FRANCE : POSITIVE LFL OVER 2 YEARS IN Q3 2016 SALES Change between Q3 2015 and Q3 2016 Total Organic Same-store Same-store growth Q3 2016 growth growth* growth* over 2 years Hypermarkets* 1,233 -0.4% +0.4% +0.2% +3.7% o/w Géant Casino 1,147 -0.6% +0.3% +0.3% +4.2% Leader Price 597 -7.6% -4.6% -2.7% -0.5% Monoprix -2.3% -0.2% 971 +1.1% +0.8% Supermarkets Casino 903 +3.3% +4.5% +2.8% +3.5% Franprix 370 -6.5% -1.9% -0.1% +0.5% Convenience & Other** 686 -1.7% -2.1% -3.9% +0.5% o/w Convenience 417 -0.6% -0.9% -2.3% +6.0% 4,760 -1.1% +0.0% -0.6% +1.8% France Reta il  In France, sales were impacted by two factors: A plan to close 282 loss-making stores which had a negative -0.6% impact on sales – – The transfer of stores to franchise in formats suited to this type of operation (Convenience, Franprix and Leader Price). These transfers, for which the Group continues to record wholesale sales, had a negative impact of -0.9% in Q3 Gross sales under banners remained dynamic rising by +0.7% (+1.4% for food)  * Total sales by each banner from integrated stores and franchises and excluding fuel ** Others : mainly Vindémia and Cafeterias Rallye – Investor Presentation – November 2016 12

I. RECOVERY IN FRANCE : RETAIL MARKET SHARES  Casino is one of the 3 retailers to achieve market share gain in France This gain has been achieved with limited expansion  Cumulative market share measured by the Kantar Worldpanel from January 1, to September 4, 2016 0.6 0.3 0.1 Lidl Leclerc Rallye – Investor Presentation – November 2016 13

I. RECOVERY IN FRANCE: PROFITABILITY  Annual target of Trading profit in 2016 above € 500m (vs € 337m in 2015): Ex real estate gains ( € 167m in FY 2015 vs c. € 80m in 2016), main improvements in 2016: –  Higher gross sales under banners in food (+2,5% y-t-d at the end of Q3)  Various gross margin improvements: purchasing gains, optimization of mix and pricing, wider fresh assortment  Transfer of stores to franchises, closure of non performing stores and cost reductions + € 170m of improvement already reached in H1 2016 – At the end of Q3 2016, the YTD unaudited trading profit of French Retail operations is well ahead of – last year and is fully consistent with our full year objective – These actions will have a positive carry-over impact in 2017, driving the 2017 profitability growth Profitability supported by solid operating performances of our different banners:  Stable market shares at Monoprix globally (Kantar) and locally (IRI) (Paris, suburbs and other cities) – and excellent margins thanks to its unique mix of food and non-food assortment High level of profitability at Franprix and increase at Casino Supermarchés – Leader Price profitable in 2016 and Géant from 2017 onwards – Rallye – Investor Presentation – November 2016 14

I. RECOVERY IN FRANCE: LEVERS OF PROFITABILITY IMPROVEMENT IN 2016 IN € Food volume growth Activity € 80m Margin improvement > € 180m Purchasing, pricing Gross and mix Targeted improvement Margin € 100m of French Retail trading profit (ex real estate) > € 250m Stores’ closures € 20m Transfer to franchise Cost reduction € 40m > € 70m Other cost cutting € 10m Rallye – Investor Presentation – November 2016 15

I. RECOVERY IN FRANCE: FREE CASH-FLOW  Net capex of c. € 350m in 2016 Gross capex allocated to premium formats and maintenance • Disposal of mature assets (stores, warehouses, etc) • Net capex level in 2017 similar to 2016 •  FCF * Before 2015 dividends and coupons on hybrids instruments > € 550m • After 2015 dividends and coupons on hybrids instruments > € 150m ** • * Operating cash flow from the French business activities after tax - capex of the French business activities and dividends received from international subsidiaries and equity associates - net financial expense ** Before 2016 interim dividend Rallye – Investor Presentation – November 2016 16

II. TURNAROUND IN BRAZIL: GPA FOOD ● Acceleration of sales growth in Q3 2016 (+8.3% LFL) • Total food sales grew +10.8% (LFL) in Q3 • Solid performance of Assaí, with sales growth of 45.8% in Q3 • Recovery in food LFL for Extra Hypermarkets thanks to new commercial initiatives (“1, 2, 3 promotions”, Hyper fair, Lowest price) • Strong performance of Proximity and Premium banners (Pao de Acucar) ● Excluding tax credit recognized in Q2, EBITDA margin to increase sequentially in Q3 vs. Q2 • Progressive improvement of Sales trends • Operational efficiency gains (headcount reductions, review of marketing spend, productivity in logistics) Rallye – Investor Presentation – November 2016 17