[caption id="attachment_80427" align="aligncenter" width="640"] Source: Company reports/Coresight Research[/caption]   FY18 Results Casino Group reported FY18 results with in-line sales while EPS slightly missed consensus. The highlights are as follows:

• Casino Group reported net sales of €6 billion, up 4.7% year over year at constant currency (down 2.4% year over year as reported) and largely in-line with the consensus estimate of €36.69 billion by StreetAccount . Net sales exclude fuel and calendar effects. On a constant currency basis, net sales were driven by strong performance in the Latin America retail segment.
• By segment, the retail segment in France showed organic sales growth of 2% year over year (up 1.4% year over year as reported) to €19.1 billion. Retail net sales in Latin America were up 8.9% year over year on organic basis (down 7.2% year over year as reported) to €15.6 billion. E-commerce net sales were up 2.6% year over year on organic basis (up 3.0% year over year as reported) to €2.0 billion. Organic revenues exclude fuel and calendar effects.
• The company grew trading profit by 9.8% year over year at constant currency (down 0.3% year over year as reported) to €21 billion.
• EBITDA expanded marginally by 3 basis points (bps) year over year to 5.1%.
• Operating margin expanded 33 bps year over year to 2.3%, led by a decline in operating expenses (net).
• The company reported adjusted diluted EPS of €2.49, up 0.2% year over year at constant currency (down 8.5% year over year as reported) and slightly missing the consensus estimate of €53 by StreetAccount.
• Net debt decreased to €42 billion from €4.13 billion in the previous fiscal year.

Casino Group announced a model focused on leveraging market trends and set targets for 2019-21 as shown below. A number of these — such as reducing exposure to hypermarket space, growing organic food sales and increasing e-commerce revenues — appear similar to rival Carrefour’s “2022” plan. Casino Group says it will:

• Open 300 premium and convenience stores by 2021.
• Increase in the share of “buoyant formats” and reduce exposure to hypermarkets to 15% of gross sales under banner (vs. 21% in 2018).
• Become the leading player in organic products in 2021, with net sales of €1.5 billion (compared to €1 billion in 2018).
• Increase the proportion of e-commerce sales to 30% in 2021 (compared to 18% at end-2018), underpinned by the “development of Cdiscount, with a marketplace contribution above 50%” and “faster digitalisation of customer relationships through mobile apps.”
• Grow food e-commerce GMV from €300 million in 2018 to €1 billion in 2021 and grow Cdiscount GMV from €3.6 billion in 2018 to €5.0 billion in 2021.
• Attain leadership in grocery home delivery aided by Ocado and Amazon Prime Now partnerships.

Jean-Charles Naouri, Chairman and CEO of Casino Group said: In Latin America, our subsidiaries continued to record excellent performance driven by Cash & Carry and the revitalization of other formats. In France, the Group is fully committed to its trajectory of continuous improvement in profitability. Our capital structure has been strengthened with the significant reduction in debt and we are planning further debt reduction this year. Our strategic leadership will be further enhanced over 2019-2021 with an increased focus on profitable formats, accelerated development of our digitalization programme and e-commerce offering, and the expansion of new businesses which benefit from the group's assets and expertise. Outlook Casino Group set the following financial targets for 2019-2021:

• To expand EBITDA and trading margins in the retail business by 0.2 percentage points per year.
• Latin America: to expand EBITDA margin by over 30 bps in Brazil and an improve EBITDA margin in Colombia.
• To grow trading profit for the retail business by 10% per year.
• To dispose of at least €2.5 billion worth of non-strategic assets in France by 1Q20.
• To generate free cash flow of €500 million per year with gross retail CAPEX below €350 million per year.

In FY19, consensus estimates recorded by StreetAccount predicts Casino Group will report revenues of €38.1 billion, up 4.1% year over year, and EPS of €3.15.