Casino - fewer moving parts

All,

We have updated our model here.

Following the refinancing in December, the question remains: Where next? Over the last two years, the moving parts of the company and its value pockets have become increasingly well defined. This leaves the long end of the curve increasingly dependent on a French turnaround, a sale of a relatively transparent set of assets as well as any upside from online. While the tender at Rallye is a bullish sign, we have yet to witness any improvement at Casino. Moreover, we do not feel that our bonds are the instrument to express such a bullish view.

We have always felt comfortable with the asset value of Casino - with Casino holding €1.6bn of listed assets and €1.8bn conservatively in unlisted assets (of which c.€700m are marked as IFRS5 assets held for sale) but Casino's problem remains cashflow. The listed and unlisted assets still do not generate any significant cash for Casino France, and under our model assumptions, Casino France continues €200m cashflow negative after interest payments.

At a bid price of E104.75 we are exiting our 2% of NAV 2023 Casino bonds. With yields inside 2% on the short to medium maturities, we don't see any opportunities in these bonds going forward. The Company refinanced inline with our assumptions, albei_t slightly more aggressive, and currently only have €733m outstanding prior to January 2024, with €487m in segregated cash to be used for debt repayment.

We are looking forward to re-entering the name with a more concrete

Happy to discuss.

Tomás

_______________
E: team@sarria.co.uk
T: +44 203 744 7003
www.sarria.co.uk