- Based on new information, we are revising downward our estimate of 2014 adjusted France retail EBITDA by 9.1%.
- Our investigators uncovered strong evidence that indicates in H2 2015 Casino has stretched payables to its suppliers in France to levels beyond what was typical of Casino, and generally accepted in France.
- Casino’s announced sale of its crown jewel stake in BigC Thailand validates our thesis that the company is hollowing itself out in order to sustain the debt load largely held at the parent level and at Rallye.
- Our investigators found evidence that the accounting and governance problems with Casino’s consolidated subsidiaries Cnova and GPA in Brazil are likely much greater than have been disclosed, and that these problems are likely attributable to Casino’s decision to force out GPA Chairman Albio Diniz, son of the company’s founder, in 2013. The information our investigators collected certainly calls into question Casino’s ability to operate its far-flung retail empire, and its willingness to be forthright with investors.
- We found a strikingly similar analog to Casino’s situation in that of Israeli supermarket chain Mega, where many mistakes by management led to the collapse of a once promising company. Like Casino, Mega was highly-levered, paid out unsustainable dividends, and has a questionable relationship with an affiliated property company.
- Casino’s management shows strong indications of deception toward investors on numerous key business issues. We engaged a behavioral analyst who worked for the U.S. Central Intelligence Agency to analyze Casino’s call transcripts and its responses to our prior analyses.
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