Auchan considers recovering despite a loss of 1.5 billion euros in six months

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The distressed distributor's holding Auchan announced Friday a heavy half-year loss due in particular to the "painful but inevitable" sales of its banking business and its subsidiary in Italy, but felt to have taken the "turn of the recovery".

At June 30, 2019, the group has a net loss of 1.5 billion euros, put on the account of activities that it is giving in: its bank Oney, which will be taken over by BCPE in September, and especially its distribution subsidiary in Italy, which was closed on July 31, and, to a lesser extent, its store base in Vietnam.

Excluding these "exceptional items", the Nordic group posted a profit on its "continuing operations" of 124 million euros over the same period, it said in a statement.

As for Auchan Holding's revenue from operations – the equivalent of revenue – it came to nearly € 23 billion, down 2.6% year-on-year, mainly due to variations in revenue. unfavorable exchange rates.

"sanitation"

For Yves Marin, distribution expert in the Bartle firm, the loss of 1.5 billion euros "is paradoxically rather good news for Auchan" because it means that the distributor "has taken the measure of the strategic problem to solve" : the solution must actually go through "strong actions", breaking with the decisions made by previous directorates, he said to AFP.

Not to mention that Auchan was also, according to him, penalized by the "poorer fortunes" of previously buoyant countries such as China or Russia, a very competitive situation in France and a lack of strong innovation policy.

The group's financial director, Xavier de Mézerac, has also estimated at a press conference that the last six months have constituted "a half-year consolidation of the perimeter", during which were noted "the first signs of a recovery that allows us to better position ourselves towards the future ".

The group notably announced that it was aiming for cost savings of 1.1 billion euros in a full year by 2022.

The details will be detailed "by the end of the year," said at a press conference Edgard Bonte, executive director of Auchan retail distribution. He set his teams a goal of doubling the operating margin (Ebitda) to 6%.

Admittedly, Mr. Bonte conceded, "the disposals of our activities, particularly in Italy, weigh heavily on our accounts, but they were inevitable in my eyes and were made in good conditions for our employees".

Turn

Formerly at Kiabi, a brand of the Mulliez galaxy that he helped to recover, Mr. Bonte was named in the spring at the head of Auchan Retail as a "straightener companies without bias".

At the end of April, the group had launched the sale of 21 sites in France, potentially involving between 700 and 800 employees.

For Mr. Bonte, now, "the turn is taken": he cited a "revenue increase" of the distribution business in the first half of the year in nine of its twelve countries, with the notable exception of France and Russia, as well as an increase in profitability.

The new boss intends to make Auchan, not just a distributor, but a "breeder-designer" of local and exclusive food products, by transforming its stores into "local market places".

Aware that proximity, the most buoyant format in the sector currently, is "one of the Achilles heels" of the group, whose network is mostly composed of supermarkets, Mr. Bonte cited the development of the pedestrian drive as instrument of "conquest of downtowns". Two are in test in Lille.

Owned by the Mulliez family association (AFM), Auchan Holding had already published a net loss of 1.145 billion euros for the whole of 2018, and announced that, consequently, it would not pay a dividend under of the year 2018.

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https://www.ladepeche.fr/2019/08/30/auchan-sestime-en-voie-de-redressement-malgre-une-perte-de-15-milliard-deuros-en-six-mois,8384636.php

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