Casino, Guichard-Perrachon S.A. (CO) Earnings Call Transcript & Summary

Welcome to the Third Quarter 2021 of Casino Group Conference Call. I now hand over to Mr. David Lubek, Chief Financial Officer of Casino Group. Sir, please go ahead.

Thank you. Good evening, everyone. Thank you for attending our quarterly results conference call. For most of the past 18 months until last July, the pandemic is a key factor in our environment. We have to adapt our operations, and we did sell quickly and effectively by leveraging our key strengths, convenience, urban stores and our exclusive assets and partnerships in food e-commerce. We also took advantage of our technological capabilities to reduce our costs substantially in our stores and back office, leading to a high level of profitability in all our banners, the [indiscernible] hypermarkets and, indeed, at a positive level in hypermarkets. As a result, we have emerged from this situation in better shape with more profitable food retail operations and improved financial situation and attractive growth opportunities in our new B2B businesses. As stated at the end of H1, our key goal now is to get back to growth in our core business, building on the strengths of our best formats. Since this summer, our environment has started to shift away from the pandemic constraints with the successful rollout of vaccines. Restaurants, cafes and entertainment venues are fully reopened for customers equipped with the pass sanitaire, which led to some headwinds for food retail as a result. Strong demand for various goods and services, coupled with temporary restrictions in logistic hubs, have also led to a return of inflationary pressures. In this environment, our priorities in France have remained the same: first, a return to growth in our food retail business with proximity and e-commerce leading; second, maintaining our high level of profitability so that additional sales fully translate into additional EBITDA and cash flows; and third, taking full advantage of growth opportunities in our new B2B businesses. As you will see from the numbers published tonight, we are on the right track on all these fronts. First, sales. At group level, like-for-like sales were up plus 1% in Q3, an improvement of 5 points compared to Q2. The improvement is even higher on total sales, up plus 4%. That is 10.6 points above Q2. The improvement is clear, both in France and Latam. Let's start with France and with our food retail business. The main takeaways of this quarter are: first, the sequential improvement in our overall sales trends; second, the excellence dynamic of our food e-commerce operations; and third, the continued rollout of our new stores. First, sales trends. Our like-for-like sales trends in France have improved sequentially by 4 points on average between Q2 and Q3 and, again, by plus 1.6 points at the beginning of Q4 in October, the convenience and Franprix now in positive territory. The total sales trend has improved even more by close to 8 points with a recovery of pure sales and the positive impact of our new stores. We now have 8,125 stores in our French banners, thanks to more than 450 new convenience format openings since the beginning of the year. Looking at market share data. Our performance has also improved consistently from minus 1.2 points in May to almost stable in October and positive at plus 0.1 point, excluding hypermarkets. All of this happened during relatively tough market conditions, especially during the summer. First, the reopening of restaurants led to a transfer from eating at home to eating out, particularly for urban formats. Hotels and restaurants consumption was up [ 469% ] during the summer, as per INSEE data. Second, the Parisian market was still soft, with a lack of tourism and some transitory reduction of the inner Paris population; and third, the pass sanitaire affected traffic in hypermarkets. These conditions led to negative sales in Q3 at minus 4.3% in like-for-like, albeit much better than Q2 at minus 8.4%. These conditions have evolved as evidenced from the last 4 weeks, with all our banners improving again from the Q3 numbers. The average was minus 1.4%, excluding hypermarkets, with Monoprix improving by 2.5 points and our convenience format, including Franprix, now in positive territory. With the continuation of this normalization, the positive impacts of our expansion plan and our food e-commerce performing extremely well, we should expect this trend to continue and bring most of our banners in France, especially our best format, back into positive territory in the next few months. This leads me to my second point: the exceptional performance once again of our food e-commerce operations based on our unique mix of strong brands and technology partnerships. Sales of home delivery in the Greater Paris area boosted by the Monoprix Plus offer were up plus 72%, 40 points above the market trend in France. These are our profitable E-commerce operations based on the strength of our banners and our unique deals with Ocado and Amazon. Our partnership with Ocado has been strengthened, adding Naturalia, our pure organic food banner to Monoprix and Casino. We now offer more than 35,000 SKUs on Monoprix Plus, 26,000 SKUs on Casino Plus and over 4,000 on Naturalia Marché Bio. This is an offer that is truly unique in breadth and reliability. Of course, the success of these partnerships with the best players in their field is based on the attractiveness of our banners. We are pleased to announce our new groundbreaking partnership with a leading and innovative quick commerce player, Gorillas. This deal will include three parts. First, Casino Group will provide national brands and Monoprix products to Gorillas in France. Second, Gorillas will prepare and deliver orders for Monoprix and Franprix customers in 10 minutes. And third, Casino Group will be associated to value creation through a stake in Gorillas in France and at group level in Germany. This is a very fancy new step for us. Once more, it shows that having the best banners in the best areas allows us to build unique exclusive partnerships that will create long-term value. We now have such partnerships at all levels of the home delivery market. With Ocado, we have a unique edge in the next-day delivery, with Amazon, a unique edge for same delivery and with Gorillas, a unique edge in 10 minutes delivery. Of course, each of our banners has also developed its own specific offer. [ One of the banners registered ] particularly impressive numbers is Franprix. Franprix has its own quick commerce offer with a dedicated app and fast delivery from its uniquely dense network of stores in the Paris area. Franprix recorded triple-digit growth in the q-commerce operation in this quarter. Another noteworthy development was the rollout of a new offer from our convenience store anywhere in France through a dedicated website, giving access to over 1,250 stores, adding to our convenience store e-commerce capacity. This comes on top of our Uber Eats and Deliveroo partnerships. This leads me my third point: our expansion plan. We have 8,125 stores in our French banners. This is already the widest network of stores in France, and we have added more than 450 convenience format stores since the beginning of the year. We have hundreds more in our pipeline, and we've put in place an extremely efficient team of developers who work in close coordination with our franchise partners to secure the best locations for our proximity formats. Having this organization in place with our mix of brands, Mono/Franprix, Monop', Naturalia, Casino Shop to Vival, Spar, Casino#ToutPrès and others, gives us a clear edge in a market that is moving fast with new space appearing from former nonfood stores. Our view is that market share will continue to move from hypermarkets toward proximity, and expanding quickly will allow us to capture this shift. Our goal was to secure 750 new locations this year, and based on the 454 new stores opened at the end of Q3 and our pipeline, we are on track to reach these targets. One business unit of particular interest is Franprix, our premium innovative banner catering to urban needs. Franprix has added 20 more stores this quarter. On an annualized basis, this represents a growth of this store base of almost 10%. We now have 906 Franprix stores, and we see this expansion accelerating in the coming quarters with the high attractiveness of these banners for franchisees and the strong development team put in place. Franprix is giving innovation and customer satisfaction in the Greater Paris area first but also now in our domain urban centers. They have recently extended their partnership with Decathlon to complete their offer. Franprix's unique density in the Greater Paris area makes it particularly valuable for business partners and suppliers. With the impact of new stores and with the sales strength now back into positive like-for-like territory and the triple-digit growth in its e-commerce operations, we expect Franprix to perform well in the coming quarters. Another key business units for our expansion program is the convenience. We have added 373 stores to our base since the beginning of the year, bringing this network over the 5,500 stores mark. This is the largest network of proximity stores in France with opportunities for further profitable expansion in franchise both in urban centers with the new shop, the Casino#ToutPrès and in rural areas, notably with the Vival [indiscernible]. Again, a very strong asset that we see growing further in the coming quarters. So overall, three drivers for sales growth: first, trends improving regularly in stores like-for-like; second, high growth in food e-commerce, thanks to our exclusive networks and partnerships; and third, significant expansion of our store base in proximity. Moving now to my second highlight in France, the high profitability of our food retail banner. In the past 2 years, we have transformed our operations significantly, boosting the bottom line of all our banners into strong cost-saving initiatives. One key development which has allowed us to realize this cost saving while increasing our NPS has been the successful digitalization of the business. Our autonomous stores and self-checkout solutions powered by our smartphone apps have led to a sharp reduction in our cost of operations. These apps allow for both efficient checkout by the customer and for targeted coupons and promotions with better ROI and standard promotions and better monetization to suppliers, all of this by reducing our carbon footprint with less reliance on paper catalog. We now have 640 stores equipped with autonomous solutions, up from 613 at the end of June, and the share of checkouts done automatically has reached 65% at Géant and 61% at Casino Supermarkets. As evidenced by our Q3 numbers, these cost-saving initiatives are still bearing fruit. EBITDA margin in our food retail banners stands at 8% in Q3, same level as last year. Most of the impact of sales lost during the quarter were compensated by our cost savings. Looking forward, we expect to maintain the high level of profitability reached in all our formats, except hypermarkets, and for hypermarkets to also remain profitable. This means that the return to sales growth should translate into higher absolute EBITDA. For the full year 2021, we confirm our objective of an EBITDA growth as the perimeter of the French food retail business. Finally, my third highlight in France relates to our high-growth businesses. We have three businesses operating in markets posed to benefit from securer megatrends: Cdiscount in e-commerce, digital marketing and marketplaces; GreenYellow in energy transitioning; and RelevanC in data and retail tech software as a service. First, Cdiscount, which has already published its Q3 numbers, and I will focus on the main takeaways. It was a relatively tough quarter for nonfood e-commerce in the particular context of the reopening, tougher than what was expected. In this context, Cdiscount performed relatively well with GMV growing plus 8%, marketplace revenues up 8% and digital marketing revenues up 31%. Cdiscount also registered a new increase in its base of loyal customers with Cdiscount à Volonté subscribers reaching 2.4 million customers, an increase of 11% compared to last year. This was achieved thanks to Cdiscount's strong offer and some targeted price investments in direct sales during the quarter, which weighed on its margin in the short term. Also and most importance, for its future growth potential, Cdiscount's B2B offering is ramping up nicely. C-Logistics, which builds on Cdiscount's unparalleled logistics capability in France to offer fulfillment, click-and-collect delivery solutions to various corporate customers, has already landed 15 contracts and has a strong pipeline. Octopia is also developing very nicely. Octopia offers a full-fledged turnkey marketplace solution to [indiscernible], including software vendors, products and fulfillment solutions. Octopia signed five new contracts during the quarter, including some major e-commerce players. We are fully convinced that Octopia's access to Cdiscount's unmatched pool of [ 40,000 ] vendors and 100 million SKUs and the 10 years of experience coming from the operation of its own marketplace gives this new business a key edge in addressing the EUR 600 billion fast-growing market. The current pipeline of new customers, particularly on the merchant-as-a-service offer, which is a unique offer in today's market, is extremely convincing. As mentioned by Cnova and its Q3 communication, due to temporary market conditions and despite strong interest from potential investors, its fundraising initiatives have been postponed. This will not prevent Cdiscount from accelerating its new B2B businesses in the next month given the investments already realized and funded by the cash generation of Cdiscount's highly profitable activity in marketplace and digital marketing. We think the next few quarters will demonstrate the strength of Octopia and C-Logistics' unique offers, which will also help future fundraising as soon as conditions progress and, in turn, accelerate its growth even more. A few words about GreenYellow, our business unit dedicated to decentralized energy transition. In the context of COP26, the urgency of acting to reduce human carbon footprint is more than ever obvious. GreenYellow, by combining decentralized solar power and decentralized energy-saving solutions in 16 countries, has again performed well with a strong series of new customers and projects. Among the key achievements in this third quarter, the new project in Vietnam for 7 megawatts for the industrial textile group Vinatex, which is the [ 5th ] project signed by GreenYellow in the country. In South Africa, a new solar program of 2 megawatts for food retailer Shoprite completes the first installation that went into operation in September. Although significant programs can be mentioned in Brazil with the extension of the partnership with Oi telecom for 3.5 megawatts, a new project for six solar plants generating 7.7 megawatts with a distributor of construction materials and the signature of an energy efficiency contract for 4.1 gigawatt hours with a leading media player. In all its relevant geographies, GreenYellow is [indiscernible]. Its new model, which entails keeping the project on its books to be at a wide base of cash flow-generating assets, will include the raising of new funds. This project is though nonactive and given the interest we have seen for this business from where it started, we are quite confident that it will be competing either through public markets or for a private deal. Finally, a few words about RelevanC, our data monetization and retail tech software-as-a-service business. RelevanC is ideally positioned to take advantage of the move to digitalize retail, having first tested its solutions on millions of customers through our own [ balance ]. Among the recent developments, the most important is the launch of Infinity Advertising, our subsidiary in partnership with Intermarché. It will leverage the data from 17 million loyalty cards combining our various banners, and we work with suppliers to sell personalized promotion, e-commerce activation, retargeting in games around promotions. This is an extremely promising business. Other recent developments include a strong start for our Brazilian subsidiary with 20 new contracts signed since last June and the fast development of Inlead, which was acquired in the first quarter. Inlead, which specializes in digital marketing for brick-and-mortar networks, has already signed 15 clients. Before moving to Latin America, a few words on our financial position in France at the end of Q3. We have a comfortable liquidity position at the end of September with EUR 2.1 billion of cash and undrawn credit lines. As you can see from our quarterly update on debt and cash position, net cash flow, during Q3, was consistent with the usual seasonality of the business. Compared to 2020 Q3, net debt variation of the French perimeter, excluding GreenYellow and disposals, actually improved by EUR 70 million despite our sales due to our strict monitoring of OpEx and CapEx. Our covenants are again comfortably met this quarter with a margin above EUR 179 million on our EBITDA. We remain fully committed to cash flow management and control and to our EUR 4.5 billion disposal plan in France. Our most recent disposal was the disposal of our stake in Floa Bank from signed in July. This deal will generate an immediate cash in of EUR 180 million plus [indiscernible] how its progressing towards is closing as planned. As usual, we do not comment on ongoing processes before they are ready for announcements. Now a few words about Latin America. GPA, Assaí and Éxito have already published their results, so I will concentrate on mainly takeaways. Main event in the quarter is a major project initiated by Assaí and GPA, which we think will create a lot of value in the next 2 years. GPA will sell 71 Extra hypermarkets to Assaí to be transformed into cash & carry stores when we turn the rest of its hypermarkets into Pão de Açúcar and Mercado Extra supermarkets. Hypermarkets are leading brands in Brazil to cash & carry quarter-after-quarter. With the deal, GPA will be able to monetize the loss-making of structurally challenged business and concentrate its development on a unique plan of profitable premium and proximity segments, such as Pão de Açúcar, Minuto, [indiscernible] and on leading omnichannel solutions. For Assaí, this transaction will allow an acceleration of this expansion plan in uniquely well-positioned locations. After a conversion process, that will take 1 year to complete. Assaí has significant experience in this matter, having done 26 such hypermarket conversions already in previous deals with GPA. Based on this strong track record, we expect sales from former hypermarkets to triple from BRL 9 million to BRL 25 million under the Assaí banner and to deliver an EBITDA margin above the average EBITDA margin by Assaí. Assaí now aims for clear leadership in the Brazilian cash & carry market with BRL 100 billion of sales in 2024. That is 2.5x 2020 sales. This is clearly a win-win deal that will benefit both companies and, by extension, should allow significant revaluation of our Latin American assets, which have already gained significant value after the spinoff of Assaí. A few words now about our Latam business results in Q3. First, sales showed a good dynamic overall, with plus 11.5% total growth and plus 3.9% like-for-like. Compared to Q2, like-for-like growth improved by 4 points, and total sales growth improved by 13 points. This was notably driven by the strong recovery in Colombia. Assaí had an excellent quarter with 18% sales growth in local currency and an impressive 56% over 2 years, driven by the success of its expansion plan and solid like-for-like performance in the relatively soft market for food retail in Brazil. At GPA, excluding hypermarkets, which will be discontinued by the end of 2021, GPA Brazil sales were stable year-on-year and plus 8.4% over 2 years. Convenience, despite strong suit of GPA Brazil is the Minuto Pão brand, recorded a very strong 12% like-for-like growth, and GPA leadership in omni-channel solution was again confirmed with impressive numbers in online operations, 46% year-on-year and 393% growth for the 2 years. Online sales accounting for 9.3% of total sales in the third quarter of '21, up from 6.3% in the third quarter of '20. At Pão de Açúcar, our premium banner, online sales accounted for an average of 16% of total sales, reaching peak of 20% in the quarter. This confirms the soundness of the company's strategy to focus on its clear distinctive advantages: urban, premium, proximity and e-commerce in a consistent ecosystem. Grupo Éxito, it was still a very strong performance with like-for-like sales of 16% boosted by the strong economic recovery in Colombia and the end of pandemic-related restrictions. Éxito has also been at the forefront of our new channel with online sales accounting for 12.2% of total sales in Colombia in the last 9 months. Among recent developments, the partnership with Rappi has been enhanced to implement Turbo-Fresh, the 10-minute delivery service in Colombia with the shipments of products from [ Peruvian ] stores and 320 stores in Colombia also for sale via WhatsApp and innovative service that grew 2.3x year-to-date, accounting for 20% of omnichannel sales. As for the profitability of our businesses, EBITDA was up 36% at Assaí, driven by sales growth and the ramp-up of recently opened stores. EBITDA was up 42% at Éxito, driven by strong sales growth as well. And our GPA Brazil, EBITDA decreased mostly due to price investment in hypermarkets and, second, facing a difficult market and which will be discontinued by the end of the year. To conclude, this has been a quarter of transition for our group from an environment mostly affected by the pandemic to a progressive normalization. We had to deal with some temporary headwinds with the immediate impact of the opening weighing on e-commerce and food retail markets. In this context, our business unit delivered a good performance on our strategic priorities, which have been clearly outlined and are arguably ensuring to be even more relevant, remain the same. In France, our goal is to maintain the high level of profitability reached in our banners and get back to growth building on the strength of our urban and proximity format and the fast development of our home delivery operations. We have unique assets, which allows us to build efficient partnerships, the latest example being our groundbreaking deal with Gorillas. Growth in our food retail operations is expected to come from a combination of several facets in the next few months: normalization of like-for-like trends in our different banners, an ambitious and efficient expansion plan in convenience format; and the fast ramp-up of our e-commerce operations. Recent trends in Q3 and at the beginning of Q4 confirmed that we are moving in the right direction. Of course, these are all profitable channels, and we expect sales growth in the coming months to translate as well into EBITDA. We're also going to take full advantage of our unique assets in secure high-growth markets. As evidenced again this quarter, high B2C loyalty and the strong B2B offer for Cdiscount, a unique blend of decentralized energy transition services for GreenYellow and a wide offer of data monetization and retail tech services for RelevanC. These three companies started a small in-house operations and now operate at a global scale. Finally, regarding our Latam operations, we have high confidence that the recent deal announced in Latin America will all generate significant value, both for our Assaí and GPA while Éxito should continue to deliver at the forefronts of the omnichannel transformation of retail. With the right drivers for success still in place, we stand ready to continue to execute on our strategy and strengthen our leading positions in the coming months and quarters. Thank you for your attention. I am now ready to take your questions.

[Operator Instructions] First question is from Mr. Arnaud Joly from Societe Generale.

I have two questions. The first one, you mentioned a stable EBITDA margin for retail France, excluding GreenYellow and the real estate gains in Q3. Just to have a full view, can you tell us what was the growth in EBITDA in Q3? So the growth of the margin trend. And the second question, at the end of September, so you have EUR 650 million in drawdown credit lines. Is it only driven by the change in WCR with the seasonality? Or do you have any unexpected effect in your free cash flow statement in Q3? And maybe just last question to this. In Q3, did you have some losses, operating losses related with the [ Leader Price ] as it was the case in the first half?

Okay. So first, I mentioned stable EBITDA margin in the food retail business. So since sales were down, actually, EBITDA in the French food retail business was slightly down in Q3. If you look at the appendix and you see the different parts of our EBITDA variation, basically, EBITDA in the French retail business was slightly down but a small reduction of about a bit less than the drop in sales. So almost 0, whereas of course, we had a drop in the commercial margin. So the gap was the cost saving impact. That EUR 650 million drawn credit line, that's purely the impact of the seasonality of the business. As you remember, every year during Q3, there is about EUR 600 million of cash consumption just linked to the seasonal variation of working capital. And of course, this is always more than reversed in Q4. And we have the same level of cash at the end of June, so the difference was in these credit lines, but this is totally normal. And actually, the variation compared to last year was slightly better. I mentioned EUR 70 million better variation than last year in Q3. And as for Leader Price, yes, we are just [indiscernible] number to give you the exact number. Last year, the variation of the net debt was EUR 580 million, and this year, it's EUR 500 million, so -- EUR 510 million, so, we have EUR 70 million improvement. In the past year, there were still some losses. We mentioned that we expected still some losses until the end of September where all the stores were converted, and I have given an estimate of the magnitude of the losses. These are, of course, included in the variation that I just mentioned in the net debt. And these are now -- this should now be over course because all the stores have been transferred to Aldi.

Next question is from Mr. James Grzinic from Jefferies.

Yes. I have two quick ones. The first one is, I mean, I think Gorillas was valued a $2.1 billion a few weeks back. Can you perhaps reassure us that you're not spending much money taking a stake at group level there? And the second one, can you just remind us on the trailing 12 months, what exceptional proceeds you had? I think -- I can think of Leader Price, but have you got anything in the way of sizable property proceeds disposals over the trailing 12 months? So we can sense check that leverage dynamic. That would be really helpful.

Yes. So Gorillas, no, it's not a significant cash out at all. It's actually -- it's a very, very small symbolic investment, but the value of the stake that we get is the significant. Basically, the idea is in exchange for the deal, in exchange for what we -- the access that we give to Gorillas to our brands, they give us a stake. And that's how it happens, not by significant cash investments in all parts. And we think, of course, that Gorillas is the best factor in the structure. The demand they brave is quite impressive. And as we can see that in the quick commerce, they might become at the same level that Ocado yields on the technological side. And I think that's really great. We can have deals in obvious cases where the best will invest in their fields. And again, with the stake, it was in exchange for the value that we saw in the partnership with us. The disposals that we did. These are the disposals that we published in the last 4 quarters. There was no additional disposals in Q3. As we mentioned in the press release, we did get advance on the Floe disposal but no cash in, specifically from disposal in Q3. So again, when you look at the cash variation, the numbers until the end of June, of course, they're public. You have them already. And what happened in Q3 is excluding any disposal, they were down this year. And comparing the cash flow to what happened last year, we were actually better by EUR 70 million. And the rest, you already noted, but we published it at the end of June.

Next question is from Clement Genelot from Bryan Garnier.

I will have some questions on my side, if I may. The first one is on growth. Is a return to growth, what like growth around in Q4 in France -- is still more likely in your view given the negative trend in October? My second question is on Gorillas. Just to have on a global spirit of the partnership, do you think that just becoming a wholeseller of Gorillas -- because obviously, on [indiscernible], which will sell brands and goods to Gorillas, is really the answer to, let's say, to fully embrace dark store trend and quick commerce. And also on the over more partnership side, so if I might -- Gorillas might as well deliver some stores. So in this case, will Franprix and Monoprix pay, let's say, 20% or even similar percent fees on each order? And my last question is whether on net debt. When we look at your French net debt, it increased by EUR 28 million at the end of Q3 versus last year despite a significant amount of asset sale. Is the incline close to almost [ EUR 700 million mark ] cash burn or real structural [ mark ] cash burn? And how do you intend to only finance it going forward?

Okay. Clement, so growth in Q4, the trend, yes, we are still negative, but they are on the right track, as I mentioned, less and less negative. And actually, some of the business units are already in positive territory. Franprix is already positive. Monoprix is already positive in October. Monoprix is still a bit negative, but not so much. And of course, as you remember last year, we had significant headwinds for Monoprix in November with the closure of the nonfood, the [indiscernible]. So of course, we will benefit in the next month from a positive base effect from Monoprix. So we think that each of these banners will get back to growth, some of them a bit earlier than the others, but all the trends are going in the right and same direction. So it's difficult to be the exact date at which each banner would be positive. But the France, I think it's quite clear. It's getting better and better. And in terms of market share, we're basically already there. Gorillas, the idea is same as -- basically the same idea as what we did with Amazon. We have a good actor and leading actor that wants to develop on this particular part of e-commerce. And we can help each other. And actually, that's the way we see things. Of course, in some ways, we are competitive, but we are -- we can also be partners. Gorillas, I think it's quite clear that it's the fastest one, the fastest-growing one and the one that [ really needs ] the most cash, which is a clear advantage. We will benefit from their growth because we will sell them our products. So if they grow, they succeed. We will benefit from that. We will also benefit from that because we'll have a stake, which, as I mentioned, can cost us cash. It's the counterpart of the deal that we made. And for us, we've gained also access to their so-to-speak technology, their dark stores. And a bit like we used to gather [indiscernible], we can use the Gorillas dark stores to deliver Monoprix and Franprix. So we now have all the tools. We have the partnership with Ocado for next day. We have Amazon for the same day to hour, and we have Gorillas for quick commerce 10 minutes. And of course, on top of that, we have all the other solutions already in place, and that will continue. So I think we -- the online business, we are really well covered there. It's a clear strength that we have in e-commerce and online. French net debt. Well, again, the numbers we mentioned, they are strictly equivalent to the ones that you can see at the end of June, so nothing new there. Of course, in the variation of net debt, the impact of the disposal, there are significant exceptional elements, if you look especially on the 12-month basis, either at the end of June or at the end of September, mostly are from Leader Price. As we mentioned, there were -- there was a significant cash on Leader Price in H1. There was also, of course, cash burn in Leader Price in Q4 last year, and there's still some but less and now 0 in Q3. So that's a big part, of course, a significant part. The rest you can have -- you can look at things one way or the other. But I would say the goal is to be clearly -- now that Leader Price is behind us, to have positive cash flows. That's clear. And we have several levers for that. We monitor our CapEx very closely, as I mentioned, and that contributed, of course, to the good performance, relatively good performance we had in Q3 compared to last year. We have full growth in EBITDA, driven by e-commerce and expansion. And we are still, of course, monitoring our inventory and working tightly with our working capital efforts. So we are clearly -- we're investing on this objective, and as mentioned, it's a clear priority for us. And again, Leader Price, it's over.

Next question is from Mr. Xavier Le Mené from Bank of America.

Yes, two questions, if I may. The first one, just back to Gorillas. Can you explain us a bit how it will work? I understand you know the fact that you're supplying them, which is quite clear. But how does it work when Gorillas is preparing or delivering actually an order for Monoprix? Who is preparing the orders? Is it -- as you know in the stores doing it? Or do you have a specific dark store that you are going to set up next to the store? Just to understand a bit how it will work with Monoprix more specifically. The second question is just to understand a bit more the profitability in France in Q3. Can you help us a bit to understand the kind of building blocks, so how much the leverage you had potentially? And I'm talking specifically Casino France retail and also the cost savings that you were able to generate in Q3. That would be very helpful.

So the idea is we will use Gorillas dark stores. It's not to build new dark stores in our own stores. They have all these dark stores, and they are put in place, and they're developing more. And in those dark stores, they will have our products, obviously, since we are the one supplying them with products, so they can just prepare all this for us, and we have -- we'll have a system where when we customers order -- move your orders, it goes to Gorillas and delivered from a Gorillas store. So it's Franprix or Monoprix delivered by Gorillas. But for us, it's really a vital transparent, and it's a way to leverage on the deal that we're doing where they will have, therefore, our products in their dark stores anyway. So it's a way to use that efficiently. As for the food retail profitability in France [indiscernible], basically, if you look at the impact of the dropping sales that we still have in Q3, reducing drop in sales, but on average, there was still rather significant drop in sales in Q3. It had a negative EUR 50 million impact on the gross margin. And most of that, I would say about 80% of that was compensated by the subsidy. And then we can keep it, the other slight reduction of the EBITDA in absolute value but less than EUR 10 million. So still a strong impact of our cost-cutting initiatives in Q3.

Next question is from Mr. Rob Joyce from Goldman Sachs.

I've got three. Just to build on Clement's question earlier so we can understand the cash generation going forward. Is it fair to think that sort of the Leader Price cash burn over the past 12 months in there is about EUR 500 million? That's the first one. Second one, just in terms of the credit lines drawn on the working capital, I think from the last year's release, it says that credit lines were undrawn. Just wondering why the change in funding this year versus last year. And then the third one on GreenYellow. I think there's guidance given in May for around EUR 80 million to EUR 85 million EBITDA at GreenYellow. Can you give us an update on that? And maybe an update on the potential capital raise or capital -- yes, capital raise you discussed back then.

Yes, Rob. Okay. We didn't -- we don't publish exactly, I think, the time frame of the prices over the last 12 months, but I think your estimate might be close to Q2. If you look at the cash running in H1, I mentioned that it would be about 1/4 of that in Q3 and the last year probably had about EUR 100 million, so it's a reasonable estimate, starts a bit less than that, but it's a reasonable estimate. And of course, this is -- the undrawn credit line, yes, it's just that -- we did the same variation as last year. But of course, the cash position at the end of June this year was lower than last year because we optimized a bit our balance sheet. We bought some bonds, reduce our gross debt and got to the level of cash that we're comfortable with. And now when we have some troughs of working capital, we draw a bit more credit line than we used to do. That's all. But compared to last year, the variation between June and September is again the same, EUR 70 million actually better. And coming from a lower point of cash, it means that in September, we drew on credit lines. Of course, we'll pay them back by the end of the year with the inflows of working capital. In GreenYellow, yes, they have mentioned an objective. They haven't changed it, so obviously still about it. Otherwise, it would have been communicated. They are growing fast. As you see, they're putting in place a lot of projects. And to realize business plan for '22, where they announced a EUR 100 million target for EBITDA, they will need likely some additional capital. And as I mentioned, we are still working with them on that. And we're really confident that it's going to come through. We'll, of course, inform the market when there's something new to announce, but the goal is still to do that, of course. It could be on either IPO or through a private deal. We mentioned growth possibilities. And I think they have a very attractive business, and it will be done.

Thank you, sir. We have no other questions. Back to you for the conclusion.

Well, thank you, everyone, for attending this call. Good evening, and stay safe.

Ladies and gentlemen, this concludes the conference call. Thank you all for your participation. You may now disconnect.