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

Welcome to the first quarter 2022 of Casino Group Conference Call. I now hand over to Mr. David Lubek, Chief Financial Officer of Casino Group. Sir, please go ahead.

Good morning, everyone. Thank you for attending our quarterly sales conference call. Over the last 2 years, we have clearly been heavily impacted by the COVID-19 pandemic, including most recently by the Omicron variance in Q4. It has pushed us to adapt our operations and to accelerate our growth initiatives in home delivery and proximity. We are now starting a new phase in which we aim to take advantage of this repositioning and are encouraged by our performance in the first quarter. Overall, the key takeaway from this quarter is a return to sales growth at group level, with net sales up plus 3.2% in like-for-like and plus 4.7% in total. Compared to Q4 2021, sales trends in Q1 improved both in France, with an acceleration in the last 4 weeks, and in Latin America with Éxito and Assaí delivering both excellent performances. At our annual conference call, we set out 3 priorities for the year in France, growth in food retail, cash flow generation disposal plan, and we can already confirm progress on all of these points. First, food retail sales improved compared to Q3 and Q4. Importantly, the last 4 weeks, which are usually indicative of next-quarter trends, are up significantly notably in the Paris area with the return of tourism, leading to positive like-for-like at plus 2% in this last 4-week period. Our expansion plan in franchise proximity stores is proceeding according to plan, with nearly 200 new stores opened during the quarter. Within food E-commerce, sales were up plus 21% in Q1 on a strong comparison basis. Second, we have improved our cash flow generation by a substantial amount. Net cash flow generation improved by EUR 570 million in Q1 2022 compared to Q1 2021, of which EUR 320 million was through operational cash flow, and EUR 250 million was through disposals. And third, since the beginning of the year, until today, we have cashed in a further EUR 383 million from the disposal plan and remain on track to deliver an additional EUR 1.2 billion before the end of 2023 to reach our EUR 4.5 billion target. As for Latin America, we outlined at the end of Q4 that our 3 assets were now well-positioned and ready to perform in their relevant markets. This is confirmed in Q1 with Éxito growing again plus 21% in like-for-like; Assaí growing plus 21%, including the impact of its expansion plan, and GPA Brazil in positive territory in its premium and proximity banners after the disposal of its extra hypermarkets. Our major strategic project, the disposal of 70 extra hypermarkets to Assaí, is proceeding as planned. Improved market sentiment towards our assets and a positive ForEx effect have led to an increase of 60% of the combined listed value of our Latam companies since the 1st of January from EUR 1.5 billion to EUR 2.4 billion. Going now into the details of our quarterly numbers. At group level, like-for-like sales were up plus 3.2% in Q1 compared to minus 0.4% in Q4 2021, and plus 4.7% in total sales compared to minus 0.1% in Q4. Let's start with France and with our food retail business. Three main takeaways. First, the sequential improvement in sales performance, which came back in positive territories at the beginning of Q2; second, the acceleration of our expansion plan in Convenience and third, the continued strong performance of our food E-commerce operations. First, sales trends. Since Q3 2021, we have seen a consistent improvement in our sales trends in France. This is again the case in Q1 '22, and also over the last 4 weeks up to April 17. Like-for-like sales in France went from minus 4.3% in Q3 to minus 3% in Q4, minus 1.6% in Q1 and plus 2% in the last 4 weeks. In Q1, we saw a clear improvement in the Casino brand banners. Combined, they went from minus 3.3% in Q4 to minus 0.5% in Q1 and plus 1.5% over the last 4 weeks. Casino hypermarkets have clearly recovered, thanks to renewed commercial focus on commercial -- customers' purchasing power needs. This combined personalized promotions, everyday competitive pricing on dedicated products, the appeal of the subscription-based loyalty programs and attractive offers in gas stations. As for proximity stores such as Vival, Spar or Casino Shop, which are particularly attuned to today's customer needs, they have delivered excellent performance, both in like-for-like reaching plus 3.7% in Q1, and in total sales, reaching plus 5.8% with the impact of new franchise stores. Our banners most exposed to the Parisian area, Franprix and especially Monoprix were still affected in Q1 by the general condition of the market with the lack of tourism, the impact of remote working and the comparison base marks by the closure of restaurants in Q1 2021. Even fast food, sales were down minus 4.6% according to IRI, which weighed on Monoprix's performance at minus 3%. The situation has been clearly improving at the end of Q1 and the last 4 weeks show a significant uplift in sales both at Franprix, with plus 2% like-for-like, and at Monoprix, with plus 2.6% like-for-like. These numbers are consistent with the return of tourists in the Paris area, which is clearly observable in recent weeks, and a reduction in remote working. They bode well for Q2 performance in operation banners. Our second key takeaway regarding our food retail business is the ongoing successful rollout of our expansion plan in franchise. We opened nearly 200 new stores during the quarter in banners such as Franprix, Vival, Marché d’à côté, Spar or Casino Shop. This acceleration is in line with our target of at least 800 openings this year. Our diversified portfolio of banners gives us a clear edge in the Convenience market, with the possibility of finding exactly the right store for the right location and the right franchisee, and the density of our network, allowing for the most efficient logistics. Based on these assets, our team of experienced developers working closely with our franchise partners to secure new locations in local retail markets that are changing fast, with new space becoming available and existing stores converting to our banners. We now have more than 6,800 stores in proximity formats, of which 978 are Franprix and 5,859 are Casino Convenience. The impact of this expansion can be seen in the results of wholesales to franchises, growing in Q1 by 6.1% at Franprix and by 10.5% in Casino Convenience. Finally, our third takeaway is the fast development of our food E-commerce operation, at plus 21% during the quarter on a strong comparison basis in Q1 2021. Our exclusive partnerships with Ocado, Amazon and Gorillas, combined with the strength of our banners stand-alone propositions and dedicated partnerships with Uber Eats and Deliveroo give us a clear edge in this fast-growing market. There is also a clear synergy between proximity and E-commerce, with 1,380 proximity stores now equipped with home delivery solutions. These are profitable operations, allowing us to increase the average basket and the loyalty of our customers. In all our banners, omni-channel customers buy more and more often. So these are the main takeaways for our food retail operations, sequential improvement leading to positive sales in the last 4 weeks, fast expansion in proximity and continued high growth in food E-commerce. Before turning to our financial performance, a few words about our other businesses in France, Cdiscount, RelevanC and GreenYellow. First, Cdiscount. Its detailed Q1 numbers were published on Tuesday. Compared to the high base of Q1 2021, GMV was negative at minus 9%. Of course, Q1 '21 numbers were boosted by the curfew put in place in the context of the pandemic. To annualize Cdiscount intrinsic performance, it is more relevant to compare Q1 numbers to Q1 2019 before COVID-19. First, compared to Q1 2019, there has been a very significant and positive shift in the mix, in line with our strategy. With GMV slightly increasing at plus 1.1% over the 3-year period, marketplace sales were up plus 21.8%, while direct sales decreased by minus 24.4%. This has led to a plus 11.5 points increase in the share of marketplace in Cdiscount GMV from 36.3% to 47.8%. This improvement in mix is a key business priority. It is a clear positive for Cdiscount margin since its marketplace model is based on commissions and structurally profitable. Second important driver, the strong performance of digital marketing was the [ source ] profit of Cdiscount. Digital market revenues doubled over 3 years, including plus 15% compared to last year's high comparison base. Cdiscount is taking advantage of the shifts of advertisement from offline to online and particularly to advertising embedded in E-commerce websites, which has the highest ROI. Third, and most important for our future, Cdiscount's B2B offering is ramping up nicely. Octopia, which offers turnkey marketplace solutions to E-commerce sales has signed 5 new contracts during the quarter, and its accumulated backlog has reached EUR 1 billion GMV over the contract's duration. Octopia has a key edge in addressing the EUR 600 billion market, with its access to Cdiscount's pool of 13,000 vendors and 100 million SKUs. It is a key part of Cdiscount's business strategy in the coming years, and it has had a quick start, consistent with our expectations. Another example of how we have developed our B2B offering based on in-house development can be found in RelevanC, which has continued to grow its Software-as-a-Service business. One recent example of a successful contracts is with Everli, which has extended its use of RelevanC technology for personalized advertising in 2 new countries, Italy and Poland. International growth is a key objective for RelevanC with the ability to scale up its solutions within our partnerships such as the one put in place last year with Google Cloud. And finally, a few words about GreenYellow, our business unit dedicated to decentralized energy transition. GreenYellow builds decentralized solar power for its B2B customers in more than 16 countries and also designed and build solutions to reduce their energy consumption. In the current context of higher energy prices and renewed urgency of the shift to renewables, its offer has become even more relevant and its pipeline of projects is strong at 4.3 gigawatts in solar. Among the key achievements of this quarter of 30 megawatts installed in France in self-consumption of grid injection, an acceleration in Eastern Europe with a new office in Poland, adding to the existing offer in Hungary, Romania and Bulgaria. GreenYellow has raised EUR 200 million at the beginning of the year, which will allow it to accelerate its investments. Overall, GreenYellow has now demonstrated high growth potential, underpinned by the strong track record of its teams, and the attractive markets in which it operates. Before moving to Latin America, a few words on financial performance in France at the end of Q1. Let's look first at cash flows, which are a key priority. Net cash flows in France are usually negative in Q1, in line with the seasonality of the business. This year shows a significant improvement of EUR 570 million over the quarter compared to Q1 2021, with net debt increasing by EUR 399 million this quarter instead of an increase of EUR 968 million in Q1 '21. This improvement is due, first, to operational cash flows, which have improved by EUR 320 million over the quarter, and second, to the positive impact of disposals for EUR 250 million. As indicated at our full year results, we expected the negative working capital effect of Q4 2021 to reverse in H1 '22, and this is already the case at the end of Q1. We remain fully committed to cash flow management and control, both in our working capital, our OpEx and our CapEx and these objectives are part of the objectives of all of our management teams. With the impact of this quarterly performance, debt valuation over 12 months has also improved sharply from an increase of EUR 828 million at the end of '21 to EUR 259 million at the end of March. This is a key metric to monitor in the coming quarters with the aim of getting back to a path of deleveraging, combining operational cash flows and disposals. I've mentioned at the beginning of the year, we remain fully committed to the finalization of our EUR 4.5 billion disposal plan, of which EUR 3.3 billion has been realized and EUR 1.2 billion remain to be cashed in before the end of next year. Since the 1st of January, we have cashed in a total of EUR 383 million of proceeds, of which EUR 86 million at the beginning of Q2, with the disposal of our remaining stake in Mercialys. We also published our quarterly EBITDA as part of our covenant computation. EBITDA after rent in France, excluding GreenYellow, as measured for our covenants, remained close to stable at EUR 776 million over the last 12 months to be compared to EUR 780 million at the end of December. The net impact of lower sales in Q1 compared to last year was mostly offset by property development profits. As for our liquidity position, it stands at EUR 2.7 billion in France at March 31, with EUR 686 million of cash and EUR 2.1 billion of undrawn credit lines since our secured RCF is wholly undrawn at this date. With these numbers, our RCF covenants are comfortably met at the end of Q1, with a margin of EUR 611 million in secured debt on our secured debt over EBITDA ratio and at a margin of EUR 208 million in EBITDA on our EBITDA of our net financial cost ratio. Now a few words about Latin America. GPA, Assaí, and Éxito have already published their results, so I will concentrate on the main takeaways. Latam sales showed a very good dynamic overall, with 13.2% total growth and 9.7% like-for-like. Assaí, again, had an excellent quarter with 21% sales growth in local currency, driven by the success of its expansion plan and solid like-for-like performance at 6.7%. Including the positive ForEx effects, total sales at Assaí were up plus 36% in euros. The Assaí format, with its broad low-price offering, is proving particularly attractive for customers in the current context in Brazil. The Assaí teams are as actually expected to fully mobilize on the conversion of the 70 extra hypermarket stores bought from GPA. 40 stores will open in H2, and after full conversion Assaí's expected sales to triple compared to the numbers achieved by GPA and estimate based on the experience of 26 previous conversions. Combined with organic expansion, this plan should bring Assaí's total gross sales to BRL 100 billion by 2024 compared to BRL 46 billion in '21. We are, of course, very excited at Assaí's potential in the coming quarters and years. This is a fantastic company with a great management team who have delivered quarter after quarter in the past 10 years in all types of market conditions. GPA Brazil sales were at plus 1% year-on-year and like-for-like. Total sales of GPA decreased, as expected, by minus 34% due to the closure of extra hypermarkets, 70 to be sold to Assaí and 28 to be converted into supermarkets. This strategic move allows the GPA to focus on its strong suits, Convenience, Premium and online. Convenience recorded 5.5% growth on a strong comparison basis. Premium Pão de Açúcar was stable despite adverse conditions in the market for premium stores in Q1. And online food sales, excluding hypermarkets, grew 44% over the quarter, confirming GPA's leadership in omni-channel. Finally, Group posted once again a very strong performance with like-for-like sales of 20.8%, boosted by the strong economic recovery in Colombia and a return of tourists. Colombia registered plus 22% -- 20.2%, sorry, growth, driven notably by the commercial success of its premium banner, Carulla Fresh, and its strong omni-channel proposition. Uruguay posted 11.8% in like-for-like, driven by positive macroeconomic conditions and format well-adapted to customer needs. Éxito is now ideally positioned to take advantage of economic growth in all its countries of operations. To sum up, there are 3 main grounds for satisfaction in the numbers published today. First, an improvement in our sales trends in France in Q1 and a return to growth over the last 4 weeks. Second, strong improvement of our net debt variation in France over the quarter, thanks to our operational cash flows and the events in our disposals. And third, an excellent performance in Latin America. These trends are consistent with the priorities outlined at the beginning of the year, and we intend to continue to make progress on all of them. Thank you for your attention. I'm now ready to take your questions.

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

Actually, I have 3 questions. The first one regarding the Q1 like-for-like sales growth versus the last 4 weeks. Can you explain better duration for supermarkets? And regarding the better trends seen during the last 4 weeks, can you highlight the price effect and the volume trends? My second question regarding the improvement in free cash flow in Q1. Can you give us more details on WCR exceptional charges and CapEx? And the last one, can you remind us the level of real estate gains in Q1 '21 at increasing the EBITDA.

So your first question on Q1 trends versus 4 weeks. So you see all the banners improving basically from Q1 to 4 weeks. I think you mentioned the supermarkets, which is slightly lower in the 4 weeks compared to Q1, that is linked to a strong basis last year for the supermarkets at this exact period, which had the -- actually you have the opposite effect on hypermarkets. So if you add the true hypermarket and supermarket, there is some switch likely from hyper to super if you compare the basis of comparison to last year. If you take the 2 combined, clearly, there's a clear improvement from Q1 to the last 4 weeks. So this is the overall trend. By the way, the last 4 weeks, if you remember, we published the last 4 weeks when we published our full year results, there was minus 1.6%. So this is the performance of the quarter. We see the like-for-like -- sorry, the last 4 weeks as quite indicative of future performance. Actually, that's what happened in the last 3 quarters. Each time you look at the last 4 weeks, the beginning of each of the previous 3 quarters, it was quite indicative of the future performance. So that's why we gave the numbers, and we see them as indicated. There's a price effect and a volume effect likely, of course. There's also both in Q1. So likely slightly more price effects as we do in Q1, but it's -- the main impact is higher traffic and higher volume between Q1 and the last 4 weeks. I don't have the exact breakdown, but that's what we saw. And why do we see that? In Paris, it's clearly the impact -- around Paris, it is clearly the impact of higher tourism and less remote work. Also I think a successful commercial rollout of what we did, first, in the hypermarkets with good effects, focusing on purchasing power. What we did is focusing on offers that are designed to cater to customers needs for purchasing power actions. And we did that in Géant, we did that in Supermarkets. And we did that also at Monoprix and Franprix with specific low-priced products and basic products, and seems to have worked well. Also very good uplift, very strong uplift in the subscription-based program that also contributed to the uplift in sales. The subscribers to our program, on average, they spend 4x more than the others. Free cash flow, of course, a big part of the EUR 320 million is a reversal of the working capital effect that we disclosed at the end of Q4. If you remember, we had a total of EUR 170 million in Q4, a negative impact due to strategic inventory plus the sales that were a bit disappointing in Q4. These have basically reversed in Q3, so they expand the majority of the operational cash flow improvement. We had also good control of the CapEx. So you can assume that CapEx are slightly lower than last year. And of course, we also had some loss-making stores that are not there anymore in Q1. So this helps also. So this is a combination of all of this. We maintain a strong focus on this working capital management. So we're going to continue, not just this reversal that we had in Q1, but we aim to continue to control this working capital very closely in the coming quarters. And of course, we intend also to -- as I mentioned previously to decrease the cost of our exceptionals and maintain our CapEx at a reasonable level. Real estate, we disclosed the exact number, I think, in our appendix. So just to make sure the number, yes, it's EUR 27 million. It's Page 8. So we disclosed this number. So this contributed, of course, to the EBITDA in Q1. This is a property development linked mostly to the disposal of Mercialys.

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

Two, if I may. The first one, can you just comment about the inflation you've seen in France, especially. So have you seen an acceleration in March? And what are your expectations going forward? That would be quite helpful. And do you see linked to that, the market as being rational, while you've seen irrational behavior, especially in the Paris region? The second question is about the hypermarket. So the performance is still negative. You've seen some improvements. You are also converting some of the hypermarket into supermarket, and you've got 20 to come. What about the remaining hypermarket? So what is the plan here? Do you have plan to convert more into supermarket, to sell some of them? Just to understand why you're doing it, and what we should expect for the full part of the remaining hypermarket?

Inflation, well, we have the same data that you have on the market inflation. What I can say is that what we forecast and what most service forecast seems to be realizing that is there is inflation on supplier price, which is transmitted by retailers in retail price. So we have a general inflation in the market, and we are positioned as the others in terms of inflation. Our price positioning has not changed compared to what it was before. So there has been a general increase in price. In this context, what is important is to have a dedicated policy, focused on customer needs and purchasing power, which is why we put in place all the specific offers. And this leads me to your second question on hypermarkets. On hypermarkets, the significant recovery we've seen first in Q1, but also in the last 4 weeks. It seems to be linked with a strong and new commercial proposition that we developed. There is the specific offers linked to gas stations. You know that gas price is a very strong focus of customers today for French people in general. And we put specific offers, such as EUR 1, now even EUR 0.85 for gas, but per liter, which is, of course, much lower than the average retail price. But to get that price, you need to go to the store and convert the difference into vouchers. And to do that, you need to buy at least EUR 100, which means we convert new customers, we gain new customers and some of these actually subscribe to our loyalty program. So this is the way we've been working. Also working on the offers on basic products, such as we basically used the experience we had from Latin America on offers such as [Foreign Language], which means you take low-priced products and -- essential or basic products, you could then have retail a price for these specific products to have a number of basics that are cheaper than anywhere else. And then you attract customers, partly with that partly with the widest offer. So on hypermarkets, we see significant improvement in the commercial performance. We convert -- we are converting in Q2, 20 of them into supermarkets. These are part of the smallest of our network, and these are hypermarkets, which are actually already used as destination stores by nearby customers mostly. So it's quite natural to convert them into supermarkets, to enlarge the fresh offer, the food offer and reduce even more the nonfood offer, which is less relevant. For the previous batch of conversions we did in that sense, they were quite successful in terms of uplift, both in sales and in profitability. Maybe we'll do more, we'll see. It depends on the situation and the type of customer that we have in the hypermarket. The remaining hypermarket that we have, a lot of them are situated in very good areas in the South of France around Bordeaux. So our hypermarkets that are well situated and that have good potential. So we'll see where it goes. But so far, I would say that, first, I would take the commercial initiatives that have been taken are successful. We also put the lesser-priced products and put them in good places in hypermarkets and supermarkets to attract customers and low price offers. So this has been quite successful. We tend to continue to do that to achieve the conversion and for the remaining hypermarkets. The priority is keeping the improvement of the commercial dynamics. That's the priority.

Next question is from Mr. Andrew Gwynn from Exane BNP Paribas.

First point, just a clarification. I just wanted to triple check. Obviously, you've got Easter impact at the beginning of April. So I just wanted to make sure that, that trading update doesn't include that. I don't think it does, but? And then secondly, just on the Ocado service, I think it's been pretty much a year now. It's been operational. Just any updates on how that's going to?

Yes. So the last 4 weeks, it's completely the same way we compute the like-for-like the quarter. So excluding -- it excludes the calendar effects as we can measure it on the last 4 weeks' business. So they are effectively linked to the basis of comparison between hyper and supermarkets as you may have seen. But overall, the overall dynamics of all the banners seem to be consistent with the usual seasonality. By the way, it includes Easter both this year and last year, of course. Ocado, we are working well with Ocado, as you know. We are ramping up, and it's, of course, part of the success of our online home delivery operations is explained by our partnership with Ocado. You see the plus 21% growth in E-commerce in Q1. By the way, the market was negative in food E-commerce in Q1 by yearly data, recent data, it was around minus 4, minus 5, and we did plus 21%. Of course, we are focused on home delivery. The market was negative, particularly because of drives, which are quite negative. But even if you look at the home delivery market, which is the part of the market that is growing right now, they grew 9.5% per year, and we grew 21%. So obviously, our various solutions, Ocado, but also the fact that we have all the other solutions, quick commerce, delivery from the stores, same-day delivery, et cetera, all of this combined and gives us a faster growth than the average of the market. So, so far, we're quite happy with this partnership with Ocado. We'll give updates when we reach certain milestones, of course, on the sales at the moment with this all-logistic warehouse, but it seems to be working quite well. And our focus on home delivery seems also to be warranted because that's the part of the market that's growing right now, not the drive -- not the drive piéton, which are actually declining quite fast. The home delivery is growing.

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

I've got 3. First one is just a clarification on, I think earlier you said that you're seeing inflation and volume in that 2% like-for-like. Is that -- are you seeing less than 2% food inflation in your French banners right now? I just want to clarify that because I think external data says it might be higher for the French market. Second question was just on the EBITDA development. I think if I remove those property adjustments, I think EBITDA looks like it's down, sort of 20% in France on an underlying basis or maybe 100 basis points on margin. I wonder if you could help us understand that move. And then the final one is just in terms of the EUR 1.2 billion asset disposals you have outstanding, can you just remind us what assets are included within that remit? Does that include the -- you've talked about the GreenYellow IPO, does that include your Brazilian assets? Any clarification much appreciated.

Yes. Inflation seems to be higher than 2% right now. So if you look at 4 weeks level of sales, net of inflation volume, they are still negative, but what I said is that the improvement between Q1 in the last 4 weeks gives you both to volume and inflation. There's not just the impact of inflation between Q1 and 4 weeks. There's also a strong improvement in volumes. That's the meaning of my comment. But of course, inflation is -- seems to be in France rather a bit higher than 3% right now. Property development, yes. So excluding property development, EBITDA was down, as you mentioned. That is due to, well, just the decline in sales in France retail compared to Q1. You saw it's minus 2.2%. That's linked to the high business. Well, to the fact that last year, restaurants were closed and they are opening this year. So obviously, the market is down, and this impacts of course EBITDA. And also at Cdiscount, we saw minus 9% drop in GMV. That also impacted the EBITDA significantly. So that's the explanation for the drop in EBITDA in Q1. Of course, the goal, as I mentioned, is to get back to growth and that should also translate into the EBITDA. But that explains quite simply the drop in EBITDA in Q1, which was compensated, offset by this property development. As for the asset disposal, the EUR 1.2 billion remaining on France, to be very clear, again, it's a EUR 4.5 billion disposal plan in France that may include various assets. We don't disclose in advance which assets are going to be sold partly or totally. So I can't give any more information, and we will inform, of course, the market. We always do that. Once we have something to announce, we announce it. But at this stage, what I can just confirm is that the EUR 1.2 million will be realized, and we have sufficient, clear and concrete options to be confident to do that.

Next question is from Mr. Nicolas Champ from Barclays.

I'll ask 3. The first one is that I think that the significant increase in petrol prices has a positive impact on the working capital of retailers this year because retailers collect taxes. A very simplistic calculation, I assume that maybe the positive impact on this increase in petrol prices had a positive impact of around up to EUR 100 million on your working capital in Q1. Could you confirm this number or clarify, quantify the impact of this increase in petrol prices on your working capital in France since the start of the quarter? The second question concerns your unsecured segregated account on Page 9. You said that is now 0. But just to double check, I think you called a bond EUR 340 million, '22 called that it is to be repaid only in April, at the end of April, in the second quarter. So could you please clarify where the cash is now sitting? I mean, the EUR 339 million that was on this escrow account, is it included in general cash, that is to say the EUR 686 million number as you disclosed in the press release? And my third question is about -- could you let us know the proportion of your debt in France that is at variable rate. Because I think you decided to unwind a lot of interest rate swaps over the past year and just wanted to better know the impact of the rising interest rates on your net financial charges in France this year that could obviously impact your quarterly net debt evolution.

So for first quarter working capital effects, the first -- the main impact on our working capital has been the reversal of the Q4 negative impact. So we had an excess inventory that was sold, and that explains -- it was EUR 170 million -- that explains the bulk of the improvement in working capital. But you're right, also in -- we've done good operation in the gas stations. There's the price effect you mentioned, but there's also the fact that we have had quite successful operation in our gas station, and that also contributes a bit to our working capital variation. But the bulk of the working capital variation in Q1 is due to the reversal of Q4. The unsecured segregated accounts, yes, it was 0 at the end of March. We said on the call on the 28th of March, which was a decided yesterday. So the debt has been repaid. And at 31st of March, when you look at the balance sheet, the cash, there wasn't segregated accountings on our balance sheet and the cash level. So it is included in the EUR 686 million, in line with the reimbursement of the '22 that we did 2 months in advance yesterday, so it was paid yesterday. There is part of our debt that is at a variable rate, especially the term loan is -- part of the term loan, it's 550 bps margin plus Euribor. So -- and we had some swaps on some of other debts. It's a Euribor rate. So, so far, it's actually captured -- when the Euribor was minus EUR 52 it doesn't increase our financial costs, these are term loan with Euribor, but with a minimum at 0. So even if the Euribor was EUR 50, doesn't give a saving, and after that, the if Euribor turns positive, it can increase a bit of the cost of our term loan. So, so far, with the current level of Euribor, there has been no increase in our net debt costs and this we don't expect given current projections, a significant impact on our financial cost in 2022 in any case.

Last question is from Mr. Clement Genelot from Bryan Garnier.

The first one is to come back on the prices. Great. So I have 2 questions. The first one is to come back on prices. So if I understood well, you said that Casino is currently still, let's say, following the pack. But if I'm right, very recently, Leclerc, U and Carrefour are reiterating that I will not pass on the entire food inflation to the customers. So is it also your view that you will have to absorb a part of your earning next to inflation resulting from the war in Ukraine? My second question is to come back as well on Cnova, GreenYellow. I understand that you will not share your potential IPO or sale plan. But what's your view on the financing needs Cnova, GreenYellow. I mean recently, GreenYellow had raised some money. Is it enough? And what about Cnova, can it evolve without any cash? I have in mind that is Cnova has to both first tranche of its [Foreign Language], if I might, that this year or next year. So what's your view on that?

Yes. Thank you, Clement. Well, as for price, what we're seeing right now is that we are passing the inflation that we get from suppliers, and we don't see a change in our price positioning compared to the market. So regarding what you said, if some other players say they are taking a hit on the margin, it might be that they got higher inflation than we got on their price increase, which is possible that since what we expected is Auxo partnership with Intermarché, which came into effect this year, we would get the first year in any case, good conditions and better conditions than usual. So it might make sense that we got a little bit better conditions, and that we are able to pass all the inflation without changing our price positioning, while others may have to take a hit on the margin. But of course, we don't do -- the reality of their margin. As for the financing need of GreenYellow and Cnova, GreenYellow, so the EUR 200 million that we got is enough for the immediate future, clearly. If we look further down the road for next year and beyond with the 4.3 gigawatt pipeline, of course, there will be more money. So we're looking at all strategic options to ensure the development of GreenYellow. We will ensure that this company can develop and realize its very, very high potential. Of course, we'll keep the market informed when there's something new to say about this. As for Cnova, there are developments for this year and the development of Octopia is funded. Of course, today, they are funded mostly by either their own cash flows or some advance by Casino when needed. Further, the option, of course, of raising the capital of Cnova is very much on our minds. One key evolution to monitor will be the development of Octopia. Octopia is a strong part of Cdiscount's future value, if it succeeds, of course. And so far, they had a very encouraging start. So we'll see how it goes in the coming quarters. And depending on the speed of all this, we'll keep again the market informed of any new financing raise at Cnova level. But in any case for this year, Cnova's plan is built within our overall cash flow plan, and it's consistent with our resources and our projections. Okay. Thank you. And that was the last question. Thank you very much, everyone, and have a good day.

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