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

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

Thank you. Good morning, everyone, and welcome to Casino H1 Results Conference Call. A few words before going through our H1 presentation. In France, as you can see on Page 2, the key highlights of this quarter's sales has been a return to growth in our food sales with all food retail banners now clearly in positive territory since Q2. This trend has accelerated since June with like-for-like at 4.7% in the last 4 weeks. This is an important inflection point, which bodes well for H2 performance in our food retail French business. Our main subsidiaries in Latam have once again delivered excellent results in Q2. Total sales in Latam reached EUR 4.5 billion in Q2, up 32%, with Assaí up 59% and Éxito plus 38%. Both companies are booming and taking advantage of their leadership in their respective markets. Another recent and important development for the group is the signing of a binding agreement to sell most of our stake in GreenYellow, as announced this morning. This brings the total of our signed disposals to EUR 4 billion. This allows us to confirm our EUR 4.5 billion target by the end of '23 with full confidence. Now to the key takeaways from this first half year, starting with France. Page 3. First, Q2 confirmed a return to growth with plus 3.4% like-for-like and all our French food retail banners in positive territory. This has been particularly the case for our Parisian banners, Monoprix and Franprix, with a return of tourists and the end of the negative impacts from the pandemic. This return to growth was the key priority outlined at the beginning of the year. Our 2 key levers for further sustainable growth are expansion in proximity and food e-commerce. 376 stores have been opened in H1 including new convenience stores and the running of independent stores and supermarkets. As for food e-commerce, our sales grew 20% in H1, in a market that was actually down minus 3.6%. This was thanks to our strong focus on the home delivery market. Over the first semester, EBITDA of the France Retail segment was down minus 5.2% due mostly to Q1 performance when sales were still negative. As for Cdiscount, its GMV is slightly up compared to pre-COVID level, plus 2.3% compared to H1 2019, compared to the high level of H1 2021 when nonfood stores were still closed, GMV is down minus 9.9% despite Cdiscount gaining market shares in the last 2 contrary periods. A key metric we follow is the share of marketplace GMV. It has now passed 50%, a clear positive for Cdiscount's business model. Finally, a key milestone has been reached in our disposal plan with the signing of a binding agreement with Tikehau to sell most of our stake in GreenYellow. This brings the total of our signed disposals to EUR 4 billion of which EUR 0.7 billion yet to be recognized in our debt reduction. Page 4, Latin America. Our listed subsidiaries have published their detailed results. Total sales in Latam reached EUR 8.2 billion in H1, up 23% in euros compared to last year. In short, our main business units, Assaí and Grupo Éxito have once again delivered stellar performance. Grupo Éxito's sales grew 28% to EUR 2.1 billion in H1 with EBITDA up 24%. Commercial dynamic was strong in Colombia, with sales accelerating in Q2 at 38%. Omnichannel sales are still up on top of the growth already achieved during the pandemic. Online now represents 12% of the business in Colombia. In Uruguay, sales were up 25% in H1 and EBITDA up 32% with efficient cost saving plans. On Page 5, Assaí, our biggest business unit, has accelerated on its profitable cash & carry model, particularly attuned to customer needs in Brazil. Its sales during H1 reached EUR 4.5 billion to be compared to EUR 3 billion in the previous year. Q2 growth was 59% in euros, including the positive ForEx effect. Growth comes with high profitability at Assaí, thanks to its extremely cost-efficient model. EBITDA was up 41%, including ForEx effect with a 6.5% EBITDA margin. Looking back, EBITDA has doubled since H1 2019 in local currency. The conversion of GPA hypermarkets is being rolled out as planned with 40 stores to be opened by the end of the year, 10 stores per month. Assaí is clearly on track to reach its target of BRL 100 billion of sales in 2024, that is EUR 18 billion at current exchange rate. Finally, a few words about GPA, which is now concentrated on premium proximity and online. Its sales grew 3.6% in like-for-like in H1. 12 hypermarkets have been converted to supermarkets or premium out of 24 conversions planned until the end of Q3. As for online sales, they were up 25% in Q2. Page 6. The main result highlights. Group sales were up 10% in H1, boosted by Latin American operations growing 23%, including ForEx effects. Group EBITDA was slightly down. This was mostly due to a tough market for Cdiscount in H1 and to the commercial dynamic of operations, food retail operations in Q1, which have since improved. We will get into the details of these numbers later on. Before going into our detailed results, let's move to a review of our progress on our strategic priorities in France, Page 8. First, as mentioned in the introduction, we saw a clear return to growth in all our banners. Like-for-like, which was still negative in Q1 at minus 1.6%, come to 3.4% in Q2 and 4.7% in the last 4 weeks at 24th of July. The rollout of our expansion plan is proceeding according to our objectives with 376 new openings in H1. It combines new proximity stores in our various banners such as Franprix, Vival, Spar, and the rallying of existing independent supermarkets to our Casino banner. The ramp-up of these stores will contribute to further growth in Q3. Of course, most of these new stores are operated by our franchise partners, which means this is a CapEx-light expansion plan. As you would see, CapEx in France are actually down year-on-year in H1. As for food e-commerce, it grew 20% in H1 in a market that was down overall. This is the first to our focus on the home delivery market, which performs better than the drive-through market; and second, to the efficient combination of technological and commercial partnerships with a key advantage of our network density. Our key partnerships with Ocado, Amazon and Gorillas have all been further extended in H1. As for our commercial strategy, we have continued to adapt our formats to customer needs. We have recently announced a complete conversion of our Géant hypermarket network. 20 general stores have been turned into Casino supermarkets in H1, the 61 remaining hypers will be converted into a new distinctive concept called Casino#HyperFrais with a fresh food offer representing at least 50%. This will complete our long-standing strategy to reduce our exposure to the average hypermarket format. Also, of note is the success of our subscription-based loyalty program at Casino and Monoprix, offering a 10% rebate on all food purchases for a 10-year monthly fixed fee. 300,000 of paying customers are already registered to be compared to 210,000 at the end of 2021. On average, those customers spend 4x more in our stores than nonsubscribers. Page 9, a few examples of the adaptation of our commercial strategy to the new inflationary environment. In this context, we are making sure that our customers get attractive offers in our stores every week. Among these offers, the best available price on a weekly selection of products with regular rotation, a wide private label offer, including our Leader Price label in Casino and Franprix stores, specific discounts linked to our gas stations, and of course, specific offers for our loyal subscribers. Moreover, the ability to deliver competitive offers also relies on the strength of our purchasing partnership with Intermarché Auxo. With Louis Delhaize joining Intermarché Auxo will become the first buyer in the French market in 2023 with 26% market share. It now also includes goods not for resale, which should allow us to optimize our negotiations with suppliers' G&A, such as cleaning, maintenance or security. On top of that, a specific partnership between Naturalia and Les Comptoirs de la Bio is being set to mutualize purchasing with the biggest suppliers in organic food. Page 10, Cdiscount. In H1, the overall nonfood e-commerce market was down compared to the high level reached in H1 '21, while nonfood stores were partially closed. Cdiscount has moved with the overall market with GMV back to pre-pandemic level of 2019. In the last quarter period, Cdiscount has actually gained market share, 0.2 point in April, plus 0.4 point in May, in a market that has remained relatively tough. In this environment, the key strategic priority has remained the same: to increase the share marketplace sales, which are the most profitable parts of Cdiscount's business. For the first time, marketplace share of GMV has passed a 50% threshold in Q2, while down minus 11% compared to the high level of H1 2021, marketplace sales are still up 19% compared to pre-pandemic level. We're also monitoring our key operational KPIs to ensure the underlying health of the business keeps improving. The main operational KPIs are positive compared to last year. Net Promoter Score is up 4 points. Advertising services previously said digital marketing are up 15% at EUR 33 million in H1, loyal subscribers Cdiscount à Volonté program are up 7%, and our B2B Octopia business has reached a total of 23 contracts, 11 of which signed in H1. Cdiscount EBITDA has moved with GMV coming back to pre-pandemic level in H1 at EUR 15 million compared to EUR 48 million in H1 2021. In order to adapt to the current level of sales, a EUR 75 million cost saving plan has been launched, of which at least EUR 30 million will be registered in H2. This will ensure that Cdiscount's cost base is consistent with sales volume. Turning to Page 11, GreenYellow. GreenYellow has continued the development of its pipeline of projects in a high-growth market with 764 megawatts of advanced pipeline and 3.7 gigawatts of additional opportunities. Its EBITDA reached EUR 40 million in H1, up 8% compared to last year. It has also continued its expansion in Europe with the creation of new offices in Poland and Spain. As announced this morning, we have reached an agreement to sell most of our stake in GreenYellow [indiscernible] for EUR 1.4 billion total EV translating into EUR 1.1 billion equity value, which means a EUR 765 million value for our stake. As part of the deal, the 2 other existing shareholders, Tikehau and Bpifrance as well as ourselves, will keep a stake in the company, which will allow us to benefit from GreenYellow's future appreciation in this high-growth market. Taking into account our EUR 165 million reinvestment in the company, the net cash in from the sale at the date of the closing is expected at EUR 600 million, which will contribute to our deleveraging plan and brings a total of signed disposals to EUR 4 billion. Finally, Page 12, a few words on our CSR policy and commitments, which are an important and long-standing priority of Casino and a distinctive feature of our group. Casino is ranked first retailer and eighth company worldwide in Moody's CSR ranking. Among our various commitments listed on this slide, partnerships with food banks, responsible offer with equitable trade, seasons food, and most importantly, a strong commitment to reduce our carbon footprint and our energy consumption. Our Latin American companies also show their commitments with a 16% reduction of Éxito's carbon footprint and a 23% reduction of Assaí's emissions linked to energy. Also, as part of its strong people's commitments, note that Assaí has been certified as a Great Place to Work company. Before detailing the results, a few words on Q2 sales on Page 14. Group sales were up 15% in Q2 in total sales and 8% in like-for-like. This results from the strong recovery of our commercial dynamic in France and excellent performance at Assaí and Éxito with Latam sales up 17% in like-for-like and 32% in total sales, including a positive ForEx effects. Let's move to Slide 15 for the detailed analysis of Q2 sales in France. Same-store sales were up 3.4% in Q2 and plus 3.1% in total sales. All our banners are now in positive territory. Monoprix and Franprix have clearly recovered with a return of tourists in the Paris area while hyper and supermarkets have also improved and proximity has accelerated with the rollout of our expansion plan, delivering 13% total growth in Q2. These trends have been confirmed and have accelerated since mid-June, particularly in the Paris area. As usual, we also published a current trading plus 4.7% like-for-like in the last 4 weeks and plus 5.6% in total sales. This includes plus 4.8% like-for-like at Monoprix and 12.6% at Franprix, confirming the strength of the Parisian market. As shown in Q2 and in the previous quarters, last 4 weeks trends at the beginning of the quarter tend to flag inflection points in our sales dynamic. Current trading bodes well for Q3 numbers. Page 16. Overall, French retail operations recorded a drop of minus 5% in EBITDA in H1, mostly due to still soft commercial dynamic in Q1, particularly in the Paris area with Monoprix and Franprix. These commercial trends have improved progressively since Q2 has mentioned previously. Looking forward, provided the recovery of our sales is confirmed as evidenced in the last 4 weeks, the trend in EBITDA should also turn positive. Page 17. Moving to the e-commerce segment, Cdiscount. As mentioned before, the key strategic direction at Cdiscount is the increase of the share marketplace in total GMV. Marketplace sales were up 19% compared to pre-pandemic level, while direct sales were down minus 25%, moving the share marketplace from 38% to 50% since 2019. Of course, compared to the high level of H1 2021, marketplace sales were down 11%. Advertising services previously digital marketing, were up 15% compared to last year and double pre-pandemic level. EBITDA was back to 2019 level, in line with the move of GMV. As for the drop in EBIT compared to 2019, it relates mostly to amortizations of investments realized by Octopia in the last few years. In order to adapt Cdiscount's operations to the new market environment, the strong cost savings plan has been launched with a EUR 75 million target, of which EUR 30 million are expected to be registered in H2 with a positive impact on the bottom line and cash flows. Page 18, Latin America. Our 3 business units have published the results in detail. They mostly reflect the excellent performance of Assaí and Éxito's managements and the strength of their business models in their respective markets. Total sales in Latam was plus 23%, of which 28% at Éxito and 48% at Assaí. Naturally, GPA sales were down minus 20% due to the disposal of the hypermarkets. Strong sales growth translated into strong EBIT with Grupo Éxito up 36% and Assaí plus 43%, including ForEx or 26% and 22% at constant exchange rates. Finally, if GPA's results dropped mostly as a result of the transitory costs linked to the exit from the hypermarket format. Page 19, underlying net profit group share was down EUR 30 million compared to last year in H1 at minus EUR 102 million with the evolution of our group EBIT already mentioned and the impact of transitorily higher financial costs in Latin America. Page 20, our disposal plan has reached almost EUR 4 billion with the recently signed disposal of GreenYellow. We confirm, of course, the overall target of EUR 4.5 billion by the end of 2023 at the latest. In view of current processes and various options already identified to finalize this plan. Note that only EUR 3.2 billion are reflected in our net debt at the end of June. The disposal of our last stake in Mercialys for EUR 86 million last April, will be reported as debt reduction in H2 when the TRS is unwound and the closing of GreenYellow is expected before the end of Q4. Page 21, cash flows and net debt variation. As usual, net cash flows are negative in H1 due to the seasonality of the business. Compared to last year, net debt variation has improved by EUR 374 million, of which EUR 100 million due to disposals and EUR 270 million due to operations. Looking at the main items. Operational cash flow was down in H1 due to the commercial dynamic of food retail in Q1 and to Cdiscount's tough market over the semester. This was offset by better working capital variation and lower CapEx. Other items that contributed to the overall improvement in H1 include the Leader Price store that weighed on last year's cash flows and have since been transferred to [ LG ]. Page 22, net debt. This table shows the evolution of net debt compared to last June, excluding IFRS 5. As mentioned previously, the current level of net debt in France at EUR 5.1 billion includes the usual negative seasonal impact. Also, EUR 700 million of disposals already signed and not yet factored in the net debt, excluding IFRS 5. GreenYellow is now classified as IFRS 5 and does not contribute to our reported consolidated net debt. In Latin America, the increase of the debt level from EUR 1.8 billion last year to EUR 2.4 billion this year, is due mostly to the investments and transformation costs linked to the transformation of hypermarkets into cash & carry stores. Also reflect some positive ForEx valuation. Page 23, our debt maturity schedule. Following our previous refinancing and buybacks, our next significant maturities will be in 2024 after the completion of our disposal plan. We are still actively managing our debt schedule and have bought back and canceled a total EUR 70 million on January 23 and January 24 debt since the beginning of the year. We may continue to buyback debts in the coming months, either in the open market or for public tenders as we have done regularly for some time. Page 24, our liquidity. At the end of June, our liquidity stands at EUR 2.2 billion, including EUR 405 million of cash at balance sheet and EUR 1.8 billion of undrawn committed credit lines with an average maturity of 3.6 years. We also had EUR 111 million on our secured segregated accounts, part of the cash from this account has been used to buy back our January 24 senior secured note. Page 25, covenants. Both our covenants are met at the end of June with secured debt over EBITDA ratio standing at 3.19x, below the limit of 3.5x, and our EBITDA of the financial cost ratio at 3.54x above the threshold of 2.5x. This translates, respectively, into a margin of EUR 227 million on our secured debt and a margin of EUR 215 million on our EBITDA. Page 26, to conclude on our priorities and perspectives in France. In a new inflationary environment, Q2 showed a positive inflection in our sales dynamic, which has accelerated since June, particularly in the Paris area. Our business mix based on proximity, loyalty programs and flexible commercial strategy has responded well to customer needs. Last 4 weeks numbers have proven a reliable indicator in our previous publications at 4.7% like-for-like at the end of July, these bode well for next quarter sales. Looking forward, our priority remains profitable growth with a target of 800 new stores in proximity and further developments of our home delivery business where we have a key structural advantage. Based on our expectation for further sales growth, we confirm our aim to increase our cash flow generation in 2022 and maintain a high level of profitability. And based on disposals already signed at EUR 4 billion and further operations already identified, we confirm the target of our disposal plan at EUR 4.5 billion. This will allow us to resume our deleveraging trajectory. Thank you for your attention. I am now ready to take your questions.

[Operator Instructions] We have the first question from Andrew Gwynn from BNP Exane.

Just looking through the earnings. Obviously, the first half, I think, particularly disappointing for French EBIT, for myself anyway. What's your expectation for the second half? Would you anticipate that the group could grow profit in the second half given the improved trading momentum? And then second, just going back to the debt. Obviously, some fairly significant redemptions coming due. What are the options, I suppose, when we look at the CDS, it does look very high, like the debt is yielding some pretty high levels. So are there anything -- or is there anything else on the table to try and mitigate some of those short-term redemptions?

Thank you, Andrew. For the French H1 EBITDA results, as I mentioned, this was due to Q1 performance mostly. We saw an improvement in Q2 in sales trend. We were still in Q2 at 2% Monoprix, which is below the level that we target. At the current trading that you see around close to 5% same-store sales, this should translate in higher EBITDA compared to last year. So basically, it's a question of sales dynamic. It started a bit soft in Q1, better in Q2 and current trading should mean higher EBITDA compared to last year from Q3 on. As for the French debt and the debt redemption, we have, of course, refinanced a lot in the past few years. So we have basically no significant redemption in '23, just EUR 200 million at January, which are covered by the disposal already secured. As for the '24 redemptions, there are a total of EUR 650 million for the collection bonds when you take into account the secured segregated account and EUR 515 million unsecured notes. So that's a total of EUR 1.2 billion. Half of this is already covered by the GreenYellow disposal, and the rest will be covered by the rest of the disposal plan. That's basically the idea. Of course, we have been active in the debt market. But as you know, the current market is difficult for high issuers. But anyway, with our disposal already signed and operations underway, we have no issue with our '24 maturities. Maybe next question?

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

Back to Andrew's question, just to understand a bit more on France. We see the return to growth already in Q2, but it seems that the French EBIT was still deteriorating, if I compare Q2 with Q1. I understand that it includes a discount, but can you potentially give us a bit more granularity on the French retail EBIT to EBITDA comparing Q1 and Q2, just to understand why you're so confident into -- going into H2? The second one, can you talk a bit more about the competitive landscape in France and how easy or not it is for you to pass an inflation and what are you expecting in terms of inflation in the second half? And linked to that also, what are your cost structures doing to labor cost and energy cost?

Xavier, thank you. On H1, if you mentioned the Cdiscount number, and I'll go back to that to show them. They are published in detail. As for the food retail itself, most of the drop was in Q1. There was still a drop in Q2 in EBITDA concentrated on the Monoprix and Franprix banner. As you see, the numbers in Q2, they are around 2% growth at Monoprix and Franprix. This is, of course, below -- this translates in the drop in volume in Q2 for Monoprix and Franprix, especially for Monoprix in the food sales. So that's basically the explanation of the drop -- still drop in EBITDA that we had in Q2 in those banners. And in Q4 -- in Q3, sorry, you see the last 4 weeks close to 5% growth at Monoprix, over 10% at Franprix. So with these kind of numbers, the EBITDA turns positive. So that's basically the source of the confidence for Q3 is the current sales trend. These are consistent with growth in EBITDA, which was not the case with a 2% growth at Monoprix and Franprix in Q2. As far as the competitive landscape is concerned, we are seeing price increase in the market that are consistent with the inflation that we see in our purchasing costs. So I would say that looking at the market, we see the inflation being passed into the market, with varying speed between the different players. But at the point where we are now, it seems that this inflation has been passed based again on the inflation that we see with our own suppliers. So we are in a rational competitive landscape. In terms of costs, we are working hard, of course, to keep our costs below the food inflation. Some of our costs are clearly below the inflation. If you look, for instance, at current increase in our personnel costs. They are below the inflation level. Rents are also at this stage, if you look at the evolution of our rents below the current inflation level. So the idea is, we keep the cost base at inflation lower than inflation of our food sales. And with that, we gain operational leverage. Further levers that we have to lower our costs or restrict inflation of our costs in H2 are, as mentioned, the strengthening of the partnership with Intermarché Auxo where we include negotiations on things such as cleaning, maintenance, security, so we can gain on this type of costs. And of course, we still have some cost savings in the organization of the back office of the food stores and the logistics of our stores. And of course, again, to get back to Cdiscount, very strong cost saving plan put in place at Cdiscount. It's the first big cost saving plan at Cdiscount. So there, there is a lot to gain in H2.

Next question from James Grzinic from Jefferies.

David, just a quick one. Can I just clarify? So your view is that the incremental portion of the not announced disposals, which I presume in the original plan related to Cdiscount will be critical in refinancing or redeeming the maturities over the next 18 months? Is that your thinking? And how do you envisage free cash flow gain, and free cash flow developing over this time?

Yes. So again, we have confirmed our EUR 4.5 billion disposal plan. We have EUR 4 billion, so we just have EUR 500 million to complete this plan. And we have various options to complete this plan. So we do not disclose -- do not do that in advance what we are selling, with whom we are discussing, what processes are ongoing. But clearly, we have the means to get the EUR 500 million remaining by the end of next year. If you look back in 4 years, we've done EUR 4 billion, so that's basically EUR 1 billion per year in the last 4 years. We have EUR 5 million (sic) [ EUR 500 million ] left to do in the next 18 months. So we are fully confident we're going to do that. And this accumulated with the disposal already signed are enough to cover the next maturities. Of course, if we have access to the market, we can also do some refinancing as we did before, but we don't need that actually. Cash flows, you saw the quite strong improvements in H1. Of course, the goal is to continue to improve our cash flows looking forward. And our aim is to have a cash flow covering the financial cost and generating net cash flows, that's clearly the case. So we have seen the first improvements in H1. We intend based particularly on the improving sales trend as we see them and cost management to continue to improve the cash flow as said at the beginning of the year and confirmed right now. Next question?

Next question from Rob Joyce from Goldman Sachs.

I've got a couple on GreenYellow first. Just firstly, why is it structured as a plus option? Is there anything around that we need to understand rather than just sort of agreement to sell the asset? Secondly, in terms of the -- what could happen in the interim, are we expecting cash out at GreenYellow over the -- it looks like Q4 intended completion? And can you confirm what the cash out of GreenYellow was in the first half? And then the final one, just on the cash exceptionals. Just wondering when we expect to see these start to roll over?

Yes, Rob. So [ put ] option -- so there's a firm commitment by [indiscernible] before making a firm commitment to sell on our side, we need first to consult with personnel. That's a lot. So that's why we structured this as production. Basically, there's a firm commitment to buy Ardian and there will be the selling happening after the process takes its course by the end of next year -- by the end of this year, sorry. The cash out, cash out by GreenYellow, yes, GreenYellow insists, of course. That's part of GreenYellow strategy. And the price that you see, of course, the EUR 1.4 billion EV translating into EUR 1.1 billion equity includes the fact that GreenYellow is going to make investments at the end of the year, and we'll have some debt at the end of the year, project debt on the project mostly. What I can confirm is that there will be no cash put into GreenYellow by Casino by the end of this year. We have been no cash put by Casino into GreenYellow in the last 3 years, actually, since we opened the capital. So it remained that way. So GreenYellow will continue to invest to develop and the investments are already taken into account in the price, of course. As for cash exceptionals, we have -- still have some in H1, as we have seen. Last year, we had a lot of cash exceptionals in H2 in France. A lot of transformation happening in the banners. This year, we expect that in H2, the cash cost, cash exceptional will be significantly lower than in 2021. So in H2, we should start to see the unwinding the end of these exceptional cash costs.

And next question from Nicolas Champ from Barclays.

I have two actually. Regarding Slide 24, could you please help me to understand correctly, I mean you said you had EUR 405 million in cash and cash equivalents in France. And you said that below in the same page, in the table that you have drawn EUR 410 million from credit lines. So do I understand correctly that, I mean, the cash you have in France at the end of June is basically only the cash drawn from the credit line and nothing else? And the second question is about Slide 21. So there was an increase in the net financial charges in H1 versus last year. I mean, could you help us to -- could you guide regarding the evolution in the second half of the year? I mean basically, my question is even the rise in interest rates. What level of net financial charges should we expect in France for the full year '22, please?

Thank you, Nicolas. Yes, on the first question, we have cash flows going on payments and cash ins regularly. So we draw credit lines. We have cash on the bank. That's been the case every time. So it's nothing special there. So there are indeed EUR 400 million cash at the end of June. Credit lines have grown by EUR 240 million. So if we pay this line, of course, we by using the cash, we have EUR 240 million cash less. That's correct. But basically, we always have cash on balance sheet and growing credit lines or drawing commercial paper depending on the situation. On the interest cost, if you look at cash cost and total interest cost. The fact is last year, we did some refinancing -- 2 refinancing, beginning and the end of the year. And the new debt that we raised is more concentrated in terms of cash coupons in H1 than the previous one. So if you look at cash coupons, they are indeed increasing. If you include the noncash financial costs that are below on the same slide, they include accrued interest, actually, cash financial costs are not increasing. So when you look at that, you should expect that in H2, we should have, of course, less cash coupons than last year. That's basically the right way to look at things. And at this stage, we don't expect financial costs to increase this year. Interest rates, you mentioned them, we still we are at 0, I think, in short-term interest rates. So the term loan, which had variable rates with the floor at 0 has not moved. Same thing for the [ last year ].

There's your next question from Clement Genelot from Bryan Garnier.

I will ask quick questions for my side. The first one is on the business. Do you see any slowdown in the demand on the consumer goods and especially [ volume on ] Monoprix? The second one is on GreenYellow. What have you included in your bridge of EUR 1.4 billion EV to go to EUR 600 million [indiscernible] on GreenYellow? Is it only buy your stake in GreenYellow expected net debt? Or is it also including all the elements regarding [indiscernible] of all bonds? And the last one is on the covenant. Obviously, in Q2, the covenant tests was quite high at 8.2x. You're having quite a limited headroom. So my question is rather direct. Did you try to renegotiate covenants with your banks during the past quarter?

Thank you, Clement. On Monoprix, Monoprix trends are clearly improving, and we see that in the last 4 weeks compared to Q2 at Monoprix, we have textile sales, which we're doing very well, better than the market. Food sales were still a bit soft at the beginning of Q2 and has since improved. The management has taken strong actions to improve the operation in stores since Q2. So we've had a good result there. And that shows, I would say, in the last 4 weeks, both impacts. First, the market. It's obviously better in the Paris area than it was a few months ago with tourists and provisions coming back, and also actions taken by management, strong commercial actions that have proven quite effective. So we are -- right now, we have good numbers at Monoprix, and we will see them continuing right now. GreenYellow, we have 2 things. We have first the bridge EV to equity. So that includes, of course, the [ follow on ] financing plus the net debt at GreenYellow as expected at the end of '22. So that explains the move from EUR 1.4 billion to EUR 1.1 billion. And then, of course, we don't have 100% of renewal. We have only our stake of 72% and that translates into our net position in the end at EUR 765 million. We taking into account EUR 600 million of cash and the rest is EUR 165 million that we reinvest in the company because we strongly believe in the potential of this company was created by 2 people in Casino, it grew from 1 solar panel to this level that you see now and we think as Tikehau and Bpifrance that keeping some stake in this company makes sense and that Ardian's projects for GreenYellow will increase its value substantially in the coming years. Of course, we made the future sell the stake. At the moment, we see fit, we have no constraints on that. So the right value to look at to sum it up, it's EUR 765 million, EUR 600 million is the part of mitigating cash and EUR 165 million is the part we gate has a stake in the new GreenYellow. As for covenants, no, we have not asked our banks for any renegotiation of our covenants. We are meeting our covenants. And we have projections on the next 12 months, quarter-by-quarter to make sure that we will keep them in the next 12 months. So that's clearly been the case since we started with this covenant, and we intend to continue that way.

Gentlemen, we have no more questions by phone.

Thank you very much. Thank you, and have a good day, everyone.

Thank you, ladies and gentlemen. This conference is over. Thank you all for your participation. You may now disconnect.