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

Good morning, everyone. I'm pleased to hold this presentation today together with Angelique, our CFO. I will start with a short introduction on where we stand in our transformation journey, followed by our key financial indicator for half year '26. Then I will provide you with an overview of '26 first half business achievement per brand. And then Angelique will walk you through our detailed financial performance for the first semester '26, and we'll take your questions at the end of the presentation. Let's start with a quick update then on the turnaround plan status and where do we stand. Casino turnaround is a long-term 3-phase mission, as you know, restore, recover, and grow. And we are not close to achieve the [indiscernible] first phase, restore and recover, and entering into the growth phase when the adaptation and the strengthening of our balance sheet structure will be behind us. We will give you more details on this a bit later on. Our strategic plan Renouveau 2030, has been updated and expanded with the objective to generate value over the period '26, 2030. Let me first start by introducing our main H1 '26 focus. First, Brand and store investment. We have focused our action on creating, testing, launching pilots, and rolling out store concepts as well as defining brand personality. We just inaugurated our new Monoprix brand platform beginning of July in Aix-en-Provence. This Monoprix store recoups all our Monoprix concepts cut into several modules such as modern decoration, beauty, quick meal solution with La Cantine, et cetera. Investing in our franchise development and streamlining our store portfolio to eliminate loss-making stores with profitability as a key driver versus market share at any cost. Continuing cost reductions such as, for example, the preparation of our Paris region headquarters unification in La Défense district, from 3 headquarters to only 1, managing COGS improvement and last but not least, cash management with a follow-up of our detailed CapEx program that includes IT, store remodeling, store opening, for example, and the monitoring and optimization of our remodeling costs for Oxygène, LatAm, Spar, or Casino concepts, for example. Let me now introduce you with our H1 '26 results. I will now guide you through an overview of the key business achievement for our brand. Let's start first with -- let's start with Monoprix. We go to the slide -- just for your recall, Monoprix business unit represents 620 Monoprix and Monop' stores by the end of H1 '26, of which 260 means 42% are owned stores and other than 50 -- 58% of the fleet are franchised. Let me present to you now the more details of Monoprix achievement. Obviously, '26 is a crucial year for the turnaround of Monoprix. Monoprix sales reached EUR 1.95 billion in H1 '26, representing a like-for-like decrease of minus 1% versus last year during the H1. Food sales were significantly impacted during the Q2 '26 by the absence of agreements with several major suppliers, 0.7 point impact on Q2 and our targeted price repositioning initiative that we have started in quarter 2. Monoprix has launched a comprehensive food assortment curation during the H1 2026 with 2 key pillars: strengthening Monoprix differentiation with the redevelopment of our premium private label range, Monoprix Gourmet, the reinforcement of the fresh food offer through our marketplace concept and the expansion of high-growth segments such as sports nutrition, high protein, or functional food, for example, while initiating the rationalization of low turnover products. This food repositioning is a short-term painful, obviously, but a long-term saving and we had to do it. What has been done in '24, '25 for all the brand is happening this year for Monoprix. The turnaround we are operating is crucial because it imply a cultural transformation, a structural transformation, and a commercial transformation. Meanwhile, the Monoprix adjusted EBITDA reached EUR 207 million, representing a growth of 11% versus PY. What are the main Monoprix H1 achievement? First, we have launched a new Monoprix brand platform inaugurate in beginning of July '26, and this store obviously will be the base for our future remodeling. Second, we have continued rollout of our new concept La Cantine, in 7 additional stores during H1 '26. And by the end of the semester, 20 stores are now rolled out with La Cantine concept posting very encouraging double-digit growth. Regarding the food category, Monoprix was focusing on developing fresh category, rolled out of 22 stores with new fruit and veg module, opening the additional of 4 Asian and Mediterranean Food to go concession and the development of north of 80 private label SKUs. And as already shared, the team initiated an assortment curation to strengthen Monoprix singularity and personality and more to come in the second half of the year. Fourth, as far as nonfood is concerned, Monoprix sustained growth in the beauty and fashion category by rolling out the beauty -- the new beauty concept in 14 additional stores. At the end of H1, 29 stores are now rolled out in our fleet and by developing as well new collection supported by 3 new designer partnership in H1 '26 in home decoration as well as fashion categories. We have also worked to continue our digitalization to position Monoprix as an omnichannel brand remain [indiscernible], we developed quick commerce solutions with Uber Eats and Deliveroo, covering today 96% of our store network. Fashion online shopping net sales has grown up by 19% versus PY. In parallel, we kept on working on retail fundamentals by reducing shrinkage that's paying off a lot. Regarding the Monoprix and Monop' store network management, 8 new stores were opened over the period, while 11 underperformings ones were closed. Four owned stores were converted to franchise. Now let's switch to Franprix. Just for recall, Franprix business units represent 1,002 stores by the end of June '26, of which 291 are owned stores and 711 are franchised. Now let me show you in one slide achievement of the first semester. Franprix reached EUR 0.76 billion sales in H1 '26, representing a positive like-for-like growth of 0.8% with an adjusted EBITDA growth by circa 19% versus PY. The execution of the Renouveau strategic plan includes several important achievements. First, the rollout of our performing Oxygène concept in 63 additional stores, summing up now to 170 stores by the end of June '26. As far as our quick meal solution is concerned, we continue to proceed with important space reallocation for snacking. We also launched several customer-focused commercial initiatives, the new loyalty program called Bibi+, with circa 45,000 additional subscribers during the semester, a new price repositioning for the top 150 SKUs. And we have launched new promotional campaign up to minus 80% discount for ice cream, beer, or sun care, for example. Now let's -- no and I forgot to mention that quick commerce as well solution like Uber Eats and Deliveroo covering today plus 49 additional stores with the network. We have worked out an important topic as well, which is our warehouse purchase loyalty rate. We have organized specific surprise events for franchisees, and as well a specific presentation for the fruit and vegetable list, we have a specific exhibition with our franchisees. Finally, we have signed a new deal with Pro Distribution and the investment vehicle of the Zouari family. I mean as you know already, Franprix will now own 100% of Project Capital and will operate around 90 stores. A new entity will be created dedicated to the Franprix store network development owned 60% by the Zouari family and 40% by Franprix. This entity will operate 30 Franprix stores. And last but not least, in terms of store network management, we maintain a disciplined approach with 21 new store openings, 18 store exits, and 3 owned store converted to franchise. Now let's switch to Casino, Spar, and Vival brands. For you recall, Casino, Spar, and Vival business unit in France represent 4,508 selling points at the end of June '26, of which 191, 4% are owned stores and the rest of the fleet are franchised. Now let me show you in one slide the achievements of the first half of the year. Of the 3 brands, sales reached EUR 0.62 billion in H1 '26, posting a positive like-for-like growth of 3.5% with an adjusted EBITDA decreased by EUR 3 million versus PY, mainly driven by the oil price increase due to the some conflict in the Middle East. [On fuel, our Spar Origines concept expanded to 112 stores. Our customer-focused commercial initiatives added circa 70,000 new loyalty app users and repositioned pricing on the top 150 SKUs. ] And in parallel, the team continued to strengthen Casino, Spar, and Vival singularity and personality, thanks to the [indiscernible] for example, the new Spar private label [indiscernible] internally were added to the assortment [indiscernible] team are focused on delivering the best logistic service rate, especially the seasonal peak. The logistics service rate reached 96% during the H1 period, which is a high level in the standard in France. We launched a new functionality of Casino Pro, which is our digital tool allowing anticipated volume commitment for our franchisee well appreciated by our clients. Finally, we have signed the renewal of our partnership with Spar International until 2039, that demonstrates trust in our business model. In terms of store network management, we opened 82 new selling points, and 223 selling points were exited from our network. Additionally, 21 owned stores were converted to franchise. Let's now continue with Naturalia brand. For your recall, Naturalia business unit represents 212 stores at the end of June '26, of which 151, 71% are owned store and 61 store, means 29% are franchised. Let's now show you in one slide the achievement of the first half of the year. Naturalia net sales reached EUR 160 million, representing a positive like-for-like growth of plus 5.7% and an adjusted EBITDA increase by circa 10% versus PY. Main Naturalia achievements, I'm going to present now first rollout of our performing La Ferme concept in 16 additional stores during the first half of the year. Means that by the end of June, we have now 52 stores already rolled out. Naturalia had launched its organic quick meal solution concept 22 additional stores which made it during the first half of the year and end of June, we are reaching 55 -- sorry, 57 stores. Naturalia team also worked out to continue natural by adding 15 new stores with our partner and Deliveroo, covering now 60% of the store fleet. We also launched several customer focus commercial initiative, with price repositioning 85 additional SKUs are now included in this perimeter of the initiative Prix Bas and this initiative now reached 255 SKUs, [indiscernible] more than 300 SKUs per month are regularly launched. The focus of Naturalia remains on organic quality backed by the Oxygène and in terms of store network management,1 underperforming store was closed and 1 new store was opened during the period. Now let's go on sales Cdiscount perimeter. Cdiscount GMV reached EUR 1.3 billion in H1 '26, posting a plus 5.7% growth versus PY, EUR 0.4 billion of net sales and an adjusted EBITDA of EUR 29 million. Starting with our solid B2C performance, we saw sustained 3P momentum with GMV increasing by 12.5% in H1 '26. Our marketplace business grew representing now 71% of total GMV 3 percentage point increase versus H1 2025. Furthermore, our Retail Media business is experiencing strong growth with net sales up 18% compared to last year. We continue to expand our customer base, acquiring plus 1 million new customers in H1 '26 and reaching a repeat purchase rate of 37%. Moving on to our B2B activities. We've, we've been significantly progressing in enhancing the experience of our sellers, resulting in a noticeable 17% reduction in support ticket. Our NPS with sellers has grown by 4.5 points versus PY. Finally, we are leveraging Gen AI in Cdiscount operation to personal customer purchasing experience optimizing acquisition costs and obviously accelerate IT development. Now let me share with you new group initiatives, starting with our store network portfolio streamlining. Key topic for us, as you know, we continue streamlining our store network portfolio to eliminate loss-making stores and coordinate selective expansion with a profitability as a key driver. From Jan to end of June '26, 254 stores left our network. And during the same period of time, we've also opened 112 new stores, and we converted 41 owned stores to franchise. In parallel, we continue to strengthen our franchisee relationship, ensuring a very high level logistic rate with a high focus during seasonal peaks continuously organizing annual franchisee event, sharing news and tracking the performance with a B2B Net Promoter Score. As far as cost reduction and synergy is concerned, we have put a lot of effort in efficiency improvement, cost reduction and CapEx monitoring. In the first half of '26, we successfully finalized the rollout of our 7 group shared service center covering key functions such as IT, accounting, payroll and others. We started the Paris region headquarters reunification planned from November '26 from 3 HQ to 1 Paris site in La Défense. We are continuously managing our CapEx with a detailed calendarization and reduction of our concept remodeling cost per square meters. In parallel, we continue to work on our assortment, including national brand assortment overlapping between Monoprix, Franprix and proximity. As of today, 63.2% of sales are with a common assortment, rationalizing and massifying private label volume, integrating continuously product innovation, close to 600 SKUs were included in our assortment during the H1 '26. Redeveloping our premium private label range, Monoprix Gourmet, to assert Monoprix singularity and personality, 50 SKUs will be launched in November '26. Now let me hand over to Angelique.

Thank you very much, Philippe, and good morning, everyone. Let me first provide the context and financial framework, which is behind this key financial data estimates for our first half of 2026. As the one published in December 2025, this publication is intended to provide the market with preliminary financial information, which remains subject here again to the formal approval of the half year financial statements. As such, this information does not stem from a full set of financial statements since it has not been approved by the Board of Directors and the limited review work by the statutory auditors is underway. However, the financial data has been prepared on a similar basis to that used for preparation of the consolidated financial statements in accordance with the IFRS reference framework. These data are based on the information known by the group as at the date of this presentation and then reviewed by the Board of Directors at its meeting held yesterday. They remain subject to potential adjustments in connection with the approval of the financial statements and the completion of the procedures of the audit of the December 2025 and for the limited review of the interim financial statements as of June '26. The approval of the financial statements on the basis of the going concern assumption remains subject to the successful outcome of our financial restructuring. Here is the summary of our half year financial data estimate. As you can see, the trend is rather positive with, first, a net sales like-for-like growth over the half year period at 0.4%, which is driven by the confirmation of the positive impact of the store concepts on our performance and the strong contribution of fresh products plus the development of the quick meal solutions offering as well as the continuation of the outperformance of the Fashion & Home segment at Monoprix. Second, there is a significant improvement in profitability with plus 14% growth in our adjusted EBITDA, driven by the measures to streamline the store network, the shrinkage reduction and our cost discipline, together with the benefit of purchasing massification under alliances. Our consolidated net loss group share came out at EUR 205 million negative, mainly due to net financial expenses in continuing operations and other operating expenses. Free cash flow before financial expenses remains negative at EUR 30 million. It, however, improved by EUR 23 million versus H1 '25, mainly derived from the growth in our operating cash flow. Let me now indicate here that our H1 2025 consolidated net loss group share and free cash flow before financial expenses had to be restated with regard to the 20% indirect stake we own in GPA, our Brazilian retail group. As a reminder, following the loss of control in GPA in March 2024, the Casino indirect stake in GPA retained by the group was classified as assets held for sale in accordance with IFRS 5. As of December '25, given the ongoing litigation and uncertainties affecting the possibility of transferring our shares, the group concluded that the criteria for held-for-sale classification were no longer met. As a consequence, historical information had to be restated and more details are available in the press release we issued this morning. Let's return to the key financial data estimates for the first half. Our net debt stood at EUR 1.7 billion, up EUR 197 million compared to December position, still impacted by cash outflows from discontinued operations. The group liquidity position was EUR 713 million at the end of June, of which EUR 701 million of available cash at the group cash pool level after mobilization of most of the credit lines other than factoring, reverse factoring and similar programs. There were also EUR 12 million of undrawn overdrafts as of that date. It includes our operational financing, for which the group has obtained from its creditors an extension of the maturity until the 24th of September this year when the RCF and the RCF at the level of Monoprix Exploitation maturity dates had been postponed to September 29 this year. Moving to the market environment. According to Circana data, FMCG category, value sales across all channels are up plus 2.1% in H1 '26. The positive performance of volumes in H1 of plus 1% is combined with a positive inflation of plus 0.9% in our inflationary environment, both are driving the revenue growth. In this context, the convenience stores segment continued to outperform other store formats in H1 in both value, plus 7.5%, and volumes plus 5.9%. Moving to our net sales performance for the first half. Our net sales totaled EUR 4 billion, up 0.4% on a like-for-like basis, as we said. You must split it into a positive growth for our convenience brand, up 0.5% like-for-like, in which you find Casino, Spar and Vival at plus 3.5% this 6 months. Franprix was plus 0.8%, while Naturalia increased by plus 5.7%, but Monoprix declined by 1%. On Cdiscount side, the GMV was up plus 5.7%, led by the marketplace performance, which rose plus 12.5%. On net sales, they declined by 0.6% over the first semester, but were positive on Q2, up 0.2%. Monoprix with EUR 2 billion net sales over the half semester -- the half year, sorry, was down 1%, as we said, of which minus 1.5% in Q2. The nonfood sales representing about 1/3 of net sales were up 0.4% and once again supported the trend driven by Fashion & Home, which is outperforming its market. The food sales, 70% of net sales, were down 1.6%, reflecting, as Philippe mentioned, the temporary supply disruption due to the absence of agreement with certain major suppliers and some targeted price cuts. However, La Cantine rollout continued with 7 additional stores converted over the 6 months, showing an accretive impact on net sales of the shops. In line with Renouveau 2030 strategic plan, Monoprix has embarked on a major transformation during the first half of the year and the brand in its 6 months recorded a minus 0.4% decrease in footfall. In terms of adjusted EBITDA, Monoprix totaled EUR 207 million in H1, up EUR 20 million year-on-year, the change being driven by the reduction in shrinkage and cost savings. Franprix net sales came to EUR 755 million in H1, up 0.8% like-for-like, same on Q2. The good performance of stores converted to the Oxygène concept were therefore plus 4.8% as well as the solid contribution from owned stores with a contribution for plus 2.1% and the warehouse sales to independent franchisees with a growth by 1.8%, all this being slightly offset by the decline in performance of our consolidated master franchises, decreasing by 1.2%. The footfall at Franprix rose by 2.6% in H1 as a result of commercial offering development. There was this new BiBi+ loyalty program with 45,000 additional subscribers during the semester. There was also the new price repositioning on top 150 SKUs. And finally, the development of the quick commerce solutions with both Uber Eats and Deliveroo, covering today 49 additional stores within the network. Franprix adjusted EBITDA totaled EUR 72 million in H1, up EUR 11 million year-on-year, driven by its activity performance and the margin improvement plus cost savings. Casino net sales were growing by 3.5% like-for-like, reaching EUR 619 million in H1. The net sales performance was positively impacted by the efficiency of the supply chain, improving the service rate at 95.4%. There was also the strong performance in fresh products, plus 8.2% over the first semester and the rollout of new concept in H1 with the accretive effect on the net sales. Adjusted EBITDA amounted to EUR 11 million in '25 (sic) [ '26 ], down EUR 3 million year-on-year. The effect of the store network streamlining was not enough to offset the impact of fuel inflation on the logistic costs. Naturalia net sales came to EUR 166 million, a growth by plus 5.7% like-for-like. The brand benefited from the positive momentum of the fresh products, eat fresh products, plus 8%, as well as the continuous success of the new concept, La Ferme, plus the quick meal solution offering. The e-commerce sales also performed well in H1 with double-digit growth of the website, plus 26.7%, while the partnership with Uber Eats on the quick commerce continues to be rolled out, covering 120 (sic) [ 123 ] stores end of June. Naturalia continues to benefit from a very strong footfall, the latter growing by plus 3.5% in H1. Its adjusted EBITDA came to EUR 14 million in H1, up EUR 1 million year-on-year, driven by the volume effects and the cost discipline. As for Cdiscount, the brand has enjoyed positive momentum in H1, thanks to its relaunch strategy initiated over the past few years. Total GMV increased significantly, plus 5.7%. Driven by the strong marketplace performance, GMV growing by 12.5%. Direct sales declined by 3.5%, reflecting a challenging comparison base since Q2 2025, had benefited from the launch of the Nintendo Switch 2. Cdiscount net sales came to EUR 454 million in 2025 (sic) [ 2026 ], down 0.6% of which plus 0.2% growth in Q2. Its adjusted EBITDA came to EUR 29 million in H1, a growth by EUR 2 million year-on-year, supported by the strong growth in site contribution margin driven by the marketplace outperformance and also Cdiscount advertising margin expansion as well as the structural cost discipline and marketing cost rationalization. I remind you that such growth was achieved despite an unfavorable Q1 base effect. By walking through the P&L statement, we arrived at a consolidated net loss of EUR 205 million, including a net loss from continuing operations of EUR 212 million, but a net profit from discontinued operations of EUR 7 million. As regards to continuing operations, the net loss was impacted by EUR 49 million trading profit -- positive trading profit, resulting from an adjusted EBITDA of EUR 326 million, but EUR 277 million of depreciation and amortization. There was an increase in other operating expenses, which amounted to minus EUR 83 million, including EUR 45 million (sic) [ EUR 54 million ] mainly related to financial and organizational restructuring costs and EUR 31 million asset impairment losses, of which EUR 20 million for Franprix goodwill. Finally, there was a negative impact of EUR 176 million from net financial expenses, including the net cost of debt of EUR 94 million, interest expenses on our lease liabilities for EUR 68 million and the financial cost of CB4X at Cdiscount for EUR 14 million. In H1 2026, we reported a free cash flow deficit of EUR 30 million, an improvement of plus EUR 23 million versus H1 '25. This change reflects the growth in our adjusted EBITDA after lease payments for EUR 54 million, but the negative impact of EUR 22 million of change in working capital. Generally speaking, the basis of comparison had been adversely affected versus H1 2025. Back to some background in that respect. As you know, H1 2024, 2 years ago, had been marked by the financial restructuring with a return to normalized payment terms leading to a higher level of disbursement in H1 2024. When moving to H1 2025, this period saw the implementation of the suppliers shared services center with a new organization requiring a complete overhaul of our processes and also a strong activity in June 2025, both leading to an increase in outstanding amounts at the end of June 2025. The consequence of this background is that the positive change recorded in H1 2025 did not recur in H1 2026. Moving to the net debt. If I start from the negative EUR 30 million free cash flow of our previous slide, our net debt position is also impacted by the net financial expenses of EUR 102 million versus EUR 83 million last year, of which EUR 63 million interest paid to our reinstated term loan. There were also negative EUR 45 million cash flows from the discontinued operations and asset disposal, of which EUR 67 million cash out related to the discontinued activities but plus EUR 22 million cash-in from the real estate disposals. We must also deduct EUR 21 million related to litigations prior to 2024, the period of the change of control, and EUR 11 million financial restructuring costs as part of our restructuring project launched in November last year. As a result of all these, our net debt increased by EUR 197 million to EUR 1.7 billion end of June. Moving to our financial covenants. The financial covenants under our financing agreements include this EUR 100 million minimum liquidity on the last day of each month. End of June, the liquidity position was EUR 0.7 billion. The same covenant applies to each month of the subsequent quarter. Our liquidity estimate stands at EUR 0.5 billion end of Q3 2026, of which EUR 0.3 billion is attributable to factoring, reverse factoring and similar programs. Last is our total net leverage ratio at the end of each quarter, which must be below a specific threshold. End of June, the ratio was 6.47 based on a EUR 242 million covenant adjusted EBITDA and EUR 1.463 billion covenant net debt. This is below the threshold of 6.88x. Hence, we are compliant. Such calculation does not take into account any pro forma restatements as granted by the documentation. But I would add that this covenant ratio has been calculated based on those estimated financial data end of June 2026, as the consolidated financial statements for both the year ended December '25 and the 6 months ending June 2026 have not yet been approved by the Board. Such ratio could then subject to a change depending on the adjustment that could be made on this set of data as part of the approval of the financial statement process. Finally, based on the current debt structure, including the drawdowns made at the beginning of the financial restructuring process back to November last year, and based on the financial projections available as of today, the group expects the leverage ratio end of September '26 to exceed the maximum threshold of 6.11x set out in the financial covenant schedule currently under effect. In such circumstances, the group would seek a waiver from its lenders not to use the event of default resulting from a breach of the financial leverage ratio as any means of action, again, under the relevant financing documentation. Let's now focus on the project to adapt and strengthen the financial structure. Here you have the status update of this project, which started back to November. The key terms of the proposals made by either the controlling shareholder, FRH, or the creditors were made public in February, March and July and are detailed in the presentations all available on our website. It's important to highlight that should such a transaction to adapt and strengthen the financial structure be completed, it would result in a significant dilution for existing shareholders. Further to the receipt on July 6 from our Term Loan B creditors and our reference shareholder of binding financial restructuring proposals, the group announced on July 10 that upon the recommendation of the ad hoc committee, the Board of Directors, in the absence of a consensus agreement, decided to elect the shareholders' proposal as the one that best serves the Casino Group corporate interest, subject to, however, improving the terms of the TLB creditors security package by allowing them to benefit from the bank security package and also to get the waiver of the condition precedent requiring the approval of a 2/3 majority of the TLB creditors for amending the safeguard plan. On July 23, the credit committees of all of our banks creditors have given their agreements in principle to the group's request and the Board of Directors could approve the terms of the agreement. The group recalls that the RCF operational financing and Quatrim consents are now valid until 24 September 2026. Furthermore, we indicate that we have obtained from our creditors an extension of the maturity of our operational financing at the same date, excluding the RCF and the RCF Monoprix Exploitation since I said that their maturity is now postponed to September 29. The group now intends, on the basis of the FRH proposal dated June 30, to launch the procedure for amending the safeguard plan and the signing of the conciliation protocol with a view to implementing operations to adapt and strengthen this financial structure by the end of the second half of '26. That concludes my presentation. I'll let Philippe conclude.

Thank you, Angélique, for your details of the presentation. Well, to conclude and before answering your questions, I will say that we're in a dynamic convenience market, and we are at the right place, with the right brands, and at the right moment. We are posting like-for-like positive sales growth for Casino, Spar, Vival, Franprix and Naturalia after an important turnaround of this brand in '24 and '25. We are, in '26, operating this crucial turnaround for Monoprix. This turnaround, as I told you, is a short-term painful, but a long-term saving. By the way, H1 '26 results are in line with our Renouveau 2030 plan and confirm the relevance of our positioning and the successful execution of our strategic plan. We have doubled our EBITDA after lease payments at the end of H1 '26 compared to '25 from EUR 55 million in '25 to EUR 109 million in '26. We will focus during the coming months on execution as always and constantly adapting our model to the market evolution. In '26, Casino's ambition is to achieve breakeven on the free cash flow before financial expenses already mentioned previously. And I would like to thank you for your attention, and we will now answer your questions.

Thank you for waiting. So we have one question from Geoffroy Michalet at ODDO -- two questions actually. First, how do you assess the risk of a longer-than-expected negotiation between shareholders and creditors on your operational performance? I would say that the restructuring decisions taken early July now allow us to move forward according to a well-defined time line. From the outset, we've kept our teams as well as our commercial and financial partners fully informed of the situation, so that we try to maintain our operational performance on track, ensuring the successful execution of our strategic plan. You have a second question, which is, are you able to invest as much as you want because of the current situation? Yes, we continue to honor our investment commitment in line with the plan, allocating capital based on expected returns on investments, but also on the returns that we already demonstrated by the projects completed to date. Another question?

Yes. We have a question. What are your relationships with your key suppliers during Q2 in this inflationary environment? Does the recent resurgence of tension in the Middle East in July increase the risk of contractual renegotiation in the short term? Well, our key suppliers are managed by Everest, which is international purchasing alliance, while Aura, which is a national purchasing alliance, is responsible for the national brands here in France. And we experienced some pressure in the segment of bottled water and the Home & Personal Care category due to the higher plastic cost, which is one point. We also received requests relating to aluminum. Although aluminum prices already declined by early July, but still there is a tension in price on this aspect as well. And if pressure on costs persist like this, it could lead to be application of automatic price adjustment clause we have in some of our contracts and as well on a case-by-case basis to contractual negotiation. But one thing is sure, we'll not accept any price increase without fighting.

Another question is referring to the TLB who stated on July 23 that they were refusing to extend their consent and were preparing an application for the termination of the company's safeguard plan. What are the consequences of this decision for the next steps? So since the request for termination of the plan relates solely to a purely technical default, which is linked to having entered into discussions with our creditors, we do not anticipate that such a default could justify the termination of the plan. So in the interim, anyway, we intend to pursue the modification of our accelerated safeguard plan in accordance with the time line we have determined. This was the last question. Thank you for attending, and available through the IR team if any further questions. Thank you very much. Bye-bye.

Yes. Thank you. Bye-bye.