{ "docId": "019dd923-622c-750b-8b96-66207923d83d", "docSlug": "e203d40c628e", "documentTitle": "Groupe Casino (CO)", "authorId": "51_Muddy_Waters", "authorName": "Carson C. Block", "documentKindSlug": "research-note", "documentKindLabel": "Research note", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2016-03-08 00:00:00", "orientation": "portrait", "aspectRatio": 0.77272725, "pageNumber": 13, "pageCount": 14, "prevPage": 12, "nextPage": 14, "slideType": "preempt_rebuttal", "function": "preempt_rebuttal", "density": "overcrowded", "nDataPoints": 0, "notes": "The slide serves as a critical commentary on corporate communication, specifically analyzing the reliability of management's responses to credit rating agency actions.", "elementsJson": [ "paragraph", "quote_block" ], "metadataConfidence": 0.9, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b96-66207923d83d/13", "deckHref": "/decks/019dd923-622c-750b-8b96-66207923d83d", "deckJsonHref": "/decks/019dd923-622c-750b-8b96-66207923d83d.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b96-66207923d83d#slide-13", "components": [ { "bbox": null, "kind": "callout", "text": "I feel that their failure to mention this report as a possible contributor to the S&P decision is conspicuous but to be expected.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-5372-7340-8f8c-d0bff698393d", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "list", "text": "3) Do you share S&P's concerns on Brazil?", "attrs": null, "subkind": "numbered", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "0ef8a5e2-b74f-4c9a-aadc-13538f941629", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "list", "text": "2) What has triggered the Credit Watch in your view?", "attrs": null, "subkind": "numbered", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "6fb0d23c-8d94-4c4e-93db-18e46870413d", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "paragraph", "text": "S&P's Credit Watch review occurred after the publication of our Q4 2015 sales, in a context of rising concerns over the macroeconomic situation in emerging markets and the recession in Brazil. Casino also announced last week the launch of the sale process for its operations in Thailand after having received strong indications of interest", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "0b7b1653-ef6d-4435-bb6c-b8614a0cdc70", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "paragraph", "text": "S&P placed the Group's BBB- rating under CreditWatch Negative on 15 January, a full month after MWC released its original report and two days after it released it's second. I feel that their failure to mention this report as a possible contributor to the S&P decision is conspicuous but to be expected. Any illusion to it as a catalyst for S&P consideration would give it a credibility they can't afford. The fact that Casino highlights the \"very recent\" reiteration of Casino's investment grade status in item #5 of their \"Casino Group Affirms...\" document released on 21 December, acknowledges the significance of S&P's prompt re-examination of Casino's credit worthiness. If it's a big deal when they say you're good in mid-December, then it's an equally big deal when they downgrade you a month later.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "61a337f7-ad07-4620-b97a-027b243355f5", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "paragraph", "text": "Due to the abbreviated, bulleted nature of their responses, effectively stripping linguistic context I rely on heavily for my analysis, few of the responses offered material indicators of deception. This is not to say the responses are true, but when removed from conversational context any analysis becomes significantly less reliable. Below are those few portions I feel are noteworthy.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "6cc1cb94-2717-4f5d-b5d0-479e59fd5472", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "paragraph", "text": "As we pointed out during our recent Q4 2015 sales update, our Brazilian operations continue to", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "89398099-76a0-402d-b3cc-f9e2a7db51ca", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "paragraph", "text": "defensive to the dismissive on behalf of Casino's management. A dismissive posture is intended to minimize the significance of the allegations. Such a posture would constitute an Inappropriate Level of Concern (2) and should be considered diagnostic.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "e4979039-bb78-4b1e-987d-37bd094641e5", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "In our view, the Credit Watch has been triggered by the following recent developments that may have an impact on Casino's credit profile", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "174157d2-429e-46e6-9f4e-3b846e86e364", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "Independently from short-term market volatility, S&P's credit rating generally relies on the review of a company's Business Risk and Financial Risk profile, factoring long-term strategic drivers and financial trends", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "e29e803a-8e48-44aa-b5d3-a42964f8ced5", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "As a reminder, S&P downgraded Brazil's sovereign credit rating to sub-Investment Grade on 9 September 2015", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "eafb041d-4404-47cd-aad9-c0d4528a87f0", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "In our view, the Credit Watch has been triggered by the following recent developments that may have an impact on Casino's credit profile — Casino Guichard-Perrachon SA", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-5372-7340-8f8c-d7f39bf9b125", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [], "arcBeats": [ { "to": 14, "from": 11, "beatId": "07b320f8-cde5-43e4-b339-4afe8fd431ef", "arcName": "Overcoming the Monster", "arcSlug": "overcoming-monster", "beatName": "The Victory", "beatSlug": "overcoming-monster-the-victory", "evidence": "Conclusion and summary of findings", "position": 2, "confidence": 0.8, "parentBeatName": "Turn", "parentBeatSlug": "turn" } ], "loops": [ { "to": 14, "from": 2, "name": "Cost Of Inaction", "slug": "27-cost-of-inaction", "bestFor": "Urgent budget requests, compliance, risk mitigation", "matchId": "310a99e5-fe49-45ac-b2b2-bb08c4f953e0", "evidence": "Implications of governance problems and aggressive accounting", "position": 1, "objective": "Highlight consequences of ignoring these issues", "structure": "The Status Quo -> The Hidden Costs Accumulating -> The Future State of Inaction -> The Tipping Point", "confidence": 0.6, "description": "Quantify what happens if the audience does nothing" } ], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }