TRANSPORTATION: Elo/Auchan (ELOFR; NR/BB Neg) gaps in our knowledge

(owned by the Mulliez family)

Below questions are the gaps in understanding we referenced. Reminder this is the 4th largest issuer in €HY with ~€4.5b outstanding in public bonds. The new April 28s are -11pts in 6-months and will likely be in the running for worst performing consumer issuance YTD.

1. Margins:
   Carrefour seemed to have been more competitive on prices (discounted -10%) which supported it holding onto market share. Most impressively cost reductions allowed them to still expand their margins. Structurally;
   1. why are you not able to do the same (prices only -0.6% while volumes -4%)?
   2. IF the above is due to the larger format stores (which is what you seem to flag) how does acquiring the casino hyper (26) and super (68)- market stores help?
   3. how is your outlook on store formats different to competitors; Casino (who decided to focus on convenience) and Carrefour (seems to have side-lined itself from the Casino bid - taking ~25 stores)?
   4. are you concerned that despite an economic slow-down we are yet to see hypermarkets report any strength?; reported basket sizes are still falling and hyper performance reported by both you and Casino point to strong underperformance in the 1H.
   5. can you please give updates on how private label sales as proportion of total sales is trending?
2. Property holdings;
   1. can you clarify if the property arm is connected to the retail business (if any locations have Auchan stores, is it the key retailer in those locations etc)? How much of your retail footprint do you own in addition (outside the RE arm)?
   2. can you walk us through property yields in particular reconciling reported rental income figures with it?
3. Approach to BS:
   1. you said you are happy with leverage here but do you have any interest in revisiting public markets given refi costs? Under what scenarios would you consider paying down debt/tendering it?
      1. **For reference bonds do have negative pledge so we do not see the need to ask if it is considering issuing under property arm to get cheaper funding - feel free to correct us if you see differently.
   2. you have in the past been rumour of a tie up with competitor Carrefour. Acquisitions to grow market share that is otherwise in decline seems your go to. Can we expect a pause on that in near term given Casino purchases or will you continue to look at inorganic growth opportunities?