* 2015 group operating profit down 35 pct, as expected
* French operating profit 337 mln euros vs 396 mln
* CFO expects Q1 performance in line with that Q4
* Shares in Casino down 1.28 pct at 0857 GMT (Adds CFO comments, details)
By Dominique Vidalon
PARIS, March 9 (Reuters) - Retailer Casino responded to pressure from U.S. activist investor Muddy Waters with a renewed pledge to cut its debt using the proceeds from disposals and the promise of improved profits and cash flow.
Muddy Waters "shorted" Casino in December, saying the French group was "dangerously leveraged" and managed for the short term, sparking a share price fall.
Casino sought to address these concerns over its balance sheet, saying it would use cash from asset sales to reduce its borrowings, which totalled 6.1 billion euros at the end of 2015.
It also kept its dividend unchanged at 3.12 euros per share.
Casino's shares were 1.28 percent lower at 0857 GMT following the 2015 results, which were in line with analysts' forecasts. The shares have almost clawed back their losses since Muddy Waters' intervention.
In another clear message to its doubters, Casino stuck to its profit and cash flow growth goals for its main French business for 2016.
And Casino's Chief Financial Officer Antoine Giscard d'Estaing told reporters the first two months of the year had shown a good sales trend in France, while a decline in consumer electronics in Brazil, which hit operating profit, was slowing.
Casino reported operating income of 1.45 billion euros ($1.6 billion), down from 2.23 billion in 2014 and in line with analysts forecasts of 1.45 billion euros.
Operating profit fell 15 percent in France to 396 million euros, reflecting a 53 million euro loss in the first half due to a price cutting campaign at its Geant hypermarkets and Leader Price discount stores.
Second-half operating profit reached 390 million euros, however, helped by a sales recovery and cost cuts.
Casino said that for French operations in 2016 it was aiming for earnings before interest, tax depreciation and amortisation (EBITDA) of about 900 million, against 726 million in 2015.
It is also targeting trading profit of more than 500 million euros, and free cash flow of at least 200 million euros after financial expenses and dividend payments, against 6 million in 2015.
Casino also disclosed that its French EBITDA included 167 million euros from property transaction gains last year. Muddy Waters had said this was an area that masked the underlying business performance. ($1 = 0.9111 euros) (Reporting by Dominique Vidalon; Editing by Andrew Callus and Alexander Smith)