Cnova NV — Q2 2016 Earnings Presentation
34 slides from Cnova NV's earnings presentation, Jul 26, 2016
Slide 1: Cnova 2Q16 Financial Results
Cnova 2Q16 Financial Results July 26, 2016
Slide 2: Disclaimers
Disclaimers Forward-Looking Statements In addition to historical information, this presentation contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the U.S. Securities Act of 1933, and Section 21E of the U.S. Securities
Slide 3: Agenda
Agenda 2Q16 Highlights 2Q16 Financial Results Brazilian Internal Review Conclusion Outlook & Strategy 3
Slide 4: Key indicators 2Q16
2Q16 Financial Results Key indicators 2Q16 Cdiscount FR Cnova BR € 1,035 € 638 million € 396 million GMV million (-3.7% vs. 2Q15, vs. 2Q15: +12.6% -19.7% constant currency) (constant currency) Marketplace 26.5% 32.4% 16.6% share (2Q15: 18.8%) 2Q15: 28.2% 8.8% € 665 € 392 million € 273 million Net Sa
Slide 5: GMV Growth Breakdown
2Q16 Financial Results GMV GMV1 Growth Breakdown X% Growth at current FX (€ million, y-o-y growth) X% Growth at constant FX2 Cdiscount Cnova Brazil +12.6% +12.6% -30.9% -9.3% 1,141 72 -113 -64 1,035 567 -19.7% 638 574 396 Cnova N.V. Cdiscount Brazil BRL FX impact Cnova N.V. 2Q15 2Q16 GMV reduction
Slide 6: KPIs
2Q16 Financial Results KPIs Marketplace evolution Traffic Items sold y-o-y (million visits) (million) Number of growth 13 sellers 11 (thousand) 11 10 +6.5% 9 +37% +16.6% 15.6 444 14.6 37 Product +22.2% 32 380 8.5 10.4 offerings 26 28 Cdiscount FR (million) 19 +90% -15.6% 6.1 5.1 Cnova BR 26.5% Share
Slide 7: Operational improvements in 2Q16
2Q16 Financial Results Operational improvements in 2Q16 Cdiscount Cnova Brazil Extended delivery offering ERP implementation – Large parcels now delivered on weekdays – Initial impacts being addressed (delivery from 6am to 11pm, in Paris and delays and customer service disruption) surroundings,
Slide 8: Agenda
Agenda 2Q16 Highlights 2Q16 Financial Results Brazilian Internal Review Conclusion Outlook & Strategy 8
Slide 9: Key Figures
2Q16 Financial Results Key Figures Key Figures June 30, 2016 Cnova N.V. Cdiscount France Cnova Brazil (Unaudited) (€ million) (∆ y-o-y) (€ million) (∆ y-o-y) (€ million) (∆ y-o-y) 2nd quarter: GMV 1,035 -3.7%1 638 +12.6% 396 -19.7%1 Net sales 665 -14.1%1 392 +9.1% 273 -27.2%2 Gross profit 86 -25.0%
Slide 10: Net sales Growth Breakdown
2Q16 Financial Results Net sales Net Sales Growth Breakdown X% Growth at current FX (€ million, y-o-y growth) X% Growth at constant FX* Cdiscount Cnova Brazil +9.1% -41.4% -19.4% 826 33 -127 -47 665 360 -19 -27.2% 393 465 273 Cnova N.V. Cnova N.V. Cdiscount Brazil BRL FX impact ICMS impact* 2Q15 2Q1
Slide 11: Gross margin and SG&A
2Q16 Financial Results Gross margin and SG&A Gross margin SG&A (% of net sales) (% of net sales) Cdiscount France Fulfillment Tech and content Marketing G&A Cnova Brazil 19.4% 13.8% 14.9% 12.9% 10.4% 13.9% 14.3% 8.2% 2.9% 2.2% 13.8% 3.6% 10.8% 2.6% 1.8% 2.5% 2Q15 2Q16 2Q15 2Q16 Cdiscount FR: 14.3%
Slide 12: Cdiscount FR Operating EBIT improvement in 2Q16 and 1H16
2Q16 Financial Results Cdiscount FR Operating EBIT improvement in 2Q16 and 1H16 Breakdown of 2Q16 Operating EBIT (€ million) X% % of total Cnova N.V. net sales -0.5% -6.2% +0.1% -6.6% -3 -41 -44 1 Cdiscount France Cnova Brazil Ivory Coast & Holding EBIT 1H16 change vs. 1H15 +11 -57 +5 -41 (€ million
Slide 13: Free cash flow affected by operations in Brazil
2Q16 Financial Results Free cash flow affected by operations in Brazil 2Q16 Free cash flow (€ million, twelve months) Cdiscount France Cnova Brazil Int. & Holding 175 (344) 38 11 (177) (50) (15) (181) Change in Non cash Net loss from CAPEX FCF Working Capital items* continuing activities Cash loss f
Slide 14: Agenda
Agenda 2Q16 Highlights 2Q16 Financial Results Brazilian Internal Review Conclusion Outlook & Strategy 14
Slide 15: Brazilian Internal Review Conclusion
Brazilian Internal Review Conclusion Previous estimate Actual total impact Impact breakdown (R$ million) (R$ million) Part 1 : Employee misconduct in DCs (47 MBRL) Inventory, Reverse 122 105 Logistics Reverse logistics (58 MBRL) Accounts payable (49 MBRL) Part 2: Outstanding orders (20 MBRL)
Slide 16: Agenda
Agenda 2Q16 Highlights 2Q16 Financial Results Brazilian Internal Review Conclusion Outlook & Strategy 16
Slide 17: Cdiscount FR: Status Report on 2016 Priorities
Outlook & Strategy Cdiscount FR: Status Report on 2016 Priorities Customer Service: – New express delivery services (same day), delivery at night, Sunday delivery – Offering of new services to customers – Continued strong growth of Cdiscount à Volonté – Significant improvement of NPS (own products
Slide 18: Cnova BR: Status Report on 2016 Priorities
Outlook & Strategy Cnova BR: Status Report on 2016 Priorities Operational excellence – Out of stock reduction – Focus on fast SEO growth (free traffic): +50% currently – Improvement of customer service, specially delivery time Client services enhancement – Continue to improve customer shopping a
Slide 19: Annex
Annex 1. Complete Financial Statements 2. Definitions 3. Non-GAAP Reconciliations 4. Other Information 19
Slide 20: Consolidated Income Statement 2nd Quarter
1. Complete Financial Statements July 26, 2016 Consolidated Income Statement 2nd Quarter 2015 Change (€ millions, unaudited) 2016 (restated*) Net sales 665.3 825.6 -19.4% Cost of sales (579.6) (711.4) -18.5% Gross profit 85.6 114.2 -25.0% % of net sales (Gross margin) 12.9% 13.8% -96 bps SG&A (Selli
Slide 21: Consolidated Balance Sheet
1. Complete Financial Statements July 26, 2016 Consolidated Balance Sheet June 30, 2015 June 30, 2016 Dec. 31, 2015 (restated*) (€ million, unaudited) ASSETS Cash and cash equivalents 174.7 400.8 414.0 Trade receivables, net 138.7 129.7 121.4 Inventories, net 431.5 415.0 447.2 Current income tax ass
Slide 22: Consolidated Cash Flow Statement
1. Complete Financial Statements July 26, 2016 Consolidated Cash Flow Statement Last Three Months Last Twelve Months at June 30 (€ millions, unaudited) 2016 2015 2016 2015 (restated*) (restated*) Net profit/(loss) from continuing operations (115.1) (24.1) (342.9) (88.0) Net profit/(loss), attributab
Slide 23: Definitions
2. Definitions Adjusted EPS or Adjusted earnings per share – calculated as adjusted net profit/(loss) divided by the weighted average number of ordinary shares outstanding during the applicable period. See “Non-GAAP Reconciliations” section for additional information. Adjusted net profit/(loss) – ca
Slide 24: Non-GAAP Reconciliations
3. Non-GAAP Reconciliations In addition to disclosing financial results in accordance with International Financial Reporting Standards, or IFRS, this earnings release contains non-GAAP financial measures that Cnova uses as measures of its performance. These non-GAAP measures should be viewed as a su
Slide 25: Adjusted net profit/(loss) and Adjusted EPS
3. Non-GAAP Reconciliations Adjusted net profit/(loss) Adjusted earnings per share (Adjusted EPS) Adjusted net profit/(loss) is calculated as net profit/(loss) before restructuring, initial public offering expenses, litigation, gain/(loss) from disposal of non-current assets and impairment of assets
Slide 26: Free cash flow
3. Non-GAAP Reconciliations Free cash flow Free cash flow is calculated as net cash from/(used in) continuing operating activities less capital expenditures (purchases of property, equipment and intangible assets) as presented in our cash flow statement. Free cash flow is a financial measure used by
Slide 27: Gross profit and Gross margin
3. Non-GAAP Reconciliations Gross profit and Gross margin Gross profit is calculated as net sales less cost of sales. Gross margin is gross profit as a percentage of net sales. Gross profit and gross margin are included in this press release because they are performance measures used by our manageme
Slide 28: Net Cash/(Net Financial Debt)
3. Non-GAAP Reconciliations Net Cash/(Net Financial Debt) Net cash/(Net financial debt) is calculated as the sum of (i) cash and cash equivalents and (ii) cash pool balances held in arrangements with Casino Group and presented in other current assets, less (iii) current and (iv) non-current financia
Slide 29: Adjusted EBITDA
3. Non-GAAP Reconciliations Adjusted EBITDA Adjusted EBITDA is calculated as operating profit/(loss) from ordinary activities (operating EBIT) before depreciation and amortization expense and share based payment expenses. We have provided a reconciliation below of this measure to operating profit/(l
Slide 30: Cash loss from activities
3. Non-GAAP Reconciliations Cash loss from activities Cash loss from activities is calculated from entries on the cash flow statement in the following way: net profit/(loss) for the last twelve months, plus depreciation and amortization expense, plus/(income) expenses on share-based payment plans, p
Slide 31: Additional 2nd Quarter Financial Information
4. Other Information July 26, 2016 Additional 2nd Quarter Financial Information (unaudited) Key Figures 2nd Quarter Change Constant (€ millions, unaudited) 2016 2015 Reported Currency (restated*) Gross merchandise volume (GMV) 1,034.7 1,140.7 -9.3% -3.7% Cdiscount France 638.0 566.5 +12.6% Cnova Bra
Slide 32: 2nd Quarter 2015 restatement / IFRS reconciliation
4. Other Information July 26, 2016 2nd Quarter 2015 restatement / IFRS 5 reconciliation 2nd Quarter 2015 Cnova N.V. Restated* Original before IFRS 5 Change (€ millions, unaudited) (as of June 30, 2016) (as of June 30, 2015) GMV 1,140.7 1,154.1 -13.4 Cdiscount France 566.5 572.4 -5.9 Cnova Brazil 574
Slide 33: Selected 1st Half Financial Information
4. Other Information July 26, 2016 Selected 1st Half Financial Information (unaudited) Key Figures 1st Half Change Constant (€ millions, unaudited) 2016 2015 Reported Currency (restated*) Gross merchandise volume (GMV) 2,169.1 2,365.3 -8.3% +0.1% Cdiscount France 1,370.4 1,185.8 +15.6% Cnova Brazil
Slide 34: 1st Half 2015 restatement / IFRS reconciliation
4. Other Information July 26, 2016 1st Half 2015 restatement / IFRS 5 reconciliation 1st Half 2015 Cnova N.V. Restated* Original before IFRS 5 Change (€ millions, unaudited) (as of June 30, 2016) (as of June 30, 2015) GMV 2,365.3 2,402.3 -37.0 Cdiscount France 1,185.8 1,197.5 -11.7 Cnova Brazil 1,17