Cnova NV — H1 2017 Earnings Presentation
26 slides from Cnova NV's earnings presentation, Jul 25, 2017
Slide 1: Cnova First Half 2017 Conference Call
Cnova First Half 2017 Conference Call July 25, 2017
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This presentation contains forward-looking statements. Such forward-looking statements may generally be identified by, but not limited to, words such as “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “poten
Slide 3: Agenda
Agenda Strategic Realignment Plan Pushing the Customer Experience Envelope 1st Half 2017 Commercial & Financial Performance Outlook
Slide 4: Our Mission: Volume centric 4-step plan
Strategic Realignment Plan Our Mission Volume centric 4-step plan Leverage our excellent traffic growth dynamic into: Sustainable higher GMV and net sales growth rates Enhanced sources of revenues 1 2 3 4 New Multichannel SKU Technological marketplace and delivery expansion advantages revenue en
Slide 5: Maintaining traffic growth is Priority #1
Strategic Realignment Plan Maintaining traffic growth is Priority #1 Traffic evolution Unique Monthly Visitors (“UMV”) y-o-y evolution +13% +12% 253 +20% 234 +12% +16% +15% 210 +11% 208 +14% +14% +14% 192 +11% 186 +11% +5% +2% +6% (1%) (2%) (3%) (4%) (6%) (8%) (9%) 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Jan-
Slide 6: Massive product assortment expansion
Strategic Realignment Plan Massive product assortment expansion SKUs eligible to CDAV fast delivery Massive product range extension across all segments… 4x 1 Reinforce Home market leading position Towards 400k 2 Boost recurring Leisure & Family categories 3 Strengthen diversity and availability o
Slide 7: Significant DC expansion
Strategic Realignment Plan Significant DC expansion DC capacity expansion 80% increase in total DC capacity “Light” product (<30kg) DCs – from 126K m² at end 2016 to 230K m² at end 1Q18 40K m² of warehouse near Orléans (Saran) Planned new 60K m² warehouse near Orly Airport south of Paris (Réau
Slide 8: Enhanced fast-delivery options
Strategic Realignment Plan Enhanced fast-delivery options From packaging in Bordeaux to same-day delivery in Paris in for small parcels (up to 30kg) Same-day delivery for all categories: Already #1 in Heavy SKUs* same-day delivery : 4,000 key Home Furnishing & Appliances references available for
Slide 9: Multichannel initiative = immediate in-store pick-up
Strategic Realignment Plan Multichannel initiative = immediate in-store pick-up Inventory consolidation Cnova managing both Casino’s and Cdiscount’s home furnishing and household appliance inventory Enable immediate in-store availability Already 1,500 SKUs to be quickly rolled out up to 4,000 SK
Slide 10: Technological advantages strengthened
Strategic Realignment Plan Technological advantages strengthened 3 main streams of tech development* Leveraging on our data scientists, big data engineers and programmers to offer the best experience on our websites and app 1 In 2016, app interface has been revamped based 1 on React Native technol
Slide 11: New revenue streams improving marketplace ecosystem
Strategic Realignment Plan New revenue streams improving marketplace ecosystem Marketplace Ecosystem Developing new revenue streams while expanding & improving marketplace ecosystem Fulfillment by Cdiscount quickly developing with share of GMV fulfilled by Cdiscount nearly tripled & other marketin
Slide 12: Agenda: Pushing the Customer Experience Envelope
Agenda Strategic Realignment Plan Pushing the Customer Experience Envelope 1st Half 2017 Commercial & Financial Performance Outlook
Slide 13: Our loyal customers benefit from enhanced services
Pushing the Customer Experience Envelope Our loyal customers benefit from enhanced services CDAV new offers & services A loyal and growing CDAV customer base… CDAV customers continue to double y-o-y CDAV customers purchase on average 4x more frequently than non-CDAV customers Accounted for 32%
Slide 14: Social media now plays a key role in customer experience
Pushing the Customer Experience Envelope Social media now plays a key role in customer experience Social media fans and award Become #1 in social network commitments (Twitter, Facebook, Instagram) Continue to increase our ever-growing fan base to reach 1.5M fans of Facebook and 230k fans on Twitte
Slide 15: Towards a true multi-specialist customer experience
Pushing the Customer Experience Envelope Towards a true multi-specialist customer experience 4 product families, 17 categories Strengthening specific customer experience for each major category Technical goods Family & leisure Large Appliances Computer Small Appliances DIY Identifying purchase tri
Slide 16: Agenda: 1H 2017 Commercial & Financial Performance
Agenda Strategic Realignment Plan Pushing the Customer Experience Envelope 1st Half 2017 Commercial & Financial Performance Outlook
Slide 17: Key performance indicators
1H17 Commercial Performance Key performance indicators Traffic 442 Highest progression since January, among the five main e-retailers in France, in terms of desktop UMV (Médiamétrie) million (+11.5% vs. 1H16) The mobile share of traffic increased +696 bp to 58.1% in 1H17 Active 8.4 CDAV member
Slide 18: KPIs
1H17 Commercial Performance KPIs Traffic Orders Active customers (million visits) (million) (million) +11.4% 12.2 +9.5% 8.4 +11.5% 442 11.0 7.7 396 1H16 1H17 1H16 1H17 1H16 1H17 Mobile CDAV 12.1% 28.8% 51.1% 58.1% Share: Share: +696 bp +1,672 bp Growing mobile share of 59.5% in Main categories i
Slide 19: GMV and marketplace evolution
1H17 Commercial Performance GMV and marketplace evolution Gross merchandise volume Marketplace evolution y-o-y Number of growth +10.5% sellers 1,456 (thousand) 9.5 9.2 8.8 10.0 10.6 1,370 9% +11% 8% Othera) 29% Marketplace b) 32% Product offerings 23 22 (million) 20 Other 18 19 8% direct salesc) 7%
Slide 20: Key financial indicators
1H17 Financial Performance Key financial indicators Cnova N.V. Key Figures1 1H17 1H16 € in millions Net sales 882 858 Gross profit 123 122 Gross margin2 14.0% 14.2% SG&A3 (140) (125) Operating EBIT4 (17) (3) Cdiscount (14) (1) Net profit/(loss) (Continuing operations) (43) (35) Adjusted EPS5 (Contin
Slide 21: Net sales & gross margin
1H17 Financial Performance Net sales & gross margin Net sales Gross margin (€ million, y-o-y growth) (% of net sales, € million, y-o-y growth) +2.9% 882 14.2% -21bp 14.0% 858 Gross profit growth 122 123 +1.3% 1H16 1H17 1H16 1H17 Net sales up +7.6% LFL with Reduction of -21 bp in gross margin: Q1
Slide 22: SG&A and EBIT
1H17 Financial Performance SG&A and EBIT SG&A EBIT (% of net sales) (€ million, % of net sales) Fulfillment Tech and content Marketing G&A 1H16 1H17 14.5% 15.9% (3.2) (17.0) -0.4% 7.5% 7.4% -1.9% 2.4% 1.7% (1.4) 3.1% 3.8% Cdiscount (13.7) (€ million) 2.4% 2.2% -0.2% -1.6% 1H16 1H17 Higher SG&A: 15
Slide 23: Free cash flow
1H17 Financial Performance Free cash flow LTM Free cash flow (€ million, twelve months) (73.5) (166.0) (216.5) (157.2) 64.7 (50.5) Net cash from Net result from Non-cash & continuing Change in Working continuing non-operating operating activities CAPEX FCF Capital activities items* (excluding financ
Slide 24: Agenda: Outlook
Agenda Strategic Realignment Plan Pushing the Customer Experience Envelope 1st Half 2017 Commercial & Financial Performance Outlook
Slide 25: Strategic outlook
Outlook Strategic outlook Cdiscount’s current strategic realignment plan is expected to yield the following results by the end of the 1st quarter of 2018: Nearly quadruple the size of the direct sales product catalogue (equivalent to an approximate €130 million increase in inventory value by YE 20
Slide 26: Thank you for your attention!
Thank you for your attention!