Cnova NV — H1 2019 Earnings Presentation
31 slides from Cnova NV's earnings presentation, Jul 24, 2019
Slide 1: Cnova Half Year 2019 Activity & Financial Performance
Cnova Half Year 2019 Activity & Financial Performance July 24, 2019
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 Half Year 2019 Business Highlights & Strategic Update Half Year 2019 Commercial & Financial Performance Outlook 3
Slide 4: 1H19 Achievements
Half Year 2019 Business Highlights 1H19 Achievements 1H19 performance paving the way to sustainable profitable growth 1 2 3 4 Strong +13% GMV …driven by dynamic … and expanding B2C … while enhancing growth in 2Q19 marketplace… services… profitability Total Marketplace Cdiscount Monetization GMV GMV
Slide 5: Progressive Shift towards a Platform Model
Half Year 2019 Business Highlights Progressive Shift towards a Platform Model Products B2C services Customers 2m CDAV members Direct Sales Marketplace 20m unique visitors Leisure Daily Finance Services 9m active customers Europe Technology Sellers & & logistics suppliers Assets monetization / B2B se
Slide 6: 2019 Strategic Update
Agenda 2019 Strategic Update Expanding B2C Products ➔ Marketplace Acceleration & Services ➔ Services Expansion Tightening Bonds with ➔ Cdiscount à Volonté (CDAV) Dynamism our Clients ➔ Brand Awareness Enhancement Developing New ➔ Monetization & B2B Revenue Streams Businesses ➔ International Expansio
Slide 7: Expanding B2C Products & Services: Marketplace Acceleration
Expanding B2C Products & Services Marketplace Acceleration sustained by Quality for Customers and Sellers An outstanding performance… …sustained by a fast-expanding offer and an acceleration of FFM Marketplace share 2Q19 SKUs available Fulfillment by CD share In millionS +3.5 pts +30% +7.4 pts 27% 4
Slide 8: Extending and Diversifying Services Offering
Expanding B2C Products & Services Extending and Diversifying Services Offering 2016 2017 2018 2019 Leisure Financials Daily life Strong and accelerating growth1 More services ▪ Travel: launch of a marketplace of holiday ▪ 2Q19 GMV +41% vs 1Q19 packages ▪ Ticketing: Ticketmaster offer available ▪ 4 p
Slide 9: Focus on the Outstanding Success of Cdiscount Voyages
Expanding B2C Products & Services Focus on the Outstanding Success of Cdiscount Voyages Sizeable French online travel market expected to keep growing at a steady pace 17.3m €23bn users in 2018 market size After offering flights and flash sales, launch of a marketplace of holiday packages ▪ Objective
Slide 10: 2019 Strategic Update
Agenda 2019 Strategic Update Expanding B2C Products ➔ Marketplace Acceleration & Services ➔ Services Expansion Tightening Bonds with ➔ Cdiscount à Volonté (CDAV) Dynamism our Clients ➔ Brand Awareness Enhancement Developing New ➔ Monetization & B2B Revenue Streams Businesses ➔ International Expansio
Slide 11: Cdiscount à Volonté: An Ever-Expanding Loyal Customer Base
Tightening Bonds with our Clients Cdiscount à Volonté: An Ever-Expanding Loyal Customer Base €29 per year Unlimited access to Free unlimited next Over 1m products Private sales and > 200 magazines & day deliveries eligible exclusive offers news papers ▪ 2.0m loyal members − 3x higher purchasing freq
Slide 12: Boosting our Brand through strong Offline and Online Media Presence
Tightening Bonds with our Clients Boosting our Brand through strong Offline and Online Media Presence Raising brand awareness ❑ Unaided awareness: +9pts vs N-1 ❑ The gap narrowed with the leader and widened with the followers Strong media coverage, including TV spot 3m fan base: commited and extendi
Slide 13: 2019 Strategic Update
Agenda 2019 Strategic Update Expanding B2C Products ➔ Marketplace Acceleration & Services ➔ Services Expansion Tightening Bonds with ➔ Cdiscount à Volonté (CDAV) Dynamism our Clients ➔ Brand Awareness Enhancement Developing New ➔ Monetization & B2B Revenue Streams Businesses ➔ International Expansio
Slide 14: Strong Increase in Monetization Revenue Streams
Developing New Businesses Strong Increase in Monetization Revenue Streams Accelerating monetization revenues: +23% in 2Q19 / +14% in 1H19 Marketplace B2B services ▪ Strong growth of premium packs ▪ Acceleration of recently launched services: Cdiscount Transport, Cdiscount Ads, Cdiscount Fintech Comm
Slide 15: Further developing international sales through a platform model
Developing New Businesses Further developing international sales through a platform model 25 countries now covered (+5 vs end of 1Q19) 1 Through Cdiscount.com ▪ Selling our core products and marketplace products to French-speaking customers abroad 2 2 ▪ Growing at a fast pace, driven by Belgium ▪ Mo
Slide 16: 2019 Strategic Update
Agenda 2019 Strategic Update Expanding B2C Products ➔ Marketplace Acceleration & Services ➔ Services Expansion Tightening Bonds with ➔ Cdiscount à Volonté (CDAV) Dynamism our Clients ➔ Brand Awareness Enhancement Developing New ➔ Monetization & B2B Revenue Streams Businesses ➔ International Expansio
Slide 17: Innovation in Constant Progress across all Fields
Committing to Innovation and CSR Innovation in Constant Progress across all Fields ▪ The Warehouse, Cdiscount’s logistics incubator – 2019 new promotion of 5 startups started with the early High-end success of Agrikolis and its farm picking points logistics ▪ Exotec, robotized picking solution – Now
Slide 18: Commitment to best-in-class Corporate Social Responsibility
Committing to Innovation and CSR Commitment to best-in-class Corporate Social Responsibility Green ▪ Rolling-out of a new 3D packing machine (4 in total): reduced parcel wasted space and cardboard usage (-30% in shipping truck traffic) ▪ 85% parcels now packed without any empty space ▪ Agrikolis: fa
Slide 19: Agenda
Agenda Half Year 2019 Business Highlights & Strategic Update Half Year 2019 Commercial & Financial Performance Outlook 19
Slide 20: Ecommerce GMV underlying growth drivers
H1 2019 Commercial & Financial Performance Ecommerce GMV underlying growth drivers Ecommerce GMV growth supported by Marketplace, CDAV and Mobile 1 Marketplace GMV share 2 CDAV GMV share 3 Mobile GMV share +3.3 pts +2.1 pts +5.3 pts 47.2% 37.8% 36.3% 34.5% 41.9% 34.2% 1H18 1H19 1H18 1H19 1H18 1H19 2
Slide 21: Acceleration of Growth driven by Diversification
H1 2019 Commercial & Financial Performance Acceleration of Growth driven by Diversification Sequential organic GMV Growth +13% +11% +9% 1Q19 2Q19 1H19 ➢ GMV organic growth accelerated quarter over quarter, driven by : ▪ Growing contribution from marketplace GMV ▪ Growing contribution from both B2B &
Slide 22: Gross Margin
H1 2019 Commercial & Financial Performance Gross Margin Gross margin (% of net sales, € million, y-o-y growth) ▪Strong acceleration (+2.8 pts) in gross margin as well as double-digit growth in 17.5% gross profit thanks to: +2.8 pts – Marketplace GMV share reaching high 14.7% levels, more than 40% in
Slide 23: SG&A
H1 2019 Commercial & Financial Performance SG&A SG&A (% of net sales) ▪SG&A accounted for 18.9% of net sales in 1H19, increasing by +2.2 point y-o-y 16.7% 18.9% − Fulfillment (8.2% ; -0.2 pt): logistics 8.2% productivity improvements in processes 8.4% and innovation (3D packing, Exotec, …) − Marketi
Slide 24: EBITDA
H1 2019 Commercial & Financial Performance EBITDA EBITDA (€ million) Before IFRS 16 After IFRS 16 ▪EBITDA +€12m increase to reach €18m restatement restatement − Positive as of H1 thanks to a +€9.3m 18.1 improvement before IFRS 16 restatement • Solid marketplace growth +11.8 • Strong expansion of mon
Slide 25: IFRS Restatement Impact
H1 2019 Commercial & Financial Performance IFRS 16 Restatement Impact ▪ IFRS 16 (elimination of the distinction between operating leases and finance leases) was adopted in January 1st 2019 with retroactive application ▪ Main impact: recognition of an asset (the right to use the leased item) and a fi
Slide 26: Key Financial Indicators
H1 2019 Commercial & Financial Performance Key Financial Indicators IFRS 16 restated Non-restated Cnova N.V. Key Figures 1H19 1H18 Change 1H19 1H18 Change € in millions Net sales 995.8 968.8 +27.1 995.8 968.8 +27.1 Gross profit 174.5 142.9 +31.6 174.5 142.9 +31.6 Gross margin 17.5% 14.7% +2.8 pts 17
Slide 27: LTM Free Cash Flow
H1 2019 Commercial & Financial Performance Free Cash flow of €(30)m on a 12-month basis (before IFRS 16 rest.) LTM Free Cash Flow (€ million, twelve months) Change in Other cash Change in FCF before Net operating Working Net financial Net interest Financial EBITDA expenses Capital CAPEX expenses exp
Slide 28: Agenda
Agenda Half Year 2019 Business Highlights & Strategic Update Half Year 2019 Commercial & Financial Performance Outlook 28
Slide 29: Outlook for the 2nd semester 2019
Outlook Outlook for the 2nd semester 2019 1 Growth ▪ Marketplace expansion initiatives well ▪ Acceleration on B2C services mainly online travel on track ▪ International development 2 ▪ Marketplace commissions expected to continue growing Profitability ▪ Monetization revenue streams expected to keep
Slide 30: Thank you for your attention!
Thank you for your attention!
Slide 31: IFRS 16 restated and non-restated Free Cash Flow
APPENDIX IFRS 16 restated and non-restated Free Cash Flow IFRS 16 non-restated IFRS 16 restated Consolidated Cash Flow Statement Last 12-months Last 12-months at June 30 (€ in millions ) June 2019 June 2019 EBITDA 35 60 Other cash operating items (10) (10) Change in operating working capital 26 23 I