Cnova NV — Q1 2016 Earnings Presentation
35 slides from Cnova NV's earnings presentation, Apr 26, 2016
Slide 1: Cnova 1Q16 Financial Results
Cnova 1Q16 Financial Results April 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: Disclaimers
Disclaimers The Company stresses that the 1st quarter 2015 figures presented herein are preliminary estimates, prepared solely by management. These figures are presented for comparison purposes only, and are subject to change depending on the developments of the ongoing internal review at Cnova Braz
Slide 4: Agenda
Agenda 1Q16 Highlights 1Q16 Financial Results Brazil Update Outlook & Strategy 4
Slide 5: Key indicators 1Q16
1Q16 Financial Results Key indicators 1Q16* Growth of +4.2% on neutral currency GMV € 1,138 Cdiscount FR : +18.3% million Cnova BR: -10.5% on local currency Marketplace 24.2% Cdiscount FR: 29.0% Cnova BR: 15.6% share (1Q15: 16.7%) 1Q15: 25.5% 7.1% Cdiscount FR : +15.3%; MP commissions +59% y
Slide 6: GMV
1Q16 Financial Results GMV GMV1 Growth Breakdown X% Growth at current FX (€ million, yoy growth) X% Growth at constant FX2, Cdiscount Cnova Brazil +18.2% -33.0% -6.9% 0 113 -63 1,222 -135 1,138 +18.3% -10.5% 402 599 623 GMV from operations: +4.2% 736 (constant currency)2 1Q15 France International Br
Slide 7: Accelerated development of marketplace
1Q16 Financial Results Accelerated development of marketplace Continuous development of marketplace as part Marketplace evolution Y-o-Y growth of long term strategy 11 +44% – Positive impact on gross margin Number 10 11 10 improvement as commissions revenues of sellers 8 grow 59% in France and 142
Slide 8: Increase of traffic and active customers
1Q16 Financial Results Increase of traffic and active customers Traffic Active customers* (million visits) (million) +16.6% 493 +3.0% 14.6 423 14.2 46.1% Mobile share 34.0% 1Q15 1Q16 1Q15 1Q16 Continued increase in mobile share of traffic: 50.6% at Cdiscount (+569 bps); 44.0% at Cnova Brazil (+1,8
Slide 9: Increase on number of orders and items
1Q16 Financial Results Increase on number of orders and items Placed orders* Items sold (million) (million) +5.3% +3.3% 9.5 15.7 16.5 5.3 -16.7% 6.3 9.2 Cnova BR 9.3 11.2 +20.4% Cdiscount FR 1Q15 1Q16 1Q15 1Q16 Evolution on orders per customer : Cdiscount FR: Main categories in the quarter: home
Slide 10: Agenda
Agenda 1Q16 Highlights 1Q16 Financial Results Brazil Update Outlook & Strategy 10
Slide 11: Key Figures
1Q16 Financial Results Key Figures March 31, Cnova N.V. Key Figures March 31, 2015 (Unaudited, € million) 2016 Preliminary1 1st quarter: GMV 1,138 1,222 Net sales 742 893 Gross profit 93 100 Gross margin 12.6% 11.2% SG&A (124) (135) Operating EBIT (31) (35) o/w: France 2 (8) Brazil (27) (21) Interna
Slide 12: Net sales
1Q16 Financial Results Net sales Net Sales Growth Breakdown X% Growth at current FX (€ million, yoy growth) X% Growth at constant FX* Cdiscount Cnova Brazil +15.2% -43.8% -17.0% 893 55 6 -0 -96 Contract -98 742 487 France International change Brazil BRL -19 FX impact 274 ICMS impact* -19.7% 468 +15.
Slide 13: Gross margin
1Q16 Financial Results Gross margin Gross margin (% of net sales) Group gross margin of 12.6% Cdiscount France Cdiscount FR: 14.0% (vs. 13.4% in 1Q15) Cnova Brazil − Positive contribution from marketplace expansion and renegotiated factoring 12.6% arrangement, partially offset by 11.2% − Negativ
Slide 14: SG&A
1Q16 Financial Results SG&A SG&A Expenses (ex-new countries*, % of net sales) SG&A of 16.4% of net sales ex-new countries* 16.4% Cdiscount FR: 13.6% (vs. 15.4% in 1Q15) 14.9% − Improvement in SG&A on the back of a higher basis of comparison in the 1st quarter 2015 8.2% 7.7% − Reduction of expens
Slide 15: Operating EBIT turns positive at Cdiscount France
1Q16 Financial Results Operating EBIT turns positive at Cdiscount France Breakdown of 1Q16 Operating EBIT X% % of total reported (€ million) net sales +0.3% -3.6% -0.8% -4.1% 2 -27 -31 -6 Cdiscount FR Cnova Brazil International EBIT2 & Holding1 Positive contribution of Cdiscount FR of € 2 million
Slide 16: Net financial expense deterioration
1Q16 Financial Results Net financial expense deterioration Net financial expense (ex-new countries*, € millions) Net financial expense impacted by: – Renegotiated factoring contract at -22.4 Cdiscount France** – Higher interest rate and cash burn -13.4 situation at Cnova Brazil i) Effect of one-ti
Slide 17: Free cash flow affected by operations in Brazil
1Q16 Financial Results Free cash flow affected by operations in Brazil 1Q16 Free cash flow (€ million, twelve months) Cdiscount France Cnova Brazil 126 Int. & Holding 7 (22) (117) (251) (63) (42) (181) Change in Non cash Net loss from CAPEX FCF Working Capital items* continuing activities Cash loss
Slide 18: Agenda
Agenda 1Q16 Highlights 1Q16 Financial Results Brazil Update Outlook & Strategy 18
Slide 19: Brazilian Internal Review Update
1Q16 Financial Results Brazilian Internal Review Update The internal review is continuing. As of the date of this presentation: The combined impact of the adjustments reported on February 24, 2016, in the amount of R$ 177 million has been revised up to R$ 219 million primarily due to unintentional
Slide 20: Agenda
Agenda 1Q16 Highlights 1Q16 Financial Results Brazil Update Outlook & Strategy 20
Slide 21: Cdiscount FR: 2016 Priorities
Outlook & Strategy Cdiscount FR: 2016 Priorities Delivery services: – Accelerate express delivery services for big products (+30 Kg) – Strengthen loyalty program Cdiscount à Volonté through inclusion of marketplace fulfilment offerings and cash back programs Mobile: – Implementation of ReactNati
Slide 22: Cnova BR: 2016 Priorities
Outlook & Strategy Cnova BR: 2016 Priorities Operational excellence – Out of stock reduction – Focus on fast SEO growth (free traffic) – Improvement of customer service Client services enhancement – Expand Click-&-Collect services – Continue to improve customer shopping and after-sale experience
Slide 23: Annex
Annex 1. Complete Financial Statements 2. Definitions 3. Non-GAAP Reconciliations 4. Other Information 23
Slide 24: Preliminary Consolidated Income Statement
1st Quarter Preliminary Consolidated Financial Statements (unaudited) Preliminary Consolidated Income Statement First Quarter* 2015 Change (€ millions, unaudited) 2016 Preliminary Net sales 741.6 893.0 -17.0% Cost of sales (648.3) (793.0) -18.3% Gross profit 93.3 99.9 -6.6% % of net sales (Gross mar
Slide 25: Preliminary Consolidated Balance Sheet
Preliminary Consolidated Balance Sheet March 31, March 31, Dec. 31, 2015 (€ million, unaudited) 2016 2015 ASSETS Cash and cash equivalents 207.8 400.8 344.8 Trade receivables, net 136.2 127.4 150.8 Inventories, net 402.7 423.1 476.3 Current income tax assets 0.5 0.8 1.7 Other current assets, net 198
Slide 26: Preliminary Consolidated Cash Flow Statement
Preliminary Consolidated Cash Flow Statement Last Three Months Last Twelve Months at March 31 (€ millions) 2016 2015(1) 2016 2015(1) Net profit/(loss) from continuing operations (64.4) (46.6) (244.1) (78.2) Net profit/(loss), attributable to non-controlling interests (1.4) (1.9) (6.5) (2.7) Net prof
Slide 27: Additional Preliminary 1st Quarter Financial Information
Additional Preliminary 1st Quarter Financial Information (unaudited) Preliminary Key Figures First Quarter1 Change Constant (€ millions, unaudited) 2016 2015 Reported Currency Preliminary Gross merchandise volume (GMV) 1,137.9 1,222.0 -6.9% +4.2% Cdiscount France 732.4 619.4 +18.3% Cnova Brazil 401.
Slide 28: 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 29: Non-GAAP Reconciliations: Adjusted net profit
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 30: Non-GAAP Reconciliations: 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 31: Non-GAAP Reconciliations: Gross profit and 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 32: Non-GAAP Reconciliations: 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 33: Non-GAAP Reconciliations: 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 34: Non-GAAP Reconciliations: 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 35: First Quarter 2015 preliminary restatement reconciliation
First Quarter 2015 preliminary restatement reconciliation First Quarter 2015 Cnova N.V. Preliminary* Original Change (€ millions, unaudited) (on March 31, 2016) (on March 31, 2015) GMV 1,222.0 1,248.2 -26.2 Cdiscount France 619.4 625.1 -5.7 Cnova Brazil 599.2 613.7 -14.5 International 3.3 9.4 -6.1 N