Cnova NV — FY2018 Earnings Presentation
35 slides from Cnova NV's earnings presentation, Feb 15, 2019
Slide 1: Cnova Full Year 2018 Conference Call
Cnova Full Year 2018 Conference Call February 15, 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 Full Year 2018 Business Highlights & Strategic Update Full Year 2018 Commercial & Financial Performance Outlook 3
Slide 4: Full Year 2018 Key Business Highlights
Full Year 2018 Key Business Highlights 2018 Achievements An acceleration of our strategic plan, proven to be relevant 1 2 3 4 High marketplace New revenue Enhanced customer Strong growth of performance streams experience monetization initiatives Total Marketplace CDAV Monetization GMV GMV membership
Slide 5: Agenda: Marketplace
Agenda Full Year 2018 Business Highlights & Strategic Update Marketplace B2C offerings & services Customer experience Multichannel strategy Monetization initiatives Innovation Corporate Social Responsibility 5
Slide 6: Marketplace: Improved quality for customers and sellers
Marketplace Improved quality for customers and sellers Marketplace share SKUs available Fulfillment by CD share In millionS +2.4 pts +37% +6.9 pts 48 21% 34.3% 32.0% 35 15% 2017 2018 2017 2018 2017 2018 ▪ Dynamic marketplace GMV growth − 1.1 billion euros (+12.3%) − Share of total GMV: 34.3% (+ 2.4
Slide 7: Agenda: B2C offerings & services
Agenda Full Year 2018 Business Highlights & Strategic Update Marketplace B2C offerings & services Customer experience Multichannel strategy Monetization initiatives Innovation Corporate Social Responsibility 7
Slide 8: Many successful events boosting the commercial dynamic
B2C offerings & services Many successful events boosting the commercial dynamic 1 20-year Anniversary ▪ A two-week event for Cdiscount’s 20-year anniversary ▪ 700 exclusive deals at unbeatable prices supported by an ambitious marketing plan 2 Black Friday ▪ Outstanding performance: €57m GMV in one d
Slide 9: Growing services offering meeting even more customer needs
B2C offerings & services Growing services offering meeting even more customer needs ▪ 30% subscriber base increase in 4Q18 compared to 3Q18 ▪ Launch of domestic heating oil offer ▪ A French leading peer-to-peer platform of personal services ▪ Full control to strengthen Cdiscount’s strategy to broade
Slide 10: Rapid expansion of Europe-wide deliveries
B2C offerings & services Rapid expansion of Europe-wide deliveries Direct delivery European partnership marketplaces ▪ Small and heavy products now available in Spain, Germany, Belgium and Italy ▪ This offer now includes 23mn SKUS Sales on 36 marketplaces both in direct from more than 2,400 sellers
Slide 11: Agenda: Customer experience
Agenda Full Year 2018 Business Highlights & Strategic Update Marketplace B2C offerings & services Customer experience Multichannel strategy Monetization initiatives Innovation Corporate Social Responsibility 11
Slide 12: Cdiscount à Volonté (CDAV): program enrichment
Customer experience Cdiscount à Volonté (CDAV): program enrichment +23% membership 34.1% GMV share: +3 points ▪ A new enriched package at 29€ per year enjoying great success ▪ Enrichment of the program during the first semester with numerous dedicated services: unlimited press offer, sharing CDAV be
Slide 13: Enhanced customer experience: Best-in-class customer journey
Enhanced customer experience Best-in-class customer journey Traffic: the mobile acceleration Continued delivery edges #2 in UMV (mobile and desktop1) Mobile in 2018 601 mn visits ▪ Opening of a new 80,000 sqm 63% of traffic 44% of GMV warehouse to handle more same-day delivery eligible products ▪ Hi
Slide 14: Agenda: Multichannel strategy
Agenda Full Year 2018 Business Highlights & Strategic Update Marketplace B2C offerings & services Customer experience Multichannel strategy Monetization initiatives Innovation Corporate Social Responsibility 14
Slide 15: Multichannel Strategy: Roll-out of multichannel concepts
Multichannel Strategy Roll-out of multichannel concepts Showrooms in Géant ▪ Offering an innovative experience for our customers on Home category and High Tech goods ▪ 49 showrooms opened by end 18 (+ 45 vs 2017). More showrooms to be opened in 2019 ▪ Showrooms contributed 1.6 pt to FY18 GMV growth
Slide 16: Agenda: Monetization initiatives
Agenda Full Year 2018 Business Highlights & Strategic Update Marketplace B2C offerings & services Customer experience Multichannel strategy Monetization initiatives Innovation Corporate Social Responsibility 16
Slide 17: Monetization initiatives: Strong Increase
Monetization initiatives Strong Increase Monetization revenues: €64m (+23%) Advertising ▪ Acceleration of the premium packs and sponsored products that more than doubled +16%1 ▪ Launch of Cdiscount Marketing Services, a new self-service platform for partner websites Commissions from ▪ Five new servi
Slide 18: Agenda: Innovation
Agenda Full Year 2018 Business Highlights & Strategic Update Marketplace B2C offerings & services Customer experience Multichannel strategy Monetization initiatives Innovation Corporate Social Responsibility 18
Slide 19: Innovation: Dynamic of innovation strengthened
Innovation Dynamic of innovation strengthened The Warehouse Exotec Multiple awards Incubation program Robotized picking solution “David avec Goliath”: Prize awarded by Bain for the High success rate with 3 out Already successfully best cooperation between a of 5 selected startups implemented in Cest
Slide 20: Agenda: Corporate Social Responsibility
Agenda Full Year 2018 Business Highlights & Strategic Update Marketplace B2C offerings & services Customer experience Multichannel strategy Monetization initiatives Innovation Corporate Social Responsibility 20
Slide 21: CSR: Commitment to best-in-class Corporate Social Responsibility
CSR Commitment to best-in-class Corporate Social Responsibility Environmental initiatives Social involvement Advertising and IA ethics MasterClass IT IT development program mixing theory courses and 3D packing, reduces professional experience cardboard usage (30% less wasted space) – covering 85% of
Slide 22: Agenda: Commercial & Financial Performance
Agenda Full Year 2018 Business Highlights & Strategic Update Full Year 2018 Commercial & Financial Performance Outlook 22
Slide 23: Ecommerce GMV underlying growth drivers
FY 2018 Commercial & Financial Performance Ecommerce GMV underlying growth drivers Ecommerce GMV growth supported by Marketplace, CDAV and Mobile 1 1 Marketplace GMV share 2 CDAV GMV share 3 Mobile GMV share +3 pts +2 pts 34% +6 pts 31% FY17 FY18 44% CDAV membership 34% 32% 38% +23% FY17 FY18 FY17 F
Slide 24: Acceleration of Growth driven by Diversification
FY 2018 Commercial & Financial Performance Acceleration of Growth driven by Diversification Sequential GMV Growth 2018 GMV Organic Growth breakdown Sequential organic GMV growth +1.6 pts 9.30% +1.5 pts +3.9 pts +11.9% +9.3% +9.0% +2.3 pts +6.1% 1Q18 2Q18 3Q18 4Q18 Ecommerce Marketplace * Services Co
Slide 25: Gross Margin
FY 2018 Commercial & Financial Performance Gross Margin Gross margin (% of net sales, € million, y-o-y growth) ▪Strong acceleration (+2 pts) in gross margin as well as high double-digit growth in gross profit thanks to: +2 pts 15.5% – Marketplace GMV share reaching high levels in 2H18 13.5% Gross pr
Slide 26: SG&A
FY 2018 Commercial & Financial Performance SG&A SG&A ▪SG&A accounted for 15.8% of net sales in (% of net sales) FY18, increasing by +0.7 point vs FY17 15.1% 15.8% − Fulfillment (7.8% ; stable): logistics productivity improvements offsetting the 7.8% increase in CDAV eligible SKUs 7.8% − Marketing (2
Slide 27: Sequential profitability improvement with an outperforming Q4
FY 2018 Commercial & Financial Performance Sequential profitability improvement with an outperforming Q4 Quarterly EBITDA y-o-y comparison (€ million) 25.5* +€32m 23.1 (6.3)* FY 2017 FY 2018 6.0 6.5 3.6 0.0 (4.5) (5.9) (10.3) Q1 Q2 Q3 Q4 ▪Quarterly improvement vs 2017 to reach +€19.5m in 4Q18 driven
Slide 28: Key Financial Indicators
FY 2018 Commercial & Financial Performance Key Financial Indicators Cnova N.V. Key Figures 2018 2017 Change € in millions Net sales 2,174.3 2,035.0 +139.2 Gross profit 336.7 274.7 +62.0 Gross margin 15.5% 13.5% 198bps SG&A (344.4) (308.0) (36.4) Operating adj. EBITDA* 25.5 (6.3) +31.9 Cdiscount 29.7
Slide 29: IFRS Restatement Impact
FY 2018 Commercial & Financial Performance IFRS 15 Restatement Impact Cnova N.V. simplified P&L IFRS15 2017 2017 € in millions impact Restated Net sales 2,122.0 (87.1) 2,034.9 Cost of sales (1,833.3) 73.1 (1,760.2) Gross profit 288.7 (13.9) 274.8 Gross margin 13.6% 16.0% 13.5% SG&A (311.6) 3.6 (308.
Slide 30: Solid Positive Free Cash Flow of +€70m
FY 2018 Commercial & Financial Performance Solid Positive Free Cash Flow of +€70m LTM Free Cash Flow (€ million, twelve months) +136 70 (74) 20 25 (18) (49) (26) (5) EBITDA Other cash Change in Net FCF before Net FCF Other* Change in operating Working CAPEX financial interest Net expenses Capital ex
Slide 31: Continued Improvement in Cash Flow
FY 2018 Commercial & Financial Performance Continued Improvement in Cash Flow Last Twelve Months € million FY 2017 June 2018 FY 2018 70 FCF before 1 interest expenses (336) Net CAPEX (69) (75) (74) Change in (5) Net Financial (55) Debt (371) 31
Slide 32: Agenda: Outlook
Agenda Full Year 2018 Business Highlights & Strategic Update Full Year 2018 Commercial & Financial Performance Outlook 32
Slide 33: Outlook for 2019
Outlook Outlook for 2019 1 Pursuing ▪ Significant increase in CDAV express delivery eligible SKUs customer ▪ Acceleration of B2B2C services to cover even more customers needs experience improvement ▪ Rolling out of Cdiscount showrooms in Géant 2 Focusing on ▪ Expected increase in the marketplace tot
Slide 34: Towards a platform strategy
Outlook Towards a platform strategy Products Services ▪ Driven by the marketplace ▪ Development of everyday ▪ More products, faster services with Stootie delivery ▪ Extension of travel & leisure ▪ European-wide activities Customers Partners Technology Innovation Advertising ▪ The Warehouse: supply ▪
Slide 35: Thank you for your attention!
Thank you for your attention!