Cnova NV — H1 2018 Earnings Presentation
33 slides from Cnova NV's earnings presentation, Jul 24, 2018
Slide 1: Cnova First Half 2018 Conference Call
Cnova First Half 2018 Conference Call July 24, 2018
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 1st Half 2018 Business Highlights & Strategic Update 1st Half 2018 Commercial & Financial Performance Outlook 3
Slide 4: Summary of 1st Half Achievements
1st Half 2018 Key Business Highlights Summary of 1st Half Achievements 1 Strong development in B2C offerings & services 2 Dynamic progression of the Marketplace 3 Improved customer experience, including fast delivery 4 A Cdiscount à Volonté community that continues to grow 5 Acceleration in multicha
Slide 5: Strong development in B2C offerings & services
Agenda 1st Half 2018 Business Highlights & Strategic Update Strong development in B2C offerings & services Dynamic progression of the Marketplace Enhanced customer experience A growing CDAV community Acceleration in multichannel strategy Material increase in B2B revenue 5
Slide 6: Innovative and Dynamic Commercial Offerings
Strong development in B2C offerings & services Innovative and Dynamic Commercial Offerings 1 New commercial event French days A five-day commercial event launched by the 6 main French e-merchants Over 200 banners participated in this 1st edition Very limited marketing costs thanks to strong me
Slide 7: Delivery to New Countries
Strong development in B2C offerings & services Delivery to New Countries Delivering abroad Deliver neighbouring countries without additional fixed costs − Small products delivery (c. 200,000 SKUs) already available to Belgium & Spain (delivered in 48 hours) and Italy & Germany (delivered in 72 hou
Slide 8: An Extended Range of Customer Services
Strong development in B2C offerings & services An Extended Range of Customer Services We provide inexpensive …and help you install your …while providing a fast and energy for your home… appliance & furniture… convenient financing solution Cdiscount Energy Cinstallé Instant credit « Coup de Pouce »
Slide 9: Dynamic progression of the Marketplace
Agenda 1st Half 2018 Business Highlights & Strategic Update Strong development in B2C offerings & services Dynamic progression of the Marketplace Enhanced customer experience A growing CDAV community Acceleration in multichannel strategy Material increase in B2B revenue 9
Slide 10: Dynamic Progression of the Marketplace
Marketplace dynamics Dynamic Progression of the Marketplace Accelerating Marketplace share Improved fundamentals 42.4 +123 bp 34.7 23.2 Product offering 0.80% 0.71% +39 bp 0.50% 36.0% Claim rate 34.8% 19.4% 32.1% 32.5% 17.8% 10.9% FBC Share Q1 Q2 1H17 2H17 1H18 2017 2018 Dynamic growth of the Mark
Slide 11: Enhanced customer experience
Agenda 1st Half 2018 Business Highlights & Strategic Update Strong development in B2C offerings & services Dynamic progression of the Marketplace Enhanced customer experience A growing CDAV community Acceleration in multichannel strategy Material increase in B2B revenue 11
Slide 12: Customer Journey Enhancements
Enhanced Customer Experience Customer Journey Enhancements The Best Mobile Experience The Fast Delivery Specialist Mobile in 1H17 260k SKUs eligible for same day 63% of trafic 42% of GMV delivery − Same day delivery now In the Top 5 fastest e-commerce available in top 6 largest mobile websites i
Slide 13: Leadership on Social Network: a Way to Reinforce our DNA
Enhanced Customer Experience Leadership on Social Network: a Way to Reinforce our DNA World Cup Campaign Instagram Emmanuel Petit’s vidéo Enterprise challenge Benefiting from the full World Cup effect with the “shouting” campaign – Leveraging on the success of our gamification strategy – 4.7m view
Slide 14: A growing CDAV community
Agenda 1st Half 2018 Business Highlights & Strategic Update Strong development in B2C offerings & services Dynamic progression of the Marketplace Enhanced customer experience A growing CDAV community Acceleration in multichannel strategy Material increase in B2B revenue 14
Slide 15: Cdiscount à Volonté (CDAV): the Key Pillar of our Marketing Strategy
A growing CDAV community Cdiscount à Volonté (CDAV): the Key Pillar of our Marketing Strategy Membership up 33% during 1H18 34.2% GMV share in 1H18, + 4.2 pts vs. 1H17 CDAV customers purchase on average 3x more frequently than non-CDAV customers Enriched CDAV program in 1H18 – Unlimited pres
Slide 16: Acceleration in multichannel strategy
Agenda 1st Half 2018 Business Highlights & Strategic Update Strong development in B2C offerings & services Dynamic progression of the Marketplace Enhanced customer experience A growing CDAV community Acceleration in multichannel strategy Material increase in B2B revenue 16
Slide 17: Multichannel Development: Roll-out of Showrooms in Géant
Acceleration in multichannel strategy Multichannel Development: Roll-out of Showrooms in Géant Offering a new experience to our customers − 350 to 400 sqm per showroom − Showrooms dedicated to Home category and High Tech goods − Interactive terminals 21 showrooms opened at end June 18 Openings
Slide 18: Material increase in B2B revenue
Agenda 1st Half 2018 Business Highlights & Strategic Update Strong development in B2C offerings & services Dynamic progression of the Marketplace Enhanced customer experience A growing CDAV community Acceleration in multichannel strategy Material increase in B2B revenue 18
Slide 19: Strong Increase in Monetization
Material increase in B2B revenue Strong Increase in Monetization Monetization revenue increased by 35% in 1H18 to €29m 1 Developing BtoB revenue Deployment of the digital platform allowing suppliers and vendors to bid on ad spaces on Cdiscount and other websites Advertising More specific client
Slide 20: 1st Half 2018 Commercial & Financial Performance
Agenda 1st Half 2018 Business Highlights & Strategic Update 1st Half 2018 Commercial & Financial Performance Outlook 20
Slide 21: Key Indicators
1st Half 2018 Commercial & Financial Performance Key Indicators Traffic Active customers CDAV membership +4.4% 442 453 +2.4% 58% +12.7% 63% +33% 8.4 8.7 42% 37% 1H17 1H18 1H17 1H18 Up 33% on average PC Mobile during 1H18 Share of GMV 1 Mobile CDAV Marketplace +417bp +92bp +530bp 42% 34% 34% 37% 30%
Slide 22: Acceleration of Growth in 2Q18
1st Half 2018 Commercial & Financial Performance Acceleration of Growth in 2Q18 GMV (y-o-y growth) Net sales (y-o-y growth) Quarterly performance Half-year Quarterly performance Half-year +15.2% +14.6% +14.3% +13.7% +13.9% +13.4% +9.0% +6.1% +7.5% +6.5% +5.1% +5.7% 1Q18 2Q18 1H18 1Q18 * 2Q18 1H18 *
Slide 23: GMV and Marketplace Evolution
1st Half 2018 Commercial & Financial Performance GMV and Marketplace Evolution GMV split 1H18 vs 1H17 5.1% 0.5% 57% 61% +3.8% 38% +8.6% 37% 1H17 1H18 A more and more diversified GMV thanks to multichannel agreement & development of services Direct sales contribution to GMV is expected to decreas
Slide 24: Gross Margin
1st Half 2018 Commercial & Financial Performance Gross Margin Gross margin (% of net sales) Acceleration of +1 pt in gross margin thanks to +107bp 14.7% – Increasing Marketplace GMV share 13.7% 13.4% together with dynamic B2B value- added services – Growth in monetization revenue, especially advert
Slide 25: SG&A
1st Half 2018 Commercial & Financial Performance SG&A SG&A SG&A accounted for 16.8% of net sales in (% of net sales) 1H18, increasing by +0.5 point vs 1H17 Fulfillment Tech and content − Fulfillment (8.4% ; +0.8 pt): increase in Marketing G&A fixed logistic costs by €8 m (1% of sales) 20.1% 16.8% 1
Slide 26: EBITDA
1st Half 2018 Commercial & Financial Performance EBITDA EBITDA y-o-y comparison (€ million, % of net sales) Half year performance Quarterly performance 2017 2018 Improvement vs. 1H17 EBITDA driven by both gross margin optimization and discipline on SG&A despite higher logistic costs: €(4.3)m up +€6
Slide 27: Key Financial Indicators
1st Half 2018 Commercial & Financial Performance Key Financial Indicators Cnova N.V. Key Figures 2018 2017 € in millions Net sales 968.8 845.4 Gross profit 142.9 115.6 Gross margin 14.7% 13.7% SG&A (163.0) (138.0) Operating EBIT (20.1) (22.4) EBITDA (4.3) (10.4) Cdiscount (2.4) (7.1) Net profit/(los
Slide 28: IFRS 15 Restatement Impact
1st Half 2018 Commercial & Financial Performance IFRS 15 Restatement Impact Cnova N.V. simplified P&L 1H17 1H17 IFRS15 impact € in millions Restated Net sales 882.3 (36.9) 845.4 Cost of sales (759.1) 29.4 (729.7) Gross profit 123.2 (7.5) 115.6 Gross margin 14.0% 20.4% 13.7% SG&A (140.2) 2.1 (138.0)
Slide 29: Free Cash Flow
1st Half 2018 Commercial & Financial Performance Free Cash Flow LTM Free Cash Flow (€ million, twelve months) +112 1 (1) (75) (34) (43) (42) (13) (55) EBITDA Other cash Change in Net FCF before Net FCF Other* Change in operating Working CAPEX financial interest Net expenses Capital expenses expenses
Slide 30: Strong Improvement in Cash Flow
1st Half 2018 Commercial & Financial Performance Strong Improvement in Cash Flow Last Twelve Months Last Six Months € million June June June June 2017 FY 2017 2018 2017 2018 FCF before 1 (30) interest (216) expenses (336) (368) +€337m Net (51) (21) (28) CAPEX (69) (75) Change in (55) (75) Net Financ
Slide 31: Outlook
Agenda 1st Half 2018 Business Highlights & Strategic Update 1st Half 2018 Commercial & Financial Performance Outlook 31
Slide 32: Outlook for H2 2018
Outlook Outlook for H2 2018 1 Expected increased growth contribution from Géant showrooms – but lower contribution from multichannel agreement to GMV growth Sustained (transaction with Casino took place in June 17) growth Development of sales delivered to European countries Expected ramp-up in
Slide 33: Thank you for your attention!
Thank you for your attention!