Cnova First Half 2020

Activity & Financial Performance

July 23, 2020

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," "potential," "predict," "project," "future," "will," "seek" and similar terms or phrases. The forward-looking statements contained in this presentation are based on management's current expectations, which are subject to uncertainty, risks and changes in circumstances that are difficult to predict and many of which are outside of Cnova's control. Important factors that could cause Cnova's actual results to differ materially from those indicated in the forward-looking statements include, among others: maintain its operating results and business generally; the outcome of any legal proceedings that may be instituted against

the Company; changes in global, national, regional or local economic, business, competitive, market or

regulatory conditions; and other factors discussed under the heading "Risk Factors" in the Dutch Annual Report for the year ended December 31, 2019. Any forward-looking statements made in this presentation speak only as of the date hereof. Factors or events that could cause Cnova's actual results to differ from the

statements contained herein may emerge from time to time, and it is not possible for Cnova to predict all of

them. Except as required by law, Cnova undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise.

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Agenda

2Q20 Business Highlights & Strategic Update

1H20 Commercial & Financial Performance

Outlook

3

2nd Quarter 2020 Business Highlights & Strategic Update

Main Highlights

Covid-19:

Cnova remained fully operational and successfully reacted to handle an increasing demand

1

2

3

Strong GMV

Accelerating

Dynamic client

growth

marketplace

recruitment

2Q20 Total GMV

2Q20 Marketplace GMV

2Q20 Customer base

+25% growth

+39% growth

+25% clients

€1bn

+6.2 pts GMV share

25m UMV1

1H20 EBITDA: +€30.3m2 vs N-1

1 Unique Monthly Visitors, according to latest Mediametrie study (May)

4

2 Under IFRS16 accounting standards

Covid-19 update

Company maintained fully operational

Cnova remained fully operational, keeping employees' safety first

  • All headquarter employees have been working from home from 16/03
  • All 10 warehouses have been fully operational under strict sanitary measures (temperature check)

Safety policy will be maintained as long as needed

Headquarter:

Gradually reopening for employees on a voluntary basis under strict measures

very

Only a fraction of overall staff can be in the offices at the same time

progressive

return

Limited access to shared areas (meetings, coffee), masks, disinfection

Warehouses:

Distancing: floor marks and guidance to respect 1m space, break staggering, …

sanitary

Disinfecting: mandatory disinfection of trolleys after each shift, …

measures

maintained

Protecting: gloves, hydroalcoholic gel and masks

5

Covid-19 update

Cnova quickly reacted to successfully face pandemic impact

3 axes to successfully face Covid-19 impacts on the business activity

1

Delivery

Reduced the minimum basket for free home delivery to 25€

adaptation

Transferred orders to express carriers to offset the reduction of national services

2

Customer

service quality

  • Extension of return duration
  • Staff reinforcement to handle the peak in inbound calls

3

Marketplace

Implemented simplified enrolment procedures for new sellers

enrolment

Offered first 6 months of subscription & Fulfilment service for free to new sellers

6

Agenda

2nd Quarter 2020 Strategic Update

Expanding B2C

Products & Services

Fast-growing customer

base driven by enhanced UX

Developing profitable

businesses

Solidarity actions

  • Booming Product Sales
  • Marketplace Acceleration
  • Services Expansion
  • Strong Customer Growth
  • Delivery Time Reduction
  • Ramping Up B2B Offers
  • International Development
  • Supporting the French economy and citizens

7

Expanding B2C Products & Services

+25% GMV growth in 2Q20 driven by accelerating product sales

Marketplace and Direct Sales contributed for 20 pts to GMV growth over the quarter

Product mix evolution towards more recurring and high margin categories

2Q20 GMV growth acceleration

+72%

+54%

+30%

Toys

Garden

DIY

+35%

+29%

+30%

Sport

IT

Small Appliance

Offering expansion to meet new client's expectations

  • Circular economy: x2.5 SKUs1 vs 1Q20
    Launch of a dedicated refurbished tab end 2019

Launch of secondhand in 2Q20: clothes, gaming with EasyCash, books

  • Made in France: creation of 6k SKUs category
  • Daily shop: +2k SKUs from top Casino's references

1. Refurbished and second-hand products

8

Expanding B2C Products & Services

Acceleration of the marketplace

2Q20 Marketplace share

+6.2 pts

46.3%

40.1%

2Q19

2Q20

Total SKUs available

In millionS

+29%

71

55

2Q19

2Q20

FFM SKUs available

In thousands

+57%

99

63

2Q19

2Q20

  • Dynamic marketplace GMV growth: +39% growth during the 2nd quarter, to reach €393 million
    • GMV share at 46.3%, a strong progression of +6.2 pts
    • +29% increase in total marketplace assortment to reach 71m SKUs
  • Fulfillment by Cdiscount: +41% GMV growth to reach 28.1% of GMV share

100k SKUs are now fulfilled by Cdiscount

Record-high sellers recruitment in June

9

Expanding B2C Products & Services

Service expansion still dynamic in a challenging context

    1. fast-growingenergy offer
  • Launch of a 100% French and renewable energy offer
  • Strong +79% subscriber base growth and +57% GMV over the quarter

Strongly impacted by Covid, travel is bouncing thanks to increased France offer

  • Strong rebound in last weeks: x3 GMV for France trips1 vs n-1
  • Several major tour operators specialized in French domestic trips were added:
  • Locatour (+380 offers), Lagrange (+215), VVF (+109), Belambra (+85),

Success of our camping offering, +62% in July

  • Diversifying the offerings, with a new ferry offer (to Corsica)
    New services launched this semester

Exclusive online seller for

Local fresh food

Driving licence

Disney+ launch in France

delivery services

with Le Permis Libre

1. From 1st to 16th July 2020

10

Fast-growing customer base

Customer growth driven by new, loyal clients and traffic dynamism

Strong customer growth driven by new clients

Total clients (in millions)

+25%

3.4

4.3

2Q19

2Q20

4.3m clients in 2Q20: +25% growth

  • Of which close to 1m new clients: +41% growth Strong re-purchase trend: +2.6 pts in 2Q201

Dynamic traffic, enhanced by SEO

Total traffic (in millions)

+34%

235

315

2Q19

2Q20

25m UMV in May, +25% vs n-1

  • +34% traffic in 2Q20
  • +47% free traffic due to SEO optimization

CDAV expansion

CDAV members (in million)

+10%

2.0

2.2

2Q19

2Q20

  • +10% members to reach 2.2m
  • 1.3m express delivery SKUs at end June, +19%
  • Addition of L'Equipe to the press offer

1. 3-months repurchase rate observed in 2Q20

11

Fast-growing customer base

Best-positioned to answer new delivery environment

Best-in class delivery

8

large cities delivered same-day

1.3m

SKUs eligible to express delivery

55%

of small parcels express delivered

24k

pickup points network1

1 Shifting to home delivery

Home delivery share

+16pts

63%

47%

Before lockdown (Feb.)

Current (June)

  • Record-highshares during lockdown
  • Free home delivery for orders >25€
  • Home delivery share at 63% in June 2020
  1. Of which 21k are now running after Covid lockdown
  2. Figures only include direct and Fulfilled by Cdiscount sales

2

Reducing delivery times

Delivery times on small products

- 11%

Before lockdown (Feb.)

Current (June)

-11% delivery time in June vs February

+12 pts of express delivery shares2

Reduced packing time

12

Developing new profitable businesses

Developing our B2B monetization

B2B monetization platform:+23% in 1H20

Growing our suppliers and marketplace sellers's business

2 specialized teams

An efficient

digital

marketing

offer

Cdiscount Ads

Retail Solution

(CARS) launched

in 1H20

For our 1,500 suppliers

For our 12,000 sellers

Product sponsoring

Display

More products visibility for

Targeted ads for suppliers

sellers and suppliers

  • New platform for suppliers and sellers:
    • 100% self-managed
    • Bid to promote their products in the search engine
  • Comprehensive campaigns dashboards and ROI

13

Developing new profitable businesses

Acceleration of international development

A fast-growingasset-light model generating increasing revenues

Existing partnerships with European players

25 countries

88 websites connected

x2.5 vs n-1

x2 GMV growth in 2Q20

14

Solidarity actions

Supporting the French economy and citizens through COVID

Supporting the French economy

  • Maintaining French SMEs activity: simplified marketplace enrollment and new local delivery feature
  • Lead B2B masks supplier: 40m masks distributed to SMEs, professionals and public institutions

Solidarity with impacted people

  • Donations: >60k masks and appliances for nursing staff, 1k tablets for hospitals and nursing homes
  • Logistic and supply support for the shipment of close to 10k tablets to isolated people

15

Agenda

2nd Quarter 2020 Business Highlights & Strategic Update

1H20 Commercial & Financial Performance

Outlook

16

1H20 Commercial & Financial Performance

GMV underlying growth drivers

Solid organic growth driven by an accelerating marketplace

+5.2pts1 +24.8%

+13.5pts

-0.7pt

+2.7pts +12.0%

+1.4pts

+6.7pts

+1.2pts

+6.9pts

1H20

2Q20

  • Marketplace: the driving force of 1H20 growth, with a +20% growth and +39% in 2Q20
  • Direct sales: accelerated in the 2nd quarter driven by more recurring and high margin categories
  • Services: a doubling GMV in Q1, slowed down in Q2 by lockdown impacts on travel
  • Others: increasing contribution of international sales and Cdiscount Pro in particular

1. Of which +3.7 pts Covid-19 hygenic masks impact (40m masks provided to SMEs, professionnals and public institutions)

17

1H20 Commercial & Financial Performance

Gross margin

Gross margin

(% of net sales, € million, y-o-y growth)

+2.8 pts

20.3%

Gross profit

Strong +2.8 pts acceleration in

gross margin as well as strong double-

digit growth in gross profit thanks to:

Marketplace GMV share reaching

17.5%

growth

+21.9%

€213m

€174m

1H191H20

high levels: 42.6% in 1H20 (+4.7 pts)

Product mix evolution: more

recurring and high margins products

(Garden, DIY, Sport, Leisure)

Development of B2C and B2B

monetization revenues

18

1H20 Commercial & Financial Performance

SG&A

SG&A

(% of net sales)

19.4%

18.9%2.4%

SG&A accounted for 19.4% of net sales in

1H20, increasing by +0.5 points y-o-y

Fulfillment (8.4%; +0.2 pt): full year

2.3%

4.5%

3.9%

4.9%

3.7%

impact of the new 60,000 sqm warehouse

Marketing (3.7%; -0.2pt): increased free

traffic and limited off-line campaigns

during lockdown

Tech & Content (4.9%; +0.4 pt):

investment acceleration in B2C and B2B

8.2%8.4%

1H191H20

monetization initiatives

G&A (2.4%; +0.1 pt)

Fullfillment Marketing Tech and content G&A

19

1H20 Commercial & Financial Performance

EBITDA

EBITDA1

(€ million)

Before IFRS 16

After IFRS 16

restatement

restatement

EBITDA +€30m increase to reach €48m

32.4

+27.4

5.0

1H19

1H20

48.4

+30.3

18.1

1H19

1H20

  • Outstanding marketplace growth
  • Direct sales margin improvements
  • Increased monetization revenues

1. operating profit/(loss) from ordinary activities (EBIT) adjusted for depreciation & amortization and share based payment expenses

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1H20 Commercial & Financial Performance

Free Cash flow of €36m on a 12-month basis

LTM Free Cash Flow

(€ million, twelve months)

Other cash

Repayment

Change in

FCF before

Financial

FCF from

Change in

EBITDA

operating

& interests

Working

Net CAPEX

financial

continuing

Other

net financial

expenses

expenses

on lease

Capital

expenses

activities

debt

liabilities

55

109

(19)

(32)

36

(78)

(13)

(49)

(13)

(5)

(18)

  • FCF before financial expenses benefited from strong fundamentals to reach +€36m
    • Strong EBITDA improvement: €109m (+€49m vs. 2019)
    • Positive working capital: +€55m notably driven by inventory optimization
  • Other cash operating expenses & taxes: €(19)m, including a €(4)m COVID impact
  • Net capex amounted to €(78) million supporting the strategic shift towards the platform model and monetization initiatives

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Agenda

2nd Quarter 2020 Business Highlights & Strategic Update

1H20 Commercial & Financial Performance

Outlook

22

Outlook

3 strategic priorities levered on a unique combination of assets

  1. Fast expanding marketplace supported by the strong growth of Fulfilment by Cdiscount
  2. Increased B2B revenues driven by digital marketing platform and new B2B offers
  3. International expansion leveraging our products catalog and technology

Growth & Profitability

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Disclaimer

Cnova NV published this content on 23 July 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 July 2020 00:35:02 UTC