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 |
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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
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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
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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
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Expanding B2C Products & Services
Service expansion still dynamic in a challenging context
- 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
- Of which 21k are now running after Covid lockdown
- 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
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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
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Agenda
2nd Quarter 2020 Business Highlights & Strategic Update
1H20 Commercial & Financial Performance
Outlook
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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 |
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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
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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 | 20 |
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
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Outlook
3 strategic priorities levered on a unique combination of assets
- Fast expanding marketplace supported by the strong growth of Fulfilment by Cdiscount
- Increased B2B revenues driven by digital marketing platform and new B2B offers
- International expansion leveraging our products catalog and technology
Growth & Profitability
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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