- Strong growth of GMV and net sales:
- GMV : +25.8% (€1,154 million)
- Net sales : +17.5% (€837 million)
- Excellent key commercial performance indicators:
- Traffic : +38.9% (396 million visits)
- Orders/customer : +5.4%
- Items/customer : +4.3%
- Mobile share of traffic : 36.9% of total traffic vs 24.7% in 2Q14
- Significant sequential improvement in France & Brazil in 2 nd quarter 2015 in view of important investments in 1Q15 to fuel future growth:
- Gross margin : +56 basis points
- EBITDA margin : +93 basis points
- EBIT margin : +78 basis points
- Start-up operations in new countries had an impact on operating margin but contributed to growth according to plan
- Last twelve month free cash flow of €27.8 million and €42 million excluding FX impact
- H2 Outlook: increase in 2 nd half 2015 net sales of 17.5% (+/- 1.5%) on a currency neutral basis, in line with 2Q net sales growth
|Y-o-Y||France and Brazil*|
|(Unaudited, € millions)||Reported||Vs. 1Q15||Vs. 2Q14|
|Gross Merchandise Value (GMV)¹||1,154.1||1,248.2||967.8||+19.2%/+25.8%**||-7.5%||+18.2%|
|France and Brazil*||108.6||113.9||106.7||+1.7%||-4.7%||+1.7%|
|% of Net Sales||13.1%||12.6%||14.1%||-100 bps||+56 bps||-100 bps|
|New countries 2||(1.0)||(0.7)||-|
|France and Brazil*||(123.0)||(136.7)||(98.0)||+25.5%||-10.1%||+25.5%|
|% of Net Sales||-14.9%||-15.1%||-13.0%||-189 bps||+23 bps||-189 bps|
|New countries 2||(8.3)||(4.4)||-|
|Operating EBITDA 3||(13.2)||(18.2)||16.3||-180.9%||-66.9%||-126.8%|
|France and Brazil*||(4.4)||(13.2)||16.3||-126.8%||-66.9%||-126.8%|
|% of Net Sales||-0.5%||-1.5%||2.2%||-269 bps||+93 bps||-269 bps|
|New countries 2||(8.8)||(5.0)||-|
|Operating EBIT 4||(23.7)||(28.0)||8.7||-370.9%||-15.5%||-264.6%|
|France and Brazil*||(14.4)||(22.9)||8.7||-264.6%||-37.1%||-264.6%|
|% of Net Sales||-1.7%||-2.5%||1.2%||-290 bps||+78 bps||-290 bps|
|New countries 2||(9.3)||(5.1)||-|
|% of Net Sales||-4.8%||-4.4%||-2.8%|
|Adjusted EPS (in Euros)||(0.06)||(0.06)||(0.02)|
|Change in Operating Working Capital 5***||129.3||160.2||73.7||+55.6|
|Free Cash Flow 6***||27.8||91.6||65.2||-37.4|
|Net cash/(Net financial debt) 7 (period end)||36.3||70.8||(112.9)||+149.2|
- Net sales totaled €837 million, up 17.5% on a currency neutral basis compared to the 2 nd quarter of 2014. The growth rate was 10.7% after taking into account the negative exchange rate impact of (6.8)%.
- Main commercial indicators continued to improve:
- Increased 6-month repurchase rate: 56.0% for customers from Oct. 2014 up from 47.5% for customers from Oct. 2012;
- Increased customer repurchase rate: 3.4 additional orders per customer from Oct. 2014 from 2.5 additional orders per customer from Oct. 2012.
- France and Brazil 9 enjoyed significant sequential improvement in their financial results:
-Gross profit from France and Brazil 9 was €109 million, with an associated gross margin of 13.1% (vs. 12.6% in 1Q15). The current pricing level in both countries is stable and well adapted to the commercial environment of both countries;-SG&A expenses decreased as a percentage of net sales, falling to 14.9% compared to 15.1% in 1Q15. Investments made in the 1st quarter of 2015 to expand warehouse capacity both in Brazil and France are allowing the Group to keep pace with its expanded product selection and to further improve customer delivery services (see "Operational highlights and initiatives" below)
- In terms of fulfillment costs, these increased to 8.3% of sales in 2Q 15 vs 7.8% in 1Q15 and 6.6% in 2Q14 due to the:
- impact of fast growing marketplace;
- changed product mix coming from strong growth of large home appliances and home furnishing items sales;
- doubling of Click-&-Collect pick-up points in Brazil: 516 at the end of June 2015 up from 210 at the end of March 2015;
- Tech and Content costs represented 2.7% of sales in 2Q15, down from 2.9% in 1Q15 and stable compared to 2Q14. G&A costs amounted to 1.8% of sales in 2Q15, down from 2.2% in 1Q15 and up from 1.6% in 2Q14;
- At Cdiscount, 2Q15 SG&A costs were impacted by the opening of the last 5 new specialty web sites in 2015: Comptoirdesparfums.com (luxury beauty products) and Cornerliterie.com (bedding) opened earlier in July in addition to MoncornerKids.com and MonCornerJardin.com (garden) opened last April and Cornerhomme.com, opened last May.
- International expansion has led to an increase in the GMV and net sales thanks to start-up operations in Africa, LatAm and South East Asia. The associated margin investment is weighing on net results as expected and according to plan.
- Gross profit of €107.6 million was up 6.9% on a currency neutral basis (reported basis: +0.8%) compared to 2Q14.
- SG&A expenses (or opex: fulfillment, marketing, IT/content and G&A), totaled €131.3 million.
- Operating EBITDA amounted to €(13.2) million.
- Operating profit from ordinary activities (Operating EBIT) amounted to €(23.7) million, a sequential improvement compared to the previous quarter at €(28.0) million. The 2nd quarter 2015 reported operating EBIT margin was (2.8)%, up from (3.1)% in 1Q15.
- Net financial expense declined from €17.3 million in 2Q14 to €14.8 million in 2Q15. This represented a reduction from 2.3% of net sales in 2Q14 to 1.8% of net sales in 2Q15. The company has been able to offset the impact of the approximate 20% increase in the Brazilian interest rate (SELIC) in the period through:
- Net income amounted to €(40.2) million of which €(36.2) million was attributable to equity holders of Cnova.
- The operating working capital change improved by €55.6 million.
- Capex increased by €29.4 million primarily due to IT investments in search engine improvements and enhanced mobile platforms. In 1H15, capex represented 2.6% of net sales, compared to 2.1% in 1 st half 2014.
- Free cash flow (FCF) amounted to €27.8 million and €42 million excluding FX impact.
- Colombia - 266 at the end of June 15, 30% of 2Q total sales;
- Thailand - 457 at the end of June 15;
- roll-out in Vietnam;
- mobile platforms:
- Colombia 41% of 2Q traffic;
- Thailand 42%;
- Vietnam 27%
Cnova's operations in Africa continue to expand, with strong growth in the Ivory Coast which has extended its delivery catchment area to Burkina Faso and Mali.
- Customer service: thanks to warehouse expansion investments made during the first six months of 2015, the following heavy product (weighing more than 30 kg) delivery enhancements are scheduled to be rolled-out during the fall of 2015:
- Next-day delivery to all pick-up points in metropolitan areas of Paris, Lyon, Lille and Marseille;
- Accelerated roll-out in Brazil with the launch in 3Q15 of over 400 pick-up points.
|1) Gross Merchandise Volume (GMV) = product sales + other revenues + marketplace business volumes (calculated based on approved and sent orders) + taxes. GMV is calculated using data for orders that have been approved and sent.|
|2) New countries: Colombia, Ecuador, Panama, Thailand, Vietnam, Ivory Coast, Senegal, Cameroon, Burkina Faso 3) Operating EBITDA is calculated as operating profit (loss) before restructuring, initial public offering expenses, litigation, gain/(loss) from disposal of non-current assets and impairment of assets and before depreciation and amortization expense and share based payment. 4) Operating profit (loss) before restructuring, litigation, initial public offering expenses, gain / (loss) from disposal of non-current assets and impairment of assets.|
|5) Change in operating working capital is calculated as the sum of change in inventory, operating payables and operating receivables and other (see Cash Flow Statement).|
|6) Net cash from (used in) operating activities less capex (see Cash Flow Statement). 7) 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 financial debt - See Non-GAAP Reconciliations section of this press release for additional information 8) Unique Customer - customer who has purchased a least once over the considered period but counted as a single customer irrespective of the number of orders placed by that customer over the considered period. 9) France and Brazil includes Holding expenses|
Conference Call and Webcast connection details:Webcast: cnova.com/investor-relations/events-and-presentations.aspx Participant Dial-In Numbers: Toll-Free Brazil 0 800 891 6221 France 0 800 912 848 UK 0 800 756 3429 USA 1-877-407-0784 Toll 1-201-689-8560 Replay Dial-In Numbers: Toll-Free 1-877-870-5176 Toll 1-858-384-5517 Available From: July 23, 2015 at 13:00 ET / 19:00 CET To: July 30, 2015 at 23:59 ET July 31, 2015 at 05:59 CET Replay Pin Number: 13612210 Presentation materials to accompany the call will be available at cnova.com on July 23, 2015. An archive of the conference call will be available for a limited time at cnova.com following its conclusion. HUG#1940672