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Cnova N.V. : Strong Growth of Net Sales; Gross Margin improvement of +18 bps; Improvement of net financial expense;Increased investment in Logistics and IT; Good Free Cash-Flow generation
AMSTERDAM, April 29, 2015 22:01 - Cnova N.V. (Nasdaq & Euronext in Paris: CNV) ("Cnova" or the "Company") today announced its financial results for the first quarter ended March 31, 2015.
- Strong commercial dynamics: Net Sales growth of +17.8% and GMV growth of +28.2%
- Improving quality of main commercial indicators:
o Increase in the number of items per Unique Customer by +4.2% in 1Q15 year-over-year for Cnova
o Increase in the number of orders per Unique Customer by +11.9% in France and +5.4% in Brazil in 1Q15 year-over-year
o Increase in the mobile share of traffic to 45% at Cdiscount and 25% at Cnova Brazil
- Improvement in Gross Margin excluding Expansion to New Countries by +18 bps as a percentage of net sales
- Increased investment in Logistics and IT for future growth, impacting operating expenses
- Improvement in Net Financial Expense
- Good Free Cash Flow generation of +27.6 MEUR over the last twelve months vs -47.1 MEUR at the end of 1Q14, leading to a positive Net Cash position of +71 MEUR at the end of 1Q15.
On a constant currency basis, over the last twelve months, Free Cash Flow generation improved by 92 MEUR (+25.4 MEUR in 2015 vs -66.8 MEUR in 2014)
Germán Quiroga, Cnova Co-CEO commented: "In the first quarter, Cnova Brazil significantly outperformed the Brazilian eCommerce market. Growth was strengthened by the successful launch of three additional marketplaces. Combined with this quarter's strategic investments to strengthen Cnova Brazil's infrastructure, we are confident in our ability to execute our growth plans."
Emmanuel Grenier, Cnova Co-CEO added: "In the first three months of 2015, Cdiscount continued to achieve fast top-line growth, increased its gross margin and accelerated strategic investments in logistics and IT to enhance customer service and support future growth."
GMV - Consolidated GMV was EUR1,248 million in 1Q15, an increase of 28.2% compared to 1Q14.
Net Sales - Consolidated Net Sales in 1Q15 were EUR915 million, an increase of 17.8% compared to 1Q14.
Gross Profit - Gross Profit increased by +17.6% to EUR113 million in 1Q15 from EUR96 million in 1Q14.
Excluding Cnova's New Countries, Gross Profit increased by +18.3% to EUR114 million in 1Q15 from EUR96 million in 1Q14. Gross Margin expanded by +18bps to 12.6% of net sales from 12.4% in 1Q14, including 1Q15 year-over-year Gross Margin expansion at Cdiscount.
Operating Profit (Loss) and Adjusted EBITDA - Operating Loss Before Other Expenses Excluding Expansion to New Countries 5,6 was (EUR22.9) million in 1Q15 compared to (EUR7.4) million in 1Q14. Adjusted EBITDA was (EUR18.2) million in 1Q15 compared to (EUR1.4) million in 1Q14. The year-over-year decline in both metrics was a result of accelerated strategic investments in the Company's infrastructure and IT platform.
Fulfillment expense increased by 36.4% to EUR73 million in 1Q15, reflecting:
Marketing expense increased 22.7% to EUR21 million in 1Q15. As a percentage of net sales and excluding New Countries, marketing expense declined by 2 bps.
Technology and content expenses increased 43.2% to EUR27 million in 1Q15, driven by increased investments for future growth.
G&A expenses increased 42.4% to EUR21 million in 1Q15, driven by holding costs, the majority of which relate to incremental costs associated with the creation of Cnova as an independent and public company, as well as higher corporate development expense.
Other Expenses - Other Expenses in 1Q15 amounted to EUR14 million , including EUR4 million of expenses related to the listing (including Euronext). Additionally, given the accelerated investments in Cnova's IT platform, the Company took a EUR5 million impairment charge related to certain IT assets.
Financial expenses - Net Financial expense declined 64.3%, from EUR15.0 million in 1Q14 to EUR5.4 million in 1Q15. Excluding the effect of one-time accrued interest on a tax credit of EUR7.1 million in 1Q15, net financial expenses declined by 17.1% to EUR12.5 million, as a result of a stronger balance sheet and the reduction in the average number of installments related to Cnova Brazil's financed sales (from 9.2 average installments in 1Q14 to 7.7 average installments in 1Q15).
Net profit (loss) - Net loss was (EUR40.6) million in 1Q15, compared to (EUR18.7) million in 1Q14.
Adjusted Net Profit (Loss) - Adjusted Net Loss in 1Q15 was (EUR25.1) million, compared to (EUR18.3) million in 1Q14. Adjusted Net Profit Per Share was (EUR0.06) in 1Q15, compared to (EUR0.04) in 1Q14.
Free Cash Flow was EUR28 million over the twelve month period ended March 31, 2015, compared to (EUR47) million over the twelve month period ended March 31, 2014, including EUR178 million in net cash flow from operating activities partially offset by EUR86 million in capital expenditures and EUR64 million of factoring costs.
In addition, Cnova Net Cash benefited from EUR125 million in IPO net proceeds, EUR95 million in relation to the reorganization completed in 2014, partially offset by (EUR30) million of foreign exchange impact.
Net Cash increased by EUR206 million from a Net Financial Debt position of (EUR135) million in
1Q14 to
EUR71 million in 1Q15 .
Cnova will continue to focus on delivering strong top-line growth while gradually improving profitability excluding new countries. Cnova's 2015 priorities remain to:
For the next 9M15 (April 2015 to December 2015), Cnova Net Sales are expected to grow by 19% compared with the same period in 2014, within a plus or minus 150 bps deviation, assuming constant currency .
Cnova N.V. will host a webcast and a conference call at 4:00 p.m. Central European Time tomorrow, Thursday, April 30 to discuss its first quarter 2015 financial results. The conference call may be accessed by dialing +1-877-407-0784 (U.S.) or +1-201-689-8560 (International). A replay will be available approximately one hour after the recording through May 7 , 2015 and can be accessed by dialing +1-877-870-5176 (U.S.) or +1-858-384-5517 (International) using the required pass code 13606889. The live conference call and replay can also be accessed at the Investor Relations section of the Company's website, at www.cnova.com . An archive will be available at this website for at least three months thereafter.
- customers who have made at least one purchase through Cnova's sites during the relevant 12-month measurement period; provided that, because we operate multiple sites, each with unique systems of identifying users, we calculate active customers on a website-by-website basis, which may result in an individual being counted more than once.
- calculated as Operating Profit (Loss) Before Other Expenses and before depreciation and amortization expense and share-based payments. See "Non-GAAP Reconciliations" section for additional information.
- calculated as Adjusted EBITDA excluding the impact related to countries with operations starting after January 1, 2014. See "Non-GAAP Reconciliations" section for additional information.
calculated as net profit (loss) attributable to equity holders of Cnova before Other Expenses and the related tax impacts. See "Non-GAAP Reconciliations" section for additional information.
calculated as Adjusted Net Profit divided by the weighted average number of ordinary shares outstanding during the applicable period. See "Non-GAAP Reconciliations" section for additional information.
- Net cash from operating activities less financial expenses paid in relation to factoring activities and less purchase of property and equipment and intangible assets. See "Non-GAAP Reconciliations" section for additional information.
Gross Profit as a percentage of net sales. See "Non-GAAP Reconciliations" section for additional information.
calculated as Gross Profit excluding the impact related to countries with operations starting after January 1, 2014. See "Non-GAAP Reconciliations" section for additional information.
- comprised of our product sales, other revenues and marketplaces business volumes, after returns, including taxes.
- net sales less cost of sales. See "Non-GAAP Reconciliations" section for additional information.
- share of marketplace business volume as a % of GMV. For France, Marketplace Share of www.cdiscount.com GMV. For Brazil, Marketplace Share of total Cnova's GMV.
- share of traffic on mobile devices excluding specialty and international websites.
- calculated as the sum of (i) cash and cash equivalents and (ii) the current account provided by Cnova or its subsidiaries to Casino pursuant to cash pool arrangements, less financial debt. See "Non-GAAP Reconciliations"section for additional information.
- calculated as operating profit (loss) before restructuring, initial public offering expenses, litigation, gain/(loss) from disposal of non-current assets and impairment of assets.
- calculated as Operating Profit Before Other Expenses excluding the impact related to countries with operations starting after January 1, 2014. See "Non-GAAP Reconciliations" section for additional information.
- calculated as the sum of restructuring, initial public offering expenses, litigation, gain/(loss) from disposal of non-current assets and impairment of assets.
- calculated as trade payables less net trade receivables less net inventories.
total number of orders placed before cancellation due to fraud detection or lack of payment by customers.
- total number of products offered to our customers across all of our sites, including all products offered by us directly and through our marketplaces.
- customers who have 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.
investor@cnova.com
+31 20 795 06 71
directiondelacommunication@cnovagroup.com
+33 6 80 39 50 71
www.cnova.com/investor-relations
(unaudited)
(unaudited)
Gross Profit is calculated as net sales less cost of sales. Gross Margin is gross profit as a percentage of net sales. Gross Profit and Gross Margin are included in this press release because they are performance measures used by our management and board of directors to determine the commercial performance of our business. We have also included Gross Profit Excluding Expansion to New Countries and Gross Margin Excluding Expansion to New countries, which further excludes the net sales and costs of sales related to countries with operations starting after January 1, 2014. In addition, we provide Gross Profit Post Marketing Expenses because it indicates that our growth in sales has been achieved with only limited marketing expenses.
The following tables present a computation of Gross Profit, Gross Margin, Gross Profit Excluding Expansion to New countries, Gross Margin Excluding Expansion to New countries and Gross Profit Post Marketing Expenses for each of the periods indicated:
Adjusted 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. We have also included Adjusted EBITDA Excluding Expansion to New Countries, which further excludes the adjusted EBITDA related to countries with operations starting after January 1, 2014. We have provided a reconciliation below of these measures to operating profit (loss) before restructuring, initial public offering expenses, litigation, gain/(loss) from disposal of non current assets and impairment of assets, the most directly comparable GAAP financial measure.
We have included Adjusted EBITDA and Adjusted EBITDA Excluding Expansion to New Countries in this press release because they are key measures used by our management and board of directors to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA facilitates operating performance comparisons on a period to period basis. In the case of exclusion of the impact of share based compensation, it excludes an item that we do not consider to be indicative of our core operating performance. In the case of exclusion of expansion to new countries, it excludes activities that are still in an early development stage since having only launched in 2014.
The following table reflects the reconciliation of operating profit (loss) before restructuring litigation, initial public offering expenses, gain/(loss) from disposal of non currents assets and impairment of assets to Adjusted EBITDA and Adjusted EBITDA Excluding Expansion to New Countries for each of the periods indicated:
Operating Profit Before Other Expenses Excluding Expansion to New Countries 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 excluding the impact related to countries with operations starting after January 1, 2014. Operating Profit Before Other Expenses Excluding Expansion to New Countries and Net of Factoring Costs further excludes the factoring costs incurred by the Company in discounting sales receivable. We have provided a reconciliation below of these two measures to operating profit (loss) before restructuring, initial public offering expenses, litigation, gain/(loss) from disposal of non current assets and impairment of assets, the most directly comparable GAAP financial measure.
These non-GAAP measures are used by Cnova's management and board of directors to gain a better understanding of the profitability of Cnova before the impact of expansion to new countries, which are still in their early stages of development, and before factoring costs, which are financial expenses specific to the discount of receivables related to sales.
The following table reflects the reconciliation of operating profit (loss) before restructuring litigation, initial public offering expenses, gain/(loss) from disposal of non currents assets and impairment of assets to Operating Profit Before Other Expenses Excluding Expansion to New Countries and to Operating Profit Before Other Expenses Excluding Expansion to New Countries and Net of Factoring Costs for each of the periods indicated:
Adjusted Net Profit/(Loss) Attributable to Equity Holders of Cnova is calculated as net profit/(loss) attributable to equity holders of Cnova before restructuring, initial public offering expenses, litigation, gain/(loss) from disposal of non current assets and impairment of assets and the related tax impacts. Adjusted EPS is calculated as Adjusted Net Profit/(Loss) Attributable to Equity Holders of Cnova divided by the weighted average number of outstanding ordinary shares of Cnova during the applicable period. We have provided a reconciliation below of Adjusted Net Profit/(Loss) Attributable to Equity Holders of Cnova to net profit/(loss) attributable to equity holders of Cnova, the most directly comparable GAAP financial measure.
Adjusted Net Profit/(Loss) Attributable to Equity Holders of Cnova is a financial measure used by Cnova's management and board of directors to evaluate the overall financial performance of the business. In particular, the exclusion of certain expenses in calculating Adjusted Net Profit/(Loss) Attributable to Equity Holders of Cnova facilitates the comparison of income on a period-to-period basis.
The following table reflects the reconciliation of net profit/(loss) attributable to equity holders of Cnova to Adjusted Net Profit/(Loss) Attributable to Equity Holders of Cnova and presents the computation of Adjusted EPS for each of the periods indicated.
Free Cash Flow is calculated as net cash provided (used) by operating activities as presented in our cash flow statement less capital expenditures (purchases of intangible assets and property and equipment) and less the financial expense paid in relation to factoring activities. We have provided below a reconciliation of free cash flow to net cash (used in) from operating activities, the most directly comparable GAAP financial measure.
The following table presents a computation of Free Cash Flow for each of the periods indicated:
The following table presents a computation of Free Cash Flow for each of the twelve months periods ended at the indicated dates :
Net Cash/(Net Financial Debt) is 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. Net Cash/(Net Financial Debt) is a measure that provides useful information to management and investors to evaluate our cash and cash equivalents and debt levels and our current account position, taking into consideration the cash pool arrangements in place among certain members of the Casino Group, and therefore assists investors and others in understanding our cash position and liquidity .
The following table presents a computation of Net Cash/(Net Financial Debt) for each of the periods indicated:
Operating Working Capital is calculated as trade payables less net trade receivables less net inventories as presented in our balance sheet . We have provided a reconciliation below of Operating Working Capital to trade payables, net trade receivables and net inventories, the most directly comparable GAAP financial measures.
Operating Working Capital is a financial measure used by Cnova's management and board of directors to evaluate the cash generation of the business. In particular, the comparison of the Operating Working Capital on a period-to-period basis takes into account our business seasonality .
The following table reflects the reconciliation of Operating Working Capital for each of the periods indicated.
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