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CNOVA N.V.: Strong Cash Generation of EUR 203 million in FY14; Net Cash position of EUR 534 million at year-end, or EUR 1.21/share; Adj. Operating Profit[1] of EUR 35 million in 4Q14 (+34.5% vs. 4Q13), EUR ...
AMSTERDAM, January 28, 2015 - Cnova N.V. (Nasdaq: CNV, Euronext Paris: CNV) ("Cnova" or the "Company") today announced its financial results for the quarter and fiscal year ended December 31, 2014.
Certain capitalized terms used throughout this release are defined at the end of the release. For more detail regarding the summary financial information provided in this release, refer to the financial statements and non-GAAP reconciliations included at the end of the release.
Emmanuel Grenier, Cnova Co-CEO commented: "In 2014, Cdiscount in France continued to show strong growth well ahead of local economic conditions and we expanded Cnova's successful business model to new countries with significant development opportunities."
German Quiroga, Cnova Co-CEO added: "In 2014, we leveraged our competitive advantages in order to continue taking market share, accelerate the growth of our marketplaces across all geographies and improve our strong cash generation."
GMV and Net sales
GMV - Consolidated GMV for 4Q14 was EUR 1,472 million, an increase of 28.6% compared to EUR 1,144 million for 4Q13. Consolidated GMV for the full year 2014 was EUR 4,516 million, an increase of 26.6% compared to EUR 3,567 million for the full year 2013.
GMV growth for both 4Q14 and full year 2014 was driven by strong increases in our direct sales and marketplace business.
GMV in both reporting segments benefitted from significant increases in Mobile Share, which accounted for 21.6% of GMV in France and 10.5% of Cnova Brazil GMV in 4Q14 compared to 14.0% and 4.4% respectively in 4Q13.
Net Sales - Consolidated net sales for 4Q14 were EUR 1,099 million, an increase of 19.7% compared to 4Q13.
The Euro increased by 2.6% against the Brazilian Real from 4Q13 to 4Q14, resulting in a negative impact on Cnova Brazil net sales. On a constant currency basis, Cnova Brazil net sales growth in 4Q14 was 28.6% compared to 4Q13.
Income Statement Highlights
Gross Profit - Gross Profit increased by 20.0% from EUR 141 million in 4Q13 to EUR 169 million in 4Q14, stable as a percentage of net sales at 15.4%. Gross Profit for the full year 2014 was EUR 486 million or 14.0% of net sales, compared to EUR 427 million or 14.7% of net sales in 2013.
Considering the marketing expenses, which are an important element of the Company's pricing strategy, those have reduced as a percentage of net sales from 2.2% to 2.0%, Gross Profit Post Marketing Expenses , as a percentage of net sales, increased from 13.1% in 4Q13 to 13.4% in 4Q14
Operating Profit - Operating Profit Before Other Expenses increased by 23.2% to EUR 32.3 million in 4Q14 compared to EUR 26.2 million in 4Q13. For the full year 2014, it increased by 41.7% to EUR 33 million compared to EUR 24 million in 2013.
Expansion to new countries - Operating Profit Before Other Expenses Excluding Expansion to New Countries , where our eCommerce activities are still in an early development stage since having only launched in 2014, increased 34.5% from EUR 26.2 million in 4Q13 to EUR 35.3 million in 4Q14, or as a percentage of net sales from 2.9% in 4Q13 to 3.2% in 4Q14.
Other Expenses - In connection with its initial public offering, Cnova incurred EUR 16 million of expenses in 2014, of which EUR 11 million were incurred in 4Q14. These expenses are classified under Other Expenses, which totaled EUR 32 million in 2014 and EUR 17 million in 4Q14.
Adjusted EBITDA - Adjusted EBITDA increased by 19.5% to EUR 42 million, or 3.8% of net sales, in 4Q14, compared to EUR 35 million, or 3.8% of net sales, in 4Q13. Adjusted EBITDA increased by 28.1% to EUR 65 million, or 1.9% of net sales, in the full year 2014 compared to EUR 51 million, or 1.8% of net sales, in 2013. Adjusted EBITDA Excluding Expansion to New Countries increased from EUR 35 million, or 3.8% of net sales, in 4Q13 to EUR 45 million, or 4.1% of net sales, in 4Q14.
Financial result - Net financial expense increased by 8.4% to EUR 18 million in 4Q14 compared to EUR 17 million in 4Q13 while reducing as a % of net sales from 1.9% in 4Q13 to 1.7% in 4Q14. For the full year 2014, net financial expense increased by 22.1% to EUR 68 million, compared to EUR 56 million in 2013. The Company was able to partially offset the negative impact on its net financial expense of an increase in the SELIC, or the overnight rate published by the Brazilian Central Bank, from 9.64% in 4Q13 to 11.33% in 4Q14, by reducing the average number of payment installments by 13% from 4Q13 to 4Q14.
Net profit (loss) - Net profit for 4Q14 was EUR 0.8 million, compared to EUR 13.4 million for 4Q13. Net loss for the full year 2014 was EUR -54.4 million, compared to EUR -23 million for 2013.
Adjusted Net Profit (Loss) - Adjusted Net Profit for 4Q14 was EUR 13.8 million, compared to EUR 10.4 million for 4Q13. Adjusted Net Loss for the full year 2014 was EUR -26.9 million, compared to EUR -24.0 million for the full year 2013. Therefore, Adjusted Net Profit Per Share for 4Q14 was EUR 0.03, compared to EUR 0.03 in 4Q13, and EUR -0.06 for FY14 compared to EUR -0.06 for FY13.
Cash Flow and Cash Position
Net sales in 1Q15 are expected to grow 17.0%, within a plus or minus 200bps deviation, compared with 1Q14 .
On November 25, 2014, Cnova completed the initial public offering (IPO) of 26,800,000 of its ordinary shares on the NASDAQ Global Select Market under the symbol CNV. On December 19, 2014, the underwriters of the IPO partially exercised their over-allotment option with respect to 2,357,327 additional ordinary shares. As a result, in its IPO, Cnova issued a total of 29,157,327 ordinary shares, representing 6.6% of its outstanding shares, and raised gross proceeds of $ 204 million. As of December 31, 2014, 441,297,846 ordinary shares were outstanding. On January 23, 2015, the Company also completed a secondary listing of its ordinary shares on Euronext Paris. The Company did not issue or offer any new equity capital in conjunction with the listing.
Cnova N.V. will host a webcast and conference call at 10:00 a.m. Eastern Time tomorrow, Thursday, January 29, to discuss its fourth quarter and fiscal year 2014 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 two hours after the recording through Thursday, February 5, 2015 and can be accessed by dialing 1-877-870-5176 (U.S.) or 1-858-384-5517 (International) using the required pass code 13599440. The live conference call, presentation materials and subsequent replay can also be accessed at www.cnova.com/investor-relations . An archived recording of the call will be available at this website for a limited time thereafter.
- customers who have made at least one purchase through our 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.
ross Profit as a percentage of net sales. 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.
- calculated by reducing the Gross Profit of marketing. See "Non-GAAP Reconciliations" section for additional information
- For France, represents marketplace share on www.cdiscount.com , and for Brazil represents marketplace share on www.extra.com.br .
- Share of placed orders value from mobile devices excluding specialty 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.
- change in cash and cash equivalents during the applicable period.
- calculated as operating profit (loss) before restructuring, initial public offering expenses, litigation, gain/(loss) from disposal of non-current assets and impairment of assets.
or - 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 by deducting factoring costs from Operating Profit Before Other Expenses. See "Non-GAAP Reconciliations" section for additional information.
- calculated as Operating Profit Before Other Expenses and Net of Factoring Costs 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.
Total number of orders placed before cancellation due to fraud detection or customers not paying for their order.
-total number of products offered to our customers across all of our sites, taking into account all products offered by us directly and through our marketplaces.
investor@cnova.com
+33 1 53 70 55 90
directiondelacommunication@cnovagroup.com
+33 6 80 39 50 71
www.cnova.com/investor-relations
(unaudited)
(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. 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 table presents a computation of Gross Profit, Gross Margin 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 stock 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.
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:
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