CNOVA N.V.
Third Quarter 2016 Financial Results
AMSTERDAM, October 26, 2016, 07:45 CEST - Cnova N.V. (NASDAQ & Euronext in Paris: CNV, ISIN: NL0010949392) ("Cnova" or the "Company") today announced its unaudited financial results for the third quarter 2016.
As a result of the Reorganization Agreement dated as of August 8, 2016, by and between the Company, Cnova Brazil, and Via Varejo S.A., pursuant to which Cnova Brazil will be reorganized within Via Varejo, Cnova Brazil is classified as a discontinued activity as of January 1, 2015. Therefore, all Cnova financial and operational metrics in this press release refer only to Cdiscount and to Cnova Holding with the exception of Page 4 and Annex C, which provide a summary financial results analysis and selected metrics for Cnova Brazil. [*]
Cnova N.V. Key Figures
2
€ million, unaudited | Q3 2016 |
Q3 2015
(restated 2 ) | ||
GMV | 681 | 640 | ||
Net sales | 414 | 403 | ||
Gross profit | 58 | 55 | ||
Gross margin | 14.1% | 13.6% | ||
SG&A | (59) | (57) | ||
Operating EBIT | (1) | (2) | ||
Cdiscount France | 2 | 1 | ||
Cnova Holding and International | (3) | (3) | ||
Net profit/(loss) from continuing activities | (16) | (8) | ||
Net profit/(loss) from discontinued activities | (60) | (31) | ||
Adjusted EPS 3 continuing | (0.02) | (0.01) | ||
3 rd Quarter 2016 Financial Performance
Gross merchandise volume (GMV) amounted to €681 million for the 3 rd quarter 2016 (+6.3% compared to the same period in 2015). This progression is explained by:
Net sales totaled €414 million in the 3 rd quarter 2016 (+2.8% y-o-y). Sales of home furnishings and household appliances fell below double digit in July before recovering in August. The Group decision to cut back on low profitability B2B activity reduced net sales in the quarter by 3%. During the quarter, Cdiscount France led the French e-commerce sector in terms of SEO progression according to Yooda.
Gross profit was €58 million with a corresponding margin of 14.1% (+46 basis points y-o-y; Cdiscount France: +40 basis points). This improvement results from both a larger marketplace contribution related to its expansion and consumer financing service fees.
SG&A costs amounted to €(59) million (14.4% of net sales):
As a result, operating EBIT totaled €(1) million compared to €(2) million during the same period last year.
The operating loss reported during the 3 rd quarter of 2016 amounted to €(8) million and included expenses related to the closing of the specialty site Le Comptoir Santé in September as well as some residual expenses associated with closed international operations.
Net financial expense was €(8) million and included the interest expense associated with the factoring costs from Cdiscount France's consumer financing plan.
Net loss from continuing operations amounted to €(16) million with an adjusted EPS of €(0.02).
Net loss from discontinued operations amounted to €(60) million with an adjusted EPS of €(0.11), mainly related to Cnova Brazil's results.
Cash Management (last twelve months at September 30, 2016)
Free cash flow was €0 million with €17 million from Cdiscount France.
Net financial debt 3 position at September 30, 2016 was €(124) million. At Cdiscount France level, the net financial debt was €(77) million.
Customer offer and service
Enhancements during the 3rd quarter 2016 centered on improvement of existing and development of new services, including:
Perimeter change
As mentioned above, Cnova closed the last of its specialty sites, Le Comptoir Santé , in September 2016. The Company is also currently considering whether it should continue with its last international activity in the Ivory Coast or instead focus solely on its core high-growth potential market in France.
Nine Month 2016 Financial Performance
GMV
amounted to €2,052 million for the first nine months of 2016 (+12.3% compared to the same period in 2015) with a corresponding marketplace share of 31.4% (+387 bps).
Net sales
totaled €1,272 million in the first nine months of 2016 (+9.1% y-o-y).
Gross profit totaled €180 million (+12.9% y-o-y) with a corresponding gross margin of 14.1% (+48 basis points; Cdiscount France: +44 basis points).
Operating EBIT amounted to €(5) million compared to €(22) million in the same period in 2015. Cdiscount France achieved breakeven versus €(11) million during the same period in 2015.
Outlook
Moving forward, Cnova will concentrate on its French business via Cdiscount, and, among other things, plans to:
As for 2016, on a full year basis, Cnova reiterates its guidance: Cdiscount France's operating EBIT is expected to continue to improve and finish above breakeven (FY 2015: -4 M€).
***
Update on Cnova Brazil (discontinued activity): 3 rd Quarter 2016
GMV at Cnova Brazil amounted to R$1.5 billion for the 3 rd quarter 2016 (-24.2% y-o-y).
Net sales totaled R$946 million * in the 3 rd quarter 2016 (-38.1% y-o-y) as a reduction in marketing investment led lower traffic. From an operational point of view, though, the main bottlenecks impacting this and previous quarters (residual ERP migration problems and logistics disruptions) are mostly resolved by end of September, while the out-of-stock situation remains an issue.
Cnova Brazil notes a significant improvement in commercial trends , on the back of an easier comparison base:
Cnova Brazil - B2C commercial trend (promised orders)
(Change vs 2015) | 2Q16 | 3Q16 |
4 weeks to
Oct. 23, 2016 |
Direct sales | -24% | -30% | -12% |
Marketplace volume | +46% | +31% | +11% |
GMV | -17% | -21% | -8% |
Gross profit was R$172 million in the 3 rd quarter 2016 with a corresponding margin of 18.2% (+645 basis points y-o-y). This improvement results primarily from higher supplier and marketplace contributions as well as the recognition in 3Q16 of non-recurring VAT (PIS Cofins) credits (leading to R$18 million more than 3Q15; without this impact, the 3Q16 gross margin would have been 13.8%).
SG&A costs increased to R$247 million (26.1% of net sales) in the 3 rd quarter 2016 mainly due to higher legal expenses related to customer claims from past operational inefficiencies, increased provisions for chargeback expenses and for returned products in transit.
As a result, 3Q16 operating EBIT totaled R$(75) million compared to R$(61) million during the same period last year. The operating loss reported during the 3 rd quarter 2016 amounted to R$(88) million.
Net financial expense was R$88 million (up 12.7% y-o-y) in 3Q16 due to interest costs from new loans contracted this year.
Net loss amounted to R$(176) million for the 3 rd quarter of 2016.
Net financial debt at September 30, 2016 was R$(1,255) million.
***
End notes:
1.
Gross Merchandise Volume (GMV) is defined as product sales + other revenues + marketplace business volumes (calculated based on approved and sent orders) + taxes.
2. Restatements, adjustments and reclassifications:
· 1Q15, 2Q15 and 3Q15 have been adjusted for the apportionment of certain adjustments in relation to the internal review performed in Cnova Brazil and previously recorded in 4Q15 - see our 2015 annual report on form 20-F on pages iv, 95 and F13 for more details.
· 3Q15 figures have been adjusted for the reclassification as discontinued activities of Cdiscount Thailand and Cdiscount Vietnam (sold 1Q16), Cdiscount Cameroon and Cdiscount Senegal (abandoned 2Q16), Cdiscount Colombia (abandoned 3Q16) and Cnova Brazil (under reorganization).
3. Non-GAAP financial measure. See Non-GAAP Definitions and/or Reconciliations sections of this press release for additional information.
About Cnova N.V.
Cnova N.V., one of the leading e-Commerce companies in France, serves 7.9 million active customers via state-of-the-art e-tail Cdiscount websites in France and the Ivory Coast. Cnova N.V.'s product offering of more than 19 million references provides its clients with a wide variety of very competitively priced goods, several fast and customer-convenient delivery options as well as practical payment solutions. Cnova N.V. is part of Groupe Casino, a global diversified retailer. Cnova N.V.'s news releases are available at www.cnova.com. Information available on, or accessible through, the sites referenced above is not part of this press release.
This press release contains regulated information (gereglementeerde informatie) within the meaning of the Dutch Financial Supervision Act (Wet op het financieel toezicht) which must be made publicly available pursuant to Dutch and French law. This press release is intended for information purposes only.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. Such forward-looking statements may generally be identified by words like "anticipate," "assume," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "future," "will," "seek" and similar terms or phrases. Examples of forward-looking statements include, but are not limited to, statements made regarding the possibility, timing and other terms and conditions of the proposed transaction and the related offer by the Company's controlling shareholder Casino, Guichard-Perrachon ("Casino") for the outstanding shares of Cnova. The forward-looking statements contained in this press release 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: the ability to obtain required shareholder approvals for closing of the corporate reorganization in Brazil (the "Reorganization"); the ability to complete the Reorganization and other transactions and the timing of completion of the Reorganization and such other transactions; the effect of the announcement of the Reorganization on the ability of the Company to retain and hire key personnel, maintain relationships with its customers and suppliers, and maintain its operating results and business generally; the outcome of any legal proceedings that may be instituted against the Company and others relating to the reorganization agreement, dated as of August 8, 2016, between Cnova Brazil, Via Varejo and Cnova (the "Reorganization Agreement"); the occurrence of any other event, change or other circumstance that could give rise to the termination of the Reorganization Agreement; 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 U.S. Annual Report on Form 20-F for the year ended December 31, 2015, filed with the SEC on July 22, 2016, and other documents filed with or furnished to the SEC. Any forward-looking statements made in this press release 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.
***
Cnova Investor Relations Contact:
Head of Investor Relations investor@cnova.com Tel: +31 20 795 06 71 |
Media contact:
Head of Communication directiondelacommunication@cnovagroup.com Tel: +31 20 795 06 76 |
Annexes
Annex A - Cnova N.V.
3
rd
Quarter and FY 2015 Consolidated Financial Statements (unaudited)
Consolidated Income Statement | 3 rd Quarter | Change | Full Year | ||
€ millions, unaudited | 2016 |
2015
(restated*) |
2015
(restated*) | ||
Net sales | 414.1 | 402.7 | +2.8% | 1,737.9 | |
Cost of sales | (355.7) | (347.9) | +2.3% | (1,509.0) | |
Gross profit | 58.3 | 54.9 | +6.3% | 228.9 | |
% of net sales (Gross margin) | 14.1% | 13.6% | +46 bps | 13.2% | |
SG&A (Selling, General & Administrative expenses) | (59.5) | (57.3) | +3.8% | (253.6) | |
% of net sales | -14.4% | -14.2% | -14 bps | -14.6% | |
Fulfillment | (27.9) | (31.2) | -10.5% | (136.4) | |
Marketing | (7.8) | (5.9) | +31.6% | (24.2) | |
Technology and content | (14.1) | (11.0) | +28.1% | (48.1) | |
General and administrative | (9.7) | (9.2) | +5.5% | (44.9) | |
Operating profit/(loss) from ordinary activities (Operating EBIT) | (1.1) | (2.4) | -52.4% | (24.7) | |
% of net sales | -0.3% | -0.6% | -1.4% | ||
Other expenses | (7.2) | (4.9) | +48.1% | (36.1) | |
Operating profit/(loss) | (8.4) | (7.3) | +14.8% | (60.8) | |
Net financial income/(expense) | (7.9) | 0.5 | (1.4) | ||
Profit/(loss) before tax | (16.2) | (6.8) | +138.2% | (62.2) | |
Income tax gain/(expense) | 0.4 | (1.6) | -121.6% | (16.3) | |
Net profit/(loss) from continuing operations | (15.9) | (8.4) | +87.9% | (78.5) | |
Net profit/(loss) from discontinued operations | (59.8) | (31.0) | +92.5% | (180.5) | |
Net profit/(loss) for the period | (75.6) | (39.5) | +91.5 % | (259.0) | |
% of net sales | -18.3% | -9.8% | -14.9% | ||
Attributable to Cnova equity holders (incl. discontinued) | (74.5) | (35.9) | (244.2) | ||
Attributable to non-controlling interests (incl. discontinued) | (1.2) | (3.6) | (14.8) | ||
Adjusted EPS (€) from continuing operations | (0.02) | (0.01) | (0.09) | ||
Adjusted EPS (€) from discontinued operations | (0.11) | (0.06) | (0.36) | ||
Adjusted EPS (€) | (0.13) | (0.07) | (0.45) |
* Please see Page 9
Consolidated
Balance
Sheet
€ millions, unaudited | Sept. 30, 2016 |
Dec. 31, 2015
(restated*) |
Sept. 30, 2015
(restated*) | |||
ASSETS | ||||||
Cash and cash equivalents | 181.9 | 400.8 | 291.8 | |||
Trade receivables, net | 67.5 | 129.7 | 138.0 | |||
Inventories, net | 226.1 | 415.0 | 418.0 | |||
Current income tax assets | 0.6 | 0.8 | 0.8 | |||
Other current assets, net | 84.6 | 195.5 | 132.6 | |||
Assets held for sale | 844.7 | -- | -- | |||
Total current assets | 1,405.5 | 1,141.8 | 981.1 | |||
Other non-current assets, net | 11.1 | 23.5 | 75.5 | |||
Deferred tax assets | 10.8 | 11.6 | 60.3 | |||
Property and equipment, net | 11.6 | 33.5 | 38.4 | |||
Intangible assets, net | 63.5 | 116.9 | 121.4 | |||
Goodwill | 56.5 | 391.4 | 378.8 | |||
Total non-current assets | 153.5 | 576.9 | 674.2 | |||
TOTAL ASSETS | 1,559.1 | 1,718.7 | 1,655.3 | |||
EQUITY AND LIABILITIES | ||||||
Current provisions | 5.7 | 7.5 | 3.4 | |||
Trade payables | 428.9 | 1,216.0 | 884.9 | |||
Current financial debt | 307.0 | 132.2 | 372.6 | |||
Current tax liabilities | 30.5 | 51.2 | 32.8 | |||
Other current liabilities | 70.7 | 178.5 | 112.0 | |||
Liabilities held for sale | 751.9 | -- | -- | |||
Total current liabilities | 1,594.8 | 1,585.4 | 1,405.6 | |||
Non-current provisions | 12.0 | 11.8 | 11.0 | |||
Non-current financial debt | 6.9 | 14.8 | 7.7 | |||
Other non-current liabilities | 1.6 | 8.6 | 1.7 | |||
Total non-current liabilities | 20.5 | 35.2 | 20.4 | |||
Share capital | 22.1 | 22.1 | 22.1 | |||
Reserves, retained earnings and additional paid-in capital | (79.9) | 83.4 | 211.7 | |||
Equity attributable to equity holders of Cnova | (57.8) | 105.5 | 233.7 | |||
Non-controlling interests | 1.6 | (7.4) | (4.5) | |||
Total equity | (56.2) | 98.1 | 229.3 | |||
TOTAL EQUITY AND LIABILITIES | 1,559.1 | 1,718.7 | 1,655.3 |
* Please see Page 9
Consolidated Cash Flow Statement | Last Three Months | Last Twelve Months | Full Year | |||||
at September 30 ( except FY 2015, € millions, unaudited ) | 2016 |
2015
(restated*) | 2016 |
2015
(restated*) |
2015
(restated*) | |||
Net profit/(loss) from continuing operations | (15.9) | (8.2) | (81.4) | (37.1) | (77.5) | |||
Net profit/(loss), attributable to non-controlling interests | -- | (0.2) | (0.8) | (0.3) | (1.0) | |||
Net profit (loss) for the period excl. discontinued operations | (15.9) | (8.4) | (82.1) | (37.4) | (78.5) | |||
Depreciation and amortization expense | 5.6 | 4.0 | 22.5 | 19.9 | 20.7 | |||
(Income) expenses on share-based payment plans | -- | 0.1 | 0.1 | 3.1 | 0.3 | |||
(Gains) losses on disposal of non-current assets and impairment of assets | 1.9 | 2.7 | 13.2 | 9.4 | 13.4 | |||
Share of profit of associates | (1.0) | |||||||
Other non-cash items | -- | -- | 0.5 | 0.2 | 0.9 | |||
Financial expense, net | 7.9 | (0.5) | 28.0 | (7.2) | 1.4 | |||
Current and deferred tax (gains) expenses | (0.4) | 1.6 | 15.7 | (4.1) | 16.3 | |||
Income tax paid | (0.8) | 0.4 | (3.6) | (1.8) | (2.9) | |||
Change in operating working capital | 22.1 | 16.1 | 38.8 | 67.3 | 36.8 | |||
Inventories of products | 7.7 | (4.8) | 0.7 | (42.8) | (35.5) | |||
Trade payables | 9.8 | 29.1 | 36.3 | 117.9 | 32.8 | |||
Operating payables | 4.1 | (1.7) | 15.1 | 11.5 | 1.6 | |||
Trade receivables | (7.3) | (16.0) | 9.3 | (7.2) | 1.9 | |||
Other receivables | -- | -- | -- | 1.3 | -- | |||
Other | 7.7 | 9.4 | (22.6) | (13.5) | 35.9 | |||
Net cash from/(used in) continuing operating activities | 20.4 | 16.0 | 33.2 | 48.3 | 8.5 | |||
Net cash from/(used in) discontinued operating activities | (52.5) | (48.8) | (163.3) | 55.4 | 3.0 | |||
Purchase of property, equipment & intangible assets | (8.4) | (9.8) | (32.8) | (44.5) | (42.6) | |||
Purchase of non-current financial assets | -- | -- | (1.2) | (1.2) | (0.9) | |||
Proceeds from disposal of prop., equip., intangible assets | (0.2) | -- | 2.7 | 0.2 | 2.5 | |||
Proceeds from disposal of non-current financial assets | -- | -- | -- | 2.2 | 2.2 | |||
Acquisition of an entity net of cash acquired | -- | 5.6 | -- | 5.7 | 5.6 | |||
Investments in associates | -- | -- | (3.0) | (1.0) | (0.1) | |||
Changes in loans granted (including to related parties ) | -- | (4.4) | 4.2 | 21.9 | 65.9 | |||
Net cash from/(used in) continuing investing activities | (8.7) | (8.6) | (30.2) | (16.7) | 32.6 | |||
Net cash from/(used in) discontinued investing activities | 1.2 | (1.2) | (6.9) | (42.8) | (18.2) | |||
Proceeds from IPO, net of costs | -- | -- | -- | 137.4 | -- | |||
Transaction with owners of non-controlling interests | (5.4) | (9.4) | (18.6) | |||||
Additions to financial debt | 0.9 | -- | 7.6 | 30.1 | 1.3 | |||
Repayments of financial debt | (0.5) | -- | (5.9) | (1.2) | -- | |||
Changes in loans received | 6.2 | (6.0) | (39.9) | 178.6 | (8.0) | |||
Interest paid, net | (6.6) | 4.3 | (16.8) | 13.8 | 8.8 | |||
Net cash from/(used in) continuing financing activities | -- | (1.7) | (60.4) | 349.4 | (16.5) | |||
Net cash from/(used in) discontinued financing activities | 42.3 | (8.2) | 111.0 | (37.8) | (57.4) | |||
Effect of changes in foreign currency translation adjustments | (7.7) | (58.0) | 55.2 | (112.8) | (55.4) | |||
Change in cash and cash equivalents from continuing operations | 19.4 | (52.3) | (2.2) | 299.6 | (30.8) | |||
Change in cash and cash equivalents from discontinued operations | 2.1 | (70.3) | (92.6) | (56.6) | (150.5) | |||
Cash and cash equivalents, net, at period begin | 173.6 | 412.3 | 289.7 | 46.7 | 573.2 | |||
Cash and cash equivalents, net, at period end | 194.9 | 289.7 | 194.9 | 289.7 | 391.8 |
* Please see Page 9
Annex B - Cnova N.V.
Additional Financial Information (unaudited)
Selected 3
rd
Quarter Data
€ millions, unaudited | 2016 | 2015 | |
Restated * | Pro forma ** | ||
(as of Sept. 30, 2016) | (as of Sept. 30, 2015) | ||
GMV | 680.9 | 640.3 | 1,125.7 |
Net sales | 414.1 | 402.7 | 785.3 |
Gross profit | 58.3 | 54.9 | 97.7 |
% of net sales (Gross margin) | 14.1% | 13.6% | 12.4% |
SG&A | (59.5) | (57.3) | (122.1) |
Operating profit/(loss) from ordinary activities (Operating EBIT) | (1.1) | (2.4) | (24.4) |
% of net sales (EBIT margin) | -0.3% | -0.6% | -3.1% |
Net Financial Income/(Expense) | (7.9) | 0.5 | (17.2) |
Selected Nine Month Data
€ millions, unaudited | 2016 | 2015 | |
Restated * | Pro forma ** | ||
(as of Sept. 30, 2016) | (as of Sept. 30, 2015) | ||
GMV | 2,051.8 | 1,826.8 | 3,510.2 |
Net sales | 1,272.3 | 1,166.6 | 2,523.4 |
Gross profit | 179.9 | 159.3 | 325.0 |
% of net sales (Gross margin) | 14.1% | 13.7% | 12.9% |
SG&A | (184.9) | (181.7) | (393.0) |
Operating profit/(loss) from ordinary activities (Operating EBIT) | (5.0) | (22.3) | (68.0) |
% of net sales (EBIT margin) | -0.4% | -1.9% | -2.7% |
Net Financial Income/(Expense) | (20.4) | 6.2 | (38.4) |
1Q15, 2Q15 and 3Q15 have been adjusted for the apportionment of certain adjustments previously recorded in 4Q15 - see our 2015 annual report on form 20-F on pages iv, 95 and F13 for more details.
3Q15 figures have been adjusted for the reclassification as discontinued activities of Cdiscount Thailand and Cdiscount Vietnam (sold 1Q16), Cdiscount Cameroon and Cdiscount Senegal (abandoned 2Q16), Cdiscount Colombia (abandoned 3Q16) and Cnova Brazil (under reorganization).
** These 3Q15 and nine-month 2015 figures include the activity of Cnova Brazil and of Cdiscount in Thailand, Vietnam, Cameroon, Senegal and Colombia.
1Q15, 2Q15 and 3Q15 have been adjusted for the apportionment of certain adjustments previously recorded in 4Q15 - see our 2015 annual report on form 20-F on pages iv, 95 and F13 for more details.
Annex C - Cnova Brazil (discontinued activity)
Additional Financial Information (unaudited)
Selected 3
rd
Quarter Data
R$ millions, unaudited | 2016 |
2015
Restated * |
GMV | 1,465.4 | 1,934.5 |
Net sales | 946.1 | 1,528.5 |
Gross profit | 171.8 | 179.0 |
% of net sales (Gross margin) | 18.2% | 11.7% |
SG&A | (247.1) | (239.6) |
Operating profit/(loss) from ordinary activities (Operating EBIT) | (75.3) | (60.6) |
% of net sales (EBIT margin) | -8.0% | -4.0% |
Net Financial Income/(Expense) | (88.1) | (78.2) |
Net profit | (175.7) | (95.9) |
Selected Nine Month Data
R$ millions, unaudited | 2016 |
2015
Restated * |
GMV | 4,761.6 | 5,837.1 |
Net sales | 3,201.7 | 4,696.6 |
Gross profit | 408.8 | 593.2 |
% of net sales (Gross margin) | 12.8% | 12.6% |
SG&A | (764.3) | (687.5) |
Operating profit/(loss) from ordinary activities (Operating EBIT) | (355.6) | (94.2) |
% of net sales (EBIT margin) | -11.1% | -2.0% |
Net Financial Income/(Expense) | (251.3) | (177.3) |
Net profit | (806.7) | (183.9) |
Summarized balance sheet
R$ millions, unaudited | Sept. 30, 2016 |
Cash and cash equivalents | 47.0 |
Inventory | 486.9 |
Trade receivables | 260.1 |
Total current assets | 1,273.2 |
Total non-current assets ** | 1,716.0 |
TOTAL ASSETS | 2,989.2 |
Trade payables | 1,307.9 |
Current financial debt | 843.9 |
Total current liabilities | 2,608.3 |
Non-current financial debt | 458.0 |
Total non-current liabilities | 565.4 |
Total Equity | (184.5) |
TOTAL EQUITY AND LIABILITIES | 2,989.2 |
1Q15, 2Q15 and 3Q15 have been adjusted for the apportionment of certain adjustments previously recorded in 4Q15 - see our 2015 annual report on form 20-F on pages iv, 95 and F13 for more details.
** Of which R$1.4 billion is goodwill.
Annex D - Definitions
Adjusted EPS or Adjusted earnings per share - calculated as adjusted net profit/(loss) divided by the weighted average number of ordinary shares outstanding during the applicable period. See "Non-GAAP Reconciliations" section for additional information.
Adjusted net profit/(loss) - calculated as net profit/(loss) before Other Expenses and the related tax impacts. See "Non-GAAP Reconciliations" section for additional information.
Free cash flow - Net cash from/(used in) operating activities less purchase of property and equipment and intangible assets as presented in the consolidated cash flow statement. See "Non-GAAP Reconciliations" section for additional information.
Gross margin - Gross profit as a percentage of net sales. See "Non-GAAP Reconciliations" section for additional information.
Gross merchandise volume (GMV) - Gross Merchandise Volume (GMV) is defined as product sales + other revenues + marketplace business volumes (calculated based on approved and sent orders) + taxes.
Marketplace share - Includes marketplace share of www.cdiscount.com in France as well as extra.com.br, pontofrio.com, casasbahia.com.br and cdiscount.com.br in Brazil.
Net Cash / (Net Financial Debt) - 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.
Adjusted EBITDA - calculated as operating profit/(loss) from ordinary activities (Operating EBIT) before depreciation and amortization expense and share based payment expenses. See "Non-GAAP Reconciliations" section for additional information.
Operating profit/(loss) from ordinary activities (Operating EBIT) - calculated as operating profit/(loss) before other expenses (restructuring, initial public offering expenses, litigation, gain/(loss) from disposal of non-current assets and impairment of assets).
Change in Operating Working Capital - calculated as the sum of the changes in inventories of products, trade payables, operating payables, operating receivables and other items of the operating working capital as presented in the Consolidated Cash Flow Statement.
Other expenses - calculated as the sum of restructuring, initial public offering expenses, litigation, gain/(loss) from disposal of non-current assets and impairment of assets.
Cash loss from activities - calculated from entries on the cash flow statement in the following way: net profit/(loss) for the last twelve months, plus depreciation and amortization expense, plus (income)/expenses on share-based payment plans, plus (gains)/losses on disposal of non-current assets and impairment of assets, plus share of (profits)/losses of associates, plus other non-cash items plus financial expense, net, plus current and deferred tax (gains)/expenses, plus income tax paid.
Annex E - Non-GAAP Reconciliations
In addition to disclosing financial results in accordance with International Financial Reporting Standards, or IFRS, this earnings release contains non-GAAP financial measures that Cnova uses as measures of its performance. These non-GAAP measures should be viewed as a supplement to and not a substitute for Cnova's IFRS measures of performance and financial results in accordance with IFRS and reconciliations from these results should be carefully evaluated.
Restatements, adjustments and reclassifications:
Adjusted net profit/(loss)
Adjusted earnings per share (Adjusted EPS)
Adjusted net profit/(loss) is calculated as net profit/(loss) 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 net profit/(loss) 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) facilitates the comparison of income on a period-to-period basis.
Adjusted EPS is calculated as adjusted net profit/(loss) divided by the weighted average number of outstanding ordinary shares of Cnova during the applicable period.
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.
€ millions | Q3 2016 | Q3 2015 | |
Net profit/(loss) for the period attributable to equity holders of Cnova | (15.9) | (8.4) | |
Excluding: | |||
Restructuring expenses | 5.9 | 2.2 | |
Litigation expenses | (0.2) | 0.4 | |
Initial public offering expenses | -- | 0.1 | |
Gain/(loss) from disposal of non-current assets | -- | (0.1) | |
Asset impairment charges | 1.6 | 2.2 | |
Income tax effect on above adjustments | (0.1) | -- | |
Minority interest effect on above adjustments | (0.3) | -- | |
Adjusted net profit/(loss) for the period attributable to equity holders of Cnova | (8.9) | (3.6) | |
Weighted average number of ordinary shares | 441,297,846 | 441,297,846 | |
Adjusted EPS (€) from continuing operations | (0.02) | (0.01) |
Free cash flow
Free cash flow is calculated as net cash from/(used in) continuing operating activities less capital expenditures (purchases of property, equipment and intangible assets) as presented in our cash flow statement. Free cash flow is a financial measure used by Cnova's management and board of directors to evaluate the overall financial performance of the business. In particular, it allows the comparison of operational cash flow after capex on a period-to-period basis.
€ millions | Sept 30, 2016 (LTM) | |
Net cash from/(used in) continuing operating activities | 33.2 | |
Less purchase of property, equipment & intangible assets | (32.8) | |
Free cash flow | 0.4 |
Gross profit and Gross margin
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.
The following tables present a computation of gross profit and gross margin for each of the periods indicated:
€ millions | Q3 2016 | Q3 2015 | |
Net sales | 414.1 | 402.7 | |
Less: Cost of sales | (355.7) | (347.9) | |
Gross Profit | 58.3 | 54.9 | |
Gross margin | 14.1% | 13.6% |
Net Cash/(Net Financial Debt)
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 (iii) current and (iv) non-current 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:
€ millions | Sept 30, 2016 | Sept 30, 2015 | |
Cash and cash equivalents | 181.9 | 291.8 | |
Plus Cash pool balances with Casino presented in other current assets | 0.9 | -- | |
Less net current financial debt | (300.2) | (372.6) | |
Less non-current financial debt | (6.9) | (7.7) | |
Net cash/(Net financial debt) | (124.3) | (88.6) |
Adjusted EBITDA
Adjusted EBITDA is calculated as operating profit/(loss) from ordinary activities (operating EBIT) before depreciation and amortization expense and share based payment expenses. We have provided a reconciliation below of this measure to operating profit/(loss) from ordinary activities (operating EBIT) - see definition above - the most directly comparable GAAP financial measure, for each of the periods indicated.
€ millions | Q3 2016 | Q3 2015 | |
Operating profit before restructuring, litigation, gain/(loss) from disposal of non-current assets and impairment of assets | (1.1) | (2.4) | |
Excluding: Share based payment expenses | -- | 0.1 | |
Excluding: Depreciation and amortization | 5.1 | 5.2 | |
Adjusted EBITDA | 3.9 | 2.9 |
Cash loss from activities
Cash loss from activities is calculated from entries on the cash flow statement in the following way: net profit/(loss) for the last twelve months, plus depreciation and amortization expense, plus/(income) expenses on share-based payment plans, plus (gains)/losses on disposal of non-current assets and impairment of assets, plus share of (profits)/losses of associates, plus other non-cash items plus financial expense, net, plus current and deferred tax (gains)/expenses, plus income tax paid.
€ millions | Sept 30, 2016 (LTM ) | |
Net profit/(loss) for the period from continuing activities | (82.1) | |
Depreciation and amortization expense | 22.5 | |
(Income) expenses on share-based payment plans | 0.1 | |
(Gains) losses on disposal of non-current assets and impairment of assets | 13.2 | |
Share of (profits) losses of associates | -- | |
Other non-cash items | 0.5 | |
Financial expense, net | 28.0 | |
Current and deferred tax (gains) expenses | 15.7 | |
Income tax paid | (3.6) | |
Cash loss from activities | (5.6) |
Annex F - Erratum
Corrections to Cnova annual report on Form 20-F for the year ended December 31, 2015
Cnova announces corrections to the following items on page F-14:
As corrected, these items read as follows:
Upcoming Event | |
Wednesday, October 26, 2016 at 16:00 CEST | Cnova Third Quarter 2016 Conference Call & Webcast |
Conference Call and Webcast connection details | |
Conference Call 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 |
Conference Call Replay Dial-In Numbers : | |
Toll-Free: | 1 844 512 2921 |
Toll: | 1 412 317 6671 |
Available From: October 26, 2016 at | 13:00 EST / 19:00 CEST |
To: November 2, 2016 at | 00:00 ET / 06:00 CET |
Replay Pin Number: | 13646527 |
Webcast: | |
http://public.viavid.com/index.php?id=121311 | |
Presentation materials to accompany the call will be available at cnova.com on October 26, 2016. | |
An archive of the conference call will be available for a limited time at cnova.com following its conclusion. | |
* Cnova N.V.'s 3 rd quarter figures are not audited. Furthermore, as a result of the Reorganization Agreement, Cnova Brazil is classified as a discontinued activity as of January 1, 2015. The Reorganization Agreement was approved by Via Varejo's minority shareholders on September 12, 2016, and will be submitted for approval by Cnova shareholders on October 27, 2016 at the Company extraordinary general meeting. In the Company's 2015 and 2016 results disclosed in this press release, the reclassification of Cnova Brazil has been reflected as a discontinued activity in the consolidated income statement and as an asset held for sale in the consolidated balance sheet as of September 30, 2016 in accordance with IFRS 5. For information purposes, a summary financial results analysis and selected activity metrics concerning Cnova Brazil are presented on Page 4 and in Annex C.
For additional information on how GMV, net sales, traffic, active customers, number of items sold and available products are calculated, please refer to footnotes on page 4.
* Beginning January 1, 2016, ICMS, the Brazilian indirect VAT on the interstate sale of goods and services, is transitioning from being 100% due in the state of the seller to being 100% due in the state of the buyer. This has led to an estimated decrease in 3rd quarter 2016 net sales at Cnova Brazil in the amount of approximately R$ 66 million.