Cnova NV: First Quarter 2024 Activity
- EBITDA after rents grew by +36%
- Free cash-flows improved by +€49m compared to 1Q23
- Services revenues increased by +4% vs. 1Q23
- Marketplace now contributes 63.8% of Product GMV
- Growth in sustainable product share to 20% of Cdiscount Product GMV
- Reduction of delivery GHG emissions by 35%
- Change in control of Casino Group empowering Cnova's innovation and value creation
- Overall GMV decreased by -12%
- Net sales decreased by -21%
- Direct sales impacted by business model transformation
- Decrease in marketing intensity affecting direct sales
- Reduction in marketplace revenues due to savings on marketing investments
- Net sales decreased by -20.6% vs. 1Q23
Insights
The report indicates a notable +36% growth in EBITDA after rents and a +€49m improvement in free cash flows for Cnova's first quarter of 2024 compared to the same period last year. However, it is essential to drill down into the quality of earnings. The improvement in profitability may appear robust, but it's important to assess the sustainability of these margins in light of the reported -12% decline in overall GMV (Gross Merchandise Value) and a significant -21% drop in net sales. The shift towards a marketplace model, now accounting for 63.8% of Product GMV and the growth in service revenues, suggest a strategic reorientation. Yet this comes with the cost of decreased net sales, which can impact the company's market position and long-term growth prospects.
Despite the financial improvements, Cnova's performance should be contextualized within the wider e-commerce and retail industry. The marketplace model's expansion, with a 7.1 percentage point increase, is in line with broader industry trends favoring platform-based e-commerce. Nevertheless, the -21% decrease in like-for-like net sales could be indicative of competitive market pressures and a need for Cnova to refine its marketplace offerings to remain relevant. Additionally, the emphasis on Cnova's CSR strategy and sustainable products, which now represent 20% of Cdiscount Product GMV, reflects growing consumer demand for sustainable options and may enhance brand loyalty and customer acquisition in the long term.
The 35% reduction in delivery GHG emissions is an encouraging sign of Cnova's commitment to sustainability. This commitment is also reflected in the growth of 'more sustainable products', indicating a strategic alignment with consumer values and regulatory expectations regarding environmental responsibility. Investors should appreciate that these efforts could lead to brand differentiation and potentially unlock new customer segments interested in sustainable consumption. However, it will be vital to monitor the impact of these initiatives on the company's bottom line, ensuring that the pursuit of sustainability also translates into financial performance.
CNOVA N.V.
First Quarter 2024 activity
Update on Casino group situation
| Cnova pursues its path towards a more profitable model with an EBITDA after rents growing by + |
|
AMSTERDAM – April 24, 2024, 17:35 CET Cnova N.V. (Euronext Paris: CNV; ISIN: NL0010949392) (“Cnova”) today announced its first quarter 2024 activity.
Thomas Métivier, Cnova’s CEO, commented:
"In the first quarter, Cnova remained steadfast in its strategy. We have kept increasing revenues from our services while maintaining rigorous cost control, resulting in a significant improvement in profitability and free cash flow.
Achieving a new marketplace share record and witnessing strong performance in B2C services such as travel, alongside our more responsible offerings, growing +
March 27 marked the beginning of a new era with the change in control of the Casino Group, empowering its various banners, especially Cnova, to persist in innovation and create more value for our customers.”
Over the 1st quarter, Cnova has pursued its efforts to improve its operational profitability, as illustrated by the gross margin rate growing by +5.3pts vs. 23 and EBITDA after rents increasing by +
In a still challenging market impacted by stagnating overall consumption and declining High Tech & Home consumption trends, overall GMV has decreased by -
-
Cnova’s services revenues stood at
- Marketplace generating
€46m revenues5 in the 1st quarter 2024, with Marketplace GMV share reaching63.8% (+7.1pts vs. 23, +27.5pts vs. 19) and improving Marketplace contribution margin6 - Advertising net revenues7 remaining resilient, standing at
€16m in the 1st quarter 2024, with growing Retail Media (+7.8% vs. 23), mostly driven by Marketplace sellers (+10.3% vs. 23). Advertising GMV take rate reached4.3% in the 1st quarter 2024 (+0.5pt vs. 23, +3.1pts vs. 19) - B2C Services GMV performing well, increasing by +
7.9% vs. 23, reaching€39m in the 1st quarter 2024, mostly driven by Mobile (+42.3% vs. 23) and Travel activities (+1.4% vs. 23) - Octopia B2B revenues improving by +
34.7% vs. 23, standing at€6m in the 1st quarter 2024, with growing Fulfilment-as-a-Service activities (+17.5% vs. 23) and increasing Marketplace-as-a-Service and Merchants-as-a-Service revenues (x3 vs. 23) with 2 clients launched, and 2 clients signed for Merchants-as-a-Service solutions in the 1st quarter - C-Logistics B2B revenues multiplying by 3 vs. 23, reaching
€6m in the 1st quarter 2024, with the number of parcels shipped for external clients increasing by x3 vs. 23. Over the 1st quarter 2024,
C-Logistics has launched two clients, respectively specialized in luxury goods and pet food
EBITDA after rents has increased by +
Free cash-flows have improved by +
Update on Casino group situation
On March 28th, 2024, Casino announced the effective completion of its financial restructuring, resulting in a change of control of Casino group to France Retail Holdings S.à.r.l. ("FRH"), an entity ultimately controlled by Mr. Daniel Křetínský. All transactions provided for in the Accelerated Safeguard Plan have been completed, in particular the capital transactions described in the press release published by Casino on March 25th, 2024.
On the same day, Cnova announced a change to its Board of Directors. The Chairman, non-executive director and member of the Nomination and Remuneration Committee, Mr. Jean-Yves Haagen, and Mrs. Josseline de Clausade, non-executive director, resigned their directorship as per March 27th, 2024.
Pursuant to the completion of the financial restructuring of Casino group on March 27th, 2024, France Retail Holdings S.à.r.l. has acquired indirectly (via Casino Guichard-Perrachon S.A.)
First Quarter 2024 Key Figures
| Financial performance (€m) | 1Q23 | 1Q24 | Change vs. 23 | |||
| Reported | Like-for-like9 | |||||
| Total GMV | 712.5 | 605.3 | (15.0)% | (12.3)% | ||
| E-commerce platform | 692.7 | 579.8 | (16.3)% | (13.6)% | ||
| o/w Marketplace | 329.1 | 315.4 | (4.2)% | |||
| o/w Direct sales | 251.4 | 179.0 | (28.8)% | |||
| Marketplace share | +7.1pts | |||||
| o/w B2C services | 36.3 | 39.2 | + | |||
| o/w other revenues | 75.8 | 46.3 | (39.0)% | (14.1)% | ||
| B2B activities | 19.8 | 25.6 | + | |||
| o/w Octopia B2B revenues | 5.1 | 6.9 | + | |||
| o/w Octopia Retail & Others | 12.7 | 12.0 | (5.2)% | |||
| o/w C-Logistics B2B | 2.0 | 6.7 | x3 | |||
| Total Net sales | 323.5 | 243.4 | (24.8)% | (20.6)% | ||
| EBITDA | 323.5 | 243.4 | (2.6)% | |||
| EBITDA after rents | 5.1 | 7.0 | + | |||
| Free Cash-Flows8 | (121.2) | (71.9) | +49.3 | |||
Operational highlights
Over the 1st quarter 2024, Cnova has pursued its efforts to extend its direct sales offer with profitable products, to develop its Marketplace and Advertising services and to grow its B2B activities.
Facing challenging market conditions, overall GMV decreased by -
Services revenues represent
| Business KPIs | 1Q23 | 1Q24 | Change vs. 23 | ||
| Marketplace10 | | 47.8 | 45.7 | (4.5)% | |
| Advertising11 | 16.4 | 16.4 | (0.4)% | ||
| B2C12 | 3.8 | 3.8 | (1.7)% | ||
| B2B13 | 5.9 | 11.3 | + | ||
| Services revenues | 74.0 | 77.1 | + | ||
| Services revenues share in net sales8 | +7.5pts | ||||
| Marketplace GMV share | +7.1pts |
1st quarter highlights
| GMV | 1Q24 vs. 23 |
| Total GMV like-for-like13 evolution | (12.3)% |
| Marketplace GMV evolution | (4.2)% |
| Marketplace GMV share evolution | +7.1pts |
| Octopia B2B GMV growth | + |
| B2C services GMV growth | + |
In the 1st quarter 2024, Cnova overall GMV decreased by -
- Direct sales contributing -10.5pts (-
28.8% y-o-y), impacted by our business model transformation from direct sales to marketplace and assortment rationalization, mostly for products with low contribution margins. In a difficult e-commerce market, direct sales were also impacted by lower marketing intensity from last year as part of the Efficiency Plan, followed by increase in marketing investments since late 3rd quarter 2023, in order to increase traffic and transformation - Marketplace contributing -2.0pts (-
4.2% y-o-y), with Marketplace GMV share increasing by +7.1pts, standing at63.8% in the 1st quarter 2024. Marketplace GMV was also impacted by lower marketing investments from last year - B2C Services contributing +0.4pt (+
7.9% y-o-y) mainly due to Cdiscount Mobile (+42.3% vs. 23) and Cdiscount Travel (+1.4% vs. 23) - C-Logistics B2B contributing +0.7pt (x3 y-o-y) with an increasing number of shipped parcels for external clients (x3 vs. 23) and two new clients launched in the 1st quarter 2024
- Octopia B2B contributing +0.3pt (+
34.7% vs. 23), driven by an increase in Fulfilment-as-a-Service revenues (+17.5% vs. 23) along with growing Marketplace-as-a-Service and Merchants-as-a-Service revenues (x3 vs. 23). Octopia launched Octopia Ads, its new Retail Media solution, relying on Cdiscount Ads Retail Solution (CARS) technology
| Clients | 1Q24 |
| Active clients over the last 12 months (m) | 7.2 |
| CDAV GMV share |
The loyalty program Cdiscount à Volonté (CDAV) covered
- A focus on loyalty pots, for instance with the “
100% remboursés” operation, which aims at promoting repurchase from customers - The share of fidelity actions dedicated to CDAV members on total fidelity actions to all clients improving by +60.5pts in the 1st quarter 2024 vs. 23
Strong focus on customer satisfaction as illustrated by the NPS standing at 55.7pts in the 1st quarter 2024, growing by +1.2pts compared to last year, mostly driven by an increase in Marketplace NPS standing at 54.1pts in the 1st quarter 2024 (+2.5pts vs. 23).
| Marketplace KPIs | 1Q24 | vs. 23 |
| Marketplace GMV share | +7.1pts | |
| Advertising net revenues from Marketplace sellers (€m) | 10.2 | + |
| Total express delivery GMV share | +0.6pt | |
| o/w Cdiscount Express Seller GMV share | (2.7)pts | |
| o/w Fulfilment by Cdiscount GMV share | +3.3pts |
Despite decreasing GMV by -
- Advertising services provided to Marketplace sellers growing by +
10.3% in the 1st quarter 2024 vs. 23, notably thanks to “Discover” offers aiming to recruit new sellers and boost Advertising services - The share of products eligible to express delivery increasing by +0.6pt vs. 23, standing at
51.9% in the 1st quarter 2024 - Marketplace GMV share growing by +7.1pts vs. 23 and Marketplace contribution margin as a % of Marketplace GMV15 improving in the 1st quarter 2024 vs. 23
| Net sales | 1Q24 vs. 23 |
| Net sales evolution15 | (20.6)% |
Net sales16 amounted to
- Decreasing direct sales revenues, notably driven by the voluntary transformation of our business model towards a more profitable model, along with impacts from the decrease in marketing intensity last year as part of the Efficiency Plan
- Reduced marketplace revenues, also impacted by the voluntary savings on marketing investments from last year
- Partly offset by increasing B2B revenues with Octopia B2B and C-Logistics B2B
Implementation of customer-centric Generative Artificial Intelligence (“GenAI”) initiatives
Artificial intelligence-powered algorithms were implemented all along the customer journey, enabling to enhance the relevance of the Cdiscount.com search engine, as illustrated by the increase in the search engine click rate by +3.5pts in the 1st quarter 2024 vs. 23.
Through Generative Artificial Intelligence (“GenAI”) initiatives, developing numerous use cases, Cnova aims at generating more value, enrich customer experience and improve internal efficiency and processes. These initiatives also enable Cnova to support Marketplace sellers in promoting their catalogs and creating their product feature sheets.
To improve its product catalog and marketability, Cnova has internally developed and deployed specific GenAI use cases since May 2023:
- Product features enrichment
- Product reclassification
- Product headlines and descriptives improvement
Environmental, social and societal stakes such as human capital, climate, business ethics and societal commitment are at the heart of Cnova’s B2B and B2C strategic development:
- Cnova is committed to promoting a more sustainable consumption through its direct sales and marketplace product offer. Actions carried out by Cdiscount and Octopia (enlarging the “more sustainable products” assortment, increasing the visibility of this offer, including these products in the commercial mechanisms) enabled to reach a share of sustainable products representing
19.8% of Cdiscount’s Product GMV in the 1st quarter 2024 (+4.6pts vs. 23) - Cnova also takes actions to reduce the impact of its operations, especially its logistics. The action plan has enabled to reduce the greenhouse gas emissions related to delivery of products sold by Cdiscount and shipped by C-Logistics by
35% 17 - Finally, Cnova pursues its social and societal commitment in favor of gender parity. Thanks to its Human Resources policy, Cnova’s consolidated gender equality index has increased by +3.5pts vs. 22
***
About Cnova N.V.
Cnova N.V., the French ecommerce leader, serves 7.2 million active customers via its state-of-the-art website, Cdiscount. Cnova N.V.’s product offering provides its B2C clients with a wide variety of very competitively priced goods, fast and customer-convenient delivery options, practical and innovative payment solutions as well as travel and entertainment services. Cnova N.V. also serves B2B clients internationally through Octopia (Marketplace-as-a-Service solutions), Cdiscount Advertising (advertising services for sellers and brands) and C-Logistics (end-to-end logistic ecommerce solution). Cnova N.V. is part of Casino group, 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.
| Cnova Investor Relations Contact: investor@cnovagroup.com Tel : +33 6 79 74 30 94 | Media contact: directiondelacommunication@cdiscount.com Tel: +33 6 18 33 17 86 cdiscount@vae-solis.com Tel: +33 6 17 76 79 71 |
***
1 Like-for-like figures exclude Carya and Neosys (disposed) along with Géant and Cdiscount Pro (discontinued)
2 Excluding depreciation & amortization, including rents
3 Comparison periods: from 1/10/2022 to 30/09/2023 vs. 1/10/2021 to 30/09/2022
4 Like-for-like figures exclude Carya and Neosys (disposed) along with Géant and Cdiscount Pro (discontinued)
5 Including Marketplace commissions after price discounts, subscription fee and revenues from fulfilment services to sellers
6 As a % of placed Marketplace GMV excluding VAT (before cancellation due to fraud detection and/or customer non-payment)
7 Including both revenues from marketing services to suppliers and sellers
8 Defined as EBITDA after rents - net CAPEX - 4 installment payment financial costs - other non-current operating expenses - change in working capital - taxes
9 Like-for-like figures exclude Carya and Neosys (disposed) along with Géant and Cdiscount Pro (discontinued)
10 Including Marketplace commissions after price discounts, subscription fee and revenues from fulfilment services to sellers
11 Including both revenues from marketing services to suppliers and sellers
12 Including Travel, Mobile, CUP cards commissions, warranty services and others
13 Including Fulfilment-as-a-Service, Merchants-as-a-Service and Marketplace-as-a-Service (Octopia) and C-Logistics B2B activities
14 Like-for-like figures exclude Carya and Neosys (disposed) along with Géant and Cdiscount Pro (discontinued)
15 Placed Marketplace GMV excluding VAT (before cancellation due to fraud detection and/or customer non-payment)
16 Like-for-like figures exclude Carya and Neosys (disposed) along with Géant and Cdiscount Pro (discontinued)
17 Comparison periods: from 1/10/2022 to 30/09/2023 vs. 1/10/2021 to 30/09/2022
Attachment
FAQ
How did EBITDA after rents perform in 1Q24 compared to 1Q23 for Cnova (CNV)?
What was the improvement in free cash-flows in 1Q24 vs. 1Q23 for Cnova (CNV)?
How much did Services revenues increase by in 1Q24 compared to 1Q23 for Cnova (CNV)?
What percentage of Product GMV does Marketplace now contribute to for Cnova (CNV)?
How much did the sustainable product share grow to in 1Q24 for Cnova (CNV)?
What was the reduction percentage in delivery GHG emissions for Cnova (CNV) in 1Q24?
What event on March 27, 2024, impacted Cnova's ability to innovate and create value for customers?
