Cnova (CNV) H1 2024 earnings summary

Executive summary

• Operational profitability improved, with EBITDA after rents up €2m and free cash flow up €101m compared to 2023, driven by a strategic shift to higher-margin services and marketplace activities.

• Product GMV declined 12% in 1H24 vs. 2023, but monthly trends improved, with marketplace GMV turning positive in July.

• Marketplace share of product GMV rose to 65% in 1H24 (+6.8pts vs. 2023), reflecting the business model transformation.

• Services revenues increased 5% to €158m, now 33% of net sales, with B2B revenues up 87%.

• Gross margin rate improved by 7pts to 36.6% of net sales, supported by marketplace, advertising, and B2B activities.

Financial highlights

• Net sales fell 23% to €471m in 1H24, mainly due to lower direct sales as the company shifted focus to services.

• EBITDA was €31m (6.6% of net sales, +1.1pt vs. 2023); EBITDA after rents rose to €18m (+€2m vs. 2023).

• Net loss from continuing operations improved to €-52m from €-65m in 1H23, mainly due to lower income tax expense.

• Free cash flow improved to €-102m in 1H24 from €-202m in 1H23, driven by better working capital management.

• Operating EBIT was €-15m, slightly worse than 2023, impacted by higher restructuring costs.

Outlook and guidance

• Focus remains on commercial recovery, reinforcing value proposition, and leveraging AI and technology to drive growth.

• Marketplace, retail media, and B2B activities are expected to continue supporting operational profitability.