As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

11/18/14  Cnova N.V.                        F-1/A                  4:9.6M                                   Merrill Corp/New/FA

Document/Exhibit                   Description                      Pages   Size 

 1: F-1/A       Pre-Effective Amendment to Registration Statement   HTML   4.36M 
                          of a Foreign Private Issuer                            
 2: EX-23.1     Consent of Experts or Counsel                       HTML      7K 
 3: EX-23.2     Consent of Experts or Counsel                       HTML      5K 
 4: EX-99.7     Miscellaneous Exhibit                               HTML      6K 

SUMMARY

        The following summary highlights certain information contained elsewhere in this prospectus and is qualified in its entirety by the more detailed information and consolidated financial statements included elsewhere in this prospectus. Because this is only a summary, it may not contain all of the information that is important to you in making a decision to invest in our ordinary shares. Before making an investment decision, you should carefully read the entire prospectus, including the "Risk Factors" and "Important Information and Cautionary Statement Regarding Forward-Looking Statements" sections, our audited consolidated financial statements and the notes to those statements.

Our Business

        We are one of the largest global eCommerce companies, with operations in Europe, Latin America, Asia and Africa. Among non-travel pure player eCommerce companies, we are the sixth largest by sales and the eighth largest by unique monthly visitors. Our current geographies represent over 530.0 million people, with €0.8 trillion ($1.0 trillion) in non-food total retail spend for the year ended December 31, 2013. For the same period, we had gross merchandise volume, or GMV, of €3,563.6 million ($4,500.1 million), representing a 21.4% increase over pro forma GMV for the year ended December 31, 2012, on a constant exchange rate basis. For the six months ended June 30, 2014, our GMV was €1,943.5 million ($2,454.3 million), representing a 32.9% increase over our GMV for the same period in 2013, on a constant exchange rate basis. For the three months ended September 30, 2014, our GMV was €1,100.8 million ($1,390.1 million), representing a 29.6% increase over our GMV for the same period in 2013, on a constant exchange rate basis. Over the seven quarters ended September 30, 2014, our GMV has shown year-over-year growth of 12.6%, 22.3%, 25.9%, 24.9%, 32.2%, 34.6% and 29.6%, on a constant exchange rate basis.

        We believe we provide our customers with the best value proposition through a low-cost business model that allows us to offer attractive pricing, an extensive product assortment and highly differentiated delivery and payment solutions. We achieve this through our scalable and proprietary technology platforms and preferred relationships with our Parent Companies, which are among the largest retailers in the markets in which we operate.

        As of September 30, 2014, we offered our over 12.9 million active customers access to a wide and growing assortment of approximately 12.0 million product offerings through a combination of our direct sales and sales by third-party vendors. Our 7.8 million placed orders in the three months ended September 30, 2014, represented a year-over-year increase of placed orders by 39.0%, while our active customers increased by 27.6% over the same period. Our most significant product categories in terms of GMV are home appliances, consumer electronics, computers and home furnishings. Our branded sites, including Cdiscount, Extra, Casas Bahia and Ponto Frio, are among the most well-recognized in the markets in which we operate.

        We are a leading eCommerce company in France, where we hold the leading eCommerce market position, with 24.0% to 39.7% market shares in June 2014, in a number of our product categories, based on revenues. From 2008 to 2013, our GMV in France experienced a compound annual growth rate, or CAGR, of 15.1%. We believe we are the second largest eCommerce company in Brazil, with a GMV CAGR of 49.3% from 2008 to 2013 and an increase in Brazilian market share from approximately 8.0% to approximately 17.0% during that period, based on revenues. For the six months ended June 30, 2014, our Brazilian market share had further increased to approximately 19.0%, based on revenues. During the first quarter of 2014, we successfully launched operations in the high-growth emerging eCommerce markets of Colombia, Thailand and Vietnam. In the second quarter of 2014, we launched operations in Ivory Coast and Ecuador, and in the third quarter of 2014, we launched operations in Senegal and extended operations to Belgium. In addition, we intend to expand into an additional African market by the end of 2014.

 

        Our business benefits from the relationships with our Parent Companies, which are part of the Casino Group, a leading global diversified retail group with total sales of €48.6 billion ($61.4 billion) for the year ended December 31, 2013. We benefit from joint purchasing power, as well as their brand recognition, local market expertise, retail brick-and-mortar stores and retail logistics infrastructure. This enables us, among other things, to offer competitive pricing and appealing customer services relative to our competitors, including our Click-and-Collect delivery option whereby our customers can select a nearby location to pick up their purchased products. Our more than 17,500 Click-and-Collect locations across the markets in which we operate provide us with a competitive advantage. For example, during the first nine months of 2014, in France, approximately 59% of our orders were delivered through Click-and-Collect, accounting for approximately 60% of our revenues in France.

        By virtue of the integration of our operations across our geographies, we expect to accelerate cross-selling opportunities, cost efficiencies and sharing of best practices, which we believe will be drivers of profitable growth. For example, we expect increased purchasing power with international suppliers as a result of the increased size and strength of our business, savings from the sharing of information technology, or IT, across our operations and opportunities for marketplace sellers and buyers to reach a wider audience. In addition, we expect to utilize the know-how and other experiences from the success of our French marketplace in order to develop and drive the profitability and traffic of our marketplaces in Brazil, Colombia and any other countries in which we may open marketplaces in the future. Similarly, we seek to leverage our expertise in data utilization to drive our profitability across the markets in which we operate.

Our Industry Drivers

        Internet Penetration:    Internet penetration across the globe is 35.7%, with the rates in the markets in which we operate ranging from 37.0% to 86.0%. Global Internet penetration rates are expected to increase in the coming years due to a variety of reasons, including further development of infrastructure and the rise in the use of Internet-enabled mobile devices.

        Shift from brick-and-mortar shopping to eCommerce:    The eCommerce markets in the countries in which we operate represent 3.7% of the $1.2 trillion retail market in those countries and have experienced rapid growth over the past few years, with revenues increasing from $36.6 billion to $42.9 billion from 2011 to 2013. We believe eCommerce will benefit from customers' continued migration from brick-and-mortar stores to eCommerce based on lower prices, wider range of products, the ability to compare prices among sellers and the convenience of shopping anytime.

        Increasing mCommerce:    mCommerce is an increasingly popular form of eCommerce, as evidenced by the mCommerce penetration rate in France having increased from 7.6% in 2012 to 9.0% in 2013, and is expected to increase to 12.2% by 2016. Similarly, the mCommerce penetration rate in Brazil is expected to increase from 4.0% in 2012 to 9.1% by 2016.

        Untapped potential in high-growth product categories:    We expect certain product categories to experience particularly high growth due to low product adoption and low eCommerce penetration in the sale of such products. In Brazil, for the year ended December 31, 2012, only 38.5% and 1.8% of households owned a microwave and dishwasher, respectively. In France, we estimate that for the year ended December 31, 2013, eCommerce penetration for home products was less than 5.0%.

Our Key Strengths

        We are one of the largest eCommerce companies in the world, and we seek to leverage the following competitive strengths:

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global eCommerce company combining scale with leadership positions in core markets and key categories across three continents;

 

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strong brand portfolio and loyal customer base, which drive significant unpaid traffic to our sites;



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best value proposition with attractive pricing, broad product assortment and convenient delivery and payment solutions;



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proven low-cost and cash generative business model;



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strong growth track record with significant margin expansion potential;



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highly scalable proprietary technology platforms with data monetization opportunities; and



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experienced, innovative and proven management team with a clear strategic vision.

Our Strategies

        Our key focus is to accelerate profitable growth through the following strategies:

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continue to grow our direct sales business through attractive prices, enhanced customer experience and category expansion;



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grow our marketplaces across our markets by adding more sellers and products, driving traffic from our direct sales business and providing fulfillment services to marketplace sellers;



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establish our specialty sites as leaders in their respective product categories;



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leverage and monetize data, traffic and other activities;



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strengthen our mobile leadership; and



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continue our expansion into new attractive geographies.

Risk Factors

        Investing in our ordinary shares involves substantial risk. The risks described under the heading "Risk Factors" immediately following this summary may cause us not to realize the full benefits of our strengths or may cause us to be unable to successfully execute all or part of our strategy. Some of the principal risks of investing in our ordinary shares include the following:

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competition presents an ongoing threat to the success of our business;



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if we fail to retain existing customers or acquire new customers, our business may not grow;



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if we are unable to benefit from the relationships with our Parent Companies, including their brand recognition, local market expertise, retail brick-and-mortar stores and retail logistics infrastructure, our business, financial condition and results of operations could be materially and adversely affected;



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if we are unable to achieve growth in the higher-margin areas of our business, including our marketplaces and home furnishings product category, it may have a material adverse effect on our business, financial condition and operating results;



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if we are unable to successfully expand our operations outside of our existing markets, our future business development and existing operations could be harmed;



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if we are unable to deliver compelling mobile shopping experiences to our customers and monetize traffic from such mobile activity, it could have a material effect on our business, financial condition and operating results;



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if we do not successfully optimize, operate and manage our fulfillment centers, our business, financial condition and operating results could be harmed;



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if we do not successfully protect our networks, systems and sites against security breaches, our reputation and brands could be damaged and our business and operating results could be substantially harmed;

 

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if our sites are affected by significant interruptions or delays in service, it could result in loss of customers and vendors;



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we may not be able to maintain and enhance our brands, on which our business depends;



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we may not be able to successfully integrate our businesses and realize many of the anticipated benefits of the Reorganization;



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as a result of the Reorganization, the financial information and pro forma financial information presented in this prospectus does not necessarily reflect the results we would have achieved as an independent, publicly traded company or our future results;



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your ability to influence corporate matters will be limited, as control of Cnova will be concentrated with our Founding Shareholders;



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our intention to rely on exemptions from certain corporate governance requirements, as we will be a foreign private issuer and a "controlled company" within the meaning of the rules applicable to the NASDAQ Stock Market, or NASDAQ, as a result of which our shareholders will not have the same protections afforded to shareholders of companies that are subject to these NASDAQ corporate governance requirements; and



•

the other risk factors set forth under the heading "Risk Factors."

        You should carefully consider all of the information included in this prospectus, including matters set forth under the headings "Risk Factors" and "Important Information and Cautionary Statement Regarding Forward-Looking Statements," before deciding to invest in our ordinary shares.

Conventions Used in this Prospectus

        Unless the context otherwise requires, references in this prospectus to:

•

"active customers" are 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;



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"GMV" are gross merchandise volume derived from our product sales, marketplaces business volumes and other revenues, after returns, including taxes;



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"mCommerce" are product purchases made through mobile devices;



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"mobile devices" are Internet-enabled mobile phones and tablets;



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"product offerings" are the total number of products offered to our customers across all of our sites, taking into account direct sales and marketplace sales;



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"pure player eCommerce companies" are companies focused exclusively on eCommerce;



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"sites" are our computer websites, mobile websites and mobile applications; and



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"UMVs" are unique monthly visitors, which is the total number of unique users that visited our sites during any given month.

Our Founding Shareholders

        Following the completion of this offering, it is expected that our Founding Shareholders will beneficially own 93.9% of our outstanding ordinary shares and 100% of our special voting depository receipts for our special voting shares, representing 96.9% of the voting power of all of our outstanding ordinary shares and special voting shares voting together as a single class, or, if the underwriters exercise in full their option to purchase additional ordinary shares, 93.0% of our ordinary shares and 100% of our special voting depository receipts for our special voting shares, representing 96.4% of the

 

voting power of all of our outstanding ordinary shares and special voting shares voting together as a single class. As a result of this ownership and the provisions of the Special Voting Agreement, the Founding Shareholders will have control over votes on fundamental and significant corporate matters and transactions.

        So long as the Founding Shareholders own more than 50% of our voting power, we will be a "controlled company" under NASDAQ rules. Under NASDAQ rules, a listed company of which more than 50% of the voting power for the election of directors is held by an individual, a group or another company is a "controlled company" that is not required to comply with certain corporate governance requirements. We intend to rely on certain exemptions following the offering, and may rely on any of these exemptions for so long as we are a "controlled company." See "Risk Factors—Risks Related to an Investment in Our Ordinary Shares" and "Certain Relationships and Related Party Transactions—Agreements Relating to our Shares—Special Voting Agreement."

Corporate History and Information

        Cnova N.V. is a newly formed public limited liability company (naamloze vennootschap) organized under the laws of the Netherlands. On July 24, 2014, Cnova and the Parent Companies completed a reorganization of the eCommerce businesses of the Parent Companies in France and Latin America, and the reorganization of the Parent Companies' eCommerce businesses in Asia was completed on November 17, 2014, which transactions we collectively refer to as the Reorganization. As a result of the Reorganization, we own or have the right to use a majority of the assets that were used, or held for use, in the eCommerce businesses of the Parent Companies and their subsidiaries. Additional information with respect to the Reorganization is included in this prospectus under the heading "The Reorganization."

        Our principal places of business are located at Cdiscount S.A., 120-126, Quai de Bacalan CS 11584, 33067 Bordeaux Cedex, France, telephone number +33 5 55 71 45 00, and CNova Comércio Eletrônico S.A., Rua Gomes de Carvalho 1609, Vila Olimpia 04547-006, São Paulo SP, Brazil, telephone number +55 11 4949-8000. Our website address is www.cnovagroup.com. Information on, or accessible through, our website is not part of this prospectus.

Enforcement of Civil Liabilities

        We are incorporated in the Netherlands, and conduct the substantial majority of our operations in France and Brazil through our subsidiaries. Service of process upon us and upon our directors and officers and certain experts named in this prospectus, substantially all of whom reside outside the United States, may be difficult to obtain within the United States. Furthermore, because substantially all of our assets and substantially all of our directors and officers are located outside the United States, any judgment obtained in the United States against us or any of our directors and officers may not be collectible within the United States. Even if you are successful in bringing an action in the United States, the laws of the Netherlands, France or Brazil may render you unable to enforce the U.S. judgment against our assets or the assets of our directors and officers. As there is no treaty on the reciprocal recognition and enforcement of judgments (other than arbitration awards) in civil and commercial matters between the United States and the Netherlands, between the United States and France, or between the United States and Brazil, courts in the Netherlands, France and Brazil will not automatically recognize and enforce a final judgment rendered by a U.S. court. In order to enforce a judgment in the Netherlands, France or Brazil, claimants must obtain leave to enforce the judgment from a Dutch, French or Brazilian court of competent jurisdiction, as applicable. For more information regarding the relevant laws of the Netherlands, France and Brazil, see "Enforcements of Civil Liabilities."

 

Corporate Structure

        The diagram below is a simplified version of our corporate structure as of the date of this prospectus after giving effect to the Reorganization and this offering.

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(1)

Casino is ultimately controlled by Jean-Charles Naouri, via Euris S.A.S. and other intermediate entities. See "Principal Shareholders."

(2)

The management shareholders of Nova HoldCo include Germán Quiroga and other minority shareholders (1.8% and 2.0%, respectively).

(3)

Nova HoldCo holds its interest in Cnova through two wholly-owned intermediate holding entities, Lux HoldCo and Dutch HoldCo. See "The Reorganization."

(4)

The remaining 0.2% of the share capital consists of shares granted to managers and employees of Cdiscount under Cdiscount Group's performance shares program and are currently subject to lock-up obligations. The existing liquidity arrangements (consisting of put and call options) between Casino and minority shareholders have been transferred to Cnova.

(5)

Cdiscount Group holds its interests in Cdiscount LatAm and C-Asia, and part of its interest in Cdiscount Colombia S.A.S., or Cdiscount Colombia, through a wholly-owned intermediate entity, Cdiscount International B.V. Cdiscount Group holds its interest in Cdiscount Africa through a wholly-owned intermediate entity, Cdiscount Afrique S.A.S.

(6)

The remaining 0.4% of the share capital is indirectly held by Casino.

(7)

The 15% minority interest in Cdiscount Africa is held by Bolloré Africa Logistics. The 49% minority interest in Cdiscount Colombia is held by Éxito. The 30% minority interest in Cdiscount LatAm is held by Éxito. The 40% minority interest in C-Asia is held by Big C Supercenter. The 30% minority interest in Cdiscount Thailand is held by Big C Supercenter. The 20% minority interest in Cdiscount Vietnam is held by a subsidiary of Casino.

 

THE OFFERING

 

        The number of ordinary shares to be outstanding after this offering is based on 412,114,952 ordinary shares outstanding as of October 31, 2014. This amount excludes (i) deferred stock units with respect to up to 1,320,000 of our ordinary shares to be granted to certain executives of Cnova immediately upon completion of this offering under the Cnova N.V. 2014 Omnibus Incentive Plan (the "Omnibus Incentive Plan") as we will not issue any of our ordinary shares to the recipients of the deferred stock units until the fourth anniversary of the completion of this offering and (ii) restricted stock awards with respect to our ordinary shares to be granted to our independent directors under the Omnibus Incentive Plan as our ordinary shares will be issued to the recipients of the restricted stock awards in equal installments on each of the first, second and third anniversaries of the grant date.

        Unless otherwise indicated, all information in this prospectus:

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assumes an offering price of $13.25 per ordinary share, which is the midpoint of the price range set forth on the cover page of this prospectus; and



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assumes no exercise of the underwriters' over-allotment option to purchase up to 4,020,000 additional ordinary shares.

 

Summary Consolidated Historical Financial Information

        The following tables set forth our summary consolidated financial information as of and for the periods ended on the dates indicated below. The summary financial information as of December 31, 2011, 2012 and 2013, and for the years then ended has been derived from our audited consolidated financial statements for the years ended December 31, 2011, 2012 and 2013, which are included elsewhere in this prospectus. The summary financial information as of September 30, 2014 and for the nine months ended September 30, 2013 and 2014 have been derived from our unaudited interim condensed consolidated financial statements as of September 30, 2014 and for the nine months ended September 30, 2013 and 2014, which are included elsewhere in this prospectus. We have prepared the unaudited consolidated financial information on the same basis as our audited consolidated financial statements. Interim results are not necessarily indicative of the results that may be achieved in an entire fiscal year. Our results of operations in any period may not necessarily be indicative of the results that may be expected for any future period. See "Risk Factors" beginning on page 13 of this prospectus.

        The summary consolidated historical financial information should be read in conjunction with our financial statements and the accompanying notes included elsewhere in this prospectus, "Unaudited Pro Forma Consolidated Financial Information" beginning on page 52 of this prospectus and "Management's Discussion and Analysis of Financial Condition and Results of Operations" beginning on page 64 of this prospectus. Our consolidated financial statements have been prepared in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board.

 

        The consolidated financial statements were prepared with Cdiscount Group and Nova Pontocom deemed as the predecessor of Cnova, with Nova Pontocom included from July 2, 2012, the date control of Nova Pontocom was obtained by Casino, which has been accounted for as a reorganization of entities under common control of Casino. We did not operate as a standalone entity in the past and, accordingly, the following discussion is not necessarily indicative of our future performance and does not reflect what our financial performance would have been had we operated as a standalone company during the periods presented.