Tokmanni Group Corporation:Revenue grew and profitability improved, strong cash flow
Tokmanni Group Corporation Financial Statement Release 8.2.2017 8.30 am EET
Tokmanni Group: Revenue grew and profitability improved, strong cash flow
This release is a summary of Tokmanni's Financial Statement Bulletin 2016. The complete report is attached to this release as a pdf-file.
FOURTH QUARTER HIGHLIGHTS
- Revenue grew 2.8% to EUR 238.1 million (231.7)
- Like-for-Like revenue grew 0.8%
- Gross profit totaled EUR 84.2 million (80.8), a gross profit margin of 35.3% (34.9%)
- Adjusted gross profit totaled EUR 83.5 million (80.5), an adjusted gross profit margin of 35.1% (34.8%)
- EBITDA amounted to EUR 28.4 million (26.0), 11.9% of revenue (11.2%)
- Adjusted EBITDA totaled EUR 27.3 million (26.4), 11.5% of revenue (11.4%)
- EBIT amounted to EUR 24.6 million (22.2), 10.3% of revenue (9.6%)
- Adjusted EBIT totaled EUR 23.6 million (22.5), 9.9% of revenue (9.7%)
- Cash flow from operating activities amounted to EUR 47.5 million (42.0)
- Earnings per share amounted to 0.32 euros (0.31)
HIGHLIGHTS OF THE REVIEW PERIOD JANUARY-DECEMBER 2016
- Revenue grew 2.7% to EUR 775.8 million (755.3)
- Like-for-Like revenue at last year's level, -0.1%
- Gross profit totaled EUR 268.4 million (257.5), a gross profit margin of 34.6% (34.1%)
- Adjusted gross profit totaled EUR 267.9 million (258.1), an adjusted gross profit margin of 34.5% (34.2%)
- EBITDA amounted to EUR 64.3 million (53.9), 8.3% of revenue (7.1%)
- Adjusted EBITDA totaled EUR 62.8 million (58.5), 8.1% of revenue (7.7%)
- EBIT amounted to EUR 49.2 million (39.1), 6.3% of revenue (5.2%)
- Adjusted EBITDA totaled EUR 47.7 million (43.7), 6.1% of revenue (5.8%)
- Cash flow from operating activities was strong EUR 62.5 million (35.0)
- Earnings per share totaled 0.50 euros (0,33)
- Based on the strong cash flow and cash position, the Board of Directors proposes to the Annual General Meeting to pay dividend according to the company dividend policy 0.41 euro per share and an extraordinary dividend of 0.10 euro, in total a dividend of 0,51 euro per share
TOKMANNI'S OUTLOOK FOR 2017: GOOD GROWTH AND IMPROVED PROFITABILITY
Tokmanni's expects good revenue growth for 2017 based on the revenue from new stores opened in 2016 and 2017 and low single digit Like-for Like revenue growth. Group profitability (adjusted EBITDA%) is expected to improve from the previous year.
CEO HEIKKI VÄÄNÄNEN: A GOOD YEAR FOR TOKMANNI - REVENUE GREW AND PROFITABILITY IMPROVED
"The year 2016 was eventful for Tokmanni. We were introduced on the Nasdaq Helsinki stock exchange, opened seven new stores around Finland and a growing number of customers found their way to our stores. This resulted in revenue growth and reinforced the brand awareness.
During the year the challenges in the market continued and according to the FTGA statistics the non-grocery market continued to decline in 2016 as well. In the summer of 2016 the department store chain Anttila went bankrupt and liquidated its stock which created temporary market turbulence. The effects were seen also at Tokmanni especially in the third quarter but also extending to the fourth quarter impacting our Like-for-Like development negatively.
With the exception of the third quarter, Tokmanni's Like-for-Like revenue has grown during the whole year which signals that our measures to improve Like-for-Like growth are in the right direction. I am particularly pleased that our number of baskets increased by 3.4% to 44.7 million showing that we create value for our customers, our assortment is topical, that Tokmanni's brand awareness constantly improves and that new customers are finding their way to our stores.
In accordance with our strategy our profitability improved by improving sourcing efficiency, focusing on direct sourcing, increasing the share of private labels and through continuous tight cost control. Our cash flow was good and our balance sheet strong enabling the continuous development of the company and increasing shareholder value.
We expect good growth in 2017. After several years there are signals of recovery in the market and consumer confidence has improved. Our guidance for 2017 is however primarily based on our own measures. We have developed the company in a focused way for several years and will continue to do so. As a result, we expect good revenue growth for 2017 based on revenue from new stores opened in 2016 and 2017 as well as low single digit Like-for-Like revenue growth. In the fourth quarter 2016 we launched a new marketing concept and we continue our active work to offer our customers good value for money through an even more attractive assortment and pleasant shopping experience. At the same time we continue our tight cost control. In 2017 we will open at least 11 new stores."
KEY FIGURES
| 10-12/2016 | 10-12/2015 | Change% | 1-12/2016 | 1-12/2015 | Change% | |
| Revenue, MEUR | 238.1 | 231.7 | 2.8% | 775.8 | 755.3 | 2.7% |
| Like-for-like revenue development, % | 0.8 | -0.1 | ||||
| Number of baskets, M | 12.8 | 12.4 | 3.5% | 44.7 | 43.3 | 3.4% |
| Gross profit, MEUR | 84.2 | 80.8 | 4.2% | 268.4 | 257.5 | 4.2% |
| Gross margin, % | 35.3 | 34.9 | 34.6 | 34.1 | ||
| Adjusted gross profit, MEUR | 83.5 | 80.5 | 3.7% | 267.9 | 258.1 | 3.8% |
| Adjusted gross margin, % | 35.1 | 34.8 | 34.5 | 34.2 | ||
| Operating expenses | -56.8 | -56.0 | 1.6% | -207.4 | -207.7 | -0.1% |
| Adjusted operating expenses | -57.2 | -55.4 | 3.3% | -208.5 | -203.7 | 2.4% |
| EBITDA, MEUR | 28.4 | 26.0 | 8.9% | 64.3 | 53.9 | 19.3% |
| EBITDA, % | 11.9 | 11.2 | 8.3 | 7.1 | ||
| Adjusted EBITDA, MEUR | 27.3 | 26.4 | 3.5% | 62.8 | 58.5 | 7.4% |
| Adjusted EBITDA, % | 11.5 | 11.4 | 8.1 | 7.7 | ||
| Operating profit (EBIT), MEUR | 24.6 | 22.2 | 11.0% | 49.2 | 39.1 | 25.9% |
| Operating profit margin EBIT, % | 10.3 | 9.6 | 6.3 | 5.2 | ||
| Adjusted EBIT, MEUR | 23.6 | 22.5 | 4.7% | 47.7 | 43.7 | 9.2% |
| Adjusted EBIT, % | 9.9 | 9.7 | 6.1 | 5.8 | ||
| Net financial items, MEUR | -1.4 | -5.1 | -72.4% | -15.2 | -20.9 | -27.2% |
| Net Capital expenditure, MEUR | 4.4 | 5.1 | -13.5% | 9.8 | 9.0 | 8.8% |
| Net debt / adjusted EBITDA | 1.8 | 2.7 | 1.8 | 2.7 | ||
| Net cash from operating activities, MEUR | 47.5 | 42.0 | 62.5 | 35.0 | ||
| Return on capital employed, % | 7.2 | 6.5 | 14.5 | 11.6 | ||
| Return on equity, % | 12.3 | 11.0 | 18.1 | 12.0 | ||
| Number of shares, weighted average during the financial period (thousands)* | 58 869 | 44 549 | 54 095 | 44 549 | ||
| Earnings per share (EUR/share)* | 0.32 | 0.31 | 0.50 | 0.33 | ||
| Personnel at the end of the period | 3 224 | 3 293 | 3 224 | 3 293 |
* The amount of shares 2015 and 2016 has been adjusted with the effects of the bonus issue ('share split') carried out 04/2016.
MARKET OUTLOOK
During 2016 the Finnish economy has seen slight recovery which has been primarily based on the growth of private consumption. The Finnish Finance Ministry predicts that GDP will grow by 0.9% in 2017 and 1.0% in 2018, but that the growth of private consumption will temporarily slowdown in 2017 as among others a result of accelerating inflation, wage development due to the Competitive Pact (KiKy) as well as annual working time changes. Tokmanni expects the Finnish retail market to grow slightly, but tough competition to continue especially in the grocery market. At the same time specialty stores and online stores will continue to strengthen their position.
Although the weak economic situation has accelerated the growth of discount stores in the Finnish retail market as a whole, growth is expected to continue as the economy recovers. When customers have taken discount retailers as a regular shopping place and become accustomed to discount retailers and found the value for money of those products favorable they are likely to remain regular customers also when the economy recovers. The value for money trend which has prevailed internationally for a long time is therefore expected to continue.
The bankruptcy clearance sale of Anttila department store has ended and the last stores closed in December 2016. The bankruptcy caused a disturbance on the market in the second half of 2016 but in the longer term, Anttila's exit from the market creates opportunities for companies such as Tokmanni both regarding retail space as well as the redistribution of Anttila's customer base.
ANALYST AND PRESS CONFERENCE
An analyst and press conference will be held on the publication at 10.00 am EEST (9.00 CET) at the GLO Hotel, Kluuvikatu 4, Helsinki. The conference is in Finnish and will also be webcasted. An audiocast in English will be held at 11.15 am EEST (10.15 CET).
Both the live casts can be accessed via Tokmanni's website at ir.tokmanni.fi or through the link http://www.goodmood.fi/webcaster/accounts/tokmanni/live. On-demand versions of both webcasts will be available at ir.tokmanni.fi later during the same day.
The participants can also join a telephone conference that will be arranged in conjunction with the live webcasts. The participants are asked to dial in 5-10 minutes prior to starting time using the Participant Phone Number and Participant Passcodes below:
09-7479 0360 (Finnish callers)
+44 (0)330 336 9401 (UK callers)
+1 719-325-2238 (US callers)
Participant code: 976594
For further information, please contact:
Heikki Väänänen
CEO
Tel. +358 20 728 6044
heikki.vaananen(at)tokmanni.fi
Sixten Hjort, CFO
tel: +358 20 728 6043
sixten.hjort(a)tokmanni.fi
Joséphine Mickwitz, Head of IR and Communications
tel. +358400784889
mail: josephine.mickwitz(a)tokmanni.fi
2016 Publications and accouncements
The 2016 financial statements, Corporate Governance Statement and Corporate Responsibility Report will be published during week 8.
All Company Announcements and press releases published by Tokmanni in 2016 can be found on the corporate website at ir.tokmanni.fi.
Tokmanni in brief
Tokmanni is the largest general discount retailer in Finland measured by number of stores and revenue. In 2016, Tokmanni's revenue was EUR 776 million and on average it had approximately 3,200 employees. Tokmanni is the only nationwide general discount retailer in Finland, with 162 stores across Finland as at 31 December 2016.
Distribution:
Nasdaq Helsinki Ltd
Main news media
Full report: