Tokmanni Financial Statement bulletin 2018

Fri, Feb 08, 2019 11:00 CET

Tokmanni Group Corporation Financial Statement Bulletin 8 February 2019 at 12:00

Q4/2018: revenue grew by 8.0%, good profitability was burdened by non-recurring items

FOURTH-QUARTER HIGHLIGHTS

Revenue grew by 8.0% to EUR 268.4 million (248.5)
Like-for-like revenue grew by 4.7% (-1.0%)
Acquisition of 9 Ale-Makasiini stores
Recall of the decoration lights impacted gross profit by about EUR -1.4 million
Gross profit totalled EUR 92.2 million (86.6) and gross margin 34.3% (34.8%)
Comparable gross profit totalled EUR 92.3 million (86.1) and comparable gross margin 34.4% (34.6%)
EBITDA amounted EUR 28.6 million (29.3), 10.7% of revenue (11.8%)
Comparable EBITDA totalled EUR 28.2 million (28.6), 10.5% of revenue (11.5%)
EBIT totalled EUR 24.7 million (25.7), 9.2% of revenue (10.3%)
Comparable EBIT totalled EUR 24.4 million (25.0), 9.1% of revenue (10.1%)
Cash flow from operating activities amounted to EUR 46.7 million (52.6)
Earnings per share were EUR 0.32 (0.33)

HIGHLIGHTS OF THE REVIEW PERIOD JANUARY-DECEMBER 2018

Revenue grew by 9.3% to EUR 870.4 million (796.5)
Like-for-like revenue grew by 5.6% (-1.3%)
2 new and 3 relocated stores opened during the review period
Gross profit totalled EUR 295.3 million (267.1) and gross margin 33.9% (33.5%)
Comparable gross margin totalled EUR 295.0 million (268.1) and comparable gross margin 33.9% (33.7%)
EBITDA amounted to EUR 64.9 million (53.1), 7.5% of revenue (6.7%)
Comparable EBITDA amounted EUR 63.3 million (55.0), 7.3% of revenue (6.9%)
EBIT totalled EUR 50.3 million (38.8), 5.8% of revenue (4.9%)
Comparable EBIT totalled EUR 48.6 million (40.6), 5.6% of revenue (5.1%)
Cash flow from operating activities amounted to EUR 44.9 million (27.1)
Earnings per share were EUR 0.61 (0.45)

DIVIDEND PROPOSAL

Tokmanni’s Board of Directors proposed to the Annual General Meeting to pay a dividend of EUR 0.50 per share.

TOKMANNI’S OUTLOOK FOR 2019

Tokmanni expects good revenue growth for 2019, based on the revenue from the new stores acquired and opened in 2018 and new stores to be opened in 2019, as well as on slight growth in like-for-like revenue. Group profitability (comparable EBIT margin) is expected to improve on the previous year.

CEO Mika Rautiainen

2018 STRONG GROWTH – 2019 IMPROVING PROFIT

Tokmanni’s main focus in 2018 was on improving customer confidence. We improved customer confidence by focusing on affordable prices, diversifying our assortment, revising the store concept and strengthening customer experience. Solid growth in revenue and customer numbers indicate that we have been successful in our task. In 2018, Tokmanni’s customer numbers grew by 6.9%. Based on this, we estimate that our market share has grown. Total revenue for the year grew by 9.3%, reaching EUR 870.4 million. Like-for-like revenue grew by 5.6%.

Buoyed by the Christmas season, total revenue in the fourth quarter grew by 8.0%, while like-for-like revenue grew by 4.7% compared to previous year of -1.0%. Fourth-quarter profitability was burdened by a significant non-recurring expense arising from the recall of decoration lights. Additionally, the integration of the Ale-Makasiini stores according to plan and preparations for the acquisition of the four stores in northern Finland had a negative impact on profitability in the fourth quarter. However, these were one-off measures and, all in all, we are on a healthy track going forward.

In 2019, Tokmanni will focus strongly on improving the performance of its business. We will make efforts to boost the efficiency of our processes in order to reduce the relative share of fixed expenses. We will also improve the gross margin by growing the sales of our private label products and increasing direct imports. Moreover, we will continue to develop the combination of our online store and brick-and-mortar stores so as to serve consumers even better than before. Based on the measures we have already taken, we expect Tokmanni’s online sales and corporate sales to develop favourably.

In 2018, Tokmanni’s employees have done a very good job of improving the company's customer confidence. As an acknowledgment for the good work, the company has paid sales bonus of about EUR 2 million to all Tokmanni’s employees in 2018.

On the whole, I consider the development of Tokmanni’s business to be encouraging. We are in a strong position to face potential slowdown in general economic growth. The importance of cheap prices tends to be emphasized in the economic downturn. We will continue to execute our strategy with the aim of reinforcing our position as the largest and best known general discount retailer in Finland.

Key figures
	10-12/2018	10-12/2017	Change%	1-12/2018	1-12/2017	Change%
Revenue, MEUR	268.4	248.5	8.0%	870.4	796.5	9.3%
Like-for-like revenue development, %	4.7	-1.0		5.6	-1.3
Customer visit development %	5.7	3.6		6.9	3.6
Gross profit, MEUR	92.2	86.6	6.5%	295.3	267.1	10.6%
Gross margin, %	34.3	34.8		33.9	33.5
Comparable gross profit, MEUR	92.3	86.1	7.2%	295.0	268.1	10.1%
Comparable gross margin, %	34.4	34.6		33.9	33.7
Operating expenses	-64.7	-58.5	10.6%	-234.3	-217.8	7.6%
Comparable operating expenses	-65.2	-58.7	11.1%	-235.7	-217.0	8.6%
EBITDA, MEUR	28.6	29.3	-2.4%	64.9	53.1	22.3%
EBITDA, %	10.7	11.8		7.5	6.7
Comparable EBITDA, MEUR	28.2	28.6	-1.3%	63.3	55.0	15.1%
Comparable EBITDA, %	10.5	11.5		7.3	6.9
Operating profit (EBIT), MEUR	24.7	25.7	-3.8%	50.3	38.8	29.7%
Operating profit margin EBIT, %	9.2	10.3		5.8	4.9
Comparable EBIT, MEUR	24.4	25.0	-2.6%	48.6	40.6	19.7%
Comparable EBIT, %	9.1	10.1		5.6	5.1
Net financial items, MEUR	-1.3	-1.6	-14.8%	-5.6	-5.8	-4.2%
Net capital expenditure, MEUR	8.8	4.3	104.1%	19.8	8.1	142.9%
Net debt / comparable EBITDA **	2.1	2.4		2.1	2.4
Net cash from operating activities, MEUR	46.7	52.6		44.9	27.1
Return on capital employed, %	7.2	7.6		14.6	11.4
Return on capital employed %,rolling 12 months	15.0	12.0		15.0	12.0
Return on equity, %	11.1	11.7		21.2	16.0
Return on equity %, rolling 12 months	23.4	18.3		23.4	18.3
Equity ratio, %	36.0	35.3		36.0	35.3
Number of shares, weighted average duringthe financial period (thousands)	58 869	58 869		58 869	58 869
Earnings per share (EUR/share)	0.32	0.33		0.61	0.45
Personnel at the end of the period	3 558	3 255		3 558	3 255
Personnel on average in the period	3 500	3 258		3 415	3 232

* Net investments without long-term receivables from others
** Rolling 12 months comparable EBITDA

Analyst and press conference

An analyst and press conference will be held in Finnish today day Friday at 2:00 pm at Scandic Simonkenttä, Simonkatu 9, 00100 Helsinki, Finland in conference room Tapiola. An audiocast in English will be held at 3:30 pm.

The English live audiocast can be accessed via Tokmanni’s website at ir.tokmanni.fi or through the link https://tokmanni.videosync.fi/2018-q4-results

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 Numbers below.

The teleconference in English will start at 3:30 pm.

Finland: +358 9 8171 0310
Sweden: +46 8 5664 2651
UK: +44 33 3300 0804
US: +1 63 1913 1422
Passcode: 82211860#

For further information, please contact

Mika Rautiainen, CEO
tel. +358 0207286061
mika.rautiainen(at)tokmanni.fi

Markku Pirskanen, CFO
tel: +358 20 728 7390
markku.pirskanen(a)tokmanni.fi

Tokmanni in brief
Tokmanni is Finland's leading general discount retailer by number of stores and revenue. In 2018, Tokmanni’s revenue totalled EUR 870.4 million, and the company had around 3,600 employees. Tokmanni is also the only nationwide general discount retailer in Finland, and it currently almost 200 around the country.

Distribution
Nasdaq Helsinki
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