Tokmanni Group Corporation: January-June 2016 Good growth and profitability
Tokmanni Group Corp. Half Year Financial Report 10.8.2016 at 8:30 EEST
TOKMANNI GROUP JANUARY-JUNE 2016: GOOD GROWTH AND PROFITABILITY
This release is a summary of Tokmanni's Half Year Financial Report January-June 2016. The complete report is attached to this release as a pdf-file.
SECOND QUARTER HIGHLIGHTS
· Revenue grew 5.4% to EUR 192.4 million (182.5), clearly outperforming the market which grew 2.9% according to the FTGA (PTY)
· Like-for-like revenue grew 2.5%
· Gross profit totaled EUR 67.8 million (62.7), a gross margin of 35.2% (34.3%)
· Adjusted gross profit totaled EUR 67.1 million (64.1), an adjusted gross margin of 34.9% (35.1%)
· EBITDA amounted to EUR 16.4 million (10.8), 8.5% of revenue (5.9%)
· Adjusted EBITDA totaled EUR 15.2 million (12.9), 7.9% of revenue (7.1%)
· EBIT amounted to EUR 12.6 million (7.1), 6.6% of revenue (3.9%)
· Adjusted EBIT totaled EUR 11.4 million (9.3), 5.9% of revenue (5.1%)
· Cash flow from operating activities totaled EUR 23.6 million (12.5)
· Earnings per share 0.08 euro (0.08)
· Tokmanni was listed on the Nasdaq Helsinki Exchange list. The IPO impacted the company's capital structure, increasing equity and decreasing non-current liabilities. In connection with the IPO, Tokmanni refinanced its loans with better terms. At the end of June Tokmanni's equity totaled EUR 137.7 million (28.3) and non-current liabilities EUR 208.0 million (304.4)
HIGHLIGHTS OF THE REVIEW PERIOD JANUARY-JUNE 2016
· Revenue grew 4.4% to EUR 350.6 million (335.8), clearly outperforming the market which grew 1.1% according to the FTGA (PTY)
· Like-for-like revenue grew 1.5%
· Gross profit totaled EUR 119.5 million (113.4), gross margin improved to 34.1% (33.8%)
· Adjusted gross profit totaled EUR 119.6 million (114.4), adjusted gross margin 34.1% (34.1%)
· EBITDA amounted to EUR 17.5 million (11.5), 5.0% of revenue (3.4%)
· Adjusted EBITDA totaled EUR 17.4 million (14.7), 5.0% of revenue (4.4%)
· EBIT totaled EUR 9.9 million (4.2), 2.8% of revenue (1.2%)
· Adjusted EBIT totaled EUR 9.8 million (7.4), 2.8% of revenue (2.2%)
· Cash flow from operating activities amounted to EUR 8.3 million (-5.3)
· Earnings per share -0.05 euro (-0.22)
TOKMANNI'S SHORT TERM OUTLOOK 2016 UNCHANGED
Despite Tokmanni's good performance during the first half 2016 and due to the market turbulence, Tokmanni has decided to leave its short-term outlook unchanged: Tokmanni estimates its revenue to grow based on the revenue growth from new and relocated stores opened in 2015 and 2016, and on revenue of like-for-like stores, which is expected to remain at the level of the previous year despite challenging market conditions.
CEO HEIKKI VÄÄNÄNEN: A STRONG FIRST HALF 2016
"Our attractive pricing, good customer experience, attractive assortment and efficient sourcing model and wide product offering continued to drive our business during the first half of 2016. We continued our market outperformance which was driven by revenue growth from new stores and was also supported by like-for-like revenue growth of 1.5%. I am particularly pleased that our number of baskets increased by almost 5% to 20.8 million which signals that the Tokmanni brand is becoming more and more recognized and that new customers are finding their way to our stores. The like-for-like growth was also driven partly by the liberalization of opening hours.
During the first half of 2016, our profitability improved, our cash flow was good and our financial position was stable. Having said that, we see that the challenges in the market continue and we will continue to work hard providing our customers good value for money with a wide and attractive assortment, and a pleasant shopping experience. At the same time our focus remains on managing costs and continuously developing our highly cash generative business model to meet our targets. Personally, I welcome the on-going legislative reforms in the retail market which will hopefully have a positive effect on our and the whole retail market development long-term."
KEY FIGURES
| 4-6/2016 | 4-6/2015 | Change% | 1-6/2016 | 1-6/2015 | Change% | 1-12/2015 | ||
| Revenue, MEUR | 192.4 | 182.5 | 5.4% | 350.6 | 335.8 | 4.4% | 755.3 | |
| Like-for-like revenue development, % | 2.5 | 1.5 | -0.6 | |||||
| Number of baskets, M | 11.4 | 10.7 | 6.1% | 20.8 | 19.9 | 4.6% | 43.3 | |
| Gross profit, MEUR | 67.8 | 62.7 | 8.1% | 119.5 | 113.4 | 5.3% | 257.5 | |
| Gross margin, % | 35.2 | 34.3 | 34.1 | 33.8 | 34.1 | |||
| Adjusted gross profit, MEUR | 67.1 | 64.1 | 4.7% | 119.6 | 114.4 | 4.5% | 258.1 | |
| Adjusted gross margin, % | 34.9 | 35.1 | 34.1 | 34.1 | 34.2 | |||
| Operating expenses | -52.2 | -52.8 | -1.1% | -103.5 | -103.7 | -0.2% | -207.7 | |
| Adjusted operating expenses | -52.7 | -52.1 | 1.3% | -103.7 | -101.4 | 2.3% | -203.7 | |
| EBITDA, MEUR | 16.4 | 10.8 | 52.4% | 17.5 | 11.5 | 52.5% | 53.9 | |
| EBITDA, % | 8.5 | 5.9 | 5.0 | 3.4 | 7.1 | |||
| Adjusted EBITDA, MEUR | 15.2 | 12.9 | 17.5% | 17.4 | 14.7 | 18.0% | 58.5 | |
| Adjusted EBITDA, % | 7.9 | 7.1 | 5.0 | 4.4 | 7.7 | |||
| Operating profit (EBIT), MEUR | 12.6 | 7.1 | 77.3% | 9.9 | 4.2 | 136.7% | 39.1 | |
| Operating profit margin EBIT, % | 6.6 | 3.9 | 2.8 | 1.2 | 5.2 | |||
| Adjusted EBIT, MEUR | 11.4 | 9.3 | 22.8% | 9.8 | 7.4 | 31.4% | 43.7 | |
| Adjusted EBIT, % | 5.9 | 5.1 | 2.8 | 2.2 | 5.8 | |||
| Net financial items, MEUR | -7.2 | -5.3 | 35.5% | -12.3 | -10.6 | 16.5% | -20.9 | |
| Capital expenditure, MEUR | 1.6 | 3.9 | -58.1% | 3.0 | 7.8 | -62.0% | 9.0 | |
| Net debt / adjusted EBITDA | 2.6 | 3.3 | 2.6 | 3.3 | 2.7 | |||
| Net cash from operating activities, MEUR | 23.6 | 12.5 | 8.3 | -5.3 | 35.0 | |||
| Number of shares, weighted average during the financial period (thousands) | 54 095 | 22 274 | 41 897 | 22 274 | 22 274 | |||
| Earnings per share (EUR/share) | 0.08 | 0.08 | -0.05 | -0.22 | 0.67 | |||
| Personnel at the end of the period | 3 503 | 3 487 | 3 503 | 3 487 | 3 293 | |||
Details of the adjustments affecting comparability can be found in the full Half year financial report attached to this release.
MARKET OUTLOOK
Tokmanni expects the weak economic conditions to continue or to improve slightly in 2016. This will continue to have an effect on the retail market in Finland where the competition is expected to remain high. Especially department stores have been impacted by the weak economic situation and have faced challenges among others due to the increase in popularity of online stores. The latest sign of these challenges were seen in the bankruptcy of the Finnish retail chain Anttila in July 2016. In the short term the bankruptcy might impact the market through increased price competition but also brings potential for companies like Tokmanni in regard to new store space, purchasing and benefits from the redistribution of Anttila's customer base.
The liberalization of opening hours is expected to continue to have a slight positive impact on the retail market. The planned reform of the Finnish alcohol legislation, to be implemented during the spring 2017, would liberate the sales of mild alcoholic beverages in grocery stores. This would have a positive impact on the productivity and competitiveness of the Finnish grocery trade.
The reform of the retail construction regulation, increasing the minimum limit of a large retail unit will enhance the construction of Finnish retail market players, which in turn will improve the competitiveness of the whole industry.
RESULTPRESENTATION
Tokmanni's CEO Heikki Väänänen and CFO Sixten Hjort will present the Half year financial report to analyst, investors and media representatives today in Finnish at 10.00 am EEST (9.00 CET) and in English at 11.15 am EEST (10.15 CET).
The live audiocasts can be accessed via Tokmanni's website at ir.tokmanni.fi or through the link http://www.goodmood.fi/webcaster/accounts/tokmanni/live.
The participants can also join a telephone conference that will be arranged in conjunction with the live audiocasts. The participants are asked to dial in 5-10 minutes prior to starting time using the Participant Phone Number and Participant Passcodes below:
0800 772 218 (Finnish callers)
+44 (0)20 3367 9434 (UK callers)
+1 917 286 8057 (US callers)
Participant code: 690114
On-demand versions of both audiocasts will be available at ir.tokmanni.fi later during the same day.
For further information, please contact:
Tokmanni Group Corporation
Heikki Väänänen, CEO, tel: +358 20 728 6044 heikki.vaananen@tokmanni.fi
Sixten Hjort, CFO, tel: +358 20 728 6043 sixten.hjort@tokmanni.fi
Joséphine Mickwitz, Investor Relations, tel: +358 20 728 6535 josephine.mickwitz@tokmanni.fi
Tokmanni in brief
Tokmanni is the largest general discount retailer in Finland measured by number of stores and revenue. In 2015, Tokmanni's revenue was EUR 755 million and on average it had approximately 3,200 employees. Tokmanni is the only nationwide general discount retailer in Finland, with 156 stores across Finland as at 31 December 2015.
Distribution:
Nasdaq Helsinki
Key Media