Tokmanni Group Corporation: Tokmanni lowers its full-year 2017 guidance
Tokmanni Group Corporation Company announcement 16 June 2017 at 7 pm EEST
TOKMANNI LOWERS ITS FULL-YEAR 2017 GUIDANCE
Tokmanni lowers its full-year 2017 revenue and profitability guidance. According to its new guidance, Tokmanni estimates revenue to grow based on the revenue from new and relocated stores opened in 2016 and 2017. Revenue of like-for-like stores is expected to remain at the level of the previous year. Profitability (adj. EBITDA%) is expected to decrease from the previous year. Very exceptional weather conditions and major changes in market conditions may impact these estimates.
The mild winter and exceptionally cold spring have impacted the whole non-grocery market which, according to the Finnish Grocery Trade Association FTGA, has decreased by -9.4% in the first five months of the year. Tokmanni has outperformed the market but due to the weaker than expected spring season and demand for Tokmanni's seasonal products also Tokmanni's second quarter like-for-like sales and profitability are expected to be below the corresponding period 2016. In addition, Tokmanni increases its selling space in 2017 by at least 27,000 square meters, which is clearly above the estimate given at the beginning of the year. New stores contribute positively to revenue but have a slight negative impact on profitability during their ramp up phase.
TOKMANNI'S CHAIRMAN OF THE BOARD HARRI SIVULA:
"The spring season has been exceptionally cold, which has been directly reflected in Tokmanni's sales. We invested heavily in the spring season and products such as garden products and furniture as well as other seasonal items. Demand for these products has been smaller than expected due to the cold weather and has affected our Like-for-Like sales as well as profitability. Due to these reasons, and the weak first quarter we have decided to revise our full-year forecast.
Although our 2017 performance has been weak so far the strong fundamentals of the company remain unchanged. Our strong price image, good customer experience, attractive product assortment and efficient sourcing model continue to drive our business. To mitigate the effects of weather fluctuations, we will however develop our assortment to be less weather dependent. The shelf availability issues which we experienced in the spring following the implementation of the new assortment management tool have now been solved.
Tokmanni has a strong market position, a clear strategy, and strategic targets. We continue to execute on our strategy and we are determined to achieve our long-term targets."
TOKMANNI'S REVISED SHORT TERM OUTLOOK 2017:
Tokmanni expects revenue growth for 2017 based on the revenue from new stores opened in 2016 and 2017. Revenue of like-for-like stores is expected to remain at the level of the previous year. Group profitability (adjusted EBITDA%) is expected to decrease from last year's level.
TOKMANNI'S PREVIOUS SHORT TERM OUTLOOK 2017 (published 8 February and 26 April):
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.
Tokmanni will publish its January-June 2017 Half year financial report on 9 August at approximately 8.30 am EEST.
Tokmanni Group Corporation
Board of Directors
TELECONFERENCE 16 JUNE AT 9 AM EEST
Tokmanni's Chairman of the Board Harri Sivula and CFO Markku Pirskanen will host a teleconference for analysts, investors and media in English on 16 June 2017 starting at 9 am EEST. Any questions related to this release will be answered in this call.
The participants are asked to dial in 5-10 minutes prior to starting time using the Participant Phone Number and Participant Passcodes below:
(0)9 7479 0360 (Finnish callers)
+44 (0)330 336 9401 (UK callers)
+1 719-325-2238 (US callers)
Participant code: 390996
The call will be recorded and the recording will be published on the company website ir.tokmanni.fi as soon as possible after the conference.
For further information, please contact:
Chairman of the Board
Tel. +358 50 656 92
Tel. +358 20 728 7390
Head of IR and Communications
Tel. +358 20 728 6535
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.
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