Tokmanni Group Corporation Half-year Financial Report January–June 2019: strong second quarter, with clear improvement in revenue and EBIT
Tokmanni Group Corporation Half-year Financial Report 8 August 2019 at 8.30 a.m.
Tokmanni has adopted IFRS 16 Leases as of 1 January 2019. The adjusted comparison information for 2018 is provided as an appendix to this bulletin. The numbers in brackets refer to the adjusted figures for 2018.
SECOND QUARTER HIGHLIGHTS
- Revenue grew by 10.2% (11.0%) and was EUR 239.9 million (217.7)
- Like-for-like revenue for stores grew by 5.3% (7.7%)
- Comparable gross profit totalled EUR 84.5 million (76.1), with the comparable gross margin being 35.2% (34.9%)
- Comparable EBITDA amounted to EUR 34.0 million (27.4), representing 14.2% of revenue (12.6%)
- Comparable EBIT amounted to EUR 18.7 million (13.1), representing 7.8% of revenue (6.0%)
- Cash flow from operating activities amounted to EUR 37.8 million (31.3)
- Earnings per share were EUR 0.21 (0.16)
JANUARY–JUNE 2019 HIGHLIGHTS
- Revenue grew by 9.4% (11.0%) and was EUR 428.0 million (391.3)
- Like-for-like revenue for stores grew by 4.8% (7.0%)
- Comparable gross profit totalled EUR 143.1 million (130.6), with the comparable gross margin being 33.4% (33.4%)
- Comparable EBITDA amounted to EUR 46.8 million (39.5), representing 10.9% of revenue (10.1%)
- Comparable EBIT amounted to EUR 16.5 million (11.1), representing 3.9% of revenue (2.8%)
- Cash flow from operating activities amounted to EUR 9.5 million (17.4)
- Earnings per share were EUR 0.14 (0.10)
TOKMANNI’S OUTLOOK FOR 2019 UNCHANGED
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:
STRONG SECOND QUARTER IN TERMS OF SALES AND EBIT
“We are satisfied with our business performance in the second quarter. Our sales improved at a good rate, and our profitability improved significantly. We succeeded in sales during the spring, an important season, for the second consecutive year. In addition, our operational efficiency measures progressed in the right direction. Our focus continues to be on strategy implementation, particularly on improving profitability and the efficiency of the supply chain.
Our total revenue grew at a strong rate, by 10.2%, in the second quarter, with our comparable revenue increasing by 5.3%. We opened two new stores, and renewed and expanded several stores. Easter was observed in the second quarter this year, which also supported the good development. Tokmanni’s determined measures to strengthen its offering have improved the selections at the stores. Tokmanni’s number of customer visits has increased due to its low prices and interesting selections. Our customer numbers grew by 7.5% in the second quarter.
During the spring season, the sales structure is centred around private label products, which has a positive effect on our profitability. The sales of garden furniture, flowers and interior decoration products were particularly strong. In the second quarter, our comparable gross margin improved slightly year-on-year, and our operating profit developed favourably, with operating expenses remaining under control.
In the second half of the year, we will continue our profitability improvement measures in order to decrease the relative share of operating expenses and improve our gross margin in particular. Due to seasonality, a larger part of Tokmanni’s revenue and result is usually generated during the second half of the year.”
| Key figures | |||||||
| 4-6/ 2019 |
Adjusted *** 4-6/ 2018 |
Change % |
1-6/ 2019 |
Adjusted *** 1-6/ 2018 |
Change % |
Adjusted *** 1-12/ 2018 |
|
| Revenue, MEUR | 239.9 | 217.7 | 10.2% | 428.0 | 391.3 | 9.4% | 870.4 |
| Like-for-like revenue development, % | 5.3 | 7.7 | 4.8 | 7.0 | 5.6 | ||
| Customer visit development % | 7.5 | 8.5 | 7.3 | 7.8 | 6.9 | ||
| Gross profit, MEUR | 84.3 | 76.8 | 9.8% | 143.1 | 131.5 | 8.8% | 295.3 |
| Gross margin, % | 35.1 | 35.3 | 33.4 | 33.6 | 33.9 | ||
| Comparable gross profit, MEUR | 84.5 | 76.1 | 11.1% | 143.1 | 130.6 | 9.6% | 295.0 |
| Comparable gross margin, % | 35.2 | 34.9 | 33.4 | 33.4 | 33.9 | ||
| Operating expenses | -51.8 | -48.8 | 6.1% | -99.1 | -92.0 | 7.8% | -188.1 |
| Comparable operating expenses | -51.5 | -49.6 | 3.8% | -98.3 | -92.9 | 5.8% | -189.5 |
| EBITDA, MEUR | 33.5 | 28.9 | 15.7% | 45.9 | 41.4 | 10.9% | 111.2 |
| EBITDA, % | 13.9 | 13.3 | 10.7 | 10.6 | 12.8 | ||
| Comparable EBITDA, MEUR | 34.0 | 27.4 | 24.0% | 46.8 | 39.5 | 18.4% | 109.5 |
| Comparable EBITDA, % | 14.2 | 12.6 | 10.9 | 10.1 | 12.6 | ||
| Operating profit (EBIT), MEUR | 18.2 | 14.6 | 24.7% | 15.6 | 13.0 | 20.2% | 53.6 |
| Operating profit margin EBIT, % | 7.6 | 6.7 | 3.7 | 3.3 | 6.2 | ||
| Comparable EBIT, MEUR | 18.7 | 13.1 | 43.2% | 16.5 | 11.1 | 48.5% | 51.9 |
| Comparable EBIT, % | 7.8 | 6.0 | 3.9 | 2.8 | 6.0 | ||
| Net financial items, MEUR | -2.6 | -2.5 | 4.5% | -5.3 | -5.3 | -0.2% | -10.6 |
| Net capital expenditure, MEUR* | 5.5 | 6.2 | -10.0% | 8.2 | 7.6 | 8.6% | 19.8 |
| Net debt / comparable EBITDA ** / **** | 3.7 | 3.7 | 3.5 | ||||
| Net cash from operating activities, MEUR | 37.8 | 31.3 | 9.5 | 17.4 | 85.8 | ||
| Return on capital employed, % | 3.2 | 3.4 | 2.7 | 3.0 | 11.6 | ||
| Return on capital employed %, rolling 12 months**** | 9.7 | 9.7 | 9.5 | ||||
| Return on equity, % | 8.7 | 7.0 | 5.8 | 4.5 | 20.8 | ||
| Return on equity %, rolling 12 months**** | 24.4 | 24.4 | 23.6 | ||||
| Equity ratio, % | 20.3 | 20.3 | 20.3 | 20.3 | 23.3 | ||
| Number of shares, weighted average during the financial period (thousands) | 58 869 | 58 869 | 58 869 | 58 869 | 58 869 | ||
| Earnings per share (EUR/share) | 0.21 | 0.16 | 0.14 | 0.10 | 0.58 | ||
| Personnel at the end of the period | 4 019 | 3 724 | 4 019 | 3 724 | 3 558 | ||
| Personnel on average in the period | 3 784 | 3 512 | 3 606 | 3 336 | 3 415 |
* Net capital expenditure, excluding non-current receivables from others
** Rolling 12 months (comparable EBITDA)
*** The adjusted figure includes comparable calculations in accordance with IFRS 16
**** Comparison figure not available, as no adjustment was made for IFRS 16 for 2017
Market outlook
According to the view of Finland’s Ministry of Finance, economic growth in the coming years will be more moderate than in recent years. In its Economic Survey for summer 2019, the Ministry of Finance forecasts that the inflation rate will be 1.2% in 2019 (1.1% in 2018). The ministry expects Finland’s GDP to grow by 1.6% in 2019 (2018: 2.4%). Even though the export market outlook and global economic outlook are weaker than before, the outlook for the Finnish export sector is not expected to weaken significantly in the early part of the forecast period. Private investments are expected to increase at a slower rate than before, while the rapid increase in public investments is expected to continue. The outlook for investments in production is bright. Recently there have been signs of weaker consumer confidence, which may reduce consumption.
Tokmanni expects the Finnish non-grocery market to grow slightly in 2019, and it expects discount stores, speciality discount stores and online stores to further strengthen their position.
Result presentation
Tokmanni’s CEO Mika Rautiainen and CFO Markku Pirskanen will present the review to analysts, investors and media representatives on the publication day at 10:00 am at Scandic Simonkenttä, Simonkatu 9, 00100 Helsinki, Finland in conference room Bulsa-Freda. The conference is in Finnish and will also be webcasted. An audiocast in English will be held at 11:30 am (Finnish time).
The live audiocast can be accessed via Tokmanni's website at https://ir.tokmanni.fi/ or through the link https://tokmanni.videosync.fi/2019-q2-results
The participants can also join an English telephone conference that will be arranged in conjunction with the live presentations. The participants are asked to dial in 5-10 minutes prior to starting time using the Participant Phone Number and Participant Passcodes below.
Finland: +358 981 710 310
Sweden: +46 856 642 651
UK: +44 333 300 08 04
US: +1 855 857 06 86
Passcode: 69920055#
On-demand versions of both presentations will be available at https://ir.tokmanni.fi/ later during the same day.
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(at)tokmanni.fi
Maarit Mikkonen, Head of IR and Communications
tel. +358 40 562 2282, maarit.mikkonen(at)tokmanni.fi
Tokmanni in brief
Tokmanni is the largest general discount retailer in Finland measured by number of stores and revenue. In 2018, Tokmanni’s revenue was EUR 870.4 million and it has approximately 3,600 employees. Tokmanni is the only nationwide general discount retailer in Finland, with almost 200 stores across Finland.
Distribution
Nasdaq Helsinki
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