Tokmanni Group Q218: strong growth and profitability improved
Tokmanni Group Corporation Half year report 9 August 2018 at 8.30 EEST
This release is a summary of Tokmanni’s January –June 2018 Half year report. The complete report is attached to this release as a pdf-file. Numbers in brackets refer to the corresponding period previous year if nothing else is mentioned.
SECOND QUARTER HIGHLIGHTS
- Revenue grew by 11.0% to EUR 217.7 million (196.0)
- Like-for-Like revenue grew by 7.7% (-1.9%)
- Gross profit totaled EUR 76.8 million (65.6) and gross margin 35.3% (33.5%)
- Comparable gross profit totaled EUR 76.1 million (66.8) and comparable gross margin 34.9% (34.1%)
- EBITDA amounted to EUR 17.5 million (10.7), 8.0% of revenue (5.4%)
- Comparable EBITDA totaled EUR 16.0 million (11.6), 7.4% of revenue (5.9%)
- EBIT totaled EUR 13.9 million (7.2), 6.4% of revenue (3.7%)
- Comparable EBIT totaled EUR 12.4 million (8.1), 5.7% of revenue (4.1%)
- Cash flow from operating activities amounted to EUR 21.2 million (18.8)
- Earnings per share were 0.17 euros (0.08)
HIGHLIGHTS OF THE REVIEW PERIOD JANUARY-JUNE 2018
- Revenue grew by 11.0% to EUR 391.3 million (352.6)
- Like-for-Like revenue grew by 7.0% (-2.7%)
- Gross profit totaled EUR 131.5 million (114.3) and gross margin 33.6% (32.4%)
- Comparable gross profit totaled EUR 130.6 million (116.0) and comparable gross margin 33,4% (32,9%)
- EBITDA amounted to EUR 18.7 million (7.1), 4.8% of revenue (2.0%)
- Comparable EBITDA amounted to EUR 16.8 million (10.1), 4.3% of revenue (2.9%)
- EBIT totaled EUR 11.5 million (-0.1), 2.9% of revenue (0.0%)
- Comparable EBIT amounted to EUR 9.6 million (2.9), 2.5% of revenue (0.8%)
- Cash flow from operating activities amounted to EUR -2.8 million (-19.1)
- Earnings per share were 0.12 euros (-0.04)
TOKMANNI’S OUTLOOK FOR 2018 UNCHANGED: GOOD GROWTH AND IMPROVED PROFITABILITY
Tokmanni’s expects good revenue growth for 2018 based on the revenue from new stores opened in 2017 and stores to be opened in 2018 and low single digit Like-for Like revenue growth. Group profitability (comparable EBITDA%) is expected to improve from the previous year.
CEO MIKA RAUTIAINEN: THE SPRING SEASON WAS PARTICULARLY SUCCESSFUL
” During the first half of 2018 we have focused on reinforcing customer confidence by diversifying our assortments and through investing in low prices. Solutions made concerning our assortment, pricing and store concept pleased our customers. The improved assortment, especially in the tool, yard and garden areas, received positive feedback. Our spring clothing collection was also liked by the customers. The splendid spring weather also supported spring season demand and sales, but nonetheless it is fair to say that we succeeded particularly well in the spring season and especially May was by all measures exceptionally good.
Our second-quarter Like-for-Like revenue grew 7.7% and the total revenue increased by 11.0%. We were also successful in inviting new customers to Tokmanni and the number of customer visits grew by 8.5%. The sales mix, which was more focused on private label seasonal products, clearly had a positive impact on our profitability. I am very proud of the contribution of all Tokmanni employees. It has had a huge impact on customer satisfaction.
Seasons are important for Tokmanni and the spring season is, after Christmas, the most important one. This year we succeeded in the spring season very well. However, it is good to note that the spring previous year was very short and thereby comparison numbers weak. Autumn is a smaller season than the spring, whereas Christmas and fourth quarter sales are traditionally the most important for Tokmanni. Our preparations for the Christmas season are already far going and our target is to, once again, delight our customers with an interesting assortment and low prices.
Online development and market transformation are changing the competitive landscape and market dynamics. Tokmanni is working daily to enhance its concept, assortment, pricing and customer service. Tokmanni’s business is subject to seasonality and normally a larger part of revenue and the result is accrued during the second half. Our guidance remains unchanged: in 2018, Tokmanni's revenue will grow well based on the revenue from new stores and low single digit Like-for Like revenue growth and our comparable EBITDA% will improve."
KEY FIGURES |
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| 4-6/2018 | 4-6/2017 | Change% | 1-6/2018 | 1-6/2017 | Change% | 1-12/2017 | ||||||||
| Revenue, MEUR | 217.7 | 196.0 | 11.0% | 391.3 | 352.6 | 11.0% | 796.5 | |||||||
| Like-for-like revenue development, % | 7.7 | -1.9 | 7.0 | -2.7 | -1.3 | |||||||||
| Customer visit development, % | 8.5 | 3.1 | 7.8 | 3.4 | 3.7 | |||||||||
| Gross profit, MEUR | 76.8 | 65.6 | 17.0% | 131.5 | 114.3 | 15.1% | 267.1 | |||||||
| Gross margin, % | 35.3 | 33.5 | 33.6 | 32.4 | 33.5 | |||||||||
| Comparable gross profit, MEUR | 76.1 | 66.8 | 13.9% | 130.6 | 116.0 | 12.6% | 268.1 | |||||||
| Comparable gross margin, % | 34.9 | 34.1 | 33.4 | 32.9 | 33.7 | |||||||||
| Operating expenses | -60.2 | -55.8 | 7.9% | -114.7 | -108.9 | 5.3% | -217.8 | |||||||
| Comparable operating expenses | -61.0 | -56.0 | 8.8% | -115.6 | -107.6 | 7.5% | -217.0 | |||||||
| EBITDA, MEUR | 17.5 | 10.7 | 64.0% | 18.7 | 7.1 | 163.8% | 53.1 | |||||||
| EBITDA, % | 8.0 | 5.4 | 4.8 | 2.0 | 6.7 | |||||||||
| Comparable EBITDA, MEUR | 16.0 | 11.6 | 38.2% | 16.8 | 10.1 | 66.4% | 55.0 | |||||||
| Comparable EBITDA, % | 7.4 | 5.9 | 4.3 | 2.9 | 6.9 | |||||||||
| Operating profit (EBIT), MEUR | 13.9 | 7.2 | 93.2% | 11.5 | -0.1 | 38.8 | ||||||||
| Operating profit margin EBIT, % | 6.4 | 3.7 | 2.9 | 0.0 | 4.9 | |||||||||
| Comparable EBIT, MEUR | 12.4 | 8.1 | 53.1% | 9.6 | 2.9 | 226.6% | 40.6 | |||||||
| Comparable EBIT, % | 5.7 | 4.1 | 2.5 | 0.8 | 5.1 | |||||||||
| Net financial items, MEUR | -1.3 | -1.4 | -11.1% | -2.8 | -2.8 | -0.4% | -5.8 | |||||||
| Net capital expenditure, MEUR | 6.2 | 0.0 | 7.6 | 1.5 | 8.1 | |||||||||
| Net debt / comparable EBITDA ** | 2.7 | 3.1 | 2.7 | 3.1 | 2.4 | |||||||||
| Net cash from operating activities, MEUR | 21.2 | 18.8 | -2.8 | -19.1 | 27.1 | |||||||||
| Return on capital employed, % | 4.4 | 2.2 | 3.7 | 0.0 | 11.4 | |||||||||
| Return on capital employed %, rolling 12 months | 15.2 | 12.0 | 15.2 | 12.0 | 12.0 | |||||||||
| Return on equity, % | 7.2 | 3.4 | 5.0 | -1.7 | 16.0 | |||||||||
| Return on equity %, rolling 12 months | 24.3 | 18.3 | 24.3 | 18.3 | 18.3 | |||||||||
| 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) | 0.17 | 0.08 | 0.12 | -0.04 | 0.45 | |||||||||
| Personnel at the end of the period | 3 724 | 3 534 | 3 724 | 3 534 | 3 255 | |||||||||
| Personnel on average in the period | 3 512 | 3 312 | 3 336 | 3 184 | 3 232 | |||||||||
** Rolling 12 months comparable EBITDA
MARKET OUTLOOK
Finland's economy has developed well during 2018, and consumer confidence has continued to strengthen as the worst unemployment threat has vanished. Unemployment is forecasted to decline this year and continue to decline in the coming years. In 2018, private consumption growth will be boosted by rising employment and earnings levels. The wage increases for 2018 and 2019 have been negotiated by sector and the disposable income of households has increased. As inflation intensifies, the growth in disposable real income will however be more moderate. The Ministry of Finance predicts an inflation of 1.1% for the current year and 1.4% for 2019 measured by the national consumer price index. The impact of the product prices on inflation is expected to remain negative this year.
Tokmanni expects the Finnish non-grocery market to grow slightly in 2018, and that specialty stores and online stores will continue to strengthen their position.
ANALYST AND PRESS CONFERENCE
An analyst and press conference will be held in Finnish today day at 10.00 am EEST at Kasarmikatu 21 B, Helsinki, conference room Pieni Diplomaatti. An audiocast in English will be held at 11.30 am EEST (10.30 CET).
The English live audiocast can be accessed via Tokmanni’s website at ir.tokmanni.fi or through the link https://tokmanni.videosync.fi/2018-08-09-q2 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 teleconference in English will start at 11.30 am EEST (10.30 CET). The participants are asked to dial in 5-10 minutes prior to starting time using the Participant Phone Numbers below:
SE: +46 8 566 427 02
FI: +358 981 710 495
UK: +44 203 194 05 52
US: +1 855 716 15 97
FOR FURTHER INFORMATION, PLEASE CONTACT:
Mika Rautianen, CEO, tel:+358 20 728 6061 mika.rautiainen@tokmanni.fi
Markku Pirskanen, CFO, tel: +358 20 728 7390 markku.pirskanen@tokmanni.fi
Joséphine Mickwitz, Head of IR and Communications, 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 2017, Tokmanni’s revenue was EUR 796 million and on average it had approximately 3,200 employees. Tokmanni is the only nationwide general discount retailer in Finland, with 175 stores across Finland as at 31 December 2017.
Distribution:
Nasdaq Helsinki
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