Tokmanni Group Oyj · OMXHEX:TOKMAN
Tokmanni Group Oyj — Q2 2018 Earnings Presentation
29 slides from Tokmanni Group Oyj's earnings presentation, Aug 9, 2018
Slide 1: Q218: Strong growth and profitability improved
Q218: Strong growth and profitability improved Mika Rautiainen, CEO Markku Pirskanen, CFO
Slide 2: Main focus in 2018: improving Tokmanni's customer confidence
MAIN FOCUS IN 2018: IMPROVING TOKMANNI’S CUSTOMER CONFIDENCE
Slide 3: Q2/18 strong growth, profitability improved
Q2/18 STRONG GROWTH, PROFITABILITY IMPROVED • Like-for-Like revenue grew by 7.7% (-1.9%) • Revenue grew by 11.0% to EUR 217.7 million (196.0) • The number of customer visits developed favorably, a growth of 8.5% (3.1%) • The sales mix had a clearly positive impact on gross profit: comparable gross p
Slide 4: 1-6/2018 highlights
1-6/2018 HIGHLIGHTS • Like-for-Like revenue grew by 7.0% (-2.7%) • Revenue grew by 11.0% to EUR 391.3 million (352.6) • Comparable gross profit totaled EUR 130.6 million (116.0) and comparable gross margin 33,4% (32,9%) • Comparable EBITDA amounted to EUR 16.8 million (10.1), 4.3% of revenue (2.9%)
Slide 5: Q218: The spring season was particularly successful
Q218: THE SPRING SEASON WAS PARTICULARLY SUCCESSFUL LFL revenue grew 7.7% We impoved our We expanded We invested in Our marketing The splendid store concepts and increased low prices efforts brought spring weather our assortment the seasonal also supported selection and its sales Departmental A rene
Slide 6: Favorable development in non-grocery market
FAVORABLE DEVELOPMENT IN NON-GROCERY MARKET Tokmanni performed better than the market Sales development% 8,0 6,0 6,0 5,4 6,3 4,0 4,5 2,0 2,9 2,6 0,0 1,1 1,4 1,6 1,0 0,4 -2,0 -0,7 -1,5 -2,0 -4,0 -3,7 -6,0 -8,0 -7,1 -7,4 -8,1 -10,0 -9,0 -12,0 -11,0 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 *Q1/1
Slide 7: Operational development (1/2): online and digital services
OPERATIONAL DEVELOPMENT (1/2) Development of online and digital services • The development of online and digital services proceeded as planned – The online store was moved to a new platform and increasing the online assortment started in March – By the end of June, Tokmanni had 10,000 SKUs in its on
Slide 8: Operational development (2/2): store network development
OPERATIONAL DEVELOPMENT (2/2) Store Store network development amount Selling space at end of • At the end of the review period Tokmanni had 177 Schedule change (approx.) period stores across Finland 2017 Total 24 000 175 2018 • During the second quarter Tokmanni opened new Q1 1 600 175 stores in Ylä
Slide 9: Financial development
Financial development 9 09.08.2018 TOKMANNI GROUP CORPORATION Q2 2018
Slide 10: Tokmanni's operations are subject to seasonality
TOKMANNI’S OPERATIONS ARE SUBJECT TO SEASONALITY The second half of the year is generally stronger than the first Comparable Revenue EBITDA M€ M€ 35,0 300,0 30,0 28,6 27,3 26,4 250,0 24,4 25,0 200,0 20,0 17,3 17,3 18,1 16,2 16,0 15,2 15,0 13,5 12,9 150,0 11,6 10,0 100,0 5,0 2,2 2,0 1,8 0,8 50,0 0,0
Slide 11: Q2/18 revenue grew 11.0%, like-for-like revenue 7.7%
Q2/18 REVENUE GREW 11.0%, LIKE-FOR-LIKE REVENUE 7.7% • The number of customer visits grew 8.5% • Average basket size grew 2.5% 1-6 Total revenue, M€ Q2 Revenue, M€ 400 391,3 380 250 +11,0% +1,9% 217.7 360 350,6 352,6 192.4 196.0 340 200 +11,0% 320 150 +7,7% 300 +0,6% -1,9% 280 100 260 240 50 220 0 2
Slide 12: Q2/18 gross profit improved
Q2/18 GROSS PROFIT IMPROVED Favorable sales mix 100 36,0 % 90 34,9 % 34,7 % 35,1 % 34,9 % 34,6 % 35,0 % 80 34,1 % 33,8 % 34,0 % 70 33,1 % 60 33,0 % 50 83,5 86,1 32,0 % 40 31,4 % 31,4 % 76,1 67,1 64,8 66,8 66,0 30 31,0 % 52,5 49,2 54,6 20 30,0 % 10 0 29,0 % Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q
Slide 13: 1-6/18 comparable gross profit
1-6/18 COMPARABLE GROSS PROFIT 135,0 34,1 % 35,0 % 32,9 % 33,4 % 34,0 % • Gross profit improved appr. 14% 130,0 33,0 % compared to the previous year 125,0 32,0 % • Sales volume and mix impacted 31,0 % sales positively 120,0 30,0 % 130,6 29,0 % 115,0 28,0 % 119,6 116,0 27,0 % 110,0 26,0 % 105,0 25,0
Slide 14: Q2/18 operative expenses grew as the network expanded
Q2/18 OPERATIVE EXPENSES GREW AS THE NETWORK EXPANDED Relative expenses decreased 70,0 35,0 % 32,2 % 32,9 % 60,0 31,5 % 30,0 % 28,6 % 28,0 % 27,4 % 50,0 25,4 % 26,0 % 25,0 % 24,0 % 23,6 % 40,0 20,0 % 30,0 58,7 61,0 15,0 % 57,2 56,0 54,7 51,0 52,7 51,6 50,7 47,6 20,0 10,0 % 10,0 5,0 % 0,0 0,0 % Q1/16
Slide 15: 1-6/18 comparable operative expenses
1-6/18 COMPARABLE OPERATIVE EXPENSES 118,0 30,5 % 31,0 % 116,0 29,6 % • Relative comparable operative 114,0 29,6 % 30,0 % expenses decreased in the review 112,0 110,0 29,0 % period 1-6/18 108,0 28,0 % 106,0 115,6 104,0 27,0 % 102,0 107,6 100,0 103,7 26,0 % 98,0 96,0 25,0 % 1-6/16 1-6/17 1-6/18 Compa
Slide 16: Q2/18 comparable EBITDA improved
Q2/18 COMPARABLE EBITDA IMPROVED 35,0 11,5 % 11,5 % 12,0 % 30,0 9,7 % 10,0 % 8,3 % 25,0 7,9 % 7,4 % 8,0 % 20,0 5,9 % 6,0 % 15,0 28,6 27,3 4,0 % 10,0 18,1 15,2 16,2 16,0 1,4 % 2,0 % 5,0 11,6 0,5 % 2,2 0,8 0,0 -0,9 % 0,0 % Q1/16 Q2/16 Q3/16 Q4/16 - 1,5 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 - 5,0 -2,0 %
Slide 17: 1-6/18 comparable EBITDA
1-6/18 COMPARABLE EBITDA 20,0 6,0 % 18,0 5,0 % • Comparable EBITDA 1-6/2018 5,0 % 16,0 4,3 % improved year on year 14,0 4,0 % 12,0 2,9 % 10,0 3,0 % 17,4 16,8 8,0 2,0 % 6,0 10,1 4,0 1,0 % 2,0 0,0 0,0 % 1-6/16 1-6/17 1-6/18 Comparable EBITDA Comparable EBITDA% 17 09.08.2018 TOKMANNI GROUP CORPORATION
Slide 18: Balance sheet, financing and cash flow: inventories
BALANCE SHEET, FINANCING AND CASH FLOW 250 180 177 • Tokmanni’s inventories amounted to 175 200 EUR 195.2 million (179.9) 168 170 at the end of the review period 150 • The growth was due to growth in the 165 store network and to the addition of 100 157 160 SKUs to the assortment 195,2 179,9 161,9 15
Slide 19: Balance sheet, financing and cash flow: debt and cash
BALANCE SHEET, FINANCING AND CASH FLOW • At the end of June 2018, interest-bearing debt totaled EUR 175.1 million (189.8) • Cash and cash equivalents totaled EUR 6.6 million (19.8) at the end of the review period • Net debt / comparable EBITDA (rolling 12 months) was 2.7 (3.1) at the end of the peri
Slide 20: Q2/18 net capital expenditure EUR 6.6 million
Q2/18 NET CAPITAL EXPENDITURE EUR 6.6 MILLION • The majority of Q2 capex related to the Net CAPEX, M€ refurbishment of grocery and other stores 8,0 7,6 and to the expansion of the store network 7,0 6,2 • In its investment program for 2018, 6,0 Tokmanni will invest in updating its 5,0 grocery stores,
Slide 21: Market outlook
MARKET OUTLOOK • Finland's economy has developed well during 2018, and consumer confidence has continued to strengthen • 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
Slide 22: Tokmanni's outlook for 2018 unchanged
TOKMANNI’S OUTLOOK FOR 2018 UNCHANGED • 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 pre
Slide 23: Focus areas in the coming months
FOCUS AREAS IN THE COMING MONTHS • We will strengthen Tokmanni’s low price image – through the enhancement of purchasing and sourcing activities, in particular when it comes to direct imports, stock lots and private labels – by enhancing supply chain elements, especially in terms of utilization of s
Slide 24: Thank you! Questions?
THANK YOU! QUESTIONS?
Slide 25: Appendix: publications and IR contacts
APPENDIX Publications 2018 : 24 October 2018 January- September 2018 Business Review IR contacts: CFO Markku Pirskanen Markku.pirskanen@tokmanni.fi Tel: +358 20 728 7390 ir@tokmanni.fi 25 09.08.2018 TOKMANNI GROUP CORPORATION Q2 2018
Slide 26: Financial targets and dividend policy
Financial targets and dividend policy Long-term financial targets Historical performance 2015 2016 2017 1. Like-for-Like Tokmanni Group’s long-term target is to achieve low single Low single digit like-for-like net sales growth assuming current market Tokmanni -0.6% -0.1% -1.3% revenue digit conditi
Slide 27: Key figures
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,
Slide 28: Tokmanni Oy comparable figures reconciliation
Tokmanni Oy MEUR 4-6/2018 4-6/2017 1-6/2018 1-6/2017 1-12/2017 Gross profit 76.8 65.6 131.5 114.3 267.1 Changes in fair value of currency derivatives -0.7 1.1 -0.9 1.7 1.0 Comparable Gross Profit 76.1 66.8 130.6 116.0 268.1 Operating expenses -60.2 -55.8 -114.7 -108.9 -217.8 Changes in fair value of
Slide 29: Thank you!
THANK YOU! ir@tokmanni.fi 29 09.08.2018 TOKMANNI GROUP CORPORATION Q2 2018