Tokmanni Group Oyj · OMXHEX:TOKMAN
Tokmanni Group Oyj — Q3 2018 Earnings Presentation
25 slides from Tokmanni Group Oyj's earnings presentation, Oct 24, 2018
Slide 1: Q318 Business review
Q318 Business review 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 Status at the end of Q3: We have progressed according the plan and the work continues
Slide 3: Q318: Revenue grew and profitability improved
Q318: Revenue grew and profitability improved • Like-for-Like revenue grew by 4.0% (0.8%) • Revenue grew by 7,8% to EUR 210.7 million (195.4) • The number of customer visits developed favorably, a growth of 6.7% (4.1%) • The sales mix had a clearly positive impact on gross profit: comparable gross p
Slide 4: 1-9/2018 Highlights
1-9/2018 HIGHLIGHTS • Like-for-Like revenue grew by 5.9% (-1.5%) • Revenue grew by 9.9% to EUR 602.0 million (547.9) • Comparable gross profit totaled EUR 202.7 million (182.0) and comparable gross margin 33.7% (33.2%) • Comparable EBITDA amounted to EUR 35.0 million (26.3), 5.8% of revenue (4.8%) 2
Slide 5: Q318: Weak development in non-grocery market
Q318: WEAK DEVELOPMENT IN NON-GROCERY MARKET Sales development% 8,0 6,0 6,0 5,4 6,3 4,0 4,5 2,0 1,6 2,9 2,6 0,0 1,1 1,4 1,6 1,0 0,4 -2,0 -0,7 -1,5 -2,0 -1,9 -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 Q1/18 Q2/18 Q3/18 Non-grocery market
Slide 6: Heavy investments to develop the store network
During this year heavy investments to develop the store network • In 2018, Tokmanni invests in improving departmental concepts and refurbishing its store network • The target is to improve the customer experience in Tokmanni stores • During January-September many significant changes done in approxim
Slide 7: Store network development in numbers
Store network development in numbers • At the end of the review period Tokmanni had 177 Store stores across Finland amount Selling space at end of • During the third quarter Tokmanni relocated and Schedule change (approx.) period expanded the store in Eura. The selling space was 2017 Total 24 000 17
Slide 8: Financial development
Financial development 24.10.2018 TOKMANNI Q3 and January - September 2018
Slide 9: Q3/18: Revenue grew 7.8%, Like-For-Like revenue +4.0%
Q3/18: Revenue grew 7,8 %, Like-For-Like revenue +4,0 % • New stores as a driver for the growth. Also Like-For-Like stores grew well • The number of customer grew 6,7% 700,0 9,9% 600,0 602,0 500,0 547,9 400,0 300,0 7,8% 200,0 195,4 210,7 100,0 0,0 Q3/17 Q3/18 1-9/17 1-9/18 Revenue, M€ Like-For-Like
Slide 10: Q3/18: Comparable Gross profit 72.1 MEUR, 34.2%
Q3/18: Comparable Gross profit 72,1 MEUR, 34,2% • Sales volume and mix impacted sales positively 250,0 200,0 202,7 182,0 150,0 100,0 50,0 66,0 72,1 0,0 Q3/17 Q3/18 1-9/17 1-9/18 Comparable gross margin, M€ Comparable Gross margin, 33,8% 34,2% 33,2% 33,7% % 24.10.2018 TOKMANNI Q3 and January - Septem
Slide 11: Q3/18: Comparable operative expenses 54.9 MEUR, 26.1%
Q3/18: Comparable operative expenses 54,9 MEUR, 26,1% • During the quarter the operative expenses were at the previous year’s level in percentage terms, cumulatively a bit under. • In January-September 2018 it has been made several changes and improvements in store network of which target is to enab
Slide 12: Q3/18: Comparable EBITDA 18.2 MEUR, 8.6%
Q3/18: Comparable EBITDA 18,2 MEUR, 8,6% • Based on increasing revenue and improved gross profit the EBITDA developed positively 40 35 35,0 30 25 26,3 20 15 18,2 16,2 10 5 0 Q3/17 Q3/18 1-9/17 1-9/18 Comparable EBITDA, M€ Comparable EBITDA, 8,3% 8,6% 4,8% 5,8% % 24.10.2018 TOKMANNI Q3 and January -
Slide 13: Tokmanni's operations are subject to seasonality
TOKMANNI’S OPERATIONS ARE SUBJECT TO SEASONALITY The last quarter of the year is generally the strongest Comparable EBITDA Revenue M€ M€ 35,0 300,0 30,0 28,6 27,3 26,4 250,0 24,4 25,0 200,0 20,0 18,1 18,2 17,3 17,3 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 - 1,
Slide 14: Balance sheet, financing and cash flow: inventories
BALANCE SHEET, FINANCING AND CASH FLOW 205 177 178 • Tokmanni’s inventories amounted to 176 200 EUR 202.6 million (189.5) 174 at the end of the review period 195 172 • The growth was due to growth in the 190 169 202,6 170 store network and to the addition of SKUs to the assortment 168 185 189,5 166
Slide 15: Balance sheet, financing and cash flow
BALANCE SHEET, FINANCING AND CASH FLOW • At the end of September 2018, interest- bearing debt totaled EUR 179.1 million (187.5) • Cash and cash equivalents totaled EUR 8.1 million (5.1) at the end of the review period • Net debt / comparable EBITDA (rolling 12 months) was 2.7 (3.4) at the end of the
Slide 16: Q3/18: Net capital expenditure EUR 3.4 million
Q3/18: NET CAPITAL EXPENDITURE EUR 3.4 MILLION • The majority of Q3 capex related to the Net capital expenditure, M€ refurbishment of fresh grocery and other 12,0 stores and to the expansion of the store 10,9 network 10,0 • In its investment program for 2018, 8,0 Tokmanni will invest in updating its
Slide 17: Market outlook
MARKET OUTLOOK • Finland's economy has developed well during 2018 • Unemployment is forecasted to decline this year and continue to decline in the near coming years • In 2018, private consumption growth will be boosted by rising employment and earnings • As inflation intensifies, the growth in dispo
Slide 18: Tokmanni's outlook for 2018 updated with regard to revenue
TOKMANNI’S OUTLOOK FOR 2018 HAS BEEN UPDATED WITH REGARD TO REVENUE Updated guidance: • Tokmanni’s expects strong revenue growth for 2018 based on the revenue from new stores opened in 2017 and stores to be opened in 2018 and good Like-for Like revenue growth • Group profitability (comparable EBITDA
Slide 19: Focus areas for the rest of the year
FOCUS AREAS FOR THE REST OF THE YEAR • Building up the Christmas sales success • During the rest of the year and also next year we will continue the actions started the beginning of the year: – Strengthen the Tokmanni’s image of low price and assortment – Improving Tokmanni’s online store – Concentr
Slide 20: Thank you! Questions?
Thank you! Questions?
Slide 21: Appendix
APPENDIX Financial statements bulleting 2018 will be published on February 8, 2019 IR contacts: CFO Markku Pirskanen Markku.pirskanen@tokmanni.fi Tel: +358 20 728 7390 ir@tokmanni.fi 24.10.2018 TOKMANNI Q3 and January - September 2018
Slide 22: 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 23: Key figures
Key figures 7-9/2018 7-9/2017 Change% 1-9/2018 1-9/2017 Change% 1-12/2017 Revenue, MEUR 210.7 195.4 7.8% 602.0 547.9 9.9% 796.5 Like-for-like revenue development, % 4.0 0.8 5.9 -1.5 -1.3 Customer visit development % 6.7 4.1 7.3 3.7 3.6 Gross profit, MEUR 71.6 66.2 8.2% 203.1 180.5 12.6% 267.1 Gross
Slide 24: Adjustments affecting comparability
Adjustments affecting comparability MEUR 7-9/2018 7-9/2017 1-9/2018 1-9/2017 1-12/2017 Gross profit 71.6 66.2 203.1 180.5 267.1 Changes in fair value of currency derivatives 0.5 -0.2 -0.4 1.5 1.0 Comparable Gross Profit 72.1 66.0 202.7 182.0 268.1 Operating expenses -55.0 -50.4 -169.6 -159.3 -217.8
Slide 25: Thank you!
THANK YOU! ir@tokmanni.fi 24.10.2018 TOKMANNI Q3 and January - September 2018