Q1/2020 First-quarter revenue grew by 5.8% and comparable EBIT - - PowerPoint PPT Presentation

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Q1/2020 First-quarter revenue grew by 5.8% and comparable EBIT - - PowerPoint PPT Presentation

Sep 30, 2023 353 likes •590 views

Q1/2020 First-quarter revenue grew by 5.8% and comparable EBIT improved Mika Rautiainen, CEO Markku Pirskanen, CFO 29 April 2020 Q1/2020: good performance Revenue grew by 5.8% (8.3%) to EUR 199.0 million (188.1) Like-for-like revenue

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Q1/2020

First-quarter revenue grew by 5.8% and comparable EBIT improved

Mika Rautiainen, CEO Markku Pirskanen, CFO 29 April 2020

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  • Revenue grew by 5.8% (8.3%) to EUR 199.0 million (188.1)
  • Like-for-like revenue grew by 4.4% (4.1%)
  • Comparable gross profit totalled EUR 63.8 million (58.6),

comparable gross margin was 32.1% of revenue (31.2%)

  • Comparable EBIT was EUR 0.3 million (-2.2), representing

0.1% of revenue (-1.2%)

  • Earnings per share were EUR -0.04 (-0.07)

Tokmanni's Business Review January-March 2020

Q1/2020: good performance

29.4.2020 2

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Tokmanni’s and non-grocery market development, %

  • 1,1

1,9 4,5 4,4 10,9 11,0 7,8 8,0 8,3 10,2 9,9 6,1 5,8

  • 9,0
  • 7,4
  • 11,0

1,1 1,4 1,6

  • 1,9
  • 2,9

4,0 0,6 7,6

  • 0,1
  • 7,0
  • 12,0
  • 8,0
  • 4,0

0,0 4,0 8,0 12,0 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/2020 Tokmanni Käyttötavaramarkkina Sales development, %

29.4.2020 3

The member companies of the FGTA operate the department store and hypermarket chains of K-Citymarket, Prisma, Sokos, Tokmanni and Minimani. FGTA STATISTICS DOESN’T INCLUDE ONLINE RETAIL SALES

Tokmanni's Business Review January-March 2020

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Highlights Q1/2020

  • Like-for-like revenue developed very well

despite the lack of a normal winter season in southern Finland

  • Positive comparable EBIT for the first time in

Tokmanni’s history achieved due to good sales performance, improved gross margin and efficient operations

  • Due to the COVID-19 epidemic (coronavirus)

the guidance for 2020 was cancelled and changes in action plan was initiated

29.4.2020 Tokmanni's Business Review January-March 2020 4

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  • Tokmanni-Europris Shanghai trading company started

daily monitoring in January, delivery delays at worst 3-4 weeks, currently the situation has been normalized

  • Grocery sales have increased since the start of hoarding
  • After the restrictions came into force, customer visits to

stores decreased clearly

  • However, the basket size increased strongly
  • Online sales grew strongly from the end of March

Tokmanni's Business Review January-March 2020

Impacts of coronavirus on business in Q1/2020

29.4.2020 5

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Online sales grew strongly from the end of March

  • Strong sales, especially in the following product

groups: sports and leisure, yard and garden, cleaning and tidying, and home decoration

  • Investments in the development of digital services and

e-commerce as well as in improving the customer experience continued

  • The targets is to expand the product range, even

multiply it, and the measures are underway

29.4.2020 Tokmanni's Business Review January-March 2020 6

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  • Measures to promote safety in stores, warehouses and offices
  • Contingency plans in stores, logistics centre and office
  • Close contact with the Tokmanni-Europris sourcing company based in China
  • Adjusting the business to meet the lower customer visits in the stores
  • Customizing product purchase plans, especially in clothing
  • Improving the efficiency of digital services and investing in e-commerce
  • Amendments of marketing actions
  • Careful consideration and reassessment of investments required for development projects
  • Clear risk management actions and related measures
  • Increasing sustainability work

Tokmanni's Business Review January-March 2020

Key measures during a coronavirus epidemic

29.4.2020 7

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Many thanks to Tokmanni employees for their commitment and excellent work during these exceptional times. In line with our values, we have worked together to serve our customers safely and to adapt Tokmanni's operations to a new and unfamiliar situation.

Tokmanni's Business Review January-March 2020 29.4.2020 8

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Financial review

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Tokmanni’s operations are subject to seasonality

173,7 217,7 210,7 268,4 188,1 239,9 231,5 284,8 199,0

  • 1,9

13,1 15,5 25,3

  • 2,2

18,7 21,9 32,0 0,3

0,0 50,0 100,0 150,0 200,0 250,0 300,0

Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/2019 Q3/2019 Q4/2019 Q1/2020

  • 5,0

0,0 5,0 10,0 15,0 20,0 25,0 30,0 35,0 Revenue Comparable EBIT, % Comparable EBIT, M€ Revenue, M€

Tokmanni's Business Review January-March 2020 29.4.2020 10

Q1/2020: Like-for-like revenue grew by 4.4% (4.1%) and total revenue by 5.8% (8.3%).

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Comparable gross profit

  • The gross profit was impacted positively by the

increase in the share of direct imports and private label products.

  • On the other hand, the large proportion of grocery

products in the sales structure in March slightly reduced gross margin-%.

58,6 63,8

Q1/2019 Q1/2020

Comparable gross profit, MEUR

Tokmanni's Business Review January-March 2020

Comparable gross margin, %

32,1 % 31,2 %

29.4.2020 11

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Direct import’s share of sales

11,6 13,3 10,5 10,3

Q1/2019 Q1/2020

12 Tokmanni's Business Review January-March 2020 29.4.2020

23,6 % 22,2 %

Import through Shanghai Other direct import

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70,9 % 29,1 %

Private label's share of sales

13

(71,9)

Q1/2020 (Q1/2019)

(28,1)

Tokmanni's Business Review January-March 2020 29.4.2020

Private label* Other

* Includes private label products, products of exclusive distribution and non-branded products

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Operating expense relative share developed favourably

  • Comparable operating expenses were EUR 48.5

million (46.8), or 24.4% of revenue (24.9%) – The increase in euro-denominated operating expenses was mainly due to the additional

  • perating expenses that came from the new stores

added to the store network – In addition, leasing of additional warehouses and contingency measures implemented to counter the effects of the coronavirus epidemic increased expenses

  • Personnel expenses were EUR 28.0 million (26.8),
  • r 14.1% of revenue (14.2%)

Tokmanni's Business Review January-March 2020

46,8 48,5

Q1/2019 Q1/2020 Comparable operating expenses

Comparable operating expenses, MEUR Share of revenue, %

29.4.2020 14

24,4 % 24,9 %

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  • 2,2

0,3

Q1/2019 Q1/2020

Comparable EBIT improved

Comparable EBIT margin, % Q1/2019 Q1/2020

  • 1,2 %

0,1 %

Tokmanni's Business Review January-March 2020 29.4.2020 15

Comparable EBIT, MEUR

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Balance sheet, cash flow and financial position

  • Tokmanni’s inventories amounted to EUR 238.8 million (214.0) at the

end of March 2020

  • Cash flow from operating activities amounted to EUR -23.5 million

(-28.3) in the first quarter

  • Tokmanni’s liquidity is good. At the end of March 2020, the company’s

cash and cash equivalents and undrawn credit limits totalled EUR 58,5 million (31 March 2019: 64,3)

  • At the end of March 2020, Tokmanni’s interest-bearing debt totalled

EUR 425.9 million (428.0) of which – non-current loans from financial institutions and corporate bonds were EUR 100.0 (100.0) million and current loans from financial institutions and corporate bonds EUR 13.9 million (10.0)

  • The ratio of net debt to comparable EBITDA (rolling 12 months) was

3.1 (3.8)

Tokmanni's Business Review January-March 2020

214,0 238,8

31.3.2019 31.3.2020 Inventories, MEUR Number of stores

188 stores 190 stores

29.4.2020 16

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Net capital expenditure

  • Net capital expenditure in the first quarter totalled

EUR 3.2 million (2.7) – Capital expenditure was mainly focused on the expansion of the store network, renovations of stores and the development of digital services.

  • Capital expenditure in 2020 is expected to be around

EUR 15 million.

2,7 3,2

Q1/2019 Q1/2020 Net capital expenditure, MEUR

Tokmanni's Business Review January-March 2020 29.4.2020 17

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KEY FOCUS 2020:

Strengthening discount retailer business model Adapting to changing market environment

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Q1 Q2 Q3 Q4

Impacts of coronavirus epidemic on Tokmanni’s business

29.4.2020 Tokmanni's Business Review January-March 2020 19

Initial impact Significant impact Stabilization Recovery Consumer confidence, spending and possible restrictions are the key variables

  • Delivery delays from

China 3-4 weeks

  • Emphasis on grocery

sales

  • Customer visits are falling,

average basket size is increasing

  • Additional costs to ensure

safety of employees and customers

  • Actions to secure the

business continuity

  • Strengthening online sales
  • Return to normal opening

hours

  • Normalization of

workplace arrangements

  • Batch buying
  • Start of the Christmas

season

  • Leveraging the

strengths of the discount retailer business

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  • Due to the uncertainty caused by the coronavirus, the

economic and industry’s outlook has changed rapidly.

  • Since it is still difficult to assess the financial impact of

the exceptional situation, Tokmanni Group Corporation will not issue guidance for 2020.

  • Once visibility improves and the material uncertainties

have cleared, Tokmanni will update its outlook and issue a new guidance.

Tokmanni's Business Review January-March 2020

Tokmanni’s outlook for 2020

29.4.2020 20

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Half-year financial review 2020 published on 29 July 2020

IR contact: Maarit Mikkonen maarit.mikkonen@tokmanni.fi +358 40 562 2282 ir@tokmanni.fi

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tokmanni.fi

Thank you!

ir@tokmanni.fi