Tokmanni Oyj : Financial Statement Bulletin 2019

Tokmanni Group Corporation        Financial Statement Bulletin        7 February 2020 at 8:30

Tokmanni Financial Statement Bulletin 2019

Strong Q4/2019: revenue grew by 6.1%, comparable EBIT improved clearly

Tokmanni has adopted IFRS 16 Leases as of 1 January 2019. The numbers in brackets refer to the adjusted figures for 2018.

FOURTH-QUARTER 2019 HIGHLIGHTS

· Revenue grew by 6.1% (8.0%) to EUR 284.8 million (268.4)
· Like-for-like revenue grew by 3.1% (4.7%)
· Comparable gross profit totalled EUR 100.1 million (92.3) and comparable gross margin 35.2% (34.4%)
· Comparable EBITDA totalled EUR 47.6 million (40.2), 16.7% of revenue (15.0%)
· Comparable EBIT totalled 32.0 million (25.3), 11.2% of revenue (9.4%)
· Cash flow from operating activities amounted to EUR 56.5 million (57.3)
· Earnings per share were EUR 0.39 (0.31)

JANUARY-DECEMBER 2019 HIGHLIGHTS

· Revenue grew by 8.5% (9.3%) to EUR 944.3 million (870.4)
· Like-for-like revenue grew by 4.3% (5.6%)
· Comparable gross profit totalled EUR 325.3 million (295.0) and comparable gross margin 34.4% (33.9%)
· Comparable EBITDA totalled EUR 131.6 million (109.5), 13.9% of revenue (12.6%)
· Comparable EBIT totalled EUR 70.4 million, (51.9), 7.5% of revenue (6.0%)
· Cash flow from operating activities amounted to EUR 84.0 million (86.0)
· Earnings per share were EUR 0.80 (0.58)

DIVIDEND PROPOSAL

Tokmanni's Board of Directors proposed to the Annual General Meeting to pay a dividend of EUR 0.62 per share.

TOKMANNI'S OUTLOOK FOR 2020

Tokmanni expects good revenue growth for 2020, based on the revenue from the new stores acquired and opened in 2019 and new stores to be opened in 2020, 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:

ALL-TIME HIGH YEAR

Tokmanni's total revenue in the fourth quarter grew by 6.1%, while like-for-like revenue grew by 3.1% on the previous year. The strong sales performance was boosted by Tokmanni's highly successful 30th birthday and the Black Friday campaigns, among other events. The change in the timing of tax refunds to citizens, the delayed winter season in most of Finland and the postal strike slowed down year-end sales. However, we succeeded in achieving all-time high sales and profits in the fourth quarter as well as in 2019.

Tokmanni's main focus in 2019 was on improving profitability. We turned our gross margin back onto a growth track and reduced the share of operating expenses relative to revenue. The comparable EBIT margin in 2019 improved significantly, amounting to 7.5% (6.0%).

Tokmanni's employees did a great job in serving our customers and advancing our company's growth story in 2019. In addition to a robust improvement in our result, we achieved comparable sales growth of 4.3% on top of the strong performance in the previous year. As a reward for a job well done, Tokmanni pays about EUR 2 million in sales and performance bonuses to its employees based on the year of 2019.

In 2019, Tokmanni engaged in its responsibility work with good drive. It is important for us to respect human rights in Finland and throughout our sourcing chain, to know where the products we sell come from and to systematically reduce Tokmanni's impact on the climate. Moreover, we aim to be the best place to work in the retail sector for our employees. As a responsible general discount retailer, we will continue our work in 2020, doing our part towards building a better future.

In 2020, we will continue to focus on investing in our general discount retailer business model in accordance with our strategy. Low prices, an attractive assortment, service-oriented employees and an efficient supply chain form the foundation for customer satisfaction at Tokmanni.
 

Key figures            
    Adjusted     Adjusted  
*** ***
  10-12/ 10-12/ Change 1-12/ 1-12/ Change
2019 2018 % 2019 2018 %
Revenue, MEUR 284.8 268.4 6.1% 944.3 870.4 8.5%
Like-for-like 3.1 4.7   4.3 5.6  
revenue
development, %
Customer visit 5.6 5.7   6.9 6.9  
development %
Gross profit, MEUR 99.7 92.2 8.2% 325.2 295.3 10.1%
Gross margin, % 35.0 34.3   34.4 33.9  
Comparable gross 100.1 92.3 8.5% 325.3 295.0 10.2%
profit, MEUR
Comparable gross 35.2 34.4   34.4 33.9  
margin, %
Operating expenses -54.1 -52.8 2.6% -198.9 -188.1 5.7%
Comparable -53.9 -53.2 1.3% -197.9 -189.5 4.4%
operating expenses
EBITDA, MEUR 47.0 40.6 15.9% 130.6 111.2 17.4%
EBITDA, % 16.5 15.1   13.8 12.8  
Comparable EBITDA, 47.6 40.2 18.5% 131.6 109.5 20.2%
MEUR
Comparable EBITDA, 16.7 15.0   13.9 12.6  
%
Operating profit 31.4 25.6 22.6% 69.4 53.6 29.5%
(EBIT), MEUR
Operating profit 11.0 9.5   7.3 6.2  
margin EBIT, %
Comparable EBIT, 32.0 25.3 26.7% 70.4 51.9 35.7%
MEUR
Comparable EBIT, % 11.2 9.4   7.5 6.0  
Net financial -2.6 -2.6 -1.8% -10.5 -10.6 -1.7%
items, MEUR
Net capital 3.5 8.8 -60.7% 15.4 19.8 -21.9%
expenditure, MEUR*
Net debt / 2.9 3.5   2.9 3.5  
comparable EBITDA
**
Net cash from 56.5 57.3   84.0 86.0  
operating
activities,
MEUR
Return on capital 5.3     11.8    
employed, %****
Return on capital 11.8 9.5   11.8 9.5  
employed %,
rolling
12 months****
Return on equity, 13.1     26.8    
%****
Return on equity 30.1 23.6   30.1 23.6  
%, rolling 12
months****
Equity ratio, % 25.3 23.3   25.3 23.3  
Number of shares, 58,869 58,869   58,869 58,869  
weighted average
during the
financial period
(thousands)
Earnings per share 0.39 0.31   0.80 0.58  
(EUR/share)
Personnel at the 3,659 3,558   3,659 3,558  
end of the period
Personnel on 3,624 3,500   3,647 3,415  
average in the
period

* 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 will be sustained by domestic demand in the coming years, as the outlook for foreign trade is fairly weak. The importance of public spending and investments for GDP growth will be emphasised, especially in 2020. In its Economic Survey for winter 2019, the Ministry forecasts that inflation in 2020 will amount to 1.3%. As for GDP growth in 2020, the Ministry forecasts that it will slow down to 1.0% (1.6% in 2019).  More information can be found on the website of the Ministry of Finance, at https://vm.fi/en/publications (https://vm.fi/julkaisut).

Tokmanni expects the Finnish non-grocery market to grow slightly in 2020, and it expects discount stores, speciality discount stores and online stores to further strengthen their position.

Analyst and press conference

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/ (https://ir.tokmanni.fi/en) or through the link https://tokmanni.videosync.fi/2019-q4-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: [phone]
Sweden: [phone]
UK: [phone]
US: [phone]
Passcode: 60856863#

On-demand versions of both presentations will be available at https://ir.tokmanni.fi/ (https://ir.tokmanni.fi/en) later during the same day.

For further information, please contact

Mika Rautiainen, CEO
tel. [phone], mika.rautiainen(at)tokmanni.fi

Markku Pirskanen, CFO
tel. [phone], markku.pirskanen(a)tokmanni.fi

Maarit Mikkonen, Head of IR and Communications
tel. [phone], maarit.mikkonen(at)tokmanni.fi

Tokmanni in brief

Tokmanni is Finland's leading general discount retailer by number of stores and revenue. In 2019, Tokmanni's revenue totalled EUR 944.3.4 million, and the company had around 3,700 employees. Tokmanni is also the only nationwide general discount retailer in Finland, and it currently almost 200 around the country.

Distribution

Nasdaq Helsinki
Key media

https://news.cision.com/tokmanni-group-oyj/r/tokmanni-financial-statement-bulletin-2019,c3030018

https://mb.cision.com/Main/16556/3030018/1189919.pdf

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