Tokmanni Group Oyj · OMXHEX:TOKMAN
Tokmanni Group Oyj — Investor Day (February 2024)
81 slides from Tokmanni Group Oyj's investor day presentation, Feb 13, 2024
Slide 1: Capital Markets Day 2024
Capital markets Day 2024 13th of February 2024 CMD 2024 1
Slide 2: Welcome
WELCOME! Mika Rautiainen President and CEO Tokmanni Group CMD 2024 2
Slide 3: Presenters
PRESENTERS Janne Pihkala Sirpa Huuskonen Mika Rautiainen Anders Kind Tapio Arimo Vice President of Vice President of President and CEO, CEO, CFO and CIO, Strategy, Business People, Culture, and Tokmanni Group DollarStore Tokmanni Development and Sustainability, Ecommerce, Tokmanni Tokmanni CMD 2024
Slide 4: Agenda
AGENDA 1:00 p.m. Welcome Discount Retail Market Overview The Growth Journey Ahead of Us The New Role of Tokmanni Group Sustainability at Tokmanni Group 10 min Break Tokmanni Strategy Update DollarStore Strategy Update Strategic Targets for Tokmanni Group Q&A 4:00 p.m. CMD ends All times in EET CMD 2
Slide 5: Discount Retail Market Overview
Market overview DISCOUNT RETAIL MARKET OVERVIEW CMD 2024 5
Slide 6: The market environment has been uncertain in recent years
The market environment has been uncertain in recent years Supply COVID-19 Inflation chain + Increase in demand when restrictions + Increase in sales prices were in place Decrease in consumers’ Volatility in container - - - Decrease in demand purchasing power prices when restrictions were lifted Decr
Slide 7: Variety discount retailers have proven to be very resilient
Despite the uncertain market environment, Variety discount retailers have proven to be very resilient Revenue development of selected variety discount retailers 27.8% 19.2% Peer group’s 13.6% 13.4% 12.7% average 11.0% 7.6% 7.5% 6.6% 5.0% 4.8% 2023/2022 LTMQ3.2023/LTMQ3.2022 LTMQ3.2023/LTMQ3.2022 202
Slide 8: Discount is and will be the fastest-growing physical channel globally
Further, Discount is and will be the fastest-growing physical channel globally CMD 2024 8 Sources: IGD
Slide 9: Recap on variety discount retail: What is it all about?
Recap on variety discount retail: What is it all about? CMD 2024 9
Slide 10: Variety discount means top-of-mind place to shop
VARIETY DISCOUNT MEANS TOP-OF-MIND PLACE TO SHOP Variety to customers is typically offered through: • Top-of-mind assortment for seasons and celebrations • Top-of-mind assortment for selected categories through strong and wide offering • Strong focus on private labels and exclusive products CMD 2024
Slide 11: Variety discount means lowest prices
VARIETY DISCOUNT MEANS LOWEST PRICES Value to customers is typically offered through: • Price cuts • Promotions • Price ceiling • Fixed price points • Bigger packs • Price comparisons CMD 2024 11 Sources: Tokmanni CMD 2021, IGD, Tokmanni analysis
Slide 12: Variety discount means exciting and fun shopping
VARIETY DISCOUNT MEANS EXCITING AND FUN SHOPPING Customer experience is typically differentiated from others through: • Treasure hunting • Embedded fun factor • Interesting products and unbelievable low prices to surprise customers • Making every visit different CMD 2024 12 Sources: Tokmanni CMD 202
Slide 13: Elements found in every variety discount concept
These elements are found in every variety discount concept, but each concept executes these elements in their own unique way CMD 2024 13 Sources: Tokmanni CMD 2021, IGD, Tokmanni analysis
Slide 14: Key trends in variety discount segment
KEY trends in Variety discount segment presented in 2021 are still valid and growing stronger CMD 2024 14
Slide 15: Growth accelerates
Growth accelerates Variety discount retailers’ businesses are thriving as low prices are becoming increasingly important for consumers. CMD 2024 15 Sources: Tokmanni CMD 2021, IGD, Tokmanni analysis
Slide 16: Unbeatable prices
UNBEATABLE PRICES Variety discount retailers are increasingly moving from just having low priced items to having lowest priced items in the market. CMD 2024 16 Sources: Tokmanni CMD 2021, IGD, Tokmanni analysis
Slide 17: Wider assortment
WIDER ASSORTMENT Variety discount retailers are still introducing new categories to fulfill even more customer missions and become one-stop-shop for even larger share of customers. Many variety discount retailers have engaged into food category and are starting to compete more directly with grocery
Slide 18: More private labels
MORE PRIVATE LABELS Variety discount retailers are still extending their ranges and pushing private labels to new categories, even to ones which have been traditionally dominated by brands, e.g. cosmetics. CMD 2024 18 Sources: Tokmanni CMD 2021, IGD, Tokmanni analysis
Slide 19: Investing in ecommerce
INVESTING IN ECOMMERCE Variety discount retailers are still experimenting with online channel. The focus is on running profitable ecommerce business. CMD 2024 19 Sources: Tokmanni CMD 2021, IGD, Tokmanni analysis
Slide 20: Improving efficiency with digital solutions
IMPROVING EFFICIENCY WITH DIGITAL SOLUTIONS Variety discount retailers will invest in digitalization to improve their efficiency in stores and supply chain. New teams will be created to focus on the use of data and shopper insights to improve operations. AI will provide opportunities to fast-track r
Slide 21: Being part of the community
BEING PART OF THE COMMUNITY Variety discount retailers are taking even more active role in local communities. Connections with individual, local stores will deepen, leading to increased loyalty and less switching. CMD 2024 21 Sources: Tokmanni CMD 2021, IGD, Tokmanni analysis
Slide 22: Stepping up with sustainability
Stepping UP WITH SUSTAINABILITY Variety discount retailers have taken sustainability to their agenda. Leading European variety discount retailers are still expected to catch up with other retailers on the topic. CMD 2024 22 Sources: Tokmanni CMD 2021, IGD, Tokmanni analysis
Slide 23: Key takeaways
Key takeAways Variety discount Variety discount is can grow all about low Key trends in profitably even in prices, fun and Variety discount challenging exiting customer segment are market experience, and growing stronger. environment. wide variety of products you need. CMD 2024 23 Sources: Tokmanni
Slide 24: The growth journey ahead of us
The growth journey ahead of us CMD 2024 24
Slide 25: Acquisitions have been central part of Tokmanni group's growth
Acquisitions have been central part of Tokmanni group’s growth in the history Sodankylä Rovaniemi and Kemijärvi Tornio and Kemi 2005-2006 2010 2019 2021 2023 2004 2007 2018 2020 2022 2024 CMD 2024 25 Sources: Company information
Slide 26: Unique operating model enabling smooth integration of new retailers
This has forced Tokmanni group to develop quite unique operating model to enable smooth integration of new retailers to its operations Key highlights of Tokmanni Group’s operating model • Tokmanni Group can operate any retail space between 200–10,000 sqm profitably. • Tokmanni Group can operate give
Slide 27: The operating model has turned out to be very successful
THE OPERATING MODEL has turned out to be very successful Revenue development compared to 2017 Case Same store +6% +36% +50% +55% revenue has increase more than 50% 2017 20181 20192 2020 2021 2022 Acquired at the end of 2018 Gross margin -% development Same store gross Payback time for 33.7 32.5 36.1
Slide 28: Leveraging capabilities internationally with DollarStore
Now we have taken our first steps to leverage these capabilities on an international level Case + Buying and sourcing synergies Acquired in the middle of 2023 - Integration costs We are utilizing our existing acquisition capabilities with DollarStore. Additional benefits identified Benefits that + S
Slide 29: Accelerating new store openings
We will also accelerate The new store openings Tokmanni Group will target to open at least 25 new stores under Tokmanni, DollarStore or BigDollar brand by the end of 2025 (335 at the end of 2023). In 2024, the target is to open 6 new stores Sweden, 4 new stores in Denmark, and 4 new stores in Finlan
Slide 30: Long term vision: leading discount retailer in Northern Europe
OUR long term VISION IS TO BEcome THE LEADING DISCOUNT RETAILER IN NORTHERN EUROPE CMD 2024 30
Slide 31: Keeping up the growth pace of peer companies
THIS will happen IF WE CAN KEEP UP the same growth pace with our peer companies Revenue development of Tokmanni Group’s peer companies before and after exceeding revenue of one BEUR Revenue 1 BEUR (BEUR) revenue exceeded Walmart Action 12 B&M 10 Dollar General Family Dollar 8 Dollar Tree 6 Home Barg
Slide 32: We aim for strong growth
We aim for strong growth Tokmanni Group is responsible for acquisitions • Tokmanni Group has proven track record in acquisitions. • We constantly screen markets for new potential acquisition targets in Northern Europe. Tokmanni and Dollarstore are responsible for LFL growth and new store openings •
Slide 33: The new role of Tokmanni Group
The NEW ROLE OF Tokmanni GROUP CMD 2024 33
Slide 34: A family of different discount retail concepts
TOKMANNI GROUP IS A family of different discount retail concepts CMD 2024 34
Slide 35: Role of Tokmanni Group: support owned discount retail concepts
The role of Tokmanni group is to provide best possible support for owned discount retail concepts Tokmanni Group’s capabilities Buying Supply People and chain and Sourcing logistics Data, Sustaina- analytics, Finance bility and AI CMD 2024 35
Slide 36: Increasing shareholder value through faster, more profitable growth
TOKMANNI GROUP WILL INCREASE SHAREHOLDER VALUE by enabling faster and more profitable growth of owned discount retail CONCEPTS • Tokmanni Group can focus growth investments to best performing assets and markets. • Tokmanni Group can fast track acquired companies to higher profitability with its exis
Slide 37: Tokmanni Group as a platform
WE WANT YOU TO THINK TOKMANNI GROUP AS A PLATFORM where we can • Provide best possible support for owned retail concepts • Add new discount retail concepts and fast track their growth and profitability CMD 2024 37
Slide 38: Sustainability at Tokmanni Group
SUSTAINABILITY AT TOKMANNI GROUP CMD 2024 38
Slide 39: Ambition to be the sustainability leader in Northern Europe
Our ambition is to be the leader in sustainability in Taking the lead in Northern SUSTAINABILITY EUROPE’s variety discount retail segment CMD 2024 39
Slide 40: Ambitious sustainability agenda and progress over 3 years
We have an ambitious sustainability agenda and we have made significant progress over the past 3 years OUR FOCUS AREAS HAVE BEEN Products and Climate People Business sourcing “carbon neutral in integrity OWN operations - “Tokmanni is for “sustainable and everybody” “Tokmanni is trusted traceable pro
Slide 41: Upcoming regulation will revolutionize corporate responsibility
The upcoming regulation will revolutionize corporate responsibility activities To thoroughly To communicate understand To change the and report the impacts of our business current ways transparently to the whole of working to value chain stakeholders New regulation taking place CSRD CSDDD CBAM Defor
Slide 42: Acquired businesses joining the sustainability agenda
we are in the middle of a transition where acquired businesses are joining Tokmanni group’s sustainability agenda. CMD 2024 42
Slide 43: Key takeaways
Key takeAways We have made We will have Significant new regulatory Ambitious progress in requirements sustainability sustainability for the upcoming agenda with over the past 3 years. clear targets years. for the whole group. CMD 2024 43
Slide 44: Tokmanni Strategy Update
TOKMANNI Strategy UPDATE 44 22.3.2021
Slide 45: Tokmanni story is about continuous growth
TOKMANNI STORY is about continuous gr0wth Head office, central warehouse, central supply One brand Transforming Tokmanni chain management Nationwide store to be the next generation Restoring customer variety discount retailer network reach confidence 2008 2015 2020 Feb 13th, 2024 2025 2012 2018 60%
Slide 46: Strategy is still valid, focus is on execution
Tokmanni’s strategy is still valid, and the focus is on execution CMD 2024 46
Slide 47: Actions to improve customer confidence and engagement
Actions to improve customer confidence and engagement Widest possible assortment Lowest Sustainable possible choice prices Strong LFL Growth Friendly and knowledge- Fast and able easy to shop personnel Personal and exciting shopping experience CMD 2024 47
Slide 48: Widest possible assortment
Widest possible assortment Widest We will double Tokmanni’s assortment possible assortment Lowest possible • Expanding current destination categories prices – Click Shoes assortment to expand Tokmanni apparel Fast and easy to shop • Introducing new destination categories Personal and exciting shoppi
Slide 49: Lowest possible prices
LOWEST POSSIBLE PRICEs Widest Our mission is to provide lowest possible prices to our customers possible assortment Lowest possible • Best price with entry-level products prices • Best value with private labels Fast and easy to shop • Best deals with A-brands • Best campaigns Personal and exciting s
Slide 50: Fast and easy to shop
Fast and EASY to shop Widest Building a winning concept for omnichannel retailing possible assortment Lowest possible • Tokmanni will continue developing fast and easy shopping prices – Developing online to support store visits even further Fast and easy – Click & collect development on its way to s
Slide 51: Personal and exciting shopping experience
personal and exciting shopping experience Widest Launch of Tokmanni Klubi customer loyalty program in 2021 possible assortment – Tokmanni Klubi has been launched with over 3 million members to date Lowest – Personalized offers and benefits expected to be launched in 2024 possible prices – Tokmanni a
Slide 52: Friendly and knowledgeable personnel
Friendly and knowledgeable personnel Widest Target is to be the best place to work in retail in Finland possible assortment Leadership Lowest possible – Tokmanni leadership index better than the index in Finnish retail sector prices Personal development Fast and easy to shop – Over 76% of our employ
Slide 53: Sustainable choice
SUSTAINABLE CHOICE Widest Our ambition is to be the leader in sustainability in Northern Europe’s possible assortment variety discount retail segment Lowest possible prices Key focus areas: • Sustainable products Fast and easy to shop • Taking care of climate Personal and exciting • Respect of human
Slide 54: Actions to improve efficiency
Actions to improve efficiency Widest possible assortment Lowest Sustainable possible choice prices Sourcing and buying EVERY DAY LOW Friendly and COST Fast and knowledge- Supply Digitalization easy able Chain to shop personnel Personal and exciting shopping experience CMD 2024 54
Slide 55: Every day low cost in everything we do
Every day Low Cost IN EVERYTHING WE DO Cost consciousness is a crucial part of Tokmanni Group’s company culture CMD 2024 55
Slide 56: Smart sourcing and buying
Smart sourcing and buying ensures the success of the whole company Sourcing and Buying Sourcing and buying • We target to increase direct sourcing. Share of sales up 0.5 %- Supply chain points since the beginning of strategy period. Digitalization • We target to significantly extend our private labe
Slide 57: Ensuring high product availability at lowest possible costs
Ensuring high product availability for our customers with lowest possible costs High product availability for our customer Sourcing and buying – Constantly improving the forecasting to ensure Supply steady flow of goods. chain • Improved demand forecast under development, expected to be in use at th
Slide 58: Digitalization to drive customer engagement and efficiency
DIGITALIZATION TO DRIVE customer engagement and EFFICIENCY Digitalization to drive customer engagement Sourcing and buying – We have started to utilize advanced analytics in different tasks such as: Supply • Assortment optimization chain • Price optimization • Personalization Digitalization – We hav
Slide 59: Key takeaways
KEY TAKEAWAYS New capabilities included in The execution of Target is to Tokmanni’s strategy achieve strong strategy will continues. lFL growth. benefit Tokmanni Group going forward. CMD 2024 59
Slide 60: DollarStore Strategy Update
DollarStore Strategy Update CMD 2024 60
Slide 61: Brief introduction to DollarStore
Brief introduction to DollarStore CMD 2024 61
Slide 62: The DollarStore story – An extraordinary growth journey
The DollarStore story – An extraordinary growth journey DollarStore has on average doubled its net sales every ~4th year MSEK Net sales 5,000 4,000 3,000 2,000 1,000 Wholesale strategy 0 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20(1) 21(1) 22(1) CMD 2024 Notes: (
Slide 63: The DollarStore story – An extraordinary growth journey
The DollarStore story – An extraordinary growth journey 6 33 134 stores stores stores 2003 2013 2023 1994 1999 2015 2021 2022 Founded Opens the Opens new central Opens the first Originally first store Reach SEK +1bn warehouse in Örebro store in Denmark wholesale of Start of retail in annual revenue
Slide 64: DollarStore's business idea: best assortment at the best price
DollarStore’s business idea is simple: To have the best assortment at the best price in the market Assortment overview Pricing overview Product groups % of sales Selected products Price Competitor 1 Competitor 2 Shampoo, make-up, clothes, comparison Fashion & Beauty skin-care, toothpaste, hygiene pr
Slide 65: Concept designed to support price and assortment image
DollarStore’s concept is designed to support price and assortment image CMD 2024 65
Slide 66: Few direct competitors in Sweden
There are only few direct competitors in Sweden with similar assortment and focus on low price DollarStore’s position compared to its main competitors in Sweden (illustrative) Tier 3 Group Tier 2 Group Tier 1 Group Low Price • Tier 1 Group: Wide assortment in DollarStore’s core categories and low-pr
Slide 67: DollarStore's performance
DollarStore’s performance CMD 2024 67
Slide 68: Discounters outperformed the Swedish retail market
The discounters have outperformed the general retail market in Sweden, while DollarStore has outperformed the discounters +11.9 %-points +9.8 %-points +4.3 %-points Higher growth compared Higher growth compared Higher growth compared to the market to the peer group average to the strongest peer CAGR
Slide 69: New store opening capabilities are world class
DollarStore’s new store opening capabilities are world class Key takeaways Illustrative timeline for a store opening • DollarStore has experienced expansion team with an established, fast and cost-efficient process for Negotiating ~2 opening new stores months • During the last ten years, DollarStore
Slide 70: Average payback time for a new store is approximately one year
Average payback time for a new store has been approximately one year Key takeaways Development of newly opened stores(1) Average EBITDA Average cumulative cashflow Average CAPEX • In the first 12 months from opening, new stores MSEK have slightly higher sales than the average store of the network du
Slide 71: New markets: Denmark
New markets: Denmark CMD 2024 71
Slide 72: Less direct competition in Denmark than in Sweden
In Denmark, there is less direct competition than in Sweden BigDollar’s position compared to its main competitors in Denmark (illustrative) Tier 3 Group Tier 2 Group Tier 1 Group Low Price • Tier 1 Group: Wide assortment in BigDollar’s core categories and low-price focus • Tier 2 Group: Wide assortm
Slide 73: Danish market looks very promising
Danish market looks very promising Key takeaways • Greenfield entry to Danish market in August 2022 with BigDollar brand name. • First new market entry for DollarStore. • Currently, 4 stores in Denmark and the plan is to double the store count by the end of 2024. • The reception has been very good f
Slide 74: Key takeaways for strategy period 2021-2025
Key takeaways for strategy period 2021-2025 Tokmanni Group DollarStore’s has a DollarStore will will support very strong focus on growing in DollarStore to allow concept that can its current markets even lower prices, win market shares as well as evaluate wider assortment in Swedish and possibilitie
Slide 75: Strategic targets for Tokmanni Group
STRATEGIC TARGETS for Tokmanni group STRATEgy period 2021-2025 CMD 2024 75
Slide 76: Strategy period 2021–2025: New Targets
Strategy period 2021–2025: New Targets New Previous Revenue 1.8 BEUR 1.5 BEUR Comparable EBIT 150 MEUR 150 MEUR Store network* > 360 stores in Nordics > 220 stores in Finland Net debt/comparable < 2.25 at year-end Net debt/EBITDA < 3.2 EBITDA excluding IFRS 16** Dividend policy*** Approx. 70% of net
Slide 77: Tokmanni Group revenue target and guidance
TOKmanni group Revenue target and guidance MEUR 2,000 1,800 1,660-1,760 1,500 1,393 1,142 1,168 1,073 1,000 944 870 797 0 2017 2018 2019 2020 2021 2022 2023 2024 2025 Guidance Target CMD 2024 77
Slide 78: Tokmanni Group comparable EBIT target and guidance
Tokmanni group Comparable EBIT target and guidance MEUR 150 150 110-130 106 100 99 100 86 70 52 50 41 0 2017 2018 2019 2020 2021 2022 2023 2024 2025 Guidance Target CMD 2024 78
Slide 79: Thank you!
TOKMANNI crour
Slide 80: Thank you!
TOKMANNI crour
Slide 81: Disclaimer
Disclaimer This presentation has been produced by Tokmanni Group Corporation for Capital Markets Day. Tokmanni Group Corporation does not accept any responsibility to anyone for the information contained in this document. Tokmanni Group Corporation has indicated within this document the sources of t