Tokmanni Group Oyj · OMXHEX:TOKMAN
Tokmanni Group Oyj — FY2017 Earnings Presentation
31 slides from Tokmanni Group Oyj's earnings presentation, Feb 9, 2018
Slide 1: Q4 2017 and FY2017
Q4 2017 and FY2017 Interim CEO Harri Sivula and CFO Markku Pirskanen
Slide 2: Good fourth quarter: revenue and EBITDA grew
GOOD FOURTH QUARTER: REVENUE AND EBITDA GREW • Revenue grew 4.4% to EUR 248.5 million (238.1) – Like-for-Like revenue decreased 1.0% • Six new stores opened during the quarter • Comparable gross profit EUR 86.1 million (83.5), a comparable gross margin of 34.6% (35.1%) • Comparable EBITDA EUR 28.6 m
Slide 3: 2017 Highlights
2017 HIGHLIGHTS • Revenue grew 2.7% to EUR 796.5 million (775.8) – Like-for-Like revenue decreased 1.3% • 13 new and 2 relocated stores opened during the review period • Comparable gross profit EUR 268.1 million (267.9), a comparable gross margin of 33.7% (34.5%) • Comparable EBITDA EUR 55.0 million
Slide 4: Market development: also the non-grocery market grew in the fourth quarter
MARKET DEVELOPMENT: ALSO THE NON-GROCERY MARKET GREW IN THE FOURTH QUARTER Sales development% 8,0 6,0 6,0 3,8 3,7 4,0 5,4 3,4 4,5 2,0 2,9 0,3 2,6 0,0 1,1 0,4 -0,3 -2,0 -0,7 -1,4-1,1 -1,5 -2,0 -4,0 -3,7 -6,0 -8,0 -6,7 -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/
Slide 5: 2017: total market grew 1.6%, non-grocery still negative
2017: TOTAL MARKET GREW 1.6%, NON- GROCERY STILL NEGATIVE Sales development% 4,0 3,3 3,0 2,9 2,7 2,7 2,0 1,6 1,1 0,0 -0,8 -1,4 -0,7 -1,7 -2,0 -2,9 -4,0 -4,7 -5,6 -6,0 -6,3 -8,0 2013 2014 2015 2016 2017 Tokmanni Total sales Non-grocery market Total market Tokmanni LFL Source: FGTA and Tokmanni. Antti
Slide 6: New stores as growth drivers
New stores as growth drivers 6 09.02.18 TOKMANNI Q4 and January-December 2017
Slide 7: New stores as growth drivers: new stores opened in Q4/17
New stores as growth drivers: 6 new stores opened in Q4/17 • At the end of the review period Tokmanni had 175 stores across Finland • In the fourth quarter Tokmanni opened six new stores and a record high amount of new stores, a total of 13 new and 2 relocated stores during 2017. Thereby, Tokmanni i
Slide 8: Nationwide store network and online store
Nationwide store network and online store Typical % of total selling Size category # Stores location Assortment Store size space m2 Large Outside larger city Full scale up to 4,000-6,000 m2 centres in high 25,000 active 19 traffic locations SKUs 21% Medium In the proximity of Up to 15,000 1,501-4,00
Slide 9: Continuously developing the store concept according to customer needs
To ensure a pleasant customer experience Tokmanni continuously develops its store concept according to customer needs • During the review period, the reinforcement of Tokmanni’s store concept continued • During the review period key components of the store concept development were – space optimizati
Slide 10: Tokmanni's renewed online store will be opened in March
Tokmanni's renewed online store will be opened in March • Number of SKUs substantially increased • Mobile usability in particular focus • Easy to add further digital services to the new platform to support customer needs 10 09.02.18 TOKMANNI Q4 and January-December 2017
Slide 11: Financial development
Financial development Q4/17 and FY2017 11 09.02.18 TOKMANNI Q4 and January-December 2017
Slide 12: Q4 2017 revenue grew 4.4%, LFL -1.0%
Q4 2017 revenue grew 4.4%, LFL -1.0% Revenue M€ +2.7%796.5 • New stores as growth driver 775.8 • LFL decreased slightly – weak beginning of the year -1.3% – stronger competition especially in groceries – the impact from some new stores and store size reductions • The Like-for-Like sales improved +4.
Slide 13: Q4/17 gross profit affected by sales mix and lower share of PL
Q4/17 gross profit affected by sales mix and lower share of PL Comparable gross Comparable margin % gross profit M€ 36,0 % 100,0 35,1 % 35,1 % 34,8 % 34,9 % 90,0 35,0 % 34,7 % 34,6 % 34,1 % 80,0 33,8 % 34,0 % 33,6 % 70,0 33,1 % 33,0 % 32,8 % 60,0 50,0 32,0 % 31,4 % 40,0 31,0 % 30,0 20,0 30,0 % 10,0
Slide 14: Developing Private Labels and direct imports to improve profitability
We continue to develop our Private Labels and direct imports to improve profitability Brand category sales mix Brand mix Leading international and national brands • Drives traffic Branded • Enforces credibility products • Supports price image Private label • Highlights private label value and other
Slide 15: Investment in sourcing efficiency and the Shanghai office
Tokmanni has invested in sourcing efficiency and sourcing through the Shanghai office Import share of sales% Direct import Imports through Shanghai Other import • The share of imports via the Shanghai office established in 2013 is gradually increasing • The role of the office in finding new 6 6 purc
Slide 16: 2018 focus on sharpening private label strategy and marketing
In 2018, we focus heavily on sharpening our private label strategy and marketing to increase their share of sales 16 09.02.18 TOKMANNI Q4 and January-December 2017
Slide 17: Comparable operating expenses almost at previous year's level
Comparable operating expenses almost at previous year's level 35,0 % 32,9 % 30,0 % 28,6 % 27,2 % 26,0 % 25,0 % 23,6 % 20,0 % 32,2 % 15,0 % 27,4 % 26,9 % 25,4 % 24,0 % 10,0 % 5,0 % 0,0 % Q1 Q2 Q3 Q4 1-12 2016 2017 17 09.02.18 TOKMANNI Q4 and January-December 2017
Slide 18: Majority of OPEX relates to store network
Majority of OPEX relates to store network OPEX by function % of OPEX 2017 8% 8% 13% 79% 12,9% Store network Administrative expenses 18 Logistics
Slide 19: EBITDA% at last year's good level 11.5%
Q4 2017 comparable EBITDA 28.6 MEUR, EBITDA% at last year’s good level 11.5% 70 60 62,8 50 55,0 40 30 27,3 28,6 20 10 0 1-12/16 1-12/17 Q4/16 Q4/17 Comparable EBITDA, M€ Comp. EBITDA, 8.1% 6.9% 11.5% 11.5% % 19 09.02.18 TOKMANNI Q4 and January-December 2017
Slide 20: Balance sheet, financing and cash flow
BALANCE SHEET, FINANCING AND CASH FLOW • At the end of December 2017 Tokmanni EUR 176.6 million (173.5) in interest bearing debt • Net debt/comparable EBITDA totaled 2.4 (1.8) at the end of the year • Tokmanni’s equity ratio was 35.2% (36.3%) • Cash flow from operating activities 2017 amounted to EU
Slide 21: Capital expenditure
CAPITAL EXPENDITURE • Fourth quarter net capital expenditure totaled EUR 4.3 million (4.4) • Net capital expenditure for 2017 amounted to EUR 8.1 million (9.8). The 2017 capital expenditure is decreased by a repayment of EUR 2.9 million temporary financing related to the construction of the Närpiö s
Slide 22: Market outlook
MARKET OUTLOOK • In 2017, the Finnish economy recovered and GDP grew over 3%, significantly more than what had been expected at the beginning of the year. The Finnish Ministry of Finance forecasts GDP growth of 2.4% in 2018 and 1.9% in 2019. Unemployment is projected to decrease to 8.1% and real dis
Slide 23: Tokmanni's outlook 2018
TOKMANNI’S OUTLOOK 2018 • 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 • As of 2018 Tokmanni’s online revenue will be included in the Group’s Like-for-Like revenue
Slide 24: How is it done?
HOW IS IT DONE? • Total growth: – sales from stores opened in 2017 and 2018 will bring good growth • Like-for-Like revenue: – strengthening the price image – customer-oriented assortment, interesting products, more stock lots – continuous and flexible development of the store concept, piloting – ren
Slide 25: Tokmanni's strengths
TOKMANNI’S STRENGTHS We perform Seasons are well strength regardless of business cycle Dealing with us We are truly a is genuinly different option close and fast Low prices are always in We know how fashion to source 25 09.02.18 TOKMANNI Q4 and January-December 2017
Slide 26: Appendix
Appendix IR Contact: Head of IR and Communication Joséphine Mickwitz [email protected] Tel: +358 20 728 6535, +358 400 784 889 [email protected]
Slide 27: 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 28: Operations subject to seasonality
Tokmanni’s operations are subject to seasonality: the second half of the year is generally stronger than the first half 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 15,2 15,0 13,5 12,9 150,0 11,6 10,0 100,0 5,0 2,2 2,0 1,8 50,0 0,0 - 1
Slide 29: Key figures
Key figures 10-12/2017 10-12/2016 Change% 1-12/2017 1-12/2016 Change% Revenue, MEUR 248.5 238.1 4.4% 796.5 775.8 2.7% Like-for-like revenue development, % -1.0 0.8 -1.3 -0.1 Number of baskets, M 13.3 12.8 3.6% 46.4 44.7 3.6% Gross profit, MEUR 86.6 84.2 2.9% 267.1 268.4 -0.5% Gross margin, % 34.8 35
Slide 30: Adjustments affecting comparability
Tokmanni Oy Adjustments affecting comparability MEUR 10-12/2017 10-12/2016 1-12/2017 1-12/2016 Gross profit 86.6 84.2 267.1 268.4 Changes in fair value of currency derivatives -0.5 -0.7 1.0 -0.5 Comparable Gross Profit 86.1 83.5 268.1 267.9 Operating expenses -58.5 -56.8 -217.8 -207.4 Changes in fai
Slide 31: TOKMANNI Q4 and January-December 2017
31 09.02.18 TOKMANNI Q4 and January-December 2017