Results Centre

Revenue decreased -1.1% and profitability weakened - full year guidance unchanged

Highlights

FIRST QUARTER HIGHLIGHTS

  • Revenue totaled EUR 156.6 million (158.3), -1.1%
  • Like-for-Like revenue decreased by -3.8%, out of which calendar impact more than -2% and mild winter impact more than -1% according to Tokmanni’s calculations
  • Adjusted gross profit totaled EUR 49.2 million (52.5), 31.4% of revenue (33.1)
  • Adjusted EBITDA totaled EUR -1.5 million (2.2), -0.9% of revenue (1.4)
  • Adjusted EBIT totaled EUR -5.2 million (-1.7), -3.3% of revenue (-1.0)
  • 1 new and 1 relocated store opened during the quarter
  • Four new stores added to the new store pipeline in the quarter, after which the total new store pipeline for 2017 is 12 net new and 2 relocated stores
SHORT TERM OUTLOOK

Tokmanni’s expects good revenue growth for 2017 based on the revenue from new stores opened in 2016 and 2017 and low single digit Like-for Like revenue growth. Group profitability (adjusted EBITDA%) is expected to improve from the previous year.

Key figures
1-3/2017 1-3/2016 Change% 1-12/2016
Revenue, MEUR 156.6 158.3 -1.1% 775.8
Like-for-like revenue development, % -3.8 0.3   -0.1
Number of baskets, M 9.8 9.4 3.9% 44.7
Gross profit, MEUR 48.7 51.7 -5.9% 268.4
Gross margin, % 31.1 32.7   34.6
Adjusted gross profit, MEUR 49.2 52.5 -6.1% 267.9
Adjusted gross margin, % 31.4 33.1   34.5
Operating expenses -53.1 -51.4 3.5% -207.4
Adjusted operating expenses -51.6 -51.0 1.1% -208.5
EBITDA, MEUR -3.6 1.1 -415.8% 64.3
EBITDA, % -2.3 0.7   8.3
Adjusted EBITDA, MEUR -1.5 2.2 -166.9% 62.8
Adjusted EBITDA, % -0.9 1.4   8.1
Operating profit (EBIT), MEUR -7.3 -2.7 167.2% 49.2
Operating profit margin EBIT, % -4.7 -1.7   6.3
Adjusted EBIT, MEUR -5.2 -1.7 212.9% 47.7
Adjusted EBIT, % -3.3 -1.0   6.1
Net financial items, MEUR -1.3 -5.2 -73.9% -15.2
Net capital expenditure, MEUR 1.5 1.3 11.9% 9.8
Net debt / adjusted EBITDA** 2.6 3.0   1.8
Net cash from operating activities, MEUR -37.9 -15.3   62.5
Return on capital employed, % -2.3 -0.8   14.5
Return on equity, % -5.2 -5.0   18.1
Number of shares, weighted average during the financial period (thousands)* 58 869 44 549   54 095
Earnings per share (EUR/share)* -0.12 -0.14   0.50
Personnel at the end of the period 3 066 3 083   3 224
Personnel on average in the period 3 057 3 095   3 209

*The amount of shares 2016 has been adjusted with the effects of the bonus issue (‘share split’) carried out 04/2016.

**Rolling 12 months adjusted EBITDA

CEO’s comment

"The first quarter is usually Tokmanni’s slowest quarter but our performance was a slight disappointment to us. Even if the weak performance was primarily due to the timing of Easter, the 2016 leap day, as well as mild winter weather conditions, the non-grocery market didn’t develop according to our expectations. Despite the improvement in consumer confidence and other positive signals the non-grocery market continued to be weak which indicates that the market is still fragile and that the positive market forecasts have not yet realized in the non-grocery retail market. Slight recovery in the Finnish economy and other retail segments has however already been seen and we continue to believe that also the non-grocery market will grow slightly.

We are very pleased that our number of baskets increased by 3.9% which shows that our marketing actions are correct. To my disappointment the average basket size however decreased due to the weak demand for winter season products and also due problems related to shelf availability which we experienced following the implementation of a new assortment management tool. The problems related to the tool are now under control and the shelf availability issues will be completely solved during the second quarter, after which the tool will improve the efficiency of our assortment management and thereby have a positive effect on our sales.

In the first quarter we began aggressive campaigning to reach, among others, department store Anttila’s old customers. This had a negative impact on our gross profit, which is reflected directly in our adjusted EBITDA which decreased to EUR -1.5 million.

Despite this slow quarter, we are confident regarding our 2017 guidance. We have increased our focus in sourcing on the spring, summer and Christmas seasons. We are accelerating our measures to improve Like-for-Like sales by, among other things, intensifying our campaigning actions. At the same time market conditions are expected to improve. The year 2017 is a very busy year in opening new stores and in the first quarter we signed four additional contracts to open new stores in store space released by Anttila. The new stores contribute well to our revenue growth. We also continue to develop our sourcing and cost control remains tight in order to improve our profitability."

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