Danske Small & Mid Cap Seminar - Tokmanni/media/Files/T/Tokmanni/reports... · 2019-03-08 · Expensive ValuePrice image Discounters Hypermarkets Discounter groceries Specialty Retail

Danske Small & Mid Cap Seminar5 March 2019

1 5.3.2019 Small & Mid Cap Seminar

Tokmanni today

2

#1General discount retailerin Finland

1 million Customer visits per week

188Stores in Finland

870 MEUR

Revenue 2018

+9,3% growth

3,600Employees

5.3.2019 Small & Mid Cap Seminar

2018 - year of a positive turnaround

• Strengthening Tokmanni strategy • Renewing management and organization • Improving customer confidence• All Tokmanni's employees involved in

building customer confidence• Implementing a strong investment plan in

store network, online business and store concept renewals

• Increasing imports from Far East

5.3.2019 Small & Mid Cap Seminar3

Tokmanni’s customer base, family households being slightly overemphasized

4 Note: Tokmanni’s customers = Customers that frequently visit TokmanniSources: TNS Mind 2018

Adult singles

17%

43%

Young couplesAdult households

6%

Family households

17%

Pensioners

40%

16%

Young singles

16%

12% 13%

7%5%

7%

Whole population Tokmanni’s customers

Small & Mid Cap Seminar5.3.2019

Smart shoppers are overemphasized and price insensitives underemphasized in Tokmanni’s customers

5 Note: Tokmanni’s customers = Customers that frequently visit TokmanniSources: TNS Mind 2018

Price insensitivesSmart shoppers Sale and discount addicts

33%

45%

57%

31%

18%

9%

Price comparers

4% 3%

Whole population Tokmanni’s customersSmart shoppersCompares always prices and buys the biggest part on discount or on sale

Sale and discount addictsBuys the biggest part on discount or on sales but doesn’t actively compare prices

Price insensitivesDoes not often compare prices and sale or discounts are not motivators

Price comparersCompares always prices but sale or discounts are not motivators


Improving Tokmanni’s customer confidence

• Unbeatable prices in destination categories and products

• Wider assortment in destination categories

• Renewing store concept in destination categories

• Stronger marketing

• Quarterly incentive program for the whole Tokmanni personnel


Tokmanni’s like-for-like customer visits development

7

2016 20172013 2014

-1.0%

2015

-0.1%

2018

-0.4%

0.2%

-1.4%

3.0%


Revenue development

8

2013

9.3%

20152014 2016

0.0%

2017-1.3%

2018

3.0% 3.0%

-0.3%

2.9%

-0.6%

2.7%

-0.1%

2.7%

5.6%

Revenue development Like-for-like revenue development


Tokmanni has a unique market position

Tokmanni’s distinctive positioning… …has 3 competitive advantages

9

Lidl

Motonet

Ikea

Gigantti

H&M Clas Ohlson

Sokos Stockmann

City-market

Prisma

Narrow Assortment Wide

Expe

nsiv

eVa

lue

Pric

e im

age

Discounters

Hypermarkets

Discounter groceriesSpecialty Retail

Department stores

Halpa-HalliHong Kong

KärkkäinenPuuilo

Better price imagevs. hypermarkets

Broader assortment widthvs. specialty retailers

Nationwide coverage and better shopping experience vs. local discounters


-1,1

1,9

4,54,4

10,9 11,07,8 8,0

-9,0-7,4

-11,0

1,1 1,4 1,6

-1,9-2,9

-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

Tokmanni Non-grocery market

10

Tokmanni’s and non-grocery market development

5.3.2019

Sales development, %

FGTA STATISTICS DOESN’T INCLUDE ONLINE RETAIL SALES

Source: FGTA

Small & Mid Cap Seminar

Revenue development

11

238,1 248,5 268,4

775,8 796,5870,4

0

100

200

300

400

500

600

700

800

900

Q4/16 Q4/17 Q4/18 2016 2017 2018


Like-for-like revenue development, %

Q4/16 Q4/17 Q4/18 2016 2017 2018

+0.8 -1.0 +4.7 -0.1 -1.3 +5.6

+8.0%+4.4%

+2.7% +9.3%

5.3.2019

Comparable gross profit

12 Small & Mid Cap Seminar

Comparable gross margin, %

Q4/16 Q4/17 Q4/18 2016 2017 2018

35.1 34.6 34.4 34.5 33.7 33.9

5.3.2019

83,5 86,1 92,3

267,9 268,1295,0

0

50

100

150

200

250

300

350

Q4/16 Q4/17 Q4/18 2016 2017 2018

+7.2%+3.1%

+0.1% +10.1%

Development of Private Labels and direct imports


Brandedproducts 68% (68%)

Private label and other32% (32%)

Import share of sales, %

10,8 12,5 13,6 14,1

11,1 9,6 9,3 10,3

2015 2016 2017 2018

Import through ShanghaiOther direct import

2015 2016 2017 2018

Brand category sales mix

57,2 58,7 65,2

208,5 217,0235,7

0

50

100

150

200

250

Q4/16 Q4/17 Q4/18 2016 2017 2018

+11.1%+2.6%

+4.1%

Comparable operating expenses


Comparable operating expenses, %

Q4/16 Q4/17 Q4/18 2016 2017 2018

24.0 23.6 24.3 26.9 27.2 27.1

5.3.2019

+8.6%

23,6 25,0 24,4

47,740,6

48,6

0,0

10,0

20,0

30,0

40,0

50,0

60,0

Q4/16 Q4/17 Q4/18 2016 2017 2018

-2.6%+6.1%

+19.7%

Comparable EBIT


Comparable EBIT, %

Q4/16 Q4/17 Q4/18 2016 2017 2018

9.9 10.1 9.1 6.1 5.1 5.6

5.3.2019

-14.9%

Estimated impact of IFRS 16 standard

• IFRS 16 is adopted as of 1 January 2019• As a result of the adoption of the standard, leases are transferred to the balance sheet as a liability

and assets• Introduction of the standard is estimated to impact in balance sheet, result and key figures as follows:

• Balance sheet• Liabilities increase by approximately EUR 242 million in the balance sheet• The balance sheet total will increase from EUR 485 million to approximately EUR 718 million

• Income statement• Comparable EBITDA will improve by approximately EUR 46 million annually• Comparable EBIT will improve by approximately EUR 4 million annually• Net profit for the year will decrease by approximately EUR 1 million

• Key figures• Equity ratio 36% will fall to about 23%• Net liabilities / comparable EBITDA of 2.1 will increase to around 3.5


The amendment of the standard has no impact on the company's operational activities

17

Main focus in 2019:

IMPROVING PROFITABILITY


Tokmannicompetitiveadvantages1. Low prices

2. Inspiring and wide assortment

3. Nationwide store network combined with an online store

4. Lean and efficient operation model


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REVENUE

PROFITABILITY

1 billion €

Comparable EBIT margin

Customer NPS >60

Best place to work in retail

Tokmanni values people andenvironment

CUSTOMERS

PERSONNEL

SUSTAINABILITY

Tokmanni business drivers


9%

5.3.2019

Tokmanni’s year 2019

• Reducing the share of fixed costs• Strengthening supply chain and reducing real estate

rentals and maintenance costs• Enhancing operations of stores

• Increasing the gross margin• Increasing direct import and sales of own brands• Increasing batch sales• Improving product group performance in terms of loss

and inventory management

• Continuing to strengthen customer confidence especially in Tokmanni's key product groups

• Increasing sales of e-commerce and improving profitability


Long-term goal: comparable EBIT margin about 9%

Operating expenses improvement potential

EBIT-% 2018*

1.0% - 1.5%

Gross margin improvement potential

1.0% - 2.0%

EBIT-% target

6.1%

About 9%

21 5.3.2019

* IFRS 16 impact of 0.5% has been taken into account


Tokmanni’s updated long-term financial targets

• Tokmanni’s goal is to continue to reinforce its position as the leading general discount retailer in Finland by making the most out of its key competitive advantages, which are its low perceived price image, wide and attractive assortment and good shopping experience.

22

Low single digit growthLike-for-Like revenue growth

Target of over 200 storesNew about 5 p.a. 12 000 sqm annually

Stores

Gradually increase to ~9%Comparable EBIT margin

Net Debt / Comparable EBITDA In long-term below 3.2x

Dividend policy About 70%


IFRS 16

Thank you!

tokmanni.fi23 5.3.2019 Small & Mid Cap Seminar

Documents

Danske Small & Mid Cap Seminar - Tokmanni/media/Files/T/Tokmanni/reports... · 2019-03-08 · Expensive ValuePrice image Discounters Hypermarkets Discounter groceries Specialty Retail