Annual General Meeting/media/Files/T/Tokmanni/reports... · 2019-03-19 · Expensive ValuePrice image Discounters Hypermarkets Discounter groceries Specialty Retail Department stores

Annual General Meeting19 March 2019

CEO reviewMika Rautiainen

19.3.2019 Tokmanni's Annual General Meeting 20192

Tokmanni Executive Group

Mika RautiainenCEO

Markku PirskanenCFO

Sirpa HuuskonenHR Director

Harri KoponenStore Network and Concept Director

Mathias KivikoskiSales and Marketing Director

Timo HeimoDirector, Information

Management andSupply Chain

Janne PihkalaDirector, Business

Development

Tuomas HyvärinenPurchasing Director

3 Tokmanni's Annual General Meeting 201919.3.2019

Tokmanni today

4

#1General discount retailerin Finland

1 million Customer visits per week

188Stores in Finland

870 MEUR

Revenue 2018

3,600Employees


5

Main focus in 2018:

IMPROVINGCUSTOMER CONFIDENCE

YEAR OF POSITIVE TURNAROUND

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


Tokmanni’s customer base, family households being slightly overemphasized

7 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

Tokmanni's Annual General Meeting 201919.3.2019

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

8 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 customers


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

914 19.3.2019 Tokmanni's Annual General Meeting 2019

Tokmanni’s like-for-like customer visits development

10

2016 20172013 2014

-1.0%

2015

-0.1%

2018

-0.4%

0.2%

-1.4%

3.0%


Revenue development

11

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

12

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

13

Tokmanni’s and non-grocery market development

19.3.2019

Sales development, %

FGTA STATISTICS DOESN’T INCLUDE ONLINE RETAIL SALES

Source: FGTA

Tokmanni's Annual General Meeting 2019

2018: revenue grew +9.3%,comparable EBIT +19.7%

• Revenue grew by 9.3% (2.7%)• Like-for-like revenue grew by 5.6% (-1.3%)• Comparable gross margin totalled EUR 295.0

million (268.1) and comparable gross margin 33.9% (33.7%)

• Comparable EBITDA amounted EUR 63.3 million (55.0), 7.3% of revenue (6.9%)

• Comparable EBIT totalled EUR 48.6 million (40.6), 5.6% of revenue (5.1%)

• Cash flow from operating activities amounted to EUR 44.9 million (27.1)

• Earnings per share were EUR 0.61 (0.45)


Inventories

15 Tokmanni's Annual General Meeting 201919.3.2019

• The increase was primarily due to growth in the store network and partly to the controlled addition of stock keeping units to the assortment.

• The inventories were also increased by the inventories of the acquired Ale-Makasiinistores by EUR 6.4 million.

155,2 170,2 190,5162

175

186

0

50

100

150

200

250

31.12.2016 31.12.2017 31.12.2018150

155

160

165

170

175

180

185

190

Inventories, MEUR Number of stores

Balance sheet and financial position

• At the end of December 2018, Tokmanni’s interest-bearing debt totalled EUR 173.0 million (176.6)

• The ratio of net debt to comparable EBITDA (rolling 12 months) was 2.1 (2.4)

• The company’s cash and cash equivalents totalled EUR 37.9 million (42.5) at the end of 2018

• Return on capital employed % (rolling 12 months) was EUR 15.0% (12.0%)

16 Tokmanni's Annual General Meeting 2019

62,5

27,1

44,9

0

10

20

30

40

50

60

70

2016 2017 2018

Cash flow from operating activities

19.3.2019

Net capital expenditure

• Capital expenditure in 2018 increased due to, in particular, the expansion of the store network and the business acquisition, renovations of grocery stores and other stores and the development of digital services

• Net capital expenditure includes goodwill of EUR 6.0 million arising from the acquisition of the business of Ale-Makasiini

• Capital expenditure in 2019 is expected to roughly equal the level of depreciation

17

9,88,1

19,8

0,0

5,0

10,0

15,0

20,0

25,0

2016 2017 2018

Tokmanni's Annual General Meeting 201919.3.2019

18

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

19 19.3.2019 Tokmanni's Annual General Meeting 2019

20

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%

19.3.2019

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%

22 19.3.2019

* 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.

23

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%


24

Corporate Responsibility

TOKMANNI IS FOR EVERYONE


2018 highlights



Tokmanni's Annual General Meeting 201927 19.3.2019

Documents

Annual General Meeting/media/Files/T/Tokmanni/reports... · 2019-03-19 · Expensive ValuePrice image Discounters Hypermarkets Discounter groceries Specialty Retail Department stores