Tokmanni Group Oyj: Tokmanni Group Corporation Half-Year Financial Report January-June 2024: Tight market and late start of spring season impacted revenue and EBIT

SECOND QUARTER 2024 HIGHLIGHTS

• Tokmanni Group's revenue grew by 32.5% (4.0%) and was EUR 422.5 million (318.9)
• Like-for-like revenue decreased by 2.4% (+1.0%)
• Comparable gross profit was EUR 155.2 million (115.1) and comparable gross profit % was 36.7% (36.1%)
• Comparable EBIT amounted to EUR 27.9 million (28.5), 6.6% of revenue (8.9%)
• Cash flow from operating activities amounted to EUR 43.9 million (79.8)
• Earnings per share, diluted was EUR 0.25 (0.33)

JANUARY-JUNE 2024 HIGHLIGHTS

• Tokmanni Group's revenue grew by 36.7% (4.3%) and was EUR 761.7 million (557.1)
• Like-for-like revenue decreased by 0.6% (+1.7%)
• Comparable gross profit was EUR 270.6 million (190.6) and comparable gross profit % was 35.5% (34.2%)
• Comparable EBIT amounted to EUR 22.8 million (26.2), 3.0% of revenue (4.7%)
• Cash flow from operating activities amounted to EUR 4.0 million (66.8)
• Earnings per share, diluted was EUR 0.05 (0.26)

GUIDANCE FOR 2024

Guidance for 2024 (updated on 23 July 2024)

In 2024, Tokmanni Group expects its revenue to be EUR 1,650-1,730 million. Comparable EBIT is expected to be EUR 98-118 million.

Previous guidance for 2024 (issued on 13 February 2024)

In 2024, Tokmanni Group expects its revenue to be EUR 1,660-1,760 million. Comparable EBIT is expected to be EUR 110-130 million.

TOKMANNI GROUP'S PRESIDENT AND CEO MIKA RAUTIAINEN

Customers cautious in tight economic climate

Sluggish consumer demand was reflected in second quarter sales and performance in both Finland and Sweden. Customers' confidence in their own finances remained low, which was reflected in a decline in like-for-like customer visits in stores and smaller average basket size. Moreover, the spring season started late, and we were unable to make up for lost sales in May and June. The Group's consolidated gross margin was at a good level and fixed costs remained well under control.

In the second quarter, Tokmanni Group's revenue grew by 32.5% to EUR 422.5 million due to the acquisition of Dollarstore. Like-for-like revenue decreased by 2.4% (+1.0%). Grocery sales increased by 1.3% and accounted for 53.7% of total sales. Comparable gross margin was 36.7% (36.1%). Comparable EBIT was EUR 27.9 million (28.5).

Dollarstore and Tokmanni will benefit significantly from the economies of scale arising from sourcing, purchasing and distribution. Together, we can offer our customers in Finland, Sweden and Denmark an even better and more optimised product assortment and lower prices. Although the economy and market conditions are challenging at the moment, Dollarstore is the spearhead of our expansion in current and potential new markets. We expect Tokmanni's growth to come from the main product groups and like-for-like sales growth.

Tokmanni and Dollarstore integration is progressing according to plan. By the end of June, the annual synergies achieved already amounted to EUR 9.9 million. By the end of 2025, we aim to generate annual synergies of more than EUR 15 million. We will continue our good work on consolidating purchasing at group level. In Sweden and Denmark, in addition to expansion, we are focusing on concept development by broadening our product assortment, for example. The aim is to attract new customer groups to Dollarstore and to strengthen the offering for existing customers.

We estimate that the increase in the VAT rate in Finland in early September will slow down the strengthening of consumer demand. This will naturally affect sales growth expectations for the second half of the year. During the second half of the year, we will focus on increasing sales and customer visits, in addition to the integration of Tokmanni and Dollarstore.

Key figures (Dollarstore included in from 1 August 2023 onwards)

4-6/ 4-6/ Change 1-6/ 1-6/ Change 1-12/
2024 2023 % 2024 2023 % 2023
Revenue, MEUR 422.5 318.9 32.5% 761.7 557.1 36.7% 1,392.7
Like-for-like -2.4 1.0 -0.6 1.7 1.1
revenue development,
%
Customer visit -0.2 0.4 0.6 2.4 0.7
development, %
Gross profit, MEUR 155.2 115.3 34.6% 270.6 191.2 41.5% 486.9
Gross profit, % 36.7 36.1 35.5 34.3 35.0
Comparable gross 155.2 115.1 34.9% 270.6 190.6 41.9% 489.5
profit, MEUR
Comparable gross 36.7 36.1 35.5 34.2 35.2
profit, %
Operating expenses, -96.4 -67.7 42.4% -185.7 -127.1 46.1% -301.2
MEUR
Comparable operating -96.4 -67.7 42.4% -185.7 -126.9 46.4% -298.1
expenses, MEUR
EBITDA, MEUR 59.6 48.5 22.8% 86.4 65.9 31.1% 189.9
EBITDA, % 14.1 15.2 11.3 11.8 13.6
Comparable EBITDA, 59.6 48.3 23.4% 86.4 65.5 31.8% 195.6
MEUR
Comparable EBITDA, % 14.1 15.1 11.3 11.8 14.0
Operating profit 27.8 28.7 -2.9% 22.8 26.7 -14.3% 93.0
(EBIT), MEUR
Operating profit 6.6 9.0 3.0 4.8 6.7
(EBIT), %
Comparable EBIT, 27.9 28.5 -2.1% 22.8 26.2 -13.2% 98.8
MEUR
Comparable EBIT, % 6.6 8.9 3.0 4.7 7.1
Net financial items, -9.8 -4.2 130.9% -18.9 -7.5 152.1% -24.7
MEUR
Capital expenditure, 12.8 15.0 -14.9% 18.6 33.3 -44.0% 238.7
MEUR
Net cash from 43.9 79.8 4.0 66.8 220.2
operating
activities, MEUR
Net debt, MEUR 824.2 453.1 730.4
Net debt without 250.0 120.2 165.3
lease liabilities,
MEUR
Net debt / 3.8 2.8 3.7
comparable EBITDA *
Net debt / 2.4 1.3 1.6
comparable EBITDA
without
lease liabilities *
Return on capital 8.9 12.3 11.2
employed, %
Return on equity, % 16.8 24.1 22.2
Equity ratio, % 17.8 27.5 18.8
Number of shares, 58,849 58,824 58,823 58,817 58,819
weighted average
during
the financial period
(thousands)
Diluted number of 58,877 58,874 58,861 58,868 58,878
shares, weighted
average during the
financial period
(thousands)
Earnings per share, 0.25 0.33 0.05 0.26 0.92
basic (EUR/share)
Earnings per share, 0.25 0.33 0.05 0.26 0.92
diluted (EUR/share)
Personnel at the end 7,299 5,004 6,206
of the period
Personnel on average 4,695 3,311 4,457 3,117 3,706
in the period (FTE)

* Rolling 12 months comparable EBITDA

ANALYST AND PRESS CONFERENCE

Tokmanni Group's President and CEO Mika Rautiainen and CFO Tapio Arimo will present the report to analysts, investors and media representatives on the publication day at 10:00 am (Finnish time).

The live webcast can be accessed via Tokmanni Group's website at https://ir.tokmanni.fi/en/investors or through the link below. A recording will be available after the event on Tokmanni Group's website.

Webcast link: https://rajucast.tv/en/tokmanni-group/half-year-financial-review-for-january-june-2024

The participants can ask questions by joining the Teams meeting that is arranged in conjunction with the live webcasts. The link to Teams can be found on the webcast page mentioned above.

For further information, please contact

Mika Rautiainen, President and CEO, tel. +358 20 728 6061, mika.rautiainen(at)tokmanni.fi
Tapio Arimo, CFO, tel. +358 20 728 7390, tapio.arimo(at)tokmanni.fi
Maarit Mikkonen, Head of IR and Communications, tel. +358 40 562 2282, maarit.mikkonen(at)tokmanni.fi

Tokmanni Group in brief

Tokmanni Group Corporation is one of the leading variety discount retailers in the Nordics. Over 6,000 employees in Finland, Sweden and Denmark make customers' everyday life and special occasions easier by offering a versatile and up-to-date assortment of nordic and international brand-name products and other high-quality products at prices that are always affordable. With more than 370 Tokmanni, Dollarstore, Big Dollar, Miny, Click Shoes and Shoe House stores and online stores, the Group is always close to its customers. In 2023, Tokmanni Group's revenue was EUR 1,392.7 million and comparable EBIT amounted to EUR 98.8 million. The Group's shares are listed on Nasdaq Helsinki.

Distribution

Nasdaq Helsinki
Key media