Tokmanni Group Oyj - Half Year financial report

Tokmanni Group Corporation: January-June 2016 Good growth and profitability

 Tokmanni Group Corp.      Half Year Financial Report
10.8.2016      at 8:30 EEST



TOKMANNI GROUP JANUARY-JUNE 2016: GOOD GROWTH AND PROFITABILITY

This release is a summary of Tokmanni's Half Year Financial Report January-June
2016. The complete report is attached to this release as a pdf-file.

SECOND QUARTER HIGHLIGHTS

   ·         Revenue grew 5.4% to EUR 192.4 million (182.5), clearly
outperforming the market which grew 2.9% according to the FTGA (PTY)
   ·         Like-for-like  revenue grew 2.5%
   ·         Gross profit totaled EUR 67.8 million (62.7), a gross margin of
35.2% (34.3%)
   ·         Adjusted gross profit totaled EUR 67.1 million (64.1), an adjusted
gross margin of 34.9% (35.1%)
   ·         EBITDA amounted to EUR 16.4 million (10.8), 8.5% of revenue (5.9%)
   ·         Adjusted EBITDA totaled EUR 15.2 million (12.9), 7.9% of revenue
(7.1%)
   ·         EBIT amounted to EUR 12.6 million (7.1), 6.6% of revenue (3.9%)
   ·         Adjusted EBIT totaled EUR 11.4 million (9.3), 5.9% of revenue
(5.1%)
   ·         Cash flow from operating activities totaled EUR 23.6 million (12.5)
   ·         Earnings per share 0.08 euro (0.08)
   ·         Tokmanni was listed on the Nasdaq Helsinki Exchange list. The IPO
impacted the company's capital structure, increasing equity and decreasing non-
current liabilities. In connection with the IPO, Tokmanni refinanced its loans
with better terms. At the end of June Tokmanni's equity totaled EUR 137.7
million (28.3) and non-current liabilities EUR 208.0 million (304.4)


HIGHLIGHTS OF THE REVIEW PERIOD JANUARY-JUNE 2016

   ·         Revenue grew 4.4% to EUR 350.6 million (335.8), clearly
outperforming the market which grew 1.1% according to the FTGA (PTY)
   ·         Like-for-like revenue grew 1.5%
   ·         Gross profit totaled EUR 119.5 million (113.4), gross margin
improved to 34.1% (33.8%)
   ·         Adjusted gross profit totaled EUR 119.6 million (114.4), adjusted
gross margin 34.1% (34.1%)
   ·         EBITDA amounted to EUR 17.5 million (11.5), 5.0% of revenue (3.4%)
   ·         Adjusted EBITDA totaled EUR 17.4 million (14.7), 5.0% of revenue
(4.4%)
   ·         EBIT totaled EUR 9.9 million (4.2), 2.8% of revenue (1.2%)
   ·         Adjusted EBIT totaled EUR 9.8 million (7.4), 2.8% of revenue (2.2%)
   ·         Cash flow from operating activities amounted to EUR 8.3 million (-
5.3)
   ·         Earnings per share -0.05 euro (-0.22)


TOKMANNI'S SHORT TERM OUTLOOK 2016 UNCHANGED

Despite Tokmanni's good performance during the first half 2016 and due to the
market turbulence, Tokmanni has decided to leave its short-term outlook
unchanged:  Tokmanni estimates its revenue to grow based on the revenue growth
from new and relocated stores opened in 2015 and 2016, and on revenue of like-
for-like stores, which is expected to remain at the level of the previous year
despite challenging market conditions.

CEO HEIKKI VÄÄNÄNEN: A STRONG FIRST HALF 2016

"Our attractive pricing, good customer experience, attractive assortment and
efficient sourcing model and wide product offering continued to drive our
business during the first half of 2016. We continued our market outperformance
which was driven by revenue growth from new stores and was also supported by
like-for-like revenue growth of 1.5%. I am particularly pleased that our number
of baskets increased by almost 5% to 20.8 million which signals that the
Tokmanni brand is becoming more and more recognized and that new customers are
finding their way to our stores. The like-for-like growth was also driven partly
by the liberalization of opening hours.

During the first half of 2016, our profitability improved, our cash flow was
good and our financial position was stable. Having said that, we see that the
challenges in the market continue and we will continue to work hard providing
our customers good value for money with a wide and attractive assortment, and a
pleasant shopping experience. At the same time our focus remains on managing
costs and continuously developing our highly cash generative business model to
meet our targets. Personally, I welcome the on-going legislative reforms in the
retail market which will hopefully have a positive effect on our and the whole
retail market development long-term."

KEY FIGURES



                   4-6/2016 4-6/2015 Change% 1-6/2016 1-6/2015 Change% 1-12/2015

Revenue, MEUR         192.4    182.5    5.4%    350.6    335.8    4.4%     755.3

Like-for-like           2.5                       1.5                       -0.6
revenue
development, %

Number of baskets,     11.4     10.7    6.1%     20.8     19.9    4.6%      43.3
M

Gross profit, MEUR     67.8     62.7    8.1%    119.5    113.4    5.3%     257.5

Gross margin, %        35.2     34.3             34.1     33.8              34.1

Adjusted gross         67.1     64.1    4.7%    119.6    114.4    4.5%     258.1
profit, MEUR

Adjusted gross         34.9     35.1             34.1     34.1              34.2
margin, %

Operating expenses    -52.2    -52.8   -1.1%   -103.5   -103.7   -0.2%    -207.7

Adjusted operating    -52.7    -52.1    1.3%   -103.7   -101.4    2.3%    -203.7
expenses

EBITDA, MEUR           16.4     10.8   52.4%     17.5     11.5   52.5%      53.9

EBITDA, %               8.5      5.9              5.0      3.4               7.1

Adjusted EBITDA,       15.2     12.9   17.5%     17.4     14.7   18.0%      58.5
MEUR

Adjusted EBITDA, %      7.9      7.1              5.0      4.4               7.7

Operating profit       12.6      7.1   77.3%      9.9      4.2  136.7%      39.1
(EBIT), MEUR

Operating profit        6.6      3.9              2.8      1.2               5.2
margin EBIT, %

Adjusted EBIT,         11.4      9.3   22.8%      9.8      7.4   31.4%      43.7
MEUR

Adjusted EBIT, %        5.9      5.1              2.8      2.2               5.8

Net financial          -7.2     -5.3   35.5%    -12.3    -10.6   16.5%     -20.9
items, MEUR

Capital                 1.6      3.9  -58.1%      3.0      7.8  -62.0%       9.0
expenditure, MEUR

Net debt /              2.6      3.3              2.6      3.3               2.7
adjusted EBITDA

Net cash from          23.6     12.5              8.3     -5.3              35.0
operating
activities, MEUR

Number of shares,    54 095   22 274           41 897   22 274            22 274
weighted average
during the
financial period
(thousands)

Earnings per share     0.08     0.08            -0.05    -0.22              0.67
(EUR/share)

Personnel at the      3 503    3 487            3 503    3 487             3 293
end of the period
Details of the adjustments affecting comparability can be found in the full Half
year financial report attached to this release.

MARKET OUTLOOK

Tokmanni expects the weak economic conditions to continue or to improve slightly
in 2016. This will continue to have an effect on the retail market in Finland
where the competition is expected to remain high. Especially department stores
have been impacted by the weak economic situation and have faced challenges
among others due to the increase in popularity of online stores. The latest sign
of these challenges were seen in the bankruptcy of the Finnish retail chain
Anttila in July 2016. In the short term the bankruptcy might impact the market
through increased price competition but also brings potential for companies like
Tokmanni in regard to new store space, purchasing and benefits from the
redistribution of Anttila's customer base.

The liberalization of opening hours is expected to continue to have a slight
positive impact on the retail market. The planned reform of the Finnish alcohol
legislation, to be implemented during the spring 2017, would liberate the sales
of mild alcoholic beverages in grocery stores. This would have a positive impact
on the productivity and competitiveness of the Finnish grocery trade.

The reform of the retail construction regulation, increasing the minimum limit
of a large retail unit will enhance the construction of Finnish retail market
players, which in turn will improve the competitiveness of the whole industry.


RESULTPRESENTATION

Tokmanni's CEO Heikki Väänänen and CFO Sixten Hjort will present the Half year
financial report to analyst, investors and media representatives today in
Finnish at 10.00 am EEST (9.00 CET) and in English at 11.15 am EEST (10.15 CET).

The live audiocasts can be accessed via Tokmanni's website at ir.tokmanni.fi or
through the link http://www.goodmood.fi/webcaster/accounts/tokmanni/live.

The participants can also join a telephone conference that will be arranged in
conjunction with the live audiocasts. The participants are asked to dial in
5-10 minutes prior to starting time using the Participant Phone Number and
Participant Passcodes below:

0800 772 218 (Finnish callers)
+44 (0)20 3367 9434 (UK callers)
+1 917 286 8057 (US callers)
Participant code: 690114


On-demand versions of both audiocasts will be available at ir.tokmanni.fi later
during the same day.





For further information, please contact:

Tokmanni Group Corporation

Heikki Väänänen, CEO, tel: +358 20 728 6044 heikki.vaananen@tokmanni.fi
Sixten Hjort, CFO, tel: +358 20 728 6043 sixten.hjort@tokmanni.fi
Joséphine Mickwitz, Investor Relations, tel: +358 20 728 6535
josephine.mickwitz@tokmanni.fi


Tokmanni in brief

Tokmanni is the largest general discount retailer in Finland measured by number
of stores and revenue. In 2015, Tokmanni's revenue was EUR 755 million and on
average it had approximately 3,200 employees. Tokmanni is the only nationwide
general discount retailer in Finland, with 156 stores across Finland as at 31
December 2015.



Distribution:

Nasdaq Helsinki

Key Media




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