Earnings Release • Feb 12, 2021
Earnings Release
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Revenue over 1 billion and EBIT over EUR 100 million – Record-breaking year ended in a strong Q4
Tokmanni's Board of Directors proposed to the Annual General Meeting to pay a dividend of EUR 0.85 per share.
The behaviour of Tokmanni's customers and thus the future prospects will be strongly influenced by the coronavirus pandemic and the development of its treatment in 2021. In the current circumstances, Tokmanni forecasts slight growth in revenue for 2021. Group profitability measured in euros (comparable EBIT) is expected to be on the same level as last year.
CEO Mika Rautiainen:
I would particularly like to thank our customers, personnel, partners and shareholders for the sales and result we have achieved in exceptional year 2020.
In 2020, Tokmanni gained a large number of new customers, and our loyal customers increased their purchases significantly. Our total number of customers for the full year grew by 3.2%, and the average basket size grew by 10.1%. In the fourth quarter, Tokmanni's revenue grew by 14.6% to EUR 326.5 million (284.8). Full-year revenue for 2020 increased by 13.6%, exceeding the one billion euro threshold for the first time in the company's history. At the same time, also our online sales grew by 124.1%. Tokmanni's extensive product offering, affordable prices and excellent customer service once again proved their attractiveness.
In an operating environment fraught with risks, Tokmanni's employees have admirably managed to serve customers and advance the company's growth story. In the changing circumstances during the year, Tokmanni's employees took good, responsible and quick decisions that led to record-breaking sales and a top result. Tokmanni exceeded its strategic EBIT target of 9% in 2020. Full-year comparable EBIT amounted to EUR 100.2 million, representing 9.3% of revenue. As a reward for their excellent work, Tokmanni employees will be paid a total of about EUR 3.7 million in sales and performance bonuses for 2020.
In recent years, Tokmanni's store network and customer base have expanded significantly and Tokmanni has become a retailer for everyone. We have reached several milestones that are important for the company. In 2021, we will continue our determined efforts to build the growth of sustainable general discount retail, being aware of that we are still living in another year of COVID-19. We will present the elements of our future growth and our revised strategic targets at Tokmanni's virtual Capital Markets Day on 22 March 2021. We warmly invite you to join us!
Stores and consumers were subjected to many changes during the coronavirus year 2020. Consumer behaviour changed as safety measures increased and people spent more time at home and travelling in Finland. Tokmanni was able to respond in an agile way to the changes caused by the coronavirus by focusing especially on the safety of customers and employees, improving customer service, developing digital channels and adjusting its product assortments and prices. In 2020, yard and garden furniture, sports, wellbeing and leisure products, home decoration products, and cleaning products and detergents had particularly strong sales in Tokmanni's extensive assortment.
In the fourth quarter, Tokmanni continued its measures to promote the safety of customers and employees, and added new measures. All of Tokmanni's stores were open in 2020, and the company was not forced to furlough any employees. During the coronavirus pandemic, Tokmanni has become aware of 17 confirmed coronavirus infections among its employees by the end of 2020 (total number of personnel: 4,056).
The reliability of the operations of the logistics centre and supply chain is critical for Tokmanni. In the latter half of the year, Tokmanni was better prepared than it was early in the year for any new disruptions from the pandemic, and it continues to employ safety measures widely. Christmas products arrived in Finland earlier than in the previous year to ensure that they would be available. The shelf availability in the stores was at a good level in the latter part of the year, after some early-year challenges. During the past year, Tokmanni managed to improve the processes in its supply chain, enabling good shelf availability in the second half of 2020.
Tokmanni's liquidity is good. At the end of December 2020, the company's cash and cash equivalents and undrawn credit limits totalled EUR 137.1 million (31 December 2019: 88.1). Tokmanni has recognised a loan of EUR 100 million on its balance sheet that was set to mature in October 2021 under its terms and conditions valid at the turn of the year. For this reason, the loan in question is reported in the financial statements under current liabilities. Since the turn of the year, the company reached an agreement on 11 February 2021 concerning a rearrangement of the EUR 100 million loan, with a new maturity date in February 2026. Tokmanni also agreed on a EUR 50 million credit limit with a maturity of five years. In addition to the above, the financing agreement includes a committed option for drawing down an additional loan of EUR 50 million in instalments. The option for an additional loan is valid for three years and it includes a conditional option to extend the loan by one year at a time for another two years.
| Key figures | ||||||
|---|---|---|---|---|---|---|
| 10-12/ | 10-12/ | Change | 1-12/ | 1-12/ | Change | |
| 2020 | 2019 | % | 2020 | 2019 | % | |
| Revenue, MEUR | 326.5 | 284.8 | 14.6% | 1 073.2 | 944.3 | 13.6% |
| Like-for-like revenue development, % | 13.4 | 3.1 | 12.3 | 4.3 | ||
| Customer visit development % | 2.2 | 5.6 | 3.2 | 6.9 | ||
| Gross profit, MEUR | 119.7 | 99.7 | 20.0% | 370.9 | 325.2 | 14.1% |
| Gross margin, % | 36.6 | 35.0 | 34.6 | 34.4 | ||
| Comparable gross profit, MEUR | 120.3 | 100.1 | 20.1% | 371.6 | 325.3 | 14.2% |
| Comparable gross margin, % | 36.8 | 35.2 | 34.6 | 34.4 | ||
| Operating expenses | -60.1 | -54.1 | 11.0% | -211.5 | -198.9 | 6.3% |
| Comparable operating expenses | -60.1 | -53.9 | 11.4% | -210.9 | -197.9 | 6.5% |
| EBITDA, MEUR | 60.9 | 47.0 | 29.5% | 163.6 | 130.6 | 25.3% |
| EBITDA, % | 18.7 | 16.5 | 15.2 | 13.8 | ||
| Comparable EBITDA, MEUR | 61.5 | 47.6 | 29.1% | 164.9 | 131.6 | 25.3% |
| Comparable EBITDA, % | 18.8 | 16.7 | 15.4 | 13.9 | ||
| Operating profit (EBIT), MEUR | 44.7 | 31.4 | 42.2% | 98.9 | 69.4 | 42.6% |
| Operating profit margin EBIT, % | 13.7 | 11.0 | 9.2 | 7.3 | ||
| Comparable EBIT, MEUR | 45.3 | 32.0 | 41.4% | 100.2 | 70.4 | 42.3% |
| Comparable EBIT, % | 13.9 | 11.2 | 9.3 | 7.5 | ||
| Net financial items, MEUR | -2.5 | -2.6 | -4.3% | -10.0 | -10.5 | -4.2% |
| Net capital expenditure, MEUR* | 4.6 | 3.5 | 31.2% | 12.8 | 15.4 | -16.8% |
| Net debt / comparable EBITDA ** | 2.0 | 2.9 | 2.0 | 2.9 | ||
| Net cash from operating activities, MEUR | 89.6 | 56.5 | 151.1 | 84.0 | ||
| Return on capital employed, % | 7.3 | 5.3 | 16.2 | 11.8 | ||
| Return on capital employed %, | ||||||
| rolling 12 months | 16.3 | 11.8 | 16.3 | 11.8 | ||
| Return on equity, % | 16.8 | 13.1 | 35.4 | 26.8 | ||
| Return on equity %, rolling 12 months | 37.4 | 30.1 | 37.4 | 30.1 | ||
| Equity ratio, % | 27.7 | 25.3 | 27.7 | 25.3 | ||
| Number of shares, weighted average during | ||||||
| the financial period (thousands) | 58 811 | 58 869 | 58 825 | 58 869 | ||
| Diluted number of shares, weighted average | ||||||
| during the financial period (thousands) | 58 845 | 58 869 | 58 850 | 58 869 | ||
| Earnings per share, basic (EUR/share) | 0.58 | 0.39 | 1.21 | 0.80 | ||
| Earnings per share, diluted (EUR/share) | 0.57 | 0.39 | 1.21 | 0.80 | ||
| Personnel at the end of the period | 4 056 | 3 659 | 4 056 | 3 659 | ||
| Personnel on average in the period | 4 057 | 3 624 | 3 873 | 3 647 |
* Net capital expenditure, excluding non-current receivables from others
** Rolling 12 months comparable EBITDA
Tokmanni reports EBITDA and EBIT as its key performance indicators and makes adjustments to improve comparability and provide a better view of Tokmanni's operational performance. EBITDA is a non-IFRS indicator that represents operating profit before depreciation. Comparable EBITDA and comparable EBIT represent the same indicators excluding items that Tokmanni's management considers to be exceptional and non-recurring, including changes in the fair value of electricity and currency derivatives, which are adjusted by Tokmanni, as they are unrealised gains or losses related to Tokmanni's open cash flow hedge positions and are therefore not related to Tokmanni's operational performance during the review periods.
Tokmanni's management uses the comparable EBITDA margin and comparable EBIT margin as key performance indicators to assess Tokmanni's underlying operational performance.
| Adjustments affecting comparability | ||||
|---|---|---|---|---|
| MEUR | 10-12/2020 | 10-12/2019 | 1-12/2020 | 1-12/2019 |
| Gross profit | 119.7 | 99.7 | 370.9 | 325.2 |
| Changes in fair value of currency derivatives | 0.6 | 0.4 | 0.7 | 0.1 |
| Comparable Gross Profit | 120.3 | 100.1 | 371.6 | 325.3 |
| Operating expenses | -60.1 | -54.1 | -211.5 | -198.9 |
| Changes in fair value of electricity derivatives | 0.0 | 0.2 | 0.6 | 1.0 |
| Comparable operating expenses | -60.1 | -53.9 | -210.9 | -197.9 |
| EBITDA | 60.9 | 47.0 | 163.6 | 130.6 |
| Operating profit (EBIT) | 44.7 | 31.4 | 98.9 | 69.4 |
| Changes in fair value of currency derivatives | 0.6 | 0.4 | 0.7 | 0.1 |
| Changes in fair value of electricity derivatives | 0.0 | 0.2 | 0.6 | 1.0 |
| Comparable EBITDA | 61.5 | 47.6 | 164.9 | 131.6 |
| Comparable operating profit (adj. EBIT) | 45.3 | 32.0 | 100.2 | 70.4 |
Tokmanni is the largest nationwide general discount retail chain in Finland. At the end of 2020 Tokmanni had 192 stores across the country, as well as an online store. Tokmanni is a customer-oriented general discount retailer whose competitive advantages are its low prices, attractive assortment, service-oriented and motivated personnel, its online store combined with its national store network, and an efficient and agile business model. Tokmanni aims for stable and profitable long-term growth.
Tokmanni's assortment consists of private label and exclusive brand products as well as non-branded products and leading international brands. Tokmanni has a wide range of products with an excellent pricequality ratio, for example in the following product categories: home cleaning, personal care, tools and electrical equipment, home and decoration, garden, yard and balcony, leisure, home electronics, apparel, and groceries.
Tokmanni is the market leader in Finland's general discount retail market. Tokmanni's competitors in this market are several smaller local companies. Tokmanni is the only general discount retailer in Finland with a nationwide network of stores. At the end of 2020 Tokmanni had 192 stores. In addition to emphasising low prices, Tokmanni focuses on its product selection and store concept and on the continuous development of the customer service in order to distinguish itself from other discount retailers.
Tokmanni offers its customers a wide assortment of non-grocery and grocery products. As a result, Tokmanni's target markets are fragmented. Grocery products include food, beverages, techno chemical products, household papers, tobacco products, magazines and daily cosmetics.
Hypermarkets carry a large product assortment, from fresh food to consumer goods. They are mostly located in the suburbs of the largest cities and benefit from repeated visits thanks to their fresh food offering. Tokmanni also has a wide selection of consumer goods. Its low prices and attractive product selection as well as easiness to do shopping is stores that sets it apart from hypermarkets give it a competitive edge over the latter.
Speciality discount retailers with low prices and a strong assortment of private label goods offer a comprehensive assortment in individual product groups, such as sports products or home electronics. Tokmanni's primary competitive advantages over speciality discount retailers come from its lower price level, nationwide store network and a significantly more extensive assortment of products. At Tokmanni, customers can purchase the products they need from several different categories at the same place. Additionally, Tokmanni's assortments include extremely low-priced and intriguing batches of products that may not necessarily be available elsewhere.
In recent years, the importance of international online stores has also increased in Finland. Competition has increased especially in the product categories of apparel and home electronics, and online stores are expected to grow further over the next few years. Tokmanni continuously develops its digital services to meet the changed needs of its consumers and to develop the total customer experience. Tokmanni's competitive advantages over other online stores are the low prices of its products, its attractive and extensive assortment, quick delivery, and a nationwide store network. Tokmanni has combined the functions of a brickand-mortar and an online store in such a way that it is as easy as possible for customers to find, buy, pick up and return products. Tokmanni also strives to ensure safety and speed of its operations.
The retail sector is undergoing a structural transformation and a digital revolution. Competition from Finnish and international rivals continue to intensify both in brick-and-mortar stores and online. In Tokmanni's view, consolidation into larger companies will probably continue in the European discount retail market. Besides online retail, general discount retail is one of the fastest growing segments in the retail sector. Companies with strong know-how in online retail, combined with a comprehensive network of brick-and-mortar stores, are best positioned to succeed over their competition. As a result of changing market conditions and stiffer competition, there is a need to boost operational and cost efficiency. With online, multi-channel service and international competition, retail companies have begun to pay even more attention to customer satisfaction and service.
Tokmanni continuously monitors market developments and the competitive environment and actively develops its own business to maintain its competitive advantages. Tokmanni has identified the following as its competitive advantages: low prices, an interesting product assortment, service-minded and motivated staff, combination of online and a nationwide store network, as well as an efficient and agile business model.
According to the statistics of the Finnish Grocery Trade Association FGTA (www.pty.fi), the non-grocery market increased by 2.3% in the final quarter of 2020. The development of home and leisure products in particular was good. The revenue of department store and hypermarket chains grew by 7.3%. Tokmanni's revenue grew by 14.6%.
According to the FGTA, the non-grocery market grew by 1.1% for the full year 2020, with the trend being weak especially in apparel. The revenue of department store and hypermarket chains grew by 7.5%. Tokmanni clearly outperformed the rest of the market in terms of growth. Tokmanni's revenue grew by 13.6%.
The member companies of the FGTA operate the department store and hypermarket chains of K-Citymarket, Prisma, Sokos, Stockmann, Tokmanni and Minimani. However, it is important to note that the statistics compiled by the FGTA only cover part of Tokmanni's addressable market.
Expanding the store network is one of the key ways of growing Tokmanni's revenue and operating profit. Tokmanni has an efficient process of rolling out and ramping up new stores. Tokmanni's target is to expand its store network to include more than 200 stores and to increase its new retail selling space by approximately 12,000 square metres in net terms every year, which means around five new, enlarged or relocated stores. At the end of 2020 Tokmanni had 192 stores (31 December 2019: 191 stores).
During 2020, Tokmanni opened new stores in the Myyrmanni shopping centre in Vantaa, in Aura, in Pudasjärvi, in the REDI shopping centre in Helsinki and in Pietarsaari, and expanded its stores in the Helsinki Citycenter shopping centre and in Kauhajoki. In the first half of the year, Tokmanni closed its store in Tammela in Tampere, its store in the centre of Äänekoski, its store in the Mylly shopping centre in Raisio and its store in the Isomyyri shopping centre in Vantaa. The company increased its retail space by about 7,000 square metres during 2020 when the closed stores are accounted for. The retail selling space in the Tokmanni stores totalled about 467,000 square metres at the end of 2020. The company's expansion and increase of its retail selling space was slower than targeted owing to delays in investments because of the pandemic in 2020.
At the end of 2020, Tokmanni signed agreements for the opening of three new stores and two relocated stores. The agreements will result in the expansion of Tokmanni's store network into the Kaari shopping centre in Helsinki and into Kausala in the municipality of Iitti during 2021. Tokmanni will open a new store in Kirkonkylä in Nurmijärvi according to the latest assessment in the spring of 2022. In addition, Tokmanni will move to new, larger commercial premises in shopping centres in the centres of Lahti and Jyväskylä in 2021.
Tokmanni is focusing on continuously developing its store concept and the shopping experience. During 2020, 14 Tokmanni stores were designed and revamped in accordance with Tokmanni's latest store concept, which emphasises effortless and pleasant shopping experiences. Under this concept, the stores have such features as wide aisles, informative signage and well-defined product areas.
Tokmanni considers a store to be new or relocated over the duration of its opening year and the following calendar year. On average, a new store becomes profitable after around 12 months and reaches its full capacity within around 24 months. New and relocated stores include new stores opened and store relocations where the store size changes by 30% or more and the assortment increases or is reduced substantially.
Tokmanni's business is subject to seasonality, which has a significant effect on its revenue, profitability and cash flows. Generally, Tokmanni's revenue, profitability and cash flows are lowest in the first quarter and highest in the fourth quarter due to Christmas sales.
In the fourth quarter of 2020, the Group's revenue increased by 14.6% on the previous year to EUR 326.5 million (284.8). Like-for-like revenue for stores grew by 13.4%. Sales grew strongly on the back of the very successful Christmas sales and Black Friday campaign. Sales development was at an extremely good level in all of Tokmanni's product categories. The measures carried out in the third quarter to improve efficiency in the apparel product category proved successful, and as a result the sales of apparel clearly outperformed the rest of the market. The like-for-like average basket in stores grew by 11.6% to EUR 21.67 (19.43).
Like-for-like customer visits in stores grew by 1.6% and the total number of customers grew by 2.2% yearon-year.
Tokmanni's online sales accounted for 1.4% (0.7%) of total revenue, growing by 134.2% year-on-year.
Direct imports accounted for 29.9% of sales (28.6%). These can be broken down into products purchased using Tokmanni's sourcing company in Shanghai, which accounted for 18.6% (16.8%), and into other direct imports, which accounted for 11.3% (11.8%). Tokmanni's private label products, exclusive brands and nonbranded products represented 34.3% of fourth-quarter sales (33.6%).
The coronavirus pandemic caused numerous challenges for sales in 2020. However, Tokmanni decided to focus on its inherent strengths as a general discount retailer, and this paid off. Sales were strongly supported with marketing in different channels. The like-for-like average basket in stores grew by 9.5% to EUR 19.72 (18.00).
Revenue for 2020 grew by 13.6% on the previous year to EUR 1,073.2 million (944.3). Like-for-like revenue grew by 12.3%. Demand for Tokmanni's leisure goods, gardening, home decoration and renovation products as well as groceries was particularly good.
Like-for-like customer visits in stores grew by 2.4% and the total number of customer visits grew by 3.2% year-on-year.
Tokmanni's online sales accounted for 1.2% (0.6%) of its total revenue, growing by 124.1% year-on-year.
Direct imports accounted for 26.6% of sales (25.6%). These can be broken down into products purchased using Tokmanni's sourcing company in Shanghai, which accounted for 16.5% (15.0%), and into other direct imports, which accounted for 10.2% (10.6%). Tokmanni's private label products, exclusive brands and nonbranded products represented 31.8% of full-year 2020 sales (31.7%).
Gross profit in the fourth quarter totalled EUR 119.7 million (99.7), and the gross margin was 36.6% (35.0%). Comparable gross profit was EUR 120.3 million (100.1), corresponding to a comparable gross margin of 36.8% (35.2%). Thanks to the success of the Christmas season, sales were more even and discount sales played a lesser role.
Operating expenses increased to EUR 60.1 million (54.1), or 18.4% of revenue (19.0%). The growth in operating expenses in euro terms was primarily due to high sales volumes. Comparable operating expenses were EUR 60.1 million (53.9), or 18.4% of revenue (18.9%), and thus their relative share developed favourably. Personnel expenses for the quarter totalled EUR 34.3 million (29.9), or 10.5% of revenue (10.5%). Personnel expenses for the quarter included EUR 2.0 million in sales and performance bonuses.
EBITDA amounted to EUR 60.9 million (47.0), and the EBITDA margin was 18.7% (16.5%). Comparable EBITDA totalled EUR 61.5 million (47.6), and the comparable EBITDA margin was 18.8% (16.7%).
EBIT totalled EUR 44.7 million (31.4), and the EBIT margin was 13.7% (11.0%). Comparable EBIT totalled EUR 45.3 million (32.0), and the comparable EBIT margin was 13.9% (11.2%).
Net financial items totalled EUR 2.5 million (2.6). The result before taxes was EUR 42.2 million (28.8). Taxes amounted to EUR 8.4 million (5.7). The net result was EUR 33.8 million (23.1).
Diluted earnings per share were EUR 0.57 (0.39). The return on capital employed was 7.3% (5.3%). The return on equity was 16.8% (13.1%).
Gross profit in 2020 totalled EUR 370.9 million (325.2) and the gross margin was 34.6% (34.4%). Comparable gross profit was EUR 371.6 million (325.3), corresponding to a gross margin of 34.6% (34.4%). As a result of the coronavirus pandemic, the gross margin fluctuated more heavily than in the previous year, although it ended up at around the same level.
Operating expenses were EUR 211.5 million (198.9), or 19.7% of revenue (21.1%). Comparable operating expenses were EUR 210.9 million (197.9), or 19.6% of revenue (21.0%). The safety measures related to the coronavirus pandemic resulted in additional expenses. The largest item in operating expenses was personnel expenses, which increased due to the higher sales volumes as well as the work shift arrangements made to prevent the spread of the coronavirus pandemic and the extra personnel recruited to improve the delivery capabilities of the warehouse. Personnel expenses in 2020 totalled EUR 122.1 million (114.0), or 11.4% of revenue (12.1%).
The expenses recognised on the sales bonus scheme, which pays out bonuses to personnel quarterly, amounted to EUR 2.2 million (1.4) in 2020. The expenses booked from the annual bonus scheme for the Group's key persons totalled EUR 1.5 million (1.0) in 2020. Tokmanni also has a share-based incentive scheme for the Group's key persons. The expenses recognised on the share-based incentive scheme totalled EUR 0.7 million (0.3) in 2020.
EBITDA for 2020 amounted to EUR 163.6 million (130.6), and the EBITDA margin was 15.2% (13.8%). Comparable EBITDA totalled EUR 164.9 million (131.6), and the comparable EBITDA margin was 15.4% (13.9%).
Thanks to the strong sales as well as the improved gross margin and cost ratio, EBIT improved considerably. EBIT totalled EUR 98.9 million (69.4), and the EBIT margin was 9.2% (7.3%). Comparable EBIT totalled EUR 100.2 million (70.4), and the comparable EBIT margin was 9.3% (7.5%), exceeding Tokmanni's strategic target of 9%.
Net financial items totalled EUR 10.0 million (10.5). The result before taxes was EUR 88.9 million (58.9). Taxes for the period amounted to EUR 17.7 million (11.8). The net result for 2020 was EUR 71.2 million (47.1).
Diluted earnings per share were EUR 1.21 (0.80). The return on capital employed was 16.2% (11.8%). The return on equity was 35.4% (26.8%).
On 31 December 2020, Tokmanni's inventories were nearly at the same level as a year before, amounting to EUR 225.7 million (222.8).
Consolidated cash flow from operating activities amounted to EUR 89.6 million (56.5) in the fourth quarter of 2020. Due to the improved net result and sound management of inventories, full-year cash flow in 2020 increased year-on-year to EUR 151.1 million (84.0). The company's cash and cash equivalents totalled EUR 78.1 million (29.1) at the end of 2020.
At the close of 2020, Tokmanni's interest-bearing debt totalled EUR 410.9 million (409.3), including EUR 100.0 million (100.0) in corporate bonds and loans from financial institutions. The remainder of the liabilities are lease liabilities reported under IFRS 16.
Tokmanni reached an agreement on 11 February 2021 concerning a rearrangement of the EUR 100 million loan, with a new maturity date in February 2026. Tokmanni also agreed on a EUR 50 million credit limit with a maturity of five years. In addition to the above, the financing agreement includes a committed option for drawing down an additional loan of EUR 50 million in instalments. The option for an additional loan is valid for three years and it includes a conditional option to extend the loan by one year at a time for another two years.
The ratio of net debt to comparable EBITDA (rolling 12 months) was 2.0 at the end of 2020. Tokmanni intends to maintain an efficient long-term capital structure, and its long-term goal is to keep the ratio of net debt to comparable EBITDA below 3.2.
Tokmanni's equity ratio was 27.7% (25.3%).
Net capital expenditure in the fourth quarter totalled EUR 4.6 million (3.5). Net capital expenditure for the full year 2020 totalled EUR 12.8 million (15.4). Some of the investments planned for 2020 were postponed until 2021 due to the coronavirus pandemic. Capital expenditure was mainly focused on the expansion and development of the store network. Depreciation and amortisation in 2020 amounted to EUR 64.6 million (61.2).
Capital expenditure in 2021 is expected to be around EUR 16–18 million.
Tokmanni has launched a review on the possibilities of expanding the Mäntsälä logistics centre together with the property owner and the municipality of Mäntsälä. According to preliminary plans, the storage space would increase by about a third compared to the current level. If the project is realized, it would replace the existing external warehouses and affect the level of investment in the next few years.
Tokmanni acquired the business of the Perhemarket Pertti Heikkinen Ky store in Pudasjärvi with a contract signed on 31 January 2020, and the acquired store was transferred to Tokmanni on 1 April 2020.
| Target | Achievement in 2020 |
|---|---|
| Tokmanni's long-term target is to achieve low single | Like-for-like revenue grew by 12.3% |
| digit growth in like-for-like revenue. | |
| Tokmanni's target is to increase its store network to | Store network increased by one store (5 openings, |
| cover more than 200 stores as well as to increase its | 4 closings) |
| new selling area by some 12,000 square metres in net | |
| terms every year, which means around five new, | Number of stores at the end of the year was 192 |
| enlarged or relocated stores each year. | (191) |
| Selling area increased by about 7,000 square | |
| metres in net terms | |
| Selling area was in total 467 000 square metres at | |
| the end of the year | |
| Tokmanni's long-term goal is to gradually increase the | Comparable EBIT margin was 9,3 % |
| comparable EBIT margin to about 9 percent by | |
| improving the gross margin and reducing the relative | Comparable gross margin increased by 0.2 |
| share of current operating expenses from the current | percentage points |
| levels. | |
| The share of comparable operating expenses of | |
| revenue decreased by 1.3 percentage points to 19.6% |
|
| Tokmanni intends to maintain an efficient long-term | Ratio of net debt to comparable EBITDA was 2,0 on |
| capital structure by keeping the ratio of net debt to | 31 December 2020 |
| comparable EBITDA below 3.2. | |
| Tokmanni's aim is to distribute around 70 per cent of | The Board's dividend proposal for 2020 to the |
| net income for each financial year in dividends, | Annual General Meeting is 70.2% of the net result |
| depending on the capital structure, financial position, | for the financial year |
| general economic and business conditions and future | |
| prospects. |
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, lean and efficient operation model, nationwide store network combined with an online store as well as effortless and pleasant shopping experience.
Tokmanni aims for stable and profitable long-term growth by:
The coronavirus pandemic and the emergency rules imposed because of it impacted the markets and consumer behaviour, and consequently the execution of Tokmanni's strategy. Due to the pandemic, the structure of sales in 2020 differed from normal in that demand for yard and garden furniture, sports, wellbeing and leisure products, home decoration products, and cleaning products and detergents was noticeable, while apparel accounted for a smaller share of sales. As a result of the change in consumer behaviour, customers also visited physical stores more infrequently than before, especially in the spring, but they bought more on each visit.
The reliability of the operations of the stores, logistics centre and supply chain is critical for Tokmanni. In the early stages of the coronavirus pandemic, Tokmanni made numerous special arrangements and took various measures to ensure the safety of customers and employees and to secure the reliability of the operations. These measures were continued throughout the year as the pandemic persisted. In the spring, Tokmanni took the decision to not furlough any employees and to increase its investment in the wellbeing of the personnel. The strong growth in sales combined with weaker efficiency in the supply chain resulted in considerable deficiencies in shelf availability during the spring and the summer. To improve shelf availability, Tokmanni recruited more employees for its warehouse and procured equipment to improve the performance of the logistics centre. Shelf availability at the stores returned to a good level, and in the latter half of the year products were delivered to the stores according to plan.
The coronavirus pandemic hit apparel sales hard because people spent more time at home and had fewer occasions for which to dress up. Tokmanni boosted the sales of apparel with discount sales at the end of the summer, which led to a lower gross margin in the third quarter of 2020. Despite the challenges, the sales of apparel in euro terms reached almost the same level as in the previous year and apparel inventories were at a normal level from an operational perspective, thanks to the steps taken by Tokmanni.
Tokmanni continued to develop the combination of its online store and brick-and-mortar stores so as to serve customers even better than before. The company benefitted from the rapid growth in online retail brought on by the coronavirus pandemic in 2020. The Tokmanni online store attracted lots of new customers during the exceptional circumstances and sales grew strongly in 2020. Tokmanni developed its online store in 2020, focusing particularly on expanding the selection, improving the customer experience and coordinating the operations of the physical stores and the online store.
Despite the coronavirus pandemic, Tokmanni continued to implement its strategy and pursue its goaloriented development of the company in 2020. The coronavirus pandemic somewhat hindered the execution of the company's strategy. In the spring, measures aiming at opening new stores were suspended for a while, but then resumed once the operational situation became clearer for the company. In addition, the company made slower progress than planned towards the strategic aim of increasing the sales of Tokmanni's private label products, as the structure of sales differed from before. Going forward, growing the sales of Tokmanni's private label products and increasing direct imports will remain key strategic measures to improve the gross margin.
In 2020, Tokmanni continued to strengthen customer trust by focusing on affordable prices, a diverse assortment, renewing the store concept and enhancing customer service. New products that complemented the selection were well-received by the customers. Likewise, the company was successful in opening new stores and expanding and renovating existing stores. An increasing number of stores have been designed in accordance with Tokmanni's latest store concept, which emphasises effortless and pleasant shopping experiences. Under this concept, the stores have such features as wide aisles, informative signage and welldefined product areas.
Tokmanni is a significant employer in Finland, and the chain's store network extends from Hanko in the south all the way to Sodankylä in the north. The skilled, motivated and satisfied Tokmanni employees work together to serve the customers, enabling the company to reach its goals. For this reason, it is paramount to ensure that the employees possess the right kind of competence and are committed to achieving the common goals. Tokmanni rewards its personnel for good and productive work, and every Tokmanni employee is covered by the performance bonus system.
Tokmanni had 4,056 (3,659) employees at the end of 2020. On average, Tokmanni employed 3,873 (3,647) people during 2020. Out of Tokmanni's total personnel, 85.3% (85.4%) worked at the stores, 8.0% (7.1%) at warehouses and 6.8% (7.5%) in support functions.
During the exceptional coronavirus year, ensuring the safety and wellbeing of the personnel became one of the company's key focuses. As early as the beginning of March, Tokmanni appointed a coronavirus team to coordinate and decide on safety measures and communications to the personnel concerning the coronavirus. During the year, Tokmanni employees received frequent instructions through various communications channels. An email address was also set up to answer questions posed by the employees and to provide urgent help with issues related to the coronavirus. Tokmanni follows the guidelines of the authorities (hospital districts or regional cooperation groups) and the Finnish Grocery Trade Association, and has introduced its own, stricter measures, instructions and recommendations to ensure the safety of customers and employees.
In the spring and the autumn, Tokmanni conducted a job wellbeing survey to ensure that employees are coping at work. The survey showed that the increase in teleworking had among other things boosted the productivity and wellbeing of experts.
Occupational safety was further enhanced by updating occupational safety processes and introducing systems that support these processes. The occupational safety system allows the personnel to report accidents at work directly to the insurance company. The same system can also be used to report safety observations and close call situations in 2020. A new risk assessment system was also introduced during the year. By updating processes and deploying new systems, Tokmanni ensures that it is aware of the accident situation in all units and the measures they have taken to address observed safety risks. In 2020, the company also aimed to enhance the personnel's occupational safety competence through revised online occupational safety course material.
During the year of 2020, nearly 200 Tokmanni employees participated in apprenticeship training, with the majority graduating as garden salespersons. Additionally, numerous employees completed qualifications in management and business that helped them advance their careers, especially at Tokmanni stores. Tokmanni's store managers also actively participated in studies leading to a Specialist Qualification in Business or a Specialist Qualification in Management. The career paths of the store personnel and studies supporting their development are documented, serving as a development incentive for the employees in future personal appraisals.
Tokmanni actively promotes an equal and diverse workplace culture, and it uses gender-neutral job titles. Before Christmas, Tokmanni intensified its cooperation with Eteva, the largest centre providing services for people with disabilities in Finland, whose customers packed delicacy bags that were sold at Tokmanni stores. The cooperation with Eteva also continued at numerous stores. Additionally, Tokmanni continued its work with the Federation of Finnish Commerce in the Kaupan polku programme, which promotes diverse working communities and sustainability, as well as its cooperation with Plan International in recruiting summer employees with an immigrant background and in arranging in-store traineeships focusing on the language and working life skills that are included in integration training aimed at immigrants. Tokmanni's diverse workplace culture is supported by the diversity project team, which is composed of volunteers from various parts of the organisation. Its work is led by a steering group that ensures that diversity is promoted actively and systematically.
All Tokmanni employees are covered by the quarterly incentive bonus scheme, with the exception of logistics personnel. Tokmanni's logistics employees are paid a personal productivity bonus based on their monthly performance, on top of their monthly basic salary. All Tokmanni employees who were employed in the second quarter were rewarded with an additional performance bonus for their excellent work during the spring and the summer.
Personnel expenses in 2020 totalled EUR 122.1 million (114.0). The salaries of employees covered by the commercial sector's collective agreement were raised by 2.0% on 1 April 2020. Most of Tokmanni's employees are covered by the agreement. Due to the coronavirus pandemic, a statutory and temporary reduction to employee pension (TyEL) payments was instituted for the period of 1 May–31 December 2020. The effect of the reduction in TyEL payments on Tokmanni's personnel expenses in the fourth quarter was around EUR 0.5 million, and the effect for the full year of 2020 was EUR 2.2 million.
Corporate responsibility is one of the factors that underpins the success of Tokmanni's strategy. The key themes of corporate responsibility were updated in 2020. The updated themes are Products and Sourcing Chain, People, Climate and Business Integrity. These themes are based on the materiality analysis Tokmanni commissioned in 2015, and they remain relevant.
Tokmanni's sustainability will be presented comprehensively in the Sustainability Report to be published in the week beginning on 22 March 2021 and which is prepared in accordance with the GRI standards. In addition, matters related to sustainability will be discussed in the "Non-financial information" section in the Board of Directors' Report.
Tokmanni was the third Nordic retail sector company to announce science-based climate targets that are aligned with the Paris Agreement and aim to limit global temperature rise to 1.5 degrees Celsius.
Tokmanni continued to invest in solar power, installing solar power plants on the roofs of 14 (18) stores in 2020. Tokmanni also installed LED lighting at 37 (36) of its stores.
Tokmanni reused, recycled or recovered all, or 100% (98%), of its waste. To reduce food waste, Tokmanni extended the evening discounts on food products about to expire to all of its stores.
Tokmanni improved its score in the global Carbon Disclosure Project (CDP) climate change assessment. The fact that Tokmanni achieved the Management level score of B in the climate change assessment shows that Tokmanni has improved the way it takes into account the risks and opportunities of climate change and is actively taking measures to reduce emissions, combat climate risks and develop a low-carbon economy.
Tokmanni continued to develop risk management in its sourcing chain from a sustainability perspective. In 2020, 94% (96%) of direct purchases from risk countries were made from factories audited by a third party. Due to the coronavirus pandemic, Tokmanni conducted its factory audits, 60 in total, mostly in the second half of the year. In addition, Tokmanni adopted revised terms and conditions for sourcing and updated its guidelines for responsible sourcing and sanctions inspections as well as its internal systems in order to support risk management. Tokmanni made progress on its targets for certifying risk raw materials in cotton and fish products in its assortment. Tokmanni invited its goods suppliers to amfori BEPI (Business Environmental Performance Initiative) in order to influence the climate impacts of its factories in risk countries. By the end of 2020, a total of 231 factories used by Tokmanni had joined amfori BEPI.
In a study conducted by the Status of Human Rights Performance of Finnish Companies (SIHTI) project, which was run by the Government's analysis, assessment and research activities under the Prime Minister's Office and published in early 2021, Tokmanni received a score that was clearly higher than the average (48.1/100; the average for all the companies surveyed was 23.9/100).
Tokmanni's social responsibility partnership with the Finnish Red Cross (FRC) continued. Its aim is to endorse work for combatting loneliness and social exclusion across Finland by supporting the FRC's friend volunteers. The annual donations towards this work were increased because of the coronavirus pandemic. In addition, Tokmanni continued to support Veikko ja Lahja Hurstin Laupeudentyö ry together with Unilever Finland, and it participated in the Green Ribbon campaign of the Finnish Association for Mental Health and cooperated with the John Nurminen Foundation in a campaign in which EUR 53,000 from the sales of Pisara-branded products were donated through the foundation for the protection of the Baltic Sea.
In 2020, Tokmanni conducted a consumer survey in which fair treatment of employees and customers as well as diversity were raised as the most important areas of corporate responsibility, as they had been in the previous year. Tokmanni continued its systematic work to promote diversity by testing an anonymous recruitment process. Its widespread adoption will require a redesign of the recruitment programme, which is under way. Tokmanni employees speak 23 different mother tongues, due to which induction materials have been revised by increasing the use of videos and images, for example. Tokmanni promoted diversity by cooperating with Plan International in recruiting trainees with an immigrant background through the Tutustu työelämään ja tienaa scheme. The company also continued its cooperation with the Federation of Finnish Commerce and Ohjaamo Helsinki in the Kaupan polku programme, which offers work trials to young people and adults at risk of social exclusion. Cooperation with Eteva, a centre providing services for people with disabilities, also continued as Tokmanni offered work to members of Eteva's Duunarit ("worker") groups, packing delicacy bags that were sold during the Christmas season. Eteva's Duunarit members are people in need of special support, such as people with intellectual and developmental disabilities or autism spectrum disorders or those participating in mental health rehabilitation.
The Compliance unit is responsible for Tokmanni's compliance with guidelines. The unit is headed by the Chief Compliance Officer (the Chief Financial Officer), who reports directly to the Chief Executive Officer and also informs the Board of Directors. In addition to the Chief Compliance Officer, the Compliance unit includes four Compliance Officers, each of whom has a specific area of responsibility. The Compliance team convened regularly during 2020, handling all reports received through the whistleblowing channel in an appropriate manner. In 2020, Tokmanni introduced a new anonymous whistleblowing channel for both internal and external reports. The Ethical Code of Conduct e-learning course, which is compulsory for every Tokmanni employee, was completed by 3,158 Tokmanni employees in 2020.
Tokmanni Group Corporation's share capital amounted to EUR 80,000 and the company had 58,868,752 shares outstanding at the end of 2020. During the year, a total of 41,677,662 Tokmanni shares were traded on Nasdaq Helsinki Ltd for a total price of EUR 548.3 million. During 2020 the final trade in Tokmanni Group Corporation shares on Nasdaq Helsinki was executed at a price of EUR 16.24. The highest quote during 2020 for the share was EUR 16.70 and the lowest was EUR 8.64. The volume-weighted average price of the share was EUR 13.17. At the end of December 2020, the market value of the shares was EUR 956.0 million (742.9).
Tokmanni Group Corporation has one share class, with each share entitling to one vote at a general meeting of the company. The shares have no nominal value.
During 2020, a total of 850 of Tokmanni Group Corporation's own shares were returned to the company. The shares had been assigned to an employee covered by the long-term share-based incentive scheme. The shares were returned to the company in accordance with the terms and conditions of the share-based incentive scheme due to the termination of this key employee's employment. Tokmanni Group Corporation purchased a total of 100,000 own shares in December 2020 at an average price per share of EUR 16,0966. At the end of 2020, Tokmanni held 106,917 own shares.
At the end of December 2020, Tokmanni had 26,480 registered shareholders. At the end of the year, the largest shareholders of Tokmanni Group Corporation were Takoa Invest Oy with 17.91%, Varma Mutual Pension Insurance Company with 4.77%, Elo Mutual Pension Insurance Company with 3.90%, Ilmarinen Mutual Pension Insurance Company with 2.94% and OP-Suomi investment fund with 2.05% ownership.
Financial and insurance institutions held 40.38% of the shares, while non-financial corporations held 23.58%, households held 19.24%, public-sector entities held 12.94% and non-profit organisations held 2.63%. Direct foreign ownership accounted for 1.23%. Of all the above-mentioned holdings, 30.42% were nomineeregistered.
More information on Tokmanni's shares and shareholders, as well as on the management's shareholding, can be found on the company's website ir.tokmanni.fi/en.
The Annual General Meeting of 2020 resolved to authorise the Board of Directors to decide on acquiring or accepting as a pledge a maximum of 2,943,000 of the company's own shares with the company's distributable funds, corresponding to around 5% of the total number of shares in the company at the time of publishing notice of the Annual General Meeting. The acquisitions can take place in one or more tranches.
The shares will be acquired in a proportion other than the shareholders' current shareholdings in the company in public trading arranged by Nasdaq Helsinki Ltd at the trading price quoted at the time of acquisition. The shares will be acquired and paid for in accordance with the rules of Nasdaq Helsinki Ltd.
The company may repurchase the shares to execute its incentive scheme, corporate acquisitions or other business arrangements, or investments related to the company's operations, to improve its capital structure, or to be otherwise further transferred, retained by the company or cancelled.
The authorisation includes the right for the Board of Directors to decide on all other matters related to the repurchase of shares. The authorisation is effective until the Annual General Meeting to be held in 2021, but no longer than 30 June 2021.
The Board of Directors of Tokmanni Group Corporation decided to start repurchasing the company's own shares on the basis of the authorisation granted by the Annual General Meeting on 19 March 2019. The shares were repurchased to be used as part of the company's incentive programmes. The number of shares acquired was 50,000, corresponding to 0.08% of the total number of shares. The shares were acquired in public trading on Nasdaq Helsinki Ltd at the market price quoted at the time of purchase. The share repurchase was started on 4 March 2020 and ended on 5 March 2020.
The Board of Directors of Tokmanni Group Corporation decided to start repurchasing the company's own shares on the basis of the authorisation granted by the Annual General Meeting on 7 May 2020. The shares were repurchased to be used as part of the company's incentive programmes. The number of shares acquired was 100,000, corresponding to 0.17% of the total number of shares. The shares were acquired in public trading on Nasdaq Helsinki Ltd at the market price quoted at the time of purchase. The share repurchase was started on 21 December 2020 and ended on 29 December 2020.
During 2020, Tokmanni assigned a total of 43,933 of the company's own shares to 58 persons covered by the company's incentive programme without consideration and in accordance with the terms and conditions of the incentive programme. During the review period, a total of 850 of these own shares were returned to Tokmanni Group Corporation. Under the terms and conditions of the incentive programme, 12,257 shares will be released from restrictions in January 2021 and 30,826 shares will be released in January 2022.
At the end of 2020, Tokmanni Group Corporation held a total of 106,917 own shares.
The Board of Directors of Tokmanni Group Corporation resolved to continue its share-based incentive program directed to the key employees. The aim of the program is to combine the objectives of the shareholders and the key employees in order to increase the value of the Company in the long-term, to commit the key employees to implement the Company's strategy, and to offer them a competitive reward program based on earning and accumulating the Company's shares.
The performance share program includes the calendar year 2020. The potential reward of the program will be based on the Company's earnings per share on 31 December 2020 and on the market value development 1.1-31.12.2020.
The target group of the program includes the CEO, the members of the Executive Group as well as other key employees. The potential rewards, which by nature are taxable income, to be paid correspond to a maximum of 120,000 Tokmanni Group Corporation's shares based on the market value at the moment of granting. Potential reward, which is earned income in nature, will be paid in company shares and possibly in part in cash. The cash proportion covers taxes arising from the payment. The shares to be transferred as a reward will be released from the restrictions in January 2023.
A total of 43,933 of Tokmanni Group Corporation's own shares were conveyed without consideration to the 58 employees participating in the incentive program under the terms and conditions of the plans.
On 28 October 2020, Tokmanni Group Corporation's Board of Directors decided to specify the remuneration of the CEO within the limits of the Remuneration Policy so that a maximum of 12,000 company shares will be transferred to the CEO, without consideration, during the remuneration period beginning on 1 November 2020 and ending on 31 October 2023.
Tokmanni Group Corporation received in May a notification pursuant to Chapter 9, Section 5 of the Securities Markets Act from Elo Mutual Pension Insurance Company. According to the notification the holding of Elo Mutual Pension Insurance Company in the Company's shares and votes decreased under 5% on 14 May 2020. After the transaction, Elo Mutual Pension Insurance Company held 2 863 549 Tokmanni's shares, which represented 4.86 % of Tokmanni's shares and voting rights.
Tokmanni Group Corporation received in June a notification pursuant to Chapter 9, Section 5 of the Securities Markets Act from Handelsbanken Fonder AB. According to the notification the holding of Handelsbanken Fonder AB in the Company's shares and votes increased above 5% on 12 June 2020. After the transaction, Handelsbanken Fonder AB held 2,978,203 Tokmanni's shares, which represented 5.06% of Tokmanni's shares and voting rights.
Tokmanni Group Corporation received in August a notification pursuant to Chapter 9, Section 5 of the Securities Markets Act from Handelsbanken Fonder AB. According to the notification the holding of Handelsbanken Fonder AB in the Company's shares and votes decreased under 5% on 12 August 2020. After the transaction, Handelsbanken Fonder AB held 2,911,340 Tokmanni's shares, which represented 4.95% of Tokmanni's shares and voting rights.
Tokmanni Group Corporation has received in August a notification pursuant to Chapter 9, Section 5 of the Securities Markets Act from Varma Mutual Pension Insurance Company. According to the notification the holding of Varma Mutual Pension Insurance Company in the Tokmanni's shares and votes decreased under 5% on 20 August 2020. After the transaction, Varma Mutual Pension Insurance Company held 2,860,526 Tokmanni's shares, which represented 4.86% of Tokmanni's shares and voting rights.
Up-to-date information on Tokmanni's shareholders is available on the company's website ir.tokmanni.fi/en.
Governance at Tokmanni Group Corporation is based on the Articles of Association approved by the General Meeting of Shareholders, the Finnish Limited Liability Companies Act and the rules and regulations by Nasdaq Helsinki Ltd. with regard to listed companies. Tokmanni complies with the Finnish Corporate Governance Code for listed companies issued by the Securities Market Association.
Tokmanni Group Corporation's Annual General Meeting was held on Thursday 7 May 2020. The general meeting approved the 2019 financial statements, including the consolidated financial statements, the report of the Board of Directors and the auditor's report and discharged the members of the Board of Directors and the company's CEO from liability.
The general meeting approved the proposal to pay a dividend EUR 0.25 per share for the accounting period that ended on 31 December 2019. The proposed dividend was paid to shareholders who were registered in the company's shareholders register, maintained by Euroclear Finland, on the record date of the payment of the dividend. The record date for the payment of the dividend was 11 May 2020 and the date for the payment of the dividend was 12 June 2020. The remaining distributable assets remained in equity. In addition, the general meeting authorised the Board of Directors to decide at a later stage and in its discretion on a dividend payment in one instalments of a total maximum of EUR 0.37 per share. The authorisation was valid until 31 December 2020.
Tokmanni Group Corporation's Board of Directors decided in July on the payment of additional dividend for the financial year ended 31 December 2019. The additional dividend to be paid was EUR 0.37 per. The record date of the additional dividend was 31 July 2020, and it was paid on 27 August 2020.
The general meeting approved the proposal that the Chairman of the Board of Directors will be paid EUR 84,000 as yearly remuneration and a member of the Board of Directors will be paid EUR 30,000 as yearly remuneration.
The Chairman and the members of the Board of Directors will be paid an attendance fee per each meeting of the Board of Directors as follows:
In addition, the Chairman of the Finance and Audit Committee will be paid EUR 1,000 as monthly remuneration.
The annual remuneration of the members of the Board of Directors is paid in company shares and in cash so that approximately 40% of the annual fee is paid in the company shares and the rest is paid in cash. The company will pay any costs and transfer tax related to the purchase of the company shares. The shares purchased for the Board member cannot be transferred until 3 years have passed from the date of purchase or before the Board member's membership in the Board has ended, whichever is earlier.
Board members' meeting fees and the Chairman of the Finance and Audit Committee's remuneration will be paid in cash.
The general meeting decided the number of Board members to be six. The meeting elected Juha Blomster, Thérèse Cedercreutz, Erkki Järvinen, Ulla Lettijeff, Seppo Saastamoinen and Harri Sivula as members of the Board of Directors. Seppo Saastamoinen was elected as the Chairman of the Board of Directors.
The general meeting decided that the auditor is paid remuneration in accordance with a reasonable invoice. The authorised public accountants PricewaterhouseCoopers Oy was elected as the company's auditor. The principal auditor designated by the audit firm is APA Maria Grönroos. The term of office of the auditor ends at the close of the Annual General Meeting of shareholders following the election of the auditor.
The Annual General Meeting decided to authorise the Board of Directors to decide on repurchase or accepting as pledge, using the company's non-restricted equity, a maximum of 2.943.000 own shares, which corresponds to approximately 5% of the company's total shares at the time of convening the meeting. The repurchase may take place in one or more tranches.
The shares shall be repurchased in a proportion other than the shareholders' current shareholdings in the company in public trading arranged by Nasdaq Helsinki Ltd at the trading price of the moment of repurchase. The shares shall be repurchased and paid in accordance with the rules of Nasdaq Helsinki Ltd.
The company may repurchase the shares to execute its incentive program or corporate acquisitions or other business arrangements or investments related to the company's operations, to improve its capital structure, or to be otherwise further transferred, retained by the company or cancelled.
The authorisation include the right for the Board of Directors to decide on all other matters related to the repurchase of shares. The authorisation is effective until the Annual General Meeting held in 2021, yet no further than until 30 June 2021.
At its constitutive meeting following the annual general meeting, the Board resolved to elect as members of the Finance and Audit Committee: Juha Blomster, Erkki Järvinen and Harri Sivula. Erkki Järvinen was elected as Chairman of the Finance and Audit Committee.
On 31 December 2020, Tokmanni's Executive Group included the following persons:
More information on Tokmanni's governance is available on the company's website ir.tokmanni.fi/en.
Tokmanni Group Corporation's risk management is guided by the risk management policy approved by the Board of Directors of Tokmanni. The purpose of Tokmanni's risk management is to support the Group's values and strategy and the continuity of its business operations by anticipating and managing any risks associated with its operations. The goal is to assess risks systematically to promote thorough planning and decision-making.
The Executive Group is responsible for the practical implementation of risk management. Risks are assessed regularly and managed comprehensively. The risks of Tokmanni Group Corporation are reviewed annually by the Finance and Audit Committee of the Board of Directors. The Chairman of the Finance and Audit Committee reports on risk management to the Board of Directors on a regular basis. The Board of Directors reports the key risks and factors of uncertainty to the markets in the Board of Directors' Report and communicates material changes to them in the business review and half-year financial report.
During the second quarter of 2020, Tokmanni added two new risks to the description of its risks and business uncertainties, injury risks and risks related to the health and ability to work of employees (published in the business review on April 29, 2020). Below is an estimate and descriptions in full.
Tokmanni's profitability and profit from operations as well as sales growth are dependent on the behaviour of consumers and competitors operating in the Finnish retail market. New international market forces and online stores are transforming the sector and its market dynamics, creating pressure in the market and further intensifying competition. If Tokmanni is unable to correctly judge the direction of the market trend and
the changes that it demands, it could have an adverse effect on Tokmanni's business. To manage market risks, Tokmanni tracks the market as part of the Group's day-to-day operational management, develops its business processes and services in an agile way, and adapts its sales promotion procedures and pricing strategies in order to respond to the changing market conditions.
Tokmanni aims to improve the management of working capital with better processes and tools used in sourcing and in supply chain and category management. A failure by Tokmanni to improve its management of working capital could have a negative effect on Tokmanni's financial position and profitability. Tokmanni continuously monitors the turnover of its inventory, the life cycles of products, depreciation on products, and its assortment management as part of the Group's day-to-day operational management, and takes corrective measures, if necessary.
Some of the key measures taken by Tokmanni to improve the gross margin include increasing direct imports and growing the sales of its private label products. Increasing imports rapidly could result in risks related to product quality and to responsibility. If monitoring and quality control in the supply chain fails, it could result in financial losses, an erosion of customer trust and the company's reputation or, in the worst case, risks to customers' health. Tokmanni has strengthened its quality organisation and fine-tuned its sourcing model. In addition, Tokmanni focuses increasingly on extensive pretesting of products and ensures through selfsupervision that products comply with regulations governing them. Effective handling of customer feedback also forms a key aspect in the management of product quality. Tokmanni mitigates the responsibility risks related to products by striving to channel all direct sourcing from risk countries to factories audited by amfori BSCI or SA8000.
Tokmanni has become increasingly dependent on data systems, data traffic and external service providers. The interconnectedness of networks, the outsourcing of services and online retail have made it more difficult for companies to monitor their data security effectively. Prolonged disturbances in data systems, payment transmission or elsewhere in the supply chain, or other exceptional situations such as a cyber-attack, could paralyse the company's operations or halt the flow of goods within the Group, causing significant losses in sales. Tokmanni is focusing increasingly on identifying data security risks and increasing its data security capabilities. In addition, Tokmanni is investing in the up-to-date device infrastructure and the development of back-up systems as well as keeping preparedness and recovery plans up to date.
Achieving business goals in the ongoing transformation of the retail sector requires an active approach and strong competence. Companies must offer products and services that appeal to customers at an accelerating pace. Technological advances will affect products, sales channels and deliveries, among other things. Digital services and online retail continue to grow in importance, as do customer communications supporting them. Tokmanni's aim is to offer its customers low prices, an interesting and wide assortment, comprehensive services, a nationwide network of stores combined with an online store, and an inspiring shopping experience through all of its sales channels. To achieve its goals, Tokmanni has increased the efficiency of its strategic work and clarified responsibilities in order to ensure that its strategically important projects are carried out smoothly from planning to implementation. Part of the strategic work involves evaluating developments taking place in the sector and predicting future changes.
The sourcing market is constantly undergoing changes that are beyond the company's control. The changing environmental legislation in China and political instability in such sourcing countries as Turkey, Bangladesh, Myanmar and Pakistan could increase sourcing prices or cause supply problems. Tokmanni focuses
increasingly on developing its sourcing models, which would enable it to adjust its sourcing flexibly in the event that risks materialise.
If Tokmanni fails in its supervision of product safety or in controlling responsibility in the supply chain, it could result in financial losses as well as an erosion or loss of customer trust. The importance of different aspects of responsibility in product manufacturing and sourcing as well as fair and equal treatment of employees is increasingly emphasised by customers. Any failure to implement responsibility perspectives would result in negative publicity for Tokmanni, impacting Tokmanni's reputation. The above-mentioned quality and reputation risks are managed with internal and external quality and responsibility audits, with the compliance requirements of the amfori BSCI Code of Conduct and Tokmanni's Ethical Code of Conduct, with good governance principles and a good corporate management model, and with internal audit measures and a large-scale internal Compliance programme. In addition, Tokmanni has a quality organisation that monitors product safety and quality in the country of origin, at the logistics centre and in the stores.
Tokmanni is increasing the number of private label products in all product categories in order to achieve its aim of improving profitability. Tokmanni's private label products usually have a low perceived price image and they offer better margins than the brand products the company sells. Tokmanni is also boosting its capability to make direct procurements by dropping intermediaries and dealing directly with goods manufacturers. An increase in Tokmanni's direct procurements may increase operational risks related to the availability of products, the need for working capital and the quality and safety of products. A failure by Tokmanni to increase the number of its private label products or direct procurements could also jeopardise the company's strategic goals, which could have a negative effect on Tokmanni's business and financial position. To manage the above-mentioned risks, Tokmanni utilises its joint sourcing company in Shanghai, continues to utilise and develop its sourcing model and conducts audits of manufacturers.
The growth of Tokmanni's like-for-like sales is dependent on the reach and effectiveness of advertising and marketing programmes. For advertising and marketing programmes to be successful, Tokmanni must, for example, manage its advertising and marketing expenses effectively so as to maintain margins and the return on Tokmanni's marketing investments at a satisfactory level. It must also increase its customer numbers through better brand awareness. To manage its marketing risk, Tokmanni tracks the markets and constantly measures the effectiveness of marketing and advertising. Tokmanni's marketing processes have been developed to be agile and flexible, to enable very rapid reaction to any adverse events.
The execution of Tokmanni's strategy and strategic transformation require new kinds of skills and competences from the personnel. Tokmanni's ongoing development projects and its need for special expertise increase the key person risk and the company's dependence on the competence of individual persons. Tokmanni focuses on recruiting people with the essential competence, developing competence through training and coaching and promoting learning on the job in order to mitigate the key person risk.
Tokmanni is exposed to foreign exchange risks through its sourcing. Unfavourable changes in foreign exchange rates can raise the acquisition costs of products purchased in other currencies than the euro, and Tokmanni may not be able to pass on all such costs to its customers. The most important foreign currency for Tokmanni is the United States dollar. In the financial year that ended on 31 December 2020, approximately 87% of Tokmanni's product purchases were made in euros and approximately 13% in US dollars. Tokmanni hedges at least half of its purchases made in US dollars for an average period of six months.
Accidents, natural disasters and epidemics, as well as restrictions on travel and transportation resulting from these, can result in significant damage to people, property and the business. Moreover, risks of loss or damage can cause delays and interruptions in business and imports that cannot be prevented in advance. Tokmanni has prepared for a possible lack of availability in goods by introducing alternative sourcing channels, among other measures. Tokmanni observes official recommendations and orders in all its activities.
Widespread absences by employees in various employee groups (e.g. logistics, sales, customer service, management) may impact the company's operations. The company strives to minimise risks relating to the health and working capacity of its employees, for example, through various safety solutions and, if necessary, by instructing employees to work from home if their work duties allow this. In addition, the company may acquire temporary labour force during possible peaks in sickness absences. Tokmanni has identified the critical key persons for its various functions and made arrangements for providing deputies for them.
The company's management is not aware of any events of material importance after the review period that might have affected the preparation of the financial statements release.
In the release published on 29 January 2021, the Shareholders' Nomination Board of Tokmanni Group Corporation proposes to the Annual General Meeting that the number of the members of the Board of Directors and their remuneration remain the same as previous year.
The behaviour of Tokmanni's customers and thus the future prospects will be strongly influenced by the coronavirus pandemic and the development of its treatment in 2021. In the current circumstances, Tokmanni forecasts slight growth in revenue for 2021. Group profitability measured in euros (comparable EBIT) is expected to be on the same level as last year.
The parent company's distributable funds total EUR 192 958 784,92, which includes EUR 62 157 402,96 in profit for the year. The Board of Directors proposes that a dividend of EUR 0.85 per share, in total EUR 49,947,559.75 be paid for the financial period ending 31 December 2020. The dividend will be paid to shareholders who are registered in the list of shareholders maintained by Euroclear Finland Ltd on the record date 25 March 2021. The dividend payment day proposed by the Board of Directors is 9 April 2021. The Group's liquidity is good, and the proposed profit distribution does not endanger Tokmanni's solvency.
Tokmanni's 2020 Financial Statements including the Report of the Board of Directors will be published during week 8 after which it can be found on the Groups' webpages ir.tokmanni.fi/en.
Mäntsälä 12 February 2021
Tokmanni Group Corporation
Board of Directors
Tokmanni's Annual General Meeting is planned to be held on 23 March 2021. Tokmanni's Board of Directors will summon the meeting at a later date. Virtual Capital Markets Day will be held on 22 March 2021.
This interim financial report has been prepared in accordance with IAS 34 lnterim Financial Reporting using the same accounting policies and methods of computation as in the financial statements for 2019. AII figures in the accounts have been rounded. Consequently, the sum of individual figures can deviate from the presented sum figure.
The preparation of the half-year financial report in accordance with IFRS requires the management to make estimates and assumptions that affect the valuation of the reported assets and liabilities and other information, such as contingent liabilities and the recognition of income and expenses on the income statement. Although the estimates are based on the management's best knowledge of current events and actions, the actual results may differ from the estimates.
This interim report is unaudited.
| Consolidated income statement (MEUR) | ||||
|---|---|---|---|---|
| 10-12/2020 | 10-12/2019 | 1-12/2020 | 1-12/2019 | |
| Revenue | 326.5 | 284.8 | 1 073.2 | 944.3 |
| Other operating income | 1.3 | 1.4 | 4.1 | 4.3 |
| Materials and services | -206.8 | -185.0 | -702.2 | -619.1 |
| Employee benefits expenses | -34.3 | -29.9 | -122.1 | -114.0 |
| Depreciation | -16.3 | -15.6 | -64.6 | -61.2 |
| Other operating expenses | -25.8 | -24.3 | -89.3 | -84.9 |
| Share of profit (loss) in joint ventures | 0.0 | 0.0 | 0.0 | 0.0 |
| Operating profit | 44.7 | 31.4 | 98.9 | 69.4 |
| Financial income | 0.0 | 0.0 | 0.0 | 0.0 |
| Financial expenses | -2.5 | -2.6 | -10.0 | -10.5 |
| Profit/loss before tax | 42.2 | 28.8 | 88.9 | 58.9 |
| Income taxes | -8.4 | -5.7 | -17.7 | -11.8 |
| Net result for the financial period | 33.8 | 23.1 | 71.2 | 47.1 |
| Profit for the year attributable to | ||||
| Equity holders of the parent company | 33.8 | 23.1 | 71.2 | 47.1 |
| Consolidated statement of comprehensive income (MEUR) | ||||
| 10-12/2020 | 10-12/2019 | 1-12/2020 | 1-12/2019 | |
| Net result for the financial period | 33.8 | 23.1 | 71.2 | 47.1 |
| Other comprehensive income | ||||
| Items that may be reclassified subsequently to profit or loss |
||||
| Exchange differences on translating foreign operations | 0.0 | 0.0 | 0.0 | 0.0 |
| Comprehensive income for the financial period, net of tax | 0.0 | 0.0 | 0.0 | 0.0 |
| Comprehensive income for the financial period | 33.8 | 23.1 | 71.2 | 47.1 |
| Comprehensive income for the financial period attributable | ||||
| to | ||||
| Equity holders of the parent company | 33.8 | 23.1 | 71.2 | 47.1 |
| Earnings per share | ||||
| Equity holders of the parent company | 33.8 | 23.1 | 71.2 | 47.1 |
| Number of shares, weighted average during the financial period | ||||
| (thousands) | 58 811 | 58 869 | 58 825 | 58 869 |
| Diluted number of shares, weighted average during the financial | ||||
| period (thousands) | 58 845 | 58 869 | 58 850 | 58 869 |
| Earnings per share, basic (EUR/share) | 0.58 | 0.39 | 1.21 | 0.80 |
| Earnings per share, diluted (EUR/share) | 0.57 | 0.39 | 1.21 | 0.80 |
| Consolidated statement of financial position (MEUR) | ||
|---|---|---|
| 31 December 2020 | 31 December 2019 | |
| ASSETS | ||
| NON-CURRENT ASSETS | ||
| Property, plant and equipment | 314.8 | 315.0 |
| Goodwill | 135.8 | 135.0 |
| Other intangible assets | 4.7 | 5.6 |
| Non-current receivables | 2.6 | 2.6 |
| Investments in joint ventures | 0.0 | 0.0 |
| Other financial assets | 0.2 | 0.1 |
| Deferred tax asset | 2.2 | 1.8 |
| NON-CURRENT ASSETS, TOTAL | 460.4 | 460.2 |
| CURRENT ASSETS | ||
| Inventories | 225.7 | 222.8 |
| Trade and other receivables | 20.9 | 17.9 |
| Income tax receivables | 0,0 | 0.8 |
| Cash and cash equivalents | 78.1 | 29.1 |
| CURRENT ASSETS, TOTAL | 324.6 | 270.7 |
| ASSETS, TOTAL | 785.0 | 730.9 |
| EQUITY AND LIABILITIES | ||
| Equity attributable to the equity holders of the parent company | ||
| Share capital | 0.1 | 0.1 |
| Reserve for invested unrestricted equity | 109.9 | 109.9 |
| Treasury shares | -2.2 | 0,0 |
| Translation differences | 0.0 | 0.0 |
| Retained earnings | 109.6 | 74.7 |
| EQUITY, TOTAL | 217.3 | 184.7 |
| NON-CURRENT LIABILITIES | ||
| Deferred tax liabilities | 0,0 | 0.0 |
| Non-current interest-bearing liabilities | 258.0 | 359.1 |
| Non-current non-interest-bearing liabilities | 5.9 | 6.3 |
| NON-CURRENT LIABILITIES, TOTAL | 263.9 | 365.4 |
| CURRENT LIABILITIES | ||
| Current interest-bearing liabilities | 152.9 | 50.2 |
| Trade payables and other current liabilities | 141.0 | 126.9 |
| Income tax liabilities | 9.9 | 3.7 |
| CURRENT LIABILITIES, TOTAL | 303.8 | 180.9 |
| EQUITY AND LIABILITIES, TOTAL | 785.0 | 730.9 |
| Consolidated statement of cash flows (MEUR) | ||
|---|---|---|
| 1-12/2020 | 1-12/2019 | |
| Cash flows from operating activities | ||
| Net result for the financial period | 71.2 | 47.1 |
| Adjustments: | ||
| Depreciation | 64.6 | 61.2 |
| Capital gains and losses on non-current assets | 0.0 | 0.1 |
| Financial income and expenses | 10.0 | 10.5 |
| Income taxes | 17.7 | 11.8 |
| Other adjustments | 0.4 | 0.3 |
| Change in working capital: | 0,0 0,0 |
0,0 0,0 |
| Change in current non-interest-bearing receivables | -2.8 | -1.8 |
| Change in inventories | -2.2 | -28.9 |
| Change in current non-interest-bearing liabilities | 13.2 | 4.4 |
| Interest paid | -9.5 | -10.1 |
| Other financing items | -0.4 | -0.1 |
| Income taxes paid | -11.3 | -10.4 |
| Net cash from operating activities | 151.1 | 84.0 |
| Cash flows from investing activities | ||
| Purchases of tangible and intangible assets | -12.9 | -15.5 |
| Proceeds from disposal of tangible and intangible assets | 0.0 | 0.1 |
| Loans granted | -0.5 | -0.3 |
| Proceeds from repayments of loans | 0,0 | 0.1 |
| Net cash from investing activities | -13.3 | -15.6 |
| Cash flows from financing activities | 0,0 | 0,0 |
| Purchase of treasury shares | -2.2 | 0,0 |
| Repayments of lease liabilities | -50.1 | -47.7 |
| Dividends paid | -36.5 | -29.4 |
| Net cash from financing activities | -88.8 | -77.2 |
| Net change in cash and cash equivalents | 48.9 | -8.7 |
| Cash and cash equivalents at beginning of the financial period | 29.1 | 37.9 |
| Cash and cash equivalents, corporate arrangements | 0.0 | 0,0 |
| Cash and cash equivalents at end of the financial period | 78.1 | 29.1 |
| Consolidated statement of changes in equity (MEUR) | |||||||
|---|---|---|---|---|---|---|---|
| Share capital |
Reserve for invested unrestricted equity |
Treasury shares |
Translation differences |
Retained earnings |
Equity attributable to owners of the parent |
Total equity |
|
| Equity 1 Jan 2020 | 0.1 | 109.9 | 0,0 | 0.0 | 74.7 | 184.7 | 184.7 |
| Comprehensive income | 0,0 | 0,0 | 0,0 | 0,0 | 0,0 | 0,0 | 0,0 |
| Net result for the financial | |||||||
| period | 0,0 | 0,0 | 0,0 | 0,0 | 71.2 | 71.2 | 71.2 |
| Translation differences | 0,0 | 0,0 | 0,0 | 0.0 | 0,0 | 0.0 | 0.0 |
| Total comprehensive income | |||||||
| for the financial period | 0,0 | 0,0 | 0,0 | 0.0 | 71.2 | 71.2 | 71.2 |
| Dividends | 0,0 | 0,0 | 0,0 | 0,0 | -36.5 | -36.5 | -36.5 |
| Treasury shares | -2.2 | 0,0 | -2.2 | -2.2 | |||
| Incentive scheme | 0,0 | 0,0 | 0,0 | 0,0 | 0.2 | 0.2 | 0.2 |
| Equity 31 Dec 2020 | 0.1 | 109.9 | -2.2 | 0.0 | 109.6 | 217.3 | 217.3 |
| Reserve for | Equity attributable |
||||||
|---|---|---|---|---|---|---|---|
| Share capital |
invested unrestricted equity |
Treasury shares |
Translation differences |
Retained earnings |
to owners of the parent |
Total equity |
|
| Equity 1 Jan 2019 | 0.1 | 109.9 | 0,0 | 0.0 | 64.5 | 174.5 | 174.5 |
| Adjustment of implementation of IFRS 16 |
0,0 | 0,0 | 0,0 | 0,0 | -7.7 | -7.7 | -7.7 |
| Adjusted equity 1 Jan 2019 | 0.1 | 109.9 | 0,0 | 0.0 | 56.8 | 166.8 | 166.8 |
| Comprehensive income | 0,0 | 0,0 | 0,0 | 0,0 | 0,0 | 0,0 | 0,0 |
| Net result for the financial period |
0,0 | 0,0 | 0,0 | 0,0 | 47.1 | 47.1 | 47.1 |
| Translation differences | 0,0 | 0,0 | 0,0 | 0.0 | 0,0 | 0.0 | 0.0 |
| Total comprehensive income for the financial period |
0,0 | 0,0 | 0,0 | 0.0 | 47.1 | 47.1 | 47.1 |
| Dividends | 0,0 | 0,0 | 0,0 | 0,0 | -29.4 | -29.4 | -29.4 |
| Incentive scheme | 0,0 | 0,0 | 0,0 | 0,0 | 0.1 | 0.1 | 0.1 |
| Equity 31 Dec 2019 | 0.1 | 109.9 | 0,0 | 0.0 | 74.7 | 184.7 | 184.7 |
| MEUR | 31 December 2020 | 31 December 2019 |
|---|---|---|
| Property, plant and equipment | ||
| Property, plant and equipment | 36.2 | 35.8 |
| Right-of-use fixed assets | 278.6 | 279.3 |
| Total | 314.8 | 315.0 |
| MEUR | 31 December 2020 | 31 December 2019 | |
|---|---|---|---|
| Non-current interest-bearing liabilities | |||
| Loans from financial institutions* | 0,0 | 99.6 | |
| Lease liabilities | 258.0 | 259.4 | |
| Total | 258.0 | 359.1 | |
| Current interest-bearing liabilities | |||
| Loans from financial institutions* | 99.7 | 0,0 | |
| Lease liabilities | 53.2 | 50.2 | |
| Total | 152.9 | 50.2 | |
| Total | 410.9 | 409.3 |
* Loans from financial institutions, adjusted with arrangement fees paid.
| MEUR | Carrying amounts of assets as per balance sheet 31 Dec 2020 |
Fair value 31 Dec 2020 |
Carrying amounts of assets as per balance sheet 31 Dec 2019 |
Fair value 31 Dec 2019 |
|---|---|---|---|---|
| Financial assets | ||||
| Derivatives (level 2) | 0.2 | 0.2 | 0.5 | 0.5 |
| Financial liabilities | ||||
| Derivatives (level 2) | 1.1 | 1.1 | 0.1 | 0.1 |
Property has not been provided as collateral for loans from financial institutions, but a covenant term is related to such loans. The covenant term determines the required net debt to EBITDA ratio.
Tokmanni's lease liabilities consist of minimum lease liabilities related to low-value leases and short-term leases.
| MEUR | 31 December 2020 | 31 December 2019 |
|---|---|---|
| No later than 1 year | 8.7 | 8.7 |
| Later than 1 year but no later than 5 years | 22.0 | 23.7 |
| Later than 5 years | 4.0 | 6.6 |
| Total | 34.6 | 39.0 |
| Like-for-like revenue | = | Like-for-like revenue growth is calculated by taking into account the revenue growth of stores that are not considered to be net-new and the revenue growth of relocated stores, as defined by Tokmanni to include: (i) new stores opened; (ii) store relocations where the store size changes by 30 per cent or more and the assortment increases or is reduced substantially; and (iii) store expansions where the store size changes by 30 per cent or more. If the store falls in one of these categories, it is regarded as a net-new or relocated store in its opening year and in the following calendar year. |
|---|---|---|
| Customer visit development, % | = | Number of customer transactions |
| Gross profit | = | Revenue - Materials and services |
| Comparable gross profit | = | Gross profit - Changes in the fair value of currency derivatives |
| Operating expenses | = | Employee benefits expenses + Other operating expenses |
| Comparable operating expenses | = | Operating expenses - Changes in fair value of electricity derivatives |
| EBITDA | = | Operating profit + Depreciation |
| Comparable EBITDA | = | EBITDA - Changes in fair value of currency and electricity derivatives |
| Comparable EBIT, % | = | EBIT - Changes in fair value of currency and electricity derivatives |
| Net financial items | = | Financial income - Financial expenses |
| Net debt | = | Interest-bearing debt - Cash and cash equivalents |
| Net debt / Comparable EBITDA | = | Net debt Comparable EBITDA |
| Capital employed | = | Balance sheet total - Deferred tax liability and other non-interest-bearing liabilities |
| Return on capital employed, % | = | Profit before taxes + Interest and other financial expenses Capital employed, average at the beginning and end of the period |
| Return on capital employed, %, rolling 12 months |
= | Profit before taxes + Interest and other financial expenses (preceding 12 months) Capital employed, average for the preceding 12 months |
| Return on equity, % | = | Net result for the period Equity, average at the beginning and end of the period |
| Return on equity, %, rolling 12 months |
= | Net result for the preceding 12 months Equity, average for the preceding 12 months |
| Number of personnel | = | Number of personnel at the end of the period |
| Number of personnel on average | = | Number of personnel on average in the period |
| Equity ratio | = | Equity Balance sheet total - Advances received |
| Earnings per share, basic | = | Net profit Number of shares, weighted average during the period |
|---|---|---|
| Earnings per share, diluted | = | Net profit Diluted number of shares, weighted average during the period |
| Dividend per share | = | Dividend for the period Number of shares, weighted average during the period |
| Payout ratio | = | Dividend per share Earnings per share |
| Effective dividend yield | = | Dividend per share Closing price for the period |
| Price/earnings ratio (P/E) | = | Closing price for the period Earnings per share |
| Closing price for the period | = | Share price at balance sheet date |
| Average price during the period |
= | Share turnover in euro terms divided by the number of shares traded during the period |
| Share turnover | = | Number of shares traded during the period |
| Market capitalisation | = | Number of shares x Share price on the balance sheet date |
| Number of shares | = | Number of shares on the balance sheet date |
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