Hello, and warm welcome to TOKMANI's Second Quarter Result Presentation. My name is Mikael Autyanen and the agenda for today is as follows. I will first present the key figures for the Q2 and first half of twenty twenty one. After that, I will give you a short recap on the Execution or let's say, the start of the execution of TOKMANI's new strategy, which was launched by the end of March this year and in TOKMANI's Capital Markets Day. After that, TOKMANI's CFO, Mr.
Marco Peterskanen, will come and give you a more detailed analysis on the 2nd quarter and the first half figures. After that, I will come back to tell a little bit more about our TOKMANI's specified guidance for 2021. So let's start. And then of course, it's time for questions afterwards. So the revenue continued to grow growth and profit improved.
And the revenue growth was 5.4%. We in TOKMANI were very happy about it because last year during the Q2, it was almost 20% sales growth. And obviously, this was from our point of view, it was a very good performance. Actually, Several product groups were performing very well during the Q2. First of all, of course, the most important Garden, as our one of our main destination categories, Garden was performing very well.
But also other categories, for example, Aperol was also performing well after very, very difficult last year. So we with Aperol, we came back to the level that we want to have this Aperol sales. But of course, other categories as well as Health and Beauty Care, Sports, these were doing very well. So it was like a Good setup for the Q2. Like for like revenue growth was 4.4%.
The comparable gross margin was also improved 35.1% compared to last year's 34.5%. Comparable EBIT for the Q2 was €32,300,000 being 10.7 Percent of revenue exactly the same as last year. And actually, Marco will tell you a little bit more The structure or the situation with the EBIT, which basically was On a very good level from our point of view, the cash flow from operating activities was €61,500,000 clearly lower than last year. Now this is based on the higher inventory level. Last year's sales growth of almost 20% basically ended up with the situation that in the End of last year June, our stores were almost like sold out and the inventory level was Too low.
Sales availability was too low. And this year, we have been preparing much better to this situation, which also shows in the inventory level in our stores, which actually from our point of view is a positive thing. Earnings per share was €0.41 compared to last year's €0.38 The first half revenue growth of 8.8% compared to last year's 13.3%. This basically was one of the drivers for the specified Guidance also, I'll come back to that a little bit later. Like for like revenue for stores Grew by 7.8%.
Comparable gross margin was 34.2% compared to Last year, clearly lower level of 33.5%. And the EBIT amounted for the first half to €39,100,000 compared to last year's €30,900,000 So the level of EBIT was clearly higher compared to last year with the 7.4%. And exactly the same story as already during the Q2, the Cash flow from operating activities was due to inventory level. It was clearly lower than last year. Earnings per share for the first half year was EUR 0.48 compared to last year's EUR 0.34 And let's look at the shopping behavior.
We have been talking about the customer our customer shopping behavior in the result presentations. So during the first half of this year, it was Actually quite a lot of different kind of restrictions in Finland due to pandemic. And the customer visits The shopping behavior has basically normalized. It shows with our customer like for like customer visits, which was already during the Q2 plus 1.3. So the first half already ended on plus figures.
At the same time, if we look at the average basket during the Q1, as mentioned, it was very high. And it was more like on the normal level. On the other hand, the Q2 last year, it was very high development also with Growth with average basket. So we were able to improve the average basket also on the 2nd quarter. The 6.8% of average basket like for like average basket is comparable to last year's almost 10% Average basket growth, so good job, I would say.
Now if we look at on TOKMANI's performance compared to other players in the Finnish market based on the Finnish Grocery Trade Associations figures. TOKMANI was actually not doing as well as the other players. So A little bit lower growth compared to the others, but I would like to highlight the figures from the Q2 of 2020, where basically TOKMANI's growth was 19.2% and the market was performing of in 3.6 percent growth. So slightly different setup for the figures or the growth figures for this year for TOKMANI. So that was basically the key figures for the first half of twenty twenty one and the second quarter.
And as mentioned, we launched TOKMANI's new strategy by the end of March in our Capital Markets Day. The execution has started very well. We're basically talking about the sources of growth, profitability and success. And I will just give you some examples like what has been happening in each of these areas during the first half of twenty twenty one. Yes, obviously, we have very ambitious targets for 2025, EUR 1.5 €1,000,000,000 revenue.
And obviously, we're in the beginning of the strategy period. But the revenue and EBIT growth as are like as planned at the moment. As mentioned, It's been like positive effects due to pandemic for the retail sector as well as for Tokmani. But obviously, we cannot base our targets strategy targets on the pandemic. So that's why we've been Working very, very actively on our strategy action points to make sure that the growth will continue during the coming years.
Basically, the revenue growth is also one of the reasons to get a very good growth with our EBIT level. This is going as planned, but mainly we're focusing on action points, for example, of our store network, which is growing after a little bit, let's say, more silent time during this pandemic. The target is to have more than 2 20 stores in Finland in 2025. By the end of June, we had 191 Stores, next weekend, we're basically acquiring 2 stores the northern part of Finland. And so these two stores will be in our store network from the beginning of August.
Also in the middle of August, we are opening a new store in Finland's Popular summerhouse region in the southern part of Finland. So basically, by the end of or In the middle of August, we will have already 194 stores and 2 more store openings for 2021. But anyway, the store network growth is going according to the plan. We're also able to we mentioned that we will start developing a new large store concept. So basically, due although with the help of this acquisition, we are basically acquiring a store in Tornio, which is In the north part of Finland on the border of Finland and Sweden, there is actually a twin city Tornio in Finland and Haparanda in Sweden.
And basically, this store is located only 102 kilometers from the border. Anyway, it will be the largest store for TOKMANI, at the moment, it's more than 10,000 square meters. And we're basically able to jump start the concept building through this store. Obviously, we were saying that the large A new large store concept will be in bigger cities in Finland. Torunjina Haparanda is not exactly a big city, even though it's a twin city.
But anyway, this gives us the opportunity to start developing this large store concept very quickly. And at the same time, we're expanding the assortment. The assortment we said that in our strategy that we will double the assortment. And basically, doubling the assortment as a channel, we're using our online store and it's Performing very well, and we're very happy with this. And actually, the assortment or the sales Through our online channel are clearly different from our stores.
But at the same time, the acquisition of these stores from Northern part of Finland, they're called Tex. They're also discounters. So they offer us a potential for new categories and products. There are like tens of thousands of new products which are potential for TOKMANI. And after or basically already next week, we can start testing and making the analysis like which one of those products could be in the whole TOKMONEY store network or online assortment.
So this is also like proceeding very well. As mentioned about the online sales, it's growing. And one of the most important things is also profitable business for TOKMANI. During the first half, it was 68% growth. It's still during the second quarter, It was only 2% of the total sales.
So it's still small, but it's growing very well. We're basically the unit price On the products which are sold in our online stores is clearly higher compared to the store sales, which is basically working very well for us. It's a very good service for our customers. Now if we talk about the sources of profitability, Obviously, direct imports and private labels are the most important elements over here. Well, most important or let's say, very, very and elements for the profitability.
And during the first half of this year, the sales Have been both for direct imports and brands managed by TOKMANI, they've been both growing as planned. So very good development on this one as well. Mainly, of course, or especially with, well, owned brands, Direct imports, it's apparel, which is now being on a positive side. Now already I already mentioned about Shell availability, it has been improving. It's very, very important for also for our profitability.
And I think it was already by the end of 2019 when we mentioned that we will start improving the efficiency of our supply chain. But to be honest, during the last 18 months, There has been a lot of external issues, which have been causing problems for an efficient supply chain Starting from well, basically due to pandemic, but different kinds of issues affecting or causing problems for our supply chain. And I would say that at the moment, we have been able to restart the action points, which will basically improve the efficiency with the supply chain. Then if we talk about the sources of success, we also mentioned during the CMD that We will launch the TOKMANI's loyalty program during 2021. Actually, The testing period is currently going on.
And hopefully, during the coming weeks, we are able to inform when we're launching this Loyalty program, obviously, it's the loyalty program gives us a tool to basically reward our best customers, the so called TOKMANI fans. And at the same time, the loyalty program will bring us extremely important customer information. Also with sustainability work, there is good progress going on. We basically said that TOKMANI's own operations will be carbon neutral by the end of 2025 and all the action points are Basically, working to reach this target and the work is on a good process. We also said that the cotton that we're sourcing will be 100% sustainable By the end of 2024, a big part of the cotton is already sustainably sourced, But it's going to be 100% by the end of 2024.
Last, But definitely not least is for our sources of success is the more than 4,000 TOKmoney people working for TOKMANI. We basically say that we or we have been saying this for all and now already several years that TOKMANI will be the best placed work in retail. It's all about the leadership, training, compensation, well-being and joint values for more than 4,000 TOKMANI people. At this point, I would definitely like to thank our Fantastic people, both in here in Finland and in China for the Great work during the first half. Let's continue making let's continue the success story also during the second half of 2021.
So thank you. Now it's time for the key figures For the Q2 and first half and Marco will come and present these. Please Marco go ahead.
Okay. Thank you, Mikko. And hi to everyone from my side also. So let's go a little bit deeply For the figures, Mikael already mentioned a couple of figures there and let's look as said a little bit deeper here. Last year 2020 was especially Q2 2020 was an exceptional development.
And therefore, I have Picked up in some points also the 3 years development, looking a little bit longer Time period to see how the development has gone and are we going to the right direction, not just looking for 2 years development. Because I think that gives a little bit better picture about the development. But okay, let's start. About the revenue, here you see the graph on the right side. If you look for graph, there are The quarters on the left side, these three bars and which is the asset quarters And the right hand side are the half year development.
As you see when we are looking at the 2nd quarter, the development From 2019 up to 2020, 2020 was very strong and we are happy To achieve now 21%, roughly 5% development to our revenue. Why we achieved this development is that when we are looking our Sales performance, it's clear that as Mikael already said that we had a better shelf availability And that really supported our sales. So looking at the product MiX, what we have there, we are we were able to sell different kind of products in white Specs. And especially in Garden, we continued the nice success, but also happy to see that the apparel recovered from the year 2020 when we had in Q2 very difficult time for Aperol sales. About gross profit and the gross margin.
If you look this quarter 2 figures from in gross margin, we are seeing that there are Development from 2019, 35.2%. We went down during 2020, 34.5 percent and now back to over 35%, 35.1%. It's clear that the product mix is impacting due to these gross margin percentages. And now during the Q2 2021, we were about more normal sales mix When we are looking at what kind of products we sold. And of course, if we look what kind of product mix we have, It affects also what is the proportion of direct imports and private labels.
But If we look for half year's number, we can see that we are now on a right track from 33.4% in 2019 up to 34.2% now in 20 1 half year time. But as said, the big effect to our gross margin is when we are looking our direct import share And what is the share of product labels managed by TOGmoney? And these product labels managed by TOGmoney includes our private labels, It includes white labels and also it includes the brands where TOGmoney has exclusive Right. Direct import Q2 from 25.1% up to 26 point 5%, that's very good development. And also looking for half year's development, it has gone to the right direction.
Private labels or product labels managed by TOKMONEY, it has been a bit more interesting development When we are looking at different quarters, here is not the 2019 figures, but quarter 2 2019 figures. But if we look at Toghmann, it's roughly 32%. So we went down during 2020 to 31.4% and now clearly over 2019 figures up to 33.1%. And as said, of course, the product mix effects to these figures. Operating expenses, and this is interesting part because of course, when I'm looking these figures, We can see that the development when we are looking what is the ratio operating expenses against the revenue, it Didn't develop during Q2 2021 well compared to 20 figures.
We went up To 19.2% from a figure 18.5%. And of course, now trying to look a little bit longer Period, how it has developed and analyze what are the reasons why we went ended up to 19.2%. The biggest reason there are the personal expenses, which is part of this operating Personal expenses were 11.8% and last year Q2 it was 11.1 So increase of 0.7%, which is mostly the explanation why the total operating The ratio went to 19.2%. Looking a bit more detailed with personal expenses, there are different kind of reasons Why they were on higher level compared last year? First one, we invested in shelf availability and Commercial setup in stores.
That was the decision what we made because when we look last year's Q2, It's clear that we had some, for example, some opening hours, which was less In some stores, but also we noted that our shelf availability was last year on lower level And we wanted to have it on a higher level and that's why we invested more working hours to our stores. That was the decision what we made. And I think so that we got it Better show further availability and we call it good revenue. So basically that was a good investment. Other reasons, of course, When we are looking euro wise, when volume is increasing, it means normally that we have to use more hours.
And that, of course, affected to euro amounts, but of course not to this relative figure. Two points from, I would say, I don't know it's the right word, but a legal point of view. First of all, our employee salaries were raised At the beginning of April 2021 by 1.3% and that Effective in euro was roughly €500,000 And going back to Again to Q2 2020, we had at that time the reduction of our pension payments And we didn't have it during this year. Last year, it was made due to the corona pandemic and that was the legal decision. But now during Q2 2021, we didn't have it and that affected roughly €900,000 When we are calculating together with €900,000,000 €500,000 it's €1,400,000 which is roughly A little bit under 0.5%, which explains quite a big part of this increase of 0.7%.
And the rest, as I said, it was our investment decision to increase our Personal and working hours in our stores. So looking a little bit this graph, we are seeing that when we are looking at the quarters But starting with 4 years period of time, starting from 2018 Q2, we were level of 22 point 8% coming down to 21.5%. And last year, the drop It was very drastic and of course very good, but drastic and then big down to 18.5% And now during this year 19.2%. And of course looking a little bit longer period, it seems to be that We are going to the right direction here and we are continuing to our work to improve this ratio in the future. But we are on the right track in any case.
And if we look for half year's development, looking 21 half year compared to last year, we were at the same level on 20.9%. Okay. It's of course next comparable EBIT which is ending up from a revenue margin and of course expenses. Looking for quarter, quarter development, I'm happy we were ended up to the same level Last year when we are looking percentages, so 10.7%. And if we look the 2019 figure, it was at below 7.8%.
So we have achieved a higher ratio here. And of course, that means that our euro wise EBIT increased due to the increase of revenue. So we ended up to 32.3% compared last year 30 point €6,000,000 Good thing when we are looking at the half year's development And looking how the EBIT percentage has developed, it has started from 3.9% in 2019, Steadily going upwards to 6.4% and this year 7.4%. And if you look where we are standing now after 6 months 2021, we are €39,100,000 which is roughly €8,000,000 ahead of €8,000,000 ahead last year 6 months situation. Balance sheet, financing, cash flow.
Mikael already mentioned couple words about our inventories. And again, looking a little Looking at 3 years development time. Last year compared to 2019, The increase even the revenue was increasing very heavily was quite small. And this year we went up More basically €25,000,000 to up to €255,000,000 compared last Roughly €230,000,000 And of course, trying to again analyze if this is good or bad. And this is Basically supporting again the shelf availability.
We had a higher inventory amount, but This increase of inventories is now located in our stores. So In our central warehouse in Mansella, the value of inventories was roughly at the same level than it was 2020. And that's of course good because we have now a good shelf availability and products in our stores. But of course, cash flow and lower level due to the development of our inventories. And looking for interest bearing debts, total debts we are on a lower level €385,000,000 roughly.
Last year's €420,000,000 so nice decrease on that total amount and that's coming from our Lease liability decrease. Lease liability amount decrease and looking for So called normal liabilities, interest bearing liabilities, they are still on the same level on the level of €100,000,000 Good development on net debt against EBITDA figure now 2.0 compared to last year 2.5 And what we have said in our long term targets that it should be on the level of under 3.2, which of course means that compared that figure to 2.0 barrels, good space for us. And return on capital employed, 12 months rolling nice development up to 18.2%. And about net capital expenditures, So basically investments, if you look at the figures, we are seeing that after 6 months we are Roughly on the level of last year's basically on €6,000,000 But when we are looking at the second half of twenty twenty one, We are expecting that we are making a bit more investments during this year compared to last year. And the total figure last year was €12,800,000 And now we are targeting to be at the level of €16,000,000 to €18,000,000 when we are speaking about the investments.
And about the investments to Logistics Center we published what we are trying to or we are clarifying possible investments into our logistics Center here in Manchaca, it's of course big investments and our feasibility studies and negotiations Still continues, so it's at this stage still open issue and we will come back to that issue later on. Okay. Thank you. That's about my side about these figures and or explanations and the clarifications. And now I Give us a bit back to Mika.
Thank you.
Thank you, Marco, for the very good analysis. So we've based on this first half figures, we have been revising the The outlook for 2021. Basically, we are at the moment, we are forecasting revenue growth instead of slight growth for 2021. And we are also forecasting basically the Profitability in euros to improve and to be €105,000,000 to €150,000,000 Compared to the previous guidance of the same level as last year group profitability, Last year, it was €100,000,000 approximately. So we've revised this.
And at this point, I'd just like to point out In 2020, the 3rd and 4th Quarter was basically representing approximately 70% of TOKMANI's Profit EBIT, so obviously, we have been very careful with this guidance. And Still only yesterday evening, we were thinking about this, how to deal with it because, of course, the market situation is also still a little bit unstable. But at the moment, we as mentioned, we've revised the outlook for 2021. So I think this one will be the result presentation. Thank you very much.
And Operator, now it's time for questions and I would also like to invite Marco to join me to answer the questions. Please go ahead.
Thank Okay. It seems like we have Okay. We have one question from Nicholas Skorpemann from Handelsbanken. Please go ahead. Your line is open.
Yes. Good morning. I have a couple of questions. Looking at the sales development, which I think was very strong, it looks like it's the average basket Size that's basically continuing to be on a very high level. And last year that Development was explained by this behavior where people consolidate their shopping trips, I.
E. They went to fewer places, but they bought more Stuff where they actually went. But I mean this year is that Still explaining that this metric doesn't drop off more? Or what do you think is explaining that Basically, your average basket has now moved up EUR 2.5 or something compared to pre pandemic?
Well, I think that the let's say, The economic situation for Finnish consumers, it's actually quite good at the moment. Now there are no money being spent On the services, basically restaurants, hotels, trips abroad, things like this. So We can see that, as mentioned in the beginning of this result presentation, several product groups were performing well. It gives us the feeling that customers are also like the shopping behavior is that like they also like Using money, it's not only to buy as little as possible, but like there is a Capacity also to buy more because the economic situation for Finnish consumers is very good and the customer or Consumer confidence is also on a very high level.
Okay. Yes, that makes a lot of sense. And I'm assuming this loyalty program that will be launched is hopefully going to sort of prevent that from Unwinding once the economy fully opens up? Or what sort of strategic initiatives do you plan on the back The loyalty card launch.
Well, for the future, For this strategy period, for TOKMANI, it's very important to start collecting customer data. And because it's also for our forecasting, it's extremely important that we On the shopping habits, on the products, on the everything that has to do with the customer data. So it gives us more background information for forecasting and also with Our sourcing and buying activities, it's very important. If we look at even the store concept, it's We already can see now that like the stores which are located in the shopping malls compared to the ones which are on the countryside, it's like a Different assortment which are working in these stores. So this is the information is extremely important for us.
That's probably one of the key drivers for the loyalty program. At the same time, as mentioned, We can see that there are all the time a bigger crowd of TOKMANI fans and obviously, we'd like to take a good grip on the TOKMANI fans by rewarding them in a very nice ways.
Yes. All right. And will it be fully launched by the end of the year, this loyalty card? Yes. Yes.
Okay. Good stuff. And then finally, for now at least, on Great rates and general cost inflation. What are you seeing for H2 in terms of price inflation On products or is that something maybe that will be more of a H1 next year issue? Or basically, What sort of impact are you seeing from the freight rates and the cost inflation?
Well, first of all, it's very clear that there will be like price inflation To start with, because of the higher freight costs well, or actually even if we go If we start from earlier stages, the higher prices for raw materials, the higher freight costs and things like this. So there will definitely be price inflation or we'll see elements of price inflation. Now we're very happy about our first half of this year. We will not we didn't have any Only couple of new a little bit higher prices. So for as a discounter, it's extremely important to be The last one to ratio prices and we were able to do that, but still with a higher gross margin level.
But Yes, there definitely will be price inflation. There is no way with some of the raw materials, they will definitely exactly how it is. And we also we need to see the Market situation, our aim is to be the last one to raise the prices, obviously, as a discounter. But We're following our following all those 600 stores in Finland every week to see what's going to be happening in the market.
Okay. But so far, It seems like everyone is pushing these prices through to the customers.
Yes. Some key products, there are already clear changes. For example, now when it's the summertime in the Nordics, as you know, And well, the barbecue time is also very important. So for example, the liquid gas, for example, it's Different price level at the moment and it's a big product for TOKMANI and in the market as well. So there we've seen already like higher prices for everybody.
We were, by the way, the last one in Finland to raise the prices.
Okay. And when will the bulk of this price inflation and freight costs, When do you think that is going to start hitting the retail level?
Sorry,
The bulk, so the majority. I guess you've already seen a bit of it now, but I also assume there's going to be more and more in H2. 2. So one, is it in Q3 already? Or is it mostly a Q4 thing or
There will be like already during the Q3, there will be. But like price inflation, we can already see clear outcomes of the price inflation. For TOKMANI, it's a little bit on our Depending on our product groups, for example, for Aperol, there won't be price inflation for Aperol. I don't think that there will be a price inflation at all. Or there are no clear reasons in raw materials.
Maybe a little bit on the freight costs, but that's very, very, very small for Aperol. But yes, on Some products, for example, in DIY, we probably will see price inflation during the Q3 and definitely during the Q4.
Okay. Thank you very much.
Okay. Thank you.
Thank you. We have no more questions from the line. I'll hand it back to our speakers.
Okay. So this was the presentation. We wish you all a very good continuation of the summertime. And we'll be meeting you next time in October. Thank you very much.
Okay. Thank you.