Good morning, and warm welcome to TOKMANI's First Quarter Result Presentation. My name is Mikael Rautiaenen, and I will first present the highlights of TOGmoney's Q1. After that, TOKMANI's CFO, Mr. Marco Pirskanen, will give you a more detailed outlook on the Q1 financials. After that, we have time for conclusions and questions.
So let's start. First of all, TOKMONEY had an excellent start for year 2021. All product groups We're selling well. There were strong growth for all product groups, including clothing, which was actually last Here when pandemic started, we had a lot of problems. And also Last year, it was strong sales for groceries.
This year during the Q1, All product groups were performing well. Gross margin improved due to this more normal sales mix Compared to last year, expenses were well in control and EBIT improved significantly. So it was a very good combination. Stronger sales, improved gross margin and expenses in control. So But obviously, it was a very special quarter due to the customer behavior.
It was very exceptional compared to a normal situation. First of all, the customers were visiting TOKMANI stores A lot more seldom not that as often at all as before, but the average basket was much higher. The very nice thing and I would actually like to say thanks to all our customers. The behavior in our stores, Customers was very responsible. Everybody was using face masks, keeping distances to other customers and to personnel using all the dissipated items as well.
And of course, thanks to our Tochmani personnel. We're doing an excellent job during the Q1. At the moment, we have new spring and summer assortment available in our Stores despite of the international transportation problems. Actually, we do have From the shipments from March, we have maybe a 3 to 4 week delay. Already the shipments In April, they are well in time.
So there are only a couple of product groups have some lacks in the availability. But I would say that the customers will have a full assortment in our stores already and it will be in the beginning of May, a normal situation. So the revenue grew by 13.6 percent and it was €226,100,000 Like for like revenue growth, very good, 12.7%. Gross margin was 33.1% compared to last year's 32.1%. And the comparable EBIT amounted to €6,800,000 Last year, it was for the First time last year, Q1 of TOKMONE was for the first time positive result with €300,000 this year, a much better result €6,800,000 Cash flow was minus €22,000,000 compared to last year's €23,500,000 And that's due to the fact that we call basically all the seasonal items to our warehouse much earlier than during the previous year.
Diluted earnings per share was €0.07 compared to last year minus €0.04 And here's the exceptional behavior of customers. First of all, we had a lot of discussions regarding all restrictions regarding COVID-nineteen in Finland during February and especially in March. A lot of discussions on the restrictions. However, all TOKMANI stores were open during these times, But customers were basically very, very careful with their behavior. Customers were Coming to our stores a lot less than during the normal times, but We were very successful with selling a lot more to customers when visiting Tochmane stores.
So actually, the like for like average basket grew with 14.3%. Already last year, the growth of average basket was almost 10%, but the beginning of this year And the first quarter was exceptional with 14.3%. Now basically, we do see already a little bit to getting it to a normal situation in Finland. Vaccinations, it's Almost 30% of the Finnish population and COVID-nineteen contamination figures are already very low. So obviously, it's a very positive atmosphere in Finland in that sense.
Also for Tochmane store network, we have basically started like a normal time store network developing program. At the end of March this year, we had 192 stores compared to last year's 190 stores. We have been renewing 4 stores in Hamelin, Elobby, Zajarvempa and Raisio. There will be new premises for Tochmane stores in Lahti Center and Ivascula center. Also a big renewal of the Mansella store.
And there we do have already like new store agreements or agreements made for new stores in Helsinki, in Ity, in Oulu and in Nurmijarvi. And there will be a new much bigger store in Lettavirta. Now these last ones, they all of them won't be opened during this year, but it's actually a little bit of the situation of depending on the situation on COVID-nineteen. But yes, the store network developing program is getting back to normal and as basically mentioned also in our strategic targets. About the TOKMANI online business.
During the Q1, special efforts were made to expand the product range and improved operational reliability. The online sales grew by almost 150%, And but it was still very small part of the TOKMONEY business, only 1.3% of the total revenue. But anyway, the development with online sales is a moment. The sales grew, particularly in home and leisure products, skincare and garden products. Obviously, it had also a lot to do With the pandemic, Finns were not what's happening in Finland, a lot of families driving to the north part of Finland to Lapland.
So we were actually selling a lot of we were selling a lot of, for example, ski boxes. And it was also a pretty heavy winter in Finland. It still is in the northern part of Finland, but basically we're selling in our online a lot of snow work equipment. Also, we launched a selective cosmetics category in the end of last year during the Black Friday campaign. It's at the moment, it's growing extremely well.
And also The guidance products all started basically already in February, which was Obviously, a little bit of a surprise, a little bit early stage to start selling garden products in Finland, but It was actually a great success. Here are the figures. The red one the red Curve is basically Tochmane's development in Finland's non grocery market And the black one is all the other players, which are reported in the Finnish Grocery Trade Association's figures and clearly this shows that TOKMANI is gaining market share in the Finnish market. However, I have to say that the online sales figures are basically missing out from these figures. But it looks very good from Toghmani perspective when it comes to the market share in Finland.
So this was basically a short recap on the highlights of Q1. And then Marco will tell you a little bit more detailed information regarding the financials. Marco, please go ahead.
Okay. Thank you.
Thanks.
Okay. Hello to everybody from my side also, and let's go through these key figures a bit, bit deeply. Let's start from revenue side, and we have here a chart in which we have taken this Last 4 years development. And as we can see that development has been quite strong already during 2018, 'nineteen 'twenty. But now looking this Q1 'twenty one, we see that we Managed to achieve €27,000,000 increase, which is very, very strong improvement.
And it was when we are looking like for like revenue growth, 12.7%. How it came? Basically, as Mikael already mentioned, very strong sales force in laser products and home electronics. But all product groups sold very well. But of course, there were different kind of Developments.
If we think last year's Q1, meaning 2020, we had an at the end of quarter, So called panic buying phase when people starting to buy toilet papers, different kind of groceries and this kind of stuff. And of course, last year figure in these product groups was Already good. And of course, the development was during this year's quarter so strong, but still, it was good even in these product groups. Jumping to our gross profit and gross margin. And if we start to look with development again for last 4 years' quarters, we see that we have Managed to achieve quite nice development also here, starting from 'nineteen to 31.2 percent last year, 32.1% and now 33.1%.
So we achieved 1% unit increase and why VAP1. For this year, for this quarter, The sales mix was good for us, and that, of course, affected strongly to gross margin. And when we are looking our sales mix, it's clear that it is in connection to direct import And what is the share of private labels or own brands? And these two Indicators or items, effects, how well we are developing in gross margin Because in some product groups, the share of private labels is on higher level. And if we are able to sell these Radgroups.
That, of course, helps. Last year, we were struggling a bit because, for example, the apparel sales was at Lower level and that, of course, affected due to the share of private labels. Here next, the issue of about the private labels and then direct import. And if we start about the chart on the left hand side, Looking first at the share of different kind of product labels. First, I'd like to mention that We have changed a bit the title of this part red part of this bar, meaning earlier it was Private labels, we were calling it private labels, but now we change it to the title, which is called labels managed by TOKMONEY Because we are thinking that it is describing better that at a part.
It includes private labels, white labels And brands where TOGmoney has exclusive rights. And as I said, it has been earlier. The content has been earlier totally the same, but now we are thinking this thinking that the labels managed by TOKMANI is describing Better with this group. But still remember that the private tables are clearly the biggest part in that group. And looking how it has been developed.
Q1, 29.6 percent And last year, 29.2%. So now we have increased Sorry. Now we have achieved the increase in that part, and that's, of course, according what we have targeted to do. And also on direct import side, if you look Last 3 years' development starting from 2019 Q1, 22.2% And jumping 23.6 percent, and now Q1 2021, we have on the level of 24.5%. So this has also developed according our plans and to the right Direction.
Next one, operating expenses. And again, starting from this chart And looking for development there and then first euro amount. Now we were on the level of 52,500,000 last year, 48,500,000. So 4,000,000 increase in euro wise And mostly, that is explained by increase in store personnel salaries. And I'd like to remind you that when the volume is increasing, we are needing more hours In our stores, for example, to putting different kind of products to the self.
So basically, our store Personal salaries are we are calling them at least partly variable expenses. The other thing which affected to euro wise expenses was heavy winter, which we have in Finland. It was clear that it affected to our store maintenance expenses. And other thing, COVID-nineteen, We had to do different kind of actions in our stores to make these disinfections, And that, of course, affected to our expenses. But what is the most important thing here is that when we are looking what is our Expenses against revenue, what is this kind of ratio?
If we start from Q1 2018, we were a level of 25%, And now Q1 'twenty one, we were at the level of 23.2%. That, of course, Means 1.8% improvement, 1.8% units improvement, which is good achievement here. Comparable EBIT, it's clear that it is end result From our revenue, our gross margin and how the expenses has been developed. And now Q1 2021, €6,800,000 EBIT compared last year's €300,000 Clear improvement. And at the same time, when we are looking EBIT in 20192018 in Q1, we are seeing that we have been on 0 level or even on minus level when we are looking history.
Now we jumped totally The new level when we achieved €6,800,000 EBIT. A couple of words from balance sheet, financing and then cash flow. And one main item here is, of course, Our inventory levels and looking again at 4 years history figures here in Q1, Seeing that we have increased our inventory level and ending €139,000,000 It seems to be quite big Increased, but when we are looking at the turnover ratio of our inventories, we can note that Now in Q1 2021, it was on the level of roughly 3.1 And last year, it was level of 2.8. So when we are looking turnover ratio, we are Seeing that we are going to the right level right direction when we are speaking about the inventory, even the euro amounts are increasing. But of course, having clear and strong emphasis on inventory levels because it effects directly to our cash flow.
Looking at Q1 cash flow, it was Minus 22,000,000 last year, minus 23,500,000. These minus figures are Clear for Q1, which is a low quarter, but also we are preparing to our Season for Q2, and we have to take our products into our inventory. So it's very natural that when we have a minus cash flow for Q1 figures. Long term loans at the same level what it has been, €100,000,000 But when we are looking at total interest bearing debt, we were level of roughly €400,000,000 and this difference comes from IFRS 16 accounting rules when we are taking our rents as Our rental agreements has an interest bearing debt to our balance sheet. The ratio of net debt to comparable EBITDA, 2.1%, which is clearly lower compared to our long term target, 3.2 percent.
So we are in a good position on that figure also. And looking for return on capital employed Start to be on a good level, 17.6% when we are speaking about the rolling 12 months figure. And couple words about our net capital expenditure or investments. Q1 'twenty one was a bit lower level Compared last year, now 2.3, last year 3.2, but looking at 2020 total figure, dollars 12,800,000 Last year, we started to Slowed down our investments when COVID-nineteen started. And this year, most probably, we are accelerating it a little bit When we are going forward to the end of the year, and that's why we are expecting our investments to be at the level of €16,000,000 to €18,000,000 in 'twenty one.
We published, but we are reviewing the expansion possibilities of the Mansella Logistics Center. And now I have to say that they are still ongoing, and let's see how it goes. But that's about the figures, and I'll still give a speech to Wiggo. Okay.
Thank you, Marco, for very informative information package. And then about the year 2021, the rest of the year. Basically, TOKmoney will keep the TOKmoney outlook, the original outlook for this year unchanged. So TOKmoney 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.
Now basically, it's a very, very, very good start for the year 2021. But at the same time, as Marco already mentioned, the first quarter It's well, basically the way smallest in TOKMANI's year of the quarters. So that's why we will still be looking, for example, the spring season quite carefully. Last year, if I remember correct, the 2nd quarter Sales growth was 19.2%. And basically in Finland, it's a lot to do with the weather forecast.
Weather snowing still continues in May, In April May, it has a lot to do with the success of the Garden season. But basically, Everything looks quite okay. We're being careful in the at this moment. Basically, the customer behavior It's becoming more normal. It looks good in that sense.
But anyway, the outlook will be at this point unchanged. We had the Tochmane CMD in the end of March where we basically said that the target will be to continue with the strong growth. Just to remind you that here are the figures. The revenue target for 2025 It's €1,500,000,000 and the EBIT target for 2025 is €150,000,000 Basically, the work has started and the work is going very well at the moment. We will be concentrating on improving the customer confidence.
And as for variety discounter, It's basically everything starts with the cost efficiency. So that's what we are basically doing at the moment. So that was basically the 1st quarter result presentation. Operator, now it's time for questions, please.
Thank you. We have a question from the line of Sante Kielcros from Nordea. Please go ahead.
Yes. Hi, Mikael and Marco, and thank you for taking my questions. The first one, Probably don't have a direct answer, but could you a bit elaborate on how you look at Opening up the society will impact you in which ways and what kind of risk and opportunities do you see from your side?
Well, first of all, the consumer confidence in Finland, as you probably know very well, it's on a very, very high level. That's always very good for retail business when the consumer confidence is good. So that's basically it looks good. As already mentioned in the presentation, The customer behavior has been quite exceptional during the well, during the last 12 months, but I would say that the biggest changes were during the last the 1st 3 months of this year. I could imagine that basically The traveling abroad won't start that heavily in well, for Finns during the next couple of quarters.
And basically that's good. There is like a boom for summer houses in Finland, so that's also very good for Tochmani. We are quite We see a sunshine with the spring season. However, last for example, last Weekend, it was still snowing and not very good for the garden season, but it looks basically everything we're quite Confident on the coming months for TOKMONE. Marco, would you like to Add something?
I think so. That was good answer.
Okay. And then Also, I think you mentioned in the Q4 report that you increased the number of new customers by something like around 20%. Have you seen that Train continuing or are you now kind of getting the benefit from having been able to get new customers?
First of all, we're not basically reporting the amount of new customers on a quarterly basis. But yes, we've seen new customers also during the Q1 of this year. And I would say that it's more about the TOKMANI in Finland. It has become everybody's variety counter in Finland. And I think it's very important for us for this year, for the coming years as well.
So we do see a clear change with becoming at everybody's store in Finland.
Okay. Thank you. And perhaps on that note, I mean, you have outgrown the market substantially for Many years now. And who do you believe you have taken most market share from? And who do you expect to Continue to take market share from, could you elaborate a bit on that?
I guess the competitive landscape is also intensifying with a lot of BRS also ramping up growth.
Yes. Well, first of all, it's a little bit difficult Say like where do we have this growth from. I would actually say that the market is growing in Tochmane Destination Categories. Well, at this moment, we can obviously talk about the garden products and garden category. I think the market is growing really well.
I could imagine that almost all garden products retailers Have been doing quite okay, but the market is really growing very well at the moment. So I cannot really say like Who's been losing? Obviously, there are some figures already available, but not all of them. So It would be a little bit difficult to say from where we have gained our sales growth. And I also would like to say that Togmane's combination of Destination categories is quite unique.
I don't really see this kind of destination categories selection with our competitors. So it's a lot of different competitors, and it's always about the category, which category we're talking about.
Thank you. That's a good answer. You mentioned at the CMD that you will Introduce the large store concept also. What's the timing on that? Can we expect something During this year, I guess, the Leppa Verta store, which you said is bigger, is that probably not the part of the large store concept.
But could you elaborate a bit on that Timing.
Well, we are in the middle of negotiations at the moment for the first sites, But it's not the decisions are not made. So unfortunately, I cannot say whether it will be this year or next year, But we're definitely preparing that. And you're absolutely right, Lepavirta is not part of the large scale Tochmani ideas. We're basically looking for sites in the bigger cities in Finland. Lepe Verda is not one of them.
And then perhaps a question more to Marco regarding the logistics costs. What's your view on that for the remainder of the year.
Yes. It's logistic costs are increasing. That's clear, as we have Said and but still remembering that, as we said in the financial statements, that it's If you speak about the foreign rights, it's 0.8%. But still, it's increasing and, of Cost effecting to our costs. And always, it's a question how it is effecting to all other players, how And that, of course, again, effect into how this price levels are Developing, but basically, of course, the price are increasing.
That's true. But still, it's on control, Vivas.
And I guess you will try to given the current situation, you will probably order, for example, Christmas products Rather earlier than later.
Yes. That's true. As early as possible. That's true.
Yes. Okay. That's all from me. Thank you.
Thank you.
We have a question from the line of Niklas Gugman from Handelsbanken. Please go ahead.
Yes. Hello. I only have 2 questions that Haven't been answered. The first one is, at the CMD, you Announce that you were evaluating opportunities for international cooperation and expansion. Do you have an update on where you are on that?
Well, basically, if I recall correct, it was mentioned that After the pandemic situation is on a healthier stage, Then we will start the activities when it comes to international expansion of cooperation. The situation in Finland actually is pretty good, but it's In Europe, it's still it's probably not as good as in Finland. So I don't have anything to add to what was mentioned during the CMD.
Yes. I get it. It was a bit early. Then the second question is on these The doubling, I think it was, of SKUs from 25,000 to 50,000. How do you see that ramping up over the coming years?
Like how many do you expect to have by the end of this year and then following year?
It's a lot about the categories like in which categories we're basically working. And in this for example, in this presentation, we said that With the online business, we have been concentrating on adding the assortment. And basically, There are already a couple of thousands of new SKUs in our online business. So we always start with the online. So we add the SKUs in online.
If they're performing well, we also start selling them the products. We're working at the same time with several different categories and the new products, new SKUs. So for example, this year it will be quite a lot of new basically Spring summer products in our online store, but not yet in our stores. So anyway, that's the logic. 1st to online and if they are performing well And also like we see a lot of potential selling these products also in our stores.
So then they will be ending up in our stores. But I think that during already during this year, It will be a rough estimation with from 5000 to 10000 new SKUs in online store.
Okay. Thank you very much.
There are no further questions registered. So I hand back to the speakers.
Okay. Well, so thank you very much. This was the Q1 of TOKMANI's year, yes, it's the smallest quarter and actually we're looking for a very Sunny and warm second quarter in Finland. And we'll come back to that in the end of July. Thank you very much.
Thank you.