Roadshow London 6 March 2019

1 6.3.2019 Roadshow London Tokmanni today

#1 1 million 188 870 MEUR 3,600 General Customer visits Stores in Revenue 2018 Employees discount retailer per week in Finland +9,3% growth

2 6.3.2019 Tokmanni Roadshow London 2018 - year of a positive turnaround

• Strengthening Tokmanni strategy • Renewing management and organization • Improving customer confidence • All Tokmanni's employees involved in building customer confidence • Implementing a strong investment plan in store network, online business and store concept renewals • Increasing imports from Far East

3 6.3.2019 Tokmanni Roadshow London Tokmanni’s customer base, family households being slightly overemphasized

Whole population Tokmanni’s customers

43% 40%

17% 16% 17% 16% 13% 12%

7% 7% 5% 6%

Family households Adult households Pensioners Adult singles Young singles Young couples

4 6.3.2019 Tokmanni Roadshow London Note: Tokmanni’s customers = Customers that frequently visit Tokmanni Sources: TNS Mind 2018 Smart shoppers are overemphasized and price insensitives underemphasized in Tokmanni’s customers

Whole population Tokmanni’s customers Smart shoppers 57% Compares always prices and buys the biggest part on discount or on sale

Sale and discount addicts 45% Buys the biggest part on discount or on sales but doesn’t actively compare prices

Price insensitives 33% Does not often compare prices and sale 31% or discounts are not motivators

Price comparers Compares always prices but sale or 18% discounts are not motivators

9%

4% 3%

Smart shoppers Sale and discount addicts Price insensitives Price comparers

5 6.3.2019 Tokmanni Roadshow London Note: Tokmanni’s customers = Customers that frequently visit Tokmanni Sources: TNS Mind 2018 Improving Tokmanni’s customer confidence

• Unbeatable prices in destination categories and products

• Wider assortment in destination categories

• Renewing store concept in destination categories

• Stronger marketing

• Quarterly incentive program for the whole Tokmanni personnel

614 6.3.2019 Tokmanni Roadshow London Tokmanni’s like-for-like customer visits development

3.0%

0.2%

-0.1% -0.4% -1.0% -1.4% 2013 2014 2015 2016 2017 2018

7 6.3.2019 Tokmanni Roadshow London Revenue development

Revenue development Like-for-like revenue development

9.3%

5.6%

3.0% 3.0% 2.9% 2.7% 2.7%

0.0% -0.1% -0.3% -0.6% -1.3% 2013 20142015 2016 2017 2018

8 6.3.2019 Tokmanni Roadshow London Tokmanni has a unique market position

Tokmanni’s distinctive positioning… …has 3 competitive advantages

Better price image vs. hypermarkets Kärkkäinen Motonet Puuilo Gigantti Halpa-Halli Hong Kong Ikea Broader assortment width City- vs. specialty retailers market

Price image Price H&M Clas Ohlson

Discounters Hypermarkets Specialty Retail Nationwide coverage Discounter groceries Sokos Stockmann and better shopping experience Department stores vs. local discounters Expensive Value Narrow Assortment Wide

9 6.3.2019 Tokmanni Roadshow London Tokmanni’s and non-grocery market development

Sales development, % 12,0

10,9 11,0 8,0 7,8 8,0 4,5 4,0 4,4 1,9 0,0 1,1 1,4 1,6 -1,1 -1,9 -4,0 -2,9

-8,0 -7,4 -9,0 -12,0 -11,0 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18

Tokmanni Non-grocery market Source: FGTA

FGTA STATISTICS DOESN’T INCLUDE ONLINE RETAIL SALES

10 6.3.2019 Tokmanni Roadshow London Revenue development

+9.3% +2.7%

900 800 870,4 700 775,8 796,5 600 500 +4.4% +8.0% 400 300 200 238,1 248,5 268,4 100 0 Q4/16 Q4/17 Q4/18 2016 2017 2018

Like-for-like revenue development, %

Q4/16 Q4/17 Q4/18 2016 2017 2018

+0.8 -1.0 +4.7 -0.1 -1.3 +5.6

11 6.3.2019 Tokmanni Roadshow London Comparable gross profit

+0.1% +10.1% 350

300 295,0 250 267,9 268,1 200 +3.1% +7.2% 150

100 92,3 50 83,5 86,1

0 Q4/16 Q4/17 Q4/18 2016 2017 2018

Comparable gross margin, %

Q4/16 Q4/17 Q4/18 2016 2017 2018

35.1 34.6 34.4 34.5 33.7 33.9

126.3.2019 Tokmanni Roadshow London Development of Private Labels and direct imports

Brand category sales mix Import share of sales, %

Private label and other Import through Shanghai 32% (32%) Other direct import

10,3 9,6 9,3 Branded 11,1 products 68% (68%)

13,6 14,1 10,8 12,5

2015 2016 2017 2018 2015 2016 2017 2018

13 6.3.2019 Tokmanni Roadshow London Comparable operating expenses

+8.6% +4.1% 250 235,7 200 208,5 217,0

150 +2.6% +11.1% 100

50 57,2 58,7 65,2

0 Q4/16 Q4/17 Q4/18 2016 2017 2018

Comparable operating expenses, %

Q4/16 Q4/17 Q4/18 2016 2017 2018

24.0 23.6 24.3 26.9 27.2 27.1

146.3.2019 Tokmanni Roadshow London Comparable EBIT

-14.9% +19.7% 60,0

50,0 47,7 48,6 40,0 -2.6% +6.1% 40,6 30,0

20,0 23,6 25,0 24,4

10,0

0,0 Q4/16 Q4/17 Q4/18 2016 2017 2018

Comparable EBIT, %

Q4/16 Q4/17 Q4/18 2016 2017 2018

9.9 10.1 9.1 6.1 5.1 5.6

156.3.2019 Tokmanni Roadshow London Estimated impact of IFRS 16 standard

• IFRS 16 is adopted as of 1 January 2019 • As a result of the adoption of the standard, leases are transferred to the balance sheet as a liability and assets • Introduction of the standard is estimated to impact in balance sheet, result and key figures as follows:

• Balance sheet • Liabilities increase by approximately EUR 242 million in the balance sheet • The balance sheet total will increase from EUR 485 million to approximately EUR 718 million • Income statement • Comparable EBITDA will improve by approximately EUR 46 million annually • Comparable EBIT will improve by approximately EUR 4 million annually • Net profit for the year will decrease by approximately EUR 1 million • Key figures • Equity ratio 36% will fall to about 23% • Net liabilities / comparable EBITDA of 2.1 will increase to around 3.5

The amendment of the standard has no impact on the company's operational activities

16 6.3.2019 Tokmanni Roadshow London Main focus in 2019: IMPROVING PROFITABILITY

17 6.3.2019 Tokmanni Roadshow London Tokmanni competitive 1. Low prices 4. Lean and efficient advantages operation model

2. Inspiring and wide 3. Nationwide store network assortment combined with an online store

18 6.3.2019 Tokmanni Roadshow London Tokmanni business drivers

CUSTOMERS Customer NPS >60

PERSONNEL Best place to work in retail

REVENUE 1 billion €

PROFITABILITY 9% Comparable EBIT margin

SUSTAINABILITY Tokmanni values people and environment

19 6.3.2019 Tokmanni Roadshow London Tokmanni’s year 2019

• Reducing the share of fixed costs • Strengthening supply chain and reducing real estate rentals and maintenance costs • Enhancing operations of stores

• Increasing the gross margin • Increasing direct import and sales of own brands • Increasing batch sales • Improving product group performance in terms of loss and inventory management

• Continuing to strengthen customer confidence especially in Tokmanni's key product groups

• Increasing sales of e-commerce and improving profitability

20 6.3.2019 Tokmanni Roadshow London Long-term goal: comparable EBIT margin about 9%

About 9%

1.0% - 2.0%

1.0% - 1.5% 6.1%

EBIT-% 2018* Operating expenses Gross margin EBIT-% target improvement potential improvement potential

* IFRS 16 impact of 0.5% has been taken into account

21 6.3.2019 Tokmanni Roadshow London Tokmanni’s updated long-term financial targets

• 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 and good shopping experience.

Like-for-Like revenue growth Low single digit growth

Target of over 200 stores Stores New about 5 p.a. 12 000 sqm annually

Comparable EBIT margin Gradually increase to ~9% IFRS 16 Net Debt / Comparable EBITDA In long-term below 3.2x

Dividend policy About 70%

22 6.3.2019 Tokmanni Roadshow London Thank you!

tokmanni.fi

23 6.3.2019 Tokmanni Roadshow London