Takko - looking ahead at Q2 results

All,

Now that June is behind us we are having a first look at Takko’s likely Q220 performance.

Takko have been comparing themselves to the category Konsum within the TW-Testclub Monolabel Medium segment.

With one more month to go, the data so far is inconclusive on how the quarter will end, but thus far LfL sales are on average +1.9%.

We note however, that May will have been the stronger margin month, with June likely to be almost entirely on sale - as well as July.

In the first week of July, Germany wide retail LfLs appear to have fallen back into negative territory.

Thus - without having the third month - we are expecting a slightly positive LfL performance from Takko, but at possibly slightly worse margins YoY and with elevated costs from the store roll-out. Not a disaster, but seemingly not good either.

Also, for the long-term we do note the positive LfL trend in Germany over the last two years (less negative). We don’t see this materially impacting our investment rationale on Takko, but overall 2019 looks easier than 2018.

Wolfgang