Danske predicts a dividend increase of over 5 percent for Puuilo:
3 Likes
I have a vague hunch stuck in the back of my mind that Puuilo doesnât actually use cash flow for expansion, but rather each new store takes on its âownâ debt for the store opening; I could be misremembering, of course. But if thatâs the case, an extra dividend could be on the way⊠
2 Likes
Of course it canât, but if extra cash accumulates in the reserves, it will likely be distributedâŠ
2 Likes
They have also mentioned that share buybacks are possible. I would consider it likely that the dividend will be increased moderately in the coming years, and then share buybacks will also be initiated.
4 Likes
This is likely true, as each location has its own sales targets.
However, I donât think it makes any sense for Puuilo to buy back its own shares at this stage. The company is valued very highly compared to, for example, Tokmanni, which has an even higher revenue. It would be like repeating Nokiaâs pathâbuying back its own shares at a high price as they did in the past, after which the share price dropped.
This is certainly a matter of perspective in many ways, but I encounter this comparison of Tokmanniâs and Puuiloâs valuations so often that the discussion is starting to baffle me a bit.
If you compare the companiesâ valuations using P/E, you can see that Puuiloâs multiples are higher than Tokmanniâs. But Tokmanni has accumulated a significant debt load over the years; therefore, I think itâs more meaningful to compare the companies using, for example, the EV/EBIT multiple. If you compare these based on Inderesâ 2025 forecasts, you can notice that the difference isnât very large:
Puuilo 16
Tokmanni 14.8
Itâs also interesting to note that although Tokmanniâs market value has taken a real beating, the enterprise value has developed less dramatically, specifically because of the aforementioned debt load.
However, the most important observation, in my opinion, is what has been raised on the forum before: that Tokmanniâs and Puuiloâs businesses are on completely different levels. At the moment, Tokmanniâs primary task should be to improve its return on capital, because right now itâs on the edge of whether growth creates value or destroys it. Puuilo, on the other hand, generates about twice as much return on capital for every euro invested. Given this profitable growth, I think the question should be: why is the difference in their valuation levels so narrow?
E: double the return on capital might not even be enough.
46 Likes
I was thinking about this about 3 years ago. At that time, both Tokmanni and Puuilo looked cheap. So, I bought both just to be safe.
Looking back now, it would have been sensible to only load up on the latter. I sold off my and my wifeâs Tokmanni shares at around âŹ12 and bought more Puuilo as the share price was rising.
If a similar situation arises in the future, I will aim to buy the higher-quality company, even if it looks more expensive.
11 Likes
Great analysis! In Puuiloâs valuation, the biggest question marks right now are likely the inevitably approaching growth limits in the domestic market and the wildcard of internationalization.
Can a stagnating Finland fit any more Puuilo stores at the end of the strategy period in 2030, when there might already be over 90 stores? Hardly many more, as competitors are also expanding all the time. If the concept is changed to, say, a smaller store size to continue growth, will profitability/return on capital be maintained?
How will they succeed in Sweden? Will the pilot stores achieve returns that allow for the value-creating investment of the strong cash flow churned out by the Finnish stores?
If internationalization flops, growth will stall, or it can be continued only at the expense of profitability or capital returns. Regardless, good business can still be done in Finland, but the stagnation of growth will certainly be reflected in the valuation, and there would likely be no upside from current levels.
If the expansion into Sweden succeeds and it doesnât go the way it typically does for Helsinki (hesuli) small-caps, the situation is completely different and there could well be upside in the valuation. Assessing this is somewhat impossible 
we just have to wait and see! Sweden would surely offer a growth runway for the next 10 years.
17 Likes
This is a good point. The problem is that return on capital metrics are backward-looking, and if, for example, the expansion into Sweden goes south, those previous ROIC figures can be tossed out the window. Many of us have unpleasant memories of that in the cases of Kamux and Talenom. In Finland, the growth path in my books is similar, i.e., around 90 stores. It could be more or a bit less, but in my opinion, it doesnât change the big picture anymore.
At this stage, when the Finnish market is full of âPuuilo,â I think the question arises as to which is the more meaningful next use of capital: channeling capital into expanding into Sweden, or deciding to buy back shares (or distribute the profits as dividends). From the shareholderâs perspective, the option with the higher expected return is the better solution. In my opinion, increasing revenue adds no value if it is done unprofitably (e.g., Tokmanni). Therefore, expansion is not necessarily a good solution. But, I want to believe at least that Puuilo could expand successfully into Sweden, and I trust that the management will make the right decision; they hopefully have the best insight into the matter.
A pilot project also sounds to me like a safer way to test the waters without committing to too large investments. However, I think itâs likely that initially, in the investment phase, profitability / return on investment will be weaker compared to Finland, as I would assume that in the expansion, they wonât be able to benefit from similar synergies as when opening a new store in Finland. This will certainly also weaken the companyâs profitability.
So far, however, Puuilo has succeeded excellently, and I want to see how management navigates the expansion. But as you said, no one at this stage can say whether it will succeed or not; management can do everything right, but the following week a new competitor opens next door, or anything else can happen that is beyond the companyâs control. In my opinion, itâs more important to follow how they go about expanding, e.g., whether they buy properties or rent, whether they make acquisitions, etc⊠That is, how much capital is tied up in this expansion and how it affects the risk level.
I made the same mistake, but when I sold the Tokmanni shares, I didnât dare to buy more Puuilo because the price felt expensive⊠Puuilo would have been around âŹ8 then. Sigh 
16 Likes
Yep, a large and risky acquisition in a new market would be significantly riskier, for example, Tokmanniâs Dollarstore specifically Piloting does sound good in the sense that a rationally operating management should have an exit strategy to withdraw from Sweden if the concept simply doesnât gain traction there and the pilot stores donât generate sufficient returns to justify continuing investments. Then they could, for instance, distribute the money to shareholders, which is admittedly already being done heavily, as investment needs remain moderate despite the growth.
After all, Talenom, for instance, didnât seem to talk about piloting when heading to Sweden; instead, they went in with big plans, investing heavily with leverage into both software and acquisitions. The âpot of goldâ was set as the industry-leading profitability achieved in the domestic market, which at least hasnât been reached in Sweden yet (if it ever will be, as that story crumbles) At this stage, it might be difficult to withdraw until itâs absolutely necessaryâsunk cost fallacy at its finest. Itâs a bit of a similar situation with Kamux.
In my opinion, an investor can come out of Puuilo relatively unscathed at the current valuation, even if Sweden flops and they withdraw quickly, as long as the business in the domestic market keeps rolling as it is. I did, however, feel the need to take some profits at this point regardless.
18 Likes
Yesterday, Friday, a large block trade was made in Puuilo shares.
7 Likes
Grafton has released its preliminary figures for last year. Grafton has decided to combine IKHâs figures with the Dutch business to better hide the weakness of the Finnish business. The problems in Finland are attributed to unusually mild winter weather and the ongoing economic weakness.
Average daily like-for-like revenue in Northern Europe declined by 0.5 per cent for the year and was down 2.9 per cent in the Period. Modest growth in the Netherlands, driven by strong project related sales, was more than offset by declines in Finland which reflected unusually mild winter weather and ongoing weakness in the economy.
8 Likes
Sale: Markku Tuomaala, Volume: 162,491 Average price: 12.68693 EUR
To put it into perspective, would that be about 4% of the holding based on the situation at the turn of the year (holding 31.12.2025: 3,952,069 shares).
10 Likes
Someone sold more Puuilo.
âPuuilo: Block trade at 11:00. 541,933 shares were sold in the trade at 12.30 euros each, total value 6,665,776 euros.â
6 Likes
I would be interested to know the counterparty of the trade.
Could the seller be âsomeâ SEB? Pure guess. In December, they sold over 975,000 shares and about 55% of the share capital still remained.
1 Like
@Elias_L has posted an interesting tweet thread about Puuilo. 
https://x.com/EliasLuhtaniemi/status/2013640590450434168
Those without X can read the thread here
https://twitter-thread.com/t/2013640590450434168
22 Likes