2009-10-22 08:00:00 CEST
2009-10-22 08:04:40 CEST
REGULATED INFORMATION
Kesko Oyj - Interim report (Q1 and Q3)
Interim financial report for the period 1 Jan.-30 Sep. 2009
KESKO CORPORATION STOCK EXCHANGE RELEASE 22.10.2009 AT 09.00 1(27)
In January-September 2009, the Group's net sales from continuing
operations were €6,294 million, which is 13.3% down on the
corresponding period of the previous year (€7,258 million). In
January-September 2009, the operating profit excluding non-recurring
items was €87.4 million (€189.7 million). The profit before tax was
€100.3 million (€280.9 million). The whole Group's profit for
January-September was €53.9 million (€223.7 million). The whole
Group's earnings per share were €0.55 (€2.28).
Key performance indicators
Continuing operations 1-9/2009 1-9/2008 7-9/2009 7-9/2008
Net sales, € million 6,294 7,258 2,133 2,435
Operating profit, € million 114 279 48 44
Operating profit excluding
non-recurring items, € million 87 190 48 72
Profit before tax, € million 100 281 44 48
Earnings/share, €, diluted 0.55 1.86 0.24 0.17
Investments, € million 156.5 233.2 49.2 89.9
Whole Group
Earnings/share, diluted, € 0.55 2.28 0.24 0.16
Earnings/share excl.
non-recurring items, basic, € 0.35 1.29 0.23 0.48
Cash flow from operating
activities,
€ million 266 116 119 27
Cash flow from investing
activities, € million -75 50 -46 -29
Return on equity, % 4.0 15.8 5.2 4.2
Return on capital employed, % 7.2 20.1 9.4 8.2
Whole Group 30.9.2009 30.9.2008
Equity ratio, % 52.3 50.2
Equity/share, € 19.60 20.29
JANUARY-SEPTEMBER 2009
CONTINUING OPERATIONS
Net sales and profit
The Group's net sales in January-September 2009 were €6,294 million,
which is 13.3% down on the corresponding period of the previous year
(€7,258 million). Net sales decreased by 8.6% in Finland and by 30.0%
abroad. Exports and foreign operations accounted for 17.9% (22.1%) of
the net sales. The deterioration of the general economic situation
has especially impacted the sales performance of the Group's building
and home improvement trade and the car and machinery trade. The
growth rate of the grocery trade remained steady during the reporting
period.
In January-September, the K-Group's (i.e. Kesko's and the chain
stores') retail and B-to-B sales (incl. VAT) totalled €9,389 million,
a decrease of 10.3% on the corresponding period of the previous year.
The Group's profit before tax for January-September was €100.3
million (€280.9 million). The operating profit was €114.3 million
(€278.8 million). The operating profit excluding non-recurring items
was €87.4 million (€189.7 million), representing 1.4% (2.6%) of the
net sales. The non-recurring items include €28.8 million of gains on
property transactions, and €1.9 million of property impairments. The
non-recurring items of the comparative period totalled €89.1 million.
The smaller year-on-year operating profit excluding non-recurring
items is due to a decrease in the demand in the building and home
improvement trade, the car and machinery trade, and the home and
speciality goods trade. Due to cost adjustments, the Group's fixed
costs decreased by some €38 million compared with the previous year,
regardless of store site openings.
The Group's earnings per share from continuing operations were €0.55
(€1.86). The Group's equity per share was €19.60 (€20.29).
Investments
In January-September, the Group's investments totalled €156.5 million
(€233.2 million), which is 2.5% (3.2%) of the net sales. Investments
in store sites were €131.2 million (€194.8 million) and other
investments €25.3 million (€38.4 million). Investments in foreign
operations represented 34.3% of total investments (25.0%).
Finance
In January-September, the cash flow from operating activities
increased by €149 million to €265.8 million (€116.4 million). The
increase was especially due to the reduction of inventories. The cash
used in investing activities was €-75.5 million (€49.9 million). The
cash flow from investing activities included €94.3 million (€277.8
million) of proceeds from the sale of fixed assets.
The Group's liquidity and solvency remained strong throughout the
reporting period. At the end of the period, liquid assets totalled
€536 million (€536 million). At the end of the reporting period, the
interest-bearing liabilities were €484 million (€509 million) and the
interest-bearing net debt was €-52 million (€-27 million). The equity
ratio was 52.3% (50.2%) at the end of the period.
In January-September, the Group's net financial expenses were €14.2
million (net financial income €0.2 million). The expenses were
increased by €14.1 million for hedging Baltic and Russian currency
exposures due to an increased interest rate spread between the
currencies. The interest income from liquid assets fell as the market
interest rate level declined.
Taxes
In January-September, the Group's taxes were €40.6 million (€84.0
million). The effective tax rate was 40.5% (29.8%), affected by the
loss-making performances of foreign companies. Income tax has been
calculated on the profit for the reporting period as a proportion of
the estimated tax for the whole period.
Personnel
In January-September, the average number of personnel in the Kesko
Group was 19,544 (21,464) converted into full-time employees. In
Finland, the average decrease was 501 people, while outside Finland
it was 1,418.
At the end of September 2009, the total number of personnel was
22,086 (24,870), of whom 12,477 (13,253) worked in Finland and 9,609
(11,617) outside Finland. Compared with the end of September 2008,
there was a decrease of 776 employees in Finland and 2,008 outside
Finland.
Due to the decline in consumer demand, measures aimed at staff number
and cost adjustments were continued in various business activities of
the Group. During the reporting period, the Group's staff cost
decreased by €35 million, or by some 8%, compared with the previous
year, regardless of store site openings.
Seasonal nature of operations
The Group's business activities are affected by seasonal
fluctuations. The net sales and operating profits of the reportable
segments are not earned evenly throughout the year. Instead they vary
by quarter depending on the characteristics of each segment.
Segment performance in January-September
Food trade
The food trade comprises the food business based on the K-retailer
business model and Kespro Ltd's grocery wholesaling in Finland.
In the food trade, the net sales in January-September were €2,827
million (€2,725 million), up 3.7%. The retail sales of K-food stores
in January-September totalled €3,649 million (incl. VAT),
representing a growth of 5.7%. The K-food stores' grocery sales
increased by 6.3%. During the first part of the year, especially the
Pirkka products' sales performance was good. The growth rate of the
total grocery trade market in Finland in January-September is
estimated at some 5% up on the previous year. In January-September,
prices increased at an average monthly rate of 5.1% compared with the
previous year (Statistics Finland).
In January-September, the operating profit excluding non-recurring
items of the food trade was €99.4 million (3.5% of the net sales),
which is €8.5 million, or 0.2 percentage points, higher than in the
previous year. The operating profit was €111.9 million (€158.1
million). The non-recurring gains on property sales were €13.3
million in January-September. The comparative year's operating profit
was increased by €67.3 million of non-recurring gains on property
sale and lease arrangements.
In January-September, investments in the food trade were €59.5
million (€107.9 million), of which investments in store sites were
€49.9 million (€94.1 million).
Home and speciality goods trade
The home and speciality goods trade comprises Anttila, K-citymarket's
home and speciality goods trade, Intersport Finland, Indoor Group,
Musta Pörssi and Kenkäkesko.
In the home and speciality goods trade, the net sales in
January-September were €1,058 million (€1,115 million), down 5.2%.
Owing to the deteriorated economic situation and a rise of the
unemployment rate, consumer demand in the home and speciality goods
trade declined especially for home electronics and interior
decoration products.
The operating loss of the home and speciality goods trade excluding
non-recurring items in January-September was €10.2 million (-1.0% of
the net sales), a €13.7 million year-on-year increase due to the fall
in sales. In January-September, the operating profit was €0.1 million
(€53.0 million). Non-recurring gains on property sales and impairment
charges were €10.3 million in January-September and €49.5 million in
the comparative period.
Investments in the home and speciality goods trade in
January-September were €22.8 million (€39.9 million).
Anttila's net sales in January-September were €334 million (€375
million), down 10.9%. Especially the sales of home electronics and
interior decoration products decreased. The sales of the Anttila
department stores were €194 million, down 7.5%. The sales of the
Kodin Ykkönen department stores for home goods and interior
decoration were €86 million, down 15.9%. NetAnttila's sales were €56
million, a decrease of 15.5% mainly due to the weakened economic
conditions in Estonia and Latvia.
The net sales of K-citymarket's home and speciality goods trade in
January-September were €397 million (€379 million), up 4.9%. The net
sales performance was affected by the store site network expansion
and intensified marketing actions.
Intersport Finland's net sales in January-September were €118 million
(€118 million), matching the level of the previous year. Indoor's net
sales in January-September were €117 million (€136 million), down
14.0%. The performance was partly attributable to the discontinuation
of Indoor's business activities in Sweden during the first quarter of
2008, and the weakened economic conditions in Estonia and Latvia.
Musta Pörssi Ltd's net sales in January-September were €72 million
(€88 million), down 17.7%. Kenkäkesko Ltd's net sales in
January-September were €20 million (€22 million), down 8.0%.
Building and home improvement trade
The building and home improvement trade comprises Rautakesko and the
agricultural supplies trade in Finland.
In the building and home improvement trade, the net sales in
January-September were €1,787 million (€2,360 million), down 24.3%.
In January-September, the net sales in Finland were €818 million, a
decrease of 22.6%. The building and home improvement trade
contributed €585 million and the agricultural supplies trade €234
million to the net sales in Finland. The net sales of the building
and home improvement trade in Finland were down 18.1%, especially due
to a fall in the sales to professional customers. The net sales of
the agricultural supplies trade decreased by 32.1%. The net sales
from foreign operations in the building and home improvement trade
were €969 million (€1,303 million), a decrease of 25.7%. In addition
to a decline in demand, the sales performance of foreign operations
was affected by the weakening of the Swedish krona, the Norwegian
krone and the Russian ruble. The net sales from foreign operations
dropped by 18.0% in terms of the local currencies. Foreign operations
contributed 54.2% to the net sales of the building and home
improvement trade.
In Sweden, the net sales of K-rauta AB decreased by 3.3% to €144
million in January-September. In terms of the local currency, K-rauta
AB's net sales grew by 10.1%. In Norway, Byggmakker's net sales
decreased by 22.9% to €357 million. In terms of the local currency,
Byggmakker's net sales dropped by 14.7%. In Estonia, Rautakesko's net
sales were down 22.0% to €50 million. In Latvia, Rautakesko's net
sales decreased by 33.3% to €38 million. In Lithuania, Senukai's net
sales fell by 41,2% to €203 million. In Russia, the net sales of the
building and home improvement trade decreased by 14.7% to €127
million. In terms of the local currency, the net sales increased by
3.4%. The net sales of the Belarusian OMA were down by 23.0% to €40
million. In terms of the local currency, OMA's net sales decreased by
9.4%.
In January-September, the operating profit excluding non-recurring
items of the building and home improvement trade was €14.0 million
(0.8% of the net sales), which was €49.8 million, or 1.9 percentage
points, lower than in the corresponding period of the previous year.
The profit performance was affected by a substantial contraction in
the Nordic and Baltic construction markets. The Russian construction
market also weakened especially during the latter part of the
reporting period. In Finland, the building and home improvement trade
market declined in January-September by some 18%, in Sweden by some
5%, in Norway by some 12%, and in the Baltic countries by some 30-40%
(Rautakesko's estimate). The staff cost was €32 million, or 22%, down
on the comparative period. The operating profit of the building and
home improvement trade was €18.0 million (€25.9 million) in
January-September. The operating profit includes a €4.0 million
non-recurring gain on a property sale. The comparative period's
operating profit includes a non-recurring €47.0 million impairment
charge on Byggmakker Norge's intangible assets, and €9.2 million of
non-recurring gains on property sales.
In January-September, investments in the building and home
improvement trade were €65.3 million (€77.8 million), of which 82.0%
(74.2%) abroad.
The retail sales of the K-rauta and Rautia chains in
January-September decreased by 7.1% to €892 million (incl. VAT) in
Finland. The sales of Rautakesko B-to-B Service decreased by 33.6%.
The retail sales of the K-maatalous chain were €352 million (incl.
VAT), down 26.1%.
Car and machinery trade
The car and machinery trade comprises VV-Auto and Konekesko.
Konekesko includes, in addition to the machinery trade, the tractor
and combine harvester trade in Finland and the agricultural and
machinery trade companies in the Baltic countries.
In January-September, the net sales of the car and machinery trade
were €743 million (€1,185 million), down 37.3%.
VV-Auto's net sales in January-September were €473 million (€723
million), a decrease of 34.6%. The net sales performance was affected
by a decline in consumer demand in the car trade, coupled with the
car tax change effective at the beginning of April, causing the car
tax levied on cars after 1 April 2009 to be excluded from the net
sales. Taking the impact of the tax change into account, the net
sales fell by 28.0%. In January-September, the combined market share
of passenger cars and vans imported by VV-Auto rose to 18.4% (16.9%).
Konekesko's net sales in January-September were €270 million (€463
million), down 41.6% on the previous year as a result of the weakened
machinery market and the discontinuation of the Baltic grain and
agricultural supplies trade. The net sales in Finland were €150
million, a decrease of 32.4%. The net sales from Konekesko's foreign
operations were €121 million, down 50.0%.
In January-September, the operating result excluding non-recurring
items of the car and machinery trade showed a loss of €2.4 million
(-0.3% of the net sales). It was €49.9 million lower than in the
corresponding period of the previous year (operating profit excluding
non-recurring items €47.5 million). The profit performance was
especially affected by the decline of Konekesko's profitability. As a
result of the discontinuation of the Baltic grain and agricultural
supplies trade, impairment charges and expense provisions in a total
amount of €9 million were recognised for the first quarter.
Investments in the car and machinery trade were €8.5 million (€10.2
million) in January-September.
JULY-SEPTEMBER 2009
CONTINUING OPERATIONS
Net sales and profit
The Group's net sales in July-September 2009 were €2,133 million,
which is 12.4% down on the corresponding period of the previous year
(€2,435 million). Net sales decreased by 7.6% in Finland and by 28.3%
abroad. Exports and foreign operations accounted for 18.8% (23.0%) of
the net sales. The net sales of the food trade continued a steady
growth. During the reporting period, the net sales of the home and
speciality goods trade were somewhat lower than in the comparative
period. Because of the weak market situation, the sales of both the
building and home improvement trade and the car and machinery trade
continued to fall markedly compared with the comparative year.
In July-September, the K-Group's (i.e. Kesko's and the chain stores')
retail and B-to-B sales (incl. VAT) totalled €3,252 million, a
decrease of 10.1% on the corresponding period of the previous year.
The Group's profit before tax for July-September was €43.8 million
(€48.0 million). The operating profit was €48.3 million (€43.8
million). The operating profit excluding non-recurring items was
€47.5 million (€72.0 million), representing 2.2% (3.0%) of the net
sales. The non-recurring items included €0.8 million of gains on
property sales. The non-recurring items of the comparative period
include gains on property sales in the amount of €18.6 million, and a
€47.0 million impairment charge on the Group goodwill and trademark
of Byggmakker Norge, a Rautakesko subsidiary.
The smaller year-on-year operating profit excluding non-recurring
items is due to a weakened demand in the building and home
improvement trade and the car and machinery trade. The adjustments of
costs and inventories had a significantly positive impact on the
Group's profitability and cash flow for the third quarter.
The Group's earnings per share from continuing operations were €0.24
(€0.17). The Group's equity per share was €19.60 (€20.29).
Investments
In July-September, the Group's investments totalled €49.2 million
(€89.9 million), which is 2.3% (3.7%) of the net sales. Investments
in store sites were €42.8 million (€75.4 million) and other
investments €6.4 million (€14.5 million). Investments in foreign
operations represented 35.4% of total investments (23.3%).
Finance
In July-September, the cash flow from operating activities was €119.4
million (€27.0 million) and the cash flow from investing activities
was €-45.9 million (€-28.6 million). The cash flow from investing
activities included €4.7 million (€60.4 million) of proceeds from the
sale of fixed assets.
In July-September, the Group's net financial expenses were €4.7
million (net financial income €1.8 million). The costs were increased
by €3.6 million for hedging especially Latvian and Russian currency
exposures due to an increased interest rate spread between the
currencies.
Taxes
In July-September, the Group's taxes were €18.3 million (€26.0
million). The effective tax rate was 41.8% (53.6%), affected by the
loss-making performances of foreign companies.
Personnel
In July-September, the average number of personnel in the Kesko Group
was 19,280 (21,472) converted into full-time employees. In Finland,
the average decrease was 561 people, while outside Finland it was
1,631.
Segment performance in July-September
Food trade
In the food trade, the net sales in July-September were €966 million
(€933 million), up 3.6%. The retail sales of K-food stores in
July-September totalled €1,243 million (incl. VAT), representing a
growth of 4.7%. Especially the K-citymarket chain and Pirkka products
recorded good sales growth. The K-food stores' grocery salesincreased by 5.5%. At the end of September, the total number of
K-food stores was 1,026.
In July-September, the operating profit excluding non-recurring items
of the food trade was €35.5 million (3.7% of the net sales), up €1.0
million year-on-year, and at proportionately the same level as in the
previous year. The operating profit of the food trade was €35.8
million (€45.3 million). The operating profit of the comparative
period was increased by €10.9 million of non-recurring gains on
property sales.
In July-September, investments in the food trade were €19.3 million
(€44.1 million), of which investments in store sites were €15.7
million (€38.1 million).
Kesko Food continued to develop the K-food store network. In August,
a K-supermarket opened in Järvenpää. In addition, several renovations
were implemented in K-supermarkets and K-markets.
In October, a K-citymarket opened in Kirkkonummi, an extended
K-citymarket in Mikkeli, and K-supermarkets opened in Eurajoki and
Porvoo. The most significant store sites being built are the
K-citymarkets in Linnainmaa, Tampere, and in Koivukylä, Vantaa, as
well as the new K-supermarkets in Kotka, in Koivuhaka, Vantaa, and in
Kangasala. K-citymarket Keljo in Jyväskylä is undergoing a shopping
centre extension.
Home and speciality goods trade
In the home and speciality goods trade, the net sales in
July-September were €381 million (€396 million), down 4.0%.
The operating profit of the home and speciality goods trade excluding
non-recurring items in July-September was €6.5 million (1.7% of the
net sales). It matched the level of the previous year (€6.8 million
and 1.7% of the net sales), owing to cost savings and gross margin
improvement. The operating profit in July-September was €7.0 million
(€9.2 million). Non-recurring gains on property sales and impairments
were €0.5 million in July-September (€2.4 million).
Investments in the home and speciality goods trade in July-September
were €5.9 million (€16.2 million).
Anttila's net sales in July-September were €117 million (€132
million), down 11.2%. The biggest decrease was registered in the
sales of entertainment and fashion products. The sales of the Anttila
department stores were €66 million, down 10.1%. The sales of the
Kodin Ykkönen department stores for home goods and interior
decoration were €31 million, down 11.4%. NetAnttila's sales were €20
million, a decrease of 14.6%. The decline was sharp in Estonia and
Latvia. In April, a department store opened in Skanssi, Turku, and a
new Kodin Ykkönen will open in Lielahti, Tampere, in October.
The net sales of K-citymarket's home and speciality goods trade in
July-September were €140 million (€135 million), up 4.3%. The net
sales performance was affected by store site network expansions and
an increased number of customers. In April, a K-citymarket opened in
Skanssi, Turku and in Ylöjärvi. In October, a K-citymarket opened in
Kirkkonummi and an extended K-citymarket in Mikkeli. By the year end,
K-citymarkets will open in Koivukylä, Vantaa, and in Linnainmaa,
Tampere.
Intersport Finland's net sales in July-September were €45 million
(€44 million), up 1.8%. Indoor's net sales in July-September were €44
million (€48 million), down 9.2%. Musta Pörssi Ltd's net sales in
July-September were €27 million (€29 million), down 8.4%. Kenkäkesko
Ltd's net sales in July-September were €9 million (€10 million), down
8.3%.
Building and home improvement trade
In the building and home improvement trade, the net sales in
July-September were €614 million (€795 million), down 22.7%.
In July-September, the net sales in Finland were €265 million, a
decrease of 21.1%. The building and home improvement trade
contributed €199 million and the agricultural supplies trade €65
million to the net sales in Finland. The net sales of the building
and home improvement trade in Finland were down 11.2% and the net
sales of the agricultural supplies trade by 41.4%.
The net sales from foreign operations in the building and home
improvement trade were €350 million (€459 million), a decrease of
23.9%. In addition to a decline in demand, the sales performance of
foreign operations was affected by the weakening of the Swedish
krona, the Norwegian krone and the Russian ruble. The net sales from
foreign operations dropped by 17.1% in terms of the local currencies.
Foreign operations contributed 56.9% to the net sales of the building
and home improvement trade.
In Sweden, the net sales of K-rauta AB increased by 7.7% to €55
million in July-September. In terms of the local currency, K-rauta
AB's net sales grew by 19.1%. In Norway, Byggmakker's net sales
decreased by 16.6% to €129 million. In terms of the local currency,
Byggmakker's net sales dropped by 9.5%. In Estonia, Rautakesko's net
sales were down 20.0% to €19 million. In Latvia, Rautakesko's net
sales decreased by 28.2% to €14 million. In Lithuania, Senukai's net
sales fell by 45,2% to €69 million. In Russia, the net sales of the
building and home improvement trade decreased by 22.1% to €46
million. In terms of the local currency, the net sales decreased by
4.5%. The net sales of the Belarusian OMA were down by 31.9% to €15
million. In terms of the local currency, OMA's net sales decreased by
14.8%.
In July-September, the operating profit excluding non-recurring items
of the building and home improvement trade was €8.4 million (1.4% of
the net sales), which was €17.1 million, or 1.8 percentage points,
lower than in the corresponding period of the previous year. The
profit performance was affected by a substantial contraction of the
construction markets. The operating profit of the building and home
improvement trade was €8.5 million (operating loss €16.1 million) in
July-September. The adjustments of costs and inventories had a
significantly positive impact on the profitability and cash flow of
the building and home improvement trade. The comparative period's
operating profit includes a €47.0 million impairment charge on
Byggmakker Norge's intangible assets, and a €5.4 million
non-recurring gain on a property sale.
In July-September, investments in the building and home improvement
trade were €19.0 million (€25.7 million), of which 91.4% (80.9%)
abroad.
The retail sales of the K-rauta and Rautia chains in July-September
decreased by 2.2% to €354 million (incl. VAT) in Finland. The sales
of Rautakesko B-to-B Service were down 30.1%. The retail sales of the
K-maatalous chain were €108 million (incl. VAT), down 33.2%.
Car and machinery trade
In July-September, the net sales of the car and machinery trade were
€213 million (€357 million), down 40.2%.
VV-Auto's net sales in July-September were €128 million (€217
million), a decrease of 41.1%. The net sales performance was affected
by a decline in consumer demand in the car trade, coupled with the
car tax change effective at the beginning of April, causing the car
tax levied on cars after 1 April 2009 to be excluded from the net
sales figures. The comparable net sales, including the tax change
impact, fell by 29.5% in July-September. The combined market share of
passenger cars and vans imported by VV-Auto grew to 18.7% (17.9%) in
July-September.
Konekesko's net sales in July-September were €86 million (€140
million), down 38.9% on the corresponding period of the previous
year. The net sales decrease is due to the weakened machinery market
and the discontinuation of the Baltic grain and agricultural supplies
trade. The net sales in Finland were €45 million, a decrease of
23.2%. The net sales from Konekesko's foreign operations were €41
million, down 50.1%.
In July-September, the operating profit excluding non-recurring items
of the car and machinery trade was €1.7 million (0.8% of the net
sales), which was €8.7 million, or 2.1 percentage points, lower than
in the corresponding period of the previous year. The profit
performance was affected by the substantial sales decrease in the car
and machinery trade. In addition, Konekesko's profitability was
negatively impacted by the weakened gross margin level of the Baltic
agricultural trade.
Changes in the Group composition
Effective 1 January 2009, the Kesko Group's segments are the food
trade, the home and speciality goods trade, the building and home
improvement trade, and the car and machinery trade (stock exchange
release on 12 December 2008).
Resolutions of the Annual General Meeting 2009 and decisions of the
Board's organisational meeting
Kesko Corporation's Annual General Meeting held on 30 March 2009
adopted the financial statements for 2008 and discharged the Board of
Directors' members and the Managing Director from liability. The
Annual General Meeting also resolved to distribute a dividend of
€1.00 per share, or a total amount of €97,851,050, as proposed by the
Board. The dividend pay date was 9 April 2009. The Annual General
Meeting elected PricewaterhouseCoopers Oy as the company's auditor,
with APA Johan Kronberg as the auditor with principal responsibility,
and approved the Board's proposal to amend the article of the
Articles of Association providing for the convocation period so that
the notice of the General Meeting shall be given at the latest 21
days before the General Meeting, and the Board's proposal to
authorise the Board to decide on the issuance of a maximum of
20,000,000 new B shares. The share issue authorisation is valid until
30 March 2012.
The Annual General Meeting resolved to leave the number of members of
the Board of Directors unchanged at seven, and elected Heikki
Takamäki, Seppo Paatelainen, Maarit Näkyvä, Ilpo Kokkila, Esa
Kiiskinen (new member), Mikko Kosonen (new member) and Rauno Törrönen
(new member) as members of the company's Board of Directors for a
three-year term defined in the Articles of Association, which will
expire at the close of the 2012 Annual General Meeting.
The resolutions of the Annual General Meeting were announced in more
detail in a stock exchange release on 30 March 2009.
The organisational meeting of Kesko Corporation's Board of Directors,
held after the Annual General Meeting on 30 March 2009, elected
Heikki Takamäki as its Chair and Seppo Paatelainen as its Deputy
Chair. Maarit Näkyvä (Ch.), Seppo Paatelainen and Mikko Kosonen were
appointed to the Board of Directors' Audit Committee. Heikki Takamäki
(Ch.), Seppo Paatelainen and Ilpo Kokkila were appointed to the Board
of Directors' Remuneration Committee. The terms of the Committees
expire at the close of the Annual General Meeting. The decisions of
the Board's organisational meeting were announced in a stock exchange
release on 30 March 2009.
Shares, securities market and Board authorisations
At the end of the reporting period, Kesko Corporation's share capital
totalled €196,426,496. Of all shares 31,737,007, or 32.3%, were A
shares and 66,476,241, or 67.7%, were B shares. The aggregate number
of shares was 98,213,248. Each A share entitles to ten (10) votes and
each B share to one (1) vote. During the reporting period, the share
capital was increased three times corresponding to share
subscriptions with the stock options of the year 2003 option scheme.
The increases were made on 11 February 2009 (€52,392), 5 May 2009
(€51,250) and 5 June 2009 (€673,146), and announced in stock exchange
notifications on the same days. The subscribed shares were included
on the main list of the Helsinki stock exchange for public trading
with the old B shares on 12 February 2009, 6 May 2009 and 8 June
2009.
The price of a Kesko A share quoted on NASDAQ OMX Helsinki (the
Helsinki stock exchange) was €22.00 at the end of 2008, and €22.80 at
the end of the reporting period in September, representing an
increase of 3.6%. The price of a B share was €17.80 at the end of
2008, and €22.90 at the end of the reporting period, representing an
increase of 28.7%. During the reporting period, the highest A share
quotation was €24.90 and the lowest was €18.73. For B shares, they
were €23.28 and €14.99 respectively. During January-September, the
Helsinki stock exchange All Share index (OMX Helsinki) rose by 17.9%,
the weighted OMX Helsinki CAP index by 30.7%, while the Consumer
Staples Index was up 35.5% during the same period.
At the end of the reporting period, the market capitalisation of A
shares was €724 million, while that of B shares was €1,522 million.
Their combined market capitalisation was €2,246 million, an increase
of €371 million compared with the end of 2008. During the first part
of 2009, 820,331 A shares were traded on the Helsinki stock exchange
at a total value of €17.9 million, while 65.4 million B shares were
traded at a total value of €1,207 million.
The 2003F stock options of the year 2003 option scheme were available
for trading and a total of some 108,000 options were traded at a
total value of €712,000 during the reporting period.
The Board of Directors was authorised by the Annual General Meeting
of 30 March 2009 to issue a maximum of 20,000,000 new B shares. The
authorisation has not been used. In addition to the 2003 stock option
scheme, the company operates the 2007 scheme of stock options 2007A,
2007B and 2007C. Their exercise period has not started and, for the
present, they have not been listed. Further information on the
Board's authorisations is available at www.kesko.fi.
At the end of the reporting period, the number of shareholders was
39,571. In 2008 it increased by 9,155 shareholders and has increased
further by 1,491 shareholders in 2009. At the end of September 2009,
foreign ownership of all shares was 19%, and foreign ownership of B
shares was 28%.
Flagging notifications
Kesko Corporation did not receive flagging notifications during the
reporting period.
Main events during the reporting period
Kesko Corporation's Board of Directors approved the Group's revised
financial objectives. The objective for return on investment has been
replaced by the objective for return on capital employed. The new
objective for return on equity has been set at 12% (previously 14%)
and the objective for return on capital employed has been set at 14%.
The objective range of the equity ratio has been broadened to 40-50%
(previously 40-45%). The Board of Directors also revised Kesko's
dividend policy, published on 6 April 2005. In accordance with the
new dividend policy, Kesko Corporation distributes at least 50% of
its earnings per share excluding non-recurring items as dividends,
taking however the company's financial position and operating
strategy into account (stock exchange release on 5 February 2009).
On 31 March 2009, Kesko sold four store properties to the Kesko
Pension Fund. The debt-free selling price was about €50 million. The
Kesko Group's gain on the sale was €19.7 million, which was treated
as a non-recurring item in the operating profit for the first quarter
(stock exchange release on 31 March 2009).
The Annual General Meeting was held on 30 March 2009 (stock exchange
releases on 30 March 2009).
The Supreme Administrative Court decided not to grant leave to appeal
against the Helsinki Administrative Court's prior decision not to
accept the €22.5 million write-down made by Rautakesko Ltd on the
shares of its Swedish subsidiary, K-rauta AB, in its taxation for the
year 2001. The Supreme Administrative Court also decided not to grant
leave to appeal against the Helsinki Administrative Court's prior
decision to dismiss Kesko Corporation's appeal concerning the
deductibility of expenses added to its taxable income for the years
1997-1999 (stock exchange release on 11 June 2009).
Risk management
The Kesko Group has established a risk management process in which
the divisions regularly assess the risks and their management and
report on them to the Group's management. Kesko's risk management and
risks relating to the business activities have been described in more
detail in Kesko's 2008 Annual Report and financial statements, and
the corporate governance section on Kesko's website.
The main risks for Kesko's business activities are related to the
general economic development in Kesko's operating area and its impact
on the Kesko Group's sales and profit performance. Country-specific
risks are emphasized especially in the Baltic countries due to
consumers' weakened purchasing power, increased unemployment rates
and devaluation risks. Also, the unemployment trends in the Nordic
countries and Russia, and consequently the consumer demand for
especially building materials, cars and machinery continue to involve
risks.
The increased possibility of financial difficulties for customers,
principals and suppliers also increases the risk of credit losses and
risks relating to the availability of merchandise. The prevailing
market situation emphasizes cost adaptation, efficient management of
inventories, accounts receivable and investment assets, as well as
risk management responses to the prevention of malpractice.
Risks and uncertainties relating to profit performance are described
in the Group's future outlook.
Future outlook
Estimates of the future outlook for the Kesko Group's net sales and
operating profit excluding non-recurring items are given for the 12
months following the reporting period (10/2009-9/2010) in comparison
with the 12 months preceding the reporting period (10/2008-9/2009).
The development of the Group's business activities is affected by the
economic outlook in its different market areas and especially by the
growth rate of private consumption. The economic outlook for the near
future remains gloomy and substantial uncertainties are associated
with the developments in the real economy. In Finland, the
unemployment rate is expected to rise further, which is why private
consumer demand is not expected to recover during the next twelve
months.
The steady development of the grocery trade is expected to continue.
The market situation is expected to remain difficult in the building
sector and in the car and machinery trade.
Uncertainty about the economic outlook continues to make any
statement about the Group's future outlook more difficult. The Kesko
Group's net sales from continuing operations in the next twelve
months are expected to match the level of the prior twelve months.
Due to the cost adjustments made and the discontinuation of the
loss-making Baltic grain and agricultural supplies trade, the Kesko
Group's operating profit excluding non-recurring items is not
expected to deteriorate further. The Group's liquidity and solvency
are expected to remain good.
Helsinki, 21 October 2009
Kesko Corporation
Board of Directors
The figures of this interim financial report are unaudited.
Further information is available from Arja Talma, Senior Vice
President, CFO, telephone +358 1053 22113, and Jukka Erlund, Vice
President, Corporate Controller, telephone +358 1053 22338. A
Finnish-language webcast from the media and analyst briefing on the
interim financial report can be accessed at www.kesko.fi at 11.00. An
English-language web conference on the interim financial report will
be held today at 14.30 (Finnish time). The web conference login is
available at www.kesko.fi.
KESKO CORPORATION
Paavo Moilanen
Senior Vice President, Corporate Communications and Responsibility
ATTACHMENTS
Accounting policies
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated cash flow statement
Group financial indicators
Net sales by segment
Operating profit by segment
Segments' operating profits excl. non-recurring items
Segment's operating margins excl. non-recurring items
Capital employed by segment
Return on capital employed by segment
Investments by segment
Segment information by quarter
Personnel average and at 30.9.
Group contingent liabilities
Calculation of financial indicators
K-Group retail and B-to-B sales
Kesko Corporation's financial statements will be released on 5
February 2010. In addition, the Kesko Group's sales figures will be
published each month. News releases and other company information are
available on Kesko's website at www.kesko.fi.
DISTRIBUTION
NASDAQ OMX Helsinki
Main news media
www.kesko.fi
********
ATTACHMENTS:
Accounting policies
This interim financial report has been prepared in accordance with
the IAS 34 standard. The same accounting policies have been applied
to the preparation of the interim financial report as to the
preparation of the 2008 financial statements, with the exception of
the following changes due to the adoption of new and amended IFRS
standards and IFRIC interpretations.
IFRS 8 Operating segments
The Kesko Group's reportable segments are the same as its business
divisions, which, effective 1 January 2009, are the food trade, the
home and speciality goods trade, the building and home improvement
trade, and the car and machinery trade (stock exchange release on 12
December 2008). The segment information for the 2008 financial period
has been restated accordingly (stock exchange release on 26 March
2009). The adoption of the IFRS 8 has not changed the Group's
reportable segments, because the Group's prior segment information
was already based on the management's internal reporting, with the
measurement principles of assets and liabilities complying with the
IFRS regulations.
The food trade comprises the food business based on the K-retailer
business model and Kespro Ltd's grocery wholesaling in Finland. The
home and speciality goods trade comprises Anttila's department store
business, K-citymarket's home and speciality goods business,
Intersport Finland's sports business, Indoor Group's furniture and
interior decoration business, Musta Pörssi's home technology
business, and Kenkäkesko's shoe business. The building and home
improvement trade includes, in addition to the previously reported
Rautakesko, the K-maatalous chain and the agricultural business in
Finland. The car and machinery trade comprises the previously
reported VV-Auto and Konekesko. Konekesko includes, in addition to
the previously reported machinery business, the tractor and combine
harvester business in Finland and the agricultural and machinery
business entities in the Baltic countries.
Segment assets and liabilities comprise items used by a segment in
its business activities or items that can be allocated to segments.
Unallocated items consist of the Group's common items.
IAS 1 Presentation of financial statements
At the beginning of 2009, the Kesko Group adopted the amended IAS 1
standard. Consequently, the interim financial report presents a
statement of comprehensive income specifying non-owner changes in
equity. At the same time, the statement of changes in equity has been
modified to comply with the requirements of the amended standard.
IFRIC 13 Customer Loyalty Programmes
At the beginning of 2009, the Kesko Group adopted a new IFRIC
interpretation, IFRIC 13 Customer Loyalty Programmes. According to
the interpretation, the loyalty award credits relating to the
K-Plussa customer loyalty programme are recognised in sales
adjustment items. In consequence, the net sales figures for 2008 of
certain retail companies of the Group have been restated to comply
with the new interpretation. The adoption of the interpretation does
not impact the Group's operating profit.
IAS 23 Borrowing Costs, capitalisation of borrowing costs
attributable to a qualifying asset
The amended standard removes the option of immediately expensing
borrowing costs attributable to the acquisition, construction or
production of a qualifying asset as part of the cost of that asset.
These borrowing costs are eligible for capitalisation as part of the
cost of the asset. The Group previously expensed borrowing costs in
the accounting period in which they incurred. The amendment has not
impacted the profit for the reporting period.
In addition, the Group has adopted the following revised or amended
IFRS standards and IFRIC interpretations endorsed by the EU as from 1
January 2009:
- IAS 32 Financial Instruments: presentation, and IAS 1 Presentation
of Financial Statements - Puttable financial instruments and
obligations arising on liquidation (amendment)
- IFRS 1 First-time adoption of IFRS, and IAS 27 Consolidated and
Separate Financial Statements - Cost of an investment in a
Subsidiary, Jointly controlled Entity or Associate (amendment)
- IFRS 2 Share-based Payments - Vesting conditions and cancellations
(amendment)
- Annual amendments to the IFRSs (Annual Improvements 2007)
- IFRIC 16 Hedges of a Net Investment in a Foreign Operation
The following standards became effective on 1 January 2009, but have
not yet been endorsed by the EU:
- IFRS 7 Financial Instruments: Disclosures (amendment)
- IFRIC 9 Reassessment of Embedded Derivatives (amendment) and IAS 39
Financial Instruments: Recognition and Measurement (amendment)
- IFRIC 15 Agreements for the Construction of Real Estate
The above amendments to standards and interpretations have not had a
material impact on the reported income statement, statement of
financial position or notes.
Other changes
The credit entry corresponding to granted share options in compliance
with IFRS 2 is presented in retained earnings instead of share
premium. The change was made retrospectively for the first quarter
and does not impact the Group's equity.
The cost for hedging foreign currency denominated items of the
statement of financial position is presented in the cash flow from
operating activities instead of the cash flow from financing
activities. The change has been made retrospectively.
Consolidated
income
statement (€
million)
1-9/ 1-9/ Change, 7-9/ 7-9/ Change, 1-12/
2009 2008 % 2009 2008 % 2008
Net sales 6,294 7,258 -13.3 2,133 2,435 -12.4 9,591
Cost of sales -5,466 -6,280 -13.0 -1,853 -2,112 -12.3 -8,293
Gross profit 828 978 -15.4 280 322 -13.1 1,299
Other operating
income 478 577 -17.1 152 171 -11.3 730
Staff cost -398 -433 -8.1 -126 -138 -8.7 -578
Depreciation and
impairment
charges -88 -134 -34.3 -30 -76 -61.0 -178
Other operating
expenses -706 -709 -0.5 -228 -236 -3.4 -987
Operating profit 114 279 -59.0 48 44 10.3 286
Interest income 17 26 -36.7 4 9 -55.3 36
Interest expenses -16 -23 -31.6 -5 -7 -29.5 -30
Exchange
differences and
other
financial items -15 -3 (..) -4 0 (..) -4
Income from
associates 0 2 -89.9 0 2 -95.1 2
Profit before tax 100 281 -64.3 44 48 -8.7 289
Income tax -41 -84 -51.7 -18 -26 -29.6 -89
Profit for the
period from
continuing
operations 60 197 -69.7 25 22 16.0 199
Profit for the
period from
discontinued
operations - 41 (..) - 0 (..) 42
Net profit for the
period 60 238 -74.9 25 22 18.4 241
Attributable to
Owners of the
parent 54 224 -75.9 23 16 45.3 220
Non-controlling
interests 6 14 -59.1 2 5 -59.8 21
Earnings per share
(€) for
profit
attributable to
equity
holders of the
parent
Continuing
operations
Basic 0.55 1.87 -70.6 0.24 0.17 41.1 1.82
Diluted 0.55 1.86 -70.5 0.24 0.17 41.4 1.81
Whole Group
Basic 0.55 2.29 -76.0 0.24 0.16 45.0 2.25
Diluted 0.55 2.28 -75.9 0.24 0.16 45.3 2.24
Consolidated
statement of
comprehensive
income
(€ million)
1-9/ 1-9/ Change, 7-9/ 7-9/ Change, 1-12/
2009 2008 % 2009 2008 % 2008
Net profit for the
period 60 238 -74.9 25 22 18.4 241
Other
comprehensive
income
Exchange
differences on
translating
foreign operations -3 0 (..) 1 1 -31.3 -6
Cash flow hedge
revaluation -10 3 (..) -3 -9 62.2 -13
Revaluation of
available-for-
sale financial
assets 0 1 (..) 1 1 -21.3 2
Tax relating to
other
comprehensive
income 3 -1 (..) 1 2 -66.4 3
Total other
comprehensive
income for the
period, net of tax -10 2 (..) -1 -5 -56.9 -14
Total
comprehensive
income
for the period 49 240 (..) 24 17 -38.4 226
Attributable to
Owners of the
parent 48 225 -78.8 22 10 (..) 205
Non-controlling
interests 2 15 (..) 2 7 (..) 21
(..) Change over 100%
Consolidated statement of
financial
position (€ million),
condensed
30.9.2009 30.9.2008 Change,% 31.12.2008
ASSETS
Non-current assets
Intangible assets 181 170 6.6 170
Tangible assets 1,208 1,174 2.9 1,210
Interests in associates and
other
financial assets 37 34 7.9 34
Loans and receivables 61 60 0.1 76
Pension assets 311 290 7.2 300
Total 1,797 1,729 4.0 1,789
Current assets
Inventories 705 922 -23.6 871
Trade receivables 633 743 -14.9 633
Other receivables 144 145 -1.1 152
Financial assets at fair
value through
profit or loss 92 130 -28.8 94
Available-for-sale financial
assets 365 353 3.4 291
Cash and cash equivalents 79 54 47.0 58
Total 2,017 2,347 -14.1 2,100
Non-current assets held for
sale 1 1 0.0 3
Total assets 3,815 4,077 -6.4 3,892
30.9.2009 30.9.2008 Change,% 31.12.2008
EQUITY AND LIABILITIES
Equity 1,925 1,984 -3.0 1,966
Non-controlling interests 62 54 14.8 61
Total equity 1,987 2,038 -2.5 2,026
Non-current liabilities
Pension obligations 2 4 -47.2 2
Interest-bearing liabilities 262 213 23.3 197
Non-interest-bearing
liabilities 9 4 (..) 12
Deferred tax 129 137 -6.3 132
Provisions 18 20 -9.2 20
Total 420 378 11.1 363
Current liabilities
Interest-bearing liabilities 222 296 -25.1 294
Trade payables 791 932 -15.1 756
Other non-interest-bearing
liabilities 375 421 -11.0 430
Provisions 20 11 79.8 24
Total 1,408 1,661 -15.2 1,503
Total equity and liabilities 3,815 4,077 -6.4 3,892
(..) Change over 100%
Consolidated statement of changes in equity (€ million)
Share Issue Share Other Cur- Revalu- Re- Non Total
capital of premi- reser- rency ation tained control-
share um ves trans surplus ear- ling-
capital lation nings inte-
differ- rests
ences
Balance at
1.1.2008 196 0 190 247 -3 10 1,270 55 1,964
Shares
subscribed
for with
options 0 0 0 0
Option
cost 4 4
Subsidiary
sales -4 4 0
Dividends -156 -16 -172
Other
changes 2 2
Total
compre-
hensive
income
for the
period 0 -3 2 225 15 240
Balance at
30.9.2008 196 0 190 243 -6 12 1,349 54 2,038
Balance at
1.1.2009 196 0 191 243 -15 2 1,350 61 2,026
Shares
subscribed
for with
options 1 0 2 3
Option
cost 6 6
Dividends -98 -98
Other
changes 1 1
Total
compre-
hensive
income for
the period 14 -8 41 2 49
Balance at
30.9.2009 196 0 193 243 -1 -6 1,300 62 1,987
Consolidated cash flow statement (€ million), condensed
1-9/ 1-9/ Change, 7-9/ 7-9/ Change, 1-12/
2009 2008 % 2009 2008 % 2008
Cash flow from operating
activities
Profit before tax 100 323 -68.9 44 48 -7.8 331
Planned depreciation 86 88 -2.1 30 29 2.7 118
Financial income and
expenses 14 0 (..) 5 -2 (..) -1
Other adjustments -24 -161 -85.3 5 11 -57.6 -130
Working capital
Current
non-interest-bearing
trade and other
receivables,
increase (-)/ decrease (+) -4 -103 -96.2 63 57 11.0 -10
Inventories
increase (-)/ decrease (+) 167 -39 (..) 37 -28 (..) 2
Current
non-interest-bearing
liabilities,
increase (+)/decrease (-) -27 77 (..) -51 -62 -17.7 -78
Financial items and tax -47 -68 -31.7 -12 -26 -51.8 -100
Net cash from operating
activities 266 116 (..) 119 27 (..) 131
Cash flow from investing
activities
Investments -172 -223 -23.0 -52 -88 -41.0 -320
Sales of fixed assets 94 278 -66.1 5 60 -92.2 281
Increase of long-term
receivables 0 -5 (..) 0 -1 (..) -7
Decrease of long-term
receivables 2 0 (..) 1 0 (..) 0
Net cash used in investing
activities -75 50 (..) -46 -29 60.4 -46
Cash flow from financing
activities
Increase (+)/ decrease (-)
in
interest-bearing
liabilities -6 -26 -75.8 -44 -2 (..) -53
Increase (-)/decrease (+)
in
short-term interest-bearing
receivables -1 214 (..) 0 3 (..) 216
Dividends paid -98 -172 -42.9 0 -16 (..) -172
Equity increase 3 0 (..) 0 0 (..) 0
Short-term money market
investments -19 -54 -64.1 -78 57 (..) -17
Other items 7 1 (..) 0 2 (..) 11
Net cash used in financing
activities -115 -37 (..) -123 43 (..) -14
Change in cash and cash
equivalents 75 129 -41.9 -49 41 (..) 71
Cash and cash equivalents
and current portion of
available-for-sale
financial
assets at 1 Jan. 319 245 30.1 440 335 31.6 245
Exchange difference and
revaluation -3 0 (..) 0 1 (..) 1
Cash and cash equivalents
relating to
available-for-sale
assets 0 -2 (..) 0 0 (..) -2
Cash and cash equivalents
and current portion of
available-for-sale
financial
assets at 30 Sep. 391 377 3.8 391 377 3.8 319
(..) Change over 100%
Group financial indicators
1-9/2009 1-9/2008 Change, pp
Return on capital employed, % 7.2 20.1 -12.9
Return on capital employed, %, rolling
12 months 5.7 18.0 -12.3
Return on capital employed excl.
non-recurring items, % 5.5 12.0 -6.6
Return on capital employed excl.
non-recurring items, %, rolling 12
months 5.3 12.3 -6.9
Return on equity, % 4.0 15.8 -11.9
Return on equity, %, rolling 12 months 3.1 14.4 -11.3
Return on equity excl. non-recurring
items, % 2.6 9.4 -6.7
Return on equity excl. non-recurring
items, %, rolling 12 months 3.1 9.7 -6.6
Equity ratio, % 52.3 50.2 2.1
Gearing, % -2.6 -1.3 -1.3
Change, %
Investments, € million* 156.5 233.2 -32.9
Investments, % of net sales* 2.5 3.2 -22.6
Earnings per share, basic, €* 0.55 1.87 -70.6
Earnings per share, diluted, €* 0.55 1.86 -70.5
Earnings per share, basic, €** 0.55 2.29 -76.0
Earnings per share, diluted, €** 0.55 2.28 -75.9
Earnings per share excl. non-recurring
items, basic, €** 0.35 1.29 -73.2
Cash flow from operating activities,
€ million** 266 116 (..)
Cash flow from investing activities,
€ million** -75 50 (..)
Equity per share, € 19.60 20.29 -3.4
Personnel, average* 19,544 21,464 -8.9
* Continuing operations
** Whole Group
Group financial indicators 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/
by quarter 2008 2008 2008 2008 2009 2009 2009
Net sales, € million 2,277 2,547 2,435 2,333 2,018 2,143 2,133
Change in net sales, % 6.8 6.1 3.0 -2.4 -11.4 -15.9 -12.4
Operating profit, €
million 150.1 84.8 43.8 6.9 23.2 42.7 48.3
Operating margin, % 6.6 3.3 1.8 0.3 1.1 2.0 2.3
Operating profit excl.
non-recurring items, €
million 36.6 81.1 72.0 27.3 3.4 36.4 47.5
Operating margin excl.
non-recurring items, % 1.6 3.2 3.0 1.2 0.2 1.7 2.2
Financial income/expenses,
€ million -1.4 -0.2 1.8 0.8 -5.1 -4.4 -4.7
Profit before tax, €
million 148.6 84.3 48.0 7.7 18.2 38.2 43.8
Profit before tax, % 6.5 3.3 2.0 0.3 0.9 1.8 2.1
Return on capital
employed, % 30.1 22.2 8.2 1.4 4.2 8.0 9.4
Return on capital employed
excl. non-recurring items,
% 7.3 15.6 13.6 4.9 0.6 6.8 9.2
Return on equity, % 25.1 19.1 4.2 0.6 2.4 4.6 5.2
Return on equity excl.
non-recurring items, % 5.6 12.3 10.4 4.3 -0.6 3.7 5.0
Equity ratio, % 46.3 49.0 50.2 52.4 49.8 51.0 52.3
Investments, € million* 60.3 83.0 89.9 105.2 51.5 55.8 49.2
Earnings per share,
diluted, €* 1.11 0.58 0.17 -0.05 0.12 0.19 0.24
Equity per share, € 19.13 20.17 20.29 20.09 19.16 19.36 19.60
* Continuing operations
Segment information
Net sales by segment,
continuing operations 1-9/ 1-9/ Change, 7-9/ 7-9/ Change,
(€ million) 2009 2008 % 2009 2008 %
Food trade, Finland 2,822 2,717 3.9 965 931 3.7
Food trade, other countries* 5 9 -38.4 2 2 -35.1
Food trade total 2,827 2,725 3.7 966 933 3.6
- of which intersegment trade 118 132 -10.4 39 43 -8.0
Home and speciality goods
trade, Finland 1,037 1,080 -4.0 373 385 -3.0
Home and speciality goods
trade, other countries* 21 36 -40.5 7 11 -38.4
Home and speciality goods
trade total 1,058 1,115 -5.2 381 396 -4.0
- of which intersegment trade 16 16 4.9 6 6 -0.8
Building and home improvement
trade, Finland 818 1,057 -22.6 265 335 -21.1
Building and home improvement
trade, other countries* 969 1,303 -25.7 350 459 -23.9
Building and home improvement
trade total 1,787 2,360 -24.3 614 795 -22.7
- of which intersegment trade 1 2 -26.3 0 1 -55.3
Car and machinery trade,
Finland 614 927 -33.8 170 270 -36.9
Car and machinery trade,
other countries* 129 257 -50.0 43 86 -50.5
Car and machinery trade
total 743 1,185 -37.3 213 357 -40.2
- of which intersegment trade 0 1 -63.4 0 0 -91.5
Common operations and
eliminations -121 -127 -4.9 -41 -46 -11.1
Finland total 5,170 5,653 -8.6 1,732 1,875 -7.6
Other countries total* 1,124 1,605 -30.0 401 560 -28.3
Group total 6,294 7,258 -13.3 2,133 2,435 -12.4
* exports and net sales in countries other than Finland
Operating profit by
segment, continuing 1-9/ 1-9/ 7-9/ 7-9/
operations (€ million) 2009 2008 Change 2009 2008 Change
Food trade 111.9 158.1 -46.2 35.8 45.3 -9.5
Home and speciality goods
trade 0.1 53.0 -52.9 7.0 9.2 -2.2
Building and home improvement
trade 18.0 25.9 -7.8 8.5 -16.1 24.6
Car and machinery trade -2.4 47.5 -49.9 1.7 10.4 -8.7
Common operations and
eliminations -13.3 -5.7 -7.7 -4.5 -4.9 0.4
Total 114.3 278.8 -164.5 48.3 43.8 4.5
Segments' operating profits
excl. non-recurring items,
continuing operations 1-9/ 1-9/ 7-9/ 7-9/
(€ million) 2009 2008 Change 2009 2008 Change
Food trade 99.4 90.9 8.5 35.5 34.4 1.0
Home and speciality goods
trade -10.2 3.5 -13.7 6.5 6.8 -0.3
Building and home improvement
trade 14.0 63.8 -49.8 8.4 25.5 -17.1
Car and machinery trade -2.4 47.5 -49.9 1.7 10.4 -8.7
Common operations and
eliminations -13.4 -16.0 2.6 -4.5 -5.1 0.6
Total 87.4 189.7 -102.4 47.5 72.0 -24.4
Segments' operating 1-9/ 7-9/
margins excl. 2009 1-9/ 7-9/ 2008
non-recurring % of 2008 2009 % of
items, continuing net % of net Change % of net net Change
operations sales sales pp sales sales pp
Food trade 3.5 3.3 0.2 3.7 3.7 0.0
Home and speciality goods
trade -1.0 0.3 -1.3 1.7 1.7 0.0
Building and home
improvement trade 0.8 2.7 -1.9 1.4 3.2 -1.8
Car and machinery trade -0.3 4.0 -4.3 0.8 2.9 -2.1
Total 1.4 2.6 -1.2 2.2 3.0 -0.7
Capital employed by segment,
cumulative 1-9/ 1-9/ 7-9/ 7-9/
average (€ million) 2009 2008 Change 2009 2008 Change
Food trade 633 628 5 624 639 -15
Home and speciality goods
trade 516 498 18 504 502 2
Building and home improvement
trade 650 629 21 631 629 2
Car and machinery trade 250 273 -23 216 270 -54
Common operations and
eliminations 81 102 -21 87 84 2
Group total 2,129 2,129 0 2,062 2,125 -63
Return on capital
employed
by segment excl. non- 1-9/ 1-9/ Change 7-9/ 7-9/ Change Rolling 12 mo
recurring items, % 2009 2008 pp 2009 2008 pp 9/2009
Food trade 20.9 19.3 1.6 22.7 21.5 1.2 20.5
Home and speciality
goods
trade -2.6 0.9 -3.6 5.2 5.4 -0.2 3.4
Building and home
improvement trade 2.9 13.5 -10.7 5.3 16.2 -10.9 1.0
Car and machinery
trade -1.3 23.3 -24.5 3.1 15.4 -12.3 -7.4
Group total 5.5 12.0 -6.6 9.2 13.6 -4.3 5.3
Investments by segment,
continuing operations 1-9/ 1-9/ 7-9/ 7-9/
(€ million) 2009 2008 Change 2009 2008 Change
Food trade 59.5 107.9 -48.4 19.3 44.1 -24.8
Home and speciality goods
trade 22.8 39.9 -17.0 5.9 16.2 -10.4
Building and home improvement
trade 65.3 77.8 -12.5 19.0 25.7 -6.7
Car and machinery trade 8.5 10.2 -1.6 5.0 3.6 1.3
Group total 156.5 233.2 -76.7 49.2 89.9 -40.7
Segment information by quarter
Net sales by segment,
continuing operations 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/
(€ million) 2008 2008 2008 2008 2009 2009 2009
Food trade 853 939 933 982 888 974 966
Home and speciality goods
trade 364 355 396 490 346 331 381
Building and home
improvement trade 695 870 795 617 529 643 614
Car and machinery trade 402 426 357 295 296 233 213
Common operations and
eliminations -37 -44 -46 -51 -41 -39 -41
Group total 2,277 2,547 2,435 2,333 2,018 2,143 2,133
Segments' operating profits,
continuing operations (€ 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/
million) 2008 2008 2008 2008 2009 2009 2009
Food trade 81.3 31.5 45.3 27.4 42.3 33.8 35.8
Home and speciality goods
trade 40.1 3.7 9.2 10.6 -3.3 -3.6 7.0
Building and home improvement
trade 7.3 34.6 -16.1 -6.5 -5.2 14.8 8.5
Car and machinery trade 15.8 21.3 10.4 -17.0 -6.0 1.9 1.7
Common operations and
eliminations 5.6 -6.3 -4.9 -7.6 -4.6 -4.3 -4.5
Group total 150.1 84.8 43.8 6.9 23.2 42.7 48.3
Segments' operating profits
excl. non-recurring items,
continuing operations 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/
(€ million) 2008 2008 2008 2008 2009 2009 2009
Food trade 25.0 31.5 34.4 31.6 33.8 30.1 35.5
Home and speciality goods
trade -6.8 3.5 6.8 27.7 -10.7 -6.0 6.5
Building and home improvement
trade 7.3 31.0 25.5 -7.5 -9.1 14.8 8.4
Car and machinery trade 15.8 21.3 10.4 -17.1 -6.0 1.9 1.7
Common operations and
eliminations -4.8 -6.2 -5.1 -7.5 -4.6 -4.4 -4.5
Group total 36.6 81.1 72.0 27.3 3.4 36.4 47.5
Personnel average and at 30.9.
Personnel, average by
segment, continuing
operations 1-9/2009 1-9/2008 Change
Food trade 3,110 3,511 -401
Home and speciality goods
trade 5,698 5,809 -111
Building and home improvement trade 8,997 10,434 -1,437
Car and machinery trade 1,328 1,471 -143
Common operations 411 239 172
Group total 19,544 21,464 -1,920
Personnel at 30.9.*
by segment,
continuing operations 2009 2008 Change
Food trade 3,336 3,961 -625
Home and speciality goods
trade 7,544 7,633 -89
Building and home improvement trade 9,525 11,533 -2,008
Car and machinery trade 1,255 1,502 -247
Common operations 426 241 185
Group total 22,086 24,870 -2,784
* total number incl. part-time employees
Group contingent liabilities (€
million)
30.9.2009 30.9.2008 Change, %
For own commitments 246 223 10.0
For shareholders 0 0 -0.9
For others 9 11 -16.8
Lease liabilities 23 22 6.5
Contingent liabilities arising from
derivative financial instruments
Fair value
Values of underlying instruments at 30.9.2009 30.9.2008 30.9.2009
30.9.
Interest rate derivatives
Forward and future contracts 23 - 0.05
Interest rate swap contracts 204 205 1.57
Currency derivatives
Forward and future contracts 409 342 -10.03
Option contracts - 3 -
Currency swap contracts 100 100 -18.47
Commodity derivatives
Electricity derivatives 38 59 -12.14
Grain derivatives 0 1 -0.04
Calculation of financial indicators
+-------------------------------------------------------------------+
| Return on capital employed, | Operating profit x 100 / |
| % | (Non-current assets + Inventories + |
| | Receivables + Other current assets |
| | - Non-interest-bearing |
| | liabilities) on average for the |
| | reporting period |
|-----------------------------+-------------------------------------|
| | |
|-----------------------------+-------------------------------------|
| Return on capital employed, | Operating profit for the prior 12 |
| %, rolling 12 months | months x 100 / (Non-current |
| | assets + Inventories + Receivables |
| | + Other current assets - |
| | Non-interest-bearing liabilities) |
| | on average for 12 months |
|-----------------------------+-------------------------------------|
| | |
|-----------------------------+-------------------------------------|
| | Operating profit excl. |
| | non-recurring items x 100 / |
| | (Non-current |
| | assets + Inventories + Receivables |
| | + Other current assets - |
| Return on capital employed, | Non-interest-bearing liabilities) |
| excluding non-recurring | on average for the reporting |
| items, % | period |
|-----------------------------+-------------------------------------|
| | |
|-----------------------------+-------------------------------------|
| | Operating profit excl. |
| | non-recurring items for the prior |
| | 12 months |
| | x 100 / (Non-current assets + |
| | Inventories + Receivables + Other |
| | current assets - |
| Return on capital employed, | Non-interest-bearing liabilities) |
| excluding non-recurring | on average for |
| items, %, rolling 12 months | 12 months |
|-----------------------------+-------------------------------------|
| | |
|-----------------------------+-------------------------------------|
| | (Profit/loss before tax - income |
| Return on equity, % | tax) x 100 / |
| | Shareholders' equity |
|-----------------------------+-------------------------------------|
| | |
|-----------------------------+-------------------------------------|
| Return on equity, %, | (Profit/loss for the prior 12 |
| rolling | months before tax - income tax for |
| 12 months | the prior 12 months) x 100 / |
| | Shareholders' equity |
|-----------------------------+-------------------------------------|
| | |
|-----------------------------+-------------------------------------|
| Return on equity excluding | (Profit/loss adjusted for |
| non-recurring items, % | non-recurring items before tax - |
| | income |
| | tax adjusted for the tax effect of |
| | non-recurring items) x 100 / |
| | Shareholders' equity |
|-----------------------------+-------------------------------------|
| | |
|-----------------------------+-------------------------------------|
| | (Profit/loss for the prior 12 |
| | months adjusted for non-recurring |
| | items before tax - income tax for |
| | the prior 12 months adjusted |
| Return on equity excluding | for the tax effect of non-recurring |
| non-recurring items, %, | items) x 100 / |
| rolling 12 months | Shareholders' equity |
|-----------------------------+-------------------------------------|
| | |
|-----------------------------+-------------------------------------|
| | Shareholders' equity x 100 / |
| Equity ratio, % | (Statement of financial position |
| | total - advances received) |
|-----------------------------+-------------------------------------|
| | |
|-----------------------------+-------------------------------------|
| | (Profit - non-controlling |
| | interests) / |
| Earnings/share, diluted | Average number of shares adjusted |
| | for the dilutive effect of |
| | options |
|-----------------------------+-------------------------------------|
| | |
|-----------------------------+-------------------------------------|
| | (Profit - non-controlling |
| Earnings/share, basic | interests) / |
| | Average number of shares |
|-----------------------------+-------------------------------------|
| | |
|-----------------------------+-------------------------------------|
| Earnings/share excl. non- | (Profit adjusted for non-recurring |
| recurring items, basic | items - non-controlling interests)/ |
| | Average number of shares |
|-----------------------------+-------------------------------------|
| | Equity attributable to equity |
| Equity/share | holders of the parent / |
| | Basic number of shares at reporting |
| | date |
|-----------------------------+-------------------------------------|
| | |
|-----------------------------+-------------------------------------|
| Gearing, % | Interest-bearing net liabilities x |
| | 100 / |
| | Shareholders' equity |
+-------------------------------------------------------------------+
K-Group retail and B-to-B sales in euros (incl. VAT) (preliminary
data):
1.1.-30.9.2009 1.7.-30.9.2009
K-Group retail and € million Change, % € million Change, %
B-to-B sales
K-Group food trade
K-food stores, Finland 3,649 5.7 1,243 4.7
Kespro 612 -1.8 214 -2.5
Food trade total 4,260 4.5 1,457 3.6
K-Group home and
speciality goods trade
Home and speciality
goods stores, Finland 1,383 -4.1 486 -3.0
Home and speciality
goods stores, Baltic
countries 19 -45.8 6 -44.1
Home and speciality goods
trade total 1,402 -5.1 492 -3.9
K-Group building and home
improvement trade
K-rauta and Rautia 892 -7.1 354 -2.2
Rautakesko B-to-B Service 147 -33.6 52 -30.1
K-maatalous 352 -26.1 108 -33.2
Finland total 1,390 -16.1 515 -14.1
Building and home improvement
stores, other Nordic
countries 881 -17.6 333 -12.4
Building and home improvement
stores, Baltic countries 348 -37.0 122 -39.3
Building and home improvement
stores, other countries 198 -17.0 71 -25.0
Building and home improvement
trade total 2,817 -19.9 1,041 -18.4
K-Group car and machinery
trade
VV-Autotalot 291 -23.8 85 -30.0
VV-Auto, import 300 -41.8 75 -48.3
Konekesko, Finland 187 -35.9 54 -25.4
Finland total 777 -34.6 215 -36.8
Konekesko, Baltic countries 132 -37.7 47 -42.9
Car and machinery trade total 910 -35.0 261 -38.0
Finland total 7,811 -6.6 2,673 -6.1
Other countries total 1,578 -25.1 579 -24.7
Retail and B-to-B sales total 9,389 -10.3 3,252 -10.1
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