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2010-10-26 08:00:00 CEST 2010-10-26 08:01:01 CEST REGULATED INFORMATION Kesko Oyj - Interim report (Q1 and Q3)Interim report for 1 January - 30 September 2010KESKO CORPORATION STOCK EXCHANGE RELEASE 26.10.2010 AT 09.00 1(30) Financial performance in brief: *In January-September, the Group's net sales increased by 2.8%. In July- September, the growth rate stood at 4.6% *Operating profit excluding non-recurring items was €187.6 million in January- September, which was €100.3 million more than in the previous year (€87.4 million). In July-September, the operating profit excluding non-recurring items was €88.7 million (€47.5 million). Profitability improved in all divisions *Net sales are expected to grow and the operating profit excluding non-recurring items is expected to remain at the achieved level during the next twelve months Key performance indicators 1-9/2010 1-9/2009 7-9/2010 7-9/2009 Net sales, € million 6,467 6,294 2,231 2,133 Operating profit excl. non- recurring items, € million 187.6 87.4 88.7 47.5 Operating profit, € million 223.9 114.3 123.9 48.3 Profit before tax, € million 225.1 100.3 124.5 43.8 Investments, € million 123.6 156.5 35.9 49.2 Earnings/share, €, diluted 1.48 0.55 0.81 0.24 Earnings/share excl. non- recurring items, €, basic 1.21 0.35 0.55 0.23 30.9.2010 30.9.2009 Equity ratio, % 53.3 52.3 Equity/share, € 21.10 19.60 FINANCIAL PERFORMANCE Net sales and profit in January-September 2010 The Group's net sales in January-September 2010 were €6,467 million, which is 2.8% up on the corresponding period of the previous year (€6,294 million). The trend in net sales was positive in all divisions. Net sales increased by 3.0% in Finland and by 1.5% in other countries. International operations accounted for 17.1% (17.3%) of net sales. In the food trade, net sales continued to grow steadily. The net sales growth recorded in the building and home improvement trade in the spring continued in the third quarter. 1-9/2010 Net sales, M€ Change, % Operating profit excl. Change, M€ non-recurring items, M€ Food trade 2,874 +1.7 123.3 +23.9 Home and speciality goods trade 1,068 +0.9 20.3 +30.5 Building and home improvement trade 1,894 +6.0 24.2 +10.2 Car and machinery trade 752 +1.2 29.2 +31.6 Common operations and eliminations -120 -0.3 -9.4 +4.1 Total 6,467 +2.8 187.6 +100.3 Non-recurring items excluded, the operating profit was €187.6 million (€87.4 million) in January-September, representing 2.9% (1.4%) of net sales. The positive trend in profitability continued in the third quarter. The operating profit excluding non-recurring items includes an €8 million amount recognised as revenue in connection with the transfer of the pension insurance portfolio. In the comparative period, the operating profit excluding non-recurring items was negatively impacted by the €9 million amount of impairments and expense provisions recognised on the Baltic agricultural supplies business. Improved management of inventory processes and cost reductions significantly contributed to the improvement of the Group's profitability. All divisions recorded higher year-on-year operating profits excluding non-recurring items. The operating profit was €223.9 million (€114.3 million). The operating profit includes a net total of €36.3 million of non-recurring gains on the disposals of real estate, and provisions related to the reorganisation of the service station grocery store business of Pikoil Oy, a Kesko Food subsidiary. The non-recurring items in the comparative period included a net total of €26.9 million of gains on the disposals of real estate and real estate impairment charges. The Group's profit before tax for January-September was €225.1 million (€100.3 million). The Group's earnings per share were €1.48 (€0.55). The Group's equity per share was €21.10 (€19.60). In January-September, the K-Group's (i.e. Kesko's and the chain stores') retail and B2B sales (VAT 0%) were €8,056 million, up 3.0% compared to the previous year. During the same period, K-food stores' grocery sales grew by 3.5% (VAT 0%). In January-September, the K-Group chains' sales entitling to K-Plussa points were €4,622 million (incl. VAT), up 2.3% compared to the previous year. In January-September, the K-Plussa customer loyalty programme gained 66,273 new households. At the end of September, there was 2,080,058 K-Plussa households. Net sales and profit in July-September 2010 The Group's net sales in July-September 2010 were €2,231 million, which is 4.6% up on the corresponding period of the previous year (€2,133 million). Net sales increased by 3.6% in Finland. The growth strengthened especially in the building and home improvement trade and the car and machinery trade. In other countries, net sales increased by 8.8%. International operations accounted for 19.1% (18.4%) of net sales. 7-9/2010 Net sales, M€ Change, % Operating profit Change, M€ excl. non- recurring items, M€ Food trade 986 +2.1 49.5 +14.1 Home and 378 -0.6 13.2 +6.7 speciality goods trade Building and home 687 +11.9 20.0 +11.7 improvement trade Car and machinery trade 218 +2.2 8.7 +7.0 Common operations and eliminations -39 -3.9 -2.8 +1.6 Total 2,231 +4.6 88.7 +41.1 The positive trend in profitability continued in the third quarter. The operating profit excluding non-recurring items was €88.7 million (€47.5 million), representing 4.0% of net sales (2.2%). The operating profit excluding non-recurring items includes an €8 million amount recognised as revenue in connection with the transfer of the pension insurance portfolio. In addition to sales growth, profitability in the third quarter was improved by efficient inventory management and cost adjustments. The operating profit excluding non- recurring items exceeded the level of the previous year, especially in the food trade and the building and home improvement trade. The operating profit was €123.9 million (€48.3 million). The operating profit includes a net total of €35.3 million of non-recurring gains on the disposals of real estate, and provisions related to the reorganisation of the service station grocery store business of Pikoil Oy, a Kesko Food subsidiary. The non-recurring income in July-September in the previous year included a total of €0.8 million of gains on the disposals of real estate. The Group's profit before tax for July-September was €124.5 million (€43.8 million). The Group's earnings per share were €0.81 (€0.24). The Group's equity per share was €21.10 (€19.60). In July-September, the K-Group's (i.e. Kesko's and the chain stores') retail and B2B sales (VAT 0%) were €2,825 million, up 4.3% compared to the previous year. The K-Group chains' sales entitling to K-Plussa points were €1,601 million (incl. VAT), up 2.2% compared to the previous year. Finance In January-September, the cash flow from operating activities was €268.8 million (€255.6 million). The cash flow from investing activities was €-46.8 million (€- 65.4 million). The cash flow from investing activities included €115.5 million (€94.3 million) of proceeds from the sale of fixed assets. In January-September, the Group's liquidity and solvency remained at an excellent level. At the end of the period, liquid assets totalled €850 million (€536 million). Interest-bearing liabilities were €456 million (€484 million) and interest-bearing net liabilities €-394 million (€-52 million) at the end of September. Equity ratio was 53.3% (52.3%) at the end of the period. In January-September, the Group's net finance income was €1.4 million (net finance costs €14.2 million). The hedging costs of the Baltic and Russian currency exposures, which had increased the net finance costs in the previous year, normalised and were €1.6 million (€15.2 million). In July-September, the cash flow from operating activities was €133.4 million (€119.4 million). The net cash from investing activities was €38.9 million (€- 45.9 million). The cash flow from investing activities included €110.9 million (€4.7 million) of proceeds from the sale of fixed assets. In July-September, the Group's net finance income was €0.8 million (net finance costs €4.7 million). Taxes The Group's taxes in January-September were €72.0 million (€40.6 million). The effective tax rate was 32.0% (40.5%), affected by loss-making foreign operations. The Group's taxes in July-September were €40.4 million (€18.3 million). The effective tax rate was 32.4% (41.8%). Investments In January-September, the Group's investments totalled €123.6 million (€156.5 million), or 1.9% (2.5%) of net sales. Investments in store sites were €93.7 million (€131.2 million) and other investments €29.9 million (€25.3 million). Investments in foreign operations represented 24.0% (34.3%) of total investments. In July-September, the Group's investments totalled €35.9 million (€49.2 million), or 1.6% (2.3%) of net sales. Investments in store sites were €30.3 million (€42.8 million) and other investments €5.6 million (€6.4 million). Investments in foreign operations represented 9.9% (35.4%) of total investments. Personnel In January-September, the average number of employees in the Kesko Group was 18,173 (19,541) converted into full-time employees. In Finland, the average decrease was 485 people, while outside Finland, it was 883. At the end of September 2010, the total number of employees was 21,700 (22,086), of whom 12,222 (12,477) worked in Finland and 9,478 (9,609) outside Finland. Compared to the end of September 2009, there was a decrease of 255 people in Finland and 131 outside Finland. In January-September, the Group's staff cost decreased by €22.8 million, or by 5.7%, compared to the previous year. In July-September, the staff cost decreased by €10.0 million, or by 8.0%, compared to the previous year. SEGMENTS Seasonal nature of operations The Group's operating 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. Food trade 1-9/2010 1-9/2009 7-9/2010 7-9/2009 Net sales, € million 2,874 2,827 986 966 Operating profit excl. non- recurring items, € million 123.3 99.4 49.5 35.5 Operating profit as % of net sales excl. non- recurring items 4.3 3.5 5.0 3.7 Investments, € million 59.8 59.5 21.9 19.3 Net sales, € million 1-9/2010 Change, % 7-9/2010 Change, % Sales to K-food stores 2,199 +2.5 747 +2.2 Kespro 517 +1.8 183 +2.9 Others 159 -9.2 56 -2.5 Total 2,874 +1.7 986 +2.1 January-September 2010 In the food trade, the net sales in January-September were €2,874 million (€2,827 million), up 1.7%. During the same period, the grocery sales of K-food stores increased by 3.5% (VAT 0%). Good sales performance was achieved especially by K-citymarkets and K-supermarkets. In January-September, the growth rate of the total grocery trade market in Finland is estimated at some 1.5% - 2.0% (VAT 0%) compared to the previous year (Kesko's own estimate). The prices are estimated to have changed by -1 - 0% (VAT 0%) compared to the previous year. K-food stores' market share strengthened. In January-September, the operating profit excluding non-recurring items of the food trade was €123.3 million (€99.4 million), or €23.9 million up on the previous year. Profitability improved due to good retail sales performance. The operating profit was €121.2 million (€111.9 million). Non-recurring items totalled €-2.1 million, the most significant items included are gains on the disposals of real estate and the provisions for the reorganisation of the service station grocery store business of Pikoil Oy, a Kesko Food subsidiary. In January-September, investments in the food trade were €59.8 million (€59.5 million), of which investments in store sites were €48.5 million (€49.9 million). July-September 2010 In the food trade, the net sales in July-September were €986 million (€966 million), up 2.1%. During the same period, the grocery sales of K-food stores increased by 3.8% (VAT 0%). In July-September, the operating profit excluding non-recurring items of the food trade was €49.5 million (€35.5 million). In addition to retail sales growth, the improved profit is attributable to the amount of some €6 million recognised as income in connection with the transfer of the pension insurance portfolio. The operating profit was €47.3 million (€35.8 million). Non-recurring items totalled €-2.3 million, the most significant items of which include gains on real estate disposals and the provisions for the reorganisation of the service station grocery store business of Pikoil Oy, a Kesko Food subsidiary. In July-September, investments in the food trade were €21.9 million (€19.3 million), of which investments in store sites were €20.3 million (€15.7 million). In July-September 2010, one new K-supermarket and two new K-markets were opened. In addition, renovations and extensions were carried out in 17 stores. The most significant store sites being built are the new K-citymarkets in Hyvinkää, in Palokka, Jyväskylä, in Kouvola, in the Karisma shopping centre in Karisto, Lahti, in Päivölä, Seinäjoki and in Iisalmi where also the existing K- citymarket is being converted into a K-supermarket. K-supermarket Kankaanpää is being extended into a K-citymarket. New K-supermarkets are being built in Paloheinä, Helsinki, in Jalasjärvi, in Veikkola, Kirkkonummi, in Mäntyharju, in Savonlinna and Sodankylä. K-supermarkets in Kiiminki, Nilsiä and Raisio are being extended, and K-markets in Piikkiö, Kaarina, in Joutjärvi, Lahti and in Suonenjoki are being extended into K-supermarkets. Home and speciality goods trade 1-9/2010 1-9/2009 7-9/2010 7-9/2009 Net sales, € million 1,068 1,058 378 381 Operating profit excl. 20.3 -10.2 13.2 6.5 non-recurring items, € million Operating profit as % 1.9 -1.0 3.5 1.7 of net sales excl. non-recurring items Investments, € million 16.9 22.8 4.2 5.9 Net sales, € million 1-9/2010 Change, % 7-9/2010 Change, % Anttila 331 -0.9 116 -0.9 K-citymarket Home 422 +6.2 146 +4.3 and Speciality Goods Intersport 118 -0.1 42 -5.0 Indoor 114 -2.2 43 -1.5 Musta Pörssi 67 -7.2 24 -9.6 Kenkäkesko 17 -15.0 7 -19.1 Total 1,068 +0.9 378 -0.6 January-September 2010 In the home and speciality goods trade, the net sales in January-September were €1,068 million (€1,058 million), up 0.9%. K-citymarket's net sales performance was good especially in clothing and household goods. The net sales were also increased by the stores opened in the previous year. As the housing market picked up, the home decoration products of the Asko and Kodin Ykkönen stores sold better than in the comparative period. As for Intersport Finland, especially Budget Sport's sales were up on the previous year. Sunday opening had a clearly positive impact on the sales performance in January-April and in September. The operating profit of the home and speciality goods trade excluding non- recurring items in January-September was €20.3 million, a €30.5 million year-on- year increase attributable to increased sales, improved productivity and more efficient purchasing operations. The operating profit for January-September was €57.7 million (€0.1 million). The non-recurring items include gains on real estate disposals, which totalled €37.4 million. Investments in the home and speciality goods trade in January-September were €16.9 million (€22.8 million). At the beginning of the year, Kodin Ykkönen in Kaisaniemi, Helsinki was closed down due to the termination of the lease. The K-citymarket in downtown Pori was converted into a K-supermarket early this year. The Anttila department store in Jyväskylä was relocated to a new site in March 2010. Indoor disposed of its operating activities in Latvia in March. A new Kodin Ykkönen was opened in Lappeenranta at the end of May. July-September 2010 In the home and speciality goods trade, the net sales in July-September were €378 million (€381 million), down 0.6%. The July sales performance was lowered by smaller than usual sale volumes. After the summer sale, home decoration products achieved a positive sales performance. Especially Indoor's Sotka and Anttila's Kodin Ykkönen department stores increased their sales over the previous year. The operating profit excluding non-recurring items of the home and speciality goods trade in July-September was €13.2 million, a €6.7 million year-on-year increase. The operating profit excluding non-recurring items was positively impacted by improved productivity and a higher level of margin, due to healthy stocks during the sale period. The operating profit in July-September was €50.6 million (€7.0 million). The non-recurring items include gains on real estate disposals, which totalled €37.4 million. Investments in the home and speciality goods trade in July-September were €4.2 million (€5.9 million). Anttila's automated logistics centre is being built in Kerava. When completed, it will also make e-commerce logistics materially more efficient. Building and home improvement trade 1-9/2010 1-9/2009 7-9/2010 7-9/2009 Net sales, € million 1,894 1,787 687 614 Operating profit excl. non-recurring items, € million 24.2 14.0 20.0 8.4 Operating profit as % of net sales excl. non-recurring items 1.3 0.8 2.9 1.4 Investments, € million 33.3 65.3 4.8 19.0 Net sales, € million 1-9/2010 Change, % 7-9/2010 Change, % Rautakesko Finland 881 +6.4 293 +9.2 K-rauta AB 159 +10.2 61 +9.4 Byggmakker 413 +15.9 152 +17.9 Rautakesko Estonia 39 -21.6 16 -17.2 Rautakesko Latvia 36 -4.1 14 +4.0 Senukai 165 -19.0 69 -0.6 Rautakesko Russia 150 +18.3 60 +32.3 OMA 52 +28.2 24 +60.2 Total 1,894 +6.0 687 +11.9 January-September 2010 In the building and home improvement trade, the net sales in January-September were €1,894 million (€1,787 million), up 6.0%. The building and home improvement market increased in January-September by some 7% in Finland, some 4% in Norway and some 6% in Sweden. The market decreased by some 10-20% in the Baltic countries (Rautakesko's estimate). The Russian building and home improvement market is estimated to have returned to growth. In January-September, the net sales in Finland were €881 million, an increase of 6.4%. The building and home improvement product lines contributed €652 million to the net sales in Finland, an increase of 11.9%. The agricultural supplies trade contributed €229 million to the net sales, down 6.8%. The net sales from foreign operations in the building and home improvement trade were €1,013 million (€959 million), an increase of 5.7%. The sales performance of foreign operations was impacted by the strengthening of the Swedish krona, the Norwegian krone and the Russian ruble, as well as new store openings. The net sales from foreign operations dropped by 1.5% in terms of the local currencies. In Sweden, the net sales of K-rauta AB decreased by 0.7% in terms of kronas. In Norway, Byggmakker's net sales increased by 4.7% in terms of krones. In Russia, the net sales of the building and home improvement trade increased by 6.1% in terms of rubles, and the net sales of the Belarusian OMA were up by 30.9% in terms of rubles. Foreign operations contributed 53.5% to the net sales of the building and home improvement trade. In January-September, the operating profit excluding non-recurring items of the building and home improvement trade was €24.2 million (€14.0 million). The operating profit increased especially in Finland and Lithuania, but decreased in Russia, owing to new store openings. In January-September, the operating profit was €24.0 million (€18.0 million). In January-September, investments in the building and home improvement trade were €33.3 million (€65.3 million), of which 88.9% (82.0%) abroad. In January-September, new K-rauta stores were opened in Palokka, Jyväskylä, in Stockholm, Sweden and in Kaluga and Tula, Russia. OMA, a subsidiary of Rautakesko's Lithuanian subsidiary Senukai, opened a new DIY store in Minsk, Belarus. The retail sales of the K-rauta and Rautia chains in Finland increased by 5.5% to €771 million (VAT 0%), in January-September. The sales of Rautakesko B2B Service increased by 18.8%. The retail sales of the K-maatalous chain were €261 million (VAT 0%), down 10.3%. July-September 2010 In the building and home improvement trade, the net sales in July-September were €687 million (€614 million), up 11.9%. In July-September, the net sales in Finland were €293 million, an increase of 9.2%. The building and home improvement product lines contributed €222 million to the net sales in Finland, an increase of 13.6%. The net sales of the agricultural supplies trade were €71 million, a decrease of 2.9%. The net sales from foreign operations in the building and home improvement trade were €395 million (€346 million), an increase of 14.1%. The net sales from foreign operations increased by 6.2% in terms of the local currencies. In Sweden, the net sales of K-rauta AB decreased by 1.6% in terms of kronas. In Norway, Byggmakker's net sales increased by 7.3% in terms of krones. In Russia, the net sales of the building and home improvement trade increased by 17.0% in terms of rubles, and the net sales of the Belarusian OMA were up by 55.4% in terms of rubles. Foreign operations contributed 57.4% to the net sales of the building and home improvement trade. In July-September, the operating profit excluding non-recurring items of the building and home improvement trade was €20.0 million, up €11.7 million. The operating profit performance grew especially in Finland and Lithuania. The operating profit in July-September was €19.9 million (€8.5 million). In July-September, investments in the building and home improvement trade were €4.8 million (€19.0 million). In July-September, new stores were not opened. A new K-rauta store is being built in Kouvola, Uppsala, Haaparanta, St. Petersburg, and two in Moscow. The retail sales of the K-rauta and Rautia chains in Finland increased by 1.2% to €294 million (VAT 0%), in July-September. The sales of Rautakesko B2B Service increased by 28.8%. The retail sales of the K-maatalous chain were €80 million, (VAT 0%), down 11.2%. Car and machinery trade 1-9/2010 1-9/2009 7-9/2010 7-9/2009 Net sales, € million 752 743 218 213 Operating profit excl. non-recurring items, € million 29.2 -2.4 8.7 1.7 Operating profit as % of net sales excl. non-recurring items 3.9 -0.3 4.0 0.8 Investments, € million 13.1 8.5 5.0 5.0 Net sales, € million 1-9/2010 Change, % 7-9/2010 Change, % VV-Auto 517 +9.4 150 +17.7 Konekesko 235 -13.0 68 -21.0 Total 752 +1.2 218 +2.2 January-September 2010 In January-September, the net sales of the car and machinery trade were €752 million (€743 million), up 1.2%. The comparable net sales of the car and machinery trade grew by 14%. The impact of the car tax change (effective 1 April 2009) and the discontinued Baltic grain and agricultural inputs trade have been eliminated from the comparable net sales. VV-Auto's net sales in January-September were €517 million (€473 million), an increase of 9.4%. In the first part of the year, the net sales performance was lowered by the car tax change effective 1 April 2009, causing the car tax to be excluded from the net sales. VV-Auto's comparable net sales growth was 18.7%. During the first part of the year in Finland, new registrations of passenger cars increased by 21.3% and those of vans by 13.9% compared to the previous year. In January-September, the combined market share of passenger cars imported by VV-Auto rose to 19.2% (18.3%) and that of vans to 21.6% (19.6%). Konekesko's net sales in January-September were €235 million (€270 million), down 13.0% compared to the previous year, as a result of the planned discontinuation of the Baltic grain and agricultural inputs trade. The net sales of Konekesko's machinery trade grew by 4.1%. Net sales in Finland were €154 million, matching the level of the previous year. The net sales from Konekesko's foreign operations were €83 million, down 29.9%. In line with its strategy, Konekesko concentrates on the machinery trade also in the Baltic countries. In January-September, the operating profit excluding non-recurring items of the car and machinery trade was €29.2 million, which was €31.6 million higher than in the previous year. The profit performance was affected by VV-Auto's strong sales growth, cost reduction implemented in the division, as well as the €9 million impairment charges and expense provisions recognised by Konekesko on the Baltic agricultural supplies business for the first quarter of 2009. The operating profit in January-September was €30.0 million (€-2.4 million). Investments in the car and machinery trade were €13.1 million (€8.5 million) in January-September. July-September 2010 In July-September, the net sales of the car and machinery trade were €218 million (€213 million), up 2.2%. The comparable net sales of the car and machinery trade grew by 11.7%. The discontinued Baltic grain and agricultural inputs trade has been eliminated from the comparable net sales. VV-Auto's net sales in July-September were €150 million (€128 million), an increase of 17.7%. The net sales were increased by a positive general market trend. At the end of September, order books were still fuller than in the previous year. Konekesko's net sales in July-September were €68 million (€86 million), down 21.0%. The net sales from Konekesko's machinery trade matched the level of the previous year. In July-September, the operating profit excluding non-recurring items of the car and machinery trade was €8.7 million, which was €7.0 million higher than in the previous year. The profit performance was especially affected by sales growth in the car trade coupled with cost savings achieved in the machinery trade. The operating profit in July-September was €8.6 million (€1.7 million). Investments in the car and machinery trade were €5.0 million (€5.0 million) in July-September. Changes in the Group composition There were no significant changes in the Group composition during the reporting period. Resolutions of the Annual General Meeting 2010 and decisions of the Board's organisational meeting Kesko Corporation's Annual General Meeting held on 29 March 2010 adopted the financial statements for 2009 and discharged the Board of Directors' members and the Managing Director from liability. The Annual General Meeting also resolved to distribute a dividend of €0.90 per share, or a total amount of €88,547,166.90, as proposed by the Board. The dividend pay date was 12 April 2010. The Annual General Meeting also resolved to leave the number of members of the Board of Directors unchanged at seven, 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 Association providing for the convocation period so that the notice of a General Meeting shall be given not later than three weeks before the General Meeting, but in any case at least nine days before the record date of the General Meeting, referred to in Chapter 4, Article 2, Subsection 2 of the Companies Act. The resolutions of the Annual General Meeting were announced in more detail in a stock exchange release on 29 March 2010. The organisational meeting of Kesko Corporation's Board of Directors, held after the Annual General Meeting, decided to leave the compositions of the Board's Audit Committee and Remuneration Committee unchanged. The decisions of the Board's organisational meeting were announced in a stock exchange release on 29 March 2010. Shares, securities market and Board authorisations At the end of September 2010, Kesko Corporation's share capital totalled €197,282,584. Of all shares 31,737,007, or 32.2%, were A shares and 66,904,285, or 67.8%, were B shares. The aggregate number of shares was 98,641,292. Each A share entitles to ten (10) votes and each B share to one (1) vote. In January- September, the share capital was increased three times as a result of the share subscriptions with the options of the 2003 stock option scheme. The increases were made on 11 February 2010 (€128,424), 3 May 2010 (€422,754) and 3 June 2010 (€88,348) and announced in stock exchange notifications on the same days. The subscribed shares were included on the main list of Nasdaq OMX Helsinki for public trading with the old B shares on 12 February 2010, 4 May 2010 and 4 June 2010. The price of a Kesko A share quoted on Nasdaq OMX Helsinki (the Helsinki stock exchange) was €23.60 at the end of 2009, and €33.50 at the end of September 2010, representing an increase of 41.9%. Correspondingly, the price of a B share was €23.08 at the end of 2009, and €34.42 at the end of September 2010, representing an increase of 49.1%. In January-September, the highest A share price was €33.50 and the lowest was €23.16. For B shares, they were €34.54 and €22.40 respectively. In January-September, the Helsinki stock exchange (OMX Helsinki) All-Share index rose by 9.9%, the weighted OMX Helsinki CAP index by 15.5%, while the Consumer Staples Index was up 31.5% during the same period. At the end of September 2010, the market capitalisation of A shares was €1,063 million, while that of B shares was €2,303 million. Their combined market capitalisation was €3,366 million, an increase of €1,080 million on the end of 2009. In January-September 2010, 3,772,299 A shares were traded on the Helsinki stock exchange at a total value of €112 million, while 39.7 million B shares were traded at a total value of €1,111 million. The number of 2003F stock options of the 2003 scheme traded during the reporting period was 273,212 at a total value of about €3.4 million. The 2003 option scheme expired on 30 April 2010. In addition, the company operates the 2007 stock option scheme for management and key personnel which comprises 2007A options, whose exercise period began on 1 April 2010, and 2007B and 2007C options, whose exercise periods will begin at the beginning of April in 2011 and 2012 respectively. The 2007A options were also included on the official list of the Helsinki stock exchange on 1 April 2010, and 6,000 options were traded during the reporting period at a total value of €6,350. 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 against payment or other consideration. The authorisation also includes a rights issue. The authorisation has not been used. Further information on Board authorisations is available at www.kesko.fi. At the end of September 2010, the number of shareholders was 37,677, which was 1,211 less than at the end of 2009. At the end of September 2010, foreign ownership of all shares was 25%, and foreign ownership of B shares was 37%. Flagging notifications The Kesko Pension Fund sold such a number of Kesko A shares owned by it to Kruunuvuoren Satama Oy that its holding of Kesko shares, as a percentage of votes carried by all Kesko shares, fell below 5%, and respectively, the number of votes carried by shares held by Kruunuvuoren Satama Oy exceeded 5% of votes carried by all Kesko shares. The matter was announced in a stock exchange notification on 27 July 2010. Main events during the reporting period On 1 July 2010, Kesko sold ten properties to Ilmarinen Mutual Pension Insurance Company and Kruunuvuoren Satama Oy, a joint venture established by Ilmarinen, the Kesko Pension Fund and Kesko Corporation. The debt-free selling price of the properties totalled €107.5 million. The €47.4 million gain on the sale of the properties is treated as a non-recurring item in Kesko's operating profit for the third quarter of the year, with the exception of a non-recurring €2.3 million gain on the sale, which will be recognised for the fourth quarter. In the same connection, the Kesko Pension Fund sold seven retail store properties owned by it to Kruunuvuoren Satama Oy. The Kesko Group companies leased the properties for the Kesko Group companies' use, mainly on 15-year leases with extension options. In consequence, the Kesko Group's lease liabilities rose by about €120 million. Kesko Corporation has made an equity investment of approximately €33 million in the joint venture. Its ownership interest and voting rights in Kruunuvuoren Satama Oy are 49%. The company is included in the Kesko Group's financial reporting as an associate starting from 1 July 2010 (stock exchange releases on 1 July 2010). On 1 September 2010, the management of the statutory pension provision and the related insurance portfolio of some 3,100 people employed by the Kesko Group were transferred from the Kesko Pension Fund to Ilmarinen Mutual Pension Insurance Company. As a result, Kesko will recognise an €8 million actuarial gain in the latter part of the year which will not be treated as a non-recurring item. The fair value of the Kesko Pension Fund's investment assets exceeds the amount of its pension liabilities. The difference is recognised as pension assets in Kesko's balance sheet. Pension assets are planned to be returned and the returned pension assets are expected to have a positive cash flow effect totalling about €160 million. The matter was announced in a stock exchange release on 1 September 2010. Responsibility For the eighth year in succession, Kesko was selected for the Dow Jones sustainability indexes DJSI World and DJSI Europe. In the annual review 2010, Kesko gained the subsector's best scores for its environmental reporting, risk management, and the corporate code of conduct for preventing corruption and bribery. Kesko Food has, in cooperation with Suominen Flexible Packaging Ltd, developed Pirkka recycled plastic bags made of protective plastic wrappings used in Kesko Food's central warehouses and terminals. The new Pirkka recycled plastic bags were available in K-food stores in September. In September, Asko launched a new sofa, Puro, designed in cooperation with the Finnish Allergy and Asthma Federation and Insofa Ltd, Asko's own sofa factory. Insofa became the first sofa manufacturer in Finland to have the right to use the allergy label. In September, Intersport and Halti launched a jacket recycling campaign in which €5 for each new jacket bought during the campaign are donated to Plan Finland's 'Because I am a girl' campaign. In October, K-food stores participate in the Cancer Society of Finland's Pink Ribbon campaign by selling Pirkka Pink Ribbon rose bunches in K-food stores and Pink Ribbon campaign bags in K-citymarkets. In Sweden, K-rauta AB participates in the Save the Children campaign until March 2011. The K-rauta stores in Sweden display collection boxes and sell campaign products from which the revenue will be donated to Save the Children's Emergency Fund. Kesko participated in the Energy Saving Week from 11 to 17 October. K- supermarket Torpparinmäki, opened in Helsinki in October, is the first store in the world with the energy efficient LED lighting system throughout the premises. The LED lighting of the store consumes over 35 percent less energy than traditional fluorescent tubes. K-food stores will also continue adding lids and doors to their existing freezers. By October 2010, the annual energy savings achieved by this amounted to 11.6 million kilowatt hours (kWh), which correspond the total annual electricity consumption of nearly 600 one-family houses. The K-Group has signed the trading sector energy agreement and made a commitment to save over 65 million kilowatt hours (kWh) by the end of 2016. Risk management The Kesko Group has established a risk management process according to which divisions regularly assess risks and their management and report on them to the Group's management. Kesko's risk management and risks involved in its operating activities are described in more detail in the Corporate Governance section on Kesko's website. During the current year, no material changes have taken place in the risk factors presented in Kesko's 2009 Annual Report and financial statements. The most significant risks for Kesko's operating activities in the near future are involved in the general economic development in Kesko's operating area and its impacts on the Kesko Group's sales and profit performance. Country-specific differences in the economic revival will affect the developments in demand especially in the building and home improvement trade and in the machinery trade. In the prevailing market situation, efficient management of costs, inventories, trade receivables and investment assets, as well as risk management responses to the prevention of malpractice are emphasized. The risks and uncertainties related to profit performance have been described in the future outlook section of this release. 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 (10/2010-9/2011) in comparison with the 12-month period preceding the reporting period (10/2009-9/2010). The outlook for trends in consumer demand has remained steady, especially as a result of higher consumer confidence and continuously low interest rate levels. Nevertheless, the trend in economic development continues to involve significant uncertainties relating to the evolution of total production, tightening taxation and ramifications of possible disturbances in the financial market. The trend in the grocery trade is expected to continue steadily. In the home and speciality goods trade, the market recovery is expected to continue as a result of higher consumer confidence. As house building activity increases, the building and home improvement market is expected to continue strengthening in the Nordic countries, and the decline is expected to ease in the other operating countries. In the car and machinery trade, new car sales are expected to increase, and the market situation in the machinery trade is expected to recover gradually. The Kesko Group's net sales are expected to grow during the next twelve months. Kesko's operating profit excluding non-recurring items has more than doubled during the past twelve months. During the next twelve months, the operating profit excluding non-recurring items is expected to remain at the achieved level, despite a significant expansion of the store site network. Helsinki, 25 October 2010 Kesko Corporation Board of Directors The information in this interim report is unaudited. Further information is available from Arja Talma, Senior Vice President, CFO, telephone +358 1053 22113. A Finnish-language webcast from the media and analyst briefing on the interim report can be accessed at www.kesko.fi at 11.00. An English-language web conference on the interim 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 performance 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 September Group contingent liabilities Calculation of performance indicators K-Group's retail and B2B sales Kesko Corporation's financial statements will be released on 3 February 2011. In addition, the Kesko Group's sales figures are 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 report has been prepared in accordance with the IAS 34 standard. The interim report has been prepared in accordance with the same principles as the annual financial statements for 2009, with the exception of the following changes due to the adoption of new and revised IFRS standards and IFRIC interpretations. -IFRS 3 (revised), Business combinations -IAS 27 (revised), Consolidated and Separate Financial Statements -IAS 39 (amendment), Financial Instruments: Recognition and Measurement - Eligible hedged items -IFRS 5 (amendment), Non-current assets held for sale and discontinued operations -IFRS 2 (amendment), Share-based Payment - Group cash-settled transactions -IFRIC 9 and IAS 39, (Amendments) Reassessment of Embedded Derivatives on Reclassification -IFRIC 17, Distributions of Non-cash Assets to Owners - Annual amendments to the IFRSs (Annual Improvements) The above amendments to standards and interpretations do not have a material impact on the reported income statement, statement of financial position or notes. The net sales from operations in Finland presented in the interim report are inclusive of the export sales of the Finnish companies (previously exports were included in the net sales of other countries). The comparative figures have been restated accordingly. Consolidated income statement (€ million) 1-9/ 1-9/ Change% 7-9/ 7-9/ Change% 1-12/ 2010 2009 2010 2009 2009 Net sales 6,467 6,294 2.8 2,231 2,133 4.6 8,447 Cost of sales -5,559 -5,466 1.7 -1,912 -1,853 3.2 -7,298 Gross profit 908 828 9.6 319 280 13.8 1,149 Other operating income 519 478 8.6 207 152 36.2 710 Staff cost -376 -398 -5.7 -116 -126 -8.0 -535 Depreciation and impairment charges -89 -88 0.9 -32 -30 8.0 -131 Other operating expenses -739 -706 4.7 -254 -228 11.3 -961 Operating profit 224 114 96.0 124 48 (..) 232 Interest income 15 17 -11.8 5 4 31.4 21 Interest expenses -11 -16 -27.5 -4 -5 -28.6 -20 Exchange differences and other financial items -2 -15 -87.7 -1 -4 -78.8 -17 Income from associates 0 0 (..) 0 0 (..) 0 Profit before tax 225 100 (..) 125 44 (..) 217 Income tax -72 -41 77.4 -40 -18 (..) -82 Profit for the period 153 60 (..) 84 25 (..) 134 Attributable to Owners of the parent 146 54 (..) 80 23 (..) 125 Non-controlling interests 7 6 25.6 4 2 89.5 9 Earnings per share (€) for profit attributable to equity holders of the parent Basic 1.48 0.55 (..) 0.81 0.24 (..) 1.28 Diluted 1.48 0.55 (..) 0.81 0.24 (..) 1.27 Consolidated statement of comprehensive income (€ million) 1-9/ 1-9/ Change% 7-9/ 7-9/ Change% 1-12/ 2010 2009 2010 2009 2009 Net profit for the period 153 60 (..) 84 25 (..) 134 Other comprehensive income Exchange differences on translating foreign operations 3 -3 (..) -4 1 (..) -3 Cash flow hedge revaluation 8 -10 (..) 1 -3 (..) -4 Revaluation of available- for- sale financial assets 1 0 (..) 0 1 -71.1 -2 Tax relating to other comprehensive income -3 3 (..) 0 1 (..) 2 Total other comprehensive income for the period, net of tax 9 -10 (..) -3 -1 (..) -7 Total comprehensive income for the period 163 49 (..) 81 24 (..) 127 Attributable to Owners of the parent 155 48 (..) 79 22 (..) 123 Non-controlling interests 7 2 (..) 2 2 19.1 4 (..) Change over 100% Consolidated statement of financial position (€ million), condensed 30.9.2010 30.9.2009 Change % 31.12.2009 ASSETS Non-current assets Intangible assets 187 181 3.4 185 Tangible assets 1,097 1,208 -9.2 1,111 Interests in associates and other financial assets 57 37 54.2 36 Loans and receivables 68 61 12.5 71 Pension assets 308 311 -1.1 315 Total 1,717 1,797 -4.5 1,717 Current assets Inventories 688 705 -2.3 665 Trade receivables 642 633 1.4 594 Other receivables 140 144 -2.6 150 Financial assets at fair value through profit or loss 225 92 (..) 213 Available-for-sale financial assets 553 365 51.7 428 Cash and cash equivalents 72 79 -9.5 74 Total 2,320 2,017 15.0 2,124 Non-current assets held for sale 3 1 (..) 1 Total assets 4,039 3,815 5.9 3,842 30.9.2010 30.9.2009 Change % 31.12.2009 EQUITY AND LIABILITIES Equity 2,082 1,925 8.1 2,005 Non-controlling interests 54 62 -13.0 64 Total equity 2,136 1,987 7.5 2,069 Non-current liabilities Pension obligations 2 2 -7.9 2 Interest-bearing liabilities 227 262 -13.3 262 Non-interest-bearing liabilities 4 9 -50.0 6 Deferred tax liabilities 124 129 -3.4 128 Provisions 13 18 -29.4 14 Total 370 420 -11.7 412 Current liabilities Interest-bearing liabilities 229 222 3.2 194 Trade payables 822 791 3.9 704 Other non-interest-bearing liabilities 450 375 20.1 434 Provisions 32 20 58.4 29 Total 1,533 1,408 8.9 1,361 Total equity and liabilities 4,039 3,815 5.9 3,842 (..) Change over 100% Consolidated statement of changes in equity (€ million) Share Issue Share Other Cur- Revalu- Re- Non Total cap of pre reser- rency ation tained cont ital share mi- ves trans surplus ear- rol- cap um lation nings ling- ital differ- inte- ences rests Balance at 1.1.2009 196 0 191 243 -10 2 1,344 61 2,026 Shares subscribed for with options 1 0 2 3 Option cost 6 0 6 Dividends -98 0 -98 Other changes 0 1 0 1 Net profit for the period 54 6 60 Other comprehensi ve income Exchange differences on translating foreign operations 0 2 0 -4 -3 Cash flow hedge revaluation -10 -10 Revaluation of available for-sale financial assets 0 0 Tax relating to other comprehens ve income 3 3 Total other comprehens ve income 0 2 -8 0 -4 -10 Balance at 30.9.2009 196 0 193 243 -8 -6 1,307 62 1,987 Balance at 1.1.2010 197 0 194 243 -7 -3 1,381 64 2,069 Shares subscribed for with options 1 4 4 Option cost 4 0 4 Dividends -89 -18 -106 Other changes 1 0 1 Net profit for the period 146 7 153 Other comprehens ve income Exchange differences on translating foreign operations 0 3 0 0 3 Cash flow hedge revaluation 8 8 Revaluation of available for-sale financial assets 1 1 Tax relating to other comprehens ve income -3 -3 Total other comprehens ve income 0 3 7 -1 0 9 Balance at 30.9.2010 197 0 198 243 -4 5 1,443 54 2,136 Consolidated cash flow statement (€ million), condensed 1-9/ 1-9/ Change% 7-9/ 7-9/ Change% 1-12/ 2010 2009 2010 2009 2009 Cash flow from operating activities Profit before tax 225 100 (..) 125 44 (..) 217 Planned depreciation 86 86 -0.1 29 30 -1.8 117 Finance income and costs -1 14 (..) -1 5 (..) 16 Other adjustments -19 -24 -17.6 -7 5 (..) -74 Working capital Current non-interest-bearing trade and other receivables, increase (-)/ decrease (+) -33 -4 (..) 85 63 34.3 39 Inventories increase (-)/ decrease (+) -16 167 (..) -14 37 (..) 207 Current non-interest-bearing liabilities, increase (+)/decrease (-) 101 -37 (..) -73 -51 42.3 -84 Financial items and tax -74 -47 57.4 -10 -12 -18.8 -59 Net cash from operating activities 269 256 5.2 133 119 11.8 379 Cash flow from investing activities Investments -164 -162 1.4 -72 -52 39.2 -223 Sales of fixed assets 115 94 22.5 111 5 (..) 252 Increase of non-current receivables 0 0 (..) 0 0 (..) 0 Decrease of non-current receivables 2 2 -17.9 0 1 -77.5 2 Net cash used in investing activities -47 -65 -28.4 39 -46 (..) 31 Cash flow from financing activities Increase (+)/ decrease (-) in interest-bearing liabilities 15 -6 (..) -29 -44 -34.5 -33 Increase (-)/decrease (+) in current interest-bearing receivables 10 -1 (..) 0 0 (..) -14 Dividends paid -106 -98 7.9 -1 0 (..) -98 Equity increase 4 3 36.9 0 0 (..) 5 Short-term money market investments -98 -19 (..) 20 -78 (..) -98 Other items -12 7 (..) -5 0 (..) 4 Net cash used in financing activities -187 -115 62.0 -15 -123 -87.7 -234 Change in cash and cash equivalents 35 75 -52.9 157 -49 (..) 175 Cash and cash equivalents and current portion of available-for-sale financial assets at 1 Jan. 491 319 53.9 371 440 -15.9 319 Translation difference and revaluation 0 -3 (..) -1 0 (..) -3 Cash and cash equivalents and current portion of available-for-sale financial assets at 30 Sep. 527 391 34.8 527 391 34.8 491 (..) Change over 100% Group performance indicators 1-9/2010 1-9/2009 Change, pp Return on capital employed, % 15.5 7.2 8.3 Return on capital employed, %, moving 12 mo 17.4 5.7 11.7 Return on capital employed excl. non- recurring items, % 13.0 5.5 7.5 Return on capital employed excl. non- recurring items, %, moving 12 mo 13.0 5.3 7.6 Return on equity, % 9.7 4.0 5.7 Return on equity, %, moving 12 mo 11.0 3.1 7.9 Return on equity excl. non-recurring items, % 8.0 2.6 5.4 Return on equity excl. non-recurring items, %, moving 12 mo 8.0 3.1 4.9 Equity ratio, % 53.3 52.3 1.0 Gearing, % -18.4 -2.6 -15.8 Change, % Investments, € million 123.6 156.5 -21.0 Investments, % of net sales 1.9 2.5 -23.1 Earnings per share, basic, € 1.48 0.55 (..) Earnings per share, diluted, € 1.48 0.55 (..) Earnings per share excl. non-recurring items, basic, € 1.21 0.35 (..) Cash flow from operating activities, € million 269 256 5.2 Cash flow from investing activities, € million -47 -65 -28.4 Equity/share, € 21.10 19.60 7.6 Personnel, average 18,173 19,541 -7.0 (..) Change over 100% Group performance 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/ indicators by quarter 2009 2009 2009 2009 2010 2010 2010 Net sales, € million 2,018 2,143 2,133 2,153 1,958 2,279 2,231 Change in net sales, % -11.4 -15.9 -12.4 -7.7 -3.0 6.4 4.6 Operating profit, € million 23.2 42.7 48.3 118.1 20.9 79.0 123.9 Operating margin, % 1.1 2.0 2.3 5.5 1.1 3.5 5.6 Operating profit excl. non- recurring items, € million 3.4 36.4 47.5 68.0 20.9 78.1 88.7 Operating margin excl. non- recurring items, % 0.2 1.7 2.2 3.2 1.1 3.4 4.0 Finance income/costs, € million -5.1 -4.4 -4.7 -1.8 0.8 -0.2 0.8 Profit before tax, € million 18.2 38.2 43.8 116.3 21.9 78.7 124.5 Profit before tax, % 0.9 1.8 2.1 5.4 1.1 3.5 5.6 Return on capital employed, % 4.2 8.0 9.4 22.9 4.4 16.0 26.2 Return on capital employed excl. non-recurring items, % 0.6 6.8 9.2 13.2 4.3 15.8 18.8 Return on equity, % 2.4 4.6 5.2 14.7 2.9 10.6 16.1 Return on equity excl. non- recurring items, % -0.6 3.7 5.0 7.7 2.9 10.5 11.1 Equity ratio, % 49.8 51.0 52.3 54.1 51.1 51.2 53.3 Investments, € million 51.5 55.8 49.2 41.5 42.0 45.7 35.9 Earnings per share, diluted, € 0.12 0.19 0.24 0.73 0.15 0.51 0.81 Equity per share, € 19.16 19.36 19.60 20.39 19.69 20.30 21.10 Segment information Net sales by segment, 1-9/ 1-9/ Change 7-9/ 7-9/ Change (€ million) 2010 2009 % 2010 2009 % Food trade, Finland 2,874 2,827 1.7 986 966 2.1 Food trade, other countries* - - - - - - Food trade total 2,874 2,827 1.7 986 966 2.1 - of which intersegment trade 122 118 2.9 40 39 0.7 Home and speciality goods trade, Finland 1,056 1,042 1.4 374 375 -0.2 Home and speciality goods trade, other countries* 11 16 -27.9 4 5 -23.5 Home and speciality goods trade total 1,068 1,058 0.9 378 381 -0.6 - of which intersegment trade 16 16 -0.2 5 6 -19.8 Building and home improvement trade, Finland 881 828 6.4 293 268 9.2 Building and home improvement trade, other countries* 1,013 959 5.7 395 346 14.1 Building and home improvement trade total 1,894 1,787 6.0 687 614 11.9 - of which intersegment trade 0 1 -66.3 0 0 -62.7 Car and machinery trade, Finland 669 626 6.9 190 172 10.2 Car and machinery trade, other countries* 83 117 -29.2 28 41 -31.3 Car and machinery trade total 752 743 1.2 218 213 2.2 - of which intersegment trade 0 0 -87.5 0 0 (..) Common operations and eliminations -120 -121 -0.3 -39 -41 -3.9 Finland total 5,360 5,202 3.0 1,804 1,741 3.6 Other countries total* 1,107 1,091 1.5 427 392 8.8 Group total 6,467 6,294 2.8 2,231 2,133 4.6 * Net sales in countries other than Finland. Operating profit by 1-9/ 1-9/ 7-9/ 7-9/ segment (€ million) 2010 2009 Change 2010 2009 Change Food trade 121.2 111.9 9.3 47.3 35.8 11.5 Home and speciality goods trade 57.7 0.1 57.7 50.6 7.0 43.7 Building and home improvement trade 24.0 18.0 6.0 19.9 8.5 11.4 Car and machinery trade 30.0 -2.4 32.4 8.6 1.7 7.0 Common operations and eliminations -9.1 -13.3 4.3 -2.5 -4.5 2.0 Total 223.9 114.3 109.6 123.9 48.3 75.6 Operating profit excl. non-recurring items by 1-9/ 1-9/ 7-9/ 7-9/ segment (€ million) 2010 2009 Change 2010 2009 Change Food trade 123.3 99.4 23.9 49.5 35.5 14.1 Home and speciality goods trade 20.3 -10.2 30.5 13.2 6.5 6.7 Building and home improvement trade 24.2 14.0 10.2 20.0 8.4 11.7 Car and machinery trade 29.2 -2.4 31.6 8.7 1.7 7.0 Common operations and eliminations -9.4 -13.4 4.1 -2.8 -4.5 1.6 Group total 187.6 87.4 100.3 88.7 47.5 41.1 Segments' 1-9/ 1-9/ Changepp 7-9/ 7-9/ Changepp operating 2010, 2009 2010, 2009, margins excl. % of net % of net % of net % of net non- sales sales sales sales recurring items Food trade 4.3 3.5 0.8 5.0 3.7 1.4 Home and speciality goods trade 1.9 -1.0 2.9 3.5 1.7 1.8 Building and home improvement trade 1.3 0.8 0.5 2.9 1.4 1.6 Car and machinery trade 3.9 -0.3 4.2 4.0 0.8 3.2 Group total 2.9 1.4 1.5 4.0 2.2 1.7 Capital employed by segment, cumulative 1-9/ 1-9/ 7-9/ 7-9/ average (€ million) 2010 2009 Change 2010 2009 Change Food trade 606 633 -27 581 624 -43 Home and speciality goods trade 432 516 -84 421 504 -83 Building and home improvement trade 639 650 -11 626 631 -5 Car and machinery trade 172 250 -78 141 216 -74 Common operations and eliminations 80 81 -1 118 87 31 Group total 1,930 2,129 -200 1,888 2,062 -173 Return on capital 1-9/ 1-9/ Change pp 7-9/ 7-9/ Change pp Moving employed excl. non- 2010 2009 2010 2009 12 mo 9/2010 recurring items by segment, % Food trade 27.1 20.9 6.2 34.1 22.7 11.3 25.4 Home and speciality goods trade 6.3 -2.6 8.9 12.6 5.2 7.4 13.3 Building and home improvement trade 5.0 2.9 2.2 12.8 5.3 7.5 3.5 Car and machinery trade 22.6 -1.3 23.9 24.6 3.1 21.5 17.3 Group total 13.0 5.5 7.5 18.8 9.2 9.6 13.0 Investments by segment (€ million) 1-9/ 1-9/ 7-9/ 7-9/ 2010 2009 Change 2010 2009 Change Food trade 60 59 0 22 19 3 Home and speciality goods trade 17 23 -6 4 6 -2 Building and home improvement trade 33 65 -32 5 19 -14 Car and machinery trade 13 9 5 5 5 0 Group total 124 156 -33 36 49 -13 Segment information by quarter Net sales by segment 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/ (€ million) 2009 2009 2009 2009 2010 2010 2010 Food trade 888 974 966 970 912 976 986 Home and speciality goods trade 346 331 381 500 355 334 378 Building and home improvement trade 529 643 614 525 495 712 687 Car and machinery trade 296 233 213 205 236 298 218 Common operations and eliminations -41 -39 -41 -47 -40 -41 -39 Group total 2,018 2,143 2,133 2,153 1,958 2,279 2,231 Operating profit by segment (€ million) 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/ 2009 2009 2009 2009 2010 2010 2010 Food trade 42.3 33.8 35.8 58.7 31.7 42.2 47.3 Home and speciality goods trade -3.3 -3.6 7.0 66.5 0.1 7.0 50.6 Building and home improvement trade -5.2 14.8 8.5 1.6 -13.8 17.9 19.9 Car and machinery trade -6.0 1.9 1.7 -2.7 6.4 15.0 8.6 Common operations and eliminations -4.6 -4.3 -4.5 -5.9 -3.4 -3.2 -2.5 Group total 23.2 42.7 48.3 118.1 20.9 79.0 123.9 Operating profit excl. non-recurring 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/ items by segment (€ million) 2009 2009 2009 2009 2010 2010 2010 Food trade 33.8 30.1 35.5 33.7 31.7 42.1 49.5 Home and speciality goods trade -10.7 -6.0 6.5 39.7 0.1 7.0 13.2 Building and home improvement trade -9.1 14.8 8.4 -2.1 -13.8 17.9 20.0 Car and machinery trade -6.0 1.9 1.7 2.7 6.4 14.1 8.7 Common operations and eliminations -4.6 -4.4 -4.5 -6.0 -3.4 -3.1 -2.8 Group total 3.4 36.4 47.5 68.0 20.9 78.1 88.7 Segments' operating margins excl. non-recurring items 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/ (€ million) 2009 2009 2009 2009 2010 2010 2010 Food trade 3.8 3.1 3.7 3.5 3.5 4.3 5.0 Home and speciality goods trade -3.1 -1.8 1.7 7.9 0.0 2.1 3.5 Building and home improvement trade -1.7 2.3 1.4 -0.4 -2.8 2.5 2.9 Car and machinery trade -2.0 0.8 0.8 1.3 2.7 4.7 4.0 Group total 0.2 1.7 2.2 3.2 1.1 3.4 4.0 Personnel average and at 30.9. Personnel, average by segment 1-9/2010 1-9/2009 Change Food trade 2,923 3,110 -187 Home and speciality goods trade 5,401 5,698 -297 Building and home improvement trade 8,317 8,994 -677 Car and machinery trade 1,133 1,328 -195 Common operations 399 411 -12 Group total 18,173 19,541 -1,368 Personnel at 30.9.* by segment 2010 2009 Change Food trade 3,165 3,336 -171 Home and speciality goods trade 7,349 7,544 -195 Building and home improvement trade 9,558 9,525 33 Car and machinery trade 1,199 1,255 -56 Common operations 429 426 3 Group total 21,700 22,086 -386 * total number incl. part-time employees Group contingent liabilities (€ million) 30.9.2010 30.9.2009 Change% For own commitments 264 228 16.0 For shareholders 0 0 0.0 For others 6 9 -37.2 Lease liabilities for machinery and fixtures 21 23 -8.0 Lease liabilities for real estate 2,304 2,106 9.4 Contingent liabilities arising from derivative financial instruments Fair value Values of underlying instruments at 30.9. 30.9.2010 30.9.2009 30.9.2010 Interest rate derivatives Forward and future contracts 3 23 2.50 Interest rate swap contracts 206 204 3.74 Currency derivatives Forward and future contracts 308 409 -6.61 Foreign exchange contracts 100 100 -12.49 Commodity derivatives Electricity derivatives 44 38 0.42 Grain derivatives - 0 - Calculation of performance 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, %, moving 12 Operating profit for prior 12 months x months 100 / (Non-current assets + Inventories + Receivables + Other current assets - Non-interest-bearing liabilities) on average for 12 months Return on capital employed, excl. non- Operating profit excl. non-recurring recurring items*, % items x 100 / (Non-current assets + Inventories + Receivables + Other current assets - Non-interest-bearing liabilities) on average for the reporting period Operating profit excl. non-recurring items for prior 12 months x 100 / (Non-current assets + Inventories + Return on capital employed excl. non- Receivables + Other current assets - recurring items, %, Non-interest-bearing liabilities) on moving 12 months average for 12 months (Profit/loss before tax - income tax) Return on equity*, % x 100 / Shareholders' equity Return on equity, %, moving 12 months (Profit/loss for prior 12 months before tax - income tax for prior 12 months) x 100 / Shareholders' equity (Profit/loss adjusted for non- recurring items before tax - income tax adjusted for the tax effect of Return on equity excl. non-recurring non-recurring items) x items*, % 100 / Shareholders' equity (Profit/loss for prior 12 months adjusted for non-recurring items before tax - income tax for prior 12 months adjusted for the tax effect of Return on equity excl. non-recurring non-recurring items) x items, %, moving 12 months 100 / Shareholders' equity Shareholders' equity x 100 / Equity ratio, % (Balance sheet total - prepayments received) (Profit - non-controlling interests) / Earnings/share, diluted Average number of shares adjusted for the dilutive effect of options Earnings/share, basic (Profit - non-controlling interests) / Average number of shares (Profit adjusted for non-recurring Earnings/share excl. non-recurring items, items - non-controlling interests)/ basic Average number of shares Equity attributable to equity holders Equity/share of the parent / Basic number of shares at balance sheet date Gearing, % Interest-bearing net liabilities x 100 / Shareholders' equity *Capital return ratios have been annualised K-Group's retail and B2B sales in euros, VAT 0% (preliminary data): 1.1.-30.9.2010 1.7.-30.9.2010 K-Group retail and B2B sales € million Change, % € million Change, % K-Group food trade K-food stores, Finland 3,189 3.1 1,092 3.6 Kespro 512 -0.6 181 0.4 Food trade total 3,700 2.6 1,273 3.1 K-Group home and speciality goods trade Home and speciality goods stores, Finland 1,161 2.2 404 1.2 Home and speciality goods stores, Baltic countries 11 -27.8 4 -23.0 Home and speciality goods trade total 1,172 1.7 408 0.9 K-Group building and home improvement trade K-rauta and Rautia 771 5.5 294 1.2 Rautakesko B2B Service 143 18.8 55 28.8 K-maatalous 261 -10.3 80 -11.2 Finland total 1,175 2.8 429 1.4 Building and home improvement stores, other Nordic countries 799 13.9 312 15.8 Building and home improvement stores, Baltic countries 240 -17.8 99 -2.8 Building and home improvement stores, other countries 202 20.5 84 39.1 Building and home improvement trade total 2,415 4.9 923 8.1 K-Group car and machinery trade VV-Autotalot 252 5.6 80 14.0 VV-Auto, import 278 12.9 73 18.4 Konekesko, Finland 154 -0.5 40 -11.9 Finland total 685 6.9 193 8.9 Konekesko, Baltic countries 84 -27.5 29 -28.1 Car and machinery trade total 769 1.7 221 2.1 Finland total 6,721 3.0 2,298 2.9 Other countries total 1,336 3.4 527 10.7 Retail and B2B sales total 8,056 3.0 2,825 4.3 [HUG#1455188] |
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