2009-07-24 08:00:00 CEST
2009-07-24 08:06:19 CEST
REGULATED INFORMATION
Kesko Oyj - Interim report (Q1 and Q3)
Interim financial report for the period 1 Jan.-30 Jun. 2009
KESKO CORPORATION STOCK EXCHANGE RELEASE 24.07.2009 AT 09.00 1(27)
In January-June 2009, the Group's net sales from continuing
operations were €4,160 million, which is 13.8% down on the
corresponding period of the previous year (€4,824 million). In
January-June 2009, the operating profit excluding non-recurring items
was €39.8 million (€117.7 million). The profit before tax was €56.5
million (€232.9 million). The whole Group's profit for January-June
was €30.6 million (€207.6 million). The whole Group's earnings per
share were €0.31 (€2.11).
Key performance indicators
Continuing operations 1-6/2009 1-6/2008 4-6/2009 4-6/2008
Net sales, € million 4,160 4,824 2,143 2,547
Operating profit, € million 65.9 235.0 42.7 84.8
Operating profit excluding
non-recurring items, € million 39.8 117.7 36.4 81.1
Profit before tax, € million 56.5 232.9 38.2 84.3
Earnings/share, €, diluted 0.31 1.69 0.19 0.58
Investments, € million 107.2 143.3 55.8 83.0
Whole Group
Earnings/share, diluted, € 0.31 2.11 0.19 0.89
Earnings/share excl.
non-recurring items, basic, € 0.11 0.81 0.15 0.56
Cash flow from operating
activities,
€ million 146 89 143 126
Cash flow from investing
activities, € million -30 79 -25 26
Return on equity, % 3.4 21.7 4.6 19.1
Return on capital employed, % 6.1 26.0 8.0 22.2
Whole Group 30.6.2009 30.6.2008
Equity ratio, % 51.0 49.0
Equity/share, € 19.36 20.17
JANUARY-JUNE 2009
CONTINUING OPERATIONS
Net sales and profit
The Group's net sales in January-June 2009 were €4,160 million, which
is 13.8% down on the corresponding period of the previous year
(€4,824 million). Net sales decreased by 9.0% in Finland and by 30.9%
abroad. Exports and foreign operations accounted for 17.4% (21.7%) of
the net sales. In consequence of the recession, the Group's net sales
performance was affected by a substantially contracted construction
market, and a decrease in the sales of the car, machinery and home
and speciality goods trade. A steady growth continued in the grocery
trade.
In January-June, the K-Group's (i.e. Kesko's and the chain stores')
retail and B-to-B sales (incl. VAT) totalled €6,135 million, a
decrease of 10.5% on the corresponding period of the previous year.
The Group's profit before tax for January-June was €56.5 million
(€232.9 million). The operating profit was €65.9 million (€235.0
million). The operating profit excluding non-recurring items was
€39.8 million (€117.7 million), representing 1.0% (2.4%) of the net
sales. The non-recurring items include €27.9 million in gains on
property transactions, and €1.9 million in property write-downs. The
most significant non-recurring income items of the comparative period
include a €103.2 million gain on property sale and lease arrangements
between Kesko and Nordisk Renting Oy, and a €10.3 million gain on the
sale of K-Rahoitus Oy.
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 dropped by some €19 million compared with the previous year,
regardless of store site openings.
The Group's earnings per share from continuing operations were €0.31
(€1.69). The Group's equity per share was €19.36 (€20.17).
Investments
In January-June, the Group's investments totalled €107.2 million
(€143.3 million), which is 2.6% (3.0%) of the net sales. Investments
in store sites were €88.4 million (€119.4 million) and other
investments €18.8 million (€23.9 million). Investments in foreign
operations represented 33.8% of total investments (26.1%).
Finance
In January-June, the cash flow from operating activities developed
positively and was €146 million (€89 million). The working capital
was reduced by the adjustment of inventories to the prevailing market
situation. The cash flow from investing activities was €-30 million
(€79 million). The cash flow from investing activities included €90
million (€217 million) of proceeds from the disposal of fixed assets.
The Group's liquidity and solvency remained strong throughout the
reporting period. At the end of the period, liquid assets totalled
€507 million (€551 million). At the end of the reporting period, the
interest-bearing net debt was €18 million (€-43 million). The equity
ratio was 51.0% (49.0%) and gearing 0.9% (-2.1%) at the end of the
period.
In January-June, the Group's net financial expenses were €9.5 million
(€1.6 million). The costs were increased by €10.5 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-June, the Group's taxes were €22.3 million (€58.0
million). The effective tax rate was 39.5% (24.9%), 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 financial year.
Personnel
In January-June, the average number of personnel in the Kesko Group
was 19,678 (21,458) converted into full-time employees. In Finland,
the average decrease was 464 people, while outside Finland it was
1,316.
At the end of June 2009, the total number of personnel was 23,776
(25,255), of whom 13,773 (13,762) worked in Finland and 10,003
(11,493) outside Finland. Compared with the end of June 2008, there
was an increase of 11 employees in Finland and a decrease of 1,490
employees 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 €23.0 million, or by some 8%, compared with the previous
year, regardless of new store openings.
Market review
In January-May, the value of the Finnish retail trade sales decreased
by 2.6% compared with the previous year and in May by 4.8% compared
with May 2008. The consumer price inflation stood at an average of
0.9% in January-June (Statistics Finland).
Consumers' confidence in the economy recovered somewhat in May-June,
but still remained below the long-term average level. Own economic
situation and saving possibilities were considered good in June, and
the time was considered to be better than before for buying consumer
durables and raising loans. On the other hand, estimates of the
unemployment rate trend continued to be gloomy. In May, the
unemployment rate was 10.9%, compared with 8.8% in May 2008
(Statistics Finland).
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-June
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-June were €1,861 million
(€1,792 million), up 3.8%. The retail sales of K-food stores in
January-June totalled €2,406 million (incl. VAT), representing a
growth of 6.2%. The K-food stores' grocery sales increased by 6.6%.
During the first part of the year, the sales performance of K-food
stores' own brand products was particularly good. The growth rate of
the total grocery trade market in Finland for the first part of the
year is estimated at 4-5% up on the previous year. In January-May,
prices increased at an average monthly rate of 6.1% compared with the
previous year (Statistics Finland).
In January-June, the operating profit excluding non-recurring items
of the food trade was €63.9 million (3.4% of the net sales), which is
€7.4 million, or 0.3 percentage points, higher than in the previous
year. The operating profit was €76.1 million (€112.9 million). The
non-recurring gains on property sales and write-downs were €12.2
million in January-June. The comparative year's operating profit was
increased by a €56.4 million non-recurring gain on a property sale
and lease arrangement.
In January-June, investments in the food trade were €40.2 million
(€63.8 million), of which investments in store sites were €34.2
million (€56.0 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-June
were €677 million (€719 million), down 5.8%. Owing to a general
deterioration of the economic situation and a rise of the
unemployment rate, consumer demand in the home and speciality goods
trade declined especially for the home electronics and interior
decoration products.
The operating loss of the home and speciality goods trade excluding
non-recurring items in January-June was €16.7 million (-2.5% of the
net sales), a €13.4 million year-on-year increase due to the fall in
sales. In January-June, the operating loss was €6.9 million
(operating profit €43.8 million). Non-recurring gains on property
sales and write-downs were €9.8 million in January-June and €47.0
million in the comparative period.
Investments in the home and speciality goods trade in January-June
were €16.9 million (€23.6 million).
Anttila's net sales in January-June were €217 million (€243 million),
down 10.8%. Especially the sales of interior decoration and home
electronics decreased. The sales of the Anttila department stores
were €127 million, down 6.2%. The sales of the Kodin Ykkönen
department stores for home goods and interior decoration were €55
million, down 18.3%. NetAnttila's sales were €35 million, a decrease
of 16.0%.
The net sales of K-citymarket's home and speciality goods trade in
January-June were €257 million (€244 million), up 5.2%. The net sales
performance was affected by store site network expansions and
intensified marketing actions.
Intersport Finland's net sales in January-June were €74 million (€74
million), matching the level of the previous year. Indoor's net sales
in January-June were €73 million (€88 million), down 16.6%. In
Finland, Indoor's net sales decreased by 11.1% and abroad by 49.8%,
partly attributable to the discontinuation of Indoor's business
activities in Sweden during the first quarter of 2008. Musta Pörssi
Ltd's net sales in January-June were €46 million (€59 million), down
22.3%. Kenkäkesko Ltd's net sales in January-June were €11 million
(€12 million), down 7.7%.
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-June were €1,173 million (€1,566 million), down 25.1%.
In January-June, the net sales in Finland were €554 million, a
decrease of 23.3%. The building and home improvement trade
contributed €385 million and the agricultural supplies trade €169
million to the net sales in Finland. The net sales of the building
and home improvement trade in Finland were down 21.2% and the net
sales of the agricultural supplies trade by 27.6%. The net sales from
foreign operations in the building and home improvement trade were
€619 million (€844 million), a decrease of 26.6%. 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 19.2% in terms of the local currencies. Foreign operations
contributed 52.8% to the net sales of the building and home
improvement trade.
In Sweden, the net sales of K-rauta AB decreased by 9.0% to €89
million in January-June. In terms of the local currency, K-rauta AB's
net sales grew by 5.4%. In Norway, Byggmakker's net sales decreased
by 26.1% and were €228 million. In terms of the local currency,
Byggmakker's net sales dropped by 17.3%. In Estonia, Rautakesko's net
sales were down by 23.1% to €31 million. In Latvia, Rautakesko's net
sales decreased by 35.9% to €24 million. In Lithuania, Senukai's net
sales decreased by 38.8% to €134 million. In Russia, the net sales of
the building and home improvement trade decreased by 9.9% to €82
million. In terms of the local currency, the net sales increased by
8.5%. The net sales of the Belarusian OMA were down by 16.8% to €26
million. In terms of the local currency, OMA's net sales decreased by
5.7%.
In January-June, the operating profit excluding non-recurring items
of the building and home improvement trade was €5.6 million (0.5% of
the net sales), which was €32.7 million, or 2.0 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. In Finland, the building and
home improvement trade market declined in January-June by some 25%,
in Sweden by some 10%, in Norway by some 20%, and in the Baltic
countries by some 30-40% (Rautakesko's estimate). The operating
profit of the building and home improvement trade was €9.6 million
(€42.0 million) in January-June. The operating profit includes a €3.9
million non-recurring gain on a property sale.
In January-June, investments in the building and home improvement
trade were €46.3 million (€52.1 million), of which 78.2% (70.8%)
abroad.
The retail sales of the K-rauta and Rautia chains in January-June
decreased by 10.0% to €538 million (incl. VAT) in Finland. The sales
of Rautakesko B-to-B Service decreased by 35.4%. The retail sales of
the K-maatalous chain were €241 million (incl. VAT), down 23.1%.
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-June, the net sales of the car and machinery trade were
€529 million (€828 million), down 36.1%.
VV-Auto's net sales in January-June were €345 million (€506 million),
a decrease of 31.8%. The net sales performance was affected by a
decline in the 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.
The comparable net sales, including the tax change impact, fell by
27.4% in January-June. The combined market share of passenger cars
and vans imported by VV-Auto rose to 18.3% (16.6%) during the first
half of the year.
Konekesko's net sales in January-June were €185 million (€323
million), down 42.8% on the previous year as a result of the weakened
machinery market and the downsizing of the Baltic agricultural trade.
The net sales in Finland were €105 million, a decrease of 35.7%. The
net sales from Konekesko's foreign operations were €80 million, down
50.0%.
In January-June, the operating loss excluding non-recurring items of
the car and machinery trade was €4.1 million (-0.8% of the net
sales), which was €41.2 million, or 5.3 percentage points, lower than
in the corresponding period of the previous year (operating profit
excluding non-recurring items €37.1 million). In addition to the
substantial sales decrease in the car and machinery trade, the profit
performance was affected by the weakening of the Baltic agricultural
market and the downsizing of the agricultural business, which
resulted in the recognition of impairment charges and expense
provisions in a total amount of €9 million on Konekesko's Baltic
business activities for the first quarter.
Investments in the car and machinery trade were €3.6 million (€6.5
million) in January-June.
APRIL-JUNE 2009
CONTINUING OPERATIONS
Net sales and profit
The Group's net sales in April-June 2009 were €2,143 million, which
is 15.9% down on the corresponding period of the previous year
(€2,547 million). Net sales decreased by 11.5% in Finland and by
30.5% abroad. Exports and foreign operations accounted for 19.1%
(23.1%) of the net sales. The Group's net sales decrease was due to a
substantially weakened construction market coupled with a decrease in
the sales of the car, machinery and home and speciality goods trade,
both resulting from the recession. The grocery trade continued its
steady growth.
In April-June, the K-Group's (i.e. Kesko's and the chain stores')
retail and B-to-B sales (incl. VAT) totalled €3,268 million, a
decrease of 12.0% on the corresponding period of the previous year.
The Group's profit before tax for April-June was €38.2 million (€84.3
million). The operating profit was €42.7 million (€84.8 million). The
operating profit excluding non-recurring items was €36.4 million
(€81.1 million), representing 1.7% (3.2%) of the net sales. The
non-recurring items included €8.1 million in gains on property
disposals, and €1.9 million in property write-downs. During the
comparative period, the operating profit was increased by a net total
of €3.7 million in non-recurring gains and losses.
The smaller year-on-year operating profit excluding non-recurring
items is due to a weakened demand in the building and home
improvement trade, the car and machinery trade, and the home and
speciality goods trade. The adjustments of costs and inventories had
a significantly positive impact on the Group's profitability and cash
flow for the second quarter.
The Group's earnings per share from continuing operations were €0.19
(€0.58). The Group's equity per share was €19.36 (€20.17).
Investments
In April-June, the Group's investments totalled €55.8 million (€83.0
million), which is 2.6% (3.3%) of the net sales. Investments in store
sites were €46.0 million (€69.4 million) and other investments €9.7
million (€13.6 million). Investments in foreign operations
represented 39.2% of total investments (24.8%).
Finance
In April-June, the cash flow from operating activities was €143
million (€126 million) and the cash flow from investing activities
was €-25 million (€26 million). The cash flow from investing
activities included €26 million (€100 million) of proceeds from the
disposal of fixed assets.
In April-June, the Group's net financial expenses were €4.4 million
(€0.2 million). The costs were increased by €4.1 million for hedging
Baltic and Russian currency exposures due to an increased interest
rate spread between the currencies.
Taxes
In April-June, the Group's taxes were €15.7 million (€21.3 million).
The effective tax rate was 41.2% (25.3%), affected by the loss-making
performances of foreign companies.
Personnel
In April-June, the average number of personnel in the Kesko Group was
19,727 (21,769) converted into full-time employees. In Finland, the
average decrease was 510 people, while outside Finland it was 1,532.
Segment performance in April-June
Food trade
In the food trade, the net sales in April-June were €974 million
(€939 million), up 3.7%. The retail sales of K-food stores in
April-June totalled €1,263 million (incl. VAT), representing a growth
of 7.4%. Especially the K-citymarket chain and Pirkka products
recorded good sales growth. The K-food stores' grocery sales
increased by 7.9%. At the end of June, the total number of K-food
stores was 1,033.
In April-June, the operating profit excluding non-recurring items of
the food trade was €30.1 million (3.1% of the net sales), which was
€1.5 million, or 0.3 percentage points, lower than in the previous
year. The operating profit was lowered by investments in new store
site openings. The operating profit of the food trade was €33.8
million (€31.5 million). The non-recurring gains on property sales
and write-downs were €3.8 million (€0.0 million) in April-June.
In April-June, investments in the food trade were €19.5 million
(€39.9 million), of which investments in store sites were €16.8
million (€34.5 million).
Kesko Food continued to develop the K-food store network. In
April-June, a K-citymarket opened in Ylöjärvi and in Skanssi, Turku,
and a K-supermarket in Kempele. The expanded K-citymarket Mikkeli and
K-supermarket Lahti Ahtiala reopened. The K-market chain was
increased by six new food stores, four of which opened at Teboil
stations. In addition, several renovations were implemented in
K-supermarkets and K-markets.
The most significant store sites being built are the K-citymarkets in
Kirkkonummi, in Linnainmaa, Tampere, in Koivukylä, Vantaa, and the
new K-supermarkets in Porvoo, Järvenpää and Eurajoki.
Home and speciality goods trade
In the home and speciality goods trade, the net sales in April-June
were €331 million (€355 million), down 6.6%.
The operating loss of the home and speciality goods trade excluding
non-recurring items in April-June was €6.0 million (-1.8% of the net
sales). The operating loss was due to the fall in sales. In
April-June 2008, the operating profit excluding non-recurring items
was 3.5 million (1.0% of the net sales). The operating loss in
April-June was €3.6 million (operating profit €3.7 million).
Non-recurring gains on property sales and write-downs were €2.4
million in April-June (€0.2 million).
Investments in the home and speciality goods trade in April-June were
€7.1 million (€13.0 million).
Anttila's net sales in April-June were €103 million (€116 million),
down 11.6%. The biggest decrease was registered in the sales of
entertainment and home products. The sales of the Anttila department
stores were €60 million, down 10.4%. The sales of the Kodin Ykkönen
department stores for home goods and interior decoration were €27
million, down 16.8%. NetAnttila's sales were €16 million, a decrease
of 6.7% in Finland, 22.7% in Estonia and 29.6% in Latvia. In April, a
department store opened in Skanssi, Turku, and a new Kodin Ykkönen
will open in Lielahti, Tampere, in November 2009.
The net sales of K-citymarket's home and speciality goods trade in
April-June were €134 million (€128 million), up 4.4%. 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. Further openings in 2009 include
K-citymarkets in Kirkkonummi, in Koivukylä, Vantaa, and in
Linnainmaa, Tampere.
Intersport Finland's net sales in April-June were €32 million (€37
million), down 12.1%. The Budget Sport online store opened in April.
Indoor's net sales in April-June were €36 million (€43 million), down
16.4%. In Finland, Indoor's net sales decreased by 13.2% and abroad
by 40.5%. Musta Pörssi Ltd's net sales in April-June were €23 million
(€26 million), down 11.5%. Kenkäkesko Ltd's net sales in April-June
were €3 million (€5 million), down 27.6%.
Building and home improvement trade
In the building and home improvement trade, the net sales in
April-June were €643 million (€870 million), down 26.1%.
In April-June, the net sales in Finland were €291 million, a decrease
of 25.8%. The building and home improvement trade contributed €211
million and the agricultural supplies trade €81 million to the net
sales in Finland. The net sales of the building and home improvement
trade in Finland were down 18.3% and the net sales of the
agricultural supplies trade by 40.1%.
The net sales from foreign operations in the building and home
improvement trade were €352 million (€478 million), a decrease of
26.3%. 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 19.1% in terms of the local currencies.
Foreign operations contributed 54.7% to the net sales of the building
and home improvement trade.
In Sweden, the net sales of K-rauta AB decreased by 12.6% to €52
million in April-June. In terms of the local currency, K-rauta AB's
net sales grew by 0.8%. In Norway, Byggmakker's net sales decreased
by 25.6% and were €133 million. In terms of the local currency,
Byggmakker's net sales dropped by 17.1%. In Estonia, Rautakesko's net
sales were down by 18.7% to €19 million. In Latvia, Rautakesko's net
sales decreased by 28.6% to €14 million. In Lithuania, Senukai's net
sales decreased by 38.8% to €74 million. In Russia, the net sales of
the building and home improvement trade decreased by 12.7% to €44
million. In terms of the local currency, Stroymaster's net sales
increased by 3.8%. The net sales of the Belarusian OMA were down by
20.3% to €14 million. In terms of the local currency, OMA's net sales
decreased by 8.8%.
In April-June, the operating profit excluding non-recurring items of
the building and home improvement trade was €14.8 million (2.3% of
the net sales), which was €16.2 million, or 1.3 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 €14.8 million (operating profit €34.6 million)
in April-June. The adjustments of costs and inventories had a
significantly positive impact on the profitability and cash flow of
the building and home improvement trade.
In April-June, investments in the building and home improvement trade
were €26.8 million (€29.4 million), of which 81.0% (69.0%) abroad.
The retail sales of the K-rauta and Rautia chains in April-June
decreased by 9.0% to €346 million (incl. VAT) in Finland. The sales
of Rautakesko B-to-B Service were €52 million, down 35.4%. The retail
sales of the K-maatalous chain were €136 million (incl. VAT), down
31.3%.
In April-June, six new stores opened and three stores closed down. In
Finland, a Rautia store opened in Pietarsaari and a
Rautia-K-Maatalous store in Levi. A new K-rauta store opened in
Valga, Estonia, and another in Madona, Latvia. In Norway, a
Byggmakker store opened in Bodö. OMA opened a store in Baranovichy.
In Norway, two Byggmakker stores closed down and one K-rauta store in
Sweden.
Car and machinery trade
In April-June, the net sales of the car and machinery trade were €233
million (€426 million), down 45.3%.
VV-Auto's net sales in April-June were €135 million (€246 million), a
decrease of 45.2%. The net sales performance was affected by a
decline in the 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 36.0% in April-June. The combined market share of passenger
cars and vans imported by VV-Auto grew to 17.4% (16.8%) in
April-June.
Konekesko's net sales in April-June were €99 million (€181 million),
down 45.5% on the corresponding period of the previous year. The net
sales decrease is due to the weakened machinery market and the
downsizing of the Baltic agricultural trade. The net sales in Finland
were €55 million, a decrease of 38.6%. The net sales from Konekesko's
foreign operations were €44 million, down 52.1%.
In April-June, the operating profit excluding non-recurring items of
the car and machinery trade was €1.9 million (0.8% of the net sales),
which was €19.4 million, or 4.2 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.
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 was €22.00 at the end of 2008, and
€20.50 at the end of the reporting period in June, representing a
decrease of 6.8%. The price of a B share was €17.80 at the end of
2008, and €18.86 at the end of the reporting period, representing an
increase of 6.0%. During the reporting period, the highest A share
quotation was €24.90 and the lowest was €18.73. For B shares, they
were €21.98 and €14.99 respectively. During the reporting period, the
Helsinki stock exchange All Share index (OMX Helsinki) rose by 3.8%,
the weighted OMX Helsinki CAP index by 8.8%, while the Consumer
Staples Index was up 8.0% during the same period.
At the end of the reporting period, the market capitalisation of A
shares was €651 million, while that of B shares was €1,254 million.
Their combined market capitalisation was €1,904 million, an increase
of €30 million compared with the end of 2008. During the first half
of 2009, 608,300 A shares were traded on the Helsinki stock exchange
at a total value of €13.3 million, while 46.7 million B shares were
traded at a total value of €827.9 million.
The 2003F stock options of the year 2003 option scheme were available
for trading and a total of some 42,000 options were traded at a total
value of €220,000 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
39,338. In 2008 it increased by 9,155 shareholders and during the
first half of 2009 by 1,258 shareholders. At the end of June 2009,
foreign ownership of all shares was 20% (27%), and foreign ownership
of B shares was 30% (39%).
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. During the
first part of the year, the consumer demand has weakened markedly in
the building materials, the car and machinery, and the home and
speciality goods trade. Because of the possibility that the recession
is prolonged and the employment situation continues to deteriorate,
the Group's sales and profit performance are affected by material
uncertainties. 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, customer receivables 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 (7/2009-6/2010) in comparison
with the 12 months preceding the reporting period (7/2008-6/2009).
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. As a result of the weakening of
the real economy, the outlook for the near future remains uncertain.
During the next twelve months, the overall consumer demand is
expected to continue developing at a rate clearly below the average
owing to increasing unemployment and problems relating to the
availability of business and consumer finance.
The steady development of the grocery trade is expected to continue.
The market situation is expected to remain difficult in the building
sector, in the car and machinery trade, and in the home and
speciality goods trade.
Uncertainty about the economic outlook continues to make any
statement about the Group's future outlook significantly more
difficult. In consequence of the weakening economic development, the
Kesko Group's net sales and operating profit excluding non-recurring
items from continuing operations in the next twelve months are
expected to remain at a lower level compared with the net sales and
operating profit excluding non-recurring items of the comparative
period. The Group's liquidity and solvency are expected to remain
good.
Helsinki, 23 July 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 June
Group contingent liabilities
Calculation of financial indicators
K-Group retail and B-to-B sales
Kesko Corporation's interim financial report for the period
January-September will be published on 22 October 2009. 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 in Finland comprises the food business based on the
K-retailer business model and Kespro Ltd's grocery wholesaling. 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)
1-6/ 1-6/ Change, 4-6/ 4-6/ Change, 1-12/
2009 2008 % 2009 2008 % 2008
Net sales 4,160 4,824 -13.8 2,143 2,547 -15.9 9,591
Cost of sales -3,613 -4,168 -13.3 -1,858 -2,196 -15.4 -8,293
Gross profit 548 656 -16.5 284 351 -19.1 1,299
Other operating
income 326 406 -19.6 165 158 4.6 730
Staff cost -273 -296 -7.8 -136 -150 -9.3 -578
Depreciation and
impairment charges -58 -58 0.6 -31 -29 5.4 -178
Other operating
expenses -477 -473 0.9 -240 -245 -2.1 -987
Operating profit 66 235 -71.9 43 85 -49.6 286
Interest income 13 17 -27.0 5 8 -40.6 36
Interest expenses -11 -16 -32.6 -5 -8 -34.3 -30
Exchange
differences and
other financial
items -11 -3 (..) -4 -1 (..) -4
Income from
associates 0 0 (..) 0 0 -68.3 2
Profit before tax 56 233 -75.8 38 84 -54.7 289
Income tax -22 -58 -61.5 -16 -21 -26.1 -89
Profit for the
period from
continuing
operations 34 175 -80.5 22 63 -64.3 199
Profit for the
period from
discontinued
operations - 41 (..) - 31 (..) 42
Net profit for the
period 34 216 -84.2 22 94 -76.1 241
Attributable to
Owners of the
parent 31 208 -85.3 19 88 -78.2 220
Non-controlling
interests 4 9 -58.6 3 6 -46.7 21
Earnings per share
(€) for
profit
attributable to
equity
holders of the
parent
Continuing
operations
Basic 0.31 1.70 -81.6 0.19 0.58 -66.3 1.82
Diluted 0.31 1.69 -81.6 0.19 0.58 -66.2 1.81
Whole Group
Basic 0.31 2.12 -85.3 0.19 0.90 -78.3 2.25
Diluted 0.31 2.11 -85.2 0.19 0.89 -78.2 2.24
Consolidated
statement of
comprehensive
income
(€ million)
1-6/ 1-6/ Change, 4-6/ 4-6/ Change, 1-12/
2009 2008 % 2009 2008 % 2008
Net profit for the
period 34 216 -84.2 22 94 -76.1 241
Other
comprehensive
income
Exchange
differences on
translating
foreign operations -3 -1 (..) -1 1 (..) -6
Cash flow hedge
revaluation -7 12 (..) 2 14 -84.5 -13
Revaluation of
available-for-sale
financial assets -1 0 (..) 0 0 45.7 2
Tax relating to
other
comprehensive
income 2 -3 (..) -1 -4 -86.2 3
Total other
comprehensive
income for the
period, net of tax -9 7 (..) 0 12 -99.5 -14
Total
comprehensive
income
for the period 25 223 -88.8 23 106 -78.7 226
Attributable to
Owners of the
parent 26 215 -88.2 20 99 -79.8 205
Non-controlling
interests -1 8 (..) 3 7 -61.6 21
(..) Change over 100%
Consolidated statement of
financial
position (€ million),
condensed
30.6.2009 30.6.2008 Change,% 31.12.2008
ASSETS
Non-current assets
Intangible assets 177 217 -18.7 170
Tangible assets 1,190 1,144 4.0 1,210
Interests in associates and
other
financial assets 36 32 14.5 34
Loans and receivables 62 67 -7.4 76
Pension assets 310 268 15.5 300
Total 1,776 1,729 2.7 1,789
Current assets
Inventories 739 897 -17.7 871
Trade receivables 717 811 -11.6 633
Other receivables 122 151 -19.2 152
Financial assets at fair
value through
profit or loss 20 216 -90.9 94
Available-for-sale financial
assets 402 262 53.7 291
Cash and cash equivalents 85 73 17.1 58
Total 2,085 2,410 -13.5 2,100
Non-current assets held for
sale 1 1 0.0 3
Total assets 3,862 4,140 -6.7 3,892
30.6.2009 30.6.2008 Change,% 31.12.2008
EQUITY AND LIABILITIES
Equity 1,901 1,973 -3.6 1,966
Non-controlling interests 60 47 27.1 61
Total equity 1,961 2,020 -2.9 2,026
Non-current liabilities
Pension obligations 2 4 -49.5 2
Interest-bearing liabilities 263 211 24.6 197
Non-interest-bearing
liabilities 9 5 83.2 12
Deferred tax 128 137 -6.6 132
Provisions 18 18 1.4 20
Total 420 374 12.1 363
Current liabilities
Interest-bearing liabilities 263 298 -11.7 294
Trade payables 809 968 -16.4 756
Other non-interest-bearing
liabilities 387 468 -17.3 430
Provisions 22 12 85.3 24
Total 1,481 1,746 -15.2 1,503
Total equity and liabilities 3,862 4,140 -6.7 3,892
(..) Change over 100%
Consolidated statement of changes in equity (€ million)
Share Issue Share Other Cur- Rev- Re- Non Total
capital of premi- reser- rency alu- tained control-
share um ves transla- ation ear- ling-
capital tion sur- nings inte-
differ- plus 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 2 2
Subsidiary
disposals -4 0 5 0
Dividends -156 -16 -172
Other
changes 2 2
Total
compre
hensive
income
for the
period 0 8 207 8 223
Balance at
30.6.2008 196 0 190 243 -4 18 1,330 47 2,020
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 3 3
Dividends -98 0 -98
Other
changes 1 1
Total
compre
hensive
income for
the period 7 -5 24 -1 25
Balance at
30.6.2009 196 0 193 243 -9 -4 1,281 60 1,961
Consolidated cash flow statement (€ million), condensed
1-6/ 1-6/ Change, 4-6/ 4-6/ Change, 1-12/
2009 2008 % 2009 2008 % 2008
Cash flow from operating
activities
Profit before tax 56 275 -79.5 38 115 -66.8 331
Planned depreciation 56 59 -4.5 29 29 -2.2 118
Financial income and
expenses 10 1 (..) 4 0 (..) -1
Other adjustments -28 -172 -83.5 -7 -39 -81.4 -130
Working capital
Current
non-interest-bearing
trade and other
receivables,
increase (-)/ decrease (+) -67 -160 -58.1 9 -16 (..) -10
Inventories
increase (-)/ decrease (+) 130 -11 (..) 91 3 (..) 2
Current
non-interest-bearing
liabilities,
increase (+)/decrease (-) 24 139 -82.7 4 59 -93.3 -78
Financial items and tax -34 -43 -19,5 -25 -27 -7.5 -100
Net cash from operating
activities 146 89 63,8 143 126 13.8 131
Cash flow from investing
activities
Investments -120 -135 -11.3 -51 -75 -32.2 -320
Disposals of fixed assets 90 217 -58.8 26 100 -73.7 281
Increase of long-term
receivables 0 -4 (..) 0 0 (..) -7
Decrease of long-term
receivables 1 0 (..) -1 0 (..) 0
Net cash used in investing
activities -30 79 (..) -25 26 (..) -46
Cash flow from financing
activities
Increase (+)/ decrease (-)
in
interest-bearing
liabilities 38 -23 (..) 27 -10 (..) -53
Increase (-)/decrease (+)
in
short-term interest-bearing
receivables -1 211 (..) 0 -5 (..) 216
Dividends paid -98 -156 -37.1 -98 -156 -37.1 -172
Equity increase 3 0 (..) 3 0 (..) 0
Short-term money market
investments 58 -111 (..) 4 -20 (..) -17
Other items 7 -1 (..) 0 -1 (..) 11
Net cash used in financing
activities 8 -80 (..) -64 -192 -66.5 -14
Change in cash and cash
equivalents 124 88 41,7 54 -41 (..) 71
Cash and cash equivalents
and current portion of
available-for-sale
financial
assets at 1 Jan. 319 245 30.1 387 371 4.4 245
Exchange difference and
revaluation -3 0 (..) 0 0 (..) 1
Cash and cash equivalents
relating to
available-for-sale
assets 0 -2 (..) 0 -4 (..) -2
Cash and cash equivalents
and current portion of
available-for-sale
financial
assets at 30 Jun. 440 335 31.6 440 335 31.6 319
(..) Change over 100%
Group financial indicators
Change,
1-6/2009 1-6/2008 pp
Return on capital employed, % 6.1 26.0 -19.9
Return on capital employed, %, rolling 12
months 5.4 20.2 -14.8
Return on capital employed excl. non-
recurring items, % 3.7 11.3 -7.6
Return on capital employed excl. non-
recurring items, %, rolling 12 months 6.4 13.2 -6.8
Return on equity, % 3.4 21.7 -18.3
Return on equity, %, rolling 12 months 2.9 17.7 -14.7
Return on equity excl. non-recurring
items, % 1.5 8.8 -7.3
Return on equity excl. non-recurring
items, %, rolling 12 months 4.5 11.1 -6.6
Equity ratio, % 51.0 49.0 1.9
Gearing, % 0.9 -2.1 3.0
Change,%
Investments, € million* 107.2 143.3 -25.2
Investments, % of net sales* 2.6 3.0 -13.2
Earnings per share, basic, €* 0.31 1.70 -81.6
Earnings per share, diluted, €* 0.31 1.69 -81.6
Earnings per share, basic, €** 0.31 2.12 -85.3
Earnings per share, diluted, €** 0.31 2.11 -85.2
Earnings per share excl. non-recurring
items, basic, €** 0.11 0.81 -85.8
Cash flow from operating activities,
€ million** 146 89 63.8
Cash flow from investing activities,
€ million** -30 79 (..)
Equity per share, € 19.36 20.17 -4.0
Personnel, average* 19,678 21,458 -8.3
* Continuing operations
** Whole Group
Group financial indicators 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
by quarter 2008 2008 2008 2008 2009 2009
Net sales, € million 2,277 2,547 2,435 2,333 2,018 2,143
Change in net sales, % 6.8 6.1 3.0 -2.4 -11.4 -15.9
Operating profit, € million 150.1 84.8 43.8 6.9 23.2 42.7
Operating margin, % 6.6 3.3 1.8 0.3 1.1 2.0
Operating profit excl. non-
recurring items, € million 36.6 81.1 72.0 27.3 3.4 36.4
Operating margin excl. non-
recurring items, % 1.6 3.2 3.0 1.2 0.2 1.7
Financial income/expenses,
€ million -1.4 -0.2 1.8 0.8 -5.1 -4.4
Profit before tax, € million 148.6 84.3 48.0 7.7 18.2 38.2
Profit before tax, % 6.5 3.3 2.0 0.3 0.9 1.8
Return on capital employed, %
30.1 22.2 8.2 1.4 4.2 8.0
Return on capital employed
excl. non-recurring items, % 7.3 15.6 13.6 4.9 0.6 6.8
Return on equity, % 25.1 19.1 4.2 0.6 2.4 4.6
Return on equity excl. non-
recurring items, % 5.6 12.3 10.4 4.3 -0.6 3.7
Equity ratio, % 46.3 49.0 50.2 52.4 49.8 51.0
Investments, € million* 60.3 83.0 89.9 105.2 51.5 55.8
Earnings per share, diluted, €* 1.11 0.58 0.17 -0.05 0.12 0.19
Equity per share, € 19.13 20.17 20.29 20.09 19.16 19.36
* Continuing operations
Segment information
Net sales by segment,
continuing operations 1-6/ 1-6/ Change, 4-6/ 4-6/ Change,
(€ million) 2009 2008 % 2009 2008 %
Food trade, Finland 1,857 1,786 4.0 972 936 3.8
Food trade, other countries* 4 6 -39.6 2 3 -31.7
Food trade total 1,861 1,792 3.8 974 939 3.7
- of which intersegment trade 79 89 -11.5 37 41 -8.3
Home and speciality goods
trade, Finland 663 695 -4.6 325 346 -6.0
Home and speciality goods
trade, other countries* 14 24 -41.4 6 9 -32.4
Home and speciality goods
trade total 677 719 -5.8 331 355 -6.6
- of which intersegment trade 10 9 8.7 6 6 -3.7
Building and home improvement
trade, Finland 554 722 -23.3 291 392 -25.8
Building and home improvement
trade, other countries* 619 844 -26.6 352 478 -26.3
Building and home improvement
trade total 1,173 1,566 -25.1 643 870 -26.1
- of which intersegment trade 1 1 -12.7 1 1 -6.3
Car and machinery trade,
Finland 444 657 -32.5 185 329 -43.7
Car and machinery trade,
other countries* 86 171 -49.8 48 98 -50.7
Car and machinery trade total 529 828 -36.1 233 426 -45.3
- of which intersegment trade 0 1 -57.8 0 0 -27.2
Common operations and
eliminations -80 -81 -1.4 -39 -44 -11.0
Finland total 3,437 3,778 -9.0 1,734 1,959 -11.5
Other countries total* 723 1,045 -30.9 408 588 -30.5
Group total 4,160 4,824 -13.8 2,143 2,547 -15.9
* exports and net sales in countries other than Finland
Operating profit by
segment, continuing 1-6/ 1-6/ 4-6/ 4-6/
operations (€ million) 2009 2008 Change 2009 2008 Change
Food trade 76.1 112.9 -36.7 33.8 31.5 2.3
Home and speciality goods trade -6.9 43.8 -50.7 -3.6 3.7 -7.3
Building and home improvement
trade 9.6 42.0 -32.4 14.8 34.6 -19.8
Car and machinery trade -4.1 37.1 -41.2 1.9 21.3 -19.4
Common operations and eliminations -8.8 -0.8 -8.1 -4.3 -6.3 2.1
Total 65.9 235.0 -169.1 42.7 84.8 -42.1
Segments' operating profits
excl. non-recurring items,
continuing operations 1-6/ 1-6/ 4-6/ 4-6/
(€ million) 2009 2008 Change 2009 2008 Change
Food trade 63.9 56.5 7.4 30.1 31.5 -1.5
Home and speciality goods trade -16.7 -3.3 -13.4 -6.0 3.5 -9.5
Building and home improvement
trade 5.6 38.3 -32.7 14.8 31.0 -16.2
Car and machinery trade -4.1 37.1 -41.2 1.9 21.3 -19.4
Common operations and
eliminations -9.0 -11.0 2.0 -4.4 -6.2 1.8
Total 39.8 117.7 -77.9 36.4 81.1 -44.7
Segments' operating 1-6/ 4-6/
margins excl. 2009 1-6/ 4-6/ 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 3.4 3.2 0.3 3.1 3.4 -0.3
Home and speciality goods
trade -2.5 -0.5 -2.0 -1.8 1.0 -2.8
Building and home
improvement trade 0.5 2.4 -2.0 2.3 3.6 -1.3
Car and machinery trade -0.8 4.5 -5.3 0.8 5.0 -4.2
Total 1.0 2.4 -1.5 1.7 3.2 -1.5
Capital employed by
segment, cumulative 1-6/ 1-6/ 4-6/ 4-6/
average (€ million) 2009 2008 Change 2009 2008 Change
Food trade 635 622 13 624 620 5
Home and speciality goods
trade 523 495 28 527 506 21
Building and home
improvement trade 661 630 32 665 643 22
Car and machinery trade 266 272 -6 247 270 -23
Common operations and
eliminations 79 110 -31 67 45 22
Group total 2,164 2,128 36 2,129 2,082 47
Return on capital
employed
by segment excl. non- 1-6/ 1-6/ Change 4-6/ 4-6/ Change Rolling 12 mo
recurring items, % 2009 2008 pp 2009 2008 pp 6/2009
Food trade 20.1 18.2 2.0 19.3 20.4 -1.1 20.3
Home and speciality
goods trade -6.4 -1.3 -5.1 -4.5 2.8 -7.3 3.4
Building and home
improvement trade 1.7 12.2 -10.5 8.9 19.3 -10.4 3.7
Car and machinery
trade -3.0 27.3 -30.4 3.1 31.6 -28.5 -3.9
Group total 3.7 11.3 -7.6 6.8 15.6 -8.7 6.4
Investments by segment,
continuing operations 1-6/ 1-6/ 4-6/ 4-6/
(€ million) 2009 2008 Change 2009 2008 Change
Food trade 40 64 -24 19 40 -20
Home and speciality goods trade 17 24 -7 7 13 -6
Building and home improvement trade 46 52 -6 27 29 -3
Car and machinery trade 4 7 -3 2 4 -2
Group total 107 143 -36 56 83 -27
Segment information by quarter
Net sales by segment,
continuing operations 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
(€ million) 2008 2008 2008 2008 2009 2009
Food trade 853 939 933 982 888 974
Home and speciality goods trade 364 355 396 490 346 331
Building and home
improvement trade 695 870 795 617 529 643
Car and machinery trade 402 426 357 295 296 233
Common operations and
eliminations -37 -44 -46 -51 -41 -39
Group total 2,277 2,547 2,435 2,333 2,018 2,143
Segments' operating
profits, continuing 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
operations (€ million) 2008 2008 2008 2008 2009 2009
Food trade 81.3 31.5 45.3 27.4 42.3 33.8
Home and speciality goods trade 40.1 3.7 9.2 10.6 -3.3 -3.6
Building and home
improvement trade 7.3 34.6 -16.1 -6.5 -5.2 14.8
Car and machinery trade 15.8 21.3 10.4 -17.0 -6.0 1.9
Common operations and eliminations 5.6 -6.3 -4.9 -7.6 -4.6 -4.3
Group total 150.1 84.8 43.8 6.9 23.2 42.7
Segments' operating profits
excl. non-recurring items,
continuing operations 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
(€ million) 2008 2008 2008 2008 2009 2009
Food trade 25.0 31.5 34.4 31.6 33.8 30.1
Home and speciality goods trade -6.8 3.5 6.8 27.7 -10.7 -6.0
Building and home
improvement trade 7.3 31.0 25.5 -7.5 -9.1 14.8
Car and machinery trade 15.8 21.3 10.4 -17.1 -6.0 1.9
Common operations and
eliminations -4.8 -6.2 -5.1 -7.5 -4.6 -4.4
Group total 36.6 81.1 72.0 27.3 3.4 36.4
Personnel average and at 30 June
Personnel, average by
segment, continuing
operations 1-6/2009 1-6/2008 Change
Food trade 3,121 3,528 -407
Home and speciality goods trade 5,703 5,816 -113
Building and home
improvement trade 9,073 10,404 -1,331
Car and machinery trade 1,366 1,468 -102
Common operations 415 242 173
Group total 19,678 21,458 -1,780
Personnel at 30.6* by
segment, continuing
operations 2009 2008 Change
Food trade 3,792 4,220 -428
Home and speciality goods trade 8,260 7,885 375
Building and home
improvement trade 9,883 11,365 -1,482
Car and machinery trade 1,371 1,534 -163
Common operations 470 251 219
Group total 23,776 25,255 -1,479
* total number incl. part-time employees
Group contingent liabilities (€
million)
30.6.2009 30.6.2008 Change,%
For own commitments 215 230 -6.2
For shareholders 0 0 0.0
For others 8 9 -11.7
Lease liabilities 24 23 1.5
Contingent liabilities arising from
derivative financial instruments
Fair value
Values of underlying instruments at 30.6.2009 30.6.2008 30.6.2009
30.6.
Interest rate derivatives
Forward and future contracts 12 - 0.1
Interest rate swap contracts 204 201 1.9
Currency derivatives
Forward and future contracts 488 348 -3.1
Option contracts 1 2 0.0
Currency swap contracts 100 100 -15.5
Commodity derivatives
Electricity derivatives 40 63 -8.6
Grain derivatives 1 3 0.1
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 months
%, rolling 12 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) on
excluding non-recurring 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
Return on capital employed, current assets - Non-interest-bearing
excluding non-recurring liabilities) on average for
items, %, rolling 12 months 12 months
(Profit/loss before tax - income tax) x
Return on equity, % 100 /
Shareholders' equity
Return on equity, %, rolling (Profit/loss for the prior 12 months
12 months before tax - income tax for
the prior 12 months) x 100 /
Shareholders' equity
Return on equity excluding (Profit/loss adjusted for non-recurring
non-recurring items, % 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
Earnings/share, basic (Profit - non-controlling interests) /
Average number of shares
(Profit adjusted for non-recurring items
Earnings/share excl. non- - non-controlling
recurring items, basic interests)/
Average number of shares
Equity attributable to equity holders of
Equity/share 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.-30.6.2009 1.4.-30.6.2009
K-Group retail and B-to-B € million Change, % € million Change, %
sales
K-Group food trade
K-food stores, Finland 2,406 6.2 1 263 7.4
Kespro 397 -1.4 211 -0.3
Food trade total 2,803 5.0 1 474 6.2
K-Group home and
speciality goods
trade
Home and speciality goods
stores,
Finland 897 -4.7 443 -4.7
Home and speciality goods
stores,
Baltic countries 13 -46.6 6 -34.5
Home and speciality goods
trade total 910 -5.7 449 -5.3
K-Group building and home
improvement trade
K-rauta and Rautia 537 -10.0 346 -9.0
Rautakesko B-to-B Service 94 -35.4 52 -35.4
K-maatalous 241 -23.1 136 -31.3
Finland total 873 -17.4 535 -18.9
Building and home improvement
stores,
other Nordic countries 548 -20.5 331 -20.0
Building and home improvement
stores,
Baltic countries 226 -35.7 127 -34.2
Building and home improvement
stores,
other countries 126 -11.7 68 -15.0
Building and home improvement
trade total 1,773 -20.9 1,061 -21.2
K-Group car and machinery
trade
VV-Autotalot 206 -20.8 91 -32.5
VV-Auto, import 224 -39.2 78 -54.6
Konekesko, Finland 132 -39.4 71 -40.6
Finland total 562 -33.6 239 -43.7
Konekesko, Baltic countries 86 -34.5 47 -42.5
Car and machinery trade total 648 -33.7 285 -43.5
Finland total 5,136 -6.9 2,690 -8.4
Other countries total 999 -25.4 578 -25.5
Retail and B-to-B sales total 6,135 -10.5 3,268 -12.0
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