2010-07-23 08:00:00 CEST
2010-07-23 08:01:16 CEST
REGULATED INFORMATION
Kesko Oyj - Interim report (Q1 and Q3)
Interim report for 1 January - 30 June 2010
KESKO CORPORATION STOCK EXCHANGE RELEASE 23.07.2010 AT 09.00 1(27)
Financial performance in brief:
*In January-June, the Group's net sales increased by 1.8%. The growth rate
strengthened to 6.4% in April-June
*Operating profit excluding non-recurring items was €99.0 million in
January-June, which was clearly better than in the previous year (€39.8
million). In April-June, the operating profit excluding non-recurring items was
€78.1 million (€36.4 million), as profitability improved in all divisions
*The Kesko Groups' net sales and operating profit excluding non-recurring items
are expected to grow during the next twelve months
Key performance indicators
1-6/2010 1-6/2009 4-6/2010 4-6/2009
Net sales, € million 4,237 4,160 2,279 2,143
Operating profit excl. non-recurring
items, € million 99.0 39.8 78.1 36.4
Profit before tax, € million 100.6 56.5 78.7 38.2
Investments, € million 87.7 107.2 45.7 55.8
Earnings/share, €, diluted 0.67 0.31 0.51 0.19
Earnings/share excl. non-recurring items,
€, basic 0.66 0.11 0.51 0.15
30.6.2010 30.6.2009
Equity ratio, % 51.2 51.0
Equity/share, € 20.30 19.36
FINANCIAL PERFORMANCE
Net sales and profit in January-June 2010
The Group's net sales in January-June 2010 were €4,237 million, which is 1.8% up
on the corresponding period of the previous year (€4,160 million). The positive
trend in net sales clearly strengthened toward the end of the reporting period.
Net sales increased by 2.7% in Finland and decreased by 2.7% in other countries.
International operations accounted for 16.1% (16.8%) of net sales. In the food
trade, steady net sales growth continued although food prices slipped. The sales
of the building and home improvement trade and the car trade clearly picked up
in spring.
1-6/2010 Net sales, M€ Change, % Operating profit excl. Change, M€
non-recurring items,
M€
Food trade 1,888 +1.4 73.7 +9.9
Home and speciality
goods trade 689 +1.8 7.1 +23.8
Building and home
improvement trade 1,207 +2.9 4.2 -1.5
Car and machinery
trade 534 +0.9 20.5 +24.6
Common operations and
eliminations -81 +1.5 -6.5 +2.4
Total 4,237 +1.8 99.0 +59.2
Kesko's positive profit performance strengthened in the second quarter of the
year. Non-recurring items excluded, the operating profit was €99.0 million
(€39.8 million), representing 2.3% (1.0%) of net sales. The operating profit was
€100.0 million (€65.9 million). The non-recurring income in the comparative
period included €27.9 million of gains on the disposals of real estate and €1.9
million of impairment charges on real estate. The Group's profit before tax for
January-June was €100.6 million (€56.5 million).
Cost reductions, coupled with more efficient inventory process management
significantly contributed to the Group's improved profitability performance. The
operating profit excluding non-recurring items exceeded the level of the
comparative period especially in the home and speciality goods trade and in the
car and machinery trade. In addition, the profit of the car and machinery trade
in the comparative period was negatively impacted by the €9 million amount of
impairments and expense provisions recognised on the Baltic agricultural
supplies business.
The Group's earnings per share were €0.67 (€0.31). The Group's equity per share
was €20.30 (€19.36).
In January-June, the K-Group's (i.e. Kesko's and the chain stores') retail and
B2B sales, including VAT, were €6,179 million, up 0.8% compared to the previous
year. During the same period, K-food stores' grocery sales grew by 3.3% (VAT
0%). The K-Group chains' sales entitling to K-Plussa points were €3,021 million,
up 2.3% compared to the previous year. In January-June, the K-Plussa customer
loyalty programme gained 44,965 new households. At the end of June, there was
2,065,384 K-Plussa households.
Net sales and profit in April-June 2010
The Group's net sales in April-June 2010 were €2,279 million, which is 6.4% up
on the corresponding period of the previous year (€2,143 million). Net sales
increased by 7.0% 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 3.6%. International operations accounted for 17.9%
(18.4%) of net sales.
4-6/2010 Net sales, M€ Change, % Operating profit excl. Change, M€
non-recurring items,
M€
Food trade 976 +0.2 42.1 +12.0
Home and speciality
goods trade 334 +0.9 7.0 +13.0
Building and home
improvement trade 712 +10.6 17.9 +3.1
Car and machinery
trade 298 +27.6 14.1 +12.2
Common operations and
eliminations -41 +4.6 -3.1 +1.3
Total 2,279 +6.4 78.1 +41.7
Kesko's positive profit performance strengthened in the second quarter of the
year. Non-recurring items excluded, the operating profit was €78.1 million
(€36.4 million), representing 3.4% (1.7%) of net sales. The operating profit was
€79.0 million (€42.7 million). The non-recurring income in April-June in the
previous year included €8.1 million of gains on the disposals of real estate and
€1.9 million of impairment charges on real estate. The Group's profit before tax
for April-June was €78.7 million (€38.2 million).
In addition to sales growth, profitability in the second quarter was improved by
efficient inventory management and cost adjustments. The operating profit
excluding non-recurring items exceeded the level of the comparative period
especially in the home and speciality goods trade and in the car and machinery
trade.
The Group's earnings per share were €0.51 (€0.19). The Group's equity per share
was €20.30 (€19.36).
In April-June, the K-Group's (i.e. Kesko's and the chain stores') retail and B2B
sales, including VAT, were €3,416 million, up 4.7% compared to the previous
year. The K-Group chains' sales entitling to K-Plussa points were €1,593
million, up 1.5% compared to the previous year.
Finance
In January-June, the cash flow from operating activities was €135.4 million
(€136.3 million). The net cash from investing activities was €-85.7 million
(€-19.5 million). The cash flow from investing activities included €4.6 million
(€89.6 million) of proceeds from the sale of fixed assets.
In January-June, the Group's liquidity and solvency remained at an excellent
level. At the end of the period, liquid assets totalled €713 million (€507
million). Interest-bearing liabilities were €490 million (€526 million) and
interest-bearing net liabilities €-223 million (€18 million) at the end of June.
Equity ratio was 51.2% (51.0%) at the end of the period.
In January-June, the Group's net finance income was €0.6 million (net finance
costs €9.5 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 €0.9 million (€10.9 million). Interest income on liquid
assets continued to decrease following a decline in the market interest rate
level.
In April-June, the cash flow from operating activities was €127.3 million
(€143.2 million). The net cash from investing activities was €-44.3 million
(€-25.2 million). The cash flow from investing activities included €3.5 million
(€26.3 million) of proceeds from the sale of fixed assets.
In April-June, the Group's net finance costs were €0.2 million (net finance
costs €4.4 million).
Taxes
The Group's taxes in January-June were €31.7 million (€22.3 million). The
effective tax rate was 31.5% (39.5%), affected by loss-making foreign
operations.
The Group's taxes in April-June were €24.8 million (€15.7 million). The
effective tax rate was 31.5% (41.2%).
Investments
In January-June, the Group's investments totalled €87.7 million (€107.2
million), or 2.1% (2.6%) of net sales. Investments in store sites were €63.5
million (€88.4 million) and other investments €24.2 million (€18.8 million).
Investments in foreign operations represented 29.7% (33.8%) of total
investments.
In April-June, the Group's investments totalled €45.7 million (€55.8 million),
or 2.0% (2.6%) of net sales. Investments in store sites were €31.0 million
(€46.0 million) and other investments €14.7 million (€9.7 million). Investments
in foreign operations represented 20.7% (39.2%) of total investments.
Personnel
In January-June, the average number of employees in the Kesko Group was 17,913
(19,678) converted into full-time employees. In Finland, the average decrease
was 625 people, while outside Finland, it was 1,139.
At the end of June 2010, the total number of employees was 22,467 (23,776), of
whom 13,099 (13,773) worked in Finland and 9,368 (10,003) outside Finland.
Compared to the end of June 2009, there was a decrease of 674 people in Finland
and 635 outside Finland.
During the reporting period, the Group's staff cost decreased by €12.8 million,
or by 4.7%, 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
1-6/2010 1-6/2009 4-6/2010 4-6/2009
Net sales, € million 1,888 1,861 976 974
Operating profit excl. non-recurring
items, € million 73.7 63.9 42.1 30.1
Operating profit as % of net sales excl.
non-recurring items 3.9 3.4 4.3 3.1
Investments, € million 37.9 40.2 21.4 19.5
Net sales, € million 1-6/2010 Change, % 4-6/2010 Change, %
Sales to K-food stores 1,451 +2.7 748 +0.8
Kespro 334 +1.1 177 +1.1
Others 103 -12.6 51 -9.6
Total 1,888 +1.4 976 +0.2
January-June 2010
In the food trade, the net sales in January-June were €1,888 million (€1,861
million), up 1.4%. During the same period, the grocery sales of K-food stores
increased by 3.3% (VAT 0%). Good sales performance was achieved especially by
K-citymarkets and K-supermarkets. In January-June, the growth rate of the total
grocery trade market in Finland is estimated at some 1-2% (VAT 0%) compared to
the previous year (Kesko's own estimate). K-food stores' market share
strengthened during the first part of the year.
In January-June, the operating profit excluding non-recurring items of the food
trade was €73.7 million (€63.9 million), or €9.9 million up on the previous
year. The operating profit was €73.9 million (€76.1 million). The comparative
year's operating profit was increased by €13.0 million of non-recurring gains on
real estate disposals.
In January-June, investments in the food trade were €37.9 million (€40.2
million), of which investments in store sites were €28.2 million (€34.2
million).
April-June 2010
In the food trade, the net sales in April-June were €976 million (€974 million),
up 0.2%. During the same period, the grocery sales of K-food stores increased by
2.6% (VAT 0%).
In April-June, the operating profit excluding non-recurring items of the food
trade was €42.1 million (€30.1 million) In addition to retail sales growth and
cost savings, the improved profit is partly attributable to the lower-than-usual
campaign volume as the food manufacturing industry cancelled some of the agreed
campaigns during the strikes in the spring.
In April-June, investments in the food trade were €21.4 million (€19.5 million),
of which investments in store sites were €16.7 million (€16.8 million).
In April-June 2010, three new K-supermarkets and one new K-market were opened.
In addition, renovations and extensions were carried out in 26 stores.
The most significant store sites being built are the new K-citymarkets in
Hyvinkää, in Palokka, Jyväskylä, 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, Kouvola and Sodankylä. K-supermarkets in Nilsiä and
Raisio are being extended, and K-market Suonenjoki and K-market Jokela in
Tuusula are being extended into K-supermarkets.
Home and speciality goods trade
1-6/2010 1-6/2009 4-6/2010 4-6/2009
Net sales, € million 689 677 334 331
Operating profit excl. non-recurring
items, € million 7.1 -16.7 7.0 -6.0
Operating profit as % of net sales excl.
non-recurring items 1.0 -2.5 2.1 -1.8
Investments, € million 12.8 16.9 9.3 7.1
Net sales, € million 1-6/2010 Change, % 4-6/2010 Change, %
Anttila 215 -1.0 101 -1.2
K-citymarket Home and Speciality Goods 276 +7.2 139 +3.5
Intersport 76 +2.9 33 +3.2
Indoor 71 -2.6 35 -2.2
Musta Pörssi 43 -5.8 23 -3.7
Kenkäkesko 10 -11.8 4 +17.2
Total 689 +1.8 334 +0.9
January-June 2010
In the home and speciality goods trade, the net sales in January-June were €689
million (€677 million), up 1.8%. K-citymarket's net sales performance was good
especially in clothes 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.
The operating profit of the home and speciality goods trade excluding
non-recurring items in January-June was €7.1 million, a €23.8 million
year-on-year increase attributable to increased sales, improved productivity and
more efficient purchasing.
Investments in the home and speciality goods trade in January-June were €12.8
million (€16.9 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.
April-June 2010
In the home and speciality goods trade, the net sales in April-June were €334
million (€331 million), up 0.9%. The best net sales performance was achieved in
clothes and sports equipment.
The operating profit of the home and speciality goods trade excluding
non-recurring items in April-June was €7.0 million, a €13.0 million year-on-year
increase. The operating profit excluding non-recurring items was positively
impacted by improved productivity, cost savings and more efficient purchasing.
Investments in the home and speciality goods trade in April-June were €9.3
million (€7.1 million).
Building and home improvement trade
1-6/2010 1-6/2009 4-6/2010 4-6/2009
Net sales, € million 1,207 1,173 712 643
Operating profit excl. non-recurring
items, € million 4.2 5.6 17.9 14.8
Operating profit as % of net sales excl.
non-recurring items 0.3 0.5 2.5 2.3
Investments, € million 28.4 46.3 10.4 26.8
Net sales, € million 1-6/2010 Change, % 4-6/2010 Change, %
Rautakesko Finland 588 +5.1 338 +14.6
K-rauta AB 99 +10.7 63 +20.3
Byggmakker 262 +14.7 154 +15.6
Rautakesko Estonia 24 -24.2 14 -23.9
Rautakesko Latvia 22 -8.9 13 -1.4
Senukai 96 -28.5 59 -20.7
Rautakesko Russia 90 +10.5 55 +25.4
OMA 28 +9.6 18 +23.1
Total 1,207 +2.9 712 +10.6
January-June 2010
In the building and home improvement trade, the net sales in January-June were
€1,207 million (€1,173 million), up 2.9%. The building and home improvement
market increased in January-June by some 7.4% in Finland, some 1% in Norway and
some 4% in Sweden. The market decreased by some 20-30% in the Baltic countries
(Rautakesko's estimate).
In January-June, the net sales in Finland were €588 million, an increase of
5.1%. The building and home improvement trade contributed €430 million, and the
agricultural supplies trade €158 million to the net sales in Finland. The net
sales of the building and home improvement trade in Finland were up 11.1%. The
net sales of the agricultural supplies trade decreased by 8.5%.
The net sales from foreign operations in the building and home improvement trade
were €618 million (€613 million), an increase of 0.9%. In addition to the
decline in demand in the Baltic countries, the sales performance of foreign
operations was affected 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 6.0% in terms of the local currencies. In Sweden,
the net sales of K-rauta AB decreased by 0.2% in terms of kronas. In Norway,
Byggmakker's net sales increased by 3.3% in terms of krones. In Russia, the net
sales of the building and home improvement trade decreased by 0.1% in terms of
rubles, and the net sales of the Belarusian OMA were up by 15.6% in terms of
rubles. Foreign operations contributed 51.2% to the net sales of the building
and home improvement trade.
In January-June, the operating profit excluding non-recurring items of the
building and home improvement trade was €4.2 million (€5.6 million). The profit
matched the level of the previous year regardless of the contraction in the
Baltic building market as well as investments in new store sites in Russia and
Sweden.
In January-June, investments in the building and home improvement trade were
€28.4 million (€46.3 million), of which 91.5% (78.2%) abroad.
The retail sales of the K-rauta and Rautia chains in Finland increased by 7.5%
to €578 million, including VAT, in January-June. The sales of Rautakesko B2B
Service increased by 13.2%. The retail sales of the K-maatalous chain were €217
million, including VAT, down 10.7%.
April-June 2010
In the building and home improvement trade, the net sales in April-June were
€712 million (€643 million), up 10.6%.
In April-June, the net sales in Finland were €338 million, an increase of
14.6%. The building and home improvement trade contributed €250 million, and the
agricultural supplies trade €88 million to the net sales in Finland. The net
sales of the building and home improvement trade in Finland were up 17.5%. The
net sales of the agricultural supplies trade increased by 6.9%.
The net sales from foreign operations in the building and home improvement trade
were €374 million (€349 million), an increase of 7.3%. The net sales from
foreign operations dropped by 0.7% in terms of the local currencies. In Sweden,
the net sales of K-rauta AB increased by 8.0% in terms of kronas. In Norway,
Byggmakker's net sales increased by 3.6% in terms of krones. In Russia, the net
sales of the building and home improvement trade increased by 11.6% in terms of
rubles, and the net sales of the Belarusian OMA were up by 24.7% in terms of
rubles. Foreign operations contributed 52.6% to the net sales of the building
and home improvement trade.
In April-June, the operating profit excluding non-recurring items of the
building and home improvement trade was €17.9 million, up €3.1 million. The
profit performance was especially affected by an increased demand in Finland.
In April-June, investments in the building and home improvement trade were €10.4
million (€26.8 million).
In April-June, new K-rauta stores were opened in Stockholm, Sweden and in
Kaluga, 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 11.4%
to €385 million, including VAT, in April-June. The sales of Rautakesko B2B
Service increased by 18.0%. The retail sales of the K-maatalous chain were €139
million, including VAT, down 1.8%.
Car and machinery trade
1-6/2010 1-6/2009 4-6/2010 4-6/2009
Net sales, € million 534 529 298 233
Operating profit excl. non-recurring
items, € million 20.5 -4.1 14.1 1.9
Operating profit as % of net sales excl.
non-recurring items 3.8 -0.8 4.7 0.8
Investments, € million 8.1 3.6 4.0 1.8
Net sales, € million 1-6/2010 Change, % 4-6/2010 Change, %
VV-Auto 367 +6.3 197 +46.0
Konekesko 168 -9.3 102 +2.6
Total 534 +0.9 298 +27.6
January-June 2010
In January-June, the net sales of the car and machinery trade were €534 million
(€529 million), up 0.9%.
VV-Auto's net sales in January-June were €367 million (€345 million), an
increase of 6.3%. 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 17.0%.
During the first part of the year in Finland, new registrations of passenger
cars and vans increased by 19.9% and 1.7% respectively compared to the previous
year. In January-June, the combined market share of passenger cars imported by
VV-Auto rose to 19.9% (18.4%) and that of vans to 22.4% (17.9%).
Konekesko's net sales in January-June were €168 million (€185 million), down
9.3% compared to the previous year, as a result of the planned discontinuation
of the Baltic grain and agricultural inputs trade. The net sales in Finland were
€114 million, an increase of 4.3%. The net sales from Konekesko's foreign
operations were €55 million, down 28.3%. In line with its strategy, Konekesko
concentrates on the machinery trade also in the Baltic countries. The net sales
of Konekesko's machinery trade increased by 6.4%.
In January-June, the operating profit excluding non-recurring items of the car
and machinery trade was €20.5 million, which was €24.6 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.
Investments in the car and machinery trade were €8.1 million (€3.6 million) in
January-June.
April-June 2010
In April-June, the net sales of the car and machinery trade were €298 million
(€233 million), up 27.6%.
VV-Auto's net sales in April-June were €197 million (€135 million), an increase
of 46.0%. In addition to the general market trend, the net sales were increased
especially by Volkswagen's good market share performance, coupled with the
execution of the exceptionally full order books seen in the first part of the
year. Especially in June, sales were boosted by the VAT rate rise on 1 July
2010. At the end of June, order books were still fuller than in the previous
year.
Konekesko's net sales in April-June were €102 million (€99 million), up 2.6%.
The net sales from Konekesko's machinery trade increased by 20.6% owing to boat
exports and a slight recovery of the machinery trade market.
In April-June, the operating profit excluding non-recurring items of the car and
machinery trade was €14.1 million, which was €12.2 million higher than in the
previous year. The profit performance was especially affected by a strong sales
growth in the car trade coupled with cost adjustments implemented in the
machinery trade.
Investments in the car and machinery trade were €4.0 million (€1.8 million) in
April-June.
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 June 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-June, 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 €26.60 at the end of June 2010,
representing an increase of 12.7%. Correspondingly, the price of a B share was
€23.08 at the end of 2009, and €26.63 at the end of June 2010, representing an
increase of 15.4%. In January-June, the highest A share quotation was €30.20 and
the lowest was €23.16. For B shares, they were €30.75 and €22.40 respectively.
In January-June, the Helsinki stock exchange (OMX Helsinki) All-Share index fell
by 3.2%, the weighted OMX Helsinki CAP index rose by 1.0%, while the Consumer
Staples Index was up 9.0% during the same period.
At the end of June 2010, the market capitalisation of A shares was €844 million,
while that of B shares was €1,782 million. Their combined market capitalisation
was €2,626 million, an increase of €340 million on the end of 2009. In
January-June 2010, 752,140 A shares were traded on the Helsinki stock exchange
at a total value of €20 million, while 27.9 million B shares were traded at a
total value of €748 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. The options of the 2007 option scheme have not been exercised or traded
yet. Further information on the Board's authorisations is available at
www.kesko.fi.
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.
At the end of June 2010, the number of shareholders was 37,599, which was 1,289
less than at the end of 2009. At the end of June 2010, foreign ownership of all
shares was 24%, and foreign ownership of B shares was 36% at the end of June
2010.
Flagging notifications
Kesko Corporation did not receive flagging notifications during the reporting
period.
Main events after 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 will be 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 will be included in
the Kesko Group's financial reporting as an associate starting from 1 July 2010
(stock exchange releases on 1 July 2010).
Responsibility
Kesko's Corporate Responsibility Report 2009 was published in Finnish and
English on 5 May. The report has been assured by an independent assurance
provider. Kesko has followed the A+ application level of the GRI guidelines in
the report.
In May, as in the previous year, Kesko was included as a member in the FTSE4Good
Global and FTSE4Good Europe indexes focusing on responsible investment. The
FTSE4Good indexes include a total of over 800 companies. The assessment for the
FTSE Group in London is made by the Ethical Investment Research Service (EIRIS).
On Mother's Day, 9 May, Kesko and K-retailers donated the sculpture
'Expectation' by Pekka Jylhä, depicting an expectant mother, to the city of
Helsinki.
Kesko's Board of Directors supported Finnish institutions of higher education
with substantial donations. The donations were granted to Aalto University and
the Universities of Helsinki, Tampere, Turku, Eastern Finland, Jyväskylä, Oulu
and Vaasa, and to polytechnics to be announced later. The total donation amount
was €1,115,000.
Kesko's Board of Directors granted scholarships to talented young athletes and
art students. The Kesko scholarships were distributed to 24 promising young
athletes and 16 art students from different parts of Finland. The total
scholarship amount was €40,000 and the recipients were chosen on the
recommendation of fine arts universities and sports associations.
Kesko sponsored the nationwide polytechnics' Thesis contest which selected the
2009 best theses in April. In addition to categories in separate fields of
education, this year's contest also featured a theme category on corporate
responsibility.
Kesko was the main partner of the ´Your Move On Tour´ series of events organised
by the Young Finland Association and the Finnish Sports Federation. The tour,
targeted to 13-19-year olds, ran in May-June and Kesko was present in five
localities in Finland.
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 discussed in more detail in Kesko's Annual Report and the
financial statements for 2009, and in the corporate governance section at
Kesko's website. During the first months of the year, no material changes have
taken place in the risk factors presented in the Annual Report and the 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, cost reduction, efficient management
of 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 (7/2010-6/2011) in comparison with the 12-month period
preceding the reporting period (7/2009-6/2010).
The outlook for trends in consumer demand has improved somewhat, 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.
Reduced grocery prices continue to dampen market growth in terms of euros,
although otherwise 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 slowly.
The Kesko Group's net sales and operating profit excluding non-recurring items
are expected to grow during the next twelve months.
Helsinki, 22 July 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, and Jukka Erlund, Vice President, Corporate
Controller, telephone +358 1053 22338. A Finnish-language webcast from the media
and analyst briefing on the interim report can be accessed at www.kesko.fi at
10.00. 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 June
Group contingent liabilities
Calculation of performance indicators
K-Group's retail and B2B sales
Kesko Corporation's interim report for January-September will be released on 26
October 2010. 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)
1-6/ 1-6/ Change% 4-6/ 4-6/ Change% 1-12/
2010 2009 2010 2009 2009
Net sales 4,237 4,160 1.8 2,279 2,143 6.4 8,447
Cost of sales -3,648 -3,613 1.0 -1,960 -1,858 5.4 -7,298
Gross profit 589 548 7.5 319 284 12.4 1,149
Other operating income 313 326 -4.2 166 165 0.3 710
Staff cost -260 -273 -4.7 -132 -136 -3.3 -535
Depreciation and impairment
charges -57 -58 -2.6 -29 -31 -4.8 -131
Other operating expenses -485 -477 1.6 -245 -240 2.3 -961
Operating profit 100 66 51.7 79 43 85.0 232
Interest income 10 13 -25.1 4 5 -17.6 21
Interest expenses -8 -11 -27.0 -4 -5 -24.8 -20
Exchange differences and
other financial items -1 -12 -90.3 -1 -4 -86.2 -17
Income from associates 0 0 (..) 0 0 42.8 0
Profit before tax 101 56 78.1 79 38 (..) 217
Income tax -32 -22 42.0 -25 -16 57.6 -82
Profit for the period 69 34 (..) 54 22 (..) 134
Attributable to
Owners of the parent 66 31 (..) 51 19 (..) 125
Non-controlling interests 3 4 -13.9 3 3 -5.4 9
Earnings per share (€) for
profit attributable to
equity
holders of the parent
Basic 0.67 0.31 (..) 0.52 0.19 (..) 1.28
Diluted 0.67 0.31 (..) 0.51 0.19 (..) 1.27
Consolidated statement of
comprehensive income
(€ million)
1-6/ 1-6/ Change% 4-6/ 4-6/ Change% 1-12/
2010 2009 2010 2009 2009
Net profit for the period 69 34 (..) 54 22 (..) 134
Other comprehensive income
Exchange differences on
translating foreign
operations 7 -3 (..) 4 -1 (..) -3
Cash flow hedge revaluation 7 -7 (..) 8 2 (..) -4
Revaluation of
available-for-sale
financial assets 1 -1 (..) 1 0 (..) -2
Tax relating to other
comprehensive income -2 2 (..) -2 -1 (..) 2
Total other comprehensive
income for the period, net
of tax 13 -9 (..) 10 0 (..) -7
Total comprehensive income
for the period 81 25 (..) 64 23 (..) 127
Attributable to
Owners of the parent 77 26 (..) 59 20 (..) 123
Non-controlling interests 5 -1 (..) 5 3 82.7 4
(..) Change over 100%
Consolidated statement of financial
position
(€ million), condensed
30.6.2010 30.6.2009 Change,% 31.12.2009
ASSETS
Non-current assets
Intangible assets 187 177 5.6 185
Tangible assets 1,101 1,190 -7.5 1,111
Interests in associates and other
financial assets 37 36 3.7 36
Loans and receivables 70 62 11.5 71
Pension assets 327 310 5.5 315
Total 1,722 1,776 -3.0 1,717
Current assets
Inventories 677 739 -8.4 665
Trade receivables 729 717 1.6 594
Other receivables 138 122 13.1 150
Financial assets at fair value through
profit or loss 267 20 (..) 213
Available-for-sale financial assets 372 402 -7.5 428
Cash and cash equivalents 74 85 -13.2 74
Total 2,256 2,085 8.2 2,124
Non-current assets held for sale 51 1 (..) 1
Total assets 4,029 3,862 4.3 3,842
30.6.2010 30.6.2009 Change,% 31.12.2009
EQUITY AND LIABILITIES
Equity 2,002 1,901 5.3 2,005
Non-controlling interests 52 60 -14.1 64
Total equity 2,054 1,961 4.7 2,069
Non-current liabilities
Pension obligations 2 2 -6.1 2
Interest-bearing liabilities 241 263 -8.5 262
Non-interest-bearing liabilities 4 9 -54.2 6
Deferred tax liabilities 134 128 5.0 128
Provisions 14 18 -26.1 14
Total 394 420 -6.1 412
Current liabilities
Interest-bearing liabilities 249 263 -5.1 194
Trade payables 878 809 8.5 704
Other non-interest-bearing liabilities 431 387 11.2 434
Provisions 24 22 7.6 29
Total 1,582 1,481 6.8 1,361
Total equity and liabilities 4,029 3,862 4.3 3,842
(..) 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 trans ation ear- ling-
capital lation sur- nings inte-
differ- plus rests
ences
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 3 0 3
Dividends -98 0 -98
Other changes 1 0 1
Net profit for
the period 31 4 34
Other
comprehensive
income
Exchange
differences on
translating
foreign
operations 0 1 0 -4 -3
Cash flow
hedge
revaluation -7 -7
Revaluation of
available-for-
sale financial
assets -1 -1
Tax relating
to
other
comprehensive
income 2 2
Total other
comprehensive
income 0 1 -6 0 -4 -9
Balance at
30.6.2009 196 0 193 243 -9 -4 1,281 60 1,961
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 3 0 3
Dividends -89 -18 -106
Other changes 1 0 1
Net profit for
the period 66 3 69
Other
comprehensive
income
Exchange
differences on
translating
foreign
operations 0 5 0 2 7
Cash flow
hedge
revaluation 7 7
Revaluation of
available-for-
sale financial
assets 1 1
Tax relating
to
other
comprehensive
income -2 -2
Total other
comprehensive
income 0 5 6 -1 2 13
Balance at
30.6.2010 197 0 198 243 -2 4 1,362 52 2,054
Consolidated cash flow statement (€ million), condensed
1-6/ 1-6/ Change% 4-6/ 4-6/ Change% 1-12/
2010 2009 2010 2009 2009
Cash flow from operating
activities
Profit before tax 101 56 78.1 79 38 (..) 217
Planned depreciation 57 56 0.7 29 29 1.6 117
Finance income and
costs -1 10 (..) 0 4 -95.0 16
Other adjustments -12 -28 -57.5 -5 -7 -24.1 -74
Working capital
Current non-interest-bearing
trade and other receivables,
increase (-)/ decrease (+) -117 -67 74.9 -55 9 (..) 39
Inventories
increase (-)/ decrease (+) -3 130 (..) 11 91 -88.3 207
Current non-interest-bearing
liabilities,
increase (+)/decrease (-) 174 14 (..) 119 4 (..) -84
Financial items and tax -64 -34 85.0 -50 -25 (..) -59
Net cash from operating
activities 135 136 -0.7 127 143 -11.1 379
Cash flow from investing
activities
Investments -92 -110 -16.4 -48 -51 -5.6 -223
Sales of fixed assets 5 90 -94.8 4 26 -86.5 252
Increase of non-current
receivables 0 0 (..) 0 0 (..) 0
Decrease of non-current
receivables 1 1 94.0 0 -1 -94.6 2
Net cash used in investing
activities -86 -19 (..) -44 -25 75.4 31
Cash flow from financing
activities
Increase (+)/ decrease (-) in
interest-bearing liabilities 45 38 16.4 36 27 34.0 -33
Increase (-)/decrease (+) in
current interest-bearing
receivables 10 -1 (..) 12 0 (..) -14
Dividends paid -105 -98 6.7 -105 -98 6.7 -98
Equity increase 4 3 36.9 3 3 15.2 5
Short-term money market
investments -118 58 (..) 62 4 (..) -98
Other items -7 7 (..) -4 0 (..) 4
Net cash used in financing
activities -172 8 (..) 4 -64 (..) -234
Change in cash and cash
equivalents -122 124 (..) 87 54 62.8 175
Cash and cash equivalents
and current portion of
available-for-sale financial
assets at 1 Jan. 491 319 53.9 283 387 -26.9 319
Translation difference and
revaluation 1 -3 (..) 0 0 (..) -3
Cash and cash equivalents
and current portion of
available-for-sale financial
assets at 30 Jun. 371 440 -15.9 371 440 -15.9 491
(..) Change over 100%
Group performance indicators
1-6/2010 1-6/2009 Change,
pp
Return on capital employed, % 10.2 6.1 4.1
Return on capital employed, %,
moving 12 mo 13.2 5.4 7.8
Return on capital employed excl. non-recurring
items, % 10.1 3.7 6.4
Return on capital employed excl. non-recurring
items, %, moving 12 mo 10.6 6.4 4.2
Return on equity, % 6.7 3.4 3.3
Return on equity, %, moving 12 mo 8.4 2.9 5.5
Return on equity excl. non-recurring items, % 6.6 1.5 5.1
Return on equity excl. non-recurring items, %,
moving 12 mo 6.6 4.5 2.1
Equity ratio, % 51.2 51.0 0.3
Gearing, % -10.9 0.9 -11.8
Change, %
Investments, € million 87.7 107.2 -18.2
Investments, % of net sales 2.1 2.6 -19.7
Earnings per share, basic, € 0.67 0.31 (..)
Earnings per share, diluted, € 0.67 0.31 (..)
Earnings per share excl. non-recurring items, basic,
€ 0.66 0.11 (..)
Cash flow from operating activities,
€ million 135 136 -0.7
Cash flow from investing activities,
€ million -86 -19 (..)
Equity/share, € 20.30 19.36 4.9
Personnel, average 17,913 19,678 -9.0
(..) Change over 100%
Group performance indicators 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
by quarter 2009 2009 2009 2009 2010 2010
Net sales, € million 2,018 2,143 2,133 2,153 1,958 2,279
Change in net sales, % -11.4 -15.9 -12.4 -7.7 -3.0 6.4
Operating profit, € million 23.2 42.7 48.3 118.1 20.9 79.0
Operating margin, % 1.1 2.0 2.3 5.5 1.1 3.5
Operating profit excl. non-recurring items,
€ million 3.4 36.4 47.5 68.0 20.9 78.1
Operating margin excl. non-recurring items,
% 0.2 1.7 2.2 3.2 1.1 3.4
Finance income/costs,
€ million -5.1 -4.4 -4.7 -1.8 0.8 -0.2
Profit before tax, € million 18.2 38.2 43.8 116.3 21.9 78.7
Profit before tax, % 0.9 1.8 2.1 5.4 1.1 3.5
Return on capital employed, % 4.2 8.0 9.4 22.9 4.4 16.0
Return on capital employed excl.
non-recurring items, % 0.6 6.8 9.2 13.2 4.3 15.8
Return on equity, % 2.4 4.6 5.2 14.7 2.9 10.6
Return on equity excl. non-recurring items,
% -0.6 3.7 5.0 7.7 2.9 10.5
Equity ratio, % 49.8 51.0 52.3 54.1 51.1 51.2
Investments, € million 51.5 55.8 49.2 41.5 42.0 45.7
Earnings per share, diluted, € 0.12 0.19 0.24 0.73 0.15 0.51
Equity per share, € 19.16 19.36 19.60 20.39 19.69 20.30
Segment information
Net sales by segment, 1-6/ 1-6/ Change, 4-6/ 4-6/ Change,
(€ million) 2010 2009 % 2010 2009 %
Food trade, Finland 1,888 1,861 1.4 976 974 0.2
Food trade, other countries* - - - - - -
Food trade total 1,888 1,861 1.4 976 974 0.2
- of which intersegment trade 82 79 4.1 40 37 7.3
Home and speciality goods trade, Finland 682 667 2.3 331 327 1.4
Home and speciality goods trade, other
countries* 8 11 -30.0 3 5 -31.4
Home and speciality goods
trade total 689 677 1.8 334 331 0.9
- of which intersegment trade 11 10 11.9 7 6 6.8
Building and home improvement trade,
Finland 588 560 5.1 338 295 14.6
Building and home improvement trade,
other countries* 618 613 0.9 374 349 7.3
Building and home improvement trade
total 1,207 1,173 2.9 712 643 10.6
- of which intersegment trade 0 1 -67.1 0 1 -54.0
Car and machinery trade, Finland 479 453 5.7 266 192 38.8
Car and machinery trade, other
countries* 55 76 -28.1 31 41 -24.1
Car and machinery trade total 534 529 0.9 298 233 27.6
- of which intersegment trade 0 0 (..) 0 0 (..)
Common operations and eliminations -81 -80 1.5 -41 -39 4.6
Finland total 3,556 3,461 2.7 1,870 1,748 7.0
Other countries total* 680 699 -2.7 409 395 3.6
Group total 4,237 4,160 1.8 2,279 2,143 6.4
* Net sales in countries other than Finland.
Operating profit by 1-6/ 1-6/ 4-6/ 4-6/
segment (€ million) 2010 2009 Change 2010 2009 Change
Food trade 73.9 76.1 -2.2 42.2 33.8 8.4
Home and speciality goods trade 7.1 -6.9 14.0 7.0 -3.6 10.6
Building and home improvement trade 4.2 9.6 -5.4 17.9 14.8 3.2
Car and machinery trade 21.4 -4.1 25.5 15.0 1.9 13.1
Common operations and eliminations -6.6 -8.8 2.3 -3.2 -4.3 1.1
Total 100.0 65.9 34.1 79.0 42.7 36.3
Operating profit excl. non-recurring items by 1-6/ 1-6/ 4-6/ 4-6/
segment (€ million) 2010 2009 Change 2010 2009 Change
Food trade 73.7 63.9 9.9 42.1 30.1 12.0
Home and speciality goods trade 7.1 -16.7 23.8 7.0 -6.0 13.0
Building and home improvement trade 4.2 5.6 -1.5 17.9 14.8 3.1
Car and machinery trade 20.5 -4.1 24.6 14.1 1.9 12.2
Common operations and eliminations -6.5 -9.0 2.4 -3.1 -4.4 1.3
Group total 99.0 39.8 59.2 78.1 36.4 41.7
Segments' 1-6/ 1-6/ Change, 4-6/2010 4-6/2009 Change,
operating 2010 2009 pp % of net % of net pp
margins excl. % of net % of net sales sales
non-recurring sales sales
items
Food trade 3.9 3.4 0.5 4.3 3.1 1.2
Home and
speciality goods
trade 1.0 -2.5 3.5 2.1 -1.8 3.9
Building and home
improvement trade 0.3 0.5 -0.1 2.5 2.3 0.2
Car and machinery
trade 3.8 -0.8 4.6 4.7 0.8 3.9
Group total 2.3 1.0 1.4 3.4 1.7 1.7
Capital employed by segment, cumulative
average (€ million) 1-6/ 1-6/ 4-6/ 4-6/
2010 2009 Change 2010 2009 Change
Food trade 625 635 -10 635 624 11
Home and speciality goods trade 439 523 -84 447 527 -80
Building and home improvement trade 648 661 -13 660 665 -5
Car and machinery trade 187 266 -79 177 247 -70
Common operations and eliminations 59 79 -20 56 67 -10
Group total 1,958 2,164 -206 1,975 2,129 -154
Return on capital Moving
employed 1-6/ 1-6/ Change, pp 4-6/ 4-6/ Change, pp 12 mo 6/2010
excl. non-recurring items 2010 2009 2010 2009
by segment, %
Food trade 23.6 20.1 3.5 26.5 19.3 7.2 22.6
Home and speciality goods
trade 3.2 -6.4 9.6 6.3 -4.5 10.8 11.3
Building and home
improvement trade 1.3 1.7 -0.4 10.9 8.9 2.0 1.6
Car and machinery trade 22.0 -3.0 25.0 32.0 3.1 28.9 12.3
Group total 10.1 3.7 6.4 15.8 6.8 9.0 10.6
Investments by segment (€ million) 1-6/ 1-6/ 4-6/ 4-6/
2010 2009 Change 2010 2009 Change
Food trade 38 40 -2 21 19 2
Home and speciality goods trade 13 17 -4 9 7 2
Building and home improvement trade 28 46 -18 10 27 -16
Car and machinery trade 8 4 5 4 2 2
Group total 88 107 -20 46 56 -10
Segment information by quarter
Net sales by segment 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
(€ million) 2009 2009 2009 2009 2010 2010
Food trade 888 974 966 970 912 976
Home and speciality goods trade 346 331 381 500 355 334
Building and home improvement trade 529 643 614 525 495 712
Car and machinery trade 296 233 213 205 236 298
Common operations and eliminations -41 -39 -41 -47 -40 -41
Group total 2,018 2,143 2,133 2,153 1,958 2,279
Operating profit by 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
segment (€ million) 2009 2009 2009 2009 2010 2010
Food trade 42.3 33.8 35.8 58.7 31.7 42.2
Home and speciality goods trade -3.3 -3.6 7.0 66.5 0.1 7.0
Building and home improvement trade -5.2 14.8 8.5 1.6 -13.8 17.9
Car and machinery trade -6.0 1.9 1.7 -2.7 6.4 15.0
Common operations and eliminations -4.6 -4.3 -4.5 -5.9 -3.4 -3.2
Group total 23.2 42.7 48.3 118.1 20.9 79.0
Operating profit excl. non-
recurring items by 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
segment (€ million) 2009 2009 2009 2009 2010 2010
Food trade 33.8 30.1 35.5 33.7 31.7 42.1
Home and speciality goods trade -10.7 -6.0 6.5 39.7 0.1 7.0
Building and home improvement trade -9.1 14.8 8.4 -2.1 -13.8 17.9
Car and machinery trade -6.0 1.9 1.7 2.7 6.4 14.1
Common operations and eliminations -4.6 -4.4 -4.5 -6.0 -3.4 -3.1
Group total 3.4 36.4 47.5 68.0 20.9 78.1
Operating margin excl.
non-recurring items by 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
segment, % 2009 2009 2009 2009 2010 2010
Food trade 3.8 3.1 3.7 3.5 3.5 4.3
Home and speciality goods trade -3.1 -1.8 1.7 7.9 0.0 2.1
Building and home improvement trade -1.7 2.3 1.4 -0.4 -2.8 2.5
Car and machinery trade -2.0 0.8 0.8 1.3 2.7 4.7
Group total 0.2 1.7 2.2 3.2 1.1 3.4
Personnel average and at 30.6.
Personnel, average by segment
1-6/2010 1-6/2009 Change
Food trade 2,894 3,121 -227
Home and speciality goods trade 5,366 5,703 -337
Building and home improvement trade 8,145 9,073 -928
Car and machinery trade 1,117 1,366 -249
Common operations 391 415 -24
Group total 17,913 19,678 -1,765
Personnel at 30.6.* by segment
2010 2009 Change
Food trade 3,485 3,792 -307
Home and speciality goods trade 7,865 8,260 -395
Building and home improvement trade 9,451 9,883 -432
Car and machinery trade 1,208 1,371 -163
Common operations 458 470 -12
Group total 22,467 23,776 -1,309
* total number incl. part-time employees
Group contingent liabilities (€ million)
30.6.2010 30.6.2009 Change, %
For own commitments 266 215 23.4
For shareholders 0 0 -0.7
For others 6 8 -24.9
Lease liabilities for machinery and fixtures 21 24 -11,7
Lease liabilities for real estate 2,294 2,114 8.5
Contingent liabilities arising from
derivative financial instruments
Fair value
Values of underlying instruments at 30.6. 30.6.2010 30.6.2009 30.6.2010
Interest rate derivatives
Forward and future contracts 2 12 2.00
Interest rate swap contracts 206 204 3.82
Currency derivatives
Forward and future contracts 480 488 -9.53
Option agreements - 1 -
Foreign exchange contracts 100 100 -2.63
Commodity derivatives
Electricity derivatives 48 40 -0.36
Grain derivatives - 1 -
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 Operating profit for prior 12 months x
12 months 100 / (Non-current assets + Inventories +
Receivables + Other current assets -
Non-interest-bearing liabilities) on
average for 12 months
Return on capital employed, excl. Operating profit excl. non-recurring items
non-recurring 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
Return on capital employed excl. assets + Inventories + Receivables + Other
non-recurring items, %, current assets - Non-interest-bearing
moving 12 months liabilities) on average for 12 months
(Profit/loss before tax - income tax) x
Return on equity*, % 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
Return on equity excl. non-recurring the tax effect of 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 non-recurring items)
Return on equity excl. non-recurring 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 items -
Earnings/share excl. non-recurring non-controlling interests)/
items, basic Average number of shares
Equity attributable to equity holders of
Equity/share 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, incl. VAT (preliminary data):
1.1.-30.6.2010 1.4.-30.6.2010
K-Group retail and B2B € million Change, % € million Change, %
sales
K-Group food trade
K-food stores, Finland 2,389 -0.6 1,248 -1.1
Kespro 381 -4.1 202 -4.2
Food trade total 2,770 -1.1 1,450 -1.5
K-Group home and
speciality goods trade
Home and speciality goods
stores, Finland 921 2.7 445 0.5
Home and speciality goods
stores, Baltic countries 9 -29.1 4 -30.6
Home and speciality
goods trade total 930 2.2 449 0.1
K-Group building and
home improvement trade
K-rauta and Rautia 578 7.5 385 11.4
Rautakesko B2B Service 107 13.2 62 18.0
K-maatalous 217 -10.7 139 -1.8
Finland total 902 3.1 586 8.6
Building and home
improvement stores, other
Nordic countries 608 12.7 372 16.4
Building and home
improvement stores, Baltic
countries 170 -24.6 104 -18.1
Building and home
improvement stores, other
countries 140 10.5 86 25.4
Building and home
improvement trade total 1,820 3.0 1,148 8.8
K-Group car and
machinery trade
VV-Autotalot 210 2.1 118 30.6
VV-Auto, import 249 11.2 129 66.3
Konekesko, Finland 136 2.9 85 20.1
Finland total 596 5.9 332 39.1
Konekesko, Baltic
countries 63 -26.8 37 -21.2
Car and machinery trade
total 659 1.6 369 29.3
Finland total 5,189 1.0 2,814 4.4
Other countries total 990 -0.1 602 6.2
Retail and B2B sales
total 6,179 0.8 3,416 4.7
[HUG#1433681]
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