2012-10-24 08:00:00 CEST
2012-10-24 08:01:58 CEST
REGULATED INFORMATION
Kesko Oyj - Interim report (Q1 and Q3)
Kesko's interim report for 1 Jan.-30 Sep. 2012
KESKO CORPORATION STOCK EXCHANGE RELEASE 24.10.2012 AT 09.00 1(28)
Financial performance in brief:
* The Group's net sales for January-September increased by 3.6%.
* The K-Group's (i.e. Kesko's and the chain stores') retail and B2B sales (VAT
0%) increased by 3.8% in January-September.
* The operating profit excluding non-recurring items was €162.9 million (€207.4
million).
* The Kesko Group's net sales are expected to grow during the next twelve
months. As a result of measures to be taken to enhance sales and purchasing
operations and cost savings to be achieved, the operating profit excluding non-
recurring items for the next twelve months is expected to exceed the operating
profit excluding non-recurring items for the preceding twelve months. Capital
expenditure is expected to be lower compared to the capital expenditure for the
preceding twelve months. The Group has amended its future outlook with regard to
profitability performance. Previously, we were prepared for the operating profit
excluding non-recurring items for the next twelve months to be lower than the
operating profit excluding non-recurring items for the preceding twelve months.
Key performance indicators
1-9/2012 1-9/2011 7-9/2012 7-9/2011
Net sales, € million 7,227 6,979 2,449 2,404
Operating profit excl. non- recurring
items, € million 162.9 207.4 78.6 89.2
Operating profit, € million 164.0 207.8 78.6 88.2
Profit before tax, € million 162.1 208.1 77.3 88.0
Capital expenditure, € million 274.5 320.9 102.6 126.3
Earnings per share, diluted, € 1.06 1.33 0.51 0.53
Earnings per share excl. non-recurring
items, basic, € 1.06 1.34 0.52 0.54
30.9.2012 30.9.2011
Equity ratio, % 51.2 54.0
Equity per share, € 22.21 21.66
FINANCIAL PERFORMANCE
Net sales and profit for January-September 2012
The Group's net sales for January-September 2012 were €7,227 million, which is
3.6% up on the corresponding period of the previous year (€6,979 million). In
Finland, net sales increased by 2.3% and in other countries by 9.2%.
International operations accounted for 18.6% (17.6%) of net sales. Net sales
grew in the food trade, the home and speciality goods trade and the building and
home improvement trade.
1-9/2012 Net sales, M€ Change, % Operating profit Change, M€
excl. non-
recurring
items, M€
Food trade 3,179 +3.4 123.4 -10.2
Home and speciality
goods trade 1,116 +4.9 -12.5 -16.2
Building and home
improvement trade 2,170 +5.4 24.4 -6.7
Car and machinery trade 887 -2.7 37.4 -7.4
Common operations and
eliminations -124 -2.7 -9.8 -4.0
Total 7,227 +3.6 162.9 -44.5
The operating profit excluding non-recurring items in January-September was
€162.9 million (€207.4 million), representing 2.3% of net sales (3.0%). The
profit performance was affected by new store openings, higher level of costs and
the expansion of Russian business operations.
Operating profit was €164.0 million (€207.8 million). The operating profit
includes a net amount of €1.1 million (€0.4 million) of non-recurring gains on
disposals of properties and write-downs. The Group's profit before tax for
January-September was €162.1 million (€208.1 million).
The Group's earnings per share were €1.06 (€1.33). The Group's equity per share
was €22.21 (€21.66).
In January-September, the K-Group's (i.e. Kesko's and the chain stores') retail
and B2B sales (VAT 0%) were €9,006 million, up 3.8% compared to the previous
year. In January-September, the K-Group chains' sales entitling to K-Plussa
points were €4,323 million excluding tax, up 4.0% compared to the previous year.
The K-Plussa customer loyalty programme gained 67,837 new households in January-
September. At the end of September, the number of K-Plussa households was
2,201,885 and the number of K-Plussa card holders was over 3.8 million.
Net sales and profit for July-September 2012
The Group's net sales for July-September 2012 were €2,449 million, which is
1.9% up on the corresponding period of the previous year (€2,404 million). In
Finland, net sales increased by 0.5% and in other countries, it increased by
7.5%. International operations accounted for 20.5% (19.4%) of net sales. In the
third quarter, net sales growth slowed due to the 15.4% decrease in the car
trade net sales after the car tax change.
7-9/2012 Net sales, M€ Change, % Operating profit Change, M€
excl. non-
recurring
items, M€
Food trade 1,078 +2.8 49.6 3.2
Home and speciality
goods trade 395 +4.8 0.9 -7.7
Building and home
improvement trade 759 +3.7 18.0 -3.3
Car and machinery trade 259 -10.5 11.5 -1.5
Common operations and
eliminations -41 -2.4 -1.4 -1.2
Total 2,449 +1.9 78.6 -10.5
The operating profit excluding non-recurring items for July-September was €78.6
million (€89.2 million), representing 3.2% of net sales (3.7%). The operating
profit excluding non-recurring items was negatively impacted by the slowing of
sales growth, an increase in costs, the expansion of the store site network and
the expansion of Russian business operations.
Operating profit was €78.6 million (€88.2 million). The operating profit of the
comparative period included €-1.0 million of non-recurring items. The Group's
profit before tax for July-September was €77.3 million (€88.0 million).
The Group's earnings per share were €0.51 (€0.53).
In July-September, the K-Group's (i.e. Kesko's and the chain stores') retail and
B2B sales (VAT 0%) were €3,122 million, up 1.8% compared to the previous year.
In July-September, the K-Group chains' sales entitling to K-Plussa points were
€1,479 million excluding tax, up 2.8% compared to the previous year.
Finance
In January-September, the cash flow from operating activities was €207.4 million
(€169.1 million). The cash flow from investing activities was €-274.9 million
(€-330.9 million), including €22.5 million (€6.2 million) of proceeds from the
sale of fixed assets.
The Group's solvency remained at an excellent level. In September, a €250
million unsecured bond was issued to finance the Group's capital expenditure and
to extend the debt financing structure. At the end of the period, liquid assets
totalled €356 million (€488 million). Interest-bearing liabilities were €640
million (€424 million) and interest-bearing net debt €284 million (€-64 million)
at the end of September. Equity ratio was 51.2% (54.0%) at the end of the
period.
In January-September, the Group's net finance costs were €1.8 million (€0.0
million).
In July-September, the cash flow from operating activities was €150.1 million
(€125.7 million). The cash flow from investing activities was €-103.8 million
(€-136.7 million), including €1.5 million (€2.4 million) of proceeds from the
sale of fixed assets.
In July-September, the Group's net finance costs were €1.3 million (net finance
income €0.3 million).
Taxes
The Group's taxes for January-September were €48.6 million (€66.5 million). The
effective tax rate was 30.0% (32.0%), affected by loss-making foreign
operations.
The Group's taxes for July-September were €22.8 million (€29.3 million). The
effective tax rate was 29.5% (33.2%).
Capital expenditure
In January-September, the Group's capital expenditure totalled €274.5 million
(€320.9 million), or 3.8% (4.6%) of net sales. Capital expenditure in store
sites was €238.8 million (€272.8 million) and other capital expenditure was
€35.7 million (€27.0 million). Capital expenditure in foreign operations
represented 19.6% (36.0%) of total capital expenditure.
In July-September, the Group's capital expenditure totalled €102.6 million
(€126.3 million), or 4.2% (5.3%) of net sales. Capital expenditure in store
sites was €90.7 million (€101.4 million) and other capital expenditure was €11.9
million (€3.8 million). Capital expenditure in foreign operations represented
29.2% (34.7%) of total capital expenditure.
Kesko's strategic focus areas and profitability programme
The key focus areas in Kesko's business operations are the strengthening of
sales growth and return on capital in all divisions, exploiting business
opportunities provided by e-commerce and Russia, as well as good solvency and
dividend payment capacity.
As a result of the weakening general economic situation, tightened competition
and an increase in the level of costs, Kesko is implementing the profitability
programme announced previously which aims to ensure price competitiveness and a
significant improvement in profitability. Measures to enhance sales and
purchasing operations and to achieve cost adjustments are taken separately in
each division. At the Group level, the objective is to achieve total cost
savings of around €100 million. The key saving measures will affect marketing,
personnel, store site and IT expenses and most of the cost savings are expected
to be achieved in 2013. Cost savings will be implemented in all operating
countries, mostly on Finnish operations in view of the volume of operations. In
respect of enhancement measures launched so far, the combined reduction need in
workforce in all operating countries equals to some 900 full time employees, of
which some 500 are in Finland. In addition to lay-offs, the planned reduction
need comprises reductions of working hours, temporary lay-offs, as well as part-
time and pension arrangements.
As announced earlier, capital expenditure will be aligned with funds generated
from operations to some €200-300 million per year.
Personnel
In January-September, the average number of employees in the Kesko Group was
19,740 (18,855) converted into full-time employees. In Finland, the average
increase was 228 people, while outside Finland, it was 658.
At the end of September 2012, the total number of employees was 23,666 (22,579),
of whom 12,847 (12,321) worked in Finland and 10,819 (10,258) outside Finland.
Compared to the end of September 2011, there was an increase of 526 people in
Finland and 561 people outside Finland.
In January-September, the Group's staff cost was €447.9 million, an increase of
8.1% compared to the previous year. In July-September, the Group's staff cost
increased by 6.8% compared to the previous year and was €140.0 million.
SEGMENT INFORMATION
Seasonal nature of operations
The Group's operating activities are affected by seasonal fluctuations. The net
sales and operating profits of the reportable segments are not earned evenly
throughout the year. Instead, they vary by quarter depending on the
characteristics of each segment.
Food trade
1-9/2012 1-9/2011 7-9/2012 7-9/2011
Net sales, € million 3,179 3,074 1,078 1,049
Operating profit excl. non- recurring
items, € million 123.4 133.6 49.6 46.4
Operating profit as % of net sales excl.
non-recurring items 3.9 4.3 4.6 4.4
Capital expenditure,
€ million 156.7 159.2 60.8 64.8
Net sales, € million 1-9/2012 Change, % 7-9/2012 Change, %
Sales to K-food stores 2,451 +3.0 826 +2.3
Kespro 584 +5.7 204 +4.9
Others 144 +1.8 48 +2.5
Total 3,179 +3.4 1,078 +2.8
January-September 2012
In the food trade, the net sales for January-September were €3,179 million
(€3,074 million), up 3.4%. During the same period, the grocery sales of K-food
stores increased by 4.3% (VAT 0%). The sales of Pirkka products grew by 14.0%
(VAT 0%). In the grocery market, retail prices are estimated to have changed by
some 4.5% compared to the previous year (VAT 0%; Kesko's own estimate based on
the Consumer Price Index of Statistics Finland) and the total market (VAT 0%) is
estimated to have grown by some 5% in January-September compared to the previous
year (Kesko's own estimate).
In January-September, the operating profit excluding non-recurring items of the
food trade was €123.4 million (€133.6 million), or €10.2 million down on the
previous year. The operating profit performance was impacted by the expansion of
the store site network and costs related to launching business operations in
Russia. Operating profit was €126.2 million (€133.7 million). Non-recurring
income included €2.7 million of gains on disposals of properties.
The capital expenditure of the food trade was €156.7 million (€159.2 million).
July-September 2012
In the food trade, the net sales for July-September were €1,078 million (€1,049
million), up 2.8%. The third quarter had one delivery day less than in the
previous year. During the same period, the grocery sales of K-food stores
increased by 3.2% (VAT 0%).
In July-September, the operating profit excluding non-recurring items of the
food trade was €49.6 million (€46.4 million), or €3.2 million up on the previous
year. Profitability was improved by enhanced operations and cost savings
achieved. Operating profit was €49.6 million (€45.7 million).
The capital expenditure of the food trade in July-September was €60.8 million
(€64.8 million).
In July-September 2012, one new K-citymarket and four new K-supermarkets were
opened. Two K-supermarkets were extended into K-citymarkets and two K-markets
were extended into K-supermarkets. A total of eight stores were renovated and
extended.
The most significant store sites being built are the new K-citymarkets in
Kokkola and Valkeakoski. New K-supermarkets are being built in Espoo, Joutsa,
Jyväskylä, Kouvola, Lohja and Muurame. K-market Malminmäki in Espoo is being
extended into a K-supermarket and K-supermarket Välivainio in Oulu is being
extended. The first Kesko food store in Russia is being built in St. Petersburg.
Home and speciality goods trade
1-9/2012 1-9/2011 7-9/2012 7-9/2011
Net sales, € million 1,116 1,063 395 376
Operating profit excl.
non-recurring items,
€ million -12.5 3.7 0.9 8.7
Operating profit as %
of net sales excl.
non-recurring items -1.1 0.3 0.2 2.3
Capital expenditure, € million 47.7 50.5 18.4 32.4
Net sales, € million 1-9/2012 Change, % 7-9/2012 Change, %
K-citymarket home and speciality goods 458 +5.2 161 +5.4
Anttila 316 +1.4 110 +4.0
Intersport Finland 126 +8.0 46 +8.9
Intersport Russia 20 - 6 -
Indoor 139 +5.2 50 +2.4
Musta Pörssi 41 -19.7 14 -27.2
Kenkäkesko 19 +5.0 8 +4.7
Total 1,116 +4.9 395 +4.8
January-September 2012
In the home and speciality goods trade, the net sales for January-September were
€1,116 million (€1,063 million), up 4.9%. The sales of K-citymarket home and
speciality goods, Intersport, Budget Sport, as well as Asko and Sotka grew
markedly from the previous year.
The operating profit excluding non-recurring items of the home and speciality
goods trade for January-September was €-12.5 million (€3.7 million). Profit was
negatively impacted by an increase in Anttila's and K-citymarket's costs and the
restructuring costs of Intersport operations in Russia. Operating profit was €-
12.5 million (€4.1 million).
The capital expenditure of the home and speciality goods trade for January-
September was €47.7 million (€50.5 million).
In April 2012, Kesko acquired the minority holding of 20% of Intersport Russia
from its previous owner Melovest Ltd. Due to the transaction, Kesko's ownership
in Intersport Russia went up to 100%. In June, the plan was announced to
integrate the Konebox online store and physical stores in the Musta Pörssi chain
and to reorganise the network.
July-September 2012
In the home and speciality goods trade, the net sales for July-September were
€395 million (€376 million), up 4.8%. K-citymarket home and speciality goods,
Anttila, Intersport and Budget Sport increased their sales.
The operating profit excluding non-recurring items of the home and speciality
goods trade for July-September was €0.9 million (€8.7 million), or €7.7 million
down on the previous year. Profit was negatively impacted by an increase in
Anttila's and K-citymarket's costs and the poor profitability of Intersport
operations in Russia. Operating profit was €0.9 million (€8.7 million).
The capital expenditure of the home and speciality goods trade was €18.4 million
(€32.4 million).
In July-September, a new K-citymarket was opened in Mäntsälä and Loimaa and a
new replacement K-citymarket in Kouvola. Anttila opened a new Kodin1 department
store in Kaisaniemi, Helsinki and an Anttila department store in Kouvola in
July-September. In September, Intersport opened a new Budget Sport store in
Kouvola. In Russia, Intersport closed down four stores in July-September. As a
result of network reorganisation, there were 26 (32) Musta Pörssi stores at the
end of September. A new citymarket.fi online store will be opened on 24 October.
Building and home improvement trade
1-9/2012 1-9/2011 7-9/2012 7-9/2011
Net sales, € million 2,170 2,059 759 731
Operating profit excl. non-recurring
items, € million 24.4 31.1 18.0 21.3
Operating profit as % of net sales excl.
non-recurring items 1.1 1.5 2.4 2.9
Capital expenditure, € million 42.4 89.3 16.6 23.2
Net sales, € million 1-9/2012 Change, % 7-9/2012 Change, %
Rautakesko Finland 956 +2.1 309 -0.9
K-rauta Sweden 168 +1.0 61 +4.4
Byggmakker Norway 491 +9.4 169 +4.0
Rautakesko Estonia 48 +8.4 19 +6.4
Rautakesko Latvia 38 -3.0 15 -8.0
Senukai Lithuania 193 +6.4 76 +3.2
Stroymaster Russia 214 +21.7 86 +23.6
OMA Belarus 63 -8.1 25 +12.1
Total 2,170 +5.4 759 +3.7
January-September 2012
In the building and home improvement trade, the net sales for January-September
were €2,170 million (€2,059 million), up 5.4%. The sales of the building and
home improvement trade increased especially in Russia, which was attributable to
market growth, as well as new store openings in Moscow during the last year.
Market growth in the building and home improvement trade in the other operating
countries slowed toward the end of the reporting period.
In Finland, the net sales for January-September were €956 million (€936
million), an increase of 2.1%. The building and home improvement product lines
contributed €678 million to the net sales in Finland, a decrease of 1.5%. The
agricultural supplies trade contributed €278 million to the net sales, up 12.4%.
The retail sales of the K-rauta and Rautia chains in Finland grew by 1.3% to
€827 million (VAT 0%). The sales of Rautakesko B2B Service, mainly deriving from
basic building materials, decreased by 1.4%. As a whole, Rautakesko chains'
retail and B2B sales are estimated to have exceeded the growth rate of the
Finnish market. The retail sales of the K-maatalous chain were €330 million (VAT
0%), up 9.6%.
In January-September, the net sales from foreign operations of the building and
home improvement trade were €1,213 million (€1,122 million), an increase of
8.1%. In Sweden, net sales were down by 2.1% in terms of kronas. In Norway, net
sales increased by 5.3% in terms of krones. In Russia, net sales increased by
19.6% in terms of roubles. Foreign operations contributed 55.9% (54.5%) to the
net sales of the building and home improvement trade.
The operating profit excluding non-recurring items of the building and homeimprovement trade for January-September was €24.4 million (€31.1 million). The
profit performance was impacted by an overall increase in cost level, new store
openings in Russia and Sweden and the introduction and development costs of the
international enterprise resource planning system. In addition, profitability
was negatively impacted by obsolete inventories written off and credit losses in
a total of €9 million. Operating profit was €22.7 million (€30.8 million).
In January-September, the capital expenditure of the building and home
improvement trade totalled €42.4 million (€89.3 million), of which 52.0% (85.8%)
abroad.
In September, a replacement K-rauta store was opened in the new shopping centre
Veturi in Kouvola and an extension of a Rautia store in Riihimäki. Earlier in
the year, a K-rauta was opened in Ylivieska, and an extension of a K-rauta in
Mikkeli was completed. A new Rautia K-maatalous store was opened in Turku and a
replacement Rautia was opened in Muhos and Sastamala. A replacement K-rauta is
being built in Turku. In Sweden, a K-rauta was opened in Uppsala and a
replacement K-rauta in Linköping. In Russia, a new K-rauta was opened in Moscow.
July-September 2012
In the building and home improvement trade, the net sales for July-September
were €759 million (€731 million), up 3.7%. During the third quarter, the growth
of building and home improvement market slowed especially in Finland, Sweden and
Latvia. In Russia, the strong sales growth continued.
In Finland, net sales were €309 million (€311 million), a decrease of 0.9%. The
building and home improvement product lines contributed €218 million to the net
sales in Finland, a decrease of 5.7%. The agricultural supplies trade
contributed €90 million to the net sales, up 13.0%.
The retail sales of the K-rauta and Rautia chains in Finland in July-September
decreased by 1.7% to €317 million (VAT 0%). The sales of Rautakesko B2B Service
decreased by 7.5%. The retail sales of the K-maatalous chain were €109 million
(VAT 0%), up 8.0%.
The net sales from foreign operations in the building and home improvement trade
were €450 million (€420 million), an increase of 7.2%. The net sales from
foreign operations grew by 5.2% in terms of local currencies. In Sweden, net
sales were down by 3.4% in terms of kronas. In Norway, net sales decreased by
1.0% in terms of krones. In Russia, net sales increased by 20.3% in terms of
roubles and in Belarus, net sales increased by 43.4% in terms of roubles
compared to 2011 due to high inflation. Foreign operations contributed 59.3%
(57.4%) to the net sales of the building and home improvement trade.
The operating profit excluding non-recurring items of the building and home
improvement trade for July-September was €18.0 million (€21.3 million). The
profit performance was impacted by a slow-down in sales performance in addition
to new store site openings in Russia and Sweden and the introduction and
development costs of the international enterprise resource planning system.
Operating profit was €18.0 million (€21.0 million).
The capital expenditure of the building and home improvement trade totalled
€16.6 million (€23.2 million), of which 47.9% (86.9%) abroad.
Car and machinery trade
1-9/2012 1-9/2011 7-9/2012 7-9/2011
Net sales, € million 887 911 259 290
Operating profit excl.
non-recurring items,
€ million 37.4 44.8 11.5 13.0
Operating profit as %
of net sales excl.
non-recurring items 4.2 4.9 4.4 4.5
Capital expenditure, € million 23.4 20.5 4.7 6.6
Net sales, € million 1-9/2012 Change, % 7-9/2012 Change, %
VV-Auto 622 -3.7 168 -15.4
Konekesko 265 -0.1 92 +0.4
Total 887 -2.7 259 -10.5
January-September 2012
In January-September, the net sales of the car and machinery trade were €887
million (€911 million), down 2.7%.
VV-Auto's net sales for January-September were €622 million (€646 million), a
decrease of 3.7%. In Finland, new registrations of passenger cars decreased by
11.2% and those of vans by 10.9% compared to the previous year. In January-
September, the combined market share of passenger cars and vans imported by VV-
Auto was 20.4% (20.5%).
Konekesko's net sales for January-September were €265 million (€266 million),
down 0.1% compared to the previous year. Net sales in Finland were €171 million,
down 1.6%. The net sales from Konekesko's foreign operations were €96 million,
up 2.4%.
In January-September, the operating profit excluding non-recurring items of the
car and machinery trade was €37.4 million (€44.8 million), down €7.4 million
compared to the previous year. Regardless of the sales decrease, profitability
remained at a good level. The operating profit for January-September was €37.4
million (€44.9 million).
The capital expenditure of the car and machinery trade was €23.4 million (€20.5
million) for January-September.
July-September 2012
In July-September, the net sales of the car and machinery trade were €259
million (€290 million), down 10.5%.
VV-Auto's net sales for July-September were €168 million (€199 million), a
decrease of 15.4%. The decrease in the car trade sales was attributable to the
more difficult conditions of the total market for passenger cars and vans. In
July-September, the combined market share of passenger cars and vans imported by
VV-Auto was 20.2% (21.2%).
Konekesko's net sales for July-September were €92 million (€91 million), up
0.4% compared to the previous year.
In July-September, the operating profit excluding non-recurring items of the car
and machinery trade was €11.5 million (€13.0 million), down €1.5 million
compared to the previous year. Profitability was weakened by a decrease in car
trade sales. The operating profit for July-September was €11.5 million (€13.0
million).
The capital expenditure of the car and machinery trade was €4.7 million (€6.6
million) for July-September.
Changes in the Group composition
No significant changes took place in the Group composition during the reporting
period.
Shares, securities market and Board authorisations
At the end of September 2012, the total number of Kesko Corporation shares was
98,650,142, of which 31,737,007, or 32.2%, were A shares and 66,913,135, or
67.8%, were B shares. On 30 September 2012, Kesko Corporation held 607,725 own B
shares. Each A share entitles to ten (10) votes and each B share to one (1)
vote. The company cannot vote with own shares held by it and no dividend is paid
on them. At the end of September 2012, Kesko Corporation's share capital was
€197,282,584. During the reporting period, the number of B shares was increased
twice to account for the shares subscribed for with the options based on the
2007 stock option scheme. The increases were made on 5 June 2012 (4,500 B
shares) and on 31 July 2012 (600 B shares), and announced in a stock exchange
notification on the same days. The shares subscribed for were listed for public
trading on NASDAQ OMX Helsinki (Helsinki Stock Exchange) with the old B shares
on 6 June 2012 and 1 August 2012. The combined subscription price of €68,544.00
received by the company was recorded in the reserve of invested non-restricted
equity.
The price of a Kesko A share quoted on NASDAQ OMX Helsinki was €24.82 at the end
of 2011, and €23.00 at the end of September 2012, representing a decrease of
7.3%. Correspondingly, the price of a B share was €25.96 at the end of 2011, and
€22.05 at the end of September 2012, representing a decrease of 15.1%. In
January-September, the highest A share price was €27.65 and the lowest was
€19.99. For B share, they were €27.81 and €18.08 respectively. In January-
September, the Helsinki stock exchange (OMX Helsinki) All-Share index was up by
2.1% and the weighted OMX Helsinki CAP index by 3.1%. The Retail Index was down
by 5.1%.
At the end of September 2012, the market capitalisation of A shares was €730
million, while that of B shares was €1,462 million, excluding the shares held by
the parent company. The combined market capitalisation of A and B shares was
€2,192 million, a decrease of €314 million from the end of 2011. In January-
September 2012, a total of 1.3 (1.6) million A shares were traded on the
Helsinki stock exchange, down 21.5%. The total turnover of A shares was €30
million. The total number of B shares traded on the Helsinki stock exchange was
56.8 (51.4) million, up 10.4%. The exchange value of B shares was €1,281
million.
The company operates the 2007 stock option scheme for management and other key
personnel, under which the share subscription period of 2007A option rights has
ended, that of 2007B option rights runs from 1 April 2011 to 30 April 2013, and
that of 2007C option rights runs from 1 April 2012 to 30 April 2014. The 2007B
and 2007C option rights are included on the official list of the Helsinki stock
exchange. A total of 144,539 2007B option rights were traded during the
reporting period at a total value of €312,975, and correspondingly, a total of
111,622 2007C option rights were traded at a total value of €905,531.
The Board has the authority, granted by the Annual General Meeting of 16 April
2012 and valid until 30 June 2015, to issue a total maximum of 20,000,000 new B
shares. In addition, the Board has the authority, granted by the Annual General
Meeting of 4 April 2011 and valid until 30 June 2014, to decide on the issuance
of a total maximum of 1,000,000 own B shares held by the company itself. The
authority granted by the Annual General Meeting of 4 April 2011 to acquire a
total maximum of 1,000,000 own B shares expired on 30 September 2012. Based on
the authority to issue own shares and the fulfilment of the vesting criteria of
the 2011 vesting period of Kesko's three-year share-based compensation plan, the
Board granted a total of 92,751 company shares held by the company itself to the
people included in the target group. The matter was announced in a stock
exchange release on 12 April 2012. After the vesting period, a total of 476
shares already transferred have been returned to the company in accordance with
the terms of the share-based compensation plan. The return was announced in a
stock exchange notification on 20 July 2012. Further information on the Board's
authorities is available at www.kesko.fi.
At the end of September 2012, the number of shareholders was 45,411, which is
4,196 more than at the end of 2011. At the end of September, foreign ownership
of all shares was 16%. At the end of September, foreign ownership of B shares
was 24%.
Flagging notifications
Kesko Corporation did not receive flagging notifications during the reporting
period.
Main events during the reporting period
The second phase of the transfer of the Kesko Group companies' statutory pension
insurance liability portfolio, agreed between the Kesko Pension Fund and
Ilmarinen Mutual Pension Insurance Company, was carried out with effect from 1
January 2012. (Stock exchange release on 15 February 2012)
Kesko transferred a total of 90,889 own B shares held by the company itself to
the about 150 Kesko management employees and other named key persons included in
the target group of the 2011 vesting period of Kesko's three-year share-based
compensation plan. In addition, on the same basis, Kesko transferred a total of
1,862 own B shares held by the company itself in May. After the transfers, the
company itself held 607,249 own B shares.
(Stock exchange release on 12 April 2012)
The number of own shares increased by 476 B shares which were returned in
accordance with the terms of the share-based compensation plan. On 20 July
2012, Kesko held 607,725 own B shares. (Stock exchange notification on 20 July
2012)
On 11 September 2012, Kesko Corporation issued a €250 million unsecured bond.
The six-year bond will mature on 11 September 2018 and it carries a fixed annual
interest at the rate of 2.75 percent. NASDAQ OMX Helsinki admitted the bond to
public trading as from 12 September 2012. (Stock exchange release on 4 and 11
September 2012)
Matti Mettälä, 49, LL.M., was appointed Senior Vice President and member of
Kesko's Corporate Management Board responsible for human resources and
stakeholder relations starting from 1 October 2012. Starting from 1 October
2012, Kesko's Corporate Management Board is composed of Matti Halmesmäki, Chair;
Terho Kalliokoski, responsible for the food trade; Minna Kurunsaari, responsible
for the home and speciality goods trade and Kesko's electronic marketing and
services projects; Arja Talma, responsible for the building and home improvement
trade; Pekka Lahti, responsible for the car and machinery trade; Jukka Erlund,
responsible for finance, treasury and IT management; and Matti Mettälä,
responsible for human resources and stakeholder relations. (Stock exchange
release on 21 September 2012)
Kesko's profitability programme is progressing. The objective is to achieve cost
savings of €100 million. Most of the savings are expected to be achieved in
2013. The profitability programme covers all of Kesko's divisions. The aim is to
reduce especially marketing, personnel, rent and information system expenses.
(Stock exchange release on 24 September 2012)
Resolutions of the 2012 Annual General Meeting and decisions of the Board's
organisational meeting
Kesko Corporation's Annual General Meeting, held on 16 April 2012, adopted the
financial statements for 2011 and discharged the Board members and the Managing
Director from liability. The General Meeting also resolved to distribute €1.20
per share as dividends on 98,035,931 shares held outside the company at the date
of dividend distribution, or a total amount of €117,643,117.20. The dividend pay
date was 26 April 2012. The General Meeting resolved to leave the number of
Board members unchanged at seven and elected Esa Kiiskinen, Ilpo Kokkila, Tomi
Korpisaari, Maarit Näkyvä, Seppo Paatelainen, Toni Pokela and Virpi Tuunainen as
Board members for a three-year term of office as stated in the Articles of
Association. The General Meeting elected PricewaterhouseCoopers Oy as the
company's auditor, with Johan Kronberg, APA, as the company's auditor with
principal responsibility. The General Meeting also approved the Board's proposal
to issue a total maximum of 20,000,000 new B shares until 30 June 2015, and the
Board's proposal that it be authorised until the 2013 Annual General Meeting to
decide on the donation of a total maximum of €300,000 for charitable or
corresponding purposes.
The organisational meeting of Kesko Corporation's Board of Directors, held after
the Annual General Meeting, elected Esa Kiiskinen as its Chair and Seppo
Paatelainen as its Deputy Chair. The Board elected Maarit Näkyvä as the Chair,
Seppo Paatelainen as the Deputy Chair and Virpi Tuunainen as a member of the
Audit Committee, and Esa Kiiskinen as the Chair, Seppo Paatelainen as the Deputy
Chair and Ilpo Kokkila as a member of the Remuneration Committee. The Board
elects the Board Chair and Deputy Chair for the whole three-year term of a Board
member, and the Committee Chairs, Deputy Chairs and members for one year at a
time.
The resolutions of the Annual General Meeting and the decisions of the Board's
organisational meeting were announced in more detail in stock exchange releases
on 16 April 2012.
Responsibility
Kesko has been included in the Dow Jones sustainability indexes DJSI World and
DJSI Europe for the 10(th) time. Kesko's total score increased from the previous
year and Kesko was given the sector's highest scores in four areas.
Kesko was again included in the FTSE4Good index. In the 2012 assessment, Kesko's
overall rating was 96 out of 100, up four points on the previous year. The score
given to Kesko's work for curbing climate change was 5 on the scale of 0-5.
Kesko was included in the STOXX Global ESG Leaders indices for the second time.
Kesko is also one of the 100 companies in the new listing of the 100 world's
most responsible companies by SPP Fonder.
Starting from autumn 2012, Keslog will provide a training programme in
economical driving for its contract transporters and their drivers. The aim is
to reduce emissions from stores' distribution transportation. Nearly all of
Keslog's over 500 contract drivers will be trained in economical driving.
The environmental perspective has been taken into account in the Veturi shopping
centre opened in Kouvola in September; the shopping centre uses ground heat in
heating and the parking space is provided with three charging points for
electric cars.
Risk management
The Kesko Group has an established and comprehensive risk management process.
Risks and their management responses are regularly assessed within the Group and
reported to the Group management. Kesko's risk management and risks associated
with business operations are described in more detail on Kesko's website in the
Corporate Governance section.
The most significant near-future risks in Kesko's business operations are
associated with the general economic development, the euro zone financial market
situation and the fall in consumer confidence in Kesko's operating area, as well
as their impact on the Kesko Group's sales and profit performance. It is
estimated that in other respects, no material changes have taken place in the
risks described in the report by the Board of Directors and financial statements
for 2011 and the risks described on Kesko's website.
Risks and uncertainties associated with economic development are described in
the future outlook section of this release.
Future outlook
Estimates of the future outlook for the Kesko Group's net sales and operating
profit excluding non-recurring items are given for the 12 months following the
reporting period (10/2012-9/2013) in comparison with the 12 months preceding the
reporting period (10/2011-9/2012).
Resulting from the problems of European national economies, the outlook for the
general economic situation is characterised by significant uncertainty. In
addition, tightening taxation and cuts in public finances are estimated to
weaken the growth in the trading sector.
The market of the grocery trade is expected to remain stable. Market development
in the home and speciality goods trade, the building and home improvement trade
and the car and machinery trade is expected to weaken.
The Kesko Group's net sales are expected to grow during the next twelve months.
As a result of measures taken to enhance sales and purchasing operations as well
as cost savings to be implemented, the operating profit excluding non-recurring
items for the next twelve months is expected to exceed the operating profit
excluding non-recurring items for the preceding twelve months. Capital
expenditure is expected to be lower compared to the capital expenditure for the
preceding twelve months.
Helsinki, 23 October 2012
Kesko Corporation
Board of Directors
The information in the interim report release is unaudited.
Further information is available from Jukka Erlund, Senior Vice President, CFO,
telephone +358 1053 22113, and Eva Kaukinen, Vice President, Corporate
Controller, telephone +358 1053 22338. A Finnish-language webcast on the interim
report can be viewed at www.kesko.fi at 11:00. An English- language web
conference on the interim report will be held today at 14:30 (Finnish time). The
web conference login is available at www.kesko.fi.
Kesko Corporation's financial statements release will be published on 5 February
2013. 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.
KESKO CORPORATION
Merja Haverinen
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's performance indicators
Net sales by segment
Operating profit by segment
Operating profit excl. non-recurring items by segment
Operating margin excl. non-recurring items by segment
Capital employed by segment
Return on capital employed excl. non-recurring items by segment
Capital expenditure by segment
Segment information by quarter
Personnel average and at the end of the reporting period
Group's contingent liabilities
Calculation of performance indicators
K-Group's retail and B2B sales
DISTRIBUTION
NASDAQ OMX Helsinki
Main news media
www.kesko.fi
TABLES
Accounting policies
This interim report has been prepared in accordance with the IAS 34 standard,
applying the same accounting policies as to the annual financial statements for
2011, with the exception of the following changes due to the adoption of new and
revised IFRS standards and IFRIC interpretations:
IFRS 7 Financial instruments: Disclosures - Derecognition (Amendment)
IAS 12 Income taxes - Deferred tax (Amendment)
Annual amendments to the IFRS (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.
Consolidated income
statement (€ million),
condensed
1-9/ 1-9/ 7-9/ 7-9/ 1-12/
2012 2011 Change% 2012 2011 Change% 2011
Net sales 7,227 6,979 3.6 2,449 2,404 1.9 9,460
Cost of goods sold - 6,259 -6,037 3.7 -2,121 -2,086 1.6 -8,163
Gross profit 968 942 2.8 328 318 3.4 1,297
Other operating income 551 517 6.5 183 173 5.5 705
Staff cost -448 -414 8.1 -140 -131 6.8 -571
Depreciation and
impairment charges -113 -90 25.9 -37 -31 20.8 -125
Other operating expenses -794 -746 6.3 -255 -241 6.0 -1,026
Operating profit 164 208 -21.1 79 88 -10.8 281
Interest income and
other finance income 13 15 -15.2 3 5 -43.7 22
Interest expense and
other finance costs -12 -13 -8.2 -3 -4 -26.7 -18
Exchange differences -3 -3 16.8 -1 0 (..) -3
Income from associates 0 0 (..) 0 0 (..) 1
Profit before tax 162 208 -22.1 77 88 -12.1 282
Income tax -49 -66 -26.8 -23 -29 -22.2 -85
Net profit for the
period 113 142 -19.9 55 59 -7.1 197
Attributable to
Owners of the parent 104 131 -20.6 51 52 -3.5 182
Non-controlling
interests 9 10 -10.5 4 6 -37.0 15
Earnings per share (€)
for profit attributable
to
equity holders of the
parent
Basic 1.06 1.34 -20.3 0.52 0.53 -3.2 1.85
Diluted 1.06 1.33 -20.1 0.51 0.53 -2.9 1.84
Consolidated statement
of comprehensive
income (€ million)
1-9/ 1-9/ Change% 7-9/ 7-9/ Change% 1-12/
2012 2011 2012 2011 2011
Net profit for the
period 113 142 -19.9 55 59 -7.1 197
Other comprehensive
income
Exchange differences on
translating foreign
operations 2 -19 (..) -1 -9 (..) -17
Adjustment for
hyperinflation 3 - (..) 2 - 37.9 6
Cash flow hedge
revaluation -1 -12 -89.9 0 -2 -80.3 -15
Revaluation of
available-for- sale
financial assets 12 0 (..) 13 0 (..) 0
Other items 0 0 54.2 0 0 (..) 0
Tax relating to other
comprehensive income -3 3 (..) -3 0 (..) 4
Total other
comprehensive income for
the period,
net of tax 13 -28 (..) 10 -10 (..) -22
Total comprehensive
income for the period 127 114 11.5 65 49 32.6 175
Attributable to
Owners of the parent 115 119 -2.7 60 48 26.7 170
Non-controlling
interests 11 -5 (..) 4 1 (..) 4
(..) Change over 100%
Consolidated statement of financial
position (€ million), condensed
30.9.2012 30.9.2011 Change % 31.12.2011
ASSETS
Non-current assets
Tangible assets 1,647 1,459 12.9 1,490
Intangible assets 193 184 4.5 189
Investments in associates and other
financial assets 86 67 27.9 69
Loans and receivables 85 73 15.2 80
Pension assets 149 177 -15.8 200
Total 2,158 1,960 10.1 2,029
Current assets
Inventories 838 793 5.6 868
Trade receivables 763 677 12.7 700
Other receivables 309 138 (..) 218
Financial assets at fair value
through profit or loss 98 122 -19.6 98
Available-for-sale financial assets 176 299 -41.3 186
Cash and cash equivalents 82 67 22.8 84
Total 2,266 2,096 8.1 2,153
Non-current assets held for sale 1 1 18.2 8
Total assets 4,425 4,058 9.1 4,190
30.9.2012 30.9.2011 Change % 31.12.2011
EQUITY AND LIABILITIES
Equity 2,177 2,122 2.6 2,175
Non-controlling interests 65 50 30.6 58
Total equity 2,243 2,172 3.3 2,233
Non-current liabilities
Interest-bearing liabilities 457 213 (..) 210
Non-interest-bearing liabilities 10 14 -29.7 18
Deferred tax liabilities 91 85 7.6 91
Pension obligations 2 2 5.3 2
Provisions 10 10 3.3 10
Total 570 324 75.9 332
Current liabilities
Interest-bearing liabilities 183 211 -13.3 190
Trade payables 956 893 7.0 886
Other non-interest-bearing liabilities 448 434 3.2 526
Provisions 26 24 7.8 24
Total 1,612 1,562 3.2 1,625
Total equity and liabilities 4,425 4,058 9.1 4,190
(..) Change over 100%
Consolidated statement of changes in equity (€ million)
Share Issue Share Other Cur- Re- Re- Non- Total
capi- of pre- reser- rency valu- tained cont-
tal share mi-um ves trans- ation earn- rolling
capi- lation sur- ings inte-
tal differ- plus rests
ences
Balance at
1.1.2011 197 0 198 243 -3 14 1,503 59 2,210
Shares
subscribed
with options 0 0
Option cost 2 0 2
Own shares -23 0 -23
Dividends -128 -4 -132
Other
changes 0 1 0 1
Net profit for
the period 131 10 142
Other
comprehen-sive
income
Exchange
differences on
translating
foreign
operations 0 -4 -15 -19
Cash flow hedge
revaluation -12 -12
Revaluation of
available-for-
sale financial
assets 0 0
Other items 0 0
Tax relating to
other
comprehensive
income 3 3
Total other
comprehensive
income 0 -4 -9 0 -15 -28
Balance at
30.9.2011 197 0 198 243 -7 5 1,486 50 2,172
Balance at
1.1.2012 197 0 198 243 -3 3 1,537 58 2,233
Shares
subscribed
with options 0 0
Share-based
payment 2 2
Option cost 0 0
Own shares 0 0
Dividends -118 -4 -122
Other
changes 2 2
Net profit for
the period 104 9 113
Other
comprehen-sive
income
Exchange
differences on
translating
foreign
operations 0 3 0 0 2
Adjustment for
hyperinflation 0 3 3
Cash flow hedge
revaluation -1 -1
Change in
revaluation
reserve 12 12
Tax relating to
other
comprehensive
income -3 -3
Total other
comprehensive
income 0 3 9 1 2 15
Balance at
30.9.2012 197 0 198 243 -1 11 1,529 65 2,243
Consolidated cash flow statement (€ million), condensed
1-9/ 1-9/ Change% 7-9/ 7-9/ Change% 1-12/
2012 2011 2012 2011 2011
Cash flow from operating activities
Profit before tax 162 208 -22.1 77 88 -12.1 282
Planned depreciation 112 90 23.9 37 31 20.8 125
Finance income and costs 3 0 (..) 1 0 (..) -1
Other adjustments 8 22 -63.4 1 7 -80.2 -6
Change in working capital
Current non-interest-bearing
trade and other receivables,
increase (-)/decrease (+) -57 -47 19.3 67 97 -30.5 -89
Inventories,
increase (-)/decrease (+) 35 -47 (..) 35 -13 (..) -119
Current non-interest-bearing
liabilities,
increase (-)/decrease (+) 5 18 -71.8 -50 -72 -31.2 127
Financial items and tax -61 -74 -17.4 -20 -11 77.6 -103
Net cash generated from operating
activities 207 169 22.7 150 126 19.4 216
Cash flow from investing activities
Capital expenditure -294 -337 -12.8 103 -139 -25.9 -449
Sales of fixed assets 23 6 (..) 1 2 -38.0 8
Increase of non-current receivables -4 -1 (..) -2 0 (..) 0
Net cash used in investing
activities -275 -331 -16.9 104 -137 -24.1 -441
Cash flow from financing activities
Interest-bearing liabilities,
increase (+)/decrease (-) 238 -39 (..) 76 -44 (..) -58
Current interest-bearing
receivables,
increase (-)/decrease (+) -49 1 (..) -14 0 (..) -37
Dividends paid -122 -132 -7.6 -4 0 (..) -133
Equity increase 0 0 -21.8 - - -100.0 0
Acquisition of own shares - -24 (..) - -1 (..) -23
Increase (-)/ decrease (+) in short-
term money market investments 38 163 -76.8 -47 37 (..) 199
Other items -11 0 (..) -3 2 (..) 1
Net cash used in financing
activities 94 -29 (..) 9 -5 (..) -51
Change in cash and cash equivalents 27 -191 (..) 55 -16 (..) -277
Cash and cash equivalents and
current portion of available-for-
sale financial assets at 1 Jan. 231 509 -54.7 202 334 -39.4 509
Currency translation difference
adjustment and revaluation 0 -3 (..) 0 -2 (..) -2
Cash and cash equivalents and
current portion of available-for-
sale financial assets at 30 Sept. 258 315 -18.3 258 315 -18.3 231
(..) Change over 100%
Group's performance indicators
1-9/2012 1-9/2011 Change pp 1-12/2011
Return on capital employed, % 8.7 13.4 -4.7 13.2
Return on capital employed, %,
moving 12 mo 9.6 14.3 -4.7 13.2
Return on capital employed excl. non-
recurring items, % 8.6 13.3 -4.7 13.1
Return on capital employed excl. non-
recurring items, %, moving 12 mo 9.5 14.2 -4.7 13.1
Return on equity, % 6.8 8.6 -1.9 8.9
Return on equity, %, moving 12 mo 7.6 9.5 -1.8 8.9
Return on equity excl. non-recurring
items, % 6.7 8.6 -1.9 8.8
Return on equity excl. non-recurring
items, %, moving 12 mo 7.6 9.4 -1.8 8.8
Equity ratio, % 51.2 54.0 -2.8 53.9
Gearing, % 12.7 -2.9 15.6 1.5
Change,%
Capital expenditure, € million 274.5 321.0 -14.5 425.4
Capital expenditure, % of net sales 3.8 4.6 -17.4 4.5
Earnings per share, basic, € 1.06 1.34 -20.3 1.85
Earnings per share, diluted, € 1.06 1.33 -20.1 1.84
Earnings per share excl. non-recurring
items, basic, € 1.06 1.34 -21.0 1.84
Cash flow from operating activities,
€ million 207 169 22.7 216
Cash flow from investing activities,
€ million -275 -331 -16.9 -441
Equity per share, € 22.21 21.66 2.5 22.20
Interest-bearing net debt 284 -64 (..) 33
Diluted number of
shares, average for
reporting period, 1,000 pcs 98,449 99,043 -0.6 98,919
Personnel, average 19,740 18,855 4.7 18,960
(..) Change over 100%
Group's performance indicators by 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/
quarter 2011 2011 2011 2011 2012 2012 2012
Net sales, € million 2,103 2,472 2,404 2,481 2,318 2,460 2,449
Change in net sales, % 7.4 8.5 7.8 7.4 10.2 -0.5 1.9
Operating profit, € million 35.7 83.9 88.2 72.8 26.3 59.0 78.6
Operating margin, % 1.7 3.4 3.7 2.9 1.1 2.4 3.2
Operating profit excl. non-
recurring items, € million 34.9 83.3 89.2 71.5 23.6 60.7 78.6
Operating margin excl.
non-recurring items, % 1.7 3.4 3.7 2.9 1.0 2.5 3.2
Finance income/costs,
€ million -0.6 0.3 0.3 0.8 -0.1 -0.3 -1.3
Profit before tax,
€ million 36.1 84.0 88.0 74.0 26.3 58.5 77.3
Profit before tax, % 1.7 3.4 3.7 3.0 1.1 2.4 3.2
Return on capital employed, % 7.2 16.0 16.4 12.8 4.3 9.2 12.2
Return on capital employed excl.
non-recurring items, % 7.0 15.9 16.6 12.5 3.9 9.5 12.2
Return on equity, % 4.5 10.6 10.9 10.0 3.3 7.3 9.9
Return on equity excl.
non-recurring items, % 4.4 10.6 11.1 9.8 3.0 7.5 9.9
Equity ratio, % 54.4 52.1 54.0 53.9 52.7 51.1 51.2
Capital expenditure, € million 64.1 130.5 126.3 104.5 104.1 67.8 102.6
Earnings per share, diluted, € 0.25 0.55 0.53 0.51 0.17 0.38 0.51
Equity per share, € 22.04 21.21 21.66 22.20 22.42 21.59 22.21
Segment information
Net sales by segment 1-9/ 1-9/ Change 7-9/ 7-9/ Change 1-12/
(€ million) 2012 2011 % 2012 2011 % 2011
Food trade, Finland 3,179 3,074 3.4 1,078 1,049 2.8 4,182
Food trade, other countries* - - - - - - -
Food trade total 3,179 3,074 3.4 1,078 1,049 2.8 4,182
- of which intersegment trade 129 124 3.8 43 41 4.0 168
Home and speciality goods trade,
Finland 1,083 1,051 3.1 384 371 3.4 1,541
Home and speciality goods trade,
other countries* 33 12 (..) 11 5 (..) 23
Home and speciality goods trade
total 1,116 1,063 4.9 395 376 4.8 1,564
- of which intersegment trade 12 13 -7.8 4 4 -15.6 20
Building and home improvement
trade, Finland 956 936 2.1 309 311 -0.9 1,233
Building and home improvement
trade, other countries* 1,213 1,122 8.1 450 420 7.2 1,483
Building and home improvement
trade total 2,170 2,059 5.4 759 731 3.7 2,716
- of which intersegment trade 1 9 -93.4 0 3 -93.8 12
Car and machinery trade, Finland 791 817 -3.2 219 248 -11.9 1,064
Car and machinery trade, other
countries* 96 94 2.2 41 42 -1.9 110
Car and machinery trade
total 887 911 -2.7 259 290 -10.5 1,174
- of which intersegment trade 1 1 -10.7 0 0 -29.6 1
Common operations and
eliminations -124 -128 -2.7 -41 -42 -2.4 -176
Finland total 5,885 5,751 2.3 1,948 1,937 0.5 7,844
Other countries total* 1,342 1,229 9.2 502 467 7.5 1,616
Group total 7,227 6,979 3.6 2,449 2,404 1.9 9,460
* Net sales in countries other than Finland.
(..) Change over 100%
Operating profit by segment (€ 1-9/ 1-9/ 7-9/ 7-9/ 1-12/
million) 2012 2011 Change 2012 2011 Change 2011
Food trade 126.2 133.7 -7.6 49.6 45.7 3.9 173.7
Home and speciality goods trade -12.5 4.1 -16.6 0.9 8.7 -7.7 37.0
Building and home improvement trade 22.7 30.8 -8.1 18.0 21.0 -3.0 26.3
Car and machinery trade 37.4 44.9 -7.6 11.5 13.0 -1.5 51.9
Common operations and eliminations -9.7 -5.7 -4.0 -1.4 -0.2 -1.2 -8.3
Group total 164.0 207.8 -43.8 78.6 88.2 -9.6 280.6
Operating profit excl.
non-recurring items 1-9/ 1-9/ 7-9/ 7-9/ 1-12/
by segment (€ million) 2012 2011 Change 2012 2011 Change 2011
Food trade 123.4 133.6 -10.2 49.6 46.4 3.2 172.2
Home and speciality goods trade -12.5 3.7 -16.2 0.9 8.7 -7.7 36.6
Building and home improvement trade 24.4 31.1 -6.7 18.0 21.3 -3.3 26.6
Car and machinery trade 37.4 44.8 -7.4 11.5 13.0 -1.5 51.8
Common operations and eliminations -9.8 -5.7 -4.0 -1.4 -0.2 -1.2 -8.3
Group total 162.9 207.4 -44.5 78.6 89.2 -10.5 278.9
Operating margin
excl. non-recurring 1-9/ 1-9/ 7-9/ 7-9/ 1-12/ Moving 12 mo
items by segment 2012 2011 Change pp 2012 2011 Change pp 2011 9/2012
Food trade 3.9 4.3 -0.5 4.6 4.4 0.2 4.1 3.8
Home and speciality
goods trade -1.1 0.3 -1.5 0.2 2.3 -2.1 2.3 1.3
Building and home
improvement trade 1.1 1.5 -0.4 2.4 2.9 -0.5 1.0 0.7
Car and machinery
trade 4.2 4.9 -0.7 4.4 4.5 -0.1 4.4 3.9
Group total 2.3 3.0 -0.7 3.2 3.7 -0.5 2.9 2.4
Capital employed by
segment, cumulative 1-9/ 1-9/ 7-9/ 7-9/ 1-12/
average (€ million) 2012 2011 Change 2012 2011 Change 2011
Food trade 740 581 159 770 610 160 601
Home and speciality goods trade 509 425 83 527 438 89 437
Building and home improvement
trade 762 692 70 757 711 46 696
Car and machinery trade 189 148 41 176 146 30 158
Common operations and
eliminations 324 228 96 344 240 106 236
Group total 2,524 2,074 451 2,576 2,144 432 2,129
Return on capital
employed excl. non-
recurring items by 1-9/ 1-9/ 7-9/ 7-9/ 1-12/ Moving
segment, % 2012 2011 Change pp 2012 2011 Change pp 2011 12 mo 9/2012
Food trade 22.2 30.7 -8.4 25.8 30.4 -4.6 28.6 22.4
Home and speciality
goods trade -3.3 1.2 -4.4 0.7 7.9 -7.2 8.4 4.1
Building and home
improvement trade 4.3 6.0 -1.7 9.5 12.0 -2.5 3.8 2.7
Car and machinery
trade 26.4 40.5 -14.1 26.1 35.6 -9.5 32.8 23.9
Group total 8.6 13.3 -4.7 12.2 16.6 -4.4 13.1 9.5
Capital expenditure 1-9/ 1-9/ 7-9/ 7-9/ 1-12/
by segment (€ million) 2012 2011 Change 2012 2011 Change 2011
Food trade 157 159 -2.5 61 65 -3.9 221
Home and speciality goods trade 48 50 -2.8 18 32 -14.0 62
Building and home improvement trade 42 89 -46.9 17 23 -6.6 110
Car and machinery trade 23 21 2.9 5 7 -1.9 30
Common operations and eliminations 4 1 2.8 2 -1 2.8 2
Group total 274 321 -46.4 103 126 -23.7 425
Segment information by quarter
Net sales by segment 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/
(€ million) 2011 2011 2011 2011 2012 2012 2012
Food trade 948 1,077 1,049 1,108 1,010 1,091 1,078
Home and speciality goods trade 348 339 376 501 369 352 395
Building and home improvement trade 570 757 731 657 629 782 759
Car and machinery trade 279 342 290 263 353 274 259
Common operations
and eliminations -42 -43 -42 -48 -42 -41 -41
Group total 2,103 2,472 2,404 2,481 2,318 2,460 2,449
Operating profit by segment (€ million) 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/
2011 2011 2011 2011 2012 2012 2012
Food trade 42.1 45.9 45.7 40.0 37.6 38.9 49.6
Home and speciality goods trade -7.4 2.8 8.7 32.9 -12.9 -0.6 0.9
Building and home improvement trade -9.1 18.8 21.0 -4.5 -9.0 13.6 18.0
Car and machinery trade 12.2 19.7 13.0 7.0 15.6 10.3 11.5
Common operations
and eliminations -2.2 -3.3 -0.2 -2.6 -5.1 -3.2 -1.4
Group total 35.7 83.9 88.2 72.8 26.3 59.0 78.6
Operating profit excl. non-recurring 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/
items by segment (€ million) 2011 2011 2011 2011 2012 2012 2012
Food trade 41.4 45.8 46.4 38.6 34.9 38.9 49.6
Home and speciality goods trade -7.4 2.4 8.7 32.9 -12.9 -0.6 0.9
Building and home improvement trade -9.1 18.8 21.3 -4.4 -9.0 15.3 18.0
Car and machinery trade 12.2 19.6 13.0 7.0 15.6 10.3 11.5
Common operations
and eliminations -2.2 -3.3 -0.2 -2.6 -5.1 -3.2 -1.4
Group total 34.9 83.3 89.2 71.5 23.6 60.7 78.6
Operating margin
excl. non-recurring 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/
items by segment 2011 2011 2011 2011 2012 2012 2012
Food trade 4.4 4.3 4.4 3.5 3.5 3.6 4.6
Home and speciality goods trade -2.1 0.7 2.3 6.6 -3.5 -0.2 0.2
Building and home improvement trade -1.6 2.5 2.9 -0.7 -1.4 2.0 2.4
Car and machinery trade 4.4 5.7 4.5 2.6 4.4 3.8 4.4
Group total 1.7 3.4 3.7 2.9 1.0 2.5 3.2
Personnel, average and at 30 September
Personnel average by
segment 1-9/2012 1-9/2011 Change
Food trade 2,804 2,733 71
Home and speciality goods trade 6,145 5,638 507
Building and home improvement trade 9,081 8,857 224
Car and machinery trade 1,260 1,206 54
Common operations 451 421 30
Group total 19,740 18,855 885
Personnel at 30.9.*
by segment 2012 2011 Change
Food trade 3,016 2,930 86
Home and speciality goods trade 8,443 7,967 476
Building and home improvement trade 10,402 9,944 458
Car and machinery trade 1,293 1,263 30
Common operations 512 475 37
Group total 23,666 22,579 1,087
* total number incl. part-time employees
Group's commitments (€ million)
30.9.2012 30.9.2011 Change %
Own commitments 180 169 6.4
For others 8 9 -11.8
Lease liabilities for machinery and equipment 26 24 10.1
Lease liabilities for real estate 2,317 2,252 2.9
Liabilities arising from derivative instruments
Fair value
Values of underlying instruments at 30.9. 30.9.2012 30.9.2011 30.9.2012
Interest rate derivatives
Interest rate swaps 205 205 1.88
Currency derivatives
Forward and future contracts 406 262 -6.53
Option agreements 33 - -0.08
Currency swaps 100 100 -7.61
Commodity derivatives
Electricity derivatives 31 41 -3.82
Calculation of performance indicators
Operating profit x 100 / (Non-current
assets + Inventories + Receivables +
Return on capital employed*, % Other current assets - Non-interest-
bearing liabilities) on average for
the reporting period
Operating profit for prior 12 months
Return on capital employed, %, moving x 100 / (Non-current assets +
12 mo 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 +
Return on capital employed excl. non- Inventories + Receivables + Other
recurring items*, % current assets - Non-interest-bearing
liabilities) on average for the
reporting period
Operating profit excl. non-recurring
items for prior 12 months x 100 /
Return on capital employed excl. non- (Non-current assets + Inventories +
recurring items, %, moving 12 months Receivables + Other current assets -
Non-interest-bearing liabilities) on
average for 12 months
(Profit/loss before tax - income tax)
Return on equity*, % x 100 /
Shareholders' equity
(Profit/loss for prior 12 months
Return on equity, %, moving 12 months before tax - income tax
for prior 12 months) x100 /
Shareholders' equity
(Profit/loss adjusted for non-
Return on equity excl. non-recurring recurring items before tax - income
items*, % tax adjusted for the tax effect of
non-recurring items) x 100 /
Shareholders' equity
(Profit/loss for prior 12 months
adjusted for non-recurring items
Return on equity excl. non-recurring before tax - income tax for prior 12
items, %, moving 12 months months adjusted for the tax effect of
non-recurring items) x 100 /
Shareholders' equity
Shareholders' equity x 100 /
Equity ratio, % (Balance sheet total - prepayments
received)
(Profit/loss - non-controlling
Earnings/share, diluted interests) /
Average number of shares adjusted for
the dilutive effect of options
(Profit/loss - non-controlling
Earnings/share, basic interests) /
Average number of shares
Earnings/share excl. (Profit/loss adjusted for non-
non-recurring items, recurring items - non-controlling
basic interests) / Average number of shares
Equity attributable to equity holders
Equity/share of the parent /
Basic number of shares at the end of
the reporting period
Interest-bearing net liabilities x
Gearing, % 100 /
Shareholders' equity
Interest-bearing liabilities - money
Interest-bearing net debt market investments - cash and cash
equivalents
* Indicators for return on capital have been annualised.
K-Group's retail and B2B sales, VAT 0% (preliminary data):
1.1.-30.9.2012 1.7.-30.9.2012
K-Group's retail and € million Change, % € million Change, %
B2B sales
K-Group's food trade 3,508 4.0 1,191 2.8
K-food stores, Finland
Kespro 578 5.8 203 5.0
Food trade total 4,087 4.2 1,394 3.1
K-Group's home and
speciality goods trade
Home and speciality goods stores,
Finland 1,193 3.0 413 3.0
Home and speciality goods stores,
other countries 33 (..) 11 (..)
Home and speciality
goods trade total 1,226 4.7 424 4.4
K-Group's building and home
improvement trade
K-rauta and Rautia 827 1.3 317 -1.7
Rautakesko B2B Service 161 -1.4 56 -7.5
K-maatalous 330 9.6 109 8.0
Finland total 1,318 2.9 481 -0.4
Building and home improvement stores,
other Nordic countries 910 5.9 335 2.0
Building and home improvement stores,
Baltic countries 281 5.5 111 2.0
Building and home improvement stores,
other countries 277 13.4 111 20.9
Building and home improvement trade
total 2,786 5.1 1,039 2.6
K-Group's car and
machinery trade
VV-Autotalot 320 1.9 95 -9.1
VV-Auto, import 316 -8.6 76 -21.5
Konekesko, Finland 170 -1.4 51 2.9
Finland total 807 -3.1 223 -11.5
Konekesko, other countries 101 3.8 43 -1.2
Car and machinery trade
total 908 -2.4 265 -10.0
Finland total 7,405 2.9 2,511 1.0
Other countries total 1,601 8.2 610 5.7
Retail and B2B sales
total 9,006 3.8 3,122 1.8
(..) Change over 100%
[HUG#1651801]
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