2009-02-05 07:30:00 CET
2009-02-05 07:32:02 CET
REGULATED INFORMATION
Kesko Oyj - Financial Statement Release
Financial statements for the period 1 Jan.-31 Dec. 2008: Earnings per share €2.24
KESKO CORPORATION FINANCIAL STATEMENTS RELEASE 05.02.2009 AT 08.30
1(30)
In 2008, the Group's net sales from continuing operations were €9,600
million, representing an increase of 3.4% over the previous year
(€9,287 million). The operating profit excluding non-recurring items
for 2008 was €217.0 million (€315.0 million). The pre-tax profit was
€288.5 million (€357.8 million). The earnings per share from
continuing operations were €1.81 (€2.52). The Group's profit for the
period was €219.8 million (€285.0 million). The Group's earnings per
share were €2.24 (€2.90). The Board of Directors proposes to the
Annual General Meeting that €1.00 (€1.60) per share be paid as
dividends.
Continuing operations 2008 2007 10-12/2008 10-12/2007
Net sales, € million 9,600 9,287 2,336 2,390
Operating profit, € million 285.6 321.5 6.9 68.3
Operating profit, excl. non-
recurring items, € million 217.0 315.0 27.3 71.9
Group's profit before tax, € 288.5 357.8 7.7 66.1
million
Earnings/share, € (continuing 1.81 2.52 -0.05 0.39
operations)
Earnings per share, €
(whole Group) 2.24 2.90 -0.04 0.41
Investments, € million 338 228 105 69
Whole group 2008 2007
Equity ratio, % 52.4 48.5
Return on equity, % 12.1 16.4
Return on investment, % 14.2 17.4
Equity/share, € 20.09 19.53
Dividend/share, € 1.00* 1.60
(* Board of Directors' proposal to the Annual General
Meeting)
JANUARY-DECEMBER 2008
CONTINUING OPERATIONS
Net sales and profit
The Group's net sales in January-December 2008 were €9,600 million,
which is 3.4% up on the corresponding period of the previous year
(€9,287 million). The net sales increased by 4.4% in Finland and
decreased by 0.2% abroad. Exports and foreign operations accounted
for 21.4% (22.2%) of net sales. The trend in the Group's net sales
was significantly affected by the weakening construction market
especially in the Nordic and Baltic countries towards the end of
2008. Grocery sales grew steadily throughout 2008.
In January-December, the K-Group's (i.e. Kesko's and the chain
stores') retail sales (incl. VAT) were €11,916 million, an increase
of 3.4% on the previous year.
The Group's profit before taxes for January-December was €288.5
million (€357.8 million). The operating profit was €285.6 million
(€321.5 million). Non-recurring items excluded, the operating profit
was €217.0 million (€315.0 million), accounting for 2.3% (3.4%) of
net sales. The most significant amounts included in non-recurring
income are the €103.2 million gain on property lease and sale
arrangements between Kesko and Nordisk Renting Oy, the €16.3 million
gain on a property transaction between Kesko and Aberdeen Property
Fund Finland 1 Ky, and the €10.3 million gain on the sale of
K-Rahoitus Oy shares. Non-recurring expenses include a €45.6 million
impairment charge on the consolidated goodwill and trademark of
Byggmakker Norge, a Rautakesko subsidiary, based on a weakened
outlook for the business. The non-recurring expenses also include a
€15.5 million impairment charge on Anttila's logistics centre in
Vantaa to be replaced by the new logistics centre in Kerava in 2011.
The financial items of the comparative period included a €37.1
million non-recurring gain on the sale of SATO Corporation shares.
The smaller year-on-year operating profit excluding non-recurring
items was mainly due to a decreased demand in the construction market
in the Nordic and Baltic countries, and the expansion and renovation
of the networks of building and home improvement stores and food
stores. Owing to the dramatic deterioration of the economic
situation, the measurement principles of inventories and trade
receivables have been tightened further. There is a €25 million
year-on-year increase in the impairment charges on inventories and
trade receivables recognised in 2008.
The Group's earnings per share from continuing operations were €1.81
(€2.52). Equity per share was €20.09 (€19.53).
Investments
In January-December 2008, the Group's investments totalled €338.4
million (€227.7 million), which is 3.5% (2.5%) of net sales.
Investments in store sites were 279.0 million (€188.2 million) and
other investments €59.5 million (€39.5 million). Investments in
foreign operations represented 29.0% of total investments.
Finance
In January-December, the cash flow from operating activities was
€134.0 million (€248.4 million) and the cash flow from investing
activities was €-45.8 million (€-84.7 million). The cash flow from
investing activities included €281.4 million (€146.1 million) of
proceeds received from the disposal of fixed assets.
At the end of the period, liquid assets totalled €443 million (€351
million). The amount was increased by the about €44 million real
estate transaction between Kesko and Aberdeen Property Fund Finland 1
Ky, and the property and lease arrangement between Kesko and Nordisk
Renting Oy, which contributed €82 million to the cash flow. In
addition, the amount of liquid assets was increased by the debt-free
selling price of about €77 million received from the disposal of
Kauko-Telko, and by the disposal of K-Rahoitus Oy, which contributed
about €240 million to liquid assets in finance receivables paid to
Kesko. At the end of the reporting period, the interest-bearing net
debt was €47 million (€275 million). Equity ratio was 52.4% (48.5%)
and gearing 2.3% (14.0%) at the end of the period.
In January-December, the Group's net financial income was €1.0
million (€36.1 million). Net financial income was increased by an
increase in the amount of liquid assets and in the interest rate
level. Towards the end of the year, net financial income was
decreased by an increase in the currency interest rate spreads. The
income for the comparative period included a €37.1 million gain on
the sale of SATO Corporation shares.
Taxes
In January-December, the Group's taxes were €89.4 million (€87.1
million). The effective tax rate was 30.9% (24.4%), increased by the
non-deductible impairment charge on Byggmakker Norge's consolidated
goodwill recognised for the reporting period.
Personnel
In January-December, the average number of personnel in the Kesko
Group was 21,327 (20,520) converted into full-time employees. In
Finland, the average decrease was 95 employees, while outside
Finland, the increase was 902. The number of personnel was
significantly increased by the Belarusian subsidiary OMA, acquired in
July 2007.
At the end of December 2008, the total number of personnel was 24,668
(25,228), of whom 13,651 (13,762) worked in Finland and 11,017
(11,466) outside Finland. Compared with the end of 2007, there was a
decrease of 111 employees in Finland and 449 outside Finland. As a
result of the decline in consumer demand, several measures aimed at
staff cost adjustment were initiated during 2008 in different
operations of the Group.
Market review
According to the data from Statistics Finland, in January-November
2008, the Finnish retail trade sales increased by 7.6% compared with
the previous year. In January-November, the wholesale trade sales
were up by 9.1%. Towards the end of 2008, however, both retail and
wholesale trade sales slowed down significantly, and in November
2008, the retail trade dropped by 0.5% and the wholesale trade by
11.4%. The average inflation rate for 2008, calculated by Statistics
Finland, was 4.1%.
According to Statistics Finland's consumer survey of January 2009,
consumers' confidence in the economy was weak. Consumers considered
their own financial situation and saving possibilities to be good,
although the possibility of becoming unemployed was considered to be
more likely than before. Their views of Finland's economy and the
economic development continued to be gloomy.
The economic development and consumer demand in Kesko's operating
area are subject to significant uncertainties resulting from
aggravated problems in the international financial market and
weakened general economic development. Therefore Kesko's financial
statements release does not make separate forward-looking statements
concerning the divisions.
Seasonal nature of operations
The Group's operating activities are affected by seasonal
fluctuations. The net sales and operating profits of its business
segments are not earned evenly throughout the year. Instead they vary
by quarter depending on the characteristics of each business segment.
Divisions' performances in January-December
Kesko Food
In January-December, Kesko Food's net sales were €4,110 million
(€3,871 million), up 6.2%. The retail sales of K-food stores (incl.
VAT) increased by 6.0%, totalling €5,351 million. Especially the
K-food stores' own Pirkka products saw good sales growth of 14.6%.
During 2008, 37 new K-food stores were opened. The number of
K-citymarkets opened was eight, two of which were expansions from
K-supermarkets into K-citymarkets. The number of new K-supermarket
food stores opened was 13. The growth rate of the total grocery trade
market in Finland for 2008 is estimated at about 9% up on the
previous year. In January-December, prices increased at an average
monthly rate of about 7.6% compared with the previous year
(Statistics Finland).
In January-December, Kesko Food's operating profit excluding
non-recurring items was €135.2 million (3.3% of net sales), i.e.
€16.2 million, or 0.6 percentage points, lower than in the previous
year. The operating profit excluding non-recurring items was
negatively impacted by the expansions and renovations carried out in
the store site network, and the weaker year-on-year sales growth in
the home and speciality goods trade. The operating profit was €245.0
million (€151.3 million). The operating profit was increased by a
€103.2 million non-recurring gain on the property and lease
arrangement between Kesko and Nordisk Renting, and by a €10.7 million
non-recurring gain on the property transaction between Kesko and
Aberdeen Property Fund Finland 1 Ky.
In January-December, Kesko Food's investments totalled €185.9 million
(€117.6 million), of which investments in store sites were €161.7
million (€104.8 million).
Rautakesko
In January-December, Rautakesko's net sales amounted to €2,518
million (€2,537 million), a decrease of 0.8%. Sales growth declined
dramatically especially in sales to professional customers. The
contribution of business acquisitions and disposals excluded, the
change in net sales was -1.4%. Net sales in Finland were €882 million
(€909 million), a decrease of 3.0%. Foreign operations' contribution
to net sales was €1,636 million (€1,628 million), up 0.5%. Foreign
operations accounted for 65.0% (64.0%) of Rautakesko's net sales.
In January-December, the retail sales (incl. VAT) of the K-rauta and
Rautia chains in Finland increased by 2.1% and were €1,225 million.
The sales of Rautakesko B-to-B Service decreased by 11.7%.
During 2008, two new and six replacement stores were opened in
Finland. 12 new and one replacement store were opened abroad.
In Sweden, the net sales increased by 1.0% to €186 million in
January-December. In Norway, the net sales decreased by 7.7% and were
€570 million. In Estonia, the net sales were down by 11.6% to €81
million. In Latvia, the net sales decreased by 15.8% and were €71
million. In Lithuania, Senukai's net sales decreased by 0.9% to €449
million. In Russia, Stroymaster's net sales grew by 34.9% to €203
million. The net sales of the Belarusian OMA were €71 million.
In January-December, Rautakesko's operating profit excluding
non-recurring items was €53.3 million (2.1% of net sales), i.e. €62.6
million, or 2.5 percentage points, lower than in the previous year.
In addition to the decreasing demand in the construction market, the
profitability was impacted by the expansion of the store site
network, and the tightening of the measurement principles of trade
receivables and inventories. There is an approximately €14 million
year-on-year increase in the impairment charges on inventories and
trade receivables recognised in 2008. Rautakesko's operating profit
for January-December was €16.3 million (€117.8 million). The
operating profit includes a €45.6 million non-recurring impairment
charge on Byggmakker Norge's intangible assets. In addition, the
operating profit includes a €5.4 million non-recurring gain on the
property transaction between Kesko and Aberdeen Property Fund Finland
1 Ky.
In January-December, Rautakesko's investments were €121.1 million
(€77.0 million). Investments abroad accounted for 80.1% (59.3%) of
total investments.
VV-Auto
In January-December, VV-Auto's net sales were €884 million (€805
million), up 9.9%. The aggregate number of registrations of passenger
cars and vans imported by VV-Auto increased by 23.6% in Finland. This
development is attributable to the car tax change enacted at the
beginning of 2008, and the good competitiveness of Volkswagen and
Audi. In 2008, the combined market share of passenger cars and vans
imported by VV-Auto was 17.1% (15.1%). The restrained trend in net
sales was attributable to the average car prices, fallen as a result
of the car tax change, by a slowdown in the Baltic car sales, and a
decrease in van sales.
In January-December, the number of first registrations of new
passenger cars totalled 139,647 in Finland, up11.2% on the previous
year. Compared with the year before, first registrations of vans were
down by 8.1% to 15,522.
In January-December, first registrations of passenger cars imported
by VV-Auto increased by 30.6%. First registrations of Volkswagen
passenger cars in January-December were 16,493 and the market share
was 11.8% (10.2%). In January-December, first registrations of Audis
were 5,836 and the market share was 4.2% (3.3%). The registrations of
new Seat passenger cars totalled 1,832 in Finland and the market
share was 1.3% (1.2%). The number of Volkswagen vans registered was
2,463 and their market share was 15.9% (18.0%).
In January-December, the operating profit was €36.3 million (4.1% of
net sales), which was up €10.3 million, or 0.9 percentage points,
compared with the corresponding period of the previous year. The
profitability was improved by the good sales performance of the
brands represented by VV-Auto.
Investments totalled €6.9 million (€6.3 million) in January-December.
Anttila
In January-December, Anttila's net sales were €560 million (€564
million), down 0.7%. As the economic outlook worsened, consumers
became more cautious, which had an impact on the demand for home
decoration products and consumer electronics in particular.
In January-December, the retail sales (incl. VAT) of the Anttila
department stores were €393 million, down 1.3%. The retail sales of
the Kodin Ykkönen department stores for home goods and interior
decoration were €181 million, down 1.9%. The distance retail sales of
Net Anttila in Finland were €93 million, up 4.9%. In Estonia,
NetAnttila's sales were €9 million, showing a growth of 1.4%. In
Latvia, NetAnttila's sales were €8 million, representing a decrease
of 17.6%.
In January-December, Anttila's operating profit excluding
non-recurring items was €19.8 million (3.5% of net sales), i.e. €5.4
million, or 0.9 percentage points, lower than in the corresponding
period of the previous year. Anttila's operating profit was €4.3
million (€27.2 million). The non-recurring items include an
impairment charge of €15.5 million on the logistics centre property
in Vantaa. Anttila is having a new logistics centre built in Kerava
to be completed in 2011.
Anttila's investments totalled €5.8 million (€5.8 million), the most
significant of which were made in the new department stores in Pori
and Rovaniemi.
Kesko Agro
In January-December, Kesko Agro's net sales were €846 million (€793
million), an increase of 6.6%. The net sales from foreign operations
were €318 million (€295 million), accounting for 37.6% of total net
sales.
In January-December, Kesko Agro's net sales in Finland were €527
million, up 5.7%, which was significantly affected by the increase in
the price levels of agricultural inputs and fuels. The net sales from
foreign operations increased by 8.0%, which is attributable to an
increase in the grain and agricultural inputs trade. The Baltic
construction machinery trade clearly declined over the previous year.
The sales of the K-maatalous chain in Finland increased by 6.0% to
€714 million (incl. VAT) in January-December.
In January-December, Kesko Agro's operating loss excluding
non-recurring items was €3.5 million (-0.4% of net sales), i.e. €15.9
million lower than in the corresponding period of the previous year.
The profit performance was significantly affected by the weakening of
the Baltic agricultural and machinery markets towards the end of
2008, as a result of which the impairment charges on Kesko Agro's
inventories and trade receivables increased by about €7 million over
the previous year.
In January-December, investments were €2.4 million (€7.6 million).
Other operating activities
Other operating activities comprise the reporting for Konekesko,
Intersport Finland, Indoor, Musta Pörssi and Kenkäkesko.
In January-December, the aggregate net sales of other operating
activities were €699 million (€743 million), a decrease of 6.0%. The
net sales from foreign operations totalled €56 million, accounting
for 8.0% of total net sales.
In January-December, the aggregate operating loss of other operating
activities excluding non-recurring items was €0.1 million (0.0% of
net sales), i.e. €14.0 million down on the corresponding period of
the previous year. The decline in profitability was attributable to
the weaker profit performance of the recreational machinery trade,
the furniture trade and home technology compared with the previous
year. In January-December, the operating profit was €0.8 million
(€10.0 million).
In January-December, investments were €15.7 million (€7.4 million).
In January-December, Konekesko's net sales were €214 million (€229
million), down 6.5% on the previous year. Sales and profitability
weakened especially in the recreational machinery trade.
In January-December, Intersport Finland's net sales were €158 million
(€147 million), an increase of 7.5%. In March, Budget Sport stores
were opened in Espoo and Raisio.
Indoor's net sales in January-December were €177 million (€197
million), down 9.7%. Sales and profitability were weakened by
consumers' cautiousness and the decline in the housing trade.
Indoor's operating activities in Sweden were discontinued in March
2008.
Musta Pörssi Ltd's net sales in January-December were €123 million
(€148 million), down 16.8%. The sales trend was affected by changes
in the store site network, coupled with a lower year-on-year demand
for consumer electronics since households had gone digital in the
comparative year. The Konebox.fi online store was opened at the end
of 2008.
In January-December, Kenkäkesko Ltd's net sales were €26 million (€23
million), up 12.6%.
Discontinued operations
In January-December, the Group's profit from discontinued operations
was €41.5 million (€36.6 million). Discontinued operations comprise
the reporting for Kauko-Telko Ltd and the €31 million gain on its
disposal, and TähtiOptikko Group Oy, with the about €8.5 million gain
on its disposal. In the comparative year, discontinued operations
included a €28.2 million gain on the disposal of food store
properties leased to Rimi Baltic AB.
OCTOBER-DECEMBER 2008
CONTINUING OPERATIONS
Net sales and profit
The Group's net sales in October-December 2008 were €2,336 million,
which is 2.3% down on the corresponding period of the previous year
(€2,390 million). The Group's net sales increased by 1.8% in Finland
and decreased by 16.0% abroad. Exports and foreign operations
accounted for 19.4% (22.6%) of net sales.
In October-December, the K-Group's (i.e. Kesko's and the chain
stores') retail sales (incl. VAT) were €3,016 million, a decrease of
2.0% on the corresponding period of the previous year.
The Group's profit before tax for October-December was €7.7 million
(€66.1 million). The operating profit was €6.9 million (€68.3
million). The operating profit included a net total of €-20.4 million
(€-3.7 million) of non-recurring gains and losses on the disposal of
fixed assets, and impairment charges. The non-recurring expenses
include a €15.5 million impairment charge on Anttila's logistics
centre in Vantaa to be replaced by the new logistics centre in Kerava
in 2011.
The operating profit excluding non-recurring items was €27.3 million
(€71.9 million). It represented 1.2% of net sales (3.0%). The smaller
year-on-year operating profit excluding non-recurring items was
mainly due to a decreased demand in the Nordic and Baltic
construction markets. Owing to the dramatic deterioration of the
economic situation, the measurement principles of inventories and
trade receivables have been tightened further. There is an
approximately €17 million year-on-year increase in the impairment
charges on inventories and trade receivables recognised in
October-December.
The smaller year-on-year operating profit excluding non-recurring
items was due to a decreased demand in the construction market and
the home and speciality goods trade, and the expansion and renovation
of the store site network.
The Group's earnings per share from continuing operations were €-0.05
(€0.39). Equity per share was €20.09 (€19.53).
Investments
The Group's investments in October-December totalled €105.2 million
(€68.8 million), which is 4.5% (2.9%) of net sales. Investments in
store sites were €84.1 million (€61.9 million). The Group's other
investments were €21.1 million (€6.9 million). Investments in foreign
operations represented 37.8% of total investments.
Finance
In October-December, the cash flow from operating activities was
€15.7 million (€70.2 million) and the cash flow from investing
activities was €-95.7 million (€-71.0 million). The cash flow from
investing activities included €3.7 million (€5.1 million) of proceeds
received from the disposal of fixed assets.
At the end of the period, liquid assets totalled €443 million (€351
million). The assets have been invested in a diversified manner,
within counterparty specific limits, across the debt instruments of
enterprises (€203 million) and banks (€141 million), in funds (€9
million), Finnish Government bonds (€32 million) and bank deposits
(€58 million).
In October-December, the Group's net financial income was €0.8
million (€-2.1 million).
Taxes
In October-December, the Group's taxes were €5.5 million (€20.6
million). The effective tax rate was 71.2% (31.1%), increased by
foreign companies' loss-making performances in the reporting period,
was 71.2% (31.1%).
Personnel
In October-December, the average number of personnel in the Kesko
Group was 20,921 (21,376) converted into full-time employees. There
was a decrease of 455 employees compared with the corresponding
period of the previous year. In Finland, the average decrease was 397
employees, while outside Finland, it was 58 employees.
Divisions' performances in October-December
Kesko Food
In October-December, Kesko Food's net sales totalled €1,122 million
(€1,046 million), up 7.3%. The retail sales of K-food stores in
October-December totalled €1,456 million (incl. VAT), representing a
growth of 6.5%, and their grocery sales increased by 7.8%. At the end
of December, there were a total of 1,055 K-food stores (mobile stores
excluded).
In October-December, Kesko Food's operating profit excluding
non-recurring items was €43.3 million (3.9% of net sales), i.e. €3.5
million, or 0.1 percentage points, higher than in the previous year.
Kesko Food's operating profit was €39.0 million (€40.0 million).
In October-December, Kesko Food's investments totalled €48.5 million
(€37.8 million), of which investments in store sites were €38.5
million (€36.7 million).
Kesko Food continued the intensive development of the K-food store
network. In October-December, a K-citymarket was opened in Tornio, in
Mikkola, Pori, in Ylivieska, Jämsä and in Klaukkala, Nurmijärvi.
K-supermarkets were expanded into K-citymarkets in Rusko, Oulu and in
Kemi. New K-supermarkets were opened in Konala, Helsinki, in Liminka,
Suomussalmi and Rovaniemi. Other renovations and expansions were also
implemented.
The most important store sites being built are the K-citymarkets in
Turku, Ylöjärvi, Kirkkonummi, in Linnainmaa, Tampere, in Koivukylä,
Vantaa, the expansion of K-citymarket Mikkeli, and the new
K-supermarkets being built in Kempele, Porvoo, Järvenpää and
Eurajoki.
Rautakesko
Compared with the previous year, the market situation in the Nordic
and Baltic building and home improvement trade weakened clearly
during the last quarter. In October-December, Rautakesko's net sales
amounted to €518 million (€622 million), a decrease of 16.7%. Net
sales in Finland were €166 million (€195 million), a decrease of
15.1%. Foreign operations contributed €352 million (€427 million) to
the net sales, a decrease of 17.5%. In addition to the decline in
demand, the sales development of foreign operations was affected by
the weakening of the Swedish krona, the Norwegian krone and the
Russian rouble. Foreign operations accounted for 68.0% of
Rautakesko's net sales.
In Sweden, the net sales of K-rauta AB decreased by 13.1% to €37
million in October-December. In local currency terms, K-rauta AB's
net sales dropped by 2.3%. In Norway, Byggmakker's net sales
decreased by 30.9% and were €107 million. In local currency terms,
Byggmakker's net sales dropped by 18.9%. In Estonia, Rautakesko's net
sales were down by 19.4% to €18 million. In Latvia, Rautakesko's net
sales decreased by 29.0% and were €15 million. In Lithuania,
Senukai's net sales decreased by 16.5% to €104 million. In Russia,
Stroymaster's net sales grew by 28.1% to €54 million. The net sales
of the Belarusian OMA were €19 million.
In October-December, Rautakesko's operating loss excluding
non-recurring items was €6.2 million (-1.2% of net sales), i.e. €28.2
million lower than in the corresponding period of the previous year.
The profit performance was affected by a decreasing demand in the
Nordic and Baltic construction markets, and by the expansion of the
store site network. In addition, the profitability was affected by
the tightening of the measurement principles of trade receivables and
inventories. There is an approximately €9 million year-on-year
increase in the impairment charges on inventories and trade
receivables recognised in October-December. Rautakesko's operating
loss for October-December was €5.3 million (operating profit €22.1
million).
In October-December, Rautakesko's investments totalled €44.7 million
(€21.2 million). Investments abroad accounted for 88.0% (75.5%) of
total investments.
In October-December, the retail sales (incl. VAT) of the K-rauta and
Rautia chains in Finland decreased by 4.2% to €266 million. The sales
of Rautakesko B-to-B Service decreased by 24.5%. At the end of
December, the K-rauta and Rautia chains in Finland comprised 42 and
102 stores respectively.
In Sweden, there are 19 K-rauta stores, one of which is owned by the
retailer. In Estonia, there are eight K-rauta stores. In Norway, the
Byggmakker chain comprises 120 stores, 18 of which are owned by
Byggmakker.
Three new stores were opened in October-December. In St. Petersburg,
Russia, the ninth K-rauta store was opened at the end of November.
Five of the K-rauta stores in St. Petersburg operate in conformity
with the new K-rauta concept. In Latvia, Rautakesko opened a new
K-rauta store in Rezekne in October. There are eight K-rauta stores
and two K-rauta partner stores in Latvia. In Lithuania, Senukai
opened a new store in Klaipeda in October. Senukai has 15 stores of
its own and 76 partnershop stores.
VV-Auto
In October-December, VV-Auto's net sales totalled €161 million (€144
million), up 12.2%. The net sales of the comparative period were
decreased by the car tax change published in November 2007, which
postponed a significant part of sales to 2008. During the last
quarter, the aggregate market share of passenger cars and vans
imported by VV-Auto was 18.3% (15.6%).
In October-December, the operating profit excluding non-recurring
items was €1.9 million (1.2% of net sales), i.e. €2.5 million, or 1.6
percentage points, higher than in the corresponding period of the
previous year.
Investments totalled €1.9 million (€1.3 million) in October-December.
Anttila
In October-December, Anttila's net sales totalled €184 million (€189
million), down 3.1%.
In October-December, the retail sales (incl. VAT) of the Anttila
department stores were €137 million, down 3.6%. The retail sales of
the Kodin Ykkönen department stores for home goods and interior
decoration were €56 million, a decrease of 7.4%. Distance retail
sales in Finland were €28 million, up 3.5%. Especially in interior
decoration and home technology, the sales trend was heavily impacted
by an increase in the overall economic uncertainty and the slowdown
in the housing trade.
In October-December, Anttila's operating profit excluding
non-recurring items was €20.0 million (10.9% of net sales), i.e. €1.6
million, or 0.5 percentage points, lower than for the corresponding
period of the previous year. Anttila's operating profit was €4.6
million (€21.6 million). The non-recurring items include a €15.5
million impairment charge on the logistics centre property in Vantaa.
Anttila is having a new logistics centre built in Kerava, which will
be completed in 2011.
Anttila's investments were €2.3 million (€1.5 million).
At the end of December, there were 28 Anttila department stores and
two specialist stores, eight Kodin Ykkönen department stores, and one
Kodin1.com online department store for home goods and interior
decoration. NetAnttila engages in distance sales and operates in
Finland, Estonia and Latvia.
In October, a new department store was opened in Pori in replacement
of the old department store. In November, a new department store was
opened in Rovaniemi and a specialist Anttila Store in Nummela, Vihti.
In 2009, a new department store will be opened in the Skanssi
shopping centre in Turku, and a new Kodin Ykkönen store in Lielahti,
Tampere.
Kesko Agro
In October-December, Kesko Agro's net sales were €202 million (€213
million), a decrease of 5.2%. Kesko Agro's net sales in Finland were
€118 million, down 9.6% in October-December. The net sales from the
Baltic agricultural and machinery trade were €84 million (€83
million), an increase of 1.8% in October-December.
In October-December, Kesko Agro's operating loss excluding
non-recurring items was €15.8 million (-7.8% of net sales), i.e.
€17.9 million lower than in the corresponding period of the previous
year. The profit performance was significantly affected by the
weakening of the Baltic construction and agricultural markets towards
the end of 2008, as a result of which a total of €9 million higher
impairment charges and provisions on trade receivables and
inventories was recognised for October-December compared with the
previous year. Approximately half of the amount relates to financial
difficulties found in the activities of a Latvian warehouse operator.
At the end of the reporting period, the K-maatalous chain comprised
91 agricultural stores in Finland. Kesko Agro has six stores in
Estonia, four in Latvia and three in Lithuania.
Other operating activities
Other operating activities comprise the reporting for Konekesko,
Intersport Finland, Indoor, Musta Pörssi and Kenkäkesko.
In October-December, the aggregate net sales of other operating
activities were €152 million (€182 million), down 16.1%.
In October-December, the aggregate operating loss of other operating
activities, non-recurring items excluded, was €7.9 million (-5.2% of
net sales), i.e. €3.4 million lower than in the corresponding period
of the previous year. In October-December, the operating loss was
€9.5 million (€8.4 million).
In October-December, investments were €4.9 million (€3.7 million).
Konekesko's net sales in October-December were €32 million (€43
million), a decrease of 26.0% compared with the previous year. In
Finland, sales were €29 million, down 19.2%. Konekesko's export sales
totalled €2 million, a decrease of 73.5%.
Intersport Finland's net sales in October-December were €40 million
(€41 million), down 1.6%.
Indoor's net sales in October-December were €42 million (€51
million), down 17.8%. In October-December, the net sales of the
furniture trade in foreign operations were €6 million, a decrease of
50.5%. Indoor's operating activities in Sweden were discontinued in
March 2008.
Musta Pörssi Ltd's net sales in October-December were €35 million
(€42 million), down 17.3%.
Kenkäkesko Ltd's net sales in October-December were €4 million (€5
million), a decrease of 21.3%.
Changes in the Group composition
K-Rahoitus Oy and its subsidiaries were sold and the transaction was
completed on 31 January 2008. Tähti Optikko Group Oy was sold and the
transaction was completed on 31 March 2008. Kauko-Telko Ltd was sold
and the transaction was completed on 30 April 2008.
Resolutions of the 2008 Annual General Meeting and the Board's
organisational meeting
Kesko Corporation's Annual General Meeting held on 31 March 2008
adopted the financial statements for 2007 and discharged the members
of the Board of Directors and the Managing Director from liability.
The Annual General Meeting also resolved to distribute a dividend of
€1.60 per share, as proposed by the Board of Directors, or total
dividends of €156,428,592. The dividend payment date was 10 April
2008.
The Annual General Meeting resolved to leave the number of Board
members unchanged at seven. The members of the Board of Directors
elected by the Annual General Meeting of 27 March 2006 are Pentti
Kalliala, Ilpo Kokkila, Maarit Näkyvä, Seppo Paatelainen, Keijo
Suila, Jukka Säilä and Heikki Takamäki. The Chair of the Board is
Heikki Takamäki and the Deputy Chair is Keijo Suila. The term of
office of each Board member, in accordance with the Articles of
Association, is three years, with the term starting at the close of
the General Meeting electing the member and expiring at the close of
the third Annual General Meeting after the election. The terms of
office of all current Board members will expire at the close of the
2009 Annual General Meeting.
The Annual General Meeting elected PricewaterhouseCoopers Oy,
Authorised Public Accountants, as the auditor of the company. The
firm has announced Johan Kronberg, APA, to be their auditor with
principal responsibility.
The resolutions of the Annual General Meeting were published in more
detail in a stock exchange release on 31 March 2008.
The organisational meeting of Kesko Corporation's Board of Directors
held after the Annual General Meeting on 31 March 2008 decided to
leave the compositions of its committees unchanged. The Board elected
Maarit Näkyvä as the Chair of its Audit Committee, and Seppo
Paatelainen and Keijo Suila as its members. The Board elected Heikki
Takamäki as the Chair of its Remuneration Committee, and Pentti
Kalliala and Keijo Suila as its members. The committees' terms of
office expire at the close of the Annual General Meeting. The
decisions of the organisational meeting of the Board of Directors
were published in a stock exchange release on 31 March 2008.
Kesko Food Ltd and Rautakesko Ltd, major subsidiaries fully owned by
Kesko Corporation, elected the members of their Boards of Directors
at their Annual General Meetings held on 28 March 2008. The
compositions of the Boards were announced in a stock exchange release
on 28 March 2008.
Shares, securities market and Board authorisations
At the end of the reporting period, Kesko Corporation's share capital
totalled €195,649,708. Of all shares 31,737,007 or 32.4% are A shares
and 66,087,847 or 67.6% are B shares. The aggregate number of shares
was 97,824,854. Each A share entitles to ten (10) votes and each B
share to one (1) vote. During the reporting period, the share capital
was increased seven times as a result of share subscriptions with the
stock options of the year 2003 option scheme. The increases were made
on 11 February 2008 (€210), 28 April 2008 (€38,168), 9 June 2008
(€42,200), 28 July 2008 (€8,600), 1 October 2008 (€4,000), 27 October
2008 (€6,000) and 18 December 2008 (€15,000), and announced in stock
exchange notifications on the same days. The subscribed shares were
included on the main list of the Helsinki Stock Exchange for public
trading with the old B shares on 12 February 2008, 29 April 2008, 10
June 2008, 29 July 2008, 2 October 2008, 28 October 2008, and 19
December 2008.
The price of a Kesko A share was €37.85 at the end of 2007, and
€22.00 at the end of 2008, representing a decrease of 41.9%. The
price of a B share was €37.72 at the end of 2007, and €17.80 at the
end of 2008, representing a decrease of 52.8%. During the reporting
period, the highest A share quotation was €38.20 and the lowest was
€21.33. For B shares, they were €38.12 and €15.31 respectively.
During 2008, the Helsinki Stock Exchange All Share index (OMX
Helsinki) fell by 53.4%, the weighted OMX Helsinki CAP index by
50.1%, while the Consumer Staples Index dropped by 57.1% during the
same period.
At the end of the reporting period, the market capitalisation of A
shares was €698 million, while that of B shares was €1,176 million.
Their combined market capitalisation was €1,875 million, a decrease
of €1,817 million from the end of 2007. During 2008, 1,427,575 A
shares were traded on the Helsinki Stock Exchange at a total value of
€41.0 million, while 121.1 million B shares were traded at a total
value of €2,859 million.
The listed 2003E and 2003F stock options of the year 2003 option
scheme were available for trading and a total of 179,000 options were
traded at a total value of €1,570,000 during 2008.
The Board of Directors was authorised by the Annual General Meeting
of 26 March 2007 to issue a maximum of 20,000,000 new B shares
against payment. The authorisation also includes a right to deviate,
for a weighty financial reason, from the shareholders' pre-emptive
right with a rights issue so that the issued shares can be used as
consideration in possible company acquisitions, other arrangements
concerning the company's operations, or to finance investments. The
authorisation is valid for two years from the resolution of the
Annual General Meeting. The authorisation has not been used.
At the end of 2008, the number of shareholders was 38,080, showing an
increase of 9,155 shareholders during the year. Foreign ownership
interest decreased from 34% to 20% of the share capital during the
year.
Flagging notifications
Kesko Corporation did not receive any flagging notifications during
the reporting period.
Main events during the reporting period
On 31 January 2008, K-Rahoitus Oy's share capital was transferred to
OKO Bank plc (Pohjola Bank plc from 1 March 2008). An agreement to
this effect was signed between OKO and Kesko Corporation on 21
December 2007. The price paid was about €30 million (stock exchange
releases on 21 December 2007 and 31 January 2008).
Kesko Corporation waived the purchase option included in the lease
agreements made with Nordisk Renting Oy in 2001 and 2002, for which
RBS Nordisk Renting paid Kesko €74.2 million in compensation. The
previous agreements were finance leases and the non-recurring gain
resulting from the cancellation was €26.5 million. The lease
arrangement and the property sale contributed a total of €103 million
to Kesko Food's and the Kesko Group's operating profits for the first
quarter, which was reported as a non-recurring item (stock exchange
release on 11 February 2008).
On 31 March 2008, Kesko Corporation sold the shares of Tähti Optikko
Group Oy to the Specsavers optical chain. The debt-free selling price
was about €15 million. The disposal contributed a non-recurring gain
of €8.5 million to Kesko's profit from discontinued operations
(release on 1 April 2008).
Kesko Corporation sold the share capital of Kauko-Telko Ltd to Aspo
plc on 30 April 2008. Based on Kauko-Telko's end-of-April balance
sheet, the debt-free selling price was about €77 million. A
non-recurring gain on the disposal of about €30 million has been
recognised in Kesko's profit from discontinued operations (stock
exchange releases on 23 May 2007, 28 February 2008 and 30 April
2008).
On 28 May 2008, Kesko announced that it would strengthen the
competitiveness of the K-maatalous and Rautia chains by demerging
Kesko Agro Ltd on 1 January 2009, so that the agricultural trade
activities in Finland become part of Rautakesko Ltd and the trade of
tractors and combines, as well as the agricultural and machinery
trade companies in the Baltic countries became part of Konekesko Ltd.
It is estimated that the arrangement will result in an annual benefit
of approximately €3 million to Kesko (stock exchange release on 28
May 2008).
On 30 September 2008, the Kesko Group, the Kesko Pension Fund and
Valluga-Sijoitus Oy sold 23 of their store properties in different
parts of Finland to Aberdeen Property Fund Finland 1 Ky. The selling
price was about 56 million euros, of which the Kesko Group's share
was about 44 million euros. The Kesko Group's gain on the sale was
about 16 million euros, which was treated as a non-recurring item in
Kesko's third quarter operating profit (stock exchange release on 30
September 2008).
Kesko announced that Anttila Oy, K-citymarket Oy (home and speciality
goods) and the other Kesko Group home and speciality goods companies
were intensifying their cooperation. They seek synergy benefits
especially in goods purchasing, management and customer relationship
management. At the same time, it was announced that Kesko's reporting
system would be changed so that the primary reportable segments are
the food trade, the home and speciality goods trade, the building and
home improvement trade, and the car and machinery trade with effect
from 1 January 2009. During the first quarter of 2009, Kesko will
publish the comparative information in accordance with its new
segment reporting structure (stock exchange release on 12 December
2008).
Events after the end of the reporting period
On 1 January 2009, Kesko Agro Ltd demerged so that the agricultural
trade activities in Finland became part of Rautakesko Ltd. In
addition, the trade of tractors and combines, as well as the
agricultural and machinery trade companies in the Baltic countries
became part of Konekesko Ltd (stock exchange release on 28 May 2008).
Anttila Oy, K-citymarket Oy (home and speciality goods) and the other
Kesko Group home and speciality goods companies intensify their
cooperation. As of 1 January 2009, the Kesko Group's primary
reportable segments are the food trade, the home and speciality goods
trade, the building and home improvement trade, and the car and
machinery trade (stock exchange release on 12 December 2008).
Risk management
The Kesko Group has established a risk management process based on
the risk management policy approved by the Board of Directors. The
divisions assess the risks in connection with the strategy cycle and
prioritise them according to their criticality and management level.
Risk assessments are updated on a quarterly basis. Also Group units
have assessed the risks threatening the Group objectives and the risk
management. Risks and their management has been discussed by the
division parent companies' and the Group's management. Separate risk
analyses have been carried out for major projects.
On the basis of the Divisions' and Group units' risk analyses, the
Corporate Risk Management Unit has prepared summaries of major risks
and their management on a quarterly basis. The resulting risk report
has been handled by Kesko Corporation's Board of Directors' Audit
Committee. The main risks and uncertainties have been reported in the
interim financial reports.
The effects of the recession
The international financial crisis and its impact on economic
development, consumer confidence, availability of finance and
investment readiness have greatly added to uncertainties in Kesko's
operating environment, especially in the building materials, car and
machinery, and home and speciality goods trade in Kesko's operating
countries. Consumer demand has weakened especially in Latvia and
Estonia. With regard to consumer demand in Russia, the crude oil
price trend is a key factor.
The recession has caused consumers' confidence about their own
finances to fall. Consumers are increasingly price conscious and
careful about buying, especially more expensive products. In
addition, risks relating to the profitability and financing of
business customers and retailers grow as consumer demand weakens. All
of this has a negative effect on Kesko's sales development and
increases default risks.
Currency risks and counterparty risks relating to financial
instruments have increased. Among Kesko's operating countries, only
Finland belongs to the euro area. The currencies of Norway, Sweden
and Russia have weakened against the euro. The risk of devaluation
has increased in the Baltic countries. As a result of the financial
crisis, profitable low-risk investment of liquid assets has become
more difficult.
Other risks
* Considerable amounts of capital and lease liabilities are tied up
in store properties for years. Failures in ongoing store site
investments, international expansion projects or programmes aimed
at more efficient operations, or their delayed implementation can
put growth and profitability at risk
* Suppliers' choices for product selections and distribution
channels, bankruptcies or business restructurings can influence
the availability of products in stores
* The trading sector is characterised by increasingly complicated
and long supply chains and a dependency on information systems,
telecommunications and external service providers. Disturbances
in the supply chain can cause major losses in sales and profit.
* Failure in the protection of personal information and card
payments could cause losses, claims for damages and the degrading
of reputation
* A failure in the quality assurance of the supply chain or in
product control may result in financial losses, the loss of
customer confidence or, in the worst case, a health hazard to
customers.
* Shrinkage causes significant financial losses for the retail
trade. Shrinkage results, for example, from spoiled or damaged
goods, theft or other malpractice, and unsuccessful purchasing.
Recession entails a growing risk of financial malpractice.
* Implementation of strategies requires competent and motivated
personnel. There is a risk that the trading sector will not
attract the most skilled people. The recession is likely to
temporarily improve the availability of labour.
* Non-compliance with legislation, agreements and Kesko's ethical
principles can result in fines, compensation for damages and
other financial losses, and a loss of confidence or reputation.
* The goal of Kesko's communications is to produce and publish
reliable information at the right time. If some information
published by Kesko proves to be incorrect or a release fails to
meet regulations, this may result in investors and other
stakeholder groups losing confidence and in possible sanctions.
More information about Kesko's business risks and uncertainties and
their management responses, as well as Kesko's risk management system
and principles is available on the Internet at www.kesko.fi
Other risks and uncertainties relating to profit performance are
described in the Group's future outlook.
Future outlook
Estimates of the future outlook for the Kesko Group's net sales and
operating profit excluding non-recurring items are given for the 12
months following the reporting period (1/2009-12/2009) in comparison
with the 12 months preceding the reporting period (1/2008-12/2008).
The development of the Group's operating activities is affected by
the economic outlook in its different market areas and especially by
the growth rate of private consumption. During the past months, the
economic outlook has continued to weaken as a result of the
aggravated problems in the financial market and the contraction in
the real economy. Private consumer demand is expected to decelerate
in the Nordic and Baltic countries owing to lower levels of consumer
confidence and higher levels of saving. It is also expected that
difficulties in the availability of financing will weaken the demand
of businesses and consumers.
The steady development in the food trade is expected to continue.
Market development is expected to weaken especially in the
construction sector, the car and machinery trade, and the home and
speciality goods trade.
The increasing uncertainty about the economic outlook makes any
statement about the Group's future outlook significantly more
difficult. In consequence of the weakening economic development, the
Kesko Group's net sales and operating profit excluding non-recurring
items from continuing operations in 2009 are expected to remain at a
lower level compared with the net sales and operating profit
excluding non-recurring items of 2008. The Group's liquidity and
solvency are expected to remain strong.
Proposal for profit distribution
The parent's distributable profits are €1,011,234,459.96 of which the
profit for the period is €236,710,599.08.
The Board of Directors proposes to the Annual General Meeting to be
held on 30 March 2009 that the distributable profits be used as
follows:
€1.00 per share, or a total of 97,851,050.00, be distributed as
dividends.
Consistent with the dividend policy, the Board of Directors' proposal
for dividend distribution takes the company's financial position and
operating strategy into account.
€300,000.00 be reserved for charitable donations at the discretion of
the Board of Directors.
€913,083,409.96 be carried forward in equity.
Annual General Meeting
The Board of Directors decided to convene the Annual General Meeting
at the Helsinki Fair Centre on 30 March 2009 at 13.00. Kesko
Corporation will publish a notice of the Annual General Meeting at a
later date.
Annual Report
Kesko will publish the 2008 Annual Report and Kesko's 2008 financial
statements on week 11 on its internet pages at www.kesko.fi.
Helsinki, 5 February 2009
Kesko Corporation
Board of Directors
The information in the financial statements 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
financial statements can be accessed at www.kesko.fi at 11.00. An
English-language web conference on the financial statements 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
Consolidated income statement
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated cash flow statement
Group financial indicators
Net sales by division
Operating profit by division, incl. non-recurring items
Operating profit by division, excl. non-recurring items
Divisions' operating profits, excl. non-recurring items, as % of net
sales
Investments by division
Group contingent liabilities
Group financial indicators by quarter
Calculation of financial indicators
Divisions' net sales by quarter
Divisions' operating profits by quarter, incl. non-recurring items
Divisions' operating profits by quarter, excl. non-recurring items
Personnel, average number, and number at 31 December
K-Group's retail sales
Kesko Corporation's interim financial report for January-March will
be published on 28 April 2009. In addition, the Kesko Group sales
figures will be published each month. News releases and other company
information are available at www.kesko.fi.
DISTRIBUTION
Helsinki Stock Exchange
Main news media
********
ATTACHMENTS:
This financial statements report has been prepared in accordance with
the IAS 34 standard. The interim financial report has been prepared
in accordance with the same principles as the annual financial
statements for 2007.
Consolidated income
statement (€ million)
Change% 10-12 10-12 Change%
2008 2007 2008 2007
Net sales 9,600 9,287 3.4 2,336 2,390 -2.3
Cost of sales -8,293 -7,957 4.2 -2,012 -2,027 -0.7
Gross profit 1,308 1,330 -1.7 324 363 -10.8
Other operating income 730 577 26.6 153 155 -1.2
Staff cost -578 -547 5.7 -145 -155 -6.6
Depreciation and
impairment charges -178 -116 53.5 -44 -32 41.0
Other operating expenses -996 -922 8.0 -281 -264 6.6
Operating profit 286 322 -11.2 7 68 -90.0
Financial income 73 87 -15.6 33 12 (..)
Financial expenses -72 -51 42.5 -33 -14 (..)
Income from associates 2 0 (..) 0 0 -18.4
Profit before tax 289 358 -19.4 8 66 -88.4
Income tax -89 -87 2.7 -5 -21 -73.4
Net profit from
continuing operations 199 271 -26.5 2 46 -95.2
Net profit from
discontinued operations 42 37 13.5 1 2 -68.4
Profit for the period 241 307 -21.7 3 47 -94.1
Attributable to:
Equity holders of the
parent company 220 285 -22.9 -4 41 (..)
Minority interest 21 22 -6.8 7 7 -2.1
Earnings per share (€)
for profit attributable
to the equity holders of
the parent company
Continuing operations
Basic 1.82 2.54 -28.3 -0.05 0.40 (..)
Diluted 1.81 2.52 -28.1 -0.05 0.39 (..)
Whole Group
Basic 2.25 2.92 -23.0 -0.04 0.42 (..)
Diluted 2.24 2.90 -22.8 -0.04 0.41 (..)
(..) Change over 100%
Consolidated balance sheet
(€ million)
31.12.2008 31.12.2007 Change, %
ASSETS
Non-current assets
Intangible assets 170 252 -32.7
Tangible assets 1,210 1,153 4.9
Non-current financial assets 34 31 10.3
Loans and receivables 76 45 69.7
Pension assets 300 262 14.8
Total 1,789 1,743 2.7
Current assets
Inventories 871 922 -5.6
Trade and other receivables 785 840 -6.5
Financial assets at fair value
through profit or loss 94 106 -10.6
Available-for-sale financial assets 291 156 87.0
Cash and cash equivalents 58 90 -35.6
Total 2,100 2,113 -0.6
Non-current assets held for sale 3 237 -98.7
Total assets 3,892 4,093 -4.9
Consolidated balance sheet
(€ million) 31.12.2008 31.12.2007 Change, %
EQUITY AND LIABILITIES
Equity 1,966 1,909 3.0
Minority interest 61 55 9.6
Total equity 2,026 1,964 3.2
Non-current liabilities
Pension obligations 2 4 -55.4
Interest-bearing liabilities 197 314 -37.3
Non-interest-bearing liabilities 12 12 2.5
Deferred tax liabilities 132 126 5.2
Provisions 20 15 30.0
Total 363 471 -23.0
Current liabilities
Interest-bearing liabilities 294 311 -5.6
Non-interest-bearing liabilities 1,186 1,320 -10.2
Provisions 24 23 2.5
Total 1,503 1,654 -9.1
Liabilities for available-for-sale
assets - 3 (..)
Total equity and liabilities 3,892 4,093 -4.9
(..) Change over 100%
Consolidated statement of changes in equity (€ million)
Share Issue Share Other Transl Reval Retain Minor Total
capital of premium reser ation u- ed ity
share ves differe ation earnin intere
capital nces surpl gs st
us
Balance at
1.1.2007 195 0 196 246 -6 -1 1,120 27 1,777
Shares
subscribed
for with
options 1 0 2 3
Option cost 2 2
Translation
differences 2 1 3
Net
investment
hedge
Minority
interest
acquisitions 15 15
Fair value
changes 10 10
Other
changes 1 1 2
Dividend -146 -9 -156
Profit for
the 285 22 307
period
Balance at
31.12.2007 195 0 200 247 -3 9 1,260 55 1,964
Balance at
1.1.2008 195 0 200 247 -3 9 1,260 55 1,964
Shares
subscribed 0 0 0 0
for with
options
Option cost 6 6
Translation
differences 0 -4 -18 9 1 -12
Net
investment 6 6
hedge
Fair value
changes -8 -8
Other
changes 2 2
Dividend -156 -16 -172
Profit for
the 220 21 241
period
Balance at
31.12.2008 196 1 206 243 -15 2 1,335 61 2,026
Consolidated cash flow
statement (€ million)
Change% 10-12 10-12 Change%
2008 2007 2008 2007
Cash flow from operating
activities
Profit before tax 331 398 -16.8 8 69 -88.0
Planned depreciation 118 119 -0.5 30 32 -4.7
Financial income and expenses -1 -37 -97.0 -1 2 (..)
Other adjustments -130 -75 73.1 31 -21 (..)
Working capital
Current non-interest-bearing
trade and other receivables,
increase (-)/ decrease (+) -10 -37 -72.5 93 65 43.6
Inventoriesincrease (-)/ decrease (+) 2 -123 (..) 41 -39 (..)
Current non-interest-bearing
liabilities,
increase (+)/decrease (-) -78 95 (..) -156 -9 (..)
Financial items and taxes -97 -91 7.2 -31 -29 7.6
Net cash from operating
activities 134 248 -46.0 16 70 -77.6
Cash flow from investing
activities
Investments -320 -237 34.9 -97 -73 32.9
Disposals of fixed assets 281 146 92.6 4 5 -28.9
Increase of long-term
receivables -7 0 (..) -2 0 (..)
Decrease of long-term
receivables 0 6 (..) 0 -3 (..)
Net cash used in investing
activities -46 -85 -46.0 -96 -71 34.8
Cash flow from financing
activities
Debt increase 0 16 (..) 0 10 (..)
Debt decrease -53 -20 (..) -27 -6 (..)
Increase (-)/decrease (+) in
short-term interest-bearing
receivables 216 -52 (..) 3 -3 (..)
Dividends paid -172 -156 10.8 0 0 (..)
Equity increase 0 3 -85.6 0 0 (..)
Short-term money market
investments -17 35 (..) 37 4 (..)
Other items 9 1 (..) 10 -1 (..)
Net cash used in financing
activities -17 -173 -90.3 22 4 (..)
Change in cash and cash
equivalents 71 -9 (..) -58 3 (..)
Cash and cash equivalents and
current portion of
available-for-sale financial
assets at 1 Jan.
(1 Oct.) 245 257 -4.5 377 244 54.3
Translation difference and
revaluation 1 0 (..) 0 0 (..)
Cash and cash equivalents
relating to available-for-sale
assets -2 2 (..) 0 2 (..)
Cash and cash equivalents and
current portion of
available-for-sale financial
assets
at 31 Dec. 319 245 30.1 319 245 30.1
(..) Change over 100%
Group financial indicators
2008 2007 Change,
pp
Return on investment, % 14.2 17.4 -3.2
Return on investment excl. non-recurring
items, % 10.0 14.5 -4.5
Return on equity, % 12.1 16.4 -4.4
Return on equity excl. non-recurring items, % 8.1 12.7 -4.6
Equity ratio, % 52.4 48.5 3.9
Gearing, % 2.3 14.0 -11.6
Change, %
Investments, € million* 338 228 48.6
Investments, % of net sales* 3.5 2.5 43.8
Earnings per share, basic, €* 1.82 2.54 -28.3
Earnings per share, diluted, €* 1.81 2.52 -28.1
Earnings per share, basic, €** 2.25 2.92 -23.0
Earnings per share, diluted, €** 2.24 2.90 -22.8
Equity per share, € 20.09 19.53 2.9
Personnel, average* 21,327 20,520 3.9
* Continuing operations
** Whole Group
Divisions
Net sales by 2008 2007 Change, 10-12/2008 10-12//2007 Change,
division, € € % € million € million %
continuing million million
operations
Kesko Food,
Finland 4,096 3,854 6.3 1,118 1,041 7.4
Kesko Food,
other
countries* 15 17 -12.6 4 5 -24.7
Kesko Food,
total 4,110 3,871 6.2 1,122 1,046 7.3
Rautakesko,
Finland 882 909 -3.0 166 195 -15.1
Rautakesko,
other
countries* 1,636 1,628 0.5 352 427 -17.5
Rautakesko,
total 2,518 2,537 -0.8 518 622 -16.7
VV-Auto,
Finland 869 779 11.5 158 139 13.8
VV-Auto, other
countries* 15 26 -40.2 3 5 -34.6
VV-Auto, total 884 805 9.9 161 144 12.2
Anttila,
Finland 541 544 -0.5 180 185 -2.9
Anttila, other
countries* 19 20 -4.7 4 4 -13.1
Anttila, total 560 564 -0.7 184 189 -3.1
Kesko Agro,
Finland 527 499 5.7 118 130 -9.6
Kesko Agro,
other
countries* 318 295 8.0 84 83 1.8
Kesko Agro,
total 846 793 6.6 202 213 -5.2
Other
operating
activities,
Finland 643 665 -3.3 146 165 -11.6
Other
operating
activities,
other
countries* 56 79 -29.2 7 17 -59.2
Other
operating
activities,
total 699 743 -6.0 152 182 -16.1
Common
operations and
eliminations -16 -26 -37.4 -3 -6 -46.6
Finland, total 7,541 7,223 4.4 1,882 1,850 1.8
Other
countries,
total* 2,059 2,064 -0.2 454 541 -16.0
Group, total 9,600 9,287 3.4 2,336 2,390 -2.3
* Exports and net sales outside Finland
Operating 2008 2007 Change, 10-12/2008 10-12/2007 Change,
profit by € € € € million € million €
division incl. million million million million
non-recurring
items,
continuing
operations
Kesko Food 245.0 151.3 93.8 39.0 40.0 -0.9
Rautakesko 16.3 117.8 -101.4 -5.3 22.1 -27.3
VV-Auto 36.3 26.1 10.3 1.9 -0.5 2.5
Anttila 4.3 27.2 -22.8 4.6 21.6 -17.1
Kesko Agro -3.5 12.9 -16.3 -15.7 2.1 -17.8
Other operating
activities 0.8 10.0 -9.1 -9.5 -8.4 -1.1
Common
operations and
eliminations -13.8 -23.6 9.8 -8.1 -8.6 0.4
Group's
operating
profit 285.6 321.5 -35.9 6.9 68.3 -61.4
Operating 2008 2007 Change, 10-12/2008 10-12/2007 Change,
profit by € € € € million € million €
division excl. million million million million
non-recurring
items,
continuing
operations
Kesko Food 135.2 151.4 -16.2 43.3 39.8 3.5
Rautakesko 53.3 115.9 -62.6 -6.2 21.9 -28.2
VV-Auto 36.3 26.1 10.3 1.9 -0.5 2.5
Anttila 19.8 25.2 -5.4 20.0 21.6 -1.6
Kesko Agro -3.5 12.4 -15.9 -15.8 2.1 -17.9
Other operating
activities -0.1 13.9 -14.0 -7.9 -4.5 -3.4
Common
operations and
eliminations -24.0 -29.9 5.8 -8.1 -8.5 0.4
Total 217.0 315.0 -98.0 27.3 71.9 -44.6
Operating profit 2008 2007 Changepp 10-12/2008 10-12/2007 Changepp
as % of net sales % of % of % of net % of net
excl. net net sales sales
non-recurring sales sales
items, continuing
operations
Kesko Food 3.3 3.9 -0.6 3.9 3.8 0.1
Rautakesko 2.1 4.6 -2.5 -1.2 3.5 -4.7
VV-Auto 4.1 3.2 0.9 1.2 -0.4 1.6
Anttila 3.5 4.5 -0.9 10.9 11.4 -0.5
Kesko Agro -0.4 1.6 -2.0 -7.8 1.0 -8.8
Other operating
activities 0.0 1.9 -1.9 -5.2 -2.5 -2.7
Common operations
and eliminations (..) (..) (..) (..) (..) (..)
Total 2.3 3.4 -1.1 1.2 3.0 -1.8
(..) over 100%
Investments by 2008 2007 Change, 10-12/2008 10-12/2007 Change,
division, € € € € million € million €
continuing million million million million
operations
Kesko Food 186 118 68 48 38 11
Rautakesko 121 77 44 45 21 23
VV-Auto 7 6 1 2 1 1
Anttila 6 6 0 2 1 1
Kesko Agro 2 8 -5 1 1 0
Other operating
activities 16 7 8 5 4 1
Common
operations and
eliminations 1 6 -5 2 2 0
Group, total 338 227 111 105 69 36
Group's contingent liabilities 2008 2007 Change, %
(€ million)
For own commitments 205 216 -4.8
For associates - - -
For shareholders 0 1 -95.0
For others 8 9 -11.8
Lease liabilities 25 13 85.0
Liabilities arising from
derivative financial instruments
Fair value
Values of underlying instruments 2008 2007 31.12.2008
at 31 Dec.
Interest rate derivatives
Forward and future contracts - 34 -
Interest rate swap contracts 205 207 9.9
Currency derivatives
Forward and future contracts 333 366 6.6
Option contracts
Bought - - -
Written 5 - -0.1
Currency swap contracts 100 100 -14.2
Commodity derivatives
Electricity derivatives 46 37 -10.8
Grain derivatives 1 5 0.0
Figures by quarter
Group financial 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/ 10-12/
indicators by 2007 2007 2007 2007 2008 2008 2008 2008
quarter
Net sales, €
million 2,131 2,401 2,365 2,390 2,279 2,549 2,437 2,336
Change in net
sales, % 11.6 8.5 10.8 6.9 6.9 6.2 3.0 -2.3
Operating profit, €
million 60.4 99.6 93.3 68.3 150.1 84.8 43.8 6.9
Operating profit
excl. non-recurring
items, € million 57.8 93.4 91.9 71.9 36.6 81.1 72.0 27.3
Operating profit
excl. non-recurring
items, % 2.7 3.9 3.9 3.0 1.6 3.2 3.0 1.2
Financial
income/expenses,
€ million 37.6 -1.9 2.5 -2.1 -1.4 -0.2 1.8 0.8
Profit before tax,
€ million 98 97 96 66 149 84 48 8
Return on
investment, % 23.5 18.6 17.4 12.4 26.6 19.6 8.8 2.5
Return on
investment excl.
non-recurring
items, % 11.9 17.5 17.2 13.0 7.4 14.1 13.3 5.6
Return on equity, % 24.4 17.3 16.2 9.8 25.1 19.1 4.2 0.6
Return on equity
excl. non-recurring
items, % 9.1 16.3 15.9 10.6 5.6 12.3 10.4 4.3
Equity ratio, % 44.6 46.5 47.4 48.5 46.3 49.0 50.2 52.4
Gearing, % 9.8 16.0 13.9 14.0 -1.8 -2.1 -1.3 2.3
Investments, €
million* 50.3 60.3 48.2 68.8 60.3 83.0 89.9 105.2
Investments, % of
net sales* 2.4 2.5 2.0 2.9 2.6 3.3 3.7 4.5
Earnings/share,
diluted, €* 0.75 0.69 0.69 0.39 1.11 0.58 0.17 -0.05
Earnings/share,
diluted, €** 1.06 0.72 0.70 0.41 1.22 0.89 0.16 -0.04
Equity/share, € 17.52 18.32 19.08 19.53 19.13 20.17 20.29 20.09
* Continuing operations
** Whole Group
Calculation of financial indicators
Return on investment, % (Profit / loss before tax + financial
expenses) x 100 /
(Shareholders' equity + interest-bearing
liabilities)
(Profit / loss adjusted for non-recurring
items before tax + financial expenses) x
Return on investment, 100 /
excluding non-recurring (Shareholders' equity + interest-bearing
items, % liabilities)
(Profit / loss before tax - income tax x
Return on equity, % 100 /
Shareholders' equity
Return on equity excluding (Profit / loss adjusted for non-recurring
non-recurring items, % items before tax - income tax adjusted for
the tax effect of non-recurring items) x
100 /
Shareholders' equity
Shareholders' equity x 100 /
Equity ratio, % (Balance sheet total - prepayments
received)
(Profit / loss - minority interest) /
Earnings/share, diluted Average number of shares adjusted for the
dilutive effect of options
Earnings/share, basic (Profit / loss - minority interest) /
Average number of shares
Equity attributable to equity holders of
Equity/share the parent /
Basic number of shares at balance sheet
date
Gearing, % Net interest-bearing liabilities x 100 /
Shareholders' equity
Divisions' net 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/ 10-12/
sales by quarter, € 2007 2007 2007 2007 2008 2008 2008 2008
million
Kesko Food 883 983 959 1,046 937 1,027 1,024 1,122
Rautakesko 534 687 694 622 591 728 681 518
VV-Auto 248 218 195 144 261 246 217 161
Anttila 120 111 143 189 128 116 132 184
Kesko Agro 168 216 196 213 180 245 219 202
Other operating 166 152
activities 184 193 185 182 189 191
Common operations
and eliminations -6 -7 -7 -6 -6 -5 -3 -3
Group's net sales 2,131 2,401 2,365 2,390 2,279 2,549 2,437 2,336
Divisions' 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/ 10-12/
operating profits 2007 2007 2007 2007 2008 2008 2008 2008
by quarter incl.
non-recurring
items, € million
Kesko Food 29.2 40.9 41.2 40.0 123.9 35.5 46.6 39.0
Rautakesko 18.6 37.6 39.5 22.1 7.0 30.9 -16.3 -5.3
VV-Auto 11.7 8.1 6.8 -0.5 13.9 11.0 9.5 1.9
Anttila -0.9 0.1 6.3 21.6 -1.4 -0.6 1.7 4.6
Kesko Agro -0.6 7.9 3.5 2.1 -0.4 9.2 3.5 -15.7
Other operating 3.3 -9.5
activities 8.6 6.5 3.3 -8.4 2.2 4.8
Common operations -6.1 -1.6 -7.3 -8.6 5.0 -6.0 -4.6 -8.1
Group's operating
profit 60.4 99.6 93.3 68.3 150.1 84.8 43.8 6.9
Divisions' operating 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/ 10-12/
profits excl. 2007 2007 2007 2007 2008 2008 2008 2008
non-recurring items, by
quarter, € million
Kesko Food 29.0 41.4 41.1 39.8 20.7 35.5 35.8 43.3
Rautakesko 16.3 38.7 39.0 21.9 7.0 27.3 25.3 -6.2
VV-Auto 11.7 8.1 6.8 -0.5 13.9 11.0 9.5 1.9
Anttila -0.9 -1.8 6.3 21.6 -1.3 -0.6 1.7 20.0
Kesko Agro -0.6 7.9 3.0 2.1 -0.4 9.2 3.5 -15.8
Other operating 0.8 -7.9
activities 8.6 6.5 3.3 -4.5 2.2 4.6
Common operations -6.3 -7.5 -7.6 -8.5 -5.4 -5.9 -4.7 -8.1
Group's operating profit
57.8 93.4 91.9 71.9 36.6 81.1 72.0 27.3
Personnel, 10-12/2008 10-12/2007 Change
average number, continuing operations
Kesko Food 5,804 5,972 -168
Rautakesko 10,089 9,959 130
VV-Auto 742 715 27
Anttila 2,068 2,132 -64
Kesko Agro 620 748 -128
Other operating activities and common
operations 1,598 1,850 -252
Kesko Group, total 20,921 21,376 -455
Personnel at 31 Dec.*, 2008 2007 Change
continuing operations
Kesko Food 7,974 7,889 85
Rautakesko 10,767 10,963 -196
VV-Auto 772 740 32
Anttila 2,828 2,885 -57
Kesko Agro 596 771 -175
Other operating activities and common
operations 1,731 1,980 -249
Kesko Group, total 24,668 25,228 -560
* Total number including part-time employees
The K-Group's retail sales (incl. VAT):
1.1.-31.12.2008 1.10.-31.12.2008
€ Change, Change,
million % € million %
K-Group food stores
K-citymarket 1,914.6 5.5 576.0 10.0
K-supermarket 1,579.1 7.7 409.1 6.2
K-market and other
K-food stores 1,856.5 5.2 470.4 2.8
Finland, total 5,350.7 6.0 1,455.5 6.5
Food stores, total* 5,350.7 6.0 1,455.5 6.5
K-Group building
and home
improvement stores
K-rauta 669.4 2.5 146.1 -3.9
Rautia 556.0 1.6 119.8 -4.6
Finland, total 1,225.4 2.1 266.0 -4.2
K-rauta, Sweden 233.5 0.7 45.9 -15.3
Byggmakker, Norway 1,117.9 -6.4 235.7 -26.3
K-rauta, Estonia 96.0 -11.6 20.7 -19.4
K-rauta, Latvia 86.8 -13.4 18.6 -26.3
Senukai, Lithuania 532.5 -0.9 123.0 -16.9
OMA, Belarus 84.3 22.3 22.6
Stroymaster, Russia 239.8 34.9 63.9 28.1
Other countries,
total 2,390.8 0.1 530.1 -17.3
Building and home
improvement stores,
total 3,616.1 0.8 796.0 -13.3
Kesko Group car stores
Helsingin VV-Auto and Turun
VV-Auto 496.0 16.5 109.3 25.5
Finland, total 496.0 16.5 109.3 25.5
Anttila
Anttila department stores 392.6 -1.3 137.3 -3.6
Kodin Ykkönen department stores
for home goods and interior
decoration 180.6 -1.9 55.9 -7.4
NetAnttila 93.4 4.9 27.8 3.5
Finland, total 666.6 -0.6 221.0 -3.8
Anttila Mail Order, Estonia and
Latvia 17.2 -8.5 2.9 -18.6
Other countries, total 17.2 -8.5 2.9 -18.6
Anttila, total 683.8 -0.8 223.9 -4.0
K-Group agricultural stores
K-maatalous 714.4 6.0 173.9 -9.3
Finland, total 714.4 6.0 173.9 -9.3
Konekesko Eesti, Estonia 68.7 -15.3 9.0 -63.0
Konekesko Latvia, Latvia 152.0 19.3 44.4 48.5
Kesko Agro Liettua, Lithuania 55.3 -34.3 10.1 -36.9
Other countries, total 276.0 -5.7 63.5 -9.6
Agricultural stores, total 990.4 2.4 237.4 -9.4
Other operating activities
Kesko Group machinery stores
Yamaha Center 15.8 -9.2 1.2 -30.5
Finland, total 15.8 -9.2 1.2 -30.5
K-Group home and speciality
goods stores
Intersport and Budget Sport 258.6 5.7 65.6 3.8
Kesport 30.8 4.2 7.6 2.7
Asko 93.5 -1.4 21.5 -10.0
Sotka 108.7 -6.8 25.1 -15.6
Musta Pörssi 183.1 -9.6 49.4 -11.9
Andiamo and K-kenkä 50.2 9.2 14.7 11.6
Kenkäexpertti 12.2 -6.0 3.1 -11.9
Finland, total 737.1 -1.3 187.1 -5.1
Furniture sales, Sweden,
Estonia and Latvia 26.0 -45.0 5.6 -50.1
Other countries, total 26.0 -45.0 5.6 -50.1
Home and speciality goods
stores, total 763.1 -3.9 192.7 -7.5
Other operating activities,
total 778.9 -4.1 193.9 -7.7
Finland, total 9,206.0 4.8 2,414.0 2.6
Other countries, total 2,710.0 -1.4 602.0 -17.1
Retail sales, total 11,916.0 3.4 3,016.0 -2.0
*The K-Group food stores' figures for 2007 have been converted for
comparison.
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