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2009-02-05 07:30:00 CET 2009-02-05 07:32:02 CET REGULATED INFORMATION Kesko Oyj - Financial Statement ReleaseFinancial statements for the period 1 Jan.-31 Dec. 2008: Earnings per share €2.24KESKO 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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