2015-04-28 08:00:00 CEST
2015-04-28 08:01:56 CEST
REGULATED INFORMATION
Kesko Oyj - Interim report (Q1 and Q3)
Kesko's interim report for the period 1 January to 31 March 2015: Profitability improved and balance sheet remained strong, Anttila sold during the reporting period
KESKO CORPORATION INTERIM REPORT 28.4.2015 AT 09.00 1(27)
Kesko's interim report for the period 1 January to 31 March 2015: Profitability
improved and balance sheet remained strong, Anttila sold during the reporting
period
Financial performance in brief:
* The Group's net sales for January-March €2,082 million, change -2.2%. Anttila
excluded, net sales growth 0.7% in local currencies.
* Operating profit excluding non-recurring items €26.5 million (€19.1 million).
* Earnings per share excluding non-recurring items €0.19 (€0.15).
* Equity ratio 51.5% (53.2%).
* Kesko Group's net sales for the next 12 months are expected to be lower than
the level of the preceding 12 months and the operating profit excluding non-
recurring items for the next 12 months is expected to exceed the level of the
preceding 12 months.
Key performance indicators
1-3/2015 1-3/2014
Net sales, € million 2,082 2,129
Operating profit excl. non-recurring items, € million 26.5 19.1
Operating profit, € million -103.6 -13.0
Profit before tax, € million -103.7 -14.4
Capital expenditure, € million 51.5 43.4
Earnings per share, €, diluted -1.11 -0.11
Earnings per share excl. non-recurring items, €, basic 0.19 0.15
31.3.2015 31.3.2014
Equity ratio, % 51.5 53.2
Equity per share, € 21.30 22.83
President and CEO Mikko Helander:"Kesko improved its profit for the first quarter of the year, although the
operating environment continued to be difficult. Profitability improved markedly
in the home improvement and speciality goods trade. Likewise in the grocery
trade, profitability remained at a good level. Profit improvement was achieved
through the enhancement of operating efficiency. The divestment of Anttila will
significantly improve Kesko's profitability, but it did not yet have a material
impact on the profit for the first quarter. Anttila's divestment supports
Kesko's objective to be an increasingly focused group in the future.
Kesko's financial position is very strong too. At the end of the reporting
period, liquid assets were approximately €500 million. The preparatory work for
the real estate arrangement progresses and the project is expected to be
implemented during the first part of 2015, provided that the terms and
conditions are acceptable to Kesko.
The general economic situation and the expected trend in consumer demand vary in
Kesko's different operating countries. In Finland, demand in the trading sector
is expected to be weak also in the current year and the tight competitive
situation in the grocery trade and the speciality goods trade is expected to
continue. In Sweden, Norway and the Baltic countries, the growth in demand in
the trading sector is expected to continue. In Russia, the economic situation
and consumers' purchasing power will weaken. Kesko Group's net sales for the
next 12 months are expected to be lower than the level of the preceding 12
months and the operating profit excluding non-recurring items for the next 12
months is expected to exceed the level of the preceding 12 months.
In Kesko's grocery trade, the key objective is to stop the decline of market
share and turn the trend upward in Finland. The first signs of a turnaround were
already seen in February-March in both customer flows and sales. The partnership
agreement with the world's leading coffee house chain, Starbucks, announced in
April is a good example of the different ways in which K-food stores can deliver
the most exciting experiences in the market.
The market position of Kesko's building and home improvement trade strengthened
in Finland and profitability is being improved further in the Nordic and the
Baltic countries. In Russia too, sales performance in local currencies has been
strong despite the challenging market situation.
Kesko's strategy work is underway and the new strategy will be published within
the next few months. It has been prepared since the beginning of the year by
some 40 people and the whole personnel has been invited to express their ideas
through different channels. Kesko will be a more focused and unified group in
the future. The strategy will guide Kesko's future direction for several years
to come and it will play a key role in the continuation of Kesko's 75-year-long
success story."
FINANCIAL PERFORMANCE
Net sales and profit for January-March 2015
The Group's net sales for January-March 2015 were €2,082 million, which is 2.2%
down on the corresponding period of the previous year (€2,129 million). Anttila
excluded, net sales performance was +0.7% in local currencies. The general
economic situation and consumer demand in Finland remained weak during the
reporting period. In the grocery trade, net sales performance was +0.1%. In the
home improvement and speciality goods trade, net sales decreased by 5.2%, but
Anttila excluded, they increased by 2.2% in local currencies. In the car and
machinery trade, net sales were down 4.2%. The Group's net sales in Finland
decreased by 1.5% and in the other countries by 5.7%; in local currencies, net
sales abroad increased by 6.0%. The weakening of the Russian rouble impacted net
sales performance in euros especially in the home improvement and speciality
goods trade. International operations accounted for 15.7% (16.3%) of net sales.
1-3/2015 Net sales, € Change, % Operating profit Change,
million excl. non- € million
recurring
items, € million
Grocery trade 1,103 +0.1 34.9 -10.5
Home improvement and
speciality goods trade 722 -5.2 -11.4 +20.0
Car and machinery
trade 261 -4.2 7.0 -1.3
Common operations and
eliminations -3 -47.5 -4.0 -0.9
Total 2,082 -2.2 26.5 +7.4
The operating profit excluding non-recurring items for January-March was €26.5
million (€19.1 million). Profitability improved markedly in the home improvement
and speciality goods trade, in which profit performance strengthened especially
in the building and home improvement trade in Finland, Sweden and Norway. The
operating loss of Anttila was also clearly smaller than in the previous year.
Profitability was at a good level also in the grocery trade and in the car and
machinery trade despite the tightened competitive situation.
Operating profit was €-103.6 million (€-13.0 million). The operating profit
includes €-130.1 million (€-32.2 million) of non-recurring items. The most
significant non-recurring item is the €130 million loss on the divestment of
Anttila. The non-recurring items in the comparative period included a €30.0
million restructuring provision recognised on measures taken to improve
Anttila's profitability.
The Group's profit before tax for January-March was €-103.7 million (€-14.4
million). The Group's earnings per share were €-1.11 (€-0.11). The Group's
equity per share was €21.30 (€22.83).
In January-March, the K-Group's (i.e. Kesko's and the chain stores') retail and
B2B sales (VAT 0%) were €2,475 million, down 3.1% compared to the previous year.
The K-Plussa customer loyalty programme gained 16,021 new households in January-
March 2015. At the end of March, there were 2.3 million K-Plussa households and
3.6 million K-Plussa cardholders.
Finance
In January-March, the cash flow from operating activities was €-74.8 million (€-
94.8 million). The cash flow from investing activities was €-64.5 million (€-
43.7 million).
The Group's liquidity remained at an excellent level in January-March. At the
end of the period, liquid assets totalled €506 million (€532 million). Interest-
bearing liabilities were €548 million (€557 million) and interest-bearing net
debt was €41 million (€25 million) at the end of March. The equity ratio was
51.5% (53.2%) at the end of the period.
In January-March, the Group's net finance costs were €0.3 million (€1.6
million).
Taxes
In January-March, the Group's taxes were €7.0 million. In the comparative
period, taxes were €2.5 million positive due to deferred tax assets recognised
on non-recurring costs.
Capital expenditure
In January-March, the Group's capital expenditure totalled €51.5 million (€43.4
million), or 2.5% (2.0%) of net sales. Capital expenditure in store sites was
€40.1 million (€27.8 million), in IT €4.7 million (€10.8 million) and other
capital expenditure was €6.6 million (€4.8 million). Capital expenditure in
foreign operations represented 53.4% (37.2%) of total capital expenditure.
Kesko's strategy work progresses
Kesko's strategy will be published and implemented across the Group within the
next few months. The new strategy aims to achieve profitable growth in selected
areas. All business operations will be developed in order to increase
shareholder value. Synergies will be fully exploited at both customer interface
and in internal operations. Special themes in the strategy include
digitalisation, strengthening of retailer entrepreneurship, customer experience
and identity. Kesko will be an increasingly focused and unified operator in the
future.
Sale of Anttila's shares was implemented
On 16 March 2015, Kesko sold the department store chain Anttila Oy to the German
investment fund 4K INVEST at a price of €1 million. The transaction included all
assets and liabilities in Anttila Oy. Anttila Oy's approximately 1,500 employees
continue in the employment of the company. The date of the transaction was 16
March 2015. Kesko recorded a €-130 million non-recurring item on the transaction
for the first quarter of 2015 relating to the financing, working capital and
fixed assets of Anttila. The transaction will improve Kesko's profitability and
make Kesko's operations more focused.
Kesko continues preparations for real estate arrangement
The intention is to sell some of the store sites owned by Kesko to a joint
venture to be set up. The arrangement is expected to be implemented during the
first part of 2015, provided that the terms and conditions of the transaction
are acceptable to Kesko.
Kesko's objective is to set up a limited liability company (a joint venture) to
own and manage mainly Kesko-owned store sites and shopping centres with Kesko as
one of its significant investors. If the joint venture is set up, Kesko Group
would continue operating on the store sites under long-term leases to be signed
in connection with their sale. The fair value of store sites planned to be sold
to the joint venture in Finland and Sweden is approximately €670 million at
maximum. If implemented, the sale of store sites is estimated to generate a
significant non-recurring profit.
Personnel
In January-March, the average number of employees in Kesko Group was 19,058
(19,619) converted into full-time employees. In Finland, the average decrease
was 877 people, while outside Finland, there was an increase of 316 people.
At the end of March 2015, the number of employees was 21,489 (23,428), of whom
9,829 (12,155) worked in Finland and 11,660 (11,273) outside Finland. Compared
to the end of March 2014, there was a decrease of 2,326 people in Finland and an
increase of 387 people outside Finland. The number of personnel at Anttila, sold
on 16 March 2015, was approximately 1,500.
The Group's employee benefit expenses were €144 million (€156 million) in
January-March.
SEGMENT INFORMATION
Seasonal nature of operations
The Group's operating activities are affected by seasonal fluctuations. The net
sales and operating profits of the reportable segments are not earned evenly
throughout the year. Instead, they vary by quarter depending on the
characteristics of each segment.
Grocery trade
1-3/2015 1-3/2014
Net sales, € million 1,103 1,102
Operating profit excl. non- recurring items, € million 34.9 45.4
Operating margin excl. non-recurring items, % 3.2 4.1
Capital expenditure,
€ million 37.6 19.7
Net sales, € million 1-3/2015 Change, %
Sales to K-food stores 758 +0.9
K-citymarket, non-food 132 -1.1
Kespro 185 +1.7
K-ruoka, Russia 21 -15.9
Others 9 -26.2
Total 1,103 +0.1
January-March 2015
The net sales of the grocery trade for January-March were €1,103 million (€1,102
million), with a performance of +0.1%. Easter falling at the beginning of April
increased the wholesale of groceries at the end of the reporting period. In
January-March, the grocery sales of K-food stores in Finland decreased by 1.1%
(VAT 0%). In the grocery market in Finland, retail prices are estimated to have
changed by approximately -0.5% compared to the previous year (VAT 0%; Kesko's
own estimate based on the Consumer Price Index of Statistics Finland) and the
total market (VAT 0%) is estimated to have been at the previous year's level in
January-March (Kesko's own estimate). Kespro's sales and market position
remained at a good level. The weakening of the rouble decreased the sales in
euros of the food stores in Russia. In roubles, net sales increased by 24%.
In January-March, the operating profit excluding non-recurring items of the
grocery trade was €34.9 million (€45.4 million). Profitability remained at a
good level despite the measures taken to improve K-food stores' competitiveness.
Kespro's market share increased and profitability remained at a good level.
Operating profit was €35.2 million (€44.3 million). Non-recurring items were
€0.3 million (€-1.1 million).
The capital expenditure of the grocery trade in January-March was €37.6 million
(€19.7 million), of which €34.2 million (€16.7 million) in store sites.
In January-March 2015, the sixth K-ruoka store in St. Petersburg and one new K-
supermarket, as well as two new K-markets in Finland were opened. Renewals and
space modifications were made in a total of seven stores.
The most significant store sites being built are the new K-supermarkets in
Lauttasaari, Helsinki, in Oulu, Raasepori, Savonlinna, Uusikaarlepyy and the two
new K-supermarkets in Lappeenranta. Two new food stores are being built in
Russia.
Numbers of stores as at 31 March 2015 2014
K-citymarket 81 80
K-supermarket 218 219
K-market (incl. service station stores) 444 441
K-ruoka, Russia 6 4
Others* 161 172
* incl. online stores
In addition, several K-food stores offer e-commerce services to their customers.
Home improvement and speciality goods trade
1-3/2015 1-3/2014
Net sales, € million 722 761
Operating profit excl. non-recurring items, € million -11.4 -31.4
Operating margin excl. non-recurring items, % -1.6 -4.1
Capital expenditure,
€ million 9.5 14.2
Net sales, € million 1-3/2015 Change, %
Rautakesko, Finland 280 -3.5
K-rauta, Sweden 40 +3.7
Byggmakker, Norway 97 -3.3
K-rauta, Estonia 17 +18.6
K-rauta, Latvia 11 +9.6
Senukai, Lithuania 60 +3.8
K-rauta, Russia 39 -21.0
OMA, Belarus 22 -6.4
Intersport, Finland 49 +8.7
Intersport, Russia 3 -35.5
Indoor 44 +4.7
Musta Pörssi 4 -37.0
Kenkäkesko 6 -4.4
Anttila 53 -30.7
Total 722 -5.2
January-March 2015
The net sales of the home improvement and speciality goods trade for January-
March were €722 million (€761 million), down 5.2%. Net sales excluding Anttila
increased by 2.2% in local currencies.
The net sales of the home improvement and speciality goods trade for January-
March in Finland were €432 million (€461 million), a decrease of 6.3%. Anttila
excluded, net sales decreased in Finland by 1.6% despite the positive
performance of Indoor and Intersport.
The K-Group's sales of building and home improvement products in Finland
decreased by a total of 3.7% and the total market (VAT 0%) is estimated to have
fallen by approximately 5.4% (Kesko's own estimate). The K-Group's market share
is estimated to have grown during the first months of the year. The retail sales
of the K-maatalous chain were down by 2.2%.
In January-March, the net sales from the foreign operations of the home
improvement and speciality goods trade were €290 million (€300 million), a
decrease of 3.5%. In local currencies, the net sales from foreign operations
increased by 6.7%. In Sweden, net sales in kronas grew by 9.9% and in Russia,
net sales in roubles grew by 14.8%. In Norway, net sales in krones were at the
previous year's level. Market position strengthened in Sweden and the Baltic
countries. Foreign operations contributed 40.2% (39.5%) to the net sales of the
home improvement and speciality goods trade.
In January-March, the operating profit excluding non-recurring items of the home
improvement and speciality goods trade was €-11.4 million (€-31.4 million), up
€20.0 million compared to the previous year. Anttila's operating profit, €-12.7
million (€-22.2 million) is included in the profit of the home improvement and
speciality goods trade. Anttila and non-recurring items excluded, the operating
profit of the home improvement and speciality goods trade was €1.3 million, up
€10.6 million on the previous year. The clearly improved profitability is
attributable to a sales increase in foreign currency terms, coupled with the
growth of sales margin and the implemented cost savings. Profit improved
especially in the building and home improvement trade in Finland, Sweden and
Norway. In Russia, the operating profit excluding foreign exchange impacts
increased. The operating profit of the home improvement and speciality goods
trade was €-141.8 million (€-62.5 million). Non-recurring items include a €130
million loss on the sale of Anttila.
In January-March, the capital expenditure of the home improvement and speciality
goods trade totalled €9.5 million (€14.2 million), of which 36.1% (65.0%) was
abroad. Capital expenditure in store sites represented 53.6% of total capital
expenditure.
In January-March, an Intersport store in Vaasa and the Sotka.fi online store
were opened and two Intersport stores were closed in St. Petersburg. The most
significant store sites being built are the K-rauta stores in Kokkola, Lahti and
Imatra.
Numbers of stores as at 31 March 2015 2014
K-rauta 42 42
Rautia* 93 98
K-maatalous* 81 83
K-rauta, Sweden 20 20
Byggmakker, Norway 84 86
K-rauta, Estonia 8 8
K-rauta, Latvia 8 8
Senukai, Lithuania 19 18
K-rauta, Russia 13 13
OMA, Belarus 11 10
Intersport, Finland** 62 63
Budget Sport** 11 11
Asko and Sotka** 87 87
Musta Pörssi** 1 6
Kookenkä** 41 46
Intersport, Russia 17 20
Asko and Sotka, the Baltics** 10 10
* in 2015, 46 (47) Rautia stores also operated as K-maatalous stores
** incl. online stores
In addition, the building and home improvement stores offer e-commerce services
to their customers.
Car and machinery trade
1-3/2015 1-3/2014
Net sales, € million 261 272
Operating profit excl. non-recurring items, € million 7.0 8.2
Operating margin excl. non-recurring items, % 2.7 3.0
Capital expenditure, € million 2.9 2.9
Net sales, € million 1-3/2015 Change, %
VV-Auto 206 -3.7
Konekesko 55 -6.2
Total 261 -4.2
January-March 2015
The net sales of the car and machinery trade for January-March were €261 million
(€272 million), down 4.2%.
VV-Auto's net sales for January-March were €206 million (€214 million), a
decrease of 3.7%. In January-March, the combined market performance of first
time registered passenger cars and vans was -3.0%.
In January-March, the combined market share of passenger cars and vans imported
by VV-Auto was 18.8% (20.9%).
Konekesko's net sales for January-March were €55 million (€58 million), down
6.2% compared to the previous year. Net sales in Finland were €38 million, up
4.9%. The net sales from Konekesko's foreign operations were €17 million, down
24.3%. The net sales decline was especially impacted by the weak market
performance of the agricultural machinery trade in Finland and the Baltic
countries.
In January-March, the operating profit excluding non-recurring items of the car
and machinery trade was €7.0 million (€8.2 million), down €1.3 million compared
to the previous year. The profitability of the car trade remained at a good
level despite the weakened market situation.
The operating profit for January-March was €7.0 million (€8.2 million).
The capital expenditure of the car and machinery trade in January-March was €2.9
million (€2.9 million).
Numbers of stores as at 31 March 2015 2014
VV-Auto, retail trade 10 10
Konekesko 1 1
Changes in the Group composition
During the reporting period, Kesko Corporation sold its subsidiary Anttila Oy.
(Stock exchange release on 16 March 2015)
Shares, securities market and Board authorisations
At the end of March 2015, the total number of Kesko Corporation shares was
100,019,752, of which 31,737,007, or 31.7%, were A shares and 68,282,745, or
68.3%, were B shares. At 31 March 2015, Kesko Corporation held 996,076 own B
shares as treasury shares. These treasury shares accounted for 1.46% of the
number of B shares, 1.00% of the total number of shares, and 0.26% of votes
attached to all shares of the company. The total number of votes attached to all
shares was 385,652,815. Each A share carries ten (10) votes and each B share one
(1) vote. The company cannot vote with own shares held by it as treasury shares
and no dividend is paid on them. At the end of March 2015, Kesko Corporation's
share capital was €197,282,584.
The price of a Kesko A share quoted on Nasdaq Helsinki was €28.56 at the end of
2014, and €36.76 at the end of March 2015, representing an increase of 28.7%.
Correspondingly, the price of a B share was €30.18 at the end of 2014, and
€39.77 at the end of March 2015, representing an increase of 31.8%. In January-
March, the highest A share price was €38.08 and the lowest was €28.52. The
highest B share price was €40.66 and the lowest was €29.95. In January-March,
the Nasdaq Helsinki All-Share index (OMX Helsinki) was up 16.2% and the weighted
OMX Helsinki Cap index 16.7%. The Retail Sector Index was up 28.6%.
At the end of March 2015, the market capitalisation of A shares was €1,167
million, while that of B shares was €2,676 million, excluding the shares held by
the parent company. The combined market capitalisation of A and B shares was
€3,843 million, an increase of €905 million from the end of 2014. In January-
March 2015, a total of 0.8 million (0.6 million) A shares were traded on Nasdaq
Helsinki, an increase of 41.7%. The exchange value of A shares was €27 million.
The number of B shares traded was 17.3 million (14.6 million), an increase of
18.8%. The exchange value of B shares was €598 million. Nasdaq Helsinki
accounted for 59% of Kesko A and B share trading in January-March 2015. Kesko
shares were also traded on multilateral trading facilities, the most significant
of which were BATS Chi-X with 34% and Turquoise with 7% of the trading (source:
Fidessa).
The Board had the authority, granted by the Annual General Meeting of 16 April
2012, to issue a total maximum of 20,000,000 new B shares, which was intended to
expire on 30 June 2015. The shares could be issued against payment for
subscription by shareholders in a directed issue in proportion to their existing
holdings of the company shares regardless of whether they consisted of A or B
shares, or, deviating from the shareholder's pre-emptive right, in a directed
issue, if there had been a weighty financial reason for the company, such as
using the shares to develop the company's capital structure and financing
possible acquisitions, capital expenditure or other arrangements within the
scope of the company's business operations. The amount paid for the shares would
have been recognised in the reserve of invested non-restricted equity. The
authorisation also included the Board's authority to decide on the share
subscription price, the right to issue shares against non-cash consideration and
the right to make decisions on other matters concerning share issues.
On 13 April 2015, the Annual General Meeting approved a share issue
authorisation which cancels the above authority granted by the General Meeting
of 16 April 2012. In consequence, the Board has the authority, granted by the
Annual General Meeting of 13 April 2015 and valid until 30 June 2018, to issue a
total maximum of 20,000,000 new B shares. The shares can be issued against
payment to be subscribed by shareholders in a directed issue in proportion to
their existing holdings of the company shares regardless of whether they hold A
or B shares, or, deviating from the shareholder's pre-emptive right, in a
directed issue, if there is a weighty financial reason for the company, such as
using the shares to develop the company's capital structure and financing
possible acquisitions, capital expenditure or other arrangements within the
scope of the company's business operations. The amount paid for the shares is
recognised in the reserve of invested non-restricted equity. The authorisation
also includes the Board's authority to decide on the share subscription price,
the right to issue shares for non-cash consideration and the right to make
decisions on other matters concerning share issues.
In addition, the Board has the authority, valid until 30 June 2017, to decide on
the transfer of a maximum of 1,000,000 own B shares held by the company as
treasury shares. On 9 February 2015, the Board decided to grant own B shares
held by the company as treasury shares to persons included in the target group
of the 2014 vesting period, based on the valid authority to issue treasury
shares granted by the Annual General Meeting held on 8 April 2013 and the
fulfilment of the vesting criteria of the 2014 vesting period of Kesko's three-
year share-based compensation plan. This transfer of a total of 120,022 own B
shares was announced in a stock exchange release on 1 April 2015 and 7 April
2015. Based on the 2014-2016 share-based compensation plan decided by the Board,
a total maximum of 600,000 own B shares held by the company as treasury shares
can be granted within a period of three years based on the fulfilment of the
vesting criteria. The Board will separately decide on the vesting criteria and
target group for each vesting period. The share-based compensation plan was
announced in a stock exchange release on 4 February 2014.
In January-March, a total of 761 shares granted based on the earlier share-based
compensation plan (the 2011-2013 share-based compensation plan) was returned to
the company in accordance with the terms and conditions of the share-based
compensation plan. The return during the reporting period was notified in a
stock exchange notification on 23 March 2015.
At the end of March 2015, the number of shareholders was 39,612, which is 257
less than at the end of 2014. At the end of March, foreign ownership of all
shares was 27%. At the end of March, foreign ownership of B shares was 39%.
Flagging notifications
Kesko Corporation did not receive flagging notifications during the reporting
period.
Key events during the reporting period
M.Sc. (Econ.) Anni Ronkainen, 48, was appointed Kesko's Chief Digital Officer
responsible for business development, digital business environment and
marketing, and a member of the Group Management Board. (Stock exchange release
on 26 January 2015)
Kesko sold the department store chain Anttila Oy to the German investment fund
4K INVEST at a price of €1 million. The transaction includes all assets and
liabilities in Anttila Oy. Anttila Oy's approximately 1,500 employees continue
in the employment of the company. The date of the transaction was 16 March
2015. (Stock exchange release on 16 March 2015)
On 20 March 2015, at http://kesko2014.kesko.fi/en, Kesko published its first
annual report that makes use of the <IR> integrated reporting framework. The
annual report includes a business review, GRI indicators, the financial
statements for 2014, the Corporate Governance Statement and the Remuneration
Statement.
Resolutions of the 2015 Annual General Meeting and decisions of the Board's
organisational meeting
Kesko Corporation's Annual General Meeting, held on 13 April 2015, adopted the
financial statements and the consolidated financial statements for 2014 and
discharged the Board members and the Managing Director from liability. The
General Meeting also resolved to distribute a dividend of €1.50 per share as
proposed by the Board, or a total amount of €148,715,547.00. The dividend pay
date was 22 April 2015. The General Meeting resolved to leave the number of
Board members unchanged at seven. The General Meeting resolved to elect
retailer, Business College Graduate Esa Kiiskinen, Master of Science in
Economics, retailer Tomi Korpisaari, retailer, Secondary School Graduate Toni
Pokela, eMBA Mikael Aro (new member), Master of Science in Economics Matti
Kyytsönen (new member), Master of Science in Economics Anu Nissinen (new member)
and Master of Laws Kaarina Ståhlberg (new member) as Board members for a three-
year term expiring at the close of the 2018 Annual General Meeting in accordance
with the Articles of Association. In addition, the General Meeting resolved to
leave the Board members' fees and the basis for reimbursement of expenses
unchanged.
The General Meeting elected the firm of auditors PricewaterhouseCoopers Oy,
Authorised Public Accountants, as the company's auditor, with APA Mikko Nieminen
as the auditor with principal responsibility. The General Meeting also approved
the Board's proposals for the Board's authorisation to issue of a total maximum
of 20,000,000 new B shares until 30 June 2018, and its authorisation to decide
on donations in a total maximum of €300,000 for charitable or corresponding
purposes until the Annual General Meeting to be held in 2016.
After the Annual General Meeting, Kesko Corporation's Board of Directors held an
organisational meeting in which it elected retailer, Business College Graduate
Esa Kiiskinen as its Chair and eMBA Mikael Aro as its Deputy Chair. Master of
Laws Kaarina Ståhlberg (Ch.), eMBA Mikael Aro (Dep. Ch.) and Master of Science
in Economics Matti Kyytsönen were elected to the Board's Audit Committee. Esa
Kiiskinen (Ch.), Mikael Aro (Dep. Ch.) and Master of Science in Economics Anu
Nissinen were elected to the Board's Remuneration Committee.
The resolutions of the 2015 Annual General Meeting and the decisions of the
Board's organisational meeting were announced in more detail in stock exchange
releases on 13 April 2015.
Responsibility
The target of the Youth Guarantee in the K-Group programme was to employ 1,000
young people during 2013-2014. By the end of 2014, nearly 1,800 young people
were employed by K-stores and Kesko in different parts of Finland.
The Blue and White Footprint campaign of the Association for Finnish Work
continues in 2015 with K-rauta and Rautia stores joining K-food stores in the
campaign. The campaign is aimed to increase the sales of Finnish products and
the awareness of the positive impacts of buying Finnish work.
Kesko is the best food and staples retailer in the 2015 Global 100 Most
Sustainable Corporations in the World list published in January rising to the
fifth place on the list.
Plan, an international development organisation promoting children's rights, and
Kesko started a common research project on the position of Cambodian immigrant
workers in Thailand in February 2015. The aim is to find out ways to improve the
working conditions of Cambodian migrant workers and children's education and
protection in Thailand. The results of the research will be published in May
2015.
Risk management
Kesko Group has an established and comprehensive risk management process. Risks
and their management responses are regularly assessed within the Group and
reported to the Group management. Kesko's risk management and risks associated
with business operations are described in more detail on Kesko's website in the
Corporate Governance section.
The most significant near-future risks in Kesko's business operations are
associated with the general development of the economic situation and consumer
confidence especially in Finland and Russia, as well as their impact on Kesko's
sales and profit. In other respects, no material change is estimated to have
taken place during the first months of the year in the risks described in the
Report by the Board of Directors and the financial statements for 2014 and the
risks described on Kesko's website. The risks and uncertainties related to
economic development are described in the section future outlook of this
release.
Future outlook
Estimates of the future outlook for Kesko Group's net sales and operating profit
excluding non-recurring items are given for the 12 months following the
reporting period (4/2015-3/2016) in comparison with the 12 months preceding the
reporting period (4/2014-3/2015).
The general economic situation and the expected trend in consumer demand vary in
Kesko's different operating countries. In Finland, demand in the trading sector
is expected to be weak also in the current year and the tight competitive
situation in the grocery trade and the speciality goods trade is expected to
continue. In Sweden, Norway and the Baltic countries, the growth in demand in
the trading sector is expected to continue. In Russia, the economic situation
and consumers' purchasing power will weaken.
Kesko Group's net sales for the next 12 months are expected to be lower than the
level of the preceding 12 months and the operating profit excluding non-
recurring items for the next 12 months is expected to exceed the level of the
preceding 12 months.
Helsinki, 27 April 2015
Kesko Corporation
Board of Directors
The information in the interim report is unaudited.
Further information is available from Jukka Erlund, Senior Vice President, Chief
Financial Officer, telephone +358 105 322 113, and Eva Kaukinen, Vice President,
Group Controller, telephone +358 105 322 338. A Finnish-language webcast of the
media and analyst briefing on the interim report can be accessed at
www.kesko.fi, at 11.00. An English-language audio conference on the interim
report will be held today at 14.30 (Finnish time). The audio conference login is
available on Kesko's website at www.kesko.fi.
Kesko Corporation's interim report for January-June will be published on 22 July
2015. In addition, Kesko Group's sales figures are published each month. News
releases and other company information are available on Kesko's website at
www.kesko.fi.
KESKO CORPORATION
Merja Haverinen
Vice President, Group Communications
ATTACHMENTS: TABLES SECTION
Accounting policies
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Group's performance indicators
Net sales by segment
Operating profit by segment
Operating profit excl. non-recurring items by segment
Operating margin excl. non-recurring items by segment
Capital employed by segment
Return on capital employed excl. non-recurring items by segment
Capital expenditure by segment
Segment information by quarter
Change in tangible and intangible assets
Related party transactions
Fair value hierarchy of financial assets and liabilities
Personnel average and at the end of the reporting period
Group's commitments
Calculation of performance indicators
K-Group's retail and B2B sales
DISTRIBUTION
NASDAQ OMX Helsinki Ltd
Main news media
www.kesko.fi
TABLES SECTION
Accounting policies
This interim report has been prepared in accordance with the IAS 34 standard.
The interim report has been prepared in accordance with the same principles as
the annual financial statements for 2014.
Consolidated income statement (€ million),
condensed
1-3/ 1-3/ 1-12/
2015 2014 Change% 2014
Net sales 2,082 2,129 -2.2 9,071
Cost of goods sold -1,812 -1,850 -2.0 -7,832
Gross profit 270 279 -3.3 1,238
Other operating income 169 165 2.4 729
Employee benefit expense -144 -156 -7.8 -614
Depreciation and impairment charges -35 -39 -10.5 -195
Other operating expenses -364 -262 38.8 -1,007
Operating profit -104 -13 (..) 151
Interest income and other finance income 2 2 14.5 14
Interest expense and other finance costs -3 -4 -21.9 -16
Exchange differences 1 1 18.3 -4
Share of results of equity accounted investments 0 0 -11.4 0
Profit before tax -104 -14 (..) 145
Income tax -7 3 (..) -37
Net profit for the period -111 -12 (..) 108
Attributable to
Owners of the parent -110 -11 (..) 96
Non-controlling
interests -1 -1 50.8 12
Earnings per share (€)
for profit attributable to
equity holders of the parent
Basic -1.11 -0.11 (..) 0.97
Diluted -1.11 -0.11 (..) 0.97
Consolidated statement
of comprehensive income (€ million)
1-3/ 1-3/ Change% 1-12/
2015 2014 2014
Net profit for the period -111 -12 (..) 108
Items that will not be reclassified subsequently
to profit or loss
Actuarial gains/losses 28 8 (..) -20
Items that may be reclassified subsequently to
profit or loss
Exchange differences on translating foreign
operations 5 -6 (..) -28
Adjustment for hyperinflation -1 2 (..) 4
Cash flow hedge revaluation 0 -2 (..) 1
Revaluation of available-for-sale financial
assets 1 1 71.7 -3
Other items - - - 0
Total other comprehensive income for the period,
net of tax 33 3 (..) -45
Total comprehensive income for the period -78 -9 (..) 63
Attributable to
Owners of the parent -75 -9 (..) 49
Non-controlling
interests -3 -1 (..) 14
(..) Change over 100%
Consolidated statement of financial
position (€ million), condensed
31.3.2015 31.3.2014 Change, % 31.12.2014
ASSETS
Non-current assets
Tangible assets 1,630 1,645 -0.9 1,624
Intangible assets 172 194 -11.5 178
Equity accounted investments and
other financial assets 109 105 3.5 105
Loans and receivables 16 16 2.4 11
Pension assets 182 181 0.1 147
Total 2,108 2,141 -1.5 2,066
Current assets
Inventories 764 840 -9.1 776
Trade receivables 704 720 -2.3 584
Other receivables 207 195 6.4 173
Financial assets at fair value
through profit or loss 213 183 16.3 219
Available-for-sale financial assets 228 263 -13.2 272
Cash and cash equivalents 65 86 -24.2 107
Total 2,181 2,287 -4.6 2,131
Non-current assets held for sale 1 1 - 1
Total assets 4,289 4,429 -3.1 4,198
31.3.2015 31.3.2014 Change, % 31.12.2014
EQUITY AND LIABILITIES
Equity 2,110 2,259 -6.6 2,184
Non-controlling interests 79 72 8.7 82
Total equity 2,188 2,331 -6.1 2,265
Non-current liabilities
Interest-bearing liabilities 310 351 -11.8 319
Non-interest-bearing liabilities 4 10 -58.5 11
Deferred tax liabilities 70 68 3.1 67
Pension obligations 1 2 -32.5 2
Provisions 20 28 -29.1 27
Total 405 459 -11.7 426
Current liabilities
Interest-bearing liabilities 238 206 15.4 180
Trade payables 938 940 -0.2 795
Other non-interest-bearing
liabilities 483 446 8.1 490
Provisions 37 46 -19.2 42
Total 1,696 1,639 3.5 1,506
Total equity and liabilities 4,289 4,429 -3.1 4,198
Consolidated statement of changes in equity (€ million)
Share Res- Cur- Re- Trea- Re- Non- Total
capi- erves rency valu- sury tained cont-
tal trans- ation sha- earn- rol-
lation reser-ve res ings ling
differ- inte-
ences rests
Balance at
1.1.2014 197 461 -13 1 -18 1,651 73 2,352
Shares
subscribed
with options 1 1
Treasury shares -15 -15
Share-based
payments 2 2
Other changes 0 0 0 0 0
Net profit for
the period -11 -1 -12
Other comprehen-
sive income
Items that will
not be
reclassified
subsequently to
profit or loss
Actuarial
gains/losses 10 10
Items that may
be reclassified
subsequently to
profit or loss
Exchange
differences
on translating
foreign
operations 0 -5 0 -1 -6
Adjustment for
hyperinflation 0 1 2
Cash flow
hedge
revaluation -2 -2
Revaluation of
available-for-
sale financial
assets 1 1
Tax related to
comprehensive
income 0 -2 -2
Total other
comprehensive
income 0 -5 -1 8 0 3
Balance at
31.3.2014 197 462 -18 0 -31 1,648 72 2,331
Balance at
1.1.2015 197 463 -38 -1 -31 1,594 82 2,265
Shares
subscribed
with options
Treasury shares
Share-based
payments 1 1
Other changes 0 0 0 0
Net profit for
the period -110 -1 -111
Other comprehen-
sive income
Items that will
not be
reclassified
subsequently to
profit or loss
Actuarial
gains/losses 34 34
Items that may
be reclassified
subsequently to
profit or loss
Exchange
differences
on translating
foreign
operations 0 6 0 -1 5
Adjustment for
hyperinflation 0 -1 -1
Cash flow
hedge
revaluation 0 0
Revaluation of
available-for-
sale financial
assets 1 1
Tax related to
comprehensive
income 0 -7 -7
Total other
comprehensive
income 0 6 1 27 -2 33
Balance at
31.3.2015 197 463 -32 0 -31 1,511 79 2,188
Consolidated statement of cash flows (€ million), condensed
1-3/ 1-3/ Change,% 1-12/
2015 2014 2014
Cash flows from operating activities
Profit before tax -104 -14 (..) 145
Planned depreciation 35 39 -10.5 151
Finance income and costs 0 2 -83.3 6
Other adjustments 126 20 (..) 63
Change in working capital
Current non-interest-bearing
operating receivables,
increase (-)/decrease (+) -188 -158 18.9 32
Inventories,
increase (-)/decrease (+) -54 -48 12.7 -7
Current non-interest-bearing
liabilities, increase (+)/
decrease(-) 123 80 54.0 -21
Financial items and tax -13 -15 -8.4 -65
Net cash from operating activities -75 -95 -21.1 304
Cash flows from investing activities
Investing activities -49 -45 8.1 -194
Sales of fixed assets -16 2 (..) 11
Increase in non-current receivables 1 0 (..) 0
Net cash used in investing activities -64 -44 47.5 -182
Cash flows from financing activities
Interest-bearing liabilities, increase (+)/decrease
(-) 39 5 (..) -46
Current interest-bearing
receivables, increase (-)/
decrease (+) 0 -3 (..) -1
Dividends paid - - - -143
Equity increase - 1 -100.0 2
Acquisition of own shares - -15 (..) -16
Short-term money market investments, increase (-)/
decrease (+) -16 -16 4.5 -57
Other items 7 3 (..) 7
Net cash used in financing activities 30 -25 (..) -254
Change in cash and cash equivalents -109 -164 -33.2 -131
Cash and cash
equivalents and current
portion of available-for-sale financial assets at 1
Jan. 313 453 -30.8 453
Currency translation difference adjustment and
revaluation 0 -1 (..) -8
Cash and cash
equivalents and current
portion of available-for-sale financial assets at 31
Mar. 204 288 -29.1 313
(..) Change over 100%
Group's performance
indicators
1-3/2015 1-3/2014 Change, pp 1-12/2014
Return on capital employed,
% -18.1 -2.2 -15.9 6.4
Return on capital employed,
%,
moving 12 mo 2.6 8.9 -6.4 6.4
Return on capital employed
excl. non-recurring items, % 4.6 3.2 1.4 9.9
Return on capital employed
excl. non-recurring items,
%, moving 12 mo 10.2 9.9 0.3 9.9
Return on equity, % -19.9 -2.0 -17.8 4.7
Return on equity, %, moving
12 mo 0.4 7.0 -6.6 4.7
Return on equity excl. non-
recurring items, % 3.1 2.3 0.8 7.6
Return on equity excl. non-
recurring items, %, moving
12 mo 7.9 7.8 0.1 7.6
Equity ratio, % 51.5 53.2 -1.7 54.5
Gearing, % 1.9 1.1 0.8 -4.4
Change, %
Capital expenditure, €
million 51.5 43.4 18.7 194.0
Capital expenditure, % of
net sales 2.5 2.0 21.3 2.1
Earnings per share, basic, € -1.11 -0.11 (..) 0.97
Earnings per share, diluted,
€ -1.11 -0.11 (..) 0.97
Earnings per share excl.
non-recurring items, basic,
€ 0.19 0.15 28.1 1.65
Cash flows from operating
activities,
€ million -75 -95 -21.1 304
Cash flows from investing
activities,
€ million -64 -44 47.5 -182
Equity per share, € 21.30 22.83 -6.7 22.05
Interest-bearing net debt, €
million 41 25 63.7 -99
Diluted number of shares,
average for the reporting
period, 1,000 pcs 99,024 99,524 -0.5 99,161
Personnel, average 19,058 19,619 -2.9 19,976
(..) Change over 100%
Group's 1-3/ 4-6/ 7-9/ 10-12/ 1-3/
performance 2014 2014 2015
indicators by 2014 2014
quarter
Net sales, €
million 2,129 2,371 2,304 2,267 2,082
Change in net
sales, % -1.4 -2.1 -2.9 -4.0 -2.2
Operating profit,
€ million -13.0 69.4 63.4 31.7 -103.6
Operating margin,
% -0.6 2.9 2.7 1.4 -5.0
Operating profit
excl. non-
recurring items, €
million 19.1 67.6 84.0 61.9 26.5
Operating margin
excl. non-
recurring items, % 0.9 2.9 3.6 2.7 1.3
Finance
income/costs,
€ million -1.6 2.2 -1.8 -5.0 -0.3
Profit before tax,
€ million -14.4 71.4 61.7 26.4 -103.7
Profit before tax,
% -0.7 3.0 2.7 1.2 -5.0
Return on capital
employed, % -2.2 11.5 10.9 5.5 -18.1
Return on capital
employed, excl.
non-recurring
items, % 3.2 11.2 14.4 10.7 4.6
Return on equity,
% -2.0 9.4 8.1 3.7 -19.9
Return on equity,
excl.
non-recurring
items, % 2.3 9.1 11.3 8.0 3.1
Equity ratio, % 53.2 52.3 54.2 54.5 51.5
Capital
expenditure,
€ million 43.4 55.7 51.7 43.2 51.5
Earnings per
share, diluted, € -0.11 0.51 0.41 0.17 -1.11
Equity per share,
€ 22.83 21.86 22.25 22.05 21.30
Segment information
Net sales by segment 1-3/ 1-3/ Change, 1-12/
2015 2014 % 2014
(€ million)
Grocery trade, Finland 1,082 1,077 0.5 4,650
Grocery trade, other countries* 21 25 -15.9 103
Grocery trade, total 1,103 1,102 0.1 4,754
- of which intersegment trade 7 10 -31.8 34
Home improvement and speciality goods trade,
Finland 432 461 -6.3 1,854
Home improvement and speciality goods trade,
other countries* 290 300 -3.5 1,470
Home improvement and speciality goods trade
total 722 761 -5.2 3,324
- of which intersegment trade 1 0 (..) 0
Car and machinery trade, Finland 244 250 -2.5 916
Car and machinery trade, other countries* 17 22 -24.0 96
Car and machinery trade
total 261 272 -4.2 1,011
- of which intersegment trade 1 0 (..) 1
Common operations and
eliminations -3 -6 47.5 -19
Finland total 1,755 1,781 -1.5 7,401
Other countries total* 328 347 -5.7 1,669
Group total 2,082 2,129 -2.2 9,071
(..) Change over 100%
* net sales in countries other than Finland
Operating profit by segment 1-3/ 1-3/ 1-12/
(€ million) 2015 2014 2014
Change
Grocery trade 35.2 44.3 -9.1 216.2
Home improvement and speciality goods trade -141.8 -62.5 -79.3 -52.6
Car and machinery trade 7.0 8.2 -1.3 29.4
Common operations and eliminations -4.0 -3.1 -0.9 -41.6
Group total -103.6 -13.0 -90.6 151.4
Operating profit excl. non-recurring items by
segment
(€ million)
1-3/ 1-3/ 1-12/
2015 2014 Change 2014
Grocery trade 34.9 45.4 -10.5 223.2
Home improvement and speciality goods trade -11.4 -31.4 20.0 -0.3
Car and machinery trade 7.0 8.2 -1.3 29.6
Common operations and eliminations -4.0 -3.1 -0.9 -19.9
Group total 26.5 19.1 7.4 232.6
Operating margin
1-3/ 1-3/
excl. non-recurring 1-12/
items by segment, % 2015 2014 Change, pp 2014 Moving 12 mo 3/2015
Grocery trade 3.2 4.1 -1.0 4.7 4.5
Home improvement and
speciality goods trade -1.6 -4.1 2.6 0.0 0.6
Car and machinery trade 2.7 3.0 -0.4 2.9 2.8
Group total 1.3 0.9 0.4 2.6 2.7
Capital employed by
segment, cumulative
1-3/ 1-3/ 1-12/
average (€ million) 2015 2014 Change 2014 Moving 12 mo 3/2015
Grocery trade 1,018 1,019 -1 1,007 1,013
Home improvement and
speciality goods trade 840 869 -29 876 869
Car and machinery trade 167 169 -2 162 161
Common operations and
eliminations 270 317 -47 310 302
Group total 2,295 2,375 -80 2,354 2,344
Return on capital employed
excl. non-recurring items
1-3/ 1-3/ Change, pp 1-12/
by segment, % 2015 2014 2014 Moving 12 mo 3/2015
Grocery trade 13.7 17.8 -4.1 22.2 21.0
Home improvement and
speciality goods trade -5.4 -14.5 9.0 0.0 2.3
Car and machinery trade 16.7 19.5 -2.8 18.3 17.7
Group total 4.6 3.2 1.4 9.9 10.2
Capital expenditure 1-3/ 1-3/ 1-12/
2015 2014 2014
by segment (€ million) Change
Grocery trade 38 20 18 98
Home improvement and speciality goods trade 9 14 -5 71
Car and machinery trade 3 3 0 14
Common operations and eliminations 1 7 -5 11
Group total 52 43 8 194
Segment information by quarter
Net sales by segment
1-3/ 4-6/ 7-9/ 10-12/ 1-3/
(€ million) 2014 2014 2014 2014 2015
Grocery trade 1,102 1,202 1,190 1,260 1,103
Home improvement and speciality
goods trade 761 890 877 796 722
Car and machinery trade 272 283 240 216 261
Common operations and
eliminations -6 -5 -3 -5 -3
Group total 2,129 2,371 2,304 2,267 2,082
Operating profit by segment
1-3/ 4-6/ 7-9/ 10-12/ 1-3/
(€ million) 2014 2014 2014 2014 2015
Grocery trade 44.3 54.4 58.3 59.1 35.2
Home improvement and speciality
goods trade -62.5 8.4 -0.5 2.0 -141.8
Car and machinery trade 8.2 10.9 8.7 1.6 7.0
Common operations and
eliminations -3.1 -4.4 -3.1 -31.0 -4.0
Group total -13.0 69.4 63.4 31.7 -103.6
Operating profit excl.
non-recurring items
1-3/ 4-6/ 7-9/ 10-12/ 1-3/
by segment (€ million) 2014 2014 2014 2014 2015
Grocery trade 45.4 55.3 60.3 62.2 34.9
Home improvement and speciality goods trade -31.4 5.8 18.2 7.1 -11.4
Car and machinery trade 8.2 10.9 8.7 1.8 7.0
Common operations and eliminations -3.1 -4.4 -3.1 -9.3 -4.0
Group total 19.1 67.6 84.0 61.9 26.5
Operating margin excl.
non-recurring items
1-3/ 4-6/ 7-9/ 10-12/ 1-3/
by segment, % 2014 2014 2014 2014 2015
Grocery trade 4.1 4.6 5.1 4.9 3.2
Home improvement and speciality goods trade -4.1 0.6 2.1 0.9 -1.6
Car and machinery trade 3.0 3.8 3.6 0.8 2.7
Group total 0.9 2.9 3.6 2.7 1.3
Change in tangible and intangible assets (€ million)
31.3.2015 31.3.2014
Opening net carrying amount 1,802 1,840
Depreciation, amortisation and impairment -35 -39
Investments in tangible and intangible assets 51 45
Disposals -22 -3
Currency translation differences 6 -5
Closing net carrying amount 1,802 1,839
Related party transactions (€ million)
The Group's related parties include its key management (the Board of Directors,
the Managing Director and the Group Management Board) and companies controlled
by them, the Group's subsidiaries, associates and joint ventures as well as
Kesko Pension Fund.
The following transactions were carried out with related parties:
1-3/2015 1-3/2014
Sales of goods and services 18 20
Purchases of goods and services 5 7
Other operating income 3 3
Other operating expenses 8 7
31.3.2015 31.3.2014
Receivables 8 11
Liabilities 26 19
Fair value hierarchy of financial assets and liabilities (€ million)
Level Level 2 Level 3 31.3.2015
1
Financial assets at fair value through profit
or loss 25 188 213
Derivative financial instruments at fair value
through profit or loss
Derivative financial assets 17 17
Derivative financial liabilities 12 12
Available-for-sale financial assets 89 140 16 245
Fair value hierarchy of financial assets and liabilities (€ million)
Level Level 2 Level 3 31.3.2014
1
Financial assets at fair value through profit
or loss 14 169 183
Derivative financial instruments at fair value
through profit or loss
Derivative financial assets 5 5
Derivative financial liabilities 25 25
Available-for-sale financial assets 61 203 17 280
Level 1 instruments are traded in active markets and their fair values are
directly based on quoted market prices. The fair values of level 2 instruments
are derived from market data. The fair values of level 3 instruments are not
based on observable market data.
Personnel, average and as at 31.3.
Personnel average by
segment 1-3/2015 1-3/2014 Change
Grocery trade 6,065 5,979 86
Home improvement and speciality goods trade 11,336 11,994 -658
Car and machinery trade 1,186 1,228 -42
Common operations 471 417 54
Group total 19,058 19,619 -561
Personnel as at 31.3.*
by segment 2015 2014 Change
Grocery trade 7,858 7,764 94
Home improvement and speciality goods trade 11,900 13,912 -2,012
Car and machinery trade 1,217 1,267 -50
Common operations 514 485 29
Group total 21,489 23,428 -1,939
* total number incl. part-time employees
Group's commitments (€ million)
31.3.2015 31.3.2014 Change, %
Own commitments 207 198 4.3
For associates and joint ventures 65 65 -
For others 10 10 0.2
Lease liabilities for machinery and equipment 26 25 4.3
Lease liabilities for real estate 2,103 2,312 -9.0
Liabilities arising from derivative instruments
(€ million)
Fair value
Values of underlying instruments at 31.3. 31.3.2015 31.3.2014 31.3.2015
Interest rate derivatives
Interest rate swaps 101 202 0.46
Currency derivatives
Forward and future contracts 240 331 5.17
Option agreements 4 - -0.09
Currency swaps 50 100 5.56
Commodity derivatives
Electricity derivatives 18 27 -5.89
Calculation of performance indicators
Return on capital employed*, %
Operating profit x 100 / (Non-current assets + Inventories + Receivables + Other
current assets - Non-interest-bearing liabilities) on average for the reporting
period
Return on capital employed, %, moving 12 mo
Operating profit for prior 12 months x 100 / (Non-current assets + Inventories +
Receivables + Other current assets - Non-interest-bearing liabilities) on
average for 12 months
Return on capital employed excl. non- recurring items*, %
Operating profit excl. non-recurring items x 100 / (Non-current assets +
Inventories + Receivables + Other current assets - Non-interest-bearing
liabilities) on average for the reporting period
Return on capital employed excl. non- recurring items, %, moving 12 months
Operating profit excl. non-recurring items for prior 12 months x 100 / (Non-
current assets + Inventories + Receivables + Other current assets - Non-
interest-bearing liabilities) on average for 12 months
Return on equity*, %
(Profit/loss before tax - Income tax) x 100 / Shareholders' equity
Return on equity, %, moving 12 months
(Profit/loss for prior 12 months before tax - Income tax for prior 12 months) x
100 / Shareholders' equity
Return on equity excl. non-recurring items*, %
(Profit/loss adjusted for non-recurring items before tax - Income tax adjusted
for the tax effect of non-recurring items) x 100 / Shareholders' equity
Return on equity excl. non-recurring items, %, moving 12 months
(Profit/loss for prior 12 months adjusted for non-recurring items before tax -
Income tax for prior 12 months adjusted for the tax effect of non-recurring
items) x 100 / Shareholders' equity
Equity ratio, %
Shareholders' equity x 100 /
(Total assets - Prepayments received)
Earnings/share, diluted
(Profit/loss - Non-controlling interests) /
Average diluted number of shares
Earnings/share, basic
(Profit/loss - Non-controlling interests) /
Average number of shares
Earnings/share excl.
non-recurring items,
basic
(Profit/loss adjusted for non-recurring items - Non-controlling interests) /
Average number of shares
Equity/share
Equity attributable to equity holders of the parent /
Basic number of shares at the balance sheet date
Gearing, %
Interest-bearing net liabilities x 100 /
Shareholders' equity
Interest-bearing net debt
Interest-bearing liabilities - Money market investments - Cash and cash
equivalents
* Indicators for return on capital have been annualised.
K-Group's retail and B2B sales, VAT 0% (preliminary data):
1.1.-31.3.2015
K-Group's retail and € million Change, %
B2B sales
K-Group's grocery trade
K-food stores, Finland 1,072 -1.6
K-citymarket, non-food 131 -0.2
Kespro 183 1.8
K-ruoka, Russia 21 -15.9
K-Group's grocery trade, total 1,406 -1.3
K-Group's home improvement and speciality goods trade
K-rauta and Rautia 172 -4.3
Rautakesko B2B Service 40 -1.2
K-maatalous 89 -2.2
Speciality goods trade, Finland 182 -10.6
Finland, total 484 -6.2
Home improvement and speciality goods trade, other
Nordic countries 166 -4.6
Home improvement and speciality goods trade, the Baltics 92 6.4
Home improvement and speciality goods trade, other
countries 64 -17.5
Home improvement and speciality goods trade, total 805 -5.6
K-Group's car and
machinery trade
VV-Autotalot 95 -5.0
VV-Auto, import 114 -4.1
Konekesko, Finland 37 4.2
Finland total 247 -3.3
Konekesko, other countries 17 -27.3
Car and machinery trade,
total 264 -5.3
Finland total 2,116 -2.5
Other countries, total 359 -6.8
Retail and B2B sales,
total 2,475 -3.1
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