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2013-10-24 08:00:00 CEST 2013-10-24 08:00:59 CEST REGULATED INFORMATION Kesko Oyj - Interim report (Q1 and Q3)Kesko's interim report for the period 1 January to 30 September 2013KESKO CORPORATION STOCK EXCHANGE RELEASE 24.10.2013 AT 09.00 1(31) Financial performance in brief: *The Group's net sales for January-September decreased by 3.8%. *The retail and B2B sales (VAT 0%) of the K-Group (i.e. Kesko and chain stores) for January-September decreased by 4.2%. *The operating profit excluding non-recurring items was €172.0 million (€159.1 million). *The Kesko Group's net sales and operating profit excluding non-recurring items for the next twelve months are expected to remain at the level of the preceding twelve months, unless the overall consumer demand weakens significantly. Key performance indicators 1-9/2013 1-9/2012 7-9/2013 7-9/2012 Net sales, € million 6,953 7,227 2,374 2,449 Operating profit excl. non- recurring items, € million 172.0 159.1 83.6 77.4 Operating profit, € million 180.4 160.2 84.1 77.4 Profit before tax, € million 174.4 158.4 81.5 76.1 Capital expenditure, € million 124.9 274.5 35.4 102.6 Earnings per share, diluted, € 1.15 1.03 0.53 0.50 Earnings per share excl. non-recurring items, basic, € 1.09 1.03 0.53 0.51 30.9.2013 30.9.2012 Equity ratio, % 52.9 51.3 Equity per share, € 22.39 22.33 FINANCIAL PERFORMANCE Net sales and profit for January-September 2013 The Group's net sales for January-September 2013 were €6,953 million, which is 3.8% down on the corresponding period of the previous year (€7,227 million). Especially in Finland, the weakening of the general economic situation and consumer demand contributed to the decline of net sales in the home and speciality goods trade and the building and home improvement trade. In Finland, net sales decreased by 3.3% and in the other countries by 5.8%. Net sales performance in the other countries was materially impacted by the sales decline in the building and home improvement trade in Norway resulting from the retailer changes that took place in the Byggmakker chain in the previous year. International operations accounted for 18.2% (18.6%) of net sales. Net sales grew in the food trade and declined in the other divisions. 1-9/2013 Net sales, € Change, % Operating profit Change, million excl. non- € million recurring items, € million Food trade 3,239 +1.9 155.0 32.3 Home and speciality goods trade 1,018 -8.8 -29.9 -17.2 Building and home improvement trade 2,012 -7.3 26.8 2.7 Car and machinery trade 811 -8.5 30.6 -6.7 Common operations and eliminations -126 +1.9 -10.4 1.8 Total 6,953 -3.8 172.0 12.9 The operating profit excluding non-recurring items for January-September was €172.0 million (€159.1 million). The enhancement measures of the profitability programme had a significant positive impact on the Group's profit performance. Operating expenses decreased by €57.0 million compared to the previous year regardless of store site network expansion and cost inflation. Operating profit was €180.4 million (€160.2 million). The operating profit includes €8.4 million (€1.1 million) of non-recurring items. The non-recurring items include gains on the disposals of properties in the amount of €9.4 million (€2.7 million). The Group's profit before tax for January-September was €174.4 million (€158.4 million). The Group's earnings per share were €1.15 (€1.03). The Group's equity per share was €22.39 (€22.33). In January-September, the K-Group's (i.e. Kesko's and the chain stores') retail and B2B sales (VAT 0%) were €8,629 million, down 4.2% compared to the previous year. The K-Plussa customer loyalty programme gained 54,036 new households in January-September. At the end of September, there was 2,241,943 K-Plussa households and 3.9 (3.9) million K-Plussa cardholders. Net sales and profit for July-September 2013 The Group's net sales for July-September 2013 were €2,374 million, which is 3.1% down on the corresponding period of the previous year (€2,449 million). Net sales decline was mainly attributable to the fall in the net sales of the home and speciality goods trade and the building and home improvement trade. In Finland, net sales decreased by 2.7% and in the other countries by 4.5%. International operations accounted for 20.2% (20.5%) of net sales. 7-9/2013 Net sales, € Change, % Operating profit Change, million excl. non- € million recurring items, € million Food trade 1,095 +1.6 56.0 6.7 Home and speciality goods trade 351 -10.9 -2.2 -3.0 Building and home improvement trade 710 -6.4 23.9 6.0 Car and machinery trade 260 +0.3 9.8 -1.6 Common operations and eliminations -43 +4.6 -4.0 -1.7 Total 2,374 -3.1 83.6 6.3 The operating profit excluding non-recurring items for July-September was €83.6 million (€77.4 million). It represented 3.5% (3.2%) of net sales. Profitability was improved through major cost adjustments in all divisions. Operating profit was €84.1 million (€77.4 million). The operating profit includes €0.5 million (€0.0 million) of non-recurring items. The non-recurring items include gains on the disposals of properties in the amount of €0.4 million (€0.0 million). The Group's profit before tax for July-September was €81.5 million (€76.1 million). The Group's earnings per share were €0.53 (€0.50). In July-September, the K-Group's (i.e. Kesko's and the chain stores') retail and B2B sales (VAT 0%) were €3,011 million, down 3.5% compared to the previous year. Finance In January-September, the cash flow from operating activities was €299.3 million (€206.4 million). The cash flow from investing activities was €-113.3 million (€-275.0 million) including a €16.6 million (€22.6 million) amount of proceeds from the sales of fixed assets. The Group's liquidity remained at an excellent level in January-September. At the end of the period, liquid assets totalled €537 million (€356 million). Interest-bearing liabilities were €568 million (€640 million) and interest- bearing net debt €31 million (€284 million) at the end of September. Equity ratio was 52.9% (51.3%) at the end of the period. In January-September, the Group's net finance costs were €5.4 million (€1.8 million). Interest expense was increased by the €250 million bond taken out in September 2012. In July-September, the cash flow from operating activities stood at €113.6 million (€150.5 million). The cash flow from investing activities was €-33.3 million (€-103.8 million) including a €2.6 million (€1.5 million) amount of proceeds from the sales of fixed assets. In July-September, the Group's net finance costs were €2.6 million (€1.3 million). Taxes The Group's taxes for January-September were €52.3 million (€47.7 million). The effective tax rate was 30.0% (30.1%), affected by loss-making foreign operations. The Group's taxes for July-September were €24.0 million (€22.5 million). The effective tax rate was 29.4% (29.5%). Capital expenditure In January-September, the Group's capital expenditure totalled €124.9 million (€274.5 million), or 1.8% (3.8%) of net sales. Capital expenditure in store sites was €92.5 million (€237.7 million), in IT €16.1 million (€17.9 million) and other capital expenditure was €16.3 million (€18.9 million). Capital expenditure in foreign operations represented 42.6% (19.6%) of total capital expenditure. In July-September, the Group's capital expenditure totalled €35.4 million (€102.6 million), or 1.5% (4.2%) of net sales. Capital expenditure in store sites was €26.1 million (€90.6 million), in IT €3.8 million (€4.4 million) and other capital expenditure was €5.5 million (€7.5 million). Capital expenditure in foreign operations represented 43.7% (29.2%) of total capital expenditure. Kesko's strategic focus areas and profitability programme The key focus areas in Kesko's business operations are to strengthen sales growth and the return on capital in all divisions, to exploit business opportunities in e-commerce and in Russia, and to maintain good solvency and dividend payment capacity. As a result of a weakened general economic situation, tightened competition and an increase in the level of costs, Kesko is implementing the profitability programme announced previously, which aims to ensure price competitiveness and to improve profitability. The profitability programme includes significant measures aimed to increase sales, to enhance purchasing operations and to adjust costs, working capital and capital expenditure. The Group level cost saving target is a total of around €100 million. Cost savings are implemented in all divisions and in all operating countries. Most of the cost savings are expected to be achieved in 2013. By the end of September 2013, Kesko's operating expenses were €1,302 million, representing a net decrease of €57 million (-4.2%) from the previous year regardless of store site network expansion and cost inflation. The measures for staff cost enhancement were implemented as announced previously. In addition to terminations, the reductions included reduced working hours and retirement arrangements. Other significant savings are implemented by adjusting especially marketing and store site expenses and by centralising ICT purchases. In addition, special enhancement measures are targeted at operations with low profitability. In the next few years, capital expenditure will be aligned with funds generated from operations to some €200-300 million per year. Personnel In January-September, the average number of employees in the Kesko Group was 19,478 (19,740) converted into full-time employees. In Finland, the average decrease was 418 people, while outside Finland, there was an increase of 156 people. At the end of September 2013, the number of employees was 23,200 (23,666), of whom 12,156 (12,847) worked in Finland and 11,044 (10,819) outside Finland. Compared to the end of September 2012, there was a decrease of 691 people in Finland and an increase of 225 people outside Finland. In January-September, the Group's staff cost was €449.3 million, showing a 0.5% decrease compared to the previous year. In July-September, staff cost was €139.0 million, down 1.7% compared to the previous year. SEGMENT INFORMATION Seasonal nature of operations The Group's operating activities are affected by seasonal fluctuations. The net sales and operating profits of the reportable segments are not earned evenly throughout the year. Instead, they vary by quarter depending on the characteristics of each segment. Food trade 1-9/2013 1-9/2012 7-9/2013 7-9/2012 Net sales, € million 3,239 3,179 1,095 1,078 Operating profit excl. non- recurring items, € million 155.0 122.7 56.0 49.4 Operating margin excl. non-recurring items, % 4.8 3.9 5.1 4.6 Capital expenditure, € million 67.9 156.7 24.0 60.8 Net sales, € million 1-9/2013 Change, % 7-9/2013 Change, % Sales to K-food stores 2,461 +0.4 820 -0.6 Kespro 600 +2.8 209 +2.0 K-ruoka, Russia 42 - 20 - Others 136 -6.0 47 -2.5 Total 3,239 +1.9 1,095 +1.6 January-September 2013 In the food trade, the net sales for January-September were €3,239 million (€3,179 million), up 1.9%. The grocery sales of K-food stores in Finland remained at the level of the previous year (VAT 0%). In the grocery market, retail prices are estimated to have changed by some +4.5% compared to the previous year (VAT 0%, Kesko's own estimate based on the Consumer Price Index of Statistics Finland), and the total market (VAT 0%) is estimated to have grown by some 3% in January-September compared to the previous year (Kesko's own estimate). The rise of consumer prices in the grocery trade has slowed towards the end of the reporting period. The sales and profitability of Kespro and the food stores in Russia were realised better than expected for the reporting period. In January-September, the operating profit excluding non-recurring items of the food trade was €155.0 million (€122.7 million), or €32.3 million up on the previous year. Profitability was improved by significant savings achieved from enhanced operations and by the adjustment of capital expenditure. Operating profit was €159.7 million (€125.4 million). Non-recurring income included €4.8 million (€2.7 million) of gains on the disposals of properties. The capital expenditure of the food trade in January-September was €67.9 million (€156.7 million), of which €60.0 million (€146.1 million) in stores sites. July-September 2013 In the food trade, the net sales for July-September were €1,095 million (€1,078 million), up 1.6%. The operating profit excluding non-recurring items of the food trade in July- September was €56.0 million (€49.4 million), or €6.7 million up on the previous year. Profit performance was affected by cost savings and a €1.4 million unrealised gain on measurement of derivatives used for hedging electricity purchases. Operating profit was €56.5 million (€49.4 million). Non-recurring income included €0.4 million (€0.0 million) of gains on the disposals of properties. The capital expenditure of the food trade in July-September was €24.0 million (€60.8 million). In July-September 2013, a K-ruoka store was opened in St. Petersburg. Renovations and extensions were carried out in a total of five stores. The most significant store sites being built are a K-citymarket in the Puuvilla shopping centre in Pori and a K-supermarket in downtown Helsinki, in Pohjois- Haaga and Jakomäki, Helsinki, in Tapiola, Espoo, in Jyväskylä, Säkylä, Ikaalinen and Kuhmo. The former K-citymarket Kokkola is being converted into a K- supermarket and K-supermarket Reimari in Parainen is being extended. The objective in Russia is to open, in addition to the existing three stores, one new food store during the rest of 2013. Numbers of stores at 30 Sep. 2013 2012 K-citymarket 80 79 K-supermarket 215 213 K-market (incl. service station stores) 445 451 K-ruoka, Russia 3 - Others 178 206 Home and speciality goods trade 1-9/2013 1-9/2012 7-9/2013 7-9/2012 Net sales, € million 1,018 1,116 351 395 Operating profit excl. non-recurring items, € million -29.9 -12.8 -2.2 0.9 Operating margin excl. non-recurring items, % -2.9 -1.1 -0.6 0.2 Capital expenditure, € million 16.8 47.7 3.0 18.4 Net sales, € million 1-9/2013 Change, % 7-9/2013 Change, % K-citymarket, home and speciality goods 434 -5.3 149 -7.6 Anttila 260 -17.8 89 -19.3 Intersport, Finland 137 +8.2 50 +8.1 Intersport, Russia 14 -30.6 4 -37.9 Indoor 136 -2.1 48 -4.6 Musta Pörssi 22 -45.7 6 -58.7 Kenkäkesko 18 -6.7 7 -10.6 Total 1,018 -8.8 351 -10.9 January-September 2013 In the home and speciality goods trade, the net sales for January-September were €1,018 million (€1,116 million), down 8.8%. Consumer demand weakened and the change in customer behaviour strengthened in the home and speciality goods trade during the reporting period. Sales declined especially in the department store trade. Net sales performance was also impacted by the change in Musta Pörssi's business model and the adjustment of the Intersport store site network in Russia. The sales and profitability of Intersport Finland and Asko and Sotka stood at a good level. The operating profit excluding non-recurring items of the home and speciality goods trade for January-September was €-29.9 million (€-12.8 million), down €17.2 million compared to the previous year. This performance was affected by the weak profit performance of the department store trade. During the reporting period, significant cost savings were implemented. Operating profit was €-25.5 million (€-12.8 million). The capital expenditure of the home and speciality goods trade was €16.8 million (€47.7 million) in January-September. The network of Intersport Russia was restructured from 28 stores to 20 by the end of May. In January-June, 15 Musta Pörssi stores were closed. In addition, 11 Musta Pörssi retailers continued as Musta Pörssi partners from the beginning of June. In March, a new Budget Sport store was opened in Lielahti, Tampere. In May, Anttila opened an extended Anttila department store in Citycenter, Helsinki and a new Kodin1 department store for interior decoration and home goods in Raisio. A Kodin1 department store for interior decoration and home goods was closed in Länsikeskus, Turku. July-September 2013 In the home and speciality goods trade, the net sales for July-September were €351 million (€395 million), down 10.9%. Net sales performance was impacted by the decrease in the sales of the department store trade in particular and the significant adjustment of the store site networks of Musta Pörssi and Intersport Russia. The operating profit excluding non-recurring items of the home and speciality goods trade for July-September was €-2.2 million (€0.9 million). Profitability was negatively impacted by the weakened profit of the department store trade. Operating profit was €-2.1 million (€0.9 million). The capital expenditure of the home and speciality goods trade was €3.0 million (€18.4 million). In July-September, Kookenkä stores were closed in Turku and Pori. Numbers of stores at 30 Sep. 2013 2012 K-citymarket, home and speciality goods* 81 80 Anttila department stores* 31 32 Kodin1 department stores for home goods and interior decoration* 13 12 Intersport 62 58 Budget Sport* 11 9 Asko and Sotka 84 82 Musta Pörssi* 6 31 Kookenkä* 46 47 Anttila, Baltics* 3 3 Intersport, Russia 20 31 Asko and Sotka, Baltics* 10 10 * incl. online stores Building and home improvement trade 1-9/2013 1-9/2012 7-9/2013 7-9/2012 Net sales, € million 2,012 2,170 710 759 Operating profit excl. non-recurring items, € million 26.8 24.1 23.9 17.9 Operating margin excl. non-recurring items, % 1.3 1.1 3.4 2.4 Capital expenditure, € million 26.4 42.4 4.8 16.6 Net sales, € million 1-9/2013 Change, % 7-9/2013 Change, % Rautakesko, Finland 916 -4.2 301 -2.5 K-rauta, Sweden 160 -4.5 57 -5.3 Byggmakker, Norway 370 -24.6 132 -22.1 K-rauta, Estonia 51 +7.0 20 +7.0 K-rauta, Latvia 39 +1.9 15 +0.5 Senukai, Lithuania 191 -1.0 77 +1.5 K-rauta, Russia 206 -3.7 78 -8.8 OMA, Belarus 79 +25.7 30 +18.8 Total 2,012 -7.3 710 -6.4 January-September 2013 In the building and home improvement trade, the net sales for January-September were €2,012 million (€2,170 million), down 7.3%. Excluding the impact of retailer changes in Norway, the decrease in net sales was 1.8%. The trend in construction activity remained weak in Rautakesko's operating area. Sales decrease was most significant in basic building materials. In Finland, the net sales for January-September were €916 million (€956 million), a decrease of 4.2%. The building and home improvement products contributed €625 million to the net sales in Finland, a decrease of 7.9%. The agricultural supplies trade contributed €291 million to net sales, up 4.7%. The retail sales of the K-rauta and Rautia chains in Finland decreased by 4.5% to €790 million (VAT 0%). The sales of Rautakesko B2B Service were down 12.8%. The retail sales of the K-maatalous chain were €352 million (VAT 0%), up 6.5%. In January-September, the net sales from the foreign operations of the building and home improvement trade were €1,095 million (€1,213 million), a decrease of 9.7%. In terms of local currencies and excluding the impact of retailer changes in Norway, the increase in the net sales from foreign operations was 2.2%. In Sweden, net sales in terms of kronas were down 6.1%. In Norway, net sales in terms of krones decreased by 23.1%, which was affected by the changes that took place in the Byggmakker chain last year. A decision has been made to introduce new chain agreements in Norway starting from 1 January 2014 and to simplify the existing company structure. In Russia, net sales in terms of roubles increased by 0.9%. Foreign operations contributed 54.5% (55.9%) to the net sales of the building and home improvement trade. The operating profit excluding non-recurring items of the building and home improvement trade for January-September was €26.8 million (€24.1 million), up €2.7 million compared to the previous year. Due to enhancement measures, profit performance was positive regardless of the decline in sales. Operating expenses were lower than in the previous year regardless of the expansion of the store site network. In the previous year, profit was negatively impacted by obsolete inventories and trade receivables written off. Operating profit was €25.9 million (€22.4 million). In January-September, the capital expenditure of the building and home improvement trade totalled €26.4 million (€42.4 million), of which 45.3% (52.0%) abroad. Capital expenditure in store sites represented 91.6% of total capital expenditure. July-September 2013 In the building and home improvement trade, the net sales for July-September were €710 million (€759 million), down 6.4%. Excluding the impact of retailer changes in Norway, net sales decreased by 1.5%. In Finland, net sales were €301 million (€309 million), a decrease of 2.5%. The building and home improvement products contributed €208 million to the net sales in Finland, a decrease of 4.7%. The agricultural supplies trade contributed €93 million to net sales, up 2.8%. The retail sales of the K-rauta and Rautia chains in Finland decreased by 2.5% to €309 million (VAT 0%) in July-September. The sales of Rautakesko B2B Service were down 7.0%. The retail sales of the K-maatalous chain were €115 million (VAT 0%), up 5.7%. The net sales from the foreign operations of the building and home improvement trade were €409 million (€450 million), a decrease of 9.1%. In terms of local currencies and excluding the impact of retailer changes in Norway, the increase in the net sales from foreign operations was 4.3%. In Sweden, net sales in terms of kronas were down 2.9%. In Norway, net sales in terms of krones decreased by 16.6%, which was affected by the changes that took place in the Byggmakker chain last year. In Russia, net sales in terms of roubles decreased by 1.3%. Foreign operations contributed 57.6% (59.3%) to the net sales of the building and home improvement trade. The operating profit excluding non-recurring items of the building and home improvement trade for July-September was €23.9 million (€17.9 million), up €6.0 million compared to the previous year. Due to enhancement measures, operating expenses were lower than in the previous year regardless of the expansion of the store site network. Operating profit was €23.9 million (€17.9 million). The capital expenditure of the building and home improvement trade totalled €4.8 million (€16.6 million), of which 36.3% (47.9%) abroad. Numbers of stores at 30 Sep. 2013 2012 K-rauta* 42 42 Rautia* 99 102 K-maatalous* 83 86 K-rauta, Sweden 21 22 Byggmakker, Norway 91 106 K-rauta, Estonia 8 9 K-rauta, Latvia 8 8 Senukai, Lithuania 17 17 K-rauta, Russia 14 14 OMA, Belarus 9 7 * In 2013, 1 K-rauta store and 47 Rautia stores also operated as K-maatalous stores in 2012, 1 K-rauta store and 50 Rautia stores also operated as K-maatalous stores. Car and machinery trade 1-9/2013 1-9/2012 7-9/2013 7-9/2012 Net sales, € million 811 887 260 259 Operating profit excl. non-recurring items, € million 30.6 37.3 9.8 11.4 Operating margin excl. non-recurring items, % 3.8 4.2 3.8 4.4 Capital expenditure, € million 11.8 23.4 3.0 4.7 Net sales, € million 1-9/2013 Change, % 7-9/2013 Change, % VV-Auto 569 -8.6 172 +2.3 Konekesko 243 -8.6 88 -3.6 Total 811 -8.5 260 +0.3 January-September 2013 In January-September, the net sales of the car and machinery trade were €811 million (€887 million), down 8.5%. The decline in net sales was affected by the weak market performance of the car and machinery trade in Finland. VV-Auto's net sales for January-September were €569 million (€622 million), a decrease of 8.6%. In January-September, the combined market performance of first time registered passenger cars and vans was -9.3%. In January-September, the combined market share of passenger cars and vans imported by VV-Auto was 20.5% (20.4%). Volkswagen was the market leader in passenger cars and vans. Konekesko's net sales for January-September were €243 million (€265 million), down 8.6% compared to the previous year. Net sales in Finland were €142 million, down 17.1%. The net sales from Konekesko's foreign operations were €102 million, up 5.8%. In January-September, the operating profit excluding non-recurring items of the car and machinery trade was €30.6 million (€37.3 million), down €6.7 million compared to the previous year. The adjustment of costs and inventories of the car and machinery trade was implemented as planned. Regardless of the weakened market situation, the return on capital of the car trade remained at an excellent level. The operating profit for January-September was €30.6 million (€37.3 million). The capital expenditure of the car and machinery trade for January-September was €11.8 million (€23.4 million). July-September 2013 The net sales of the car and machinery trade for July-September were €260 million (€259 million), up 0.3%. VV-Auto's net sales for July-September were €172 million (€168 million), an increase of 2.3%. In July-September, the combined market share of passenger cars and vans imported by VV-Auto was 20.2% (21.2%). Konekesko's net sales for July-September were €88 million (€92 million), down 3.6% compared to the previous year. In July-September, the operating profit excluding non-recurring items of the car and machinery trade was €9.8 million (€11.4 million), down €1.6 million compared to the previous year. The operating profit for July-September was €9.8 million (€11.4 million). The capital expenditure of the car and machinery trade for July-September was €3.0 million (€4.7 million). Numbers of stores at 30 Sep. 2013 2012 VV-Auto, retail trade 10 10 Konekesko 1 1 Changes in the Group composition No significant changes took place in the Group composition during the reporting period. Shares, securities market and Board authorisations At the end of September 2013, the total number of Kesko Corporation shares was 99,700,654, of which 31,737,007, or 31.8%, were A shares and 67,963,647, or 68.2%, were B shares. At 30 September 2013, Kesko Corporation held 546,025 own B shares as treasury shares. These treasury shares accounted for 0.80% of the number of B shares and 0.55% of the total number of shares, and 0.14% of votes carried by all shares of the company. The total number of votes carried by all shares was 385,333,717. Each A share entitles to ten (10) votes and each B share to one (1) vote. The company cannot vote with treasury shares and no dividend is paid on them. At the end of September 2013, Kesko Corporation's share capital was €197,282,584. During the reporting period, the number of B shares was increased five times to account for the shares subscribed for with the options based on the 2007 option scheme. The increases were made on 11 February 2013 (74,600 B shares), 2 May 2013 (135,861 B shares), 5 June 2013 (592,619 B shares), 30 July 2013 (116,773 B shares) and 30 September 2013 (68,461 B shares) and announced in a stock exchange notification on the same days. The shares subscribed for were listed for public trading on NASDAQ OMX Helsinki (Helsinki Stock Exchange) with the old B shares on 12 February 2013, 3 May 2013, 6 June 2013, 31 July 2013 and 1 October 2013. The subscription price of €17,938,505.76 received by the company was recorded in the reserve of invested non-restricted equity. The price of a Kesko A share quoted on NASDAQ OMX Helsinki was €24.39 at the end of 2012, and €23.40 at the end of September 2013, representing a decrease of 4.1%. Correspondingly, the price of a B share was €24.77 at the end of 2012, and €22.18 at the end of September 2013, representing a decrease of 10.5%. In January-September, the highest A share price was €26.85 and the lowest was €22.48. For B share, they were €25.87 and €20.96 respectively. In January- September, the Helsinki stock exchange (OMX Helsinki) All-Share index was up 18.3% and the weighted OMX Helsinki CAP index 18.3%. Correspondingly, the Retail Index was down 9.3%. At the end of September 2013, the market capitalisation of A shares was €743 million, while that of B shares was €1,495 million, excluding the shares held by the parent company. The combined market capitalisation of A and B shares was €2,238 million, a decrease of €180 million from the end of 2012. In January- September 2013, a total of 0.8 million (1.3 million) A shares was traded on the Helsinki stock exchange, down 40%. The exchange value of A shares was €19 million. The total number of B shares traded was 31.4 million (56.8 million), down 45%. The exchange value of B shares was €739 million. The company operates the 2007 option scheme for management and other key personnel, under which the share subscription period of 2007B share options ran from 1 April 2011 to 30 April 2013 (subscription period has expired), and that of 2007C share options runs from 1 April 2012 to 30 April 2014. The share options have been included on the official list of the Helsinki stock exchange since the beginning of the share subscription periods. During the reporting period, a total of 381,332 2007B share options were traded at a total value of €923,801, and a total of 263,497 2007C share options were traded at a total value of €2,960,236. The share subscription period of 2007A share options under the option scheme expired and their trading on the official list ended in 2012. The Board has the authority, granted by the Annual General Meeting of 16 April 2012 and valid until 30 June 2015, to issue a total maximum of 20,000,000 new B shares. The shares can be issued against payment for subscription by shareholders in a directed issue in proportion to their existing shareholdings regardless of whether they consist of 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, investments 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 against non- cash consideration and the right to make decisions on other matters concerning share issuances. In addition, the Board has the authority, granted by the Annual General Meeting of 8 April 2013 and valid until 30 September 2014, to decide on the acquisition of a maximum of 500,000 own B shares, and the authority, valid until 30 June 2017, to decide on the issuance of a maximum of 1,000,000 own B shares held as treasury shares by the company. On 4 February 2013, based on the authority to issue own shares valid prior to the Annual General Meeting of 8 April 2013 and the fulfilment of the vesting criteria of the 2012 vesting period of Kesko's three-year share-based compensation plan, the Board decided to grant own B shares held as treasury shares by the company to people included in the target group of the 2012 vesting period. The issuance of the total of 66,331 own B shares, referred to above, was announced in a stock exchange release on 5 February 2013 and on 5 April 2013. The latter release also announced that 866 own B shares had been returned to the company without consideration. During the reporting period, a total of 3,765 shares granted based on the fulfilment of the vesting criteria of the 2011 and 2012 vesting periods were returned to the company in accordance with the terms and conditions of the share-based compensation plan. The shares returned during the reporting period were announced in the stock exchange release referred to above and in stock exchange notifications on 8 May 2013, 20 May 2013, 18 June 2013, 19 July 2013 and 20 August 2013. Further information on the Board's authorisations is available at www.kesko.fi. At the end of September 2013, the number of shareholders was 43,500, which was 1,054 less than at the end of 2012. At the end of September, foreign ownership of all shares was 23%. At the end of September, foreign ownership of B shares was 33%. Flagging notifications Kesko Corporation did not receive flagging notifications during the reporting period. Key events during the reporting period Changes, effective 5 February 2013, took place in Kesko's Corporate Management Board. Arja Talma, M.Sc. (Econ.), eMBA, 50, was appointed Senior Vice President responsible for the Kesko Group's store sites and investments. Terho Kalliokoski, M.Sc. (Econ.), 51, was appointed Rautakesko Ltd's President. Jorma Rauhala, M.Sc. (Econ.), 47, was appointed Kesko Food Ltd's President. Starting from 5 February 2013, Kesko's Corporate Management Board is composed of Matti Halmesmäki, Chair; Jorma Rauhala, food trade; Minna Kurunsaari, home and speciality goods trade and Kesko's customer information and e-commerce projects; Terho Kalliokoski, building and home improvement trade; Pekka Lahti, car and machinery trade; Arja Talma, store sites and investments; Jukka Erlund, CFO, accounting, finance and IT management; and Matti Mettälä, human resources and stakeholder relations. (Stock exchange release on 5 February 2013) On 5 April 2013, Kesko transferred a total of 66,331 own B shares (KESBV) held by the company as treasury shares to the about 150 Kesko management employees and other named key persons included in the target group of the 2012 vesting period of Kesko's three-year share-based compensation plan. In the same context, 866 B shares, originally transferred to a person included in the target group of the 2011 vesting period of the share-based compensation plan, were returned to Kesko without consideration. After the transfer and return of shares, Kesko held 543,126 own B shares as treasury shares. (Stock exchange release on 5 April 2013) With effect from 1 January 2013, the Kesko Group adopted the revised IAS 19 Employee benefits standard. The amendment had an impact on the Kesko Group's pension costs and profit, as well as the pension assets and equity on the balance sheet. Resulting from the amendment, Kesko's consolidated income statement, consolidated statement of financial position and segment information for 2012 were updated in compliance with the requirements prescribed in the revised standard. (Stock exchange release on 11 April 2013) Events after the reporting period A total of 921 B shares (KESBV), initially transferred to a person included in the target groups of the 2011 - 2012 vesting periods of Kesko's three-year share-based compensation plan, have been returned to Kesko without consideration. After the return of the shares, Kesko holds 546,946 own B shares as treasury shares. (Stock exchange release on 9 October 2013) Resolutions of the 2013 Annual General Meeting and decisions of the Board's organisational meeting Kesko Corporation's Annual General Meeting, held on 8 April 2013, adopted the financial statements for 2012 and discharged the Board members and the Managing Director from liability. The General Meeting also resolved, as proposed by the Board, to distribute €1.20 per share, or a total of €117,892,576.80 as dividends. The dividend pay date was 18 April 2013. The General Meeting resolved that the number of Board members is unchanged at seven, elected PricewaterhouseCoopers Oy as the company's auditor, with APA Johan Kronberg as the auditor with principal responsibility, and approved the Board's proposals for amending Article 9 of the Articles of Association concerning the delivery of the notice of a General Meeting, for authorising the Board to acquire a maximum of 500,000 own B shares and to issue a maximum of 1,000,000 own B shares held as treasury shares by the company. The General Meeting also approved the Board's proposal that it be authorised to decide on the donations in a total maximum of €300,000 for charitable or corresponding purposes until the Annual General Meeting to be held in 2014. The organisational meeting of the company's Board of Directors, held after the Annual General Meeting, kept the compositions of the Audit Committee and the Remuneration Committee unchanged. The resolutions of the Annual General Meeting and the decisions of the Board's organisational meeting were announced in more detail in stock exchange releases on 8 April 2013. Responsibility In September, Kesko was included in the Dow Jones Sustainability Indices DJSI World and DJSI Europe for the 11th time. Kesko's total score increased from the previous year and Kesko received the highest score in its sector in economic dimension. Kesko was selected for the new UN Global Compact 100 stock index composed of 100 companies selected based on a responsibility evaluation from among the Global Compact signatories. Shopping centre Veturi in Kouvola achieved a BREEAM Very Good Certificate. Shopping centre Veturi reached an especially high score in the energy category of the assessment. Veturi, opened in autumn 2012, is one of Kesko's biggest shopping centre projects ever. Risk management The Kesko Group has an established and comprehensive risk management process. Risks and their management are assessed in the Group regularly and they are reported to the Group's management. Kesko's risk management and risks associated with business operations are described in more detail on Kesko's website in the section Corporate Governance. The most significant near-future risks in Kesko's business operations are related to the general economic development, the financial market situation in the euro zone and the trend of consumer confidence as well as their impact on Kesko's sales and profit performance. In 2013, no material changes are estimated to have taken place in the risks described in the 2012 report by Kesko's Board of Directors and the financial statements, or in the risks described on Kesko's website. The risks and uncertainties related to financial performance are described in the section future outlook of this release. Future outlook Estimates of the future outlook for the Kesko Group's net sales and operating profit excluding non-recurring items are given for the 12 months following the reporting period (10/2013-9/2014) in comparison with the 12 months preceding the reporting period (10/2012-9/2013). Resulting from the problems of European national economies, the future prospects for the general economic situation and consumer demand continue to be characterised by significant uncertainty. In consequence of weakened employment and consumers' purchasing power, the growth prospects for the trading sector remain weak. In the Finnish grocery trade, the market is expected to remain stable. As a result of the weakened economic situation, the demand in the home and speciality goods trade, the building and home improvement trade and the car and machinery trade is expected to remain weak. The Kesko Group's net sales and the operating profit excluding non-recurring items for the next twelve months are expected to remain at the level of the preceding twelve months, unless the overall consumer demand weakens significantly. Helsinki, 23 October 2013 Kesko Corporation Board of Directors The information in the interim report release 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, Corporate Controller, telephone +358 105 322 338. A Finnish-language webcast from the media and analyst briefing on the interim report can be accessed at www.kesko.fi at 11.00. An English-language web conference on the interim report will be held today at 14.30 (Finnish time). The web conference login is available on Kesko's website at www.kesko.fi. Kesko Corporation's financial statements release will be published on 4 February 2014. In addition, the Kesko Group's sales figures are published each month. News releases and other company information are available on Kesko's website at www.kesko.fi. KESKO CORPORATION Merja Haverinen Vice President, Corporate Communications 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 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 accounting principles as the annual financial statements for 2012, with the exception of the following changes due to the adoption of new and revised IFRS standards and IFRIC interpretations: The amendment to the IAS 19 Employee benefits standard changes the determination of the return on defined benefit pension plan assets. According to the revised standard, the rate used to discount the retirement benefit obligation is used as the return on assets in place of the expected long-term return on the assets used previously. Due to the amendment, the net return on defined benefit pension plans recognised in the consolidated income statement decreases. In addition, the amendment to the IAS 19 Employee benefits standard eliminates the possibility to apply the so-called "corridor approach" to the calculation of retirement benefits classified as defined benefit pension plans, which follows that the changes in the calculation assumptions used for measuring the pension obligation and the covering assets are recognised in pension assets and equity in the balance sheet. The impact of the amendment was announced in a separate stock exchange release on 11 April 2013. In addition, the Group has adopted the following standards and amendments to standards issued for application: -IAS 1 Presentation of financial statements (amendment) -IFRS 13 Fair value measurement -IFRS 7 Financial instruments: Disclosures (amendment). Consolidated income statement (€ million), condensed 1-9/ 1-9/ Change,% 7-9/ 7-9/ Change,% 1-12/ 2013 2012 2013 2012 2012 Net sales 6,953 7,227 -3.8 2,374 2,449 -3.1 9,686 Cost of goods sold -6,020 -6,259 -3.8 -2,055 -2,121 -3.1 -8,367 Gross profit 933 968 -3.6 318 328 -3.1 1,319 Other operating income 549 551 -0.3 182 183 -0.3 747 Staff cost -449 -452 -0.5 -139 -141 -1.7 -608 Depreciation and impairment charges -114 -113 0.4 -37 -37 0.7 -158 Other operating expenses -739 -794 -6.9 -240 -255 -6.0 -1,088 Operating profit 180 160 12.6 84 77 8.7 212 Interest income and other finance income 14 13 9.5 4 3 37.0 21 Interest expense and other finance costs -16 -12 36.9 -5 -3 57.6 -17 Exchange differences -4 -3 20.2 -1 -1 47.8 -5 Income from associates -1 0 (..) 0 0 (..) -1 Profit before tax 174 158 10.1 81 76 7.1 210 Income tax -52 -48 9.7 -24 -22 6.7 -75 Net profit for the period 122 111 10.4 57 54 7.2 136 Attributable to Owners of the parent 114 101 12.0 53 50 5.9 124 Non-controlling interests 8 9 -7.6 5 4 24.0 11 Earnings per share (€) for profit attributable to equity holders of the parent Basic 1.15 1.03 11.4 0.53 0.51 5.3 1.27 Diluted 1.15 1.03 11.3 0.53 0.50 5.3 1.26 Consolidated statement of comprehensive income (€ million) 1-9/ 1-9/ Change,% 7-9/ 7-9/ Change,% 1-12/ 2013 2012 2013 2012 2012 Net profit for the period 122 111 10.4 57 54 7.2 136 Items that will not be reclassified to profit or loss Actuarial gains and losses 7 9 -20.5 7 0 - 1 Actuarial gains and losses, tax -2 -2 -20.5 -2 0 - 0 Items that may be reclassified subsequently to profit or loss Exchange differences on translating foreign operations -8 2 (..) -2 -1 24.5 0 Adjustment for hyperinflation 1 3 -64.2 -1 2 (..) 4 Cash flow hedge revaluation -1 -1 -17.5 2 0 (..) -3 Revaluation of available-for- sale financial assets -3 12 (..) 1 13 -94.7 9 Other items 0 0 12.5 0 0 -100.0 0 Tax relating to components of other comprehensive income 0 -3 (..) -1 -3 -77.1 1 Total other comprehensive income for the period, net of tax -6 20 (..) 6 10 -45.7 11 Total comprehensive income for the period 116 131 -11.5 63 64 -1.3 147 Attributable to Owners of the parent 108 120 -10.2 59 60 -0.5 133 Non-controlling interests 8 11 -26.0 4 4 -12.6 14 (..) Change over 100% Consolidated statement of financial position (€ million), condensed 30.9.2013 30.9.2012 Change, % 31.12.2012 ASSETS Non-current assets Tangible assets 1,661 1,647 0.8 1,678 Intangible assets 187 193 -3.1 192 Investments in associates and other financial assets 105 86 22.5 105 Loans and receivables 83 85 -2.2 91 Pension assets 163 165 -0.8 154 Total 2,198 2,174 1.1 2,220 Current assets Inventories 776 838 -7.3 814 Trade receivables 700 763 -8.3 703 Other receivables 160 309 -48.2 153 Financial assets at fair value through profit or loss 174 98 77.8 137 Available-for-sale financial assets 260 176 47.9 249 Cash and cash equivalents 103 82 25.7 103 Total 2,173 2,266 -4.1 2,160 Non-current assets held for sale 1 1 -49.7 2 Total assets 4,372 4,441 -1.6 4,382 30.9.2013 30.9.2012 Change, % 31.12.2012 EQUITY AND LIABILITIES Equity 2,218 2,190 1.3 2,206 Non-controlling interests 70 65 8.2 67 Total equity 2,289 2,255 1.5 2,272 Non-current liabilities Interest-bearing liabilities 358 457 -21.7 450 Non-interest-bearing liabilities 9 10 -10.7 10 Deferred tax liabilities 84 95 -11.6 81 Pension obligations 2 2 -7.3 2 Provisions 20 10 96.9 21 Total 472 574 -17.7 564 Current liabilities Interest-bearing liabilities 210 183 15.2 174 Trade payables 911 951 -4.2 804 Other non-interest-bearing liabilities 454 452 0.4 529 Provisions 35 26 33.7 40 Total 1,611 1,612 -0.1 1,546 Total equity and liabilities 4,372 4,441 -1.6 4,382 Consolidated statement of changes in equity (€ million) Cur- rency Non- trans- Re- cont- Share lation tained rolling capi- Re- differ- Revaluation Treasury earn- inter- tal serves ences reserve shares ings ests Total Balance at 1.1.2012 197 441 -3 3 -22 1,567 58 2,241 Shares subscribed with options 0 0 Share-based payments 2 0 3 Dividends -118 -4 -122 Other changes 0 2 2 Net profit for the period 101 9 111 Other comprehen-sive income Items not classified to profit or loss Actuarial gains/losses 9 9 Actuarial gains/losses, tax -2 -2 Items that may be reclassified subsequently to profit or loss Exchange differences on translating foreign operations 0 3 0 0 2 Adjustment for hyperinflation 0 3 3 Cash flow hedge revaluation -1 -1 Revaluation of available-for- sale financial assets 12 12 Tax relating to other comprehen-sive income -3 -3 Total other comprehen-sive income 0 3 9 7 2 20 Balance at 30.9.2012 197 441 -1 11 -20 1,561 65 2,255 Balance at 1.1.2013 197 442 -2 10 -19 1,578 67 2,272 Shares subscribed with options 18 18 Share-based payments 2 0 2 Dividend -118 -5 -122 Other changes 0 3 3 Net profit for the period 114 8 122 Other comprehen-sive income Items not classified to profit or loss Actuarial gains/losses 7 7 Actuarial gains/losses, tax -2 -2 Items that may be reclassified subsequently to profit or loss Exchange differences on translating foreign operations 0 -7 -1 -8 Adjustment for hyperinflation 0 1 1 Cash flow hedge revaluation -1 -1 Revaluation of available-for- sale financial assets -3 -3 Other items 0 0 Tax relating to other comprehen-sive income 0 0 Total other comprehensive income 0 -7 -4 6 0 -6 Balance at 30.9.2013 197 460 -10 6 -18 1,583 70 2,289 Consolidated statement of cash flows (€ million), condensed 1-9/ 1-9/ Change,% 7-9/ 7-9/ Change,% 1-12/ 2013 2012 2013 2012 2012 Cash flows from operating activities Profit before tax 174 158 10.1 81 76 7.1 210 Planned depreciation 112 112 0.6 37 37 0.8 155 Finance income and costs 5 2 (..) 3 1 93.3 1 Other adjustments -2 12 (..) 2 3 -13.8 103 Change in working capital Current non-interest-bearing operating receivables, increase (-)/decrease (+) -5 -57 -91.3 112 67 66.0 5 Inventories, increase (-)/decrease (+) 29 35 -18.7 29 35 -18.1 57 Current non-interest-bearing liabilities, increase (+)/decrease (-) 47 5 (..) -123 -50 (..) -70 Financial items and tax -61 -61 0.3 -28 -19 41.9 -79 Net cash from operating activities 299 206 45.0 114 150 -24.5 382 Cash flows from investing activities Investing activities -130 -294 -55.7 -36 -103 -64.8 -411 Sales of fixed assets 17 23 -26.2 3 1 78.9 24 Increase in non-current receivables 0 -4 (..) 0 -2 (..) -4 Net cash used in investing activities -113 -275 -58.8 -33 -104 -67.9 -391 Cash flows from financing activities Interest-bearing liabilities, increase (+)/decrease (-) -36 238 (..) -17 76 (..) 230 Current interest-bearing receivables, increase (-)/decrease (+) 0 -49 (..) -2 -14 -88.2 37 Dividends paid -122 -122 0.3 -5 -4 3.4 -123 Equity increase 18 0 (..) 2 - - 1 Short-term money market investments, increase (-)/ decrease (+) -62 38 (..) -62 -47 32.3 -2 Other items 3 -11 (..) 4 -3 (..) -14 Net cash used in financing activities -199 94 (..) -78 9 (..) 130 Change in cash and cash equivalents -13 26 (..) 2 55 -96.5 121 Cash and cash equivalents and current portion of available-for- sale financial assets at 1 Jan. 352 231 52.5 337 202 66.4 231 Currency translation difference adjustment and revaluation -1 0 (..) 0 0 (..) 0 Cash and cash equivalents and current portion of available-for- sale financial assets at 30 Sep. 338 258 31.2 338 258 31.2 352 (..) Change over 100% Group's performance indicators 1-9/2013 1-9/2012 Change, pp 1-12/2012 Return on capital employed, % 9.8 8.4 1.4 8.3 Return on capital employed, %, moving 12 mo 9.3 9.4 -0.1 8.3 Return on capital employed excl. non-recurring items, % 9.3 8.4 1.0 9.0 Return on capital employed excl. non-recurring items, %, moving 12 mo 9.7 9.3 0.4 9.0 Return on equity, % 7.1 6.6 0.6 6.0 Return on equity, %, moving 12 mo 6.5 7.5 -1.0 6.0 Return on equity excl. non- recurring items, % 6.8 6.5 0.3 6.9 Return on equity excl. non- recurring items, %, moving 12 mo 7.0 7.4 -0.3 6.9 Equity ratio, % 52.9 51.3 1.6 52.5 Gearing, % 1.4 12.6 -11.2 6.0 Change, % Capital expenditure, € million 124.9 274.5 -54.5 378.3 Capital expenditure, % of net sales 1.8 3.8 -52.7 3.9 Earnings per share, basic, € 1.15 1.03 11.4 1.27 Earnings per share, diluted, € 1.15 1.03 11.3 1.26 Earnings per share excl. non- recurring items, basic, € 1.09 1.03 6.2 1.47 Cash flow from operating activities, € million 299 206 45.0 382 Cash flow from investing activities, € million -113 -275 -58.8 -391 Equity per share, € 22.39 22.33 0.2 22.48 Interest-bearing net debt 31 284 -89.1 135 Diluted number of shares, average for the reporting period 99,013 98,449 0.6 98,472 Personnel, average 19,478 19,740 -1.3 19,741 Group's performance 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/ indicators by quarter 2012 2012 2012 2012 2013 2013 2013 Net sales, € million 2,318 2,460 2,449 2,459 2,159 2,420 2,374 Change in net sales, % 10.2 -0.5 1.9 -0.9 -6.9 -1.6 -3.1 Operating profit, € million 25.1 57.7 77.4 51.8 19.2 77.0 84.1 Operating margin, % 1.1 2.3 3.2 2.1 0.9 3.2 3.5 Operating profit excl. non- recurring items, € million 22.3 59.4 77.4 70.9 18.6 69.8 83.6 Operating margin excl. non-recurring items, % 1.0 2.4 3.2 2.9 0.9 2.9 3.5 Finance income/costs, € million -0.1 -0.3 -1.3 1.1 -3.3 0.4 -2,6 Profit before tax, € million 25.0 57.3 76.1 52.1 15.8 77.2 81.5 Profit before tax, % 1.1 2.3 3.1 2.1 0.7 3.2 3.4 Return on capital employed, % 4.1 8.9 11.9 8.0 3.1 12.3 14.2 Return on capital employed excl. non- recurring items, % 3.6 9.2 11.9 10.9 3.0 11.1 14.1 Return on equity, % 3.1 7.0 9.6 4.4 1.9 9.5 10.2 Return on equity excl. non-recurring items, % 2.8 7.3 9.6 8.0 1.8 8.6 10.1 Equity ratio, % 52.8 51.2 51.3 52.5 51.7 50.5 52.9 Capital expenditure, € million 104.1 67.8 102.6 103.8 41.5 48.1 35.4 Earnings per share, diluted, € 0.16 0.37 0.50 0.23 0.11 0.50 0.53 Equity per share, € 22.56 21.72 22.33 22.48 22.62 21.79 22.39 Segment information Net sales by segment 1-9/ 1-9/ Change, 7-9/ 7-9/ Change, 1-12/ (€ million) 2013 2012 % 2013 2012 % 2012 Food trade, Finland 3,197 3,179 0.6 1,076 1,078 -0.2 4,308 Food trade, other countries* 42 - - 20 - - 3 Food trade total 3,239 3,179 1.9 1,095 1,078 1.6 4,311 - of which intersegment trade 127 129 -1.5 44 43 1.3 172 Home and speciality goods trade, Finland 993 1,083 -8.3 344 384 -10.4 1,557 Home and speciality goods trade, other countries* 25 33 -24.7 7 11 -30.4 45 Home and speciality goods trade total 1,018 1,116 -8.8 351 395 -10.9 1,603 - of which intersegment trade 12 12 -2.9 4 4 6.3 18 Building and home improvement trade, Finland 916 956 -4.2 301 309 -2.5 1,229 Building and home improvement trade, other countries* 1,095 1,213 -9.7 409 450 -9.1 1,598 Building and home improvement trade total 2,012 2,170 -7.3 710 759 -6.4 2,827 - of which intersegment trade 0 1 (..) 0 0 (..) 0 Car and machinery trade, Finland 709 791 -10.3 218 219 -0.4 998 Car and machinery trade, other countries* 102 96 6.0 43 41 4.3 116 Car and machinery trade total 811 887 -8.5 260 259 0.3 1,114 - of which intersegment trade 1 1 0.0 0 0 (..) 1 Common operations and eliminations -126 -124 1.9 -43 -41 4.6 -169 Finland total 5,689 5,885 -3.3 1,895 1,948 -2.7 7,924 Other countries total* 1,264 1,342 -5.8 479 502 -4.5 1,762 Group total 6,953 7,227 -3.8 2,374 2,449 -3.1 9,686 * net sales in countries other than Finland (..) Change over 100% Operating profit by segment (€ 1-9/ 1-9/ 7-9/ 7-9/ 1-12/ million) 2013 2012 Change 2013 2012 Change 2012 Food trade 159.7 125.4 34.4 56.5 49.4 7.1 170.2 Home and speciality goods trade -25.5 -12.8 -12.7 -2.1 0.9 -3.0 0.0 Building and home improvement trade 25.9 22.4 3.5 23.9 17.9 6.0 11.6 Car and machinery trade 30.6 37.3 -6.7 9.8 11.4 -1.6 41.9 Common operations and eliminations -10.4 -12.1 1.7 -4.0 -2.2 -1.7 -11.8 Group total 180.4 160.2 20.2 84.1 77.4 6.7 212.0 Operating profit excl. non-recurring items 1-9/ 1-9/ 7-9/ 7-9/ 1-12/ by segment (€ million) 2013 2012 Change 2013 2012 Change 2012 Food trade 155.0 122.7 32.3 56.0 49.4 6.7 167.5 Home and speciality goods trade -29.9 -12.8 -17.2 -2.2 0.9 -3.0 19.6 Building and home improvement trade 26.8 24.1 2.7 23.9 17.9 6.0 13.3 Car and machinery trade 30.6 37.3 -6.7 9.8 11.4 -1.6 41.9 Common operations and eliminations -10.4 -12.2 1.8 -4.0 -2.2 -1.7 -12.2 Group total 172.0 159.1 12.9 83.6 77.4 6.3 230.0 Operating margin excl. non-recurring 1-9/ 1-9/ 7-9/ 7-9/ 1-12/ Moving 12 mo items by segment, % 2013 2012 Change pp 2013 2012 Change pp 2012 9/2013 Food trade 4.8 3.9 0.9 5.1 4.6 0.5 3.9 4.6 Home and speciality goods trade -2.9 -1.1 -1.8 -0.6 0.2 -0.8 1.2 0.2 Building and home improvement trade 1.3 1.1 0.2 3.4 2.4 1.0 0.5 0.6 Car and machinery trade 3.8 4.2 -0.4 3.8 4.4 -0.6 3.8 3.4 Group total 2.5 2.2 0.3 3.5 3.2 0.4 2.4 2.6 Capital employed by segment, cumulative 1-9/ 1-9/ 7-9/ 7-9/ 1-12/ average (€ million) 2013 2012 Change 2013 2012 Change 2012 Food trade 833 745 87 811 774 36 763 Home and speciality goods trade 459 510 -52 424 529 -105 514 Building and home improvement trade 745 764 -19 712 757 -47 760 Car and machinery trade 157 190 -33 144 177 -33 188 Common operations and eliminations 268 330 -63 284 351 -67 327 Group total 2,461 2,540 -79 2,374 2,590 -217 2,552 Return on capital employed excl. non- recurring items by 1-9/ 1-9/ 7-9/ 7-9/ 1-12/ Moving segment, % 2013 2012 Change pp 2013 2012 Change pp 2012 12 mo 9/2013 Food trade 24.8 21.9 2.9 27.7 25.5 2.1 21.9 24.2 Home and speciality goods trade -8.7 -3.3 -5.4 -2.0 0.7 -2.7 3.8 0.5 Building and home improvement trade 4.8 4.2 0.6 13.4 9.4 4.0 1.7 2.1 Car and machinery trade 26.0 26.2 -0.2 27.2 25.8 1.4 22.3 21.6 Group total 9.3 8.4 1.0 14.1 11.9 2.1 9.0 9.7 Capital expenditure by segment (€ 1-9/ 1-9/ 7-9/ 7-9/ 1-12/ million) 2013 2012 Change 2013 2012 Change 2012 Food trade 68 157 -89 24 61 -37 200 Home and speciality goods trade 17 48 -31 3 18 -15 61 Building and home improvement trade 26 42 -16 5 17 -12 63 Car and machinery trade 12 23 -12 3 5 -2 27 Common operations and eliminations 2 4 -2 1 2 -2 27 Group total 125 274 -150 35 103 -67 378 Segment information by quarter Net sales by segment 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/ (€ million) 2012 2012 2012 2012 2013 2013 2013 Food trade 1,010 1,091 1,078 1,132 1,045 1,099 1,095 Home and speciality goods trade 369 352 395 487 345 322 351 Building and home improvement trade 629 782 759 657 562 740 710 Car and machinery trade 353 274 259 227 249 301 260 Common operations and eliminations -42 -41 -41 -45 -42 -41 -43 Group total 2,318 2,460 2,449 2,459 2,159 2,420 2,374 Operating profit by segment 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/ (€ million) 2012 2012 2012 2012 2013 2013 2013 Food trade 37.4 38.6 49.4 44.8 48.2 55.1 56.5 Home and speciality goods trade -12.9 -0.7 0.9 12.8 -17.7 -5.6 -2.1 Building and home improvement trade -9.0 13.5 17.9 -10.8 -16.1 18.0 23.9 Car and machinery trade 15.5 10.3 11.4 4.7 7.8 13.0 9.8 Common operations and eliminations -5.9 -4.0 -2.2 0.3 -3.0 -3.4 -4.0 Group total 25.1 57.7 77.4 51.8 19.2 77.0 84.1 Operating profit excl. non-recurring 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/ items by segment (€ million) 2012 2012 2012 2012 2013 2013 2013 Food trade 34.7 38.6 49.4 44.8 48.2 50.8 56.0 Home and speciality goods trade -12.9 -0.7 0.9 32.3 -17.8 -10.0 -2.2 Building and home improvement trade -9.0 15.2 17.9 -10.8 -16.6 19.5 23.9 Car and machinery trade 15.5 10.3 11.4 4.7 7.8 13.0 9.8 Common operations and eliminations -5.9 -4.0 -2.2 -0.1 -3.0 -3.4 -4.0 Group total 22.3 59.4 77.4 70.9 18.6 69.8 83.6 Operating margin excl. non-recurring 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/ 7-9/ items by segment, % 2012 2012 2012 2012 2013 2013 2013 Food trade 3.4 3.5 4.6 4.0 4.6 4.6 5.1 Home and speciality goods trade -3.5 -0.2 0.2 6.6 -5.2 -3.1 -0.6 Building and home improvement trade -1.4 1.9 2.4 -1.6 -3.0 2.6 3.4 Car and machinery trade 4.4 3.7 4.4 2.1 3.1 4.3 3.8 Group total 1.0 2.4 3.2 2.9 0.9 2.9 3.5 Change in tangible and intangible assets (€ million) 30.9.2013 30.9.2012 Opening net carrying amount 1,870 1,680 Depreciation, amortisation and impairment -114 -113 Investments in tangible and intangible assets 127 279 Disposals -7 -21 Currency translation differences -28 15 Closing net carrying amount 1,847 1,839 Related party transactions (€ million) The Group's related parties include its key management (the Board of Directors, the President and CEO and the Corporate Management Board), subsidiaries, associates and the Kesko Pension Fund. The following transactions were carried out with related parties: 1-9/2013 1-9/2012 Sales of goods and services 63 59 Purchases of goods and services 15 10 Other operating income 1 0 Other operating expenses 20 18 Finance costs 0 0 30.9.2013 30.9.2012 Receivables 10 8 Liabilities 19 34 Fair value hierarchy of financial assets and liabilities (€ million) Level Level 2 Level 3 30.09.2013 1 Financial assets at fair value through profit or loss 14.1 160.0 174.1 Derivative financial instruments at fair value through profit or loss Derivative financial assets 3.8 3.8 Derivative financial liabilities 16.3 16.3 Available-for-sale financial assets 24.9 235.0 6.4 266.2 Fair value hierarchy of financial assets and liabilities (€ million) Level Level 2 Level 3 30.09.2013 1 Financial assets at fair value through profit or loss 153.9 153.9 Derivative financial instruments at fair value through profit or loss Derivative financial assets 3.3 3.3 Derivative financial liabilities 19.4 19.4 119.8 6.5 126.3 Available-for-sale financial assets 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 at 30.9. Personnel average by segment 1-9/2013 1-9/2012 Change Food trade 3,118 2,804 314 Home and speciality goods trade 5,771 6,145 -374 Building and home improvement trade 8,893 9,081 -188 Car and machinery trade 1,257 1,260 -3 Common operations 439 451 -12 Group total 19,478 19,740 -263 Personnel at 30.9.* by segment 2013 2012 Change Food trade 3,505 3,016 489 Home and speciality goods trade 7,812 8,443 -631 Building and home improvement trade 10,115 10,402 -287 Car and machinery trade 1,280 1,293 -13 Common operations 488 512 -24 Group total 23,200 23,666 -466 * total number incl. part-time employees Group's commitments (€ million) 30.9.2013 30.9.2012 Change % Own commitments 191 180 6.2 For associates 65 - - For others 11 8 45.3 Lease liabilities for machinery and equipment 25 26 -6.2 Lease liabilities for real estate 2,372 2,317 2.3 Liabilities arising from derivative instruments Fair value Values of underlying instruments at 30.9. 30.9.2013 30.9.2012 30.9.2013 Interest rate derivatives Interest rate swaps 202 205 0.17 Currency derivatives Forward and future contracts 245 406 1.24 Option agreements 3 33 -0.01 Currency swaps 100 100 -11.56 Commodity derivatives Electricity derivatives 41 31 -2.27 Calculation of performance indicators Operating profit x 100 / (Non- current assets + Inventories + Return on capital employed*, % Receivables + Other current assets - Non-interest-bearing liabilities) on average for the reporting period Operating profit for prior 12 months x 100 / (Non-current assets + Return on capital employed, %, moving Inventories + Receivables + Other 12 mo current assets - Non-interest- bearing liabilities) on average for 12 months Operating profit excl. non-recurring items x 100 / (Non-current assets + Return on capital employed excl. non- Inventories + Receivables + Other recurring items*, % current assets - Non-interest- bearing liabilities) on average for the reporting period Operating profit excl. non-recurring items for prior 12 months x 100 / Return on capital employed excl. non- (Non-current assets + Inventories + recurring items, %, moving 12 months Receivables + Other current assets - Non-interest-bearing liabilities) on average for 12 months (Profit/loss before tax - income Return on equity*, % tax) x 100 / Shareholders' equity (Profit/loss for prior 12 months Return on equity, %, moving 12 months before tax - income tax for prior 12 months) x100 / Shareholders' equity (Profit/loss adjusted for non- Return on equity excl. non-recurring recurring items before tax - income items*, % tax adjusted for the tax effect of non-recurring items) x 100 / Shareholders' equity (Profit/loss for prior 12 months adjusted for non-recurring items Return on equity excl. non-recurring before tax - income tax for prior items, %, moving 12 months 12 months adjusted for the tax effect of non-recurring items) x 100 / Shareholders' equity Shareholders' equity x 100 / Equity ratio, % (Balance sheet total - prepayments received) (Profit/loss - non-controlling Earnings/share, diluted interests) / Average diluted number of shares (Profit/loss - non-controlling Earnings/share, basic interests) / Average number of shares Earnings/share excl. (Profit/loss adjusted for non- non-recurring items, recurring items - non-controlling basic interests) / Average number of shares Equity attributable to equity Equity/share holders of the parent / Basic number of shares at the balance sheet date Interest-bearing net liabilities x Gearing, % 100 / Shareholders' equity Interest-bearing liabilities - money Interest-bearing net debt market investments - cash and cash equivalents * Indicators for return on capital have been annualised. K-Group's retail and B2B sales (VAT 0%) (preliminary data): 1.1.-30.9.2013 1.7.-30.9.2013 K-Group's retail and € million Change, % € million Change, % B2B sales K-Group's food trade K-food stores, Finland 3,495 -0.3 1,180 -0.9 Kespro 594 2.7 206 1.8 K-ruoka stores, Russia 42 - 20 - Food trade total 4,131 1.1 1,406 0.9 K-Group's home and speciality goods trade Home and speciality goods stores, Finland 1,084 -9.1 366 -11.3 Home and speciality goods stores, other countries 23 -29.9 7 -34.3 Home and speciality goods trade total 1,107 -9.7 373 -11.9 K-Group's building and home improvement trade K-rauta and Rautia 790 -4.5 309 -2.5 Rautakesko B2B Service 140 -12.8 52 -7.0 K-maatalous 352 6.5 115 5.7 Finland total 1,282 -2.8 476 -1.2 Building and home improvement stores, other Nordic countries 713 -21.6 270 -19.6 Building and home improvement stores, Baltic countries 283 0.8 114 2.5 Building and home improvement stores, other countries 286 3.1 108 -2.7 Building and home improvement trade total 2,563 -8.0 967 -6.9 K-Group's car and machinery trade VV-Autotalot 288 -10.1 92 -3.2 VV-Auto, import 293 -7.2 82 7.9 Konekesko, Finland 141 -17.0 46 -10.5 Finland total 722 -10.4 220 -1.1 Konekesko, other countries 105 4.0 44 3.7 Car and machinery trade total 827 -8.8 265 -0.3 Finland total 7,177 -3.0 2,449 -2.5 Other countries total 1,452 -9.3 562 -7.9 Retail and B2B sales total 8,629 -4.2 3,011 -3.5 [HUG#1737843] |
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