2012-07-25 08:00:00 CEST
2012-07-25 08:01:30 CEST
REGULATED INFORMATION
Kesko Oyj - Interim report (Q1 and Q3)
Kesko's interim report 1 Jan.-30 Jun. 2012
KESKO CORPORATION STOCK EXCHANGE RELEASE 25.07.2012 AT 09.00 1(28)
Financial performance in brief:
* The Group's net sales for January-June increased by 4.4%.
* The K-Group's (i.e. Kesko's and the chain stores') retail and B2B sales (VAT
0%) increased by 4.9% in January-June.
* The operating profit excluding non-recurring items was €84.3 million (€118.3
million).
* The Kesko Group's net sales are expected to grow during the next twelve
months. Owing to the costs involved in the expansion of the store site network
and Russian business operations, as well as a sales decrease in the car trade,
we are prepared for the operating profit excluding non-recurring items for the
next twelve months to be lower than the operating profit excluding non-recurring
items for the preceding twelve months. Capital expenditure is expected to be
lower than the capital expenditure for the preceding twelve months.
Key performance indicators
1-6/2012 1-6/2011 4-6/2012 4-6/2011
Net sales, € million 4,778 4,575 2,460 2,472
Operating profit excl. non- recurring
items, € million 84.3 118.3 60.7 83.3
Operating profit, € million 85.3 119.6 59.0 83.9
Profit before tax, € million 84.8 120.1 58.5 84.0
Capital expenditure, € million 171.9 194.6 67.8 130.5
Earnings per share, diluted, € 0.55 0.79 0.38 0.55
Earnings per share excl. non-recurring
items, basic, € 0.54 0.79 0.39 0.55
30.6.2012 30.6.2011
Equity ratio, % 51.1 52.1
Equity per share, € 21.59 21.21
FINANCIAL PERFORMANCE
Net sales and profit for January-June 2012
The Group's net sales in January-June 2012 were €4,778 million, which is 4.4% up
on the corresponding period of the previous year (€4,575 million). In Finland,
net sales increased by 3.3% and in other countries by 10.3%. International
operations accounted for 17.6% (16.7%) of the net sales. Net sales grew in all
divisions.
1-6/2012 Net sales, M€ Change, % Operating profit Change, M€
excl. non- recurring
items, M€
Food trade 2,101 +3.8 73.8 -13.4
Home and speciality
goods trade 721 +5.0 -13.5 -8.5
Building and home
improvement trade 1,411 +6.3 6.4 -3.4
Car and machinery trade 627 +1.0 25.9 -5.9
Common operations and
eliminations -83 -2.9 -8.3 -2.8
Total 4,778 +4.4 84.3 -34.0
The operating profit excluding non-recurring items in January-June was €84.3
million (€118.3 million). It was 1.8% of net sales (2.6%). The profit
performance was influenced by the opening of new stores, higher rental expenses,
the expansion of Russian business operations and the slowing down of sales
growth towards the end of the reporting period.
The operating profit was €85.3 million (€119.6 million). The operating profit
includes a net amount of €1.1 million (€1.4 million) of non-recurring gains on
disposals of properties and write-downs. The Group's profit before tax for
January-June was €84.8 million (€120.1 million).
The Group's earnings per share were €0.55 (€0.79). The Group's equity per share
was €21.59 (€21.21).
In January-June, the K-Group's (i.e. Kesko's and the chain stores') retail and
B2B sales (VAT 0%) were €5,883 million, up 4.9% compared to the previous year.
In January-June, the K-Group chains' sales entitling to K-Plussa points were
€2,844 million excluding tax, up 4.7% compared to the previous year. The K-
Plussa customer loyalty programme gained 41,925 new households in January-June.
At the end of June, the number of K-Plussa households was 2,181,609 and the
number of K-Plussa card holders was 3.8 million.
Net sales and profit for April-June 2012
The Group's net sales in April-June 2012 were €2,460 million, which is 0.5% down
on the corresponding period of the previous year (€2,472 million). In Finland,
net sales decreased by 2.0% and in other countries it increased by 6.1%.
International operations accounted for 19.6% (18.4%) of the net sales. In the
second quarter, there was a significant negative impact on the growth of net
sales from the decrease in car trade net sales, -27.8%, which was attributable
to the car tax change.
4-6/2012 Net sales, M€ Change, % Operating profit Change, M€
excl. non- recurring
items, M€
Food trade 1,091 +1.4 38.9 -7.0
Home and speciality
goods trade 352 +3.9 -0.6 -3.1
Building and home
improvement trade 782 +3.3 15.3 -3.5
Car and machinery trade 274 -19.8 10.3 -9.3
Common operations and
eliminations -41 -6.6 -3.2 0.1
Total 2,460 -0.5 60.7 -22.7
The operating profit excluding non-recurring items in April-June was €60.7
million (€83.3 million). It was 2.5% of net sales (3.4%). The operating profit
excluding non-recurring items was negatively impacted by the steep decrease in
car sales due to the car tax change, the slowing down of sales growth in other
divisions, and the expansion of the store site network and the expansion of
Russian business operations.
The operating profit was €59.0 million (€83.9 million). The operating profit
includes €-1.7 million of non-recurring items (€0.6 million). The Group's profit
before tax for April-June was €58.5 million (€84.0 million).
The Group's earnings per share were €0.38 (€0.55).
In April-June, the K-Group's (i.e. Kesko's and the chain stores') retail and B2B
sales (VAT 0%) were €3,104 million, up 0.4% compared to the previous year. In
April-June, the K-Group chains' sales entitling to K-Plussa points were €1,490
million excluding tax, up 2.9% compared to the previous year.
Finance
In January-June, the cash flow from operating activities was €57.2 million
(€43.3 million). The cash flow from investing activities was €-171.2 million (€-
194.2 million), including €21.1 million (€3.8 million) of proceeds from the sale
of fixed assets.
The Group's solvency remained at an excellent level despite the ongoing capital
expenditure programme. At the end of the period, liquid assets totalled €253
million (€545 million). Interest-bearing liabilities were €563 million (€475
million) and interest-bearing net debt €310 million (€-70 million) at the end of
June. Equity ratio was 51.1% (52.1%) at the end of the period.
In January-June, the Group's net finance costs were €0.4 million (€0.3 million).
In April-June, the cash flow from operating activities was €62.4 million (€68.6
million). The cash flow from investing activities was €-79.3 million (€-126.5
million), including €1.5 million (€2.1 million) of proceeds from the sale of
fixed assets.
In April-June, the Group's net finance costs were €0.3 million (net financial
income €0.3 million).
Taxes
The Group's taxes in January-June were €25.9 million (€37.2 million). The
effective tax rate was 30.5% (31.0%), affected by loss-making foreign
operations.
The Group's taxes in April-June were €18.3 million (€26.0 million). The
effective tax rate was 31.2% (31.0%).
Capital expenditure
In January-June, the Group's capital expenditure totalled €171.9 million (€194.6
million), or 3.6% (4.3%) of the net sales. Capital expenditure in store sites
was €148.1 million (€171.4 million) and other capital expenditure was €23.8
million (€23.2 million). Capital expenditure in foreign operations represented
13.8% (36.8%) of total capital expenditure.
In April-June, the Group's capital expenditure totalled €67.8 million (€130.5
million), or 2.8% (5.3%) of the net sales. Capital expenditure in store sites
was €57.3 million (€118.7 million) and other capital expenditure was €10.5
million (€11.8 million). Capital expenditure in foreign operations represented
22.2% (45.3%) of total capital expenditure.
Main focus areas in Kesko's operations
The main focus areas in Kesko's operations are: strengthening the growth of
sales, improving the profitability of the building and home improvement trade,
utilisation of business opportunities in St. Petersburg and Moscow in Russia,
and a strong financial result, financial position and good dividend payment
capacity.
In order to ensure Kesko's earnings and return on capital, divisions take
significant measures to enhance sales and purchasing operations and to adjust
costs, working capital and capital expenditure. Capital expenditure will be
aligned with funds generated from operations to €200-300 million per year also
due to uncertainty of the general economic outlook.
Due to the availability of store sites in Russia suitable for Kesko's operations
and the adjustment of capital expenditure, it is expected that it will take two
years longer than previously announced to meet the growth targets of Kesko's
Russian operations. The net sales target for the building and home improvement
trade for the year 2017 is €800 million, and the net sales target for the food
trade for the year 2017 is €500 million. Previously, these targets were
estimated to be reached in 2015. Russian operations in food trade will start in
St. Petersburg, and during the years 2012 and 2013 the target is to open a total
of three food stores in St. Petersburg.
Personnel
In January-June, the average number of employees in the Kesko Group was 19,574
(18,644) converted into full-time employees. In Finland, the average increase
was 208 people, while outside Finland, it was 722.
At the end of June 2012, the total number of employees was 24,461 (23,084), of
whom 13,762 (13,191) worked in Finland and 10,699 (9,893) outside Finland.
Compared to the end of June 2011, there was an increase of 571 people in Finland
and 806 people outside Finland.
In January-June, the Group's staff cost was €307.9 million, an increase of 8.7%
compared to the previous year. In April-June, the Group's staff cost increased
7.8% compared to the previous year and was €156.8 million.
SEGMENT INFORMATION
Seasonal nature of operations
The Group's operating activities are affected by seasonal fluctuations. The net
sales and operating profits of the reportable segments are not earned evenly
throughout the year. Instead, they vary by quarter depending on the
characteristics of each segment.
Food trade
1-6/2012 1-6/2011 4-6/2012 4-6/2011
Net sales, € million 2,101 2,025 1,091 1,077
Operating profit excl. non- recurring
items, € million 73.8 87.2 38.9 45.8
Operating profit as % of net sales
excl. non-recurring items 3.5 4.3 3.6 4.3
Capital expenditure, € million 95.7 94.4 35.6 63.5
Net sales, € million 1-6/2012 Change, % 4-6/2012 Change, %
Sales to K-food stores 1,625 +3.4 845 +0.8
Kespro 380 +6.2 199 +2.8
Others 97 +1.4 47 +5.9
Total 2,101 +3.8 1,091 +1.4
January-June 2012
In the food trade, the net sales for January-June were €2,101 million (€2,025
million), up 3.8%. The sales of Pirkka products to K-food stores grew by 14.5%
(VAT 0%). During the same period, the grocery sales of K-food stores increased
by 4.9% (VAT 0%). In the grocery market, retail prices are estimated to have
changed by some 4-4.5% compared to the previous year (VAT 0%; Kesko's own
estimate based on the Consumer Price Index of Statistics Finland) and the total
grocery trade market (VAT 0%) is estimated to have grown by some 5.5% in
January-June compared to the previous year (Kesko's own estimate).
In January-June, the operating profit excluding non-recurring items of the food
trade was €73.8 million (€87.2 million), or €13.4 million down on the previous
year. The operating profit development was impacted by the expansion of the
store site network and costs related to launching business operations in Russia.
The operating profit was €76.5 million (€88.0 million). Non-recurring income
included €2.7 million of gains on disposals of properties.
Capital expenditure of the food trade was €95.7 million (€94.4 million).
April-June 2012
In the food trade, the net sales for April-June were €1,091 million (€1,077
million), up 1.4%. The second quarter had one delivery day less than the
previous year. During the same period, the grocery sales of K-food stores
increased by 3.2% (VAT 0%).
In April-June, the operating profit excluding non-recurring items of the food
trade was €38.9 million (€45.8 million), or €7.0 million down on the previous
year. The development of operating profit was impacted by the expansion of the
store site network and costs related to launching business operations in Russia.
The operating profit was €38.9 million (€45.9 million).
Capital expenditure of the food trade in April-June was €35.6 million (€63.5
million).
In April-July 2012, two new K-citymarkets, three new K-supermarkets and one K-
market were opened. A total of 16 stores were renovated and extended.
The most significant store sites being built are K-citymarkets in Kokkola,
Kouvola and Valkeakoski. K-supermarkets in Mäntsälä and Loimaa are being
extended into K-citymarkets and K-citymarket Imatra is being extended. New K-
supermarkets are being built in Lähdekeskus, Espoo; in Kaisaniemi, Helsinki; in
Joutsa, Jyväskylä, Kouvola, Lohja, Muurame and Nurmijärvi; and in Hämeenkylä and
Nikinmäki, Vantaa. The first Kesko food store in Russia is being built in St.
Petersburg.
Home and speciality goods trade
1-6/2012 1-6/2011 4-6/2012 4-6/2011
Net sales, € million 721 687 352 339
Operating profit excl. non-recurring
items, € million -13.5 -5.0 -0.6 2.4
Operating profit as % of net sales excl.
non-recurring items -1.9 -0.7 -0.2 0.7
Capital expenditure, € million
29.3 18.1 10.8 10.0
Net sales, € million 1-6/2012 Change, % 4-6/2012 Change, %
K-citymarket home and speciality goods 297 +5.1 150 +2.0
Anttila 206 +0.1 99 +2.1
Intersport Finland 80 +7.5 36 +7.7
Intersport Russia 14 6
Indoor 89 +6.9 45 +7.3
Musta Pörssi 27 -15.3 15 -10.7
Kenkäkesko 11 +5.2 4 -13.8
Total 721 +5.0 352 +3.9
January-June 2012
In the home and speciality goods trade, the net sales for January-June were €721
million (€687 million), up 5.0%. The sales of K-citymarket's home and speciality
goods, Intersport, Asko and Sotka grew significantly from the previous year.
New Asko stores were opened in Ylivieska and in Pärnu, Estonia, and new Konebox
stores in Raisio and Lielahti. In Finland, Intersport opened new stores in
Ideapark, Lempäälä, and in Hyvinkää. In Russia, Intersport opened a new store in
Otrada, Moscow, and one store was closed in St. Petersburg. The reform of the
Kookenkä chain was completed at the end of March. As a result of network
restructuring, there were 29 (35) Musta Pörssi stores at the end of June.
The operating profit excluding non-recurring items of the home and speciality
goods trade in January-June was €-13.5 million (€-5.0 million). Profitability
was weakened by the integration and development measures of K-citymarket and
Anttila, the expansion of the store site network and the loss from Russian
Intersport operations. Operating profit was €-13.5 million (€-4.6 million).
In April 2012, Kesko acquired the minority holding of 20% of Intersport Russia
from its previous owner Melovest Ltd. Due to the transaction, Kesko's ownership
in Intersport Russia went up to 100%. In June, the plan was announced to
renovate the Musta Pörssi concept and business model and to integrate Konebox in
Musta Pörssi.
Capital expenditure of the home and speciality goods trade in January-June was
€29.3 million (€18.1 million).
April-June 2012
In the home and speciality goods trade, the net sales for April-June were €352
million (€339 million), up 3.9%. K-citymarket's home and speciality goods,
Anttila, Asko and Sotka as well as Intersport Finland increased their sales.
The operating profit excluding non-recurring items of the home and speciality
goods trade in April-June was €-0.6 million (€2.4 million), or €3.1 million down
on the previous year. The most important factor affecting the development in
profitability was the expansion of the K-citymarket store site network. The
operating profit was €-0.6 million (€2.8 million).
Capital expenditure of the home and speciality goods trade was €10.8 million
(€10.0 million).
Building and home improvement trade
1-6/2012 1-6/2011 4-6/2012 4-6/2011
Net sales, € million 1,411 1,327 782 757
Operating profit excl. non-recurring
items, € million 6.4 9.8 15.3 18.8
Operating profit as % of net sales excl.
non-recurring items 0.5 0.7 2.0 2.5
Capital expenditure, € million 26.0 66.1 14.2 47.4
Net sales, € million 1-6/2012 Change, % 4-6/2012 Change, %
Rautakesko Finland 648 +3.7 348 +0.9
K-rauta Sweden 107 -0.8 63 -2.4
Byggmakker Norway 322 +12.4 176 +7.8
Rautakesko Estonia 29 +9.8 17 +4.1
Rautakesko Latvia 23 +0.7 13 -6.9
Senukai Lithuania 117 +8.6 67 +5.4
Stroymaster Russia 128 +20.4 75 +18.9
OMA Belarus 38 -17.7 23 -17.6
Total 1,411 +6.3 782 +3.3
January-June 2012
In the building and home improvement trade, the net sales for January-June were
€1,411 million (€1,327 million), up 6.3%. Towards the end of the reporting
period, the development of sales weakened in Finland, Sweden and the Baltic
countries. Growth remained strong in Russia and Norway. In Sweden, sales
decreased in the weakening market conditions.
In Finland, the net sales for January-June were €648 million (€625 million), an
increase of 3.7%. The building and home improvement product lines contributed
€460 million to the net sales in Finland, an increase of 0.6%. The agricultural
supplies trade contributed €188 million to the net sales, up 12.1%.
The retail sales of the K-rauta and Rautia chains in Finland grew by 3.2% to
€511 million (VAT 0%). The sales of Rautakesko B2B Service increased by 2.1%. As
a whole, Rautakesko chains' retail and B2B sales are estimated to have exceeded
the growth rate of the market in Finland. The retail sales of the K-maatalous
chain were €221 million (VAT 0%), up 10.5%.
In January-June, the net sales from foreign operations in the building and home
improvement trade were €763 million (€702 million), an increase of 8.6%. In
Russia, net sales increased by 19.2% in terms of roubles. In Norway, net sales
increased by 8.8% in terms of krones. In Sweden, net sales were down by 1.4% in
terms of kronas. Foreign operations contributed 54.1% (52.9%) 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 in January-June was €6.4 million (€9.8 million). The profit
performance was impacted by new store openings in Russia and Sweden and
significant introduction and development costs of the international enterprise
resource planning system. In addition, the profitability was negatively impacted
by obsolete inventories and trade receivables written off at €8 million. The
operating profit was €4.7 million (€9.8 million).
In January-June, capital expenditure of the building and home improvement trade
totalled €26.0 million (€66.1 million), of which 54.9% (85.4%) abroad.
During the reporting period, a new Rautia-K-maatalous store was opened in Turku
and Rautia stores in Muhos and Sastamala were renovated. In April, a K-rauta was
opened in Ylivieska, and a significant extension of a K-rauta in Mikkeli was
completed. There are replacement K-rauta stores being built in Kouvola and
Turku. In Sweden, a K-rauta was opened in Uppsala and a K-rauta replacing the
former store in Linköping. In Russia, a new K-rauta was opened in Moscow, where
two sites have been acquired for new K-rauta stores.
April-June 2012
In the building and home improvement trade, the net sales for April-June were
€782 million (€757 million), up 3.3%. The growth of building and home
improvement product sales slowed down in all Rautakesko's operating countries.
In Finland, the net sales were €348 million (€345 million), an increase of
0.9%. The building and home improvement product lines contributed €248 million
to the net sales in Finland, a decrease of 3.5%. The agricultural supplies trade
contributed €100 million to the net sales, up 13.4%.
The retail sales of the K-rauta and Rautia chains in Finland in April-June grew
by 1.1% to €324 million (VAT 0%). The sales of B2B Service decreased by 7.0%.
The retail sales of the K-maatalous chain were €132 million (VAT 0%), up 9.5%.
The net sales from foreign operations in the building and home improvement trade
were €434 million (€413 million), an increase of 5.3%. The net sales from
foreign operations grew by 8.5% in terms of local currencies. In Sweden, net
sales were down by 3.4% in terms of kronas. In Norway, net sales increased by
4.2% in terms of krones. In Russia, net sales increased by 17.7% in terms of
roubles and in Belarus, net sales increased by 59.3% in terms of roubles, due to
strong inflation. Foreign operations contributed 55.6% (54.5%) 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 in April-June was €15.3 million (€18.8 million). The weakening
of the operating profit excluding non-recurring items from the comparative
period was impacted by the renewal and expansion of the store site network and
introduction and development costs of the international enterprise resource
planning system. In addition, the profitability was negatively impacted by
obsolete inventories and trade receivables written off at €4 million. The
operating profit was €13.6 million (€18.8 million).
Capital expenditure of the building and home improvement trade totalled €14.2
million (€47.4 million), of which 45.6% (92.5%) abroad.
Car and machinery trade
1-6/2012 1-6/2011 4-6/2012 4-6/2011
Net sales, € million 627 621 274 342
Operating profit excl. non-recurring
items, € million 25.9 31.8 10.3 19.6
Operating profit as % of net sales excl.
non-recurring items 4.1 5.1 3.8 5.7
Capital expenditure, € million 18.7 13.9 5.9 7.9
Net sales, € million 1-6/2012 Change, % 4-6/2012 Change, %
VV-Auto 454 +1.6 165 -27.8
Konekesko 174 -0.4 109 -3.6
Total 627 +1.0 274 -19.8
January-June 2012
In January-June, the net sales of the car and machinery trade were €627 million
(€621 million), up 1.0%.
VV-Auto's net sales for January-June were €454 million (€447 million), an
increase of 1.6%. In Finland, new registrations of passenger cars decreased by
6.2% and those of vans by 4.7% compared to the previous year. In January-June,
the combined market share of passenger cars and vans imported by VV-Auto was
20.4% (20.3%).
Konekesko's net sales for January-June were €174 million (€175 million), down
0.4% compared to the previous year. Net sales in Finland were €120 million, down
3.3%. The net sales from Konekesko's foreign operations were €55 million, up
5.7%.
In January-June, the operating profit excluding non-recurring items of the car
and machinery trade was €25.9 million (€31.8 million), down €5.9 million
compared to the previous year. The decrease in the operating profit was due to
the change in car tax effective from 1 April 2012 and the more difficult general
market conditions of passenger cars and vans. The operating profit for January-
June was €25.9 million (€32.0 million).
Capital expenditure of the car and machinery trade was €18.7 million (€13.9
million) in January-June.
April-June 2012
In April-June, the net sales of the car and machinery trade were €274 million
(€342 million), down 19.8%.
VV-Auto's net sales for April-June were €165 million (€229 million), a decrease
of 27.8%. The decrease in the car trade was attributable to the car tax change
effective from 1 April 2012 and the more difficult general market conditions of
passenger cars and vans. In April-June, the combined market share of passenger
cars and vans imported by VV-Auto was 21.8% (21.6%).
Konekesko's net sales for April-June were €109 million (€113 million), down
3.6% compared to the previous year.
In April-June, the operating profit excluding non-recurring items of the car and
machinery trade was €10.3 million (€19.6 million), down €9.3 million compared to
the previous year. Profitability was weakened by the radical decrease in car
trade sales. The operating profit for April-June was €10.3 million (€19.7
million).
Capital expenditure of the car and machinery trade was €5.9 million (€7.9
million) in April-June.
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 June 2012, the total number of Kesko Corporation shares was
98,649,542, of which 31,737,007, or 32.2%, were A shares and 66,912,535, or
67.8%, were B shares. On 30 June 2012, Kesko Corporation held 607,249 own B
shares. Each A share entitles to ten (10) votes and each B share to one (1)
vote. The company cannot vote with own shares held by it and no dividend is paid
on them. At the end of June 2012, Kesko Corporation's share capital was
€197,282,584. During the reporting period, the number of B shares has been
increased once to account for the shares subscribed for with the options based
on the 2007 stock option scheme. The increase was made on 5 June 2012 (4,500 B
shares), and there was a stock exchange notification about the increase on the
same day. The shares subscribed for were entered for public trading in NASDAQ
OMX Helsinki (Helsinki Stock Exchange) together with the old B shares on 6 June
2012. The whole subscription price of €60,480.00 received by the company has
been recorded in the reserve of invested non-restricted equity.
The price of a Kesko A share quoted on NASDAQ OMX Helsinki was €24.82 at the end
of 2011, and €21.89 at the end of June 2012, representing a decrease of 11.8%.
Correspondingly, the price of a B share was €25.96 at the end of 2011, and
€20.59 at the end of June 2012, representing a decrease of 20.7%. In January-
June, the highest A share price was €27.65 and the lowest was €19.99. For B
share, they were €27.81 and €19.04 respectively. In January-June, the Helsinki
stock exchange (OMX Helsinki) All-Share index was down by 5.3% and the weighted
OMX Helsinki CAP index was down by 4.5%. The Retail Index was down by 6.9%.
At the end of June 2012, the market capitalisation of A shares was €695 million,
while that of B shares was €1,365 million, excluding the shares held by the
parent company. The combined market capitalisation of A and B shares was €2,060
million, a decrease of €447 million from the end of 2011. In January-June 2012,
a total of 1.0 (1.1) million A shares were traded on the Helsinki stock
exchange, down 8.7%. The exchange value of A shares was €24 million. A total of
42.9 (32.1) million B shares were traded on the Helsinki stock exchange, up
33.4%. The exchange value of B shares was €988 million.
The company operates the 2007 stock option scheme for management and other key
personnel, under which the share subscription period of 2007A option rights ran
from 1 April 2010 to 30 April 2012 (subscription period has ended), that of
2007B option rights runs from 1 April 2011 to 30 April 2013, and that of 2007C
option rights began on 1 April 2012 and it will end on 30 April 2014. All option
rights have also been included on the official list of the Helsinki stock
exchange since the beginning of the share subscription periods. No 2007A option
rights were traded during the reporting period. A total of 55,520 2007B option
rights were traded during the reporting period at a total value of €174,548, and
a total of 42,680 2007C option rights at a total value of €364,294.
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. The corresponding authority, granted by the Annual General
Meeting of 30 March 2009, to issue a total maximum of 20,000,000 new B shares
against payment or other consideration expired on 30 March 2012. The authority
expired at the end of March had not been used. In addition, the Board has the
authority, granted by the Annual General Meeting of 4 April 2011 and valid until
30 September 2012, to decide on the acquisition of a total maximum of 1,000,000
own B shares, and the authority, valid until 30 June 2014, to decide on the
issuance of a total maximum of 1,000,000 own B shares held by the company
itself. Based on the authority to issue own shares and the fulfilment of the
vesting criteria of the 2011 vesting period of Kesko's three-year share-based
compensation plan, the Board granted a total of 92,751 company shares held by
the company itself to the people included in the target group. The matter was
announced in a stock exchange release on 12 April 2012. Further information on
the Board's authorities is available at www.kesko.fi.
At the end of June 2012, the number of shareholders was 45,314, which is 4,099
more than at the end of 2011. At the end of June, foreign ownership of all
shares was 15%. At the end of June, foreign ownership of B shares was 21%.
Flagging notifications
Kesko Corporation did not receive flagging notifications during the reporting
period.
Main events during the reporting period
The second phase of the transfer of the Kesko Group companies' statutory pension
insurance liability portfolio, agreed between the Kesko Pension Fund and
Ilmarinen Mutual Pension Insurance Company, was carried out with effect from 1
January 2012. (Stock exchange release on 15 February 2012)
Kesko transferred a total of 90,889 own B shares held by the company itself to
the about 150 Kesko management employees and other named key persons included in
the target group of the 2011 vesting period of Kesko's three-year share-based
compensation plan. In addition, on the same basis, Kesko transferred a total of
1,862 own B shares held by the company itself in May. After the transfers, the
company itself held 607,249 own B shares.
(Stock exchange release on 12 April 2012)
Main events after the reporting period
The number of own shares was increased by 476 B shares that were returned to the
company in accordance with the terms of the share-based compensation plan. On
20 July, Kesko Oyj held 607,725 own B shares. (Stock exchange notification on
20 July 2012)
Resolutions of the 2012 Annual General Meeting and decisions of the Board's
organisational meeting
Kesko Corporation's Annual General Meeting, held on 16 April 2012, adopted the
financial statements for 2011 and discharged the Board members and the Managing
Director from liability. The General Meeting also resolved to distribute €1.20
per share as dividends on 98,035,931 shares held outside the company at the date
of dividend distribution, or a total amount of €117,643,117.20. The dividend pay
date was 26 April 2012. The General Meeting resolved to leave the number of
Board members unchanged at seven and elected Esa Kiiskinen, Ilpo Kokkila, Tomi
Korpisaari, Maarit Näkyvä, Seppo Paatelainen, Toni Pokela and Virpi Tuunainen as
Board members for a three-year term of office as stated in the Articles of
Association. The General Meeting elected PricewaterhouseCoopers Oy as the
company's auditor, with Johan Kronberg, APA, as the company's auditor with
principal responsibility. The General Meeting also approved the Board's proposal
to issue a total maximum of 20,000,000 new B shares until 30 June 2015, and the
Board's proposal that it be authorised until the 2013 Annual General Meeting to
decide on the donation of a total maximum of €300,000 for charitable or
corresponding purposes.
The organisational meeting of Kesko Corporation's Board of Directors, held after
the Annual General Meeting, elected Esa Kiiskinen as its Chair and Seppo
Paatelainen as its Deputy Chair. The Board elected Maarit Näkyvä as the Chair,
Seppo Paatelainen as the Deputy Chair and Virpi Tuunainen as a member of the
Audit Committee, and Esa Kiiskinen as the Chair, Seppo Paatelainen as the Deputy
Chair and Ilpo Kokkila as a member of the Remuneration Committee. The Board
elects the Board Chair and Deputy Chair for the whole three-year term of a Board
member, and the Committee Chairs, Deputy Chairs and members for one year at a
time.
The resolutions of the Annual General Meeting and the decisions of the Board's
organisational meeting were announced in more detail in stock exchange releases
on 16 April 2012.
Responsibility
In April, Kesko joined the Climate Partners network, a joint organization formed
by business and the City of Helsinki, and signed a commitment to reduce carbon
dioxide emissions.
Kesko's 12th Corporate Responsibility Report was published in April. The report
is a comprehensive account of the objectives, actions and performance of Kesko's
responsibility programme and responsibility work.
In Kaivopuisto Park in Helsinki, Kesko arranged a Mother's day event, at which
Fairtrade was put on the map and 10,000 Pirkka Fairtrade roses were given to
mothers and grandmothers.
Kesko partnered with the Young Finland Association in the Taisto campaign that
challenged more than 60,000 13-to-15-year old children to excercise during the
spring.
In May, Kesko's Board awarded scholarships with a total value of €41,000 to
talented young athletes and arts students.
Konekesko Oy and Helly Hansen buoyancy aids and life jackets support again this
summer the Finnish water safety campaign "Viisaasti vesillä" (Be smart when
boating). The water safety campaign started in May and will visit a total of 31
localities during the summer.
Risk management
The Kesko Group has an established and comprehensive risk management process.
Risks and their management responses are regularly assessed within the Group and
reported to the Group management. Kesko's risk management and risks associated
with business operations are described in more detail on Kesko's website in the
Corporate Governance section.
The most significant near-future risks in Kesko's business operations are
associated with the general economic development, the euro zone financial market
situation and consumer confidence in Kesko's operating area, as well as their
impact on the Kesko Group's sales and profit performance. It is estimated that
in other respects, no material changes have taken place in the risks described
in the report by the Board of Directors and financial statements for 2011 and
the risks described on Kesko's website.
Risks and uncertainties associated with economic development are described in
the future outlook section of this release.
Future outlook
Estimates of the future outlook for the Kesko Group's net sales and operating
profit excluding non-recurring items are given for the 12 months following the
reporting period (7/2012-6/2013) in comparison with the 12 months preceding the
reporting period (7/2011-6/2012).
Resulting from the problems of European national economies, the outlook for the
general economic situation is characterised by significant uncertainty. In
addition, cuts in public finances and tightening taxation increase the
uncertainty about the development of consumer demand.
The market is expected to remain stable in the grocery trade and home and
speciality goods trade. Growth in the building and home improvement trade is
expected to slow down as the growth of building construction slows down
especially in Finland and Sweden. In the car and machinery trade, the market is
expected to decrease.
The Kesko Group's net sales are expected to grow during the next twelve months.
Owing to the costs involved in the expansion of the store site network and
Russian business operations, as well as a sales decrease in the car trade, we
are prepared for the operating profit excluding non-recurring items for the next
twelve months to be lower than the operating profit excluding non-recurring
items for the preceding twelve months. Capital expenditure is expected to be
lower than the capital expenditure of preceding twelve months.
Helsinki, 24 July 2012
Kesko Corporation
Board of Directors
The information in the interim report release is unaudited.
Further information is available from Jukka Erlund, Senior Vice President, CFO,
telephone +358 1053 22113, and Eva Kaukinen, Vice President, Corporate
Controller, telephone +358 1053 22338. A Finnish-language webcast from the media
and analyst briefing on the interim report can be accessed at www.kesko.fi at
10:00. An English- language web conference on the interim report will be held
today at 14:30 (Finnish time). The web conference login is available at
www.kesko.fi.
Kesko Corporation's interim report for January-September will be released on 24
October 2012. 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
Senior Vice President, Corporate Communications and Responsibility
ATTACHMENTS: TABLES
Accounting policies
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated cash flow statement
Group's performance indicators
Net sales by segment
Operating profit by segment
Operating profit excl. non-recurring items by segment
Operating margin excl. non-recurring items by segment
Capital employed by segment
Return on capital employed excl. non-recurring items by segment
Capital expenditure by segment
Segment information by quarter
Personnel average and at the end of the reporting period
Group's contingent liabilities
Calculation of performance indicators
K-Group's retail and B2B sales
DISTRIBUTION
NASDAQ OMX Helsinki
Main news media
www.kesko.fi
TABLES:
Accounting policies
This interim report has been prepared in accordance with the IAS 34 standard,
applying the same accounting policies as to the annual financial statements for
2011, with the exception of the following changes due to the adoption of new and
revised IFRS standards and IFRIC interpretations:
IFRS 7 (amendment), Financial instruments: Disclosures - Derecognition
IAS 12 (amendment), Income taxes - Deferred tax
Annual amendments to the IFRS (Annual Improvements)
The above amendments to standards and interpretations do not have a material
impact on the reported income statement, statement of financial position or
notes.
Consolidated income
statement (€ million),
condensed
1-6/ 1-6/ Change,% 4-6/ 4-6/ Change,% 1-12/
2012 2011 2012 2011 2011
Net sales 4,778 4,575 4.4 2,460 2,472 -0.5 9,460
Cost of goods sold -4,138 -3,951 4.7 -2,131 -2,137 -0.3 -8,163
Gross profit 640 624 2.5 329 335 -1.9 1,297
Other operating income 368 343 7.1 197 183 7.8 705
Staff cost -308 -283 8.7 -157 -145 7.8 -571
Depreciation and impairment
charges -76 -59 28.6 -41 -30 34.3 -125
Other operating expenses -538 -506 6.4 -270 -259 4.3 -1,026
Operating profit 85 120 -28.7 59 84 -29.7 281
Interest income and other
finance income 10 10 -2.0 5 5 -7.1 22
Interest expense and other
finance costs -8 -8 1.5 -5 -4 22.2 -18
Exchange differences -2 -2 -8.6 -1 -1 -48.4 -3
Income from associates 0 1 (..) 0 0 -49.7 1
Profit before tax 85 120 -29.4 59 84 -30.3 282
Income tax -26 -37 -30.5 -18 -26 -29.9 -85
Net profit for the period 59 83 -28.9 40 58 -30.5 197
Attributable to
Owners of the parent 54 79 -31.9 37 54 -32.0 182
Non-controlling
interests 5 4 32.9 3 4 -6.9 15
Earnings per share (€)
for profit attributable to
equity holders of the
parent
Basic 0.55 0.80 -31.6 0.38 0.55 -31.7 1.85
Diluted 0.55 0.79 -31.3 0.38 0.55 -31.4 1.84
Consolidated statement
of comprehensive
income (€ million)
1-6/ 1-6/ Change,% 4-6/ 4-6/ Change,% 1-12/
2012 2011 2012 2011 2011
Net profit for the period 59 83 -28.9 40 58 -30.5 197
Other comprehensive income
Exchange differences on
translating foreign
operations 3 -11 (..) 0 -9 97.9 -17
Adjustment for
hyperinflation 1 0 6
Cash flow hedge revaluation -1 -10 92.2 1 -5 (..) -15
Revaluation of available-
for- sale financial assets -1 -1 -48.0 -1 0 (..) 0
Other items 0 0 100.0 0 0 100.0 0
Tax relating to other
comprehensive income 0 3 -85.7 0 1 (..) 4
Total other comprehensive
income for the period, net
of tax 3 -18 (..) 0 -13 99.6 -22
Total comprehensive income
for the period 62 65 -4.4 40 45 -11.2 175
Attributable to
Owners of the parent 55 71 -22.5 35 49 -29.8 170
Non-controlling
interests 7 -6 (..) 6 -4 (..) 4
(..) Change over 100%
Consolidated statement of financial
position (€ million), condensed
30.6.2012 30.6.2011 Change,% 31.12.2011
ASSETS
Non-current assets
Tangible assets 1,579 1,383 14.2 1,490
Intangible assets 190 179 6.3 189
Investments in associates and other
financial assets 72 67 7.2 69
Loans and receivables 82 74 10.4 80
Pension assets 146 180 -18.7 200
Total 2,069 1,883 9.9 2,029
Current assets
Inventories 869 780 11.4 868
Trade receivables 803 769 4.5 700
Other receivables 322 137 (..) 218
Financial assets at fair value
through profit or loss 51 148 -65.4 98
Available-for-sale financial assets 141 323 -56.4 186
Cash and cash equivalents 61 74 -17.1 84
Total 2,248 2,230 0.8 2,153
Non-current assets held for sale 1 1 18.8 8
Total assets 4,318 4,114 5.0 4,190
30.6.2012 30.6.2011 Change,% 31.12.2011
EQUITY AND LIABILITIES
Equity 2,117 2,077 1.9 2,175
Non-controlling interests 65 49 34.4 58
Total equity 2,182 2,126 2.6 2,233
Non-current liabilities
Interest-bearing liabilities 210 219 -3.9 210
Non-interest-bearing liabilities 10 7 46.4 18
Deferred tax liabilities 87 83 5.3 91
Pension obligations 2 2 4.6 2
Provisions 11 10 11.0 10
Total 321 321 0.1 332
Current liabilities
Interest-bearing liabilities 353 256 37.9 190
Trade payables 993 939 5.7 886
Other non-interest-bearing liabilities 445 446 -0.2 526
Provisions 24 26 -9.4 24
Total 1,815 1,667 8.8 1,625
Total equity and liabilities 4,318 4,114 5.0 4,190
(..) Change over 100%
Consolidated statement of changes in equity (€ million)
Share Issue Share Other Cur- Re- Re- Non- Total
capi- of pre- reser- rency valu- tained cont-
tal share mi-um ves trans- ation earn- rolling
capi- lation sur- ings inte-
tal differ- plus rests
ences
Balance at
1.1.2011 197 0 198 243 -3 14 1,503 59 2,210
Shares
subscribed
with options 0 0 0
Option cost 2 0 2
Own
shares -23 0 -23
Dividends -128 -4 -132
Other
changes 0 4 0 4
Net profit for
the period 79 4 83
Other
comprehen-sive
income
Exchange
differences on
translating
foreign
operations 0 0 -10 -11
Cash flow hedge
revaluation
-10 -10
Revaluation of
available-for-
sale financial
assets -1 -1
Other items 0 0
Tax relating to
other
comprehensive
income 3 3
Total other
comprehensive
income 0 0 -7 0 -10 -18
Balance at
30.6.2011 197 0 198 243 -3 6 1,436 49 2,126
Balance at
1.1.2012 197 0 198 243 -3 3 1,537 58 2,233
Shares
subscribed
with options 0 0
Share-based
compensation 2 2
Option cost 0 0 0
Own shares 0 0
Dividends -118 -118
Other changes 2 2
Net profit for
the period 54 5 59
Other
comprehen-sive
income
Exchange
differences on
translating
foreign
operations 0 2 0 1 3
Adjustment for
hyperinflation 0 1 1
Cash flow hedge
revaluation -1 -1
Revaluation of
available-for-
sale financial
assets -1 -1
Tax relating to
other
comprehen-sive
income 0 0
Total other
comprehen-sive
income 0 2 -2 0 2 3
Balance at
30.6.2012 197 0 198 243 -1 1 1,478 65 2,182
Consolidated cash flow statement (€ million), condensed
1-6/ 1-6/ Change,% 4-6/ 4-6/ Change,% 1-12/
2012 2011 2012 2011 2011
Cash flow from operating activities
Profit before tax 85 120 -29.4 59 84 -30.3 282
Planned depreciation 75 59 25.6 39 30 28.7 125
Finance income and costs 2 0 (..) 1 0 (..) -1
Other adjustments 6 14 -55.2 -1 7 (..) -6
Change in working capital
Current non-interest-bearing
trade and other receivables,
increase (-)/decrease (+) -124 -144 -14.1 -4 -83 -95.3 -89
Inventories,
increase (-)/decrease (+) 0 -34 (..) 37 6 (..) -119
Current non-interest-bearing
liabilities,
increase (-)/decrease (+) 55 90 -39.3 -46 102 (..) 127
Financial items and tax -41 -63 -34.2 -23 -78 -69.8 -103
Net cash generated from operating
activities 57 43 32.1 62 69 -9.0 216
Cash flow from investing activities
Capital expenditure -191 -198 -3.5 -80 -128 -37.7 -449
Sales of fixed assets 21 4 (..) 2 2 -25.7 8
Increase of non-current receivables -2 0 (..) -1 0 (..) 0
Net cash used in investing
activities -171 -194 -11.9 -79 -127 -37.3 -441
Cash flow from financing activities
Interest-bearing liabilities,
increase (-)/decrease (+) 162 5 (..) 113 34 (..) -58
Current interest-bearing
receivables,
increase (-)/decrease (+) -35 1 (..) -14 2 (..) -37
Dividends paid -118 -132 -10.9 118 -132 -10.9 -133
Equity increase 0 0 -21.8 0 0 -21.8 0
Acquisition of own shares - -23 (..) - -23 (..) -23
Increase (-)/ decrease (+) in short-
term money market investments 85 126 -32.9 53 40 33.1 199
Other items -8 -2 (..) -2 -1 59.4 1
Net cash used in financing
activities 86 -24 (..) 32 -81 (..) -51
Change in cash and cash equivalents -28 -175 -83.9 15 -139 (..) -277
Cash and cash equivalents and
current portion of available-for-
sale financial assets at 1 Jan. 231 509 -54.7 187 473 -60.4 509
Currency translation difference
adjustment and revaluation 0 -1 -67.8 0 -1 -48.1 -2
Cash and cash equivalents and
current portion of available-for-
sale financial assets at 30 June 202 334 -39.4 202 334 -39.4 231
(..) Change over 100%
Group's performance indicators
1-6/2012 1-6/2011 Change 1-12/2011
pp
Return on capital employed, % 6.8 11.7 -4.9 13.2
Return on capital employed, %, moving 12 mo 10.4 16.6 -6.1 13.2
Return on capital employed excl. non-
recurring items, % 6.7 11.6 -4.8 13.1
Return on capital employed excl. non-
recurring items, %, moving 12 mo 10.4 14.6 -4.2 13.1
Return on equity, % 5.3 7.6 -2.3 8.9
Return on equity, %, moving 12 mo 8.0 11.0 -3.0 8.9
Return on equity excl. non-recurring items,
% 5.3 7.5 -2.3 8.8
Return on equity excl. non-recurring items,
%, moving 12 mo 8.0 9.6 -1.6 8.8
Equity ratio, % 51.1 52.1 -1.0 53.9
Gearing, % 14.2 -3.3 17.5 1.5
Change,%
Capital expenditure, € million 171.9 194.6 -11.7 425.4
Capital expenditure, % of net sales 3.6 4.3 -16.7 4.5
Earnings per share, basic, € 0.55 0.80 -31.6 1.85
Earnings per share, diluted, € 0.55 0.79 -31.3 1.84
Earnings per share excl. non-recurring
items, basic, € 0.54 0.79 -31.7 1.84
Cash flow from operating activities, €
million 57 43 32.1 216
Cash flow from investing activities, €
million -171 -194 -11.9 -441
Equity per share, € 21.59 21.21 1.8 22.20
Interest-bearing net debt 310 -70 (..) 33
Diluted number of
shares, average of
reporting period 98,440 99,328 -0.9 98,919
Personnel, average 19,574 18,644 5.0 18,960
(..) Change over 100%
Group's performance 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
indicators by quarter 2011 2011 2011 2011 2012 2012
Net sales, € million 2,103 2,472 2,404 2,481 2,318 2,460
Change in net sales, % 7.4 8.5 7.8 7.4 10.2 -0.5
Operating profit, € million 35.7 83.9 88.2 72.8 26.3 59.0
Operating margin, % 1.7 3.4 3.7 2.9 1.1 2.4
Operating profit excl. non- recurring
items, € million 34.9 83.3 89.2 71.5 23.6 60.7
Operating margin excl.
non-recurring items, % 1.7 3.4 3.7 2.9 1.0 2.5
Finance income/costs,
€ million -0.6 0.3 0.3 0.8 -0.1 -0.3
Profit before tax,
€ million 36.1 84.0 88.0 74.0 26.3 58.5
Profit before tax, % 1.7 3.4 3.7 3.0 1.1 2.4
Return on capital employed excl. non-
recurring items, % 7.0 15.9 16.6 12.5 3.9 9.5
Return on equity excl.
non-recurring items, % 4.4 10.6 11.1 9.8 3.0 7.5
Equity ratio, % 54.4 52.1 54.0 53.9 52.7 51.1
Capital expenditure, € million 64.1 130.5 126.3 104.5 104.1 67.8
Earnings per share, diluted, 0,25 0,55 0,53 0,51 0,17 0,38
Equity per share, € 22,04 21,21 21,66 22,20 22,42 21,59
Segment information
Net sales by segment (€ 1-6/ 1-6/ Change, % 4-6/ 4-6/ Change, % 1-12/
million) 2012 2011 2012 2011 2011
Food trade, Finland 2,101 2,025 3.8 1,091 1,077 1.4 4,182
Food trade, other countries* - - - - - - -
Food trade total 2,101 2,025 3.8 1,091 1,077 1.4 4,182
- of which intersegment trade 86 83 3.7 41 40 3.4 168
Home and speciality goods
trade, Finland 699 680 2.9 343 336 2.1 1,541
Home and speciality goods
trade, other countries* 22 7 (..) 10 3 (..) 23
Home and speciality goods
trade total 721 687 5.0 352 339 3.9 1,564
- of which intersegment trade 8 9 -4.0 5 5 -12.9 20
Building and home improvement
trade, Finland 648 625 3.7 348 345 0.9 1,233
Building and home improvement
trade, other countries* 763 702 8.6 434 413 5.3 1,483
Building and home improvement
trade total 1,411 1,327 6.3 782 757 3.3 2,716
- of which intersegment trade 0 6 -93.1 1 4 -88.2 12
Car and machinery trade,
Finland 572 569 0.6 235 303 -22.4 1,064
Car and machinery trade, other
countries* 55 52 5.4 39 39 0.0 110
Car and machinery trade
total 627 621 1.0 274 342 -19.8 1,174
- of which intersegment trade 1 1 -4.4 0 0 50.3 1
Common operations and
eliminations -83 -85 -2.9 -41 -43 -6.6 -176
Finland total 3,938 3,813 3.3 1,977 2,016 -2.0 7,844
Other countries total* 840 762 10.3 483 456 6.1 1,616
Group total 4,778 4,575 4.4 2,460 2,472 -0.5 9,460
* Net sales in countries other than Finland.
(..) Change over 100%
Operating profit by segment (€ 1-6/ 1-6/ 4-6/ 4-6/ 1-12/
million) 2012 2011 Change 2012 2011 Change 2011
Food trade 76.5 88.0 -11.5 38.9 45.9 -7.1 173.7
Home and speciality goods trade -13.5 -4.6 -8.9 -0.6 2.8 -3.4 37.0
Building and home improvement trade 4.7 9.8 -5.1 13.6 18.8 -5.2 26.3
Car and machinery trade 25.9 32.0 -6.1 10.3 19.7 -9.4 51.9
Common operations and eliminations -8.3 -5.5 -2.8 -3.2 -3.3 0.1 -8.3
Group total 85.3 119.6 -34.3 59.0 83.9 -24.9 280.6
Operating profit excl.
non-recurring items 1-6/ 1-6/ 4-6/ 4-6/ 1-12/
by segment (€ million) 2012 2011 Change 2012 2011 Change 2011
Food trade 73.8 87.2 -13.4 38.9 45.8 -7.0 172.2
Home and speciality goods trade -13.5 -5.0 -8.5 -0.6 2.4 -3.1 36.6
Building and home improvement trade 6.4 9.8 -3.4 15.3 18.8 -3.5 26.6
Car and machinery trade 25.9 31.8 -5.9 10.3 19.6 -9.3 51.8
Common operations and eliminations -8.3 -5.5 -2.8 -3.2 -3.3 0.1 -8.3
Group total 84.3 118.3 -34.0 60.7 83.3 -22.7 278.9
Operating margin
excl. non-recurring 1-6/ 1-6/ 4-6/ 4-6/ 1-12/ Moving 12 mo
items by segment 2012 2011 Change, pp 2012 2011 Change, pp 2011 6/2012
Food trade 3.5 4.3 -0.8 3.6 4.3 -0.7 4.1 3.7
Home and speciality
goods trade -1.9 -0.7 -1.1 -0.2 0.7 -0.9 2.3 1.8
Building and home
improvement trade 0.5 0.7 -0.3 2.0 2.5 -0.5 1.0 0.8
Car and machinery
trade 4.1 5.1 -1.0 3.8 5.7 -2.0 4.4 3.9
Group total 1.8 2.6 -0.8 2.5 3.4 -0.9 2.9 2.5
Capital employed by
segment, cumulative 1-6/ 1-6/ 4-6/ 4-6/ 1-12/
average (€ million) 2012 2011 Change 2012 2011 Change 2011
Food trade 724 566 158 745 572 173 601
Home and speciality goods trade 502 420 82 525 431 94 437
Building and home improvement trade 767 685 81 781 712 70 696
Car and machinery trade 195 148 47 192 149 43 158
Common operations and
eliminations 315 223 92 321 229 92 236
Group total 2,503 2,042 460 2,564 2,092 471 2,129
Return on capital Moving
employed excl. non- 1-6/ 1-6/ Change, pp 4-6/ 4-6/ Change, pp 1-12/ 12 mo 6/2012
recurring items by 2012 2011 2012 2011 2011
segment, %
Food trade 20.4 30.8 -10.4 20.9 32.1 -11.2 28.6 23.3
Home and speciality
goods trade -5.4 -2.4 -3.0 -0.5 2.3 -2.7 8.4 5.9
Building and home
improvement trade 1.7 2.8 -1.2 7.9 10.6 -2.7 3.8 3.1
Car and machinery
trade 26.5 43.0 -16.5 21.5 52.5 -30.9 32.8 25.7
Group total 6.7 11.6 -4.8 9.5 15.9 -6.5 13.1 10.4
Capital expenditure 1-6/ 1-6/ 4-6/ 4-6/ 1-12/
by segment (€ million) 2012 2011 Change 2012 2011 Change 2011
Food trade 96 94 1 36 64 -28 221
Home and speciality goods trade 29 18 11 11 10 1 62
Building and home improvement trade 26 66 -40 14 47 -33 110
Car and machinery trade 19 14 5 6 8 -2 30
Common operations and eliminations 2 2 0 1 2 -1 2
Group total 172 195 -23 68 131 -63 425
Segment information by quarter
Net sales by segment 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
(€ million) 2011 2011 2011 2011 2012 2012
Food trade 948 1,077 1,049 1,108 1,010 1,091
Home and speciality goods trade 348 339 376 501 369 352
Building and home improvement trade 570 757 731 657 629 782
Car and machinery trade 279 342 290 263 353 274
Common operations
and eliminations -42 -43 -42 -48 -42 -41
Group total 2,103 2,472 2,404 2,481 2,318 2,460
Operating profit by 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
segment (€ million) 2011 2011 2011 2011 2012 2012
Food trade 42.1 45.9 45.7 40.0 37.6 38.9
Home and speciality goods trade -7.4 2.8 8.7 32.9 -12.9 -0.6
Building and home improvement trade -9.1 18.8 21.0 -4.5 -9.0 13.6
Car and machinery trade 12.2 19.7 13.0 7.0 15.6 10.3
Common operations
and eliminations -2.2 -3.3 -0.2 -2.6 -5.1 -3.2
Group total 35.7 83.9 88.2 72.8 26.3 59.0
Operating profit excl.
non-recurring items 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
by segment (€ million) 2011 2011 2011 2011 2012 2012
Food trade 41.4 45.8 46.4 38.6 34.9 38.9
Home and speciality goods trade -7.4 2.4 8.7 32.9 -12.9 -0.6
Building and home improvement trade -9.1 18.8 21.3 -4.4 -9.0 15.3
Car and machinery trade 12.2 19.6 13.0 7.0 15.6 10.3
Common operations
and eliminations -2.2 -3.3 -0.2 -2.6 -5.1 -3.2
Group total 34.9 83.3 89.2 71.5 23.6 60.7
Operating margin
excl. non-recurring 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
items by segment 2011 2011 2011 2011 2012 2012
Food trade 4.4 4.3 4.4 3.5 3.5 3.6
Home and speciality goods trade -2.1 0.7 2.3 6.6 -3.5 -0.2
Building and home improvement trade -1.6 2.5 2.9 -0.7 -1.4 2.0
Car and machinery trade 4.4 5.7 4.5 2.6 4.4 3.8
Group total 1.7 3.4 3.7 2.9 1.0 2.5
Personnel, average and at 30 June
Personnel average by
segment 1-6/2012 1-6/2011 Change
Food trade 2,773 2,730 64
Home and speciality goods trade 6,095 5,542 553
Building and home improvement trade 9,018 8,765 232
Car and machinery trade 1,245 1,192 53
Common operations 444 415 29
Group total 19,574 18,644 930
Personnel at 30 June*
by segment 2012 2011 Change
Food trade 3,333 3,192 163
Home and speciality goods trade 8,894 8,128 766
Building and home improvement trade 10,323 9,976 325
Car and machinery trade 1,373 1,308 65
Common operations 538 480 58
Group total 24,461 23,084 1,377
* total number incl. part-time employees
Group's commitments (€ million)
30.6.2012 30.6.2011 Change,%
Own commitments 180 198 -9.1
For shareholders 0 0 (..)
For others 8 7 2.1
Lease liabilities for machinery and equipment 27 23 14.1
Lease liabilities for real estate 2,239 2,278 -1.7
Own commitments do not include lease liabilities
Liabilities arising from
derivative instruments
Fair value
Values of underlying instruments at 30 June 30.6.2012 30.6.2011 30.6.2012
Interest rate derivatives
Interest rate swaps 205 205 3.31
Currency derivatives
Forward and future contracts 355 216 2.12
Option agreements 13 0 0.04
Currency swaps 100 100 -5.10
Commodity derivatives
Electricity derivatives 35 48 4.68
Calculation of performance indicators
Operating profit x 100 / (Non-current
assets + Inventories + Receivables + Other
Return on capital employed*, % current assets -
Non-interest-bearing liabilities) on
average for the reporting period
Operating profit for prior 12 months x
100 / (Non-current assets + Inventories +
Return on capital employed, excl. Receivables + Other
non-recurring items, %, moving 12 mo current assets - Non-interest-bearing
liabilities) on
average for 12 months
Operating profit excl. non-recurring items
x 100 / (Non-current assets + Inventories
Return on capital employed excl. non- + Receivables +
recurring items*, % Other current assets
-Non-interest-bearing liabilities) on
average for the reporting period
Operating profit excl. non-recurring items
for prior 12
months x 100 / (Non-current assets +
Return on capital employed excl. non- Inventories +
recurring items, %, moving 12 months Receivables + Other current assets - Non-
interest-
bearing liabilities) on average for 12
months
(Profit/loss before tax - income tax) x
Return on equity*, % 100 /
Shareholders' equity
(Profit/loss for prior 12 months before
Return on equity, %, moving 12 months tax - income tax
for prior 12 months) x 100 / Shareholders'
equity
(Profit/loss adjusted for non-recurring
items before
Return on equity excl. non-recurring tax-income tax adjusted for the tax effect
items*, % of non-
recurring items) x 100 / Shareholders'
equity
(Profit/loss for prior 12 months adjusted
for non-
Return on equity excl. non- recurring recurring items before tax - income tax
items, %, moving 12 months for prior 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 interests) /
Earnings/share, diluted Average number of shares adjusted for the
dilutive
effect of options
(Profit/loss - non-controlling interests)
Earnings/share, basic /
Average number of shares
Earnings/share excl. (Profit/loss adjusted for non-recurring
non- recurring items, items - non-
basic controlling interests)/Average number of
shares
Equity attributable to equity holders of
the parent /
Equity/share Basic number of shares at the end of the
reporting
period
Gearing, % Interest-bearing net liabilities x 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.-30.6.2012 1.4.-30.6.2012
K-Group's retail and € million Change, % € million Change, %
B2B sales
K-Group's food trade
K-food stores, Finland 2,317 4.6 1,200 2.8
Kespro 376 6.3 197 2.7
Food trade total 2,693 4.8 1,397 2.8
K-Group's home and
speciality goods trade
Home and speciality goods stores,
Finland 780 3.0 379 1.5
Home and speciality goods stores, Balticcountries 22 (..) 10 (..)
Home and speciality
goods trade total 802 4.9 389 3.1
K-Group's building and home improvement
trade
K-rauta and Rautia 511 3.2 324 1.1
Rautakesko B2B Service 105 2.1 57 -7.0
K-maatalous 221 10.5 132 9.5
Finland total 837 4.9 513 2.1
Building and home improvement stores,
other Nordic countries 574 8.2 331 4.1
Building and home improvement stores,
Baltic countries 169 7.2 98 2.8
Building and home improvement stores,
other countries 166 8.9 98 7.3
Building and home improvement trade
total 1,746 6.6 1,039 3.3
K-Group's car and
machinery trade
VV-Autotalot 225 7.5 87 -22.1
VV-Auto, import 240 -3.6 81 -33.8
Konekesko, Finland 119 -3.1 70 -6.0
Finland total 584 0.5 238 -22.9
Konekesko, Baltic countries 58 7.7 41 0.4
Car and machinery trade
total 642 1.1 279 -20.1
Finland total 4,893 4.0 2,527 -0.6
Other countries total 990 9.7 577 5.2
Retail and B2B sales
total 5,883 4.9 3,104 0.4
(..) Change over 100%
[HUG#1629135]
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