2013-07-24 08:00:00 CEST
2013-07-24 08:02:46 CEST
REGULATED INFORMATION
Kesko Oyj - Interim report (Q1 and Q3)
Kesko's interim report for the period 1 Jan. to 30 Jun. 2013
KESKO CORPORATION STOCK EXCHANGE RELEASE 24.07.2013 AT 09.00 1(31)
Financial performance in brief:
*The Group's net sales for January-June decreased by 4.2%.
*The retail and B2B sales (VAT 0%) of the K-Group (i.e. Kesko and chain stores)
for January-June decreased by 4.6%.
*The operating profit excluding non-recurring items was €88.4 million (€81.7
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.
Key performance indicators
1-6/2013 1-6/2012 4-6/2013 4-6/2012
Net sales, € million 4,580 4,778 2,420 2,460
Operating profit excl. non- recurring
items, € million 88.4 81.7 69.8 59.4
Operating profit, € million 96.3 82.8 77.0 57.7
Profit before tax, € million 93.0 82.3 77.2 57.3
Capital expenditure, € million 89.5 171.9 48.1 67.8
Earnings per share, diluted, € 0.62 0.53 0.50 0.37
Earnings per share excl. non-recurring
items, basic, € 0.56 0.52 0.45 0.38
30.6.2013 30.6.2012
Equity ratio, % 50.5 51.2
Equity per share, € 21.79 21.72
FINANCIAL PERFORMANCE
Net sales and profit for January-June 2013
The Group's net sales in January-June 2013 were €4,580 million, which is 4.2%
down on the corresponding period of the previous year (€4,778 million). Net
sales performance was affected by weaker consumer demand especially in the
building and home improvement trade and department store trade in Finland. In
Finland, net sales decreased by 3.6% and in the other countries by 6.6%. 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 17.1% (17.6%) of net sales. Net sales
grew in the food trade and declined in the other divisions.
1-6/2013 Net sales, € Change, % Operating profit Change,
million excl. non- € million
recurring
items, € million
Food trade 2,144 +2.0 99.0 25.7
Home and speciality
goods trade 667 -7.6 -27.8 -14.2
Building and home
improvement trade 1,302 -7.7 2.9 -3.3
Car and machinery
trade 551 -12.2 20.8 -5.0
Common operations and
eliminations -83 +0.6 -6.4 3.5
Total 4,580 -4.2 88.4 6.7
The operating profit excluding non-recurring items for January-June was €88.4
million (€81.7 million). The enhancement measures of the profitability programme
had a significant positive impact on the Group's profit performance. Operating
expenses decreased by €40 million compared to the previous year.
Operating profit was €96.3 million (€82.8 million). The operating profit
includes €7.9 million (€1.1 million) of non-recurring items. The non-recurring
items include gains on the disposals of properties in the amount of €9.0
million. The Group's profit before tax for January-June was €93.0 million (€82.3
million).
The Group's earnings per share were €0.62 (€0.53). The Group's equity per share
was €21.79 (€21.72).
In January-June, the K-Group's (i.e. Kesko's and the chain stores') retail and
B2B sales (VAT 0%) were €5,615 million, down 4.6% compared to the previous year.
The K-Plussa customer loyalty programme gained 33,787 new households in January-
June. At the end of June, there was 2,229,370 K-Plussa households and 3.8
million K-Plussa cardholders.
Net sales and profit for April-June 2013
The Group's net sales in April-June 2013 were €2,420 million, which is 1.6% down
on the corresponding period of the previous year (€2,460 million). Net sales
decline was mainly attributable to the fall in the department store trade in
Finland and in the sales of the building and home improvement trade in Norway.
In Finland, net sales decreased by 1.2% and in the other countries by 3.3%.
International operations accounted for 19.3% (19.6%) of net sales.
4-6/2013 Net sales, Change, % Operating profit Change,
€ million excl. non- € million
recurring
items, € million
Food trade 1,099 +0.7 50.8 12.1
Home and speciality goods
trade 322 -8.7 -10.0 -9.3
Building and home improvement
trade 740 -5.4 19.5 4.2
Car and machinery trade 301 +9.8 13.0 2.7
Common operations and
eliminations -41 +1.7 -3.4 0.6
Total 2,420 -1.6 69.8 10.3
The operating profit excluding non-recurring items for April-June was €69.8
million (€59.4 million). It represented 2.9% (2.4%) of net sales. Profitability
was improved through major cost adjustments in all divisions.
Operating profit was €77.0 million (€57.7 million). The operating profit
includes €7.3 million (€-1.7 million) of non-recurring items. The non-recurring
items include gains on the disposals of properties in the amount of €8.4
million. The Group's profit before tax for April-June was €77.2 million (€57.3
million).
The Group's earnings per share were €0.50 (€0.37).
In April-June, the K-Group's (i.e. Kesko's and the chain stores') retail and B2B
sales (VAT 0%) were €3,042 million, down 2.0% compared to the previous year.
Finance
In January-June, the cash flow from operating activities was €185.7 million
(€55.9 million). The cash flow from investing activities was €-80.0 million (€-
171.2 million) including a €14.0 million (€21.1 million) amount of proceeds from
the sales of fixed assets.
The Group's liquidity remained at an excellent level in January-June. At the end
of the period, liquid assets totalled €474 million (€253 million). Interest-
bearing liabilities were €587 million (€563 million) and interest-bearing net
debt €113 million (€310 million) at the end of June. Equity ratio was 50.5%
(51.2%) at the end of the period.
In January-June, the Group's net finance costs were €2.9 million (€0.4 million).
Interest expense was increased by the €250 million bond taken out in September
2012.
In April-June, the cash flow from operating activities stood at an excellent
€244.3 million (€61.4 million). The cash flow from investing activities was €-
38.1 million (€-79.3 million) including an €11.5 million (€1.5 million) amount
of proceeds from the sales of fixed assets.
In April-June, the Group's net finance income was €0.4 million (net finance
costs €0.3 million. It includes a €4.0 million amount of interest in cooperative
capital from Suomen Luotto-osuuskunta.
Taxes
The Group's taxes for January-June were €28.3 million (€25.2 million). The
effective tax rate was 30.5% (30.7%), affected by loss-making foreign
operations.
The Group's taxes for April-June were €23.6 million (€17.9 million). The
effective tax rate was 30.5% (31.3%).
Capital expenditure
In January-June, the Group's capital expenditure totalled €89.5 million (€171.9
million), or 2.0% (3.6%) of net sales. Capital expenditure in store sites was
€66.8 million (€147.1 million), in IT €12.1 million (€13.4 million) and other
capital expenditure was €10.6 million (€11.4 million). Capital expenditure in
foreign operations represented 42.2% (13.8%) of total capital expenditure.
In April-June, the Group's capital expenditure totalled €48.1 million (€67.8
million), or 2.0% (2.8%) of net sales. Capital expenditure in store sites was
€35.1 million (€56.8 million), in IT €6.5 million (€6.0 million) and other
capital expenditure was €6.5 million (€5.0 million). Capital expenditure in
foreign operations represented 47.0% (22.2%) 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. Kesko's operating expenses
for the first half of 2013 were €885 million, down €40 million (-4.3%) on 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-June, the average number of employees in the Kesko Group was 19,373
(19,574) converted into full-time employees. In Finland, the average decrease
was 331 people, while outside Finland, there was an increase of 130 people.
At the end of June 2013, the number of employees was 24,026 (24,462), of whom
13,252 (13,762) worked in Finland and 10,774 (10,700) outside Finland. Compared
to the end of June 2012, there was a decrease of 510 people in Finland and an
increase of 74 people outside Finland.
In January-June, the Group's staff cost was €310 million, unchanged compared to
the previous year. In April-June, the staff cost decreased by 0.7% compared to
the previous year and was €157 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
1-6/2013 1-6/2012 4-6/2013 4-6/2012
Net sales, € million 2,144 2,101 1,099 1,091
Operating profit excl. non- recurring
items, € million 99.0 73.3 50.8 38.6
Operating margin excl. non-recurring
items, % 4.6 3.5 4.6 3.5
Capital expenditure,
€ million 43.9 95.9 27.4 35.7
Net sales, € million 1-6/2013 Change, % 4-6/2013 Change, %
Sales to K-food stores 1,640 +0.9 837 -1.0
Kespro 392 +3.2 204 +2.5
K-ruoka, Russia 22 - 14 -
Others 89 -7.7 44 -6.9
Total 2,144 +2.0 1,099 +0.7
January-June 2013
In the food trade, the net sales for January-June were €2,144 million (€2,101
million), up 2.0%. During the same period, the grocery sales of K-food stores
increased by 0.2% (VAT 0%). In the grocery market, retail prices are estimated
to have changed by some +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-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 €99.0 million (€73.3 million), or €25.7 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
€103.3 million (€76.0 million). Non-recurring income included €4.3 million (€2.7
million) of gains on the disposals of properties.
The capital expenditure of the food trade in January-June was €43.9 million
(€95.9 million), of which €38.9 million (€88.1 million) in stores sites.
April-June 2013
In the food trade, the net sales for April-June were €1,099 million (€1,091
million), up 0.7%.
The operating profit excluding non-recurring items of the food trade in April-
June was €50.8 million (€38.6 million), or €12.1 million up on the previous
year. Operating profit was €55.1 million (€38.6 million). Non-recurring income
included €4.3 million (€0.0 million) of gains on the disposals of properties.
The capital expenditure of the food trade in April-June was €27.4 million (€35.7
million).
In April-June 2013, one new K-citymarket was opened in Kokkola and a K-ruoka
store in St. Petersburg. Renovations were carried out in a total of four stores.
The most significant store sites being built are a K-citymarket in the Puuvilla
shopping centre in Pori and a K-supermarket in Tapiola, Espoo, in Pohjois-Haaga,
Helsinki, in Jyväskylä, Säkylä and Ikaalinen. The objective in Russia is to
open, in addition to the existing two stores, two new food stores during the
latter part of 2013.
Numbers of stores at 30 June 2013 2012
K-citymarket 80 77
K-supermarket 215 211
K-market (incl. service station stores) 445 454
K-ruoka, Russia 2 -
Others 178 200
Home and speciality goods trade
1-6/2013 1-6/2012 4-6/2013 4-6/2012
Net sales, € million 667 721 322 352
Operating profit excl. non-recurring
items, € million -27.8 -13.6 -10.0 -0.7
Operating margin excl. non-recurring
items, % -4.2 -1.9 -3.1 -0.2
Capital expenditure,
€ million 13.8 29.3 5.8 10.8
Net sales, € million 1-6/2013 Change, % 4-6/2013 Change, %
K-citymarket home and speciality goods 285 -4.1 145 -3.5
Anttila 171 -17.0 82 -16.5
Intersport, Finland 87 +8.3 36 +1.1
Intersport, Russia 10 -27.3 4 -32.7
Indoor 88 -0.8 44 -1.4
Musta Pörssi 17 -39.2 7 -53.2
Kenkäkesko 11 -3.9 4 -2.6
Total 667 -7.6 322 -8.7
January-June 2013
In the home and speciality goods trade, the net sales for January-June were €667
million (€721 million), down 7.6%. Consumer demand in the home and speciality
goods trade has weakened and the change in customer behaviour has strengthened
during the first months of the year. 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 and Budget Sport, as well
as Asko and Sotka stood at a good level.
The operating profit excluding non-recurring items of the home and speciality
goods trade for January-June was €-27.8 million (€-13.6 million), down €14.2
million compared to the previous year. Profitability was negatively impacted by
the weak profit performances of Anttila and Intersport Russia. During the
reporting period, significant cost savings were implemented. Operating profit
was €-23.3 million (€-13.6 million).
The capital expenditure of the home and speciality goods trade was €13.8 million
(€29.3 million) in January-June.
April-June 2013
In the home and speciality goods trade, the net sales for April-June were €322
million (€352 million), down 8.7%. Net sales decline was driven by the decrease
in the sales of the department store trade in particular and the significant
adjustment of the store site network of Musta Pörssi and the Intersport store
site network in Russia.
The operating profit excluding non-recurring items of the home and speciality
goods trade for April-June was €-10.0 million (€-0.7 million), down €9.3 million
compared to the previous year. Operating profit was €-5.6 million (€-0.7
million).
The capital expenditure of the home and speciality goods trade was €5.8 million
(€10.8 million).
In April-June, eight Must Pörssi stores were closed. In addition, 11 Musta
Pörssi retailers continued as Musta Pörssi partners from the beginning of June.
Intersport Russia completed the store network adjustment in May, as it closed
the Ekaterinburg store. In May, the extended Anttila department store was opened
in Citycenter, Helsinki and a new Kodin1 department store in Raisio, and the
Kodin1 department store in Länsikeskus, Turku was closed.
Numbers of stores at 30 June 2013 2012
K-citymarket, home and speciality goods* 81 77
Anttila department stores* 31 31
Kodin1 department stores for home goods and interior decoration* 13 11
Intersport 62 58
Budget Sport* 11 8
Asko and Sotka 84 82
Musta Pörssi* 6 34
Kookenkä* 48 47
Anttila, Baltics (NetAnttila)* 3 3
Intersport, Russia 20 35
Asko and Sotka, Baltics* 10 10
* incl. online stores
Building and home improvement trade
1-6/2013 1-6/2012 4-6/2013 4-6/2012
Net sales, € million 1,302 1,411 740 782
Operating profit excl. non-recurring
items, € million 2.9 6.2 19.5 15.2
Operating margin excl. non-recurring
items, % 0.2 0.4 2.6 1.9
Capital expenditure, € million 21.6 25.8 9.1 14.1
Net sales,
€ million 1-6/2013 Change, % 4-6/2013 Change, %
Rautakesko, Finland 615 -5.0 334 -3.8
K-rauta, Sweden 103 -4.0 65 +2.9
Byggmakker, Norway 238 -25.9 137 -22.4
Rautakesko, Estonia 31 +6.9 19 +9.0
Rautakesko, Latvia 23 +2.8 14 +3.1
Senukai, Lithuania 114 -2.6 66 -1.0
Stroymaster, Russia 128 -0.3 77 +2.1
OMA, Belarus 50 +30.1 29 +26.8
Total 1,302 -7.7 740 -5.4
January-June 2013
In the building and home improvement trade, the net sales for January-June were
€1,302 million (€1,411 million), down 7.7%. Excluding the impact of retailer
changes in Norway, the decrease in net sales was 2.0%. 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-June were €615 million (€648 million), a
decrease of 5.0%. The building and home improvement products contributed €417
million to the net sales in Finland, a decrease of 9.3%. The agricultural
supplies trade contributed €198 million to net sales, up 5.7%.
The retail sales of the K-rauta and Rautia chains in Finland decreased by 5.8%
to €481 million (VAT 0%). The sales of Rautakesko B2B Service were down 15.9%.
The retail sales of the K-maatalous chain were €236 million (VAT 0%), up 6.9%.
In January-June, the net sales from the foreign operations of the building andhome improvement trade were €686 million (€763 million), a decrease of 10.1%.
Excluding the impact of retailer changes in Norway, net sales increased by
0.7%. In Sweden, net sales were down 7.8% in terms of kronas. In Norway, net
sales decreased by 26.4% in terms of krones, which was attributable to 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 increased
by 2.3% in terms of roubles. Foreign operations contributed 52.7% (54.1%) 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-June was €2.9million (€6.2 million), down €3.3
million compared to the previous year. The fall is due to weak sales
performance. Due to enhancement measures, operating expenses were lower than in
the previous year regardless of store site network expansion. Operating profit
was €2.0 million (€4.5million).
In January-June, the capital expenditure of the building and home improvement
trade totalled €21.6 million (€25.8 million), of which 47.3% (54.6%) abroad.
Capital expenditure in store sites represented 96.6% of total capital
expenditure.
April-June 2013
In the building and home improvement trade, the net sales for April-June were
€740 million (€782 million), down 5.4%. Excluding the impact of retailer changes
in Norway, net sales increased by 0.1%.
In Finland, the net sales were €334 million (€348 million), a decrease of 3.8%.
The building and home improvement products contributed €227 million to the net
sales in Finland, a decrease of 8.5%. The agricultural supplies trade
contributed €108 million to net sales, up 7.9%.
The retail sales of the K-rauta and Rautia chains in Finland decreased by 4.0%
to €311 million (VAT 0%) in April-June. The sales of Rautakesko B2B Service were
down 11.7%. The retail sales of the K-maatalous chain were €143 million (VAT
0%), up 8.6%.
The net sales from the foreign operations of the building and home improvement
trade were €406 million (€434 million), a decrease of 6.6%. Excluding the impact
of retailer changes in Norway, net sales increased by 3.6%. In terms of local
currencies, the net sales from foreign operations decreased by 5.5%. In Sweden,
net sales were down 1.2% in terms of kronas. In Norway, net sales decreased by
22.1% in terms of krones, which was attributable to the changes that took place
in the Byggmakker chain last year. In Russia, net sales increased by 5.5% and in
Belarus by 44.2% in terms of roubles. Foreign operations contributed 54.8%
(55.6%) 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 April-June was €19.5 million (€15.2 million), up €4.2
million compared to the previous year. Due to enhancement measures, operating
expenses were lower than in the previous year regardless of store site network
expansion. In the previous year, profit was negatively impacted by obsolete
inventories and trade receivables written off. Operating profit was €18.0
million (€13.5 million).
The capital expenditure of the building and home improvement trade totalled €9.1
million (€14.1 million), of which 44.7% (45.1%) abroad.
In April, Moscow's third K-rauta store was opened in Mytishi, Russia.
Numbers of stores at 30 June 2013 2012
K-rauta* 42 42
Rautia* 99 103
K-maatalous* 83 86
K-rauta, Sweden 21 22
Byggmakker, Norway 90 106
K-rauta, Estonia 8 9
K-rauta, Latvia 8 8
Senukai, Lithuania 17 17
K-rauta, Russia 15 14
OMA, Belarus 9 6
*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
1-6/2013 1-6/2012 4-6/2013 4-6/2012
Net sales, € million 551 627 301 274
Operating profit excl.
non-recurring items,
€ million 20.8 25.8 13.0 10.3
Operating margin excl. non-recurring
items, % 3.8 4.1 4.3 3.7
Capital expenditure, € million 8.7 18.7 4.8 5.9
Net sales, € million 1-6/2013 Change, % 4-6/2013 Change, %
VV-Auto 397 -12.7 204 +23.3
Konekesko 154 -11.2 97 -10.8
Total 551 -12.2 301 +9.8
January-June 2013
In January-June, the net sales of the car and machinery trade were €551 million
(€627 million), down 12.2%.
VV-Auto's net sales for January-June were €397 million (€454 million), a
decrease of 12.7%. In January-June, the combined market performance of first
time registered passenger cars and vans was -15.9%.
In January-June, the combined market share of passenger cars and vans imported
by VV-Auto was 21.1% (20.4%). Volkswagen was the market leader in passenger cars
and vans.
Konekesko's net sales for January-June were €154 million (€174 million), down
11.2% compared to the previous year. Net sales in Finland were €96 million, down
19.8%. The fall is attributable to the weak market performance of machinery
trade in Finland. The net sales from Konekesko's foreign operations were €59
million, up 6.8%.
In January-June, the operating profit excluding non-recurring items of the car
and machinery trade was €20.8 million (€25.8 million), down €5.0 million
compared to the previous year. Regardless of the weakened market situation, the
profitability of the car trade remained at a good level.
The operating profit for January-June was €20.8 million (€25.8 million).
The capital expenditure of the car and machinery trade for January-June was €8.7
million (€18.7 million).
April-June 2013
The net sales of the car and machinery trade for April-June were €301 million
(€274 million), up 9.8%.
VV-Auto's net sales for April-June were €204 million (€165 million), an increase
of 23.3%. In the previous year, sales were decreased by the car tax change
effective 1 April 2012. In April-June, the combined market share of passenger
cars and vans imported by VV-Auto was 22.1% (21.8%).
Konekesko's net sales for April-June were €97 million (€109 million), down
10.8% compared to the previous year.
In April-June, the operating profit excluding non-recurring items of the car and
machinery trade was €13.0 million (€10.3 million), up €2.7 million compared to
the previous year. Profitability improved as a result of sales growth and cost
savings implemented. The operating profit for April-June was €13.0 million
(€10.3 million).
The capital expenditure of the car and machinery trade for April-June was €4.8
million (€5.9 million).
Numbers of stores at 30 June 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 June 2013, the total number of Kesko Corporation shares was
99,515,420, of which 31,737,007, or 31.9%, were A shares and 67,778,413, or
68.1%, were B shares. At 30 June 2013, Kesko Corporation held 544,854 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 385,148,483. 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 June 2013, Kesko Corporation's share capital was
€197,282,584. During the reporting period, the number of B shares was increased
three 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) and 5 June (592,619 B shares) and
announced in stock exchange notifications 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 and 6 June
2013. The subscription price of €15,671,241.60 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 €22.89 at the end of June 2013, representing a decrease of 6.2%.
Correspondingly, the price of a B share was €24.77 at the end of 2012, and
€21.36 at the end of June 2013, representing a decrease of 13.8%. In January-
June, 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-June, the Helsinki
stock exchange (OMX Helsinki) All-Share index was up 1.6% and the weighted OMX
Helsinki CAP index 1.4%. Correspondingly, the Retail Index was down 13.6%.
At the end of June 2013, the market capitalisation of A shares was €726 million,
while that of B shares was €1,436 million, excluding the shares held by the
parent company. The combined market capitalisation of A and B shares was €2,163
million, a decrease of €255 million from the end of 2012. In January-June 2013,
a total of 0.5 (1.0) million A shares were traded on the Helsinki stock
exchange, down 47%. The exchange value of A shares was €13 million. The total
number of B shares traded was 22.2 million, down 48%. The exchange value of B
shares was €525 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 187,336 2007C share options were traded at a total
value of €2,096,239. 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 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 2,594 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 and 18 June
2013. Further information on the Board's authorisations is available at
www.kesko.fi.
At the end of June 2013, the number of shareholders was 44,323, which was 231
less than at the end of 2012. At the end of June, foreign ownership of all
shares was 20%. At the end of June, foreign ownership of B shares was 29%.
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
holds 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 260 B shares (KESBV), initially transferred to a person included in
the target group of the share-based compensation plan's 2011 vesting period,
have been returned to Kesko without consideration. After the return of the
shares, Kesko holds 545,114 own B shares as treasury shares. (Stock exchange
notification on 19 July 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
Kesko's 13th Corporate Responsibility Report was published in May. The theme of
report is "Let's do good. Together." The 2012 report provides information on the
objectives, actions and results of Kesko's responsibility programme and work.
A Kesko Fair Play scholarship was distributed to over 2,800 pupils for promoting
school work. The scholarships were rewards to pupils who had promoted peace and
tolerance at school, motivation in school work and a positive atmosphere in
their schools with their exemplary behaviour. Schools themselves across Finland
selected the scholarship recipients from among their grade nine pupils. The
total scholarship amount was nearly €150,000.
Kodin1 opened the first passive retail store building in Finland and the Nordic
countries in Raisio. The department store saves energy with, for example,
lighting solutions, need-based air-conditioning, building automation and air-
tight structures.
Kesko arranged a Mother's Day celebration at Kaivopuisto in Helsinki at which
mothers and grandmothers were given 10,000 Pirkka Fairtrade roses. In addition,
another 10,000 Pirkka Fairtrade roses were distributed to new mothers at
hospital maternity wards in Hyvinkää, Turku, Tampere, Lahti, Seinäjoki,
Jyväskylä, Kuopio, Oulu, Espoo and Helsinki.
Kesko's Board of Directors granted scholarships to talented young athletes and
art students in a total amount of €40,000.
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 low consumer confidence and their impact on Kesko's sales and
profit performance. During the first months of the year, 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 (7/2013-6/2014) in comparison with the 12 months preceding the
reporting period (7/2012-6/2013).
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.
Helsinki, 23 July 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 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 on Kesko's website at www.kesko.fi.
Kesko Corporation's interim report for January-September will be released on 24
October 2013. 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
1-6/ 1-6/ 4-6/ 4-6/ 1-12/
2013 2012 Change,% 2013 2012 Change,% 2012
Net sales 4,580 4,778 -4.2 2,420 2,460 -1.6 9,686
Cost of goods sold -3,965 -4,138 -4.2 -2,090 -2,131 -1.9 -8,367
Gross profit 615 640 -3.9 331 329 0.5 1,319
Other operating income 367 368 -0.3 194 197 -1.9 747
Staff cost -310 -310 0.0 -157 -158 -0.7 -608
Depreciation and
impairment charges -76 -76 0.2 -40 -41 -2.4 -158
Other operating expenses -499 -538 -7.3 -251 -270 -7.1 -1,088
Operating profit 96 83 16.3 77 58 33.4 212
Interest income and
other finance income 10 10 2.2 7 5 42.3 21
Interest expense and
other finance costs -11 -8 29.1 -6 -5 21.3 -17
Exchange differences -2 -2 9.8 -1 -1 57.0 -5
Income from associates 0 0 (..) 0 0 (..) -1
Profit before tax 93 82 13.0 77 57 34.7 210
Income tax -28 -25 12.3 -24 -18 31.4 -75
Net profit for the
period 65 57 13.3 54 39 36.3 136
Attributable to
Owners of the parent 61 52 17.8 50 36 38.6 124
Non-controlling
interests 4 5 -32.1 4 3 11.1 11
Earnings per share (€)
for profit attributable
to
equity holders of the
parent
Basic 0.62 0.53 17.4 0.50 0.37 38.0 1.27
Diluted 0.62 0.53 17.3 0.50 0.37 38.0 1.26
Consolidated statement
of comprehensive
income (€ million)
1-6/ 1-6/ Change,% 4-6/ 4-6/ Change,% 1-12/
2013 2012 2013 2012 2012
Net profit for the
period 65 57 13.3 54 39 36.3 136
Items that will not be
reclassified to profit
or loss
Actuarial gains and
losses - 9 - - 0 - 1
Actuarial gains and
losses,
tax - -2 - - 0 - 0
Items that may be
reclassified
subsequently to profit
or loss
Exchange differences on
translating foreign
operations -7 3 (..) -10 0 (..) 0
Adjustment for
hyperinflation 2 1 (..) 0 0 (..) 4
Cash flow hedge
revaluation -3 -1 (..) -3 1 (..) -3
Revaluation of
available-for- sale
financial assets -4 -1 (..) -4 -1 (..) 9
Other items 0 0 (100) 0 0 (100) 0
Tax relating to
components of other
comprehensive income 1 0 (..) 1 0 (..) 1
Total other
comprehensive income for
the period,
net of tax -12 10 (..) -16 0 (..) 10
Total comprehensive
income for the period 53 67 -21.3 37 39 -5.0 147
Attributable to
Owners of the parent 48 60 -19.8 34 34 1.4 133
Non-controlling
interests 5 7 -34.3 3 6 -42.3 14
(..) Change over 100%
Consolidated statement of financial
position (€ million), condensed
30.6.2013 30.6.2012 Change, % 31.12.2012
ASSETS
Non-current assets
Tangible assets 1,665 1,579 5.4 1,678
Intangible assets 189 190 -0.7 192
Investments in associates and other
financial assets 105 72 46.8 105
Loans and receivables 87 82 6.5 91
Pension assets 155 163 -4.9 154
Total 2,202 2,086 5.5 2,220
Current assets
Inventories 807 869 -7.1 814
Trade receivables 790 803 -1.7 703
Other receivables 183 321 -43.1 153
Financial assets at fair value
through profit or loss 115 51 (..) 137
Available-for-sale financial assets 271 141 92.1 249
Cash and cash equivalents 88 61 42.6 103
Total 2,253 2,246 0.3 2,160
Non-current assets held for sale 1 1 -49.1 2
Total assets 4,455 4,334 2.8 4,382
30.6.2013 30.6.2012 Change, % 31.12.2012
EQUITY AND LIABILITIES
Equity 2,156 2,130 1.2 2,206
Non-controlling interests 67 65 2.3 67
Total equity 2,223 2,195 1.3 2,272
Non-current liabilities
Interest-bearing liabilities 370 210 76.0 450
Non-interest-bearing liabilities 12 10 12.8 10
Deferred tax liabilities 81 92 -12.2 81
Pension obligations 2 2 -6.4 2
Provisions 20 11 86.2 21
Total 484 325 49.0 564
Current liabilities
Interest-bearing liabilities 217 353 -38.6 174
Trade payables 1,015 988 2.7 804
Other non-interest-bearing
liabilities 482 449 7.3 529
Provisions 35 24 45.8 40
Total 1,748 1,814 -3.6 1,546
Total equity and liabilities 4,455 4,334 2.8 4,382
(..) Change over 100%
Consolidated statement of changes in equity (€ million)
Cur-
rency Non-
trans- Re- cont-
Share lation Reval- tained rolling
capi- Reser- differ- uation Treasury earn- inter-
tal ves ences reserve shares ings sts 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 0 2
Dividends -118 -118
Other changes 0 2 2
Net profit for
the period 52 5 57
Other
comprehensive
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 2 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 -1 7 2 10
Balance at
30.6.2012 197 441 -1 1 -21 1,511 65 2,195
Balance at
1.1.2013 197 442 -2 10 -19 1,578 67 2,272
Shares
subsribed with
options 16 16
Share-based
payments 1 0 1
Dividends -118 -5 -122
Other changes 0 3 3
Net profit for
the period 61 4 65
Other
comprehensive
income
Items that may
be
reclassified
subsequently
to profit or
loss
Exchange
differences on
translating
foreign
operations 0 -6 -1 -7
Adjustment for
hyperinflation 0 2 2
Cash flow
hedge
revaluation -3 -3
Revaluation of
available-for-
sale financial
assets -4 -4
Other items 0 0
Tax relating
to other
comprehen-sive
income 1 1
Total other
comprehen-sive
income 0 -6 -6 0 1 -12
Balance at
30.6.2013 197 457 -8 3 -18 1,525 67 2,223
Consolidated statement of cash flows (€ million), condensed
1-6/ 1-6/ Change,% 4-6/ 4-6/ Change,% 1-12/
2013 2012 2013 2012 2012
Cash flows from operating
activities
Profit before tax 93 82 13.0 77 57 34.7 210
Planned depreciation 75 75 0.5 38 39 -1.9 155
Finance income and costs 3 0 (..) 0 0 (..) 1
Other adjustments -5 9 (..) -4 0 (..) 103
Change in working capital
Current non-interest-bearing
operating receivables,
increase (-)/decrease (+) -117 -124 -5.8 28 -4 (..) 5
Inventories,
increase (-)/decrease (+) 0 0 (..) 43 37 15.3 57
Current non-interest-bearing
liabilities,
increase (+)/decrease (-) 170 55 (..) 83 -46 (..) -70
Financial items and tax -33 -41 -19.3 -20 -23 -12.7 -79
Net cash from operating activities 186 56 (..) 244 61 (..) 382
Cash flows from investing
activities
Investing activities -94 -191 -50.8 -49 -80 -38.2 -411
Sales of fixed assets 14 21 -33.6 12 2 (..) 24
Increase in non-current
receivables 0 -2 -91.3 0 -1 -70.2 -4
Net cash used in investing
activities -80 -171 -53.3 -38 -79 -51.9 -391
Cash flows from financing
activities
Interest-bearing liabilities,
increase (+)/decrease (-) -19 162 (..) -41 113 (..) 230
Current interest-bearing
receivables,
increase (-)/decrease (+) 2 -35 (..) 1 -14 (..) 37
Dividends paid -118 -118 0.2 -118 -118 0.2 -123
Equity increase 16 0 (..) 15 0 (..) 1
Short-term money market
investments, increase (-)/
decrease (+) 0 85 -99.9 -21 53 (..) -2
Other items -1 -8 -90.8 1 -2 (..) -14
Net cash used in financing
activities -120 86 (..) -163 32 (..) 130
Change in cash and cash
equivalents -14 -30 -51.0 43 14 (..) 121
Cash and cash equivalents and
current portion of available-for-
sale financial assets at 1 Jan. 352 231 52.5 294 187 57.0 231
Currency translation difference
adjustment and revaluation -1 0 (..) -1 0 (..) 0
Cash and cash equivalents and
current portion of available-for-
sale financial assets at 30 Jun. 337 202 66.4 337 202 66.4 352
(..) Change over 100%
Group's performance indicators
1-6/2013 1-6/2012 Change, pp 1-12/2012
Return on capital employed, % 7.7 6.6 1.1 8.3
Return on capital employed, %,
moving 12 mo 8.8 10.3 -1.5 8.3
Return on capital employed excl. non-
recurring items, % 7.1 6.5 0.6 9.0
Return on capital employed excl. non-
recurring items, %, moving 12 mo 9.3 10.2 -1.0 9.0
Return on equity, % 5.7 5.1 0.6 6.0
Return on equity, %, moving 12 mo 6.5 7.9 -1.4 6.0
Return on equity excl. non-recurring
items, % 5.2 5.1 0.2 6.9
Return on equity excl. non-recurring
items, %, moving 12 mo 7.1 7.9 -0.7 6.9
Equity ratio, % 50.5 51.2 -0.7 52.5
Gearing, % 5.1 14.1 -9.0 6.0
Change, %
Capital expenditure, € million 89.5 171.9 -47.9 378.3
Capital expenditure, % of net sales 2.0 3.6 -44.7 3.9
Earnings per share, basic, € 0.62 0.53 17.4 1.27
Earnings per share, diluted, € 0.62 0.53 17.3 1.26
Earnings per share excl. non-recurring
items, basic, € 0.56 0.52 8.0 1.47
Cash flow from operating activities,
€ million 186 56 (..) 382
Cash flow from investing activities,
€ million -80 -171 -53.3 -391
Equity per share, € 21.79 21.72 0.3 22.48
Interest-bearing net debt 113 310 -63.4 135
Diluted number of
shares, average for
reporting period 98,880 98,440 0.4 98,472
Personnel, average 19,373 19,574 -1.0 19,741
(..) Change over 100%
Group's performance indicators by quarter 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
2012 2012 2012 2012 2013 2013
Net sales, € million 2,318 2,460 2,449 2,459 2,159 2,420
Change in net sales, % 10.2 -0.5 1.9 -0.9 -6.9 -1.6
Operating profit, € million 25.1 57.7 77.4 51.8 19.2 77.0
Operating margin, % 1.1 2.3 3.2 2.1 0.9 3.2
Operating profit excl. non- recurring
items, € million 22.3 59.4 77.4 70.9 18.6 69.8
Operating margin excl.
non-recurring items, % 1.0 2.4 3.2 2.9 0.9 2.9
Finance income/costs,
€ million -0.1 -0.3 -1.3 1.1 -3.3 0.4
Profit before tax,
€ million 25.0 57.3 76.1 52.1 15.8 77.2
Profit before tax, % 1.1 2.3 3.1 2.1 0.7 3.2
Return on capital employed, % 4.1 8.9 11.9 8.0 3.1 12.3
Return on capital employed excl. non-
recurring items, % 3.6 9.2 11.9 10.9 3.0 11.1
Return on equity, % 3.1 7.0 9.6 4.4 1.9 9.5
Return on equity excl.
non-recurring items, % 2.8 7.3 9.6 8.0 1.8 8.6
Equity ratio, % 52.8 51.2 51.3 52.5 51.7 50.5
Capital expenditure, € million 104.1 67.8 102.6 103.8 41.5 48.1
Earnings per share, diluted, € 0.16 0.37 0.50 0.23 0.11 0.50
Equity per share, € 22.56 21.72 22.33 22.48 22.62 21.79
Segment information
Net sales by segment 1-6/ 1-6/ Change, 4-6/ 4-6/ Change, 1-12/
(€ million) 2013 2012 % 2013 2012 % 2012
Food trade, Finland 2,121 2,101 1.0 1,085 1,091 -0.6 4,308
Food trade, other countries* 22 - - 14 - - 3
Food trade total 2,144 2,101 2.0 1,099 1,091 0.7 4,311
- of which intersegment trade 83 86 -2.9 41 41 -0.6 172
Home and speciality goods trade,
Finland 649 699 -7.1 314 343 -8.3 1,557
Home and speciality goods trade,
other countries* 17 22 -21.9 7 10 -25.4 45
Home and speciality goods trade
total 667 721 -7.6 322 352 -8.7 1,603
- of which intersegment trade 8 8 -6.8 4 5 -4.4 18
Building and home improvement
trade, Finland 615 648 -5.0 334 348 -3.8 1,229
Building and home improvement
trade, other countries* 686 763 -10.1 406 434 -6.6 1,598
Building and home improvement
trade total 1,302 1,411 -7.7 740 782 -5.4 2,827
- of which intersegment trade 0 0 (..) 0 1 (..) 0
Car and machinery trade, Finland 492 572 -14.1 261 235 10.9 998
Car and machinery trade, other
countries* 59 55 7.2 41 39 3.0 116
Car and machinery trade
total 551 627 -12.2 301 274 9.8 1,114
- of which intersegment trade 1 1 -27.4 0 0 -25.8 1
Common operations and
eliminations -83 -83 0.6 -41 -41 1.7 -169
Finland total 3,795 3,938 -3.6 1,953 1,977 -1.2 7,924
Other countries total* 785 840 -6.6 467 483 -3.3 1,762
Group total 4,580 4,778 -4.2 2,420 2,460 -1.6 9,686
* 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) 2013 2012 Change 2013 2012 Change 2012
Food trade 103.3 76.0 27.3 55.1 38.6 16.5 170.2
Home and speciality goods trade -23.3 -13.6 -9.7 -5.6 -0.7 -4.9 0.0
Building and home improvement trade 2.0 4.5 -2.5 18.0 13.5 4.5 11.6
Car and machinery trade 20.8 25.8 -5.0 13.0 10.3 2.7 41.9
Common operations and eliminations -6.4 -9.9 3.5 -3.4 -4.0 0.6 -11.8
Group total 96.3 82.8 13.5 77.0 57.7 19.3 212.0
Operating profit excl.
non-recurring items 1-6/ 1-6/ 4-6/ 4-6/ 1-12/
by segment (€ million) 2013 2012 Change 2013 2012 Change 2012
Food trade 99.0 73.3 25.7 50.8 38.6 12.1 167.5
Home and speciality goods trade -27.8 -13.6 -14.2 -10.0 -0.7 -9.3 19.6
Building and home improvement trade 2.9 6.2 -3.3 19.5 15.2 4.2 13.3
Car and machinery trade 20.8 25.8 -5.0 13.0 10.3 2.7 41.9
Common operations and eliminations -6.4 -9.9 3.5 -3.4 -4.0 0.6 -12.2
Group total 88.4 81.7 6.7 69.8 59.4 10.3 230.0
Operating margin
excl. non-recurring 1-6/ 1-6/ 4-6/ 4-6/ 1-12/ Moving 12 mo
items by segment, % 2013 2012 Changepp 2013 2012 Change pp 2012 6/2013
Food trade 4.6 3.5 1.1 4.6 3.5 1.1 3.9 4.4
Home and speciality
goods trade -4.2 -1.9 -2.3 -3.1 -0.2 -2.9 1.2 0.3
Building and home
improvement trade 0.2 0.4 -0.2 2.6 1.9 0.7 0.5 0.4
Car and machinery
trade 3.8 4.1 -0.3 4.3 3.7 0.6 3.8 3.6
Group total 1.9 1.7 0.2 2.9 2.4 0.5 2.4 2.5
Capital employed by
segment, cumulative 1-6/ 1-6/ 4-6/ 4-6/ 1-12/
average (€ million) 2013 2012 Change 2013 2012 Change 2012
Food trade 842 729 113 842 750 93 763
Home and speciality goods trade 478 504 -26 481 527 -46 514
Building and home improvement
trade 763 769 -6 769 783 -14 760
Car and machinery trade 164 196 -33 160 193 -33 188
Common operations and eliminations 258 321 -63 259 329 -70 327
Group total 2,504 2,518 -14 2,511 2,582 -71 2,552
Return on capital Moving
employed excl. non- 1-6/ 1-6/ Change pp 4-6/ 4-6/ Changepp 1-12/ 12 mo 6/2013
recurring items by 2013 2012 2013 2012 2012
segment, %
Food trade 23.5 20.1 3.4 24.1 20.6 3.5 21.9 23.7
Home and speciality
goods trade -11.6 -5.4 -6.2 -8.3 -0.5 -7.8 3.8 1.1
Building and home
improvement trade 0.8 1.6 -0.9 10.1 7.8 2.3 1.7 1.3
Car and machinery
trade 25.4 26.3 -0.9 32.5 21.3 11.2 22.3 21.5
Group total 7.1 6.5 0.6 11.1 9.2 1.9 9.0 9.3
Capital expenditure by segment (€ 1-6/ 1-6/ 4-6/ 4-6/ 1-12/
million) 2013 2012 Change 2013 2012 Change 2012
Food trade 44 96 -52 27 36 -8 200
Home and speciality goods trade 14 29 -16 6 11 -5 61
Building and home improvement trade 22 26 -4 9 14 -5 63
Car and machinery trade 9 19 -10 5 6 -1 27
Common operations and eliminations 2 2 -1 1 1 0 27
Group total 90 172 -82 48 68 -20 378
Segment information by quarter
Net sales by segment 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
(€ million) 2012 2012 2012 2012 2013 2013
Food trade 1,010 1,091 1,078 1,132 1,045 1,099
Home and speciality goods trade 369 352 395 487 345 322
Building and home improvement trade 629 782 759 657 562 740
Car and machinery trade 353 274 259 227 249 301
Common operations and eliminations -42 -41 -41 -45 -42 -41
Group total 2,318 2,460 2,449 2,459 2,159 2,420
Operating profit by segment (€ million) 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
2012 2012 2012 2012 2013 2013
Food trade 37.4 38.6 49.4 44.8 48.2 55.1
Home and speciality goods trade -12.9 -0.7 0.9 12.8 -17.7 -5.6
Building and home improvement trade -9.0 13.5 17.9 -10.8 -16.1 18.0
Car and machinery trade 15.5 10.3 11.4 4.7 7.8 13.0
Common operations and eliminations -5.9 -4.0 -2.2 0.3 -3.0 -3.4
Group total 25.1 57.7 77.4 51.8 19.2 77.0
Operating profit excl. non-recurring items 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
by segment (€ million) 2012 2012 2012 2012 2013 2013
Food trade 34.7 38.6 49.4 44.8 48.2 50.8
Home and speciality goods trade -12.9 -0.7 0.9 32.3 -17.8 -10.0
Building and home improvement trade -9.0 15.2 17.9 -10.8 -16.6 19.5
Car and machinery trade 15.5 10.3 11.4 4.7 7.8 13.0
Common operations and eliminations -5.9 -4.0 -2.2 -0.1 -3.0 -3.4
Group total 22.3 59.4 77.4 70.9 18.6 69.8
Operating margin
excl. non-recurring 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
items by segment, % 2012 2012 2012 2012 2013 2013
Food trade 3.4 3.5 4.6 4.0 4.6 4.6
Home and speciality goods trade -3.5 -0.2 0.2 6.6 -5.2 -3.1
Building and home improvement trade -1.4 1.9 2.4 -1.6 -3.0 2.6
Car and machinery trade 4.4 3.7 4.4 2.1 3.1 4.3
Group total 1.0 2.4 3.2 2.9 0.9 2.9
Change in tangible and intangible assets (€ million)
30.6.2013 30.6.2012
Opening net carrying amount 1,870 1,680
Depreciation, amortisation and impairment -76 -76
Investments in tangible and intangible assets 90 175
Disposals -9 -14
Currency translation differences -21 5
Closing net carrying amount 1,854 1,770
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:
1-6/2013 1-6/2012
Sales of goods and services 42 38
Purchases of goods and services 11 6
Other operating income 0 0
Other operating expenses 13 12
Finance costs 0 0
30.6.2013 30.6.2012
Receivables 8 6
Liabilities 20 39
Fair value hierarchy of financial assets and liabilities (€ million)
Level 1 Level 2 Level 3 30.6.2013
Financial assets at fair value through
profit or loss 10.0 105.3 115.4
Derivative financial instruments at fair
value through profit or loss
Derivative financial assets 5.7 5.7
Derivative financial liabilities 15.9 15.9
Available-for-sale financial assets 21.8 249.0 6.8 277.6
Fair value hierarchy of financial assets and liabilities (€ million)
Level 1 Level 2 Level 3 30.6.2012
Financial assets at fair value through
profit or loss 51.1 51.1
Derivative financial instruments at fair
value through profit or loss
Derivative financial assets 9.3 9.3
Derivative financial liabilities 13.5 13.5
Available-for-sale financial assets 0.0 140.9 6.5 147.4
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 June
Personnel average by
segment 1-6/2013 1-6/2012 Change
Food trade 3,030 2,773 258
Home and speciality goods trade 5,805 6,095 -290
Building and home improvement trade 8,852 9,018 -165
Car and machinery trade 1,245 1,245 0
Common operations 440 444 -3
Group total 19,373 19,574 -201
Personnel at 30 June*
by segment 2013 2012 Change
Food trade 3,706 3,333 373
Home and speciality goods trade 8,462 8,894 -432
Building and home improvement trade 10,016 10,324 -308
Car and machinery trade 1,329 1,373 -44
Common operations 513 538 -25
Group total 24,026 24,462 -436
* total number incl. part-time employees
Group's commitments (€ million)
30.6.2013 30.6.2012 Change, %
Own commitments 191 180 6.2
For associates 65 - -
For others 10 8 25.4
Lease liabilities for machinery and equipment 25 27 -6.1
Lease liabilities for real estate 2,413 2,239 7.8
Liabilities arising from derivative instruments
Fair value
Values of underlying instruments at 30 June 30.6.2013 30.6.2012 30.6.2013
Interest rate derivatives
Interest rate swaps 203 205 0.45
Currency derivatives
Forward and future contracts 230 355 4.21
Option agreements 4 13 -0.01
Currency swaps 100 100 -8.68
Commodity derivatives
Electricity derivatives 38 35 -6.20
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-
Return on capital employed excl. non- current assets + Inventories +
recurring items*, % Receivables + Other current assets
- Non-interest-bearing liabilities)
on average for the reporting period
Operating profit excl. non-
recurring items for prior 12 months
Return on capital employed excl. non- x 100 / (Non-current assets +
recurring items, %, moving 12 months Inventories + 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 -
Interest-bearing net debt money market investments - cash and
cash equivalents
* Indicators for return on capital have been annualised.
K-Group's retail and B2B sales (VAT 0%) (preliminary data):
1.1.-30.6.2013 1.4.-30.6.2013
K-Group's retail and € million Change, % € million Change, %
B2B sales
K-Group's food trade
K-food stores, Finland 2,315 0.0 1,183 -1.3
Kespro 388 3.1 201 2.4
K-ruoka, Russia 22 14
Food trade total 2,725 1.3 1,399 0.2
K-Group's home and
speciality goods trade
Home and speciality goods stores,
Finland 718 -8.0 352 -7.3
Home and speciality goods stores,
other countries 16 -27.8 6 -32.8
Home and speciality
goods trade total 734 -8.5 358 -8.0
K-Group's building and home
improvement trade
K-rauta and Rautia 481 -5.8 311 -4.0
Rautakesko B2B Service 88 -15.9 51 -11.7
K-maatalous 236 6.9 143 8.6
Finland total 806 -3.7 505 -1.6
Building and home improvement stores,
other Nordic countries 441 -23.3 267 -19.4
Building and home improvement stores,
Baltic countries 169 -0.3 99 1.2
Building and home improvement stores,
other countries 177 6.4 105 7.6
Building and home improvement trade
total 1,593 -8.8 976 -6.1
K-Group's car and
machinery trade
VV-Autotalot 195 -13.0 106 22.2
VV-Auto, import 211 -12.0 104 28.1
Konekesko, Finland 96 -19.8 57 -18.4
Finland total 502 -14.0 267 12.2
Konekesko, other countries 61 4.3 42 0.7
Car and machinery trade
total 563 -12.4 308 10.5
Finland total 4,729 -3.3 2,509 -0.7
Other countries total 886 -10.6 533 -7.7
Retail and B2B sales
total 5,615 -4.6 3,042 -2.0
[HUG#1718283]
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