2007-07-18 07:00:00 CEST
2007-07-18 07:00:00 CEST
REGULATED INFORMATION
Kesko Oyj - Quarterly report
Interim financial report for the period 1 January-30 June 2007
KESKO CORPORATION STOCK EXCHANGE RELEASE 18.07.2007
Interim financial report for the period 1 January-30 June 2007
The Group's net sales in April-June 2007 were €2,464 million, up
8.2% on the corresponding period of the previous year (€2,277
million). In April-June, the operating profit excluding non-
recurring items was €96.8 million (€89.4 million). The pre-tax
profit was €101.2 million (€91.9 million). The consolidated
earnings per share were €0.72 (€0.41). The Group's net sales in
January-June were €4,658 million, up 9.6% on the corresponding
period of the previous year (€4,248 million). In January-June, the
operating profit excluding non-recurring items was €156.6 million
(€126.0 million). The pre-tax profit was €202.1 million (€242.1
million). The consolidated earnings per share were €1.78 (€1.53).
Net sales and profit, continuing operations
Net sales and profit in April-June
The Group's net sales in April-June 2007 were €2,464 million,
which is 8.2% up on the corresponding period of the previous year
(€2,277 million). The Group's net sales increased by 5.3% in
Finland and by 19.0% abroad. Excluding acquisitions and business
disposals, the Group's net sales increase was 8.5%. Exports and
foreign operations accounted for 23.0% (21.0%) of net sales.
In April-June, the K-Group's (i.e. Kesko's and the chain stores')
retail sales were €2,969.4 million, an increase of 8.2% on the
corresponding period of the previous year.
The Group's profit before taxes for April-June was €101.2 million
(€91.9 million). The operating profit excluding non-recurring
items was €96.8 million (€89.4 million), representing 3.9% of net
sales (3.9%). Especially Rautakesko improved its profit excluding
non-recurring items. The operating profit was €103.2 million
(€91.6 million). The operating profit was increased by a net total
of €6.4 million (€2.2 million) in non-recurring gains and losses
from disposal of fixed assets and operations, and impairment
charges.
The consolidated earnings per share from continuing operations
were €0.72 (€0.42). Equity per share was €18.32 (€15.79).
Net sales and profit in January-June
The Group's net sales in January-June 2007 were €4,658 million,
which is 9.6% up on the corresponding period of the previous year
(€4,248 million). The Group's net sales increased by 6.6% in
Finland and by 22.4% abroad. Excluding acquisitions and business
disposals, the Group's net sales increase was 9.9%. Exports and
foreign operations accounted for 21.6% (19.3%) of net sales.
In January-June the K-Group's (i.e. Kesko's and the chain stores')
retail sales were €5,416 million, an increase of 10.4% on the
corresponding period of the previous year.
The Group's profit before taxes for January-June was €202.1
million (€242.1 million). The Group's profit before taxes included
€37.1 million in non-recurring gains on the disposal of SATO
Corporation shares. The operating profit excluding non-recurring
items was €156.6 million (€126.0 million), up €30.6 million on the
previous year, due especially to Kesko Food's and Rautakesko's
good profit performances. The operating profit excluding non-
recurring items represented 3.4% (3.0%) of net sales.
The Group's operating profit was €165.6 million (€242.4 million).
The operating profit included a net total of €9.0 million (€116.4
million) in non-recurring gains and losses from disposal of fixed
assets and operations, and impairment charges. In 2006, the gains
from disposal of fixed assets included €99.3 million received by
Kesko for selling its retail store properties to Niam Retail
Holding Finland AB. The consolidated earnings per share from
continuing operations were €1.49 (€1.57). Equity per share was
€18.32 (€15.79).
Investments
The Group's investments in April-June totalled €62.8 million
(€60.1 million), which is 2.5% (2.6%) of net sales. Investments in
retail store sites amounted to €45.5 million (€44.1 million).
Investments in acquisitions represented €1.5 million (€2.9
million) of total investments. The Group's other investments were
€15.8 million. Investments in foreign operating activities
represented 25.3% of total investments.
The Group's investments in January-June totalled €114.4 million
(€116.7 million), which is 2.5% (2.7%) of net sales. Investments
in retail store sites amounted to €85.3 million (€81.6 million).
Investments in acquisitions represented €2.3 million (€9.1
million) of total investments. The Group's other investments were
€26.8 million. Investments in foreign operating activities
represented 23.4% of total investments.
Finance
In April-June, the cash flow from operating activities was €117.1
million (€152.5 million) and the cash flow from investing
activities was €-58.3 million (€-60.1 million). The latter
included €24 million in proceeds received on the disposal of fixed
assets.
In January-June, the cash flow from operating activities was €97.0
million (€124.7 million) and the total cash flow from investing
activities was €-3.5 million (€100.6 million). The latter was
increased by €50 million received on the disposal of food store
properties in the Baltic countries, and by €46 million for selling
SATO Corporation shares. The comparative cash flow from investing
activities was increased by the over €200 million price received
in March for selling real estate.
At the end of the period, liquid funds totalled €283 million (€117
million). The amount was affected by the €190 million price
received in December 2006 for selling Rimi Baltic AB shares.
Interest-bearing net debt was €290 million (€564 million). At the
end of the period, equity ratio was 46.5% (41.7%) and gearing
16.0% (36.1%).
In April-June the Group's net financial expenses were €1.7 million
(net financial income €0.4 million). Increase in financial
expenses was caused by widening of interest rate differentials in
certain currencies. In January-June the consolidated net financial
income was €36.2 million (€-1.1 million), positively affected by
the €37.1 million non-recurring gain on SATO shares and interest
income from liquid funds.
Taxes
In April-June the Group's taxes were €24.2 million (€46.6
million). The effective tax rate was 23.9%. In January-June the
Group's income taxes were €45.9 million (€83.8 million). The year
2006 taxes included taxes from prior periods in the amount of
€26.7 million. The taxes have been calculated based on the
anticipated effective tax rate of 22.7% for the whole year.
Discontinued operations
The sale to Rimi Baltic AB of food store properties that had been
leased to it was concluded in January. The gain on the disposal
was €28.2 million.
Seasonal nature of operations
The Group's operating activities are affected by seasonal
fluctuations. The net sales and operating profits of its business
segments are not earned evenly throughout the year. Instead they
vary by quarter depending on the characteristics of each business
segment.
Personnel
In April-June the average number of personnel in the Kesko Group
was 20,689 (24,254) converted into full-time employees. There was
a decrease of 3,565 employees compared with the corresponding
period of the previous year. In Finland, the average decrease was
354 employees, while outside Finland it was 3,211.
In January-June the average number of personnel in the Kesko Group
was 20,305 (23,531) converted into full-time employees. There was
a decrease of 3,226 employees compared with the corresponding
period of the previous year. In Finland, the average decrease was
322 employees, while outside Finland it was 2,904. The number of
personnel mainly decreased as a result of the disposal of the
joint venture Rimi Baltic AB in December 2006.
At the end of June 2007, the total number of personnel was 24,865
(28,337), of whom 14,829 (14,729) worked in Finland and 10,036
(13,608) in other countries. Compared with the end of June 2006,
there was an increase of 100 employees in Finland, and a decrease
of 3,572 in other countries.
Market review
According to Statistics Finland, the Finnish economy grew by 5.0%
in 2006, accelerated by a brisk growth in exports, private
consumption and investments. In 2007, the growth rate of the
Finnish economy is expected to decelerate slightly compared with
2006. It is forecast that private consumption will increase by
2.4% and investments by 3%. The increase in consumer prices is
forecast to reach 1.8%. Housing construction investments are
estimated to grow by about 2% (ETLA, The Research Institute of the
Finnish Economy).
According to the preliminary data of Statistics Finland, in
January-April 2007, the volume of Finnish retail trade increased
by 7.9% compared with the corresponding period of the previous
year. The increase in the wholesale trade volume was 6.5% in the
same period. The volumes of Finnish retail and wholesale trade are
expected to continue to grow also during the latter part of the
year. The growth is expected to decelerate somewhat compared with
previous years, as the growth of households' buying power slows
down.
According to Statistics Finland's consumer survey of June,
consumers continued to be very confident about their own finances
and the growth of Finland's economy. They also had higher
expectations of a decrease in unemployment.
The Estonian economy is forecast to grow by 8.9%, the Latvian
economy by 9.5% and the Lithuanian economy by 7.4% this year.
Private consumption is estimated to grow by about 13% in Estonia
and by 8-9% in Latvia and Lithuania. Consumer prices are forecast
to rise by 4.7% in Estonia, by 6.2% in Latvia and by 4% in
Lithuania (Nordea). The retail trade will continue growing briskly
in all Baltic countries.
This year the Swedish economy and private consumption are forecast
to grow by 3.5%. The increase in consumer prices is anticipated to
be 1.4% (Nordea). Due to brisk housing construction, total
building investments are forecast to continue increasing at a rate
of some 4% in 2007 (Sveriges Byggindustrier).
The Norwegian economy is forecast to grow by 3.4% and private
consumption by 3.2% in 2007. Consumer price inflation is
anticipated to be approximately 1% (Nordea).
The Russian economy is forecast to grow by 6.5%. Private
consumption and investments are estimated to continue increasing
at the brisk pace of 15% in 2007 (Nordea). The strong growth in
private consumption will be reflected positively in the growth of
retail trade. As income levels rise, households will have more
money to spend on the maintenance of homes, gardens and
countryside houses. The retail trade is growing rapidly and the
competitive situation is tightening as new local and foreign
operators enter the market.
The market and outlook for each of Kesko's business divisions are
discussed in the business division reviews of this interim
financial report.
Divisions
Kesko Food
In April-June Kesko Food's net sales totalled €982.5 million, up
by 5.6%. In January-June the net sales were €1,865.5 million, an
increase of 6.9%.
In April-June, Kesko Food's operating profit excluding non-
recurring items was €41.4 million (4.2% of net sales), i.e. €2.8
million more than in the previous year, and relatively at the same
level as in the previous year. Kesko Food's operating profit was
@40.9 million (€38.9 million).
In January-June, Kesko Food's operating profit excluding non-
recurring items was €70.5 million (3.8% of net sales), i.e. €11.3
million, and 0.4 percentage points, more than in the previous
year. During the first part of the year, the operating profit
increased as a result of improved cost efficiency and good retail
sales growth. The operating profit was €70.1 million (€103.6
million). The comparative operating profit was increased by non-
recurring gains from property disposals.
In April-June Kesko Food's investments totalled €30.5 million
(€19.3 million), of which investments in retail store sites were
€24.7 million (€19.8 million). In January-June investments
totalled €54.8 million (€35.3 million), of which investments in
retail store sites were €43.7 million (€32.3 million).
In April-June, the retail sales of the K-food stores increased by
6.1%, totalling €1,260 million (incl. VAT). In January-June, the
retail sales increased by 7.1% to €2,396 million (incl. VAT). At
the end of June, there were a total of 1,066 K-food stores.
Kesko Food continued to invest heavily in the development of the K-
food store network. In April-June, K-supermarkets were opened in
Naantali, Tampere, Eura and Saarijärvi, and K-markets in Kuopio
and Karigasniemi. In addition, the expansion of the K-market
network to service stations was continued. A K-supermarket in
Pieksämäki was expanded into a K-citymarket. In January-March a K-
supermarket was opened in Siilinjärvi and a K-market in Nilsiä.
Other renovations and extensions were also implemented.
The total grocery trade market in Finland has continued to grow
steadily. The growth rate for January-June is estimated at about
4.5% up on the previous year. In January-June prices rose at an
average monthly rate of 2.0% (Statistics Finland) compared with
the corresponding period of the previous year.
On 23 April 2007 Kesko Food announced that it had decided to look
into opportunities to sell its HoReCa wholesaling subsidiary,
Kespro Ltd, and its sourcing operations. Kesko Food's aim is to
concentrate more closely on consumer-customer trade in line with
its strategy. Kespro will be classified as a discontinuing
operation in compliance with the IFRS 5 when it meets the criteria
of the standard.
Kesko Food's net sales and operating profit excluding non-
recurring items are expected to increase in 2007.
Rautakesko
In April-June, Rautakesko's net sales amounted to €686.6 million,
an increase of 20.0%. Net sales in Finland were €266.3 million, an
increase of 15.6%. Net sales of foreign subsidiaries were €419.7
million, up 22.8%. Foreign subsidiaries contributed 61.1% to
Rautakesko's net sales.
In Sweden, the net sales of K-rauta AB increased by 18.1% to €54.9
million. In Estonia, Rautakesko's net sales were up by 35.7% to
€26.3 million. In Lithuania, the net sales of UAB Senuku Prekybos
Centras (Senukai), in which Rautakesko has a majority interest,
increased by 27.8% to €112.0 million. In Latvia, Rautakesko's net
sales increased by 51.9% to €22.1 million. In Russia,
Stroymaster's net sales grew by 54.2% to €37.0 million. In Norway,
Byggmakker's net sales grew by 11.2% and were €164.4 million.
In January-June, Rautakesko's net sales amounted to €1,220.7
million, an increase of 22.0%. Net sales in Finland were €481.7
million, an increase of 15.5%. Net sales of foreign subsidiaries
were €738.0 million, up 26.7%. Foreign subsidiaries contributed
60.5% to Rautakesko's net sales.
In January-June in Sweden, the net sales increased by 20.1% to
€88.6 million. In Estonia, the net sales were up by 36.1% to €43.6
million. In Lithuania, the net sales increased by 31.7% to €201.2
million. In Latvia, the net sales increased by 62.0% to €39.4
million. In Russia, Stroymaster's net sales grew by 56.3% to €65.8
million. In Norway, the net sales grew by 15.6% and were €294.4
million.
In April-June, Rautakesko's operating profit excluding non-
recurring items was €38.7 million (5.6% of net sales), i.e. €7.1
million, or 0.1 percentage points, more than in the corresponding
period of the previous year. Rautakesko's operating profit for
April-June was €37.6 million (€32.1 million). During the review
period, three new stores were opened.
In January-June, Rautakesko's operating profit excluding non-
recurring items was €55.0 million (4.5% of net sales), i.e. €14.5
million, or 0.5 percentage points, more than in the corresponding
period of the previous year. The operating profit excluding non-
recurring items increased due to good sales growth and regardless
of the fact that a total of seven new stores were opened in
January-June. Rautakesko's operating profit for January-June was
€56.2 million (€88.5 million). During the comparative period, the
operating profit was increased by non-recurring gains on disposal
of real estate.
In April-June Rautakesko's investments totalled €18.7 million
(€14.0 million), of which 54.4% (67.2%) was abroad. In January-
June the investments were €38.6 million (€26.9 million), of which
47.6% (51.7%) was abroad.
At the end of June, the K-rauta chain in Finland comprised 41
stores and the Rautia chain 105 stores. In April-June the sales of
the K-Group's building and home improvement stores in Finland
increased by 12.3% to €365 million (incl. VAT). The sales of the
Rautakesko B-to-B Service increased by 24.3%. In January-June the
sales of the K-Group's building and home improvement stores in
Finland increased by 13.4% to €569 million (incl. VAT). The sales
of the Rautakesko B-to-B Service increased by 24.1%.
Rautakesko operates 17 K-rauta stores in Sweden, the latest of
which was opened in Växjö in April. A new K-rauta will be opened
in Gävle in August 2007 to replace the outlet destroyed in a fire
in August 2006. In Estonia, Rautakesko has five stores now that
the fifth K-rauta opened in Tallinn in March. In Latvia,
Rautakesko has five stores of its own and two partner stores. A
new K-rauta was opened in Tukums in June. In Lithuania, UAB Senuku
Prekybos Centras (Senukai) operates 14 Senukai stores and 76
Partnershops. In Norway, Rautakesko owns Byggmakker Norge AS, a
company managing the Byggmakker chain of building and home
improvement stores. The chain comprises 119 stores, 21 of which
are owned by Byggmakker. The other stores of the chain are owned
by retailer-entrepreneurs who have signed a chain agreement with
Byggmakker. Byggmakker Norge AS opened a new Byggmakker store in
Oslo in March. There are seven K-rauta stores in St. Petersburg,
Russia, two of which are new and operate in conformity with the K-
rauta concept.
The building and home improvement market is anticipated to grow in
all countries in which Rautakesko operates. In 2007, a growth rate
of about 5-10% is forecast for the Nordic countries and 10% for
the Baltic countries. The rate forecast for the St. Petersburg
area is about 15%.
In 2007, Rautakesko will invest heavily in new store sites,
employee competence and a uniform information system. It is
expected that Rautakesko's net sales and its operating profit
excluding non-recurring items will grow in 2007.
VV-Auto
In April-June VV-Auto's net sales totalled €218.3 million, down by
1.4%. In January-June VV-Auto's net sales totalled €466.2 million,
up by 3.2%. The new Volkswagen and Audi retail businesses acquired
by VV-Auto at the beginning of March 2006 contributed 1.1% to the
growth of VV-Auto's net sales in January-June.
In April-June, the operating profit was €8.1 million (3.7% of net
sales), down €3.8 million, or 1.7 percentage points, compared with
the corresponding period of the previous year. The trend in the
operating profit was affected by a dramatic decline in the market
for new passenger cars.
In January-June, the operating profit was €19.8 million (4.2% of
net sales), down €3.2 million, or 0.9 percentage points, compared
with the corresponding period of the previous year.
Investments totalled €2.0 million (€8.2 million) in April-June. In
January-June investments were €3.6 million (€23.4 million).
In January-June, first registrations of new passenger cars
totalled 77,407 in Finland, down by 10.3% on the previous year.
Compared with the previous year, first registrations of vans were
up by 16.0% to 9,634. The sale of new cars has been constrained by
a rise in interest rates and uncertainty about future tax
decisions. In addition, the prices of used cars have come down,
which increases the customer's cash payment in exchange.
In April-June, VV-Auto's retail sales volume increased by 3.6%. In
January-June it grew by 17.1% compared with the corresponding
period of the previous year. The growth is mainly attributable to
the business acquisition completed in March 2006.
In January-June, registrations of Volkswagen passenger cars
totalled 7,613 and their market share was 9.8%, compared with
11.0% in the previous year. The number of Volkswagen vans
registered was 1,725, while the market share was 17.9% (17.0%). In
January-June, first registrations of Audis were 2,698, and the
market share was 3.5%, the same as in the previous year. The
registrations of new Seat passenger cars totalled 938 in Finland,
407 in Estonia and 124 in Latvia. The market share in Finland was
1.2%, compared with 0.7% in the previous year.
It is estimated that Finland's total market for passenger cars in
2007 will fall well short of the previous year. The total market
for vans is expected to grow on 2006.
In 2007 VV-Auto's net sales are expected to match the previous
year's level. Operating profit excluding non-recurring items is
expected to be slightly below the previous year's level due to the
market trend.
Anttila
In April-June, Anttila's net sales totalled €111.4 million (€111.5
million). The net sales trend was affected by the closing down of
the City department store in Helsinki due to the expiry of the
lease in January, and changes in the competitive situation due to
the opening of new shopping centres. In January-June, the net
sales were €231.1 million, matching last year's level.
In April-June, Anttila's operating loss excluding non-recurring
items was €1.8 million
(-1.6% of net sales), showing an increase of €1.2 million, or 1.1
percentage points, on the corresponding period of the previous
year. Anttila's operating profit was €0.1 million (€-0.7 million).
In January-June, the operating loss excluding non-recurring items
was €2.7 million
(-1.2% of net sales), showing an increase of €0.6 million, or 0.3
percentage points, on the corresponding period of the previous
year. Anttila's operating loss was €0.8 million (operating profit
€10.2 million). Non-recurring items included €1.9 million in gains
on the disposal of real estate. In the corresponding period of the
previous year, the gains on the disposal of real estate were €12.3
million. Due to the nature of the department store trade, the
majority of profits are made towards the end of the year.
In January-June the sales of the Anttila department stores were
€158.9 million (incl. VAT), down 1.4% due to the closing down of
the City department store in Helsinki. The sales of the Kodin
Ykkönen department stores for home goods and interior decoration
were €74.5 million (incl. VAT), up 2.6%. Distance sales in Finland
were €38.4 million (incl. VAT), up 1.5%. The sales trend was
affected by a reduction in the number of illustrated catalogues.
Online sales, which are part of distance sales, increased by
25.2%. Sales trends varied significantly by product line, with the
best performance recorded by entertainment product lines.
Trends in the home and speciality goods market vary considerably
by product line. The growth is forecast to average 3-5%.
In 2007 Anttila's net sales are expected to match the level of the
previous year, while its operating profit excluding non-recurring
items is expected to remain slightly smaller than in the previous
year.
Kesko Agro
In April-June, Kesko Agro's net sales were €216 million, an
increase of 1.8%. The net sales of foreign subsidiaries were €80
million, accounting for 36.9% of net sales.
In January-June, the net sales were €385 million, an increase of
2.6%. The net sales of foreign subsidiaries were €128 million,
accounting for 33.3% of net sales.
In April-June, Kesko Agro's net sales in Finland were €135
million, up by 0.3%. The sales of the agricultural and machinery
trade in the Baltic countries increased by 5.7%, which is
attributable to the good sales trend of agricultural and
construction machinery.
In January-June, Kesko Agro's net sales in Finland were €253
million, up by 2.3%. The net sales growth is mainly attributable
to the trend in grain and implement sales. The sales in the Baltic
countries increased by 3.0% in January-June.
In April-June, Kesko Agro's operating profit excluding non-
recurring items was €7.9 million (3.6% of net sales), i.e. €0.2
million, or 0.2 percentage points, smaller than in the
corresponding period of the previous year.
In January-June, the operating profit was €7.2 million (1.9% of
net sales), which was €0.7 million, or 0.2 percentage points
bigger than in the corresponding period of the previous year. The
operating profit, non-recurring items excluded, was affected by
the good sales trend and cost savings in Finland. In January-June,
Kesko Agro's operating profit was €7.2 million (€7.9 million).
Kesko Agro's comparative operating profit included non-recurring
gains on the disposal of fixed assets.
In April-June, investments totalled €3.1 million, 81.4% of which
were in projects abroad. In January-June, investments totalled
€5.3 million, 81.2% of which were in projects abroad.
At the end of the period under review, the K-maatalous chain
comprised 100 agricultural stores in Finland. The sales of the K-
maatalous chain increased by 4.0% in April-June to €190 million.
In January-June, the sales increased by 9.4% to €325 million
(incl. VAT). Kesko Agro has six stores in Estonia, four in Latvia
and three in Lithuania.
It is estimated that Finland's total agricultural trade market
will match the level of the previous year. The total Baltic market
is anticipated to grow by about 5-10%.
Kesko Agro will discontinue its grain, animal feed and chemicals
trade in Lithuania by the end of 2007 because of their poor
profitability. With the company concentrating exclusively on
machinery trade in Lithuania, the profitability of its operating
activities is expected to improve.
Regardless of the structural changes taking place in the sector,
Kesko Agro's net sales and operating profit excluding non-
recurring items in 2007 are expected to match the level of 2006.
Other operating activities
Other operating activities comprise the reporting for Konekesko,
Intersport Finland, Indoor, Musta Pörssi, Kenkäkesko (former
WellStep), Tähti Optikko and Kauko-Telko.
In April-June, the aggregate net sales from other operating
activities were €259 million, up 8.6%. Net sales from foreign
operations were €50 million, contributing 19.4% to the net sales.
In January-June, the net sales were €506 million, up 9.3%. Net
sales from foreign operations were €102 million, contributing
20.1% to the net sales.
In April-June, the aggregate operating profit from other operating
activities, non-recurring items excluded, was €9.9 million (3.8%
of net sales), which was up by €2.8 million, or 0.8 percentage
points, on the corresponding period of the previous year. The
greatest improvement in operating profit excluding non-recurring
items was achieved by Musta Pörssi and Kauko-Telko. The operating
profit was €10.1 million (€7.7 million).
In January-June, the operating profit excluding non-recurring
items was €20.6 million (4.1% of net sales), which was €7.9
million, or 1.4 percentage points bigger than in the corresponding
period of the previous year. The operating profit was €20.8
million (€16.1 million). The operating profit was improved by the
€0.1 million non-recurring gain on the disposal of fixed assets.
The operating profit for the comparative period was improved by
the €3.7 million non-recurring gain on the disposal of operating
activities and fixed assets.
In April-June, investments totalled €3.7 million. In January-June,
investments were €6.5 million.
In April-June, the net sales of Konekesko were €80 million (€65
million), an increase of 22.4% from the previous year. In Finland,
sales were €68.5 million, up by 22.2%. Konekesko's export sales
totalled €11.8 million, an increase of 24.2%. In January-June, the
net sales were €142 million (€114 million), an increase of 24.3%.
In Finland, sales were €118 million, up by 22.4%. Konekesko's
export sales totalled €26 million, an increase of 37.0%.
In April-June, the net sales of Intersport Finland were €30
million (€30 million), up by 1.8%. The net sales in January-June
were €68 million, (€63 million), an increase of 7.0%.
In April-June, Indoor's net sales were €48 million (€43 million),
up by 11.9%. The aggregate net sales of furniture trade in the
Baltic countries and Sweden were €10 million, an increase of 53%.
In January-June, the net sales were €94 million (€84 million), up
by 11.9%. In January-June, the aggregate net sales of furniture
trade in the Baltic countries and Sweden were €20.0 million, an
increase of 60.8%.
In April-June, the net sales of Musta Pörssi Ltd were €31 million
(€29 million), up by 6.8%. In January-June, the net sales were €63
million (€57 million), up by 10.5%.
In April-June, the net sales of Kenkäkesko Ltd (former WellStep
Ltd) were €5 million (€5 million), a decrease of 2.9%. In January-
June, the net sales dropped by 11.5% to €11 million (€12 million).
In April-June, the net sales of Tähti Optikko were €5 million (€5
million), up 10.5%. In January-June, the net sales were €11
million (€10 million), an increase of 8.9%.
In April-June, Kauko-Telko's net sales were €60 million (€62
million), down 3.0%. Foreign operations contributed €28.1 million,
or 46.4%, to the net sales. In January-June, the net sales were
€118 million (€125 million), down by 5.2% from the previous year.
Foreign operations contributed €55.4 million, or 46.8%, to the net
sales.
In May, Kesko announced that it would look into opportunities to
sell Kauko-Telko (stock exchange release on 23 May 2007). Kauko-
Telko will be classified as a discontinuing operation in
compliance with the IFRS 5 when it meets the criteria of the
standard.
It is expected that in 2007, the net sales of other operating
activities will match the level of the previous year and the
operating profit excluding non-recurring items will increase
slightly.
Changes in Group structure
No significant changes took place in the Group structure during
the period under review.
Decisions of the Annual General Meeting
Kesko Corporation's Annual General Meeting held on 26 March 2007
adopted the financial statements for 2006 and discharged the
members of the Board of Directors and the Managing Director from
liability. The Annual General Meeting also decided to distribute a
dividend of €1.50 per share, as proposed by the Board of
Directors, or total dividends of €146,314,669.50.
The Annual General Meeting decided to leave the number of Board
members unchanged at seven. The members of the Board of Directors
elected by the Annual General Meeting of 27 March 2006 are Pentti
Kalliala, Ilpo Kokkila, Maarit Näkyvä, Seppo Paatelainen, Keijo
Suila, Jukka Säilä and Heikki Takamäki. The term of office of each
Board member, in accordance with the Articles of Association, is
three years, with the term starting at the close of the General
Meeting electing the member and expiring at the close of the third
Annual General Meeting after the election (in 2009).
The decisions of the Annual General Meeting were published in more
detail in a stock exchange release on the day of the meeting and
in the 3-month interim financial report.
Corporate governance
Kesko Food Ltd and Rautakesko Ltd, major subsidiaries fully owned
by Kesko Corporation, elected the members of their Boards of
Directors at their Annual General Meetings held on 23 March 2007.
The compositions of the Boards were announced in a stock exchange
release on 23 March 2007.
The organising meeting of Kesko Corporation's Board of Directors
held after the Annual General Meeting on 26 March 2007 decided to
leave the compositions of its committees unchanged. The Board
elected Maarit Näkyvä as the Chairman of its Audit Committee, and
Seppo Paatelainen and Keijo Suila as its members. The Board
elected Heikki Takamäki as the Chairman of its Compensation
Committee, and Pentti Kalliala and Keijo Suila as its members. The
committees' terms of office always expire at the Annual General
Meeting. On the basis of the evaluation of independence carried
out by the Board of Directors, all members of the Audit Committee
are independent of the company and its significant shareholders.
The decisions of the organising meeting of the Board of Directors
were published in a stock exchange release on the day of the
meeting.
Juhani Järvi resigned from the positions of Kesko's Corporate
Executive Vice President and Deputy to the President and CEO as of
1 June 2007. He also gave up membership in the Corporate
Management Board and in the Boards of Kesko Food Ltd and
Rautakesko Ltd. Järvi's duties have been divided between the other
Corporate Management Board members. His responsibility areas
included corporate development, IT management, real estate
services, and corporate responsibility and business development. A
more detailed stock exchange release about the matter was
published on 24 May 2007.
Shares and the securities market and Board authorisations
At the end of the review period, Kesko Corporation's share capital
totalled €195,471,598. Of all shares, 31,737,007, i.e. 32.5%, were
A shares and 65,998,792, i.e. 67.5%, were B shares. During the
review period, the share capital was increased three times by
share subscriptions with the stock options of the year 2003 option
scheme. The increases were made on 12 February 2007 (€46,376), 26
April 2007 (€86,800) and 29 May 2007 (€298,572) and were announced
in stock exchange notifications on the respective dates. The
subscribed shares were included on the main list of the Helsinki
Stock Exchange for public trading with the old B shares on 13
February 2007, 27 April 2007 and 30 May 2007.
The price of a Kesko A share was €38.43 at the end of 2006 and
€47.40 at the end of the review period in June 2007, representing
an increase of 23.3%. The price of a B share was €40.02 at the end
of 2006 and €49.34 at the end of June 2007, an equal increase of
23.3%. From the beginning of 2007 until the end of June 2007, the
Helsinki Stock Exchange All Share index (OMX Helsinki) rose by
17.9%, the weighted OMX Helsinki CAP index by 13.4%, and the
Consumer Staples Index by 24.2% during the review period.
At the end of the review period, the market value of A shares was
€1,504.3 million, while that of B shares was €3,256.4 million.
Their combined market capitalisation was €4,760.7 million, an
increase of €909 million from the beginning of the year. During
the first part of 2007, approximately 2.5 million A shares were
traded on the Helsinki Stock Exchange at a total value of €112.3
million, while 63.7 million B shares were traded at a total value
of €2,822.2 million.
The 2003D stock options of the year 2003 option scheme were
included on the main list of the Helsinki Stock Exchange on 1
April 2005. The number of 2003D options traded during the review
period was 81,288 at a total value of €3.2 million.
The 2003E stock options were included on the main list of the
Helsinki Stock Exchange on 3 April 2006. The number of 2003E
options traded during the review period was 114,549 at a total
value of €4.9 million.
The 2003F stock options were included on the main list of the
Helsinki Stock Exchange on 2 April 2007. The number of 2003F
options traded during the review period was 227,552 at a total
value of €7.6 million.
The Board of Directors was authorised by the Annual General
Meeting of 26 March 2007 to issue a maximum of 20,000,000 new B
shares against payment. The authorisation also includes a right to
deviate, for a weighty financial reason, from the shareholders'
pre-emptive right with a rights issue so that the issued shares
can be used as consideration in possible company acquisitions,
other arrangements concerning the company's operating activities,
or to finance investments. The authorisation is valid for two
years from the decision of the Annual General Meeting.
The Annual General Meeting of 26 March 2007 decided to grant stock
options for no consideration to the Kesko Group management, other
key Kesko personnel, and to Sincera Oy, a subsidiary wholly owned
by Kesko Corporation. The stock options shall be marked with the
symbols 2007A, 2007B and 2007C, and their total number shall be
3,000,000 at the maximum. Each option entitles its holder to
subscribe for one B share, so that a maximum of 3,000,000 new B
shares can be subscribed for with the options in compliance with
the terms and conditions of the stock option plan.
The Board's share issue authorisation and the year 2007 stock
option scheme were disclosed in more detail in a stock exchange
release on 26 March 2007.
The Board has no other valid authorisation concerning an issue of
shares, options or other special rights entitling to shares.
Flagging notifications
Kesko Corporation did not receive any flagging notifications
during the review period
Main events
Fiesta Real Estate AS, an Estonian subsidiary of Kesko
Corporation, sold the food trade properties leased by Rimi Baltic
AB in Estonia to Rimi Baltic for €50 million. Kesko was expected
to gain approximately €25 million on the property transaction. The
€28.2 million gain on the disposal was recognised in discontinued
operations for the first quarter of 2007 (stock exchange release
on 4 January 2007).
On 16 February 2007, Kesko Corporation and Varma Mutual Pension
Insurance Company completed a deal in which Kesko sold its SATO
Corporation shares to Varma. Kesko's ownership interest in SATO
was approximately 16.5%. The price of the shares was about €46
million and the gain on the disposal (€37.1 million) was
recognised for the first quarter of 2007 (stock exchange releases
on 7 and 16 February 2007).
Kesko Food has decided to look into opportunities to sell its
HoReCa wholesaling subsidiary, Kespro Ltd, and its sourcing
operations (stock exchange release on 23 April 2007).
Kesko Corporation's Board of Directors specified the company
strategy. Based on the expansion of the Group's international
operations and the current business outlook, the targets for
return on capital were raised. The new target for return on equity
is 14% (previously 12%) and that for invested capital 16%
(previously 12%). In the next few years, provisions will be made
for large-scale store site investments in Finland and the other
operating countries. The Board also decided to look into
possibilities to sell Kauko-Telko (stock exchange release on 23
May 2007).
Events after the end of the review period
No significant events took place after the end of the review
period.
Future outlook
Kesko's operating activities are affected by the economic outlook
in its different market areas and especially by the growth rate of
private consumption and any changes therein. Markets in the Baltic
countries and in the St. Petersburg region in Russia are expected
to continue more rapid growth than markets in the Nordic
countries.
In 2007, the Kesko Group divisions are expected to perform as
described in the above division reviews.
Due to the more rapid market growth and the expansion of the
retail store network in other operating countries than Finland,
the Group's sales will continue to grow more strongly outside
Finland. The Group's sales are expected to grow in the next six
months, but at a slightly slower rate than during the first six
months of the year.
The Kesko Group's operating profit for the next six months, non-
recurring items excluded, is expected to remain at a good level.
Helsinki, 17 July 2007
Kesko Corporation
Board of Directors
The figures of the interim financial report are unaudited.
Further information is available from Arja Talma, Senior Vice
President, CFO, telephone +358 1053 22113, and Jukka Erlund,
Corporate Business Controller, telephone +358 1053 22338. A
Finnish-language webcast on the interim result can be accessed at
www.kesko.fi at 11.00. An English-language web conference on the
interim financial report will be held today at 14.30 (Finnish
time). The web conference login is available at www.kesko.fi.
KESKO CORPORATION
Paavo Moilanen
Senior Vice President, Corporate Communications
ATTACHMENTS
Consolidated income statement
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated cash flow statement
Group indicators
Group contingent liabilities
Net sales by division
Operating profit by division
Operating profit by division excluding non-recurring items
Investments by division
Group indicators by quarter
Divisions' net sales by quarter
Divisions' operating profits by quarter
Divisions' operating profits, excluding non-recurring items, by
quarter
Personnel, average number and number at 30 June
The K-Group retail sales
Kesko Corporation's nine-month interim financial report for 2007
will be published on 17 October 2007. In addition, the Kesko Group
sales figures will be published each month. News releases and
other company information are available at www.kesko.fi.
DISTRIBUTION
Helsinki Stock Exchange
Main news media
********
ATTACHMENTS:
This interim financial report has been prepared in accordance with
the IAS 34 standard. The interim financial report has been
prepared in accordance with the same principles as the annual
financial statements for 2006.
Consolidated
income statement
(€ million)
1-6 1-6 Change 4-6 4-6 Change 1-12
2007 2006 % 2007 2006 % 2006
Net sales 4,658 4,248 9.6 2,464 2,277 8.2 8,749
Cost of sales -3,990 -3,638 9.7 -2,110 -1,944 8.6 -7,474
Gross profit 667 610 9.4 354 334 6.0 1,275
Other operating 282 372 -24.2 152 138 9.9 661
income
Staff cost -273 -263 3.8 -142 -137 3.6 -544
Depreciation and -57 -60 -4.5 -29 -30 -5.0 -160
impairment charges
Operating expenses -453 -417 8.8 -233 -214 8.8 -869
Operating profit 166 242 -31.7 103 92 12.6 363
Financial income* 58 17 (..) 9 10 -10.0 38
Financial expenses -22 -18 21.2 -10 -9 12.4 -44
Income from 0 1 -65.6 0 0 59.7 1
associates
Profit before 202 242 -16.5 101 92 10.2 358
taxes
Income tax -46 -84 -45.3 -24 -47 -48.1 -107
Net profit from 156 158 -1.3 77 45 70.2 251
continuing
operations
Net profit from 28 -3 (..) 0 -2 (..) 129
discontinued
operations*
Net profit 184 155 19.0 77 44 76.9 379
Attributable to:
Equity holders 175 150 16.7 71 40 78.4 369
of the
parent company
Minority 9 5 87.0 6 4 60.6 11
interest
Earnings per share
(€) for profit
attributable to
the equity holders
of the parent
company
Continuing
operations
Basic 1.50 1.58 -4.9 0.73 0.43 69.9 2.47
Diluted 1.49 1.57 -4.8 0.72 0.42 70.0 2.45
Whole Group
Basic 1.79 1.55 15.9 0.73 0.41 77.1 3.80
Diluted 1.78 1.53 16.0 0.72 0.41 77.3 3.76
* Change over 100%
Income tax has been calculated on the profit for the review period
as a proportion of
the estimated tax for the whole financial year.
Consolidated balance sheet
(€ million)
30.6.200 30.6.200 Change, 31.12.20
7 6 % 06
ASSETS
Non-current assets
Intangible assets 252 306 -17.8 248
Tangible assets 1,119 1,175 -4.8 1,115
Investments 31 37 -18.2 38
Loans and receivables 147 163 -9.7 126
Pension assets 233 218 7.2 220
Total 1,781 1,899 -6.2 1,746
Current assets
Inventories 833 800 4.2 789
Trade and other receivables 1,034 937 10.3 852
Marketable securities* 227 59 (..) 341
Cash on hand and balances 56 58 -3.1 57
with banks
Non-current assets held for 1 2 -39.5 22
sale
Total 2,151 1,856 15.9 2,061
Total assets 3,932 3,754 4.7 3,807
* Change over 100%
Consolidated balance sheet
(€ million)
30.6.2007 30.6.2006 Change, % 31.12.20
06
EQUITY AND LIABILITIES
Equity 1,790 1,536 16.5 1,750
Minority interest 28 26 7.8 27
Total equity 1,818 1,562 16.4 1,777
Non-current liabilities
Pension obligations 4 4 0.5 4
Interest-bearing 316 388 -18.5 317
Non-interest-bearing 15 20 -24.7 18
Deferred tax liabilities 116 119 -2.8 113
Provisions 17 19 -6.1 18
Total 468 549 -14.8 469
Current
Interest-bearing 257 294 -12.4 293
Non-interest-bearing 1,375 1,344 2.4 1,254
Provisions* 14 6 (..) 14
Total 1,646 1,643 0.2 1,561
Total equity and 3,932 3,754 4.7 3,807
liabilities
* Change over 100%
Consolidated statement of changes in equity (€ million)
Share Issue Share Other Curre Reval Re- Minor Total
capit of premi- reser n-cy u- taine ity
al share um ves trans-ation d inter
capit latio surpl earni est
al n us ngs
diffe
r-
ences
Balance at
1 Jan. 193 1 189 246 -4 0 857 27 1,508
2006
Shares 5
subscribed 2 -1 4
for with
options
Option
cost 1 1
Currency
translatio 1 1
n
difference
s
Fair value
changes 4 4
Dividend -106 -6 -112
Net profit
for the 150 5 155
period
Balance at
30 Jun. 195 0 194 246 -3 4 901 26 1,562
2006
Balance at
1 Jan. 195 0 196 246 -6 0 1,120 27 1,777
2007
Shares
subscribed 0 0 2 2
for with
options
Option 0 0
cost
Currency
translatio 3 1 4
n
difference
s
Minority
interest 1 1
Fair value 3 3
changes
Other
changes 2 2
Dividend
-146 -9 -155
Net profit
for the 175 9 184
period
Balance at
30 Jun. 195 0 198 246 -3 3 1,151 28 1,818
2007
Consolidated cash flow
statement
(€ million)
1-6 1-6 Change 4-6 4-6 Change 1-12
2007 2006 % 2007 2006 % 2006
Cash flow from
operating activities
Profit before tax 230 238 -3.4 101 90 12.5 487
Planned depreciation 57 66 -13.7 29 33 -13.3 142
Financial income and -36 2 (..) 2 0 (..) 7
expenses*
Other adjustments -50 -127 -60.4 -11 -6 83.2 -215
Working capital
Current non-interest- -146 -149 -1.8 -51 -60 -15.1 -85
bearing trade
receivables,
increase ( -)/ decrease
(+)
Inventories -44 -12 (..) 8 22 -65.5 -36
increase ( -)/ decrease
(+)*
Current non-interest- 136 147 -7.5 64 98 -34.8 142
bearing liabilities,
increase (+)/decrease (-
)
Financial items and -51 -40 26.1 -25 -25 -1.8 -114
taxes
Net cash from operating 97 125 -22.5 117 153 -23.2 328
activities
Cash flow from
investing activities
Investments -125 -113 10.6 -68 -60 13.1 -237
Disposals of fixed 137 254 -46.3 24 21 15.7 450
assets
Loans granted -15 -40 -62.5 -15 -21 -29.9 -10
Net cash used in -3 101 (..) -58 -60 -2.9 203
investing activities*
Cash flow from
financing activities
Debt increase* 0 17 (..) 0 -5 (..) 18
Debt decrease -64 -139 -53.5 -12 -51 -77.3 -159
Dividends paid -146 -107 37.1 -146 -107 36.8 -113
Equity increase 2 5 -54.2 2 0 (..) 6
Short-term money market 31 0 (..) 28 0 (..) -140
investments*
Other items* 0 0 (..) -3 0 (..) -3
Net cash used in -178 -224 -20.4 -130 -163 -20.0 -390
financing activities
Change in cash and cash -85 2 (..) -72 -71 2.3 141
equivalents*
Cash and cash 257 115 (..) 0 1 (..) 115
equivalents
at 1 Jan. *
Currency translation 0 0 (..) 0 0 (..) 1
difference*
Cash and cash 172 117 47.8 -72 -70 2.7 257
equivalents at 30 Jun.
* Change over 100%
Group indicators
6/2007 6/2006 Change,
%
Return on invested capital, % 20.6 22.6 -8.6
Return on invested capital, %, 22.3 16.9 31.9
moving 12 months
Return on equity, % 20.5 20.2 1.6
Return on equity, moving 12 24.2 15.7 54.0
months
Equity ratio, % 46.5 41.7 11.3
Investments, € million* 114.4 116.7 -2.0
Earnings per share, basic, €* 1.50 1.58 -4.9
Earnings per share, diluted, €* 1.49 1.57 -4.8
Earnings per share, basic, €** 1.79 1.55 15.9
Earnings per share, diluted, 1.78 1.53 16.0
€**
Equity per share, € 18.32 15.79 16.0
Personnel, average 20,305 23,531 -13.7
* Continuing operations
** Whole Group
Divisions
Net sales by 1-6/2007 1-6/2006 Change 4-6/2007 4-6/2006 Change
division, continuing € € % € € ,%
operations million million million million
Kesko Food, Finland 1,858 1,736 7.0 978 926 5.7
Kesko Food, other 8 9 -13.2 4 4 -8.5
countries*
Kesko Food, total 1,866 1,745 6.9 983 931 5.6
Rautakesko, Finland 482 417 15.5 266 230 15.6
Rautakesko, other 739 583 26.7 420 342 22.9
countries*
Rautakesko, total 1,221 1,001 22.0 687 572 20.0
VV-Auto, Finland 452 444 1.9 210 216 -3.0
VV-Auto, other 14 8 76.7 8 5 67.7
countries*
VV-Auto, total 466 452 3.2 218 221 -1.4
Anttila, Finland 221 221 0.0 107 107 0.2
Anttila, other 10 11 -4.2 4 4 -7.6
countries*
Anttila, total 231 231 -0.2 111 112 -0.1
Kesko Agro, Finland 253 248 2.3 135 135 0.3
Kesko Agro, 131 127 3.2 81 78 4.4
other countries*
Kesko Agro, total 385 375 2.6 216 212 1.8
Other operating 405 381 6.2 208 194 7.2
activities, Finland
Other operating 102 82 23.7 50 44 14.8
activities,
foreign countries*
Other operating 506 463 9.3 259 238 8.6
activities, total
Common operations -17 -19 -9.8 -9 -9 6.2
and eliminations
Finland, total 3,654 3,428 6.6 1,896 1,800 5.3
Other countries, 1,004 820 22.4 568 477 19.0
total*
Group, total 4,658 4,248 9.6 2,464 2,277 8.2
* Exports and net sales in other countries than Finland
Operating profit by 1- 1- Change 4- 4- Change
division incl. non- 6/2007 6/2006 , € 6/2007 6/2006 , €
recurring items € € millio € € millio
millio millio n millio millio n
n n n n
Kesko Food 70.1 103.6 -33.6 40.9 38.9 2.0
Rautakesko 56.2 88.5 -32.3 37.6 32.1 5.6
VV-Auto 19.8 23.0 -3.2 8.1 11.9 -3.8
Anttila -0.8 10.2 -10.9 0.1 -0.7 0.8
Kesko Agro 7.2 7.9 -0.7 7.9 8.1 -0.2
Other operating 20.8 16.1 4.7 10.1 7.7 2.4
activities
Common operations -7.7 -6.9 -0.8 -1.6 -6.3 4.7
and eliminations
Group's operating 165.6 242.4 -76.8 103.2 91.6 11.6
profit
Operating profit by 1- 1- Change 4- 4- Change
division excl. non- 6/2007 6/2006 , € 6/2007 6/2006 , €
recurring items € € millio € € millio
millio millio n millio millio n
n n n n
Kesko Food 70.5 59.1 11.3 41.4 38.7 2.8
Rautakesko 55.0 40.5 14.5 38.7 31.7 7.1
VV-Auto 19.8 23.0 -3.2 8.1 11.9 -3.8
Anttila -2.7 -2.1 -0.6 -1.8 -0.6 -1.2
Kesko Agro 7.2 6.5 0.7 7.9 8.1 -0.2
Other operating 20.6 12.7 7.9 9.9 7.2 2.8
activities
Common operations -13.7 -13.7 0.0 -7.5 -7.5 0.0
and eliminations
Total 156.6 126.0 30.6 96.8 89.4 7.4
Investments by 1- 1- Change, 4- 4- Change,
division 6/2007 6/2006 € 6/2007 6/2006 €
€ € million € € million
million million million million
Kesko Food 55 35 20 30 19 11
Rautakesko 39 27 12 19 14 5
VV-Auto 4 23 -20 2 8 -6
Anttila 3 3 -1 1 1 0
Kesko Agro 5 5 1 3 3 0
Other operating 9 23 -14 7 14 -7
activities and
common
operations
Group, total 114 117 -2 63 60 3
Group's contingent liabilities 6/2007 6/2006 Change, %
(€ million)
For own commitments 266 273 -2.4
For associates - - -
For shareholders 1 1 0.0
For others 12 32 -63.7
Lease liabilities 12 9 40.7
Liabilities arising from
derivative financial
instruments
Fair
value
Values of underlying 6/2007 6/2006 30.6.2007
instruments
at 30 Jun.
Interest rate derivatives
Forward and future contracts 58 42 -0.12
Interest rate swap contracts 202 204 0.15
Currency derivatives
Forward and future contracts 330 177 -0.74
Currency swap contracts 100 100 -11.56
Commodity derivatives
Electricity derivatives 40 35 3.63
Grain derivatives - 1 -
* Change over 100%
Figures by quarter
Group indicators by 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
quarter 2006 2006 2006 2006 2007 2007
Net sales, € million 1,971 2,277 2,196 2,304 2,193 2,464
Change in net sales, % 15.6 12.8 6.2 8.2 11.3 8.2
Operating profit, € 150.8 91.6 82.6 37.6 62.4 103.2
million
Operating profit, % 7.7 4.0 3.8 1.6 2.8 4.2
Operating profit excl. 36.6 89.4 82.4 71.4 59.8 96.8
non-recurring items, €
million
Operating profit excl. 1.9 3.9 3.7 3.1 2.7 3.9
non-recurring items, %
Financial -1.5 0.4 1.5 -5.9 37.9 -1.7
income/expenses,
€ million
Profit before tax, € 150 92 84 31 101 101
million
Profit before tax, % 7.6 4.0 3.8 1.4 4.6 4.1
Return on invested 27.8 17.7 16.5 30.4 23.5 18.6
capital, %
Return on equity, % 29.4 11.3 17.4 36.4 24.4 17.3
Equity ratio, % 41.2 41.7 43.8 47.0 44.6 46.5
Investments, € 56.6 60.1 45.8 88.0 51.6 62.8
million*
Earnings/share, €* 1.14 0.42 0.67 0.21 0.77 0.72
Equity/share, € 15.43 15.79 16.46 17.94 17.52 18.32
* Continuing operations
Calculation of indicators
Return on invested Profit before extraordinary items +
capital = interest and other financial expenses x
100/
Balance sheet total - non-interest-
bearing debt (average)
Return on equity = Profit before extraordinary items -
income tax x 100/
Shareholders' equity + minority
interest (average)
Equity ratio = Equity + minority interest x 100/
Balance sheet total - advances received
Earnings/share, Profit before taxes - income tax -
diluted = minority interest/
Average number of shares adjusted for
dilutive effect of options
Equity/share = Equity/
Number of shares at end of period
Divisions' net sales 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
by quarter, € million 2006 2006 2006 2006 2007 2007
Kesko Food 814 931 899 971 883 983
Rautakesko 428 572 588 541 534 687
VV-Auto 230 221 186 152 248 218
Anttila 120 112 132 185 120 111
Kesko Agro 162 212 174 206 168 216
Other operating 225 238 225 257 248 259
activities
Common operations and -10 -9 -6 -7 -7 -9
eliminations
Group's net sales 1,971 2,277 2,196 2,304 2,193 2,464
Divisions' operating 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
profits by quarter, € 2006 2006 2006 2006 2007 2007
million
Kesko Food 64.8 38.9 32.6 36.9 29.2 40.9
Rautakesko 56.5 32.1 34.3 16.5 18.6 37.6
VV-Auto 11.1 11.9 5.0 1.5 11.7 8.1
Anttila 10.8 -0.7 7.1 21.4 -0.9 0.1
Kesko Agro -0.1 8.1 1.0 0.3 -0.6 7.9
Other operating 8.4 7.7 6.2 -17.4 10.7 10.1
activities
Common operations -0.6 -6.3 -3.6 -21.6 -6.1 -1.6
Group's operating 150.8 91.6 82.6 37.6 62.4 103.2
profit
Divisions' operating 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
profits, excl. non- 2006 2006 2006 2006 2007 2007
recurring items, by
quarter, € million
Kesko Food 20.5 38.7 32.5 37.0 29.0 41.4
Rautakesko 8.8 31.7 34.2 16.5 16.3 38.7
VV-Auto 11.1 11.9 5.0 1.5 11.7 8.1
Anttila -1.5 -0.6 7.1 21.4 -0.9 -1.8
Kesko Agro -1.6 8.1 1.0 0.3 -0.6 7.9
Other operating 5.5 7.2 6.2 2.7 10.6 9.9
activities
Common operations -6.2 -7.5 -3.6 -8.0 -6.3 -7.5
Group's operating 36.6 89.4 82.4 71.4 59.8 96.8
profit
Personnel, 4-6/2007 4-6/2006 Change
average number
Kesko Food 6,132 6,335 -203
Rautakesko 8,390 7,259 1131
VV-Auto 756 661 95
Anttila 2,074 2,098 -24
Kesko Agro 819 887 -68
Other operating 2,518 2,586 -68
activities and common
operations
Group companies, total 20,689 19,826 863
Kesko Food's joint 0 4,428 -4,428
ventures
Kesko Group, total 20,689 24,254 -3,565
Personnel at 30 Jun.* 2007 2006 Change
Kesko Food 8,274 8,053 221
Rautakesko 9,274 8,063 1,211
VV-Auto 794 693 101
Anttila 2,888 2,916 -28
Kesko Agro 840 924 -84
Other operating 2,795 2,815 -20
activities and common
operations
Group companies, total 24,865 23,464 1,401
Kesko Food's joint 0 4,873 -4,873
ventures
Kesko Group, total 24,865 28,337 -3,472
* Total number including part-time employees
The K-Group's retail sales (incl. VAT) (preliminary data):
1.1.-30.6.2007 1.4.-30.6.2007
€ Change, € Change,
million % million %
K-Group food stores
K-citymarket 841.7 6.0 446.9 4.3
K-supermarket 713.3 6.3 372.8 5.9
K-market 582.0 11.9 304.1 11.4
Other K-food stores and 258.5 2.5 135.8 1.6
mobile stores
Finland, total 2,395.6 7.1 1,259.6 6.1
Food stores, total 2,395.6 7.1
1,259.6 6.1
K-Group building and home
improvement stores
K-rauta 312.0 12.6 197.8 10.6
Rautia 256.6 14.3 167.1 14.3
Finland, total 568.6 13.4 364.9 12.3
K-rauta, Sweden 111.4 20.4 68.8 18.3
K-rauta, Estonia 51.5 37.9 31.0 37.6
K-rauta, Latvia 46.5 62.7 26.1 52.9
Senukai, Lithuania 238.1 31.7 132.7 28.0
Stroymaster, Russia 77.6 56.3 43.7 54.2
Byggmakker, Norway 535.3 11.9 303.7 8.4
Other countries, total 1,060.4 22.3 606.0 18.8
1,629.0 19.0
Building and home
improvement stores, total 971.0 16.3
Kesko Group car stores
Helsingin VV-Auto and Turun 233.8 17.1 118.2 3.6
VV-Auto
Finland, total 233.8 17.1 118.2 3.6
Anttila
Anttila department stores 158.9 -1.4 77.4 -1.7
Kodin Ykkönen department 74.5 2.6
stores for home goods
and interior decoration 38.2 3.3
Distance sales (Mail Order 38.4 1.5
and NetAnttila) 16.4 2.5
Finland, total 271.8 0.1 132.0 0.2
Anttila Mail Order, Estonia 9.9 -6.3 3.8 -10.9
and Latvia
Other countries, total 9.9 -6.3 3.8 -10.9
Anttila, total 281.7 -0.1 135.8 -0.1
K-Group agricultural stores
K-maatalous 324.6 9.4 190.3 4.0
Finland, total 324.6 9.4 190.3 4.0
Kesko Agro, Estonia 38.6 -15.0 24.1 -24.6
Kesko Agro, Latvia 56.1 5.1 36.7 8.8
Kesko Agro, Lithuania 44.5 11.2 27.4 2.9
Other countries, total 139.2 0.3 88.2 -4.5
Agricultural stores, total 463.8 6.5 278.5 1.2
Other operating activities
Kesko Group machinery
stores
Yahama Center 11.6 6.5 9.5 8.7
Finland, total 11.6 6.5 9.5 8.7
K-Group home and speciality
goods stores
Intersport 123.7 5.8 57.9 3.1
Kesport 14.0 4.0 7.0 2.7
Asko 44.5 4.0 22.3 5.2
Sotka 55.2 4.9 28.2 1.6
Musta Pörssi 86.0 10.4 41.0 10.0
Andiamo and K-kenkä 22.0 -6.8 12.9 -15.3
Kenkäexpertti 6.3 -6.2 3.6 -15.0
Tähti Optikko chain 25.2 1.9 11.9 0.2
Finland, total 376.9 5.1 184.8 2.4
Furniture sales, Sweden, 24.0 59.5
Estonia and Latvia 12.0 55.3
Other countries, total 24.0 59.5 12.0 55.3
Home and speciality goods 400.9 7.3
stores, total 196.8 4.6
Other operating activities, 412.4 7.2 206.3 4.7
total
Finland, total 4,182.7 7.9 2,259.3 6.1
Other countries, total 1,233.6 19.6 710.1 15.6
Retail sales, total 5,416.3 10.4 2,969.4 8.2
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