2016-04-27 08:02:19 CEST
2016-04-27 08:02:19 CEST
REGULATED INFORMATION
Kesko Oyj - Interim report (Q1 and Q3)
Kesko's interim report for the period 1 January to 31 March 2016: Kesko's profitability improved
KESKO CORPORATION INTERIM REPORT 27.04.2016 AT 09.00 1(29)
Kesko's interim report for the period 1 January to 31 March 2016: Kesko's
profitability improved
Financial performance in brief:
* The Group's net sales for January-March were €2,013 million (€2,082 million).
Net sales in local currencies excluding Anttila were at the previous year's
level, up 0.2%.
* The operating profit excluding non-recurring items increased to €32.3 million
(€26.5 million).
* Return on capital employed excluding non-recurring items increased to 12.4%
(rolling 12 mo).
* Earnings per share excluding non-recurring items €0.26 (€0.19).
* Equity ratio 54.8% (51.5%).
* Kesko Group's net sales for the next 12 months are expected to exceed the
level of the preceding 12 months. The operating profit excluding non-recurring
items for the next 12-month period is expected to equal the level of the
preceding 12 months. The outlook does not take account of the acquisition of
Onninen, in respect of which estimates will be given in connection with its
completion.
Key performance indicators
1-3/2016 1-3/2015
Net sales, € million 2,013 2,082
Operating profit excl. non-recurring items, € million 32.3 26.5
Operating profit, € million 33.5 -103.6
Profit before tax, € million 35.7 -103.7
Capital expenditure, € million 51.4 51.5
Earnings per share, €, diluted 0.28 -1.11
Earnings per share excl. non-recurring items, €, basic 0.26 0.19
31.3.2016 31.3.2015
Equity ratio, % 54.8 51.5
Equity per share, € 22.13 21.30
President and CEO Mikko Helander:
"In comparable terms, Kesko's net sales for the first quarter of the year were
at the same level as in the previous year, the operating profit increased and
the return on capital employed continued to rise.
Despite intense competition, the grocery trade performance was stable and
profitability remained at a good level. In the home improvement and speciality
goods trade, especially the net sales of the B2B trade were clearly on the rise
and outside Finland, profitability improved further. In the building and home
improvement trade, market share strengthened especially in Finland. In the car
trade, net sales increased markedly and profitability remained at a good level.
The acquisition of Suomen Lähikauppa, completed in April, is a significant step
in the implementation of Kesko's strategy. With the acquisition, Kesko's
neighbourhood retail services will improve significantly and the combination of
business operations will enable significant synergies. The Siwa and Valintatalo
stores will be converted into K-Markets within the next 12 months and in
addition, the existing K-Markets, more than 400 in all, will be renewed. The
renewal of the service station network is also progressing strongly and the
first new Neste K service station was opened in Tampere in March. In the future,
there will be nearly 100 of these new era service stations in different parts of
Finland.
The acquisition of Onninen will create an excellent platform for the growth of
Kesko's building and technical trade in Finland and the rest of Europe. The
acquisition will enable increasingly customer oriented services especially in
the B2B business, which is growing well. The acquisition is expected to be
completed in the first half of the year.
Consumers value Kesko's responsibility work. According to the results of a
recent survey, consumers consider K-stores to be the most responsible food
stores in Finland. Finnish products account for more than 80% of K-food stores'
selections and it is of primary importance for the K-Group that the vitality of
Finnish food producers and food manufacturing industry are ensured. Moreover, in
January this year, Kesko ranked 15(th) on the Global 100 Most Sustainable
Corporations in the World list and, at the same time, the most sustainable
trading sector company in the world."
FINANCIAL PERFORMANCE
Net sales and profit for January-March 2016
The Group's net sales for January-March 2016 were €2,013 million, which is 3.3%
down on the corresponding period of the previous year (€2,082 million). Anttila
excluded, comparable net sales performance in local currencies was at the
previous year's level, up 0.2%. Anttila was included in the figures for the
comparative period until 16 March 2015.
In the grocery trade, the -0.8% net sales performance was affected by the
decline in prices. In the home improvement and speciality goods trade,
comparable net sales decreased by 0.4% due to the timing of Easter. In euro
terms, the reported net sales performance in the home improvement and speciality
goods trade was -10.0%. In the car trade, net sales growth was strong at 7.1%.
The Group's net sales in Finland decreased by 3.5% and the comparable
performance was -0.9%. In the other countries, net sales decreased by 2.1% but
increased by 6.0% in comparable terms. International operations accounted for
15.9% (15.7%) of net sales.
1-3/2016 Net sales, € Change, % Operating profit Change,
million excl. non- € million
recurring
items, € million
Grocery trade 1,094 -0.8 31.3 -3.6
Home improvement and
speciality goods trade 695 -10.0 0.3 +14.5
Car trade 225 +7.1 9.4 -0.4
Common functions and
eliminations -1 -79.0 -8.7 -4.8
Total 2,013 -3.3 32.3 +5.8
The operating profit excluding non-recurring items for January-March was €32.3
million (€26.5 million). In the grocery trade, profitability was good. The real
estate arrangement completed in June 2015 weakened the operating profit
excluding non-recurring items of the grocery trade by €2.8 million. In the home
improvement and speciality goods trade, profitability was improved by the good
profit performance of foreign operations and the divestment of Anttila completed
in the previous year. In the car trade, profitability remained steadily at a
good level. The operating profit of the comparative period includes a €12.7
million operating loss from Anttila divested on 16 March 2015. The combined
effect of the real estate arrangement completed in June 2015 on the operating
profit excluding non-recurring items of the first quarter in the grocery trade
and the building and home improvement trade was €-3.7 million.
The operating profit was €33.5 million (€-103.6 million). The operating profit
includes €1.3 million (€-130.1 million) of non-recurring items. The non-
recurring items of the comparative period include a €130 million loss on the
divestment of Anttila.
The Group's profit before tax for January-March was €35.7 million (€-103.7
million). The Group's earnings per share were €0.28 (€-1.11). The Group's equity
per share was €22.13 (€21.30).
In January-March, the K-Group's (i.e. Kesko's and the chain stores') retail and
B2B sales (VAT 0%) excluding Anttila were €2,429 million, up 0.2% compared to
the previous year. The K-Plussa customer loyalty programme gained 13,691 new
households in January-March 2016. At the end of March, there were 2.3 million K-
Plussa households and 3.6 million K-Plussa cardholders.
Finance
In January-March, the cash flow from operating activities was €-96.3 million (€-
74.8 million). The cash flow from investing activities was €-52.9 million (€-
64.5 million).
At the end of the period, liquid assets totalled €746 million (€506 million).
Interest-bearing liabilities were €435 million (€548 million) and interest-
bearing net debt was €-311 million (€41 million) at the end of March. The equity
ratio was an excellent 54.8 % (51.5%) at the end of the period.
The Group's net finance income was €2.7 million (net finance costs €0.3 million)
in January-March.
Taxes
In January-March, the Group's taxes were €7.0 million (€7.0 million). The
effective tax rate was 19.7%.
Capital expenditure
In January-March, the Group's capital expenditure totalled €51.4 million (€51.5
million), or 2.6% (2.5%) of net sales. Capital expenditure in store sites was
€36.9 million (€40.1 million), in IT €2.7 million (€4.7 million) and other
capital expenditure was €11.8 million (€6.6 million). Capital expenditure in
foreign operations represented 22.6% (53.4%) of total capital expenditure.
Personnel
In January-March, the average number of personnel in Kesko Group was 18,405
(19,058) converted into full-time employees. In Finland, the average decrease
was 735 people, while outside Finland, there was an increase of 81 people. The
decrease in the average number of personnel in Finland was affected by the
divestment of Anttila on 16 March 2015.
At the end of March 2016, the number of personnel was 21,780 (21,489), of whom
9,878 (9,829) worked in Finland and 11,902 (11,660) outside Finland. Compared to
the end of March 2015, there was an increase of 49 people in Finland and an
increase of 242 people outside Finland.
In January-March, the Group's employee benefit expenses were €136.3 million,
down 5.3% compared to the previous year. The change was affected by the
divestment of Anttila on 16 March 2015.
SEGMENTS
Seasonal nature of operations
The Group's operating activities are affected by seasonal fluctuations. The net
sales and operating profits of the reportable segments are not earned evenly
throughout the year. Instead, they vary by quarter depending on the
characteristics of each segment.
Grocery trade
1-3/2016 1-3/2015
Net sales, € million 1,094 1,103
Operating profit excl. non- recurring items, € million 31.3 34.9
Operating margin excl. non-recurring items, % 2.9 3.2
Capital expenditure,
€ million 34.7 37.6
Net sales, € million 1-3/2016 Change, %
Sales to K-food stores 748 -1.3
K-citymarket, non-food 130 -1.2
Kespro 186 +0.7
K-ruoka, Russia 25 +20.7
Others 5 -39.0
Total 1,094 -0.8
January-March 2016
In the grocery trade market, the downward price trend and the intense
competitive situation continued. The strengthening of K-food stores'
competitiveness in terms of quality and price continued in accordance with
strategy. With the acquisition of Suomen Lähikauppa, completed in April, Kesko's
neighbourhood retail services will improve significantly and at the same time,
the acquisition will enable Kesko to obtain significant economies of scale and
synergies.
The net sales of the grocery trade for January-March were €1,094 million (€1,103
million), representing a change of -0.8%. In January-March, the grocery sales of
K-food stores in Finland increased by 0.1% (VAT 0%). In the grocery market in
Finland, retail prices are estimated to have changed by approximately -1.5%
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 increased by approximately 1.5% in January-March (Kesko's own
estimate). The sales of the food stores in Russia increased by 40.3% in the
local currency.
In January-March, the operating profit excluding non-recurring items of the
grocery trade was €31.3 million (€34.9 million). Profitability was good in the
grocery trade, although the operating profit excluding non-recurring items
decreased from the previous year. The real estate arrangement completed in June
2015 had a €-2.8 million impact on the operating profit excluding non-recurring
items. The operating profit of the grocery trade was €30.2 million (€35.2
million). Non-recurring items were €-1.1 million (€0.3 million).
The capital expenditure of the grocery trade in January-March was €34.7 million
(€37.6 million), of which €32.8 million (€34.2 million) was in store sites.
In January-March, two new K-supermarkets and four K-markets were opened.
Renewals and extensions were made in a total of 17 stores.
The most significant store sites under construction are the K-citymarket
shopping centre in Itäkeskus, Helsinki, a K-citymarket in Sastamala and K-
citymarket Vuosaari is being reduced to a K-supermarket. A new K-supermarket is
being built in Tampere, in Niittykumpu, Espoo, in Lappeenranta, Porvoo,
Kemiönsaari, Rovaniemi, Haapajärvi and in Lauttasaari, Kalasatama and Pasila,
Helsinki. K-market Ivalo is being extended into a K-supermarket. Two new food
stores are under construction in Russia.
Store numbers at 31.3. 2016 2015
K-citymarket 81 81
K-supermarket 221 218
K-market (incl. service station stores) 484 444
K-ruoka, Russia 9 6
Others* 98 161
* Incl. online stores
In addition, several K-food stores offer e-commerce services to their customers.
Home improvement and speciality goods trade
1-3/2016 1-3/2015
Net sales, € million 695 773
Operating profit excl. non-recurring items, € million 0.3 -14.2
Operating margin excl. non-recurring items, % 0.0 -1.8
Capital expenditure,
€ million 8.2 9.7
Net sales, € million 1-3/2016 Change, %
Building and home improvement, Finland 195 -1.0
K-rauta, Sweden 44 +12.2
Byggmakker, Norway 88 -8.6
K-rauta, Estonia 18 +8.9
K-rauta, Latvia 10 -10.8
Senukai, Lithuania 63 +5.1
K-rauta, Russia 32 -17.2
OMA, Belarus 19 -15.2
Intersport, Finland 47 -5.3
Intersport, Russia 4 +21.7
Indoor 42 -4.0
Agricultural and machinery trade 129 -3.8
Others 7 -88.3
Total 695 -10.0
January-March 2016
The comparable net sales performance of the home improvement and speciality
goods trade was stable and profitability improved compared to the previous year.
This is attributable to the good profit performance in the building and home
improvement trade outside Finland and in the agricultural and machinery trade,
as well as the divestment of the loss-making Anttila in March 2015. In the
building and home improvement trade, growth strengthened especially in the B2B
trade. The market share of the K-Group's building and home improvement trade is
estimated to have strengthened especially in Finland.
The net sales of the home improvement and speciality goods trade for January-
March were €695 million (€773 million), down 10.0%. In the home improvement and
speciality goods trade, comparable net sales in local currencies excluding
Anttila were down by 0.4% due to the timing of Easter.
The net sales of the home improvement and speciality goods trade for January-
March in Finland were €400 million (€466 million), a decrease of 14.2%. In
comparable terms, net sales decreased in Finland by 3.4%. In January-March, the
net sales from the foreign operations of the home improvement and speciality
goods trade were €296 million (€307 million), a decrease of 3.6%. In comparable
terms, the net sales from foreign operations increased by 3.7%. Foreign
operations contributed 42.5% (39.7%) to the net sales of the home improvement
and speciality goods trade.
In January-March, the net sales of the building and home improvement trade were
€509 million (€524 million), a decrease of 2.9%. In local currencies, net sales
were up by 1.1%. In respective local currencies, net sales grew in Sweden by
11.6%, decreased in Norway by 0.3% and in Russia by 3.8%.
The net sales of the agricultural and machinery trade for January-March were
€129 million (€134 million), down 3.8% compared to the previous year. Net sales
in Finland were €112 million, a decrease of 4.2%. The net sales from foreign
operations were €17 million, a decrease of 1.6%. The net sales of the leisure
trade were €56 million, a decrease of 3.7% in local currencies.
The K-Group's sales of building and home improvement products in Finland
increased by a total of 3.6% and the total market (VAT 0%) is estimated to have
fallen by approximately 1.4% (Kesko's own estimate). The retail sales of the K-
maatalous chain were €86 million, down 3.2%.
In January-March, the operating profit excluding non-recurring items of the home
improvement and speciality goods trade was €0.3 million (€-14.2 million), up
€14.5 million compared to the previous year. The profit for the comparative
period includes a €12.7 million operating loss from Anttila. Profit improved in
the building and home improvement trade especially outside Finland.
Profitability improved from the previous year also in the agricultural and
machinery trade.
The operating profit of the home improvement and speciality goods trade was €1.8
million (€-144.7 million). The most important non-recurring expense in the
comparative period is the €130 million loss on the disposal of Anttila.
In January-March, the capital expenditure of the home improvement and speciality
goods trade totalled €8.2 million (€9.7 million), of which 68.9% (36.0%) was
abroad. Capital expenditure in store sites represented 44.2% of total capital
expenditure.
In January-March, a K-rauta building and home improvement store in Kokkola, K-
rauta Holma in Lahti and OMA Brest in Belarus, as well as Asko and Sotka
furniture stores in Narva, Estonia were opened.
The most significant store sites under construction are the K-rauta stores in
Savonlinna and St. Petersburg and a Senukai store in Vilnius.
Store numbers at 31.3. 2016 2015
K-rauta 46 42
Rautia* 95 93
K-maatalous* 80 81
K-rauta, Sweden 20 20
Byggmakker, Norway 88 84
K-rauta, Estonia 8 8
K-rauta, Latvia 8 8
Senukai, Lithuania 20 19
K-rauta, Russia 13 13
OMA, Belarus 13 11
Intersport, Finland** 60 62
Budget Sport** 11 11
Asko and Sotka** 87 87
Kookenkä** 38 41
Intersport, Russia 16 17
Asko and Sotka, the Baltics** 12 10
Konekesko 1 1
* In 2016, 45 (46) Rautia stores also operated as K-maatalous stores
** Including online stores
In addition, the building and home improvement stores offer e-commerce services
to their customers.
Car trade
1-3/2016 1-3/2015
Net sales, € million 225 210
Operating profit excl. non-recurring items, € million 9.4 9.8
Operating margin excl. non-recurring items, % 4.2 4.7
Capital expenditure, € million 4.6 2.7
Net sales, € million 1-3/2016 Change, %
VV-Auto 225 +7.1
January-March 2016
The net sales of the car trade for January-March were €225 million (€210
million), up 7.1%. In January-March, the combined market performance of first
registrations of passenger cars and vans was +12.5% (-3.0%). The combined market
share of passenger cars and vans imported by VV-Auto in January-March was 18.5%
(18.8%).
The profitability of the car trade remained at a good level. The operating
profit excluding non-recurring items for January-March was €9.4 million (€9.8
million).
The operating profit for January-March was €9.4 million (€9.8 million).
The capital expenditure of the car trade in January-March was €4.6 million (€2.7
million).
Store numbers at 31.3. 2016 2015
VV-Auto, retail trade 10 10
Changes in the Group composition
Kesko implemented the arrangement agreed in the autumn of 2015 to centralise its
Baltic building and home improvement trade in UAB Senuku Prekybos centras
(Senukai). The company's name will be changed to Kesko Senukai.
In the arrangement, Kesko sold the shares in its wholly owned companies
responsible for the operations of K-rauta stores in Estonia and Latvia to its
subsidiary Senukai, in which Kesko has a majority interest.
Shares, securities market and Board authorisations
At the end of March 2016, the total number of Kesko Corporation shares was
100,019,752, of which 31,737,007, or 31.7%, were A shares and 68,282,745, or
68.3%, were B shares. At 31 March 2016, Kesko Corporation held 741,677 own B
shares as treasury shares. These treasury shares accounted for 1.09% of the
number of B shares, 0.74% of the total number of shares, and 0.19% of votes
attached to all shares of the Company. The total number of votes attached to all
shares was 385,652,815. Each A share carries ten (10) votes and each B share one
(1) vote. The Company cannot vote with own shares held by it as treasury shares
and no dividend is paid on them. At the end of March 2016, Kesko Corporation's
share capital was €197,282,584.
The price of a Kesko A share quoted on Nasdaq Helsinki was €31.12 at the end of
2015, and €36.95 at the end of March 2016, representing an increase of 18.7%.
Correspondingly, the price of a B share was €32.37 at the end of 2015, and
€38.81 at the end of March 2016, representing an increase of 19.9%. In January-
March, the highest A share price was €37.89 and the lowest was €28.98. The
highest B share price was €39.48 and the lowest was €29.56. In January-March,
the Nasdaq Helsinki All-Share index (OMX Helsinki) was down by 6.9% and the
weighted OMX Helsinki Cap index by 4.9%. The Retail Sector Index was up by
18.2%.
At the end of March 2016, the market capitalisation of A shares was €1,173
million, while that of B shares was €2,621 million, excluding the shares held by
the parent company. The combined market capitalisation of A and B shares was
€3,794 million, an increase of €624 million from the end of 2015. In January-
March 2016, a total of 0.5 million (0.8 million) A shares were traded on Nasdaq
Helsinki, a decrease of 41.1%. The exchange value of A shares was €17 million.
The number of B shares traded was 16.6 million (17.3 million), a decrease of
3.8%. The exchange value of B shares was €598 million. Nasdaq Helsinki accounted
for 54% of the Kesko A and B share trading in January-March 2016. Kesko shares
were also traded on multilateral trading facilities, the most significant of
which were BATS Chi-X with 29% and Turquoise with 17% of the trading (source:
Fidessa).
During the reporting period, the Board had the authority to decide on the
transfer of a maximum of 1,000,000 own B shares held by the Company as treasury
shares. On 3 February 2016, the Board decided to grant own B shares held by the
Company as treasury shares to persons included in the target group of the 2015
vesting period, based on this share issue authorisation and the fulfilment of
the vesting criteria of the 2015 vesting period of Kesko's three-year share-
based compensation plan. This transfer of a total of 137,054 own B shares was
announced in a stock exchange release on 17 March 2016. Based on the 2014-2016
share-based compensation plan decided by the Board, a total maximum of 600,000
own B shares held by the Company as treasury shares can be granted within a
period of three years based on the fulfilment of the vesting criteria. The Board
will separately decide on the vesting criteria and target group for each vesting
period. The share-based compensation plan was announced in a stock exchange
release on 4 February 2014. In January-March, a total of 1,154 shares granted
based on the fulfilment of the vesting criteria of the share-based compensation
plans (the 2011-2013 and the 2014-2016 share-based compensation plans) was
returned to the Company in accordance with the terms and conditions of the
share-based compensation plans. The returns during the reporting period were
notified in a stock exchange notification on 17 March 2016 and 31 March 2016.
Kesko's Annual General Meeting held on 4 April 2016 authorised the Company's
Board to make decisions concerning the transfer of a total maximum of 1,000,000
own B shares held by the Company as treasury shares (the 2016 share issue
authorisation). The authorisation cancelled the earlier share issue
authorisation corresponding in content. Based on the authorisation, own B shares
held by the Company as treasury shares can be issued for subscription by
shareholders in a directed issue in proportion to their existing holdings of the
Company shares, regardless of whether they own A or B shares. Shares can also be
issued in a directed issue, departing from the shareholder's pre-emptive right,
for a weighty financial reason of the Company, such as using the shares to
develop the Company's capital structure, to finance possible acquisitions,
capital expenditure or other arrangements within the scope of the Company's
business operations, and to implement the Company's commitment and incentive
scheme. Own B shares held by the Company as treasury shares can be transferred
either against or without payment. A share issue can only be without payment, if
the Company, taking into account the best interests of all of its shareholders,
has a particularly weighty financial reason for it. The authorisation also
includes the Board's authority to make decisions concerning any other matters
related to share issues. The amount possibly paid for the Company's own shares
is recorded in the reserve of unrestricted equity. The authorisation is valid
until 30 June 2020.
The Annual General Meeting held on 4 April also approved the Board's proposal
for its authorisation to decide on the acquisition of a maximum of 1,000,000 own
B shares of the Company (the 2016 authorisation to acquire own shares). B shares
are acquired with the Company's distributable unrestricted equity, not in
proportion to the shareholdings of shareholders, at the market price quoted in
public trading organised by Nasdaq Helsinki Ltd ("the exchange") at the date of
acquisition. The shares are acquired and paid in accordance with the rules of
the exchange. The acquisition of own shares reduces the amount of the Company's
distributable unrestricted equity. B shares are acquired for use in the
development of the Company's capital structure, to finance possible
acquisitions, capital expenditure and/or other arrangements within the scope of
the Company's business operations, and to implement the Company's commitment and
incentive scheme. The Board makes decisions concerning any other issues related
to the acquisition of own B shares. The authorisation is valid until 30
September 2017.
In addition, the Board has a share issue authorisation according to which the
Board is authorised to issue a maximum of 20,000,000 new B shares (the 2015
share issue authorisation). The authorisation is valid until 30 June 2018. The
shares can be issued against payment to be subscribed by shareholders in a
directed issue in proportion to their existing holdings of the Company shares
regardless of whether they hold A or B shares, or, departing from the
shareholder's pre-emptive right, in a directed issue, if there is a weighty
financial reason for the Company, such as using the shares to develop the
Company's capital structure and financing possible acquisitions, capital
expenditure or other arrangements within the scope of the Company's business
operations. The amount paid for the shares is recognised in the reserve of
invested non-restricted equity. The authorisation also includes the Board's
authority to decide on the share subscription price, the right to issue shares
for non-cash consideration and the right to make decisions on other matters
concerning share issues.
At the end of March 2016, the number of shareholders was 40,193, which is 664
more than at the end of 2015. At the end of March, foreign ownership of all
shares was 27%. Foreign ownership of B shares was 39% at the end of March.
Flagging notifications
Kesko Corporation did not receive any flagging notifications during the
reporting period.
Key events during the reporting period
Kesko Corporation entered into an agreement to acquire Onninen Oy's whole share
capital from Onvest Oy. The pro forma net sales of the business to be acquired
were €1,438 million and the EBITDA was €39 million for the period from October
2014 until the end of September 2015. The price of the debt-free acquisition,
structured as a share purchase, is €369 million. Onninen's steel business and
Russian subsidiary are not included in the acquisition. The completion of the
acquisition is subject to the approval of the competition authorities and the
fulfilment of the other terms and conditions of the transaction. The acquisition
is estimated to be completed during the first half of 2016. (Stock exchange
release on 12 January 2016)
Tomi Korpisaari, a member of Kesko Corporation's Board of Directors, announced
that he would resign from the Company's Board of Directors for reasons of health
as of 1 March 2016. Kaarina Ståhlberg was appointed General Counsel and member
of the Management Board of Posti Group Corporation as of 1 March 2016, as a
result of which Ståhlberg announced that she would resign from Kesko
Corporation's Board of Directors as of 1 March 2016. (Stock exchange release on
5 February 2016 and 15 February 2016)
The arrangement agreed by Kesko in the autumn of 2015 to centralise its Baltic
building and home improvement trade in UAB Senuku Prekybos centras (Senukai) was
completed. The company's name will be changed to Kesko Senukai. In the
arrangement, Kesko sold the shares in its wholly owned companies responsible for
the operations of K-rauta stores in Estonia and Latvia to its subsidiary
Senukai, in which Kesko has a majority interest. (Stock exchange release on 1
April 2016)
Events after the reporting period
The transaction agreed between Kesko Corporation's subsidiary Kesko Food and the
private equity investment firm Triton to acquire Suomen Lähikauppa was closed.
The debt-free price of the acquisition, structured as a share purchase, is
approximately €60 million. In 2015, Suomen Lähikauppa's net sales were €935.7
million, it has around 600 Siwa and Valintatalo stores and around 3,800
employees. On 11 April 2016, the Finnish Competition and Consumer Authority
(FCCA) announced their approval of the acquisition. The permission contains
conditions imposed by the FCCA. The condition imposed by the FCCA to the
acquisition is an obligation to sell 60 stores of Suomen Lähikauppa Oy to
competitors. In case the sale of some store or some stores is not possible, the
selling obligation imposed on Kesko Food Ltd will cease. The FCCA also imposed
an obligation to Suomen Lähikauppa Oy, transferred to Kesko Food Ltd's
ownership, to continue purchases from Tuko Logistics Osuuskunta during a fixed
period of 18 months in order that purchases can be reduced in stages. (Stock
exchange release on 11 April 2016 and on 12 April 2016)
The Finnish Competition and Consumer Authority (FCCA) approved the acquisition
of Onninen Oy by Kesko Corporation as regards Finland. The permission does not
contain any conditions. The acquisition is yet subject to the approval of the EU
Commission as regards the other countries included in the arrangement and the
fulfilment of the other terms and conditions of the acquisition. The acquisition
is estimated to be completed during the first half of 2016. (Stock exchange
release on 20 April 2016)
Resolutions of the 2016 Annual General Meeting and decisions of the Board's
organisational meeting
Kesko Corporation's Annual General Meeting, held on 4 April 2016, adopted the
financial statements and the consolidated financial statements for 2015 and
discharged the Board members and the Managing Director from liability. The
General Meeting also resolved to distribute a dividend of €2.50 per share as
proposed by the Board, or a total amount of €248,195,187.50. The dividend pay
date was 13 April 2016.
The General Meeting resolved to leave the number of Board members unchanged at
seven. The term of office of each of the seven (7) Board members elected by the
Annual General Meeting on 13 April 2015, i.e. retailer, Business College
Graduate Esa Kiiskinen, retailer, Master of Science in Economics Tomi
Korpisaari, retailer, Secondary School Graduate Toni Pokela, eMBA Mikael Aro,
Master of Science in Economics Matti Kyytsönen, Master of Science in Economics
Anu Nissinen and Master of Laws Kaarina Ståhlberg, will expire at the close of
the 2018 Annual General Meeting in accordance with Kesko's Articles of
Association. Korpisaari and Ståhlberg had resigned from the membership of the
Company's Board of Directors as of 1 March 2016. The General Meeting resolved to
replace them by retailer, trade technician Matti Naumanen and Managing Director,
Master of Science in Economics Jannica Fagerholm until the close of the Annual
General Meeting to be held in 2018. In addition, the General Meeting resolved to
leave the Board members' fees and the basis for reimbursement of expenses
unchanged.
The General Meeting elected the firm of auditors PricewaterhouseCoopers Oy,
Authorised Public Accountants, as the Company's auditor with APA Mikko Nieminen
as the auditor with principal responsibility.
The General Meeting approved the Board's proposal for share issue authorisation
according to which the Board may decide on the transfer of a total maximum of
1,000,000 own B shares held by the Company as treasury shares (the 2016 share
issue authorisation). The General Meeting also approved the Board's proposal for
the authorisation to acquire own shares, according to which the Board may decide
on the acquisition of a maximum of 1,000,000 own B shares of the Company (the
2016 authorisation to acquire own shares).
Moreover, the General Meeting approved the Board's proposal for its
authorisation to decide on the donations in a total maximum of €300,000 for
charitable or similar purposes until the Annual General Meeting to be held in
2017 and to decide on the donation recipients, purposes of use and other terms
of the donations.
After the Annual General Meeting, Kesko Corporation's Board of Directors held an
organisational meeting in which it elected M.Sc. (Econ.) Jannica Fagerholm as
the Chair of the Audit Committee, re-elected eMBA Mikael Aro as its Deputy Chair
and M.Sc. (Econ.) Matti Kyytsönen as its member. Business College Graduate Esa
Kiiskinen (Ch.), Mikael Aro (Dep. Ch.) and M.Sc. (Econ.) Anu Nissinen were re-
elected to the Board's Remuneration Committee.
The resolutions of Annual General Meeting and the decisions of the Board's
organisational meeting were announced in more detail in stock exchange releases
on 4 April 2016.
Responsibility
Kesko was the best trading sector company (Food & Staples Retailing) on 'The
Global 100 Most Sustainable Corporations' list of 2016. Kesko placed 15(th) on
the list.
In February, Kesko, Arla Finland, HKScan Finland and Unilever Finland initiated
a Finnish soy commitment in cooperation with WWF Finland. The members of the
commitment pledge to ensure that by 2020, all the soy used in the production
chain of their private label products will be responsibly produced, either Round
Table on Responsible Soy (RTRS) or ProTerra certified soy.
In March, Kesko's Annual Report 2015 was published in Finnish at
http://vuosiraportti2015.kesko.fi and in English at
http://annualreport2015.kesko.fi. The Annual Report 2015 consists of the
strategy report, the GRI report, financial statements for 2015, Kesko's
Corporate Governance Statement, and the Remuneration Statement.
At the beginning of April, the Pirkka Thank the Producer product range expanded
from meat products to milks. A certain proportion of the price of the products
in the range is paid directly to Finnish producers. The objective of the K-Group
is to support Finnish producers with hundreds of thousands of euros through the
Thank the Producer operating model in 2016.
Risk management
Kesko Group has an established and comprehensive risk management process. Risks
and their management responses are regularly assessed within the Group and
reported to the Group management. Kesko's risk management and risks associated
with business operations are described in more detail on Kesko's website in the
Corporate Governance section.
The most significant near-future risks in Kesko's business operations are
associated with the general development of the economy and consumer confidence
especially in Finland and the weakening of the Russian economy and operating
conditions, as well as their impact on Kesko's sales and profit. In other
respects, no material change is estimated to have taken place during the first
part of the year in the risks described in Kesko's Report by the Board of
Directors and the financial statements for 2015 and the risks described on
Kesko's website. The risks and uncertainties related to economic development are
described in the outlook section of this release.
Outlook
Estimates for the outlook of Kesko Group's net sales and operating profit
excluding non-recurring items are given for the 12-month period following the
reporting period (4/2016-3/2017) in comparison with the 12 months preceding the
end of the reporting period (4/2015-3/2016).
The general economic situation and the expected trend in consumer demand vary in
Kesko's different operating countries. In Finland, owing to the weak trend in
consumers' purchasing power, the trading sector's performance is expected to
remain modest, which may be complicated further by actions taken to balance the
public finances. In the Finnish grocery trade, intense competition is expected
to continue. The markets for the Finnish building and home improvement trade and
for the car trade are expected to improve slightly. With respect to foreign
countries, the economic situation and consumers' purchasing power, as well as
the outlook in Russia are still weak. In Sweden and Norway and the Baltic
countries, the market is expected to grow.
Kesko Group's net sales for the next 12 months are expected to exceed the level
of the preceding 12 months. The operating profit excluding non-recurring items
for the next 12-month period is expected to equal the level of the preceding 12
months. The outlook does not take account of the acquisition of Onninen, in
respect of which estimates will be given in connection with its completion.
Helsinki, 26 April 2016
Kesko Corporation
Board of Directors
The information in the interim report is unaudited.
Further information is available from Jukka Erlund, Senior Vice President, Chief
Financial Officer, telephone +358 105 322 113, and Eva Kaukinen, Vice President,
Group Controller, telephone +358 105 322 338. A Finnish-language webcast of the
interim report briefing can be accessed at www.kesko.fi, at 11.30. An English-
language audio conference on the interim report will be held today at 14.30
(Finnish time). The audio conference login is available on Kesko's website at
www.kesko.fi.
Kesko Corporation's interim report for January-June will be published on 3
August 2016. In addition, Kesko Group's sales figures are published each month.
News releases and other Company information are available on Kesko's website at
www.kesko.fi.
KESKO CORPORATION
Merja Haverinen
Vice President, Group Communications
ATTACHMENTS: TABLES SECTION
Accounting policies
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Group's performance indicators
Net sales by segment
Operating profit by segment
Operating profit excl. non-recurring items by segment
Operating margin excl. non-recurring items by segment
Capital employed by segment
Return on capital employed excl. non-recurring items by segment
Capital expenditure by segment
Segment information by quarter
Change in tangible and intangible assets
Related party transactions
Fair value hierarchy of financial assets and liabilities
Personnel average and at the end of the reporting period
Group's commitments
Calculation of performance indicators
K-Group's retail and B2B sales
DISTRIBUTION
Nasdaq Helsinki Ltd
Main news media
www.kesko.fi
TABLES SECTION
Accounting policies
This interim report has been prepared in accordance with the IAS 34 standard.
The interim report has been prepared in accordance with the same principles as
the annual financial statements for 2015.
Consolidated income statement (€ million),
condensed
1-3/ 1-3/ 1-12/
2016 2015 Change, % 2015
Net sales 2,013 2,082 -3.3 8,679
Cost of goods sold -1,755 -1,812 -3.2 -7,540
Gross profit 259 270 -4.3 1,139
Other operating income 165 169 -2.3 800
Employee benefit expense -136 -144 -5.3 -545
Depreciation and impairment charges -28 -35 -20.0 -137
Other operating expenses -226 -364 -37.9 -1,063
Operating profit 34 -104 (..) 195
Interest income and other finance income 3 2 38.7 10
Interest expense and other finance costs -2 -3 -41.1 -14
Exchange differences 1 1 (..) -3
Share of results of equity accounted investments 0 0 (..) 1
Profit before tax 36 -104 (..) 188
Income tax -7 -7 0.4 -71
Net profit for the period 29 -111 (..) 117
Attributable to
Owners of the parent 27 -110 (..) 102
Non-controlling
interests 1 -1 (..) 16
Earnings per share (€)
for profit attributable to
equity holders of the parent
Basic and diluted 0.28 -1.11 (..) 1.03
Consolidated statement
of comprehensive income (€ million)
1-3/ 1-3/ 1-12/
2016 2015 Change,% 2015
Net profit for the period 29 -111 (..) 117
Items that will not be reclassified subsequently
to profit or loss
Actuarial gains/losses 4 28 -84.3 23
Items that may be reclassified subsequently to
profit or loss
Exchange differences on translating foreign
operations -2 5 (..) -17
Adjustment for hyperinflation - -1 - -
Cash flow hedge revaluation -1 0 (..) 0
Revaluation of available-for-sale financial
assets 0 1 -65.5 1
Other items - - - 0
Total other comprehensive income for the period,
net of tax 2 33 -94.5 6
Total comprehensive income for the period 30 -78 (..) 124
Attributable to
Owners of the parent 33 -75 (..) 119
Non-controlling
interests -2 -3 -19.7 5
(..) Change over 100%
Consolidated statement of financial
position (€ million), condensed
31.3.2016 31.3.2015 Change, % 31.12.2015
ASSETS
Non-current assets
Tangible assets 1,301 1,630 -20.2 1,282
Intangible assets 170 172 -1.3 168
Equity accounted investments and other
financial assets 114 109 5.2 115
Loans and receivables 65 16 (..) 67
Pension assets 183 182 0.9 176
Total 1,833 2,108 -13.0 1,808
Current assets
Inventories 770 764 0.9 735
Trade receivables 656 704 -6.7 582
Other receivables 195 207 -5.9 127
Financial assets at fair value
through profit or loss 243 213 13.8 374
Available-for-sale financial assets 213 228 -6.9 372
Cash and cash equivalents 291 65 (..) 141
Total 2,368 2,181 8.6 2,331
Non-current assets held for sale 0 1 -16.7 0
Total assets 4,201 4,289 -2.0 4,139
31.3.2016 31.3.2015 Change, % 31.12.2015
EQUITY AND LIABILITIES
Equity 2,197 2,110 4.1 2,163
Non-controlling interests 90 79 14.9 79
Total equity 2,287 2,188 4.5 2,242
Non-current liabilities
Interest-bearing liabilities 256 310 -17.4 258
Non-interest-bearing liabilities 35 4 (..) 42
Deferred tax liabilities 68 70 -3.2 71
Pension obligations 1 1 -30.3 1
Provisions 13 20 -32.4 16
Total 373 405 -8.0 388
Current liabilities
Interest-bearing liabilities 179 238 -24.8 181
Trade payables 866 938 -7.6 795
Other non-interest-bearing liabilities 460 483 -4.7 495
Provisions 37 37 -1.5 38
Total 1,542 1,696 -9.1 1,509
Total equity and liabilities 4,201 4,289 -2.0 4,139
(..) Change over 100%
Consolidated statement of changes in equity (€ million)
Share Re- Cur- Re- Treas- Re- Non- Total
capi- serves rency valu- ury tained con-
tal trans- ation shares earn- trol-
lation reserve ings ling
differ- inter-
ences ests
Balance at
1.1.2015 197 463 -38 -1 -31 1,594 82 2,265
Treasury shares
Share-based
payments 1 1
Dividends
Other changes 0 0 0 0
Net profit for
the period -110 -1 -111
Other comprehen-
sive income
Items that will
not be
reclassified
subsequently to
profit or loss
Actuarial
gains/losses 34 34
Items that may
be reclassified
subsequently to
profit or loss
Exchange
differences
on translating
foreign
operations 0 6 -1 5
Adjustment for
hyperinflation 0 -1 -1
Cash flow
hedge
revaluation 0 0
Revaluation of
available-for-
sale financial
assets 1 1
Others
Tax related to
comprehensive
income 0 -7 -7
Total other
comprehensive
income 0 6 1 27 -2 33
Balance at
31.3.2015 197 463 -32 0 -31 1,511 79 2,188
Balance at
1.1.2016 197 463 -45 0 -27 1,575 79 2,242
Share-based
payments 0 0
Increase of
share capital 13 13
Acquisition of
subsidiary 2 2
Net profit for
the period 27 1 29
Other comprehen-
sive income
Items that will
not be
reclassified
subsequently to
profit or loss
Actuarial
gains/losses 5 5
Items that may
be reclassified
subsequently to
profit or loss
Exchange
differences
on translating
foreign
operations 0 2 -4 -2
Cash flow
hedge
revaluation -1 -1
Revaluation of
available-for-
sale financial
assets 0 0
Tax related to
comprehensive
income 0 -1 -1
Total other
comprehensive
income 0 2 -1 4 -4 2
Balance at
31.3.2016 197 463 -43 0 -27 1,606 90 2,287
Consolidated statement of cash flows (€ million), condensed
1-3/ 1-3/ Change,% 1-12/
2016 2015 2015
Cash flows from operating activities
Profit before tax 36 -104 (..) 188
Depreciations according to plan 28 35 -20.0 128
Finance income and costs -3 0 (..) 7
Other adjustments -1 126 (..) 40
Change in working capital
Current non-interest-bearing
receivables, increase (-)/
decrease (+) -140 -188 -25.5 -2
Inventories,
increase (-)/decrease (+) -35 -54 -35.0 -44
Current non-interest-bearing
liabilities, increase (+)/
decrease(-) 27 123 -78.2 7
Financial items and tax -8 -13 -38.0 -48
Net cash from operating activities -96 -75 28.8 276
Cash flows from investing activities
Investing activities -49 -49 -0.9 -215
Sales of fixed assets -3 -16 -81.2 432
Increase in non-current receivables -1 1 (..) -1
Net cash used in investing activities -53 -64 -17.9 217
Cash flows from financing activities
Interest-bearing liabilities, increase (+)/decrease (-) -9 39 (..) -61
Current interest-bearing
receivables, increase (-)/
decrease (+) -1 0 (..) 2
Dividends paid - - - -156
Equity increase 13 - - -
Short-term money market investments, increase (-)/
decrease (+) 169 -16 (..) -269
Other items 5 7 -25.7 19
Net cash used in financing activities 178 30 (..) -466
Change in cash and cash equivalents 28 -109 (..) 28
Cash and cash
equivalents and current
portion of available-for-sale financial assets at 1
Jan. 334 313 6.6 313
Currency translation difference adjustment and
revaluation -1 0 (..) -7
Cash and cash
equivalents and current
portion of available-for-sale financial assets at 31
Mar. 361 204 76.9 334
(..) Change over 100%
Group's performance indicators
1-3/2016 1-3/2015 Change, pp 1-12/2015
Return on capital employed, % 6.7 -18.1 24.8 9.3
Return on capital employed, %,
rolling 12 mo 16.4 2.6 13.8 9.3
Return on capital employed excl. non-
recurring items, % 6.5 4.6 1.9 11.7
Return on capital employed excl. non-
recurring items, %, rolling 12 mo 12.4 10.2 2.1 11.7
Return on equity, % 5.1 -19.9 25.0 5.2
Return on equity, %, rolling 12 mo 11.5 0.4 11.0 5.2
Return on equity excl. non-recurring
items, % 4.8 3.1 1.7 8.2
Return on equity excl. non-recurring
items, %, rolling 12 mo 8.7 7.9 0.8 8.2
Equity ratio, % 54.8 51.5 3.3 54.7
Gearing, % -13.6 1.9 -15.5 -20.0
Interest-bearing net debt/EBITDA,
rolling 12 mo -0.7 0.2 (..) -1.4
Change, %
Capital expenditure, € million 51.4 51.5 -0.3 218.5
Capital expenditure, % of net sales 2.6 2.5 3.2 2.5
Earnings per share, basic, € 0.28 -1.11 (..) 1.03
Earnings per share, diluted, € 0.28 -1.11 (..) 1.03
Earnings per share excl. non-recurring
items, basic, € 0.26 0.19 41.0 1.70
Cash flows from operating activities,
€ million -96 -75 28.8 276
Cash flows from investing activities,
€ million -53 -64 -17.9 217
Equity per share, € 22.13 21.30 3.9 21.82
Interest-bearing net debt, € million -311 41 (..) -448
Diluted number of shares, average for the
reporting period, 1,000 pcs 99,045 99,024 0.0 99,114
Personnel, average 18,405 19,058 -3.4 18,955
(..) Change over 100%
Group's performance indicators by quarter 1-3/ 4-6/ 7-9/ 10-12/ 1-3/
2015 2015 2015 2015 2016
Net sales, € million 2,082 2,227 2,203 2,166 2,013
Change in net sales, % -2.2 -6.0 -4.4 -4.4 -3.3
Operating profit, € million -103.6 175.8 83.1 39.3 33.5
Operating margin, % -5.0 7.9 3.8 1.8 1.7
Operating profit excl. non- recurring items, €
million 26.5 76.4 82.5 59.1 32.3
Operating margin
excl. non-recurring items, % 1.3 3.4 3.7 2.7 1.6
Finance income/costs,
€ million -0.3 -4.2 -3.5 0.9 2.7
Profit before tax, € million -103.7 172.1 78.8 40.7 35.7
Profit before tax, % -5.0 7.7 3.6 1.9 1.8
Return on capital employed, % -18.1 31.9 17.6 8.2 6.7
Return on capital employed, excl. non-recurring
items, % 4.6 13.9 17.5 12.4 6.5
Return on equity, % -19.9 28.0 8.9 4.8 5.1
Return on equity, excl.
non-recurring items, % 3.1 10.6 10.6 9.2 4.8
Equity ratio, % 51.5 52.2 54.2 54.7 54.8
Capital expenditure,
€ million 51.5 58.6 41.5 66.9 51.4
Earnings per share,
diluted, € -1.11 1.48 0.43 0.22 0.28
Equity per share, € 21.30 21.21 21.41 21.82 22.13
Segmental information
Net sales by segment 1-3/ 1-3/ 1-12/
(€ million) 2016 2015 Change,% 2015
Grocery trade, Finland 1,069 1,082 -1.2 4,566
Grocery trade,
other countries* 25 21 20.7 107
Grocery trade, total 1,094 1,103 -0.8 4,673
- of which intersegment trade 3 7 -52.8 15
Home improvement and speciality goods trade, Finland 400 466 -14.2 1,719
Home improvement and speciality goods trade, other
countries* 296 307 -3.6 1,530
Home improvement and speciality goods trade total 695 773 -10.0 3,250
- of which intersegment trade 3 1 (..) 1
Car trade, Finland 225 210 7.1 748
Car trade total 225 210 7.1 748
- of which intersegment trade 0 0 -61.5 0
Common functions and
eliminations -1 -3 -79.0 8
Finland total 1,693 1,755 -3.5 7,042
Other countries total* 321 328 -2.1 1,637
Group total 2,013 2,082 -3.3 8,679
(..) Change over 100%
* Net sales in countries other than Finland
Operating profit by segment 1-3/ 1-3/ 1-12/
(€ million) 2016 2015 Change 2015
Grocery trade 30.2 35.2 -5.0 249.4
Home improvement and speciality goods trade 1.8 -144.7 146.4 -57.2
Car trade 9.4 9.8 -0.4 26.1
Common functions and eliminations -7.8 -3.9 -3.9 -23.7
Group total 33.5 -103.6 137.1 194.6
Operating profit excl. non-recurring items by segment 1-3/ 1-3/ 1-12/
(€ million) 2016 2015 Change 2015
Grocery trade 31.3 34.9 -3.6 177.5
Home improvement and speciality goods trade 0.3 -14.2 14.5 63.6
Car trade 9.4 9.8 -0.4 26.1
Common functions and eliminations -8.7 -3.9 -4.8 -22.7
Group total 32.3 26.5 5.8 244.5
Operating margin Rolling
excl. non-recurring items by segment, % 1-3/ 1-3/ 1-12/ 12 mo
2016 2015 Change, pp 2015 3/2016
Grocery trade 2.9 3.2 -0.3 3.8 3.7
Home improvement and speciality goods trade 0.0 -1.8 1.9 2.0 2.5
Car trade 4.2 4.7 -0.5 3.5 3.4
Group total 1.6 1.3 0.3 2.8 2.9
Capital employed by segment, cumulative Rolling
average 1-3/ 1-3/ 1-12/ 12 mo
(€ million) 2016 2015 Change 2015 3/2016
Grocery trade 795 1 018 -223 871 829
Home improvement and speciality goods trade 773 910 -137 823 791
Car trade 119 98 22 104 107
Common functions and eliminations 303 270 33 285 294
Group
total 1,990 2,295 -305 2,083 2,020
Return on capital employed Rolling
excl. non-recurring items 1-3/ 1-3/ Change, 1-12/ 12 mo
by segment, % 2016 2015 pp. 2015 3/2016
Grocery trade 15.7 13.7 2.0 20.4 21.0
Home improvement and
speciality goods trade 0.2 -6.3 6.4 7.7 9.9
Car trade 31.6 40.2 -8.6 25.2 24.1
Group total 6.5 4.6 1.9 11.7 12.4
Capital expenditure 1-3/ 1-3/ 1-12/
by segment (€ million) 2016 2015 Change 2015
Grocery trade 35 38 -3 129
Home improvement and speciality goods trade 8 10 -1 55
Car trade 5 3 2 16
Common functions and eliminations 4 1 2 18
Group total 51 52 0 219
Segmental information by quarter
Net sales by segment 1-3/ 4-6/ 7-9/ 10-12/ 1-3/
(€ million) 2015 2015 2015 2015 2016
Grocery trade 1,103 1,149 1,171 1,249 1,094
Home improvement and speciality goods trade 773 883 857 736 695
Car trade 210 190 170 177 225
Common functions and eliminations -3 4 4 4 -1
Group total 2,082 2,227 2,203 2,166 2,013
Operating profit by segment 1-3/ 4-6/ 7-9/ 10-12/ 1-3/
(€ million) 2015 2015 2015 2015 2016
Grocery trade 35.2 115.8 45.0 53.4 30.2
Home improvement and speciality goods trade -144.7 61.5 36.8 -10.9 1.8
Car trade 9.8 6.5 6.0 3.8 9.4
Common functions and eliminations -3.9 -8.0 -4.6 -7.1 -7.8
Group total -103.6 175.8 83.1 39.3 33.5
Operating profit excl.
non-recurring items 1-3/ 4-6/ 7-9/ 10-12/ 1-3/
by segment (€ million) 2015 2015 2015 2015 2016
Grocery trade 34.9 43.3 44.8 54.5 31.3
Home improvement and speciality goods trade -14.2 34.5 35.8 7.5 0.3
Car trade 9.8 6.5 6.0 3.8 9.4
Common functions and eliminations -3.9 -8.0 -4.1 -6.7 -8.7
Group total 26.5 76.4 82.5 59.1 32.3
Operating margin excl.
non-recurring items 1-3/ 4-6/ 7-9/ 10-12/ 1-3/
by segment, % 2015 2015 2015 2015 2016
Grocery trade 3.2 3.8 3.8 4.4 2.9
Home improvement and speciality goods trade -1.8 3.9 4.2 1.0 0.0
Car trade 4.7 3.4 3.5 2.1 4.2
Group total 1.3 3.4 3.7 2.7 1.6
Change in tangible and intangible assets (€ million)
31.3.2016 31.3.2015
Opening net carrying amount 1,451 1,802
Depreciation, amortisation and impairment -28 -35
Investments in tangible and intangible assets 50 51
Disposals -3 -22
Currency translation differences 1 6
Closing net carrying amount 1,471 1,802
Related party transactions (€ million)
The Group's related parties include its key management (the Board of Directors,
the Managing Director and the Group Management Board) and companies controlled
by them, the Group's subsidiaries, associates and joint ventures as well as
Kesko Pension Fund.
The following transactions were carried out with related parties:
1-3/2016 1-3/2015
Sales of goods and services 12 18
Purchases of goods and services 2 5
Other operating income 2 3
Other operating expenses 16 8
Finance costs 1 -
31.3.2016 31.3.2015
Receivables 60 8
Liabilities 23 26
Fair value hierarchy of financial assets and liabilities (€ million)
Level 1 Level 2 Level 3 31.3.2016
Financial assets at fair value through profit
or loss 112.7 129.9 242.7
Derivative financial instruments at fair
value through profit or loss
Derivative financial assets 4.0 4.0
Derivative financial liabilities 9.8 9.8
Available-for-sale financial assets 142.3 70.5 15.6 228.4
Fair value hierarchy of financial assets and liabilities (€ million)
Level 1 Level 2 Level 3 31.3.2015
Financial assets at fair value through profit
or loss 25.0 188.1 213.2
Derivative financial instruments at fair
value through profit or loss
Derivative financial assets 16.9 16.9
Derivative financial liabilities 11.8 11.8
Available-for-sale financial assets 88.9 139.5 16.1 244.5
Level 1 instruments are traded in active markets and their fair values are
directly based on quoted market prices. The fair values of level 2 instruments
are derived from market data. The fair values of level 3 instruments are not
based on observable market data
Personnel, average and as at 31.3.
Personnel average by
segment 1-3/2016 1-3/2015 Change
Grocery trade 6,174 6,065 109
Home improvement and speciality goods trade 10,775 11,747 -972
Car trade 767 775 -8
Common functions 688 471 217
Group total 18,405 19,058 -653
Personnel as at 31.3.*
by segment 2016 2015 Change
Grocery trade 8,037 7,858 179
Home improvement and speciality goods trade 12,190 12,322 -132
Car trade 795 795 0
Common functions 758 514 244
Group total 21,780 21,489 291
* Total number including part-time employees
Group's commitments (€million)
31.3.2016 31.3.2015 Change, %
Own commitments 154 207 -25.6
For associates and joint ventures - 65 -100.0
For others 16 10 58.6
Lease liabilities for machinery and equipment 26 26 3.1
Lease liabilities for real estate 2,535 2,103 20.6
Liabilities arising from derivative instruments (€ million)
Fair value
Values of underlying instruments at 31.3. 31.3.2016 31.3.2015 31.3.2016
Interest rate derivatives
Interest rate swaps 100 101 -0.00
Currency derivatives
Forward and future contracts 211 240 -0.46
Option agreements - 4 -
Currency swaps 50 50 2.49
Commodity derivatives
Electricity derivatives 8 18 -6.85
Calculation of performance indicators
Operating profit x 100 / (Non-current
assets + Inventories + Receivables +
Return on capital employed*, % Other current assets - Non-interest-
bearing liabilities) on average for
the reporting period
Operating profit for the preceding 12
Return on capital employed, %, rolling months x 100 / (Non-current assets +
12 months Inventories + Receivables + Other
current assets - Non-interest-bearing
liabilities) on average for 12 months
Operating profit excl. non-recurring
Return on capital employed excl. non- items x 100 / (Non-current assets +
recurring items*, % Inventories + Receivables + Other
current assets - Non-interest-bearing
liabilities) on average for the
reporting period
Operating profit excl. non-recurring
Return on capital employed excl. non- items for the preceding 12 months x
recurring items, %, rolling 12 months 100 / (Non-current assets +
Inventories + Receivables + Other
current assets - Non-interest-bearing
liabilities) on average for 12 months
Return on equity*, % (Profit/loss before tax - Income tax)
x 100 / Shareholders' equity
(Profit/loss for the preceding 12
Return on equity, %, rolling 12 months months before tax - Income tax for the
preceding 12 months) x 100 /
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 the preceding 12
months adjusted for non-recurring
Return on equity excl. non-recurring items before tax - Income tax for the
items, %, rolling 12 months preceding 12 months adjusted for the
tax effect of non-recurring items) x
100 / Shareholders' equity
Equity ratio, % Shareholders' equity x 100 /
(Total assets - Prepayments received)
(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 holders
Equity/share of the parent /
Basic number of shares at the balance
sheet date
Interest-bearing net liabilities x
Gearing, % 100 /
Shareholders' equity
Interest-bearing liabilities - Money
Interest-bearing net debt market investments - Cash and cash
equivalents
EBITDA, rolling 12 mo Operating profit + Depreciation,
amortisation and impairment +
Depreciation and impairment charges
for the preceding 12 months
Interest-bearing net debt/ EBITDA, Interest-bearing net debt/ EBITDA,
rolling 12 mo rolling 12 mo
* Indicators for return on capital have been annualised
K-Group's retail and B2B sales*, VAT 0% (preliminary data):
1.1.-31.3.2016
K-Group's retail and € million Change, %
B2B sales
K-Group's grocery trade
K-food stores, Finland 1,073 -0.1
K-citymarket, non-food 127 -2.5
Kespro 184 0.9
K-ruoka, Russia 25 20.6
Grocery trade, total 1,409 0.1
K-Group's home improvement and speciality goods trade
K-rauta and Rautia 171 0.0
Rautakesko B2B Service 48 19.4
K-maatalous 86 -3.2
Machinery trade, Finland 35 3.2
Speciality goods trade, Finland 118 -9.8
Finland, total 459 -1.5
Home improvement and speciality goods trade, other Nordic
countries 165 -0.3
Home improvement and speciality goods trade, the Baltics 111 3.0
Home improvement and speciality goods trade, other countries 55 -14.5
Home improvement and speciality goods trade, total 790 -1.7
K-Group's car trade
VV-Autotalot 106 11.4
VV-Auto, import 124 5.3
Car trade, total 230 8.0
Finland total 2,074 0.4
Other countries, total 356 -0.6
Retail and B2B sales,
total 2,429 0.2
* Excluding Anttila
[HUG#2007201]
© 2024 Nasdaq, Inc. All Rights Reserved |