2016-08-03 08:00:38 CEST
2016-08-03 08:00:38 CEST
REGULATED INFORMATION
Kesko Oyj - Half Year financial report
Kesko's half year financial report for the period 1 January to 30 June 2016: Kesko's net sales increased and comparable operating profit improved
KESKO HALF YEAR FINANCIAL REPORT 03.08.2016 AT 09.00 1(35)
Kesko's half year financial report for the period 1 January to 30 June 2016:
Kesko's net sales increased and comparable operating profit improved
Financial performance in brief:
* Group's net sales for January-June were €4,624 million (€4,310 million)
Net sales grew by 7.3% and in local currencies, acquisitions and disposals
excluded, by 2.5%
* Comparable operating profit was €111.4 million (€102.9 million)
* Operating profit was €101.6 million (€72.2 million)
* Comparable return on capital employed increased to 12.6% (rolling 12 mo)
* Comparable profit before tax was €113.7 million (€99.1 million)
* Comparable earnings per share were €0.85 (€0.71)
* Kesko Group's net sales for the next 12 months are expected to exceed the
level of the preceding 12 months. The comparable operating profit for the next
12-month period is expected to exceed the level of the preceding 12 months.
Key performance indicators
1-6/2016 1-6/2015 4-6/2016 4-6/2015
Net sales, € million 4,624 4,310 2,610 2,227
Operating profit, comparable,
€ million 111.4 102.9 79.1 76.4
Operating profit, € million 101.6 72.2 68.0 175.8
Profit before tax, comparable,
€ million 113.7 99.1 79.2 72.7
Profit before tax, € million 103.8 68.5 68.1 172.1
Capital expenditure, € million 564.1 110.1 512.7 58.6
Earnings per share, €, diluted 0.76 0.38 0.49 1.48
Earnings per share, comparable, €, basic 0.85 0.71 0.59 0.52
30.6.2016 30.6.2015
Equity ratio, % 44.8 52.2
Equity per share, € 20.31 21.21
President and CEO Mikko Helander:
"The implementation of Kesko's growth strategy progressed significantly during
the second quarter, as the acquisition of Suomen Lähikauppa was completed in
April and that of Onninen in June. With the acquisition of Suomen Lähikauppa
Kesko will grow in the neighbourhood retail market of the grocery trade and the
neighbourhood retail services valued by Finnish consumers will improve
significantly. The conversion of Suomen Lähikauppa's Siwa and Valintatalo stores
into K-Market stores began in May and will continue for about a year.
Kesko is clearly Finland's most internationalised trading sector company. The
acquisition of Onninen will further strengthen our position in Finland and open
up new, interesting opportunities for growth in the building and technical trade
in Europe.
Both acquisitions will provide significant economies of scale and synergies for
Kesko.
Thanks to the acquisitions, Kesko's net sales for the second quarter increased
by 17.2% and in local currencies, excluding the impact of acquisitions, by
4.6%. Both the comparable operating profit and the return on capital employed
increased.
In the grocery trade, profitability remained at a good level thanks to the
enhancement actions taken. In the building and technical trade, net sales were
clearly on the rise and the comparable operating profit of the division
continued to grow. In the car trade, net sales increased markedly and
profitability remained at a good level.
The completion of the acquisitions and the implementation of the strategy are
expected to further improve Kesko's growth and profitability.
During the reporting period, a decision was made in the building and technical
trade to combine the Rautia and K-rauta stores into a new K-rauta chain in
spring 2017. At the same time, all of the 140 building and home improvement
stores in Finland will be revamped.
A key role in the implementation of Kesko's strategy is also played by the
revision of K-Plussa. In the future, the revised K-Plussa will be the most
personally rewarding customer loyalty programme and offer the best digital
services.
Kesko's new K-kampus will also take the one, unified Kesko a leap forward. K-
kampus will be built in Kalasatama, Helsinki, in cooperation with Varma Mutual
Pension Insurance Company. Kampus will be completed in spring 2019 and it will
bring together around 1,700 Kesko employees."
FINANCIAL PERFORMANCE
Net sales and profit for January-June 2016
The Group's net sales for January-June 2016 were €4,624 million, which is 7.3%
up on the corresponding period of the previous year (€4,310 million).
Acquisitions and disposals excluded, net sales in local currencies grew by
2.5%. Suomen Lähikauppa Oy has been consolidated into Kesko Group as of 12 April
2016 and Onninen Group as of 1 June 2016. Anttila was included in the figures
for the comparative period until 16 March 2015.
In the grocery trade, the 8.6% net sales growth was significantly attributable
to the acquisition of Suomen Lähikauppa. Net sales in local currencies,
excluding Suomen Lähikauppa, were up 0.9%. In the building and technical trade,
net sales increased by 5.1% and in local currencies, excluding Onninen and
Anttila, by 3.5%. In the car trade, net sales were markedly up by 9.5%. The
Group's net sales in Finland increased by 6.9%, and acquisitions and disposals
excluded, by 1.1%. In the other countries, net sales increased by 8.9% and in
local currencies, acquisitions and disposals excluded, by 8.6%. International
operations accounted for 18.5% (18.2%) of net sales.
1-6/2016 Net sales, Change, % Change in local Operating Change, €
€ million currency excl. profit, million
acquisitions and comparable,
disposals, % € million
Grocery trade 2,447 +8.6 +0.9 74.8 -3.4
Building and
technical trade 1,741 +5.1 +3.5 38.2 +17.9
Car trade 438 +9.5 +9.5 15.2 -1.1
Common functions
and eliminations -3 (..) (..) -16.9 -4.9
Total 4,624 +7.3 +2.5 111.4 +8.5
(..) Change over 100%
The Group's comparable operating profit for January-June was €111.4 million
(€102.9 million). The total effect of the real estate arrangement completed in
June 2015 on the comparable operating profit of the first six months of the year
in the grocery trade and the building and technical trade was €-7.4 million. In
the grocery trade, profitability was good. The comparable operating profit was
€74.8 million (€78.2 million), adversely affected by €5.5 million from the real
estate arrangement completed in June 2015. In the building and technical 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 was €101.6 million (€72.2 million). The items affecting
comparability totalled €-9.8 million (€-30.7 million). The key items affecting
comparability included €4.8 million in gains on the disposal of real estate, €-
6.5 million in asset transfer taxes on acquisitions and €-6.0 million in real
estate impairment charges. In the previous year, the items affecting
comparability included a €130 million loss on the divestment of Anttila and €100
million in gains on the disposal of real estate.
Items affecting comparability, € million 1-6/2016 1-6/2015
Operating profit, comparable 111.4 102.9
Items affecting comparability
+gains on disposal 7.1 99.9
-losses on disposal -0.3 -131.6
-real estate impairment charges -6.0 -
+/-structural arrangements -8.7 -
+/-others -1.9 1.0
Total items affecting comparability -9.8 -30.7
Operating profit 101.6 72.2
The Group's profit before tax for January-June was €103.8 million (€68.5
million). The Group's earnings per share were €0.76 (€0.38). The Group's equity
per share was €20.31 (€21.21).
In January-June, the K-Group's (i.e. Kesko's and the chain stores') retail and
B2B sales (VAT 0%) were €5,665 million, up 6.2% compared to the previous year.
The K-Plussa customer loyalty programme gained 25,776 new households in January-
June 2016. At the end of June, there were 2.3 million K-Plussa households and
3.6 million K-Plussa cardholders.
Net sales and profit for April-June 2016
The Group's net sales for April-June 2016 were €2,610 million, which is 17.2% up
on the corresponding period of the previous year (€2,227 million). Acquisitions
excluded, net sales in local currencies grew by 4.6%.
In the grocery trade, the 17.7% net sales growth was affected by the acquisition
of Suomen Lähikauppa. Net sales growth in local currencies, excluding Suomen
Lähikauppa, was 2.3%. In the building and technical trade, net sales increased
by 18.4% and in local currencies, excluding Onninen, by 6.7%. In the car trade,
net sales increased by 12.1%. The Group's net sales in Finland increased by
17.3% and acquisitions excluded, by 3.1%. In the other countries, net sales
increased by 16.8% and in local currencies, acquisitions excluded, by 10.5%.
International operations accounted for 20.4% (20.5%) of net sales.
4-6/2016 Net sales, Change, % Change in local Operating Change, €
€ million currency excl. profit, million
acquisitions, % comparable,
€ million
Grocery trade 1,353 +17.7 +2.3 43.6 +0.2
Building and
technical trade 1,046 +18.4 +6.7 37.9 +3.4
Car trade 214 +12.1 +12.1 5.8 -0.7
Common functions
and eliminations -2 (..) (..) -8.2 -0.2
Total 2,610 +17.2 +4.6 79.1 +2.8
(..) Change over 100%
The comparable operating profit for April-June was €79.1 million (€76.4
million). The effect of the real estate arrangement completed in June 2015 on
the Group's comparable operating profit for the second quarter was €-3.7
million. The €43.6 million comparable operating profit of the grocery trade was
at a good level (€43.3 million). The impact of the real estate arrangement
completed in June 2015 on the comparable operating profit of the grocery trade
was €-2.8 million. In the building and technical trade, the comparable operating
profit was increased by the good profit performance of foreign operations and
the acquisition of Onninen. In the car trade, the comparable operating profit
was €5.8 million (€6.5 million).
The operating profit was €68.0 million (€175.8 million). The operating profit
includes items affecting comparability in the amount of €-11.1 million (€99.4
million). In the previous year, the items affecting comparability mainly
included gains on the disposal of real estate.
Items affecting comparability, € million 4-6/2016 4-6/2015
Operating profit, comparable 79.1 76.4
Items affecting comparability
+gains on disposal 5.9 99.6
-losses on disposal -0.3 -1.0
-real estate impairment charges -6.0 -
+/-structural arrangements -8.7 -
+/-others -1.9 0.9
Total items affecting comparability -11.1 99.4
Operating profit 68.0 175.8
The Group's profit before tax for April-June was €68.1 million (€172.1 million).
The Group's earnings per share were €0.49 (€1.48).
In April-June, the K-Group's (i.e. Kesko's and the chain stores') retail and B2B
sales (VAT 0%) were €3,236 million, up 13.2% compared to the previous year.
Finance
In January-June, the cash flow from operating activities was €-17.8 million
(€67.5 million). The cash flow from operating activities was impacted by an
increase in working capital resulting from sales growth and seasonal changes,
coupled with €30 million in taxes of the previous financial year paid on a cash
basis. The cash flow from investing activities was €-529.0 million (€334.3
million).
At the end of the period, liquid assets totalled €327 million (€843 million).
Interest-bearing liabilities were €657 million (€483 million) and interest-
bearing net debt was €330 million (€-359 million) at the end of June. The equity
ratio was 44.8% (52.2%) at the end of the period.
The Group's net finance income was €4.3 million (net finance costs €4.5 million)
in January-June.
In April-June, the cash flow from operating activities was €78.5 million (€142.3
million). The cash flow from investing activities was €-476.0 million (€398.7
million).
The Group's net finance income was €1.7 million (net finance costs €4.2 million)
in April-June.
Taxes
In January-June, the Group's taxes were €21.4 million (€26.4 million). The
effective tax rate was 20.6% (38.5%).
In April-June, the Group's taxes were €14.3 million (€19.4 million). The
effective tax rate was 21.1% (11.2%).
Capital expenditure
In January-June, the Group's capital expenditure totalled €564.1 million (€110.1
million), or 12.2% (2.6%) of net sales. Capital expenditure in store sites was
€100.5 million (€78.5 million), acquisitions €431.0 million, capital expenditure
in IT €8.9 million (€8.6 million) and other capital expenditure €23.6 million
(€23.0 million).
In April-June, the Group's capital expenditure totalled €512.7 million (€58.6
million), or 19.6% (2.6%) of net sales. Capital expenditure in store sites was
€63.6 million (€38.3 million), acquisitions €428.1 million, capital expenditure
in IT €6.2 million (€3.9 million) and other capital expenditure €14.7 million
(€16.4 million).
Personnel
In January-June, the average number of personnel in Kesko Group was 20,593
(19,065) converted into full-time employees. The increase was due to the
acquisitions of Suomen Lähikauppa and Onninen.
At the end of June 2016, the number of personnel was 30,257 (22,894), of whom
16,232 (10,774) worked in Finland and 14,025 (12,120) outside Finland. The
number of Suomen Lähikauppa's personnel was 4,180 and that of Onninen 3,123.
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
1-6/2016 1-6/2015 4-6/2016 4-6/2015
Net sales, € million 2,447 2,252 1,353 1,149
Operating profit, comparable, € million 74.8 78.2 43.6 43.3
Operating margin, comparable, % 3.1 3.5 3.2 3.8
Capital expenditure, € million 139.3 70.9 104.6 33.2
Net sales, € million 1-6/2016 Change, % 4-6/2016 Change, %
Sales to K-food stores 1,550 +0.5 802 +2.2
K-citymarket, non-food 263 -1.5 133 -1.8
Suomen Lähikauppa 185 - 185 -
Kespro 390 +2.3 204 +3.7
K-ruoka, Russia 54 +8.5 29 -0.2
Others 5 -60.5 0 (..)
Total 2,447 +8.6 1,353 +17.7
(..) Change over 100%
January-June 2016
The net sales of the grocery trade for January-June were €2,447 million (€2,252
million), representing a growth of 8.6%. Suomen Lähikauppa excluded, net sales
in local currencies increased by 0.9%. In January-June, the grocery sales of K-
food stores in Finland decreased by 0.1% (VAT 0%) (excluding Suomen Lähikauppa)
and Suomen Lähikauppa included, sales were up 7.7%. In the grocery market in
Finland, retail prices are estimated to have changed by approximately -1%
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-June (Kesko's own
estimate). The sales in roubles of the food stores in Russia increased by 32.4%.
The acquisition of Suomen Lähikauppa was completed on 12 April 2016 and the
conversion of Siwa and Valintatalo stores into K-Market stores was begun in May.
At the same time, the renewal of the entire K-Market chain started. Kesko's
neighbourhood retail services improve significantly and the acquisition will
provide significant economies of scale and synergies for Kesko. The downward
price trend and the intense competitive situation continued in the Finnish
grocery trade market.
In January-June, the comparable operating profit of the grocery trade was €74.8
million (€78.2 million). Thanks to the enhancement actions taken, profitability
was good in the grocery trade. The real estate arrangement completed in June
2015 had a €-5.5 million impact on the comparable operating profit. The
operating profit of the grocery trade was €74.3 million (€151.0 million). The
items affecting comparability were €-0.6 million (€72.8 million).
The capital expenditure of the grocery trade in January-June was €139.3 million
(€70.9 million), of which €70.2 million (€64.3 million) was in store sites and
acquisitions were €54.1 million.
April-June 2016
The net sales of the grocery trade for April-June were €1,353 million (€1,149
million), representing a growth of 17.7%. Suomen Lähikauppa excluded, net sales
in local currencies increased by 2.3%. In April-June, the grocery sales of K-
food stores in Finland decreased by 0.3% (VAT 0%) (excluding Suomen Lähikauppa)
and Suomen Lähikauppa included, sales increased by 14.9%. In the grocery market
in Finland, retail prices are estimated to have changed by approximately -1%
compared to the previous year. The sales in roubles of the food stores in Russia
increased by 25.8%.
In April-June, the comparable operating profit of the grocery trade was €43.6
million (€43.3 million). The real estate arrangement completed in June 2015 had
a €-2.8 million impact on the comparable operating profit. The operating profit
was €44.1 million (€115.8 million). The items affecting comparability were €0.5
million (€72.4 million). Suomen Lähikauppa contributed €-1.1 million to the
comparable operating profit for April-June and €-2.4 million to the operating
profit.
The capital expenditure of the grocery trade in April-June was €104.6 million
(€33.2 million), of which €37.3 million (€30.1 million) was in store sites and
acquisitions were €54.1 million.
In April-June, two new K-supermarkets and four K-Markets were opened. Renewals
and extensions were made in a total of 58 stores.
The most significant store sites under construction are the K-citymarket
shopping centre i3 in Itäkeskus, Helsinki and a K-citymarket in Sastamala. A new
K-supermarket is being built in Tampere, in Niittykumpu, Espoo, in Lappeenranta,
Porvoo, Kemiönsaari, Haapajärvi and in Lauttasaari, Kalasatama and Pasila,
Helsinki. Two food stores are being built in Russia.
Store numbers at 30.6. 2016 2015
K-citymarket 81 81
K-supermarket 223 220
K-Market (incl. service station stores) 484 441
Suomen Lähikauppa 601 -
K-ruoka, Russia 9 8
Others* 96 160
* Including online stores
In addition, several K-food stores offer e-commerce services to their customers.
Building and technical trade
1-6/2016 1-6/2015 4-6/2016 4-6/2015
Net sales, € million 1,741 1,656 1,046 883
Operating profit, comparable, € million 38.2 20.3 37.9 34.5
Operating margin, %, comparable 2.2 1.2 3.6 3.9
Capital expenditure, € million 412.9 18.4 404.7 8.7
Net sales, € million 1-6/2016 Change, % 4-6/2016 Change, %
Building and home improvement
trade, Finland 436 +4.1 241 +8.7
Indoor 87 +0.2 45 +4.5
K-rauta, Sweden 111 +7.5 67 +4.6
Byggmakker, Norway 206 -4.4 118 -1.0
Kesko Senukai, the Baltics 221 +5.0 130 +6.0
K-rauta, Russia 77 -17.4 45 -17.5
OMA, Belarus 46 -13.9 27 -12.9
Onninen 136 - 136 -
Intersport, Finland 83 +0.8 37 +9.8
Intersport, Russia 7 +7.5 3 -5.8
Agricultural and machinery trade 324 +1.9 195 +6.1
Others 12 -82.9 5 -44.0
Total 1,741 +5.1 1,046 +18.4
January-June 2016
The net sales of the building and technical trade for January-June were €1,741
million (€1,656 million), up 5.1%. The net sales of the building and technical
trade in local currencies, excluding acquisitions and disposals, increased by
3.5%. In January-June, the net sales of the building and technical trade in
Finland were €941 million (€921 million), up 2.1%. Acquisitions and disposals
excluded, net sales in Finland grew by 0.5%. In January-June, the net sales from
the foreign operations of the building and technical trade were €800 million
(€735 million), up 9.0%. In local currencies, excluding acquisitions and
disposals, the net sales from foreign operations increased by 7.0%. Foreign
operations contributed 46.0% (44.4%) to net sales.
The acquisition of Onninen was completed in 1 June 2016. Onninen's net sales in
June 2016 were €136 million. The acquisition accelerates the implementation of
the international growth strategy of Kesko's building and technical trade and
provide significant synergy potential. The division's business operations expand
in the HEPAC and electrical product groups and it is able to better serve
contractor customers in particular.
In January-June, the net sales of the building and home improvement trade were
€1,179 million (€1,178 million), representing the level of the previous year. In
local currencies, net sales were up by 4.6%. In respective local currencies, net
sales grew in Sweden by 7.1%, in Norway by 4.2% and in Russia by 0.8%. 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, Sweden and Norway. The K-
Group's sales of building and home improvement products in Finland increased by
a total of 5.6% and the total market (VAT 0%) is estimated to have grown by
approximately 2.4% (Kesko's own estimate).
The net sales of the agricultural and machinery trade for January-June were €324
million (€318 million), up 1.9% compared to the previous year. Net sales in
Finland were €264 million, down 2.4%. The net sales from foreign operations were
€60 million, up 25.8%. The retail sales of the K-maatalous chain in Finland were
€221 million, down 1.8%.
The net sales of the leisure trade were €99 million, an increase of 2.1% in
local currencies.
In January-June, the comparable operating profit of the building and technical
trade was €38.2 million (€20.3 million), up €17.9 million compared to the
previous year. The profit for the comparative period includes a €12.7 million
operating loss from Anttila divested in March 2015. Profitability was improved
by the good profit performance of foreign operations.
The operating profit of the building and technical trade was €34.6 million (€-
83.1 million). The most significant items in the previous year affecting
comparability include a €130 million loss on the divestment of Anttila and €27
million in gains on the disposal of real estate.
In January-June, the capital expenditure of the building and technical trade
totalled €412.9 million (€18.4 million), of which €376.9 million were
acquisitions and capital expenditure in store sites was €29.7 million (€11.5
million). The acquisitions include €364.1 million for the acquisition of Onninen
and €10.0 million for increasing the ownership interest in the Belarusian OMA.
April-June 2016
The net sales of the building and technical trade for April-June were €1,046
million (€883 million), up 18.4%. Net sales in local currencies, excluding
acquisitions, increased by 6.7%.
In April-June, the net sales of the building and technical trade in Finland were
€541 million (€456 million), up 18.8%. Acquisitions excluded, net sales in
Finland grew by 4.1%. In April-June, the net sales from the foreign operations
of the building and technical trade were €505 million (€428 million), up 18.0%.
In local currencies, excluding acquisitions, the net sales from foreign
operations increased by 9.5%. Foreign operations contributed 48.3% (48.4%) to
net sales.
In April-June, the net sales of the building and home improvement trade were
€671 million (€655 million), up 2.5%. In local currencies, net sales grew by
7.4%. In respective local currencies, net sales grew in Sweden by 4.2%, in
Norway by 7.9% and in Russia by 4.8%. The K-Group's sales of building and home
improvement products in Finland increased by a total of 6.7% and the total
market (VAT 0%) is estimated to have grown by approximately 4.8% (Kesko's own
estimate).
Onninen's net sales in June 2016 were €136 million.
The net sales of the agricultural and machinery trade for April-June were €195
million (€184 million), up 6.1% compared to the previous year. Net sales in
Finland were €152 million, down 1.0%. The net sales from foreign operations were
€44 million, up 40.8%. The retail sales of the K-maatalous chain in Finland were
down by 0.9%.
The net sales of the leisure trade were €43 million, an increase of 10.4% in
local currencies.
In April-June, the comparable operating profit of the building and technical
trade was €37.9 million (€34.5 million), up €3.4 million compared to the
previous year. The operating profit was increased by the growth of the operating
profit of the building and home improvement trade in the Nordic and the Baltic
countries, the acquisition of Onninen and the good profit performance of the
leisure trade. Onninen's operating profit in June 2016 was €2.2 million,
adversely impacted by the fair value allocations of inventories written off in
the amount of €0.9 million.
The operating profit of the building and technical trade was €32.8 million
(€61.5 million). Items affecting comparability were €-5.1million (€27.0
million).
In April-June, the capital expenditure of the building and technical trade
totalled €404.7 million (€8.7 million), of which €374.1 million were
acquisitions and capital expenditure in store sites was €26.0 million (€6.4
million).
In April-June 2016, two Senukai stores in Lithuania and the OMA Bobruisk
building and home improvement store in Belarus were opened. In June, Onninen
Express stores were opened in Finland and Sweden.
The most significant store sites under construction are a K-rauta store in
Savonlinna and two K-rauta stores in St. Petersburg.
Store numbers at 30.6. 2016 2015
K-rauta 46 43
Rautia* 95 93
K-maatalous* 80 81
K-rauta, Sweden 20 20
Byggmakker, Norway 86 83
K-rauta, Estonia 8 8
K-rauta, Latvia 8 8
Senukai, Lithuania 22 19
K-rauta, Russia 13 13
OMA, Belarus 13 11
Onninen 146 -
Intersport, Finland** 58 62
Budget Sport** 11 11
Asko and Sotka** 87 87
Kookenkä** 37 42
Intersport, Russia 16 16
Asko and Sotka, the Baltics** 12 10
Konekesko 1 1
* In 2016, 43 (45) 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
1-6/2016 1-6/2015 4-6/2016 4-6/2015
Net sales, € million 438 400 214 190
Operating profit, comparable, € million 15.2 16.3 5.8 6.5
Operating margin, comparable, % 3.5 4.1 2.7 3.4
Capital expenditure, € million 8.1 6.6 3.5 3.8
Net sales, € million 1-6/2016 Change, % 4-6/2016 Change, %
VV-Auto 438 +9.5 214 +12.1
January-June 2016
The net sales of the car trade for January-June were €438 million (€400
million), up 9.5%. In January-June, the combined market performance of first
registrations of passenger cars and vans was 14.6% (-2.8%). The combined market
share of passenger cars and vans imported by VV-Auto in January-June was 18.6%
(20.0%).
The profitability of the car trade remained at a good level. The comparable
operating profit for January-June was €15.2 million (€16.3 million). The
operating profit for January-June was €15.2 million (€16.3 million).
The capital expenditure of the car trade in January-June was €8.1 million (€6.6
million).
April-June 2016
The net sales of the car trade for April-June were €214 million (€190 million),
up 12.1%. The combined market share of passenger cars and vans imported by VV-
Auto in April-June was 18.7% (21.2%).
The profitability of the car trade remained at a good level. The comparable
operating profit for April-June was €5.8 million (€6.5 million). The operating
profit for April-June was €5.8 million (€6.5 million). VV-Auto's order books
strengthened markedly from the previous year.
The capital expenditure of the car trade in April-June was €3.5 million (€3.8
million).
Store numbers at 30.6. 2016 2015
VV-Auto, retail trade 10 9
Changes in the Group composition
Kesko implemented the arrangement it had 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 has been 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).
Kesko Food Ltd, a Kesko Corporation subsidiary, acquired the whole share capital
of Suomen Lähikauppa Oy from the private equity investment firm Triton. (Stock
exchange release on 12 April 2016).
Kesko Corporation acquired Onninen Oy's whole share capital from Onvest Oy. The
acquisition does not include Onninen's steel business or Russian subsidiary.
(Stock exchange release on 1 June 2016).
Shares, securities market and Board authorisations
At the end of June 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 30 June 2016, Kesko Corporation held 742,272 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 June 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 €35.49 at the end of June 2016, representing an increase of 14.0%.
Correspondingly, the price of a B share was €32.37 at the end of 2015, and
€38.12 at the end of June 2016, representing an increase of 17.8%. In January-
June, the highest A share price was €37.89 and the lowest was €28.98. The
highest B share price was €39.51 and the lowest was €29.56. In January-June, the
Nasdaq Helsinki All-Share index (OMX Helsinki) was down by 8.1% and the weighted
OMX Helsinki Cap index by 5.4%. The Retail Sector Index was up by 12.2%.
At the end of June 2016, the market capitalisation of A shares was €1,126
million, while that of B shares was €2,575 million, excluding the shares held by
the parent company. The combined market capitalisation of A and B shares was
€3,701 million, an increase of €531 million from the end of 2015. In January-
June 2016, a total of 0.9 million (1.5 million) A shares were traded on Nasdaq
Helsinki, a decrease of 41.9%. The exchange value of A shares was €30 million.
The number of B shares traded was 28.6 million (32.2 million), a decrease of
11.4%. The exchange value of B shares was €1,030 million. Nasdaq Helsinki
accounted for 53% of the Kesko A and B share trading in January-June 2016. Kesko
shares were also traded on multilateral trading facilities, the most significant
of which were BATS Chi-X with 28% and Turquoise with 19% 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, and the transfer of
2,670 own B shares was announced in a stock exchange release on 27 April 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-June, a total of
4,419 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, 31 March 2016, 27 April 2016 and 30 May 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 2016 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 June 2016, the number of shareholders was 39,933, which is 404
more than at the end of 2015. At the end of June, foreign ownership of all
shares was 30%. Foreign ownership of B shares was 43% at the end of June.
Flagging notifications
Kesko Corporation did not receive any flagging notifications during the
reporting period.
Key events during the reporting period
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 has been 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)
The transaction agreed between Kesko Corporation's subsidiary Kesko Food and the
private equity investment firm Triton to acquire Suomen Lähikauppa was
completed. The debt-free price of the acquisition, structured as a share
purchase, was €54 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. The Finnish Competition and Consumer Authority (FCCA) announced their
approval of the acquisition on 11 April 2016. The permission contains conditions
imposed by the FCCA. The FCCA made the acquisition conditional on the sale of
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 12 April
2016)
The transaction agreed between Kesko Corporation and Onvest Oy to acquire Suomen
Lähikauppa was completed. The acquisition does not include Onninen's steel
business or Russian subsidiary. In 2015, the pro forma net sales of the acquired
business were €1,465 million and the EBITDA was €39 million. The price of the
debt-free acquisition, structured as a share purchase, was €364 million. (Stock
exchange release on 12 January 2016, 20 April 2016 and 1 June 2016)
Events after the reporting period
The operations of Intersport Russia were sold in July 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, eMBA 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
Kespro was granted the MSC and ASC Chain of Custody - the traceability
certificate - in April. All phases of Kespro's fish and shellfish supply chain
have been audited, and Kespro and its certified customer restaurants can use MSC
and ASC ecolabelling in their marketing.
Kesko and the child rights organization Plan International Finland continue
cooperating to improve the responsibility of the fishing industry and the
situation of migrant workers in Thailand. As a part of the project, already 60
children from migrant families have been able to start school.
Kesko's grocery trade and the Finnish cancer foundation Syöpäsäätiö signed an
agreement on main sponsorship in the Pink ribbon campaign in May. The objective
is to generate tenfold donations to the fundraising from K-food stores compared
to what they were before.
Pirkka Street Basket events were arranged in 16 localities in Finland in May.
Pirkka Street Basket 2016 is part of the Little Wolves project by the Finnish
Basketball Association and Kesko's grocery trade that aims to promote physical
activity for children.
Kesko had Finland's largest property-specific solar utility built on the roof of
K-citymarket Tammisto in Vantaa in May-June. The peak power of the solar utility
is 503 kWp and it generates electricity for the property.
The K-maatalous Experimental farm made a Baltic Sea Commitment to Baltic Sea
Action Group, BSAG, in June. The Experimental farm's commitment concentrates on
developing soil condition and nutrient usage measurement practices and
technology.
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
in Finland and the weakening of the Russian economy and operating conditions, as
well as their impact on Kesko's sales and profit. There are risks involved in
the integration of the business operations of Suomen Lähikauppa, Onninen and
Kesko Senukai that, if realised, may slow the achievement of the financial
objectives set. 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 comparable operating
profit are given for the 12-month period following the reporting period (7/2016-
6/2017) in comparison with the 12 months preceding the end of the reporting
period (7/2015-6/2016).
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 growth is expected to remain
slow. In the Finnish grocery trade, intense competition is expected to continue.
The markets for the Finnish building and technical trade are expected to improve
slightly. With respect to foreign countries, the outlook for the Russian economy
is still modest. 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 comparable operating profit for the next 12-
month period is expected to exceed the level of the preceding 12 months.
Helsinki, 2 August 2016
Kesko Corporation
Board of Directors
The information in the half year financial 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
half year financial report briefing can be viewed from 11.30 at www.kesko.fi. An
English-language audio conference on the half year financial 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-September will be published on
26 October 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
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 by segment, comparable
Operating margin by segment, comparable
Capital employed by segment
Return on capital employed by segment, comparable
Items affecting comparability
Capital expenditure by segment
Segment information by quarter
Acquisitions
Change in tangible and intangible assets
Transactions conducted by persons discharging managerial responsibilities or
persons closely associated with them
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 half year financial report has been prepared in accordance with the IAS 34
standard. The half year financial report has been prepared in accordance with
the same principles as the annual financial statements for 2015.
Consolidated income
statement (€ million),
condensed
1-6/ 1-6/ Change, % 4-6/ 4-6/ Change, % 1-12/
2016 2015 2016 2015 2015
Net sales 4,624 4,310 7.3 2,610 2,227 17.2 8,679
Cost of goods sold -3,990 -3,748 6.5 -2,235 -1,935 15.5 -7,540
Gross profit 634 562 12.7 375 292 28.5 1,139
Other operating income 348 449 -22.4 183 280 -34.6 800
Employee benefit expense -316 -282 12.2 -180 -138 30.4 -545
Depreciation and
impairment charges -66 -67 -1.9 -38 -33 17.3 -137
Other operating expenses -498 -589 -15.5 -272 -225 20.6 -1,063
Operating profit 102 72 40.7 68 176 -61.3 195
Interest income and other
finance income 7 4 52.7 4 2 68.1 10
Interest expense and
other finance costs -4 -7 -42.4 -2 -4 -43.3 -14
Exchange differences 2 -1 (..) 1 -2 (..) -3
Share of results of
equity accounted
investments -2 1 (..) -2 1 (..) 1
Profit before tax 104 68 51.7 68 172 -60.4 188
Income tax -21 -26 -18.9 -14 -19 -25.9 -71
Net profit for the period 82 42 95.9 54 153 -64.8 117
Attributable to
Owners of the parent 76 37 (..) 48 147 -67.1 102
Non-controlling
interests 7 5 40.1 5 6 -7.9 16
Earnings per share
for profit attributable
to
equity holders of the
parent, (€)
Basic and diluted 0.76 0.38 (..) 0.49 1.48 -67.2 1.03
Consolidated statement
of comprehensive income
(€ million)
1-6/ 1-6/ Change,% 4-6/ 4-6/ Change,% 1-12/
2016 2015 2016 2015 2015
Net profit for the period 82 42 95.9 54 153 -64.8 117
Items that will not be
reclassified subsequently
to profit or loss
Actuarial gains/losses 9 14 -41.1 4 -13 (..) 23
Items that may be
reclassified subsequently
to profit or loss
Exchange differences on
translating foreign
operations 2 3 -30.9 4 -3 (..) -17
Adjustment for
hyperinflation - - - - 1 - -
Cash flow hedge
revaluation 1 0 (..) 2 -1 (..) 0
Revaluation of available-
for-sale financial assets 0 1 -74.0 0 0 (..) 1
Other items 0 0 -1.0 0 0 -1.0 0
Total other comprehensive
income for the period,
net of tax 11 18 -37.7 9 -15 (..) 6
Total comprehensive
income for the period 93 60 56.6 63 138 -54.3 124
Attributable to
Owners of the parent 88 59 48.5 55 134 -59.1 119
Non-controlling
interests 6 1 (..) 8 3 (..) 5
(..) Change over 100%
Consolidated statement of financial
position (€ million), condensed
30.6.2016 30.6.2015 Change, % 31.12.2015
ASSETS
Non-current assets
Tangible assets 1,359 1,265 7.4 1,282
Intangible assets 416 171 (..) 168
Equity accounted investments and other
financial assets 121 115 5.3 115
Loans and receivables 69 73 -5.0 67
Pension assets 188 165 14.2 176
Total 2,153 1,788 20.4 1,808
Current assets
Inventories 1,017 740 37.5 735
Trade receivables 988 676 46.3 582
Other receivables 199 160 24.4 127
Financial assets at fair value
through profit or loss 97 430 -77.4 374
Available-for-sale financial assets 84 328 -74.5 372
Cash and cash equivalents 146 84 72.8 141
Total 2,531 2,418 4.7 2,331
Non-current assets held for sale 28 0 (..) 0
Total assets 4,712 4,206 12.0 4,139
30.6.2016 30.6.2015 Change, % 31.12.2015
EQUITY AND LIABILITIES
Equity 2,016 2,103 -4.1 2,163
Non-controlling interests 86 76 -12.4 79
Total equity 2,102 2,179 -3.6 2,242
Non-current liabilities
Interest-bearing liabilities 360 266 35.3 258
Non-interest-bearing liabilities 39 35 11.3 42
Deferred tax liabilities 61 63 -3.4 71
Pension obligations 1 1 -33.0 1
Provisions 14 16 -12.4 16
Total 475 381 24.5 388
Current liabilities
Interest-bearing liabilities 296 217 36.5 181
Trade payables 1,257 918 36.9 795
Other non-interest-bearing liabilities 538 475 13.3 495
Provisions 44 36 24.7 38
Total 2,135 1,646 29.8 1,509
Total equity and liabilities 4,712 4,206 12.0 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
Share-based
payments 4 0 4
Dividends -149 -6 -155
Other changes 0 0 5 0 5
Net profit for
the period 37 5 42
Other comprehen-
sive income
Items that will
not be
reclassified
subsequently to
profit or loss
Actuarial
gains/losses 18 18
Items that may
be reclassified
subsequently to
profit or loss
Exchange
differences
on translating
foreign
operations 0 7 -4 3
Cash flow hedge
revaluation 0 0
Revaluation of
available-for-
sale financial
assets 1 1
Others 0 0
Tax related to
comprehensive
income 0 -4 -4
Total other
comprehensive
income 0 7 1 14 -4 18
Balance at
30.6.2015 197 463 -31 0 -28 1,502 76 2,179
Balance at
1.1.2016 197 463 -45 0 -27 1,575 79 2,242
Share-based
payments 4 4
Increase in
share capital 13 13
Acquisition of
subsidiary and
minority
interest 0 -10 -9
Dividends -248 -1 -250
Other changes 9 9
Net profit for
the period 76 7 82
Other comprehen-
sive income
Items that will
not be
reclassified
subsequently to
profit or loss
Actuarial
gains/losses 11 11
Items that may
be reclassified
subsequently to
profit or loss
Exchange
differences
on translating
foreign
operations 0 3 -1 2
Cash flow
hedge
revaluation 1 1
Revaluation of
available-for-
sale financial
assets 0 0
Tax related to
comprehensive
income 0 -2 -2
Total other
comprehensive
income 0 3 1 8 -1 11
Balance at
30.6.2016 197 463 -42 1 -23 1,419 86 2,102
Consolidated statement of cash flows (€ million), condensed
1-6/ 1-6/ Change,% 4-6/ 4-6/ Change,% 1-12/
2016 2015 2016 2015 2015
Cash flows from operating activities
Profit before tax 104 68 51.7 68 172 -60.4 188
Depreciations according to plan 60 67 -10.8 32 33 -1.1 128
Finance income and costs -4 4 (..) -2 4 (..) 7
Other adjustments 4 23 -81.5 5 -103 (..) 40
Change in working capital
Current non-interest-bearing
receivables, increase (-)/
decrease (+) -198 -119 67.1 -59 69 (..) -2
Inventories,
increase (-)/decrease (+) -19 -31 -38.4 16 23 -30.3 -44
Current non-interest-bearing
liabilities, increase (+)/
decrease(-) 81 69 17.5 55 -54 (..) 7
Financial items and tax -45 -15 (..) -37 -1 (..) -48
Net cash from operating activities -18 68 (..) 79 142 -44.8 276
Cash flows from investing activities
Investing activities -530 -109 (..) -481 -60 (..) -215
Sales of fixed assets 4 444 -99.2 7 460 -98.5 432
Increase in non-current receivables -3 -1 (..) -2 -2 6.7 -1
Net cash used in investing
activities -529 334 (..) -476 399 (..) 217
Cash flows from financing activities
Interest-bearing liabilities,
increase (+)/decrease (-) 213 -18 (..) 222 -57 (..) -61
Current interest-bearing
receivables, increase (-)/
decrease (+) 2 -1 (..) 3 -1 (..) 2
Dividends paid -250 -149 67.8 -250 -149 67.8 -156
Equity increase 13 - - - - - -
Short-term money market investments,
increase (-)/ decrease (+) 406 -295 (..) 237 -279 (..) -269
Other items 6 9 -29.9 1 2 -44.2 19
Net cash used in financing
activities 390 -454 (..) 213 -484 (..) -466
Change in cash and cash equivalents -156 -52 (..) -185 57 (..) 28
Cash and cash
equivalents and current
portion of available-for-sale
financial assets at 1 Jan. 334 313 6.6 361 204 76.9 313
Currency translation difference
adjustment and revaluation 1 1 -3.6 2 1 (..) -7
Cash and cash
equivalents and current
portion of available-for-sale
financial assets at 30 Jun. 178 262 -32.0 178 262 -32.0 334
(..) Change over 100%
Group's performance indicators
1-6/2016 1-6/2015 Change, pp 1-12/2015
Return on capital employed, % 9.7 6.4 3.2 9.3
Return on capital employed, %,
rolling 12 mo 11.1 7.3 3.8 9.3
Return on capital employed,
comparable, % 10.6 9.2 1.4 11.7
Return on capital employed,
comparable, %, rolling 12 mo 12.6 10.9 1.7 11.7
Return on equity, % 7.6 3.8 3.8 5.2
Return on equity, %, rolling 12 mo 7.4 4.9 2.5 5.2
Return on equity, comparable, % 8.4 6.8 1.6 8.2
Return on equity, comparable, %,
rolling 12 mo 9.4 8.4 1.0 8.2
Equity ratio, % 44.8 52.2 -7.3 54.7
Gearing, % 15.7 -16.5 32.2 -20.0
Interest-bearing net debt/EBITDA,
rolling 12 mo 0.9 -1.0 1.9 -1.4
Change, %
Capital expenditure, € million 564.1 110.1 (..) 218.5
Capital expenditure, % of net sales 12.2 2.6 (..) 2.5
Earnings per share, basic, € 0.76 0.38 (..) 1.03
Earnings per share, diluted, € 0.76 0.38 (..) 1.03
Earnings per share, comparable,
basic, € 0.85 0.71 20.1 1.70
Cash flows from operating
activities,
€ million -18 68 (..) 276
Cash flows from investing
activities,
€ million -529 334 (..) 217
Equity per share, € 20.31 21.21 -4.3 21.82
Interest-bearing net debt, €
million 330 -359 (..) -448
Diluted number of shares, average
for the reporting period, 1,000 pcs 99,221 99,084 0.1 99,114
Personnel, average 20,593 19,065 8.0 18,955
(..) Change over 100%
Group's performance indicators by quarter 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
2015 2015 2015 2015 2016 2016
Net sales, € million 2,082 2,227 2,203 2,166 2,013 2,610
Change in net sales, % -2.2 -6.0 -4.4 -4.4 -3.3 17.2
Operating profit, € million -103.6 175.8 83.1 39.3 33.5 68.0
Operating margin, % -5.0 7.9 3.8 1.8 1.7 2.6
Operating profit, comparable, € million 26.5 76.4 82.5 59.1 32.3 79.1
Operating margin, %, comparable 1.3 3.4 3.7 2.7 1.6 3.0
Finance income/costs,
€ million -0.3 -4.2 -3.5 0.9 2.7 1.7
Profit before tax, € million -103.7 172.1 78.8 40.7 35.7 68.1
Profit before tax, % -5.0 7.7 3.6 1.9 1.8 2.6
Return on capital employed, % -18.1 31.9 17.6 8.2 6.7 12.3
Return on capital employed, comparable, % 4.6 13.9 17.5 12.4 6.5 14.3
Return on equity, % -19.9 28.0 8.9 4.8 5.1 9.8
Return on equity, comparable, % 3.1 10.6 10.6 9.2 4.8 11.7
Equity ratio, % 51.5 52.2 54.2 54.7 54.8 44.8
Capital expenditure,
€ million 51.5 58.6 41.5 66.9 51.4 512.7
Earnings per share,
diluted, € -1.11 1.48 0.43 0.22 0.28 0.49
Equity per share, € 21.30 21.21 21.41 21.82 22.13 20.31
Segment information
Net sales by segment
1-6/ 1-6/ 4-6/ 4-6/ 1-12/
(€ million) 2016 2015 Change,% 2016 2015 Change,% 2015
Grocery trade, Finland 2,393 2,203 8.6 1,324 1,120 18.2 4,566
Grocery trade,
other countries* 54 50 8.5 29 29 -0.2 107
Grocery trade, total 2,447 2,252 8.6 1,353 1,149 17.7 4,673
- of which intersegment trade 6 10 -42.7 2 3 -15.3 15
Building and technical trade,
Finland 941 921 2.1 541 456 18.8 1,719
Building and technical trade,
other countries* 800 735 9.0 505 428 18.0 1,530
Building and technical trade
total 1,741 1,656 5.1 1,046 883 18.4 3,250
- of which intersegment trade 6 1 (..) 3 0 (..) 1
Car trade, Finland 438 400 9.5 214 190 12.1 748
Car trade total 438 400 9.5 214 190 12.1 748
- of which intersegment trade 0 0 -82.2 0 0 (..) 0
Common functions and
eliminations -3 1 (..) -2 4 (..) 8
Finland total 3,769 3,525 6.9 2,077 1,770 17.3 7,042
Other countries total* 854 784 8.9 534 457 16.8 1,637
Group total 4,624 4,310 7.3 2,610 2,227 17.2 8,679
(..) Change over 100%
* Net sales in countries other than Finland
Operating profit by segment
1-6/ 1-6/ 4-6/ 4-6/ 1-12/
(€ million) 2016 2015 Change 2016 2015 Change 2015
Grocery trade 74.3 151.0 -76.7 44.1 115.8 -71.7 249.4
Building and technical trade 34.6 -83.1 117.7 32.8 61.5 -28.7 -57.2
Car trade 15.2 16.3 -1.1 5.8 6.5 -0.7 26.1
Common functions and eliminations -22.5 -11.9 -10.6 -14.7 -8.0 -6.7 -23.7
Group total 101.6 72.2 29.4 68.0 175.8 -107.8 194.6
Operating profit by segment, 1-6/ 1-6/ 4-6/ 4-6/ 1-12/
comparable (€ million) 2016 2015 Change 2016 2015 Change 2015
Grocery trade 74.8 78.2 -3.4 43.6 43.3 0.2 177.5
Building and technical trade 38.2 20.3 17.9 37.9 34.5 3.4 63.6
Car trade 15.2 16.3 -1.1 5.8 6.5 -0.7 26.1
Common functions and eliminations -16.9 -12.0 -4.9 -8.2 -8.0 -0.2 -22.7
Group total 111.4 102.9 8.5 79.1 76.4 2.8 244.5
Operating margin by Rolling
segment, comparable 1-6/ 1-6/ 4-6/ 4-6/ 1-12/ 12 mo
(%) 2016 2015 Change, pp 2016 2015 Change, pp 2015 6/2016
Grocery trade 3.1 3.5 -0.4 3.2 3.8 -0.5 3.8 3.6
Building and
technical trade 2.2 1.2 1.0 3.6 3.9 -0.3 2.0 2.4
Car trade 3.5 4.1 -0.6 2.7 3.4 -0.7 3.5 3.2
Group total 2.4 2.4 0.0 3.0 3.4 -0.4 2.8 2.8
Capital employed by
segment, cumulative Rolling
1-6/ 1-6/ 4-6/ 4-6/ 1-12/ 12 mo
average (€ million) 2016 2015 Change 2016 2015 Change 2015 6/2016
Grocery trade 823 988 -164 853 975 -122 871 784
Building and
technical trade 849 888 -39 914 861 53 823 805
Car trade 118 96 22 120 95 24 104 111
Common functions and
eliminations 312 272 41 321 273 48 285 309
Group total 2,103 2,243 -141 2,207 2,204 3 2,083 2,009
Return on capital
employed by segment, Rolling
comparable (%) 1-6/ 1-6/ 4-6/ 4-6/ 1-12/ 12 mo
2016 2015 Change, pp 2016 2015 Change, pp 2015 6/2016
Grocery trade 18.2 15.8 2.3 20.4 17.8 2.7 20.4 22.2
Building and technical
trade 9.0 4.6 4.4 16.6 16.0 0.6 7.7 10.1
Car trade 25.7 33.9 -8.3 19.4 27.3 -7.9 25.2 22.5
Group total 10.6 9.2 1.4 14.3 13.9 0.5 11.7 12.6
Items affecting comparability
€ million 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
2015 2015 2015 2015 2016 2016
Items affecting
comparability
Gains on disposal 0.3 99.6 1.2 0.1 1.3 5.9
Losses on disposal -130.6 -1.0 -0.2 - - -0.3
Impairment charges - - - - - -6.0
Structural arrangements - - - -19.3 0.0 -8.7
Others 0.2 0.9 -0.4 -0.7 - -1.9
Items in operating profit affecting
comparability -130.1 99.4 0.7 -19.9 1.3 -11.1
Items in income taxes affecting
comparability -2.1 4.5 10.4 4.6 -0.1 -0.8
Total items affecting comparability -132.2 103.9 11.1 -15.2 1.2 -12.0
Operating profit, comparable
Operating profit -103.6 175.8 83.1 39.3 33.5 68.0
Net of
Items in operating profit affecting
comparability -130.1 99.4 0.7 -19.9 1.3 -11.1
Operating profit, comparable 26.5 76.4 82.5 59.1 32.3 79.1
Operating margin, %, comparable 1.3 3.4 3.7 2.7 1.6 3.0
Capital employed, average 2,295 2,204 1,889 1,907 1,990 2,207
Return on capital employed,
comparable, % 4.6 13.9 17.5 12.4 6.5 14.3
Profit before tax, comparable
Profit before tax -103.7 172.1 78.8 40.7 35.7 68.1
Net of
Items in operating profit affecting
comparability -130.1 99.4 0.7 -19.9 1.3 -11.1
Profit before tax, comparable 26.4 72.7 78.2 60.6 34.5 79.2
Profit, comparable
Profit before tax, comparable 26.4 72.7 78.2 60.6 34.5 79.2
Net of
Income tax -7.0 -19.4 -30.4 -14.0 -7.0 -14.3
Items in income taxes affecting
comparability -2.1 4.5 10.4 4.6 -0.1 -0.8
Profit, comparable 17.4 57.8 58.2 51.3 27.3 64.0
Equity, average 2,227 2,184 2,189 2,220 2,265 2,195
Return on equity, comparable, % 3.1 10.6 10.6 9.2 4.8 11.7
Profit attributable to owners of
the parent, comparable
Profit, comparable 17.4 57.8 58.2 51.3 27.3 64.0
Profit attributable to non-
controlling interests -1.1 5.9 5.8 5.1 1.3 5.5
Profit attributable to owners of
the parent, comparable 18.5 51.9 52.5 46.1 26.0 58.6
Average number of shares, basic,
1,000 pcs 99,024 99,084 99,104 99,114 99,163 99,221
Earnings per share, comparable, € 0.19 0.52 0.53 0.47 0.26 0.59
Capital expenditure
1-6/ 1-6/ 4-6/ 4-6/ 1-12/
by segment, € million 2016 2015 Change 2016 2015 Change 2015
Grocery trade 139 71 68 105 33 71 129
Building and technical trade 413 18 394 405 9 396 55
Car trade 8 7 2 4 4 0 16
Common functions and eliminations 4 14 -10 0 13 -13 18
Group total 564 110 454 513 59 454 219
Segment information by quarter
Net sales by segment, 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
€ million 2015 2015 2015 2015 2016 2016
Grocery trade 1,103 1,149 1,171 1,249 1,094 1,353
Building and technical trade 773 883 857 736 695 1,046
Car trade 210 190 170 177 225 214
Common functions and eliminations -3 4 4 4 -1 -2
Group total 2,082 2,227 2,203 2,166 2,013 2,610
1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
Operating profit by segment, € million 2015 2015 2015 2015 2016 2016
Grocery trade 35.2 115.8 45.0 53.4 30.2 44.1
Building and technical trade -144.7 61.5 36.8 -10.9 1.8 32.8
Car trade 9.8 6.5 6.0 3.8 9.4 5.8
Common functions and eliminations -3.9 -8.0 -4.6 -7.1 -7.8 -14.7
Group total -103.6 175.8 83.1 39.3 33.5 68.0
Items affecting
1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
comparability, € million 2015 2015 2015 2015 2016 2016
Grocery trade 0.3 72.4 0.2 -1.0 -1.1 0.5
Building and technical trade -130.4 27.0 1.0 -18.4 1.5 -5.1
Car trade - - - - - -
Common functions and eliminations - 0.0 -0.6 -0.5 0.9 -6.5
Group total -130.1 99.4 0.7 -19.9 1.3 -11.1
Operating profit by segment, comparable, 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
€ million 2015 2015 2015 2015 2016 2016
Grocery trade 34.9 43.3 44.8 54.5 31.3 43.6
Building and technical trade -14.2 34.5 35.8 7.5 0.3 37.9
Car trade 9.8 6.5 6.0 3.8 9.4 5.8
Common functions and eliminations -3.9 -8.0 -4.1 -6.7 -8.7 -8.2
Group total 26.5 76.4 82.5 59.1 32.3 79.1
Operating margin by segment, %, comparable 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
2015 2015 2015 2015 2016 2016
Grocery trade 3.2 3.8 3.8 4.4 2.9 3.2
Building and technical trade -1.8 3.9 4.2 1.0 0.0 3.6
Car trade 4.7 3.4 3.5 2.1 4.2 2.7
Group total 1.3 3.4 3.7 2.7 1.6 3.0
Acquisitions
On 12 April 2016, Kesko Food Ltd, a Kesko Corporation subsidiary, acquired the
whole share capital of Suomen Lähikauppa Oy from the private equity investment
firm Triton. In addition, Kesko Corporation acquired Onninen Oy's whole share
capital from Onvest Oy on 1 June 2016.
Suomen Lähikauppa Onninen group
€ million € million
Consideration paid 54 364
Provisionally determined values of assets
acquired and liabilities assumed as at the date
of acquisition
Intangible assets 5 97
Tangible assets and
investments 33 21
Inventories 33 227
Receivables 12 238
Deferred tax asset 22 3
Cash and cash equivalents 8 17
Total assets 113 602
Trade payables, other
liabilities and provisions 138 275
Deferred tax liability 0 16
Total liabilities 138 291
Net assets acquired, total
-25 311
Provisional goodwill 79 53
Provisional cash flow impact
of acquisition
Consideration paid -54 -364
Cash and cash equivalents 8 17
acquired
Provisional cash flow impact
of acquisition
-46 -347
Suomen Lähikauppa Oy
On 12 April 2016, Kesko Food Ltd, a Kesko Corporation subsidiary, acquired the
whole share capital of Suomen Lähikauppa Oy from the private equity investment
firm Triton. The debt-free price of the acquisition, structured as a share
purchase, was €54 million.
Suomen Lähikauppa concentrates on grocery stores located near customers. The
acquisition underpins Kesko's new strategy, one focus area of which is to
increase and renew the neighbourhood store network.
The tables above are a condensed presentation of the consideration paid to
Triton, the values of the assets acquired and liabilities assumed by Kesko Group
as at the date of the acquisition, as well as the cash flow impact of the
acquisition.
The €79 million of goodwill from the acquisition reflects the synergies expected
to arise especially from purchasing and logistics, marketing, store site network
development, information system expenses and administration. Kesko estimates
that it will achieve synergy benefits of approximately €25-30 million at EBITDA
level from the acquisition as of 2018. The achievement of synergies will require
conversion costs for the renewal of the stores acquired from Suomen Lähikauppa.
The costs of store and network conversion, to be treated as restructuring costs
affecting the comparability of the operating profit, will total approximately
€30 million in 2016-2018. The goodwill derived from the acquisition is not tax
deductible.
The Group's profit for January-June 2016 includes costs incurred from the
acquisition in the amount of €0.9 million, the most significant of which is the
€0.6 million asset transfer tax. The costs are presented within items affecting
comparability.
Suomen Lähikauppa contributed €185 million to the net sales of the April-June
period. The impact on the comparable operating profit for the April-June period
was €-1.1 million. Management estimates that if the acquisition had been
completed on 1 January 2016, the impact on the Group's net sales would have been
approximately €405 million. The impact on the comparable operating profit would
have been €-10 million. When determining the amounts of net sales and comparable
operating profit, management estimates that the fair values recognized at the
date of acquisition would have been the same if the acquisition had been
completed on 1 January 2016.
Onninen Oy
Kesko Corporation acquired Onninen Oy's whole share capital from Onvest Oy on 1
June 2016. The debt-free price of the acquisition, structured as a share
purchase, was €364 million.
Onninen is the leading provider of HEPAC and electrical products and services in
the Baltic Sea Region and Scandinavia. The group specializes in the B2B trade
and has around 150 units in Finland, Sweden, Norway, Poland, the Baltic
countries and Russia. Kesko's business operations will expand in the HEPAC and
electrical product groups and it will be able to better serve contractor
customers in particular. In addition, Kesko will gain new customer relationships
in the infrastructure and industry customer groups.
The tables above are a condensed presentation of the consideration paid to
Onvest Oy, the values of the assets acquired and liabilities assumed by Kesko
Group as at the date of the acquisition, as well as the cash flow impact of the
acquisition.
The total provisional value of the intangible assets acquired as at the date of
the acquisition (including customer relationships and trademarks) is €97
million. The carrying amount of current trade receivables equals their fair
value.
The €53 million of goodwill from the acquisition reflects the synergies mainly
expected to arise from making use of common customer relationships, purchasing
and logistics, the development of the store site network, as well as from ICT
and administration in particular. Kesko estimates that the acquisition will
generate around €30 million in annual synergies at the EBITDA level from 2020
onwards. The achievement of synergies will require both capital expenditures and
non-recurring costs. The combined net cash flow impact of synergies is estimated
at around €25 million positive in 2016-2019. The goodwill derived from the
acquisition is not tax deductible.
The Group's profit for January-June 2016 includes costs incurred from the
acquisition in the amount of €6.8 million, the most significant of which is the
€5.8 million asset transfer tax. The costs are presented within items affecting
comparability.
Onninen contributed €136 million to the net sales of June. The impact on the
comparable operating profit for June was €2.2 million, adversely impacted by the
fair value allocations of inventories written off in the amount of €0.9 million.
Management estimates that if the acquisition had been completed on 1 January
2016, the impact on the Group's net sales would have been approximately €728
million. The impact on the comparable operating profit would have been €1.7
million. When determining the amounts of net sales and comparable operating
profit, management estimates that the fair values recognized at the date of
acquisition would have been the same if the acquisition had been completed on 1
January 2016.
Change in tangible and intangible assets (€ million)
30.6.2016 30.6.2015
Opening net carrying amount 1,451 1,802
Acquisitions 289 -
Depreciation, amortisation and impairment -66 -67
Investments in tangible and intangible assets 136 98
Disposals -38 -402
Currency translation differences 3 4
Closing net carrying amount 1,775 1,435
Transactions conducted by persons discharging managerial responsibilities or
persons closely associated with them (€ million)
The Group's persons discharging managerial responsibilities or persons closely
associated with them include its 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 persons discharging managerial
responsibilities or persons closely associated with them:
1-6/2016 1-6/2015
Sales of goods and services 37 35
Purchases of goods and services 69 9
Other operating income 5 6
Other operating expenses 31 15
Finance costs 0 -
30.6.2016 30.6.2015
Receivables 72 62
Liabilities 59 24
Fair value hierarchy of financial assets and liabilities (€ million)
Level 1 Level 2 Level 3 30.6.2016
Financial assets at fair value through profit
or loss 17.2 80.0 97.2
Derivative financial instruments at fair
value through profit or loss
Derivative financial assets 2.6 2.6
Derivative financial liabilities 8.2 8.2
Available-for-sale financial assets 50.9 32.8 15.2 98.9
Fair value hierarchy of financial assets and liabilities (€ million)
Level 1 Level 2 Level 3 30.6.2015
Financial assets at fair value through profit
or loss 216.4 214.0 430.4
Derivative financial instruments at fair
value through profit or loss
Derivative financial assets 9.6 9.6
Derivative financial liabilities 8.4 8.4
Available-for-sale financial assets 150.1 178.0 15.1 343.2
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 30.6.
Personnel average by
segment 1-6/2016 1-6/2015 Change
Grocery trade 7,660 6,374 1,287
Building and technical trade 11,430 11,421 9
Car trade 777 783 -5
Common functions 726 488 238
Group total 20,593 19,065 1,528
Personnel as at 30.6.*
by segment 2016 2015 Change
Grocery trade 12,952 9,003 3,949
Building and technical trade 15,639 12,493 3,146
Car trade 819 832 -13
Common functions 847 566 281
Group total 30,257 22,894 7,363
* Total number including part-time employees
Group's commitments (€ million)
30.6.2016 30.6.2015 Change, %
Own commitments 193 167 15,6
For others 15 11 32,5
Lease liabilities for machinery and equipment 36 26 38.8
Lease liabilities for real estate 2,825 2,666 6.0
Liabilities arising from derivative instruments (€ million)
Fair value
Values of underlying instruments at 30.6. 30.6.2016 30.6.2015 30.6.2016
Interest rate derivatives
Interest rate swaps 40 101 0.12
Currency derivatives
Forward and future contracts 208 579 -1.20
Currency swaps 20 50 1.53
Commodity derivatives
Electricity derivatives 8 15 -4.98
Calculation of performance indicators
Return on capital employed*, %
Operating profit x 100 / (Non-current assets + Inventories + Receivables + Other
current assets - Non-interest-bearing liabilities) on average for the reporting
period
Return on capital employed, %, rolling 12 months
Operating profit for the preceding 12 months x 100 / (Non-current assets +
Inventories + Receivables + Other current assets - Non-interest-bearing
liabilities) on average for 12 months
Return on capital employed*, %, comparable
Comparable operating profit x 100 / (Non-current assets + Inventories +
Receivables + Other current assets - Non-interest-bearing liabilities) on
average for the reporting period
Return on capital employed, comparable, %, rolling 12 months
Comparable operating profit for the preceding 12 months x 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, average of
the beginning and end of the reporting period
Return on equity, %, rolling 12 months
(Profit/loss for the preceding 12 months before tax - Income tax for the
preceding 12 months) x 100 / Shareholders' equity, average of the beginning and
end of the reporting period
Return on equity*, %, comparable
(Profit/loss adjusted for items affecting comparability before tax - Income tax
adjusted for the tax effect of items affecting comparability) x 100 /
Shareholders' equity, average of the beginning and end of the reporting period
Return on equity, %, comparable, rolling 12 months
(Profit/loss for the preceding 12 months adjusted for items affecting
comparability before tax - Income tax for the preceding 12 months adjusted for
the tax effect of items affecting comparability) x 100 / Shareholders' equity,
average of the beginning and end of the reporting period
Equity ratio, %
Shareholders' equity x 100 /
(Total assets - Prepayments received)
Earnings/share, diluted
(Profit/loss - Non-controlling interests) /
Average diluted number of shares
Earnings/share, basic
(Profit/loss - Non-controlling interests) /
Average number of shares
Earnings/share,
basic, comparable
(Profit/loss adjusted for items affecting comparability - Non-controlling
interests) / Average number of shares
Equity/share
Equity attributable to equity holders of the parent /
Basic number of shares at the balance sheet date
Gearing, %
Interest-bearing net liabilities x 100 /
Shareholders' equity
Interest-bearing net debt
Interest-bearing liabilities - Financial assets at fair value through profit or
loss - Available-for-sale financial assets - 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, rolling 12 mo
Interest-bearing net debt/ EBITDA, rolling 12 mo
* Indicators for return on capital have been annualised
K-Group's retail and B2B sales*, VAT 0% (preliminary data):
1.1.-30.6.2016 1.4.-30.6.2016
K-Group's retail and € million Change, % € million Change, %
B2B sales
K-Group's grocery trade
K-food stores, Finland 2,212 -0.4 1,139 -0.6
K-citymarket, non-food 257 -1.9 130 -1.1
Suomen Lähikauppa 182 - 182 -
Kespro 387 2.3 202 3.6
K-ruoka, Russia 54 8.5 29 -0.2
Grocery trade, total 3,091 6.3 1,682 12.0
K-Group's building and technical trade
K-rauta and Rautia 488 3.0 316 4.7
Rautakesko B2B Service 109 19.2 61 19.0
Onninen 68 - 68 -
K-maatalous 221 -1.8 135 -0.9
Machinery trade, Finland 87 -2.8 52 -6.4
Speciality goods trade, Finland 232 -3.3 114 0.4
Finland, total 1,206 2.1 747 12.7
Building and technical trade, other
Nordic countries 472 13.8 307 23.1
Building and technical trade, the Baltic
countries 293 10.5 182 15.6
Building and technical trade, other
countries 151 -1.7 96 7.4
Building and technical trade, total 2,122 5.3 1,332 14.9
K-Group's car trade
VV-Autotalot 219 12.5 113 13.6
VV-Auto, import 234 7.6 110 10.2
Car trade, total 452 9.9 222 11.9
Finland total 4,695 5.5 2,622 12.3
Other countries, total 970 9.8 614 16.9
Retail and B2B sales,
total 5,665 6.2 3,236 13.2
[HUG#2032778]
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