KESKO CORPORATION STOCK EXCHANGE RELEASE 26.07.2011 AT 09.00 1(27)
Financial performance in brief:
*The Group's net sales for January-June increased by 8.0%.
*The operating profit excluding non-recurring items for January-June was €118.3
million, up €19.3 million on the previous year (€99.0 million).
* The Kesko Group's net sales are expected to grow during the next twelve
months. During the next twelve months, the operating profit excluding non-
recurring items is expected to increase despite significant costs involved in
the expansion of the store site network and business operations in Russia.
Key performance indicators
1-6/2011 1-6/2010 4-6/2011 4-6/2010
Net sales, € million 4,575 4,237 2,472 2,279
Operating profit excl. non-recurring
items, € million 118.3 99.0 83.3 78.1
Operating profit, € million 119.6 100.0 83.9 79.0
Profit before tax, € million 120.1 100.6 84.0 78.7
Capital expenditure, € million 194.6 87.7 130.5 45.7
Earnings/share, €, diluted 0.79 0.67 0.55 0.51
Earnings/share excl. non-recurring items,
€, basic 0.79 0.66 0.55 0.51
30.6.2011 30.6.2010
Equity ratio, % 52.1 51.4
Equity/share, € 21.21 20.30
FINANCIAL PERFORMANCE
Net sales and profit for January-June 2011
The Group's net sales in January-June 2011 were €4,575 million, which is 8.0% up
on the corresponding period of the previous year (€4,237 million). In Finland,
net sales increased by 7.2% and in other countries by 12.0%. International
operations accounted for 16.7% (16.1%) of the net sales. Net sales increased in
the food trade, the building and home improvement trade, and the car and
machinery trade, with comparable growth standing at 21.6% in the car and
machinery trade. The net sales of the home and speciality goods trade remained
nearly unchanged.
1-6/2011 Net sales, M€ Change, % Operating profit Change, M€
excl. non-recurring
items, M€
Food trade 2,025 +7.2 87.2 +13.5
Home and speciality
goods trade 687 -0.3 -5.0 -12.1
Building and home
improvement trade 1,327 +10.0 9.8 +5.6
Car and machinery trade 621 +16.3 31.8 +11.3
Common operations and
eliminations -85 +4.6 -5.5 +1.0
Total 4,575 +8.0 118.3 +19.3
The operating profit excluding non-recurring items for January-June was €118.3
million (€99.0 million), representing 2.6% (2.3%) of the net sales.
Profitability improved in the food trade, the building and home improvement
trade and the car and machinery trade. At the beginning of the year, the
principle for allocating surplus amounts related to the additional defined
benefit obligation of the Kesko Pension Fund to divisions was changed to
correspond to the breakdown of defined benefit obligations. For January-June
2011, the change contributed €-0.8 million to the operating profit excluding
non-recurring items in the food trade, and €-2.0 million in the home and
speciality goods trade.
Operating profit was €119.6 million (€100.0 million). The operating profit
includes €1.4 million of non-recurring items. The Group's profit before tax for
January-June was €120.1 million (€100.6 million).
The Group's earnings per share were €0.79 (€0.67). The Group's equity per share
was €21.21 (€20.30).
In January-June, the K-Group's (i.e. Kesko's and the chain stores') retail and
B2B sales (VAT 0%) were €5,606 million, up 7.1% compared to the previous year.
During the same period, K-food stores' grocery sales grew by 6.0% (VAT 0%). In
January-June, the K-Group chains' sales entitling to K-Plussa points were €2,719
million excluding tax, up 4.8% compared to the previous year. In January-June,
the K-Plussa customer loyalty programme gained 40,168 new households. At the end
of June, there was 2,118,858
K-Plussa households.
Net sales and profit for April-June 2011
The Group's net sales in April-June 2011 were €2,472 million, which is 8.5% up
on the corresponding period of the previous year (€2,279 million). In Finland,
net sales increased by 7.8% and in other countries by 11.5%. International
operations accounted for 18.4% (17.9%) of the net sales. In the food trade, the
increase in net sales is attributable to the good grocery sales performance of
the K-food stores. In the car and machinery trade, the comparable growth in net
sales was 18.2%.
4-6/2011 Net sales, M€ Change, % Operating profit Change, M€
excl. non-recurring
items, M€
Food trade 1,077 +10.3 45.8 +3.8
Home and speciality
goods trade 339 +1.4 2.4 -4.6
Building and home
improvement trade 757 +6.4 18.8 +0.9
Car and machinery trade 342 +14.9 19.6 +5.5
Common operations and
eliminations -43 +6.3 -3.3 -0.2
Total 2,472 +8.5 83.3 +5.3
The operating profit excluding non-recurring items for April-June was €83.3
million (€78.1 million), representing 3.4% (3.4%) of the net sales. In the food
trade and the building and home improvement trade, the operating margin
excluding non-recurring items remained unchanged and in the car and machinery
trade, it increased.
Operating profit was €83.9 million (€79.0 million). The operating profit
includes €0.6 million of non-recurring items. The Group's profit before tax for
April-June was €84.0 million (€78.7 million).
The Group's earnings per share were €0.55 (€0.51). The Group's equity per share
was €21.21 (€20.30).
In April-June, the K-Group's (i.e. Kesko's and the chain stores') retail and B2B
sales (VAT 0%) were €3,088 million, up 7.0% compared to the previous year.
During the same period, K-food stores' grocery sales grew by 7.1% (VAT 0%). In
April-June, the K-Group chains' sales entitling to K-Plussa points were €1,448
million excluding tax, up 6.0% compared to the previous year.
Finance
In January-June, the cash flow from operating activities was €43.3 million
(€135.4 million). The cash flow from operating activities was negatively
impacted by higher receivables and inventories. The cash flow from investing
activities was €-194.2 million (€-85.7 million). It included €3.8 million (€4.6
million) of proceeds from the sales of fixed assets.
Throughout January-June, the Group's liquidity and solvency remained at an
excellent level. At the end of the period, liquid assets totalled €545 million
(€713 million). Interest-bearing liabilities were €475 million (€490 million)
and interest-bearing net debt €-70 million (€-223 million) at the end of June.
Equity ratio was 52.1% (51.4%) at the end of the period.
In January-June, the Group's net finance costs were €0.3 million (net finance
income €0.6 million).
In April-June, the cash flow from operating activities was €68.6 million (€127.3
million). The cash flow from investing activities was €-126.5 million (€-44.3
million). It included €2.1 million (€3.5 million) of proceeds from the sales of
fixed assets.
In April-June, the Group's net finance income was €0.3 million (net finance
costs €0.2 million).
Taxes
The Group's taxes in January-June were €37.2 million (€31.7 million). The
effective tax rate was 31.0% (31.5%), affected by loss-making foreign
operations.
The Group's taxes in April-June were €26.0 million (€24.8 million). The
effective tax rate was 31.0% (31.5%).
Capital expenditure
In January-June, the Group's capital expenditure totalled €194.6 million (€87.7
million), or 4.3% (2.1%) of the net sales. Capital expenditure in store sites
was €175.6 million (€63.5 million) and other capital expenditure €19.0 million
(€24.2 million). Capital expenditure in foreign operations represented 36.8%
(29.7%) of total capital expenditure.
In April-June, the Group's capital expenditure totalled €130.5 million (€45.7
million), or 5.3% (2.0%) of the net sales. Capital expenditure in store sites
was €121.0 million (€31.0 million) and other capital expenditure €9.5 million
(€14.7 million). Capital expenditure in foreign operations represented 45.3%
(20.7%) of total capital expenditure.
Personnel
In January-June, the average number of employees in the Kesko Group was 18,644
(17,914) converted into full-time employees. In Finland, the average increase
was 157 people, while outside Finland, it was 574.
At the end of June 2011, the total number of employees was 23,084 (22,467), of
whom 13,191 (13,099) worked in Finland and 9,893 (9,368) outside Finland.
Compared to the end of June 2010, there was an increase of 92 people in Finland
and 525 people outside Finland.
In January-June, the Group's staff cost was €283.1 million and increased by
9.0% compared to the previous year. In April-June, the staff cost increased by
10.4% compared to the previous year and was €145.4 million.
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.
Food trade
1-6/2011 1-6/2010 4-6/2011 4-6/2010
Net sales, € million 2,025 1,888 1,077 976
Operating profit excl. non-recurring
items, € million 87.2 73.7 45.8 42.1
Operating profit as % of net sales excl.
non-recurring items 4.3 3.9 4.3 4.3
Capital expenditure,
€ million 94.4 37.9 63.5 21.4
Net sales, € million 1-6/2011 Change, % 4-6/2011 Change, %
Sales to K-food stores 1,572 +8.1 838 +11.9
Kespro 358 +7.2 193 +9.3
Others 95 -5.4 45 -9.9
Total 2,025 +7.2 1,077 +10.3
January-June 2011
In Kesko's food trade, the net sales for January-June were €2,025 million
(€1,888 million), up 7.2%. The sales of Pirkka products to K-food stores were
excellent, with sales growth standing at 38.9% (VAT 0%). During the same period,
the grocery sales of K-food stores increased by 6.0% (VAT 0%). Good sales
performance was achieved especially by the K-citymarket and K-supermarket
chains. In January-June, the growth rate of the total grocery trade market in
Finland is estimated at some 5.5% (VAT 0%) compared to the previous year
(Kesko's own estimate). The price change in the grocery market is estimated to
have stood at some 4.5% compared to the previous year (VAT 0%, Kesko's own
estimate).
In January-June, the operating profit excluding non-recurring items of the food
trade was €87.2 million (€73.7 million), or €13.5 million up on the previous
year. The profitability improvement is attributable to K-food stores' good
performance and cost management. Operating profit was €88.0 million (€73.9
million).
In January-June, capital expenditure in the food trade was €94.4 million (€37.9
million), of which capital expenditure in store sites was €89.9 million (€28.2
million).
April-June 2011
In Kesko's food trade, the net sales for April-June were €1,077 million (€976
million), up 10.3%. During the same period, the grocery sales of K-food stores
increased by 7.1% (VAT 0%).
In April-June, the operating profit excluding non-recurring items of the food
trade was €45.8 million (€42.1 million), or €3.8 million up on the previous
year. Operating profit was €45.9 million (€42.2 million).
In April-June, capital expenditure in the food trade was €63.5 million (€21.4
million), of which capital expenditure in store sites was €60.9 million (€16.7
million).
In April-June 2011, two new K-citymarkets, seven K-supermarkets and two K-
markets were opened. In addition, one K-supermarket was extended into a K-
citymarket. Renovations and extensions were made in 31 stores.
The most significant store sites being built are the new K-citymarkets in
Hämeensaari, Hämeenlinna, in Karisto, Lahti, in Äänekoski, Hyvinkää, Kauhajoki,
Kouvola and Valkeakoski. A K-supermarket in Mäntsälä is being extended into a K-
citymarket and K-citymarket Kolmisoppi in Kuopio is being extended. New K-
supermarkets are being built in Lappeenranta, Vihti, in Myllypuro, Helsinki, in
Hattula, Tampere, Nurmijärvi and in Kaisaniemi, Helsinki. K-market Parila in
Pälkäne is being extended into a K-supermarket.
Home and speciality goods trade
1-6/2011 1-6/2010 4-6/2011 4-6/2010
Net sales, € million 687 689 339 334
Operating profit excl. non-recurring
items, € million -5.0 7.1 2.4 7.0
Operating profit as % of net sales excl.
non-recurring items -0.7 1.0 0.7 2.1
Capital expenditure, € million 18.1 12.8 10.0 9.3
Net sales, € million 1-6/2011 Change, % 4-6/2011 Change, %
K-citymarket home and speciality goods 282 +2.4 147 +6.2
Anttila 206 -4.2 97 -4.7
Intersport 75 -1.8 33 -0.4
Indoor 83 +16.1 42 +18.0
Musta Pörssi 32 -25.0 17 -26.8
Kenkäkesko 10 +3.5 5 +19.2
Total 687 -0.3 339 +1.4
January-June 2011
In the home and speciality goods trade, the net sales for January-June were €687
million (€689 million), down 0.3%. K-citymarket home and speciality goods, as
well as Asko and Sotka increased their sales. At the beginning of February, the
Anttila department store in Tikkurila was closed because its lease term expired.
The Anttila department store in Hämeenlinna is being converted into a K-
citymarket, which will open in October 2011. In April, a K-citymarket was opened
in Tammisto, Vantaa and in Palokka, Jyväskylä. In May, a K-citymarket was opened
in Päivölä, Seinäjoki. As a result of network restructuring, there were 16 less
Musta Pörssi stores than in the comparative period.
The operating profit excluding non-recurring items of the home and speciality
goods trade for January-June was €-5.0 million (€7.1 million), showing a €12.1
million year-on-year decrease. The operating profit performance is partly
attributable to the launch of Anttila's new logistics centre, the decrease in
Anttila's sales and the development of Anttila's and K-citymarket's selections.
Operating profit was €-4.6 million (€7.1 million).
Capital expenditure in the home and speciality goods trade in January-June was
€18.1 million (€12.8 million).
April-June 2011
In the home and speciality goods trade, the net sales for April-June were €339
million (€334 million), up 1.4%. K-citymarket home and speciality goods, Kodin
Ykkönen, as well as Asko and Sotka increased their sales. The increase in the
net sales of K-citymarket home and speciality goods is attributable to
successful marketing, product selection and new stores.
The operating profit excluding non-recurring items of the home and speciality
goods trade for April-June was €2.4 million (€7.0 million), showing a €4.6
million year-on-year decrease. The operating profit excluding non-recurring
items was partly affected by the launch of Anttila's new logistics centre and
the decrease in Anttila's sales. Operating profit was €2.8 million (€7.0
million).
Capital expenditure in the home and speciality goods trade in April-June was
€10.0 million (€9.3 million).
In April, a K-citymarket was opened in Tammisto, Vantaa and in Palokka,
Jyväskylä. In May, a K-citymarket was opened in Päivölä, Seinäjoki.
The launch of Anttila's new automated logistics centre has progressed according
to plan. The logistics centre will make e-commerce and department store
logistics significantly more efficient.
Kesko has signed agreements on the transfer of the Intersport licence in Russia
to Kesko with Intersport International and the current licence holder Intersport
CIS. Kesko will establish a new company for Intersport operations in Russia
together with Melovest, the owner of the current licence holder Intersport CIS.
Melovest will hold a 20% ownership interest in the new company, which is planned
to begin operations in August 2011. The final closure of the transaction is
subject to a final agreement on all the terms and conditions of the arrangement,
the approval by the Russian competition authority and the fulfilment of the
other terms and conditions of the transaction closure.
Building and home improvement trade
1-6/2011 1-6/2010 4-6/2011 4-6/2010
Net sales, € million 1,327 1,207 757 712
Operating profit excl. non-recurring
items, € million
9.8 4.2 18.8 17.9
Operating profit as % of net sales excl.
non-recurring items 0.7 0.3 2.5 2.5
Capital expenditure, € million 66.1 28.4 47.4 10.4
Net sales, € million 1-6/2011 Change, % 4-6/2011 Change, %
Rautakesko Finland 625 +6.2 345 +2.1
K-rauta Sweden 108 +9.6 65 +3.4
Byggmakker Norway 286 +9.4 163 +6.5
Rautakesko Estonia 26 +11.8 17 +17.6
Rautakesko Latvia 23 +4.8 14 +5.9
Senukai Lithuania 108 +12.5 64 +8.6
Stroymaster Russia 107 +18.3 63 +14.8
OMA Belarus 47 +66.0 28 +58.9
Total 1,327 +10.0 757 +6.4
January-June 2011
In the building and home improvement trade, the net sales for January-June were
€1,327 million (€1,207 million), up 10.0%. The sales of the building and home
improvement trade increased in all operating countries. Sales performance and
structure vary between countries and customer groups. Sales growth was
negatively affected by a keen competitive situation in Sweden, and the VAT rate
change effective from July 2010 in Finland.
In January-June, net sales in Finland were €625 million, an increase of 6.2%.
The building and home improvement product lines contributed €457 million to the
net sales in Finland, an increase of 6.4%. The agricultural supplies trade
contributed €167 million to the net sales, up 5.7%.
In January-June, the net sales from foreign operations in the building and home
improvement trade were €702 million (€618 million), an increase of 13.6%. The
net sales from foreign operations increased by 12.8% in terms of local
currencies. In Sweden, net sales stood at the previous year's level in terms of
kronas. In Norway, net sales increased by 6.9% in terms of krones. In Russia,
net sales increased by 19.0% in terms of rubles. In Belarus, net sales were up
by 100.4% in terms of rubles. The growth is attributable to price increases
resulting from the high inflation in Belarus. Foreign operations contributed
52.9% to the net sales of the building and home improvement trade.
In January-June, the operating profit excluding non-recurring items of the
building and home improvement trade was €9.8 million (€4.2 million), up €5.6
million compared to the previous year. The profit performance was impacted by
the fact that sales growth was mainly derived from basic building materials with
low margins, that sales growth slackened during the second quarter, and by the
costs related to the development of the international enterprise resource
planning system. Operating profit was €9.8 million (€4.2 million).
In January-June, capital expenditure in the building and home improvement trade
totalled €66.1 million (€28.4 million), of which 85.4% (91.5%) abroad and 92.4%
in store sites.
The retail sales of the K-rauta and Rautia chains in Finland grew by 4.8% to
€496 million (VAT 0%). The sales of Rautakesko B2B Service increased by 17.8%.
As a whole, the growth rate of Rautakesko's building materials sales is
estimated to have continued exceeding that of the market in Finland. The retail
sales of the K-maatalous chain were €200 million (VAT 0%), up 8.5%.
April-June 2011
In the building and home improvement trade, the net sales for April-June were
€757 million (€712 million), up 6.4%.
In April-June, net sales in Finland were €345 million, an increase of 2.1%. The
building and home improvement product lines contributed €257 million to the net
sales in Finland, an increase of 2.8%. The agricultural supplies trade
contributed €88 million to the net sales, representing the level of the previous
year.
In April-June, the net sales from foreign operations in the building and home
improvement trade were €413 million (€374 million), an increase of 10.3%. The
net sales from foreign operations increased by 11.5% in terms of local
currencies. In Sweden, net sales decreased by 4.1% in terms of kronas. In
Norway, net sales increased by 5.0% in terms of krones. In Russia, net sales
increased by 18.4% in terms of rubles. In Belarus, net sales were up by 111.9%
in terms of rubles as a result of high inflation. Foreign operations contributed
54.5% to the net sales of the building and home improvement trade.
In April-June, the operating profit excluding non-recurring items of the
building and home improvement trade was €18.8 million (€17.9 million), up €0.9
million compared to the previous year. Operating profit was €18.8 million (€17.9
million).
In April-June, capital expenditure in the building and home improvement trade
totalled €47.4 million (€10.4 million), of which 92.5% (90.5%) abroad. Capital
expenditure in store sites represented 95.1% of the total capital expenditure.
The retail sales of the K-rauta and Rautia chains in Finland grew by 1.3% to
€320 million (VAT 0%) in April-June. The sales of Rautakesko B2B Service
increased by 21.8%. The retail sales of the K-maatalous chain were €121 million
(VAT 0%), up 3.3%.
In April-June, a new K-rauta was opened in St. Petersburg, Russia. In Finland,
new K-rauta stores are being built in Kuopio and Kouvola. In Sweden, a K-rauta
was opened in Haparanda in July, and a K-rauta store is being built in Uppsala.
Two K-rauta stores are being built in Moscow, Russia. A new Rautia-K-maatalous
store is being built in Turku.
Car and machinery trade
1-6/2011 1-6/2010 4-6/2011 4-6/2010
Net sales, € million 621 534 342 298
Operating profit excl. non-recurring
items, € million 31.8 20.5 19.6 14.1
Operating profit as % of net sales excl.
non-recurring items 5.1 3.8 5.7 4.7
Capital expenditure, € million 13.9 8.1 7.9 4.0
Net sales, € million 1-6/2011 Change, % 4-6/2011 Change, %
VV-Auto 447 +21.9 229 +16.6
Konekesko 175 +4.1 113 +11.5
Total 621 +16.3 342 +14.9
January-June 2011
In January-June, the net sales of the car and machinery trade were €621 million
(€534 million), up 16.3%. The comparable net sales of the car and machinery
trade grew by 21.6%. The discontinued Baltic grain and agricultural inputs trade
has been eliminated from the comparable net sales.
VV-Auto's net sales for January-June were €447 million (€367 million), an
increase of 21.9%. In Finland, new registrations of passenger cars increased by
14.2% and those of vans by 31.9% compared to the previous year. In January-June,
the combined market share of passenger cars and vans imported by VV-Auto was
20.3% (20.4%). In January-June, Volkswagen was the best selling passenger car
and van brand in Finland.
Konekesko's net sales for January-June were €175 million (€168 million), up
4.1% compared to the previous year. Konekesko's comparable net sales grew by
20.7%, from which the discontinuation of the Baltic grain and agricultural
inputs trade has been eliminated. The net sales in Finland were €124 million, up
8.7%. The net sales from Konekesko's foreign operations were €52 million, down
4.6%. Konekesko's comparable net sales growth is attributable to the good
performance of the agricultural machinery trade in the Baltic countries.
In January-June, the operating profit excluding non-recurring items of the car
and machinery trade was €31.8 million (€20.5 million), up €11.3 million on the
previous year. The strong profit is the result of good sales performance and
cost management. The operating profit for January-June was €32.0 million (€21.4
million).
Capital expenditure in the car and machinery trade was €13.9 million (€8.1
million) in January-June.
April-June 2011
In April-June, the net sales of the car and machinery trade were €342 million
(€298 million), up 14.9%. The comparable net sales of the car and machinery
trade grew by 18.2%.
VV-Auto's net sales for April-June were €229 million (€197 million), an increase
of 16.6%.
Konekesko's net sales for April-June were €113 million (€102 million), up 11.5%
compared to the previous year. Konekesko's comparable net sales grew by 21.3%.
In April-June, the operating profit excluding non-recurring items of the car and
machinery trade was €19.6 million (€14.1 million), up €5.5 million compared to
the previous year. The operating profit for April-June was €19.7 million (€15.0
million).
Capital expenditure in the car and machinery trade was €7.9 million (€4.0
million) in April-June.
Changes in the Group composition
There were no significant changes in the Group composition during the reporting
period.
Shares, securities market and Board authorisations
At the end of June 2011, the total number of Kesko Corporation shares was
€98,644,042, of which 31,737,007, or 32.2%, were A shares and 66,907,035, or
67.8%, were B shares. At 30 June 2011, Kesko Corporation held 700,000 own B
shares. Each A share entitles to ten (10) votes and each B share to one (1)
vote. The company cannot vote with own shares held by it. At the end of June
2011, Kesko Corporation's share capital was €197,282,584. During the reporting
period, the number of B shares was increased once to correspond to share
subscriptions with the option rights of the 2007 option scheme. The increase
(2,750 B shares) was made on 31 May 2011 and announced in a stock exchange
notification on the same day. The subscribed shares were listed for public
trading on NASDAQ OMX Helsinki (the Helsinki stock exchange) with the old B
shares on 1 June 2011. The €64,267.50 subscription price of the shares received
by the company was recorded in the reserve of invested non-restricted equity.
The price of a Kesko A share quoted on NASDAQ OMX Helsinki was €34.70 at the end
of 2010, and €31.65 at the end of June 2011, representing a decrease of 8.8%.
Correspondingly, the price of a B share was €34.93 at the end of 2010, and
€32.08 at the end of June 2011, representing a decrease of 8.2%. In January-
June, the highest A share price was €36.00 and the lowest was €29.39. For B
share, they were €35.97 and €29.86 respectively. In January-June, the Helsinki
stock exchange (OMX Helsinki) All-Share index fell by 12.3%, the weighted OMX
Helsinki CAP index by 9.9%, while the Consumer Staples Index was down 9.0%.
At the end of June 2011, the market capitalisation of A shares was €1,004
million, while that of B shares was €2,124 million, excluding the shares held by
the parent company. The combined market capitalisation of A and B shares was
€3,128 million, a decrease of €310 million from the end of 2010. In January-June
2011, a total of 1,111,378 A shares were traded on the Helsinki stock exchange
at a total value of €37 million, while 32.1 million B shares were traded at a
total value of €1,061 million.
The company operates the 2007 stock option scheme for management and other key
personnel, under which the share subscription period of 2007A option rights runs
from 1 April 2010 to 30 April 2012, that of 2007B option rights from 1 April
2011 to 30 April 2013, and that of 2007C option rights will begin on 1 April
2012 and end on 30 April 2014. The 2007A and 2007B option rights have also been
included on the official list of the Helsinki stock exchange since the beginning
of the share subscription periods. A total of 171,459 2007A option rights were
traded during the reporting period at a total value of €173,983. A total of
86,320 2007B option rights were traded during the reporting period at a total
value of €996,815.
The Board of Directors was authorised by the Annual General Meeting of 4 April
2011 to acquire a total maximum of 1,000,000 own B shares. The authorisation is
valid until 30 September 2012. The Annual General Meeting also authorised the
Board to decide on the issuance of a maximum of 1,000,000 own B shares held by
the company itself. The authorisation is valid until 30 June 2014. The prior
authorisation by the Annual General Meeting of 30 March 2009 to issue a maximum
of 20,000,000 new B shares against payment or other consideration remains valid
until 30 March 2012. By virtue of the share acquisition authorisation, a total
of 700,000 own B shares were acquired from the Helsinki stock exchange during
the reporting period. The beginning of acquisition was announced on a stock
exchange release on 28 April 2011. Each subsequent acquisition was announced in
a stock exchange notification on the same day. No company shares have been
issued by virtue of the share issue authorisations. Further information on the
Board's authorisations is available at www.kesko.fi.
At the end of June 2011, the number of shareholders was 39,005, which is 747
more than at the end of 2010. At the end of June 2011, foreign ownership of all
shares was 24%, and foreign ownership of B shares was 36%.
Flagging notifications
Kesko Corporation did not receive flagging notifications during the reporting
period.
Main events during the reporting period
Merja Haverinen, M.Soc.Sc., was appointed Kesko Corporation's Senior Vice
President for Corporate Communications and Responsibility starting from 1 April
2011. Paavo Moilanen, Senior Vice President for Corporate Communications and
Responsibility, retired on 1 April 2011, in accordance with his service
contract. (Stock exchange release on 4 February 2011).
Kesko's Annual General Meeting was held on 4 April 2011. President and CEO Matti
Halmesmäki announced in his review that Kesko Food will open four large-scale
grocery stores in Russia in 2012-2013. Kesko Food's objective is to achieve €500
million in net sales and a positive operating result in Russia by 2015. The
capital expenditure is estimated at €300 million in 2011-2015. At the same time
with new construction, Kesko Food will continue to explore business acquisition
opportunities in both St. Petersburg and Moscow. (Stock exchange release on 4
April 2011).
On 4 April 2011, Kesko's Board of Directors decided to introduce a new share-
based compensation plan for some 150 Kesko management personnel and other named
key personnel, in which a maximum of 600,000 own B shares held by the company
can be granted to people in the target group within a period of three years. The
purpose of the plan is to promote Kesko's business operations and to increase
the company's value by combining the objectives of the shareholders and the
management personnel. The plan encourages its participants to commit to the
Kesko Group and provides them with the opportunity to receive company shares, if
the targets set in the share-based compensation plan are achieved. The share-
based compensation plan includes three vesting periods, namely the calendar
years 2011, 2012 and 2013. A commitment period of three calendar years following
each vesting period is attached to the shares issued in compensation, during
which shares must not be transferred. (Stock exchange release on 4 April 2011).
Kesko Corporation's Board of Directors agreed to extend the term of Kesko
Corporation's Managing Director and Kesko Group's President and CEO Matti
Halmesmäki until the end of May 2015, when Mr. Halmesmäki will be 63. According
to the previous agreement, Mr. Halmesmäki's term would have expired in May
2012. (Stock exchange release on 25 May 2011).
Kesko signed agreements on the transfer of the Intersport licence in Russia to
Kesko with Intersport International and Intersport CIS. According to the letter
of intent signed in the same connection, Kesko will establish a new company for
Intersport operations in Russia together with Melovest, the owner of Intersport
CIS. Melovest will hold a 20% ownership interest in the new company. The
completion of the arrangement is subject to a final agreement on all of its
terms and conditions, the approval by the Russian competition authority and the
fulfilment of the other completion terms and conditions. (Stock exchange release
on 3 June 2011).
Jari Lind, Rautakesko Ltd's President and a member of Kesko's Corporate
Management Board, resigned on 9 June 2011. During the recruitment process of a
new president, Antti Ollila, Vice President for Rautakesko Commerce, will be in
charge ad interim of the duties of the Rautakesko President. In consequence of
Lind's resignation, his membership of Kesko's Corporate Management Board ended.
(Stock exchange release on 9 June 2011).
Resolutions of the 2011 Annual General Meeting and decisions of the Board's
organisational meeting
Kesko Corporation's Annual General Meeting, held on 4 April 2011, adopted the
financial statements for 2010 and discharged the Board members and the Managing
Director from liability. The General Meeting also resolved to distribute €1.30
per share as dividends, or a total of €128,233,679.60, as proposed by the Board
of Directors. The dividend pay date was 14 April 2011. The General Meeting also
resolved to leave the number of Board members unchanged at seven, elected
PricewaterhouseCoopers Oy as the company's auditor, with APA Johan Kronberg as
the auditor with principal responsibility, and approved the Board's proposals to
authorise the Board to acquire a total maximum of 1,000,000 own B shares, and to
issue a total maximum of 1,000,000 own B shares held by the company itself. The
General Meeting also approved the Board's proposal to decide in 2011 on the
donation of a total maximum of €300,000 for charitable or corresponding
purposes.
The organisational meeting of Kesko Corporation's Board of Directors, held after
the Annual General Meeting, decided to maintain the compositions of the Board's
Audit Committee and Remuneration Committee unchanged.
More detailed information on the resolutions of the 2011 Annual General Meeting
and on the decisions of the Board's organisational meeting was given in stock
exchange releases on 4 April 2011.
Responsibility
Kesko's Corporate Responsibility Report for 2010 was published on 2 May 2011. An
independent assurance has been provided for the report. The report structure was
revised and it describes Kesko's responsibility work with the help of five
themes.
Kesko distributed a total of €30,000 in recognition awards to pioneers in
sustainable development from the assets reserved for donations at the Board's
discretion. In addition, €1,000 scholarships were granted to 42 talented young
athletes and art students from those assets.
Kesko was the main partner of The Your Move Grand Event taking place in Helsinki
on 27 May-1 June 2011. The event attracted more than 42,000 13-19-year olds from
different parts of Finland.
Kesko takes part in the Responsible Summer Job 2011 campaign, which is intended
to raise public discussion on the importance of summer employment for young
people. The summer job campaign run by VV-Auto Group Oy's Volkswagen Commercial
Vehicles has "Apupoika Antero" collecting small waste electrical and electronic
equipment for recycling, whereas "Aputyttö Annukka" delivers meals to aged
people.
Konekesko Marine takes part in a campaign aimed to reduce the number of
drownings and to promote boating safety and recreational use of water areas.
Risk management and significant risks and uncertainties in the near future
The Kesko Group has an established and comprehensive risk management process.
Risks and their management are regularly assessed within the Group and reported
to the Group's management. Kesko's risk management and risks related to business
operations are described in more detail in the corporate governance section of
Kesko's website.
The most significant risks for Kesko's operating activities in the near future
are involved in the general instability of the financial market, the economic
development and consumer confidence in Kesko's operating area and their impacts
on the Kesko Group's sales and profit performance. An intensive expansion of
business operations in Russia improves Kesko's business opportunities, but at
the same time, the importance of country risk management is emphasized. In other
respects, no material changes are estimated to have taken place in the risks
presented in the Report by the Board of Directors in Kesko's 2010 Annual Report
and financial statements, and those presented on the Kesko's website during the
first part of the year.
The uncertainties related to profit performance are described in the future
outlook section of this release.
Future outlook
Estimates of the future outlook for the Kesko Group's net sales and operating
profit excluding non-recurring items are given for the 12 months following the
reporting period (7/2011-6/2012) in comparison with the 12 months preceding the
reporting period (7/2010-6/2011).
For the present, the outlook for trends in consumer demand is steady, owing to
high consumer confidence and continuously low interest rate levels. However,
uncertainties relating to economic development have mounted with respect to the
evolution of total production, tightening taxation, accelerating inflation and
the ramifications of possible disturbances in the financial market. In addition,
cuts in public finances may have a negative impact on the trend in consumer
demand.
The steady development in the grocery trade is expected to continue. The home
and speciality goods trade is expected to develop in line with the trend in
private consumption. The building and home improvement market is expected to
strengthen moderately. In the car and machinery trade, the sales of new cars are
expected to grow, and the recovery of the market situation of the machinery
trade is expected to continue.
The Kesko Group's net sales are expected to grow during the next twelve months.
During the next twelve months, the operating profit excluding non-recurring
items is expected to increase despite significant costs involved in the
expansion of the store site network and business operations in Russia.
Helsinki, 25 July 2011
Kesko Corporation
Board of Directors
The information in this interim report is unaudited.
Further information is available from Arja Talma, Senior Vice President, CFO,
telephone +358 10 53 22113, and Eva Kaukinen, Vice President, Corporate
Controller, telephone +358 10 53 22338. A Finnish-language webcast from the
media and analyst briefing on the interim report can be accessed at www.kesko.fi
at 10.00. An English-language web conference on the interim report will be held
today at 14.30 (Finnish time). The web conference login is available at
www.kesko.fi.
Kesko Corporation's interim report for the period January-September will be
released on 26 October 2011. In addition, the Kesko Group's sales figures are
published each month. News releases and other company information are available
on Kesko's website at: www.kesko.fi.
KESKO CORPORATION
Merja Haverinen
Senior Vice President, Corporate Communications and Responsibility
ATTACHMENTS
Accounting policies
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated cash flow statement
Group performance indicators
Net sales by segment
Operating profit by segment
Operating profit excl. non-recurring items by segment
Operating margins excl. non-recurring items by segment
Capital employed by segment
Return on capital employed excl. non-recurring items by segment
Capital expenditure by segment
Segment information by quarter
Personnel average and at 30 June
Group's contingent liabilities
Calculation of performance indicators
K-Group's retail and B2B sales
DISTRIBUTION
NASDAQ OMX Helsinki
Main news media
www.kesko.fi
ATTACHMENTS:
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 2010, with the exception of the following
changes due to the adoption of new and revised IFRS standards and IFRIC
interpretations.
-IAS 24 (revised), Related Party Disclosures
-IAS 32 (amendment), Financial Instruments: Presentation - Classification of
Rights Issues
-IFRIC 14 (amendment), Prepayments of a Minimum Funding Requirement
-IFRIC 19, Extinguishing Financial Liabilities with Equity Instruments
- Annual amendments to the IFRSs (Annual Improvements)
The above amendments to standards and interpretations do not have a material
impact on the reported income statement, statement of financial position or
notes.
The Group accounts for real estate company acquisitions as acquisitions of
tangible assets. Previously, real estate company acquisitions were accounted for
as business combinations in accordance with IFRS 3. Adjustments related to
acquisitions have been recognised retrospectively.
Consolidated income
statement (€ million),
condensed
1-6/ 1-6/ Change,% 4-6/ 4-6/ Change,% 1-12/
2011 2010 2011 2010 2010
Net sales 4,575 4,237 8.0 2,472 2,279 8.5 8,777
Cost of goods sold -3,951 -3,661 7.9 -2,137 -1,967 8.6 -7,547
Gross profit 624 576 8.4 335 312 7.3 1,230
Other operating income 343 313 9.8 183 166 10.3 699
Staff cost -283 -260 9.0 -145 -132 10.4 -521
Depreciation and impairment
charges -59 -57 4.6 -30 -29 3.8 -121
Other operating expenses -506 -472 7.1 -259 -238 8.5 -981
Operating profit 120 100 19.6 84 79 6.2 307
Interest income and other
finance income 10 10 3.9 5 4 26.1 23
Interest expense and other
finance costs -8 -8 3.9 -4 -4 4.5 -15
Exchange differences -2 -1 69.3 -1 -1 55.2 -1
Income from associates 1 0 (..) 0 0 80.0 0
Profit before tax 120 101 19.4 84 79 6.7 312
Income tax -37 -32 17.5 -26 -25 4.9 -97
Profit for the period 83 69 20.3 58 54 7.6 216
Attributable to
Owners of the parent 79 66 20.0 54 51 7.4 205
Non-controlling interests 4 3 26.4 4 3 11.0 11
Earnings per share (€) for
profit attributable to
equity
holders of the parent
Basic 0.80 0.67 19.6 0.55 0.52 7.0 2.08
Diluted 0.79 0.67 19.3 0.55 0.51 6.8 2.06
Consolidated statement of
comprehensive income
(€ million)
1-6/ 1-6/ Change,% 4-6/ 4-6/ Change,% 1-12/
2011 2010 2011 2010 2010
Net profit for the period 83 69 20.3 58 54 7.6 216
Other comprehensive income
Exchange differences on
translating foreign
operations -11 7 (..) -9 4 (..) 5
Cash flow hedge revaluation -10 7 (..) -5 8 (..) 21
Revaluation of available-
for-sale financial assets -1 1 (..) 0 1 -67.6 1
Other items 0 -1 -83.5 0 -1 -83.5 -1
Tax relating to other
comprehensive income 3 -2 (..) 1 -2 (..) -6
Total other comprehensive
income for the period, net
of tax -18 13 (..) -13 10 (..) 20
Total comprehensive income
for the period 65 81 -20.5 45 64 -28.6 236
Attributable to
Owners of the parent 71 77 -7.6 49 59 -16.5 224
Non-controlling interests -6 5 (..) -4 5 (..) 12
(..) Change over 100%
Consolidated statement of financial
position (€ million), condensed
30.6.2011 30.6.2010 Change, % 31.12.2010
ASSETS
Non-current assets
Tangible assets 1,383 1,101 25.6 1,261
Intangible assets 179 176 1.6 180
Interests in associates and other
financial assets 67 37 78.3 61
Loans and receivables 74 70 6.3 72
Pension assets 180 327 -45.1 186
Total 1,883 1,711 10.0 1,759
Current assets
Inventories 780 677 15.2 757
Trade receivables 769 729 5.5 620
Other receivables 137 138 -0.9 183
Financial assets at fair value through
profit or loss 148 267 -44.7 242
Available-for-sale financial assets 323 372 -13.2 549
Cash and cash equivalents 74 74 -0.2 56
Total 2,230 2,256 -1.2 2,406
Non-current assets held for sale 1 51 -98.2 1
Total assets 4,114 4,019 2.4 4,167
30.6.2011 30.6.2010 Change, % 31.12.2010
EQUITY AND LIABILITIES
Equity 2,077 2,002 3.7 2,152
Non-controlling interests 49 52 -5.8 59
Total equity 2,126 2,054 3.5 2,210
Non-current liabilities
Interest-bearing liabilities 219 241 -8.9 235
Non-interest-bearing liabilities 7 4 75.5 5
Deferred tax liabilities 83 123 -32.7 87
Pension obligations 2 2 -5.8 2
Provisions 10 14 -28.4 12
Total 321 383 -16.4 340
Current liabilities
Interest-bearing liabilities 256 249 2.7 242
Trade payables 939 878 6.9 838
Other non-interest-bearing liabilities 446 431 3.6 507
Provisions 26 24 11.3 29
Total 1,667 1,582 5.4 1,616
Total equity and liabilities 4,114 4,019 2.4 4,167
(..) Change over 100%
Consolidated statement of changes in equity (€ million)
Share Issue Share Other Cur- Revalu- Re- Non- Total
capital of premi- reser- rency ation tained cont-
share um ves trans- sur- earn- rol-
capital lation plus ings ling
differ- inte-
ences rests
Balance at
1.1.2010 197 0 194 243 -7 -3 1,381 64 2,070
Shares
subscribed
with options 1 4 4
Option cost 3 0 3
Dividends -89 -18 -106
Other changes 1 0 1
Net profit for
the period 66 3 69
Other
comprehensive
income
Exchange
differences on
translating
foreign
operations 0 5 0 2 7
Cash flow hedge
revaluation 7 7
Revaluation of
available-for-
sale financial
assets 1 1
Other items -1 -1
Tax relating to
other
comprehensive
income -2 -2
Total other
comprehensive
income 0 5 6 -1 2 13
Balance at
30.6.2010 197 0 198 243 -2 4 1,363 52 2,054
Balance at
1.1.2011 197 0 198 243 -3 14 1,503 59 2,210
Shares
subscribed
with options 0 0 0
Option cost 2 0 2
Own shares -23 0 -23
Dividends -128 -4 -132
Other changes 0 4 0 4
Net profit for
the period 79 4 83
Other
comprehensive
income
Exchange
differences on
translating
foreign
operations 0 0 -10 -11
Cash flow hedge
revaluation -10 -10
Revaluation of
available-for-
sale financial
assets -1 -1
Other items 0 0
Tax relating to
other
comprehensive
income 3 3
Total other
comprehensive
income 0 0 -7 0 -10 -18
Balance at
30.6.2011 197 0 198 243 -3 6 1,436 49 2,126
Consolidated cash flow statement (€ million), condensed
1-6/ 1-6/ Change, % 4-6/ 4-6/ Change,% 1-12/
2011 2010 2011 2010 2010
Cash flow from operating
activities
Profit before tax 120 101 19.4 84 79 6.7 312
Planned depreciation 59 57 4.8 30 29 3.8 116
Finance income and costs 0 -1 (..) 0 0 (..) -6
Other adjustments 14 -12 (..) 7 -5 (..) 97
Change in working capital
Current non-interest-bearing
trade and other receivables,
increase (-)/ decrease (+) -144 -117 23.2 -83 -55 52.0 -15
Inventories
increase (-)/ decrease (+) -34 -3 (..) 6 11 -43.7 -82
Current non-interest-bearing
liabilities,
increase (+)/decrease (-) 90 174 -48.3 102 119 -13.7 153
Financial items and tax -63 -64 -1.4 -78 -50 54.9 -136
Net cash generated from
operating activities 43 135 -68.0 69 127 -46.1 438
Cash flow from investing
activities
Capital expenditure -198 -92 (..) -128 -48 (..) -367
Sales of fixed assets 4 5 -17.7 2 4 -41.1 124
Increase of non-current
receivables 0 - (..) 0 - (..) -
Decrease of non-current
receivables - 1 (..) - 0 (..) 4
Net cash used in investing
activities -194 -86 (..) -127 -44 (..) -240
Cash flow from financing
activities
Increase (+)/ decrease (-) in
interest-bearing liabilities 5 45 -88.6 34 36 -6.1 39
Increase (-)/decrease (+) in
current interest-bearing
receivables 1 10 -85.3 2 12 -85.0 11
Dividends paid -132 -105 25.7 -132 -105 25.7 -106
Equity increase 0 4 -97.9 0 3 -97.4 4
Acquisition of own shares -23 - (..) -23 - (..) -
Increase (-)/ decrease (+) in
short-term money market
investments 126 -118 (..) 40 62 -35.5 -114
Other items -2 -7 -76.2 -1 -4 -67.9 -15
Net cash used in financing
activities -24 -172 -86.0 -81 4 (..) -181
Change in cash and cash
equivalents -175 -122 43.5 -139 87 (..) 18
Cash and cash equivalents
and current portion of
available-for-sale financial
assets at 1 Jan. 509 491 3.7 473 283 67.3 491
Currency translation difference
adjustment and revaluation -1 1 (..) -1 0 (..) 0
Cash and cash equivalents
and current portion of
available-for-sale financial
assets at 30 Jun. 334 371 -9.9 334 371 -9.9 509
(..) Change over 100%
Group's performance indicators
1-6/2011 1-6/2010 Change, pp 1-12/2010
Return on capital employed, % 11.7 10.3 1.4 16.0
Return on capital employed, %,
moving 12 mo 16.6 13.3 3.3 16.0
Return on capital employed excl. non-
recurring items, % 11.6 10.2 1.4 14.0
Return on capital employed excl. non-
recurring items, %, moving 12 mo 14.6 10.7 3.9 14.0
Return on equity, % 7.6 6.7 1.0 10.1
Return on equity, %, moving 12 mo 11.0 8.4 2.6 10.1
Return on equity excl. non-recurring
items, % 7.5 6.6 0.9 8.7
Return on equity excl. non-recurring
items, %, moving 12 mo 9.6 6.6 3.0 8.7
Equity ratio, % 52.1 51.4 0.7 53.5
Gearing, % -3.3 -10.9 7.6 -16.8
Change, %
Capital expenditure, € million 194.6 87.7 (..) 325.3
Capital expenditure, % of net sales 4.3 2.1 (..) 3.7
Earnings per share, basic, € 0.80 0.67 19.6 2.08
Earnings per share, diluted, € 0.79 0.67 19.3 2.06
Earnings per share excl. non-recurring
items, basic, € 0.79 0.66 19.3 1.78
Cash flow from operating activities,
€ million 43 135 -68.0 438
Cash flow from investing activities,
€ million -194 -86 (..) -240
Equity/share, € 21.21 20.30 4.5 21.81
Personnel, average 18,644 17,914 4.1 18,215
(..) Change over 100%
Group's performance 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
indicators by quarter 2010 2010 2010 2010 2011 2011
Net sales, € million 1,958 2,279 2,231 2,310 2,103 2,472
Change in net sales, % -3.0 6.4 4.6 7.3 7.4 8.5
Operating profit, € million 20.9 79.0 123.9 82.8 35.7 83.9
Operating margin, % 1.1 3.5 5.6 3.6 1.7 3.4
Operating profit excl. non-recurring items,
€ million 20.9 78.1 88.7 80.5 34.9 83.3
Operating margin excl. non-recurring items,
% 1.1 3.4 4.0 3.5 1.7 3.4
Finance income/costs,
€ million 0.8 -0.2 0.8 4.6 -0.6 0.3
Profit before tax, € million 21.9 78.7 124.5 87.3 36.1 84.0
Profit before tax, % 1.1 3.5 5.6 3.8 1.7 3.4
Return on capital employed, % 4.4 16.1 26.4 17.5 7.2 16.0
Return on capital employed excl. non-
recurring items, % 4.4 15.9 18.9 17.0 7.0 15.9
Return on equity, % 2.9 10.6 16.1 11.5 4.5 10.6
Return on equity excl. non-recurring items,
% 2.9 10.5 11.1 11.2 4.4 10.6
Equity ratio, % 51.3 51.4 53.4 53.5 54.4 52.1
Capital expenditure,
€ million 42.0 45.7 35.9 201.6 64.1 130.5
Earnings per share, diluted, € 0.15 0.51 0.81 0.59 0.25 0.55
Equity per share, € 19.69 20.30 21.11 21.81 22.04 21.21
Segment information
Net sales by segment, 1-6/ 1-6/ Change, 4-6/ 4-6/ Change, 1-12/
(€ million) 2011 2010 % 2011 2010 % 2010
Food trade, Finland 2,025 1,888 7.2 1,077 976 10.3 3,896
Food trade, other countries* - - - - - - -
Food trade total 2,025 1,888 7.2 1,077 976 10.3 3,896
- of which intersegment trade 83 82 1.1 40 40 -1.0 162
Home and speciality goods trade,
Finland 680 682 -0.3 336 331 1.3 1,553
Home and speciality goods trade,
other countries* 7 8 -3.5 3 3 9.0 15
Home and speciality goods trade
total 687 689 -0.3 339 334 1.4 1,569
- of which intersegment trade 9 11 -22.4 5 7 -18.9 23
Building and home improvement
trade, Finland 625 588 6.2 345 338 2.1 1 163
Building and home improvement
trade, other countries* 702 618 13.6 413 374 10.3 1 357
Building and home improvement
trade total 1,327 1,207 10.0 757 712 6.4 2,519
- of which intersegment trade 6 0 (..) 4 0 (..) 0
Car and machinery trade, Finland 569 479 18.7 303 266 13.6 859
Car and machinery trade, other
countries* 52 55 -4.1 39 31 26.0 96
Car and machinery trade total 621 534 16.3 342 298 14.9 955
- of which intersegment trade 1 0 (..) 0 0 (..) 0
Common operations and eliminations -85 -81 4.6 -43 -41 6.3 -162
Finland total 3,813 3,556 7.2 2,016 1,870 7.8 7,309
Other countries total* 762 680 12.0 456 409 11.5 1,468
Group total 4,575 4,237 8.0 2,472 2,279 8.5 8,777
* Net sales in countries other than Finland.
(..) Change over 100%
Operating profit by 1-6/ 1-6/ 4-6/ 4-6/ 1-12/
segment (€ million) 2011 2010 Change 2011 2010 Change 2010
Food trade 88.0 73.9 14.2 45.9 42.2 3.7 158.4
Home and speciality goods trade -4.6 7.1 -11.7 2.8 7.0 -4.2 103.4
Building and home improvement trade 9.8 4.2 5.6 18.8 17.9 0.9 23.9
Car and machinery trade 32.0 21.4 10.6 19.7 15.0 4.7 33.9
Common operations and eliminations -5.5 -6.6 1.0 -3.3 -3.2 -0.2 -12.8
Group total 119.6 100.0 19.6 83.9 79.0 4.9 306.7
Operating profit excl.
non-recurring items by 1-6/ 1-6/ 4-6/ 4-6/ 1-12/
segment (€ million) 2011 2010 Change 2011 2010 Change 2010
Food trade 87.2 73.7 13.5 45.8 42.1 3.8 160.1
Home and speciality goods trade -5.0 7.1 -12.1 2.4 7.0 -4.6 66.0
Building and home improvement trade 9.8 4.2 5.6 18.8 17.9 0.9 24.0
Car and machinery trade 31.8 20.5 11.3 19.6 14.1 5.5 33.1
Common operations and eliminations -5.5 -6.5 1.0 -3.3 -3.1 -0.2 -15.0
Group total 118.3 99.0 19.3 83.3 78.1 5.3 268.1
Operating margins
excl. non-recurring 1-6/ 1-6/ 4-6/ 4-6/ 1-12/ Moving 12 mo
items by segment 2011 2010 Change pp 2011 2010 Change pp 2010 6/2011
Food trade 4.3 3.9 0.4 4.3 4.3 -0.1 4.1 4.3
Home and speciality
goods trade -0.7 1.0 -1.8 0.7 2.1 -1.4 4.2 3.4
Building and home
improvement trade 0.7 0.3 0.4 2.5 2.5 0.0 1.0 1.1
Car and machinery
trade 5.1 3.8 1.3 5.7 4.7 1.0 3.5 4.3
Group total 2.6 2.3 0.2 3.4 3.4 -0.1 3.1 3.2
Capital employed by
segment, cumulative 1-6/ 1-6/ 4-6/ 4-6/ 1-12/
average (€ million) 2011 2010 Change 2011 2010 Change 2010
Food trade 566 623 -57 572 633 -61 590
Home and speciality goods trade 420 439 -19 431 447 -16 431
Building and home improvement trade 685 641 45 712 652 59 627
Car and machinery trade 148 186 -39 149 176 -27 168
Common operations and eliminations 223 59 164 229 56 173 101
Group total 2,042 1,948 94 2,092 1,965 127 1,918
Return on capital 1-6/ 1-6/ Change, pp 4-6/ 4-6/ Change pp 1-12/ Moving
employed excl. non- 2011 2010 2011 2010 2010 12 mo 6/2011
recurring items by
segment, %
Food trade 30.8 23.7 7.1 32.1 26.6 5.5 27.1 30.6
Home and speciality
goods trade -2.4 3.2 -5.6 2.3 6.3 -4.0 15.3 12.7
Building and home
improvement trade 2.8 1.3 1.5 10.6 11.0 -0.4 3.8 4.5
Car and machinery
trade 43.0 22.0 21.0 52.5 32.0 20.4 19.6 30.3
Group total 11.6 10.2 1.4 15.9 15.9 0.0 14.0 14.6
Capital expenditure by 1-6/ 1-6/ 4-6/ 4-6/ 1-12/
segment (€ million) 2011 2010 Change 2011 2010 Change 2010
Food trade 94 38 57 64 21 42 117
Home and speciality goods trade 18 13 5 10 9 1 45
Building and home improvement trade 66 28 38 47 10 37 78
Car and machinery trade 14 8 6 8 4 4 18
Common operations and eliminations 2 0 2 2 0 1 67
Group total 195 88 107 131 46 85 325
Segment information by quarter
Net sales by segment 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
(€ million) 2010 2010 2010 2010 2011 2011
Food trade 912 976 986 1,022 948 1,077
Home and speciality goods trade 355 334 378 501 348 339
Building and home improvement trade 495 712 687 625 570 757
Car and machinery trade 236 298 218 203 279 342
Common operations and eliminations -40 -41 -39 -42 -42 -43
Group total 1,958 2,279 2,231 2,310 2,103 2,472
Operating profit by 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
segment (€ million) 2010 2010 2010 2010 2011 2011
Food trade 31.7 42.2 47.3 37.2 42.1 45.9
Home and speciality goods trade 0.1 7.0 50.6 45.6 -7.4 2.8
Building and home improvement trade -13.8 17.9 19.9 -0.2 -9.1 18.8
Car and machinery trade 6.4 15.0 8.6 3.9 12.2 19.7
Common operations and eliminations -3.4 -3.2 -2.5 -3.7 -2.2 -3.3
Group total 20.9 79.0 123.9 82.8 35.7 83.9
Operating profit excl.
non-recurring items by 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
segment (€ million) 2010 2010 2010 2010 2011 2011
Food trade 31.7 42.1 49.5 36.8 41.4 45.8
Home and speciality goods trade 0.1 7.0 13.2 45.7 -7.4 2.4
Building and home improvement trade -13.8 17.9 20.0 -0.2 -9.1 18.8
Car and machinery trade 6.4 14.1 8.7 3.9 12.2 19.6
Common operations and eliminations -3.4 -3.1 -2.8 -5.7 -2.2 -3.3
Group total 20.9 78.1 88.7 80.5 34.9 83.3
Operating margin excl.
non-recurring items by 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
segment (€ million) 2010 2010 2010 2010 2011 2011
Food trade 3.5 4.3 5.0 3.6 4.4 4.3
Home and speciality goods trade 0.0 2.1 3.5 9.1 -2.1 0.7
Building and home improvement trade -2.8 2.5 2.9 0.0 -1.6 2.5
Car and machinery trade 2.7 4.7 4.0 1.9 4.4 5.7
Group total 1.1 3.4 4.0 3.5 1.7 3.4
Personnel average and at 30 June
Personnel average by
segment 1-6/2011 1-6/2010 Change
Food trade 2,730 2,894 -164
Home and speciality goods trade 5,542 5,366 177
Building and home improvement trade 8,765 8,145 619
Car and machinery trade 1,192 1,117 75
Common operations 415 391 24
Group total 18,644 17,914 731
Personnel at 30 June*
by segment 2011 2010 Change
Food trade 3,192 3,485 -293
Home and speciality goods trade 8,128 7,865 263
Building and home improvement trade 9,976 9,451 525
Car and machinery trade 1,308 1,208 100
Common operations 480 458 22
Group total 23,084 22,467 617
* total number incl. part-time employees
Group's contingent liabilities
(€ million)
30.6.2011 30.6.2010 Change, %
For own commitments 249 266 -6.3
For shareholders 0 0 0.0
For others 7 6 24.7
Lease liabilities for machinery and fixtures 23 21 10.9
Lease liabilities for real estate 2,278 2,294 -0.7
Contingent liabilities arising from
derivative financial instruments
Fair value
Values of underlying instruments at 30 June 30.6.2011 30.6.2010 30.6.2011
Interest rate derivative contracts
Forward and future contracts 1 2 0.99
Interest rate swap contracts 205 206 4.39
Currency derivative contracts
Forward and future contracts 216 480 0.33
Currency swap contracts 100 100 -17.39
Commodity derivative contracts
Electricity derivative contracts 48 48 2.67
Calculation of performance indicators
Operating profit x 100 / (Non-current
Return on capital employed*, % assets + Inventories + Receivables +
Other current assets - Non-interest-
bearing liabilities) on average for the
reporting period
Return on capital employed, %, moving Operating profit for prior 12 months x
12 months 100 / (Non-current assets + Inventories +
Receivables + Other current assets - Non-
interest-bearing liabilities) on average
for 12 months
Return on capital employed excl. non- Operating profit excl. non-recurring
recurring items*, % items x 100 / (Non-current assets +
Inventories + Receivables + Other current
assets - Non-interest-bearing
liabilities) on average for the reporting
period
Return on capital employed, excl. non- Operating profit excl. non-recurring
recurring items, %, moving 12 mo items for prior 12 months x 100 / (Non-
current assets + Inventories +
Receivables + Other current assets - Non-
interest-bearing liabilities) on average
for 12 months
(Profit/loss before tax - income tax) x
Return on equity*, % 100 /
Shareholders' equity
(Profit/loss for prior 12 months before
Return on equity, %, moving 12 months tax - income tax for prior 12 months) x
100 /Shareholders' equity
(Profit/loss adjusted for non-recurring
items before tax - income tax adjusted
for the tax effect of non-recurring
Return on equity excl. non-recurring items) x
items*, % 100 / Shareholders' equity
(Profit/loss for prior 12 months adjusted
for non-recurring items before tax -
income tax for prior 12 months adjusted
Return on equity excl. non-recurring for the tax effect of non-recurring
items, %, moving 12 months items) x100 / Shareholders' equity
Shareholders' equity x 100 /
Equity ratio, % (Balance sheet total - prepayments
received)
(Profit/loss - non-controlling interests)
Earnings/share, diluted /
Average number of shares adjusted for the
dilutive effect of options
(Profit/loss - non-controlling interests)
Earnings/share, basic /
Average number of shares
Earnings/share excl. non-recurring (Profit/loss adjusted for non-recurring
items, basic items - non-controlling
interests)/Average number of shares
Equity attributable to equity holders of
Equity/share the parent /
Basic number of shares at balance sheet
date
Gearing, % Interest-bearing net liabilities x 100 /
Shareholders' equity
* Indicators for return on capital have been annualised.
K-Group's retail and B2B sales, VAT 0% (preliminary data):
1.1.-30.6.2011 1.4.-30.6.2011
K-Group retail and B2B € million Change, % € million Change, %
sales
K-Group food trade
K-food stores, Finland 2,216 5.6 1,167 6.6
Kespro 354 6.9 191 9.2
Food trade total 2,569 5.8 1,359 6.9
K-Group home and speciality goods trade
Home and speciality goods stores,
Finland 758 0.1 374 2.1
Home and speciality goods stores, Baltic
countries 7 -2.9 3 8.8
Home and speciality goods trade total 765 0.0 377 2.2
K-Group building and home improvement
trade
K-rauta and Rautia 496 4.8 320 1.3
Rautakesko B2B Service 103 17.8 62 21.8
K-maatalous 200 8.5 121 3.3
Finland total 799 7.2 502 3.9
Building and home improvement stores,
other Nordic countries 527 8.2 314 5.4
Building and home improvement stores,
Baltic countries 157 11.6 95 10.1
Building and home improvement stores,
other countries 153 29.6 91 26.1
Building and home improvement trade
total 1,636 9.7 1,002 6.7
K-Group car and machinery trade
VV-Autotalot 209 19.9 111 13.2
VV-Auto, import 249 22.5 123 17.1
Konekesko, Finland 123 7.3 74 4.4
Finland total 581 18.0 308 12.4
Konekesko, Baltic countries 54 -2.0 41 28.2
Car and machinery trade total 635 16.0 349 14.1
Finland total 4,707 6.4 2,543 6.2
Other countries total 899 11.1 545 10.8
Retail and B2B sales total 5,606 7.1 3,088 7.0
[HUG#1533342]
