FINANCIAL PERFORMANCE IN BRIEF:
- Group's net sales for January-June were €5,411 million (€4,624 million) an increase of 17.0%, in local currencies, excluding acquisitions and divestments, the increase was 1.2%
- Comparable operating profit was €113.2 million (€111.4 million)
- Operating profit was €169.1 million (€101.6 million)
- Comparable return on capital employed was 11.1% (rolling 12 months)
- Comparable profit before tax was €116.2 million (€113.7 million)
- Comparable earnings per share were €0.90 (€0.85)
- In comparable terms, the net sales for the next 12 months are expected to exceed the level of the previous 12 months. Due to the divestments and restructuring, Kesko Group's net sales for the next 12 months are expected to fall below the level of the previous 12 months. Comparable operating profit for the next 12 months is expected to exceed the level of the previous 12 months.
KEY PERFORMANCE INDICATORS
PRESIDENT AND CEO MIKKO HELANDER:
"In line with its strategy, Kesko is an increasingly focused company, which concentrates on the further improvement of profitability and growth in the grocery trade, the building and technical trade and the car trade.
The strategy was implemented consistently during the second quarter through the divestment of K-maatalous business, the Asko and Sotka furniture trade, the Yamarin boat business and Kesko's representation of Yamaha as well as several properties in the Baltic countries. The sale price of the divested businesses totalled €171 million and an €80 million gain on the divestments was recorded.
In the grocery trade, we can be satisfied with both sales and profit development. In particular, the K-Citymarket chain and the revamped K-Market stores have increased their sales well. The integration of Suomen Lähikauppa stores, acquired in April 2016, has also progressed well. A total of 409 Siwa and Valintatalo stores had been converted into K-stores by the end of May 2017, of which 99 stores had been transferred to retailers by the end of the reporting period.
The emphasis on growth in the building and technical trade division is increasingly on B2B sales. The acquisition of Onninen has provided us with good preconditions for succeeding in this market shift. Onninen's sales and profit developed according to the targets set in the first half of the year. Due to seasonal variations in construction, the second half of the year will be clearly stronger than the first for Onninen. Furthermore, we also managed well in the challenging retail consumer market, which suffered from exceptionally cold weather in northern Europe in spring and early summer.
In the car trade, sales clearly grew in the second quarter and the development of orders for new cars continued to be strong. The integration of the Porsche business has progressed well and has improved the profitability of the car trade.
In our corporate responsibility we have reached a new level in our work on combatting climate change. K Group is the first Finnish company to set science-based targets to reduce emissions from its properties, logistics and supply chains. The ambitious targets will be achieved by significantly increasing the use of renewable energy and improving energy efficiency.
Kesko's cash flow improved and its financial position clearly strengthened during the reporting period. This provides excellent preconditions for continuing the implementation of our strategy."
Audiocast and teleconference of President and CEO Mikko Helander
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