Kesko's interim report 1 Jan.-30 Jun. 2012
KESKO CORPORATION STOCK EXCHANGE RELEASE 25.07.2012 AT 09.00 1(28)
Financial performance in brief:
* The Group's net sales for January-June increased by 4.4%.
* The K-Group's (i.e. Kesko's and the chain stores') retail and B2B sales (VAT 0%) increased by 4.9% in January-June.
* The operating profit excluding non-recurring items was 84.3 million (118.3 million).
* The Kesko Group's net sales are expected to grow during the next twelve months. Owing to the costs involved in the expansion of the store site network and Russian business operations, as well as a sales decrease in the car trade, we are prepared for the operating profit excluding non-recurring items for the next twelve months to be lower than the operating profit excluding non-recurring items for the preceding twelve months. Capital expenditure is expected to be lower than the capital expenditure for the preceding twelve months.
Key performance indicators
| 1-6/2012 | 1-6/2011 | 4-6/2012 | 4-6/2011 | |
| Net sales, million | 4,778 | 4,575 | 2,460 | 2,472 |
| Operating profit excl. non- recurring items, million | 84.3 | 118.3 | 60.7 | 83.3 |
| Operating profit, million | 85.3 | 119.6 | 59.0 | 83.9 |
| Profit before tax, million | 84.8 | 120.1 | 58.5 | 84.0 |
| Capital expenditure, million | 171.9 | 194.6 | 67.8 | 130.5 |
| Earnings per share, diluted, | 0.55 | 0.79 | 0.38 | 0.55 |
| Earnings per share excl. non-recurring items, basic, | 0.54 | 0.79 | 0.39 | 0.55 |
| 30.6.2012 | 30.6.2011 | |||
| Equity ratio, % | 51.1 | 52.1 | ||
| Equity per share, | 21.59 | 21.21 |
FINANCIAL PERFORMANCE
Net sales and profit for January-June 2012The Group's net sales in January-June 2012 were 4,778 million, which is 4.4% up on the corresponding period of the previous year (4,575 million). In Finland, net sales increased by 3.3% and in other countries by 10.3%. International operations accounted for 17.6% (16.7%) of the net sales. Net sales grew in all divisions.
| 1-6/2012 | Net sales, M | Change, % | Operating profit excl. non- recurring items, M | Change, M |
| Food trade | 2,101 | +3.8 | 73.8 | -13.4 |
| Home and speciality goods trade | 721 | +5.0 | -13.5 | -8.5 |
| Building and home improvement trade | 1,411 | +6.3 | 6.4 | -3.4 |
| Car and machinery trade | 627 | +1.0 | 25.9 | -5.9 |
| Common operations and eliminations | -83 | -2.9 | -8.3 | -2.8 |
| Total | 4,778 | +4.4 | 84.3 | -34.0 |
The operating profit excluding non-recurring items in January-June was 84.3 million (118.3 million). It was 1.8% of net sales (2.6%). The profit performance was influenced by the opening of new stores, higher rental expenses, the expansion of Russian business operations and the slowing down of sales growth towards the end of the reporting period.
The operating profit was 85.3 million (119.6 million). The operating profit includes a net amount of 1.1 million (1.4 million) of non-recurring gains on disposals of properties and write-downs. The Group's profit before tax for January-June was 84.8 million (120.1 million).
The Group's earnings per share were 0.55 (0.79). The Group's equity per share was 21.59 (21.21).
In January-June, the K-Group's (i.e. Kesko's and the chain stores') retail and B2B sales (VAT 0%) were 5,883 million, up 4.9% compared to the previous year. In January-June, the K-Group chains' sales entitling to K-Plussa points were 2,844 million excluding tax, up 4.7% compared to the previous year. The K-Plussa customer loyalty programme gained 41,925 new households in January-June. At the end of June, the number of K-Plussa households was 2,181,609 and the number of K-Plussa card holders was 3.8 million.
Net sales and profit for April-June 2012The Group's net sales in April-June 2012 were 2,460 million, which is 0.5% down on the corresponding period of the previous year (2,472 million). In Finland, net sales decreased by 2.0% and in other countries it increased by 6.1%. International operations accounted for 19.6% (18.4%) of the net sales. In the second quarter, there was a significant negative impact on the growth of net sales from the decrease in car trade net sales, -27.8%, which was attributable to the car tax change.
| 4-6/2012 | Net sales, M | Change, % | Operating profit excl. non- recurring items, M | Change, M |
| Food trade | 1,091 | +1.4 | 38.9 | -7.0 |
| Home and speciality goods trade | 352 | +3.9 | -0.6 | -3.1 |
| Building and home improvement trade | 782 | +3.3 | 15.3 | -3.5 |
| Car and machinery trade | 274 | -19.8 | 10.3 | -9.3 |
| Common operations and eliminations | -41 | -6.6 | -3.2 | 0.1 |
| Total | 2,460 | -0.5 | 60.7 | -22.7 |
The operating profit excluding non-recurring items in April-June was 60.7 million (83.3 million). It was 2.5% of net sales (3.4%). The operating profit excluding non-recurring items was negatively impacted by the steep decrease in car sales due to the car tax change, the slowing down of sales growth in other divisions, and the expansion of the store site network and the expansion of Russian business operations.
The operating profit was 59.0 million (83.9 million). The operating profit includes -1.7 million of non-recurring items (0.6 million). The Group's profit before tax for April-June was 58.5 million (84.0 million).
The Group's earnings per share were 0.38 (0.55).
In April-June, the K-Group's (i.e. Kesko's and the chain stores') retail and B2B sales (VAT 0%) were 3,104 million, up 0.4% compared to the previous year. In April-June, the K-Group chains' sales entitling to K-Plussa points were 1,490 million excluding tax, up 2.9% compared to the previous year.
Finance
In January-June, the cash flow from operating activities was 57.2 million (43.3 million). The cash flow from investing activities was -171.2 million (-194.2 million), including 21.1 million (3.8 million) of proceeds from the sale of fixed assets.
The Group's solvency remained at an excellent level despite the ongoing capital expenditure programme. At the end of the period, liquid assets totalled 253 million (545 million). Interest-bearing liabilities were 563 million (475 million) and interest-bearing net debt 310 million (-70 million) at the end of June. Equity ratio was 51.1% (52.1%) at the end of the period.
In January-June, the Group's net finance costs were 0.4 million (0.3 million).
In April-June, the cash flow from operating activities was 62.4 million (68.6 million). The cash flow from investing activities was -79.3 million (-126.5 million), including 1.5 million (2.1 million) of proceeds from the sale of fixed assets.
In April-June, the Group's net finance costs were 0.3 million (net financial income 0.3 million).
Taxes
The Group's taxes in January-June were 25.9 million (37.2 million). The effective tax rate was 30.5% (31.0%), affected by loss-making foreign operations.
The Group's taxes in April-June were 18.3 million (26.0 million). The effective tax rate was 31.2% (31.0%).
Capital expenditure
In January-June, the Group's capital expenditure totalled 171.9 million (194.6 million), or 3.6% (4.3%) of the net sales. Capital expenditure in store sites was 148.1 million (171.4 million) and other capital expenditure was 23.8 million (23.2 million). Capital expenditure in foreign operations represented 13.8% (36.8%) of total capital expenditure.
In April-June, the Group's capital expenditure totalled 67.8 million (130.5 million), or 2.8% (5.3%) of the net sales. Capital expenditure in store sites was 57.3 million (118.7 million) and other capital expenditure was 10.5 million (11.8 million). Capital expenditure in foreign operations represented 22.2% (45.3%) of total capital expenditure.
Main focus areas in Kesko's operations
The main focus areas in Kesko's operations are: strengthening the growth of sales, improving the profitability of the building and home improvement trade, utilisation of business opportunities in St. Petersburg and Moscow in Russia, and a strong financial result, financial position and good dividend payment capacity.
In order to ensure Kesko's earnings and return on capital, divisions take significant measures to enhance sales and purchasing operations and to adjust costs, working capital and capital expenditure. Capital expenditure will be aligned with funds generated from operations to 200-300 million per year also due to uncertainty of the general economic outlook.
Due to the availability of store sites in Russia suitable for Kesko's operations and the adjustment of capital expenditure, it is expected that it will take two years longer than previously announced to meet the growth targets of Kesko's Russian operations. The net sales target for the building and home improvement trade for the year 2017 is 800 million, and the net sales target for the food trade for the year 2017 is 500 million. Previously, these targets were estimated to be reached in 2015. Russian operations in food trade will start in St. Petersburg, and during the years 2012 and 2013 the target is to open a total of three food stores in St. Petersburg.
Personnel
In January-June, the average number of employees in the Kesko Group was 19,574 (18,644) converted into full-time employees. In Finland, the average increase was 208 people, while outside Finland, it was 722.
At the end of June 2012, the total number of employees was 24,461 (23,084), of whom 13,762 (13,191) worked in Finland and 10,699 (9,893) outside Finland. Compared to the end of June 2011, there was an increase of 571 people in Finland and 806 people outside Finland.
In January-June, the Group's staff cost was 307.9 million, an increase of 8.7% compared to the previous year. In April-June, the Group's staff cost increased 7.8% compared to the previous year and was 156.8 million.
SEGMENT INFORMATION
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
| 1-6/2012 | 1-6/2011 | 4-6/2012 | 4-6/2011 | |||
| Net sales, million | 2,101 | 2,025 | 1,091 | 1,077 | ||
| Operating profit excl. non- recurring items, million | 73.8 | 87.2 | 38.9 | 45.8 | ||
| Operating profit as % of net sales excl. non-recurring items | 3.5 | 4.3 | 3.6 | 4.3 | ||
| Capital expenditure, million | 95.7 | 94.4 | 35.6 | 63.5 | ||
| Net sales, million | 1-6/2012 | Change, % | 4-6/2012 | Change, % | ||
| Sales to K-food stores | 1,625 | +3.4 | 845 | +0.8 | ||
| Kespro | 380 | +6.2 | 199 | +2.8 | ||
| Others | 97 | +1.4 | 47 | +5.9 | ||
| Total | 2,101 | +3.8 | 1,091 | +1.4 |
January-June 2012
In the food trade, the net sales for January-June were 2,101 million (2,025 million), up 3.8%. The sales of Pirkka products to K-food stores grew by 14.5% (VAT 0%). During the same period, the grocery sales of K-food stores increased by 4.9% (VAT 0%). In the grocery market, retail prices are estimated to have changed by some 4-4.5% compared to the previous year (VAT 0%; Kesko's own estimate based on the Consumer Price Index of Statistics Finland) and the total grocery trade market (VAT 0%) is estimated to have grown by some 5.5% in January-June compared to the previous year (Kesko's own estimate).
In January-June, the operating profit excluding non-recurring items of the food trade was 73.8 million (87.2 million), or 13.4 million down on the previous year. The operating profit development was impacted by the expansion of the store site network and costs related to launching business operations in Russia. The operating profit was 76.5 million (88.0 million). Non-recurring income included 2.7 million of gains on disposals of properties.
Capital expenditure of the food trade was 95.7 million (94.4 million).
April-June 2012
In the food trade, the net sales for April-June were 1,091 million (1,077 million), up 1.4%. The second quarter had one delivery day less than the previous year. During the same period, the grocery sales of K-food stores increased by 3.2% (VAT 0%).
In April-June, the operating profit excluding non-recurring items of the food trade was 38.9 million (45.8 million), or 7.0 million down on the previous year. The development of operating profit was impacted by the expansion of the store site network and costs related to launching business operations in Russia. The operating profit was 38.9 million (45.9 million).
Capital expenditure of the food trade in April-June was 35.6 million (63.5 million).
In April-July 2012, two new K-citymarkets, three new K-supermarkets and one K-market were opened. A total of 16 stores were renovated and extended.
The most significant store sites being built are K-citymarkets in Kokkola, Kouvola and Valkeakoski. K-supermarkets in Mäntsälä and Loimaa are being extended into K-citymarkets and K-citymarket Imatra is being extended. New K-supermarkets are being built in Lähdekeskus, Espoo; in Kaisaniemi, Helsinki; in Joutsa, Jyväskylä, Kouvola, Lohja, Muurame and Nurmijärvi; and in Hämeenkylä and Nikinmäki, Vantaa. The first Kesko food store in Russia is being built in St. Petersburg.
Home and speciality goods trade
| 1-6/2012 | 1-6/2011 | 4-6/2012 | 4-6/2011 | |
| Net sales, million | 721 | 687 | 352 | 339 |
| Operating profit excl. non-recurring items, million | -13.5 | -5.0 | -0.6 | 2.4 |
| Operating profit as % of net sales excl. non-recurring items | -1.9 | -0.7 | -0.2 | 0.7 |
| Capital expenditure, million | 29.3 | 18.1 | 10.8 | 10.0 |
| Net sales, million | 1-6/2012 | Change, % | 4-6/2012 | Change, % |
| K-citymarket home and speciality goods | 297 | +5.1 | 150 | +2.0 |
| Anttila | 206 | +0.1 | 99 | +2.1 |
| Intersport Finland | 80 | +7.5 | 36 | +7.7 |
| Intersport Russia | 14 | 6 | ||
| Indoor | 89 | +6.9 | 45 | +7.3 |
| Musta Pörssi | 27 | -15.3 | 15 | -10.7 |
| Kenkäkesko | 11 | +5.2 | 4 | -13.8 |
| Total | 721 | +5.0 | 352 | +3.9 |
January-June 2012
In the home and speciality goods trade, the net sales for January-June were 721 million (687 million), up 5.0%. The sales of K-citymarket's home and speciality goods, Intersport, Asko and Sotka grew significantly from the previous year.
New Asko stores were opened in Ylivieska and in Pärnu, Estonia, and new Konebox stores in Raisio and Lielahti. In Finland, Intersport opened new stores in Ideapark, Lempäälä, and in Hyvinkää. In Russia, Intersport opened a new store in Otrada, Moscow, and one store was closed in St. Petersburg. The reform of the Kookenkä chain was completed at the end of March. As a result of network restructuring, there were 29 (35) Musta Pörssi stores at the end of June.
The operating profit excluding non-recurring items of the home and speciality goods trade in January-June was -13.5 million (-5.0 million). Profitability was weakened by the integration and development measures of K-citymarket and Anttila, the expansion of the store site network and the loss from Russian Intersport operations. Operating profit was -13.5 million (-4.6 million).
In April 2012, Kesko acquired the minority holding of 20% of Intersport Russia from its previous owner Melovest Ltd. Due to the transaction, Kesko's ownership in Intersport Russia went up to 100%. In June, the plan was announced to renovate the Musta Pörssi concept and business model and to integrate Konebox in Musta Pörssi.
Capital expenditure of the home and speciality goods trade in January-June was 29.3 million (18.1 million).
April-June 2012
In the home and speciality goods trade, the net sales for April-June were 352 million (339 million), up 3.9%. K-citymarket's home and speciality goods, Anttila, Asko and Sotka as well as Intersport Finland increased their sales.
The operating profit excluding non-recurring items of the home and speciality goods trade in April-June was -0.6 million (2.4 million), or 3.1 million down on the previous year. The most important factor affecting the development in profitability was the expansion of the K-citymarket store site network. The operating profit was -0.6 million (2.8 million).
Capital expenditure of the home and speciality goods trade was 10.8 million (10.0 million).
Building and home improvement trade
| 1-6/2012 | 1-6/2011 | 4-6/2012 | 4-6/2011 | |
| Net sales, million | 1,411 | 1,327 | 782 | 757 |
| Operating profit excl. non-recurring items, million | 6.4 | 9.8 | 15.3 | 18.8 |
| Operating profit as % of net sales excl. non-recurring items | 0.5 | 0.7 | 2.0 | 2.5 |
| Capital expenditure, million | 26.0 | 66.1 | 14.2 | 47.4 |
| Net sales, million | 1-6/2012 | Change, % | 4-6/2012 | Change, % |
| Rautakesko Finland | 648 | +3.7 | 348 | +0.9 |
| K-rauta Sweden | 107 | -0.8 | 63 | -2.4 |
| Byggmakker Norway | 322 | +12.4 | 176 | +7.8 |
| Rautakesko Estonia | 29 | +9.8 | 17 | +4.1 |
| Rautakesko Latvia | 23 | +0.7 | 13 | -6.9 |
| Senukai Lithuania | 117 | +8.6 | 67 | +5.4 |
| Stroymaster Russia | 128 | +20.4 | 75 | +18.9 |
| OMA Belarus | 38 | -17.7 | 23 | -17.6 |
| Total | 1,411 | +6.3 | 782 | +3.3 |
January-June 2012
In the building and home improvement trade, the net sales for January-June were 1,411 million (1,327 million), up 6.3%. Towards the end of the reporting period, the development of sales weakened in Finland, Sweden and the Baltic countries. Growth remained strong in Russia and Norway. In Sweden, sales decreased in the weakening market conditions.
In Finland, the net sales for January-June were 648 million (625 million), an increase of 3.7%. The building and home improvement product lines contributed 460 million to the net sales in Finland, an increase of 0.6%. The agricultural supplies trade contributed 188 million to the net sales, up 12.1%.
The retail sales of the K-rauta and Rautia chains in Finland grew by 3.2% to 511 million (VAT 0%). The sales of Rautakesko B2B Service increased by 2.1%. As a whole, Rautakesko chains' retail and B2B sales are estimated to have exceeded the growth rate of the market in Finland. The retail sales of the K-maatalous chain were 221 million (VAT 0%), up 10.5%.
In January-June, the net sales from foreign operations in the building and home improvement trade were 763 million (702 million), an increase of 8.6%. In Russia, net sales increased by 19.2% in terms of roubles. In Norway, net sales increased by 8.8% in terms of krones. In Sweden, net sales were down by 1.4% in terms of kronas. Foreign operations contributed 54.1% (52.9%) to the net sales of the building and home improvement trade.
The operating profit excluding non-recurring items of the building and home improvement trade in January-June was 6.4 million (9.8 million). The profit performance was impacted by new store openings in Russia and Sweden and significant introduction and development costs of the international enterprise resource planning system. In addition, the profitability was negatively impacted by obsolete inventories and trade receivables written off at 8 million. The operating profit was 4.7 million (9.8 million).
In January-June, capital expenditure of the building and home improvement trade totalled 26.0 million (66.1 million), of which 54.9% (85.4%) abroad.
During the reporting period, a new Rautia-K-maatalous store was opened in Turku and Rautia stores in Muhos and Sastamala were renovated. In April, a K-rauta was opened in Ylivieska, and a significant extension of a K-rauta in Mikkeli was completed. There are replacement K-rauta stores being built in Kouvola and Turku. In Sweden, a K-rauta was opened in Uppsala and a K-rauta replacing the former store in Linköping. In Russia, a new K-rauta was opened in Moscow, where two sites have been acquired for new K-rauta stores.
April-June 2012
In the building and home improvement trade, the net sales for April-June were 782 million (757 million), up 3.3%. The growth of building and home improvement product sales slowed down in all Rautakesko's operating countries.
In Finland, the net sales were 348 million (345 million), an increase of 0.9%. The building and home improvement product lines contributed 248 million to the net sales in Finland, a decrease of 3.5%. The agricultural supplies trade contributed 100 million to the net sales, up 13.4%.
The retail sales of the K-rauta and Rautia chains in Finland in April-June grew by 1.1% to 324 million (VAT 0%). The sales of B2B Service decreased by 7.0%. The retail sales of the K-maatalous chain were 132 million (VAT 0%), up 9.5%.
The net sales from foreign operations in the building and home improvement trade were 434 million (413 million), an increase of 5.3%. The net sales from foreign operations grew by 8.5% in terms of local currencies. In Sweden, net sales were down by 3.4% in terms of kronas. In Norway, net sales increased by 4.2% in terms of krones. In Russia, net sales increased by 17.7% in terms of roubles and in Belarus, net sales increased by 59.3% in terms of roubles, due to strong inflation. Foreign operations contributed 55.6% (54.5%) to the net sales of the building and home improvement trade.
The operating profit excluding non-recurring items of the building and home improvement trade in April-June was 15.3 million (18.8 million). The weakening of the operating profit excluding non-recurring items from the comparative period was impacted by the renewal and expansion of the store site network and introduction and development costs of the international enterprise resource planning system. In addition, the profitability was negatively impacted by obsolete inventories and trade receivables written off at 4 million. The operating profit was 13.6 million (18.8 million).
Capital expenditure of the building and home improvement trade totalled 14.2 million (47.4 million), of which 45.6% (92.5%) abroad.
Car and machinery trade
| 1-6/2012 | 1-6/2011 | 4-6/2012 | 4-6/2011 | |
| Net sales, million | 627 | 621 | 274 | 342 |
| Operating profit excl. non-recurring items, million | 25.9 | 31.8 | 10.3 | 19.6 |
| Operating profit as % of net sales excl. non-recurring items | 4.1 | 5.1 | 3.8 | 5.7 |
| Capital expenditure, million | 18.7 | 13.9 | 5.9 | 7.9 |
| Net sales, million | 1-6/2012 | Change, % | 4-6/2012 | Change, % |
| VV-Auto | 454 | +1.6 | 165 | -27.8 |
| Konekesko | 174 | -0.4 | 109 | -3.6 |
| Total | 627 | +1.0 | 274 | -19.8 |
January-June 2012
In January-June, the net sales of the car and machinery trade were 627 million (621 million), up 1.0%.
VV-Auto's net sales for January-June were 454 million (447 million), an increase of 1.6%. In Finland, new registrations of passenger cars decreased by 6.2% and those of vans by 4.7% compared to the previous year. In January-June, the combined market share of passenger cars and vans imported by VV-Auto was 20.4% (20.3%).
Konekesko's net sales for January-June were 174 million (175 million), down 0.4% compared to the previous year. Net sales in Finland were 120 million, down 3.3%. The net sales from Konekesko's foreign operations were 55 million, up 5.7%.
In January-June, the operating profit excluding non-recurring items of the car and machinery trade was 25.9 million (31.8 million), down 5.9 million compared to the previous year. The decrease in the operating profit was due to the change in car tax effective from 1 April 2012 and the more difficult general market conditions of passenger cars and vans. The operating profit for January-June was 25.9 million (32.0 million).
Capital expenditure of the car and machinery trade was 18.7 million (13.9 million) in January-June.
April-June 2012
In April-June, the net sales of the car and machinery trade were 274 million (342 million), down 19.8%.
VV-Auto's net sales for April-June were 165 million (229 million), a decrease of 27.8%. The decrease in the car trade was attributable to the car tax change effective from 1 April 2012 and the more difficult general market conditions of passenger cars and vans. In April-June, the combined market share of passenger cars and vans imported by VV-Auto was 21.8% (21.6%).
Konekesko's net sales for April-June were 109 million (113 million), down 3.6% compared to the previous year.
In April-June, the operating profit excluding non-recurring items of the car and machinery trade was 10.3 million (19.6 million), down 9.3 million compared to the previous year. Profitability was weakened by the radical decrease in car trade sales. The operating profit for April-June was 10.3 million (19.7 million).
Capital expenditure of the car and machinery trade was 5.9 million (7.9 million) in April-June.
Changes in the Group composition
No significant changes took place in the Group composition during the reporting period.
Shares, securities market and Board authorisations
At the end of June 2012, the total number of Kesko Corporation shares was 98,649,542, of which 31,737,007, or 32.2%, were A shares and 66,912,535, or 67.8%, were B shares. On 30 June 2012, Kesko Corporation held 607,249 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 and no dividend is paid on them. At the end of June 2012, Kesko Corporation's share capital was 197,282,584. During the reporting period, the number of B shares has been increased once to account for the shares subscribed for with the options based on the 2007 stock option scheme. The increase was made on 5 June 2012 (4,500 B shares), and there was a stock exchange notification about the increase on the same day. The shares subscribed for were entered for public trading in NASDAQ OMX Helsinki (Helsinki Stock Exchange) together with the old B shares on 6 June 2012. The whole subscription price of 60,480.00 received by the company has been recorded in the reserve of invested non-restricted equity.
The price of a Kesko A share quoted on NASDAQ OMX Helsinki was 24.82 at the end of 2011, and 21.89 at the end of June 2012, representing a decrease of 11.8%. Correspondingly, the price of a B share was 25.96 at the end of 2011, and 20.59 at the end of June 2012, representing a decrease of 20.7%. In January-June, the highest A share price was 27.65 and the lowest was 19.99. For B share, they were 27.81 and 19.04 respectively. In January-June, the Helsinki stock exchange (OMX Helsinki) All-Share index was down by 5.3% and the weighted OMX Helsinki CAP index was down by 4.5%. The Retail Index was down by 6.9%.
At the end of June 2012, the market capitalisation of A shares was 695 million, while that of B shares was 1,365 million, excluding the shares held by the parent company. The combined market capitalisation of A and B shares was 2,060 million, a decrease of 447 million from the end of 2011. In January-June 2012, a total of 1.0 (1.1) million A shares were traded on the Helsinki stock exchange, down 8.7%. The exchange value of A shares was 24 million. A total of 42.9 (32.1) million B shares were traded on the Helsinki stock exchange, up 33.4%. The exchange value of B shares was 988 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 ran from 1 April 2010 to 30 April 2012 (subscription period has ended), that of 2007B option rights runs from 1 April 2011 to 30 April 2013, and that of 2007C option rights began on 1 April 2012 and it will end on 30 April 2014. All option rights have also been included on the official list of the Helsinki stock exchange since the beginning of the share subscription periods. No 2007A option rights were traded during the reporting period. A total of 55,520 2007B option rights were traded during the reporting period at a total value of 174,548, and a total of 42,680 2007C option rights at a total value of 364,294.
The Board has the authority, granted by the Annual General Meeting of 16 April 2012 and valid until 30 June 2015, to issue a total maximum of 20,000,000 new B shares. The shares can be issued against payment for subscription by shareholders in a directed issue in proportion to their existing shareholdings regardless of whether they consist of A or B shares, or, deviating 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, investments 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 against non-cash consideration and the right to make decisions on other matters concerning share issuances. The corresponding authority, granted by the Annual General Meeting of 30 March 2009, to issue a total maximum of 20,000,000 new B shares against payment or other consideration expired on 30 March 2012. The authority expired at the end of March had not been used. In addition, the Board has the authority, granted by the Annual General Meeting of 4 April 2011 and valid until 30 September 2012, to decide on the acquisition of a total maximum of 1,000,000 own B shares, and the authority, valid until 30 June 2014, to decide on the issuance of a total maximum of 1,000,000 own B shares held by the company itself. Based on the authority to issue own shares and the fulfilment of the vesting criteria of the 2011 vesting period of Kesko's three-year share-based compensation plan, the Board granted a total of 92,751 company shares held by the company itself to the people included in the target group. The matter was announced in a stock exchange release on 12 April 2012. Further information on the Board's authorities is available at www.kesko.fi.
At the end of June 2012, the number of shareholders was 45,314, which is 4,099 more than at the end of 2011. At the end of June, foreign ownership of all shares was 15%. At the end of June, foreign ownership of B shares was 21%.
Flagging notifications
Kesko Corporation did not receive flagging notifications during the reporting period.
Main events during the reporting period
The second phase of the transfer of the Kesko Group companies' statutory pension insurance liability portfolio, agreed between the Kesko Pension Fund and Ilmarinen Mutual Pension Insurance Company, was carried out with effect from 1 January 2012. (Stock exchange release on 15 February 2012)
Kesko transferred a total of 90,889 own B shares held by the company itself to the about 150 Kesko management employees and other named key persons included in the target group of the 2011 vesting period of Kesko's three-year share-based compensation plan. In addition, on the same basis, Kesko transferred a total of 1,862 own B shares held by the company itself in May. After the transfers, the company itself held 607,249 own B shares.
(Stock exchange release on 12 April 2012)
Main events after the reporting period
The number of own shares was increased by 476 B shares that were returned to the company in accordance with the terms of the share-based compensation plan. On 20 July, Kesko Oyj held 607,725 own B shares. (Stock exchange notification on 20 July 2012)
Resolutions of the 2012 Annual General Meeting and decisions of the Board's organisational meeting
Kesko Corporation's Annual General Meeting, held on 16 April 2012, adopted the financial statements for 2011 and discharged the Board members and the Managing Director from liability. The General Meeting also resolved to distribute 1.20 per share as dividends on 98,035,931 shares held outside the company at the date of dividend distribution, or a total amount of 117,643,117.20. The dividend pay date was 26 April 2012. The General Meeting resolved to leave the number of Board members unchanged at seven and elected Esa Kiiskinen, Ilpo Kokkila, Tomi Korpisaari, Maarit Näkyvä, Seppo Paatelainen, Toni Pokela and Virpi Tuunainen as Board members for a three-year term of office as stated in the Articles of Association. The General Meeting elected PricewaterhouseCoopers Oy as the company's auditor, with Johan Kronberg, APA, as the company's auditor with principal responsibility. The General Meeting also approved the Board's proposal to issue a total maximum of 20,000,000 new B shares until 30 June 2015, and the Board's proposal that it be authorised until the 2013 Annual General Meeting to decide 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, elected Esa Kiiskinen as its Chair and Seppo Paatelainen as its Deputy Chair. The Board elected Maarit Näkyvä as the Chair, Seppo Paatelainen as the Deputy Chair and Virpi Tuunainen as a member of the Audit Committee, and Esa Kiiskinen as the Chair, Seppo Paatelainen as the Deputy Chair and Ilpo Kokkila as a member of the Remuneration Committee. The Board elects the Board Chair and Deputy Chair for the whole three-year term of a Board member, and the Committee Chairs, Deputy Chairs and members for one year at a time.
The resolutions of the Annual General Meeting and the decisions of the Board's organisational meeting were announced in more detail in stock exchange releases on 16 April 2012.
Responsibility
In April, Kesko joined the Climate Partners network, a joint organization formed by business and the City of Helsinki, and signed a commitment to reduce carbon dioxide emissions.
Kesko's 12th Corporate Responsibility Report was published in April. The report is a comprehensive account of the objectives, actions and performance of Kesko's responsibility programme and responsibility work.
In Kaivopuisto Park in Helsinki, Kesko arranged a Mother's day event, at which Fairtrade was put on the map and 10,000 Pirkka Fairtrade roses were given to mothers and grandmothers.
Kesko partnered with the Young Finland Association in the Taisto campaign that challenged more than 60,000 13-to-15-year old children to excercise during the spring.
In May, Kesko's Board awarded scholarships with a total value of 41,000 to talented young athletes and arts students.
Konekesko Oy and Helly Hansen buoyancy aids and life jackets support again this summer the Finnish water safety campaign "Viisaasti vesillä" (Be smart when boating). The water safety campaign started in May and will visit a total of 31 localities during the summer.
Risk management
The 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 economic development, the euro zone financial market situation and consumer confidence in Kesko's operating area, as well as their impact on the Kesko Group's sales and profit performance. It is estimated that in other respects, no material changes have taken place in the risks described in the report by the Board of Directors and financial statements for 2011 and the risks described on Kesko's website.
Risks and uncertainties associated with economic development 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 (7/2012-6/2013) in comparison with the 12 months preceding the reporting period (7/2011-6/2012).
Resulting from the problems of European national economies, the outlook for the general economic situation is characterised by significant uncertainty. In addition, cuts in public finances and tightening taxation increase the uncertainty about the development of consumer demand.
The market is expected to remain stable in the grocery trade and home and speciality goods trade. Growth in the building and home improvement trade is expected to slow down as the growth of building construction slows down especially in Finland and Sweden. In the car and machinery trade, the market is expected to decrease.
The Kesko Group's net sales are expected to grow during the next twelve months. Owing to the costs involved in the expansion of the store site network and Russian business operations, as well as a sales decrease in the car trade, we are prepared for the operating profit excluding non-recurring items for the next twelve months to be lower than the operating profit excluding non-recurring items for the preceding twelve months. Capital expenditure is expected to be lower than the capital expenditure of preceding twelve months.
Helsinki, 24 July 2012
Kesko Corporation
Board of Directors
The information in the interim report release is unaudited.
Further information is available from Jukka Erlund, Senior Vice President, CFO, telephone +358 1053 22113, and Eva Kaukinen, Vice President, Corporate Controller, telephone +358 1053 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 January-September will be released on 24 October 2012. 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: TABLES
Accounting policies
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated cash flow statement
Group's performance indicators
Net sales by segment
Operating profit by segment
Operating profit excl. non-recurring items by segment
Operating margin excl. non-recurring items by segment
Capital employed by segment
Return on capital employed excl. non-recurring items by segment
Capital expenditure by segment
Segment information by quarter
Personnel average and at the end of the reporting period
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
TABLES:
Accounting policies
This interim report has been prepared in accordance with the IAS 34 standard, applying the same accounting policies as to the annual financial statements for 2011, with the exception of the following changes due to the adoption of new and revised IFRS standards and IFRIC interpretations:
IFRS 7 (amendment), Financial instruments: Disclosures - Derecognition
IAS 12 (amendment), Income taxes - Deferred tax
Annual amendments to the IFRS (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.
| Consolidated income statement ( million), condensed | |||||||
| 1-6/ 2012 | 1-6/ 2011 | Change,% | 4-6/ 2012 | 4-6/ 2011 | Change,% | 1-12/ 2011 | |
| Net sales | 4,778 | 4,575 | 4.4 | 2,460 | 2,472 | -0.5 | 9,460 |
| Cost of goods sold | -4,138 | -3,951 | 4.7 | -2,131 | -2,137 | -0.3 | -8,163 |
| Gross profit | 640 | 624 | 2.5 | 329 | 335 | -1.9 | 1,297 |
| Other operating income | 368 | 343 | 7.1 | 197 | 183 | 7.8 | 705 |
| Staff cost | -308 | -283 | 8.7 | -157 | -145 | 7.8 | -571 |
| Depreciation and impairment charges | -76 | -59 | 28.6 | -41 | -30 | 34.3 | -125 |
| Other operating expenses | -538 | -506 | 6.4 | -270 | -259 | 4.3 | -1,026 |
| Operating profit | 85 | 120 | -28.7 | 59 | 84 | -29.7 | 281 |
| Interest income and other finance income | 10 | 10 | -2.0 | 5 | 5 | -7.1 | 22 |
| Interest expense and other finance costs | -8 | -8 | 1.5 | -5 | -4 | 22.2 | -18 |
| Exchange differences | -2 | -2 | -8.6 | -1 | -1 | -48.4 | -3 |
| Income from associates | 0 | 1 | (..) | 0 | 0 | -49.7 | 1 |
| Profit before tax | 85 | 120 | -29.4 | 59 | 84 | -30.3 | 282 |
| Income tax | -26 | -37 | -30.5 | -18 | -26 | -29.9 | -85 |
| Net profit for the period | 59 | 83 | -28.9 | 40 | 58 | -30.5 | 197 |
| Attributable to | |||||||
| Owners of the parent | 54 | 79 | -31.9 | 37 | 54 | -32.0 | 182 |
| Non-controlling interests | 5 | 4 | 32.9 | 3 | 4 | -6.9 | 15 |
| Earnings per share () for profit attributable to equity holders of the parent | |||||||
| Basic | 0.55 | 0.80 | -31.6 | 0.38 | 0.55 | -31.7 | 1.85 |
| Diluted | 0.55 | 0.79 | -31.3 | 0.38 | 0.55 | -31.4 | 1.84 |
| Consolidated statement of comprehensive income ( million) | |||||||
| 1-6/ 2012 | 1-6/ 2011 | Change,% | 4-6/ 2012 | 4-6/ 2011 | Change,% | 1-12/ 2011 | |
| Net profit for the period | 59 | 83 | -28.9 | 40 | 58 | -30.5 | 197 |
| Other comprehensive income | |||||||
| Exchange differences on translating foreign operations | 3 | -11 | (..) | 0 | -9 | 97.9 | -17 |
| Adjustment for hyperinflation | 1 | 0 | 6 | ||||
| Cash flow hedge revaluation | -1 | -10 | 92.2 | 1 | -5 | (..) | -15 |
| Revaluation of available-for- sale financial assets | -1 | -1 | -48.0 | -1 | 0 | (..) | 0 |
| Other items | 0 | 0 | 100.0 | 0 | 0 | 100.0 | 0 |
| Tax relating to other comprehensive income | 0 | 3 | -85.7 | 0 | 1 | (..) | 4 |
| Total other comprehensive income for the period, net of tax | 3 | -18 | (..) | 0 | -13 | 99.6 | -22 |
| Total comprehensive income for the period | 62 | 65 | -4.4 | 40 | 45 | -11.2 | 175 |
| Attributable to | |||||||
| Owners of the parent | 55 | 71 | -22.5 | 35 | 49 | -29.8 | 170 |
| Non-controlling interests | 7 | -6 | (..) | 6 | -4 | (..) | 4 |
(..) Change over 100%
| Consolidated statement of financial position ( million), condensed | ||||
| 30.6.2012 | 30.6.2011 | Change,% | 31.12.2011 | |
| ASSETS | ||||
| Non-current assets | ||||
| Tangible assets | 1,579 | 1,383 | 14.2 | 1,490 |
| Intangible assets | 190 | 179 | 6.3 | 189 |
| Investments in associates and other financial assets | 72 | 67 | 7.2 | 69 |
| Loans and receivables | 82 | 74 | 10.4 | 80 |
| Pension assets | 146 | 180 | -18.7 | 200 |
| Total | 2,069 | 1,883 | 9.9 | 2,029 |
| Current assets | ||||
| Inventories | 869 | 780 | 11.4 | 868 |
| Trade receivables | 803 | 769 | 4.5 | 700 |
| Other receivables | 322 | 137 | (..) | 218 |
| Financial assets at fair value through profit or loss | 51 | 148 | -65.4 | 98 |
| Available-for-sale financial assets | 141 | 323 | -56.4 | 186 |
| Cash and cash equivalents | 61 | 74 | -17.1 | 84 |
| Total | 2,248 | 2,230 | 0.8 | 2,153 |
| Non-current assets held for sale | 1 | 1 | 18.8 | 8 |
| Total assets | 4,318 | 4,114 | 5.0 | 4,190 |
| 30.6.2012 | 30.6.2011 | Change,% | 31.12.2011 | |
| EQUITY AND LIABILITIES | ||||
| Equity | 2,117 | 2,077 | 1.9 | 2,175 |
| Non-controlling interests | 65 | 49 | 34.4 | 58 |
| Total equity | 2,182 | 2,126 | 2.6 | 2,233 |
| Non-current liabilities | ||||
| Interest-bearing liabilities | 210 | 219 | -3.9 | 210 |
| Non-interest-bearing liabilities | 10 | 7 | 46.4 | 18 |
| Deferred tax liabilities | 87 | 83 | 5.3 | 91 |
| Pension obligations | 2 | 2 | 4.6 | 2 |
| Provisions | 11 | 10 | 11.0 | 10 |
| Total | 321 | 321 | 0.1 | 332 |
| Current liabilities | ||||
| Interest-bearing liabilities | 353 | 256 | 37.9 | 190 |
| Trade payables | 993 | 939 | 5.7 | 886 |
| Other non-interest-bearing liabilities | 445 | 446 | -0.2 | 526 |
| Provisions | 24 | 26 | -9.4 | 24 |
| Total | 1,815 | 1,667 | 8.8 | 1,625 |
| Total equity and liabilities | 4,318 | 4,114 | 5.0 | 4,190 |
(..) Change over 100%
Consolidated statement of changes in equity ( million)
| Share capi- tal | Issue of share capi-tal | Share pre-mi-um | Other reser- ves | Cur- rency trans- lation differ-ences | Re-valu- ation sur- plus | Re- tained earn- ings | Non- cont- rolling inte-rests | Total | |
| 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 comprehen-sive 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 |
| Balance at 1.1.2012 | 197 | 0 | 198 | 243 | -3 | 3 | 1,537 | 58 | 2,233 |
| Shares subscribed with options | 0 | 0 | |||||||
| Share-based compensation | 2 | 2 | |||||||
| Option cost | 0 | 0 | 0 | ||||||
| Own shares | 0 | 0 | |||||||
| Dividends | -118 | -118 | |||||||
| Other changes | 2 | 2 | |||||||
| Net profit for the period | 54 | 5 | 59 | ||||||
| Other comprehen-sive income | |||||||||
| Exchange differences on translating foreign operations | 0 | 2 | 0 | 1 | 3 | ||||
| Adjustment for hyperinflation | 0 | 1 | 1 | ||||||
| Cash flow hedge revaluation | -1 | -1 | |||||||
| Revaluation of available-for-sale financial assets | -1 | -1 | |||||||
| Tax relating to other comprehen-sive income | 0 | 0 | |||||||
| Total other comprehen-sive income | 0 | 2 | -2 | 0 | 2 | 3 | |||
| Balance at 30.6.2012 | 197 | 0 | 198 | 243 | -1 | 1 | 1,478 | 65 | 2,182 |
Consolidated cash flow statement ( million), condensed
| 1-6/ 2012 | 1-6/ 2011 | Change,% | 4-6/ 2012 | 4-6/ 2011 | Change,% | 1-12/ 2011 | |
| Cash flow from operating activities | |||||||
| Profit before tax | 85 | 120 | -29.4 | 59 | 84 | -30.3 | 282 |
| Planned depreciation | 75 | 59 | 25.6 | 39 | 30 | 28.7 | 125 |
| Finance income and costs | 2 | 0 | (..) | 1 | 0 | (..) | -1 |
| Other adjustments | 6 | 14 | -55.2 | -1 | 7 | (..) | -6 |
| Change in working capital | |||||||
| Current non-interest-bearing trade and other receivables, increase (-)/decrease (+) | -124 | -144 | -14.1 | -4 | -83 | -95.3 | -89 |
| Inventories, increase (-)/decrease (+) | 0 | -34 | (..) | 37 | 6 | (..) | -119 |
| Current non-interest-bearing liabilities, increase (-)/decrease (+) | 55 | 90 | -39.3 | -46 | 102 | (..) | 127 |
| Financial items and tax | -41 | -63 | -34.2 | -23 | -78 | -69.8 | -103 |
| Net cash generated from operating activities | 57 | 43 | 32.1 | 62 | 69 | -9.0 | 216 |
| Cash flow from investing activities | |||||||
| Capital expenditure | -191 | -198 | -3.5 | -80 | -128 | -37.7 | -449 |
| Sales of fixed assets | 21 | 4 | (..) | 2 | 2 | -25.7 | 8 |
| Increase of non-current receivables | -2 | 0 | (..) | -1 | 0 | (..) | 0 |
| Net cash used in investing activities | -171 | -194 | -11.9 | -79 | -127 | -37.3 | -441 |
| Cash flow from financing activities | |||||||
| Interest-bearing liabilities, increase (-)/decrease (+) | 162 | 5 | (..) | 113 | 34 | (..) | -58 |
| Current interest-bearing receivables, increase (-)/decrease (+) | -35 | 1 | (..) | -14 | 2 | (..) | -37 |
| Dividends paid | -118 | -132 | -10.9 | 118 | -132 | -10.9 | -133 |
| Equity increase | 0 | 0 | -21.8 | 0 | 0 | -21.8 | 0 |
| Acquisition of own shares | - | -23 | (..) | - | -23 | (..) | -23 |
| Increase (-)/ decrease (+) in short-term money market investments | 85 | 126 | -32.9 | 53 | 40 | 33.1 | 199 |
| Other items | -8 | -2 | (..) | -2 | -1 | 59.4 | 1 |
| Net cash used in financing activities | 86 | -24 | (..) | 32 | -81 | (..) | -51 |
| Change in cash and cash equivalents | -28 | -175 | -83.9 | 15 | -139 | (..) | -277 |
| Cash and cash equivalents and current portion of available-for-sale financial assets at 1 Jan. | 231 | 509 | -54.7 | 187 | 473 | -60.4 | 509 |
| Currency translation difference adjustment and revaluation | 0 | -1 | -67.8 | 0 | -1 | -48.1 | -2 |
| Cash and cash equivalents and current portion of available-for-sale financial assets at 30 June | 202 | 334 | -39.4 | 202 | 334 | -39.4 | 231 |
(..) Change over 100%
| Group's performance indicators | ||||
| 1-6/2012 | 1-6/2011 | Change pp | 1-12/2011 | |
| Return on capital employed, % | 6.8 | 11.7 | -4.9 | 13.2 |
| Return on capital employed, %, moving 12 mo | 10.4 | 16.6 | -6.1 | 13.2 |
| Return on capital employed excl. non-recurring items, % | 6.7 | 11.6 | -4.8 | 13.1 |
| Return on capital employed excl. non-recurring items, %, moving 12 mo | 10.4 | 14.6 | -4.2 | 13.1 |
| Return on equity, % | 5.3 | 7.6 | -2.3 | 8.9 |
| Return on equity, %, moving 12 mo | 8.0 | 11.0 | -3.0 | 8.9 |
| Return on equity excl. non-recurring items, % | 5.3 | 7.5 | -2.3 | 8.8 |
| Return on equity excl. non-recurring items, %, moving 12 mo | 8.0 | 9.6 | -1.6 | 8.8 |
| Equity ratio, % | 51.1 | 52.1 | -1.0 | 53.9 |
| Gearing, % | 14.2 | -3.3 | 17.5 | 1.5 |
| Change,% | ||||
| Capital expenditure, million | 171.9 | 194.6 | -11.7 | 425.4 |
| Capital expenditure, % of net sales | 3.6 | 4.3 | -16.7 | 4.5 |
| Earnings per share, basic, | 0.55 | 0.80 | -31.6 | 1.85 |
| Earnings per share, diluted, | 0.55 | 0.79 | -31.3 | 1.84 |
| Earnings per share excl. non-recurring items, basic, | 0.54 | 0.79 | -31.7 | 1.84 |
| Cash flow from operating activities, million | 57 | 43 | 32.1 | 216 |
| Cash flow from investing activities, million | -171 | -194 | -11.9 | -441 |
| Equity per share, | 21.59 | 21.21 | 1.8 | 22.20 |
| Interest-bearing net debt | 310 | -70 | (..) | 33 |
| Diluted number of | ||||
| shares, average of | ||||
| reporting period | 98,440 | 99,328 | -0.9 | 98,919 |
| Personnel, average | 19,574 | 18,644 | 5.0 | 18,960 |
| (..) Change over 100% |
| Group's performance indicators by quarter | 1-3/ 2011 | 4-6/ 2011 | 7-9/ 2011 | 10-12/ 2011 | 1-3/ 2012 | 4-6/ 2012 |
| Net sales, million | 2,103 | 2,472 | 2,404 | 2,481 | 2,318 | 2,460 |
| Change in net sales, % | 7.4 | 8.5 | 7.8 | 7.4 | 10.2 | -0.5 |
| Operating profit, million | 35.7 | 83.9 | 88.2 | 72.8 | 26.3 | 59.0 |
| Operating margin, % | 1.7 | 3.4 | 3.7 | 2.9 | 1.1 | 2.4 |
| Operating profit excl. non- recurring items, million | 34.9 | 83.3 | 89.2 | 71.5 | 23.6 | 60.7 |
| Operating margin excl. non-recurring items, % | 1.7 | 3.4 | 3.7 | 2.9 | 1.0 | 2.5 |
| Finance income/costs, million | -0.6 | 0.3 | 0.3 | 0.8 | -0.1 | -0.3 |
| Profit before tax, million | 36.1 | 84.0 | 88.0 | 74.0 | 26.3 | 58.5 |
| Profit before tax, % | 1.7 | 3.4 | 3.7 | 3.0 | 1.1 | 2.4 |
| Return on capital employed excl. non-recurring items, % | 7.0 | 15.9 | 16.6 | 12.5 | 3.9 | 9.5 |
| Return on equity excl. non-recurring items, % | 4.4 | 10.6 | 11.1 | 9.8 | 3.0 | 7.5 |
| Equity ratio, % | 54.4 | 52.1 | 54.0 | 53.9 | 52.7 | 51.1 |
| Capital expenditure, million | 64.1 | 130.5 | 126.3 | 104.5 | 104.1 | 67.8 |
| Earnings per share, diluted, | 0,25 | 0,55 | 0,53 | 0,51 | 0,17 | 0,38 |
| Equity per share, | 22,04 | 21,21 | 21,66 | 22,20 | 22,42 | 21,59 |
Segment information
| Net sales by segment ( million) | 1-6/ 2012 | 1-6/ 2011 | Change, % | 4-6/ 2012 | 4-6/ 2011 | Change, % | 1-12/ 2011 |
| Food trade, Finland | 2,101 | 2,025 | 3.8 | 1,091 | 1,077 | 1.4 | 4,182 |
| Food trade, other countries* | - | - | - | - | - | - | - |
| Food trade total | 2,101 | 2,025 | 3.8 | 1,091 | 1,077 | 1.4 | 4,182 |
| - of which intersegment trade | 86 | 83 | 3.7 | 41 | 40 | 3.4 | 168 |
| Home and speciality goods trade, Finland | 699 | 680 | 2.9 | 343 | 336 | 2.1 | 1,541 |
| Home and speciality goods trade, other countries* | 22 | 7 | (..) | 10 | 3 | (..) | 23 |
| Home and speciality goods trade total | 721 | 687 | 5.0 | 352 | 339 | 3.9 | 1,564 |
| - of which intersegment trade | 8 | 9 | -4.0 | 5 | 5 | -12.9 | 20 |
| Building and home improvement trade, Finland | 648 | 625 | 3.7 | 348 | 345 | 0.9 | 1,233 |
| Building and home improvement trade, other countries* | 763 | 702 | 8.6 | 434 | 413 | 5.3 | 1,483 |
| Building and home improvement trade total | 1,411 | 1,327 | 6.3 | 782 | 757 | 3.3 | 2,716 |
| - of which intersegment trade | 0 | 6 | -93.1 | 1 | 4 | -88.2 | 12 |
| Car and machinery trade, Finland | 572 | 569 | 0.6 | 235 | 303 | -22.4 | 1,064 |
| Car and machinery trade, other countries* | 55 | 52 | 5.4 | 39 | 39 | 0.0 | 110 |
| Car and machinery trade total | 627 | 621 | 1.0 | 274 | 342 | -19.8 | 1,174 |
| - of which intersegment trade | 1 | 1 | -4.4 | 0 | 0 | 50.3 | 1 |
| Common operations and eliminations | -83 | -85 | -2.9 | -41 | -43 | -6.6 | -176 |
| Finland total | 3,938 | 3,813 | 3.3 | 1,977 | 2,016 | -2.0 | 7,844 |
| Other countries total* | 840 | 762 | 10.3 | 483 | 456 | 6.1 | 1,616 |
| Group total | 4,778 | 4,575 | 4.4 | 2,460 | 2,472 | -0.5 | 9,460 |
* Net sales in countries other than Finland.
(..) Change over 100%
| Operating profit by segment ( million) | 1-6/ 2012 | 1-6/ 2011 | Change | 4-6/ 2012 | 4-6/ 2011 | Change | 1-12/ 2011 |
| Food trade | 76.5 | 88.0 | -11.5 | 38.9 | 45.9 | -7.1 | 173.7 |
| Home and speciality goods trade | -13.5 | -4.6 | -8.9 | -0.6 | 2.8 | -3.4 | 37.0 |
| Building and home improvement trade | 4.7 | 9.8 | -5.1 | 13.6 | 18.8 | -5.2 | 26.3 |
| Car and machinery trade | 25.9 | 32.0 | -6.1 | 10.3 | 19.7 | -9.4 | 51.9 |
| Common operations and eliminations | -8.3 | -5.5 | -2.8 | -3.2 | -3.3 | 0.1 | -8.3 |
| Group total | 85.3 | 119.6 | -34.3 | 59.0 | 83.9 | -24.9 | 280.6 |
| Operating profit excl. non-recurring items by segment ( million) | 1-6/ 2012 | 1-6/ 2011 | Change | 4-6/ 2012 | 4-6/ 2011 | Change | 1-12/ 2011 |
| Food trade | 73.8 | 87.2 | -13.4 | 38.9 | 45.8 | -7.0 | 172.2 |
| Home and speciality goods trade | -13.5 | -5.0 | -8.5 | -0.6 | 2.4 | -3.1 | 36.6 |
| Building and home improvement trade | 6.4 | 9.8 | -3.4 | 15.3 | 18.8 | -3.5 | 26.6 |
| Car and machinery trade | 25.9 | 31.8 | -5.9 | 10.3 | 19.6 | -9.3 | 51.8 |
| Common operations and eliminations | -8.3 | -5.5 | -2.8 | -3.2 | -3.3 | 0.1 | -8.3 |
| Group total | 84.3 | 118.3 | -34.0 | 60.7 | 83.3 | -22.7 | 278.9 |
| Operating margin excl. non-recurring items by segment | 1-6/ 2012 | 1-6/ 2011 | Change, pp | 4-6/ 2012 | 4-6/ 2011 | Change, pp | 1-12/ 2011 | Moving 12 mo 6/2012 |
| Food trade | 3.5 | 4.3 | -0.8 | 3.6 | 4.3 | -0.7 | 4.1 | 3.7 |
| Home and speciality goods trade | -1.9 | -0.7 | -1.1 | -0.2 | 0.7 | -0.9 | 2.3 | 1.8 |
| Building and home improvement trade | 0.5 | 0.7 | -0.3 | 2.0 | 2.5 | -0.5 | 1.0 | 0.8 |
| Car and machinery trade | 4.1 | 5.1 | -1.0 | 3.8 | 5.7 | -2.0 | 4.4 | 3.9 |
| Group total | 1.8 | 2.6 | -0.8 | 2.5 | 3.4 | -0.9 | 2.9 | 2.5 |
| Capital employed by segment, cumulative average ( million) | 1-6/ 2012 | 1-6/ 2011 | Change | 4-6/ 2012 | 4-6/ 2011 | Change | 1-12/ 2011 |
| Food trade | 724 | 566 | 158 | 745 | 572 | 173 | 601 |
| Home and speciality goods trade | 502 | 420 | 82 | 525 | 431 | 94 | 437 |
| Building and home improvement trade | 767 | 685 | 81 | 781 | 712 | 70 | 696 |
| Car and machinery trade | 195 | 148 | 47 | 192 | 149 | 43 | 158 |
| Common operations and eliminations | 315 | 223 | 92 | 321 | 229 | 92 | 236 |
| Group total | 2,503 | 2,042 | 460 | 2,564 | 2,092 | 471 | 2,129 |
| Return on capital employed excl. non- recurring items by segment, % | 1-6/ 2012 | 1-6/ 2011 | Change, pp | 4-6/ 2012 | 4-6/ 2011 | Change, pp | 1-12/ 2011 | Moving 12 mo 6/2012 |
| Food trade | 20.4 | 30.8 | -10.4 | 20.9 | 32.1 | -11.2 | 28.6 | 23.3 |
| Home and speciality goods trade | -5.4 | -2.4 | -3.0 | -0.5 | 2.3 | -2.7 | 8.4 | 5.9 |
| Building and home improvement trade | 1.7 | 2.8 | -1.2 | 7.9 | 10.6 | -2.7 | 3.8 | 3.1 |
| Car and machinery trade | 26.5 | 43.0 | -16.5 | 21.5 | 52.5 | -30.9 | 32.8 | 25.7 |
| Group total | 6.7 | 11.6 | -4.8 | 9.5 | 15.9 | -6.5 | 13.1 | 10.4 |
| Capital expenditure by segment ( million) | 1-6/ 2012 | 1-6/ 2011 | Change | 4-6/ 2012 | 4-6/ 2011 | Change | 1-12/ 2011 |
| Food trade | 96 | 94 | 1 | 36 | 64 | -28 | 221 |
| Home and speciality goods trade | 29 | 18 | 11 | 11 | 10 | 1 | 62 |
| Building and home improvement trade | 26 | 66 | -40 | 14 | 47 | -33 | 110 |
| Car and machinery trade | 19 | 14 | 5 | 6 | 8 | -2 | 30 |
| Common operations and eliminations | 2 | 2 | 0 | 1 | 2 | -1 | 2 |
| Group total | 172 | 195 | -23 | 68 | 131 | -63 | 425 |
Segment information by quarter
| Net sales by segment ( million) | 1-3/ 2011 | 4-6/ 2011 | 7-9/ 2011 | 10-12/ 2011 | 1-3/ 2012 | 4-6/ 2012 |
| Food trade | 948 | 1,077 | 1,049 | 1,108 | 1,010 | 1,091 |
| Home and speciality goods trade | 348 | 339 | 376 | 501 | 369 | 352 |
| Building and home improvement trade | 570 | 757 | 731 | 657 | 629 | 782 |
| Car and machinery trade | 279 | 342 | 290 | 263 | 353 | 274 |
| Common operations and eliminations | -42 | -43 | -42 | -48 | -42 | -41 |
| Group total | 2,103 | 2,472 | 2,404 | 2,481 | 2,318 | 2,460 |
| Operating profit by segment ( million) | 1-3/ 2011 | 4-6/ 2011 | 7-9/ 2011 | 10-12/ 2011 | 1-3/ 2012 | 4-6/ 2012 |
| Food trade | 42.1 | 45.9 | 45.7 | 40.0 | 37.6 | 38.9 |
| Home and speciality goods trade | -7.4 | 2.8 | 8.7 | 32.9 | -12.9 | -0.6 |
| Building and home improvement trade | -9.1 | 18.8 | 21.0 | -4.5 | -9.0 | 13.6 |
| Car and machinery trade | 12.2 | 19.7 | 13.0 | 7.0 | 15.6 | 10.3 |
| Common operations and eliminations | -2.2 | -3.3 | -0.2 | -2.6 | -5.1 | -3.2 |
| Group total | 35.7 | 83.9 | 88.2 | 72.8 | 26.3 | 59.0 |
| Operating profit excl. non-recurring items by segment ( million) | 1-3/ 2011 | 4-6/ 2011 | 7-9/ 2011 | 10-12/ 2011 | 1-3/ 2012 | 4-6/ 2012 |
| Food trade | 41.4 | 45.8 | 46.4 | 38.6 | 34.9 | 38.9 |
| Home and speciality goods trade | -7.4 | 2.4 | 8.7 | 32.9 | -12.9 | -0.6 |
| Building and home improvement trade | -9.1 | 18.8 | 21.3 | -4.4 | -9.0 | 15.3 |
| Car and machinery trade | 12.2 | 19.6 | 13.0 | 7.0 | 15.6 | 10.3 |
| Common operations and eliminations | -2.2 | -3.3 | -0.2 | -2.6 | -5.1 | -3.2 |
| Group total | 34.9 | 83.3 | 89.2 | 71.5 | 23.6 | 60.7 |
| Operating margin excl. non-recurring items by segment | 1-3/ 2011 | 4-6/ 2011 | 7-9/ 2011 | 10-12/ 2011 | 1-3/ 2012 | 4-6/ 2012 |
| Food trade | 4.4 | 4.3 | 4.4 | 3.5 | 3.5 | 3.6 |
| Home and speciality goods trade | -2.1 | 0.7 | 2.3 | 6.6 | -3.5 | -0.2 |
| Building and home improvement trade | -1.6 | 2.5 | 2.9 | -0.7 | -1.4 | 2.0 |
| Car and machinery trade | 4.4 | 5.7 | 4.5 | 2.6 | 4.4 | 3.8 |
| Group total | 1.7 | 3.4 | 3.7 | 2.9 | 1.0 | 2.5 |
Personnel, average and at 30 June
| Personnel average by segment | 1-6/2012 | 1-6/2011 | Change |
| Food trade | 2,773 | 2,730 | 64 |
| Home and speciality goods trade | 6,095 | 5,542 | 553 |
| Building and home improvement trade | 9,018 | 8,765 | 232 |
| Car and machinery trade | 1,245 | 1,192 | 53 |
| Common operations | 444 | 415 | 29 |
| Group total | 19,574 | 18,644 | 930 |
| Personnel at 30 June* by segment | 2012 | 2011 | Change |
| Food trade | 3,333 | 3,192 | 163 |
| Home and speciality goods trade | 8,894 | 8,128 | 766 |
| Building and home improvement trade | 10,323 | 9,976 | 325 |
| Car and machinery trade | 1,373 | 1,308 | 65 |
| Common operations | 538 | 480 | 58 |
| Group total | 24,461 | 23,084 | 1,377 |
* total number incl. part-time employees
| Group's commitments ( million) | |||
| 30.6.2012 | 30.6.2011 | Change,% | |
| Own commitments | 180 | 198 | -9.1 |
| For shareholders | 0 | 0 | (..) |
| For others | 8 | 7 | 2.1 |
| Lease liabilities for machinery and equipment | 27 | 23 | 14.1 |
| Lease liabilities for real estate | 2,239 | 2,278 | -1.7 |
| Own commitments do not include lease liabilities | |||
| Liabilities arising from | |||
| derivative instruments | |||
| Fair value | |||
| Values of underlying instruments at 30 June | 30.6.2012 | 30.6.2011 | 30.6.2012 |
| Interest rate derivatives | |||
| Interest rate swaps | 205 | 205 | 3.31 |
| Currency derivatives | |||
| Forward and future contracts | 355 | 216 | 2.12 |
| Option agreements | 13 | 0 | 0.04 |
| Currency swaps | 100 | 100 | -5.10 |
| Commodity derivatives | |||
| Electricity derivatives | 35 | 48 | 4.68 |
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, excl. non-recurring items, %, moving 12 mo | Operating profit for prior 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 excl. non- recurring items*, % | Operating profit excl. non-recurring 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- recurring items, %, moving 12 months | Operating profit excl. non-recurring items for prior 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 |
| Return on equity, %, moving 12 months | (Profit/loss for prior 12 months before tax - income tax for prior 12 months) x 100 / Shareholders' equity |
| Return on equity excl. non-recurring items*, % | (Profit/loss adjusted for non-recurring items before tax-income tax adjusted for the tax effect of non- recurring items) x 100 / Shareholders' equity |
| Return on equity excl. non- recurring items, %, moving 12 months | (Profit/loss for prior 12 months adjusted for non- recurring items before tax - income tax for prior 12 months adjusted for the tax effect of non-recurring items) x 100 / Shareholders' equity |
| Equity ratio, % | Shareholders' equity x 100 / (Balance sheet total - prepayments received) |
| Earnings/share, diluted | (Profit/loss - non-controlling interests) / Average number of shares adjusted for the dilutive effect of options |
| Earnings/share, basic | (Profit/loss - non-controlling interests) / Average number of shares |
| Earnings/share excl. non- recurring items, basic | (Profit/loss adjusted for non-recurring items - non- controlling interests)/Average number of shares |
| Equity/share | Equity attributable to equity holders of the parent / Basic number of shares at the end of the reporting period |
| Gearing, % | Interest-bearing net liabilities x 100 / Shareholders' equity |
| Interest-bearing net debt | Interest-bearing liabilities - money market investments - cash and cash equivalents |
* Indicators for return on capital have been annualised.
K-Group's retail and B2B sales, VAT 0% (preliminary data):
| 1.1.-30.6.2012 | 1.4.-30.6.2012 | |||
| K-Group's retail and B2B sales | million | Change, % | million | Change, % |
| K-Group's food trade | ||||
| K-food stores, Finland | 2,317 | 4.6 | 1,200 | 2.8 |
| Kespro | 376 | 6.3 | 197 | 2.7 |
| Food trade total | 2,693 | 4.8 | 1,397 | 2.8 |
| K-Group's home and speciality goods trade | ||||
| Home and speciality goods stores, Finland | 780 | 3.0 | 379 | 1.5 |
| Home and speciality goods stores, Baltic countries | 22 | (..) | 10 | (..) |
| Home and speciality goods trade total | 802 | 4.9 | 389 | 3.1 |
| K-Group's building and home improvement trade | ||||
| K-rauta and Rautia | 511 | 3.2 | 324 | 1.1 |
| Rautakesko B2B Service | 105 | 2.1 | 57 | -7.0 |
| K-maatalous | 221 | 10.5 | 132 | 9.5 |
| Finland total | 837 | 4.9 | 513 | 2.1 |
| Building and home improvement stores, other Nordic countries | 574 | 8.2 | 331 | 4.1 |
| Building and home improvement stores, Baltic countries | 169 | 7.2 | 98 | 2.8 |
| Building and home improvement stores, other countries | 166 | 8.9 | 98 | 7.3 |
| Building and home improvement trade total | 1,746 | 6.6 | 1,039 | 3.3 |
| K-Group's car and machinery trade | ||||
| VV-Autotalot | 225 | 7.5 | 87 | -22.1 |
| VV-Auto, import | 240 | -3.6 | 81 | -33.8 |
| Konekesko, Finland | 119 | -3.1 | 70 | -6.0 |
| Finland total | 584 | 0.5 | 238 | -22.9 |
| Konekesko, Baltic countries | 58 | 7.7 | 41 | 0.4 |
| Car and machinery trade total | 642 | 1.1 | 279 | -20.1 |
| Finland total | 4,893 | 4.0 | 2,527 | -0.6 |
| Other countries total | 990 | 9.7 | 577 | 5.2 |
| Retail and B2B sales total | 5,883 | 4.9 | 3,104 | 0.4 |
(..) Change over 100%
