« Previous | Next »

NOTE 2

Segment information

The Group’s reportable segments are composed of the Group’s divisions, namely the food trade, the home and speciality goods trade, the building and home improvement trade, and the car and machinery trade.

Segment information is reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, responsible for allocating resources to the operating segments, has been identified as the Corporate Management Board. The reportable operating segments derive their net sales from the food trade, the home and speciality goods trade, the building and home improvement trade, and the car and machinery trade. Sales between segments are charged at prevailing market rates.

The Corporate Management Board assesses the performance of the segments based on operating profit, operating profit adjusted for non-recurring items, and return on capital employed. Exceptional transactions outside ordinary course of business are treated as non-recurring items and allocated to segments. The Group identifies gains and losses on the disposal of real estate, shares and operating activities, impairments and costs of discontinuing significant operations as non-recurring items. Gains on disposal are presented within ‘other income’ in the income statement, and losses on disposal within ‘other operating costs’. In other respects, the Management Board’s performance monitoring is in full compliance with IFRS reporting. Finance income and costs are not allocated to segments, as the Group’s cash and cash equivalents are managed by Group Treasury. Changes in the fair values of currency forwards entered into inside the Group are reported as part of other operating income and expenses to the extent that they hedge the segments’ operational foreign currency risk.

The assets and liabilities of a segment’s capital employed consist of items which can be justifiably allocated to segments. The assets of capital employed comprise property, plant and equipment and intangible fixed assets, investments in associates, pension assets, inventories, trade receivables and other non-interest-bearing receivables, external interest-bearing receivables and available-for-sale assets. The liabilities of capital employed consist of trade payables, other non-interest-bearing liabilities and provisions. The Group’s real estate assets and the revenue and costs derived from them have been allocated to the segments.

Capital employed does not include deferred tax assets and liabilities, financial assets at fair value through profit or loss, except for fair value measurements of forward foreign exchange contracts recognised in the balance sheet, available-for-sale financial assets, cash and cash equivalents, or interest-bearing liabilities.

THE FOOD TRADE comprises the food business based on Kesko Food’s K-retailer business model and Kespro’s grocery wholesaling. Kesko Food is active in the grocery trade in Finland. The operations of the nearly 1,000 K-food stores are based on the K-retailer business model. These stores form the K-citymarket, K-supermarket, K-market and K-extra food retail chains. Kesko Food manages the operations of the chains made up by the stores. Chain operations ensure higher competitiveness and a strong operational base for K-retailers in terms of sourcing and purchasing, building selections, marketing and price competition. Kesko Food’s subsidiary Kespro Ltd engages in wholesaling in the Finnish HoReCa business.

THE HOME AND SPECIALITY GOODS TRADE comprises Anttila, K-citymarket’s home and speciality goods trade, and the other home and speciality goods companies, namely Intersport, Indoor, Musta Pörssi and Kenkäkesko. Anttila retails home and speciality goods at Anttila department stores, Kodin Ykkönen department stores for home goods and interior decoration, and through NetAnttila focusing on distance sales. K-citymarket, home and speciality goods trade is responsible for the home and speciality goods and the household goods trade of the K-citymarket chain’s department stores. Intersport is active in the sports equipment trade in Finland and Russia and its retail store chains are Intersport, Budget Sport and Kesport. Indoor is a furniture and interior decoration retail company operating in Finland and the Baltic countries. Its store chains are Asko and Sotka. Musta Pörssi offers home technology products and services through the Musta Pörssi store chain and the Konebox.fi online store. Kenkäkesko is active in the shoe trade and its retail store chains are Kookenkä, K-kenkä and Andiamo.

THE BUILDING AND HOME IMPROVEMENT TRADE comprises Rautakesko’s building and home improvement trade and agricultural trade in Finland, Sweden, Norway, the Baltic countries, Russia and Belarus. Rautakesko’s operations are based on strong chain concepts, efficient sourcing, and best practices duplicated internationally. Rautakesko is responsible for the chains’ concepts, marketing, and sourcing and logistics services, store site network and retailer resources in Finland. Rautakesko itself is a retail operator in Sweden, Norway, the Baltic countries, Russia and Belarus. The retail store chains are K-rauta, Rautia, K-Maatalous, Byggmakker (Norway), Senukai (Lithuania) and OMA (Belarus). Rautakesko’s building and home improvement stores serve both consumer and professional customers.

THE CAR AND MACHINERY TRADE comprises the business operations of VV-Auto and Konekesko. VV-Auto imports and markets Volkswagen, Audi and Seat passenger cars and Volkswagen commercial vehicles in Finland. VV-Auto is also engaged in car retailing and provides after-sales services at its own retail outlets. Konekesko is a service company specialising in the import and sales of construction, environmental and agricultural machinery, trucks and buses, and recreational machinery. Konekesko operates in Finland, the Baltic countries and Russia.

COMMON OPERATIONS comprise Group support functions.

Segment information 2011
               

Profit

              
€ million Food trade Home and
speciality
goods trade		 Building
and home
improvement
trade		 Car and
machinery trade		 Common
operations		 Eliminations Total
               
Segment net sales 4,181.9 1,564.3 2,715.7 1,174.1 146.1   9,782.2
of which inter-segment sales -168.3 -19.7 -11.6 -1.1 -121.0   -321.7
Net sales from external customers 4,013.5 1,544.6 2,704.1 1,173.1 25.1   9,460.4
               
Other segment income 587.9 77.1 112.4 3.1 10.1   790.7
of which inter-segment income -75.2 -6.9 -3.9 -0.3 0.5   -85.8
Other operating income from external customers 512.7 70.2 108.5 2.9 10.6   704.9
               
Depreciation and amortisation -44.6 -24.0 -44.0 -8.7 -3.8 0.3 -124.8
Operating profit 173.7 37.0 26.3 51.9 -8.3   280.6
               
Non-recurring items 1.5 0.4 -0.3 0.2     1.7
Operating profit excluding non-recurring items 172.2 36.6 26.6 51.8 -8.3   278.9
               
Finance income and costs             0.8
Share of profit/loss of associates             0.7
Profit before tax             282.1
               

Assets and liabilities

              
Tangible and intangible assets 655.0 281.7 551.3 90.0 76.4 25.5 1,679.9
Investments in associates and other investments 2.3 0.1 0.2   60.8 5.2 68.6
Pension assets 43.4 50.7 9.6 4.5 92.0   200.1
Inventories 104.9 263.2 277.5 223.1   -1.1 867.5
Trade receivables 295.4 147.2 202.6 67.8 15.4 -28.1 700.3
Other non-interest-bearing receivables 33.4 32.9 60.8 6.1 45.0 -14.6 163.5
Interest-bearing receivables from external customers 93.2 0.2 0.5   41.6 -3.1 132.6
Assets held for sale 6.9   0.2   0.9   8.0
Assets included in capital employed 1,234.4 775.9 1,102.7 391.6 332.2 -16.2 3,820.6
               
Unallocated items              
Deferred tax assets             2.0
Financial assets at fair value through profit or loss             97.8
Available-for-sale financial assets             185.5
Cash and cash equivalents             84.0
Total assets 1,234.4 775.9 1,102.7 391.6 332.2 -16.2 4,189.9
               
Trade payables 422.2 146.8 263.0 69.4 5.5 -26.0 881.0
Other non-interest-bearing liabilities 165.7 153.0 100.1 94.0 50.8 -13.0 550.7
Provisions 9.4 3.7 1.9 18.1 1.1   34.2
Liabilities included in capital employed 597.3 303.6 364.9 181.5 57.4 -39.0 1,465.8
               
Unallocated items              
Interest-bearing liabilities             400.0
Deferred tax liabilities             91.1
Total liabilities 597.3 303.6 364.9 181.5 57.4 -39.0 1,956.9
               
Total capital employed at 31 Dec. 637.0 472.3 737.8 210.1 274.8 22.8 2,354.8
Average capital employed 601.4 437.4 696.1 157.7 214.9 21.3 2,128.8
               
Return on capital employed
excl. non-recurring items, %		 28.6 8.4 3.8 32.8     13.1
               
Capital expenditure 221.5 61.8 109.8 29.9 3.2 -0.8 425.4
               
Number of personnel at 31 Dec. 2,984 8,765 9,895 1,250 481   23,375
Average number of personnel 2,706 5,754 8,874 1,206 420   18,960
 

Segment information 2010
               

Profit

              
Milj. € Food trade Home and
speciality
goods trade		 Building
and home
improvement
trade		 Car and
machinery trade		 Common
operations		 Eliminations Total
               
Segment net sales 3,896.3 1,568.5 2,519.4 954.8 136.5   9,075.6
of which inter-segment sales -161.7 -23.4 -0.5 -0.3 -112.9   -298.8
Net sales from external customers 3,734.7 1,545.1 2,519.0 954.5 23.6   8,776.8
               
Other segment income 544.3 116.4 101.5 2.3 16.6   781.1
of which inter-segment income -73.7 -6.2 -1.4 -0.1 -0.8   -82.3
Other operating income from external customers 470.6 110.1 100.1 2.2 15.8   698.8
               
Depreciation and amortisation -42.6 -22.9 -40.7 -8.2 -2.3 0.3 -116.3
Impairment -4.6       0.0   -4.6
Operating profit 158.4 103.4 23.9 33.9 -12.9 0.1 306.7
               
Non-recurring items -1.7 37.4 -0.1 0.8 2.3   38.6
Operating profit excluding non-recurring items 160.1 66.0 24.0 33.1 -15.2 0.1 268.1
               
Finance income and costs             6.0
Share of profit/loss of associates             -0.3
Profit before tax             312.4
               

Assets and liabilities

              
Tangible and intangible assets 526.2 248.6 488.5 73.4 78.7 25.3 1,440.8
Investments in associates and other investments 1.3 0.1 0.2 0.0 60.1 -0.6 61.1
Pension assets 73.5 66.8 16.5 10.9 18.0   185.8
Inventories 107.6 230.7 254.4 165.0   -0.9 756.9
Trade receivables 265.0 132.6 188.3 52.3 14.1 -32.6 619.7
Other non-interest-bearing receivables 56.1 27.5 56.0 5.3 44.1 -18.7 170.3
Interest-bearing receivables from external customers 78.7 1.9 1.0 0.4 2.0 -2.8 81.1
Assets held for sale     0.4   0.9   1.3
Assets included in capital employed 1,108.4 708.1 1,005.3 307.4 217.9 -30.3 3,317.0
               
Unallocated items              
Deferred tax assets             2.9
Financial assets at fair value through profit or loss             242.1
Available-for-sale financial assets             549.0
Cash and cash equivalents             56.1
Total assets 1,108.4 708.1 1,005.3 307.4 217.9 -30.3 4,167.1
               
Trade payables 393.5 152.2 264.0 51.6 4.2 -31.8 833.5
Other non-interest-bearing liabilities 163.6 138.9 101.2 78.1 55.9 -19.3 518.4
Provisions 12.5 9.1 2.0 14.5 2.7   40.9
Liabilities included in capital employed 569.6 300.2 367.2 144.2 62.8 -51.1 1,392.9
               
Unallocated items              
Interest-bearing liabilities             476.8
Deferred tax liabilities             87.1
Total liabilities 569.6 300.2 367.2 144.2 62.8 -51.1 1,956.8
               
Total capital employed at 31 Dec. 538.9 407.9 638.1 163.2 155.1 20.8 1,924.1
Average capital employed 590.2 431.3 626.9 168.3 80.4 20.7 1,917.8
               
Return on capital employed
excl. non-recurring items, %		 27.1 15.3 3.8 19.6     14.0
               
Capital expenditure 117.2 45.3 78.2 17.8 67.0 -0.2 325.3
               
Number of personnel at 31 Dec. 3,106 7,887 9,493 1,205 433   22,124
Average number of personnel 2,881 5,418 8,379 1,138 399   18,215

 

Group-wide information

The Group operates in the Nordic countries, the Baltic countries, Russia and Belarus. The food trade and the home and speciality goods trade mainly take place in Finland, the car and machinery trade in Finland and the Baltic countries, and the building and home improvement trade in Finland, Sweden, Norway the Baltic countries, Russia and Belarus.

Net sales, assets, capital expenditure and personnel are disclosed by location.

2011

            
€ million Finland Other Nordic countries Baltic
countries		 Russia and Belarus Eliminations Total
Net sales 7,861.3 806.7 487.1 324.9 -19.6 9,460.4
Assets 3,009.4 310.3 178.7 270.8 51.5 3,820.6
Capital expenditure 290.6 22.4 2.2 110.2   425.4
Average number of personnel 1 Jan.–31 Dec. 10,056 1,602 4,174 3,128   18,960
             

2010

            
€ million Finland Other Nordic countries Baltic
countries		 Russia and Belarus Eliminations Total
Net sales 7,323.0 755.1 437.8 277.7 -16.8 8,776.8
Assets 2,658.2 290.7 156.3 171.3 40.5 3,317.0
Capital expenditure 283.0 19.1 3.2 19.9 0.0 325.3
Average number of personnel 1 Jan.–31 Dec. 9,914 1,544 4,015 2,741   18,215


Net sales nearly completely consist of the sales of goods. The sales of services are immaterial.

There was no income from transactions with a single customer amounting more than 10% of the Group’s total income.