KESKO CORPORATION HALF YEAR FINANCIAL REPORT 27.07.2017 AT 09.00
Kesko's half year financial report for the period 1 January to 30 June 2017: Kesko's profitability improved
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
| 1-6/ 2017 | 1-6/ 2016 | 4-6/ 2017 | 4-6/ 2016 | ||||
| Net sales, € million | 5,411 | 4,624 | 2,814 | 2,610 | |||
| Operating profit, comparable, € million | 113.2 | 111.4 | 84.6 | 79.1 | |||
| Operating profit, € million | 169.1 | 101.6 | 152.5 | 68.0 | |||
| Profit before tax, comparable, € million | 116.2 | 113.7 | 82.6 | 79.2 | |||
| Profit before tax, € million | 172.1 | 103.8 | 150.5 | 68.1 | |||
| Capital expenditure, € million | 170.0 | 564.1 | 91.7 | 512.7 | |||
| Earnings per share, €, diluted | 1.48 | 0.76 | 1.29 | 0.49 | |||
| Earnings per share, comparable, €, basic | 0.90 | 0.85 | 0.61 | 0.59 | |||
| 30.6.2017 | 30.6.2016 | ||||||
| Equity ratio, % | 47.0 | 44.8 | |||||
| Equity per share, € | 20.18 | 20.31 | |||||
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."
FINANCIAL PERFORMANCE
Net sales and profit for January-June 2017
The Group's net sales for January-June 2017 were €5,411 million, which is 17.0% more than in the corresponding period of the previous year (€4,624 million). Net sales increased significantly due to the acquisitions completed during 2016. The net sales growth in comparable terms, excluding acquisitions and divestments in local currencies, was 1.2%.
The 5.0% growth in the grocery trade net sales was affected by the acquisition of Suomen Lähikauppa and the divestment of Russian business operations. Net sales increased by 1.2%, excluding the acquisition of Suomen Lähikauppa, which took place in April 2016, and the divestment of Russian business operations in November 2016. In the building and technical trade, net sales grew by 35.8%. In comparable terms, net sales in local currencies, excluding the divestment of the K-maatalous business (sold on June 1, 2017) and the acquisition of Onninen (on 1 June 2016), increased by 0.6%. Net sales in the car trade increased by 9.3%, and excluding the impact of the acquisition of AutoCarrera in December 2016, by 3.3%. The Group's net sales increased by 13.6% in Finland and by 1.5% in comparable terms. In other countries, net sales grew by 32.1% and in comparable terms net sales were at the previous year's level. International operations accounted for 20.9% (18.5%) of the Group's net sales.
During the reporting period, the Kesko Group divested the K-maatalous business on June 1, 2017 and on 30 June 2017, the Asko and Sotka furniture trade, the Yamarin boat business and Yamaha representation.
| 1-6/2017 | Net sales, € million | Change, % | Change in local currency excl. acquisi- tions and divest- ments, % | Operating profit, compa- rable, € million | Change, € million |
| Grocery trade | 2,570 | +5.0 | +1.2 | 76.9 | +2.1 |
| Building and technical trade | 2,364 | +35.8 | +0.6 | 38.5 | +0.3 |
| Car trade | 479 | +9.3 | +3.3 | 17.6 | +2.4 |
| Common functions and eliminations | -2 | -3.7 | - | -19.8 | -2.9 |
| Total | 5,411 | +17.0 | +1.2 | 113.2 | +1.8 |
The Group's comparable operating profit for January-June was €113.2 million (€111.4 million). In the grocery trade, profitability improved despite the significant costs of revamping Suomen Lähikauppa stores. In the building and technical trade, the operating profit was at the previous year's level. The operating profit increased due to the acquisition of Onninen, but the speciality goods trade and Kesko Senukai's operating profits were lower than in the previous year. In the car trade, operating profit grew. Profitability improved due to good growth in sales and the acquisition of AutoCarrera's Porsche business.
Operating profit was €169.1 million (€101.6 million). Items affecting comparability totalled €55.8 million (€-9.8 million). The most significant items affecting comparability were the €50.2 million gain on the divestment of properties in the Baltics, the €20.3 million expenses related to the conversion of the Suomen Lähikauppa chains, the gain on the divestment of the K-maatalous business of €12.2 million as well as the gain on the divestment of the Asko and Sotka furniture trade amounting to €19.0 million.
| Items affecting comparability, € million | 1-6/2017 | 1-6/2016 |
| Operating profit, comparable | 113.2 | 111.4 |
| Items affecting comparability | ||
| +gains on disposal | +82.1 | +4.2 |
| -losses on disposal | -1.6 | -0.3 |
| -impairment charges related to properties | - | -7.9 |
| +/-structural arrangements | -22.5 | -9.1 |
| +/-others | -2.2 | +3.3 |
| Items affecting comparability, total | 55.8 | -9.8 |
| Operating profit | 169.1 | 101.6 |
The Group's profit before tax for January-June was €172.1 million (€103.8 million). The Group's earnings per share were €1.48 (€0.76). The Group's equity per share was €20.18 (€20.31).
K Group's (Kesko and K-chain stores) retail and B2B sales (VAT 0%) for January-June were €6,325 million, which is a growth of 1.5% compared to the previous year (pro forma). The K-Plussa customer loyalty programme added 34,016 new households between January and June 2017. The number of K-Plussa households stood at 2.3 million at the end of June and there were 3.6 million K-Plussa card-holders in total.
Net sales and profit for April-June 2017
The Group's net sales for April-June 2017 were €2,814 million, which is 7.8% more than in the corresponding period of the previous year (€2,610 million). Net sales increased significantly due to acquisitions made during 2016. In comparable terms growth in net sales, excluding acquisitions and divestments in local currencies, was 0.4%.
In the grocery trade, net sales decreased by 1.9%, and it was affected by the transfer of Suomen Lähikauppa stores to retailers and store closures, as well as the divestment of Russian business operations on 30 November 2016. In comparable terms, net sales in the grocery trade grew by 2.1%. In the building and technical trade, net sales grew by 19.8%, and it was positively impacted by the acquisition of Onninen on 1 June 2016. In comparable terms, net sales in local currencies, excluding Onninen as well as the K-maatalous business divested on 1 June 2017, decreased by 2.8%. The development of net sales was affected by the number of delivery days, which were three fewer than in the previous year, while B2C sales in Northern Europe were negatively affected by cold weather. In the car trade, net sales increased by 9.7%, and without the impact of AutoCarrera, acquired in December 2016, the net sales increase was 3.3%. The Group's net sales grew by 5.5% in Finland and in comparable terms by 1.2%. In other countries, net sales grew by 16.8% but fell by 2.7% in comparable terms. International operations accounted for 22.2% (20.4%) of the Group's net sales.
| 4-6/2017 | Net sales, € million | Change, % | Change in local currency excl. acquisi- tions and divest- ments, % | Operating profit, compa- rable € million | Change, € million |
| Grocery trade | 1,327 | -1.9 | +2.1 | 50.5 | +6.9 |
| Building and technical trade | 1,253 | +19.8 | -2.8 | 35.5 | -2.4 |
| Car trade | 234 | +9.7 | +3.3 | 7.6 | +1.8 |
| Common functions and eliminations | 0 | -86.5 | - | -9.0 | -0.8 |
| Total | 2,814 | +7.8 | +0.4 | 84.6 | +5.4 |
The Group's comparable operating profit was €84.6 million for April-June (€79.1 million). Profitability in the grocery trade improved and was driven by the synergy benefits gained from the acquisition of Suomen Lähikauppa, good sales performance, especially by K-Citymarket and the renewed K-Markets, as well as the divestment of the loss-making Russian business operations that were sold in the previous year. The renewal of Suomen Lähikauppa stores and the changes in the store site network were completed during the quarter. In the building and technical trade, Onninen's operating profit grew, but the operating profits of both the speciality goods trade and Kesko Senukai were lower than in the previous year. The profit development of the speciality goods trade was partly affected by the sale of the K-maatalous business on 1 June 2017. Comparable operating profit in the car trade remained on a good level. Profitability improved due to good growth in sales and the acquisition of AutoCarrera's Porsche business.
Operating profit was €152.5 million (€68.0 million). Items affecting comparability totalled €67.9 million (€-11.1 million). The most significant items affecting comparability were the €50.2 million gain on the divestment of properties in the Baltics, the €10.9 million expenses related to the conversion of Suomen Lähikauppa chains, the gain from the divestment of the K-maatalous business of €12.2 million as well as as the gain on the divestment of the Asko and Sotka furniture trade amounting to €19.0 million.
| Items affecting comparability, € million | 4-6/2017 | 4-6/2016 |
| Operating profit, comparable | 84.6 | 79.1 |
| Items affecting comparability | ||
| +gains on disposal | +81.8 | +2.9 |
| -losses on disposal | -1.2 | -0.3 |
| - impairment charges related to properties | - | -7.9 |
| +/-structural arrangements | -11.2 | -9.1 |
| +/-others | -1.4 | +3.3 |
| Items affecting comparability, total | +67.9 | -11.1 |
| Operating profit | 152.5 | 68.0 |
The Group's profit before taxes for April-June was €150.5 million (€68.1 million). Group earnings per share were €1.29 (€0.49).
The retail and B2B sales of K Group (Kesko's and the K-chain stores) (VAT 0%) for April-June were €3,373 million, which was down 0.3% compared to the previous year (pro forma).
Finance
Cash flow from operating activities for January-June was €83.8 million (€-17.8 million). Cash flow from investing activities was a positive of €63.2 million (€-529.0 million) due to the proceeds from divestments amounting to €192.4 million.
Liquid assets amounted to €367 million (€327 million) at the end of the period. Interest-bearing liabilities at the end of June were €561 million (€657 million) and the interest-bearing net debt was €194 million (€330 million). The equity ratio at the end of the period was 47.0% (44.8%).
The Group's net finance income was €2.9 million (€4.3 million) for January-June. The financial items include dividend income and interest income on cooperative capital of €4.5 million, of which €2.3 million is interest income on cooperative capital from Suomen Luotto-osuuskunta.
Cash flow from operating activities for April-June was €141.1 million (€78.5 million). Cash flow from investing activities was a positive of €97.7 million (€-476.0 million) due to the proceeds from divestments amounting to €171.1 million.
The Group's net finance costs for April-June were €1.3 million (net finance income €1.7 million).
Taxes
The Group's taxes for January-June were €22.1 million (€21.4 million). The effective tax rate was 12.8% (20.6%). For April-June, the Group's taxes were €17.8 million (€14.3 million). The effective tax rate was 11.8% (21.1%). The Group's effective tax rate was lowered by the tax-exempt gains on the sale of properties and subsidiaries.
Capital expenditure
The Group's capital expenditure for January-June totalled €170.0 million (€564.1 million), representing 3.1% (12.2%) of net sales. Capital expenditure in store sites amounted to €117.1 million (€100.5 million), in IT €17.4 million (€8.9 million) and other capital expenditure €35.5 million (€23.6 million). In the previous year, acquisitions amounted to €431.0 million.
The Group's capital expenditure for April-June totalled €91.7 million (€512.7 million) or 3.3% (19.6%) of net sales. Capital expenditure in store sites was €63.4 million (€63.6 million), in IT €8.3 million (€6.2 million) and other capital expenditure €20.0 million (€14.7 million). In the previous year, acquisitions amounted to €428.1 million.
Personnel
For January-June, the average number of personnel in Kesko Group was 21,927 (20,595) converted into full time employees. The increase was due to the acquisitions of Suomen Lähikauppa and Onninen.
At the end of June 2017, the number of personnel stood at 27,826 (30,264), of whom 14,878 (16,239) were employed in Finland and 12,948 (14,025) outside Finland. The number of personnel in Suomen Lähikauppa was 2,426, in Onninen 3,106 and in AutoCarrera 40.
SEGMENTS
Seasonal nature of operations
The Group's operating activities are affected by seasonal fluctuations. The net sales and the 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. In terms of the level of operating profit, the second and third quarter are strongest, whereas the impact of the first quarter on the full year profit is smallest. The acquisitions of Suomen Lähikauppa and Onninen increase the seasonal fluctuations between quarters. The operating profit levels of Onninen and Suomen Lähikauppa are lowest for the first quarter.
Grocery trade
| 1-6/ 2017 | 1-6/ 2016 | 4-6/ 2017 | 4-6/ 2016 | |
| Net sales, € million | 2,570 | 2,447 | 1,327 | 1,353 |
| Operating profit, comparable, € million | 76.9 | 74.8 | 50.5 | 43.6 |
| Operating margin, comparable, % | 3.0 | 3.1 | 3.8 | 3.2 |
| Capital expenditure, € million | 97.6 | 139.3 | 44.3 | 104.6 |
| Net sales, € million | 1-6/2017 | Change, % | 4-6/2017 | Change, % |
| Sales to K-food stores | 1,587 | +2.4 | 841 | +4.7 |
| K-Citymarket, non-food | 258 | +0.8 | 132 | +1.9 |
| K-Market, own retail trade | 296 | +60.1 | 138 | -25.5 |
| Kespro | 393 | +3.2 | 202 | +1.5 |
| Others | 36 | -52.3 | 15 | -59.9 |
| Total | 2,570 | +5.0 | 1,327 | -1.9 |
January-June 2017
The net sales of the grocery trade in January-June amounted to €2,570 million (€2,447 million), representing a growth of 5.0%. The development of net sales was affected by the acquisition of Suomen Lähikauppa and the disposal of Russian business operations. In comparable terms the net sales, excluding Suomen Lähikauppa and Russian business operations, increased by 1.2%. K Group's grocery sales grew by 1.8% (incl. VAT) if the impact of the acquisition of Suomen Lähikauppa is excluded. K Group's grocery trade sales pro forma growth was 0.1% (incl. VAT), which was affected by the Suomen Lähikauppa store site network being smaller than the previous year. In the Finnish grocery market, retail prices are estimated to have changed by approximately -0.1% compared to the previous year (incl. VAT, Kesko's own estimate based on Consumer Price Index of Statistics Finland) and the total market (incl. VAT) is estimated to have increased by approximately 1.2% in January-June (Kesko's own estimate).
The acquisition of Suomen Lähikauppa was completed in April of the previous year and the conversion of Siwa and Valintatalot stores to K-Markets began in May 2016. By the end of May 2017, all Siwa and Valintatalo stores that continued operating (at 409 store locations) had been converted into K-stores (408 K-Market and 1 K-Supermarket). Of these, 99 stores had been transferred to retailers by the end of June. The transfer of the stores to retailers will be complete by the end of 2018.
The comparable operating profit for the grocery trade for January-June was €76.9 million. (€74.8 million). The profitability of the division remained on a good level. The effect of Suomen Lähikauppa on the comparable operating profit for January-June was €-3.4 million (April-June 2016 €-1.1 million), which was affected by the major restructuring of the store site network. The Russian business divested in November 2016 made a loss of €9.3 million in the comparison period. The grocery trade's operating profit was €56.6 million (€74.3 million). Items affecting comparability amounted to €-20.3 million (€-0.6 million), and they were mainly related to the €-20.3 million restructuring of Suomen Lähikauppa.
The capital expenditure in the grocery trade totalled €97.6 million for January-June (€139.3 million), of which the capital expenditure in store sites accounted for €87.0 million (€70.2 million).
April-June 2017
The net sales of the grocery trade amounted to €1,327 million for April-June (€1,353 million), a decrease of 1.9%, which was influenced by the changes in the Suomen Lähikauppa store site network and the transfer of stores to retailers. In addition, the development of net sales was affected by the divestment of Russian business operations in November 2016. In comparable terms, grocery trade net sales grew by 2.1%. K Group's grocery trade sales grew by 3.4% (incl. VAT) if the acquisition of Suomen Lähikauppa is excluded. K Group's grocery trade sales pro forma growth was 1.0% (incl. VAT). In the Finnish grocery market, retail prices are estimated to have changed by approximately -0.1% compared to the previous year.
The comparable operating profit of the grocery trade for April-June was €50.5 million (€43.6 million). Profitability remained on a good level and K-Citymarket, in particular, improved its profitability thanks to a good sales performance. The effect of Suomen Lähikauppa on the comparable operating profit for April-June was €+2.2 million (€-1.1 million) while the effect of the Russian business operations divested in November 2016 was €-4.3 million in the comparison period. The grocery trade's operating profit was €39.9 million (€44.1 million). Items affecting comparability were €-10.6 million. (€0.5 million) and they were mainly related to the restructuring of Suomen Lähikauppa, €-10.9 million.
Capital expenditure in the grocery trade totalled €44.3 million for April-June (€104.6 million), of which capital expenditure in store sites totalled €40.6 million (€37.3 million).
In the period of April-June, one new K-Citymarket and four K-Supermarkets (of which two are replacement new buildings) and four new K-Markets were opened. Renewals and extensions were made to a total of 73 stores, 27 of which became K-Markets after being Siwa and Valintatalo stores.
The most significant store sites under construction are a K-Citymarket (a replacement new building) and the Easton shopping centre in Helsinki. New K-Supermarkets are under construction in Tampere at Tesoma and Kaukajärvi, in Turku, in Espoo at Suurpelto and Espoonlahti, in Ilmajoki, in Helsinki at Kalasatama and Pasila, and in Oulu and Kauniainen.
| Number of stores at 30.6. | 2017 | 2016 |
| K-Citymarket | 81 | 81 |
| K-Supermarket | 230 | 223 |
| K-Market** | 825 | 1,018 |
| Neste K | 69 | 67 |
| K-ruoka, Russia | - | 9 |
| Others* | 91 | 98 |
* Including online stores
** The total number of Suomen Lähikauppa's stores was 408.
In addition, several K-food stores offer e-commerce services to their customers.
Building and technical trade
| 1-6/ 2017 | 1-6/ 2016 | 4-6/ 2017 | 4-6/ 2016 | |
| Net sales, € million | 2,364 | 1,741 | 1,253 | 1,046 |
| Operating profit, comparable, € million | 38.5 | 38.2 | 35.5 | 37.9 |
| Operating margin, comparable, % | 1.6 | 2.2 | 2.8 | 3.6 |
| Capital expenditure, € million | 48.8 | 412.9 | 35.2 | 404.7 |
| Net sales, € million | 1-6/ 2017 | Change, % | 4-6/ 2017 | Change, % |
| Building and home improvement trade, Finland | 457 | +4.7 | 238 | -1.3 |
| K-Rauta, Sweden | 104 | -7.1 | 60 | -9.9 |
| Byggmakker, Norway | 209 | +1.2 | 109 | -8.0 |
| K-Rauta, Russia | 90 | +15.8 | 51 | +12.2 |
| Kesko Senukai, the Baltics | 230 | +4.1 | 132 | +1.3 |
| OMA, Belarus | 59 | +27.3 | 34 | +24.5 |
| Onninen | 765 | - | 402 | - |
| Machinery trade | 140 | -5.3 | 86 | -10.3 |
| Sports trade, Finland | 80 | -3.6 | 34 | -6.8 |
| Others | 246 | -12.7 | 114 | -24.8 |
| Total | 2,364 | +35.8 | 1,253 | +19.8 |
January-June 2017
The net sales in the building and technical trade for January-June amounted to €2,364 million (€1,741 million), an increase of 35.8%. In comparable terms net sales in local currencies, excluding acquisitions and disposals, increased by 0.6%. During the reporting period, Kesko Group divested the K-maatalous business on 1 June 2017, and on 30 June 2017 the Asko and Sotka furniture trade and the Yamarin boat business and Yamaha representation.
Net sales in the building and technical trade in Finland for January-June were €1,235 million (€941 million), an increase of 31.3%. In comparable terms net sales increased by 1.4% in Finland. Net sales from foreign operations amounted to €1,129 million (€800 million) for January-June, an increase of 41.0%. Net sales of foreign operations in comparable terms remained at the previous year's level. In the building and technical trade, 47.7% (46.0%) of the net sales came from foreign operations.
Net sales for the building and home improvement trade for January-June totalled €1,144 million (€1,093 million), an increase of 4.7%. In local currencies, net sales grew by 2.4%. Net sales decreased in local currency in Norway by 1.3%, in Sweden by 4.1% and in Russia by 7.1%. Net sales growth strengthened in the building and home improvement trade especially in the B2B sector. The market share of K Group's building and technical trade is estimated to have strengthened in Finland. K Group's sales in the building and home improvement products trade in Finland increased by 3.2% and the total market (VAT 0%) is estimated to have increased by about 0.8% (Kesko's own estimate).
The net sales of the machinery trade for January-June amounted to €140 million (€148 million), a decrease of 5.3% from the previous year. Net sales in Finland were €75 million, down 14.8%. Net sales from foreign operations were €65 million, up 8.5%.
Net sales in the leisure trade amounted to €89 million (€99 million), down 3.7%, excluding the Russian Intersport business sold in July 2016.
Net sales for Asko and Sotka furniture trade, which were sold on 30 June, 2017, totalled €89 million (€87 million), an increase of 2.1%.
The K-maatalous business, sold on 1 June 2017, had net sales of €149 million (€176 million).
The comparable operating profit for the building and technical trade for January-June was €38.5 million (€38.2 million), increasing by €0.3 million when compared to the previous year. Profitability was improved due to Onninen's good profit performance and the divestment of Intersport Russia's business operations in July 2016. Onninen's comparable operating profit for January-June was €8.8 million (June 2016 €2.2 million). Profitability was weakened by Kesko Senukai's lower operating profit compared to the previous year, which was partly due to the renewal and expansion of the store site network in the Baltic countries and Belarus. The comparable operating profit of the building and technical trade, excluding the speciality goods business operations, was €28.7 million (€25.4 million). The comparable operating profit for the speciality goods trade was €9.8 million (€12.9 million), of which the share of the divested K-maatalous business and the Asko and Sotka furniture trade in June was €6.8 million.
The building and technical trade's operating profit was €116.5 million (€34.6 million). The most significant items affecting comparability were the €50.2 million gain from the divestment of properties in the Baltic countries, the €12.2 million gain from the divestment of the K-maatalous business and the €19.0 million gain on the divestment of Asko and Sotka furniture trade.
The capital expenditure of the building and technical trade in January-June totalled €48.8 million (€412.9 million), of which €29.6 million was related to capital expenditure in store sites (€29.7 million). The period in the previous year includes acquisitions amounting to €376.9 million.
April-June 2017
The net sales of the building and technical trade for April-June totalled €1,253 million (€1,046 million), an increase of 19.8%. In comparable terms net sales decreased by 2.8%. The development of net sales was affected by the number of delivery days, which were three fewer than in the previous year while B2C sales in northern Europe countries were negatively affected by cold weather.
Net sales for the building and technical trade in Finland amounted to €629 million (€541 million) an increase of 16.3%. In comparable terms, net sales decreased by 2.9% in Finland. Net sales for foreign operations in April-June were €623 million (€505 million), increasing by 23.5%. Net sales from foreign operations fell by 2.7% in comparable terms. A total of 49.8% (48.3%) of the net sales in the building and technical trade came from foreign operations.
Net sales in the building and home improvement trade were €622 million (€626 million) for April-June, a decrease of 0.7%. In comparable terms net sales decreased by 2.0%. Net sales in local currency decreased in Norway by 7.8%, in Sweden by 6.3% and in Russia by 6.1%. K Group's sales in the building and home improvement trade in Finland decreased by 0.7% and the overall market (VAT 0%) is estimated to have fallen by about 4.3% (Kesko's own estimate).
The net sales for machinery trade for April-June totalled €86 million (€96 million), down by 10.3% on the previous year. Net sales in Finland amounted to €40 million, a decrease of 23.7%. Net sales from foreign operations were €46 million, up 5.8%.
The leisure trade had net sales of €37 million (€43 million), down by 7.4%, excluding the Russian Intersport business sold in July 2016.
The net sales of the Asko and Sotka furniture trade sold on June 30, 2017 were €44 million (€45 million), down by 2.4%.
The net sales of the K-maatalous business sold on 1 June 2017 were €67 million (€99 million).
The comparable operating profit for the building and technical trade for April-June was €35.5 million (€37.9 million), down €2.4 million compared with the previous year. Profitability was improved by the acquisition of Onninen. Onninen's comparable operating profit for April-June was €6.4 million (June 2016 €2.2 million). Profitability was weakened by the sale of the K-maatalous business on 1 June 2017 and the renewal and extension of Kesko Senukai's store site network in the Baltic countries and Belarus. The comparable operating profit of the building and technical trade, excluding the speciality goods trade was €28.6 million (€27.0 million). The comparable operating profit for the speciality goods trade was €6.8 million (€10.9 million), of which the K-maatalous business as well as the Asko and Sotka furntiture trade, sold in June, accounted for €4.0 million.
The building and technical trade's operating profit was €115.3 million (€32.8 million). Items affecting comparability were €79.8 million (€-5.1 million).
Capital expenditure in the building and technical trade for April-June totalled €35.2 million. (€404.7 million), of which store sites amounted to €22.6 million (€26.0 million). The comparison period in the previous year includes €374.1 million of acquisitions.
The most important store sites under construction are two building and home improvement stores in Belarus.
| Number of stores at 30.6. | 2017 | 2016 |
| K-Rauta, Finland* | 139 | 46 |
| Rautia* | - | 95 |
| K-maatalous | - | 80 |
| K-Rauta, Sweden | 18 | 20 |
| Byggmakker, Norway | 82 | 86 |
| K-Rauta and K-Senukai, Estonia | 8 | 8 |
| K-Rauta and K-Senukai, Latvia | 8 | 8 |
| K-Senukai, Lithuania | 22 | 22 |
| K-Rauta, Russia | 14 | 13 |
| OMA, Belarus | 16 | 13 |
| Onninen | 144 | 149 |
| Intersport, Finland** | 56 | 58 |
| Budget Sport** | 11 | 11 |
| The Athlete's Foot** | 5 | - |
| Asko and Sotka** | - | 87 |
| Kookenkä** | 37 | 37 |
| Intersport, Russia | - | 16 |
| Asko and Sotka, the Baltics** | - | 12 |
| Konekesko | - | 1 |
* The K-Rauta and Rautia stores were combined to form the K-Rauta chain, launched with a new brand image in March 2017
** Including online stores
In addition, the building and home improvement stores offer e-commerce services to their customers.
One Onninen store in Sweden operates in the same store with K-Rauta.
Car trade
| 1-6/ 2017 | 1-6/ 2016 | 4-6/ 2017 | 4-6/ 2016 | |
| Net sales, € million | 479 | 438 | 234 | 214 |
| Operating profit, comparable, € million | 17.6 | 15.2 | 7.6 | 5.8 |
| Operating margin, comparable, % | 3.7 | 3.5 | 3.2 | 2.7 |
| Capital expenditure, € million | 9.0 | 8.1 | 5.4 | 3.5 |
| Net sales, € million | 1-6/2017 | Change, % | 4-6/2017 | Change, % |
| VV-Auto | 453 | +3.3 | 221 | +3.3 |
| AutoCarrera | 26 | - | 14 | - |
| Total | 479 | +9.3 | 234 | +9.7 |
January-June 2017
Net sales in the car trade for January-June were €479 million (€438 million), an increase of 9.3%. The development of net sales without AutoCarrera, purchased in December 2016, amounted to 3.3%. The combined market development for new registrations for passenger cars and vans was +0.8% (+14.6%) for January-June. The combined market share for cars and vans imported by VV-Auto was 18.7% (18.6%) for January-June.
In the car trade, profitability continued to improve thanks to good sales performance and the acquisition of AutoCarrera's Porsche business. Comparable operating profit for January-June was €17.6 million (€15.2 million). AutoCarrera's comparable operating profit was €1.1 million. Operating profit for January-June was €17.6 million (€15.2 million).
Capital expenditure for the car trade for January-June was €9.0 million (€8.1 million).
April-June 2017
Net sales in the car trade for April-June amounted to €234 million (€214 million), an increase of 9.7%. The development of net sales without AutoCarrera, acquired in December 2016, was +3.3%. The combined market share for cars and vans imported by VV-Auto was 19.7% (18.7%) for April-June.
In the car trade, profitability continued to improve thanks to good sales performance and the acquisition of AutoCarrera's Porsche business. The comparable operating profit for April-June was €7.6 million (€5.8 million). AutoCarrera's comparable operating profit was €1.0 million. The operating profit for April-June was €7.6 million (€5.8 million).
Capital expenditure for the car trade for April-June was €5.4 million (€3.5 million).
| Number of stores at 30.6. | 2017 | 2016 |
| VV-Auto, retail trade | 10 | 10 |
| AutoCarrera | 3 | - |
Changes in Group composition
Konekesko Ltd, a Kesko Corporation subsidiary, sold its Yamarin boat business to Inhan Tehtaat Oy Ab, a subsidiary owned by Yamaha Motor Europe N.V. At the same time, the transfer of the representation of Yamaha's recreational machinery in Finland from Konekesko Ltd to Yamaha Motor Europe N.V. was also completed. (Press release 30 June 2017)
In March of this year, Kesko and Oriola announced their intention to establish a new chain of health, beauty and wellbeing across Finland. Finland's Competition and Consumer Authority approved the establishment of the joint venture on 26 June 2017 and the establishment of the company was finalised at the end of June. Both parties own 50 per cent of the new company. (Press release 30 June 2017)
Kesko Corporation sold Indoor Group, which is responsible for the Asko and Sotka furniture trade, to a company owned by Sievi Capital Oyj, three franchising entrepreneurs from the Sotka chain and Etera Mutual Pension Insurance Company. The debt free price of the sale, structured as a share transaction, was €67 million. (Press releases on 20 June 2017 and 30 June 2017)
Kesko Corporation sold its K-maatalous business to Swedish Lantmännen ek för. The debt free price of the sale, structured as a share transaction, was €38.5 million. (Press release 1 June 2017)
Kesko sold seven store sites used by Kesko Senukai in Estonia and Latvia to the property investment company UAB Baltic Retail Properties. At the same time, Kesko acquired a 10% shareholding in the property investment company. (Press release 24 May 2017)
Kesko Food Ltd, K-citymarket Oy and Kespro Ltd, subsidiaries wholly-owned by Kesko Corporation, merged into Kesko Corporation on 28 February 2017.
Kesko Corporation's subsidiary Konekesko Ltd sold 45% of its Baltic subsidiaries' shares to Danish Agro a.m.b.a.'s group company DAVA Agravis Machinery Holding A/S. In the same context, an agreement was made on options to expand DAVA Agravis' ownership to include the whole share capital of the Baltic machinery trade companies and Danish Agro group's ownership to include Konekesko's agricultural machinery business in Finland. (Stock exchange release on 10 February 2017)
Shares, securities market and Board authorisations
At the end of June 2017, the total number of Kesko Corporation shares was 100,019,752, of which 31,737,007, or 31.7%, were A shares and 68,282,745, or 68.3%, were B shares. At 30 June 2017, Kesko Corporation held 554,264 own B shares as treasury shares. These treasury shares accounted for 0.81% of the number of B shares, 0.55% of the total number of shares, and 0.14% of votes attached to all shares of the Company. The total number of votes attached to all shares was 385,652,815. Each A share carries ten (10) votes and each B share one (1) vote. The Company cannot vote with own shares held by it as treasury shares and no dividend is paid on them. At the end of June 2017, Kesko Corporation's share capital was €197,282,584.
The price of a Kesko A share quoted on Nasdaq Helsinki was €43.85 at the end of 2016, and €43.67 at the end of June 2017, representing an decrease of 0.4%. Correspondingly, the price of a B share was €47.48 at the end of 2016, and €44.54 at the end of June 2017, representing a decrease of 6.2%. In January-June, the highest A share price was €45.99 and the lowest was €40.11. The highest B share price was €48.59 and the lowest was €42.05. In January-June, the Nasdaq Helsinki All-Share index (OMX Helsinki) was up by 7.5% and the weighted OMX Helsinki Cap index by 7.3%. The Retail Sector Index was down by 3.1%.
At the end of June 2017, the market capitalisation of A shares was €1,386 million, while that of B shares was €3,017 million, excluding the shares held by the parent company as treasury shares. The combined market capitalisation of A and B shares was €4,403 million, a decrease of €196 million from the end of 2016.
In January-June 2017, a total of 0.8 million (0.9 million) A shares were traded on Nasdaq Helsinki, a decrease of 9.2%. The exchange value of A shares was €34 million. The number of B shares traded was 26.8 million (28.6 million), a decrease of 6.1%. The exchange value of B shares was €1,198 million. Nasdaq Helsinki accounted for 40% of the Kesko A and B share trading in January-June 2017. Kesko shares were also traded on multilateral trading facilities, the most significant of which was BATS with 37% of the trading (source: Fidessa).
The Board holds a valid authorisation to decide on the transfer of a maximum of 1,000,000 own B shares held by the Company as treasury shares (the 2016 share issue authorisation). On 1 February 2017, the Board decided to grant own B shares held by the Company as treasury shares to persons included in the target group of the 2016 vesting period, based on this share issue authorisation and the fulfilment of the vesting criteria of the 2016 vesting period of Kesko's three-year share-based compensation plan. This transfer of a total of 192,822 own B shares was announced in a stock exchange release on 15 March 2017. Based on the 2014-2016 share-based compensation plan decided by the Board, a total maximum of 600,000 own B shares held by the Company as treasury shares could be granted within a period of three years based on the fulfilment of the vesting criteria. The Board decided on the vesting criteria and the target group separately for each vesting period. In January-June, a total of 977 shares granted based on the fulfilment of the vesting criteria of the share-based compensation plan 2014-2016 was returned to the Company in accordance with the terms and conditions of the share-based compensation plans. The returns during the reporting period were notified in a stock exchange release on 12 May 2017. The share-based compensation plan 2014-2016 was announced in a stock exchange release on 4 February 2014.
On 1 February 2017, Kesko Corporation's Board of Directors made a decision to establish a new share-based long-term incentive scheme for Kesko's top management and key persons selected separately. The scheme consists of a performance share plan (PSP) as the main structure, and of a restricted share pool (RSP), which is a complementary share plan for special situations. Besides the PSP, the Board has made a decision to establish a share-based bridge plan to cover the transitional phase during which Kesko transfers from a one-year performance period to a longer performance period in its long-term incentive scheme structure. If the performance criteria set for the PSP 2017-2020 plan are achieved in full, the maximum number of series B shares to be paid based on this plan is 340,000 shares. If all the performance criteria set for the Bridge Plan are achieved in full, the maximum number of series B shares to be paid based on the Bridge Plan is 340,000 shares. The total maximum amount of share awards payable under the RSP 2017-2019 is 20,000. The new share-based incentive scheme was announced in a stock exchange release on 2 February 2017.
Kesko's Board of Directors holds a valid authorisation decided by the Annual General Meeting held on 4 April 2016 to transfer of a total maximum of 1,000,000 own B shares held by the Company as treasury shares (the 2016 share issue authorisation). Based on the authorisation, own B shares held by the Company as treasury shares can be issued for subscription by shareholders in a directed issue in proportion to their existing holdings of the Company shares, regardless of whether they own A or B shares. Shares can also be issued in a directed issue, departing from the shareholder's pre-emptive right, for a weighty financial reason of the Company, such as using the shares to develop the Company's capital structure, to finance possible acquisitions, capital expenditure or other arrangements within the scope of the Company's business operations, and to implement the Company's commitment and incentive scheme. Own B shares held by the Company as treasury shares can be transferred either against or without payment. A share issue can only be without payment, if the Company, taking into account the best interests of all of its shareholders, has a particularly weighty financial reason for it. The authorisation also includes the Board's authority to make decisions concerning any other matters related to share issues. The amount possibly paid for the Company's own shares is recorded in the reserve of unrestricted equity. The authorisation is valid until 30 June 2020.
Kesko's Board of Directors also holds a valid authorisation decided by the Annual General Meeting held on 4 April 2016 to acquire a maximum of 1,000,000 own B shares of the Company (the 2016 authorisation to acquire own shares). B shares are acquired with the Company's distributable unrestricted equity, not in proportion to the shareholdings of shareholders, at the market price quoted in public trading organised by Nasdaq Helsinki Ltd ("the exchange") at the date of acquisition. The shares are acquired and paid in accordance with the rules of the exchange. The acquisition of own shares reduces the amount of the Company's distributable unrestricted equity. B shares are acquired for use in the development of the Company's capital structure, to finance possible acquisitions, capital expenditure and/or other arrangements within the scope of the Company's business operations, and to implement the Company's commitment and incentive scheme. The Board makes decisions concerning any other issues related to the acquisition of own B shares. The authorisation is valid until 30 September 2017.
In addition, Kesko's Board of Directors holds a share issue authorisation, decided by the Annual General Meeting held on 13 April 2015, to issue a maximum of 20,000,000 new B shares (the 2015 share issue authorisation). The shares can be issued against payment to be subscribed by shareholders in a directed issue in proportion to their existing holdings of the Company shares regardless of whether they hold A or B shares, or, departing from the shareholder's pre-emptive right, in a directed issue, if there is a weighty financial reason for the Company, such as using the shares to develop the Company's capital structure and financing possible acquisitions, capital expenditure or other arrangements within the scope of the Company's business operations. The amount paid for the shares is recognised in the reserve of invested non-restricted equity. The authorisation also includes the Board's authority to decide on the share subscription price, the right to issue shares for non-cash consideration and the right to make decisions on other matters concerning share issues. The authorisation is valid until 30 June 2018.
At the end of June 2017, the number of shareholders was 41,781, which is 2,377 more than at the end of 2016. At the end of June, foreign ownership of all shares was 31%. Foreign ownership of B shares was 44% at the end of June.
Flagging notifications
According to a notification received by Kesko Corporation, the combined voting rights in respect of shares in Kesko held by K-Retailers' Association, its Branch Clubs and the Foundation for Vocational Training in the Retail Trade rose to 15 per cent on 3 February 2017 and exceeded 15 per cent on 6 February 2017. (Stock exchange release on 7 February 2017)
Key events during the reporting period
The court of arbitration dismissed Voimaosakeyhtiö SF's action against Kestra Kiinteistöpalvelut Oy concerning the further financing of the Fennovoima nuclear power plant project. (Stock exchange release on 10 January 2017)
Kesko Corporation's Board of Directors decided to establish a new share-based long-term incentive scheme for Kesko's top management and key persons selected separately. In addition, the Board of Directors decided to grant a total of 192,822 own B shares held by the Company as treasury shares, based on the fulfilment of the performance criteria of the 2016 performance period of Kesko's share-based compensation plan 2014-2016, to 130 Kesko management employees and other named key persons. (Stock exchange release on 2 February 2017)
Kesko Corporation's subsidiary Konekesko Ltd sold 45% of its Baltic subsidiaries' shares to Danish Agro a.m.b.a.'s group company DAVA Agravis Machinery Holding A/S. In the same context, an agreement was made on options to expand DAVA Agravis' ownership to include the whole share capital of the Baltic machinery trade companies and Danish Agro group's ownership to include Konekesko's agricultural machinery business in Finland. (Stock exchange release on 10 February 2017)
Kesko Corporation and Oriola-KD Corporation start building a completely new kind of store chain in Finland, specialising in overall wellbeing. The companies have signed an agreement to establish a joint venture. Finland's Competition and Consumer Authority approved the establishment of the joint venture on 26 June 2017 and the establishment of the company was finalised. Both parties own 50 per cent of the new company. The first phase objective is to build a chain of 100 stores and an online store. The plan is, if legislation is amended, to expand the business to include pharmaceuticals. (Stock exchange release on 13 March 2017, press release 30 June 2017)
The trading symbols of Kesko Corporation shares changed as of 15 March 2017. The new symbols are KESKOA (share series A) and KESKOB (share series B). (Stock exchange release on 13 March 2017)
Kesko Corporation sold its K-maatalous business to the Swedish Lantmännen ek för. The debt free price of the sale, structured as a share transaction, was €38.5 million. Kesko Corporation recorded a profit of €12.2 million on the disposal. On 26 May 2017, the Finnish Competition and Consumer Authority (FCCA) announced that it approves the disposal, and it was completed on 1 June 2017. The approval was not subject to any conditions. (Stock exchange release on 11 April 2017, press release on 1 June 2017)
Kesko Corporation sold Indoor Group, which is responsible for the Asko and Sotka furniture trade chains, to a company owned by Sievi Capital Oyj, three franchising entrepreneurs from the Sotka chain and Etera Mutual Pension Insurance Company. The debt free price of the sale, structured as a share transaction, was €67 million, and the sale was completed on 30 June 2017. Kesko Corporation recorded a profit of approximately €19.0 million on the divestment. (Press releases on 20 June 2017 and 30 June 2017)
Resolutions of the 2017 Annual General Meeting and decisions of the Board's organisational meeting
Kesko Corporation's Annual General Meeting held on 3 April 2017 adopted the financial statements and the consolidated financial statements for 2016 and discharged the Board members and the Managing Director from liability. The General Meeting also resolved to distribute €2.00 per share as dividends, or a total of €198,932,930.00. The dividend pay date was 12 April 2017.
The General Meeting resolved to leave the number of Board members unchanged at seven. The Annual General Meeting held on 13 April 2015 elected seven (7) Board members for terms of office in accordance with the Articles of Association expiring at the close of the Annual General Meeting to be held in 2018. Those Board members are retailer Esa Kiiskinen, Master of Science in Economics Tomi Korpisaari, retailer, eMBA Toni Pokela, eMBA Mikael Aro, Master of Science in Economics Matti Kyytsönen, Master of Science in Economics Anu Nissinen and Master of Laws Kaarina Ståhlberg. Korpisaari and Ståhlberg resigned from the membership of the Company's Board of Directors as of 1 March 2016. The General Meeting held on 4 April 2016 replaced Korpisaari and Ståhlberg by retailer, trade technician Matti Naumanen and Managing Director, Master of Science in Economics Jannica Fagerholm until the close of the Annual General Meeting to be held in 2018.
The General Meeting elected the firm of auditors PricewaterhouseCoopers Oy as the Company's Auditor, with Mikko Nieminen, APA, as the Auditor with principal responsibility.
In addition, the General Meeting approved the Board's proposal for its authorisation to decide on donations in a total maximum of €300,000 for charitable or corresponding purposes until the Annual General Meeting to be held in 2018, and to decide on the donation recipients, purposes of use and other terms of the donations.
After the Annual General Meeting, Kesko Corporation's Board of Directors held an organisational meeting in which it elected M.Sc. (Econ.) Jannica Fagerholm as the Chair of the Audit Committee, eMBA Mikael Aro as its Deputy Chair, and M.Sc. (Econ.) Matti Kyytsönen as its member. Business College Graduate Esa Kiiskinen (Ch.), eMBA Mikael Aro (Dep. Ch.) and M.Sc. (Econ.) Anu Nissinen were elected to the Board's Remuneration Committee.
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 3 April 2017.
Responsibility
Kesko was the first Finnish company to set up science-based targets in order to reduce the emissions resulting from its facilities, transportation use and supply chains. These ambitious emission targets will be achieved by increasing the use of renewable energy and improving energy efficiency.
In 2008, K Group committed to the Energy Efficiency Agreement for the commerce sector and committed to improving its annual energy efficiency by 65 GWh by the end of 2016. Through the use of determined measures, K Group exceeded that target and reached 67 GWh. In the new agreement for the period 2017-2025 K Group undertakes, by means of various energy saving measures, to reduce its energy consumption by 7.5% or approximately 79 GWh.
In April, the first Pirkka product made from Finnish bream went on sale. The raw material of the Pirkka Fish Patty uses bream caught as part of the Local Fishing Project organised by the John Nurminen Foundation for sustainable fisheries.
Kesko has contributed to the financing of Plan International's Seas of Change project for two years. Thanks to the project about 100 children of Cambodian migrants working in the Thai fishing industry have begun studying at Thai schools.
According to the timber and paper policy published at the end of June, by the year 2025, all wood and paper products in Kesko's range will be of sustainable origin, either FSC or PEFC certified or recycled material. For products made of tropical wood in the K-Rauta range, the policy has been in force since 2009.
Risk management
Kesko Group has an established and comprehensive risk management process. Risks and their management responses are regularly assessed within the Group and reported to the Group management. Kesko's risk management and risks associated with business operations are described in more detail on Kesko's website in the Corporate Governance section.
The most significant near-future risks in Kesko's business operations continue to be associated with price competition in the Finnish grocery trade, the implementation of the neighbourhood market strategy of the grocery trade, business arrangements in the building and technical trade, as well as the change in the trading sector caused by digitalisation. No material change is estimated to have taken place in 2017 in the risks described in Kesko's 2016 Report by the Board of Directors, financial statements and the risks described on Kesko's website. The risks and uncertainties related to economic development are described in the outlook section of this release.
Outlook
Estimates for the outlook of Kesko Group's net sales and comparable operating profit are given for the 12-month period following the reporting period (7/2017-6/2018) in comparison with the 12 months preceding the end of the reporting period (7/2016-6/2017).
The general economic situation and the expected trend in consumer demand vary in Kesko's different operating countries. In Finland, the trading sector is expected to grow. In the Finnish grocery trade, intense competition is expected to continue, although, as purchasing power increases, the importance of quality will be emphasised more than previously. In the building and technical trade, the growth in B2B sales is expected to continue stronger than the growth in the retail market. The market for the Finnish building and technical trade is expected to grow. In Sweden and Norway, the market is expected to grow but at a somewhat slower rate. The trend in the Russian market is expected to remain modest. In the Baltic countries, the market is expected to grow.
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. That development results from the divestments of the Russian grocery trade, the K-maatalous business, the Asko and Sotka furniture trade, the Yamarin boat business and Kesko's Yamaha representation as well as store closures and the transfer of Suomen Lähikauppa stores to retailers.
Comparable operating profit for the next 12 months is expected to exceed the level of the previous 12 months.
Helsinki, 26 June 2017
Kesko Corporation
Board of Directors
The information in the half year financial report is unaudited.
Further information is available from Jukka Erlund, Executive Vice President, Chief Financial Officer, telephone +358 105 322 113, Kia Aejmelaeus, Vice President, Investor Relations, telephone +358 53 22533, and Eva Kaukinen, Vice President, Group Controller, telephone +358 105 322 338. A Finnish-language webcast of the half year financial report briefing can be viewed at 11.00 at www.kesko.fi. An English-language audio conference on the half year financial report will be held today at 14.00 (Finnish time). The audio conference login is available on Kesko's website at www.kesko.fi.
Kesko Corporation's interim report for January-September 2017 will be published on 25 October 2017. In addition, Kesko Group's sales figures are published each month. News releases and other Company information are available on Kesko's website at www.kesko.fi.
KESKO CORPORATION
ATTACHMENTS:
Kesko half year financial report
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