KESKO CORPORATION STOCK EXCHANGE RELEASE 27.04.2010 AT 09.00 1(23)
January-March in brief:
*Group net sales decreased by 3.0%, the decline eased towards the end of the
reporting period
*Operating profit excluding non-recurring items was €20.9 million (€3.4 million)
*Kesko Groups' net sales and operating profit excluding non-recurring items are
expected to grow during the next twelve months.
Key performance indicators
1-3/2010 1-3/2009
Net sales, € million 1,958 2,018
Operating profit excl. non-recurring items, € million 20.9 3.4
Profit before tax, € million 21.9 18.2
Investments, € million 42.0 51.5
Earnings/share, €, diluted 0.15 0.12
Earnings/share excl. non-recurring items, €, basic 0.15 -0.03
31.3.2010 31.3.2009
Equity ratio, % 51.1 49.8
Equity/share, € 19.69 19.16
FINANCIAL PERFORMANCE
Net sales and profit in January-March 2010
The Group's net sales in January-March 2010 were €1,958 million, which is 3.0%
down on the corresponding period of the previous year (€2,018 million). In
Finland, the sales decline eased during the reporting period, although demand
continued to vary greatly between product lines. Net sales decreased by 1.6% in
Finland and by 10.8% in other countries. International operations accounted for
13.9% (15.1%) of net sales. In the food trade, steady net sales growth continued
although food prices slipped. In the home and speciality goods trade, the
positive net sales trend seen towards the end of the previous year continued in
the first quarter. Low demand in the building and home improvement trade and in
the car and machinery trade continued in the reporting period.
1-3/2010 Net sales, M€ Change, % Operating profit excl. Change, M€
non-recurring items,
M€
Food trade 912 2.8 31.7 -2.2
Home and speciality
goods trade 355 2.6 0.1 10.8
Building and home
improvement trade 495 -6.5 -13.8 -4.6
Car and machinery
trade 236 -20.2 6.4 12.3
Common operations and
eliminations -40 -1.5 -3.4 1.1
Total 1,958 -3.0 20.9 17.5
Kesko's positive profit performance continued in the first quarter of the year.
The Group's profit before tax for January-March was €21.9 million (€18.2
million). The operating profit was €20.9 million (€23.2 million). Non-recurring
items excluded, the operating profit was €20.9 million (€3.4 million),
representing 1.1% (0.2%) of net sales. The non-recurring income in the
comparative period included €19.7 million of gains on the disposals of real
estate.
Cost adjustments, coupled with more efficient inventory management significantly
contributed to the Group's profitability performance. The operating profit
excluding non-recurring items exceeded the level of the comparative period
especially in the home and speciality goods trade and in the car and machinery
trade. In addition, the financial performance of the car and machinery trade in
the comparative period was negatively impacted by the €9 million amount of
impairments and expense provisions recognised on the Baltic agricultural
supplies business.
The Group's earnings per share were €0.15 (€0.12). The Group's equity per share
was €19.69 (€19.16).
In January-March, the K-Group's (i.e. Kesko's and the chain stores') retail and
B2B sales, including VAT, were €2,765 million, down 3.4% compared to the
previous year. The K-Group chains' sales entitling to K-Plussa points were
€1,428 million, up 3.2% compared to the previous year. In January-March, the
K-Plussa customer loyalty programme gained 25,529 new households. At the end of
March, there was 2,052,354 K-Plussa households.
Finance
In January-March, the cash flow from operating activities was €8.0 million
(€-6.9 million). The cash flow from operating activities was healthy in all
divisions, even if inventories in the car trade were temporarily increased by
some €20 million due to vehicles remaining in Germany as a result of industrial
actions at ports. The net cash from investing activities was €-41.5 million
(€5.8 million). The cash flow from investing activities included €1.1 million
(€63.2 million) of proceeds from the sale of fixed assets.
In the reporting period, the Group's liquidity and solvency remained at an
excellent level. At the end of the period, liquid assets totalled €687 million
(€458 million). Interest-bearing liabilities were €458 million (€501 million)
and interest-bearing net liabilities €-229 million (€43 million) at the end of
the reporting period. Equity ratio was 51.1% (49.8%) at the end of the period.
In January-March, the Group's net finance income was €0.8 million (net finance
costs €5.1 million). The hedging costs of the Baltic and Russian currency
exposures, which had increased the net finance costs in the previous year,
normalised and were €0.3 million (€6.4 million). Interest income on liquid
assets continued to decrease following a decline in the market interest rate
level.
Taxes
The Group's taxes in January-March were €6.9 million (€6.6 million). The
effective tax rate was 31.4% (36.0%), affected by loss-making foreign
operations.
Investments
In January-March, the Group's investments totalled €42.0 million (€51.5
million), representing 2.1% (2.6%) of net sales. Investments in store sites were
€32.5 million (€42.3 million) and other investments €9.5 million (€9.1 million).
Investments in foreign operations represented 39.5% (27.9%) of total
investments.
Personnel
In January-March, the average number of employees in the Kesko Group was 17,534
(19,628) converted into full-time employees. In Finland, the average decrease
was 633 people, while outside Finland, it was 1,462.
At the end of March 2010, the total number of employees was 21,052 (23,326), of
whom 12,110 (12,889) worked in Finland and 8,942 (10,437) outside Finland.
Compared to the end of March 2009, there was a decrease of 779 people in Finland
and 1,495 outside Finland.
During the reporting period, the staff cost decreased by €8.3 million, or by
6.1%, compared to the previous year.
SEGMENTS
Seasonal nature of operations
The Group's operating activities are affected by seasonal fluctuations. The net
sales and operating profits of the reportable segments are not earned evenly
throughout the year. Instead, they vary by quarter depending on the
characteristics of each segment. The Group's net sales and operating profit
excluding non-recurring items for the first quarter typically remain lower
compared to the other quarters.
Food trade
1-3/2010 Change
Net sales, € million 912 2.8%
Operating profit excl. non-recurring items, € million 31.7 €-2.2 million
Operating profit as % of net sales excl. non-recurring
items 3.5 -0.3 pp
Investments, € million 16.5 €-4.2 million
Net sales, € million 1-3/2010 Change, %
Sales to K-food stores 703 4.8
Kespro 157 1.2
Others 52 -15.3
Total 912 2.8
January-March 2010
In the food trade, the net sales in January-March were €912 million (€888
million), up 2.8%. During the same period, the grocery sales of K-food stores
increased by 4.1% (VAT 0%). Good sales performance was achieved especially by
K-citymarkets and K-supermarkets. In January-March, the growth rate of the total
grocery trade market in Finland is estimated at some 2 - 3% (VAT 0%) compared to
the previous year. Prices are estimated to have changed by -1.5% (VAT 0%),
compared to the previous year. K-food stores' market share is estimated to have
strengthened further during the first months of the year.
In January-March, the operating profit excluding non-recurring items of the food
trade was €31.7 million (€33.8 million), which is about €2.2 million down on the
previous year. Real estate maintenance costs increased by about €3 million, due
to a cold and snowy winter. The operating profit was €31.7 million (€42.3
million). The comparative year's operating profit was increased by €8.5 million
of non-recurring gains on real estate disposals.
In January-March, investments in the food trade were €16.5 million (€20.7
million), of which investments in store sites were €11.5 million (€17.4
million).
During the first months of the year, K-citymarket Keljo in Jyväskylä was
reopened after refurbishment in connection with the shopping centre extension,
and one new K-supermarket and five K-markets were opened. In addition,
renovations and extensions were carried out in fifteen stores.
The most significant store sites being built are the K-supermarkets in Kotka, in
Koivuhaka, Vantaa, in Kangasala, Kouvola, Sodankylä, Sotkamo and in Paloheinä,
Helsinki. A new K-citymarket is being built in Iisalmi and K-supermarket in
Kankaanpää is being extended into a K-citymarket.
Home and speciality goods trade
1-3/2010 Change
Net sales, € million 355 2.6%
Operating profit excl. non-recurring items, € million 0.1 €10.8 million
Operating profit as % of net sales excl. non-recurring
items 0.0 3.1 pp
Investments, € million 3.5 €-6.3 million
Net sales, € million 1-3/2010 Change, %
Anttila 113 -0.8
K-citymarket, home and speciality goods 137 11.1
Intersport 42 2.7
Indoor 36 -3.0
Musta Pörssi 20 -8.0
Kenkäkesko 6 -24.5
Total 355 2.6
January-March 2010
In the home and speciality goods trade, the net sales in January-March were €355
million (€346 million), up 2.6%. K-citymarket's net sales performance was good
especially in household goods and clothes. The net sales were also increased by
the stores opened in the previous year. As the housing market picked up, the
home decoration products of the Asko and Kodin Ykkönen stores sold clearly
better than in the comparative period. Intersport Finland's net sales were
increased by successful winter season sales. Sunday opening had a clearly
positive impact on the sales performance.
The operating profit of the home and speciality goods trade excluding
non-recurring items in January-March was €0.1 million, a €10.8 million
year-on-year increase attributable to increased sales, improved productivity and
inventory management.
Investments in the home and speciality goods trade in January-March were €3.5
million (€9.8 million).
At the beginning of 2010, Kodin Ykkönen in Kaisaniemi, Helsinki was closed down
due to the termination of the lease. The K-citymarket in downtown Pori was
closed down at the beginning of the year and replaced by a new K-supermarket.
The Anttila department store in Jyväskylä was relocated to a new site in March
2010. Indoor disposed of its operating activities in Latvia in March.
Building and home improvement trade
1-3/2010 Change
Net sales, € million 495 -6.5%
Operating profit excl. non-recurring items, € million -13.8 €-4.6 million
Operating profit as % of net sales excl. non-recurring
items -2.8 -1.1 pp
Investments, € million 18.0 €-1.5 million
Net sales, € million 1-3/2010 Change, %
Rautakesko Finland 251 -5.5
K-rauta AB 36 -2.7
Byggmakker 108 13.6
Rautakesko Estonia 9 -24.7
Rautakesko Latvia 8 -18.9
Senukai 37 -38.2
Rautakesko Russia 35 -7.0
OMA 10 -7.3
Total 495 -6.5
January-March 2010
In the building and home improvement trade, the net sales in January-March were
€495 million (€529 million), down 6.5%. The building and home improvement market
increased in January-March by some 1% in Finland, while the market decreased by
some 20-30% in the Baltic countries (Rautakesko's estimate).
In January-March, the net sales in Finland were €251 million, a decrease of
5.5%. The building and home improvement trade contributed €181 million, and the
agricultural supplies trade €70 million to the net sales in Finland. The net
sales of the building and home improvement trade in Finland were up 3.3%. The
net sales of the agricultural supplies trade decreased by 22.5%.
The net sales from foreign operations in the building and home improvement trade
were €244 million (€264 million), a decrease of 7.5%. In addition to a decline
in demand in the Baltic countries and Russia, the sales performance of foreign
operations was affected by the strengthening of the Swedish krona, the Norwegian
krone and the Russian ruble. The net sales from foreign operations dropped by
13.0% in terms of the local currencies. In Sweden, the net sales of K-rauta AB
decreased by 11.5% in terms of the local currency. In Norway, Byggmakker's net
sales increased by 2.8% in terms of the local currency. In Russia, the net sales
of the building and home improvement trade decreased by 13.6% in terms of the
local currency, and the net sales of the Belarusian OMA were up by 3.4% in terms
of the local currency. Foreign operations contributed 49.3% to the net sales of
the building and home improvement trade.
In January-March, the operating profit excluding non-recurring items of the
building and home improvement trade was €-13.8 million, which was €4.6 million
lower than in the previous year. In addition to the exceptionally cold and snowy
winter, the profit performance was affected by a contraction in the construction
market especially in the Baltic countries, as well as investments in new store
sites in Russia. The staff cost decreased by €3.3 million, or 8.2%, on the
comparative period.
In January-March, investments in the building and home improvement trade were
€18.0 million (€19.5 million), of which 92.1% (74.3%) abroad. In January-March,
a new K-rauta store was opened in Jyväskylä and in Tula, Russia.
OMA is having a new store built in Minsk, Belarus. A new K-rauta was opened in
Kaluga, Russia on 3 April 2010 and in Stockholm, Sweden on 22 April 2010.
The retail sales of the K-rauta and Rautia chains in Finland increased by 0.3%
to €192 million, including VAT, in January-March. The sales of Rautakesko B2B
Service increased by 7.3%. The retail sales of the K-maatalous chain were €78
million, including VAT, down 23.0%.
Car and machinery trade
1-3/2010 Change
Net sales, € million 236 -20.2%
Operating profit excl. non-recurring items, € million 6.4 €12.3 million
Operating profit as % of net sales excl. non-recurring
items 2.7 4.7 pp
Investments, € million 4.0 €2.3 million
Net sales, € million 1-3/2010 Change, %
VV-Auto 170 -19,1
Konekesko 66 -23,0
Total 236 -20,2
January-March 2010
In January-March, the net sales of the car and machinery trade were €236 million
(€296 million), down 20.2%.
VV-Auto's net sales in January-March were €170 million (€210 million), a
decrease of 19.1%. The net sales performance was affected by cars' extended
delivery times, coupled with the car tax change effective at the beginning of
April 2009, causing the car tax levied on cars after 1 April 2009 to be excluded
from the net sales. Adjusted for the tax change, the net sales decrease was
-1.5%. At the end of March, the order books were exceptionally high for the time
of the year, which will increase sales in the spring. In January-March, the
combined market share of passenger cars and vans imported by VV-Auto was 18.9%
(19.0%). In March, VV-Auto opened a redesigned Volkswagen Center outlet in
Vantaa. A new Audi Center outlet is being built in the same area to open in late
summer 2010.
Konekesko's net sales in January-March were €66 million (€86 million), down
23.0% on the previous year, as a result of the weakened machinery market and the
downsizing of the Baltic grain and agricultural supplies trade. The net sales in
Finland were €43 million, a decrease of 16.3%. The discontinuation of the Baltic
agricultural supplies trade has progressed as planned. The net sales from
Konekesko's foreign operations were €23 million, down 33.0%. In line with its
strategy, Konekesko concentrates on the machinery trade also in the Baltic
countries and disposes of its grain and agricultural inputs trade. The net sales
of Konekesko's machinery trade decreased by 13.2%.
In January-March, the operating profit excluding non-recurring items of the car
and machinery trade was €6.4 million, which was €12.3 million higher than in the
previous year. The profit performance was affected by cost adjustments
implemented in VV-Auto and Konekesko, as well as the €9 million impairment
charges and expense provisions recognised by Konekesko on the Baltic
agricultural supplies business for the first quarter of 2009.
Investments in the car and machinery trade were €4.0 million (€1.8 million) in
January-March.
Changes in the Group composition
There were no significant changes in the Group composition during the reporting
period.
Resolutions of the Annual General Meeting 2010 and decisions of the Board's
organisational meeting
Kesko Corporation's Annual General Meeting held on 29 March 2010 adopted the
financial statements for 2009 and discharged the Board of Directors' members and
the Managing Director from liability. The Annual General Meeting also resolved
to distribute a dividend of €0.90 per share, or a total amount of
€88,547,166.90, as proposed by the Board. The dividend pay date was 12 April
2010. The Annual General Meeting also resolved to leave the number of members of
the Board of Directors unchanged at seven, elected PricewaterhouseCoopers Oy as
the company's auditor, with APA Johan Kronberg as the auditor with principal
responsibility, and approved the Board's proposal to amend the Article of
Association providing for the convocation period so that the notice of a General
Meeting shall be given not later than three weeks before the General Meeting,
but in any case at least nine days before the record date of the General
Meeting, referred to in Chapter 4, Article 2, Subsection 2 of the Companies Act.
The resolutions of the Annual General Meeting were announced in more detail in a
stock exchange release on 29 March 2010.
The organisational meeting of Kesko Corporation's Board of Directors, held after
the Annual General Meeting, decided to leave the compositions of the Board's
Audit Committee and Remuneration Committee unchanged. The decisions of the
Board's organisational meeting were announced in a stock exchange release on 29
March 2010.
Shares, securities market and Board authorisations
At the end of March 2010, Kesko Corporation's share capital totalled
€196,771,482. Of all shares 31,737,007, or 32.3%, were A shares and 66,648,734,
or 67.7%, were B shares. The aggregate number of shares was 98,385,741. Each A
share entitles to ten (10) votes and each B share to one (1) vote. In
January-March, the share capital was increased once as a result of the share
subscriptions with the options of the 2003 stock option scheme. The increase was
made on 11 February 2010 (€128,424) and announced in a stock exchange
notification on the same day. The subscribed shares were included on the main
list of Nasdaq OMX Helsinki for public trading with the old B shares on 12
February 2010.
The price of a Kesko A share quoted on Nasdaq OMX Helsinki (the Helsinki stock
exchange) was €23.60 at the end of 2009, and €28.75 at the end of March 2010,
representing an increase of 21.8%. The price of a B share was €23.08 at the end
of 2009, and €29.14 at the end of March 2010, representing an increase of
26.3%. In January-March, the highest A share quotation was €30.20 and the lowest
was €23.16. For B shares, they were €30.75 and €22.40 respectively. In
January-March, the Helsinki stock exchange (OMX Helsinki) General index rose by
13.0%, the weighted OMX Helsinki CAP index by 10.6%, while the Consumer Staples
Index was up 20.2% during the same period.
At the end of March 2010, the market capitalisation of A shares was €912
million, while that of B shares was €1,942 million. Their combined market
capitalisation was €2,855 million, an increase of €569 million on the end of
2009. In January-March 2010, 419,221 A shares were traded on the Helsinki stock
exchange at a total value of €11 million, while 14.7 million B shares were
traded at a total value of €382 million.
The number of 2003F stock options of the 2003 scheme traded during the reporting
period was 240,804 at a total value of about €2.8 million.
The Board of Directors was authorised by the Annual General Meeting of 30 March
2009 to issue a maximum of 20,000,000 new B shares against payment or other
consideration. The authorisation also includes a rights issue. The authorisation
has not been used. In addition to the 2003 stock option scheme, the company
operates the 2007 scheme which comprises 2007A options, whose exercise period
began on 1 April 2010, and 2007B and 2007C options, whose exercise periods will
begin at the beginning of April in 2011 and 2012 respectively. The 2007A options
were also included on the official list of the Helsinki stock exchange on 1
April 2010. Further information on the Board's authorisations is available at
www.kesko.fi.
At the end of March 2010, the number of shareholders was 38,492, which was 396
less than at the end of 2009. At the end of March 2010, foreign ownership of all
shares was 23%, and foreign ownership of B shares was 33%.
Flagging notifications
Kesko Corporation did not receive flagging notifications during the reporting
period.
Main events during the reporting period
The Annual General Meeting was held on 29 March 2010 (stock exchange releases on
29 March 2010).
Responsibility
Kesko continues on the 'The Global 100 Most Sustainable Corporations in the
World' list, announced at the World Economic Forum Annual Meeting in Davos,
Switzerland on 27 January 2010.
In the 2010 Sustainability Yearbook, Kesko's responsibility work qualified in
the SAM Silver Class in the Food & Drug Retailers sector. In the yearbook, Kesko
was also recognised as the "Sector Mover", a qualification given to the company
that has achieved the biggest proportional improvement in its sustainability
performance.
We took part in the worldwide Earth Hour 2010 event by turning off lights in
office buildings and stores. The lights in the Katajanokka main office building
and the remote controlled signs and advertising pylons of the real estate and
stores in the Greater Helsinki area were turned off on Saturday 27 March,
because we want to respond to the climate challenge by promoting low-carbon
business and sustainable economic growth.
Risk management
The Kesko Group has established a risk management process according to which
divisions regularly assess risks and their management and report on them to the
Group's management. Kesko's risk management and risks involved in its operating
activities are discussed in more detail in Kesko's Annual Report and the
financial statements for 2009, and in the corporate governance section at
Kesko's website. During the first months of the year, no material changes have
taken place in the risk factors presented in the Annual Report and the financial
statements.
The most significant risks for Kesko's operating activities in the near future
are involved in the general economic development in Kesko's operating area and
its impacts on the Kesko Group's sales and profit performance. Country-specific
differences in the economic revival will affect the developments in demand
especially in the building and home improvement trade and in the machinery
trade. In the prevailing market situation, cost adjustments, efficient
management of inventories, trade receivables and investment assets, as well as
risk management responses to the prevention of malpractice are emphasized.
The risks and uncertainties related to profit performance have been 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 (4/2010-3/2011) in comparison with the 12 months preceding the
reporting period (4/2009-3/2010).
The trend in consumer demand continues to involve uncertainties caused by
unemployment and a higher level of taxation, although consumer confidence has
strengthened and the economic outlook is improving.
Grocery prices have turned down, which will dampen market growth in terms of
euros, although the grocery trade performance is expected to continue its
otherwise steady trend. The prolonged decline in the home and speciality goods
trade has eased and the market is expected to return to growth. As a result of
increased activity in the housing market and house building, the building and
home improvement market is expected to grow in the Nordic countries and the
decline is expected to ease in the other operating countries. In the car and
machinery trade, new car sales are expected to increase, but the market
situation in the machinery trade is expected to remain difficult.
The Kesko Group's net sales and operating profit excluding non-recurring items
are expected to grow during the next twelve months.
Helsinki, 26 April 2010
Kesko Corporation
Board of Directors
The information in this interim report is unaudited.
Further information is available from Arja Talma, Senior Vice President, CFO,
telephone +358 1053 22113, and Jukka Erlund, Vice President, Corporate
Controller, telephone +358 1053 22338. A Finnish-language webcast from the media
and analyst briefing on the financial statements can be accessed at www.kesko.fi
at 11.00. 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
Paavo Moilanen
Senior Vice President, Corporate Communications and Responsibility
ATTACHMENTS
Accounting policies
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated cash flow statement
Group performance indicators
Net sales by segment
Operating profit by segment
Segments' operating profits excl. non-recurring items
Segment's operating margins excl. non-recurring items
Capital employed by segment
Return on capital employed by segment
Investments by segment
Segment information by quarter
Personnel average and at 31 March
Group contingent liabilities
Calculation of performance indicators
K-Group's retail and B2B sales
Kesko Corporation's interim report for January-June will be released on 23 July
2010. 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.
DISTRIBUTION
NASDAQ OMX Helsinki
Main news media
www.kesko.fi
********
ATTACHMENTS:
Accounting policies
This interim report has been prepared in accordance with the IAS 34 standard.
The interim report has been prepared in accordance with the same principles as
the annual financial statements for 2009, with the exception of the following
changes due to the adoption of new and revised IFRS standards and IFRIC
interpretations.
-IFRS 3 (revised), Business combinations.
-IAS 27 (revised), Consolidated and Separate Financial Statements.
-IAS 39 (amendment) Financial Instruments: Recognition and Measurement -
Eligible hedged items.
-IFRS 5 (amendment) Non-current assets held for sale and discontinued
operations.
-IFRS 2 (amendment) Share-based Payment - Group cash-settled transactions.
-IFRIC 9 (amendment) Reassessment of Embedded Derivatives and IAS 39 (amendment)
Financial Instruments: Recognition and Measurement
-IFRIC 17 Distributions of Non-cash Assets to Owners
- Annual amendments to the IFRSs (Annual Improvements)
The above amendments to standards and interpretations do not have a material
impact on the reported income statement, statement of financial position or
notes.
The net sales from operations in Finland presented in the interim report are
inclusive of the export sales of the Finnish companies (previously exports were
included in the net sales of other countries). The comparative figures have been
restated accordingly.
Consolidated income statement
(€ million)
1-3/2010 1-3/2009 Change, % 1-12/2009
Net sales 1,958 2,018 -3.0 8,447
Cost of sales -1,688 -1,754 -3.8 -7,298
Gross profit 269 263 2.3 1,149
Other operating income 147 161 -8.9 710
Staff cost -128 -136 -6.1 -535
Depreciation and impairment charges -27 -28 -0.2 -131
Other operating expenses -240 -237 0.9 -961
Operating profit 21 23 -9.7 232
Interest income 5 8 -30.0 21
Interest expenses -4 -6 -28.8 -20
Exchange differences and other financial
items -1 -7 -92.9 -17
Income from associates 0 0 -52.2 0
Profit before tax 22 18 19.9 217
Income tax -7 -7 4.6 -82
Profit for the period 15 12 28.6 134
Attributable to
Owners of the parent 15 11 31.7 125
Non-controlling interests 0 0 (..) 9
Earnings per share (€) for
profit attributable to equity
holders of the parent
Basic 0.15 0.12 31.4 1.28
Diluted 0.15 0.12 30.8 1.27
Consolidated statement of
comprehensive income
(€ million)
1-3/2010 1-3/2009 Change, % 1-12/2009
Net profit for the period 15 12 28.6 134
Other comprehensive income
Exchange differences on translating
foreign operations 3 -2 (..) -3
Cash flow hedge revaluation -1 -9 -89.4 -4
Revaluation of available-for-sale
financial assets 1 -1 (..) -2
Tax relating to other comprehensive income 0 2 -97.1 2
Total other comprehensive income for the
period, net of tax 3 -9 (..) -7
Total comprehensive income
for the period 18 2 (..) 127
Attributable to
Owners of the parent 18 5 (..) 123
Non-controlling interests 0 -3 (..) 4
(..) Change over 100%
Consolidated statement of financial
position
(€ million), condensed
31.3.2010 31.3.2009 Change, % 31.12.2009
ASSETS
Non-current assets
Intangible assets 187 173 8.2 185
Tangible assets 1,131 1,180 -4.1 1,111
Interests in associates and other
financial assets 36 34 5.0 36
Loans and receivables 65 68 -3.6 71
Pension assets 321 305 5.2 315
Total 1,741 1,760 -1.1 1,717
Current assets
Inventories 684 829 -17.5 665
Trade receivables 669 722 -7.3 594
Other receivables 154 131 17.0 150
Financial assets at fair value through
profit or loss 324 41 (..) 213
Available-for-sale financial assets 297 374 -20.5 428
Cash and cash equivalents 66 43 51.6 74
Total 2,194 2,141 2.5 2,124
Non-current assets held for sale 1 1 27.2 1
Total assets 3,937 3,902 0.9 3,842
31.3.2010 31.3.2009 Change, % 31.12.2009
EQUITY AND LIABILITIES
Equity 1,937 1,875 3.3 2,005
Non-controlling interests 65 58 11.3 64
Total equity 2,002 1,933 3.6 2,069
Non-current liabilities
Pension obligations 2 2 -6.6 2
Interest-bearing liabilities 244 244 0.1 262
Non-interest-bearing liabilities 6 13 -54.9 6
Deferred tax liabilities 129 126 2.5 128
Provisions 14 19 -26.7 14
Total 395 404 -2.2 412
Current liabilities
Interest-bearing liabilities 214 258 -17.0 194
Trade payables 804 819 -1.9 704
Other non-interest-bearing liabilities 496 467 6.3 434
Provisions 27 22 23.0 29
Total 1,540 1,565 -1.6 1,361
Total equity and liabilities 3,937 3,902 0.9 3,842
(..) Change over 100%
Consolidated statement of changes in equity (€ million)
Share Issue Share Other Cur- Rev- Re- Non Total
capi- of premi- reser- rency alu- tain- cont-
tal share um ves trans ation ed rol-
capi- lation sur- ear- ling-
tal differ- plus nings inte-
ences rests
Balance at
1.1.2009 196 0 191 243 -10 2 1,344 61 2,026
Shares
subscribed
for with
options 0 0 0 0
Option cost 2 2
Dividends -98 0 -98
Net profit for
the period 11 0 12
Other
comprehen-
sive income
Exchange differences
on
translating foreign
operations 1 -3 -2
Cash flow
hedge
revaluation -9 -9
Revaluation
of available-for-sale
financial
assets -1 -1
Tax relating
to other
comprehen-
sive income 2 2
Total other
comprehen-
sive income 1 -7 -3 -9
Balance at 31.3.2009 196 0 191 243 -8 -5 1,259 58 1,933
Balance at
1.1.2010 197 0 194 243 -7 -3 1,381 64 2,069
Shares
subscribed
for with
options 0 1 1
Option cost 2 0 2
Dividends -89 -89
Net profit for
the period 15 0 15
Other
comprehen-
sive income
Exchange
differences
on
translating
foreign
operations 3 0 3
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 3 0 0 3
Balance at
31.3.2010 197 0 195 243 -4 -3 1,310 65 2,002
Consolidated cash flow statement (€ million), condensed
1-3/ 1-3/ Change,% 1-12/
2010 2009 2009
Cash flow from operating
activities
Profit before tax 22 18 19.9 217
Planned depreciation 27 28 -0.2 117
Finance income and
costs -1 5 (..) 16
Other adjustments -7 -21 -68.7 -74
Working capital
Current non-interest-bearing
trade and other receivables,
increase (-)/ decrease (+) -63 -76 -17.3 39
Inventories
increase (-)/ decrease (+) -13 39 (..) 207
Current non-interest-bearing
liabilities,
increase (+)/decrease (-) 55 10 (..) -84
Financial items and tax -13 -10 39.7 -59
Net cash from operating
activities 8 -7 (..) 379
Cash flow from investing
activities
Investments -44 -59 -25.7 -223
Sales of fixed assets 1 63 -98.3 252
Increase of non-current
receivables 0 0 (..) 0
Decrease of non-current
receivables 1 2 -16.3 2
Net cash used in investing
activities -41 6 (..) 31
Cash flow from financing
activities
Increase (+)/ decrease (-) in
interest-bearing liabilities 8 11 -25.8 -33
Increase (-)/decrease (+) in
current interest-bearing
receivables -2 -1 (..) -14
Dividends paid 0 0 (..) -98
Equity increase 1 0 (..) 5
Short-term money market
investments -180 55 (..) -98
Other items -3 7 (..) 4
Net cash used in financing
activities -176 72 (..) -234
Change in cash and cash
equivalents -209 71 (..) 175
Cash and cash equivalents
and current portion of
available-for-sale financial
assets at 1 Jan. 491 319 53.9 319
Translation difference and
revaluation 1 -3 (..) -3
Cash and cash equivalents
and current portion of
available-for-sale financial
assets at 31 Mar. 283 387 -26.9 491
(..) Change over 100%
Group performance indicators
1-3/2010 1-3/2009 Change, pp
Return on capital employed, % 4.4 4.2 0.1
Return on capital employed, %,
moving 12 mo 11.2 8.8 2.4
Return on capital employed excl. non-recurring
items, % 4.3 0.6 3.7
Return on capital employed excl. non-recurring
items, %, moving 12 mo 8.4 8.6 -0.1
Return on equity, % 2.9 2.4 0.6
Return on equity, %, moving 12 mo 7.0 6.7 0.3
Return on equity excl. non-recurring items, % 2.9 -0.6 3.5
Return on equity excl. non-recurring items, %,
moving 12 mo 4.9 6.8 -1.9
Equity ratio, % 51.1 49.8 1.4
Gearing, % -11.5 2.2 -13.7
Change, %
Investments, € million 42 51 -18.3
Investments, % of net sales 2.1 2.6 -15.8
Earnings per share, basic, € 0.15 0.12 31.4
Earnings per share, diluted, € 0.15 0.12 30.8
Earnings per share excl. non-recurring items,
basic, € 0.15 -0.03 (..)
Cash flow from operating activities,
€ million 8 -7 (..)
Cash flow from investing activities,
€ million -41 6 (..)
Equity/share, € 19.69 19.16 2.8
Personnel, average 17,534 19,628 -10.7
(..) Change over 100%
Group performance indicators 1-3/ 4-6/ 7-9/ 10-12/ 1-3/
by quarter 2009 2009 2009 2009 2010
Net sales, € million 2,018 2,143 2,133 2,153 1,958
Change in net sales, % -11.4 -15.9 -12.4 -7.7 -3.0
Operating profit, € million 23.2 42.7 48.3 118.1 20.9
Operating margin, % 1.1 2.0 2.3 5.5 1.1
Operating profit excl. non-recurring items, €
million 3.4 36.4 47.5 68.0 20.9
Operating margin excl. non-recurring items, % 0.2 1.7 2.2 3.2 1.1
Finance income/costs,
€ million -5.1 -4.4 -4.7 -1.8 0.8
Profit before tax, € million 18.2 38.2 43.8 116.3 21.9
Profit before tax, % 0.9 1.8 2.1 5.4 1.1
Return on capital employed, % 4.2 8.0 9.4 22.9 4.4
Return on capital employed excl. non-recurring
items, % 0.6 6.8 9.2 13.2 4.3
Return on equity, % 2.4 4.6 5.2 14.7 2.9
Return on equity excl. non-recurring items, % -0.6 3.7 5.0 7.7 2.9
Equity ratio, % 49.8 51.0 52.3 54.1 51.1
Investments, € million 51.5 55.8 49.2 41.5 42.0
Earnings per share, diluted, € 0.12 0.19 0.24 0.73 0.15
Equity per share, € 19.16 19.36 19.60 20.39 19.69
Segment information
Net sales by segment, 1-3/2010 1-3/2009 Change, %
(€ million)
Food trade, Finland 912 888 2.8
Food trade, other countries* - - -
Food trade total 912 888 2.8
- of which intersegment trade 42 41 1.4
Home and speciality goods trade, Finland 350 340 3.1
Home and speciality goods trade, other countries* 4 6 -28.8
Home and speciality goods
trade total 355 346 2.6
- of which intersegment trade 5 4 19.9
Building and home improvement trade, Finland 251 265 -5.5
Building and home improvement trade, other
countries* 244 264 -7.5
Building and home improvement trade total 495 529 -6.5
- of which intersegment trade 0 0 -85.4
Car and machinery trade, Finland 213 261 -18.6
Car and machinery trade, other countries* 23 35 -32.9
Car and machinery trade total 236 296 -20.2
- of which intersegment trade 0 0 -34.0
Common operations and eliminations -40 -41 -1.5
Finland total 1,686 1,713 -1.6
Other countries total* 272 304 -10.8
Group total 1,958 2,018 -3.0
* Net sales in countries other than Finland
Operating profit by
segment (€ million) 1-3/2010 1-3/2009 Change
Food trade 31.7 42.3 -10.6
Home and speciality goods trade 0.1 -3.3 3.4
Building and home improvement trade -13.8 -5.2 -8.6
Car and machinery trade 6.4 -6.0 12.3
Common operations and eliminations -3.4 -4.6 1.2
Group total 20.9 23.2 -2.2
Operating profit excl. non-recurring items by
segment (€ million) 1-3/2010 1-3/2009 Change
Food trade 31,7 33,8 -2,2
Home and speciality goods trade 0,1 -10,7 10,8
Building and home improvement trade -13,8 -9,1 -4,6
Car and machinery trade 6,4 -6,0 12,3
Common operations and eliminations -3,4 -4,6 1,1
Group total 20,9 3,4 17,5
Segments' operating 1-3/ 1-3/ Change,
margins excl. non-recurring 2010 2009 pp
items % of net sales % of net sales
Food trade 3.5 3.8 -0.3
Home and speciality goods trade 0.0 -3.1 3.1
Building and home improvement trade -2.8 -1.7 -1.1
Car and machinery trade 2.7 -2.0 4.7
Group total 1.1 0.2 0.9
Capital employed by segment, cumulative
average (€ million) 1-3/ 1-3/
2010 2009 Change
Food trade 610 646 -36
Home and speciality goods trade 433 519 -86
Building and home improvement trade 638 661 -22
Car and machinery trade 201 285 -84
Common operations and eliminations 43 72 -29
Group total 1,926 2,182 -257
Return on capital employed Moving
excl. non-recurring items by segment, 1-3/2010 1-3/2009 Change, pp 12 mo 3/2010
%
Food trade 20.7 20.9 -0.2 20.8
Home and speciality goods trade 0.1 -8.3 8.3 8.2
Building and home improvement trade -8.6 -5.5 -3.1 1.1
Car and machinery trade 12.7 -8.4 21.0 5.7
Group total 4.3 0.6 3.7 8.4
Investments by segment
(€ million) 1-3/2010 1-3/2009 Change
Food trade 16 21 -4
Home and speciality goods trade 3 10 -6
Building and home improvement trade 18 20 -1
Car and machinery trade 4 2 2
Group total 42 51 -9
Segment information by quarter
Net sales by segment 1-3/ 4-6/ 7-9/ 10-12/ 1-3/
(€ million) 2009 2009 2009 2009 2010
Food trade 888 974 966 970 912
Home and speciality goods trade 346 331 381 500 355
Building and home improvement trade 529 643 614 525 495
Car and machinery trade 296 233 213 205 236
Common operations and eliminations -41 -39 -41 -47 -40
Group total 2,018 2,143 2,133 2,153 1,958
Operating profit by segment (€ million) 1-3/ 4-6/ 7-9/ 10-12/ 1-3/
2009 2009 2009 2009 2010
Food trade 42.3 33.8 35.8 58.7 31.7
Home and speciality goods trade -3.3 -3.6 7.0 66.5 0.1
Building and home improvement trade -5.2 14.8 8.5 1.6 -13.8
Car and machinery trade -6.0 1.9 1.7 -2.7 6.4
Common operations and eliminations -4.6 -4.3 -4.5 -5.9 -3.4
Group total 23.2 42.7 48.3 118.1 20.9
Operating profit excl. non-recurring items by
segment (€ million) 1-3/ 4-6/ 7-9/ 10-12/ 1-3/
2009 2009 2009 2009 2010
Food trade 33.8 30.1 35.5 33.7 31.7
Home and speciality goods trade -10.7 -6.0 6.5 39.7 0.1
Building and home improvement trade -9.1 14.8 8.4 -2.1 -13.8
Car and machinery trade -6.0 1.9 1.7 2.7 6.4
Common operations and eliminations -4.6 -4.4 -4.5 -6.0 -3.4
Group total 3.4 36.4 47.5 68.0 20.9
Operating margin excl. non-recurring items by
segment, % 1-3/ 4-6/ 7-9/ 10-12/ 1-3/
2009 2009 2009 2009 2010
Food trade 3.8 3.1 3.7 3.5 3.5
Home and speciality goods trade -3.1 -1.8 1.7 7.9 0.0
Building and home improvement trade -1.7 2.3 1.4 -0.4 -2.8
Car and machinery trade -2.0 0.8 0.8 1.3 2.7
Group total 0.2 1.7 2.2 3.2 1.1
Personnel average and at 31.3.
Personnel, average by segment
1-3/2010 1-3/2009 Change
Food trade 2,822 3,033 -211
Home and speciality goods trade 5,247 5,574 -327
Building and home improvement trade 7,979 9,209 -1,230
Car and machinery trade 1,109 1,407 -298
Common operations 378 405 -27
Group total 17,534 19,628 -2,094
Personnel at 31.3.* by segment
2010 2009 Change
Food trade 3,201 3,498 -297
Home and speciality goods trade 7,284 7,645 -361
Building and home improvement trade 8,987 10,298 -1,311
Car and machinery trade 1,158 1,441 -283
Common operations 422 444 -22
Group total 21,052 23,326 -2,274
* total number incl. part-time employees
Group contingent liabilities (€ million)
31.3.2010 31.3.2009 Change, %
For own commitments 224 206 9.1
For shareholders 0 0 0.0
For others 5 8 -31.9
Lease liabilities for machinery and fixtures 22 24 -10.1
Lease liabilities for real estate 2,291 2,140 7.0
Contingent liabilities arising from
derivative financial instruments
Fair value
Values of underlying instruments at 31.3. 31.3.2010 31.3.2009 31.3.2010
Interest rate derivatives
Forward and future contracts 0 19 0.40
Interest rate swap contracts 206 205 0.61
Currency derivatives
Forward and future contracts 519 439 -11.58
Option agreements 2 1 0.00
Foreign exchange contracts 100 100 -11.39
Commodity derivatives
Electricity derivatives 45 39 -5.49
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, %, moving Operating profit for prior 12 months x
12 months 100 / (Non-current assets + Inventories +
Receivables + Other current assets -
Non-interest-bearing liabilities) on
average for 12 months
Return on capital employed, excl. Operating profit excl. non-recurring items
non-recurring items*, % x 100 / (Non-current assets + Inventories
+ Receivables + Other current assets -
Non-interest-bearing liabilities) on
average for the reporting period
Operating profit excl. non-recurring items
for prior 12 months x 100 / (Non-current
Return on capital employed excl. assets + Inventories + Receivables + Other
non-recurring items, %, current assets - Non-interest-bearing
moving 12 months liabilities) on average for 12 months
(Profit/loss before tax - income tax) x
Return on equity*, % 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
(Profit/loss adjusted for non-recurring
items before tax - income tax adjusted for
Return on equity excl. non-recurring the tax effect of non-recurring items) x
items*, % 100 / Shareholders' equity
(Profit/loss for prior 12 months adjusted
for non-recurring items before tax -
income tax for prior 12 months adjusted
for the tax effect of non-recurring items)
Return on equity excl. non-recurring x
items, %, moving 12 months 100 / Shareholders' equity
Shareholders' equity x 100 /
Equity ratio, % (Balance sheet total - prepayments
received)
(Profit - non-controlling interests) /
Earnings/share, diluted Average number of shares adjusted for the
dilutive effect of options
Earnings/share, basic (Profit - non-controlling interests) /
Average number of shares
(Profit adjusted for non-recurring items -
Earnings/share excl. non-recurring non-controlling interests)/
items, basic Average number of shares
Equity attributable to equity holders of
Equity/share the parent /
Basic number of shares at balance sheet
date
Gearing, % Interest-bearing net liabilities x 100 /
Shareholders' equity
*Capital return ratios have been annualised
K-Group's retail and B2B sales in euros, incl. VAT (preliminary data):
1.1.-31.3.2010
K-Group retail and B2B sales € million Change, %
K-Group food trade
K-food stores, Finland 1 141 -0.1
Kespro 179 -4.1
Food trade total 1 320 -0.7
K-Group home and speciality goods trade
Home and speciality goods stores, Finland 476 4.7
Home and speciality goods stores, Baltic countries 5 -28.0
Home and speciality goods trade total 481 4.2
K-Group building and home improvement trade
K-rauta and Rautia 192 0.3
Rautakesko B2B Service 45 7.3
K-maatalous 78 -23.0
Finland total 316 -5.9
Building and home improvement stores, other Nordic countries 236 8.7
Building and home improvement stores, Baltic countries 68 -30.9
Building and home improvement stores, other countries 54 -7.1
Building and home improvement trade total 674 -5.0
K-Group car and machinery trade
VV-Autotalot 92 -20.2
VV-Auto, import 120 -17.9
Konekesko, Finland 51 -16.8
Finland total 264 -18.5
Konekesko, Baltic countries 26 -33.4
Car and machinery trade total 290 -20.1
Finland total 2,375 -2.7
Other countries total 390 -7.4
Retail and B2B sales total 2,765 -3.4
[HUG#1408477]
