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20<br />
<strong>Kesko's</strong> <strong>year</strong> <strong>2007</strong><br />
Own brands<br />
High-quality and inexpensive Prof, Cello, FXA<br />
and Fiorin product ranges help customers<br />
implement their building, interior decoration<br />
and renovation projects. International development<br />
work was continued by launching<br />
several new products and categories in <strong>2007</strong>.<br />
The new store look and new product ranges<br />
were received well in all the countries where<br />
Rautakesko operates.<br />
The Cello range of interior decoration<br />
items strengthens the sales and market position<br />
of Rautakesko’s chains in these products.<br />
The aim is to help customers reach purchasing<br />
decisions with the help of a comprehensive<br />
Cello collection. The new web site www.<br />
cello-info.com was opened in summer <strong>2007</strong>.<br />
The Cello range grew by 150 new products<br />
during the <strong>year</strong>.<br />
The Prof product range offers high-quality<br />
materials, supplies and tools related to building<br />
and renovation for consumers and professionals.<br />
The range grew by 200 products<br />
during the <strong>year</strong>.<br />
Inexpensive FXA hand tools were<br />
launched in Finland, Sweden, Latvia and<br />
Estonia in the autumn.<br />
At the end of <strong>2007</strong>, there were more than<br />
1,000 different Prof, Cello, Fiorin and FXA<br />
products on the market.<br />
ments totalled €77.0 million, of which investments<br />
outside Finland accounted for 59.3%.<br />
In Finland, new K-rauta stores were<br />
opened during the <strong>year</strong> in Hyvinkää, Kirkkonummi<br />
and Kotka, and new Rautia stores in<br />
Kurikka, Mäntyharju and Klaukkala, Nurmijärvi.<br />
Refurbished K-rauta stores were opened<br />
in Joensuu, Kouvola, Välivainio and Äimärautio<br />
in Oulu, and Rautia stores in Alajärvi,<br />
Kaavi, Konnevesi, Oulainen, Raahe and Salo.<br />
In Sweden, new K-rauta stores were<br />
opened in Umeå and Växjö, and the refurbished<br />
and expanded K-rauta was opened in<br />
Gävle where its predecessor had been<br />
destroyed by fire a <strong>year</strong> before. Byggmakker<br />
stores were opened in Oslo and Haugesund,<br />
Norway. In Tallinn, Rautakesko opened its<br />
biggest store in Estonia. In Latvia, K-rauta<br />
stores were opened in Tukums and Daugavpils.<br />
In St. Petersburg, Russia, Rautakesko<br />
opened its eighth K-rauta outlet in December.<br />
Rautakesko renewed its cooperation<br />
agreement with the Pulmonary Association<br />
Heli in the ’Mould Trap’ project, effective in<br />
<strong>2007</strong> and 2008. The K-rauta and Rautia<br />
chains support the renovation of mouldaffected<br />
one-family houses by delivering the<br />
required supplies for interior decoration, sanitary<br />
areas and ventilation free of charge.<br />
Rautia participated in the Hämeenlinna<br />
housing fair with the Vieska house brand and<br />
K-rauta with the Avainkoti house brand.<br />
The Latvia Building Material Traders’<br />
Association chose K-rauta Ulmana in Riga as<br />
the best building materials retail company in<br />
2006. K-rauta Liepaja was rated third in the<br />
contest.<br />
Several new import projects were started<br />
in <strong>2007</strong> through the Shanghai sourcing<br />
agency established with Kauko-Telko at the<br />
end of the previous <strong>year</strong>. Thanks to a sourcing<br />
agency of our own we can leverage the purchasing<br />
power and logistics of the entire<br />
international Rautakesko to the benefit of our<br />
customers.<br />
In July, Senukai acquired the majority of<br />
voting rights in the Lithuanian UAB Romos<br />
Holdingas, which owns OMA, a Belarussian<br />
DIY operator.<br />
Objectives and outlook<br />
Rautakesko will significantly expand and<br />
modernise the present store network in every<br />
operating country, particularly in Russia, during<br />
the next three <strong>year</strong>s. The target is to<br />
increase the proportion of services out of<br />
total sales and to achieve market leadership<br />
in all operating countries.<br />
Eight K-rauta and four Rautia outlets will be<br />
refurbished in Finland in 2008. Four new stores<br />
will be opened in Sweden, one in Norway, six in<br />
the Baltic countries and two in Russia.<br />
The store concepts of the retail chains will<br />
be enhanced actively. The stores in Sweden,<br />
Estonia and Russia will be reformed to comply<br />
with the revised K-rauta store concept. A<br />
project has been started to upgrade the Rautia<br />
store concept, which will reach the pilot<br />
stage during the <strong>year</strong> 2008. In Norway, 25–30<br />
Byggmakker stores will be annually converted<br />
to the revised concept.<br />
Rautakesko will develop its operations<br />
and support the retail chains with joint business<br />
models and systems in all the operating<br />
countries. Synergy benefits are sought with<br />
uniform product ranges, own brands, productised<br />
services, logistics solutions, centralised<br />
information management, partnership cooperation<br />
projects, and improving staff<br />
competencies.<br />
Rautakesko will gradually adopt the joint<br />
information system of its retail chains (Best<br />
Practice Retail Solutions, BPRS) in all its<br />
operating countries by the end of 2011. The<br />
information system will be first adopted in<br />
Norway in early 2008. Furthermore, an internationally<br />
uniform logistics network is also<br />
being planned.<br />
The starting point is strengthening the<br />
market position in all operating countries.<br />
With the view to achieving the best customer<br />
satisfaction Rautakesko focuses on motivated<br />
and skilled staff and on close joint operations<br />
while taking the local market situation<br />
into account. The management’s role as trainers<br />
and motivators by setting an example will<br />
be emphasised.<br />
Rautakesko’s fast expansion in many<br />
countries has necessitated taking cultural<br />
differences into account and introducing new<br />
joint business models. During the following<br />
three <strong>year</strong>s, the focus will be on arranging<br />
training in sales and customer service and<br />
common international training events.<br />
In 2008, Rautakesko will continue to<br />
invest in new store sites, employee competencies<br />
and a uniform information system. It is<br />
expected that Rautakesko’s net sales will<br />
grow in 2008. Its operating profit excluding<br />
non-recurring items is expected to grow<br />
slightly in 2008.