Kesko's year 2007

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4 Kesko's year 2007 Year 2007 in brief Sales and profit increased considerably Kesko’s sales and profit continued to increase considerably in 2007. The strong development of operating profit excluding non-recurring items continued for the sixth successive year. Kesko Food and Rautakesko increased their profit most. Particularly encouraging was the growth in the sales of K-food stores. Rautakesko continued its successful expansion and Kesko continued its strong performance in 2007 ●● ●● ●● ●● ●● ●● ●● ●● ●● ●● Retail sales of the K-Group increased by 9.7% to €11,575.6 million (incl. VAT). The Kesko Group’s net sales increased by 9.0% to €9,534 million. Net sales in Finland increased by 6.0% to €7,357 million. Net sales outside Finland grew by 20.4% to €2,177 million, accounting for 22.8% of the total net sales. Operating profit excluding non-recurring items increased by €45.3 million to €325.1 million. Kesko Food’s sales grew by 7.7%. Rautakesko’s strong internationalisation continued. Earnings per share were €2.61 (€2.45). The market capitalisation of the company was €3,692 million (€3,852 million) at the end of the year. A dividend of €1.50 per share was distributed for the year 2006. The Board of Directors proposes to the Annual General Meeting that €1.60 per share be distributed as a dividend for 2007. achieved strong growth particularly in international operations. Investments in new store sites and the renovation of existing ones were are at a high level in Finland. 27 new K-food stores were opened, and several stores were refurbished or expanded. Investments in the building and home improvement sector mainly focused on the development of the international network, but stores were opened and improved in Finland, too. Out of the 16 new building and home improvement stores opened during the year, eleven were outside Finland. The eighth K-rauta outlet in St. Petersburg was opened in December. Major investments in store sites will continue over the next few years. Corporate strategy was specified In spring, the Board of Directors revised the company’s financial targets and specified the strategy. Due to the expanding international operations and outlook for business development, objectives for return on equity and invested capital were raised. The company is preparing for sizable store site investments in the next few years in all the countries where it operates. Strategic emphases include healthy, focused growth, the focus on sales and services to consumer-customers, and responsible and cost-efficient operations. K-Plussa is undergoing a reform Kesko and the K-retailers started a thorough reform of the K-Plussa customer loyalty programme. The choice of cards became more diversified and the benefits for loyal customers increased. The new K-Plussa combination card can be used as a means of payment both at home and abroad. The popularity of the new cards exceeded expectations: their total number has already exceeded 400,000. Pirkka magazine revamped The content and appearance of Pirkka, the K-Group’s customer loyalty magazine, were changed. The first new-look Pirkka magazine was published in February and was well received by readers. According to the survey published by the National Media Research KMT in September, Pirkka has increased its readership by 60,000 to over 2.5 million readers and is the most widely read magazine in Finland. Recognition for responsible operating practices Kesko continues to be one of the top companies in the world judged by sustainability indicators and was again included among ’The Global 100 Most Sustainable Corporations’ list published by the World Economic Forum. Furthermore, Kesko was listed for the fifth time in the Dow Jones sustainability index. In the review for 2007, Kesko’s environmental performance was evaluated to be the best in the retailing sector. Actions promoting a healthier way of life Kesko started a campaign to promote children’s and adolescents’ physical activity in cooperation with the Young Finland Association. Kesko promised to donate 0.25 cents to support children’s and adolescents’ healthy way of life every time a customer uses a K-Plussa card in a K-Group store. The total sum raised was about €500,000. Market capitalisation The company’s market capitalisation was €3.7 billion, showing a decrease of about €150 million compared with the end of 2006. The proportion of foreign owners of the B shares was about 50% at end of the year.
Year 2007 Financial highlights for 2007 Group's net sales*, € million 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 < FAS IFRS > 2003 2004 2004 2005 2006 2007 FINlAND OThER COuNTRIES * continuing operations ●●1. Kesko Food 40.5% ●●2. Rautakesko 26.5% ●●3. VV-Auto 8.4% ●●4. Anttila 5.9% ●●5. Kesko Agro 8.3% ●●6. Other operating activities 10.4% * continuing operations Divisions The Group Financial statements Further information 5 Key indicators for 2007 2007 2006 Change, % Net sales* € million 9,534 8,749 9.0 Operating profit* € million 332 363 -8.5 Operating profit excl. non-recurring items* € million 325 280 16.1 Profit before tax* € million 369 358 3.2 Investments* € million 234 251 -6.6 Cash flow from operating activities € million 248 328 -24.3 Personnel (average) 21,176 23,767 -10.9 Dividend per share** € 1.60 1.50 6.7 Earnings per share, diluted € 2.90 3.76 -22.9 Earnings per share, diluted* € 2.61 2.45 6.6 Equity per share, diluted € 19.53 17.94 8.8 % points Return on invested capital % 17.4 22.6 -5.2 Return on equity % 16.4 23.1 -6.7 Equity ratio % 48.5 47.0 1.5 Gearing % 14.0 11.9 2.0 * continuing operations **proposal to the Annual General Meeting Group’s operating profit excl. non-recurring items*, € million 350 300 250 200 150 100 50 0 < FAS IFRS > 2003 2004 2004 2005 2006 2007 * continuing operations ●●1. Kesko Food 42.6% ●●2. Rautakesko 32.7% ●●3. VV-Auto 7.3% ●●4. Anttila 7.1% ●●5. Kesko Agro 3.5% ●●6. Other operating activities 67% * continuing operations Earnings per share and dividend per share, € EARNINGS PER ShARE, DIluTED DIVIDEND PER ShARE Net sales 2007* Operating profit excl. non-recurring items 2007* 4. 3. 5. 6. 2. 1. 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0 3. 4. < FAS IFRS > 2003 2004 2004 2005 2006 2007 ** proposal to the Annual General Meeting 2. 5. 6. 1. **
Page 1 and 2: Kesko’s year 2007
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Year 2007 Decision-making Divisions
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Year 2007 Maarit Näkyvä b. 1953,
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Year 2007 Pekka Lahti b. 1955, M.Sc
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Year 2007 Key indicators Group’s
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Year 2007 Note 12 Tangible assets
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Year 2007 Changes in deferred taxes
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Year 2007 Shares and shareholders D
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Year 2007 Share capital and shares
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Year 2007 Latvia Rautakesko A/S Ren
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Year 2007 Logistics is a process in
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Design and layout: Incognito Photos
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