Kesko's Annual Report 2009
Kesko's Annual Report 2009
Kesko's Annual Report 2009
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Movements in quantities and exercise prices 2008<br />
2008 2003D 2003E 2003F<br />
Kesko financial statements <strong>2009</strong><br />
2003 STOCK OPTIONS 2007 STOCK OPTIONS<br />
Weighted<br />
average<br />
exercise<br />
price 2007A 2007B 2007C<br />
121<br />
Weighted<br />
average<br />
exercise<br />
price<br />
Options outstanding at beginning of period 33,150 406,133 434,245 13.23 € 786,000 45.82 €<br />
Options available for grant at beginning of<br />
period 25,912 24,000 47,500 11.45 € 214,000 1,000,000 1,000,000 45.82 €<br />
Options granted during period 776,000 26.57 €<br />
Options forfeited during period 29,500 8,500 40.27 €<br />
Options exercised during period 33,150 22,739 1,200 5.05 €<br />
Options lapsed during period 25,912 2.00 €<br />
Options outstanding at end of period 383,394 433,045 12.11 € 756,500 767,500 35.33 €<br />
Options exercisable at end of period 407,394 480,545 12.18 € 1,000,000 1,000,000 1,000,000 35.40 €<br />
Average price weighted by grant date<br />
trading volume* 30.87 € 23.61 € 23.61 €<br />
* for 2003D: trade volume weighted average price of a B share in January-April 2008, for 2003E and 2003F: trade volume weighted average price of a B share in 2008<br />
Fair value measurement<br />
For fair value measurement Kesko Corporation has consulted<br />
Alexander Corporate Finance Oy. The fair value of options has<br />
been calculated using the Black-Scholes share pricing model.<br />
The fair value of options determined on the date of the grant<br />
has been expensed over their vesting period.<br />
During the financial year 1 January-31 December <strong>2009</strong>, the<br />
options contributed €8.1 million (€5.5 million) to the Group's<br />
profit.<br />
Black-Scholes model assumptions<br />
€ million Granted in <strong>2009</strong> Granted in 2008 Granted in 2007 All options<br />
Number of options granted, pcs 785,500 776,000 789,000 2,350,500<br />
B share average (weighted) price 20.12 € 26.47 € 49.37 € 32.03 €<br />
Average (weighted) exercise price 16.84 € 26.57 € 45.82 € 29.78 €<br />
Expected average (weighted) volatility 32.0% 27.4% 21.7% 27.0%<br />
Average (weighted) vesting period 4.9 yrs 4.9 yrs 4.8 yrs 4.9 yrs<br />
Average (weighted) risk-free interest rate 3.0% 4.4% 4.5% 4.0%<br />
Returned options (weighted average) 0.4% 3.9% 6.1% 4.09%<br />
Total fair value, € 6,320,122 6,406,920 11,697,744 24,424.787<br />
The expected volatility of a Kesko B share has been estimated based on historic volatility using weekly changes over a period of time<br />
corresponding to the option's vesting period. The risk-free interest rate is the government zero coupon bond interest rate at the<br />
measurement date with a maturity equalling the option vesting period.
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