Kesko's Annual Report 2009

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18 Kesko’s year 2009 High-quality Pirkka products are tested and safe All new Pirkka products are carefully analysed by Kesko Food’s own Pirkka Product Research. The unit was awarded the ISO 17025 accreditation, an important international recognition for competence, in March 2009 as the only laboratory in Finland responsible for quality assurance for the trading sector’s own brands. The Pirkka Product Research includes the Pirkka test kitchen, which creates and tests recipes for everyday and special purposes alike. Development of the store network continues At the end of 2009, there were 1,030 K-food stores, catering for various consumer needs ranging from daily local services to the wide range of clothing and other home and speciality goods stocked by hypermarkets. The K-food store network is the most comprehensive in Finland. 51% of Finns live less than a kilometre away from a K-food store. The K-Group’s neighbourhood store network is the most comprehensive in Finland. The total number of K-markets and K-extras is 676. Kesko Food develops the K-food store network by investing in stores of all sizes. The constant development of the network is required to meet the needs of ageing stores, expanding selections, new services and migration. Year 2009 The food segment’s net sales totalled €3,798 million in 2009, an increase of 2.4%. The operating profit excluding non-recurring items amounted to €133.1 million, which is €10.5 million up on the previous year. The value added tax on retail sales of food was reduced at the beginning of October. Kesko Food and K-food retailers undertook to implement the reduction in full on food prices. The price monitoring survey published by the National Consumer Research Centre in November verified that at K-food stores food prices decreased even more than the VAT cut. Due to the reduction, K-food stores changed more than 6 million prices. A family who spent about €5,000 on food per year before the VAT decrease will now save €215 a year. The Act to extend retail store opening hours came into force at the beginning of December. The amendment meant that another 400 K-food stores would be able to benefit from extended Sunday opening hours. The total number of K-food stores is 1,030. For customers, this means much better accessibility to retail services. The fact that the stores no longer have to stay closed one day a week also improves efficiency and reduces waste, because total demand is easier to predict. During the year, five new K-citymarkets, four K-supermarkets, and 15 K-markets were opened. A total of 25 new food stores were opened, one of which replaced an existing store. Several K-food stores were also extended and renovated in 2009. Objectives and strategic emphases Kesko Food’s key objective is to increase market share. The implementation of Kesko Food’s strategy aims at growth faster than the market, increased customer satisfaction and competitiveness. Kesko Food’s opportunities for internationalisation are also being actively investigated, particularly in Russia. Kesko Food’s key strategic focuses include increasing the efficiency of operations and enhancing electronic customer communications. Automated processes play a central role in increasing the efficiency of operations. In addition to more targeted information on the products and services available at K-food stores, electronic customer communications also provide customers with new methods of handling their customer relationship matters online. Opportunities for food retailing online are also being explored. The premise is that the retailing sector and electronic transactions should support customer needs and make shopping easier.
Competitors Finland, market share 34% (own estimate) Competitors: Prisma, S-market and Alepa/ Sale (S Group), Valintatalo, Siwa and Euromarket (Suomen Lähikauppa Oy) and Lidl HoReCa, Finland, Kespro Competitors: Meiranova Oy, Metro Chain, Heinon Tukku Oy K-Group’s food trade, retail and B2B sales Number Kesko’s year 2009 Sales (incl. VAT) € million 19 2009 2008 2009 2008 K-citymarket, groceries 69 64 1,412 1,249 K-supermarket 170 163 1,633 1,580 K-market (incl. service station stores) 487 490 1,502 1,494 Others 304 338 344 362 K-food stores, retail sales 4,891 4,685 Kespro 811 837 Food trade, total 1,030 1,055 5,703 5,521 Food segment’s key figures, continuing operations 2009 2008 Net sales € million 3,798 3,707 Operating profit € million 170.6 185.5 Operating profit excl. non-recurring items € million 133.1 122.5 Operating profit as % of net sales excl. non-recurring items % 3.5 3.3 Investments € million 69.4 139.7 Return on capital employed* excl. non-recurring items % 20.9 19.3 Personnel average 3,035 3,440 * cumulative average Food segment’s net sales, continuing operations € million change, % K-citymarket 854 12.1 K-supermarket 1,001 3.7 K-market and K-extra 1,067 -2.5 Kespro 677 -2.6 Others 199 4.1 Net sales, total 3,798 2.4 Food segment’s capital employed at 31 December, € million 2009 2008 Non-current assets 632 704 Inventories 90 91 Short-term receivables 371 380 ./. Non-interest-bearing debt -489 -510 ./. Provisions -8 -8 Capital employed** 596 657 ** capital employed at the end of month
Page 1: Kesko’s year
Page 4 and 5: 2 Kesko’s year 2009 Kesko in brie
Page 6 and 7: 4 Kesko’s year 2009 Review by the
Page 8 and 9: 6 Kesko’s year 2009 Year 2009 in
Page 11 and 12: Kesko is a highly valued listed tra
Page 13 and 14: uct and service benefits to custome
Page 15: the Pirkka magazine continued to in
Page 18 and 19: 16 Kesko’s year 2009 K-food store
Page 23 and 24: Kesko’s home and speciality goods
Page 25 and 26: Year 2009 In 2009, the net sales of
Page 27: Market shares and competitors Hyper
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Page 32 and 33: 30 Kesko’s year 2009 Through its
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Page 37 and 38: VV-Auto and Konekesko make up the c
Page 39 and 40: market for agricultural machinery i
Page 41 and 42: Market shares VV-Auto Finland: Volk
Page 43: Real estate operations indicators f
Page 46 and 47: 44 Kesko’s year 2009 Kesko is a g
Page 48 and 49: 46 Kesko’s year 2009 The widest v
Page 51 and 52: Principles and indicators of respon
Page 53 and 54: effective stakeholder interaction w
Page 55 and 56: compare the responsibility practice
Page 57 and 58: member and expiring at the close of
Page 59 and 60: Decision-making, activities and mee
Page 61 and 62: A written managing director’s ser
Page 63 and 64: made by the Remuneration Committee
Page 65 and 66: programmes, for their competitive t
Page 67 and 68: the Audit Committee, and reports on
Page 69 and 70: Mikko Kosonen b. 1957, D.Sc. (Econ.
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Notice period and severance pay: 6
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Report by the Board of Directors Ja
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In January-December, two new K-raut
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The retail sales of the K-rauta and
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Significant risks and uncertainties
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Group performance indicators Kesko
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Net sales by segment, continuing op
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Calculation of performance indicato
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Consolidated Financial Statements C
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Consolidated statement of cash flow
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NOTE 1 Accounting policies for the
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Foreign currency items The consolid
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Other intangible assets The cost of
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exceed 10 percent of the higher rat
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cating resources, has been identifi
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Segment information 2008 Income sta
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Net assets of discontinued operatio
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Exchange differences recognised in
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Goodwill and intangible rights by s
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Property, plant and equipment inclu
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NOTE 18 Finance lease receivables K
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NOTE 20 Kesko financial statements
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A total amount of €12.6 million (
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Kesko financial statements 2009 Rev
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NOTE 29 Finance lease liabilities K
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Group as the lessor Minimum lease p
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Movements in quantities and exercis
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NOTE 41 Financial risk management W
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Liquidity risk and sensitivity anal
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Kesko financial statements 2009 Bre
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Fair values of derivative financial
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with regard to business operations,
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In addition, the other operating ex
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Owned by other Group companies Domi
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Parent's balance sheet (FAS) € 31
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Kesko financial statements 2009 Not
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€ million 2009 2008 Accumulated d
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Increase in share capital During th
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Signatures Signatures Helsinki, 4 F
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the record date, and whose custodia
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Share performance indicators Tradin
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Prices and trading of Kesko A and B
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Share capital and shares Kesko fina
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Information about Kesko for investo
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Kenkäkesko Ltd Kutojantie 4, FI-02
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Operations control system (ERP Ente
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www.kesko.fi Business ID 0109862-8
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Kesko's Annual Report 2009

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