Kesko's Annual Report 2009

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28 Kesko’s year 2009 Products and services for building, interior decoration and agriculture The building and home improvement market Rautakesko aims to be the leading service provider in the building and home improvement trade. Rautakesko’s building and home improvement store chains K-rauta, Rautia, Byggmakker, Senukai and OMA serve both consumer and professional customers. Consumer customers mainly comprise home, leisure home and yard builders, renovators and interior decorators. Important professional customers include construction companies, the manufacturing industry and public institutions. In terms of its chains’ retail sales, Rautakesko is one of the five largest companies in the European building and home improvement market. The principal European competitors operating in Rautakesko’s market area are Castorama (Kingfisher Group), Leroy Merlin (Groupe Adeo), DT Group, Bauhaus, Hornbach and OBI. Rautakesko is a partner in tooMax-x, a purchasing alliance. Rautakesko’s partnership in tooMax-x made it the third largest European sourcing channel for home building and interior decoration items. The total retail market of this sector in Rautakesko’s operating area amounts to some €28 billion. It is estimated that the overall market change in the 2009 building and home improvement trade in the Baltic countries was -30%, in Norway -10%, in Sweden -5%, in Finland -15%, and in Russia -25%. The main reason for the decrease in demand has been the strong decline in the construction market, resulting from the recession. Retail sales of Rautakesko’s chains totalled €3,778 million (incl. VAT) in 2009, a decrease of 18.0% from the previous year. In Finland, the retail market in the building and home improvement sector totals some €3.4 billion and declined by 14.8% in 2009 (Finnish Hardware Association, DIY). The K-Group’s market share in this sector was some 38% (Finnish Hardware Association, DIY, own estimate). In Finland, Rautakesko operates the K-rauta and Rautia retail chains and Rautakesko B2B Sales which serves construction companies, the manufacturing industry and other professional customers. Rautakesko also provides services at 33 customer contract stores operating outside the chains. The K-rauta chain consists of 42 stores, with some 70% of sales going to consumers. The Rautia chain consists of 107 stores, 50 of which also operate as K-maatalous stores, engaged in the agricultural trade. The emphasis in the sales structure of Rautia is more on basic building products. All Finnish chain stores are run by retailer entrepreneurs. The combined sales of the K-rauta and Rautia chains, Rautakesko B2B Sales and K-customer contract stores in Finland were €1,417 million (incl. VAT), a decrease of 15.5%. The principal competitors in Finland are Starkki, Terra, S-rauta and Agrimarket, and Bauhaus.
In Sweden, the building and home improvement market totals some €3.8 billion (SCB). In 2009, the market declined by about 5% (SCB). At the end of 2009, Rautakesko had 19 K-rauta stores of its own and one retailerowned store in Sweden. Retail sales of K-rauta stores in Sweden totalled €235 million (incl. VAT), a growth of 0.7%. Rautakesko’s market share is about 6% (own estimate). Private customers account for around 85% of K-rauta clientele. Principal competitors are Bauhaus, Byggmax, DT Group, and local speciality stores. In Norway, the building and home improvement market totals some €4.7 billion (TBF), down by about 10% in 2009 (TBF). Byggmakker Norge AS, which is owned by Rautakesko, manages the Byggmakker chain of 113 building and home improvement stores, 15 of which are owned by Byggmakker. Other stores in the chain are owned by retailer entrepreneurs who have chain contracts with Byggmakker. Retail sales of the chain’s stores totalled €963 million (incl. VAT) in 2009, a decrease of 13.8% from the previous year. Rautakesko’s market share in Norway is about 17% (TBF). More than half of all sales are to professional customers. Rautakesko’s competitors are Monter/Optimera (Saint Gobain), Maxbo and Coop. In Estonia, the building and home improvement market totals some €0.4 billion (own estimate) and in 2009 the market decreased by 20% (own estimate). Rautakesko has nine building and home improvement stores in Estonia. Their retail sales totalled €76 million (incl. VAT) in 2009, a decrease of 21.4%. Professional customers account for some 59% of all customers. Rautakesko’s market share in Estonia is about 20% (own estimate). Rautakesko’s competitors are Ehitus ABC (Saint Gobain), Bauhof and Espak. In Latvia, the building and home improvement market totals approximately €0.4 billion (CSB), a decrease of 30–40% in 2009 (CSB). Rautakesko has nine K-rauta stores of its own in Latvia. Retail sales of K-rauta stores totalled €61 million (incl. VAT) in 2009, a decrease of 30.3%. It is estimated that Rautakesko’s market share in Latvia is 16% (own estimate). Rautakesko’s competitors are Depo DIY and Kursi. In Lithuania, the building and home improvement market totals some €0.4 billion (own estimate) and it decreased by 40–50% in 2009 (own estimate). In Lithuania, Rautakesko has the majority shareholding in UAB Senuku prekybos centras, which is the market leader in the Lithuanian building and home improvement sector with a share of about 25%. The Senukai chain, which sells to both consumers and business customers, comprises 16 stores of its own, a logistics centre and 60 partner stores. Senukai’s retail sales totalled €311 million (incl. VAT) in 2009, a decrease of 41.6%. Its competitors include local building supplies outlets and speciality stores. Kesko’s year 2009 29 Own brands continue to grow The strong development of Rautakesko’s own international brands continued. Cello, Prof, Fiorin and FXA offer a reliable and affordable solution for the building and renovation needs of both consumer and professional customers. Major launches in 2009 included Cello exterior paints and Cello storage systems. In 2010 own brands will focus on improving the efficiency of selections and increasing international coverage. The web service of the Cello brand will be enhanced to make a channel which serves customers better.
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 20 and 21: 18 Kesko’s year 2009 High-quality
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
Page 32 and 33: 30 Kesko’s year 2009 Through its
Page 34 and 35: 32 Kesko’s year 2009 Responsibili
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.
Page 71 and 72: Notice period and severance pay: 6
Page 73 and 74: Report by the Board of Directors Ja
Page 75 and 76: In January-December, two new K-raut
Page 77 and 78: The retail sales of the K-rauta and
Page 79 and 80: 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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