Kesko's Annual Report 2009

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6 Kesko’s year 2009 Year 2009 in brief • The Kesko Group’s net sales from continuing operations totalled €8,447 million (€9,591 million) • Operating profit excluding nonrecurring items was €155.4 million (€217.0 million) • Profit before tax was €216.6 million (€288.5 million) • The Kesko Group’s earnings per share were €1.27 (€2.24) • Earnings per share excluding nonrecurring items were €0.71 (€1.44) • The Board of Directors proposes to the Annual General Meeting that €0.90 per share be distributed as dividends for 2009 Net sales and profit The deterioration in the general economic situation in 2009 affected sales particularly in Kesko’s car and machinery trade and in the building and home improvement trade. Sales growth remained stable in the food trade. Net sales decreased by 11.9% from the previous year. In Finland, net sales dropped by 7.5% and in other countries by 28.1%. The K-Group’s sales (incl. VAT) to retail and B2B customers were €12,614 million, representing a decrease of 9.1% from the previous year. Net sales in the food segment increased by 2.4% and the grocery sales of K-food stores increased by 5.6% (VAT 0%) from the previous year. The sales growth of Pirkka products was particularly good. The K-citymarket’s sales also performed well and showed an increase of 14.3% in food sales. Net sales in the home and speciality goods segment decreased by 3.0%. Sales of home electronics and interior decoration items suffered from the weaker economic situation and growing unemployment. Towards the end of the year, however, sales started to pick up. Sales of clothing and sports items increased in particular and Christmas sales were very successful. In the building and home improvement segment, net sales dropped by 22.4%. In Finland, the decline in net sales can be mainly attributed to the drop in B2B sales. In other countries, the decrease in net sales resulted from lower demand and the weakening of the Swedish krona, the Norwegian krone, and the Russian rouble. The construction market declined substantially in the Nordic and Baltic countries, and in Russia. In the car and machinery trade, the market remained difficult and net sales decreased by 36.0%. The demand for cars dropped, but Audi, Volkswagen and Seat succeeded in increasing their market share to 18.5% (17.1%). The number of orders grew towards the end of the year. Konekesko’s net sales dropped due to the weakened machinery market and the discontinuation of the Baltic grain and agricultural supplies trade. Operating profit well short of the previous year Operating profit excluding non-recurring items amounted to €155.4 million (€217.0 million). Non-recurring items totalled €77 million and they include a €93 million gain on the sale of properties. Non-recurring expenses include a €14.4 million impairment charge on properties. The decrease in the operating profit excluding non-recurring items compared with the previous year can be attributed to weakened demand in the building and home improvement trade in particular and in the car and machinery trade. Kesko is transferring statutory employee pension insurance to Ilmarinen Kesko has decided to transfer management of the statutory pension provision and the insurance portfolio to Ilmarinen Mutual Pension Insurance Company in two phases, starting 1 June 2010. The Kesko Pension Fund’s statutory employee pension insurance (department B) covers about 8,700 people, and the first phase of the transfer will concern some 3,600 people. The transfer is estimated to have a positive effect on Kesko’s cash flow. The transfer is subject to the approval of the Financial Supervisory Authority and the Finnish Competition Authority. The second phase will be implemented at the beginning of 2012 at the earliest. Number of shareholders increased The number of shareholders totalled 38,888 at the end of 2009, an increase of 808 from the beginning of the year. Foreign shareholders owned 30% of the B shares at the end of 2009.
Performance indicators for 2009 Kesko’s year 2009 Key figures 2009 2008 Changes Net sales* € million 8,447 9,591 -11.9% Operating profit* € million 232 286 -18.7% Operating profit excl. non-recurring items* € million 155 217 -28.4% Profit before tax* € million 217 289 -24.9% Return on capital employed % 11.0 15.2 -4.2 pp Return on equity % 6.6 12.1 -5.5 pp Cash flow from operating activities € million 379 131 (..) Investments* € million 198 338 -41.5% Equity ratio % 54.1 52.4 1.8 pp Gearing % -12.5 2.3 -14.8 pp Dividend per share € 0.90** 1.00 -10.0% Earnings per share, diluted € 1.27 2.24 -43.1% Equity per share, adjusted € 20.39 20.09 1.5% Personnel, average* 19,184 21,327 -10.0% *continuing operations **proposal to the AGM (..) change over 100% Net sales by division* Operating profit excl. non-recurring items by division* Group’s net sales* € million Finland Other countries Food trade Home and speciality goods trade Building and home improvement trade Car and machinery trade Group’s operating profit* excl. non-recurring items, € million Food trade Home and speciality goods trade Building and home improvement trade Car and machinery trade Earnings/share and dividend/share, € 10,000 350 4.0 9,000 8,000 7,000 300 250 3.5 3.0 6,000 200 2.5 5,000 2.0 4,000 150 1.5 3,000 2,000 1,000 100 50 1.0 0.5 ** 0 0 0 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 *continuing operations **proposal to the AGM Earnings/share, basic Non-recurring items Dividend 7
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 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 30 and 31: 28 Kesko’s year 2009 Products and
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
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Page 55 and 56: compare the responsibility practice
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Decision-making, activities and mee
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A written managing director’s ser
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made by the Remuneration Committee
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programmes, for their competitive t
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the Audit Committee, and reports on
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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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