roadshow presentation 9/2014
DESCRIPTION
Roadshow presentation materialTRANSCRIPT
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RoadshowArja Talma
SVP, Store Sites and InvestmentsSeptember, 2014
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Kesko today
0
1 000
2 000
3 000
4 000
5 000
Net sales Q3/13-Q2/14€9,235m
Food trade
Home and speciality goods trade
Building and home improvement trade
Car and machinery trade
-50
0
50
100
150
200
250
Operating profit excl. non-recurring items Q3/13-Q2/14 €237m
SVP Arja Talma2
• Kesko’s net sales €9.2bn
- K-Group’s sales €11.5bn
• 2,000 stores in eight
countries
• Over 1.3 million customer
visits every day
• Book value of real estate
€1.4bn
• Market capitalisation €2.8bn
(June 30, 2014)
• 40,000 shareholders
• 24,000 employees
9/2014
€m
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Kesko has 2,000 stores engaged in chainoperations in eight countries
9/2014SVP Arja Talma
Total about 56m consumers
Food trade
• Finland, Russia
Home and speciality
goods trade
• Finland, Estonia, Latvia,
Russia
Building and home
improvement trade
• Finland, Sweden, Norway,
Baltic countries, Russia,
Belarus
Car and machinery trade
• Finland, Baltic countries
3
4%
82%2%
1%
5%
1%
3%
1%
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Business models
Suppliersand service
providers
Retailer
entrepreneurs’
retail trade, 51%
Kesko’s own
retail trade,
27%
B2B sales,
22%
Consumers
• Store concepts and business models
• Sourcing, logistics and marketing services
• Store chainmanagement
• Store sites• Retailer resources• Support processes
4 SVP Arja Talma 9/2014
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Strategic priorities
SVP Arja Talma5
Strengthening
sales growth and
improving
profitability
E-commerce and
multi-channel service
models
Utilising Russia’s
business
opportunities
9/2014
Strong financial position and good dividend payment capacity
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Focus on profitability in DIY and Home and speciality goods
SVP Arja Talma6
-50
0
50
100
150
200
250
300
350
400
2007 2008 2009 2010 2011 2012 2013
Operating profit excl. non-recurring items
Food trade Home and speciality goods trade
Building and home improvement trade Car and machinery trade
Common operations and eliminations
9/2014
€m
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Expansion of Kesko’s business operations in Russia
• Retail growth in Russia is estimated to exceed Nordic
countries’ growth figures also in the coming years
• Kesko has now 13 K-rauta stores in Russia and net
sales total about €300 million
• Kesko has now 4 K-ruoka stores in St. Petersburg, the
target is a network of 10 stores by 2015
• Launch of business operations has been better than
expected
• Changes in the business model, concept and network of
Intersport Russia to improve profitability
SVP Arja Talma7 9/2014
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Russian retail growth has exceededGDP growth
-10
-5
0
5
10
15
20
2000 2002 2004 2006 2008 2010 2012
Retail GDP
9/2014SVP Arja Talma8
Source: Rosstat
%
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Net sales
9/2014SVP Arja Talma9
0
2000
4000
6000
8000
10000
12000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Finland Other countries
+2.2%+5.8%
+11.1%
+9.3%+3.3%
-11.9%+3.9%
+7.8%+2.4%
-3.8%
€m
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-50
0
50
100
150
200
250
300
350
400
450
500
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Operating profit excl. non-recurring items Non-recurring items
Operating profit
9/2014SVP Arja Talma10
€m
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Significant strengthening of cash flow
-500
-400
-300
-200
-100
0
100
200
300
400
500
2008 2009 2010 2011 2012 2013
Cash flow fromoperating activities
Cash flow frominvesting activities
€414m
€-152m
9/2014SVP Arja Talma11
€m
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Capital expenditures will be adjusted to annual level of €200-300 million
0
50
100
150
200
250
300
350
400
450
500
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Capital expenditure in store sites Acquisitions Other capital expenditure
9/2014SVP Arja Talma12
€m
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SVP Arja Talma13
Strong financial position
Liquid funds €461m €474m
Interest bearing net debt €78m €113m
Equity ratio 52.3% 50.5%
Gearing 3.5% 5.1%
Q2/2014 Q2/2013
9/2014
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Kesko Corporation distributes at least 50% of its earnings per share excluding
non-recurring items as dividends, taking however the company's financial
position and operating strategy into account.
Dividend policy
SVP Arja Talma14 9/2014
1.44
0.711.00
1.78
0.90
1.84
1.30
1.47
1.20
1.68
1.40
0.80
0.57
0.290.01
-0.19
0.07
-0,5
0,0
0,5
1,0
1,5
2,0
2,5
2008 2009 2010 2011 2012 2013
Earnings/share, excl.
non-rec. items, basicNon-recurring items Dividend
Effective
dividend yield
2008 5.6%
2009 3.9%
2010 3.7%
2011 4.6%
2012 4.8%
2013 5.2%
€
1.27
2.24
1.28
2.08
1.85
69% 127%
73%65% 82%
1.20
83%
1.75
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Financial targets
The objectives Target level Realised 2013
Net sales growth Growth rate exceeding that of the market
Realised**: Furniture trade and Car trade in Finland
Return on equity* 12% 7.7%
Return on capital employed*
14% 9.8%
Interest-bearing net debt/EBITDA
< 3 -0.3
Equity ratio 40–50% 54.5%
*Excluding non-recurring items
**Kesko’s own estimate
15 SVP Arja Talma 9/2014
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Future outlook
Estimates of the future outlook for Kesko Group's net sales and operating profit excluding non-recurring items are given for the 12 months following the reporting period (7/2014-6/2015) in comparison with the 12 months preceding the reporting period (7/2013-6/2014).
Future prospects for the general economic situation and consumer demand continue to be characterised by significant uncertainty in Kesko's operating area. Due to the weakened economic situation and the decline in consumers' purchasing power, demand in the trading sector is expected to remain weak.
Kesko Group's net sales and operating profit excluding non-recurring items for the next 12 months are expected to remain at the level of the preceding 12 months, unless the overall consumer demand weakens significantly.
SVP Arja Talma16 9/2014
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Divisions
9/2014SVP Arja Talma17
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SVP Arja Talma18
Food trade
•Net sales €4,356 million, +0.0%
•Operating profit* €203.7 million (4.7%), €+10.6 million
•Return on capital employed* 25.7%
*excl. non-recurring items
Total 916 stores
9/2014
Q3/2013-Q2/2014
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• K-food stores’ competitive
advantage projects- fruit & vegetables- bakery- service counters
(meat, fish, ready-to-eat)
K-Group 34.0%
S-Group 45.7%
Suomen Lähikauppa 7.0%
Lidl 6.6%
Others 6.8%
34.0%
Food trade market shares 2013
9/2014SVP Arja Talma19
Total market €16.6 billion
Source: Nielsen
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Superior fresh foods departments
9/2014SVP Arja Talma20
The most diversified
food selection for
families
Service oriented fresh foods
market for home cooks
The freshest neighbourhood
store
Retailer’s online store,
citymarket.fi
Reliable food shopping regardless
of place and time
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Pirkka – one of Finnish superbrands
• By far the most valued and best-
known store private label in Finland
• Launched in 1986
• Pirkka range comprises more than
2,200 products
– Some 100 of Pirkka products are
organic and some 40 are
Fairtrade products
• Introducing a new PL, K-Menu
• Total share of K-store PL-sales 19%
SVP Arja Talma21 9/2014
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Russian food market
• Market size some €255 billion
- Share of all retailing some 47%
• Operative EBITDA of peers 6-12%
9/2014SVP Arja Talma22
Source: PMR
RetailerRevenues ’13,
€ bn
Magnit 13.4
X5 12.5
Auchan 7.2
Dixy 4.3
O’key 3.3
Metro 3.0
Lenta 2.0
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K-ruoka
• Russian business operations started
in St. Petersburg in December 2012
- Total of 4 food stores and net
sales of € 71 million at the end of
2013
- Target is to open 3 new stores in
2014 and a network of 10 stores
by 2015
• Net sales target of the food trade
€500 million and positive result in
2017
• The basic concept is a large, better
than the average food store – ”Best in
Fresh”, with a selection of home and
speciality goods for everyday needs
9/2014SVP Arja Talma23
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SVP Arja Talma
Home and speciality goods trade chains
24 9/2014
Total 368 stores
•Net sales €1,390 million, -10.2%
•Operating profit* €-21.5 million (-1.5%), €-26.9 million
•Return on capital employed* -5.2%
*excl. non-recurring items
Division of sales, 2013
Hypermarkets, non-food, €613 m
Department stores, €380 m
Sports, €272 m
Furniture, €196 m
Home electronics, €41 m
Shoes, €42 m
Q3/2013-Q2/2014
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Strategic focus areas of home and speciality goods trade
• Customer driven renewal of K-citymarkethome and speciality goods trade
• NetAnttila’s strong development and improvement of Anttila’s profitability
- Expanding considerably the selection and significantly improving customerexperience in online store
- Decisions are made to close 8 Anttila department stores and 4 Kodin1 department stores
- Personnel reductions will totalapproximately 400 full-time equivalents
• Maintaining Intersport Finland’s and Asko’sand Sotka’s strong brands, market positionsand profitability
• Changes in the business model, concept and network of Intersport Russia
• Increasing the share of e-commerce in allchains
9/2014SVP Arja Talma25
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Building and home improvement trade
SVP Arja Talma26
Total 339 stores
9/2014
•Net sales €2,623 million, -3.5%
•Operating profit* €39.0 million (1.5%), €+29.1 million
•Return on capital employed* 5.5%
*excl. non-recurring items
Q3/2013-Q2/2014
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Building and home improvement trademarket shares 2013
Sales by country in 2013
Finland, €1,718 m
Sweden, €207 m
Norway, €720 m
Estonia, €69 m
Latvia, €52 m
Lithuania, €266 m
Russia, €272 m
Belarus, €106 m
9/2014SVP Arja Talma27
0 10 20 30 40
Belarus
N-w and…
Lithuania
Latvia
Estonia
Norway
Sweden
Finland
N-w and central
Russia
Market shares
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The biggest DIY-enterprisesin Europe 2013
Sources: Companies’ annual reports, companies’ webpages, Baumarktmanager
NET SALES BN€
13.10 13.04
5.434.27
3.36 3.152.26
0
2
4
6
8
10
12
14NET SALES € BN
9/2014SVP Arja Talma28
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Strategic focus areas of building and home improvement trade
• ’K-rauta makes it happen with you’
• Common selections, own brands
and reduced inventories
• Increasing B2B sales
• Strong development of
online services
• Cost efficiency and inventory
programs
• Nordic retailer business model
9/2014SVP Arja Talma29
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Russian DIY market
• Retail chains share of DIY sales
about 50%
- Share of modern retail on the
increase
• K-rauta is the second largest
operator in St. Petersburg
- Targeting a network of some 10
stores
• The focus of the expansion will be
Moscow and cities nearby Moscow
• Net sales target of €500 million and
positive result in 2017
9/2014SVP Arja Talma30
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Volkswagen 12.4%
Toyota 11.7%
Skoda 9.5%
Volvo 7.3%
Ford 6.9%
Audi 6.5%
Nissan 6.1%
Kia 5.6%
BMW 4.9%
Seat 1.6%
Others 27.5%
20.9%
Car and machinery trade
SVP Arja Talma31 9/2014
•Net sales €1,042 million, +0.4%
•Operating profit* €32.3 million (3.1%),
€-4.6 million
•Return on capital employed* 20.1%
*excl. non-recurring items
Source: TraFi
Q3/2013-Q2/2014
Market share (passenger cars),
new registrations 1-6/2014
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Kesko as an investment
9/2014SVP Arja Talma32
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Basic information
• Established in 1940
• Listed on the Helsinki Stock Exchange (NASDAQ OMX Helsinki) in 1960
• Employees 24,500, of whom 53% work in Finland and 47% outside Finland
• 40,000 shareholders
– 29% of all shares owned by non-Finnish
– 42% of B-shares owned by non-Finnish
• Market capitalisation €2.8 billion (June 30, 2014)
• Share series: A and B – voting rights 10:1
Number of shares
Ashares31.7%
Bshares68.3%
Voting rights
B shares
18%A shares
82%
33 SVP Arja Talma 9/2014
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Shareholders
Ownership by shareholder category
At 6/2014
The largest registered shareholders
At 6/2014 by number of shares%
Non-financial corporations and housingcorporations 26%Financial and insurance corporations 7%
General Government 5%
Households 27%
Rest of the world 29%
Others 6%
34 SVP Arja Talma 9/2014
1 The K-Retailers´ Association 3,674,867 3.67
2 Vähittäiskaupan Takaus Oy 3,491,771 3.49
3 Kruunuvuoren Satama Oy 3,438,885 3.44
4 Valluga-sijoitus Oy 1,340,439 1.34
5 Elo Pension Company 1,192,968 1.19
6 Varma Mutual Pension
Insurance Company
1,130,986 1.13
7 Foundation for Vocational
Training in the Retail Trade
1,045,808 1.05
8 Kesko Oyj 1,002,735 1.00
9 Oy The English Tearoom Ab 1,000,000 1.00
10 Ilmarinen Mutual Pension
Insurance Company
841,587 0.84
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Real estate in 2013
9/2014SVP Arja Talma35
Owned properties
CountryArea,
1,000 m2
Finland 758
Other Nordic countries 121
Baltic countries and Belarus 112
Russia 143
Total
Carrying amount
1,135
€1,423 M
Leased properties total1,000 m2 2,963
Owned properties by region
Finland 71%
Other Nordiccountries 6%
Baltic countriesand Belarus 3%
Russia 20%
Owned properties by division
Food 46%
Home and specialitygoods 14%
Building and homeimprovement 30%
Car and machinery5%
Others 5%
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Kesko looks into setting up a real estate investment trust
• Kesko is looking into selling some of the store sites it owns to a trust to be set up with Kesko as one of its significant investors. Kesko Group would continue its operations in the store sites under long-term leases signed in connection with their sales to the trust.
• Kesko's objective is to set up a trust of mainly Kesko-owned store sites and shopping centres in Finland, Sweden and Russia with a maximum fair value of approximately €750 - 950 million. The trust is planned also to be made available to private investors. Listing of units is also being assessed.
• The possible trust is expected to be launched in the course of 2014.
• The sale of store sites to the trust is estimated to generate a significant non-recurring gain, the amount of which depends on the properties sold and return requirements applied to them. These will be specified at a later stage in the assessment.
• Launching the real estate investment trust depends in addition to investor interest on whether it is possible for Kesko to achieve such terms and conditions in the arrangement that are economically justifiable for it, taking the Group's strong financial position into account. Moreover, starting a real estate investment trust is subject to the authorisation of the Financial Supervisory Authority.
9/2014SVP Arja Talma36
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Reclassification of store sites
Old classification
Strategic properties 77%
Standard properties 19%
Development properties 4%
New classification
Strategic properties 53%
Standard properties 43%
Development properties 4%
Realisation properties 0%
9/2014SVP Arja Talma37
Key criteria for
strategic properties
• Catchment area
with over 100,000
inhabitants
• Store area over
2,000 m2
• Useful life over 10
years
• Development
possibilities
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Kesko is one of the world's leading companies in ESG
• In ’The Global 100 Most Sustainable Corporations in the World’ list since 2005.
• In the SAM (Sustainable Asset Management) Sustainability Yearbook 2013,
Kesko was classified into the bronze class in the Food & Drug Retailers sector.
• Included in the Dow Jones sustainability indexes DJSI World and DJSI Europe
since 2003.
• Included in the FTSE4Good index focusing on responsible investment since
2009.
• Best in its sector in the Nordic Carbon Disclosure Leadership climate index in
2011-2013.
• 2011-2013 World Finance Award for Best Corporate Governance in Finland
SVP Arja Talma38 9/2014
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Responsibility is an integral part of Kesko’sstrategy and key business operations
SVP Arja Talma39
• Kesko’s updated responsibility programme includes objectives for
- responsible purchasing and sales
– sustainable choices and services for customers
– welfare in the workplace
– mitigation of climate change
– sustainable use of natural resources
– stakeholder inclusion.
• Statements and policies supporting the work of buyers and stores
include:
- Palm oil policy
- Stand on sandblasting of jeans
- Fish and shellfish statement
- Timber policy
• In supplier assessment for high-risk countries, Kesko uses
international auditing systems, BSCI auditing and SA8000
certification.
9/2014
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Additional material
40 SVP Arja Talma 9/2014
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Kesko’s operating profit excluding non-recurring items for January-June at previous year’s level• Kesko’s net sales were €4.5 billion, change -1.8%
– Sales increased in the building and home improvement trade and in the
car trade
• Operating profit excl. non-recurring items was €86.7 million (€88.4 million)
– Profitability improved significantly in the building and home improvement
trade, but continued to weaken in Anttila
– Enhancement measures continued in all business operations
– Return on capital employed excl. non-recurring items was 9.9% (9.3%)
• Strong financial position
– Liquid assets €461 million (€474 million)
– Equity ratio 52.3% (50.5%)
• Total net sales from Russia are expected to exceed €1 billion in 2017 and
operations are expected to be profitable
• Kesko Group's net sales and operating profit excluding non-recurring items for
the next 12 months are expected to remain at the level of the preceding 12
months, unless the overall consumer demand weakens significantly
SVP Arja Talma41 9/2014
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Consumers’ expectations for own financesOwn finances in 12 months
0
2
4
6
8
10
12
14
16
1/0
0
7/0
0
1/0
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7/0
1
1/0
2
7/0
2
1/0
3
7/0
3
1/0
4
7/0
4
1/0
5
7/0
5
1/0
6
7/0
6
1/0
7
7/0
7
1/0
8
7/0
8
1/0
9
7/0
9
1/1
0
7/1
0
1/1
1
7/1
1
1/1
2
7/1
2
1/1
3
7/1
3
1/1
4
7/1
4
Expectations for own finances
Expectation, 21st centuryaverage
SVP Arja Talma42
Source: Statistics Finland
9/2014
![Page 43: Roadshow presentation 9/2014](https://reader034.vdocuments.us/reader034/viewer/2022042816/5590944d1a28abb0538b4700/html5/thumbnails/43.jpg)
Profit for 1-6/2014
SVP Arja Talma43
1-6/2014 1-6/2013
Net sales, €m 4,499 4,580
Fixed costs excl. non-recurring items, €m 874 884
Operating profit excl. non-recurring items, €m
87 88
Non-recurring items, €m -30 8
Net financial items, €m 1 -3
Income tax, €m 15 28
Net profit for the period, €m 42 65
9/2014
![Page 44: Roadshow presentation 9/2014](https://reader034.vdocuments.us/reader034/viewer/2022042816/5590944d1a28abb0538b4700/html5/thumbnails/44.jpg)
Financial position
1-6/2014 1-6/2013 1-12/2013
Equity ratio, % 52.3 50.5 54.5
Liquid assets, €m 461 474 681
Capital expenditure, €m 99 90 171
Interest-bearing net debt, €m 78 113 -126
Inventories, €m 828 807 797
SVP Arja Talma44 9/2014
![Page 45: Roadshow presentation 9/2014](https://reader034.vdocuments.us/reader034/viewer/2022042816/5590944d1a28abb0538b4700/html5/thumbnails/45.jpg)
Net sales by division (€m)
SVP Arja Talma45
1-6/2014 Change 4-6/2014 Change
Food trade 2,112 -1.5% 1,106 +0.6%
Home and specialitygoods trade
600 -10.0% 288 -10.5%
Building and home improvement trade
1,317 +1.2% 736 -0.6%
Car and machinerytrade
556 +0.9% 283 -6.0%
Group total 4,499 -1.8% 2,371 -2.1%
9/2014
![Page 46: Roadshow presentation 9/2014](https://reader034.vdocuments.us/reader034/viewer/2022042816/5590944d1a28abb0538b4700/html5/thumbnails/46.jpg)
Operating profit excl. non-recurring itemsby quarter
18.6
69.8
83.6
66.8
19.1
67.6
0
20
40
60
80
100
Q1 Q2 Q3 Q4 Q1 Q2
SVP Arja Talma46
2013 2014
€m
9/2014
![Page 47: Roadshow presentation 9/2014](https://reader034.vdocuments.us/reader034/viewer/2022042816/5590944d1a28abb0538b4700/html5/thumbnails/47.jpg)
Operating profit excl. non-recurring itemsby division (€m)
SVP Arja Talma47
1-6/2014 Change 4-6/2014 Change
Food trade 99.4 0.4 52.9 2.2
Home and specialitygoods trade
-41.0 -13.2 -18.3 -8.2
Building and home improvement trade
16.2 13.3 26.6 7.1
Car and machinery trade 19.1 -1.7 10.9 -2.1
Group total 86.7 -1.7 67.6 -2.1
9/2014
![Page 48: Roadshow presentation 9/2014](https://reader034.vdocuments.us/reader034/viewer/2022042816/5590944d1a28abb0538b4700/html5/thumbnails/48.jpg)
Year-on-year change in fixed costsexcluding non-recurring items
SVP Arja Talma48
10.3%
7.5% 8.0%
1.2%
-4.0% -4.5% -4.0%
-2.0% -1.3%-1.0%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
9/2014
![Page 49: Roadshow presentation 9/2014](https://reader034.vdocuments.us/reader034/viewer/2022042816/5590944d1a28abb0538b4700/html5/thumbnails/49.jpg)
Return on capital employedexcl. non-recurring items, moving 12 mo
SVP Arja Talma
-5.2%
5.5%
20.1%
9.9%
-10
-5
0
5
10
15
20
25
30
Group totalHome and
speciality goods
trade
Food
trade
Car and
machinery trade
Building and
home
improvement
trade
49
%
25.7%
€792 m €412 m €713 m €160 m €2,384 mCapital
employed:
9/2014
![Page 50: Roadshow presentation 9/2014](https://reader034.vdocuments.us/reader034/viewer/2022042816/5590944d1a28abb0538b4700/html5/thumbnails/50.jpg)
1,099 1,106
2,144 2,112
0
400
800
1200
1600
2000
2400
4-6/13 4-6/14 1-6/13 1-6/14
Steady profit performancein the food trade
SVP Arja Talma50
-1.5%
• Kesko Food’s net sales down 1.5%
- Decreased purchasing power also
reflected on the food trade
- Increase in prices has stopped
- Sales of K-food stores below market
performance
• In Russia, sales and profitability of food
stores better than expected
• Profitability improved by cost savings
• Capital expenditure €47 million
(€44 million)
• Four new K-supermarkets and two new
K-markets opened in Finland
50.8 52.9
99.0 99.4
0
20
40
60
80
100
4-6/13 4-6/14 1-6/13 1-6/14
+0.6%
9/2014
Net sales, €m
Operating profit excl.
non-recurring items, €m
![Page 51: Roadshow presentation 9/2014](https://reader034.vdocuments.us/reader034/viewer/2022042816/5590944d1a28abb0538b4700/html5/thumbnails/51.jpg)
322 288
667600
0
200
400
600
800
4-6/13 4-6/14 1-6/13 1-6/14
-10.0-18.3
-27.8
-41.0
-50
-40
-30
-20
-10
0
4-6/13 4-6/14 1-6/13 1-6/14
Market situation in the home and specialitygoods trade continued to deteriorate
SVP Arja Talma51
• Profitability of the home and specialitygoods chains negatively impacted by salesdecline
• Anttila's profit continued to decline and was clearly loss-making
- Eight Anttila department stores andfour Kodin1 department stores to beclosed
- Decisions on a total reduction of around 400 full-time equivalents in department stores and centralisedfunctions
• Intersport Finland's profit remained at a good level despite sales decline
• Sales of online stores increasing- Musta Pörssi to concentrate on
e-commerce• Capital expenditure €7 million (€14 million)
-10.0%
-10.5%
9/2014
Net sales, €m
Operating profit excl.
non-recurring items, €m
![Page 52: Roadshow presentation 9/2014](https://reader034.vdocuments.us/reader034/viewer/2022042816/5590944d1a28abb0538b4700/html5/thumbnails/52.jpg)
740 736
1,302 1,317
0
500
1000
1500
4-6/13 4-6/14 1-6/13 1-6/14
19.5
26.6
2.9
16.2
0
10
20
30
4-6/13 4-6/14 1-6/13 1-6/14
Sales and profit of the building and home improvement trade on the increase
SVP Arja Talma52
• In terms of local currencies, sales were
up in all countries, at 5.8% in total
• Market position of K-rauta and Rautia in
Finland continued to strengthen
• Operating profit was up from the
previous year due to sales increase and
cost savings
-Profit improved especially in foreign
operations
• Capital expenditure €27 million
(€22 million)
+1.2%
-0.6%
9/2014
Net sales, €m
Operating profit excl.
non-recurring items, €m
![Page 53: Roadshow presentation 9/2014](https://reader034.vdocuments.us/reader034/viewer/2022042816/5590944d1a28abb0538b4700/html5/thumbnails/53.jpg)
301 283
551 556
0
200
400
600
800
4-6/13 4-6/14 1-6/13 1-6/14
Volkswagen continued as market leader
SVP Arja Talma53
• Market share of Audi, Volkswagen and
Seat 21.0% (21.1%)
• VV-Auto’s net sales performance +3.4%
- Market performance of new
registrations of passenger cars and
vans +4.6% in Finland
• Konekesko’s net sales performance
-5.7%, market performance declined in the
agricultural machinery trade
• Profitability of the car trade at a good level
due to sales increase and enhancement
measures13.010.9
20.8 19.1
0
10
20
30
4-6/13 4-6/14 1-6/13 1-6/14
+0.9%
-6.0%
9/2014
Car and machinery trade:
Net sales, €m
Operating profit excl.
non-recurring items, €m
![Page 54: Roadshow presentation 9/2014](https://reader034.vdocuments.us/reader034/viewer/2022042816/5590944d1a28abb0538b4700/html5/thumbnails/54.jpg)
Capital expenditure
41
48
35
47
43
56
0
10
20
30
40
50
60
Q1 Q2 Q3 Q4 Q1 Q2
SVP Arja Talma54
20142013
€m
9/2014
![Page 55: Roadshow presentation 9/2014](https://reader034.vdocuments.us/reader034/viewer/2022042816/5590944d1a28abb0538b4700/html5/thumbnails/55.jpg)
Operating margin excl. non-recurringitems by division
1-3/2012
4-6/2012
7-9/2012
10-12/2012
1-3/2013
4-6/2013
7-9/2013
10-12/2013
1-3/2014
4-6/2014
Food 3.4 3.5 4.6 4.0 4.6 4.6 5.1 4.2 4.6 4.8
Home and specialitygoods
-3.5 -0.2 0.2 6.6 -5.2 -3.1 -0.6 4.9 -7.3 -6.3
Building and home improvement
-1.4 1.9 2.4 -1.6 -3.0 2.6 3.4 -0.2 -1.8 3.6
Car and machinery
4.4 3.7 4.4 2.1 3.1 4.3 3.8 1.5 3.0 3.8
Total 1.0 2.4 3.2 2.9 0.9 2.9 3.5 2.8 0.9 2.9
9/2014SVP Arja Talma55
![Page 56: Roadshow presentation 9/2014](https://reader034.vdocuments.us/reader034/viewer/2022042816/5590944d1a28abb0538b4700/html5/thumbnails/56.jpg)
Operating profit as % of net sales
9/2014SVP Arja Talma56
Operating margin
excl. non-recurring
items
Q3/13-
Q2/14,
% of net
sales
Q3/12-
Q2/13,
% of net
sales
Change,
pp
Q2/14,
% of net
sales
Q2/13,
% of net
sales
Change,
pp
Food trade 4.7 4.4 0.2 4.8 4.6 0.2
Home and speciality
goods’ trade-1.5 0.3 -1.9 -6.3 -3.1 -3.2
Building and home
improvement trade1.5 0.4 1.1 3.6 2.6 1.0
Car and machinery
trade3.1 3.6 -0.5 3.8 4.3 -0.5
Total 2.6 2.5 0.1 2.9 2.9 0.0
![Page 57: Roadshow presentation 9/2014](https://reader034.vdocuments.us/reader034/viewer/2022042816/5590944d1a28abb0538b4700/html5/thumbnails/57.jpg)
Kesko Group’s sales 1-7/2014
57 SVP Arja Talma 9/2014
July 2014 1.1. -31.07.2014
€ million Change, % € million Change, %
Food trade, total 375.1 0.7 2,506.5 -1.0
Home and speciality goods trade, total 103.4 -5.7 708.2 -9.4
Building and home improvement trade, Finland 96.5 -3.4 737.8 1.2
Building and home improvement trade, other countries
139.6 -0.4 846.7 0.8
Building and home improvement trade, total 236.1 -1.6 1,584.4 1.0
Car and machinery trade, total 92.9 -5.9 662.0 0.2
Common operations and eliminations -10.4 -95.9
Grand total 797.1 -1.5 5,365.1 -1.5
Finland, total 631.4 -1.1 4,372.1 -2.4
Other countries, total 165.7 -2.9 993.0 2.4
Grand total 797.1 -1.5 5,365.1 -1.5
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Maturities of interest-bearing liabilities
€ millionAt 31 Dec.
2013 2014 2015 2016 2017
2018 and
later
Loans from financial institutions 27.3 0.6 24.4 0.2 0.1 1.9
Bonds 242.4 242.7
Private placement notes (USD) 100.3 43.5 26.1 17.4
Pension loans 31.9 5.8 5.8 5.8 5.8 8.7
Finance lease liabilities 18.8 7.6 2.8 2.7 2.6 3.2
Payables to K-retailers 113.4 113.4
Other interest-bearing liabilities 21.6 21.6
58 SVP Arja Talma 9/2014
Unused commercial paper programmes, €359m
Two unused committed borrowing facilities, total €100m
![Page 59: Roadshow presentation 9/2014](https://reader034.vdocuments.us/reader034/viewer/2022042816/5590944d1a28abb0538b4700/html5/thumbnails/59.jpg)
Unemployment rate
SVP Arja Talma59 9/2014
Source: Statistics Finland
![Page 60: Roadshow presentation 9/2014](https://reader034.vdocuments.us/reader034/viewer/2022042816/5590944d1a28abb0538b4700/html5/thumbnails/60.jpg)
Development of value and volume of retail trade sales, %
-10
-5
0
5
10
15
Value VolumeSource: Statistics Finland
9/2014SVP Arja Talma60
%
![Page 61: Roadshow presentation 9/2014](https://reader034.vdocuments.us/reader034/viewer/2022042816/5590944d1a28abb0538b4700/html5/thumbnails/61.jpg)
Development of value and volume of daily consumer goods trade, %
9/2014SVP Arja Talma61
-10
-5
0
5
10
15
Value Volume
%
Source: Statistics Finland
![Page 62: Roadshow presentation 9/2014](https://reader034.vdocuments.us/reader034/viewer/2022042816/5590944d1a28abb0538b4700/html5/thumbnails/62.jpg)
Building permits granted and building starts, mil. m3, variable annual sum
9/2014SVP Arja Talma62
Source: Statistics Finland
* Preliminary data
![Page 63: Roadshow presentation 9/2014](https://reader034.vdocuments.us/reader034/viewer/2022042816/5590944d1a28abb0538b4700/html5/thumbnails/63.jpg)
New registrations of passenger cars in Finland
SVP Arja Talma
Source: Statistics Finland
63 9/2014
![Page 64: Roadshow presentation 9/2014](https://reader034.vdocuments.us/reader034/viewer/2022042816/5590944d1a28abb0538b4700/html5/thumbnails/64.jpg)
Contact information
• www.kesko.fi/investors
• Twitter.com/Kesko_IR
9/2014SVP Arja Talma64