INTERIM REPORT JANUARY-JUNE 2015 PRESIDENT AND CEO MIKKO HELANDER 22 JULY 2015

Transcription

1 INTERIM REPORT JANUARY-JUNE 2015 PRESIDENT AND CEO MIKKO HELANDER 22 JULY

2 KEY EVENTS IN Q2 K-food stores market share is estimated to have increased Profitability of the home improvement and speciality goods trade continued to improve Real estate arrangement was completed as planned, positive cash flow effect 403 million Liquid assets rose to 843 million, Kesko has a very strong financial position New strategy was published 2

3 FINANCIAL PERFORMANCE Q2/ 2015 Q2/ 2014 H1/ 2015 H1/ 2014 Net sales, m 2,227 2,371 4,310 4,499 Operating profit, m Operating profit excl. non-recurring items, m Operating margin excl. non-recurring items, % Net profit for the period, m Net profit for the period excl. nonrecurring items, m

4 NET SALES IN LOCAL CURRENCIES EXCL. ANTTILA IN Q2-2.2% AND H1-0.8% TOTAL CHANGE FOR Q2-6.0% AND FOR H1-4.2% m 5,000 4,000 4,499 4,310 3,000 2,000 1,000 2,371 2,227 0 Q2/2014 Q2/2015 Reported net sales,, incl. Anttila H1/2014 H1/2015 4

5 Q2 NET SALES BY DIVISION Car and machinery trade 277m 12% 1,149m 52% Grocery trade Home improvement and speciality goods trade 797m 36% 5

6 OPERATING PROFIT EXCL. NON-RECURRING ITEMS IMPROVED IN Q2 AND H1 m Q2/2014 Q2/2015 H1/2014 H1/2015 6

7 STEADY PROFIT PERFORMANCE CONTINUES OPERATING PROFIT EXCL. NON-RECURRING ITEMS m Q1/2013 Q2/2013 Q3/2013 Q4/2013 Q1/2014 Q2/2014 Q3/2014 Q4/2014 Q1/2015 Q2/2015 7

8 RETURN ON CAPITAL EMPLOYED INCREASES EXCL. NON-RECURRING ITEMS, ROLLING 12 MO % Q1/2013 Q2/2013 Q3/2013 Q4/2013 Q1/2014 Q2/2014 Q3/2014 Q4/2014 Q1/2015 Q2/2015 8

9 STRONG CASH FLOW ALSO WITHOUT REAL ESTATE ARRANGEMENT m Q1/2013 Q2/2013 Q3/2013 Q4/2013 Q1/2014 Q2/2014 Q3/2014 Q4/2014 Cash flow after capital expenditure Q1/ Q2/2015 9

10 FINANCIAL POSITION Equity ratio, % Liquid assets, m Interest-bearing net liabilities, m Capital expenditure, m Return on capital employed*, % Return on equity*, % * Excl. non-recurring items, rolling 12 mo 10

11 GROCERY TRADE 11

12 NET SALES FOR Q2 AND H1 m 2,500 2,000 2,304 2,252 1,500 1,000 1,202 1, Q2/2014 Q2/2015 H1/2014 H1/

13 OPERATING PROFIT EXCL. NON-RECURRING ITEMS FOR Q2 AND H1 m Q2/2014 Q2/2015 H1/2014 H1/

14 GROCERY TRADE IN Q2 K-food stores market share in Finland is estimated to have increased Profitability improved to 3.8% from the first months of the year (Q1: 3.2%) Sales in Russia increased by 36% in roubles Kespro s market share increased and profitability remained at a good level 14

15 MARKET SHARE IS ESTIMATED TO HAVE INCREASED SINCE APRIL, NO SIGNIFICANT CHANGE IN THE LONG TERM %

16 K-GROUP S PERFORMANCE IN THE GROCERY TRADE HAS BEEN GOOD Exceptional operating environment, consumers purchasing power has declined for three years Due to intense competition and consumers decreased purchasing power, food prices have fallen by 1% in 2015 K-Group has succeeded by investing in both price and quality As the economic cycle turns, the K-Group will have even better preconditions for success 16

17 HOME IMPROVEMENT AND SPECIALITY GOODS TRADE 17

18 NET SALES IN LOCAL CURRENCIES EXCL. ANTTILA IN Q2 +0.1% AND H1 +1.0% TOTAL CHANGE FOR Q2-10.4% AND FOR H1-8.0% m 2,000 1,500 1,651 1,519 1, Q2/2014 Q2/2015 Reported net sales,, incl. Anttila H1/2014 H1/

19 OPERATING PROFIT EXCL. NON-RECURRING ITEMS IMPROVED CLEARLY IN Q2 AND H1 m Q2/2014 Q2/2015 H1/2014 H1/

20 HOME IMPROVEMENT AND SPECIALITY GOODS TRADE IN Q2 Building and home improvement trade Market share is estimated to have increased in Finland, Sweden, the Baltics and Russia Operating profit has improved for nine consecutive quarters Best profit improvement was seen in Sweden In the speciality goods trade, K-maatalous improved its result in a difficult operating environment 20

21 CAR AND MACHINERY TRADE 21

22 NET SALES FOR Q2 AND H1 m Q2/2014 Q2/2015 H1/2014 H1/

23 OPERATING PROFIT EXCL. NON-RECURRING ITEMS FOR Q2 AND H1 m Q2/2014 Q2/2015 H1/2014 H1/

24 CAR AND MACHINERY TRADE IN Q2 Profitability remained at a good level despite the challenging operating environment Uncertainty related to car taxation has been removed Volkswagen continues as the market leader Net sales growth of the machinery trade 3.4%, profitability improved Yamarin boats had good sales performance 24

25 MARKET SITUATION AND FUTURE OUTLOOK 25

26 odotukset omasta taloudesta seuraavan 12 kk:n kuluttua CONSUMER CONFIDENCE IN FINLAND Expectations for own finances Expectation, 21st century average /00 7/00 1/01 7/01 1/02 7/02 1/03 7/03 1/04 7/04 1/05 7/05 1/06 7/06 1/07 7/07 1/08 7/08 1/09 7/09 1/10 7/10 1/11 7/11 1/12 7/12 1/13 7/13 1/14 7/14 1/15 Source: Statistics Finland Lähde: Tilastokeskus

27 WEAK TREND IN THE RETAIL TRADE IN FINLAND 10 8 % (rolling 12 mo) Estonia Lithuania Norway Sweden Latvia Finland Source: Eurostat, excl. motor vehicles and fuels

28 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 (7/2015-6/2016) in comparison with the 12 months preceding the reporting period (7/2014-6/2015). The general economic situation and the expected trend in consumer demand vary in Kesko s different operating countries. In Finland, the trading sector s performance is expected to remain weak and the tough competitive situation is expected to continue. In Sweden, Norway and the Baltic countries, the growth in demand in the trading sector is expected to continue. In Russia, the economic situation and consumers purchasing power are estimated to remain weak. Kesko Group's net sales for the next 12 months are expected to be lower than the level of the preceding 12 months and the operating profit excluding nonrecurring items for the next 12 months is expected to exceed the level of the preceding 12 months. 28

29 THE TRAIN KEEPS RUNNING Loss-making department store trade Anttila s divestment Profitability problems in the building and home improvement trade in Sweden and Norway clear profitability improvement Real estate arrangement incomplete real estate arrangement completed Declining food trade market share market share is estimated to have increased Strategy new focused strategy 29

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