AGM 2005: Speech of Heikki Takamäki
Dear shareholders,
ladies and gentlemen!
Year 2004 was a very successful one to the Kesko Group in many respects. Our net sales increased to 7,517 million euros and our profit before taxes reached 173 million euros. Both of these figures are all-time high in the history of Kesko.
As we already know, in accordance with our long-standing dividend policy, Kesko's Board of Directors proposes to the Annual General Meeting that 1 euro per share be distributed as dividends.
The positive development of the Kesko Group can mainly be attributed to the recent years' reforms in the Group strategy and the activities based on that, with the key target on growth and profitability in Finland, Sweden and the Baltic countries.
Kesko's President and CEO Matti Halmesmäki, who assumed office at the beginning of March, will in a moment present the Group's operations and financial highlights for last year in more detail. I would however like to list here, as a kind of subheadings, some key achievements of our Group during the past year.
One of the most essential trends, to my mind, was the continued intensive internationalisation. The Group's net sales outside Finland grew by nearly one third, exceeding one billion euros.
This is particularly important as our high market shares in nearly all product lines in Finland make it increasingly difficult to grow our sales here. And the fact the several international trading chains representing diverse sectors have already entered the Finnish market is certainly a challenge.
Last year's greenfielding included the establishment of a joint venture with the Swedish ICA Baltic AB for the Baltic food market. The joint venture called RIMI Baltic AB started operations at the beginning of this year.
The joint venture runs about 160 food stores in all and its share of the Baltic market is about 15%.
Another important and, in fact, a new country for our retail business was Russia. At the end of July, we signed a letter of intent to acquire a majority holding in the St. Petersburg Stroymaster DIY chain.
However, negotiations concluded in Kesko's subsidiary Rautakesko Ltd's agreeing to acquire all shares of the company that owns the Stroymaster chain. Kesko Corporation's Board of Directors approved this arrangement on 17 March. The deal remains subject to an audit made and approved at Stroymaster.
Kesko complemented its service concepts in Finland too when Keswell Ltd agreed to acquire Indoor Group Ltd's shares in October. As a result, the chain concepts of Indoor Group Ltd, as well as Indoor's own Asko and Sotka furniture stores in Finland, Sweden, Estonia and Latvia, were transferred to Keswell Ltd's ownership.
Furniture is an important supplement to the total service package provided by the K-Alliance. Now we are able to offer an increasingly full set of services for our customers in building, furnishing, interior decoration and all other consumption.
Last year, the Group continued to actively highlight the importance of responsible operations in all our purchasing and marketing. We have also reported extensively about this work.
Kesko's corporate responsibility report was ranked best in the trading sector and 14th of all in the global comparison made for the UN Environmental Programme last October.
Ladies and gentlemen!
The change in the post of a listed company's President and CEO is always a significant event both for the company and the persons involved.
In September, Kesko's Board of Directors appointed Matti Halmesmäki, M.Sc. (Econ .), LL.M., as Kesko Corporation's Managing Director and the Kesko Group's President and CEO with effect from 1 March 2005.
The same day Matti Honkala retired after serving Kesko for over 38 years. I would once again like to thank you, Matti, for your good and profitable work for the success of the K-Alliance.
The new President and CEO Matti Halmesmäki has also already made a long career at Kesko.
He started at the company in 1980 as a lawyer and was appointed as Director of the Accounting and Office Administration Department in 1986. In 1989, Matti Halmesmäki became a member of Kesko's Board of Directors and Executive Vice President, Finance and Accounting. He became Executive Vice President, Agricultural and Builders' Supplies Division in 1993, Executive Vice President, Speciality Goods Division in 1995 and Managing Director of Tuko in 1996.
Since 2001, Matti Halmesmäki was the President of both Rautakesko Ltd and Kesko Agro Ltd and a member of the Kesko Group's Corporate Management Board.
He has versatile experience of the operations of the Kesko Group and he is an energetic person, who originally comes from Ostrobothnia, western Finland.
I am sure that under his leadership the Kesko Group will further strengthen its position as the leading provider of services in the Finnish trade, while also taking long steps in the global market.
Customer satisfaction is something Matti Halmesmäki has focused on. And customers satisfied with Kesko and K-stores will be our most important guiding stars in the future, too!
Matti Halmesmäki has started briskly and, during his first month in the post, made significant new outlines both in Kesko Food and the corporate management. We will hear more of these plans in the speech by Matti Halmesmäki in a moment.
Ladies and gentlemen!
According to Kesko Group' vision, we commit ourselves to being the leading provider of services of the trading sector. This target obliges us to actively understand the needs of our customers and to develop new services.
Maintaining and strengthening the leading position in Finland in the EU era calls for global-level expertise in the store type development, product selections and in developing winning brands.
We will actively respond to the Finnish and international competition in our divisions.
We are preparing for an in-depth change in the age structure of society.
One of the basic future questions is how to reach customers.
Customer needs are getting more and more complicated and they have a vast variety of choices.
The K-Alliance will use an increasing amount of resources to meet these challenges, and preparing for them well in time is an integral part of Kesko Group's responsible operations.
When pondering about the future of trade in a wider sense, I have reached the conclusion that our customers will, more often than not, select their stores and products on the basis of a credible price and quality image, that is, the promise built in the brands.
Food prices for instance will drop and their share of consumers' costs will decrease all the time. That is when images decide - the feeling created by a smart choice!
Whose reputation will stand critical evaluation from the viewpoint of, say, product safety, ethics and responsibility? That company will be the winner in the battle for market shares.
Through its good brands, such a listed company will also strengthen its market value. And that is the type of company Kesko is.
Ladies and gentlemen!
On behalf of Kesko's whole Board of Directors, I want to thank our all shareholders, Kesko Group's management and personnel and all our partners for our profitable co-operation.
I would like to ask President and CEO Matti Halmesmäki to convey the warmest thanks of the Board to all employees of the Group, both in Finland and other countries.
I am convinced that the Kesko Group will continue its steady growth under the new leadership this year, too.
Dear attendees!
A General Meeting is also meant, in the framework of the minutes, to provide an opportunity for active conversation between shareholders and the Board of Directors. A General Meeting is a natural place for this kind of exchange of ideas.
I wish you all once again warmly welcome to Kesko Corporation's Annual General Meeting!
Welcome!
