Note 2
Segment information
In segment reporting, a business segment has been determined
as the primary reporting format and a geographical segment as
the secondary reporting format. Business segments are based
on the Group's internal business divisions and internal financial
reporting.
The basis of inter-segment pricing is fair market price.
The segment income statement is disclosed down to operating
profit. Segment assets and liabilities consist of items used by
the segment in its operating activities, or items justifiably allocated
to segments. Segment assets comprise intangible assets
including goodwill, tangible assets, inventories, trade receivables
and deferred revenue and other accruals linked to operating
activities. Segment liabilities consist of trade payables,
accrued liabilities and provisions linked to operating activities.
The Group's real estate assets and their revenue and costs have
been allocated to the segments. The division parent companies
have profit responsibility for properties during their whole
lifecycles.
Business segments
Business segments are composed of the Group's business
divisions.
Kesko Food operates in the Finnish grocery market and its retail
chains are K-citymarket, K-supermarket, K-market and K-extra.
Kesko Food manages the K-food store chains and combines
their purchasing power, arranges efficient logistics, acquires
store sites and guarantees strong marketing and development
support. Kesko Food’s subsidiary Kespro Ltd offers delivery sales
and wholesale services to business customers.
Rautakesko is engaged in the building and home improvement
trade in the Nordic and Baltic countries, Russia and Belarus.
The retail chains are K-rauta, Rautia, Byggmakker and Senukai.
Rautakesko manages its chains, combines their purchasing
power, arranges efficient logistics, acquires store sites and
guarantees strong marketing and development support.
Rautakesko B-to-B Service serves building firms, industry and
other professional customers.
VV-Auto imports and markets Volkswagen, Audi and Seat passenger
cars and Volkswagen commercial vehicles in Finland.
VV-Auto is also engaged in car retailing and provides aftersales
services at its own retail outlets.
Anttila is a company concentrating on the department store
trade. Anttila operates Anttila department stores, Kodin
Ykkönen department stores for interior decoration and home
goods, Anttila Mail Order and the NetAnttila online department
store.
Kesko Agro's K-maatalous chain purchases and sells agricultural
inputs and machinery to agricultural entrepreneurs, and trades
in grain with them. Kesko Agro is active in Finland and the
Baltic countries.
Other operating activities comprise the reporting for
Konekesko, engaging in the machinery trade, Indoor in the
furniture and interior decoration trade, Intersport Finland in
the sports trade, Musta Pörssi in the home technology trade,
and Kenkäkesko in the shoe trade.
Common operations include shared Group support functions.
Geographical segments
The geographical segments are composed of the four geographical
areas with different economic situations in which the
Group is active, namely Finland, the other Nordic countries,
the Baltic countries and other countries.
The net sales of the geographical segments are disclosed
based on the location of the customers and assets are disclosed
based on their location.
Segment information in 2009
As of 1 January 2009, the Kesko Group's primary reportable segments
are the food trade, the home and speciality goods trade,
the building and home improvement trade, and the car and
machinery trade.
On 1 January 2009, Kesko Agro Ltd demerged so that the agricultural
trade activities in Finland became part of Rautakesko
Ltd and will be reported as part of the building and home
improvement segment. The trade of tractors and combines,
as well as the agricultural and machinery trade companies in
the Baltic countries became part of Konekesko Ltd and will be
reported as part of the car and machinery trade segment.
Starting from 1 January 2009, Anttila Oy, K-citymarket Oy
(home and speciality goods) and the other Kesko Group home
and speciality goods companies intensify their cooperation, and
will be jointly reported as the home and speciality goods trade
segment.
