Shares and shareholders

Dividend policy

On 4 February 2009, Kesko's Board of Directors decided to revise Kesko's dividend policy published on 6 April 2005. In addition to the financial position and the operating strategy, the new policy takes account of the nature of non-recurring items. According to Kesko Corporation's revised dividend policy, Kesko Corporation distributes at least 50% of its earnings per share excluding nonrecurring items as dividends, taking however the company's financial position and operating strategy into account (stock exchange release 5 February 2009).

The financial objectives are presented on "Strategic emphases".

Proposed dividends for the year 2008

Kesko Corporation's Board of Directors proposes to the Annual General Meeting that €97,851,050.00 or €1.00 per share, be distributed as dividends from the net profit for the year 2008, representing 44.7% of earnings per share and 69.6% of earnings per share excluding non-recurring items. During the past five years, 71.5% of earnings per share, on the average, has been distributed as dividends.

Basic information on the shares at 31 December 2008

A share

  • shortname: KESAV (OMX)
  • ISIN code: FI0009007900
  • voting rights per share: 10 votes
  • number of shares: 31,737,007
  • market capitalisation: €698 million

B share

  • shortname: KESBV (OMX)
  • ISIN code: FI0009000202
  • voting rights per share: 1 vote
  • number of shares: 66,087,847
  • market capitalisation: €1,176 million

Trading unit of both share series: 1 share
Total share capital: €195,649,708
Total number of shares: 97,824,854
Voting rights carried by all shares: 383,457,917
Market capitalisation: €1,875 million

Share series and share capital

Kesko Corporation's share capital is divided into A share series and B share series. The company's share capital was €195,649,708.

The minimum number of A shares is one (1) and the maximum number two hundred and fifty million (250,000,000) and the minimum number of B shares is one (1) and the maximum number two hundred and fifty million (250,000,000), provided that the total number of shares is at minimum two (2) and at maximum four hundred million (400,000,000).

The total number of shares is 97,824,854, of which 31,737,007 (32.4%) are A shares and 66,087,847 (67.6%) are B shares. Each A share entitles the holder to 10 votes and each B share to 1 vote. Both shares give the same dividend rights. The number of votes entitled by A shares is 83% and the number of votes entitled by B shares 17% of the total voting rights. The shares are included in the book-entry securities system held by the Euroclear Finland Ltd.

The right to receive distributions from the company and the right to subscribe for shares when the share capital is increased belongs only to those:

  • who are registered as shareholders in the shareholder register on the record date
  • whose right to receive funds has been entered by the record date into the book-entry securities account of the shareholder registered in the shareholder register, and registered in the shareholder register, and
  • if a share has been registered in a nominee name, into whose book-entry securities account the share has been entered by the record date, and whose custodian has been registered in the shareholder register as the custodian of the shares by the record date.

Authorisations of the Board of Directors and treasury shares

The Kesko Annual General Meeting, held on 26 March 2007, authorised the company's Board of Directors to decide about the issuance of new B shares. The new B shares can be issued against payment either to the company's shareholders in proportion to their existing shareholdings, regardless of whether they consist of A or B shares, or in a directed issue deviating from shareholders' pre-emptive rights in order for the issued shares to be used as consideration in possible company acquisitions, other company business arrangements, or financial investments. The company must have a weighty financial reason for deviating from pre-emptive rights. The maximum number of new shares issued shall be 20,000,000.

The authorisation also includes an authorisation given by the Board of Directors to decide on the subscription price of the issued shares, the right to issue shares against non-cash consideration and the right to make decisions concerning any other matters relating to share issues.

The authorisation shall be valid for two (2) years after the decision in the General Meeting.

The Board of Directors had no other valid authorisation to issue shares, to increase the share capital, or to acquire or assign treasury shares.

Kesko Corporation or any of its subsidiaries held no Kesko Corporation shares.

Shareholders

According to the register of Kesko's shareholders kept by the Euroclear Finland Ltd, there were 38,080 shareholders at the end of 2008 (28,925 at the end of 2007). The total number of shares registered in a nominee name was 18,909,587, accounting for 19.33% of the shares (33,170,238 and 33.93% respectively at the end of 2007). The number of votes entitled by these shares was 19,535,132, or 5.09% of the total voting rights (33,733,485 or 8.8% respectively at the end of 2007). A list of Kesko's largest shareholders, updated monthly, is available at www.kesko.fi/ investors.

Year 2003 stock option scheme

On 31 March 2003, the Annual General Meeting resolved to gratuitously issue a total of 1,800,000 stock options to the management of the Kesko Group as well as to a wholly-owned subsidiary of Kesko Corporation. A deviation was made from the shareholders' pre-emptive right to subscription since the stock options form a part of the incentive and commitment programme for the management. The scheme comprises approximately 60 persons. Each stock option entitles its owner to subscribe for one Kesko Corporation B share. The stock options have been marked with shortnames 2003D (KESBVEW103, ISIN code FI0009609317), 2003E (KESBVEW203, ISIN code FI0009609325), and 2003F (KESBVEW303, ISIN code FI0009609333), in units of 600,000 stock options each. The share subscription periods are:

  • for stock option 2003D 1 April 2005–30 April 2008,
  • for stock option 2003E 1 April 2006–30 April 2009, and
  • for stock option 2003F 1 April 2007–30 April 2010.

The original share subscription price for stock option 2003D was the trade volume weighted average price of a Kesko Corporation B share on the Helsinki Stock Exchange between 1 to 30 April 2003 (€9.63), for stock option 2003E, the corresponding price between 1 to 30 April 2004 (€15.19) and for stock option 2003F, the corresponding price between 1 to 30 April 2005 (€19.08). From the prices of shares subscribed for with stock options shall be deducted the amount of the dividend per share distributed after the above period for the determination of the subscription price has ended but before the date of subscription for shares.

At the end of 2008, the subscription price of a B share subscribed for with stock option 2003E was €8.99, with stock option 2003F €14.88. The subscription period for stock option 2003D ended on 30 April 2008. Dividend rights and other shareholder rights of the share subscribed for with options take effect when the share capital increase has been entered in the Trade Register. The 2003D stock options were listed on the Helsinki Stock Exchange on 1 April 2005, the 2003E stock options on 1 April 2006 and the 2003F stock options on 1 April 2007.

Year 2007 stock option scheme

The Annual General Meeting of 26 March 2007 decided to grant a total of 3,000,000 stock options for no consideration to the Kesko Group management and other key Kesko personnel, and to a subsidiary wholly owned by Kesko Corporation. The company had a weighty financial reason for granting stock options because they are intended to be part of Kesko's share-based incentive system.

Each stock option entitles its holder to subscribe for one new Kesko Corporation B share. The stock options shall be marked with symbols 2007A, 2007B and 2007C in units of 1,000,000 options each.

The exercise periods of the options shall be:

  • for stock option 2007A, from 1 April 2010 until 30 April 2012,
  • for stock option 2007B, from 1 April 2011 until 30 April 2013 and
  • for stock option 2007C, from 1 April 2012 until 30 April 2014.

The original subscription price for stock option 2007A shall be the trade volume weighted average quotation of a Kesko Corporation B share on the Helsinki Stock Exchange between 1 April and 30 April 2007 (€45.82), for stock option 2007B between 1 April and 30 April 2008 (€26.57), and for stock option 2007C between 1 April and 30 April 2009. The subscription prices of shares subscribed for with stock options shall be reduced by the amount decided after the beginning of the period for the determination of the subscription price but before the subscription as at the record date for each dividend distribution or other distribution of funds.

Presuming that shares are subscribed for with all of the 1,800,000 stock options granted under the year 2003 plan and all of the 3,000,000 stock options granted under the year 2007 plan, the shares subscribed for with stock options account for 4.69% of shares and 1.23% of all votes. The subscriptions made with stock options may raise the number of the company's shares to 101,712,793, and the voting rights of all shares to 387,345,856 votes.

Share subscriptions made with stock options

In 2008, the share capital was raised seven times corresponding to share subscriptions made with stock options granted under the year 2003 plan: on 11 February (by €210), on 28 April (by €38,168), on 9 June (by €42,200), on 28 July (by €8,600), on 1 October (by €4,000), on 27 October (by €6,000) and on 18 December (by €15,000). The total share capital increase in 2008 was €114,178 (57,089 shares).

By the end of 2008, 574,088 B shares had been subscribed for with the 2003D options (subscription period has ended), 192,606 B shares with the 2003E options and 119,455 B shares with the 2003F options, or 886,149 B shares in aggregate. The subscribed shares have been included in the main list of the NASDAQ OMX Helsinki Stock Exchange for public trading.

Other special shareholding rights

The company has not issued other stock options, convertible bonds, bonds with warrants or other special rights to company shares.

Shares and stock options held by the management

At the end of 2008, the members of Kesko Corporation's Board of Directors, the President and CEO and the corporations under their control held 202,910 Kesko A shares (197,030 A shares at the end of 2007) and 210,370 Kesko B shares (170,520), i.e. a total of 413,280 shares (367,550), which represented 0.42% (0.38%) of the company's total share capital and 0.58% (0.56%) of its voting rights.

At the end of 2007, the company's Managing Director held a total of 100,000 Kesko stock options (50,000 at the end of 2007), which represented 0.10% (0.05%) of the company's total share capital and 0.03% (0.01%) of voting rights, presuming that shares have been subscribed for with all of these options. No Board members held stock options at the end of 2008 (nor at the end of 2007).

Detailed information on shares and stock options held by the management at the beginning and at the end of 2008 is given on pages 66–69.

Trading in Kesko's shares and stock options in 2008 Kesko Corporation's shares are listed on the NASDAQ OMX Helsinki Stock Exchange. Key information about share trading in 2008 is given in the tables and graphs on this double page spread. The price trends of both shares closely followed the general trend. The prices of liquid B shares dropped by 53 percent and those of less liquid A shares by 42 percent, while the NASDAQ OMX Helsinki All Share Index was down 53 percent. The trading in B shares was lively, nearly matching the high level of the previous year. Instead the value traded almost halved. The number of A shares traded remained at about 40% compared with the previous year, and the value traded represented only about one quarter of last year's level. At the end of the year, the market capitalisation of A shares was €698 million and that of B shares €1,176 million. The total market capitalisation of the company was €1,875 million, a decrease of €1,817 million, or 49% during the year.

Flagging notifications

Kesko Corporation did not receive any flagging notification during 2008.

The company has not been informed of any agreements relating to its share ownership or the exercising of its voting rights.





During the year, the NASDAQ OMX Helsinki All Share Index dropped by 53.4% and the NASDAQ OMX HelsinkiCAP Index by 50.1%, while the Helsinki Stock Exchange Consumer Staples Index fell by 57.1%. Up-to-date information on shares and shareholders is available at www.kesko.fi.