NOTE 2
The Group’s reportable segments are composed of the Group’s divisions, namely the food trade, the home and speciality goods trade, the building and home improvement trade, and the car and machinery trade.
Segment information is reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, responsible for allocating resources to the operating segments, has been identified as the Corporate Management Board. The reportable operating segments derive their net sales from the food trade, the home and speciality goods trade, the building and home improvement trade, and the car and machinery trade. Sales between segments are charged at prevailing market rates.
The Corporate Management Board assesses the performance of the segments based on operating profit, operating profit adjusted for non-recurring items, and return on capital employed. Exceptional transactions outside ordinary course of business are treated as non-recurring items and allocated to segments. The Group identifies gains and losses on the disposal of real estate, shares and operating activities, impairments and costs of discontinuing significant operations as non-recurring items. Gains on disposal are presented within ‘other income’ in the income statement, and losses on disposal within ‘other operating costs’. In other respects, the Management Board’s performance monitoring is in full compliance with IFRS reporting. Finance income and costs are not allocated to segments, as the Group’s cash and cash equivalents are managed by Group Treasury. Changes in the fair values of currency forwards entered into inside the Group are reported as part of other operating income and expenses to the extent that they hedge the segments’ operational foreign currency risk.
The assets and liabilities of a segment’s capital employed consist of items which can be justifiably allocated to segments. The assets of capital employed comprise property, plant and equipment and intangible fixed assets, investments in associates, pension assets, inventories, trade receivables and other non-interest-bearing receivables, external interest-bearing receivables and available-for-sale assets. The liabilities of capital employed consist of trade payables, other non-interest-bearing liabilities and provisions. The Group’s real estate assets and the revenue and costs derived from them have been allocated to the segments.
Capital employed does not include deferred tax assets and liabilities, financial assets at fair value through profit or loss, except for fair value measurements of forward foreign exchange contracts recognised in the balance sheet, available-for-sale financial assets, cash and cash equivalents, or interest-bearing liabilities.
THE FOOD TRADE comprises the food business based on Kesko Food’s K-retailer business model and Kespro’s grocery wholesaling. Kesko Food is active in the grocery trade in Finland. The operations of the nearly 1,000 K-food stores are based on the K-retailer business model. These stores form the
THE HOME AND SPECIALITY GOODS TRADE comprises Anttila,
THE BUILDING AND HOME IMPROVEMENT TRADE comprises Rautakesko’s building and home improvement trade and agricultural trade in Finland, Sweden, Norway, the Baltic countries, Russia and Belarus. Rautakesko’s operations are based on strong chain concepts, efficient sourcing, and best practices duplicated internationally. Rautakesko is responsible for the chains’ concepts, marketing, and sourcing and logistics services, store site network and retailer resources in Finland. Rautakesko itself is a retail operator in Sweden, Norway, the Baltic countries, Russia and Belarus. The retail store chains are
THE CAR AND MACHINERY TRADE comprises the business operations of VV-Auto and Konekesko. 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 after-sales services at its own retail outlets. Konekesko is a service company specialising in the import and sales of construction, environmental and agricultural machinery, trucks and buses, and recreational machinery. Konekesko operates in Finland, the Baltic countries and Russia.
COMMON OPERATIONS comprise Group support functions.
Segment information 2011 |
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Profit |
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€ million | Food trade | Home and speciality goods trade |
Building and home improvement trade |
Car and machinery trade |
Common operations |
Eliminations | Total |
Segment net sales | 4,181.9 | 1,564.3 | 2,715.7 | 1,174.1 | 146.1 | 9,782.2 | |
of which inter-segment sales | -168.3 | -19.7 | -11.6 | -1.1 | -121.0 | -321.7 | |
Net sales from external customers | 4,013.5 | 1,544.6 | 2,704.1 | 1,173.1 | 25.1 | 9,460.4 | |
Other segment income | 587.9 | 77.1 | 112.4 | 3.1 | 10.1 | 790.7 | |
of which inter-segment income | -75.2 | -6.9 | -3.9 | -0.3 | 0.5 | -85.8 | |
Other operating income from external customers | 512.7 | 70.2 | 108.5 | 2.9 | 10.6 | 704.9 | |
Depreciation and amortisation | -44.6 | -24.0 | -44.0 | -8.7 | -3.8 | 0.3 | -124.8 |
Operating profit | 173.7 | 37.0 | 26.3 | 51.9 | -8.3 | 280.6 | |
Non-recurring items | 1.5 | 0.4 | -0.3 | 0.2 | 1.7 | ||
Operating profit excluding non-recurring items | 172.2 | 36.6 | 26.6 | 51.8 | -8.3 | 278.9 | |
Finance income and costs | 0.8 | ||||||
Share of profit/loss of associates | 0.7 | ||||||
Profit before tax | 282.1 | ||||||
Assets and liabilities |
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Tangible and intangible assets | 655.0 | 281.7 | 551.3 | 90.0 | 76.4 | 25.5 | 1,679.9 |
Investments in associates and other investments | 2.3 | 0.1 | 0.2 | 60.8 | 5.2 | 68.6 | |
Pension assets | 43.4 | 50.7 | 9.6 | 4.5 | 92.0 | 200.1 | |
Inventories | 104.9 | 263.2 | 277.5 | 223.1 | -1.1 | 867.5 | |
Trade receivables | 295.4 | 147.2 | 202.6 | 67.8 | 15.4 | -28.1 | 700.3 |
Other non-interest-bearing receivables | 33.4 | 32.9 | 60.8 | 6.1 | 45.0 | -14.6 | 163.5 |
Interest-bearing receivables from external customers | 93.2 | 0.2 | 0.5 | 41.6 | -3.1 | 132.6 | |
Assets held for sale | 6.9 | 0.2 | 0.9 | 8.0 | |||
Assets included in capital employed | 1,234.4 | 775.9 | 1,102.7 | 391.6 | 332.2 | -16.2 | 3,820.6 |
Unallocated items | |||||||
Deferred tax assets | 2.0 | ||||||
Financial assets at fair value through profit or loss | 97.8 | ||||||
Available-for-sale financial assets | 185.5 | ||||||
Cash and cash equivalents | 84.0 | ||||||
Total assets | 1,234.4 | 775.9 | 1,102.7 | 391.6 | 332.2 | -16.2 | 4,189.9 |
Trade payables | 422.2 | 146.8 | 263.0 | 69.4 | 5.5 | -26.0 | 881.0 |
Other non-interest-bearing liabilities | 165.7 | 153.0 | 100.1 | 94.0 | 50.8 | -13.0 | 550.7 |
Provisions | 9.4 | 3.7 | 1.9 | 18.1 | 1.1 | 34.2 | |
Liabilities included in capital employed | 597.3 | 303.6 | 364.9 | 181.5 | 57.4 | -39.0 | 1,465.8 |
Unallocated items | |||||||
Interest-bearing liabilities | 400.0 | ||||||
Deferred tax liabilities | 91.1 | ||||||
Total liabilities | 597.3 | 303.6 | 364.9 | 181.5 | 57.4 | -39.0 | 1,956.9 |
Total capital employed at 31 Dec. | 637.0 | 472.3 | 737.8 | 210.1 | 274.8 | 22.8 | 2,354.8 |
Average capital employed | 601.4 | 437.4 | 696.1 | 157.7 | 214.9 | 21.3 | 2,128.8 |
Return on capital employed excl. non-recurring items, % |
28.6 | 8.4 | 3.8 | 32.8 | 13.1 | ||
Capital expenditure | 221.5 | 61.8 | 109.8 | 29.9 | 3.2 | -0.8 | 425.4 |
Number of personnel at 31 Dec. | 2,984 | 8,765 | 9,895 | 1,250 | 481 | 23,375 | |
Average number of personnel | 2,706 | 5,754 | 8,874 | 1,206 | 420 | 18,960 | |
Segment information 2010 |
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Profit |
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Milj. € | Food trade | Home and speciality goods trade |
Building and home improvement trade |
Car and machinery trade |
Common operations |
Eliminations | Total |
Segment net sales | 3,896.3 | 1,568.5 | 2,519.4 | 954.8 | 136.5 | 9,075.6 | |
of which inter-segment sales | -161.7 | -23.4 | -0.5 | -0.3 | -112.9 | -298.8 | |
Net sales from external customers | 3,734.7 | 1,545.1 | 2,519.0 | 954.5 | 23.6 | 8,776.8 | |
Other segment income | 544.3 | 116.4 | 101.5 | 2.3 | 16.6 | 781.1 | |
of which inter-segment income | -73.7 | -6.2 | -1.4 | -0.1 | -0.8 | -82.3 | |
Other operating income from external customers | 470.6 | 110.1 | 100.1 | 2.2 | 15.8 | 698.8 | |
Depreciation and amortisation | -42.6 | -22.9 | -40.7 | -8.2 | -2.3 | 0.3 | -116.3 |
Impairment | -4.6 | 0.0 | -4.6 | ||||
Operating profit | 158.4 | 103.4 | 23.9 | 33.9 | -12.9 | 0.1 | 306.7 |
Non-recurring items | -1.7 | 37.4 | -0.1 | 0.8 | 2.3 | 38.6 | |
Operating profit excluding non-recurring items | 160.1 | 66.0 | 24.0 | 33.1 | -15.2 | 0.1 | 268.1 |
Finance income and costs | 6.0 | ||||||
Share of profit/loss of associates | -0.3 | ||||||
Profit before tax | 312.4 | ||||||
Assets and liabilities |
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Tangible and intangible assets | 526.2 | 248.6 | 488.5 | 73.4 | 78.7 | 25.3 | 1,440.8 |
Investments in associates and other investments | 1.3 | 0.1 | 0.2 | 0.0 | 60.1 | -0.6 | 61.1 |
Pension assets | 73.5 | 66.8 | 16.5 | 10.9 | 18.0 | 185.8 | |
Inventories | 107.6 | 230.7 | 254.4 | 165.0 | -0.9 | 756.9 | |
Trade receivables | 265.0 | 132.6 | 188.3 | 52.3 | 14.1 | -32.6 | 619.7 |
Other non-interest-bearing receivables | 56.1 | 27.5 | 56.0 | 5.3 | 44.1 | -18.7 | 170.3 |
Interest-bearing receivables from external customers | 78.7 | 1.9 | 1.0 | 0.4 | 2.0 | -2.8 | 81.1 |
Assets held for sale | 0.4 | 0.9 | 1.3 | ||||
Assets included in capital employed | 1,108.4 | 708.1 | 1,005.3 | 307.4 | 217.9 | -30.3 | 3,317.0 |
Unallocated items | |||||||
Deferred tax assets | 2.9 | ||||||
Financial assets at fair value through profit or loss | 242.1 | ||||||
Available-for-sale financial assets | 549.0 | ||||||
Cash and cash equivalents | 56.1 | ||||||
Total assets | 1,108.4 | 708.1 | 1,005.3 | 307.4 | 217.9 | -30.3 | 4,167.1 |
Trade payables | 393.5 | 152.2 | 264.0 | 51.6 | 4.2 | -31.8 | 833.5 |
Other non-interest-bearing liabilities | 163.6 | 138.9 | 101.2 | 78.1 | 55.9 | -19.3 | 518.4 |
Provisions | 12.5 | 9.1 | 2.0 | 14.5 | 2.7 | 40.9 | |
Liabilities included in capital employed | 569.6 | 300.2 | 367.2 | 144.2 | 62.8 | -51.1 | 1,392.9 |
Unallocated items | |||||||
Interest-bearing liabilities | 476.8 | ||||||
Deferred tax liabilities | 87.1 | ||||||
Total liabilities | 569.6 | 300.2 | 367.2 | 144.2 | 62.8 | -51.1 | 1,956.8 |
Total capital employed at 31 Dec. | 538.9 | 407.9 | 638.1 | 163.2 | 155.1 | 20.8 | 1,924.1 |
Average capital employed | 590.2 | 431.3 | 626.9 | 168.3 | 80.4 | 20.7 | 1,917.8 |
Return on capital employed excl. non-recurring items, % |
27.1 | 15.3 | 3.8 | 19.6 | 14.0 | ||
Capital expenditure | 117.2 | 45.3 | 78.2 | 17.8 | 67.0 | -0.2 | 325.3 |
Number of personnel at 31 Dec. | 3,106 | 7,887 | 9,493 | 1,205 | 433 | 22,124 | |
Average number of personnel | 2,881 | 5,418 | 8,379 | 1,138 | 399 | 18,215 |
The Group operates in the Nordic countries, the Baltic countries, Russia and Belarus. The food trade and the home and speciality goods trade mainly take place in Finland, the car and machinery trade in Finland and the Baltic countries, and the building and home improvement trade in Finland, Sweden, Norway the Baltic countries, Russia and Belarus.
Net sales, assets, capital expenditure and personnel are disclosed by location.
2011 |
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€ million | Finland | Other Nordic countries | Baltic countries |
Russia and Belarus | Eliminations | Total |
Net sales | 7,861.3 | 806.7 | 487.1 | 324.9 | -19.6 | 9,460.4 |
Assets | 3,009.4 | 310.3 | 178.7 | 270.8 | 51.5 | 3,820.6 |
Capital expenditure | 290.6 | 22.4 | 2.2 | 110.2 | 425.4 | |
Average number of personnel 1 Jan.–31 Dec. | 10,056 | 1,602 | 4,174 | 3,128 | 18,960 | |
2010 |
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€ million | Finland | Other Nordic countries | Baltic countries |
Russia and Belarus | Eliminations | Total |
Net sales | 7,323.0 | 755.1 | 437.8 | 277.7 | -16.8 | 8,776.8 |
Assets | 2,658.2 | 290.7 | 156.3 | 171.3 | 40.5 | 3,317.0 |
Capital expenditure | 283.0 | 19.1 | 3.2 | 19.9 | 0.0 | 325.3 |
Average number of personnel 1 Jan.–31 Dec. | 9,914 | 1,544 | 4,015 | 2,741 | 18,215 |
Net sales nearly completely consist of the sales of goods. The sales of services are immaterial.
There was no income from transactions with a single customer amounting more than 10% of the Group’s total income.