SEGMENT DATA COMPARISON FIGURES FOR 2017 FOR KESKO GROUP’S CONTINUING OPERATIONS

On 16 February 2018, Kesko announced it will discontinue its building and home improvement trade operations in Russia and sell 12 building and home improvement store properties in Russia to Leroy Merlin Vostok LLC, a Russian division of the French Leroy Merlin. In the first interim report for 2018, the discontinuation of the building and home improvement trade operations in Russia will be presented as discontinued operations in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. The standard requires comparison data to be adjusted, thus prompting changes in the presentation of data for 2017.

In 2017, Kesko’s building and home improvement trade operations in Russia recorded net sales of €184 million and a comparable operating profit of €0.6 million. The tables below depict comparison figures for 2017 for key continuing operations segment data.

Segment data for continuing operations

Net sales by   segment, € million 1-3/2017 4-6/2017 7-9/2017 10-12/2017 1-12/
  2017
Grocery trade 1,243 1,327 1,313 1,399 5,282
Building and   technical trade 1,073 1,202 1,070 957 4,302
Car trade 245 234 212 218 909
Common functions and eliminations -2 0 0 1 -1
Continuing operations, total 2,558 2,763 2,596 2,575 10,492

 

Operating   profit by segment, continuing operations, € million 1-3/2017 4-6/2017 7-9/2017 10-12/2017 1-12/
  2017
Grocery trade 16.7 39.9 59.3 65.4 181.3
Building and   technical trade 4.0 114.6 38.0 12.1 168.7
Car trade 10.0 7.6 8.8 6.7 33.1
Common functions and eliminations -11.4 -10.3 -9.4 -13.4 -44.5
Continuing   operations, total 19.4 151.8 96.7 70.8 338.6

 

Items in   operating profit affecting comparability, continuing operations, € million 1-3/2017 4-6/2017 7-9/2017 10-12/2017 1-12/
  2017
Grocery trade -9.7 -10.6 -0.2 -1.7 -22.1
Building and   technical trade -1.8 79.8 -2.7 -1.8 73.5
Car trade - - - - -
Common functions and eliminations -0.6 -1.3 -1.0 -6.0 -8.9
Continuing   operations, total -12.1 67.9 -3.8 -9.5 42.5

 

Operating   profit by segment, comparable, continuing operations, € million 1-3/2017 4-6/2017 7-9/2017 10-12/2017 1-12/
  2017
Grocery trade 26.4 50.5 59.4 67.0 203.4
Building and   technical trade 5.8 34.8 40.7 14.0 95.2
Car trade 10.0 7.6 8.8 6.7 33.1
Common functions and eliminations -10.8 -9.0 -8.5 -7.4 -35.6
Continuing   operations, total 31.5 83.8 100.5 80.4 296.2

The table below depicts figures for the speciality goods trade, which is included in the net sales and comparable operating profit for the building and technical trade division.

Speciality   goods trade, € million 1-3/2017 4-6/2017 7-9/2017 10-12/2017 1-12/
  2017
Net sales
K-maatalous, Indoor Group Ltd, and Yamaha and Yamarin 148 131 0 - 279
Machinery trade and leisure trade 85 103 117 80 384
Speciality   goods trade, total 232 234 117 80 663
Comparable operating profit
K-maatalous, Indoor Group Ltd, and Yamaha and Yamarin 3.6 5.2 - - 8.7
Machinery trade and leisure trade -0.5 1.6 6.1 0.3 7.5
Speciality   goods trade, total 3.0 6.8 6.1 0.3 16.2

Calculation of performance indicators

Kesko uses alternative performance measures to reflect business performance and profitability. These indicators should be examined together with the IFRS-compliant performance indicators.

Performance indicators reflecting comparable profit and profitability are used to improve the comparability of operational performance between periods. Gains and losses on disposal of real estate, shares and business operations, impairment charges and significant restructuring costs are identified as items affecting comparability. Gains on disposal have been presented within other operating income, and losses on disposal within other operating expenses in the income statement.

Operating   profit, comparable Operating profit +/– items affecting comparability
Items affecting   comparability – gains on disposal + losses on disposal + impairment charges +/-   structural arrangements

Reconciliation of performance indicators to IFRS financial statements

€ million 1-3/2017 4-6/2017 7-9/2017 10-12/2017 1-12/
  2017
Items in operating profit affecting comparability, continuing   operations
Gains on disposal 0.3 81.8 0.6 0.6 83.4
Losses on disposal -0.4 -1.2 -0.1 -0.1 -1.8
Impairment charges - - -0.5 - -0.5
Structural arrangements -12.1 -12.6 -3.9 -10.1 -38.6
Items in operating profit affecting comparability, continuing   operations, total -12.1 67.9 -3.8 -9.5 42.5
Operating profit, comparable, continuing operations
Operating profit 19.4 151.8 96.7 70.8 338.6
Net of
Items in operating profit affecting   comparability -12.1 67.9 -3.8 -9.5 42.5
Operating profit, comparable, continuing operations, total 31.5 83.8 100.5 80.4 296.2

Further information is available from Jukka Erlund, Executive Vice President, Chief Financial Officer, telephone +358 105 322 113, Kia Aejmelaeus, Vice President, Investor Relations, telephone +358 105 322 533, and Eva Kaukinen, Vice President, Group Controller, telephone +358 105 322 338.

Kesko Corporation

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