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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.
Change in comparable net sales is used to reflect changes in the Group’s business volume between periods. The indicator reflects the change in net sales excluding the impact of acquisitions and divestments, in local currencies. The comparable net sales have been calculated by including in the net sales the business operations that have been part of Kesko Group in both the reporting year as well as the comparison year. Other structural arrangements related to acquisitions and divestments have been adjusted in the same manner as acquisitions. The changes in Suomen Lähikauppa Oy’s store site network in 2016 and 2017 have been handled in this manner.
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.
In addition, the financial performance indicators required by the Decree of the Ministry of Finance on obligation of securities issuers to disclose periodic information have been presented as alternative performance measures. The management uses these indicators to monitor and analyse business performance, profitability and financial position.
Profitability
Operating profit, comparable Operating profit +/– items affecting comparability
Items affecting comparability – gains on disposal + losses on disposal + impairment charges +/- structural arrangements
Return on equity, % (Profit/loss before tax − Income tax) x 100
Shareholders' equity, average of the beginning and end of the reporting period
Comparable return on equity, % (Profit/loss adjusted for items affecting comparability before tax − Income tax adjusted for the tax effect of the items affecting comparability) x 100
Shareholders' equity, average of the beginning and end of the reporting period
Return on capital employed, % Operating profit x 100
(Non-current assets + Inventories + Receivables + Other current assets - Non-interest-bearing liabilities) on average for 12 months
Comparable return on capital employed, % Comparable operating profit x 100
(Non-current assets + Inventories + Receivables + Other current assets - Non-interest-bearing liabilities) on average for 12 months
EBITDA Operating profit + Depreciation and amortisation + Impairments
Funding, capital expenditure and financial position
Equity ratio, % Shareholders' equity x 100
(Balance sheet total − Prepayments received)
Gearing, % Interest-bearing net debt x 100
Shareholders' equity
Interest-bearing net debt Interest-bearing liabilities – Financial assets at fair value through profit or loss – Available-for-sale financial assets - Cash and cash equivalents
Interest-bearing net debt/EBITDA Interest-bearing net debt
EBITDA
Capital expenditure Investments in property, plant and equipment, intangible assets, subsidiary shares, shares in associates and joint ventures and other shares
Share performance indicators
Earnings/share, diluted Net profit/loss - Non-controlling interests
Average number of shares adjusted for the dilutive effect
Earnings/share, basic Net profit/loss − Non-controlling interests
Average number of shares
Earnings/share, basic, comparable Net profit/loss adjusted for items affecting comparability − Non-controlling interests
Average number of shares
Equity/share Equity attributable to equity holders of the parent
Basic number of shares at the balance sheet date
Payout ratio, % (Dividend/share) x 100
(Earnings/share)
Price/earnings ratio (P/E) Share price at balance sheet date
(Earnings/share)
Effective dividend yield, % (Dividend/share) x 100
Share price at balance sheet date
Market capitalisation Share price at balance sheet date x Number of shares
Cash flow from operating activities/share Cash flow from operating activities
Average number of shares
Yield of A share and B share Change in share price + Annual dividend yield
Reconciliation of performance indicators to IFRS financial statements
€ million 1–12/2017 1–12/2016
Items affecting comparability
Gains on disposal 83.4 4.2
Losses on disposal -1.8 -71.0
Impairment charges -15.0 -30.0
Structural arrangements -38.7 -29.4
Items in operating profit affecting comparability 27.9 -126.2
Items in financial items affecting comparability -0.4 -
Items in income taxes affecting comparability 3.8 25.3
Total items affecting comparability 31.4 -100.9
Operating profit, comparable
Operating profit 324.6 146.8
Net of
Items in operating profit affecting comparability 27.9 -126.2
Operating profit, comparable 296.7 272.9
Profit before tax, comparable
Profit before tax 327.6 145.2
Net of
Items in operating profit affecting comparability 27.9 -126.2
Items in financial items affecting comparability -0.4 -
Profit before tax, comparable 300.1 271.4
Net profit, comparable
Comparable profit before tax 300.1 271.4
Net of
Income tax 58.8 31.4
Items in income taxes affecting comparability 3.8 25.3
Net profit, comparable 237.5 214.8
Net profit attributable to owners of the parent, comparable
Net profit, comparable 237.5 214.8
Net profit attributable to non-controlling interests 11.0 15.3
Net profit attributable to owners of the parent, comparable 226.4 199.5
Earnings/share, comparable, €
Net profit attributable to owners of the parent, comparable 226.4 199.5
Average number of shares, basic, 1,000 pcs 99,426 99,249
Earnings/share, comparable, € 2.28 2.01
Return on capital employed, %
Operating profit 324.6 146.8
Capital employed, average 2,427 2,288
Return on capital employed, % 13.4 6.4
Return on capital employed, %, comparable
Operating profit, comparable 296.7 272.9
Capital employed, average 2,427 2,288
Return on capital employed, %, comparable 12.2 11.9
Return on equity, %
Net profit 268.8 113.8
Equity, average 2,179 2,184
Return on equity, % 12.3 5.2
Return on equity, %, comparable
Net profit, comparable 237.5 214.8
Equity, average 2,179 2,184
Return on equity, %, comparable 10.9 9.8
Equity ratio, %
Shareholders’ equity 2,232 2,126
Total assets 4,472 4,408
Advances received 39 35
Equity ratio, % 50.4 48.6
Reconciliation of performance indicators to IFRS financial statements by quarter
€ million 1–3/
2016
4–6/
2016
7–9/
2016
10–12/
2016
1–3/
2017
4–6/
2017
7–9/
2017
10–12/
2017
Items affecting comparability
Gains on disposal 1.3 2.9 0.8 -0.8 0.3 81.8 0.6 0.6
Losses on disposal - -0.3 -0.1 -70.6 -0.4 -1.2 -0.1 -0.1
Impairment charges - -7.9 -3.1 -18.9 - - -0.5 -14.5
Structural arrangements 0.0 -5.8 -10.3 -13.3 -12.1 -12.6 -4.0 -10.1
Items in operating profit affecting comparability 1.3 -11.1 -12.7 -103.6 -12.1 67.9 -4.0 -24.0
Items in financial items affecting comparability - - - - - - - -0.4
Items in income taxes affecting comparability 0.1 0.8 2.7 21.6 2.0 -0.4 0.1 2.1
Total items affecting comparability 1.4 -10.3 -10.0 -82.0 -10.1 67.5 -3.8 -22.3
Operating profit, comparable
Operating profit 33.5 68.0 85.5 -40.3 16.6 152.5 98.6 56.9
Net of
Items in operating profit affecting comparability 1.3 -11.1 -12.7 -103.6 -12.1 67.9 -4.0 -24.0
Operating profit, comparable 32.3 79.1 98.2 63.3 28.7 84.6 102.5 81.0
Profit before tax, comparable
Profit before tax 35.7 68.1 84.8 -43.5 21.5 150.5 98.0 57.6
Net of
Items in operating profit affecting comparability 1.3 -11.1 -12.7 -103.6 -12.1 67.9 -4.0 -24.0
Items in financial items affecting comparability - - - - - - - -0.4
Profit before tax, comparable 34.5 79.2 97.5 60.2 33.6 82.6 101.9 82.0
Net profit, comparable
Comparable profit before tax 34.5 79.2 97.5 60.2 33.6 82.6 101.9 82.0
Net of
Income tax 7.0 14.3 16.4 -6.4 4.3 17.8 23.8 12.9
Items in income taxes affecting comparability 0.1 0.8 2.7 21.6 2.0 -0.4 0.1 2.1
Net profit, comparable 27.3 64.0 78.4 44.9 27.4 65.2 77.9 67.0
Net profit attributable to owners of the parent, comparable
Net profit, comparable 27.3 64.0 78.4 44.9 27.4 65.2 77.9 67.0
Net profit attributable to non-controlling interests 1.3 5.5 5.7 2.8 -1.0 4.2 6.0 1.8
Net profit attributable to owners of the parent, comparable 26.0 58.6 72.7 42.1 28.4 61.0 72.0 65.1
Earnings/share, comparable, €
Net profit attributable to owners of the parent, comparable 26.0 58.6 72.7 42.1 28.4 61.0 72.0 65.1
Average number of shares, basic, 1,000 pcs 99,163 99,221 99,240 99,249 99,308 99,387 99,414 99,426
Earnings/share, comparable, € 0.26 0.59 0.73 0.42 0.29 0.61 0.72 0.65
Return on capital employed, %
Operating profit 33.5 68.0 85.5 -40.3 16.6 152.5 98.6 59.6
Capital employed, average 1,990 2,207 2,523 2,497 2,430 2,455 2,375 2,442
Return on capital employed, % 6.7 12.3 13.6 -6.4 2.7 24.8 16.6 9.3
Return on capital employed, %, comparable
Operating profit, comparable 32.3 79.1 98.2 63.3 28.7 84.6 102.5 81.0
Capital employed, average 1,990 2,207 2,523 2,497 2,430 2,455 2,375 2,442
Return on capital employed, %, comparable 6.5 14.3 15.6 10.1 4.7 13.8 17.3 13.3
Return on equity, %
Net profit 28.7 53.8 68.5 -37.1 17.2 132.8 74.1 44.7
Equity, average 2,265 2,195 2,131 2,143 2,155 2,142 2,138 2,204
Return on equity, % 5.1 9.8 12.8 -6.9 3.2 24.8 13.9 8.1
Return on equity, %, comparable
Net profit, comparable 27.3 64.0 78.4 44.9 27.4 65.2 77.9 67.0
Equity, average 2,265 2,195 2,131 2,143 2,155 2,142 2,138 2,204
Return on equity, %, comparable 4.8 11.7 14.7 8.4 5.1 12.2 14.6 12.2
Equity ratio, %
Shareholders’ equity 2,287 2,102 2,161 2,126 2,183 2,100 2,176 2,232
Total assets 4,201 4,712 4,538 4,408 4,638 4,496 4,464 4,472
Advances received 28 25 26 35 32 27 32 39
Equity ratio, % 54.8 44.8 47.9 48.6 47.4 47.0 49.1 50.4