S Group's result at previous year's level - S-ryhmä
S Group's result at previous year's level

S Group's result at previous year's level

S Group's result for 2013 increased by 6.7% from 2012 and stood at €226 million. Despite the generally poor economic situation, S Group's retail sales went up by more than one per cent to more than €11.3 billion in 2013.

13.2.2014

In 2013, S Group's total profit before extraordinary items and taxes was €226 million, whereas the profit for the corresponding period in 2012 was €212 million.

SOK Corporation's result for 2013 before taxes improved substantially through the divestment of Hankkija Oy shares. The result was €5.2 million to the negative, whereas the result for 2012 was €27.1 million to the negative.

S Group's operational result was €196 million, whereas in 2012 it was €206 million. SOK Corporation's operational result was 32.1 million to the negative, whereas in 2012 it was €30.4 million to the negative.

The year 2013 was difficult to the trade sector due to the poor situation of the economy and the slowdown in private consumption. Consumer confidence in the economy was considerably lower than the long-term average.

The slowdown of retail trade will also continue this year. According to a forecast by the Finnish Commerce Federation, a recovery can only be expected in 2015.

"In addition to strict cost control, S Group addresses the difficult situation by developing new operating models. We also hope that the Finnish government will refrain from taking action that decrease consumers' purchasing power and the trade sector's opportunities of providing jobs," says SOK CEO Taavi Heikkilä.

In 2013, S Group's retail sales (excluding VAT) totalled €11,353 million. It increased by 1.2% compared to 2012.

Regional cooperatives' retail sales increased by 0.8% compared to 2012 and it was €10,462 million. The cooperative enterprises' proportion in S Group's sales was 92% and in SOK Corporation's sales, 8%.

S Group invested €566 million in 2013. In 2012, investments stood at €584 million.

The total number of business locations was 1,646. This was 51 less than in 2012.

Summary:

S Group's sales and economic development in 2013

The S Group as a whole

  • S Group tax-exclusive retail sales in 2013 was €11,353 million.

  • Comparable retail sales increased by 1.2%.

  • S Group's result (cooperatives + SOK Corporation) before extraordinary items was €226 million (€212 million in 2012).

  • Investments totalled €566 million (€584 million in 2012).

  • The number of personnel decreased from the previous year and was 41,784 at the end of 2013 (43,417 in 2012).

  • The total number of business locations on 31 December 2013 was 1,646 (1,697 in 2012)

Regional cooperatives

  • Retail sales totalled €10,462 million, up 0.8%.

  • Profit before extraordinary items and taxes was €231 million (€239 million in 2012).

SOK Corporation (SOK + subsidiaries)

  • The revenue of continuous operations was €8,539 million, a decrease of 19.7% compared to 2012.

  • The decrease of €2,095 million in the revenue from continuing operations is due to a change that took place in the ownership of North European Oil Trade Oy in December 2012. As a result of this change, North European Oil Trade Oy is no longer considered a subsidiary but a joint venture.

  • The comparable revenue excluding the figures for the company increased slightly from the previous year.

  • SOK Corporation's result before taxes was €5.2 million to the negative (€27.1 million to the negative in 2012).

  • SOK Corporation's operational result was 32 million to the negative, whereas in 2012 it was €30 million to the negative.

  • Investments totalled €100 million (€125 million in 2012). The number of SOK Corporation personnel decreased by 1,277 people from the corresponding period last year, totalling 9,353 at the end of June.

S Group's retail sales by business area in January–December 2013 (excluding VAT)

1 Jan–31 Dec 2013

1 Oct–31 Dec 2013

€ million

Change, %

€ million

Change, %

Supermarket trade*

7,807.1

3.5

2,059.9

2.4

Service station store and fuel sales

1,817.2

-0.8

433.7

-2.3

Department store and speciality store trade

338.5

-2.9

109.8

8.5

Travel industry and hospitality business*

810.8

1.0

213.6

3.4

Automotive trade and accessories

406.0

-19.9

74.9

-29.9

Agricultural trade**

161.8

-3.4

33.9

-22.8

Other

11.7

6.1

3.3

2.9

Total

11,353.2

1.2

2,929.1

0.4

* Includes the retail sales for neighbouring areas (the Baltic countries and St. Petersburg).

** The figures for Hankkija Group have been excluded from the agricultural trade total.

Supermarket trade

S Group's supermarket sales increased by 3.5 per cent in 2013. This figure includes the grocery and consumer goods sales of the Prisma, S-Market, Sale, Alepa, Kodin Terra and S-Rauta stores, as well as the grocery and consumer goods sales at other supermarket trade units.

When considered separately, S Group's grocery sales grew by 3.8 per cent, totalling €6,960 million. Consumer goods trade remained at the previous year's level and stood at €1,425 million.

The number of supermarket trade business locations increased by 21 in 2013 and the total number at year-end was 938. Sale chain opened the largest number of new market trade locations.

Service station store and fuel sales

Service station store and fuel trade sales decreased by less than one per cent in 2013. At the end of 2013, there were 234 outlets (437, including all S Group distribution outlets). S Group's service station store and fuel sales are managed by the ABC service station chain.

Department store and speciality store trade

Retail sales in the Department Stores and Speciality Stores decreased by almost 3%. At the end of the year, there were a total of 22 Sokos stores (including the online store) and 35 Emotion stores.

Travel industry and hospitality business

Retail sales increased by 1%. At the end of the year, there were 63 hotels and 267 restaurant locations. All in all, there were 760 restaurant locations, taking into account units located in connection with other units. The tourism and hospitality business chains include Sokos Hotels, Radisson Blu Hotels and several restaurant chains.

Automotive trade and accessories

Automotive sales decreased by 20% in 2013. S Group had 37 automotive trade outlets at the end of June.

At the end of the year, SOK Corporation's automotive trade had been discontinued through divestments and outlet closures. A total of 11 regional cooperatives still engage in automotive trade in S Group.

Agricultural trade

Comparable sales in the agricultural trade decreased by 3.4%. The chains operating in the agricultural trade segment are Agrimarket and Multasormi. The number of agricultural trade outlets fully owned by the S Group totalled 15 at the end of the year. Cooperatives engaged in agricultural trade include Etelä-Pohjanmaan Osuuskauppa, Suur-Seudun Osuuskauppa and Kymen Seudun Osuuskauppa.

In 2013, the sales and the number of outlets within the agricultural trade no longer included Hankkija Oy, a former subsidiary of SOK, as 60 per cent of the company was sold to the Danish DLA Group.

Neighbouring areas (the Baltic countries and St. Petersburg)

Retail sales in the business operations in Finland's neighbouring countries totalled €570 million, up 22.1 per cent on the corresponding period in the previous year. Grocery trade sales in Finland's neighbouring countries totalled €448 million, up 25.2 per cent. In 2013, one new Prisma unit was introduced in Tallinn and three new units in St. Petersburg.

Banking

At the end of 2013, S Bank had more than 2.6 million customers using its free basic banking services. By the end of the year, S Bank had granted about 1.4 million S-Etukortti Visa cards, and about 1.3 million customers had received online bank codes for digital services.

S Bank Group's operating result for 2013 was €27.9 million (€6.4 million in 2013) and the solvency ratio was 18.2% (19.4% in 2012).

The amount of deposits by private customers in S-Bank totalled nearly €2,304 million at the end of the year. Corporate deposits included, S-Bank's total funds on deposit were nearly €2,532 million at the end of the year. This showed an increase of around €60 million from the turn of the year.  Lending to private customers increased by more than €141 million and amounted to almost €394 million at the end of the year. Including corporate customer credit, the credit base at year-end was €589 million. The amount of outstanding credit grew by a total of €229 million during the year. The development of deposits and lending is explained by a rapid increase in volumes and by that the S Bank Group also includes the banking operations of FIM through the acquisition of a share majority in FIM Oyj in August.

At the beginning of August, S Bank acquired the share majority in the FIM investment service company, expanding its product range to cover funds and asset management services. The first new fund products were introduced at the end of November. Another long-awaited product was also introduced in November: the entire S Group's S-mobiili service that combines store and bank customerships.

S-Säästörahasto funds, introduced at the end of November, were well received, and a total of 8,600 S Bank customers had signed a fund savings contract in December. A total of 38% of the customers selected S-Säästörahasto Rohkea fund, 49% S-Säästörahasto Kohtuullinen fund and 13% S-Säästörahasto Varovainen fund. The assets managed by FIM totalled €2,112 million at the end of the year. 

However, the most significant event in 2013 was the decision made in November to merge with LähiTapiola Pankki to become the new S Bank launched in May 2014. 

Co-op membership

The co-op members, or the members of the cooperative enterprises, are the sole owners of S Group's cooperative enterprises. Co-op membership is S Group's way of conducting its cooperative form of business and producing services and benefits for its co-op members. In 2013, the number of members of bonus system cooperatives increased by 92,113. The total number of members at year-end was 2,109,025.

Cooperative member purchases from S Group, that is, the Group's bonus sales, was €9,541 million, an increase of 1% in comparison to 2012. The share of bonus sales in the entire S Group's sales was 71.2% (66.9% in 2012). The bonus paid to cooperative members, i.e. purchase refund based on centralising monthly purchases, was €379 million, which was at the same level as at the end of 2012.

The payment method-related benefit paid to the co-op members increased by 7%, amounting to €6 million. The co-op members have been receiving the payment method-related benefit of 0.5 per cent since the beginning of 2008. The benefit is calculated from the total sum of purchases covered by the bonus scheme and made at Finnish S Group outlets using the S-Etukortti bonus card.

For more information:Taavi Heikkilä, CEO, SOK, tel. +358 10 76 80200Jari Annala, Senior VIce President, CFO, SOK, tel +358 0 10 76 82040

SOK Corporation's Financial Statements are available in their entirety at www.s-kanava.fi

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