KESKO CORPORATION STOCK EXCHANGE RELEASE ... - Euroland

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4 The new Articles of Association approved by Kesko´s Extraordinary General Meeting held on 30 October 2000 were entered in the Trade Register on 1 January 2001. The entry into force of the new Articles of Association also started the term of the Board members elected by the Extraordinary General Meeting. Their term will expire at the close of the Annual General Meeting in 2003. Kesko’s Board of Directors elected Matti Kallio as its Chairman and Keijo Suila as its Deputy Chairman at the Board meeting held on 3 January 2001. Other Board members are Kesko’s President and CEO Matti Honkala, B.S. (Econ.); Eero Kasanen, Dr.Sc. (Econ.); Maarit Näkyvä, M.Sc. (Econ.); Kalevi Sivonen, retailer; Heikki Takamäki, retailer; and Jukka Toivakka, retailer. On 1 January 2001, a Corporate Management Board was established in the Kesko Group. Its members represent the company’s operating management. President and CEO Matti Honkala acts as the Board’s Chairman, and the other members appointed are Kalervo Haapaniemi, Matti Halmesmäki, Erkki Heikkinen, Juhani Järvi, Matti Laamanen, Riitta Laitasalo and Jouko Tuunainen. Acting in accordance with a previously decided plan, Kesko Corporation transferred its foods and home and speciality goods businesses to its wholly-owned subsidiaries, Kesko Food Ltd and Keswell Ltd respectively, on 1 April 2001. Kalervo Haapaniemi was appointed President of Kesko Food, responsible for the foods trade, and Matti Laamanen the President of Keswell Ltd, responsible for the home and speciality goods trade. It is planned that two new subsidiaries, responsible for the hardware and builders’ supplies trade and the agricultural and machinery trade, will be formed on 1 October 2001. Personnel The Group’s average number of employees in the review period was 10,928 (10,543), divided by division as follows: average average 1-3/2001 1-3/2000 31.3.2001 Kesko Food 4,887 4,672 6,293 Rautakesko 1,173 688 1,295 Keswell 2,453 2,749 3,202 Kesko Agriculture and 668 627 718 Machinery VV-Auto 110 103 113 Kaukomarkkinat 841 757 875 Others 796 947 860 Total 10,928 10,543 13,356
5 (The comparable figures have been adjusted to correspond with the new organisation. In calculating the average number of employees, part-time employees have been converted to full-time employees in relation to their working hours.) The total number of Kesko Group employees has increased slightly. The number was increased by the expansion of Kesko Food’s and Rautakesko’s operations in Estonia and those of Rautakesko in Sweden. On the other hand, the number was decreased by the outsourcing of service and support activities in line with strategy. The Group employed 1,156 persons (523) abroad. Development of divisions Kesko Food Kesko Food´s net sales were EUR 758 million, a decrease of 4.5 percent. Revised pricing and charging practices related to the chain reform has had an effect of about four percentage points on Kesko Food´s net sales. The operating loss was EUR 4.2 million, compared with the operating loss of EUR 1.2 million in the corresponding period of 2000. The main reasons for the increased loss during the first three months of the year are the costs of starting up the new chain operations and investments in the store network. The investments totalled EUR 11.5 million. Kesko Food Ltd started operating as an independent company on 1 April 2001. The transfer to a pricing system and payment structure based on the new chain operating system on 1 January 2001 has significantly affected the development of Kesko Food´s net sales. In the first quarter of the year, total grocery sales increased by about 4-5 percent in Finland. The opening hours of stores with a floor area of below 400 square metres were extended at the end of January, which, together with Sunday openings, stimulated sales. On the other hand, this change slightly diminished the sales of kiosks, service stations and large outlets. The sales of the Estonian units developed better than Kesko Food´s other units. The operating loss of Citymarket Oy, which carries on the non-food trade in the Citymarket hypermarkets, increased from the previous year and was EUR 6.7 million (EUR 5.6 million). During the first three months of the year, five new K-grocery stores were opened: a Citymarket in Kuusamo, a K-superstore in
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KESKO CORPORATION STOCK EXCHANGE RELEASE ... - Euroland

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