Kesko has completed the acquisition of Suomen Lähikauppa - Siwa and Valintatalo stores to be converted into K-markets
(Thomson Reuters ONE) -
KESKO CORPORATION STOCK EXCHANGE RELEASE 12.04.2016 AT 10.30 1(4)
Kesko has completed the acquisition of Suomen Lähikauppa - Siwa and Valintatalo
stores to be converted into K-markets
Kesko Food Ltd, a Kesko Corporation subsidiary, has acquired the whole share
capital of Suomen Lähikauppa Oy from the private equity investment firm Triton.
With the acquisition of Suomen Lähikauppa, Kesko will grow in the neighbourhood
market in line with its strategy and the neighbourhood retail services valued by
Finnish consumers will improve significantly. Suomen Lähikauppa's Siwa and
Valintatalo stores will be converted into K-market stores. At the same time, the
renewal of the entire K-market chain will begin. In the next few years, hundreds
of new retailers will be recruited to run the new K-food stores.
The transaction agreed between Kesko Corporation's subsidiary Kesko Food and the
private equity investment firm Triton to acquire Suomen Lähikauppa has been
closed. The debt-free price of the acquisition, structured as a share purchase,
is approximately ?60 million. In 2015, Suomen Lähikauppa's net sales were ?935.7
million, it has around 600 Siwa and Valintatalo stores and around 3,800
employees.
"As the acquisition is completed, Suomen Lähikauppa will have a committed,
responsible and solid Finnish owner. In line with our strategy, we seek growth
in the grocery trade by renewing and increasing our neighbourhood market
network. Suomen Lähikauppa has excellent business locations and the acquisition
will enable us to implement our strategy faster than planned and with
significantly less capital expenditure. The acquisition also enables significant
synergies. We will now begin to write a new chapter in the Finnish neighbourhood
retailing with the objective of doubling the footfall in our neighbourhood
stores. The acquisition also supports the development of other K-Group grocery
stores," says Kesko's President and CEO Mikko Helander.
The Finnish Competition and Consumer Authority (FCCA) announced their approval
of the acquisition on 11 April 2016. The permission contains conditions imposed
by the FCCA. The FCCA made the acquisition conditional on the sale of 60 stores
of Suomen Lähikauppa Oy to competitors. The FCCA also imposed an obligation to
Suomen Lähikauppa Oy, transferred to Kesko Food Ltd's ownership, to continue
purchases from Tuko Logistics Osuuskunta during a fixed period of 18 months in
order that purchases can be reduced in stages.
Entire K-market chain to be renewed, Siwa and Valintatalo stores to be converted
into K-markets
Kesko will start converting the Siwa and Valintatalo stores into K-markets in
May. The objective is to complete the conversions within the next year. At the
same time, an extensive renewal of the entire K-market chain will begin.
"With the acquisition of Suomen Lähikauppa and the extensive K-market renewal,
the neighbourhood retail services valued by Finnish consumers will improve
significantly. The renewed K-markets will form Finland's most comprehensive and
service oriented neighbourhood store network. These neighbourhood stores of the
2020s will offer a fresh and wide selection, comprehensive services and a
reliable, competitive price level, all of it easily and fast. The visual image
of K-markets will also be redesigned," says Jorma Rauhala, Kesko's Executive
Vice President and Senior Vice President for the grocery trade.
The Siwa and Valintatalo stores will be converted into K-markets in stages and
the objective is to transfer all stores to K-retailers within the next two
years. As the store network expands, Kesko will recruit and train hundreds of
new K-retailers.
Petteri Niemi, Vice President for the logistics, supply chain and IT management
of Kesko's grocery trade, has been appointed Suomen Lähikauppa's new Managing
Director. He will report to Jorma Rauhala, Kesko's Executive Vice President and
Senior Vice President for the grocery trade.
Financial impacts of the acquisition
In 2015, Suomen Lähikauppa's net sales were ?935.7 million and its operating
profit was ?-8.0 million.
Kesko estimates that it will achieve synergy benefits of approximately ?25-30
million at EBITDA level from the acquisition as of 2018. Synergies are expected
to arise especially from purchasing and logistics, marketing, store site network
development, information system expenses and administration.
The achievement of synergies requires conversion costs for the renewal of the
stores acquired from Suomen Lähikauppa. The costs of store and network
conversion, to be treated as non-recurring restructuring costs, will total
approximately ?30 million in 2016-2018.
Updated future outlook
The future outlook announced in Kesko's financial statements release on 3
February 2016 was as follows: "Kesko Group's net sales for 2016 are expected to
equal the level of the previous year. The operating profit excluding non-
recurring items for 2016 is expected to slightly exceed the level of 2015. The
future outlook does not take account of the acquisitions of Suomen Lähikauppa
and Onninen, in respect of which estimates will be given in connection with
their respective completions."
As a result of the completion of the acquisition of Suomen Lähikauppa, Kesko's
future outlook for 2016 has now been updated. According to the updated future
outlook, Kesko Group's net sales for 2016 are expected to increase from the
previous year. The operating profit excluding non-recurring items for 2016 is
expected to equal the level of 2015. The future outlook does not take account of
the acquisition of Onninen, in respect of which estimates will be given in
connection with its completion.
Briefing in Finnish at Kesko today at 13.00
Kesko will hold a briefing on the acquisition today, 12 April 2016 at 13.00 in
the auditorium at Ankkurikatu 5, Helsinki (Katajanokka). The briefing can be
viewed on webcast at www.kesko.fi.
Audio conference in English today at 15.00
An English-language audio conference on the acquisition will be held today at
15.00 (Finnish time). The audio conference login is available at www.kesko.fi.
Suomen Lähikauppa Group's profit performance and financial position
INCOME STATEMENT 1 Jan.-31 Dec. 2015
Net sales 935.7
Cost of goods sold -677.4
Gross profit 258.3
Other operating income 5.3
Employee benefit expenses -137.4
Depreciation and amortisation -16.1
Other operating expenses -118.1
Operating profit -8.0
Finance income and expenses -0.7
Profit before tax -8.6
Income tax 0.0
Profit for the period -8.6
BALANCE SHEET 31 Dec. 2015
Total assets
Non-current assets
Intangible assets 9.8
Tangible assets 51.4
Other investments 10.6
Deferred tax assets 15.0
Total non-current assets 86.8
Current assets
Inventories 39.3
Trade receivables 3.4
Other receivables 6.4
Cash and cash equivalents 5.3
Total current assets 54.3
Total assets 141.0
Equity and liabilities
Equity 3.8
Non-controlling interest 1.3
Total equity 5.2
Provisions 0.9
Current liabilities
Interest-bearing liabilities 12.9
Trade payables 79.2
Other non-interest-bearing liabilities 42.9
Deferred tax liabilities 0.0
Total current liabilities 135.0
Total equity and liabilities 141.0
Kesko has published stock exchange releases on the acquisition on 18 November
2015 and 11 April 2016.
Further information:
Jorma Rauhala, Executive Vice President and Senior Vice President for the
grocery trade, tel. +358 105 322 211
Jukka Erlund, Senior Vice President, Chief Financial Officer, tel.
+358 105 322 113
Karoliina Partanen, Vice President, communications, grocery trade, tel.
+358 105 320 744
Kesko is a Finnish listed trading sector company. Kesko operates in the grocery
trade, the home improvement and speciality goods trade and the car trade. Its
divisions and chains act in close cooperation with retailer entrepreneurs and
other partners. In 2015, Kesko's net sales totalled ?8.7 billion and it employed
nearly 20,000 people. Kesko has over 1,500 stores engaged in chain operations in
Finland, Sweden, Norway, Estonia, Latvia, Lithuania, Russia and Belarus. Kesko's
shares are listed on Nasdaq Helsinki. The company's domicile and main premises
are in Helsinki. Kesko is the most sustainable trading sector company in the
world (Food and Staples Retailing, The Global 100 Most Sustainable Corporations
in the World). www.kesko.fi
Suomen Lähikauppa concentrates on neighbourhood services. We take care of the
needs of residents in the neighbourhood, we bring together services and provide
a good service experience - readily, conveniently and fast. Suomen Lähikauppa
has two nationwide store chains: Siwa and Valintatalo. The network of Siwa
stores is Finland's most comprehensive. www.lahikauppa.fi
Kesko Corporation
Merja Haverinen
Vice President, Group Communications
DISTRIBUTION
Nasdaq Helsinki Ltd
Main news media
www.kesko.fi
This announcement is distributed by GlobeNewswire on behalf of
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(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Kesko Oyj via GlobeNewswire
[HUG#2002702]
Unternehmensinformation / Kurzprofil:
Datum: 12.04.2016 - 09:30 Uhr
Sprache: Deutsch
News-ID 463286
Anzahl Zeichen: 12489
contact information:
Town:
Kesko
Kategorie:
Business News
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