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Press release
For publication 14 February 2008 at 13.00 p.m.

The S Group’s sales grow and profit remains good

The S Group racked up good performance in 2007. The Group’s retail sales rose to EUR 10.5 billion, up 7.9 per cent on the figure a year earlier.
The S Group posted aggregate profit before extraordinary items of EUR 317 million (2006: € 336 million). 

The regional cooperative enterprises reported a favourable sales trend, with growth of 9.7 per cent on the previous year. The co-operative societies’ share of the S Group’s sales was 84 per cent, with SOK Corporation accounting for 16 per cent.

The S Group’s grocery sales went up by 8.5 per cent compared with the figure a year ago, rising to EUR 5,435 million.

The Cooperative enterprises’ profit before extraordinary items was EUR 265 million (€ 310 million).

The S Group’s capital expenditures rose by EUR 7 million on the previous year and were EUR 565 million.

The S Group’s payroll grew by 2,000 employees compared with the previous year and totalled nearly 36,000 people at 31 December 2007. 

The S Group added 43 locations to its units in Finland, bringing the total number of locations to 1,518 at the end of the year. In addition, there are 8 locations in the Baltic countries.

Members were paid EUR 263 million in bonuses

110,730 new members joined the co-operative enterprises last year. The total membership at the end of December was 1,707,274.

The S Group’s bonus sales grew by 11 per cent on the previous year, reaching EUR 6,779 million. Bonus sales accounted for 66 per cent of the S Group’s sales in Finland (64% in 2006). At present, already 70 per cent (66%) of all Finnish households are members of the S Group.

The share of bonuses paid to members grew by 13 per cent on the figure a year earlier, rising to EUR 263 million.

The S Group’s retail sales by business area
(including sales in the Baltic countries)

The S Group’s supermarket trade includes the grocery and consumer goods sales of the Prismas, S-markets, Sale and Alepa stores as well as the other units in the supermarket trade. There were a total of 783 supermarket locations at the end of the year.

The S Group’s market position within the grocery trade strengthened further. Sales growth outpaced overall market growth again last year.

In the consumer goods trade, consumers’ disposable income held up well. The range of consumer goods offered by the Prismas will be expanded, and new units will be established within the Kodin Terra chain.

The Group's market position within the service station store and fuel trade strengthened as a result of the Esso transaction and the establishment of new units. There were a total of 185 locations at the end of the year and, counting all outlets, 349.

The S Group’s market position within the department store trade strengthened. In 2007, there were 20 Sokos department stores. The Emotion chain comprised 13 units, and the chain will add four more units this year.

The tourism and hospitality trade has generated sales that have outstripped growth in the sector. The chains in the tourism and hospitality trade are Sokos Hotels, Radisson SAS Hotels and Holiday Club Spa Hotels. There are a total of 302 locations.

The S Group’s automotive trade was reorganised, and a development programme was prepared for the current year. Last summer, the S Group divested its vehicle dealerships in the Baltic countries. The S Group’s automotive trade had 44 locations at the turn of the year.

The agricultural trade reported a better‑than‑forecast sales and earnings trend. The chains operating in the agricultural trade are Agrimarket, S-Rautamarket (hardware) and Multasormi (Green Thumb). There were 144 agritrade sites at the turn of the year.

SOK Corporation’s operations in 2007
SOK Corporation comprises SOK and its subsidiaries

SOK Corporation’s revenue was up 14.3 per cent on the previous year, to EUR 7,813 million.

Profit before taxes was EUR 51.6 million (€ 25.9 million).The earnings growth was attributable mainly to the increase in capital gains on disposals of property, plant and equipment. The operational result was a loss of EUR 2.1 million (profit of EUR 17.4 million).

SOK Corporation’s payroll increased by above 300 employees compared with the previous year and was 8,889 people at the end of the year.

SOK Corporation’s capital expenditures in 2007 amounted to EUR 115.9 million (€ 201.9 million).

SOK Corporation’s Retail and Wholesale Business: revenue and operational result

SOK Corporation’s supermarket trade includes the supermarket trade carried on in Estonia and Latvia. Revenue was up 35.1 per cent on the previous year, to EUR 134 million. The supermarket trade generated profit of EUR 2.5 million (€ 1.9 million).

The tourism and hospitality business reported a revenue increase of 12.9 per cent to EUR 245 million. The operational result was a profit of EUR 0.1 million (€ 9.0 million). Earnings were burdened particularly by the hotel projects that are under way in St Petersburg.

Revenue from the automotive trade and accessories business was down 10.9 per cent on the previous year and totalled EUR 378 million. The operational result was a loss of EUR 15.8 million (a loss of € 7.8 million). The weak earnings trend was attributable both to the standstill, in the latter months of this year, in vehicle sales as a result of the change in the car tax and to the below-par performance of Peugeot and Ford in the Finnish vehicle market.

Revenue from the agritrade, including hardware and building supplies wholesaling, increased by 15.4 per cent on the previous year, to EUR 987 million. The operational result was EUR 10.1 million (€ 7.5 million). The good result reported by the Hankkija‑Maatalous Group was due to a better‑than‑expected sales trend.

Procurement operations reported a revenue increase of 24.7 per cent on the previous year, to EUR 4,160 million. The operational result of the Inex Partners Group was better than planned. The operational result of Intrade Partners Oy fell short of the figure a year earlier but was on budget. The result for the fuel trade was as budgeted. The aggregate result of procurement operations was a profit of EUR 6.5 million (€ 10.8 million).

Operational result from Banking

S-Bank’s operations got started in October 2007. The S Group’s financial services have a history of close on a hundred years of savings association operations.

At the end of the year, S Bank’s deposits from retail customers grew by about EUR 160 million and stood at nearly EUR 990 million at the end of the year. Over the same period, the Bank’s total assets topped the EUR 1.2 billion mark.

Nearly 200,000 bank PIN code agreements were made, and about 40,000 Visa Credit and Debit multiple application cards were issued, a first for S-Bank among banks in Europe.

The start‑up of banking operations was reflected in the result of operations. The operating loss for the financial period was EUR 8.6 million. In 2007, heavy outlays were made on launching the bank’s operations.

For further information, please contact
CEO Arto Hiltunen, SOK, tel. +358 10 76 80200
Jari Annala, Senior Vice President, SOK Administrative Division, tell. +358 10 76 82040

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