Consumer Goods Trade and Hotels Improved S Group’s Result

The good performance of the consumer goods trade and hotels segments improved S Group’s result for 2016.

S Group’s operating result for 2016 was € 290 million, compared to € 265 million in 2015. Correspondingly, SOK Corporation’s operating result increased to € 29 million (up from € 17 million in 2015). S Group’s total retail sales excluding taxes increased by two percent in 2016 and stood at slightly above € 11 billion.

Taavi Heikkilä, CEO of SOK, is happy with the improved operative result.

“Our grocery trade managed to maintain its performance close to previous year’s level and the other operations showed a positive development. I am especially pleased with the performance of our consumer goods trade and hotels. In contrast to the rest of the department store business, Sokos and Emotion did well and showed a positive result.”

The ABC chain also performed well, although the deregulated opening hours and dropping world-market prices of fuel had a negative effect on the sales.

S Group’s strategic policy to lower the price of food by cutting the Group’s share has been a success.

“Lowering the price of food, in combination with longer opening hours, has brought about a clear increase in the customer volumes in our supermarket trade. Increased sales volumes have partially compensated the effects of smaller margins,” says Mr. Heikkilä.

S Group’s investments amounted to € 511 million, compared to € 558 million in 2015. The investments also had considerable indirect employment effects.

Less Waste and More Bonuses

Intra-operational savings – for instance, in energy, ICT and marketing costs – have supported S Group’s good performance. Larger acquisition volumes and reduced waste have also resulted in savings.

“Our goal is to reduce the food waste from our operations by five million kilograms by 2020. Reducing waste has already saved the Group several million euros,” says Mr Heikkilä. 

S Group’s co-op members received bonuses for almost one million euros every day of the year. Annually, the amount of bonuses paid totals € 353 million, which is € 10 million more than in 2015. With the addition of payment-method benefits, interest on co-operative capital and returned surplus, co-op members received monetary benefits for a sum total of close to € 394 million.

In 2017, S Group will focus on securing the price competitiveness in the grocery trade, as well as on developing the product selections, improving quality, and increasing customer satisfaction.

S Group’s and SOK Corporation’s Key Figures for January–December 2016

The Entire S Group: Co-operatives + SOK Corporation

(2015 values are in parentheses)

• Retail sales excluding taxes totalled € 11,020 million (€ 10,804 million).
• Retail sales increased by 2%.
• Operating profit was € 290 million (€ 265 million).
• Profit before appropriations and taxes was € 292 million (€ 299 million).
• Investments totalled € 511 million (€ 558 million).
• At the end of 2016, there were 2,292,039 co-op members (2,225,506).
• At the end of 2016, the number of personnel was 37,758 (37,758). In 2017, S Group will employ more than 10,000 summer employees.
• The total number of outlets at the end of 2016 was 1,633 (1,632).

SOK Corporation: SOK + Subsidiaries

(2015 values are in parentheses)

• Net sales (IFRS) were € 7,074 million (€ 7,038 million).
• Net sales increased by one per cent.
• Operating profit (FAS) was € 29 million (€ 17 million).
• Profit before taxes (IFRS) was € 23 million (€ 9 million).
• Investments totalled € 93 million (€ 48 million).
• At the end of 2016, the number of personnel was 7,280 (7,767).

More information:

Taavi Heikkilä, CEO, SOK, tel. +358 10 76 80200

Jari Annala, Senior Vice President, CFO, SOK, tel.: +358 10 76 82040