SOK Corporation's 2017
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SOK Corporation's 2017 Financial Statements 1 Jan –31 Dec 2017 6 2 SOK Corporation's Financial Statements 2017 6 SOK Corporation's Financial Statements 2017 Executive board report on operations .......................4 SOK Corporation Key Ratios 2013–2017 .................56 Consolidated financial statements, IFRS .................10 Parent Cooperative’s Consolidated income statement.......................................10 Financial Statement, FAS ..............................................58 Consolidated statement of financial position ...................11 Income statement of SOK ...............................................58 Consolidated statement of cash flows ..............................12 Balance sheet of SOK ......................................................59 Consolidated statement of changes in equity ...................13 Cash flow statement of SOK ...........................................60 Notes to the consolidated financial statements: Notes to SOK’s financial statements ................................61 Company information ..............................................14 Accounting policies for consolidated Executive Board’s proposal for the distribution financial statements ...................................................14 of SOK’s distributable surplus ...................................70 1. Segment information ..........................................22 2. Other operating income .....................................26 Auditor’s report ..............................................................71 3. Employee benefit expenses ..................................26 4. Depreciation and impairment .............................27 Statement by the Supervisory Board .......................73 5. Other operating expenses ....................................27 6. Auditor’s fees ......................................................28 7. Financial income and expenses ...........................28 8. Financial instrument items recognised in the income statement .....................................28 9. Income taxes .......................................................29 10. Property, plant and equipment ...........................30 11. Investment properties .........................................31 12. Intangible assets ..................................................32 13. Impairment testing .............................................33 14. Shares in associated companies and joint ventures ...............................................33 15. Non-current financial assets ................................35 16. Deferred taxes .....................................................36 17. Inventories ..........................................................37 18. Trade receivables and other current non-interest-bearing receivables ..........................37 19. Current interest-bearing receivables ....................37 20. Cash and cash equivalents ...................................37 21. Equity ................................................................37 22. Interest-bearing liabilities ....................................38 23. Non-interest-bearing liabilities ............................38 24. Fair values of financial assets and liabilities ..........39 25. Provisions ...........................................................43 26. Operating leases ..................................................43 27. Management of financial and commodity price risks .........................................44 28. Related party transactions ...................................52 29. Contingent liabilities ..........................................52 30. Subsidiaries and associated companies ................54 31. Events after the balance sheet date ......................55 SOK Corporation's Financial Statements 2017 3 Executive board report on operations Development of the operating environment S Group’s retail sales excluding taxes +/- % by business area EUR million prev. year Prisma* 3 490 +1.1 Finland’s GNP grew 1.9 per cent during year 2016, and the strong growth has continued in year 2017 as well. According to S-Bank’s S-market 3 358 +1.3 forecast, the growth for the entire year will be 3.2 per cent. The Sale and Alepa 1 018 +4.1 low interest rates, moderate increase in consumer prices and de- Other supermarket trade 4 -7.3 creased unemployment have supported private consumption, but Supermarket trade total* 7 870 +1.5 the actual drivers of growth are exports and industrial invest- Hardware trade 177 -11.3 ments, for both of which the forecast growth is more than 8 per Service station store and fuel sales 1 633 +5.8 cent compared to the previous year. Department stores and speciality stores 310 +3.2 The development of private consumption is of key importance for the development of sales in S Group. Strong consumer con- Travel industry and hospitality business* 811 +2.2 fidence in the economy and the positive economic development Automotive trade and accessories 379 +11.7 have upheld household consumption and generated growth of Agricultural trade 75 +2.6 2.2 per cent from the previous year. As part of general economic Others 19 +1.2 growth, retail also grew 2.2 per cent from the previous year. S Group total* 11 273 +2.3 Year 2017 was characterised by global growth, and it is estimated that global GNP will grow 3.5 per cent. Exports have * Includes retail sales in the neighbouring regions been supported by the stronger economic growth of the export (the Baltic countries and St Petersburg). countries. Among the largest export countries, the euro region has experienced the best growth since 2007 in the current year, and At the end of year, S Group had 1,631 outlets (1,633 on the forecast growth for the entire 2017 is 2.2 per cent. GNP in the 31 December 2016). USA is also forecast to grow 2.2 per cent. Due to the economic On 31 December 2017, there were 20 regional cooperatives sanctions imposed by the West, the economic development of and seven local cooperatives. Russia has been slightly slower and the economy there is forecast A total of 109,584 new members joined the cooperatives to grown 1.7 per cent. Russian exports and economic growth have participating in the Bonus system in 2017. The total number of been supported by the increased world market prices of oil and co-op members was 2,355,963 at the end of December. Co-op other raw materials. members were paid EUR 334 million in Bonus rewards. The The stronger economic growth has increased tax income and principal reason for the lower amount of Bonus paid last year is resulted in decreased economic deficit. However, this will not the change in tobacco law due to which Bonus is no longer paid solve the existing structural problems in the public economy.. for tobacco products in 2017. S Group’s investments amounted to EUR 492 million, compared to EUR 510 million in the previous year. S Group’s business development S Group’s combined non-consolidated result before appropri- 1 January – 31 December 2017 ations and taxes was EUR 296 million positive, whereas the re- sult was EUR 292 million in the previous year. The cooperatives’ S Group comprises the cooperatives and SOK with its subsid- combined result before appropriations and taxes showed a profit iaries. S Group’s retail sales excluding taxes in 2017 were EUR of EUR 291 million, whereas the result was EUR 269 million in 11,273 million, showing an increase of 2.3 per cent compared the previous year. SOK Corporation’s result before taxes (IFRS) to the previous year. showed a profit of EUR 5,0 million, whereas it was EUR 22,8 million in the previous year. The transfer agreed between S Group and Stockmann of the Stockmann Delicatessen department’s business operations to S Group cooperatives was approved by the Finnish Consum- er and Competition Authority. The operations that were trans- ferred to the SOK Corporation were the chain operations of the Delicatessen department and the production of Stockmann Meals. The store operations of the Delicatessen department in the Helsinki region, Turku and Tampere were transferred to HOK-Elanto, the Turun Osuuskauppa cooperative and the Pir- kanmaan Osuuskauppa cooperative, respectively. 4 SOK Corporation's Financial Statements 2017 Financial development SOK’s operations SOK Corporation’s operating result SOK is the parent company of SOK Corporation. In accordance The operating result is used to monitor the result of the operational with its statutes, SOK is the central organisation of S Group, business activities after financial items excluding non-recurring promoting and developing the operations of the cooperatives and items and IFRS items. The positive development of the operating other organisations belonging to S Group, and managing and result is due to the strengthening of the result of the supermarket supervising the Group’s overall resources for maximum efficiency trade and the travel industry and hospitality business. while also monitoring the operations and seeing to the interests of S Group and its segments. SOK Corporation 31 Dec 2017 31 Dec 2016 31 Dec 2015 SOK is responsible for S Group’s overall strategic management. Operating result, Its tasks are to provide S Group companies with services in chain EUR million 41.5 28.8 16.9 management, co-op membership and marketing, as well as other group and corporate services and development activities related to these services and other activities of S Group. Services central to S Group’s operations also include procurement and assortment SOK Corporation’s net sales and operating result services.