S Group's operating result for 2017 was EUR 344 million, compared to EUR 290 million in 2016. Correspondingly, SOK Corporation's operating result increased to EUR 41 million from EUR 29 million in the previous year. S Group's retail sales excluding taxes increased by 2.3% last year and stood at EUR 11,273 million.
"The fine development of the result continued, in particular, in department store trade, hotels and restaurants, and ABC stations. The clearly positive result of Sokos and Emotion is a fine achievement in the challenging market situation", says Taavi Heikkilä, CEO of SOK.
The result of the department store business was boosted by the more targeted product range of the renewed Sokos and the new brands, especially in men's clothing. Travel industry and hospitality business was energised by the increase in the number of foreign travellers, renewals of restaurants and investments in a better customer experience. At ABC stations, growth was supported by decreasing fuel prices and renewals in the restaurant trade.
The result of S Group's grocery trade has also remained at a good level. The increased sales at grocery stores have compensated the impact of the lowered margins on profit, and the market share of the Group has further grown.
Digitalisation improves performance and service
S Group's investments amounted to EUR 492 million last year. The largest investment in the past years has been the new logistics centre for grocery trade, which will be taken fully in use by the end of 2018.
"The centre, which is already in use for a large part, is a prime example of savings potential brought about by automation. Efficient logistics is a central factor for lower prices and good availability. In addition, we are investing in other large-scale digital projects and services, as well as energy efficiency", Heikkilä says.
The cooperatives paid to co-op members a total of EUR 334 million in Bonus rewards. An average amount of EUR 164 was paid to co-op member households during the year, when including payment method-related benefit, return of surplus and interest on the membership fee, in addition to Bonus.
S Group's operating result for 2018 is expected to be at the same level as in 2017. The operating result of SOK Corporation is expected to further grow.
S Group's and SOK Corporation's key figures for January–December 2017
S Group as a whole (cooperatives + SOK Corporation), January–December 2017:
- Retail sales excluding taxes totalled EUR 11,273 million (EUR 11,020 million).
- Retail sales increased by 2.3 percent.
- Operating profit was EUR 344 million (EUR 290 million).
- Profit before appropriations and taxes was EUR 296 million (EUR 292 million).
- Investments totalled EUR 492 million (EUR 510 million).
- At the end of the year, there were 2,355,963 co-op members (2,292,039).
- At the end of the year, the number of personnel was 36,694 (37,397). The decrease in the number of personnel was largely due to the closing of stores in Latvia and Lithuania.
- This year, S Group will employ a total of around 13,000 summer employees.
- The total number of outlets at the end of the year was 1,631 (1,633).
- The S-mobiili app, which combines bank and store services, has already been downloaded 1.35 million times.
SOK Corporation (SOK + subsidiaries), January–December 2017:
- Net sales (IFRS) were EUR 7,064 million (EUR 7,074 million)Operating profit (FAS) was EUR 41 million (EUR 29 million).
- Profit before taxes (IFRS) was EUR 5 million (EUR 23 million). The result was affected by non-recurring costs for closing the stores in Latvia and Lithuania.
- Investments totalled EUR 58 million (EUR 93 million).
- At the end of the year, the number of personnel was 6,095 (6,722). The decrease in the number of personnel was largely due to the closing of stores in Latvia and Lithuania.
SOK Corporation's financial statements bulletin for January–December 2017 will be published in the S-kanava online service on 9 February 2018. S Group's annual report and corporate responsibility report, as well as SOK Corporation's financial statements for 2017 with notes, will be published in March 2018.