S Group's operating result for January–June 2018 was EUR 133 million, compared to EUR 128 million in the corresponding period last year. SOK Corporation's operating result increased by nearly EUR 10 million year-on-year, to EUR 20 million. S Group's retail sales excluding taxes increased by 2.7% and stood at EUR 5.6 billion.
"Overall, S Group's result was slightly better than in the previous year. SOK's operating result in particular increased markedly year-on-year. The non-recurring costs related to the rundown of the operations in Latvia and Lithuania last year are no longer reflected in this year's result," says Taavi Heikkilä, CEO of SOK.
The cooperatives' combined result decreased slightly due to S Group's increased investments and lower prices.
The sunny summer has caused customers to be more active than usual in Finland and its neighbouring countries.
"Hotels, bar and restaurant terraces and major summer events in particular have attracted visitors. The Sokos Hotels in St Petersburg were full during the FIFA World Cup, and the Argentinian national football team, with Messi as their captain, brought the hotels some nice visibility," Heikkilä continues.
The Group is investing its profits in improving the efficiency of logistics, in other extensive digital projects, and in renovating stores, for example. During the first half of the year, S Group's investments totalled EUR 280 million, which is an increase of EUR 30 million compared to the corresponding period last year.
"Investment is needed for continuous improvement of our performance, which enables us to lower prices, develop services and eventually achieve our vision of providing unparalleled benefits and convenience from the co-op members' own stores," Heikkilä emphasises.
Co-op members received EUR 161 million in bonus rewards. This was on a par with last year, even though the new Alcohol Act, which came into effect at the beginning of March, prohibits bonus rewards for alcohol products. S Group cooperatives lowered the tiers of their bonus tables during the first half of the year, meaning that monthly purchases amounting to EUR 900 now provide the maximum reward rate of 5% in all cooperatives.
A mobile payment revolution will begin in the autumn
Beginning in the autumn, it will be possible to use MobilePay to pay for purchases in nearly 1,000 S Group grocery stores and in online stores. MobilePay works with all smartphones and all banks' cards.
S Group is also continuing its rapid development of other digital services that make customers' daily lives easier. In August, we will introduce the "Omat ostot" service on S-kanava. The service will enable co-op members to monitor their consumption and examine their purchases by product group, for example.
"Customers are the main beneficiaries of customer information. We want to use the large amount of data we have for the benefit of our members and provide them with various services that make their daily lives run more smoothly. The "Omat ostot" service is one example of this. We are also working on many other services," says Heikkilä.
S Group's largest digital project, the new grocery trade logistics centre in Sipoo, will be taken into use fully by the end of 2018.
S Group's and SOK Corporation's key figures for January–June 2018
S Group as a whole (cooperatives + SOK Corporation), January–June 2018:
- Retail sales before taxes totalled EUR 5,610 million (EUR 5,464 million).
- Retail sales increased by 2.7%.
- Profit before appropriations and taxes was EUR 140 million (EUR 119 million).
- Operating profit was EUR 133 million (EUR 128 million).
- Investments totalled EUR 280 million (EUR 246 million).
- At the end of June, there were 2,372,034 co-op members (2,295,749).
- At the end of June, the number of personnel was 41,959 (41,381). This year, S Group will employ a total of around 13,000 summer employees and summer trainees through the Learn and Earn programme.
- The total number of outlets at the end of June was 1,645 (1,630).
SOK Corporation (SOK + subsidiaries), January–June 2018:
- Net sales (IFRS) were EUR 3,581 million (EUR 3,449 million).
- Profit before taxes (IFRS) was EUR 14 million (EUR -4 million).
- Operating profit (FAS) was EUR 20 million (EUR 11 million).
- Investments totalled EUR 71 million (EUR 25 million).
- At the end of June, the number of personnel was 6,586 (6,695).
SOK Corporation's full interim report for January–June 2018 will be available in the S-kanava online service on 16 August 2018.