Rautakirja is the market leader in all its operations in Finland: kiosk operations, press distribution, bookstores, and movie theatres. In the Baltic countries, it is the market leader in press distribution and movie theatres. Press distribution has extended to Romania and kiosk operations to the Czech Republic.
KEY INDICATORS, € million | 31.3.2005 | 31.3.2004 | Change, % | 31.12.2004 |
Net sales | 148.6 | 152.4 | -2.5 | 659.7 |
Operating profit | 13.8 | 8.5 | 61.7 | 47.2 |
% of net sales | 9.3 | 5.6 | 7.1 | |
Balance sheet total | 438.9 | 347.0 | 26.5 | 369.2 |
Gross investments | 83.9 | 2.5 | 3 219.9 | 18.0 |
Personnel under employment contract, average | 5 793 | 6 192 | -6.4 | 6 261 |
Personnel, average (full-time equivalents) | 4 439 | 4 842 | -8.3 | 4 795 |
OPERATIONAL INDICATORS, 1.1–31.3. *) | 2005 | 2004 | ||
Customer volume in kiosk operations, thousands | 27 477 | 28 561 | ||
Customer volume in bookstore operations, thousands | 1 690 | 1 474 | ||
Customer volume in movie theatres, thousands | 948 | 1 005 | ||
Number of copies sold (press distribution), thousands | 31 073 | 30 921 |
*) Units in Finland
Rautakirja’s net sales decreased to EUR 148.6 (152.4) million in the first quarter. Net sales decreased in Finland as Rautakirja divested its restaurant operations and sold its highway service area operations to Neste Marketing in December 2004. Net sales increased in the Baltic countries and the Czech Republic. Finland accounted for 85% (90%) of net sales. After adjustment for changes in Group structure, the Division’s net sales increased by slightly less than 1%.
Kiosk operations generated net sales of EUR 81.9 (81.7) million. Net sales declined slightly in Finland but grew in the other countries. The first kiosks in Finland started to use the new cash register system in February. The aim is to introduce the system in all R-kiosks by the end of 2005.
Net sales from press distribution grew to EUR 22.7 (19.0) million. Growth was mainly due to consolidation of operations in Lithuania and Romania, acquired at the end of 2004. In Finland, newsstand sales of magazines grew slightly.
Net sales from bookstores amounted to EUR 27.9 (27.6) million. Net sales grew in Finland but declined slightly in Estonia. In Finland, sales of non-fiction and paperbacks developed favourably. Sales of children and juvenile books fell short of the previous year’s success boosted by Harry Potter. At the beginning of the year, Suomalainen Kirjakauppa launched a customer loyalty programme. By the end of March, the number of registered loyal customers amounted to 58,000.
The entertainment business comprises movie theatres in Finland and the Baltic countries, and a multi-purpose arena in Hamburg. Net sales amounted to EUR 16.2 (14.5) million in January–March. Movie theatres’ net sales declined in Finland, Estonia, and Lithuania since, at the beginning of the year, few box-office movies were shown. Net sales were boosted by the acquisition of V&K Holding, a video wholesaler operating in the Baltic countries, in April 2004, and the multi-purpose arena in Hamburg, acquired in February 2005. In the first quarter, Finnkino signed lease agreements for multiplex movie theatres in Oulu and Lahti. Construction work starts in spring 2005 and will be finished by the end of 2006.
Net sales from other operations, EUR 2.5 (12.2) million, include highway service areas in January only, whereas in 2004, they were part of Rautakirja for the full year. Highway service areas were transferred to Neste Marketing by the end of January.
Rautakirja’s operating profit increased to EUR 13.8 (8.5) million, mainly as a result of the gain on the sale of restaurant operations. Rautakirja’s most significant non-recurring gains on the sales of assets amounted to EUR 4.0 (0.0) million in January–March. Operating profit grew in kiosk operations, press distribution, and bookstores. Also, the new multi-purpose arena boosted net sales. Movie theatres fell slightly short of the previous year’s figures.
Competition will continue to be challenging in retail but Rautakirja’s heavy investments in ICT, business concepts, and personnel development will also secure success in 2005. Comparable net sales are expected to grow, particularly outside Finland, and operating profit is expected to improve.