Upload
hoangthien
View
217
Download
0
Embed Size (px)
Citation preview
REITAN CONVENIENCE ANNUAL REPORT 2015
KEY FIGURES
Amounts in NOK million TURNOVER/STORES 2015 2014Turnoverincludingfranchiseeturnover 15,544 14,754Growthinturnover 1.3% 0.4%Numberofstoresat31December 2,362 2,427Numberofemployeesinstoresat31December 13,221 14,616 RESULT 2015 2014Operatingrevenues 4,491 4,973EBITDA 934 796Operatingprofit 553 410Profitbeforeincometaxexpenses 444 350Profitfortheyear 330 269 PROFITABILITY 2015 2014Operatingmargin 3.6% 2.8%Cashflowmargin 6.0% 5.4%Returnontotalassets 7.1% 4.6%Returnonequity 13.5% 11.9%Returnoncapitalemployed 17.1% 12.4% BALANCESHEET 2015 2014Non-currentassets 4,595 4,623Currentassets 1,927 1,674Equity 2,528 2,337Non-currentliabilities 1,147 1,441Currentliabilities 2,847 2,519Totalcapital 6,522 6,297Equityratio 38.8% 37.1% CASHFLOW 2015 2014Netinvestmentinproperty,plantandequipment 316 278Cashandcashequivalentsat31December 575 388Non-currentborrowingsat31December 788 1,099Currentborrowingsat31December - 1Netinterest-bearingdebtat31December - -
Turnoverincludingfranchiseeturnoverconsistsoftotalsaleofgoods,agentincomefromtransporttickets,lot-teriesandtelephoneandgiftcardsinfranchisedstoresandcompanyownedconveniencestores,anddistri-butionofpressproductstounitsbothinsideandoutsideofReitangruppen.TurnoverfromfranchisedstoresisnotpartofReitanConvenience’soperatingrevenues,andconsequently,thesefiguresareunaudited.However,thegroup’smanagementbelievesthatthisturnoverisimportant,andessentialtounderstandtheeconomicdevelopmentofthebusiness.
Seepage74fordefinitionofkeyfigures.
2 Reitan Convenience Annual Report 2015
CONTENTS
Keyfigures 2
LetterfromtheCEO 4
OTHER
Auditor’sreport 72
Definitionofkeyfigures 74
Addresslist 75
Ourresponsibility–appendix 76
Directors’report 8Incomestatement 13Balancesheet-assets 14Balancesheet-equityandliabilities 15Equity 16Statementofcashflows 17Notestothefinancialstatements-Contents 19Notestothefinancialstatements 20
Incomestatement 55Balancesheet-assets 56Balancesheet-equityandliabilities 57
Equity 58Statementofcashflows 59Notestothefinancialstatements-Contents 60Notestothefinancialstatements 61
INTRODUCTION
CONSOLIDATEDFINANCIALSTATEMENTS
FINANCIALSTATEMENTSREITANCONVENIENCEAS
Reitan Convenience Annual Report 2015 3
Outofthe3,836storesinReitangrup-pen,2,362arepartofReitanConveni-ence,whichundoubtedlymakesusthemostinternationalanddiverseofthefourbusinessareasinReitangruppen.OneofthethingsIammostproudofisthefactthatReitanConvenienceisnotjustaNorwegiancompanywith“someforeignbusinessontheside”.Farfromit.Notonlydoweownandrunstrongandreputableconvenienceconceptsinse-vencountries–wearethemarketleaderinsevencountries.Thisisatremendousadvantage.Wecantestnewproductsandcategories,wecansucceedandwecanfail,andwecanlearnfromoursuccessesandfailures.Weliketoviewthesesevenmarketsasourveryownconvenienceretail“laboratory”.Beingmarketleadergivesusastrongposition,andformsanidealbaseforfurthergrowthinEuropetoachieveourvision.
Inallthecountrieswhereweoperate,wefacesteadilyincreasingcompetitionandchangingframe-work
conditions:newlawsandregulations,specialistconceptstryingtogetashareofourbusiness,andnewtechnologyinfluencingsalesofourtraditionalpro-ducts.Theonlysurethingweknowaboutthefutureisthatitwillbedifferent.InReitanConvenience,weneverlookatchangesasthreatsordifficulties-weviewthemasopportunities.Weknowthatchangeisusuallyagoodthing,andifwedon´tchange,wewilldie.Wehaveadaptedtochangeandtakenadvan-tageofopportunitiessince1894,andthismustcontinuesothatwealwaysdevelopinlinewiththemarketandmoveourbusinessforward.WearealsoworkingonimprovingandstrengtheningourCSRefforts,or,simplyput,“ourresponsibility”.2015wasthe
yearwhenwefinalizedandimple-mentedacollectiveresponsibility
strategyforReitanConvenienceandouroperationsinsevencountries.Wehavedividedoureffortsintothreecategories:people,planetandproduct.Initiativesincludetrainingand
developmentprogramsforourfranchiseesandemployees,increasedfocusonhealthierfood
anddrinkoptionsinourstores,andreductionofourenergyconsumptionandthusourenvironmentalfootprint.Thecontinuousdevelopmentoftheseinitiativeswillbeanimportanttaskin2016.
LETTER FROM THE CEO2015hasbeenthebestyearinthehistoryofReitanConvenience,withacashflowofalmostNOK1billion.Inaddition,ourturnoverincreasedby1.3percenttoNOK15.5billion.Withfivestrongconveniencebrandsand14,200peopleinsevencountries,wecontinuetoworkhardtoachieveourvisionofbecomingthebig-gest,bestandmostprofitableconvenienceretailerinEurope.
Magnus ReitanCEO
Denmark
Estonia
Finland
4 Reitan Convenience Annual Report 2015
IhaveneverhadastrongerbeliefintheconveniencemarketthanIhavenow.Retailanalystsandexpertsworldwideviewconvenienceasamegatrend.Andbythesameanalystsandexperts,ReitanConvenienceisperceivedasoneofthebestconvenienceretailersworld-wide.LastsummerIhadthegreathonorofreceivingtheawardasEuropeanCon-venienceIndustryLeaderoftheYear.Inmyeyes,thisawardisnotformeperso-nally.ItisahugeacknowledgementtoallthepeopleinReitanConvenience,andespeciallyofthemenandwomenwhogreetourcustomersinourstoreseverysingleday.In2016,ReitanConveniencewillworktofurtherstrengthenthepositivedevelop-mentinhotandcoldfoodanddrinks,continuetodevelopelectronicservices,andincreasetheimportanceofthestoreasahubinthelocalmarket,forexampleasapick-upplaceforvariousservicessuchasparceldeliveries,onlinegrocery,passportsandsoon.Asalwayswithourultimateboss,thecustomer,andourbusinessideainmind.
Keyfigures–concept
Kiosk Norway Sweden Denmark Finland Latvia Estonia LithuaniaTurnover(NOKmillion) 2,361 2,733 - 2,772 538 228 257Growthinturnover -0.2% 3.7% - 0.4% 6.5% -0.6% 0.6%Numberofstores 345 308 - 614 250 99 215
7-Eleven Norway Sweden Denmark Finland Latvia Estonia LithuaniaTurnover(NOKmillion) 756 815 1,867 - - - -Growthinturnover 0.0% 4.5% 1.4% - - - -Numberofstores 70 79 127 - - - -
Shell/7-Eleven Norway Sweden Denmark Finland Latvia Estonia LithuaniaTurnover(NOKmillion) 800 1,190 736 - - - -Growthinturnover 1.2% 2.3% 0.3% - - - -Numberofstores 87 106 62 - - - -
Pressdistribution Norway Sweden Denmark Finland Latvia Estonia LithuaniaTurnover(NOKmillion) - 101 - - 141 129 119Growthinturnover - -26.5% - - -0.7% -10.1% 0.7%
KioskincludesNarveseninNorway,LatviaandLithuania,PressbyråninSweden,R-kioskiinFinland,R-kioskinEstoniaandLietuvosSpaudainLithuania.
Lithuania
Sweden Norway
Latvia
Reitan Convenience Annual Report 2015 5
6 Reitan Convenience Annual Report 2015
CONSOLIDATED FINANCIAL STATEMENTSREITAN CONVENIENCE
Reitan Convenience Annual Report 2015 7
DIRECTORS’ REPORT
MANAGEMENT’SINTRODUCTIONReitanConvenienceisoneoffourbusi-nessareasinReitangruppen,besidesREMA1000,Uno-XGruppenandReitanEiendom(realestate).
Reitangruppen’svaluesReitangruppen’svisionistoberecogni-sedasthemostvalue-drivencompany.Reitangruppen’svaluesdescribethebasisofitsculture,andhavebeende-velopedthroughoutthecompany’slong-standinghistory.AstrongcorporateculturebasedonReitangruppen’seightvaluesisimportanttoachieveitsoveralltargets,andvalue-basedleadershipandcollaborationarepartofthecompany’sphilosophy.
VALUES1.Wefocusonourbusinessidea2.Wekeepahighbusinessmoral3.Wearecommittedtobedebt-free4.Weencourageawinningculture5.Wehaveapositiveandproactivemindset6.Wetalkwitheachother,notabouteachother7.Thecustomerisourultimateboss8.Wewantourworktobeenjoyableandprofitable
ReitanConveniencehasaleadingpositioninorganisationandoperationoffranchise-basedbusinessintheNordicandBaltickioskandconveniencemarket.ReitanConvenience’svisionistobecomethebiggest,bestandmostprofitableconveniencecompanyinEurope.
REITANCONVENIENCE’SOPERATIONSReitanConvenienceconsistsofconve-nienceoperationsinNorway,Sweden,Denmark,Finland,Latvia,EstoniaandLithuania.TheoperationsincludeNar-veseninNorway,LatviaandLithuania,PressbyråninSweden,R-kioskiinFinland,R-kioskinEstonia,LietuvosSpaudainLithuaniaandNorthlandin
Norway.Ouroperationsalsoinclude7-EleveninNorway,SwedenandDen-mark.ReitanConvenienceisentitledtouse7-Eleven’strademarkinthesecoun-triesbyagreementby7-ElevenInc. ReitanConveniencehasaleadingpositioninallcountriesthegroupisrepresentedin. Ouroperationsalsoincludedistributi-onofpressproductsthroughInterpressinNorwayandSweden,PresesServissinLatvia,LehepunktinEstoniaandPressExpressinLithuania. ThroughthecooperationagreementwithShell,ReitanConvenienceoperates255servicestationsinNorway,SwedenandDenmark.ScandinavianFuelInfra-structure(SFI)ownsthefuelinfrastructu-reattheShell/7-ElevenservicestationsinNorwayandDenmark. ReitanConvenienceoperatesfromOslo,Stockholm,Copenhagen,Helsinki,Riga,TallinnandVilnius.Asof31De-cember2015,ReitanConveniencehad2,362stores(2,427).
ConceptsNarvesenwasestablishedin1894andisanationwideconveniencestorechain.Narvesenisestablishedtobeeasyac-cessiblewheremanypeopleareonthegoandfocusongivingthecustomerthequickestandmostenjoyableserviceonthemarket. Pressbyrånwasestablishedin1899andisstilltheleadingconveniencechaininSweden.Pressbyrånprovidesfastproductsandservicesforpeopleonthego. 7-ElevenwasestablishedinDallasin1927,andistheworld’slargestretailchainwithmorethan56,000storesaroundtheworld.7-ElevenistheleadingconveniencechaininScandinavia,andwasestablishedinSwedenin1980,inNorwayin1986andinDenmarkin1993. ThecooperationagreementwithShellentailsthatReitanConvenienceopera-testhestorebusinessthrough7-Eleven,whileShellhandlesthefueloperationsatthestationsinNorway,SwedenandDenmark. R-kioskiinFinlandwasestablishedin1910andthehistoryofthebrandisverysimilartoNarvesenandPressbyrån. NarveseninLatviawasestablishedin1997andacquiredthedominantkioskchainPresesApvienibain2000. R-kioskinEstoniawasestablishedin1993andhasaleadingpositionintheEstonianconveniencemarket. LietuvosSpaudainLithuaniawasestablishedin1944andisatraditional
kioskchain,mainlyconsistingofsmallwindowkiosks. Northlandisanewbreadandba-guetteconcept,establishedinNorwayinNovember2015.
NorwayReitanConvenienceinNorwayhadagrowthinstoreturnoverof0.3percent(0.1percent)in2015,andacomparablegrowthof0.7percentinNarvesen,0.0percentin7-Elevenand2.0percentinShell/7-Eleven.Theestimated2015marketshareforReitanConvenienceNorwaywas29.8percent(29.2percent).
SwedenReitanConvenienceinSwedenhadagrowthinstoreturnoverof3.5percent(0.8percent)in2015andacomparablegrowthof4.7percentinPressbyrån,2.9percentin7-Elevenand2.7percentinShell/7-Eleven.Theestimated2015marketshareforReitanConvenienceSwedenwas31.9percent(32.0percent).
DenmarkReitanConvenienceinDenmarkhadagrowthinstoreturnoverof1.1percent(-0.3percent)in2015andacompara-blegrowthof0.7percentin7-Eleven,0.3percentinShell/7-Elevenand-0.1percentinDSB/7-Eleven.Theestimated2015marketshareforReitanConveni-enceDenmarkwas31.5percent(31.0percent).
FinlandR-kioskiinFinlandhadagrowthinstoreturnoverof0.4percent(-0.8percent)in2015andacomparablegrowthof1.4percent.Theestimated2015marketshareforR-kioskiinFinlandwas36.8percent(36.8percent).
LatviaNarveseninLatviahadagrowthinstoreturnoverof6.5percent(9.1percent)in2015andacomparablegrowthof3.8percent.Theestimated2015marketshareforNarveseninLatviawas59.5percent(56.2percent).
EstoniaR-kioskinEstoniahadagrowthinstoreturnoverof-0.6percent(5.5percent)in2015andacomparablegrowthof3.2percent.Theestimated2015marketshareforR-kioskinEstoniawas24.7percent(31.6percent).
LithuaniaReitanConvenienceinLithuaniahada
8 Reitan Convenience Annual Report 2015
growthinstoreturnoverof0.6percent(1.5percent)in2015andacomparablegrowthof1.5percent.Theestimated2015marketshareforReitanConveni-enceinLithuaniawas18.3percent(20.4percent).
FranchiseoperationReitanConvenience’sretailconceptsshouldalwaysbebasedonfranchising. Franchisingisaclosecooperationbetweentwoindependentparties,thefranchisorandthefranchisee.Franchi-singisaboutstrikingabalancebetweenfreedomandsystemsoperations.Thefranchiseeisself-employed,butmustcomplywiththeconceptandphilosophyestablishedbythefranchisor. Thefranchisordevelopsstandardsforestablishmentandoperationofbusines-seswithcertaingoodsand/orservicesunderacommonbrandname.Thefranchiseerunshis/herlocalbusinessbasedonthis,withassistancefromthefranchisor.Thisrequiresagreatsenseofresponsibilityonbothsides,andafranchiseewhomanagesabrandalsohasaspecialresponsibilitytowardsthebranditself. Thefranchisornegotiatestermsforanddecidesuponthedistributionofgoodsand/orservicestothefranchisee.Inprinciple,theworkisdividedbet-weenthepartiessothatthefranchisorperformsservicesinareaswhereitischeaper,moreefficientandmorepracticaltodoitcentrally.Thefranchisesystemmakesgreatmutualdemandsontheparties,whichresultsinacontinuousdevelopmentofskillsintheorganisation.
FINANCIALHIGHLIGHTSReitanConvenience’sfinancialstate-mentsarepreparedinaccordancewiththeInternationalFinancialReportingStandards(IFRS)asadoptedbytheEU.Theofficialseparatefinancialstatementsoftheparentcompanyhavebeenpre-paredaccordingtosimplifiedIFRS.Thefinancialstatementshavebeenpreparedontheassumptionofagoingconcern.Theboardofdirectorsisoftheopinionthatthefinancialstatementsgiveafairviewofthecompany’sfinancialposition.
ResultsIn2015,turnoverincludingfranchise-operatedunitsamountedtoNOK15,544million(NOK14,754million),correspon-dingtoagrowthof1.3percent(0.4percent).Growthinturnoverequalstheaverageweightedgrowthmeasuredinlocalcurrency. OperatingrevenueamountedtoNOK4,491(NOK4,973).Thedecreasein2015isduetotheprocesstotransferthekiosksinFinlandfromcompanyownedtofranchisedunits.ForfranchisestoresareonlyfranchisefeeincludedinReitanConvenience’sfinancialstatements. EBITDAamountedtoNOK934million(NOK796million),whileoperatingprofitwereNOK553million(NOK410million).Thechangeinnetfinanceexpenses
from2015to2014relatesprimarilytounrealisedcurrencyeffectsonforeigncurrencyloans. ProfitbeforeincometaxwasNOK444million(NOK350million).ProfitfortheyearamountedtoNOK330million(NOK269million).
BalancesheetandliquidityTotalassetsasat31December2015wereNOK6,522million(NOK6,297million).Liquidassetsasat31December2015amountedtoNOK575million(NOK388million),whilenetinterest-bearingdebtwasNOK0million(NOK0million).Asat31December2015,totalborro-wingswereNOK788million(NOK1,100million),ofwhichthemajorityaredueforpaymentinDecember2019. Netinvestmentsinnon-currentassetswereNOK316million(NOK278million).ThegrouphasunusedloanfacilitiesofNOK1,059million(NOK737million). Equityattheendoftheyearamoun-tedtoNOK2,528million(NOK2,337million),whichgivesanequityratioof38.8percent(37.1percent).
CashflowfromoperationsCashflowfromoperationsamountedtoNOK1,080million(NOK779million).Earningsbeforeinterest,taxes,depre-ciationandamortisation(EBITDA)wereNOK934million(NOK796million).ChangesinworkingcapitalresultedinapositivecashflowofNOK164million(NOK-5million).Cashflowfrominves-tingactivitiesamountedtoNOK-318million(NOK-291million).Thegroup’sabilitytofinanceitsowninvestmentsisconsideredgood. CashflowfromfinancingactivitiesamountedtoNOK-489million(NOK-626million).
FINANCIALRISKReitanConveniencehasitscoreactivi-tiesintheconveniencemarket,andisexposedtoordinaryfinancialriskrelatedtothistypeofactivity. ReitanConvenienceoperatesinamarketwithhighturnover.Annualcashflowsareconsiderableandrelativelystable,howevervolatileintheshortrun.Thegrouphandlesitsliquidityriskbyensuringasufficientliquidityreservecombinedwithsufficientavailableoverdraftfacilities.Thegroup’sfinancingsourcesincludeamulti-currencyloanfacilitywhichissyndicatedtoabanksyndicateconsistingofsixbanks.Theloanisdueforpaymentattheendof2019. TheturnoverinReitanConveni-encecomesfrombothfranchisedandcompanyownedunits.Thefranchisorhasagoodoverviewoftheindividualfranchisee’sfinancialsituation.His-torically,defaultsandlossesontradereceivablehavebeenlow.InReitanCon-venience,acostofNOK10million(NOK33million)hasbeenenteredaslossontradereceivablein2015.Wedonotexpectanymaterialdeviationsfromthis
creditriskleveloranymajorchangesincreditorcompositioninthenearfuture. Asformarketrisk,thiswilllargelybedependentofchangesinlegalcondi-tionsintheindividualcountriesinthelongrun.Thegeneralmarketdevelop-mentforvariousproductgroupswillvary.Theproductgrouppressproductshavebeendeclining,andweexpectittodeclinefurtherintheyearsahead.Asfortheproductgrouptobacco,therearecommonexpectationsofadecline,inlightofahealthierlife-styleamongpeople,whileproductsgroupssuchascoffee,colddrinksandfastfoodareex-pectedtoshowapositivedevelopment.SinceReitanConvenienceoperatesinsevendifferentcountries,thetotalmar-ketriskisconsideredacceptable. Weseektolimitexposurerelatedtoownershipinterestsinforeignoperationsbyadjustingthecompositionofourdebtportfoliotoreflecttheimportanceoftheindividualcurrencyandcountryinrelationtothegroup’stotalactivities.ReitanConveniencehasestablishedstrategiestohandleriskrelatedtointerestandexchangerates.Wemaketransactionstocushiontheeffectofshorttermfluctuationsintheinterestmarketsandtoprovidesomewhatgrea-terpredictabilityrelatedtofutureinterestcosts.Theinterestrateprofileofourdebtportfolioisadjustedthroughchoiceofintereststructureonthegroup’sloanandthroughtheuseofinterestswaps.
OURRESPONSIBILITYInReitanConvenience,webelievethattrustisessentialtostayinbusinesslongterm,somethingwhichisreflectedes-peciallyinoneofoureightcorevalues:“Wekeepahighbusinessmoral”.Keep-ingahighbusinessmoraldoesnotonlyentailcompliancewithrules,standardsandlaws;italsomeansgoingbeyondcompliance-bybeingacompanythatisnotonlyfocusedonmaximizingitspro-fits,butalsoondoingitinaresponsibleway.Sucheffortsareoftenreferredtoascorporatesocialresponsibility(CSR),butwesimplycallit«ourresponsibility».Wedefinethisas“aconceptwherebyReitanConvenienceintegratessocialandenvironmentalconcernsinbusinessoperationsandininteractionwithstake-holders,onavoluntarybasis”.
Weareworkingonimprovingandstrengtheningourresponsibility,and2015wastheyearwhenwefinalizedandimplementedacollectiveresponsibilitystrategyforReitanConvenienceandouroperationsinsevencountries.Wehavedividedoureffortsintothreecategories:people,planetandproduct.Withineachdimension,oursevencountrymanage-mentgroupshaveselectedandcommit-tedtoacollectiveresponsibilityinitiative.Theseinclude:1)traininganddevelop-mentprogramsforourfranchiseesandemployees,2)increasedfocusonhealthierfoodanddrinkoptionsinourstores,and3)reductionofourenergy
Reitan Convenience Annual Report 2015 9
consumptionandthusourenvironmen-talfootprint.Asofthesecondquarterof2015,thecountrymanagementteamshavereportedquarterlyontheseinitia-tivestotheirrespectivecountryboards,andannuallytotheboardofReitanCon-venienceAS.Thequantitativeresultsareincludedinthe“Ourresponsibility”appendixonpage76.Acomplementaryonlinereportwillbepublishedduring2016.
Inadditiontoourcollectiveinitiatives,wealsofocusmorebroadlyonworkingen-vironment,socialaspectsandexternalenvironment.
WorkingenvironmentOurpeopleareourmostimportantresource,andwebelievethatcompanieswithagoodworkingenvironment,whereemployeesfeelwelltreatedandrespec-ted,aremorelikelytosucceed.Creatingandmaintainingasafeandpositiveworkingenvironmentisaprerequisiteforprofitability,aswellasanimportantpartofourresponsibility.Intotal,ReitanConvenienceanditsfranchiseeshad14,181employeesbytheendof2015(15,604).Inthegroupitself,therewere1,855employees(2,854).Thecoopera-tionwiththeemployees’organizationsisconsideredtobegood,andweseektocontinuethis.
WewantReitanConveniencetobeaworkplacewithequalemploymentopportunitiesforeveryone,regardlessofage,gender,ethnicity,religion,sexualorientationordisabilities.Ourperson-nelpolicystatesthatthereshouldbenodiscriminationinmattersconcerningrecruitment,personaldevelopment,pro-motionandremuneration.WestrivetopromoteequalstatusforallemployeesandpreventanyactionscontrarytotheAnti-discriminationAct.
Amongouremployees,thereare365menand1,490women.InthekioskoperationsinFinland,Latvia,EstoniaandLithuania,mostoftheemployeesarewomen.InReitanConvenience,thereare71employeesatthetopexe-cutivelevel,ofwhich45aremenand26women.Among92employeesinmiddlemanagement,34aremenand58wo-men.Instorageandtransport,thereare192employeesintotal,81menand111women.Amongthestoreemployees,44aremenand851women,whilethereare605officeemployees,ofwhich161aremenand444women.Amongthe1,855employeesinReitanConvenience,242workpart-time,ofwhich50menand192women.TheboardofdirectorsinReitanConvenienceASconsistsoftwomenandonewoman.
EmployeedevelopmentiscrucialinReitanConvenience.Wehavecarriedoutanumberofdifferentprogram-mes,suchasphilosophycourses,
talentprogrammes,measurementsofcorporatecultureandvariousindividualprogrammestoencourageouremploy-ees(see“Ourresponsibility”appendixonpage76).In2015,ReitangruppenwasselectedthefourthbestplacetoworkinNorwayintheworkenvironmentsurveyGreatPlacetoWork.AmongthefourbusinessareasinReitangruppen,ReitanConveniencehadthehighestscoreofall:97percentoftherespondentsstatedthatthecompanyisagreatplacetowork.
ReitanConveniencehasasystematicapproachtosecurityandsafety,andweaimtooptimiseroutines,minimisesickleaveandincreaseinvolvementofouremployees.In2015,thesickleavewasapproximately2.4percent(4.7percent),correspondingto15,621days(26,580).Thecompanyhadnoseriouspersonalinjuriesduring2015.Therewerenoinjuriesresultinginsickleaveduringtheyear.
SocialaspectsReitanConveniencedoesnotonlyhaveresponsibilitiestowardsourownem-ployees,butalsotowardsourcustomersandsocietyatlarge.Ouractivitieshaveanimpactonabroadrangeofstakehol-ders,whetheritarisesdirectlythroughouroperationsorindirectlythroughoureffectsoncustomersinthemarketplaceandotherorganisationsinthesupplychain.Asabusiness,wedependonthehealth,stability,andprosperityofthecommunitiesinwhichweoperate.Oneofthewayswecaninfluencethisinapositivewayisbyfocusingonhealthierfoodanddrinkoptionsinourstores(see“Ourresponsibility”appendixonpage76).
Legalandregulatorycomplianceisacornerstoneinouroperations.Anyviolationoflaws,rulesorregulationsapplicabletouscouldjeopardiseourin-tegrity,andwedonottolerateanyformsoffraud,briberyorcriminalconduct.WeexpectalloftheemployeesinReitanConveniencetounderstandandcomplywithlaws,rulesandregulationsapplica-bletotheirjobsandresponsibilities.Em-ployeesarealsorequiredtocomplywiththecompany’sethicalguidelines,andtoreporttothecompany’smanagementifthey,throughtheirwork,shouldbecomeawareofanycasesofillegalactivities,corruptionorothercircumstancesthatrepresentabreachofthecompany’scommitmenttosocialresponsibility.Nosuchincidentswerereportedin2015.
ReitanConvenienceseekstoavoidcau-singorcontributingtoadversehumanrightsimpactsthroughourownactivi-ties,andaddressessuchimpactswhentheyoccur.Wealsohavearesponsibilitytopreventormitigateadversehumanrightsimpactsthataredirectlylinkedtoouroperations,productsorservices
throughourbusinessrelationships,evenwhenwehavenotcontributedtosuchimpacts.ReitanConvenience’sethicalguidelinesarepartofoursuppliercon-tracts.Oursuppliersaresubjectedtoanumberofethicalguidelines,formulatedindifferentways.However,theyallcoverthesamecentralprinciples,laiddownintheUNsDeclarationofHumanRightsandILO’sCoreConventions.Theguid-elinesstateourcommitmenttohumanrights,health,safetyandenvironmentandanti-corruption.Nobreacheswerereportedin2015.Thesevencountryorganisationsalsoworkdirectlywithseveralsuppliersonfairtradeandcertifi-cationprogrammes.
ReitanConveniencealsoaimstobeasociallyresponsiblecompanybyprovi-dingcharitablesupporttoselectedso-cialorganisations.Thesecontributionscomeinadditionto,andnotinsteadof,responsibilitymeasuresrelatedtoourcoreoperations.Webasethechoiceofwhomtosupportonourvalues,inad-ditiontoanassessmentofourexper-tiseandawishtoachieveamutuallyfavourablecooperation.In2015,ReitanConveniencecooperatedwithMOT,theNorwegianRefugeeCouncil,theRedCross,OsloPrideFestivalandthe14thofAugustCommittee(Norway);Friends,SavetheChildren,StockholmPrideFestival,Svanen,Stadsmissionen,Enläsandeklass,LäsrörelsenandtheChildren’sCancerFund(Sweden);MOT,severalLBGTevents/initiativesinclu-dingPridefestivalsinmajorcities,andDanmarksIndsamlingen(Denmark);TheAssociationofFriendsoftheUniversityChildren’sHospitals(Finland);Dr.Clown,NacLidzasandseveralyouthorgani-sations(Latvia);EstonianAssociationofWoundedWarriorsandWomen’sVoluntaryDefenceOrganization,andSOSChildren’sHome(Estonia);CarraceteamN-40,toeducatepeopleontrafficsafety,distributingreflectorsinschools(Lithuania).
ExternalenvironmentReitanConvenienceshallcomplywithinternational,nationalandlocalenvi-ronmentallawsandregulations.Wedonotwishourinfluencesontheexternalenvironmenttoexceedlevelsthatarenormalforouroperationsandactions.Ourgoalistooperateasefficientlyandenvironmentallyfriendlyaspossible,andwecontinuouslystrivetominimisetheenvironmentalimpactofouroperationsthroughouttheentirevaluechain.
ReitanConveniencehasseveralon-goingprojectstoreduceemissionsandenergyconsumption(i.e.the“WattHunt2.0”project,see“Ourresponsibility”appendixonpage76),bothinstoresandinourtransportationanddistributionnetwork.Whenweestablishnewstoresorrenovateexistingstores,wefocusonmeasuresthathaveapositiveeffecton
10 Reitan Convenience Annual Report 2015
theenvironment.Wearememberofthematerialscompanies’schemesforreturnandrecyclingofpackagingwasteinallthecountriesweoperatein.Wealsopartakeinnationalandlocalcoopera-tionwithNGOsandsupplierstoreducewaste.
TheenvironmentalstrategyofScandi-navianFuelInfrastructure,whichleasesandoperatesservicestationsinNorwayandDenmark,isbasedonEAM(Envi-ronmentalAssessmentManagement).Thisensuresoptimalandcontinuousmonitoringandcleaningofcontami-natedareasaccordingtoapplicablerequirementsandguidelines.
ORGANISATION
OrganisingandinternalcontrolReitanConveniencefollowsReitan-gruppen’sphilosophyinorganisingitsactivitiesinawaythatmakesthedistancebetweenresponsibility/autho-rityandoperativeexecutionasshortaspossible. Asafranchiseorganisation,ReitanConvenienceisbasedonsystemsope-rations,bothforoperativeandadminis-trativeactivities.“Systemsoperations”alsomeanstoestablishandcomplywithroutinesandinternalcontrolinallareasoftheorganisation.Solidroutinesensuregoodandcontinuouscontrol
ofthecompany,andthroughthis,themanagementisprovidedwiththebestinformationfordecision-makingatanytime.
ManagementandorganisationTheboardofdirectorsinReitanConve-nienceconsistsofchairmanOddReitan,RolfErikLieandCathrineHaugStange. ThemanagementteaminReitanConvenienceconsistsofchiefexecutiveofficerMagnusReitan,financedirectorRitaForsberg,businessdevelopmentdirectorMagnarMøkkelgård,directorRolfErikLie,chiefoperatingofficerJohannesSangnes,managingdirectorofReitanConvenienceNorway,MarietteKristenson,managingdirectorofReitanConvenienceSweden,MagnusCarls-son,managingdirectorofReitanCon-venienceDenmark,JesperØstergaard,managingdirectorofR-kioski,TeemuRissanen,managingdirectorofNarve-senBaltija,KatrineJudovica,managingdirectorofR-kioskEstonia,TiiaIlves,andmanagingdirectorofReitanConve-nienceLithuania,VigintasBartasevicius.
ShareholdersReitanConvenienceASisawhollyownedsubsidiaryofReitanHandelAS,whichagainiswhollyownedbyReitangruppenAS.ReitangruppenASiscontrolled100percentbytheReitanfamily.
ALLOCATIONOFPROFITFORTHEYEARProfitfortheyearforReitanConvenien-ceASamountedtoNOK669million,andisproposedallocatedasfollows:Dividendprovided NOK415millionTransferredto(from)retainedearnings NOK254millionTotalamountallocated NOK669million
THEFUTURETheboardemphasisesthatthereisnor-mallyconsiderableuncertaintyrelatedtofuturedevelopment.
ReitanConvenienceisanimportantpartofReitangruppen’scoreoperations.ReitanConvenienceaimstobethebig-gest,bestandmostprofitablekioskandconveniencecompanyinEurope,andaspecialistindevelopment,organisa-tionandoperationoffranchise-basedconvenienceconcepts.Thismustbeviewedasalong-termtarget,whichatanytimewilldependonthepossibilitiesthatappearandthecompany’sabilitytocreatethecashflownecessarytopur-suethem.GrowthinthemarketswhereReitanConvenienceisalreadypresentwillprimarilytakeplacethroughfurtherdevelopmentofexistingconceptsandassortments.
Oslo,14March2016
OddReitanChairmanoftheboard
RolfErikLieBoardmember
CathrineStangeBoardmember
MagnusReitanChiefexecutiveofficer
Reitan Convenience Annual Report 2015 11
12 Reitan Convenience Annual Report 2015
CONSOLIDATED INCOME STATEMENT
Amounts in NOK million Note 2015 2014 Operatingrevenues 6 4,491 4,973Otherincome 7 591 542Netothergains(losses) 8 -28 2Costofgoodssold 21 -1,440 -1,904Employeebenefitexpenses 9,10,11 -705 -855Otheroperatingexpenses 12,13 -1,975 -1,962EBITDA 934 796 Amortisationandimpairmentintangibleassets 16 -23 -32Depreciationandimpairmentproperty,plantandequipment 17 -358 -354Operatingprofit 553 410 Interestincome 14,30 24 39Interestexpenses 14,30 -33 -68Otherfinancialincome(expenses) 14 -100 -31Netfinanceincome(expenses) -109 -60 Profitbeforeincometaxexpenses 444 350 Incometaxexpenses 15 -114 -81Profitfortheyear 330 269 Othercomprehensiveincome: Remeasurementofpost-employmentbenefitobligations 23 -3 -4Itemsthatwillnotbereclassifiedtoprofitorloss -3 -4 Currencytranslationdifferences 15,23 164 134Itemsthatmaybesubsequentlyreclassifiedtoprofitorloss 164 134 Othercomprehensiveincomefortheyear,netoftax 161 130 Totalcomprehensiveincomefortheyear 491 399 Attributableto: Ownersoftheparentcompany 330 269Non-controllinginterests - -Profitfortheyear 330 269 Attributableto: Ownersoftheparentcompany 491 399Non-controllinginterests - -Totalcomprehensiveincomefortheyear 491 399 Note1to32areanintegralpartoftheseconsolidatedfinancialstatements.
Reitan Convenience Annual Report 2015 13
Amounts in NOK million Note 2015 2014
Non-currentassets Deferredincometaxassets 15 127 144Intangibleassets 16 2,288 2,192Investmentproperty 5 6Property,plantandequipment 17 1,183 1,174Investmentsinassociatedcompanies 8 9Financialinvestments 19 173 166Tradeandotherreceivables 20 811 932Totalnon-currentassetsat31December 4,595 4,623 Currentassets Inventories 21 186 270Tradeandotherreceivables 20 1,166 1,016Cashandcashequivalents 22 575 388Totalcurrentassetsat31December 1,927 1,674 Totalassetsat31December 6,522 6,297
CONSOLIDATED BALANCE SHEET ASSETS
14 Reitan Convenience Annual Report 2015
CONSOLIDATED BALANCE SHEET EQUITY AND LIABILITIES
Amounts in NOK million Note 2015 2014
Equity Sharecapital 3 3Sharepremiumreserve 199 199Otherreserves 23 490 326Retainedearnings 1,834 1,807Equityattributabletotheparentcompanyat31December 2,526 2,335 Non-controllinginterests 2 2Totalequityat31December 2,528 2,337 Non-currentliabilities Deferredincometaxliabilities 15 173 156Pensionliabilities 11 34 33Derivativefinancialinstruments 29 9 3Provisionsforotherliabilities 28 143 150Borrowings 24,25 788 1,099Totalnon-currentliabilitiesat31December 1,147 1,441 Currentliabilities Provisionsforotherliabilities 28 24 23Currentincometaxliabilities 15 25 12Borrowings 24,25 - 1Derivativefinancialinstruments 29 24 13Tradeandotherliabilities 31 2,774 2,470Totalcurrentliabilitiesat31december 2,847 2,519 Totalliabilitiesat31December 3,994 3,960 Totalequityandliabilitiesat31December 6,522 6,297 Note1to32areanintegralpartoftheseconsolidatedfinancialstatements.
Oslo,14March2016
OddReitanChairmanoftheboard
RolfErikLieBoardmember
CathrineStangeBoardmember
MagnusReitanChiefexecutiveofficer
Reitan Convenience Annual Report 2015 15
CONSOLIDATED STATEMENT OF CHANGE IN EQUITY
Sharecapital Other Retained Non-controlling TotalAmounts in NOK million andpremium reserves earnings Total interests equityEquityat1January2014 202 192 1,777 2,171 2 2,173 Profitoftheyear - - 269 269 - 269 Remeasurementofpost-employmentbenefitobligations - - -4 -4 - -4Itemsthatwillnotbereclassifiedtoprofitorloss - - -4 -4 - -4 Currencytranslationdifferences - 134 - 134 - 134Itemsthatmaybesubsequentlyreclassifiedtoprofitorloss - 134 - 134 - 134 Totalothercomprehensiveincome - 134 -4 130 - 130 Totalcomprehensiveincome - 134 265 399 - 399 Dividends - - -235 -235 - -235Changeinnon-controllinginterests - - - - - -Equityat31December2014 202 326 1,807 2,335 2 2,337 Profitfortheyear - - 330 330 - 330 Remeasurementofpost-employmentbenefitobligations - - -3 -3 - -3Itemsthatwillnotbereclassifiedtoprofitorloss - - -3 -3 - -3 Currencytranslationdifferences - 164 - 164 - 164Itemsthatmaybesubsequentlyreclassifiedtoprofitorloss - 164 - 164 - 164 Totalothercomprehensiveincome - 164 -3 161 - 161 Totalcomprehensiveincome - 164 327 491 - 491 Dividends - - -300 -300 - -300Changeinnon-controllinginterests - - - - - -Equityat31December2015 202 490 1,834 2,526 2 2,528
16 Reitan Convenience Annual Report 2015
CONSOLIDATED STATEMENT OF CASH FLOWS
Amounts in NOK million Note 2015 2014
Cashgeneratedfromoperations Profitbeforeincometax 444 350Amortisationandimpairment,intangibleassets 16 23 32Depreciationandamortisationofproperty,plantandequipment 17 358 354Loss(profit)ondisposalsofproperty,plantandequipment 8 -1 1Loss(profit)onsaleofshares 8 2 -5Changeinretirementbenefitobligations 11 1 -1Changeinfairvalueofderivatives 8,14 18 -5Changeinfairvalueoffinancialinvestments 29 - 2Netfinancialitemsexcl.changeinfairvalueofderivatives 14 68 53Shareofprofitfromassociates -1 1Currencytranslationlosses(gains)onoperatingactivities 8 4 2Changeininventories 21 84 45Changeintradeandotherreceivables -217 -114Changeintradeandotherpayables 297 64Cashgeneratedfromoperations 1,080 779 Interestpaid 14 -12 -13Incometaxpaid 15 -74 -58Netcashgeneratedfromoperatingactivities 994 708 Cashflowfrominvestingactivities Saleofinvestmentproperty 2 -Purchaseofproperty,plantandequipment 17 -320 -285Saleofproperty,plantandequipment 17 4 7Purchaseofintangibleassets 16 -12 -20Saleofintangibleassets 16 1 -Saleoffinancialinvestments 19 3 3Interestreceived 14 -10 4Netcashusedininvestingactivities -318 -291 Cashflowfromfinancingactivities Increaseofborrowings - -8Repaymentofborrowings -371 -517Dividendpayments -100 -50Interestpaid-borrowings -18 -51Netcashusedinfinancingactivities -489 -626 Netincrease(decrease)incashandcashequivalents 187 -209 Cashandcashequivalentsat1January 22 388 599Exchangegains(losses)oncashandcashequivalents 8 - -2Cashandcashequivalentsat31December 22 575 388
Reitan Convenience Annual Report 2015 17
18 Reitan Convenience Annual Report 2015
NOTES TO THE FINANCIAL STATEMENT CONTENTS
Note1 Generalinformation Page20
Note2 Summaryofsignificantaccountingpolicies Page20
Note3 Financialriskmanagement Page26
Note4 Criticalaccountingestimatesandjudgments Page27
Note5 Segmentreporting-operational Page28
Note6 Operatingrevenue Page31
Note7 Otherincome Page31
Note8 Netothergains(losses) Page31
Note9 Employeebenefitexpenses Page32
Note10 Relatedpartiesandkeymanagementcompensations Page33
Note11 Retirementbenefitobligations Page34
Note12 Leases Page37
Note13 Otheroperatingexpenses Page38
Note14 Netfinancialitems Page38
Note15 Incometax Page39
Note16 Intangibleassets Page41
Note17 Property,plantandequipment Page42
Note18 Investmentsinmaterialsubsidiaries Page43
Note19 Financialinvestments Page44
Note20 Tradeandotherreceivables Page44
Note21 Inventories Page46
Note22 Cashandcashequivalents Page46
Note23 Othercomprehensiveincome Page47
Note24 Loanagreements Page47
Note25 Borrowings Page48
Note26 Guarantees Page50
Note27 Netinterest-bearingdebt Page50
Note28 Provisionsforotherliabilities Page51
Note29 Derivativefinancialinstruments Page52
Note30 Financialinstrumentsbycategory Page52
Note31 Tradeandotherliabilities Page53
Note32 Relatedparties Page53
Reitan Convenience Annual Report 2015 19
NOTES TO THE FINANCIAL STATEMENT
ReitanConvenienceASisregisteredanddomiciledinNorway,and itsheadoffice is locatedatGladengveien2,Oslo.Thegroup companies operate from Oslo, Stockholm, Copen-hagen,Helsinki,Riga,TallinnandVilnius.ReitanConvenienceAS isownedbyReitanHandelAS,which in turn isownedbyReitangruppenAS.OddReitanHoldingASisthegroup’sultimateparentcompany.
ReitangruppenAS’headoffice is locatedatLadeGaard inTrondheim.ReitanConvenienceASisincludedintheconso-lidatedfinancialstatementsofReitangruppenAS.
TheconsolidatedfinancialstatementsofReitanConvenienceASwereapprovedby thecompany’sboardofdirectorson14March2016.
The principal accounting policies applied in the preparationoftheseconsolidatedfinancialstatementsaresetoutbelow.Thesepolicieshavebeenconsistentlyappliedtoalltheyearspresented,unlessotherwisestated.
2.1Basisofpreparation
TheconsolidatedfinancialstatementsofReitanConvenienceAShavebeenpreparedinaccordancewithInternationalFinan-cialReportingStandards(IFRS)asadoptedbytheEU.
Theconsolidatedfinancialstatementsarepreparedunderthethehistoricalcostconvention,asmodifiedbytherevaluationof landandbuildings,available-for-salefinancialassets,andfinancialassetsandfinancialliabilities(includingderivativein-struments)atfairvaluethroughprofitorloss.
ThepreparationoffinancialstatementsinconformitywithIFRSrequirestheuseofcertaincriticalaccountingestimates.Italsorequiresmanagementtoexerciseitsjudgementintheprocessofapplying thegroup’saccountingpolicies.Theareas invol-vingahigherdegreeofjudgmentorcomplexity,orareaswhereassumptionsandestimatesaresignificanttotheconsolidatedfinancialstatementsaredisclosedinnote4.
2.1.aNewandamendedstandardsadoptedbythegroupThefollowingstandardshavebeenadoptedbythegroupforthefirsttimeforthefinancialyearbeginningonorafter1Ja-nuary2015: • AnnualImprovementstoIFRSs–2010-2012Cycleand 2011-2013Cycle • AmendmentstoIAS19,‘DefinedBenefitPlans:Employee Contributions’Theamendmentsdidnothaveasignificanteffectonthegroupfinancialstatements.
2.1.bNewstandardsandinterpretationsnotyetadoptedCertain new accounting standards and interpretations havebeenpublishedthatarenotmandatoryfor31December2015reporting periods and have not been early adopted by thegroup.Thesearelistetbelow: • AnnualImprovementstoIFRSs–2012-2014Cycle • AmendmentstoIAS1,‘DisclosureInitiative’ • AmendmentstoIFRS9,‘FinancialInstruments’ • AmendmentstoIFRS15,‘RevenuefromContractswith Customers’
Thesestandardsandinterpretationsarenotexpectedtohaveanymaterialimpactontheconsolidatedfinancialstatements.However,appraisalisstillongoing.
The new Leases standard, IFRS 16, is expected to take ef-fectfrom1January2019,andwillhavematerialimpactontheconsolidatedfinancial statements.The standard requires re-cognitionofanassetandaliabilityinthebalancesheet.Thisrecognitionwillresultinanincreasedbalancesheettotalandareducedequityratio.Intheincomestatementitwillbeareclas-sification fromoperatingexpenses tofinanceexpenses.Thereclassificationwill result in increasedEBITDAandoperating
profit.Thegrouphasnotyetfinalizedareliableestimateoftheeffects
2.2Consolidation
2.2.aSubsidiariesSubsidiariesareallentitiesoverwhichthegrouphascontrol.Thegroupcontrols anentitywhen thegroup is exposed to,orhasrightsto,variablereturnsfromitsinvolvementwiththeentityandhastheabilitytoaffectthosereturnsthroughitspo-werovertheentity.Subsidiariesarefullyconsolidatedfromthedateonwhichcontrolistransferredtothegroup.Theyarede-consolidatedfromthedatethatcontrolceases.
Thegroupappliestheacquisitionmethodtoaccountforbusi-nesscombinations.Theconsiderationtransferredfortheac-quisitionofasubsidiaryisthefairvaluesoftheassetstransfer-red,theliabilitiesincurredtotheformerownersoftheacquireeandtheequityinterestsissuedbythegroup.Theconsiderationtransferredincludesthefairvalueofanyassetorliabilityresul-tingfromacontingentconsiderationarrangement.Identifiableassetsacquiredand liabilitiesandcontingent liabilitiesassu-medinabusinesscombinationaremeasuredinitiallyattheirfairvaluesat theacquisitiondate.Thegrouprecognisesanynon-controlling interest in theacquireeonanacquisition-by-acquisitionbasis,eitheratfairvalueoratthenon-controllinginterest’s proportionate share of the recognised amounts ofacquiree’sidentifiablenetassets.
Acquisition-relatedcostsareexpensedasincurred.
Ifthebusinesscombinationisachievedinstages,theacquisi-tiondatecarryingvalueoftheacquirer’spreviouslyheldequityinterestintheacquireeisre-measuredtofairvalueattheac-quisitiondate;anygainsorlossesarisingfromsuchre-measu-rementarerecognisedinprofitorloss.
Anycontingentconsideration tobe transferredby thegroupisrecognisedatfairvalueattheacquisitiondate.SubsequentchangestothefairvalueofthecontingentconsiderationthatisdeemedtobeanassetorliabilityisrecognisedinaccordancewithIAS39eitherinprofitorlossorasachangetoothercom-prehensiveincome.Contingentconsiderationthatisclassifiedasequityisnotre-measured,anditssubsequentsettlementisaccountedforwithinequity.
Goodwill is initiallymeasuredastheexcessoftheaggregateoftheconsiderationtransferredandthefairvalueofnon-con-trolling interest over thenet identifiable assets acquiredandliabilitiesassumed.Iftheconsiderationislowerthanthevalueofthenetassetsofthesubsidiaryacquired,thedifferenceisrecognisedinprofitorloss.
Inter-company transactions, balances, and unrealised gainsontransactionsbetweengroupcompaniesareeliminated.Un-realisedlossesarealsoeliminated.Whennecessary,amountsreportedbysubsidiarieshavebeenadjustedtoconformwiththegroup’saccountingpolicies.
Note1–Generalinformation
Note2–Summaryofsignificantaccountingpolicies
20 Reitan Convenience Annual Report 2015
NOTES TO THE FINANCIAL STATEMENT
2.2.bChangesinownershipinterestsinsubsidiarieswit-houtchangeofcontrolTransactionswithnon-controllingintereststhatdonotresultinlossofcontrolareaccountedforasequitytransactions–thatis,astransactionswiththeownersintheircapacityasowners.Thedifferencebetweenfairvalueofanyconsiderationpaidandtherelevantshareacquiredofthecarryingvalueofnetassetsofthesubsidiaryisrecordedinequity.Gainsorlossesondis-posalstonon-controllinginterestsarealsorecordedinequity.
2.2.cDisposalofsubsidiariesWhenthegroupceasestohavecontrolanyretained interestin theentity is remeasured to its fair valueat thedatewhencontrolislost,withthechangeincarryingamountrecognisedinprofitorloss.Thefairvalueistheinitialcarryingamountforthepurposesofsubsequentlyaccountingfortheretainedinte-restasanassociate,jointventureorfinancialasset.Inaddition,anyamountspreviouslyrecognisedinothercomprehensivein-comeinrespectofthatentityareaccountedforasifthegrouphaddirectlydisposedof the relatedassetsor liabilities.Thismaymeanthatamountspreviouslyrecognisedinothercom-prehensiveincomearereclassifiedtoprofitorloss.
2.2.dAssociatesAssociatesareallentitiesoverwhichthegrouphassignificantinfluencebutnotcontrol,generallyaccompanyingasharehol-dingofbetween20percentand50percentofthevotingrights.Investmentsinassociatesareaccountedforusingtheequitymethodofaccounting.Under theequitymethod, the invest-mentisinitiallyrecognisedatcost,andthecarryingamountisincreasedordecreasedtorecognisetheinvestor’sshareoftheprofitorlossoftheinvesteeafterthedateofacquisition.Thegroup’s investment inassociates includesgoodwill identifiedonacquisition.
Iftheownershipinterestinanassociateisreducedbutsigni-ficant influence is retained,onlyaproportionateshareof theamountspreviouslyrecognisedinothercomprehensiveinco-meisreclassifiedtoprofitorlosswhereappropriate.
Thegroup’sshareofpost-acquisitionprofitorlossisrecogni-sedintheincomestatement,anditsshareofpost-acquisitionmovements inothercomprehensive income is recognised inothercomprehensiveincomewithacorrespondingadjustmentto thecarryingamountof the investment.When thegroup’sshareoflossesinanassociateequalsorexceedsitsinterestintheassociate,includinganyotherunsecuredreceivables,thegroupdoesnotrecognisefurtherlosses,unlessithasincurredlegalorconstructiveobligationsormadepaymentsonbehalfoftheassociate.
Thegroupdeterminesateachreportingdatewhetherthereisanyobjectiveevidencethattheinvestmentintheassociateisimpaired.Ifthisisthecase,thegroupcalculatestheamountofimpairmentasthedifferencebetweentherecoverableamountof the associate and its carrying value and recognises theamountadjacentto‘shareofprofit/(loss)ofassociatesintheincomestatement.
Profits and losses resulting fromupstreamanddownstreamtransactionsbetweenthegroupand itsassociatearerecog-nisedinthegroup’sfinancialstatementsonlytotheextentofunrelatedinvestor’sinterestsintheassociates.Unrealisedlos-ses are eliminated unless the transaction provides evidenceofanimpairmentoftheassettransferred.Accountingpoliciesofassociateshavebeenchangedwherenecessarytoensureconsistencywiththepoliciesadoptedbythegroup.
Dilutiongainsandlossesarisingininvestmentsinassociatesarerecognisedintheincomestatement.
2.3Segmentreporting
Operatingsegmentsarereportedinamannerconsistentwiththeinternalreportingprovidedtothechiefoperatingdecision-
maker.Thechiefoperatingdecision-maker,who is responsi-bleforallocatingresourcesandassessingperformanceoftheoperatingsegments,hasbeen identifiedas theBoardofDi-rectors.
2.4Foreigncurrencytranslation
2.4.aFunctionalandpresentationcurrencyItemsincludedinthefinancialstatementsofeachofthegroup’sentitiesaremeasuredusingthecurrencyoftheprimaryecono-micenvironment inwhich theentityoperates (‘the functionalcurrency’).Theconsolidatedfinancialstatementsarepresen-tedinNorwegiankrone(NOK),whichisthegroup’spresenta-tioncurrency.
2.4.bTransactionsandbalancesForeigncurrencytransactionsaretranslated intothefunctio-nalcurrencyusingtheexchangeratesprevailingatthedatesofthetransactionsorvaluationwhereitemsarere-measured.Foreignexchangegainsand lossesresultingfromthesettle-mentofsuchtransactionsandfromthetranslationatyear-endexchangeratesofmonetaryassetsandliabilitiesdenominatedinforeigncurrenciesarerecognisedintheincomestatement.
Foreignexchangegainsandlossesthatrelatetoworkingcapi-talareclassifiedasoperatingprofit/loss.Currencyitemsrela-tedtofinancingactivitiesareincludedinnetfinancialincome(expenses).
Translationdifferencesonnon-monetaryfinancialassetsandliabilities suchasequitiesheldat fair value throughprofitorlossare recognised inprofitor lossaspartof the fair valuegainorloss.Translationdifferencesonnon-monetaryfinancialassets,suchasequitiesclassifiedasavailableforsale,arein-cludedinothercomprehensiveincome.
2.4.cGroupcompaniesTheresultsandfinancialpositionofallthegroupentities(noneofwhichhasthecurrencyofahyper-inflationaryeconomy)thathaveafunctionalcurrencydifferentfromthepresentationcur-rencyaretranslatedintothepresentationcurrencyasfollows:(a)assetsandliabilitiesforeachbalancesheetpresentedaretranslatedattheclosingrateatthedateofthatbalancesheet.(b)incomeandexpensesforeachincomestatementaretrans-latedatmonthlyaverageexchangerates.Iftheaveragerateisnotareasonableapproximationofthecumulativeeffectsfromcompletedtransactions,thetransactionrateisused.(c)all resultingexchangedifferencesare recognised inothercomprehensiveincome.
Onconsolidation,exchangedifferencesarisingfromthetrans-lationofnetinvestmentsinforeignoperationsarerecognisedinothercomprehensiveincomeandasaseparateiteminthestatementofequity.Onsaleofallorpartsofaforeignoperationthe exchangedifferences fromother comprehensive incomearereclassifiestoprofitorlossaspartofthegainorlossonthesale.
Goodwillandfairvalueadjustmentsarisingontheacquisitionofaforeignentityaretreatedasassetsandliabilitiesofthefo-reignentityandtranslatedattheclosingrate.Exchangediffe-rencesarisingarerecognisedinothercomprehensiveincome.
2.5Property,plantandequipment
Tangibleassetsincludeproperty,plantandequipmentthatareutilisedinthedeliveryofgoodsorforadministrativepurposes,andthathaveausefullifeofmorethanoneyear.Property,plantandequipmentarestatedathistoricalcost lessdepreciationand impairment. Historical cost includes expenditure that isdirectly attributable to the acquisitionof the items. Financialcoststhataredirectlyattributabletoacquisitionorproductionofassetsthattakesconsiderabletimetofinalizeforuseorsale,arecapitalisedaspartoftheasset’sacquisitionscost.
Reitan Convenience Annual Report 2015 21
Subsequentcostsareincludedintheasset’scarryingamountorrecognisedasaseparateasset,asappropriate,onlywhenit is probable that future economic benefits associatedwiththeitemwillflowtothegroupandthecostoftheitemcanbemeasuredreliably.Thecarryingamountofthereplacedpartisderecognised.Allotherrepairsandmaintenancearechargedto the incomestatementduring thefinancialperiod inwhichtheyareincurred.
Adaptationsmadeonleasedpropertyarecapitalisedwhenitisprobablethatfutureeconomicbenefitswillflowtothegroupasaresultoftheadaptions.Costsassociatedwithrestoringthepropertytoitsoriginalcondition,ifcontracted,areincludedinthecostoftheadaptationsandaresimultaneouslyrecognisedasaliability.
Landisnotdepreciated.Depreciationonotherassetsiscal-culatedusingthestraight-linemethodtoallocatetheircostorrevaluedamountstotheirresidualvaluesovertheirestimatedusefullives,asfollows:
Buildings 10-25yearsStorefixtures 3-10yearsFixtures 5-20yearsVehicles 4-5yearsFurniture,fittingsandequipment 3-5yearsIT-equipment 2-5yearsFuelpumpsandtanks 5-20years
Theassets’residualvaluesandusefullivesarereviewed,andadjustedifappropriate,attheendofeachreportingperiod.Anasset’scarryingamountiswrittendownimmediatelytoitsre-coverableamountiftheasset’scarryingamountisgreaterthanitsestimatedrecoverableamount(note2.8).
Gainsandlossesondisposalsaredeterminedbycomparingtheproceedswiththecarryingamountandarerecognisedwit-hin‘Netothergains(losses)’intheincomestatement.
2.6Investmentproperty
Investmentpropertiesareheldforlong-termrentalyields.The-sepropertiesarenotoccupiedbythecompaniesinthegroup.Leasedpropertiesonoperatingleasesarenotconsideredasinvestmentproperty.
Investmentpropertiesaremeasuredinitiallyathistoricalcostand subsequently recognised at fair value at each reportingdate, using a calculationmodel. Themodel is basedon theproperty’s rental income, estimated cost of ownership andrequiredrateofreturn.Therequiredrateofreturnisdetermi-nedbasedonanassessmentofvariouscriteria,suchasthequalityoftheproperties,theirlocationandpossibilitiesforal-ternativeuse,thelessee’sfinancialcapacity/creditworthiness,the lengthof the lease, therent level, regulationclausesandvacancyrates.Independentvaluersarenotused.
Gainsandlossesarisingfromchangesinfairvaluearerecog-nised in the incomestatementandpresentedonaseparateline.Ondisposal,thedifferencebetweencarryingamountandsalespriceisrecognisedundernetgains(losses).
Whenpropertiesclassifiedasfixedassetsarereclassifiedtoinvestmentpropertiesasaresultofachangeinuse,thedif-ferencearisingbetweenbookedvalueandfairvalueatthedateof reclassification,willbe recordedaspartofothercompre-hensive income andpresented as a separate component ofequity. Impairment lossesare recognised in the incomesta-tement. Incasesofreclassificationfrominventories(eg. landplotspurchased for resale)orplantsunderconstruction, thechangeinvaluewillberecognisedintheincomestatement.
If thegroup isdevelopinganexisting investmentproperty, itremainsaninvestmentpropertymeasuredatfairvalue.Sub-sequentcostsassociatedwithrealestatearecapitalisediftheexpendituremeets the requirements for capitalization under
IFRS.Ongoingmaintenancewillbeexpensed.
InvestmentpropertiesscheduledtoberesoldareclassifiedascurrentassetsheldforsalewhentherequirementsofIFRS5aremet(note2.9).
2.7Intangibleassets
2.7.aGoodwillGoodwillariseson theacquisitionofsubsidiariesand repre-sents the excess of the consideration transferred over thegroup’sinterestinnetfairvalueofthenetidentifiableassets,liabilitiesandcontingent liabilitiesof theacquireeat thetimeofacquisition.
For the purpose of impairment testing, goodwill acquired inabusinesscombination isallocatedtoeachoftheCGUs,orgroupsofCGUs,thatisexpectedtobenefitfromthesynergiesofthecombination.
Goodwillimpairmentreviewsareundertakenannuallyormorefrequentlyifeventsorchangesincircumstancesindicateapo-tentialimpairment.Thecarryingvalueofgoodwilliscomparedtotherecoverableamount,whichisthehigherofvalueinuseandthefairvaluelesscoststosell.Anyimpairmentisrecog-nisedimmediatelyasanexpenseandisnotsubsequentlyre-versed.
2.7.bTrademarksandlicencesSeparately acquired trademarks and licences are shown athistorical cost. Trademarks and licences acquired in a busi-nesscombinationarerecognisedatfairvalueattheacquisitiondate.Trademarksandlicenceshaveafiniteusefullifeandarecarriedatcostlessaccumulatedamortisation.Amortisationiscalculatedusingthestraight-linemethodtoallocatethecostoftrademarksandlicencesovertheirestimatedusefullives(5to20years).
Capitalised leaserights inNorwayaredepreciatedover theirestimateduseful livesof10years.Capitalised leaserights inSwedenandDenmarkare,basedonaspecificassessmentoflocallegislationandmarketconditions,consideredtohavein-definableusefullives.Theseleaserightarethereforenotamor-tised,buttestedannuallyforimpairment.
2.7.cComputersoftwareAcquired computer software licences are capitalised on thebasisofthecostsincurredtoacquireandbringtousethespe-cificsoftware.Thesecostsareamortisedovertheirestimatedusefullives(3to7years).
Costs associated with developing or maintaining computersoftwareprogramsareexpensedas incurred.Costsdirectlyassociatedwiththeproductionofidentifiableanduniquesoft-ware products controlled by the group andwhich are likelyto generate economicbenefits exceeding costsbeyondoneyear, are recognised as intangible assets. Expenses includethecostsofdevelopingsoftwareandanappropriateportionofrelevantoverheads.
Capitalisedinternallydevelopedsoftwareisdepreciatedovertheirestimatedusefullives(3to7years).
2.8Impairmentofnon-financialassets
Intangibleassetsthathaveanindefiniteusefullife–forexam-ple,goodwill or intangibleassetsnot ready touse –arenotsubjecttoamortisationandaretestedannuallyforimpairment.Assetsthataresubjecttoamortisationarereviewedforimpair-mentwhenevereventsorchanges incircumstances indicatethatthecarryingamountmaynotberecoverable.
Animpairmentlossisrecognisedfortheamountbywhichtheasset’scarryingamountexceedsitsrecoverableamount.Therecoverableamountisthehigherofanasset’sfairvaluelesscostsofdisposalandvalueinuse.Forthepurposesof
NOTES TO THE FINANCIAL STATEMENT
22 Reitan Convenience Annual Report 2015
assessingimpairment,assetsaregroupedatthelowestlevelsforwhichtherearelargelyindependentcashinflows(cash-ge-neratingunits).Priorimpairmentsofnonfinancialassets(otherthangoodwill)arereviewedforpossiblereversalateachreportingdate.
2.9Non-currentassets(ordisposalgroups)heldforsale
Non-currentassets (ordisposalgroups)areclassifiedasas-setsheldforsalewhentheircarryingamountistoberecoveredprincipally througha sale transactionanda sale is conside-redhighlyprobable.Theyarestatedat the lowerofcarryingamountandfairvaluelesscoststosell.
2.10Financialassets
Thegroupclassifiesitsfinancialassetsinthefollowingcate-gories:
•Financialassetsatfairvaluethroughprofitorloss•Loansandreceivables•Financialassetsavailableforsale
Theclassificationdependsonthepurposeforwhichthefinan-cialassetswereacquired.Managementdeterminestheclas-sificationofitsfinancialassetsatinitialrecognition.
2.10.aFinancialassetsatfairvaluethroughprofitorlossFinancialassetsat fairvalue throughprofitor lossarefinan-cial assets held for trading. A financial asset is classified inthiscategoryifacquiredprincipallyforthepurposeofsellingintheshortterm.Derivativesarealsocategorisedasheldfortradingunlesstheyaredesignatedashedges(note2.12).As-setsinthiscategoryareclassifiedascurrentassetsifexpectedtobesettledwithin12months,otherwisetheyareclassifiedasnon-current.
Financial assets at fair value through profit or loss (derivati-ves)arebyacquisitionrecognisedatfairvalueandtransactioncostsareexpensed.Investmentsarederecognisedwhentherightstoreceivecashflowsfromtheinvestmentshaveexpiredorwhentheserightshavebeentransferredandthegrouphastransferredsubstantiallyallrisksandrewardsofownership.
Financialassetsatfairvaluethroughprofitorlossarestatedatfairvalueafterinitialrecognition.
Changesinfairvalueonderivativesthatdonotqualifyforhed-geaccountingareimmediatelyrecordedintheincomestate-ment.Derivativesrelatedtothefinancingofthecompany(in-cludinginterestrateandcurrencyderivatives)arerecognisedundernetfinancialitems,whileotherderivativesarerecogni-sedundernetgains(losses).
2.10.bLoansandreceivablesLoansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenotquotedinanactivemarket.Theyareincludedincurrentassets,exceptformaturiti-esgreaterthan12monthsaftertheendofthereportingperiod.Theseareclassifiedasnon-currentassets.Thegroup’sloansandreceivablescomprise‘Tradeandotherreceivables’inthebalancesheet(note2.14).
2.10.cAvailable-for-salefinancialassetsAvailable-for-salefinancialassetsarenon-derivativesthatareeither designated in this category or not classified in any oftheothercategories.Theyareincludedinnon-currentassetsunlesstheinvestmentmaturesormanagementintendstodis-poseofitwithin12monthsoftheendofthereportingperiod.
Available-for-sale financial assetsandfinancial assetsat fairvaluethroughprofitorlossaresubsequentlycarriedatfairva-lue.Gainsorlossesarisingfromchangesinthefairvalueofthe‘financialassetsat fair value throughprofitor loss’categoryarepresentedintheincomestatementwithin‘netothergains
(losses)’intheperiodinwhichtheyarise.Dividendincomefromfinancialassetsatfairvaluethroughprofitor lossisrecogni-sedintheincomestatementaspartofotherincomewhenthegroup’srighttoreceivepaymentsisestablished.
Changesinthefairvalueoffinancialassetsclassifiedasavai-lableforsalearerecognisedinothercomprehensiveincome,exceptofimpairmentofacquisitioncostwhichisrecognisedinprofitorloss.Reversalsofimpairmentlossarerecognisedinothercomprehensiveincome.
Whensecuritiesclassifiedasavailableforsalearesoldorim-paired,theaccumulatedfairvalueadjustmentsrecognisedinequityareincludedintheincomestatementasnetothergains(losses).
2.10.dImpairmentoffinancialassetsThegroupassessesattheendofeachreportingperiodwhetherthereisobjectiveevidencethatafinancialassetoragroupoffinancialassetsisimpaired.Inthecaseofequityinvestmentsclassifiedasavailableforsale,asignificantorprolongeddecli-neinthefairvalueofthesecuritybelowitscostisalsoevidencethat theassetsare impaired. If anysuchevidenceexists foravailable-for-salefinancialassets,theimpairmentlosswillberecognisedinothercomprehensiveincome,exceptofthedif-ferencebetweentheacquisitioncostandthecurrentfairvalue,whichisrecognisedinprofitorloss.Averageacquisitioncostisusedintheassessmentofimpairment.
Impairment testing of trade receivables is described in note2.14.
2.11Derivativefinancialinstruments
Thegrouphasenteredintocertainderivativecontractstopro-videeconomichedgesforpartsofthegroup’sexposuretocur-rency,interestandenergyraterisk.Thegroupdoesnotapplytheprinciplesofhedgeaccounting in IAS39 for this typeofhedging.Thesederivativesaremeasuredasfinancial assetsheldfortrading(fairvaluethroughprofitandloss).
2.12Inventories
Inventoriesarestatedat the lowerofcostandnet realisablevalue.Costisdeterminedusingthefirst-in,first-out(FIFO)me-thod.Thecostoffinishedgoodsandwork inprogresscom-prisesdesigncosts,rawmaterials,direct labour,otherdirectcosts and related production overheads (based on normaloperatingcapacity).Itexcludesborrowingcosts.Netrealisablevalueistheestimatedsellingpriceintheordinarycourseofbu-siness,lessapplicablevariablesellingexpenses.Thegroup’sinventorysubstantiallyconsistsofpurchasedfinishedgoodsforresale.
2.13Tradereceivables
Tradereceivablesarerecognisedinitiallyatfairvalueandsub-sequentlymeasuredatamortisedcostusingtheeffectiveinter-estmethod,lessprovisionforimpairment.Theinterestelementisdisregardedifitisinsignificant.
Provision for impairment of trade receivables is recognisedwhenthereisobjectiveevidencethatthegroupwillnotreceivepaymentinaccordancewiththeoriginalterms.Indicationsofimpairmentmayincludethatthedebtorisexperiencingsignifi-cantfinancialdifficulty,theprobabilitythatthedebtorwillenterbankruptcyorotherfinancialreorganization,anddelinquencyordefaultinpayments(overduemorethan30days).Provisionisthedifferencebetweentheasset’sfacevalueanditsreco-verableamount.The recoverableamountequals thepresentvalueofexpectedcashflows,discountedattheoriginaleffec-tiveinterestrate.
NOTES TO THE FINANCIAL STATEMENT
Reitan Convenience Annual Report 2015 23
2.14Cashandcashequivalents
In theconsolidated statementof cash flows, cashandcashequivalents includescash inhand,depositsheldatcallwithbanks,othershort-termhighlyliquidinvestmentswithoriginalmaturitiesofthreemonthsorlessandbankoverdrafts.Intheconsolidatedbalancesheet,bankoverdraftsareshownwithinborrowingsincurrentliabilities.
2.15Sharecapital
Ordinarysharesareclassifiedasequity.Incrementalcostsdi-rectlyattributabletothe issueofnewordinarysharesorop-tionsareshowninequityasadeduction,netoftax,fromtheproceeds.
2.16Tradepayables
Tradepayablesarerecognisedinitiallyatfairvalueandsubse-quentlymeasuredatamortisedcostusingtheeffectiveinterestmethod.Theinterestelementisdisregardedifitisinsignificant.
2.17Borrowings
Borrowingsare recognised initiallyat fairvalue,netof trans-actioncostsincurred.Borrowingsaresubsequentlycarriedatamortisedcost;anydifferencebetweentheproceeds(netoftransactioncosts)andtheredemptionvalue is recognised intheincomestatementovertheperiodoftheborrowingsusingtheeffectiveinterestmethod.
Feespaidontheestablishmentofloanfacilitiesarerecognisedastransactioncostsoftheloantotheextentthatitisprobablethatsomeorallofthefacilitywillbedrawndown.Inthiscase,thefeeisdeferreduntilthedraw-downoccurs.Totheextentthereisnoevidencethatitisprobablethatsomeorallofthefacilitywillbedrawndown,thefeeiscapitalisedasapre-pay-mentforliquidityservicesandamortisedovertheperiodofthefacilitytowhichitrelates.
Borrowingsareclassifiedascurrentliabilitiesunlessthegrouphasanunconditionalrighttodefersettlementoftheliabilityforatleast12monthsfromthebalancesheetdate.
2.18Dividenddistribution
Dividenddistributiontothecompany’sshareholdersisrecog-nised as a liability in the group’s financial statements in theperiodinwhichthedividendsareapprovedbythecompany’sshareholders.
2.19Currentanddeferredincometax
Thetaxexpensefortheperiodcomprisescurrentanddeferredtax.Taxisrecognisedintheincomestatement,excepttotheextentthatitrelatestoitemsrecognisedinothercomprehen-siveincomeordirectlyinequity.Inthiscase,thetaxisalsore-cognisedinothercomprehensiveincomeordirectlyinequity,respectively.
Thecurrentincometaxchargeiscalculatedonthebasisofthetaxlawsenactedorsubstantivelyenactedatthebalancesheetdateinthecountrieswherethecompanyanditssubsidiariesoperateandgenerate taxable income.Managementperiodi-callyevaluatespositions taken in tax returnswith respect tosituationsinwhichapplicabletaxregulationissubjecttointer-pretation. It establishesprovisionswhereappropriateon thebasisofamountsexpectedtobepaidtothetaxauthorities.
Deferred incometax is recognisedon temporarydifferencesarisingbetweenthetaxbasesofassetsandliabilitiesandtheir
carryingamountsintheconsolidatedfinancialstatements.Ho-wever,deferred tax liabilitiesarenot recognised if theyarisefromtheinitialrecognitionofgoodwill;deferredincometaxisnotaccountedforifitarisesfrominitialrecognitionofanassetorliabilityinatransactionotherthanabusinesscombinationthatat the timeof the transactionaffectsneitheraccountingnortaxableprofitor loss.Deferredincometax isdeterminedusingtaxrates(andlaws)thathavebeenenactedorsubstan-tivelyenactedbythebalancesheetdateandareexpectedtoapplywhentherelateddeferredincometaxassetisrealisedorthedeferredincometaxliabilityissettled.
Deferredincometaxassetsarerecognisedonlytotheextentthat it is probable that future taxable profit will be availableagainstwhichthetemporarydifferencescanbeutilised.
Deferred income tax liabilities are provided on taxable tem-porarydifferencesarisingfrominvestmentsinsubsidiariesandassociates,exceptfordeferredincometaxliabilitywherethetimingofthereversalofthetemporarydifferenceiscontrolledbythegroupanditisprobablethatthetemporarydifferencewillnotreverseintheforeseeablefuture.
Deferredincometaxassetsandliabilitiesareoffsetwhenthereisalegallyenforceablerighttooffsetcurrenttaxassetsagainstcurrenttaxliabilitiesandwhenthedeferredincometaxesas-setsand liabilities relate to incometaxes leviedby thesametaxationauthority oneither the same taxable entity ordiffe-rent taxable entitieswhere there is an intention to settle thebalancesonanetbasis.BasedonthisdeferredtaxassetsanddeferredtaxliabilitiesareoffsetfortheDanishsubsidiaries,butnotfortheothersubsidiaries.
2.20Employeebenefits
2.20.aPensionobligationsGroup companies operate various pension schemes. Theschemesaregenerallyfundedthroughpaymentstoinsurancecompaniesortrustee-administeredfunds,determinedbyperi-odicactuarialcalculations.Thegrouphasbothdefinedbenefitanddefinedcontributionplans.
Adefinedcontributionplanisapensionplanunderwhichthegrouppaysfixedcontributionsintoaseparateentity.Thegrouphasnolegalorconstructiveobligationstopayfurthercontribu-tionsifthefunddoesnotholdsufficientassetstopayallem-ployeesthebenefitsrelatingtoemployeeserviceinthecurrentandpriorperiods.
Fordefinedcontributionplans,thegrouppayscontributionstopubliclyorprivatelyadministeredpensioninsuranceplansonamandatory,contractualorvoluntarybasis.Thegrouphasnofurtherpaymentobligationsoncethecontributionshavebeenpaid. The contributions are recognised as employee benefitexpensewhentheyaredue.Prepaidcontributionsarerecogni-sedasanassettotheextentthatacashrefundorareductioninthefuturepaymentsisavailable.
Adefinedbenefitplanisapensionplanthatisnotadefinedcontribution plan. Typically defined benefit plans define anamountofpensionbenefitthatanemployeewillreceiveonre-tirement,usuallydependentononeormore factorssuchasage,yearsofserviceandcompensation.Inadditiontofundeddefined benefit plans funded through insurance companies,the group also has unfunded pension liabilities covered byoperations.
Theliabilityrecognisedinthebalancesheetinrespectofde-finedbenefitpensionplansisthepresentvalueofthedefinedbenefitobligationattheendofthereportingperiodlessthefairvalueofplanassets.
Thedefinedbenefitobligationiscalculatedannuallybyinde-pendentactuariesusingtheprojectedunitcreditmethod.Thepresentvalueofthedefinedbenefitobligationisdeterminedby
NOTES TO THE FINANCIAL STATEMENT
24 Reitan Convenience Annual Report 2015
discountingtheestimatedfuturecashoutflowsusinginterestratesofhigh-qualitycorporatebondsthataredenominatedinthecurrencyinwhichthebenefitswillbepaid,andthathavetermstomaturityapproximatingtothetermsoftherelatedpen-sionobligation.Incountrieswherethereisnodeepmarketinsuchbonds,themarketratesongovernmentbondsareused.
Actuarial gains and losses arising from experience adjust-mentsandchanges inactuarialassumptionsarechargedorcreditedtoequityinothercomprehensiveincomeintheperiodinwhichtheyarise.
Past-servicecostsarerecognisedimmediatelyinincome.
2.20.bTerminationbenefitsThegrouprecognisesterminationbenefitswhenitisdemon-strablycommittedtoaterminationwhentheentityhasade-tailed formal plan to terminate the employment of currentemployeeswithoutpossibilityofwithdrawal.Inthecaseofanoffermade toencouragevoluntary redundancy, the termina-tionbenefitsaremeasuredbasedonthenumberofemployeesexpectedtoaccepttheoffer.Benefitsfallingduemorethan12monthsaftertheendofthereportingperiodarediscountedtotheirpresentvalue.
2.21Provisions
Provisions for rental obligations, environmental obligations,restructuring costs, legal claims and employee benefits arerecognisedwhen:thegrouphasapresentlegalorconstructi-veobligationasaresultofpastevents;it isprobablethatanoutflowof resourceswillbe required tosettle theobligation;and the amount has been reliably estimated. Restructuringprovisionscompriseleaseterminationpenaltiesandemployeeterminationpayments.Provisionsarenotrecognisedforfutureoperatinglosses.
Provisionsaremeasuredatthepresentvalueoftheexpendi-turesexpectedtoberequiredtosettletheobligationusingapre-tax rate that reflects currentmarket assessments of thetimevalueofmoneyandtherisksspecifictotheobligation.Theincreaseintheprovisionduetopassageoftimeisrecognisedasinterestexpense.
2.22Leases
Leasesinwhichasignificantportionoftherisksandrewardsofownershipareretainedbythelessorareclassifiedasopera-tingleases.Paymentsmadeunderoperatingleases(netofanyincentivesreceivedfromthelessor)arechargedtotheincomestatementonastraight-linebasisovertheperiodofthelease.
Thegroupleasescertainproperty,plantandequipment.Lea-sesof property, plant andequipmentwhere thegrouphavesubstantiallyall therisksandrewardsofownershipareclas-sifiedasfinanceleases.Financeleasesarecapitalisedatthelease’s commencement at the lower of the fair value of theleasedpropertyandthepresentvalueof theminimumleasepayments.
Each leasepayment isallocatedbetween the liabilityandfi-nance charges. The corresponding rental obligations, net offinancecharges,areincludedinotherlong-termpayables.Theinterestelementofthefinancecostischargedtotheincomestatementovertheleaseperiodsoastoproduceaconstantperiodicrateofinterestontheremainingbalanceoftheliabilityforeachperiod.Theproperty,plantandequipmentacquiredunderfinanceleasesisdepreciatedovertheshorteroftheuse-fullifeoftheassetandtheleaseterm.
2.23Revenuerecognition
Revenueismeasuredatthefairvalueoftheconsiderationre-ceivedor receivable, and represents amounts receivable forgoodssupplied,statednetofdiscounts,returnsandvaluead-dedtaxes.Intercompanysalesareeliminated.
The group recognises revenuewhen the amount of revenuecanbereliablymeasured;whenitisprobablethatfutureecon-omicbenefitswillflowtotheentity;andwhenspecificcriteriahavebeenmetforeachofthegroup’sactivities,asdescribedbelow.Thegroupbasesitsestimateofreturnonhistoricalre-sults,takingintoconsiderationthetypeofcustomer,thetypeoftransactionandthespecificsofeacharrangement.Mostty-pesofincomewillberecognisedatthetimeofdelivery.
2.23.aSalesofgoodsThegroupsellsgoodspurchasedforresaletofranchiseesandagentsintheconveniencemarket.Inaddition,thegroupsellsproductsdirectlytoretailcustomersthroughcompany-ownedstores.Salesofgoodsarerecognisedwhenagroupentityhasdelivereditsproductstothefranchisee,agentorenduser.De-liverydoesnotoccuruntiltheproductshavebeenshippedtothespecifiedlocation,andtheriskoflossandobsolescencehasbeentransferredtothefranchiseeoragent.
2.23.bSaleofservicesThegroupengagesinfranchisingactivitiesintheconveniencemarket.Agreedfranchisefeesarerecognisedeachmonth inaccordancewiththefranchiseagreementsandbasedonreve-nuesorgrossmargin.
Thegroupalsorecognisescommissionsfromthesaleofpho-necards,publictransportcards,varioustypesoflotteryticketsandbettingthroughcompany-ownedstores.
2.23.cRentalincomeRentalincomefromoperatingleasesisrecognisedinprofitorlossonastraight-linebasisovertheleaseterm.Leasesofin-vestmentpropertieswhere thegroupretainssubstantiallyallrisksand rewards related to theownership,areclassifiedasoperatingleases.
2.23.dOtherrevenueJointmarketingandotherservicesprovidedtosuppliersandothersformthebasisofanyotherincomeofthegroup.Sup-plier loyalty agreements are classified as goods discount orotherincomebasedonthesubstanceofeachagreement.Totheextentthatapaymentfromthesupplierisrelatedtoaspe-cificadorcampaignthatReitanConveniencehasexpensed,andforwhichthesupplierhasagreedtocoveritsshareof,thepaymentisdeductedfromtheperiod’smarketingcosts.Otherrevenuesfromvendorsareclassifiedasotherincome.
2.23.eGainsondisposalGains on disposal of fixed assets are reported as net othergains(losses).Gains(losses)fromsaleofshares,orotherse-curitiesclassifiedasavailable for sale, arecalculatedas thedifferencebetweencostpriceandtransactionprice.Anychan-ges in value recognised temporarily in other comprehensiveincomearesimultaneouslyreclassifiedtoprofitandloss.
2.24Interestincomeanddividendincome
Interestincomeisrecognisedwhenearned.Dividendincomeisrecognisedwhentherighttoreceivepaymentisestablished.
NOTES TO THE FINANCIAL STATEMENT
Reitan Convenience Annual Report 2015 25
Thegroupoperatesintheconveniencemarket,andincludesthechainsNarveseninNorway,LatviaandLithuania,7-Elev-eninNorway,SwedenandDenmark,PressbyråninSweden,R-kioski inFinland,R-kiosk inEstonia, LietuvosSpauda inLithuaniaandNorthlandinNorway.Theoperationsalsoin-cludedistributionofpressproductsinNorway,Sweden,Lat-via,EstoniaandLithuania to internalandexternal retailers,andrentalandoperationofservicestations inNorwayandDenmark.
Thegroup’sactivities involvevariousfinancial risks:marketrisk (includingcurrency risk, fairvalue interest risk,floatinginterestriskandpricerisk),creditriskandliquidityrisk.Thegroup’soverall riskmanagementplan focuseson thecapi-tal markets’ unpredictability and represents an attempt tominimizepotentialnegativeeffectson thegroup’sfinancialperformance.Thegroupmakesuseof financialderivativestohedgeagainstcertainrisks.Thegroup’sriskmanagementisperformedbyacentralfinancedepartment,inaccordancewithinstructionswhichhavebeenpresentedtoandappro-vedby theboardofdirectors.Thegroup’sfinancedepart-mentidentifies,evaluatesandmanagesfinancialriskinclosecooperationwith thedifferentoperational units. Theboardofdirectorsapprovestheprinciplesforoverallriskmanage-ment,andprovidesguidelinesforspecificareassuchascur-rencyrisk,creditrisk,useoffinancialderivativesanduseofsurpluscash.
3.1Marketrisk
3.1.aCurrencyriskThegroupisexposedtocurrencyriskaccordingtoSwedishkroner,Danishkronerandeuro.Currencyriskarisesfromfu-turetradingtransactions,assetsandliabilitiesrecognisedinthebalancesheet,andnetinvestmentsininternationalope-rations.Thisriskisstilllimited,asouroperationalunitsmainlyhavetheirincomeandcostsandkeeptheiraccountsinlocalcurrency.Thegrouphasfinancialhedging forcurrencyex-posure,andthusissubjectforvolatilityintheP&L.Thegrouphasinvestmentsinforeignsubsidiaries,wherenetassetsareexposedtocurrencyriskinforeigncurrencytranslation.Thegrouptriestolimitthisexposurebyensuringanoveralldebtportfoliocompositionwhichtothegreatestpossibleextentisadaptedtotheindividualcurrency’sandcountry’srelativeimportanceinthegroup’sactivities.
Theeffectofa10percentchangeinthecurrencyagainsttheNorwegiankronerisshowninthetablebelow.Theeffectsarecalculatedonthebasisofthegroup’snetassets(liabilities)ineachcurrencyat31December2015.
Balancesheetitemsincurrency DKK SEK EURCurrencygain(loss)-10% 7 31 13Effectonequity-10% -27 -38 -143
Currencygain(loss)+10% -7 -31 -13Effectonequity+10% 26 38 143
3.1.bPriceriskThe group use an energy broker to obtain the best possi-ble price for electricity in Norway, Sweden, Denmark andFinland.Inadditiontospotcontracts,thebrokerentersintofinancialcontractsonbehalfofReitanConvenienceatNas-daqOMXStockholm.Fairvalueofthefinancialcontractsischangingwhenexpectationsabout futureelectricitypriceschange.Gains/lossesareincludedinnote8–Netothergains(losses),whilethemarketvalueisstatedinnote29–Deriva-tivefinancialinstruments.
ThegroupownssharesinrealestateinFinlandthataremadetogetaccesstopremisesforthegroup’soperations.Thesesharesareclassifiedas”financialassetsavailableforsale”.Theexposure forprice riskon theunderlyingproperties isconsidered to be limited when these are mainly used by
R-kioskifranchisees.Thegroup’sexposuretootherstocks’andsecurities’pricerisksislimited.
3.1.cInterestriskSincethegrouphasnomajorinterest-bearingassets,itspro-fitsandcashflowsfromoperatingactivitiesaremainlyinde-pendentoffluctuationsinthemarketinterestrates.
The group’s interest risk is related to borrowings, lendingandbankdeposits.Borrowingswithinthegroupareenteredwith floating interest rateand represent an interest risk forthegroup’scashflow.Interestrateswapshavebeenestab-lished tominimize the interest risk related toborrowings inbothNOKandforeigncurrency.Thegroup’sborrowingsareinNOK,SEK,DKKandEUR.
Theeffectofchangeinmarketinterestratesbyonepercen-tagepointofthegroup’sborrowings,lendingandbankdepo-sitsatfloatingratesareshowninthetablebelow.
Interest -1%-points +1%-pointsDecrease(increase)ininterestcost -11 11Effectonequity -8 8
3.2Creditrisk
Themostsignificantpartofthegroup’sturnovercomesfromfranchisees. The franchisor has a good overview of eachfranchisee’sfinancialsituation.Historically,defaultand los-sesonaccountsreceivableshavebeenlowintheNordicandBalticmarkets. A certain credit risk also arises from com-mittedtransactionswithcustomersandderivativesandde-positswithfinancialinstitutions.Counterpartiesinderivativecontractsandfinancialdepositsarelimitedtofinancialinsti-tutionswithhighcreditworthiness.
3.3.Liquidityrisk
The group operates in a market with high turnover. Cashflowsarehighandrelativelystable,butvolatilewithinaweek/month. The groupmanages its liquidity risk by ensuring asufficientamountofcashincombinationwithsufficienthea-droomonitsundrawnborrowingfacilities.
Managementmonitorsthegroup’sliquidityreserves(consis-tingofvariousborrowingfacilities(note25)andcashequiva-lents(note22))throughrollingforecastsbasedonexpectedcashflow.Managementfollowsitsliquidityreservessepara-telyforeachmaincurrency(NOK,DKK,SEKandEUR).
The group’s primary sources of funding in 2015 are loansfrom a multi-currency credit facility syndicated among sixbanks(note24–Loanagreements).TheloanexpiresinDe-cember2019.Detailedmaturityforotherloansispresentedinnote25-Borrowings.
3.4Riskrelatedtofinancingandcapitalstructure
Thegroup’sambitionregardingfinancingandcapitalstructu-re is based on Reitangruppen’s value principle no. 3: ”Wearecommittedtobedebt-free.”Thisentailsthattheparentcompanyshouldbedebt-free,whilethegroupseeksanop-timalbusinesssolutionwithintheframeworkofappropriateriskmanagement.
ThisvalueprincipleisoperationalizedbytheBoardofdirec-tors in Reitangruppen,who has established decision rulesforeachindividualbusinessarea.Thedecisionrulesdefinethescopeforfinancingalternativesandcapitalstructure.ThedecisionruleforReitanConvenienceisthatitsdebtshouldnot exceed1.5 timesEBITDA. Financing is resolvedwithineachindividualbusinessarea,aslongasthecapitalstructu-reiswithinthescopedefinedbythedecisionrules.
Note3–Financialriskmanagement
NOTES TO THE FINANCIAL STATEMENT
26 Reitan Convenience Annual Report 2015
NOTES TO THE FINANCIAL STATEMENT
TheBoardofdirectorsinReitangruppenisauthorizedtoap-provearrangementsbeyondthedecisionrulesforeachbu-sinessarea.
To improve capital structure, the group may adjust its in-vestmentlevel,exploitavailablecreditfacilities,sellfinancialinvestmentsoradjusttheamountofdividendpaidtoshare-holders.
3.5Assessmentoffairvalue
IFRS7requiresdisclosuresoffairvaluemeasurementsusingafairvaluehierarchythatreflectsthesignificanceoftheinp-utsusedinmakingthemeasurements.Thefairvaluehierar-chyhavethefollowinglevels:•Quotedprices (unadjusted) inactivemarketsfor identicalassetsorliabilities(level1).•Inputsotherthanquotedpricesthatareobservableforthe
assetorliability,eitherdirectly(forexample,asprices)orin-directly(forexample,derivedfromprices)(level2)•Inputs for theassetor liability thatarenotbasedonob-servablemarketdata(level3).
Thegroup’selectricityderivativesbelongtolevel1.Seealsonote29–Derivativefinancialinstruments.Thegroup’sfinan-cialassetsthatareclassifiedasavailableforsalebelongtolevel3.Seealsonote19–Financialinvestments.
Theaccountingvalueofaccountsreceivableandpayableisassumedtoequalthefairvalueoftheseitems.Thefairvalueof financial liabilities (calculated for note purposes) is esti-matedbydiscountingfuturecontractualcashflowswiththegroup’salternativemarketinterestforsimilarfinancialinstru-ments.Seealsonote25–Borrowings.
Estimatesand judgmentsarecontinuallyevaluatedandarebasedonhistoricalexperienceandother factors, includingexpectationsoffutureeventsthatarebelievedtobereaso-nableunderthecircumstances.
4.1Criticalaccountingestimatesandassumptions
Thegroupmakesestimatesandassumptionsconcerningthefuture.Theresultingaccountingestimateswill,bydefinition,seldomequal the relatedactual results.Theestimatesandassumptionsthathaveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitieswithinthenextfinancialyearareaddressedbelow.
4.1.aEstimatedimpairmentofgoodwillThegrouptestsannuallywhethergoodwillhassufferedanyimpairmentinaccordancewiththeaccountingpolicystatedin note 2.7.a. The recoverable amounts of cash-generatingunitshavebeendeterminedbasedonvalue-in-usecalcula-tions.Thesecalculationsrequireuseofestimates.Seenote16–Intangibleassetsformoreinformation.
4.1.bRentobligationsThegroupmakesprovisions for rentobligations forpremi-seswheretheoperationhasbeenorwillbeterminated.Thegroupalsomakesprovisionsforfuturelossesoncontracts.The provisions are determined based on discounted cashflow related to existing contractual obligations and expira-tion dates, including the possibility of buying out the con-tractandsubleaseincome.Estimatedcashflows,lengthofcontractperiodanddiscountrateareparticularlyimportantjudgments.Seenote28–Provisions forother liabilities formoreinformation.
4.1.cRestorationliabilitiesThegrouphasinsomecasesassumedaliabilitytorestoreproperties/locations to its original standardwhen the acti-vitiesatthelocationscease.Thegroupestimatesthesere-storationliabilities.Thepresentvalueoftherestorationcostisdeterminedbyconsideringallassumptionsanduncertainestimateswhichareincludedinthepresentvalueofexpec-tedrestorationcost.Theseincludetheasset’seconomiclife,cost of restoration, discount rate and rate of inflation. Seenote28–Provisionsforotherliabilitiesforfurtherinformation.
4.1.dEnvironmentalliabilitiesThe group’s environmental liabilities are related to theScandinavianFuel Infrastructurecompanies inNorwayandDenmark, who purchase, store and sell petroleum basedproducts.Whenpurchasingthecompanies,thegroupcon-ducted an environmental review that formed the basis fora reliable estimate of existing environmental liabilities. Theresultsfromthisreview,combinedwithaccumulatedknow-ledge about how these liabilities arise, gives the group abasis for estimating the development of our environmentalliabilities.
4.1.eTrademarksOn1May2012,thegrouppurchased1,048kiosksinFinland,EstoniaandLithuaniawiththetrademarksR-kioski,R-kioskandLietuvosSpauda.Inthisconnection,assetswereiden-tifiedrelatedtotrademarksacquiredinabusinesscombina-tioninaccordancewiththe”relieffromroyalty”method,seeIAS38.41.b.i.Thetrademarkshaveindefiniteusefullives.InaccordancewithIAS38.107,thetrademarksarenotamorti-sed,buttestedforimpairmentinaccordancewithIAS38.108andIAS36.
4.2Critical judgments in applying the entity’s accoun-tingpolicies
4.2.aAgreementswithfranchiseesThegroupoperatesfranchise-basedbusinessintheconve-niencemarket.Franchiseconceptsareexplicitlymentionedin IFRS 10 Consolidated financial statements. The group’sassessmentisthatthefranchiseesshouldnotbeconsolida-tedbecause the franchisordoesnothavecontrol,butonlyprotectionrightsagainstthefranchisees.
4.2.bUsefullifeofleaserightsThegrouphasenteredintoleasecontractsforpremisesusedby thegroup in thecountries inwhich thegroupoperates.Differences in rental legislation in these countries have re-sultedindifferentuseful livesofrecordedleaserights.Thishasimplicationsfortheamortisationperiodandwhethertheleaseshouldbeconsideredtemporaryornot.RentalrightsinDenmarkandSwedenareconsideredunlimited,while inNorwaytheyareconsideredlimitedtotheleaseterminac-cordancewiththecontract.TherearenoleaserightsinFin-land,Latvia,EstoniaandLithuania.
Note4–Criticalaccountingestimatesandjudgments
Note3–Financialriskmanagement–continued
Reitan Convenience Annual Report 2015 27
Theoperatingsegmentsareidentifiedbasedonthereportstheboarduseswhenassessingperformance,profitabilityandcapitalallocationatastrategiclevel.Theboardevaluatesthecompany’sperformanceineachofthecountriesitisrepresen-tedin.ThedefinedoperatingsegmentsareReitanConvenienceNorway,ReitanConvenienceSweden,ReitanConvenienceDenmark,R-kioskiFinland,NarvesenLatvia,R-kioskEstoniaandReitanConvenienceLithuania.Turnoverfromthedefinedsegmentscomefromfranchisedstoresandcompanyownedconveniencestores,togetherwithexternaldistributionofpressproducts.
Thesegmentother/eliminationsincludestheoperationsoftheparentcompanyReitanConvenienceAS. Amounts in NOK million
Segment-Turnover,numberofstoresandnumberofemployeesinstores(unaudited)
Note5–Segmentreporting–operational
ReitanConvenienceNorway 2015 2014Turnoverincl.franchiseeturnover 3,916 3,904 Numberofstores 502 511Numberofemployeesinstores 3,360 3,615 ReitanConvenienceSweden 2015 2014Turnoverincl.franchiseeturnover 4,839 4,566 Numberofstores 493 500Numberofemployeesinstores 4,483 4,454 ReitanConvenienceDenmark 2015 2014Turnoverincl.franchiseeturnover 2,603 2,405 Numberofstores 189 190Numberofemployeesinstores 1,751 1,807 R-kioskiFinland 2015 2014Turnoverincl.franchiseeturnover 2,772 2,581 Numberofstores 614 627Numberofemployeesinstores 1,948 2,915 NarvesenLatvia 2015 2014Turnoverincl.franchiseeturnover 680 602 Numberofstores 250 258Numberofemployeesinstores 809 880
R-kioskEstonia 2015 2014Turnoverincl.franchiseeturnover 357 348 Numberofstores 99 104Numberofemployeesinstores 317 335 ReitanConvenienceLithuania 2015 2014Turnoverincl.franchiseeturnover 377 348 Numberofstores 215 237Numberofemployeesinstores 553 610 Other/eliminations 2015 2014Turnoverincl.franchiseeturnover - - Numberofstores - -Numberofemployeesinstores - - Group 2015 2014Turnoverincl.franchiseeturnover 15,544 14,754 Numberofstores 2,362 2,427Numberofemployeesinstores 13,221 14,616
Turnoverincludingfranchiseeturnoverconsistsoftotalsaleofgoods,agentincomefromtransporttickets,lotteriesandtele-phoneandgiftcardsinfranchisedstoresandcompanyownedconveniencestores,anddistributionofpressproductstounitsbothinsideandoutsideofReitangruppen.TheturnoverfromfranchisedoperationsisnotpartofReitanConvenience’sope-ratingrevenue,andconsequently,thesefiguresareunaudited.However,thegroup’smanagementbelievesthattheturnoverisimportantandacriticalfactortounderstandthecompany’seconomicdevelopment.
NOTES TO THE FINANCIAL STATEMENT
28 Reitan Convenience Annual Report 2015
Note5–Segmentreporting–operational–continued
ReitanConvenienceNorway 2015 2014Operatingrevenues 976 932Otherrev.,netothergainsandrevaluationofinvestmentproperty 158 141Costofgoodssold -23 -19Otheroperatingexpenses -768 -748EBITDA 343 306 Amortisationandimpairmentintangibleassets -6 -9Depreciationandimpairmentproperty,plantandequipment -106 -103Operatingprofit 231 194 Investments 103 90 ReitanConvenienceSweden 2015 2014Operatingrevenues 1,132 1,156Otherrev.,netothergainsandrevaluationofinvestmentproperty 173 159Costofgoodssold -219 -274Otheroperatingexpenses -758 -786EBITDA 328 255 Amortisationandimpairmentintangibleassets -4 -11Depreciationandimpairmentproperty,plantandequipment -92 -114Operatingprofit 231 130 Investments 100 82 ReitanConvenienceDenmark 2015 2014Operatingrevenues 290 257Otherrev.,netothergainsandrevaluationofinvestmentproperty 108 90Costofgoodssold - -Otheroperatingexpenses -273 -246EBITDA 125 101 Amortisationandimpairmentintangibleassets - -3Depreciationandimpairmentproperty,plantandequipment -75 -70Operatingprofit 50 28 Investments 31 24
R-kioskiFinland 2015 2014Operatingrevenues 681 1331Otherrev.,netothergainsandrevaluationofinvestmentproperty 99 104Costofgoodssold -173 -660Otheroperatingexpenses -456 -648EBITDA 151 127 Amortisationandimpairmentintangibleassets -9 -8Depreciationandimpairmentproperty,plantandequipment -56 -49Operatingprofit 86 70 Investments 71 67 NarvesenLatvia 2015 2014Operatingrevenues 680 602Otherrev.,netothergainsandrevaluationofinvestmentproperty 24 19Costofgoodssold -479 -432Otheroperatingexpenses -176 -156EBITDA 49 33 Amortisationandimpairmentintangibleassets -2 -Depreciationandimpairmentproperty,plantandequipment -12 -8Operatingprofit 35 25 Investments 13 17 R-kioskEstonia 2015 2014Operatingrevenues 357 348Otherrev.,netothergainsand