Report
EUR 500.00 For Business Accounts Only

Kesko April 08th, 2019

In general, Kesko is in compliance with the Finnish regulations relating to the organization and procedures of the Annual General Meeting.

Under ITEM 9, the Board of Directors proposes to distribute a dividend of EUR 2.34 per share, +6.4% as compared with 2017 despite a 38.0% decline in consolidated net income. The proposed dividend distribution is not fully covered by consolidated net earnings or free cash flow. However, it should be noted that cash flow from operations significantly increased in 2018, by 49.7%, and the reduction in consolidated net income was mainly due to extraordinary transactions, such as the divestments of non-profitable business units. In comparable terms, operating profit increased by 12.2%, and the comparable earnings per share increased by 7.9%. Also taking into account Kesko's healthy financial position (net debt-to-EBITDA ratio was 0.4x in 2018), ECGS recommends to vote FOR.

Under ITEM 13, the Audit Committee of the Board of Directors seeks approval of the remuneration of the auditor. Since non-audit fees paid are greater than 50% of the audit fee on a three-year aggregate basis, ECGS recommends to vote OPPOSE.

Under ITEM 14, the Audit Committee proposes to reappoint PricewaterhouseCoopers as the Company's auditor for FY 2019. As already mentioned above, the level of non-audit fees is not in accordance with ECGS' guidelines, and the current auditor has been in office for 43 years, which exceeds its guidelines. In line with EU regulation, ECGS recommends a term of maximum 20 years (10 + 10 years, if a tender is undertaken).  Therefore, ECGS recommends to vote OPPOSE.

Underlying
Kesko Oyj Class B

Kesko is a provider of trading sector services. Co.'s reportable segments are: food trade, which comprises the wholesale and B2B trade of groceries in Finland and the grocery trade in Russia; home and speciality goods trade, which comprises Co.'s K-citymarket Oy subsidiary's home and speciality goods; building and home improvement trade, which includes Co.'s Rautakesko Ltd's subsidiary's wholesale and B2B sales in the building and home improvement and agricultural trade in Finland, and the trade in Sweden, Norway, the Baltic countries, Russia and Belarus; and car and machinery trade, which comprises the business operations of Co.'s subsidiaries, VV-Auto Group Oy and Konekesko Ltd.

Provider
Proxinvest
Proxinvest

Founded in 1995, Proxinvest is an independent proxy firm supporting the engagement and proxy analysis processes of investors. Proxinvest mission is to analyse corporate governance practices and resolutions proposed at general meetings of listed firms.

Proxinvest main services are :

  • ​Proxy reports
  • Definition and monitoring of client customized voting guidelines
  • Corporate Governance Data and Rating
  • Thematic research
  • Engagement support

Proxinvest has been a pioneer and champion of good corporate governance and has grown into a recognised expert in the field.

Proxinvest is independently-owned and only works for investors : Proxinvest does not provide consulting services to the companies it covers, mitigating related risks to its clients and ensuring the independence of our analysis. As a result Proxinvest is able to take a robust, independent, engaged and unconflicted view of the companies in which our clients invest.

As Managing Partner of Expert Corprate Governance Service Ltd (ECGS), Proxinvest has built a large network of corporate governance experts to support clients in corporate governance analysis worldwide. 

Other Reports on these Companies
Other Reports from Proxinvest

ResearchPool Subscriptions

Get the most out of your insights

Get in touch