2nd quarter and half year 2012 Financial statements and review

Transcription

1 2nd quarter and half year 2012 Financial statements and review

2 Statoil Fuel & Retail second quarter and half year results 2012 Financial and operational review (in NOK million) Q Q2 2011* YTD 2012 YTD 2011* Full year 2011* Revenues 19,284 19,015 37,755 36,010 73,691 Cost of goods sold (16,756) (16,387) (32,875) (30,947) (63,657) Gross profit 2,528 2,628 4,879 5,062 10,035 Distribution cost and administrative expenses (2,144) (2,089) (4,169) (4,177) (8,228) Other gain/(loss), net Operating profit ,845 Interest and other financial incomes Interest and other financial expenses (117) (108) (231) (213) (438) Exchange rate gain/(loss) (10) (15) Net financial expenses (104) (40) (133) (175) (376) Net income/(loss) from associated companies (1) 1 (1) 1 3 Profit before income tax ,472 Income tax expense (120) (134) (291) (195) (412) Profit for the period ,060 Adjusted EBITDA Operating profit ,845 Depreciation, amortisation and impairment ,169 Net income/(loss) from associated companies (1) 1 (1) 1 3 EBITDA ,563 1,489 3,017 Adjustments: Curtailment gain related to pensions - - (263) - - Environmental remediation cost Restructuring cost (Gain)/loss from sale of businesses and property (37) Adjusted EBITDA ,353 1,489 3,002 Depreciation and amortisation (277) (299) (561) (593) (1,169) Net (income)/loss from associated companies 1 (1) 1 (1) (3) Adjusted operating profit ,830 Gross profit Road transportation fuel 1,316 1,398 2,452 2,558 5,103 Convenience ,389 1,407 2,815 Other products (7) ,493 Fees and services (8) Total 2,528 2,628 4,879 5,062 10,035 * Restated due to early adoption of IAS19R Statoil Fuel & Retail Q2 and half year results 2012 Page 1 of 18

3 Statoil Fuel & Retail's second quarter 2012 adjusted EBITDA was NOK 704 million, down from NOK 840 million in the same period of Adjusted operating profit totalled NOK 428 million, a decrease of NOK 112 million from the second quarter Statoil Fuel & Retail`s financial performance was impacted by reduced gross profit from road transportation fuel and convenience in the quarter. The cash offer from Alimentation Couche-Tard Inc. ( ACT or Couche-Tard ) for 100 percent of the shares in Statoil Fuel & Retail at a consideration of NOK 53 per share (51.20 ex dividend) had been accepted by percent of the shareholders in Statoil Fuel & Retail on 19 June On June 29, following a compulsory acquisition of the remaining shares of Statoil Fuel & Retail, ACT become owner of 100 percent of the shares and the company was delisted from the stock exchange in Oslo on 12 July Gross profit Second quarter 2012 compared with second quarter 2011 Gross profit for the second quarter of 2012 was NOK 2,528 million, a decrease of NOK 100 million compared with the same period in Negative foreign exchange effects caused by an appreciation of the Norwegian Krone and negative stock effects caused by a revaluation of fuel inventory reflecting reduced prices of refined oil products explain the decline in gross profit. Gross profit from road transportation fuel decreased in the second quarter 2012 compared with the same quarter last year, mainly because of declining margins as fuel volumes were in line with last year. The unit margin decline was primarily caused by negative foreign exchange effects and negative stock effects compared with the same quarter last year. Gross profit from convenience was down in the second quarter of 2012, compared with the same quarter last year, impacted by poor weather conditions. Like-for-like convenience sales growth was down by 2.5 percent in the quarter despite positive numbers in Central and Eastern Europe. Strong sales within the MADE TO GO category were the main reason for the positive development. Gross profit from other products (consisting of stationary energy, marine gasoil, lubricants, aviation fuel and chemicals) increased in the second quarter of 2012 compared with the second quarter of The increase was caused by improved gross profit from aviation and lubricants due to higher margins for both products. Gross profit from fees and services (consisting mainly of income from cards, car rentals, other rental income, corporate and Group eliminations) was in line with expectations for the quarter. Year to date 2012 compared with year to date 2011 Gross profit for the first half of 2012 was NOK 4,879 million, down from NOK 5,062 million in the same period in The total decline in gross profit was NOK 183 million, of which approximately NOK 62 million was the result of negative foreign exchange effects. The remaining reduction can mainly be attributed to negative stock effects and a decrease in convenience sales in Scandinavia. Distribution and administrative costs Second quarter 2012 compared with second quarter 2011 Distribution costs and administrative expenses in the second quarter 2012 were up compared with the second quarter 2011, due to a one-off restructuring provision in Central and Eastern Europe and advisory services following the cash offer for Statoil Fuel & Retail. The increase in costs was partly offset by a positive foreign exchange impact. Year to date 2012 compared with year to date 2011 Distribution costs and administrative expenses for the first six months of 2012 were slightly lower compared with the same period last year. Other gain/(loss), net Second quarter 2012 compared with second quarter 2011 In the second quarter, the net gain of NOK six million was related to the sale of fixed assets. Year to date 2012 compared with year to date 2011 In the first quarter 2012, Statoil Fuel & Retail implemented a change in the company s pension scheme. In the second quarter an adjustment was carried out to reflect the company s early adoption of IAS 19R, thus reducing the gain year-to-date to NOK 267 million. The details are disclosed in Statoil Fuel & Retail s half-year 2012 financial statements. Operating profit Second quarter 2012 compared with second quarter 2011 Operating profit for the second quarter of 2012 was NOK 389 million, a decrease of NOK 151 million compared with Statoil Fuel & Retail Q2 and half year results 2012 Page 2 of 18

4 the same period last year. The decrease was mainly driven by the decline in gross profit and one-off costs, mainly restructuring costs in Central and Eastern Europe and advisory services to Statoil Fuel & Retail s Board of Directors in connection with the offer for Statoil Fuel & Retail from Couche-Tard. Year to date 2012 compared with year to date 2011 Operating profit for the first half of 2012 was NOK 977 million, up from NOK 896 million in the same period in The increase reflects the gain related to the change in pension schemes, partly offset by the decrease in gross profit and one-off costs as detailed for the second quarter Adjusted EBITDA Second quarter 2012 compared with second quarter 2011 For the second quarter of 2012, adjusted EBITDA totalled NOK 704 million compared with NOK 840 million in the same period last year. The decrease is due to negative stock effects caused by a revaluation of fuel inventory and negative foreign exchange effects, while EBITDA from operations is on par, adjusted for restructuring provision in Central & Eastern Europe. Year to date 2012 compared with year to date 2011 For the first six months of 2012, adjusted EBITDA totalled NOK 1,353 million, down NOK 136 million compared with the same period in The decrease is due to negative stock effects caused by a revaluation of fuel inventory and negative foreign exchange effects, while EBITDA from operations is on par, adjusted for the curtailment gain related to pensions and environmental remediation costs in first quarter 2012 and restructuring provisions in the second quarter. Net finance expenses Second quarter 2012 compared with second quarter 2011 Net finance expenses for the second quarter of 2012 increased by NOK 64 million to NOK 104 million, mainly due to a net foreign exchange loss of NOK 10 million in the second quarter of 2012 versus a net foreign exchange gain of NOK 48 million during the same period in Year to date 2012 compared with year to date 2011 Net finance expenses for the first half of 2012 decreased by NOK 42 million to NOK 133 million. The decrease was driven by higher foreign exchange gains compared with the same period last year Risk and uncertainties Statoil Fuel & Retail is, through its activities in the transportation fuel retailer industry, exposed to various financial, operational and market-related risk factors as described in the annual report for General economic and market conditions in the countries in which the Group sells its products and services influence consumer confidence and consumer purchasing power and thereby demand for the Group s products and services. Prices of crude oil and refined oil products are volatile and depend upon many factors that are beyond the Group s control and which could have a materially adverse effect on the Group s profitability. While Statoil Fuel & Retail seeks to pass on any increases in purchase costs to its consumers, its margins are also driven by industry dynamics and other factors that affect crude oil and refined oil product prices. Statoil Fuel & Retail is exposed to potential liability arising from accidents or incidents relating to health, safety and the environment and from remediation of such accidents and incidents at its terminals, fuel stations and/or other sites. Furthermore, Statoil Fuel & Retail offers a range of convenience products, including food and beverage products, at the full service fuel stations that it owns and operates. Although it has implemented stringent guidelines, such as its Food Safety Program, on how convenience products, such as perishable food products, are to be transported and handled, the products may be mishandled at the fuel stations or be spoilt or contaminated before reaching the fuel stations. Statoil Fuel & Retail Q2 and half year results 2012 Page 3 of 18

5 Statement on compliance To the best of our knowledge, we confirm that: the Statoil Fuel & Retail ASA interim consolidated financial statements for the first half of 2012 have been prepared in accordance with IAS 34 Interim Financial Reporting the information presented in the interim consolidated financial statements gives a true and fair view of the group s assets, liabilities, financial position and results for the period the interim report gives a fair review of the information under the Norwegian Securities Trading Act section 5 6 paragraph four. Oslo, 29 August 2012 Board of Directors Forward-looking statements This financial and operating review contains certain forward-looking statements that involve risks and uncertainties. In some cases, we use words such as "believe", "intend", "expect", "anticipate", "plan", "target" and similar expressions to identify forward-looking statements. All statements other than statements of historical facts, including, among others, statements such as those regarding: plans for future development and operation of projects; margin information; expected market development; the projected levels of risk exposure with respect to financial counterparties; the expected impact of exchange rate fluctuations on our financial position. These forward-looking statements reflect current views with respect to future events and are, by their nature, subject to significant risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements, including macroeconomic development, demand and pricing; currency exchange rates; the political and economic policies of Norway and other European countries; changes in laws and governmental regulations; the actions of competitors; and other factors discussed elsewhere in this report. Additional information, including information on factors which may affect Statoil Fuel & Retail's business, is contained in the prospectus published in connection with the Offering of Statoil Fuel & Retail shares in October 2010 and the annual report 2011, which can be found on Statoil Fuel & Retail's web site at Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot assure you that our future results, level of activity, performance or achievements will meet these expectations. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. Unless we are required by law to update these statements, we will not necessarily update any of these statements after the date of this review, either to make them conform to actual results or changes in our expectations. End notes (1) EBITDA is defined as operating profit adjusted for depreciation and amortisation, impairments and net income/(loss) from associated companies. (2) Adjusted EBITDA is defined as EBITDA adjusted for effects that management considers may affect the comparability of the underlying operational performance in the relevant reporting periods. (3) Adjusted operating profit is defined as operating profit adjusted for effects that management considers may affect the comparability of the underlying operational performance in the relevant reporting periods. (4) Capital expenditure is defined as the cash outflow used to acquire property, plant and equipment and intangible assets. (5) Earnings per share is defined as profit/(loss) attributable to equity holders of the Company divided by number of issued shares. (6) Adjusted EBITDA margin (%) is defined as adjusted EBITDA divided by gross profit. (7) Other products consist of stationary energy, marine fuels (in Scandinavia and Central and Eastern Europe) and Statoil Fuel & Retail Q2 and half year results 2012 Page 4 of 18

6 chemicals. Other products also include lubricants and aviation fuel sold in Scandinavia and Central and Eastern Europe. (8) Fees and services consist of leasing fees earned from cars leased by franchisees, rental income, card operation income on Routex cards, MasterCard profit sharing fees (in Scandinavia and Central and Eastern Europe), fees accrued under exchange and throughput agreements, profit from joint ventures of the aviation business (in Special Products only) and maintenance services at lubricants plants (in Special Products only), as well as various adjustments and eliminations. Fees and services also include sale of chemicals (in Special Products only). (10) Road transportation fuel volumes include all volumes of gasoline products, diesel products and LPG auto-gas sold by Statoil Fuel & Retail in each presented period on a retail and non-retail basis. As a result of rounding adjustments, the figures in some columns may not add up to the total of that column. Statoil Fuel & Retail Q2 and half year results 2012 Page 5 of 18

7 Interim consolidated financial statements Interim consolidated statement of income (in NOK million) Notes Q Q2 2011* YTD 2012 YTD 2011* Full year 2011* Revenues 2, 5 19,284 19,015 37,755 36,010 73,691 Cost of goods sold 2, 5 (16,756) (16,387) (32,875) (30,947) (63,657) Gross profit 2 2,528 2,628 4,879 5,062 10,035 Distribution cost and administrative expenses (2,144) (2,089) (4,169) (4,177) (8,228) Other gain/(loss), net Operating profit ,845 Interest and other financial income Interest and other financial expense 6 (117) (108) (231) (213) (438) Foreign exchange gain/(loss) 6 (10) (15) Net financial expenses 6 (104) (40) (133) (175) (376) Net income from associated companies (1) 1 (1) 1 3 Profit before income tax ,472 Income tax expense 7 (120) (134) (291) (195) (412) Profit for the period ,060 Profit attributable to: Equity holders of the Company ,059 Non-controlling interest (1) 1 (3) 1 0 Basic and diluted earnings per share (NOK) Weighted average number of shares (in million) * Restated due to early adoption of IAS19R Interim consolidated statement of comprehensive income (in NOK million) Notes Q Q2 2011* YTD 2012 YTD 2011* Full year 2011* Profit for the period ,060 Foreign currency translation differences (130) (174) (159) (154) (315) Net movement in cash flow hedges Actuarial gain/(loss) (487) Income tax on income and expenses recognised directly in other comprehensive income (35) (2) (45) (4) 135 Other comprehensive income (39) (170) (44) (145) (666) Comprehensive income Comprehensive income attributable to: Equity holders of the Company Non-controlling interest (1) 1 (3) 1 - Comprehensive income * Restated due to early adoption of IAS19R Statoil Fuel & Retail Q2 and half year results 2012 Page 6 of 18

8 Interim consolidated statement of financial position (in NOK million) Notes As at 30 June 2012 As at 31 December 2011 Assets Intangible assets 2, 4, 8 1, Deferred tax assets Property, plant and equipment 2, 4, 8 9,752 9,901 Investments in associated companies Pension assets Financial investments and receivables Financial receivables related parties Other non-current receivables Total non-current assets 11,588 11,672 Inventories 1,649 1,981 Trade and other receivables 8,823 8,187 Trade and other receivables related parties Cash and cash equivalents Total current assets 11,607 11,152 Total assets 23,195 22,825 Equity and liabilities Equity Share capital 11 1,500 1,500 Additional paid-in capital 5 4 Retained earnings 10 6,257 6,127 Other reserves (415) (256) Total equity attributable to equity holders of the Company 7,348 7,375 Non-controlling interests (2) 1 Total equity 7,346 7,376 Liabilities Financial liabilities ,132 Deferred tax liabilities Pension liabilities Provisions Total non-current liabilities 1,504 5,608 Trade and other payables 6,717 6,089 Trade and other payables related parties 2,012 2,135 Current tax payable Financial liabilities 6 5,492 1,450 Total current liabilities 14,345 9,840 Total liabilities 15,849 15,449 Total equity and liabilities 23,195 22,825 Oslo, 29 August 2012 The Board of Directors of Statoil Fuel & Retail ASA Statoil Fuel & Retail Q2 and half year results 2012 Page 7 of 18

9 Interim consolidated statement of changes in equity (in NOK million) Share capital Additional paid-in capital Retained earnings Hedging reserve 1) Foreign currency translation 1) Total before noncontrolling interest Noncontrolling interest Total At 31 December ,500 5, , ,907 Profit for the period* Other comprehensive income* 2) (154) (145) - (145) Total comprehensive income (154) Share-based payment Separation agreement 1 October shares that required third party consent Dividend to equity holders of the Company - - (9) - - (9) - (9) - - (900) - - (900) - (900) Decrease of additional paid-in capital - (5,848) 5, Purchase and allocation of treasury shares to employees - - (11) - - (11) - (11) At 30 June , ,955 - (96) 7, ,370 At 1 July , ,955 - (96) 7, ,370 Profit for the period* (1) 533 Other comprehensive income* 2) - - (361) 1 (162) (521) - (521) Total comprehensive income (162) 13 (1) 12 Share-based payment Dividend to non-controlling interests (8) (8) At 31 December , ,127 1 (257) 7, ,376 At 1 January , ,127 1 (257) 7, ,376 Profit for the period (3) 552 Other comprehensive income 2) (159) (44) - (44) Total comprehensive income (159) 511 (3) 509 Share-based payment Dividend to equity holders of the Company - - (540) - - (540) - (540) At 30 June , ,257 1 (416) 7,348 (2) 7,346 1) The hedging reserve and the foreign currency translation are in the Group s consolidated statement of financial position included in other reserves 2) Other comprehensive income includes items of income and expenses that are not recognised in the consolidated statement of income as required or permitted by the prevailing IFRSs. The nature of these items is presented in the consolidated statement of comprehensive income. * Restated due to early adoption of IAS 19R Statoil Fuel & Retail Q2 and half year results 2012 Page 8 of 18

10 Interim consolidated statement of cash flow (in NOK million) Notes Q Q2 2011* YTD 2012 YTD 2011* Full year 2011* Operating activities Profit before income tax ,472 Adjustments to reconcile profit before income tax to net cash flows provided by operating activities Depreciation, amortisation and impairment losses ,169 Net interest Foreign exchange (gain)/loss on operating activities (11) (38) (97) (31) 7 Other changes 10 (81) (274) (61) (112) Cash flows from changes in working capital Inventories (133) Trade and other receivables (237) (227) (690) (530) (226) Trade and other payables (161) (308) 514 (1,005) (1,077) Interest received Interest paid (68) (117) (130) (136) (249) Taxes paid (65) (33) (272) (84) (258) Cash flow provided by/(used in) operating activities (405) 840 Investing activities Purchases of property, plant and equipment and intangible assets 4 (351) (274) (561) (401) (1,439) Proceeds from sale of property, plant and equipment Purchase of businesses, equity securities and other investments Proceeds from sales of businesses, equity securities and other investments - - (138) (63) (58) 4 (56) 4-20 Cash flows provided by/(used) in investing activities (11) (265) (335) (354) (1,209) Financing activities Proceeds from long term borrowings , Proceeds from short term borrowings , ,800 Repayment of long term borrowings (1,350) - - Repayment of short term borrowings 6 (600) - (1,200) (300) (1,900) Repayment of financial liabilities (5) (7) (10) (15) (39) Dividends paid to equity holders of the parent company 10 (540) - (540) - (900) Dividends paid to non-controlling interests (8) Payments for treasury shares - (11) - (11) (11) Cash flows provided by/(used in) financing activities (245) 482 (300) 174 (1,057) Net increase/(decrease) in cash and cash equivalents (586) (1,426) Effect of exchange rate changes on cash and cash equivalents (4) (4) (6) (3) (28) Cash and cash equivalents at period start (326) (17) (525) Cash, cash equivalents and bank overdraft at period end 1) (228) 341 (228) 341 (525) Of which bank overdrafts 6 (974) (628) (974) (628) (1,166) 1) Bank overdrafts are recognised as current financial liabilities in the interim consolidated statement of financial position * Restated due to early adoption of IAS 19R Statoil Fuel & Retail Q2 and half year results 2012 Page 9 of 18

11 Notes to the interim consolidated financial statements 1 Organisation and basis of preparation General information Statoil Fuel & Retail ASA is incorporated and domiciled in Norway. The address of its registered office is Sørkedalsveien 8, N-0369 OSLO, Norway. With effect from 19 June 2012, Alimentation Couche-Tard Inc. through its wholly-owned indirect subsidiary Couche-Tard Norway AS is the new ultimate parent company in Statoil Fuel & Retail ASA. Following a compulsory acquisition effected 29 June 2012, Couche-Tard Norway AS holds 100 percent of the shares in Statoil Fuel & Retail ASA. Statoil Fuel & Retail ASA ( the Company ), its subsidiaries and investments in associated companies ("the Group" or "Statoil Fuel & Retail") operates fuel service stations both under dealer and franchise operating models, as well as company operated models. Statoil Fuel & Retail sells road transportation fuel, lubricants, stationary energy, chemicals and convenience products in Scandinavia and Central and Eastern Europe, and marine fuel in Norway. In addition, the Group produces and sells lubricant oils and supplies aviation fuel at major airports in Europe. The interim consolidated financial statements were authorised for issue by the Board of Directors on 29 August Basis of preparation These interim consolidated financial statements are prepared in accordance with recognition, measurement and presentation principles consistent with International Financing Reporting Standards as adopted by the European Union ( IFRS ) for interim reporting under International Accounting Standard ( IAS ) 34 Interim Financial Reporting. These interim consolidated financial statements are unaudited. These interim consolidated financial statements are condensed and do not include all of the information and notes required by IFRS for a complete set of consolidated financial statements. These interim consolidated financial statements should be read in conjunction with the annual consolidated financial statements. The accounting policies adopted in the preparation of these interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2011, except for accounting for pensions (see below). Standards and interpretations mentioned in note 2 of the Group s annual report 2011 with effective date from financial year 2012 do not have a significant impact on the Group s interim consolidated financial statements. In June 2011, the IASB issued a revised version of IAS 19 Employee Benefits to modify accounting rules for defined benefits pension plans. The revised IAS 19 was endorsed by the EU in June 2012 and the effective date is 1 January Statoil Fuel & Retail has in the second quarter 2012, early adopted the revised IAS 19 with retrospective effect. For Statoil Fuel & Retail the main effect of the changed accounting policy going forward is that interest costs and expected returns on plan assets are replaced with a net interest amount that is calculated by applying the discount rate to the net defined benefit liability (asset). The difference between the net interest income and the actual return will be recognised in other comprehensive income. For the financial year 2011 and the first quarter of 2012, this increased operating expenses by NOK 28 million and NOK 5 million, respectively. Further, past service costs will be recognised immediately in the period of a plan amendment and unvested benefits will no longer be spread over a future service period. This results in a reduction of NOK 204 million in the curtailment gain recognised in the first quarter 2012 and a corresponding increase in the net pension liability. In parallel to the early implementation of IAS 19 R it was decided to present net pension interest expense in net finance expenses. These costs were previously presented in distribution costs. For fiscal 2011 and first quarter 2012 this decreased operating expenses by NOK 7 million and NOK 6 million, respectively. See note 9 for further details. As the change of accounting principle has no impact on the comparable period presented in the consolidated statement of financial position, a consolidated statement of financial position as at the beginning of the earliest comparative period has not been presented. The functional currency of the entities in the Group is determined based on the nature of the primary economic environment in which each company operates. The functional currency of the parent company Statoil Fuel & Retail ASA and the presentation currency of the Group is NOK. Statoil Fuel & Retail Q2 and half year results 2012 Page 10 of 18

12 As a result of rounding adjustments, the figures in some columns may not add up to the total of that column. Use of estimates The preparation of interim consolidated financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the result of which forms the basis for making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis, considering the current and expected future market conditions. Changes in accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. Seasonality in operations Interim period results are not necessarily indicative of results of operations or cash flows for an annual period. The Group's operating results are affected by external factors, such as seasonality, weather and temperature. During the summer and warmer months, there is generally increased traffic at the Group's service stations and, consequently, higher retail road transportation fuel sales and convenience sales. During the colder winter months, driving is generally reduced resulting in a decline in fuel station traffic. The demand for Group's other energy products, such as heating oil and winter fuels, is higher during the winter months and cold weather, although not in sufficient amounts to offset the general lower road transportation fuel demand in these months. As such, the Group's revenues and gross profit are generally higher during the summer months when demand for its core products is higher. 2 Operating segments Reportable segments Statoil Fuel & Retail manages its operations in three operating segments: Scandinavia, Central & Eastern Europe and Special Products. No segments have been aggregated to form these reporting segments. Scandinavia and Central & Eastern Europe The two segments Scandinavia and Central & Eastern Europe derive their revenue primarily from the sale of fuel and convenience products on a retail basis. The Central & Eastern Europe segment includes the Group s business in Estonia, Latvia, Lithuania, Poland and Russia, while the segment for Scandinavia includes Sweden, Denmark and Norway. Special Products The Special Products segment derives its revenue primarily from the production and sale of lubricants and the sale of aviation fuel on a wholesale basis to airlines at 85 airports in Europe Corporate Corporate consists of the activities of corporate services, management and finance. Intercompany sales Internal sales are based on terms estimated to approximate those that prevail in arm's-length transactions with third parties. The operating revenue presented for each segment includes sales to both internal and external parties. Sales to internal parties are eliminated in the consolidated accounts. Operating segment information Operating segments align with internal management reporting to the Group's chief operating decision maker, defined as the Corporate Executive Committee (CEC). The CEC assesses the performance of the operating segments based on a measure of gross profit and operating profit. The gross profit measure comprises total revenues less cost of goods sold. The operating profit measure includes distribution costs and administrative expenses as well as the effects of less frequent recurring items from the operating segments such as restructuring costs and goodwill impairments. The measure also includes other gains or losses usually related to the disposal of assets or operations. The CEC does not assess financial items or total liabilities on segment level. The measurement basis for total revenue, gross profit and cost of goods sold follows the accounting principles used in the consolidated financial statement as described in note 2 to the Group's consolidated financial statements for Statoil Fuel & Retail Q2 and half year results 2012 Page 11 of 18

13 (in NOK million) Scandinavia Central & Eastern Europe Special Products Corporate Eliminations Total Q External revenue 12,991 3,894 2, ,284 Internal revenue (355) - Revenues 13,006 3,898 2, (355) 19,284 Gross profit 1, (237) 2,528 PP&E and intangible assets 6,645 3, ,780 Q External revenue 12,989 3,575 2,446 (17) 22 19,015 Internal revenue (403) - Revenues 13,007 3,578 2, (381) 19,015 Gross profit 2, (264) 2,628 PP&E and intangible assets 6,908 3, ,721 YTD 2012 External revenue 25,663 7,523 4, ,755 Internal revenue (637) - Revenues 25,692 7,528 4, (637) 37,755 Gross profit 3, (446) 4,879 PP&E and intangible assets 6,645 3, ,780 YTD 2011 External revenue 24,972 6,642 4,380 (7) 22 36,010 Internal revenue (700) - Revenues 25,008 6,647 4, (678) 36,010 Gross profit 3, (478) 5,062 PP&E and intangible assets 6,908 3, ,721 Full Year 2011 External revenue 50,499 14,032 9, ,691 Internal revenue (1,370) - Revenues 50,548 14,044 9, (1,370) 73,691 Gross profit 7,683 1, (963) 10,035 PP&E and intangible assets 6,957 3, ,814 Statoil Fuel & Retail Q2 and half year results 2012 Page 12 of 18

14 3 Other gain/(loss), net The table below summarises gains or losses related to disposals that have been included in other gain/(loss), net in the interim consolidated statement of income. (in NOK million) Q Q YTD 2012 YTD 2011 Full year 2011 Curtailment gain spouse, children and gratuity pension Gain/(loss) sale of fixed assets Gain on sale of businesses Other gain/(loss), net The company did not have any material sales during second quarter of 2012 or During the 6 months ended 30 June 2012 the company had a gain of NOK 263 million related to changes in the Groups pension scheme. The gain has been recognised in the operating segments Scandinavia, Special Products and Corporate with NOK 108 million, NOK 29 million and NOK 126 million respectively. See note 9 for further information. 4 Intangible assets, property, plant and equipment In first quarter 2012 the Group has incurred an impairment charge of NOK 15 million related to the change in use of one of the Group s properties. The impairment is recognised in distribution cost in the corporate segment. In second quarter in 2012 the Group has incurred restructuring costs of NOK 35 million in relation to the future closure of all stations in the Pskov region in Russia following the termination of the lease contracts. The amount consist of both penalties for terminating the contracts, impairment of fixed assets (NOK 8 million) and other related costs. The restructuring costs are recognised in distribution cost in the Central & Eastern European segment. Included in additions and disposals is a sale lease back transaction regarding the car fleet in Sweden. Book value of sold assets was NOK 309 million, and the consideration was NOK 314 million. Book value of assets leased back was NOK 170 million. See note 8 for information regarding the additions through business combination of NOK 138 million. 5 Related parties Up until 19 June 2012 Statoil Fuel & Retail was part of the Statoil ASA group through Statoil ASA s ownership of 54 percent of the shares outstanding. 19 June At that date, Alimentation Couche-Tard Inc., through its whollyowned indirect subsidiary Couche-Tard Norway AS had acquired percent of the shares in Statoil Fuel & Retail and had waived all other conditions of their offer. In effect the Statoil ASA group is, as of 19 June 2012, is no longer a related party. To ensure comparability, and as the Statoil ASA group was a related party up until 19 June 2012, outstanding balances and transactions with the Statoil ASA group have been presented as related party balances and transactions up until 30 June 2012 in these interim consolidated financial statements. (in NOK million) Q Q YTD 2012 YTD 2011 Full year 2011 Sale of goods ,442 1,357 2,872 Sale of services Purchases of goods 11,124 12,243 22,292 22,760 43,920 Purchases of services In connection with the separation of the Fuel and Retail business from Statoil ASA, Statoil Fuel & Retail has entered into agreements governing the continuing provision of a number of services and goods from Statoil to the Group. The services and goods are provided at estimated market value. The aggregated value of sale and purchases of goods and services from related parties is presented in the table above. Statoil Fuel & Retail Q2 and half year results 2012 Page 13 of 18

15 6 Net financial expenses and liabilities The term loan and the floating rate bond are recognised at amortised cost, NOK 2,638 million and NOK 1,495 million respectively, and are classified as short term in the interim consolidated statement of financial position. Included in the current financial liabilities is bank overdraft of NOK 974 million. Change of control impact on outstanding bonds According to the bond agreements dated 21 February 2012, the bondholders have an option to require prepayment at par plus accrued interest upon occurrence of a change of control event, for a period of two months. A change of control event occurred on 19 June 2012, when Alimentation Couche-Tard Inc. gained control of more than 50 percent of Statoil Fuel & Retail. If the bondholders exercise the option to require pre-payment, the settlement date of that pre-payment shall be 30 business days following the date when the option is exercised. At the expiration of the exercise period for the options to require pre-payment on 20 August 2012, options for prepayment for bonds with a face value of NOK 1,327 million have been exercised under the bond agreements, leaving NOK 174 million not exercised. Settlement of the amounts that bondholders have exercised for pre-payment under the bond agreements will take place in August and September The bonds are listed on the Oslo Stock Exchange. Change of control impact on other financing According to the bank facility agreement dated 26 August 2010, majority lenders have the right to cancel the total commitments and declare all outstanding loans, together with accrued interest, immediately due and payable upon occurrence of a change of control event. The cancellation shall be given by not less than 30 days notice to Statoil Fuel & Retail. Majority lenders requested to have the total commitments cancelled as of 7 August Following this, Statoil Fuel & Retail repaid the NOK 300 million outstanding under the revolving credit facility at its maturity on 29 July 2012 and repaid the NOK 2,650 million outstanding under the term loan at the cancellation date on 7 August No additional drawdowns can be made under the bank facility. Share capital increase On 6 August 2012 the share capital of SFR ASA was increased by NOK 2,650 million from a capital injection from Couche-Tard Norway AS. On 24 August 2012 the share capital of SFR ASA was increased by an additional amount of NOK 1,327 million from another capital injection from Couche-Tard Norway AS. The total share capital at 29 August 2012 is NOK 5,477 million. Swaps In relation to the fixed bond, Statoil Fuel & Retail entered into two fixed-to-floating rate swaps. Due to the change of control, these agreements were terminated in June A gain of NOK 10 million is recognised in net financial expenses. 7 Income tax expense (in NOK million) Q Q2 2011* YTD 2012 YTD 2011* Full year 2011* Profit before income tax ,472 Income tax expense (120) (134) (291) (195) (412) Equivalent to a tax rate of (%) * Restated due to early adoption of IAS 19R The effective tax rate in second quarter 2012 was primarily influenced by a valuation allowance of NOK 35 million the Danish business unit. Statoil Fuel & Retail had recognised a deferred tax asset for a tax loss carry forward that was dependent upon joint taxation with other Statoil ASA entities under common control in Denmark. Following the change of control, Statoil Fuel & Retail s Danish operations will no longer be jointly taxable with other Statoil ASA entities. Therefore, the deferred tax asset of NOK 35 million was derecognized in the second quarter of The tax expense increased accordingly in this quarter. Further, the effective tax rate for the first six months of 2012 was primarily influenced by valuation allowances related to tax carried forward both in the Russian and Danish Business unit of total NOK 55 million. Statoil Fuel & Retail Q2 and half year results 2012 Page 14 of 18

16 The effective income tax rate in previous periods was mainly influenced by permanent differences, foreign taxable income where the local tax rate is lower than the nominal tax rate (28 percent), and taxes related to previous years. 8 Acquisition of service station network in Russia In December 2011 Statoil Fuel & Retail entered into a purchase agreement to acquire seven service stations in St. Petersburg and the Leningrad region from Ekogasservice JSC. The agreement was subject to the approval of the Russian competition authorities (FAS). Following approval from the authorities the purchase agreement was finalised in March The consideration paid was NOK 138 million excluding VAT. The goodwill of NOK 4 million represents intangible assets acquired that are not separately recognised, and are allocated to the retail network in Russia. The transaction is considered to be a business combination in accordance with IFRS 3 Business combinations as the purchased group of assets is considered to constitute a business. The acquisition date is 1 March Identifiable assets acquired (in NOK million) Notes Fair values Goodwill 4 4 Equipment 4 16 Land and buildings Total identifiable net assets 138 Total purchase consideration settled in cash in March 2012 (exclusive VAT) Retirement benefit obligation The majority of the employees of Statoil Fuel & Retail ASA, Statoil Fuel & Retail Norge AS and Svenska Statoil AB are covered by defined benefit retirement plans, which cover substantially all of the employees in the three companies. Early adoption of IAS19 Employee Benefits revised In June 2011, IASB issued a revised version of IAS 19 Employee Benefits (hereinafter IAS 19R) to modify accounting rules for defined benefits pension plans. IAS 19 R was endorsed by EU 9 June 2012 and the effective date is 1 January Statoil Fuel & Retail has in second quarter 2012 early adopted IAS 19 R with retrospective effect. Consequently, the comparable figures have been restated. For Statoil Fuel & Retail the main effect of the changed accounting policy going forward is that interest cost and expected return on plan assets are replaced with a net interest amount that is calculated by applying the discount rate to the net defined benefit liability (asset). The difference between the net interest income and the actual return is recognised in other comprehensive income. For fiscal 2011 and first quarter 2012 this increased operating expenses NOK 28 million and NOK 6 million respectively. Further, past service costs will be recognised immediately in the period of a plan amendment and unvested benefits will no longer be spread over a future service period. This results in a reduction of NOK 204 million of the curtailment gain recognized in Q and a corresponding increase in the net pension liability (see below). In parallel to the early implementation of IAS 19 R it was decided to present net pension interest expense in net finance expenses. These costs were previously presented in distribution costs. For fiscal 2011 and first quarter 2012 this decreased operating expenses NOK 7 million and NOK 6 million respectively. Curtailment in the Norwegian defined benefit plans In February 2012 the Board of Directors of Statoil Fuel & Retail ASA and Statoil Fuel & Retail Norge AS resolved to redesign their companies' defined benefit plans. The redesign involved closing the existing benefit plan and introducing a defined contribution plan for new employees. In addition, benefits related to the current spouse and children pension were replaced by insurance coverage for dependents. Furthermore the gratuity plan which has effectively contributed to a combined early retirement scheme was discontinued. The changes came into effect from 1 April Statoil Fuel & Retail Q2 and half year results 2012 Page 15 of 18

17 The effects of the discontinuance of the spouse and children pension was recognised as a curtailment gain under IAS 19 in the consolidated statement of income in the first quarter of The curtailment gain was NOK 263 million. Net pension liability was reduced with the same amount. The accounting treatment under IAS19 R is identical. The national Norwegian agreement-based early retirement plan (AFP) and the supplementary gratuity company pension plan have been regarded as one combined defined benefit plan for early retirement benefits purposes. Consequently, the termination of the gratuity pension plan was considered to be a curtailment of the group s total early retirement schemes. However, under IAS19R the past service costs are recognised immediately, reducing the curtailment gain of NOK 204 million recognised in the consolidated statement of income. The Norwegian companies remain members of the AFP plan. Statoil Fuel & Retail has during the second quarter concluded that the AFP obligation may be reliable estimated and has consequently classified the AFP plan as a multi-employer defined benefit plan. The curtailment is presented under other gain/(loss), net. Pension cost for the period related to both the defined benefit plans and the defined contribution plans are recognised as distribution costs and administrative expenses. Net pension interest expense is presented under net finance expenses. Curtailment recognised in first quarter 2012 (in NOK million) Q Spouse and children pension 61 Gratuity pension scheme 202 Total curtailment recognised in first quarter Net periodic pension cost defined benefit plans (in NOK million) YTD 2012 Full year 2011 Current service cost Interest cost on prior years' benefit obligation Expected return on plan assets (34) (98) Defined benefit plans excluding curtailment Curtailment gain spouse and children pension (263) - Total net pension cost defined benefit plans (194) 124 Recognised in the consolidated statement of income per (in NOK million) YTD 2012 Full year 2011 Distribution cost Interest and other finance expense 10 8 Gain/loss, net (263) - Total net pension cost defined benefit plans (194) 124 Change in net pension asset/(liability) (in NOK million) YTD 2012 Full year 2011 Net pension assets/(liabilities) at beginning of period (775) (275) Net periodic pension cost - defined benefit plans (69) (124) Net actuarial gain/(loss) recognised in other comprehensive income 161 (485) Company contributions Benefits paid Other changes (including curtailments, settlements and foreign currency translation) Net pension assets/(liabilities) at period end (346) (775) Statoil Fuel & Retail Q2 and half year results 2012 Page 16 of 18

18 Recognised in the consolidated statement of financial position per (in NOK million) YTD 2012 Full year 2011 Pension assets at period end 46 3 Pension liabilities at period end (392) (778) Net pension assets/liabilities specified by funded and unfunded plans (in NOK million) YTD 2012 Full year 2011 Funded pension plans 38 (197) Unfunded pension plans (384) (578) Net pension assets/(liabilities) at period end (346) (775) Actuarial gains and losses recognised in other comprehensive income (in NOK million) YTD 2012 Full year 2011 Accumulated gain/(loss) in retained earnings at beginning of period (976) (491) Recognised gain/(loss) during the year 161 (485) Accumulated gain/(loss) in retained earnings at period end (816) (976) Actuarial gains and losses are recorded in the consolidated statement of comprehensive income in the period which they occur. Net actuarial gain recognised in 2012 primarily related to a decrease in number of employees and higher return on plan assets. Further, net actuarial losses recognised in 2011 primarily relate to negative return on plan assets as well as increased gross pension liability due to increased number of employees, updated actuarial assumptions and revised calculations of early retirement plans. Actuarial assumptions per 30 June 2012 are updated according to market conditions. 10 Dividend On 26 April 2012, the Annual General Meeting of Statoil Fuel & Retail ASA resolved a dividend of NOK 1.80 per share, totalling NOK 540 million. The dividend was distributed to the shareholders on 9 May Trading in the company s shares excluding the right to the distribution of dividend was 27 April 2012 (ex-date). 11 Shareholder information Statoil Fuel & Retail ASA has become an indirect subsidiary of Alimentation Couche-Tard Inc. following Couche-Tard's announcement on 19 June 2012 that it had reached the percent acceptance threshold for its voluntary cash offer for the shares in Statoil Fuel & Retail. In addition to Statoil ASA, holding 54 percent of the shares in Statoil Fuel & Retail, the holders of the majority of the remaining Statoil Fuel & Retail shares accepted the offer of NOK per share during the initial offer period which ended 20 June. The offer valued the total share capital of Statoil Fuel & Retail at NOK 15.9 billion, and represented a premium of 52.5 percent to the closing price on 17 April 2012, the last trading day prior to the announcement of the offer. On 29 June Couche-Tard announced that compulsory acquisition of all of the remaining shares was initiated and, as a result, as of that date Couche-Tard was deemed to own 100 percent of the issued and outstanding shares. An extraordinary general meeting of Statoil Fuel & Retail ASA was held on 2 July The extraordinary general meeting gave Statoil Fuel & Retail its consent to send an application for delisting the company's shares from the Oslo Børs, the stock exchange in Oslo. Following approval from the Oslo Børs, Statoil Fuel & Retail was delisted on 12 July Under the acquisition agreement, Statoil Fuel & Retail will continue to build on its Scandinavian heritage and maintain its Oslo-based European headquarters. In addition, as part of a range of transitional services being provided, Statoil ASA will continue to provide operational support services for a specified period of time. Key commercial agreements, including sale of refined oil products, will also continue. 12 Change of control impact on joint venture agreements There are a number of changes of control clauses in SFR s joint venture (JV) agreements, primarily within the Aviation Statoil Fuel & Retail Q2 and half year results 2012 Page 17 of 18

19 business and related to Routex (European fuelling network allowing the use of Statoil credit cards). Statoil Fuel & Retail has started the process to obtain the necessary consents or waivers to these clauses for the JV agreements, and while it does not expect that there will be significant issues in obtaining such consents or waivers there can be no assurance that such consents or waivers will be obtained. 13 Subsequent events No events have occurred after the balance sheet date with significant impact on the interim financial statements for the second quarter of 2012 except from change of control impact on outstanding bonds described in disclosure 6. Statoil Fuel & Retail Q2 and half year results 2012 Page 18 of 18

20 Statoil Fuel & Retail ASA Box 1176 Sentrum Sørkedalsveien 8, 0107 Oslo Norway Registered in Norway NO MVA 2012 Statoil Fuel & Retail Copyright in all published material in this report, including photographs, drawings and images, remains vested in Statoil Fuel & Retail ASA and third party contributors as appropriate. Neither the whole nor any part of this publication may be reproduced in any way without the express, prior, written permission of Statoil Fuel & Retail. Articles and opinions appearing in this report do not necessarily represent the views of Statoil Fuel & Retail. While every step has been taken to ensure the accuracy of the published content of this report, Statoil Fuel & Retail does not accept responsibility for any errors or resulting loss or damage whatsoever caused, and readers have the responsibility to thoroughly check these aspects for themselves. Enquiries about reproduction of content from this publication should be directed to corporate communications at Statoil Fuel & Retail.