Kesko Oyj Class A · OMXHEX:KESKOA
Kesko Oyj Class A — Investor Day (2022)
20 slides from Kesko Oyj Class A's investor day presentation, Dec 7, 2022
Slide 1: Unique Player in All Areas of Finnish Food Trade
UNIQUE PLAYER IN ALL AREAS OF FINNISH FOOD TRADE Ari Akseli President, Grocery trade Kesko Capital Markets Day 2022
Slide 2: Clear Strategy in Grocery Trade
CLEAR STRATEGY IN GROCERY TRADE KESKO GROWTH STRATEGY GROCERY TRADE STRATEGY FOCUS ON FINLAND NATIONWIDE ONE UNIFIED B2C GROCERY TRADE WHOLESALING AND RETAILING - K-STORES OPERATED BY K-RETAILERS CUSTOMER EXPERIENCE B2B FOODSERVICE WHOLESALE AND CASH & CARRY DIGITALISATION SHARED ADVANCED SOURCING,
Slide 3: Strong Position in All Areas of Finnish Food Trade
STRONG POSITION IN ALL AREAS OF FINNISH FOOD TRADE • Strong No. 2 in the Finnish consumer grocery trade • No. 1 in Finnish foodservice business, with a 46% market, with a close to 37% market share market share • Finland’s most extensive grocery store network with • Largest online food store in the m
Slide 4: Solid Growth and Improving Profitability
SOLID GROWTH AND IMPROVING PROFITABILITY Net sales have increased by €1.4 billion and EBIT has risen to €469 million Operating profit, € million Net sales, € million 6500 6,500 600 6,064 5,909 500 6000 6,000 5,732 469 5,531 443 400 5,500 5500 5,386 5,236 5,282 375 300 328 5,000 5000 4,673 200 228 17
Slide 5: Cornerstones of Success
CORNERSTONES OF SUCCESS Al
Slide 6: Unique and Agile Retailer Model
UNIQUE AND AGILE RETAILER MODEL • Efficiency from chain operations combined with the ability of retailers to adapt to their local market with store-specific business ideas • Agile retailers can respond to changes in customer needs and operating environment fast • Retailer model requires less capital
Slide 7: Suomen Lähikauppa Acquisition Significantly Strengthened Sales, Volume and Reach
SUOMEN LÄHIKAUPPA ACQUISITION SIGNIFICANTLY STRENGTHENED SALES, VOLUME AND REACH • Kesko acquired the long loss-making Suomen Lähikauppa in 2016 for €60 million • Over 400 stores rebranded as K-stores with an investment of €60 million • Successful acquisition made Kesko the market leader in local ne
Slide 8: Data and Digitalisation Bring Insight, New Earnings Opportunities and Efficiency
DATA AND DIGITALISATION BRING INSIGHT, NEW EARNINGS OPPORTUNITIES AND EFFICIENCY Kesko is the forerunner in grocery trade digitalisation • Data-based store-specific business ideas tailored to the needs of each store’s customer base • Better customer experience: a seamless omnichannel experience with
Slide 9: Kespro the Clear Market Leader in Growing Foodservice Wholesale
KESPRO THE CLEAR MARKET LEADER IN GROWING FOODSERVICE WHOLESALE • Sales over €1 billion* • Wide customer base from private restaurants to public sector operators • Significant synergies with K Group grocery stores • Growth in foodservice to continue, supported by megatrends *Q3/2022, rolling 12 mont
Slide 10: Wide Customer Base Supports Growth
WIDE CUSTOMER BASE SUPPORTS GROWTH Some 70% Kespro’s total sales from lunches, staff restaurants and public sector KESPRO’S CUSTOMER SEGMENTS LUNCH SALES IN DIFFERENT CUSTOMER SEGMENTS Retail & grocery Bars and cafés 8% Staff restaurants and public 6% Fast food sector 6% Public 46 % Pizzerias & ethn
Slide 11: Leading Operator in Online Food Trade
LEADING OPERATOR IN ONLINE FOOD TRADE Big volumes lend us a competitive advantage also online SALES VIA DIGITAL CHANNELS • K-ruoka.fi is the market leader and the best consumer online €925 MILLION grocery service in Finland • Online grocery is permanently at a higher level than before 22% pandemic •
Slide 12: Grocery Trade Market
GROCERY TRADE MARKET Al
Slide 13: Kesko Has a Strong Market Share in Food Trade
KESKO HAS A STRONG MARKET SHARE IN FOOD TRADE 46 46.0 43.9 44 42.3 42.2 42.5 41.8 41.6 42 40.5 40.6 40 38.3 38.0 38.0 38.1 38.1 38 37.6 37.6 37.7 37.2 37.4 37.3 37.6 37.4 36 36.6 32.6 34 33.0 33.9 33.7 0 2014 2015 2016 * 2017 2018 2019 2020 2021 Q3/2022 rolling 12 months GT Foodservice Total Kesko 1
Slide 14: Our Focus Is on Optimising the Store Network
OUR FOCUS IS ON OPTIMISING THE STORE NETWORK New store openings also impacting the market MARKET KESKO • In recent years, competitors have opened • Updating and optimising store network clearly more new stores, especially outside of • Focusing investments in growth areas metropolitan area • Improvin
Slide 15: Inflation-Driven Market Challenges the Whole Grocery Trade Sector
INFLATION-DRIVEN MARKET CHALLENGES THE WHOLE GROCERY TRADE SECTOR Food prices a daily Ongoing changes in Important to meet topic of conversation purchasing behaviour customer expectations 15
Slide 16: Focus Areas in a Challenging Market
FOCUS AREAS IN A CHALLENGING MARKET Constantly updating Improving price Maintaining the best Further store-specific competitiveness quality and widest improving business ideas to and price image selections efficiency respond to changes 16
Slide 17: Customers Expect Both Quality and Good Prices
CUSTOMERS EXPECT BOTH QUALITY AND GOOD PRICES Campaign sales equally important for all households & 30% 30% FAVOUR EXTENSIVE SELECTIONS, FOCUS MORE ON PRICE NEW PRODUCTS AND PREMIUM BARGAINS 40% BUY PRODUCTS FROM VARIOUS QUALITY AND PRICE CATEGORIES 17 Source: Kesko customer data
Slide 18: Focus on Improving Price Image and Differentiation
FOCUS ON IMPROVING PRICE IMAGE AND DIFFERENTIATION Still plenty of potential in increasing the share of private labels • Strong focus on affordable prices in marketing • XXPrice products fighter • Price fighter K-Menu’s sales up by +30%, but still less than 1% of total sales • XX 200 % products • Re
Slide 19: Solid Fundamentals for Our Good Performance
SOLID FUNDAMENTALS FOR OUR GOOD PERFORMANCE CUSTOMER SATISFACTION: EFFICIENT PROCESSES IN SELECTIONS THAT MEET CUSTOMER NEEDS PROCUREMENT AND LOGISTICS RETAIL SALES GROWTH €2.4 BILLION: DATA UTILISATION FIXED COSTS ON BIGGER SALES BUSINESS MODEL THAT ENABLES NEW EARNINGS OPPORTUNITIES GROWTH AND AGI
Slide 20: Thank You!
THANK YOU! Al