Kesko Oyj Class A · OMXHEX:KESKOA
Kesko Oyj Class A — Investor Day (June 2024)
23 slides from Kesko Oyj Class A's investor day presentation, Jun 4, 2024
Slide 1: Updated Growth Strategy Ensuring Success in a Challenging Market Environment
KESKO INVESTOR EVENT 2024 UPDATED GROWTH STRATEGY ENSURING SUCCESS IN A CHALLENGING MARKET ENVIRONMENT Jorma Rauhala President and CEO 4 June 2024
Slide 2: K Group Today
K GROUP TODAY 3 DIVISIONS: 45,000 EMPLOYEES, MARKET CAP GROCERY TRADE 1,800 STORES AND ~ €6.8 BN BUILDING AND TECHNICAL 1,100 RETAILERS ~112,000 SHAREHOLDERS TRADE 8 OPERATING COUNTRIES CAR TRADE RETAIL AND B2B SALES 2 MILLION DAILY ~ €16 BILLION CUSTOMER ENCOUNTERS 2
Slide 3: Kesko Key Figures
KESKO Net sales, € million 2023 11,784 2022 11,809 KEY FIGURES Operating profit*, € million 712 815 Operating margin* 6.0% 6.9% Capex, € million 679 449 Cash flow from operating activities, € million 1,049.5 915.2 *) Comparable KESKO NET SALES €11,784 MILLION KESKO NET SALES €11,784 MILLION KESKO OP
Slide 4: Highlights of the Strategy
HIGHLIGHTS OF THE STRATEGY Al
Slide 5: Guiding Principles of the Updated Strategy
GUIDING PRINCIPLES OF THE UPDATED STRATEGY # Kesko has a good, effective strategy, with no need for major changes in 2024-2026 # No changes to be made to the current business portfolio, good growth potential remains in all three chosen business divisions # In the strategy review process, focus was o
Slide 6: Operating Environment and Megatrends Affecting Kesko
OPERATING ENVIRONMENT AND MEGATRENDS AFFECTING KESKO INTEREST RATES & INFLATION URBANISATION CLIMATE CHANGE & GREEN TRANSITION • Weak FOCUS : consumer and business confidence • Migration to growth centres • Energy efficiency and energy infrastructure investments • Higher cost of capital • Substantia
Slide 7: Kesko's Growth Strategy
KESKO’S GROWTH STRATEGY THE LEADING AND MOST ATTRACTIVE TRADING SECTOR VISION GROWTH COMPANY IN NORTHERN EUROPE STRATEGIC DELIVERING STRENGTHENING BUILDING A FOCUSED INCREASING TARGETS PROFITABLE GROWTH MARKET POSITION B2C AND B2B CUSTOMER VALUE BUSINESS PORTFOLIO COMPETITIVE OPERATIONAL OMNICHANNEL
Slide 8: Grocery Trade Division in Brief
GROCERY TRADE GROCERY TRADE DIVISION IN BRIEF 35.2% MARKET 1,200 stores 6,300 SHARE IN employees The leading foodservice More than 700 K Group 2023 (PTY) provider in Finland grocery stores offer online 900 services K-retailers 47.9% market share NET SALES 2023 2022 2021 KCM non-food Net sales, € mil
Slide 9: Aim to Gain Market Share in Grocery Trade
GROCERY TRADE GROCERY TRADE: AIM TO GAIN MARKET SHARE IN GROCERY TRADE KEY ACTIONS: STORE SITE AND PRICE INVESTMENTS WILL HAVE A SLIGHT IMPACT ON GROCERY TRADE PROFITABILITY IN UPCOMING YEARS • STRENGTHENING STORE-SPECIFIC BUSINESS IDEAS: Focusing on strengthening chosen competitive advantages and r
Slide 10: Grocery Trade Store Site Investment Focus on Growth Centres
GROCERY TRADE GROCERY TRADE STORE SITE INVESTMENT FOCUS ON GROWTH CENTRES Emphasising hypermarkets and other larger units • Urbanisation is expected to accelerate in Finland • Long-term store site investment programme to ensure Kesko’s competitiveness and market share development • In upcoming years
Slide 11: Building and Technical Trade in Brief
BUILDING AND TECHNICAL TRADE BUILDING AND TECHNICAL TRADE IN BRIEF NET SALES Leading operator in building and B2B trade accounts for more technical trade in Northern Europe 80% than 80% of sales Onninen Baltic Onninen countries 3% Poland 7% K-Rauta Customer segments: technical professionals, profess
Slide 12: Acquisitions Have Played a Significant Role in International Growth
ACQUISITIONS HAVE PLAYED A SIGNIFICANT ROLE IN INTERNATIONAL GROWTH 4/2016 6-7/2018 1/2019 3/2020 08/2021 4/2022 3/2023 1/2024 Suomen Reinin Liha Sørbø Trelast MIAB Kungälvs Trävaru- Djurbergs Zenitec Sweden Davidsen A/S Lähikauppa and Kalatukku and Tau & Jørpeland €18 million aktiebolag Järnhandel
Slide 13: Elektroskandia Strengthened Onninen's Position in Technical Trade in Norway
BUILDING AND TECHNICAL TRADE ELEKTROSKANDIA STRENGTHENED ONNINEN'S POSITION IN TECHNICAL TRADE IN NORWAY • Kesko acquired Elektroskandia Norge in March 2023 • One of the most significant distributors of electricals in Norway, net sales of some €250 million (2022) • The deal made Onninen the market l
Slide 14: Expanding Operations to Denmark and Acquiring Davidsen
BUILDING AND TECHNICAL TRADE EXPANDING OPERATIONS TO DENMARK AND ACQUIRING DAVIDSEN DAVIDSEN STORE NETWORK • Kesko acquired 90% of the previously family-owned Davidsen Koncernen Greenland A/S, enterprise value approx. €190 million • Davidsen is one of the biggest building and home improvement trade
Slide 15: Focusing on Securing Profitability and Generating Cash Flow
BUILDING AND TECHNICAL TRADE BUILDING AND TECHNICAL TRADE: FOCUSING ON SECURING PROFITABILITY AND GENERATING CASH FLOW KEY ACTIONS: • FINLAND: Continuing growth and winning market share. THE LONG-TERM STRATEGIC TARGET OF A 6-8 % EBIT MARGIN IS STILL VALID. • SWEDEN AND NORWAY: Stabilising and improv
Slide 16: Building and Technical Trade Long-Term EBIT-% Target Intact
BUILDING AND TECHNICAL TRADE BUILDING AND TECHNICAL TRADE LONG-TERM EBIT-% TARGET INTACT EBIT-% Target Kesko 8 6-8% 6 7.1% Kesko 4 5.1% Kesko 2 2.4% 0 2018 2021 2023 Time 16
Slide 17: Car Trade in Brief
CAR TRADE CAR TRADE IN BRIEF K-Auto is the leading and most interesting automotive 2023 2022 2021 company in Finland Net sales, € million 1,079 911 1,028 Importing and sales of attractive and high-quality new cars Operating profit*, € million 73 48 52 Significant multi-brand used car sales in Finlan
Slide 18: Focusing on Performing Better Than the Market in All Businesses
CAR TRADE CAR TRADE: FOCUSING ON PERFORMING BETTER THAN THE MARKET IN ALL BUSINESSES KEY ACTIONS: • CONTINUING WITH GROWTH STRATEGY: Major SOLID EBIT DEVELOPMENT turnaround and continuous development establish a robust foundation for the next strategy period. #1 IN BRAND AWARENESS AND PREFERENCE • M
Slide 19: Kesko's Medium-Term Financial Targets Remain
KESKO’S MEDIUM-TERM FINANCIAL TARGETS REMAIN TARGET 2023 OPERATING MARGIN, OVER 6% 6.0% COMPARABLE RETURN ON CAPITAL OVER 14.5% 13.4% EMPLOYED, COMPARABLE, % INTEREST-BEARING NET DEBT/EBITDA, AT MAXIMUM 2.5 0.7 EXCLUDING IFRS 16 IMPACT 19
Slide 20: Sustainability Is Integrated into Our Business
SUSTAINABILITY IS INTEGRATED INTO OUR BUSINESS SUSTAINABILITY STRATEGY VISION EXECUTION BY THE BUSINESS DIVISIONS We enable sustainable choices for our customers and Grocery trade drive change throughout the value chain Building and technical trade Car trade FOCUS AREAS Climate and nature PROGRESS M
Slide 21: Kesko Group Management Board
KESKO GROUP MANAGEMENT BOARD President and CEO Jorma Rauhala EVP, Chief Financial Officer EVP, Human Resources Anu Hämäläinen Matti Mettälä EVP, Brand and Communications EVP, Legal and Sustainability Karoliina Partanen Lasse Luukkainen Grocery trade Building and technical trade Car trade President P
Slide 22: Kesko Strategy Summary 2024-2026
KESKO STRATEGY SUMMARY 2024-2026 # Our business portfolio is set to remain stable, with focus on the three core divisions. The focus is on maintaining and further developing current businesses. # Targeting growth and profitability improvement as outlook strengthens in construction in 2025-2026. # In
Slide 23: Al
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