Kesko Oyj Class A · OMXHEX:KESKOA
Kesko Oyj Class A — Non-Deal Roadshow (March 2025)
68 slides from Kesko Oyj Class A's roadshow presentation, March 2025
Slide 1: Kesko seeks growth in all its three business divisions
KESKO INVESTOR PRESENTATION KESKO SEEKS GROWTH IN ALL ITS THREE BUSINESS DIVISIONS February - March 2025
Slide 2: Kesko today
KESKO TODAY KEY FINANCIALS Leading trading sector ~ 45,000 employees in the Net sales, € million 2024 11,920.1 2023 11,783.8 #1 company in Northern Europe with retail and B2B sales of nearly €16bn whole K Group,1,800 stores, 3 divisions, comprehensive digital services in 8 countries Operating profit
Slide 3: Kesko segment key figures
KESKO SEGMENT KEY FIGURES NET SALES OPERATING PROFIT Car trade Car trade Grocery trade €69.3m B2C-sales 5.7% €1,209m Sales to Grocery trade €6,381m ~18% K-retailers €438.0m Building and ~45% Building and 6.9% technical technical trade trade €650.1m €4,352m €11,781m €11,920m €11,920m 5.5% B2B-sales €
Slide 4: Kesko growth strategy
KESKO 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 K
Slide 5: Strong position in Finnish food trade yielding good results
GROCERY TRADE STRONG POSITION IN FINNISH FOOD TRADE YIELDING GOOD RESULTS 5
Slide 6: Grocery trade division in brief
GROCERY TRADE GROCERY TRADE DIVISION IN BRIEF 34.3% MARKET 1,100 stores 6,300 SHARE IN employees The leading foodservice Almost 800 K Group grocery 2023 provider in Finland (NIELSEN) stores offer online grocery services 860 49% market share K-retailers NET SALES 2024 2023 2022 KCM non-food 6,124.7 N
Slide 7: Grocery trade: target to maintain good profitability and gain market share
GROCERY TRADE: TARGET TO MAINTAIN GOOD PROFITABILITY AND GAIN MARKET SHARE KEY ACTIONS: • STRENGTHENING STORE SPECIFIC BUSINESS IDEAS: INVESTMENTS WILL HAVE A SLIGHT EFFECT ON Focusing on strengthening chosen competitive advantages PROFITABILITY. and raising the level of stores. • DEVELOPING STORE S
Slide 8: Grocery trade division: grocery store business
GROCERY TRADE DIVISION GROCERY STORE BUSINESS In brief: Market and market shares: Operates in Finland, business comprises three grocery store Total Finnish grocery trade market €21–22 billion; chains with some 1,100 stores across the country operated by Kesko the second biggest operator with a marke
Slide 9: Kesko and K-retailers
KESKO AND K-RETAILERS Wholesale, product strategy Chain agreement, chain steering KESKO Services and business support Store concepts Chain selections, wholesale Steering retail prices and campaigns K-RETAILERS Responsible purchasing channels, Ensure customer satisfaction, results and purchasing alli
Slide 10: Grocery trade division: foodservice business
GROCERY TRADE DIVISION FOODSERVICE BUSINESS In brief: Market and market share: Operates in Finland, business comprises Kespro’s foodservice Total Finnish foodservice market €2.5 billion; wholesale with 13 cash-and-carry outlets and online sales Kespro the market leader with a market share representi
Slide 11: 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 program to ensure Kesko’s competitiveness and market share development • During up-coming ye
Slide 12: New hypermarkets to be opened in Finnish growth centres
GROCERY TRADE NEW HYPERMARKETS TO BE OPENED IN FINNISH GROWTH CENTRES Several new growth centre hypermarkets in pipeline • New K-Citymarket in Lempäälä near Tampere in 2025 • New K-Citymarket in Lahti in autumn 2025, replacing K-Citymarket Paavola • New K-Citymarket in Kivistö, Vantaa, Helsinki metr
Slide 13: A good result in a challenging economic cycle
BUILDING AND TECHNICAL TRADE A GOOD RESULT IN A CHALLENGING ECONOMIC CYCLE 13
Slide 14: 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 80% technical trade in Northern Europe than 80% of net sales Onninen Baltic countries Customer segments: Technical professionals, professional builders and consum
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 6-8 % EBIT MARGIN IS STILL VALID. • SWEDEN AND NORWAY: Stabilising and improvin
Slide 16: Building and technical trade: technical trade
BUILDING AND TECHNICAL TRADE TECHNICAL TRADE In brief: Market and market shares: Operates in 7 countries. Kesko subsidiary Onninen offers Total market (est.) for 8 countries (incl. Denmark) technical wholesale products and services (offering varies €22 bn; Kesko’s market shares Finland 44% (market b
Slide 17: Building and technical trade: building and home improvement
BUILDING AND TECHNICAL TRADE BUILDING AND HOME IMPROVEMENT In brief: Market and market shares: Operates in 7 countries; offers products and services for Total market (est.) for 8 countries €25 bn; Kesko’s building, renovation, garden, interior decoration and home market shares Finland 52% (market le
Slide 18: 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 Trä Djurbergs Zenitec Sweden Davidsen A/S Lähikauppa and Kalatukku and Tau & Jørpel €18 million €33 million Järnhandel €13 mil
Slide 19: Entry to Denmark an important strategic step
BUILDING AND TECHNICAL TRADE ENTRY TO DENMARK AN IMPORTANT STRATEGIC STEP • Kesko has a consistent strategy in building and technical trade: to consolidate the market in Northern Europe and to be among the leading players in B2B business in each country • The Danish market is not yet consolidated, g
Slide 20: Market share in Danish builders' merchant set to rise via acquisitions
BUILDING AND TECHNICAL TRADE MARKET SHARE IN DANISH BUILDERS’ MERCHANT SET TO RISE FROM ~10% TO ~20% VIA ACQUISITIONS DAVIDSEN ACQUISITIONS ANNOUNCED ON 14 AUGUST 2024 KESKO SUBSIDIARY AS OF 1 FEB. 2024 ROSLEV TRÆLASTHANDEL A/S • Kesko acquired 90% of the PART OF DAVIDSEN AS OF 1 FEB. 2025 previousl
Slide 21: Technical trade – opportunities for further growth outside Finland
BUILDING AND TECHNICAL TRADE TECHNICAL TRADE – OPPORTUNITIES FOR FURTHER GROWTH OUTSIDE FINLAND Total market size ~€22 billion Technical trade Retail Market (€bn) 2.9 Technical trade Market share 19 % Retail Market (€bn) 2.5 Market share of current Market share (2024) 44% 39%* operating market (2024
Slide 22: Building and home improvement – further possibilities outside Finland
BUILDING AND TECHNICAL TRADE BUILDING AND HOME IMPROVEMENT – STILL FURTHER POSSIBILITIES ESPECIALLY OUTSIDE FINLAND Total market size ~€18 billion Professional Consumers builders Professional Consumers Retail Market (€bn) 3.1 1.7 builders Market share (2024) 12% Retail Market (€bn) 1.6 0.9 Market sh
Slide 23: Strong focus on B2B trade in building and home improvement in Finland
STRONG FOCUS ON B2B TRADE IN BUILDING AND HOME IMPROVEMENT TRADE ALSO IN FINLAND Breakdown of K-Rauta Finland’s sales by customer segments B2B sales B2C sales, project customers B2C sales, occational customers 18% 22% 60% DIRECT DELIVERIES TO INDUSTRY 23 Project customers purchase typically e.g. the
Slide 24: 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 6-8% 8 6 7.1% Kesko 4 Kesko 3.9% 2 2.4% 0 Time 2018 2021, 2022 2024 24
Slide 25: Good result in car trade
CAR TRADE GOOD RESULT IN CAR TRADE 25
Slide 26: Car trade in brief
CAR TRADE CAR TRADE IN BRIEF K-Auto is the leading and most interesting automotive company in Finland 2024 2023 2022 Importing and sales of attractive and high-quality new cars. Net sales, € million 1,209 1,262 1,125 Operating profit*, € million 69 83 64 Significant multi-brand used car sales in Fin
Slide 27: Car trade: focusing on performing better than the market
CAR TRADE CAR TRADE: FOCUSING ON PERFORMING BETTER THAN THE MARKET IN ALL BUSINESSES KEY ACTIONS: • CONTINUING WITH GROWTH STRATEGY: SOLID EBIT DEVELOPMENT Major turnaround and continuous development establish a robust foundation for the next strategy period. #1 IN BRAND AWARENESS AND PREFERENCE • M
Slide 28: Car trade
CAR TRADE In brief: Market and market shares: Operates in Finland. The whole value chain - imports and sells Total first registrations of new cars incl. vans in Finland Volkswagen Group car brands, sells used cars, and offers car- approx. 74,000 in 2024, of which Kesko’s K-Auto related services e.g.
Slide 29: Other strategic themes
OTHER STRATEGIC THEMES 29
Slide 30: Kesko is affected by various megatrends
KESKO IS AFFECTED BY VARIOUS MEGATRENDS 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 • Substantial infra and b
Slide 31: Kesko's financial targets intact
KESKO’S FINANCIAL TARGETS INTACT TARGET 2024 OPERATING MARGIN, OVER 6% COMPARABLE 5.5% RETURN ON CAPITAL OVER 14.5% 11.3% EMPLOYED, COMPARABLE, % INTEREST-BEARING NET DEBT/EBITDA, AT MAXIMUM 2.5 1.1 EXCLUDING IFRS 16 IMPACT 31
Slide 32: Kesko strategy summary 2024-2026
KESKO STRATEGY SUMMARY 2024-2026 # The portfolio will most likely stay as is during 2024-2026. The focus is on maintaining and further developing current businesses. # Targeting growth and profitability improvement as outlook strengthens in construction in 2025-2026. # In grocery trade, focusing on
Slide 33: 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 34: Focus areas and key actions
FOCUS AREAS AND KEY ACTIONS WE ENABLE SUSTAINABLE CHOICES FOR OUR CUSTOMERS AND DRIVE CHANGE THROUGHOUT THE VALUE CHAIN CLIMATE AND NATURE VALUE CHAIN OUR PEOPLE GOOD GOVERNANCE Reduce emissions in the value chain Ensure sustainability in the value Increase the safety and wellbeing of Commit to the
Slide 35: Kesko listed in sustainability indices
KESKO LISTED IN SUSTAINABILITY INDICES Sustainability indices are key tools for investors to assess the ESG level of corporations. Dow Jones Best-in-Class Indices (World and Europe) v Kesko is the only company in the world to have been on the Global 100 list every year since it was launched in 2005.
Slide 36: Forerunner in trading sector digitalisation
FORERUNNER IN TRADING SECTOR DIGITALISATION Using digitalisation to improve customer experience and make operations more efficient Online and digital sales Data and analytics at the core Digitalisation of stores and Digitalisation increases growing forcefully of business operations processes proceed
Slide 37: Sales via digital channels nearly €2.2 billion
SALES VIA DIGITAL CHANNELS NEARLY €2.2 BILLION 1% 2% 4 % 11% 42% 44% K-ruoka.fi (online grocery) Kespro (foodservice) Onninen Building and home improvement Car trade Sportstrade 37 2024, excl. VAT
Slide 38: Dividend
DIVIDEND Dividend proposal for 2024: €0.90/ share, to be paid in four instalments. Kesko's dividend policy: In the long-term, Kesko aims to distribute a steadily growing dividend of some 60-100% of its comparable earnings per share, taking into account the company’s financial position and strategy.
Slide 39: Number of shareholders has grown
NUMBER OF SHAREHOLDERS HAS GROWN ~115,000 REGISTERED SHAREHOLDERS BALANCED OWNERSHIP STRUCTURE 115 000 105 000 26,0 % 33,2 % 95 000 85 000 7,5 % 75 000 65 000 33,3 % 55 000 45 000 Nominee-registered, foreign ownership 35 000 Finnish institutions 07 01/20 07 01/21 07 07 07 07 01/19 04 04 04 04 04 01
Slide 40: Year-end turnaround – quarter result improved for the first time in eight quarters
KESKO FINANCIAL STATEMENTS RELEASE 2024 YEAR-END TURNAROUND – QUARTER-RESULT IMPROVED FOR THE FIRST TIME IN EIGHT QUARTERS Jorma Rauhala President and CEO 5 February 2025
Slide 41: Summary of 2024
SUMMARY OF 2024 • Year-end turnaround: quarter result in Q4 up for the first time in eight quarters 2024 2023 • Highlights for full-year 2024: Net sales, € million 11,920.1 11,783.8 • Net sales increased, comparable operating profit decreased Change in net sales, %* -2.3 -0.8 • Grocery trade: net sa
Slide 42: Net sales 2024
NET SALES 2024 GROUP DIVISIONS € million € million Change, comparable -2.3% 0.4% -6.0% -4.0% 42
Slide 43: Operating profit 2024
OPERATING PROFIT 2024 GROUP DIVISIONS € million € million Operating margin 6.0% 5.5% 7.0% 6.9% 5.1% 3.9% 6.5% 5.7% 43 Comparable figures
Slide 44: Return on capital employed
RETURN ON CAPITAL EMPLOYED % 44 Comparable figures
Slide 45: Financial position
FINANCIAL POSITION Cash flow almost flat year-on-year 2024 2023 Cash flow from operating activities, € million 1,008.2 1,049.5 Liquid assets, € million 488.1 227.3 Capital expenditure, € million 675.9 678.9 Interest-bearing net debt excl. lease liabilities, € million 857.2 561.9 Interest-bearing net
Slide 46: Capital expenditure
CAPITAL EXPENDITURE Main CAPEX: the Davidsen acquisition, Onnela logistics centre, store site investments 2024 2023 Store sites, € million 289.2 300.3 Acquisitions, € million 172.9 141.1 IT, € million 18.0 25.0 Other investments, € million 195.8 212.5 Total, € million 675.9 678.9 46
Slide 47: Expenses
EXPENSES Expenses up due to the Davidsen acquisition and real estate costs 2024 2023 Fixed costs, € million 2,076.4 1,959.1 - Employee benefit expenses, € million 838.1 779.1 - Other expenses, € million 673.1 646.6 - Depreciation, € million 565.2 533.3 Cost ratio, % 17.4 16.6 47 Figures excluding it
Slide 48: Q4/2024 first quarter-result improvement in eight quarters
Q4/2024 FIRST QUARTER-RESULT IMPROVEMENT IN EIGHT QUARTERS 48
Slide 49: Net sales Q4
NET SALES Q4 GROUP DIVISIONS € million € million Change, comparable 1.1% 1.2% -1.7% 9.7% 49
Slide 50: Operating profit Q4
OPERATING PROFIT Q4 GROUP DIVISIONS € million € million Operating margin 5.9% 5.6% 7.6% 7.4% 4.2% 3.4% 4.8% 6.1% 50 Comparable figures
Slide 51: Grocery trade Q4: stable performance
GROCERY TRADE Q4 STABLE PERFORMANCE 51
Slide 52: Grocery trade highlights in Q4
GROCERY TRADE HIGHLIGHTS IN Q4 • Net sales grew, operating margin at a good level • K Group grocery sales up by 1.6% • Kespro's net sales up by 2.5%, again exceeding market growth • K-Citymarket non-food sales down by 1.0% • Online grocery sales up by 7.6% • Total grocery market growth approx. 2.8%
Slide 53: Price programme introduced in stores in line with strategy
PRICE PROGRAMME INTRODUCED IN STORES IN LINE WITH STRATEGY • Price programme rolled out in January 2025: price cuts on 1,200 products in K Group grocery stores – Kesko and K-retailers together investing nearly €50 million during 2025 • Prices cut on some 1,000 branded everyday staples and some 200 p
Slide 54: Increased focus on quality
INCREASED FOCUS ON QUALITY K Group the quality leader in Finnish grocery • Our unique retailer business model enables constant development of store-specific business ideas and quality • Store-specific business ideas generated utilising customer data based on customer profiles for local residents and
Slide 55: Strengthening our store network as planned
STRENGTHENING OUR STORE NETWORK AS PLANNED • Investments in the store network continue, impact set to become visible especially towards the end of Kesko’s 2024-2026 strategy period • Kesko invests on average €200-250 million annually in store updates and new stores • In 2024: 44 remodelled stores an
Slide 56: Building and technical trade Q4: result in line with expectations
BUILDING AND TECHNICAL TRADE Q4 RESULT IN LINE WITH EXPECTATIONS 56
Slide 57: Building and technical trade highlights in Q4
BUILDING AND TECHNICAL TRADE HIGHLIGHTS IN Q4 • Construction cycle still weak, sales development improved in all countries towards year-end: Q4/2024 Q4/2023 • Denmark and Poland: sales improved markedly Net sales, € million 1,056.3 971.1 • Finland: sales development of K-Rauta and Onninen at the Q3
Slide 58: Sales of K-Rauta Finland and Onninen Finland
SALES OF K-RAUTA FINLAND AND ONNINEN FINLAND Retail and B2B sales 58
Slide 59: Byggmakker sales in Norway: 2020-2024
BYGGMAKKER SALES IN NORWAY: 2020-2024 Retail and B2B sales 59
Slide 60: Car trade Q4: profit improved in a challenging market
CAR TRADE Q4 PROFIT IMPROVED IN A CHALLENGING MARKET 60
Slide 61: Car trade highlights in Q4
CAR TRADE HIGHLIGHTS IN Q4 K-AUTO, NET SALES • Market demand for new cars muted, Q4 first registrations of passenger cars and vans -3.0%; first registrations of brands represented by Kesko up by 10% • Net sales and comparable operating profit grew clearly despite the challenging market • New cars: s
Slide 62: Profit guidance and outlook for 2025
PROFIT GUIDANCE AND OUTLOOK FOR 2025 62
Slide 63: Profit guidance for 2025
PROFIT GUIDANCE FOR 2025 Kesko Group’s profit guidance is given for the year 2025, in comparison with the year 2024. Kesko’s operating environment is estimated to improve in 2025, but to still remain somewhat challenging. Kesko’s comparable operating profit is estimated to improve in 2025. Kesko est
Slide 64: Outlook for 2025
OUTLOOK FOR 2025 In grocery trade, B2C trade and the foodservice market are estimated to remain stable. In 2025, the comparable operating margin for the grocery trade division is estimated to stay clearly above 6% despite the investments in price and the store site network in accordance with Kesko’s
Slide 65: Management and IR contact
MANAGEMENT AND IR CONTACT 65
Slide 66: 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 67: IR contact
IR CONTACT Hanna Jaakkola Vice President, Investor Relations tel.+358 40 5666 070 hanna.jaakkola@kesko.fi
Slide 68: Al
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