Kesko Oyj Class A · OMXHEX:KESKOA
Kesko Oyj Class A — Investor Day (December 2022)
20 slides from Kesko Oyj Class A's investor day presentation, Dec 7, 2022
Slide 1: Kesko is a unique trading and retailing company
KESKO IS A UNIQUE TRADING AND RETAILING COMPANY Kesko Capital Markets Day, 7 December 2022 Mikko Helander President and CEO
Slide 2: Kesko was formed during World War II
KESKO WAS FORMED DURING WORLD WAR II • Four regional wholesaling companies merged in 1940 • One of the largest Finnish companies from the start • Established and owned by retailer entrepreneurs Source: Kesko, SA-kuva 2
Slide 3: In 1960 Kesko was listed on Helsinki Stock Exchange
IN 1960 KESKO WAS LISTED ON HELSINKI STOCK EXCHANGE • Fast growth required more capital • Kesko has made a profit every year and paid dividends each year except for 1967 • Today, Kesko has nearly 82,000 shareholders and the share is one of the most popular on the Helsinki Stock Exchange Source: Finn
Slide 4: Kesko has always been a forerunner in adopting new technologies and concepts
KESKO HAS ALWAYS BEEN A FORERUNNER IN ADOPTING NEW TECHNOLOGIES AND CONCEPTS • First self-service stores and hypermarkets • Centralised logistics • One of the first companies to adopt IT systems • First modern DIY stores in Finland • Private labels • Customer loyalty programme Source: Kesko, HS, Yrj
Slide 5: Long tradition in sustainability
LONG TRADITION IN SUSTAINABILITY • • • • 5
Slide 6: K Group is the leading trading sector company in Northern Europe
K GROUP IS THE LEADING TRADING SECTOR COMPANY IN NORTHERN EUROPE *Excl. lease liabilities
Slide 7: Kesko has a good strategy
KESKO HAS A GOOD STRATEGY GROWTH STRATEGY FOCUS: ONE UNIFIED GROCERY TRADE CUSTOMER EXPERIENCE BUILDING AND TECHNICAL TRADE DIGITALISATION SUSTAINABILITY CAR TRADE 7
Slide 8: Our success is not a coincidence
OUR SUCCESS IS NOT A COINCIDENCE The right strategic choices and their successful execution FOCUSING ON THREE CORE BUSINESSES MARKET LEADERSHIP IN NEIGHBOURHOOD STORES THROUGH THE SUOMEN LÄHIKAUPPA ACQUISITION MASSIVE DIVESTMENTS OF NON-CORE DIGITAL FORERUNNER IN THE EUROPEAN RETAIL BUSINESSES, INCL
Slide 9: Good profitability
GOOD PROFITABILITY Comparable operating profit Updated Q3/2022 Reported figures, € million guidance 790–840 800 776 700 600 568 500 462 429 400 296 300 274 221 243 200 100 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2014-2019 continuing operations IFRS 16 impact 9
Slide 10: All divisions have good profitability
ALL DIVISIONS HAVE GOOD PROFITABILITY BUILDING AND GROCERY TRADE TECHNICAL TRADE CAR TRADE €349.3 EBIT EBIT EBIT €469 million million €348 million €45 million 10 Q3/2022, rolling 12 months, comparable operating profit
Slide 11: Impressive €6.1 billion growth in core business retail sales
IMPRESSIVE €6.1 BILLION GROWTH IN CORE BUSINESS RETAIL SALES € million 10,000 10 000 8,083 6,716 5,965 5 000 5,000 2,884 787 906 0 Grocery trade Building and technical trade Car trade 2014 Q3/2022, rolling 12 months 11 Retail sales include retail and B2B sales
Slide 12: Sales via digital channels already €1.7 billion
SALES VIA DIGITAL CHANNELS ALREADY €1.7 BILLION 3% 2% 12% 41% 42% K-ruoka.fi (online grocery) Kespro Onninen Building & home improvement Sports trade 12 Q3/2022, rolling 12 months
Slide 13: Meeting financial targets well
MEETING FINANCIAL TARGETS WELL We are coming back to financial targets when the political and economic situation becomes more stable Operating margin, comparable Over 6% Over 14.5% Return on capital employed, comparable, % Interest-bearing net debt/EBITDA, At maximum 2.5 excluding IFRS 16 impact 13
Slide 14: Kesko is in a good position to continue profitable growth
KESKO IS IN A GOOD POSITION TO CONTINUE PROFITABLE GROWTH 14
Slide 15: Grocery trade outlook 2023
GROCERY TRADE OUTLOOK 2023 • The grocery trade market is expected to remain stable as a whole, in part supported by price inflation • Kesko is a strong player in all areas of food trade • Consequently, operating profit is expected to remain at a good level despite rising costs 15
Slide 16: Building and technical trade outlook 2023
BUILDING AND TECHNICAL TRADE OUTLOOK 2023 • B2B trade accounts for over 80% of sales • In 2023, the construction market is expected to decrease somewhat compared to 2022 • Renovation building and construction related to the green transition are expected to continue to grow • Good profit level is sup
Slide 17: Car trade outlook 2023
CAR TRADE OUTLOOK 2023 • In the car trade market, the availability and demand for cars are expected to remain below their long-term average in 2023 • Despite the market situation, profitability in Kesko’s car trade division is expected to remain at a good level thanks to the transformation and effic
Slide 18: Kesko outlook 2023
KESKO OUTLOOK 2023 Net sales and operating profit are expected to remain at a good level despite the challenges in the operating environment 18
Slide 19: Strong strategy execution will boost success also in the future
STRONG STRATEGY EXECUTION WILL BOOST SUCCESS ALSO IN THE FUTURE KEY PRIORITIES: • Utilising our exceptionally FOCUS: strong position in all areas of Finnish food trade to maintain good development in sales growth and profitability GROWTH STRATEGY ONE UNIFIED • Continuing growth and profitability GRO
Slide 20: Thank you!
THANK YOU! Al