Kesko Oyj Class A · OMXHEX:KESKOA
Kesko Oyj Class A — Investor Day (2022)
11 slides from Kesko Oyj Class A's investor day presentation, Dec 7, 2022
Slide 1: Growth and Efficiency in a Changing Operating Environment
GROWTH AND EFFICIENCY IN A CHANGING OPERATING ENVIRONMENT Jukka Erlund Chief Financial Officer Kesko Capital Markets Day 2022
Slide 2: Good performance in all areas…
GOOD PERFORMANCE IN ALL AREAS… NET SALES, € MILLION GROSS MARGIN OPEX-% 15.0% 15.0 % 12,000 12000 17.2%% 17.2 11500 11,500 14.5% 14.5 % 17.0% 17.0 % 11000 11,000 16.8% 16.8 % 14.0 % 14.0% 10500 10,500 16.6% 16.6 % 10000 10,000 13.5 % 13.5% 16.4% 16.4 % 9500 9,500 13.0% 13.0 % 16.2% 16.2 % 9000 9,000
Slide 3: … also in capital efficiency
… ALSO IN CAPITAL EFFICIENCY EBIT-%, COMPARABLE ROCE-%, COMPARABLE NET WORKING CAPITAL/NET SALES 8 20 3.5 7 18 3 16 6 14 2.5 5 12 2 4 10 8 1.5 3 6 1 2 4 1 0.5 2 0 0 0 2019 2020 2021 Q3 2022, 2019 2020 2021 Q3 2022, 2019 2020 2021 Q3 2022, rolling rolling rolling EBIT-% * ROCE-% Net working capital/n
Slide 4: Profitability improvement from all sources
PROFITABILITY IMPROVEMENT FROM ALL SOURCES Operating profit up by €390 million 826 5 47 106 94 138 436 € million 2019 illustrative EBIT Growth Gross margin OPEX efficiency Acquisitions Other Q3/2022 EBIT EBIT-% 4.4% EBIT-% 7.1% Kesko Senukai treated as a joint venture in the illustrative comparison
Slide 5: Investing in growth
INVESTING IN GROWTH • In upcoming years, no major changes in capital expenditure CAPITAL EXPENDITURE (EXCL. ACQUISITIONS), € MILLION compared to current levels 376** • In store site CAPEX, focus on renewals 310* 66 • Investing in logistical capabilities, starting with Onninen 263 48 246 239 technica
Slide 6: Ensuring operational efficiency
ENSURING OPERATIONAL EFFICIENCY OPERATING EXPENSES KEY FOCUS AREAS 09/2022, rolling 12 months • Organisational efficiency Depreciations • Process re-engineering and automation 25.3% Personnel expenses 40.4% • Efficiencies in indirect sourcing • Measures to mitigate cost-inflation Other €1,931m COST
Slide 7: Managing electricity costs
MANAGING ELECTRICITY COSTS • Kesko’s electricity costs were around €35 million in 2021 • Spot prices have increased substantially in 2022 • Kesko has centrally hedged 50-80% of K Group’s electricity consumption in 2022-2025 • We are currently reducing our electricity consumption with both short-term
Slide 8: Measures to improve cash flow generation continue
MEASURES TO IMPROVE CASH FLOW GENERATION CONTINUE CASH FLOW FROM OPERATING ACTIVITIES by quarter, rolling 12 months, € million • Key initiatives driving cashflow: 1,191 • Maintaining good profitability 1,152 1,172 1,152 1,117 1,097 1,068 984 • Improving working capital efficiency, especially 921 inv
Slide 9: Strategy execution supported by strong balance sheet
STRATEGY EXECUTION SUPPORTED BY STRONG BALANCE SHEET NET DEBT/EBITDA – MAXIMUM TARGET LEVEL 2.5 • Net debt/EBITDA 0.2 and gearing 80.6% 2.5 • Additional net debt fire power of over €1.5 billion 2 • Our strong balance sheet enables 1.5 • Organic investments and acquisitions in line with our strategy
Slide 10: Solid dividend track-record
SOLID DIVIDEND TRACK-RECORD 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. Dividend paid in four instalments in 2022. 1.5 1.5 1.43
Slide 11: Thank you!
THANK YOU! Al