Kesko Oyj Class A · OMXHEX:KESKOA
Kesko Oyj Class A — Shareholder Meeting (March 2023)
28 slides from Kesko Oyj Class A's shareholder meeting presentation, Mar 30, 2023
Slide 1: The Best Result in Kesko's History
KESKO ANNUAL GENERAL MEETING 2022 REVIEW BY THE PRESIDENT AND CEO THE BEST RESULT IN KESKO’S HISTORY Mikko Helander President and CEO 30.3.2023
Slide 2: Group: Leading trading sector group in Northern Europe
GROUP Leading trading sector group in Northern Europe
Slide 3: Key Topics in 2022
KEY TOPICS IN 2022 • Good progress in strategy execution in all divisions • Grocery trade: profit improved, all-time record result • Building and technical trade: growth continued, another record result • Car trade: good profitability despite availability issues • Sustainability strategy updated, im
Slide 4: Net Sales Growth Continued
NET SALES GROWTH CONTINUED GROUP DIVISIONS 2021 2022 € million € million 6,125 11,809 5,909 12 000 12,000 11,300 6 000 6,000 4,805 4,388 8 000 8,000 4,000 4 000 4,000 4 000 2 000 2,000 1,028 911 0 0 2021 2022 Grocery trade Building and technical trade Car trade Comparable growth 4.4% 3.6% 9.4% -11.4
Slide 5: Operating Profit Improved
OPERATING PROFIT IMPROVED GROUP DIVISIONS € million € million 2021 2022 460.4 815.1 442.9 775.5 800 400 339.8 318.0 600 400 200 200 52.2 48.4 0 0 2021 2022 Grocery trade Building and technical trade Car trade Operating margin 6.9% 6.9% 7.5% 7.5% 7.2% 7.1% 5.1% 5.3% 5 Comparable figures
Slide 6: Good Return on Capital Employed
GOOD RETURN ON CAPITAL EMPLOYED % 20.6 19.6 19.0 19.4 20 17.2 16.9 14.0 12.7 10 0 Grocery trade Building and technical trade Car trade Group 2021 2022 6 Comparable figures
Slide 7: Results
RESULTS 1-12/2022 1-12/2021 Net sales, € million 11,809.0 11,300.2 Operating profit, € million 816.5 775.2 Operating profit, comparable, € million 815.1 775.5 Profit before tax, € million 761.1 712.9 Earnings per share, € 1.53 1.44 7
Slide 8: Financial Position
FINANCIAL POSITION 2022 2021 Cash flow from operating activities, € million 915.2 1,152.0 Liquid assets, € million 314.1 387.7 Interest-bearing net debt excl. lease liabilities, € million 184.1 -21.3 Interest-bearing net debt/EBITDA (rolling, excl. IFRS 16 impact) 0.2 0.0 Lease liabilities, € millio
Slide 9: Capital Expenditure
CAPITAL EXPENDITURE 2022 2021 Capital expenditure in store sites, € million 268.1 129.0 Acquisitions, € million 50.1 13.8 IT investments, € million 41.8 42.2 Other investments, € million 89.2 91.6 Total, € million 449.2 276.6 9
Slide 10: Kesko Is One of the Most Sustainable Trading Sector Companies in the World
KESKO IS ONE OF THE MOST SUSTAINABLE TRADING SECTOR COMPANIES IN THE WORLD DOW JONES SUSTAINABILITY INDICES ’GLOBAL 100’ LISTING • Among the most esteemed sustainability indices, based on • Annual listing by Corporate Knights of the 100 most an extensive sustainability assessment by Standard & susta
Slide 11: We Continue to the Execution of Our Growth Strategy
WE CONTINUE TO THE EXECUTION OF OUR GROWTH STRATEGY
Slide 12: Strategy
STRATEGY GROWTH STRATEGY FOCUS : ONE UNIFIED GROCERY TRADE CUSTOMER EXPERIENCE BUILDING AND TECHNICAL TRADE DIGITALISATION SUSTAINABILITY CAR TRADE 12
Slide 13: Updated Sustainability Strategy
UPDATED SUSTAINABILITY STRATEGY Management remuneration tied to sustainability targets SUSTAINABILITY STRATEGY VISION : IMPLEMENTATION WITHIN DIVISIONS: WE ENABLE SUSTAINABLE CHOICES FOR OUR • GROCERY TRADE CUSTOMERS AND DRIVE CHANGE THROUGHOUT THE VALUE CHAIN • BUILDING AND TECHNICAL TRADE • CAR TR
Slide 14: Successful Strategic Choices
SUCCESSFUL STRATEGIC CHOICES Focusing on three core businesses – speciality Expansion to technical wholesale with goods trade and Russian operations divested the acquisition of Onninen Market leadership in neighbourhood stores European trading sector forerunner in digitalisation through the Suomen L
Slide 15: A Well-Functioning Organisation
A WELL-FUNCTIONING ORGANISATION KESKO GROUP MANAGEMENT BOARD President and CEO Mikko Helander EVP, Chief Financial Officer EVP, Human Resources Jukka Erlund Matti Mettälä EVP, Communications EVP, Sustainability and Public Affairs Karoliina Partanen Riikka Joukio Grocery trade Building and Car trade
Slide 16: Good Profitability Development
GOOD PROFITABILITY DEVELOPMENT Comparable operating profit Reported figures, € million 815 776 800 700 600 568 500 462 429 400 296 300 274 243 221 200 100 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2014 - 2019 continuing operations IFRS 16 impact
Slide 17: Growth in Core Business Sales €6.2 Billion
GROWTH IN CORE BUSINESS SALES €6.2 BILLION CORE BUSINESS RETAIL AND B2B SALES € million 10 000 10,000 8,131 6,759 5,965 5 000 5,000 2,884 787 918 0 Grocery trade Building and technical trade Car trade 2014 2022 17
Slide 18: Sales via Digital Channels Already Some €1.8 Billion
SALES VIA DIGITAL CHANNELS ALREADY SOME €1.8 BILLION 3% 2% 12% 41% 42% K-ruoka.fi B2C grocery Kespro Onninen Building and home improvement Sports trade 2022, excl. VAT
Slide 19: Profitability in Food Trade on a Solid Basis
PROFITABILITY IN FOOD TRADE ON A SOLID BASIS Net sales GROCERY TRADE Operating profit • Significant share of the €20 billion total food sales in Finland € million € million 6500 6,500 600 • Finland’s most extensive and versatile store network 6,125 5,909 500 6,000 6000 with 913 K-retailers 5,732 460
Slide 20: Strong Position in Building and Technical Trade
STRONG POSITION IN BUILDING AND TECHNICAL TRADE Net sales BUILDING AND TECHNICAL TRADE Operating profit • Leading sector operator in Northern Europe, among the best € million € million 55,000 000 500 in Europe in terms of profitability 4,805 4,500 4 500 4,388 • Clear market leader in Finland in buil
Slide 21: Good Post-Transformation Foundation for Further Profitability Improvement in Car Trade
GOOD POST-TRANSFORMATION FOUNDATION FOR FURTHER PROFITABILITY IMPROVEMENT IN CAR TRADE Net sales CAR TRADE Operating profit € million € million • Availability of new cars has improved • Comprehensive offering: new cars, used cars, and services 1,028 911 893 864 893 • Long-term collaboration with the
Slide 22: Guidance for 2023
GUIDANCE FOR 2023 Kesko estimates that its comparable operating profit in 2023 will be in the range of €680–800 million. The guidance is based on an estimate for a relatively short recession in Kesko’s operating countries. Key uncertainties impacting Kesko’s outlook are developments in inflation and
Slide 23: Growing Our Shareholder Value Is Important
GROWING OUR SHAREHOLDER VALUE IS IMPORTANT 23
Slide 24: Profitable Growth and Transformation
PROFITABLE GROWTH AND TRANSFORMATION KESKO’S MARKET CAPITALISATION 5-YEAR TOTAL RETURN OF A KESKO B SHARE €8.2 billion +130% 24
Slide 25: Dividend
DIVIDEND • Board dividend proposal to the Annual General Meeting: €1.08 / share • Total amount of dividends paid: €429 million • Proposed to be paid in four instalments in 2023 1.54 1,5 1.43 1.06 1.08 0.97 1,0 0.74 0.75 0.61 0.59 0.63 0.57 0.55 0.50 0.50 0,5 99% 96% 96% 85% 78% 74% 70% 0,0 2016 2017
Slide 26: Number of Shareholders Growing
NUMBER OF SHAREHOLDERS GROWING OVER 87,000 SHAREHOLDERS BALANCED OWNERSHIP STRUCTURE 85000 24 % 38 % 75000 7% 65000 55000 31 % 45000 Nominee-registered, foreign ownership 35000 Finnish institutions 05 05 05 05 07 07 07 01/22 01/23 07 11 11 11 11 01/20 03 03 03 03 01/19 09 09 09 09 01/21 K-Retailers'
Slide 27: Shareholder's K-Plussa
SHAREHOLDER’S K-PLUSSA K GROUP ’BEST CUSTOMER’ TIER • 3.3 million Finns are part of K Group’s K-Plussa customer loyalty €6,000 annual purchases / programme Plussa household • Customers whose annual purchases from K Group stores total €6,000 receive ‘Best Customer’ benefits OR • With the new Sharehol
Slide 28: Thank You!
FOR THANK YOU! SHOPPING TO BE FUN