Kesko Oyj Class A · OMXHEX:KESKOA
Kesko Oyj Class A — Q1 2024 Earnings Presentation
29 slides from Kesko Oyj Class A's earnings presentation, Apr 25, 2024
Slide 1: A Good Result in a Challenging Market
KESKO INTERIM REPORT Q1/2024 A GOOD RESULT IN A CHALLENGING MARKET Jorma Rauhala President and CEO 25.4.2024
Slide 2: Key Events in Q1/2024
KEY EVENTS IN Q1/2024 Q1/2024 Q1/2023 • Result in line with expectations in a challenging market, good cost efficiency and Net sales, € million 2,759.5 2,828.0 strong cash flow from operating activities Change in net sales*, % -5.5 +4.4 • Grocery trade: net sales increased, profit stable Operating p
Slide 3: Net Sales
NET SALES - €69 million 11,784 11,715 12,000 12 000 3,105 2,949 2,902 3,000 3 000 2,828 2,759 10 000 10,000 8 000 8,000 2,000 € million 2 000 € million 6 000 6,000 4 000 4,000 1,000 1 000 2,000 2 000 0 0 Q1/23 Q2/23 Q3/23 Q4/23 Q1/24 2023 Q1/2024 rolling 12 months 3
Slide 4: Operating Profit
OPERATING PROFIT 300 - €26.4 million 800 712.0 685.6 207.6 208.1 200 600 € million € million 170.5 125.9 400 99.5 100 200 0 0 Q1/23 Q2/23 Q3/23 Q4/23 Q1/24 2023 Q1/2024 rolling 12 months Operating Operating margin 4.5% 6.7% 7.1% 5.9% 3.6% 6.0% 5.9% margin 4 Comparable figures
Slide 5: Return on Capital Employed
RETURN ON CAPITAL EMPLOYED 25 20 17,4 17,0 15,8 15,0 15 13,4 12,5 11,4 % 9,6 10 5 0 Grocery trade Building and technical trade Car trade Group 2023 Q1/2024 rolling 12 months 5 Comparable figures
Slide 6: Financial Position
FINANCIAL POSITION Q1/2024 Q1/2023 Cash flow from operating activities, € million 112.6 27.0 Liquid assets, € million 145.1 159.8 Capital expenditure, € million 329.0 231.8 Interest-bearing net debt excl. lease liabilities, € million 881.7 495.6 Interest-bearing net debt / EBITDA (excl. IFRS 16 impa
Slide 7: Capital Expenditure
CAPITAL EXPENDITURE Capital expenditure up due to investments in store sites and acquisitions Q1/2024 Q1/2023 • Kesko continued investments in its network of grocery store sites Store sites, € million 110.3 56.4 • Two properties acquired from eQ Commercial Properties Fund: Acquisitions, € million 17
Slide 8: Expenses
EXPENSES Excluding acquisitions, expenses stable year-on-year Q1/2024 Q1/2023 Fixed costs, € million 507.1 487.8 - Employee benefit expenses, € million 204.8 197.5 - Other expenses, € million 162.8 161.3 - Depreciation, € million 139.4 129.0 Cost ratio, % 18.4 17.2 8 Figures excluding items affectin
Slide 9: Grocery Trade: Good Performance in Q1
GROCERY TRADE GOOD PERFORMANCE IN Q1 9
Slide 10: Grocery Trade Net Sales
GROCERY TRADE NET SALES €20 million 6,352 6,372 1,624 1,593 1,639 1,495 1,515 6 000 6,000 11,500 500 5 500 5,500 € million € million 11,000 000 55,000 000 500 4 500 4,500 0 4 000 4,000 Q1/23 Q2/23 Q3/23 Q4/23 Q1/24 2023 Q1/2024 rolling 12 months 10
Slide 11: Grocery Trade Operating Profit
GROCERY TRADE OPERATING PROFIT - €1.4 million 444.8 443.4 150 400 124.2 118.4 118.2 120 300 90 83.9 82.5 € million € million 200 60 30 100 0 0 Q1/23 Q2/23 Q3/23 Q4/23 Q1/24 2023 Q1/2024 rolling 12 months Operating margin 5.6% 7.3% 7.4% 7.6% 5.4% 7.0% 7.0% 11 Comparable figures
Slide 12: Key Events in Grocery Trade in Q1
KEY EVENTS IN GROCERY TRADE IN Q1 • Net sales and profit at a good level despite our actions towards more competitive price levels • K Group's grocery sales grew by 3.3%, online grocery sales up by 19.9% • Kespro’s net sales up by 0.7%, growth again outpacing the market • K-Citymarket’s non-food sal
Slide 13: Building and Technical Trade: Result in Line with Expectations in a Weak Cycle
BUILDING AND TECHNICAL TRADE RESULT IN LINE WITH EXPECTATIONS IN A WEAK CYCLE 13
Slide 14: Building and Technical Trade Net Sales
BUILDING AND TECHNICAL TRADE NET SALES - €59 million 11,200 200 1,149 4,193 4,134 1,023 1,050 971 964 4,000 4 000 € million 800 € million 3,000 3 000 400 0 22,000 000 Q1/23 Q2/23 Q3/23 Q4/23 Q1/24 2023 Q1/2024 rolling 12 months 14
Slide 15: Building and Technical Trade Operating Profit
BUILDING AND TECHNICAL TRADE OPERATING PROFIT - €23.2 million 90 212.5 72.0 69.8 200 189.3 € million 60 € million 40.6 100 30.0 30 6.8 0 0 Q1/23 Q2/23 Q3/23 Q4/23 Q1/24 2023 Q1/2024 rolling 12 months Operating 2.9% 6.3% 6.6% 4.2% 0.7% 5.1% 4.6% margin 15 Comparable figures
Slide 16: Key Events in Building and Technical Trade in Q1
KEY EVENTS IN BUILDING AND TECHNICAL TRADE IN Q1 Q1/2024 Q1/2023 • Overall, net sales and operating profit development in line with expectations Net sales, € million 963.6 1,023.0 • Construction cycle weak in all operating countries; net sales and operating profit also impacted by Technical trade 52
Slide 17: Onninen Finland's Operating Profit Down
ONNINEN FINLAND'S OPERATING PROFIT DOWN Solar power product sales exceptionally strong in the comparison period ONNINEN FINLAND, • Technical trade market continued to weaken especially due to the COMPARABLE OPERATING PROFIT heavy decline in new building construction Q1/2023 operating profit 23,0 23.
Slide 18: Car Trade: Profitability at a Good Level
CAR TRADE PROFITABILITY AT A GOOD LEVEL 18
Slide 19: Car Trade Net Sales
CAR TRADE NET SALES - €30 million 1,262 1,232 338 1,200 1 200 316 311 297 300 286 900 € million 200 € million 600 100 300 0 0 Q1/23 Q2/23 Q3/23 Q4/23 Q1/24 2023 Q1/2024 rolling 12 months 19 Figures including sports trade
Slide 20: Car Trade Operating Profit
CAR TRADE OPERATING PROFIT - €3.0 million 30 82.6 80 79.5 24.3 24.3 19.5 60 20 € million 16.4 € million 14.4 40 10 20 0 0 Q1/23 Q2/23 Q3/23 Q4/23 Q1/24 2023 Q1/2024 rolling 12 months Operating 6.2% 7.2% 7.8% 4.8% 5.7% 6.5% 6.5% margin Comparable figures 20 Figures including sports trade
Slide 21: Key Events in Car Trade in Q1
KEY EVENTS IN CAR TRADE IN Q1 • K-Auto’s order book for new cars grew compared to the end of 2023, K-AUTO, NET SALES new car orders exceeded the market New cars Used cars Services • Used car sales also grew, and market share continued to strengthen 20 % • Positive development in service sales: growt
Slide 22: Profit Guidance and Outlook
PROFIT GUIDANCE AND OUTLOOK 22
Slide 23: Outlook
OUTLOOK In grocery trade, B2C trade and the foodservice market are expected to remain stable despite tightened price competition, and inflation is expected to slow down in 2024. Profitability in grocery trade is estimated to remain good also in 2024. In building and technical trade, the market is ex
Slide 24: Profit Guidance for 2024
PROFIT GUIDANCE FOR 2024 Kesko Group’s profit guidance is given for the year 2024, in comparison with the year 2023. Kesko’s operating environment is estimated to remain challenging in 2024. Kesko’s net sales and operating profit are estimated to remain at a good level in 2024 despite the challenges
Slide 25: Topical Themes
TOPICAL THEMES 25
Slide 26: Priorities in Grocery Trade
PRIORITIES IN GROCERY TRADE • Development of our store site network continues in 2024 • 1 new K-Citymarket store, 13 store updates • 3 new K-Supermarket stores, 12 store updates • 6 new K-Market stores, 20 store updates • Further development of store-specific business ideas • Further improvement of
Slide 27: Priorities in Building and Technical Trade
PRIORITIES IN BUILDING AND TECHNICAL TRADE • Proactive sales • Continued cost savings programme • Developing the Onninen Express network in Finland and the Baltic countries, building central warehouses for Onninen • Converting K-Rauta stores in Sweden into K-Bygg stores, finalising Zenitec’s integra
Slide 28: Priorities in Car Trade
PRIORITIES IN CAR TRADE • Maintaining good profitability • Growth that outpaces the market in all business areas • Launching important new car models • Continued growth in used cars • Expanding offering in the service business • Growing multichannel sales and network • Further developing and expandi
Slide 29: Al
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