Kesko Oyj Class A · OMXHEX:KESKOA
Kesko Oyj Class A — Shareholder Meeting (March 2024)
32 slides from Kesko Oyj Class A's shareholder meeting presentation, Mar 26, 2024
Slide 1: A Good Result from All Divisions in 2023
KESKO ANNUAL GENERAL MEETING REVIEW BY THE PRESIDENT AND CEO A GOOD RESULT FROM ALL DIVISIONS IN 2023 Jorma Rauhala President and CEO 26 March 2024 1
Slide 2: Jorma Rauhala, Kesko's President and CEO
JORMA RAUHALA KESKO’S PRESIDENT AND CEO AS OF 1 FEBRUARY 2024 MASTER OF SCIENCE (ECON.), BORN 1965 LONG CAREER IN KESKO WITH VARIOUS RESPONSIBILITIES With the company since 1992 2017-2024 President, building and technical trade division Deputy CEO 2013-2017 President, grocery trade division 2007-201
Slide 3: Kesko Group Management Board as of 1 April 2024
KESKO GROUP MANAGEMENT BOARD AS OF 1 APRIL 2024 President and CEO Jorma Rauhala 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 technical trade Car trad
Slide 4: Key Events for Kesko in 2023
KEY EVENTS FOR KESKO IN 2023 • Good progress in strategy execution in all three divisions • Sales growth continued in grocery trade, profitability good • Profitability in building and technical trade remained good despite weak construction cycle • Sales and profit improved clearly in all car trade b
Slide 5: Kesko Has Excellent Profit Capacity
Comparable operating profit, € million Reported figures KESKO HAS 900 EXCELLENT 800 776 815 PROFIT CAPACITY 700 712 600 568 500 462 Operating profit for 2023 429 400 €712 million 300 221 243 274 296 200 – a good result in a weak cycle 100 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Operating
Slide 6: Net Sales 2023
NET SALES 2023 GROUP DIVISIONS 11,809 11,784 12,000 12 000 7,000 7 000 6,352 6,125 10 000 10,000 6 000 6,000 5 000 5,000 4,591 8,000 8 000 4,193 4,000 4 000 € million € million 6 000 6,000 3,000 3 000 4 000 4,000 2 000 2,000 1,125 1,262 22,000 000 1 000 1,000 0 0 2022 2023 Grocery trade Building and
Slide 7: Operating Profit 2023
OPERATING PROFIT 2023 GROUP DIVISIONS 900 500 460,4 815,1 444,8 750 712,0 400 323,8 600 300 € million € million 450 212,5 200 300 100 82,6 150 64,3 0 0 2022 2023 Grocery trade Building and technical trade Car trade Operating margin, % 6.9 6.0 Operating margin, % 7.5 7.0 7.1 5.1 5.7 6.5 2022 2023 7 *
Slide 8: Results
RESULTS 2023 2022 Net sales, € million 11,783.8 11,809.0 Change in net sales, %* -0.8 4.4 Operating profit, € million 695.4 816.5 Operating profit, € million* 712.0 815.1 Operating margin, %* 6.0 6.9 Profit before tax, € million* 630.4 763.2 Earnings per share, basic, € 1.25 1.53 Earnings per share,
Slide 9: Financial Position
FINANCIAL POSITION 2023 2022 Cash flow from operating activities, € million 1,049.5 915.2 Liquid assets, € million 227.3 314.1 Capital expenditure, € million 678.9 449.2 Interest-bearing net debt excl. lease liabilities, € million 561.9 184.1 Interest-bearing net debt/EBITDA (rolling, excl. IFRS 16
Slide 10: Capital Expenditure
CAPITAL EXPENDITURE Capital expenditure grew due to acquisitions and logistics projects 2023 2022 Capital expenditure in store sites, € million 286.5 268.1 Acquisitions, € million 141.1 50.1 IT investments, € million 25.0 41.8 Other investments, € million 226.3 89.2 Total, € million 678.9 449.2 10
Slide 11: Cost Control
COST CONTROL 2023 2022 Fixed costs, € million 1,959.1 1,946.0 - Personnel expenses, € million 779.1 784.7 - Other expenses, € million 646.6 668.6 - Depreciation, € million 533.3 492.7 Cost ratio, % 16.6 16.5 11
Slide 12: Return on Capital Employed 2023
RETURN ON CAPITAL EMPLOYED 2023 25 19,6 20 19,1 17,4 16,9 15,8 14,7 15 13,4 11,4 % 10 5 0 Grocery trade Building and technical trade Car trade Group 2022 2023 12 Comparable figures
Slide 13: Kesko Today
KESKO ANNUAL GENERAL MEETING KESKO TODAY 13
Slide 14: Kesko's Strategy
KESKO’S STRATEGY GROWTH STRATEGY FOCUS ON THREE DIVISIONS ONE UNIFIED GROCERY TRADE CUSTOMER EXPERIENCE BUILDING AND TECHNICAL TRADE DIGITALISATION CAR TRADE SUSTAINABILITY 14
Slide 15: Successful Strategic Choices and Consistent Strategy Execution
SUCCESSFUL STRATEGIC CHOICES AND CONSISTENT STRATEGY EXECUTION Focusing on three selected divisions Becoming the market leader in neighbourhood grocery stores by acquiring Suomen Lähikauppa Divesting non-core operations, including A forerunner in trading sector digitalisation businesses in R
Slide 16: Transformation from a Traditional Retailer into 'One Unified K'
TRANSFORMATION FROM A TRADITIONAL RETAILER INTO ‘ONE UNIFIED K’ 16
Slide 17: 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 18: Elektroskandia Strengthened Onninen's Position in Technical Trade in Norway
ELETROSKANDIA STRENGTHENED ONNINEN’S POSITION IN TECHNICAL TRADE IN NORWAY ONNINEN NOW THE MARKET LEADER IN ELECTRICAL WHOLESALE IN NORWAY • Kesko acquired Elektroskandia Norge in March 2023 • One of the most significant distributors of electricals in Norway • Net sales of some €250 million (2022) •
Slide 19: Expanding Operations to Denmark and Acquiring Davidsen
EXPANDING OPERATIONS TO DENMARK AND ACQUIRING DAVIDSEN DAVIDSEN STORE NETWORK PARTICIPATING IN SECTOR CONSOLIDATION IN NORTHERN EUROPE PART OF KESKO’S STRATEGY Greenland • Kesko acquired 90% of the previously family-owned Davidsen Koncernen A/S, enterprise value approx. €190 million • Davidsen is on
Slide 20: A Strong Foundation for Grocery Trade
A STRONG FOUNDATION FOR GROCERY TRADE GROCERY TRADE 6,500 6 500 6,125 6,352 500 • Strong No. 2 in Finnish grocery trade with 5,909 6,000 6 000 450 a market share of ~34.3% 5 500 5,500 460 443 445 • No. 1 in the Finnish foodservice market with Operating profit, € million 5,000 5 000 400 Net sales, €
Slide 21: New K-Citymarket Hypermarket Stores to Open Over the Next Few Years
NEW K-CITYMARKET HYPERMARKET STORES TO OPEN OVER THE NEXT FEW YEARS • K-Supermarket in Vuosaari, Helsinki converted into a K-Citymarket in 2024 • New K-Citymarket in Ideapark, Lempäälä in 2025 • New K-Citymarket in Haapaniemi, Kuopio in 2026 • New K-Citymarket in Kivistö, Vantaa in 2026 • Planning a
Slide 22: Good Performance in a Challenging Market in Building and Technical Trade
GOOD PERFORMANCE IN A CHALLENGING MARKET IN BUILDING AND TECHNICAL TRADE BUILDING AND TECHNICAL TRADE • Leading sector operator in Northern Europe 5 5,000 000 500 4,591 • The clear marker leader in Finland in both 4,500 4 500 4,172 4,193 400 building and home improvement trade and 4 000 4,000 Operat
Slide 23: Good Potential for Continued Growth in Car Trade
GOOD POTENTIAL FOR CONTINUED GROWTH IN CAR TRADE CAR TRADE 1,500 1 500 100 • Comprehensive offering: new cars, used cars, 1,244 1,262 11,250 250 1,125 80 and services 83 Operating profit, € million 1 000 1,000 74 • Long-standing collaboration with the Net sales, € million 60 64 Volkswagen Group 750
Slide 24: 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 25: Kesko Is One of the Most Sustainable Trading Sector Operators in the World
KESKO IS ONE OF THE MOST SUSTAINABLE TRADING SECTOR OPERATORS IN THE WORLD Kesko’s sustainability has been recognised in various independent assessments 25
Slide 26: Dividend Proposal
KESKO ANNUAL GENERAL MEETING DIVIDEND PROPOSAL 26
Slide 27: The Board's Dividend Proposal to the AGM: €1.02 / Share
THE BOARD’S DIVIDEND PROPOSAL TO THE ANNUAL GENERAL MEETING: €1.02 / SHARE Proposed to be paid in four instalments 1,8 1,6 1,54 1,43 1,4 1,28 1,2 1,08 1,06 1,02 0,97 1,0 € 0,8 0,74 0,75 0,61 0,59 0,63 0,57 0,55 0,6 0,50 0,50 0,4 0,2 0,0 2016 2017 2018 2019 2020 2021 2022 2023 100 % 96 % 96 % 85 % 77
Slide 28: The Future
KESKO ANNUAL GENERAL MEETING THE FUTURE 28
Slide 29: Outlook for the Future
OUTLOOK FOR THE FUTURE 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, t
Slide 30: Profit Guidance for 2024
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 in the company’s PROFIT operating environment. Kesko estimates that its comparable GUIDANCE operating profit in 2024
Slide 31: The Execution of Kesko's Growth Strategy Continues
THE EXECUTION OF KESKO’S GROWTH STRATEGY CONTINUES • Kesko today is a strong, modern and international trading sector company • Kesko’s established strategy has proven effective and has yielded excellent results – Kesko has undergone a transformation, grown, and created significant value for its sha
Slide 32: Thank you!
Thank you! Al