Kesko raises its profit guidance for 2021. The company now estimates that its comparable operating profit in 2021 will be in the range of €740 – 800 million. Before, the company estimated that the comparable operating profit would be in the range of €650 – 750 million. The guidance upgrade is based on better-than-anticipated sales growth and profit development especially in the building and technical trade division, and the division’s more positive outlook for the remainder of the year. In 2020, Kesko’s illustrative comparable operating profit totalled €554 million.
In the third quarter of 2021, preliminary net sales totalled approximately €2,902 million (Q3/2020: €2,651.9 million) and comparable operating profit approximately €236 million (Q3/2020: €181.8 million). Net sales and comparable operating profit increased especially in the building and technical trade division, underpinned by a strong market. The changes implemented in the building and technical trade division in recent years have also had a significant positive impact on profitability alongside acquisitions carried out and their successful integration. Comparable operating profit exceeded last year’s level also in the grocery trade and car trade divisions. Kesko will publish its third-quarter results on 29 October 2021.
Guidance upgrade rationale
In the building and technical trade division, growth in B2B trade has continued stronger than anticipated in all operating countries. The growth has been underpinned by stronger-than-anticipated volume development in the construction market and continued rise in raw material prices. Raw material prices have risen the most in building materials such as wood products, metals and plastic products. Expectations regarding the remainder of the year especially in the building and technical trade are more positive than before.
In the grocery trade division, retail sales have developed well while Kespro’s foodservice business has strengthened compared to the year before.
In the car trade division, sales margin growth and cost adjustments have supported profitability, but availability issues caused by component shortages may weaken profitability in the fourth quarter.
The company has managed to improve its cost ratio in all divisions by further increasing operational efficiency.
Estimates for the remainder of the year are made more difficult by the continuing pandemic and challenges in predicting customer behaviour. Estimates are also made more difficult by uncertainties regarding the availability of goods and price inflation.
Archive of future outlooks
Financial statements release 2020
Interim report 1.1.-30.9.2020
Stock exchange release 17.9.2020
Half year financial report 2020
Stock exchange release 10.7.2020
Interim report 1.1.-31.3.2020
Stock exchange release 18.3.2020