Kesko as an investment
Profitable growth strategy
Kesko’s growth strategy centres on profitable growth in three selected business divisions: grocery trade, building and technical trade, and car trade. Continuous improvement of customer experiences, further development of digital services, and corporate responsibility and sustainability are central themes for us strategically. We execute our growth strategy both organically and via acquisitions. We operate as ‘One unified K’ and maximise synergies between our operations.
Our growth strategy, first established in 2015, has proven effective, and its successful execution has seen Kesko’s net sales grow and profitability improve significantly. We have also invested over €3 billion in growth, while divesting non-core businesses worth some €1 billion in total. We continued strategic investments also in 2022.
Strong market position
Kesko is one of the leading trading sector operators in Northern Europe. Finland accounts for some 80% of net sales, and overall Kesko is the biggest trading sector operator in the country, and number one in building and technical trade and car trade. We are also among the biggest operators in the Nordic and Baltic countries in various customer segments. Our objective is to grow our market shares in various operations, and to be among the top two operators in all our businesses to ensure economies of scale.
Ability to increase shareholder value
Kesko’s good dividend capacity is based on the strong and steady ability of its operations to generate cash flow. We aim for a steadily growing, attractive dividend yield. Kesko has paid dividends uninterrupted every year since 1968, and over the past five years, our annual dividend yield has averaged 4.4%. Growth in shareholder value is based on making and executing successful strategic choices, and on efficient allocation of capital – these saw Kesko’s comparable return on capital employed reach 16.9% in 2022.
Sustainability
Sustainability is at the core of Kesko’s operations. Kesko strives to enable sustainable choices for its customers and drive change throughout its value chain. The focus areas of Kesko’s sustainability strategy, updated in spring 2021, are climate and nature, value chain, people, and good governance. The strategy sets clear sustainability targets for the operations of Kesko and its three divisions. Management remuneration is tied to both financial targets and sustainability criteria.
Business-oriented sustainability actions are increasingly central to Kesko’s strategy. We aim to enable more sustainable lifestyles for our customers, and actively offer them information and easier ways to reduce their carbon footprint.
Kesko was the first Finnish company to set emissions reduction targets approved by the Science Based Targets initiative in 2017; in 2021 it set even more demanding targets that aim at limiting global warming to 1.5 degrees. In 2022, Kesko was included e.g. in the Dow Jones sustainability indices the DJSI World and DJSI Europe, and made both the Leadership level Climate A- List in CDP’s international climate questionnaire and the ‘Global 100 Most Sustainable Corporations in the World’ list. In the MSCI ESG Ratings, Kesko received the highest AAA rating (scale: AAA-CCC).
