Kesko as an investment

Growth strategy

Kesko's growth strategy is based on customer-oriented operations and using quality for differentiation in both our stores and digital channels. We seek growth organically and through acquisitions. In business, we focus on growth in three divisions where we have strong competencies and competitiveness: the grocery trade in Finland, building and technical trade in Northern Europe, and car trade in Finland. These divisions and markets offer good growth and value creation potential long into the future.

Strong market positions

Kesko is one of the leading retail companies in Northern Europe and the largest retail operator in Finland. We strive to be among the top two operators in all our businesses in order to ensure economies of scale. Finland accounts for nearly 80% of Kesko’s net sales. Kesko is the second biggest operator in the Finnish grocery trade, and the biggest operator in the Finnish building and technical trade as well as in the car trade. Outside Finland, we have strong market shares in the Baltics, Belarus and Norway.

Long-term profitability improvement

Kesko’s strategic objective is to achieve profitable growth in all its businesses. Our comparable operating profit in 2018 was €332 million. In 2014, before we adopted our new strategy, it was €233 million. This improvement in profitability is a result of customer-oriented growth strategies in our business divisions, measures taken to improve gross profit, and the effective management of capital employed. We operate under “One unified K” and maximise the use of synergies between our businesses.

Attractive dividend yield

Kesko’s good dividend capacity is based on the solid and consistent ability of its operations to generate cash flow. Kesko has paid uninterrupted dividends every year since 1968, and our aim is to sustain an attractive and steadily growing dividend yield.

Ability to increase shareholder value

The total shareholder return of a Kesko B share since 2015 is 17.5% p.a. This growth in shareholder value is the outcome of successful strategic decision making and execution and the efficient allocation of capital – these have seen Kesko's return on capital employed rise from 11.7% in 2015 to 14.0% in 2018.

Responsibility

Thanks to Kesko’s long-term and comprehensive sustainability work, it is included in prestigious global sustainability indices, such as the DJSI World and DJSI Europe. Furthermore, we have been counted among the Global 100 Most Sustainable Corporations in the World list.


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