Kesko as an investment

Profitable growth strategy and strong track record in strategy execution

Customer-orientation and quality are at the core of Kesko’s growth strategy. We seek focused profitable growth in three strategic areas – the grocery trade in Finland, building and technical trade in Northern Europe, and car trade in Finland – both organically and via acquisitions. We began the execution of our current strategy in 2015, and since then our net sales have annually increased on average by 5.4% and our operating profit on average by 17.2%. During the period, the net sales for Kesko’s core businesses have increased by €3.1 billion, and we have invested €2.4 billion in growth, while divesting some €1.0 billion worth of non-core business operations. The improvement in profitability is the result of customer-oriented growth strategies in our divisions, constant improvements in cost efficiency, and efficient capital allocation. We operate as “One unified K” and maximise the utilisation of synergies between our businesses.

Strong market position

Kesko is one of the leading retail companies in Northern Europe and the biggest retail operator in Finland. Our objective is to always be among the top two operators in all our businesses to ensure economies of scale. Finland accounts for approximately 78% of our net sales, and Kesko is the biggest trading sector company in Finland, and the biggest operator in the Finnish building and technical trade and car trade. We also have strong market shares outside Finland in Sweden, Norway, the Baltics and Belarus.

Ability to increase shareholder value

Kesko’s good dividend capacity is based on the strong and steady ability of its businesses to generate cash flow. Our objective is a steadily growing, attractive dividend yield. Kesko has paid dividends uninterrupted every year since 1968, and over the past five years, Kesko’s dividend yield has averaged 5.4% a year. The total annual shareholder return of a Kesko B share since the beginning of 2015 is 21.7%. Growth in shareholder value is based on making and implementing successful strategic choices and on efficient allocation of capital – these saw Kesko’s return on capital employed rise to 9.6% in 2019.

Corporate responsibility

 Thanks to our extensive long-term corporate responsibility work, Kesko is included in prestigious global sustainability indices, such as the DJSI World and DJSI Europe, as well as the Global 100 Most Sustainable Corporations in the World list. Kesko’s climate work focuses on the purchasing and production of renewable energy and increased energy efficiency. We have set tight Science Based Targets for emissions from our operations and supply chain. We also actively offer our customers convenient ways to reduce their carbon footprint.

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