Hanna Jaakkola, Vice President, IR: Kesko recorded its all-time record result in 2019. What was the reason behind our success?
Mikko Helander, President and CEO: 2019 was indeed our all-time best year, and that is primarily thanks to the successful strategic choices we have made together, at both Group and division levels. Moreover, it was thanks to the exemplary implementation of those choices across Kesko and K Group.
Hanna: How did we succeed in strategy execution in our three divisions, the grocery trade, building and technical trade, and car trade?
Mikko: Good progress was seen in all our divisions. In the grocery trade, the good sales performance we’ve seen grew even stronger. Even better, the sales development and growth were also profitable. This is thanks to our successful strategic choices. I want to especially stress store-specific business ideas, which retailers have implemented with Kesko’s support.
In the building and technical trade, good development continued also in 2019. Sales grew and profit improved. Performance was strong particularly in Finland, where K-Rauta broke records and Onninen’s performance continued strong. In terms of strategy, the successful acquisitions carried out in Sweden and Norway have of course been very important, and have strengthened our position in those countries.
I must once again applaud our car trade division, which in an exceptionally challenging market situation still managed to maintain good profitability, and carried out strategically important acquisitions and measures to ensure competitiveness.
Thus all three divisions performed very well.
Hanna: Those were good examples of our success, but is there something else you would like to stress, something you are particularly proud of?
Mikko: There are many such things. Overall, I am pleased and we should all be proud of our ability do and develop our business though our strategies, and read the operating environment and make strategic choices. We at K Group, that is Kesko together with K-retailers, are great at implementing in close collaboration plans and things we’ve agreed on. This gives me hope and faith also going forward.
Hanna: So we’ve had wind in our sails and have moved forward. But what has been the most challenging part of our strategy execution?
Mikko: Whenever managing a business, especially a company of this size, the most challenging aspect – but also a very interesting one – are the strategic choices. How well we are able to read the operating environment and assess changes, and make successful strategic choices based on that. As I said, that is challenging, but also very interesting. And as the results show, we are good at this.
Hanna: Sustainability and combatting climate change have an important role in Kesko. What does this mean in practice?
Mikko: Sustainability and combatting climate change are increasingly crucial strategic focus areas for us. This means even greater commitment to our successful long-term sustainability work. We will also share our bigger and smaller sustainability efforts more with the public and our customers. Our sustainability work and climate efforts must be made visible and tangible in all K Group’s operations, especially all our 1,800 stores in Northern Europe.
Hanna: What threats and opportunities do you see in our operating environment?
Mikko: In terms of the future and our operating environment, I want to emphasise the opportunities. If we think of the type of company Kesko is, our good financial position and our results, I see interesting opportunities for us in the future.
Of course, there are always threats as well. However, we can use the same strengths – the ability to read the operating environment and make and determinately execute the right choices. I firmly believe that executing our existing strategies is the best way to ensure our success amidst tightening competition also going forward.
Hanna: How do you see the future? Can Kesko and K Group continue their success?
Mikko: When it comes to the future of Kesko and K Group, these days I’m often asked how much more we can still improve our operations, both as a whole and at division level. To that I say ”significantly”. Our actions so far have proven effective. Our strategic choices have been right. By implementing these even more determinedly, I am sure we can reach even better figures, both commercially and financially. So the future looks bright, and it won’t be boring.