President and CEO Mikko Helander: Kesko posted the best result in its history in Q3/2021
Mikko Helander, President and CEO
The results we have achieved act as proof that our strategy is working and we have made the right choices. We will continue our efforts to grow our sales and improve profitability, says President and CEO Mikko Helander of Kesko’s Q3 result.
Kesko posted its best-ever result in Q3. Sales grew and profitability improved in all divisions. Net sales grew by 7.8% in comparable terms, totalling €2,902.4 million. Our comparable operating profit totalled €236.4 million, representing an increase of €54.5 million. The grocery trade division and the building and technical trade division both recorded their all-time best profitability. Profit for the car trade division improved markedly. Profitability in both grocery trade and building and technical trade has risen to the level of the best European operators. The strong growth is based on the successful execution of our growth strategy and a favourable market situation.
Strong development continued in food trade. Our strength there lies in our extensive network of well-placed stores combined with efficient online grocery operations and our foodservice business, as well as our well-functioning retailer business model. Our strategic goal is to constantly improve customer experiences. Sales grew in all our grocery store chains. The division’s comparable operating profit totalled €122.2 million. Online grocery sales grew by 17.3% despite the strong comparison figures. Our market share in food trade grew. K Group’s grocery sales grew by 3.3% and net sales for Kespro’s foodservice business by 8.9%.
In the building and technical trade division, growth continued strong in all operating countries, driven by B2B trade. The successful execution of country-specific strategies and strong demand resulted in a record third quarter. Strong development continued for Onninen and K-Rauta in Finland. Sales and profitability development was good also in Norway and Sweden both in building and home improvement trade and technical trade. Profitability was also supported by the changes made in recent years and the acquisitions completed and their successful integration. The division’s net sales grew by 14.6% in comparable terms, and its comparable operating profit rose to €104.5 million. The growth has been underpinned by strong construction market performance and the continued rise in raw material prices.
Our transformation process in the car trade division is proceeding well and yielding results. The division’s net sales grew by 6.7%, and its comparable operating profit rose to €18.2 million. The division’s profitability was underpinned by sales margin growth and cost adjustment measures. Demand was strong for both new and used cars, although availability issues related to component shortages have slowed down new car deliveries and hindered used car availability. The planned exemption of all-electric vehicles from car tax in Finland as of 1 October impacted the timing of car deliveries.
The importance of sustainability continues to grow. Concrete efforts to stop climate change will be in the forefront in upcoming years. In mitigating climate change, the role of the trading sector extends clearly beyond reducing emissions from its own operations. In all our business divisions, we provide our customers with information on their choices and encourage them to adopt more sustainable lifestyles. We also challenge our suppliers and the whole supply chain to cut emissions and set their own tangible emission reduction targets.
The Nordic countries are among the most stable and well-functioning societies globally. Good overall economic development is estimated to continue in our operating countries. Household savings have grown and people have money to spend. Domestic demand is expected to continue to stay high. The so-called green transition will also increase public and private investment and offer growth opportunities for all our divisions.
We will continue the execution of our growth strategy. Our strong food trade operations form a foundation for ongoing profitable growth in the grocery trade division. Our grocery stores together with Kespro’s foodservice business form a strong, unique combination. In the building and technical trade division, our strong country-specific actions will support growth. Over 75% of the division’s net sales now come from B2B trade and demand in B2B trade is growing forcefully. In the car trade division, wider sector transformation and our own transformation efforts support sales growth. We will continue our efforts to grow our sales and improve profitability. The results we have achieved act as proof that our strategy is working and we have made the right choices.
7-9/2021 FINANCIAL PERFORMANCE IN BRIEF:
Group net sales in July-September totalled €2,902.4 million (€2,651.9 million), an increase of 7.8% in comparable terms, reported net sales grew by 9.4%
Comparable operating profit totalled €236.4 million (€181.8 million), up by €54.5 million
Operating profit totalled €236.5 million (€224.6 million)
Comparable earnings per share €0.43 (€0.33
Reported Group earnings per share €0.43 (€0.48)
Find out more:
Kesko's Q3/2021 interim report and result presentation