President and CEO Mikko Helander: Sales growth improved Kesko's profit in Q3
Kesko’s Q3 result in 2022 was the best quarter result in the company’s history. Our quarter-result has now improved on its comparison period for 14 consecutive quarters. Net sales grew by 3.4% in comparable terms, totalling €3,010 million. Our comparable operating profit totalled €243 million, representing an increase of €6.4 million. The results achieved act as strong proof of Kesko’s uniqueness as a trading sector operator and the effectiveness of our strategy also in a post-pandemic market.
In food trade, profit improved thanks to good performance in Kespro and our grocery stores. The division’s sales continued to grow, and its net sales totalled €1,574 million and operating profit €133.4 million. The operating profit improved thanks to sales growth in both Kespro and the grocery stores. Kespro’s performance was particularly strong, with sales growth of over 15%. Consumer online grocery sales also grew by 3.4%. Online growth is also supported by the extensive collaboration we have launched with Wolt. We have focused more on the price-competitiveness of our grocery stores and have ranked well in price comparisons in the media. K Group grocery stores are the only ones on the market that offer both bargains and premium under one roof.
"The record Q3 result is strong proof of Kesko’s uniqueness as a trading sector operator and the effectiveness of our strategy also in the current market."
In the building and technical trade division, all businesses delivered good results. Growth continued and profit strengthened in B2B trade. The division’s net sales grew by €70 million and totalled €1,203 million. The growth was attributable to good performance in B2B trade. Sales growth was particularly strong in technical wholesale, where volumes grew especially robustly in the heating and energy product categories. In Finland, both Onninen and K-Rauta recorded strong results. In Norway, profitability was good for both Onninen and Byggmakker. The result in Sweden was good thanks to B2B-focused K-Bygg, Onninen and MIAB. B2B trade now accounts for over 80% of the division’s sales.
In the car trade division, profitability remained good despite availability issues. Net sales decreased due to issues with new car deliveries. Profitability was at a good level thanks to better sales margins and efficiency measures, and the operating margin stood at 5.5%. The share of electric cars is growing forcefully in passenger car sales. Our K Charge EV charging network is expanding, and charging has more than doubled in a year.
”We estimate that the outlook for Kesko’s business will be positive also in 2023. All three business divisions are making a good profit.”
We estimate that the outlook for Kesko’s business will be positive also in 2023. All three business divisions are making a good profit. Kesko has an exceptionally strong position in all areas of Finnish food trade, and we are doing well also in a price-driven market. K Group is the leading operator in technical wholesale and building and home improvement trade in Northern Europe, with total retail and B2B sales of over €6.7 billion. The green transition, efforts to improve energy-efficiency, and growing renovation building are set to keep up demand also going forward. Kesko estimates that its comparable operating profit in 2022 will be in the range of €790 – 840 million. Kesko’s net sales and operating profit are expected to remain at a good level also in 2023 despite the challenges in our operating environment.
KESKO'S Q3/2022 PERFORMANCE IN BRIEF:
Group net sales in July-September totalled €3,009.8 million (€2,902.4 million), an increase of 3.4% in comparable terms, reported net sales grew by 3.7%
Comparable operating profit totalled €242.8 million (€236.4 million), up by €6.4 million
Operating profit totalled €242.4 million (€236.5 million)
Comparable earnings per share €0.47 (€0.43)
Reported Group earnings per share €0.47 (€0.43)
See our Q3 results release and presentation materials