Kesko’s Annual Report: K Group is transforming and growing

Kesko’s 2017 Annual Report describes the progress made in Kesko’s strategy and sustainability work, providing comprehensive performance indicators. The report depicts K Group’s impact on the society and our value creation and contains perspectives from our stakeholders.

Kesko’s Annual Report, published on 9 March, contains a strategy section, a sustainability section assured by an independent third party, as well as the financial statements, the Report by the Board of Directors and the Corporate Governance Statement and the Remuneration Statement. The review of non-financial information is included in the Report by the Board of Directors.

We continue our determined transformation

Kesko initiated a strategic transformation in 2015. Good progress has since been made in the core areas of customer orientation, stronger growth and profitability, and increased focus of operations.

“In 2017, Kesko and K Group continued on a strong growth path, focusing on our three strategic areas: the grocery trade, the building and technical trade, and the car trade. Our good performance confirms that our decision to focus on quality, selections and services has been the right one,” says Mikko Helander, Kesko’s President and CEO, in his review.

Key performance indicators:
• Net sales grew in comparable terms by 1.8% and comparable operating profit rose to €297 million.
• Net sales grew in all divisions and profitability improved compared to the year before.

Read more: Strategy and Review by the President and CEO

We create welfare for all our stakeholders and for all society

K Group has a considerable impact on the Finnish society.

• In 2017, 80.5% of purchases of goods made by Kesko Group’s Finnish companies were from suppliers operating in Finland and 19.5% elsewhere.
• K Group’s investments totalled some €423 million, salaries paid €914.2 million and income tax paid €84.2 million.
• K-retailers’ direct purchases from Finnish regions grew by 24.4% to €748.4 million.
• The impact of Finnish products on employment is significant; for example, Pirkka products are produced by 175 companies across Finland.

Sustainability highlights in 2017

• We were the first Finnish company to set Science Based Targets for reducing emissions from our facilities, transportation, and supply chains. To achieve these ambitious targets, we will increase the use of renewable energy and improve our energy efficiency.

• Since the beginning of 2017, all electricity purchased by Kesko in Finland has been produced with renewable energy. The renewable electricity has a Guarantee of Origin, and in 2017 was produced with Finnish bioenergy.

• In August 2017, we initiated K Fishpaths, a multi-year collaboration with the environmental organisation WWF Finland, to save endangered migratory fish. We map out areas in Finland to find obstacles in migratory fish spawning grounds, and in a spirit of cooperation with landowners, local K-retailers and volunteers, remove them to make the spawning grounds once again accessible to fish.

• The Little Big Deeds model established by K-Retailers' Association and Kesko brings to public attention responsible deeds relevant to our customers, for example, a retailer creating a meeting place for lonely elderly people, or retailers making stores accessible to customers with special needs.

Read more: Kesko’s responsibility programme

Kesko’s Annual Report is available in English at https://annualreport2017.kesko.fi

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