K Group is increasing its purchases of Finnish wind power. K Group has signed an agreement to purchase annually some 50 GWh of electricity generated in a wind farm to be built in Northern Ostrobothnia, starting in 2023.
Kesko’s 2020 Annual Report, published today, describes the progress made in Kesko’s strategy execution and sustainability work, with clear performance indicators. The Annual Report has four sections: Kesko's Direction, Sustainability, Financial Review and Corporate Governance.
Corporate annual reports are important tools especially for investors, analysts and raters that make sustainability assessments. “In addition to financials, investors are increasingly interested in aspects related to the environment, social responsibility, and corporate governance (ESG). We were particularly happy to see significant increased interest towards Kesko’s shares among Finnish private investors. We currently have nearly 60,000 shareholders – the number rose by some 40% in 2020,” notes Hanna Jaakkola, Kesko’s Vice President for Investor Relations.
The Kesko’s Direction section of the Annual Report describes, among other things, the objectives and execution of Kesko’s growth strategy, megatrends affecting our operations, and opportunities and risks related to issues such as climate change and biodiversity.
A key issue for Kesko throughout the Covid-19 pandemic has been to ensure the safety of customers and employees. Kesko’s divisions have been affected by the exceptional circumstances in different ways. In 2020, retail sales grew in the grocery trade division and the market for the building and technical trade division remained good in both B2C and B2B trade. The foodservice business and car trade, in turn, were hit by the pandemic.
The Annual Report offers information on the impacts of the Covid-19 pandemic on K Group’s operations as well as on measures taken to ensure the safety of customers and personnel.
The purchases of goods by Kesko Group’s Finnish companies totalled €7.5 billion in 2020 (2019: €7.3 billion). Of these purchases, 82.5% were from suppliers operating in Finland and 17.5% from other countries.
Appreciation for Finnish products was reflected in the growing sales of products with a mark of origin, such as products with the Hyvää Suomesta (Produced in Finland) label, Avainlippu (Key Flag) products and Sirkkalehti products in the grocery trade, and in the growing sales of Finnish products in the building and home improvement trade.
Income taxes paid by K Group – i.e. Kesko and the K-retailers – in Finland rose to €122.6 million in 2020 (2019: €116.7 million).
• Capital expenditure €398.4 million
• Earnings per share, basic, €0.97
• The new, stricter climate targets set in February 2020 mean K Group aims to become carbon neutral in 2025, and will systematically reduce emissions to reach zero emissions from own operations and transports by 2030.
• In 2020, K Group implemented about 20.3 GWh of energy efficiency measures, which is 97% of the annual target rate of 21 GWh in our energy strategy.
• All electricity purchased by Kesko for K-stores and other Kesko properties in Finland is produced with renewable energy.
• Identified food waste in proportion to food sold in K-food stores was 1.4%. Our objective is to reduce K Group's identified food waste by at least 13% from the 2016 level by the end of 2021. By the end of 2020, we had decreased food waste in K-food stores by 12%.
• In the fourth year of the K Fishpaths collaboration between K Group and WWF Finland, 66 spawning grounds were restored at 8 locations, five barriers were removed, and 2.5 kilometres of previously unreachable mating grounds and habitats opened up.
• Kesko expanded its tax reporting in 2020, and publishes for the first time country-by-country tax information in its Annual Report. In 2020, income taxes paid by Kesko in Finland totalled €70.6 million and in other countries €13.9 million. The Group’s effective tax rate was 17.5%.
• Kesko’s community investments rose to €3.0 million (2019: €2.2 million).
• At the beginning of 2020, Kesko’s suppliers in high-risk countries had a total of 613 (2019: 733) valid social responsibility audits.
• The new nutrition feature in our data-based K-Ostokset service allows customers to monitor their consumption of sugar, salt, red meat, fish and vegetables. The service also continues to enable users to track the domestic content and climate impact of their food shopping.
• In 2020, a total Fairtrade premium of €935,784 was generated by products sold by K-food stores and Kespro (2019: €964,807). Fairtrade roses were one of the first products whose origin and journey to K-stores is tracked on the new Tracing Our Products website, launched in autumn 2020.
• Kesko employs some 17,630 people and K-retailers some 21,000 people: combined, K Group thus employs some 39,000 people.
• Of Kesko’s personnel, 59% are based in Finland and 41% in the other operating countries, i.e. Sweden, Norway, Estonia, Latvia, Lithuania and Poland.
• In 2020, we began preparing a programme to build a more diverse and inclusive
• Ranking 12th in 2020, K Group improved its position in the Universum Ideal Employer Ranking survey. K Group was up by 10 positions and received an award for being one of the best climbers.