Financial performance in brief:

• Group net sales in July-September totalled €3,026.6 million (€2,949.1 million); reported net sales grew by 2.6% while comparable net sales were down by 0.8%.

• Comparable operating profit totalled €201.5 million (€208.1 million)

• Operating profit totalled €202.1 million (€206.6 million)

• Cash flow from operating activities totalled €285.6 million (€394.9 million)

• Comparable earnings per share €0.34 (€0.38); reported earnings per share €0.35 (€0.37).

• Group net sales in January-September totalled €8,879.5 million €8,881.8 million); reported net sales were at last year's level, while comparable net sales were down by 3.5%

• Comparable operating profit totalled €479.3 million (€541.6 million)

• Operating profit totalled €458.5 million (€535.5 million)

• Cash flow from operating activities totalled €707.2 million (€707.1 million)

• Comparable earnings per share €0.80 (€0.97); reported earnings per share €0.76 (€0.96)

Key performance indicators

7-9/2024 7-9/2023 1-9/2024 1-9/2023 1-12/2023
Net sales, €                                         
million 3,026.6 2,949.1 8,879.5 8,881.8 11,783.8
Operating                                                        
profit, 201.5 208.1 479.3 541.6 712.0
comparable,
€ million
Operating 6.7 7.1  5.4 6.1  6.0
margin,
comparable,
%
Operating                                                        
profit, € 202.1 206.6 458.5 535.5 695.4
million
Profit                                                        
before tax, 172.1 188.4 399.7 485.3 630.4
comparable,
€ million
Profit                                                          
before tax, 172.5 186.8 378.5 479.1 613.5
€
million
Cash flow                                                     
from 285.6 394.9 707.2 707.1 1,049.5
operating
activities,
€
million
Capital                                                        
expenditure, 109.4 127.5 566.9 520.5 678.9
€
million

Earnings per                                                                  
share, €, 0.35 0.37 0.76 0.96 1.25
basic and
diluted
Earnings per                                                                 
share, 0.34 0.38 0.80 0.97 1.28
comparable,
€, basic

7-9/2 7-9/2023 1-9/2024 1-9/2023 1-12/2023
024
Return on capital employed, 11.5 14.1  11.5 14.1  13.4
comparable, %, rolling 12
months
Return on equity, comparable, 16.7 20.2 16.7 20.2 18.5
%, rolling 12 months

In this interim report, the comparable change % in net sales has been calculated in local currencies and excluding the impact of acquisitions and divestments completed in 2024 and 2023. The comparable operating profit has been calculated by deducting items affecting comparability from the reported operating profit.

Profit guidance for 2024 (specified)

Kesko Group's profit guidance is given for the year 2024, in comparison with the year 2023. Kesko's operating environment is estimated to remain challenging in 2024. Kesko's net sales and operating profit are estimated to remain at a good level in 2024 despite the challenges in the company's operating environment. Kesko estimates that its comparable operating profit in 2024 will amount to €630-680 million. Previously, the comparable operating profit was estimated to amount to €620-680 million. The profit guidance specification is based on third-quarter profit development in building and technical trade.

The profit guidance and outlook are based on an estimate of a relatively short recession in Kesko's operating countries. Key uncertainties impacting Kesko's outlook are developments in inflation and interest rate levels, and geopolitical crises and tensions.

Outlook for 2025

Kesko's operating environment is estimated to improve in 2025, and Kesko's comparable operating profit is also estimated to improve in 2025.

In grocery trade, B2C trade and the foodservice market are estimated to remain stable. In 2025, the comparable operating margin for the grocery trade division is estimated to stay clearly above 6% despite the investments in price and the store site network in accordance with Kesko's strategy for 2024-2026.

In building and technical trade, the cycle is expected to improve in 2025 from the historically low levels. Profitability in the building and technical trade division is estimated to improve on 2024.

In car trade, new car orders are expected to stay at a low level in 2025. Demand for used cars and services is estimated to remain good. Profitability for the car trade division is estimated to remain at a good level in 2025 despite weak demand for new cars.

President and CEO Jorma Rauhala:

Kesko's performance in the third quarter of 2024 was good considering the market, which remained challenging. Our net sales totalled €3,027 million, up by 2.6% year-on-year, while in comparable terms net sales decreased by 0.8%. Our comparable operating profit totalled €201.5 million, and it was up in both building and technical trade and grocery trade.

Net sales for the grocery trade division totalled €1,609 million, up by 1.0%, while the division's comparable operating profit amounted to €118.8 million. K Group's grocery sales were down by 0.1%, slightly underperforming the market. Online grocery sales increased by 13.9% thanks in particular to growth in express deliveries. Kespro's net sales grew by 3.1%, exceeding market growth. Grocery price inflation slowed down notably and stood at 0.4%. Our customer flows continued to grow thanks to campaigns, while customers emphasise price. Our strategy execution in grocery trade is proceeding according to plans, focusing on strengthening store-specific business ideas, developing our store site network, and improving our price competitiveness.

In the building and technical trade division, we can see a turn for the better: result for the division grew for the first time in eight quarters. Sales have picked up in both building and home improvement trade and technical trade, but the market remains challenging, The division's net sales totalled €1,128 million, up by 7.4%, or down by 2.2% in comparable terms. Comparable operating profit for the division totalled €70.1 million, up by €0.2 million. In building and home improvement trade, net sales increased thanks to sales growth in K-Rauta Finland and the Davidsen acquisition in Denmark. Operating profit for Onninen Finland was nearly at last year's level, and sales and profitability for solar power products have returned to normal levels. In Norway, there have been logistics-related delays in the Elektroskandia integration process, while Byggmakker's sales slightly underperformed the market. In Sweden, our increased focus on B2B trade under the K-Bygg brand has proceeded according to plans. 

In the car trade division, both net sales and profit decreased as the market remained challenging, but profitability stayed at a good level. Market demand for new cars was muted, but the market for used cars grew slightly. The division's net sales totalled €295 million and comparable operating profit €17.8 million. New car sales decreased, but when it came to orders for new cars, the market share of car brands represented by Kesko increased. Our sales growth in used cars notably outpaced the market. Service sales also increased. In September, we completed the acquisition of Autotalo Lohja.

Kesko's net sales and operating profit are estimated to remain at a good level in 2024 despite the challenges in our operating environment. We now specify our profit guidance and estimate that our comparable operating profit in 2024 will amount to €630-680 million. We furthermore estimate that Kesko's comparable operating profit will improve in 2025.

Further information, audioconference and webcast

Further information is available from Anu Hämäläinen, Executive Vice President, Chief Financial Officer, tel. +358 105 323 713, Hanna Jaakkola, Vice President, Investor Relations, tel. +358 105 323 540, and Eva Kaukinen, Vice President, Group Controller, tel. +358 105 322 338. An English-language audio conference on the results briefing will be held on 30 October 2024 at 9.00 (EET). The audio conference login is available on Kesko's website at www.kesko.fi. A Finnish-language webcast of the interim report briefing can be viewed at 10.30 am (EET) at www.kesko.fi.

Kesko's Financial statements release for January-December 2024 will be published on 5 February 2025. In addition, Kesko Group's sales figures are published monthly. News releases and other company information are available on Kesko's website at www.kesko.fi.

This is a summary of Kesko Corporation's January-September 2024 Q3 interim financial report. The complete report is attached to this release and also available at www.kesko.fi/en/investor