24 July 2024
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Market + Management

Kesko Group: Announces H1-2024 Financial Results

Kesko / FI. (kkc) Good performance in a weak market accompanied Kesko Group’s first half of fiscal 2024. Group net sales in January-June totalled EUR 5,852.9 million (EUR 5,932.7 million). Reported net sales were down by 1.3 percent, and comparable net sales by 4.8 percent. Comparable operating profit totalled EUR 277.7 million (EUR 333.5 million). Operating profit totalled EUR 256.4 million (EUR 328.9 million). Cash flow from operating activities totalled EUR 421.6 million (EUR 312.2 million). Comparable earnings per share EUR 0.46 (EUR 0.60); reported earnings per share EUR 0.42 (EUR 0.59).

President and CEO Jorma Rauhala: «The second quarter of the year came in line with expectations, and Kesko again managed a good performance in a challenging market. Our net sales totalled EUR 3,093.4 million, representing a decrease of 0.4 percent year-on-year, or 4.1 percent in comparable terms. Our comparable operating profit totalled EUR 178.3 million. The cash flow from operating activities was strong at EUR 309.0 million, and our cost-efficiency remained good.

  • «Net sales for the grocery trade division totalled EUR 1,596.5 million, representing a decrease of 1.7 percent year-on-year, while the comparable operating profit stood at EUR 114.5 million. K Group grocery sales were down by 1.1 percent. Online grocery sales grew by 13.5 percent, driven especially by express deliveries. Net sales for the foodservice business decreased by 1.3 percent, but still exceeded market growth. Price inflation in groceries has clearly slowed down, and stood at 0.1 percent. Our customer flows have continued to grow thanks to campaigns, while price is an important consideration for customers. In June, legislative changes enabled the sales of beverages with an alcohol content of at maximum 8 percent in grocery stores: we introduced new products in a responsible manner, and have seen that wines are typically acquired alongside food.
  • «In the building and technical trade division, profitability weakened as expected due to the weak construction cycle in the Nordic countries. In Poland and the Baltic countries, the cycle has turned, leading to an upturn in Onninen’s sales in those markets. The division’s net sales totalled EUR 1,203.7 million, and were up thanks to the Davidsen acquisition, while the comparable operating profit totalled EUR 56.1 million. The sales and profit of solar power products in particular fell short of the levels of the comparison period, which impacted Onninen’s relative performance. Inventories are now at a healthier level in both building and home improvement trade and technical trade. The market is showing signs of picking up in all our operating countries, even though the cycle continues to be weak.
  • «In the car trade division, net sales and profit decreased in the second quarter as expected. The market demand for new cars was muted, while the market for used cars grew slightly. The division recorded net sales of EUR 298.7 million and a comparable operating profit of EUR 14.9 million. Although new car sales were down, customer demand for new models was at a good level. Growth in used car sales outpaced the market notably, and growth in service sales also continued strong. In May, we announced that we would be acquiring the operations of Autotalo Lohja to strategically strengthen our car dealership network in Southern Finland.

«In June, Kesko published a strategy update. The main pillars of the strategy remain intact, while each division’s competitive advantages and objectives have been refined. Kesko’s growth strategy continues to centre around profitable growth in three selected divisions, namely grocery trade, building and technical trade, and car trade. We seek sales growth, improved customer experience, and profitability and efficiency in all businesses, with the help of e.g. digital services and artificial intelligence. Kesko’s financial targets remain unchanged. 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 are specifying our profit guidance, and now estimate that the comparable operating profit in 2024 will amount to EUR 620-680 million.»

For additional information please read the company’s PDF file below (278 KB):

20240723-KESKO-GROUP-H12024.


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