Building and technical trade strategy

The building and technical trade division operates in 8 countries: Finland, Sweden, Norway, Estonia, Latvia, Lithuania, Poland and Denmark*. In the Baltics and Belarus, building and home improvement trade operations are handled by the joint venture Kesko Senukai. The division has some 500 stores and offers extensive online services via its chains: Onninen serves technical trade customers, while K-Rauta, Byggmakker and K-Bygg and Davidsen serve professional builders and consumers.

* Davidsen acquisition was completed in January 2024.

Strategic focus areas

• Profitable growth both organically and through M&A. Winning market share in all operating countries.
• Due to the low cycle in the construction market, our focus is on securing profitability and cash flow generation. Improving profitability: the long-term strategic target of a 6-8% operating margin is still valid.
• Finland continues winning market share. Continue growing K-Rauta’s market share through store-specific business ideas, focusing on growth centres. Continue improving Onninen’s market share by increasing the sales of green transition products, growing the store network and improving customer-focused digital solutions.
• Sweden stabilising business performance: Execution of conversion of K-Rautas to K-Byggs to create a solid platform for profitable growth in building and home improvement trade. Looking for suitable acquisition targets to achieve economies of scale. 
• Norway implementing business performance improvement programme: Boosting Byggmakker’s performance and growth to drive EBIT improvement. Finalising the Onninen-Elektroskandia integration and executing according to the business case.
• Denmark driving growth and improving margins: Organic growth as well as executing M&As and ensuring their successful integration.
• All countries: Proactive sales, margin and cost management, digital solutions to drive efficiency and customer experience.

Megatrends in operating environment

Economic cycle

• The cycle is expected to turn in 2025
• Interest rates and the ability to invest
• Market environment creates possibilities for industry consolidation

Green transition

• Growing demand for energy boosts the market for energy solutions
• Increasing investments in energy infrastructure
• Fast development of technologies related to the green transition

Renovation

• High underlying demand for renovation and technical infrastructure investments
• Need for renovation growing steadily

Urbanisation

• Urbanisation driving the need for construction
• Growing need for infrastructure investments, e.g. electric grid, water and sewage

Digitalisation and technologization

• Increasing use of smart technical solutions in building and construction
• Technological transformation
• Digitalisation and AI improving efficiency and customer service

Kesko organised an investor event on Tuesday, 4 June 2024. At the event, President and CEO Jorma Rauhala and other members of Kesko’s top management presented the company’s updated strategy and focus areas for the three business divisions. The event was held in English. Watch the recording and related materials here.

Read more about the country specific achievements and strategy in Kesko's Annual Report.