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K Group today is a leading operator in Northern European building and technical trade, with retail and B2B sales of over €6.5 billion. Onninen, the technical wholesale company acquired by Kesko in 2016 as part of Kesko’s building and technical trade division, is a valuable part of the equation, and will continue to play an important role in Kesko’s success also going forward.

Kesko acquired the Finnish technical wholesale company Onninen in 2016. Founded in 1913, Onninen today operates some 130 Onninen Express stores and Onninen points of sale in Sweden, Norway, Poland, Estonia, Latvia and Lithuania, and of course in Finland, where it is the clear market leader.

Onninen offers a wide selection of products and service packages to contractors, industry, infrastructure building, and retailers, but does not engage in B2C trade. Onninen’s business is fully Kesko’s and not run by retailer entrepreneurs.

Onninen has helped Kesko expand its B2B sales in building and technical trade

Kesko’s acquisition of Onninen in 2016 was motivated by the identified megatrend of building and construction becoming more and more technical and being increasingly outsourced to professionals. This trend is underpinned by other megatrends such as urbanisation, rising standard of living, and population ageing. Kesko saw the need to focus more on B2B trade aimed at building and construction sector professionals, and Onninen offered a great pathway to this.

The move has proven successful: before Kesko acquired Onninen, only 40% of the sales for the building and technical trade division came from B2B trade, while today the figure stands above 80%.Onninen offers products and solutions to various B2B customers,
including those working in HEPAC, electrical, refrigeration and energy

Onninen as part of Kesko has been a success story

Today, K Group is a leading operator in Northern European building and technical trade with retail and B2B sales of €6.5 billion. Onninen’s performance as part of Kesko has been solid and strong. In 2022, Onninen has gained market share in all seven operating countries and both Onninen’s net sales and comparable operating profit grew in all countries in 1-9/2022.

Renovation building, energy-efficiency and green transition underpinning performance going forward

In recent years, the pandemic, inflation and the war in Ukraine have increased the need for better energy-efficiency, self-sufficiency and ensuring security of supply. Onninen provides, for example, solar panels that enable emission-free energy, pumps for energy-efficiency improving heating renovation projects, products for infrastructure projects, and wide selections for EV charging. In the third quarter of this year, volumes grew the most in the heating and energy product categories.

Global events have also presented many challenges, with international issues with logistics impacting product availability and security of supply. Onninen has been able to tackle these issues with the strength of its procurement capabilities and long-standing relations with suppliers. Customers have also valued Onninen’s ability to offer services and warehousing in uncertain times. Onninen’s online store in Finland is the biggest and the best in the business.

”The fact that through acquiring Onninen, Kesko has become a significant player in technical wholesale, is important also for Kesko’s future,” noted Kesko’s President and CEO Mikko Helander at the third-quarter results briefing in October 2022. Kesko expects efforts to improve energy-efficiency, investments in the green transition, and the growing need for renovation building to underpin demand for technical wholesale also in 2023.

Kesko’s confidence in Onninen is also reflected in its investment decisions: in September, Kesko announced that between 2025 and 2030, it will build a new 82,000 square metre logistics centre for Onninen and K-Auto in Finland, costing over €300 million.

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