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Sami Kiiski has headed Kesko's second-largest and most international division, building and technical trade, for almost a year. It has not been an easy start, as the construction market has been very challenging in all of the division’s eight operating countries. However, profitability for the division has stayed at a good level, and Kesko has continued to invest in the division despite the weak market. Kiiski believes that as the market improves, Kesko's position in building and technical trade will be good, and in the long term, it could become Kesko's largest division.

Antti Järvenpää from Inderes interviewed Sami Kiiski, the President of Kesko’s building and technical trade division, in early March 2025

Sami Kiiski was appointed as the President of Kesko's building and technical trade division in April 2024. Prior to this, Kiiski served as the President of Kesko’s car trade division, and prior to that, as the head of leisure trade. Kiiski sat down for a video interview with Inderes to discuss, among other things, how the division has pursued growth both organically and through acquisitions, how to succeed in international acquisitions, and the growth opportunities the division has in Northern Europe going forward. The key topics discussed can are summarised in this blog post. The original Finnish-language interview can be found on Youtube here.

Growth opportunities in eight countries

Kesko’s building and technical trade division operates in eight countries: Finland, Sweden, Norway, Poland, Estonia, Latvia, Lithuania, and as of the beginning of last year, Denmark.

The division consists of technical trade – which is aimed solely at B2B customers – and building and home improvement trade, aimed at both consumers and B2B customers. In recent years, focus has shifted notably towards B2B, which already accounts for over 80% of the division's sales. According to Kiiski, the motivation behind the shift is that building and renovation work is becoming increasingly technical and professional, partly due to regulation.

Currently, Kesko operates in both building and home improvement trade and technical trade in nearly all its operating countries. According to Kiiski, Kesko will continue to focus solely on its strong technical trade business in Poland, while in the other operating countries, interesting growth opportunities are scanned in both building and home improvement trade and technical trade.

How to succeed in international acquisitions

Kesko has significantly grown its building and technical trade business through acquisitions across Northern Europe. According to Sami Kiiski, several factors contribute to a successful acquisition: first, it is essential to know what you are looking for. For example, Kesko has decided to focus on companies that primarily deal in B2B trade. Preparation is vital: it is important to thoroughly understand the market and its players.

Once an acquisition is completed, Kiiski emphasises the importance of appreciating the acquired company's proven concepts and corporate culture, instead of forcibly imposing Kesko's operating models on the company. This is why the division has country-specific strategies for each operating country, which take into account the unique characteristics of that particular market. Kesko-level synergies can be found, e.g. in negotiations with large global product suppliers, but local purchase organisations are also important.

Kiiski also stresses the importance of committing local management and other key personnel post-acquisition, noting that in the case of family-owned companies, an industrial player such as Kesko – which is committed to developing the acquired company in the long term – can often be seen as a more attractive buyer than, for example, a private equity investor.

Strong market positions in Finland – additional growth sought organically

In Finland, K-Rauta and Onninen are both market leaders in their respective fields: K-Rauta holds a 52% market share in building and home improvement trade, while Onninen has a 44% share in technical trade.

Kiiski contributes much of the success of K-Rauta in Finland to K Group's retailer business model and store-specific business ideas, which allow retailer entrepreneurs in the K-Rauta chain to tailor their stores to meet the needs of their local customer base. Kesko lends support through investments and development efforts. Meanwhile, Onninen offers its customers a wide selection of technical trade products, efficient logistics, and reliable deliveries. Onninen is also very strong in digital services, with 80% of its product sales lines already coming through digital channels.

Due to the strong market positions, growth in Finland is not sought through acquisitions. Instead, says Kiiski, further organic growth is not only possible but also targeted. K-Rauta, for example, has more to gain in B2B trade, while Onninen will benefit from its new logistics centre Onnela, currently under construction in Hyvinkää, which will centralise warehousing and enable a higher degree of automation as well as deliveries of customised products to customers. According to Kiiski, operations in both chains can also be made more efficient.

Good profitability despite the challenging operating environment – Kesko’s position strong when the market turns

The market for building and technical trade has been very challenging in all of Kesko’s eight operating countries for a couple of years now. However, the division has managed to maintain a profitability level that can be considered good even in international comparison. According to Sami Kiiski, profitability has been underpinned by the good customer relationships and customer insight, as well as the division’s ability to carry out demanding projects. Cost control and increased operational efficiency have also been contributing factors. In the long term, the division targets an operating margin of 6-8%.

Kiiski notes that despite the weak market, Kesko has continued to develop the division, making acquisitions in line with the growth strategy and notable investments in e.g. logistics in various operating countries. Kiiski sees Kesko’s position strong when the market takes an upturn. Kesko’s vision is to be a leading player in the building and technical trade in Northern Europe, and the objective is to grow businesses outside Finland and be amongst the largest market players in each operating country. Kiiski believes that building and technical trade could even one day become Kesko's biggest division.

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