Financial statements release 2024: Year-end turnaround

Financial performance in brief:

10-12/2024

• Group net sales in October-December totalled €3,040.6 million (€2,902.0 million); reported net sales grew by 4.8% while comparable net sales grew by 1.1%

• Comparable operating profit totalled €170.8 million (€170.5 million)

• Operating profit totalled €121.0 million (€159.8 million)

• Cash flow from operating activities totalled €301.0 million (€342.4 million)

• Comparable earnings per share €0.31 (€0.31); reported earnings per share €0.19 (€0.28)

1-12/2024

• Group net sales in January-December totalled €11,920.1 million (€11,783.8 million); reported net sales grew by 1.2%, while comparable net sales decreased by 2.3%

• Comparable operating profit totalled €650.1 million (€712.0 million)

• Operating profit totalled €579.5 million (€695.4 million)

• Cash flow from operating activities totalled €1,008.2 million (€1,049.5 million)

• Comparable earnings per share €1.11 (€1.28); reported earnings per share €0.95 (€1.25)

• The Board proposes a dividend of €0.90 per share, proposed to be paid in four instalments

 
Key performance indicators

In this financial statements release, 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.

Outlook and profit guidance for 2025

Kesko Group’s profit guidance is given for the year 2025, in comparison with the year 2024.

Kesko’s operating environment is estimated to improve in 2025, but to still remain somewhat challenging. Kesko’s comparable operating profit is estimated to improve in 2025. Kesko estimates that its comparable operating profit in 2025 will amount to €640-740 million. The profit guidance is based on an estimate of a gradually improving economic cycle in all Kesko operating countries. Key uncertainties impacting Kesko’s outlook are developments in consumer confidence, investment appetites, as well as geopolitical crises and tensions.  

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, the market for new cars is expected to stay at a low level. 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 sales and profitability were at a good level in 2024 despite the challenges in our operating environment.  Towards the end of the year, we witnessed a turnaround, as our quarterly result improved for the first time in eight quarters in Q4. Full-year net sales totalled €11,920.1 million, while our comparable operating profit amounted to €650.1 million. The successful execution of our updated growth strategy in all three divisions has yielded results also in a challenging operating environment. Our cash flow from operating activities amounted to €1,008.2 million. We have also been successful in managing costs. Kesko’s good ability to generate profits and our strong financial position enable investments in growth as well as good dividend capacity. Kesko’s Board proposes to the Annual General Meeting a dividend of €0.90 per share – in total, €358 million – to be paid in four instalments.

In the grocery trade division, sales grew in 2024 in both our grocery stores and the foodservice business. Net sales for the division totalled €6,381.4 million, up by 0.5%. The comparable operating profit for the division was €438.0 million. Kespro performed particularly well in 2024, and we aim to continue the good performance in the foodservice business. The popularity of online grocery persisted, and sales grew by 13.5% thanks to express deliveries. Campaigns and other marketing measures strengthened our customer flows and sales during the year, but the market share for our grocery stores came down as average purchase decreased. Price competition in Finnish grocery trade remained tight, and price continues to be a significant factor for grocery customers. At the beginning of 2025, we responded to customer wishes by launching an extensive price programme, reducing prices of more than 1,200 grocery products. The investment in this strategic programme amounts to nearly €50 million, shared between Kesko and the retailers. Our focus in grocery trade is to strengthen our market position while maintaining good profitability.

In building and technical trade, profitability remained good even though it declined year-on-year due to weak construction activity. Net sales for the division totalled €4,351.6 million, up by 3.8% thanks to the Davidsen acquisition in Denmark. The division’s comparable operating profit totalled €169.1 million. In 2024, demand decreased in both building and home improvement trade and technical trade in all our operating countries as construction volumes came down, but sales picked up in the latter half of the year. In the longer term, the outlook for building and technical trade is positive. Urbanisation, renovation and infrastructure investment debt, infrastructure projects, and the green transition underpin construction over cycles. During the year, we expanded operations to Denmark by completing the acquisition of Davidsen Koncernen A/S, one of the leading operators in Danish building and home improvement trade, at the beginning of February. In August, we announced the acquisitions of three other Danish operators: Roslev, Tømmergaarden and CF Petersen & Søn. Strategic focus areas for the division are securing profitability and improving cash flow with a country and business focus.

The car trade market in Finland was weak in 2024, but profitability for Kesko’s car trade division stayed at a good level. The market showed some signs of picking up, but weak consumer confidence, continued high interest rates, and uncertainty regarding powertrain alternatives slowed down recovery. Development in the used car market was clearly better than in new cars, and sales also grew in car related services. Net sales for the division in 2024 totalled €1,209.4 million, representing a decrease of 4.0% in comparable terms. The division’s comparable operating profit totalled €69.3 million. The major transformation measures carried out within the division in recent years have improved its profitability. Kesko’s strategic focus is on outperforming the market in all car trade business areas, namely new cars, used cars, and services.

I took over as Kesko’s President and CEO at the beginning of February 2024. In June, we updated Kesko’s strategy, keeping the main pillars intact. In all business operations, we seek sales growth, better customer experiences, profitability and efficiency with the help of e.g. digital services and artificial intelligence. All three divisions have plenty of potential for growth and for further strengthening their business especially by listening to their customers and responding to customer needs. I see Kesko’s future bright also in upcoming years. I want to thank all our customers, the people of K Group, our shareholders, and our partners for their trust and good collaboration over the past year.

Proposal for profit distribution

The Board of Directors of Kesko Corporation proposes to the Annual General Meeting to be held on 24 March 2025 that a dividend of €0.90 per share be paid for the year 2024 based on the adopted balance sheet on shares held outside the company at the date of dividend distribution. The remaining distributable assets will remain in equity. The Board proposes that the dividend be paid in four instalments.

The first instalment of €0.23 per share is to be paid to shareholders registered in the company's register of shareholders kept by Euroclear Finland Ltd on the instalment’s record date 26 March 2025. The Board proposes that the dividend instalment pay date be 2 April 2025.

The second instalment of €0.22 per share is to be paid to shareholders registered in the company's register of shareholders kept by Euroclear Finland Ltd on the instalment’s record date 15 July 2025. The Board proposes that the dividend instalment pay date be 22 July 2025.

The third instalment of €0.23 per share is to be paid to shareholders registered in the company's register of shareholders kept by Euroclear Finland Ltd on the instalment’s record date 14 October 2025. The Board proposes that the dividend instalment pay date be 21 October 2025.

The fourth instalment of €0.22 per share is to be paid to shareholders registered in the company's register of shareholders kept by Euroclear Finland Ltd on the instalment’s record date 13 January 2026. The Board proposes that the dividend instalment pay date be 20 January 2026.

The Board proposes that it be authorised to decide, if necessary, on new dividend payment record dates and pay dates for the second, third and/or fourth instalments, if the rules and statutes of the Finnish book-entry system change or otherwise so require, or if the payment of dividends is prevented by laws or regulations applied.

As at the date of the proposal for the distribution of profit, 4 February 2025, a total of 397,956,408 shares were held outside the company, and the corresponding total amount of dividends is €358,160,767.20.

The distributable assets of Kesko Corporation total €1,539,047,794.71, of which profit for the financial year is €357,128,787.22.

Annual General Meeting

The Board of Directors has decided that Kesko’s Annual General Meeting will be held on 24 March 2025 at 1.00 pm (EET). Kesko Corporation will publish a notice of the General Meeting on the its website and as a stock exchange release on 5 February 2025.

Annual Report 2024, Corporate Governance Statement, and Remuneration Report for Governing Bodies

Kesko will publish its 2024 Annual Report, including a strategy review, the Report by the Board of Directors and financial statements for 2024, the Corporate Governance Statement, and the Remuneration Report for Governing Bodies in week 9 on its website at www.kesko.fi.

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 5 February 2025 at 9.00 am (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 interim report for January-March 2025 will be published on 29 April 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.

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