Kesko's financial statements release for 1 Jan.-31 Dec. 2022: All divisions generated good results in 2022

FINANCIAL PERFORMANCE IN BRIEF:

10-12/2022

• Group net sales in October-December totalled €2,983.4 million (€2,870.3 million), an increase of 4.3% in comparable terms, reported net sales grew by 3.9%
• Comparable operating profit totalled €192.6 million (€203.5 million), a decrease of €10.9 million
• Operating profit totalled €191.2 million (€204.9 million)
• Comparable earnings per share €0.36 (€0.40)
• Reported Group earnings per share €0.36 (€0.41)

1-12/2022

• Group net sales in January-December totalled €11,809.0 million (€11,300.2 million), an increase of 4.4% in comparable terms, reported net sales grew by 4.5%
• Comparable operating profit totalled €815.1 million (€775.5 million), an increase of €39.6 million
• Operating profit totalled €816.5 million (€775.2 million)
• Comparable earnings per share €1.54 (€1.43)
• Reported Group earnings per share €1.53 (€1.44)
• Board proposes a dividend of €1.08 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 the acquisitions and divestments completed in 2021 and 2022. The comparable operating profit has been calculated by deducting items affecting comparability from the reported operating profit.

OUTLOOK AND GUIDANCE FOR 2023

Kesko Group’s guidance is given for the year 2023, in comparison with the year 2022. Kesko’s net sales and operating profit are estimated to remain at a good level in 2023 despite the challenges in the company’s operating environment. Kesko estimates that its comparable operating profit in 2023 will be in the range of €680-800 million.

The guidance is based on an estimated relatively short recession in Kesko’s operating countries. Key uncertainties impacting Kesko’s outlook are developments in inflation and interest rate levels, and Russia’s ongoing offensive war in Ukraine.

In the grocery trade division, B2C trade as a whole is estimated to remain stable, and the foodservice market is predicted to continue to grow. Price inflation will support sales development in euro terms, but will also increase costs. Operating profit is expected to remain at a good level.

The construction market is expected to decrease somewhat compared to 2022. New building construction is estimated to decrease, but renovation building and construction related to the green transition are estimated to continue to grow. Operating profit is expected to remain at a good level also in building and technical trade.

In the car trade division, car availability is estimated to improve, but demand is estimated to remain below long-term average. Profitability in the car trade division is expected to remain at a good level.

PRESIDENT AND CEO MIKKO HELANDER:

All Kesko divisions generated a good result in 2022. Our annual result has now improved for eight consecutive years. The result we achieved is strong proof that Kesko is a unique trading sector operator whose strategy works in a rapidly changing operating environment.

In 2022, our net sales grew by 4.3% in comparable terms and totalled €11,809 million. Our comparable operating profit amounted to €815 million, representing an increase of €40 million. Good progress was made in strategy execution in all areas. Our good ability to produce a profit and strong financial position enable investments in growth and good dividend capacity. Kesko’s Board proposes to the Annual General Meeting a dividend of €1.08 per share, which totals nearly €430 million, proposed to be paid in four instalments.

In the grocery trade division, profitability was good also in 2022. Profitability improved thanks to good performance by Kespro. The division’s net sales grew by 3.6%, and its comparable operating profit rose to €460 million. Profitability for the division was good, with a comparable operating margin of 7.5%. The basis for good profitability in the grocery trade division is our strong position in all areas of Finnish food trade. Our strength in food trade lies in our extensive network of physical grocery stores combined with efficient online sales and our foodservice business, as well as our well-functioning retailer business model. Our strategic goal is to continue to grow sales and improve customer experience.

The building and technical trade division posted its all-time best result in 2022. The division’s net sales grew by 9.4% in comparable terms and totalled €4,805 million. The comparable operating margin for the division was 7.1%. Strong performance continued for Onninen and K-Rauta in Finland. In Norway and Sweden, sales development was good in the B2B segment in both technical trade and building and home improvement trade. Onninen’s sales continued to grow also in Poland and the Baltic countries. B2B trade now accounts for over 80% of the division’s sales. Sales growth in B2B trade continued strong, underpinned by good construction activity. Demand was very strong especially in products related to the green transition and to improving energy efficiency. Good demand in renovation building also underpinned the positive performance. Renovation building accounts for over half of the division’s sales. During the year, we continued acquisitions in line with our strategy and the integration of the acquired businesses.

Our transformation process in the car trade division is proceeding well and yielding results. The division’s net sales totalled €911 million, and its comparable operating margin was 5.3%. Availability issues with cars caused net sales to decrease in 2022, but profitability remained at a good level thanks to improved sales margins and  transformation measures and efficiency improvements. Kesko’s car trade is No 1 in Finland when it comes to the sales of electric cars and the EV charging network.

Kesko’s long-standing work for sustainability and corporate responsibility brings results that gather also international recognition. The most recent examples are the assessments for the Dow Jones Sustainability Indices and the Global 100 listing of the most sustainable companies in the world: Kesko ranked among the best in its sector in both.

Kesko’s outlook for 2023 is also positive. We estimate that our comparable operating profit will be in the range of €680-800 million.

I want to thank all our customers, shareholders, Kesko employees, K-retailers and their staff, as well as our partners for their trust and collaboration in 2022.

IMPORTANT EVENTS

POSITIVE PROFIT WARNING ON 25 APRIL 2022

Kesko raised its profit guidance for 2022 on 25 April 2022, estimating that its comparable operating profit in 2022 will be in the range of €730 – 840 million. Before, the company estimated that the comparable operating profit would be in the range of €680–800 million.

PROPOSAL FOR PROFIT DISTRIBUTION

The Board of Directors of Kesko Corporation proposes to the Annual General Meeting to be held on 30 March 2023 that a dividend of €1.08 per share be paid for the year 2022 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 €0,27 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 3 April 2023. The Board proposes that the dividend instalment pay date be 12 April 2023.

The second instalment of €0,27 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 21 June 2023. The Board proposes that the dividend instalment pay date be 28 June 2023.

The third instalment of €0,27 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 12 September 2023. The Board proposes that the dividend instalment pay date be 19 September 2023.

The fourth instalment of €0,27 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 12 December 2023. The Board proposes that the dividend instalment pay date be 19 December 2023.

The Board proposes 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.

As at the date of the proposal for the distribution of profit, 1 February 2023, a total of 397,458,647 shares were held outside the company, and the corresponding total amount of dividends is €429,255,338.76.

The distributable assets of Kesko Corporation total €1,498,545,852.49, of which profit for the financial year is €408,925,619.88.

ANNUAL GENERAL MEETING

The Board of Directors decided that the Annual General Meeting will be held on 30 March 2023 at 1.00 pm (EET). Kesko Corporation will publish a notice of the General Meeting on the company’s website and as a stock exchange release on 2 February 2023.

Annual Report 2022, Corporate Governance Statement and Remuneration report for Governing Bodies

Kesko will publish its 2022 Annual Report, including a strategy review, the Report by the Board of Directors and financial statements for 2022, the Corporate Governance Statement, the Remuneration Report for Governing Bodies, and sustainability reporting indicators (GRI) in week 10 at the latest on its website at www.kesko.fi.

FURTHER INFORMATION, AUDIO CONFERENCE AND WEBCAST

Further information is available from Jukka Erlund, Executive Vice President, Chief Financial Officer, tel. +358 105 322 113, 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 2 February 2023 at 9.00 am (EET/EEST) 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 11.30 am (EET) at www.kesko.fi.

Kesko Corporation's interim report for January-March 2023 will be published on 28 April 2023. 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.

DISTRIBUTION
Nasdaq Helsinki Ltd
Main news media
www.kesko.fi

The complete financial statements release is attached to this release (pdf) and is also available at our website