In the Finnish-language briefing, analyst questions were no longer heard, and I thought it might be useful to share the content of the English-language briefing as well, since I listened to it. The presentations in the briefings are always the same, but since most analysts tend to ask their questions during the international conference call held before the Finnish briefing, some of this information sometimes receives less attention.
Outlook 2025: The guidance does not include the recently announced acquisitions in Denmark; meaning that when talking about growing comparable operating profit, expectations for earnings growth are in the context of the current Kesko. The Roslev Trælasthandel, Tømmergaarden, and CF Petersen & Søn transactions are estimated to be completed in the first half of next year.
Guidance 2024: The earnings range, adjusted upwards by EUR 10 million, came as a surprise to analysts, at least in the sense that, as I understand it, consensus expected the upper end of the guidance to decrease before the results day. The reason for the change in guidance was the better-than-expected earnings development in the building and technical trade, as also became clear in the results day interview.
Improving price competitiveness: Customer flows in K-food stores have continued to grow thanks to campaigning, but the average basket size has decreased. The importance of price is significant for consumers, and Kesko does not expect this to change. The effects of price investments will be visible in stores from next year onwards; discounts are targeted (utilizing data, customer-specific offers).
Grocery trade market share: Kesko expects market share to turn to growth by 2026 at the latest. This is supported by the development of the store site network, especially new K-Citymarkets, price investments, and the sharpening of store-site-specific concepts.
New revenue streams from media and data businesses: This area was discussed in the results day interview, but I will add that, according to comments in the briefing, the earnings impact from these is in the double digits annually, if I understood correctly: ”EBIT of these businesses are two double digits millions annually and it’s growing all the time.” These partly support the profitability of the grocery trade, as the aforementioned price investments put pressure on margins.
Growth in building and technical trade: Based on the comments, Kesko has increased its market share this year in Finland, Sweden, Poland, and the Baltics. In Norway, on the other hand, it has lost some ground. In Finland, Onninen has apparently lost some market share in electrical products, but at the same time succeeded in increasing it in other product categories.