Kesko as an investment
“In 2017, we successfully continued the implementation of our growth strategy towards becoming a more focused Kesko and K Group. Net sales grew in all divisions and profitability improved. Kesko’s financial position is strong and enables attractive dividends as well as active business transformation.”
Jukka Erlund, Executive Vice President, Chief Financial Officer
Six reasons for investing in Kesko
Strong market position in Finland and other countries
- Market share of the grocery trade is around 37.2% (Kesko's own estimate) in Finland following the acquisition of Suomen Lähikauppa
- In building and technical trade, the market shares in Finland are 41% in the building and home improvement trade and 37% in technical wholesale; strong market position also in Norway, the Baltics and Belarus
- In the car trade, VV-Auto is the market leader in Finland with a market share of 18.6%
Growth strategy
- Growth of the grocery trade in Finland
- Growth and expansion of the building and technical trade in Northern Europe
- Growth of the car trade, particularly in Finland
- Strong progress was made in implementing the strategy thanks to the acquisitions completed in 2016 and 2017
- Best customer experience in the trading sector in all channels
Strong and stable financial performance and financial position
- Enables investing in growth and long-term business development
- Return on capital employed 12.2% (2017)
- Equity ratio of 50.4% and gearing of 6.1% (2017)
- Significant synergies from acquisitions
Good dividend payment capacity
- Kesko distributes at least 50% of its comparable earnings per share as dividends while taking into account the Company’s financial position and operating strategy
- A dividend of €2.20 per share is proposed to be paid for 2017, which would represent 96.6% of the comparable earnings per share, and the effective dividend yield of a B share would be 4.9%
- Dividends for the past five years were paid at the average rate of 100.5% on the comparable earnings per share, and the average effective dividend yield of a B share was 5.4%
Recognised responsibility work
- Kesko is included in several sustainability indices and listings, such as CDP's Climate A- level, Dow Jones Sustainability (DJSI), FTSE4Good, the STOXX Global ESG Leaders indices, and 'The Global 100 Most Sustainable Corporations in the World' list
- The responsibility programme covers all Kesko's divisions and contains both short-term and long-term objectives
Competitive advantage with retailer enterpreneurship
- We operate the retailer business model when it provides a competitive advantage
- We combine systematic chain operations with retailer operations based on entrepreneurship
- K-retailers tailor their product selections and services to meet the needs of local customers
- In 2017 Kesko had more than 1,100 K-retailer entrepreneurs as partners
- In 2017, 43% of Kesko's net sales were generated by the retailer-entrepreneur business model
Share development
Dividend history 2012-2017
* Proposal to the Annual General Meeting
Kesko Corporation distributes at least 50% of its comparable earnings per share as dividends, taking however the company's financial position and operating strategy into account.