Kesko Q1'26: Laaja-alaisesti vahvaa tekemistä

Well, I think we can be very satisfied with Q1. If we consider that our sales improved, profits improved quite broadly – we operate in eight markets or countries – we also performed well in terms of market share. And taking into account that we have two divisions, building services and automotive, where the cycle is still historically quite weak, I'd say this was a very strong performance for the first quarter.

Yes, yes. Regarding the grocery trade, that is our food retail in Finland, of course there are two parts: the consumer side with our well-known City Market, Supermarket, and Market, and then the food service side. In the food service side, the market is quite weak, but Kesko performed well there. But then on the consumer side of daily goods, we updated our strategy '24 and set a specific goal to reverse the decline in market share while maintaining good profitability. We are talking clearly above 6% profitability. And now, if we look, we turned the market share for the first time in years. Last summer in July we gained market share, and then in Q3 we gained market share. Sorry, Q4 we gained market share clearly by 0.5, and now in Q1 again clearly by 0.5 percentage points, which is quite a lot. And what's pleasing is that it happened in all size categories. Last year City Market was strong, but now we have City Market, Supermarket, Market all winning market share in their own size categories. How was this done? I would say it's following the strategy. The network is one factor. Last year the network effect was negative, but this year it's becoming neutral. Then there is our broad pricing program: permanent products, Pirkka products, campaign products, own-plus products, their implementation, quality issues. This is a store-specific business, and we have excellent tools to sharpen them store by store, on bread, produce, etc. Gradually, everything is starting to work, and we achieved an excellent result: sales growth, profit growth, and market share growth across all measures.

Well, yes, of course we need to be careful about these cost increases. We talk about the Hormuz Strait, and it's important to channel the discussion to the issues there. The Suez Canal has been affected for a long time, but it's been bypassed, so that's not a reason now. So Q1 had no impact on us. Regarding Q2 and the daily goods trade you asked about, we see our procurement freight and distribution freight to stores or to end customers in the food service side. There are some fuel price increases, but so far the impact is very marginal. I'm talking specifically about this moment, Q2: April, May, June. I don't see much basis for price increases in this quarter. That would have to be linked to oil price increases. Such things are more evident in the technical wholesale side, where oil is central, but not in food production. Okay. If this continues beyond Q2 into Q3 and Q4, then it's hard to assess. It depends on consumer confidence, interest rates, and so on. I understand that it could affect primary production and agriculture if fuel prices rise, fertilizer prices rise, and there are availability issues. How big? I find it hard to imagine they would be as large as in 2022 and 2023, when food prices in Finland rose 10% each year. These would be much more marginal even in the worst case. Such price increases and decreases have always existed. Our strategy continues to invest in our pricing program, so we will continue that. But if significant changes occur in pricing, we will have to adjust somewhat, but the market largely dictates it.

Yes, overall I can say that especially in Finland, where we are a larger player, we had strong sales growth. In Q1, the market didn't develop much, so Onninen's sales growth was over 10 percentage points better than the market, about 10.1% while the market was near zero. So we gained market share in an exceptional way. What is the reason? I believe that through these difficult years, we have invested in having skilled professional staff, active sales activities, and contacting our customers. A key factor is product availability. In this business, it's crucial that products are available when customers order. That works for us. We have our new warehouse in use, and we had no problems. It doesn't bring huge efficiency gains yet, but it has worked. We have been able to make deliveries. Also, there has been consolidation in the industry; a significant acquisition among our competitors may have negatively affected their operations, and we may have gained some customer shifts.

I believe it's a combination of these, especially in Finland today.

Very often, understanding that northern conditions have snow and frost, consumers don't do much construction work, and professional construction isn't very active either. The change was less than two million euros compared to last year. So no drama. It's a small thing. In Finland, our result dropped a bit, in Sweden it improved a bit, in Pykmakker it weakened a bit, in Davidsen Denmark improved, but these are very small differences. The key is Q2, because the hardware trade is so seasonal. We have cyclical business, but especially in hardware, where the consumer role is smaller, it's about how spring goes. And now it's quite promising; there was a fairly early spring in Finland and other countries, which supported it. There were some colder spells, but now it's warming up again. That will determine how Q2 goes. We'll see in summer, but no drama.

Well, yes, regarding this, the strategy is very clear. Looking at recent years, in '23 we bought Electroscandia in Norway. In '24 we entered the Danish market, bought Davidsen. In '25 we bought three more companies in Denmark and are now a strong player there. For this year, not yet, but it's definitely a key part of Kesko's strategy to grow in the building and technical trade abroad. There are specific reasons: in Finland, growth is largely organic, whether in food or building services. So we are looking for acquisitions. We are particularly interested in Sweden, Norway, Denmark, and maybe others. We are interested in at least medium-sized and large players, not small ones. We are seeking significant growth there, and I believe this market will consolidate. When these will happen, this year, next year, remains to be seen. And I believe the financing is in order, especially when we can do strong strategic acquisitions, which I strongly believe will come at some point.

Yes. Well, I would say that first, regarding the range, it is quite strong and improving. If I remember correctly, this year we will launch 26 new or facelifted models. A good example is the Cupra Raval, which had its world premiere a few weeks ago, a full electric car priced well under 30,000, about 25,000, and demand is very strong. The ID. Pool will actually be launched this afternoon, and we are talking about the same price range. On the larger end, the Porsche Cayenne has also sold very well, even without test drives. So our electric car offering looks very strong. Then regarding the first part of the question about March: I haven't been in the car business that much, but I've learned that looking at a single month or even a quarter is too short. So if we look at the whole quarter, including vans, we were actually slightly better than the market. And the order backlog in March was the strongest in three years, and that will be realized over the next six months, part in Q2, part in Q3. So I'm not worried at all; it looks good, it's a timing issue. Last year we had the ID.4, ID.7, etc., which sold well in the opposite numbers. That always affects.

No, we haven't seen any such weakening. On the contrary, there are many threats, and consumer confidence is weak. It has been weak for a long time. At the same time, Finnish consumers have 5 billion euros more in bank accounts than a year ago. The question is when they will start spending it. We can go into things like consumer confidence is weak, Hormuz Strait issues, etc. The consumer thinks about it, but if there are warm weekends at the cottage, they might need to replace a dock or paint a house. I think those factors might have more influence. We haven't seen any impact yet, and we discussed earlier what this could all mean. I'm not very worried about it at this point.

I am very confident in maintaining the guidance. Of course, we do it very carefully; we build the budget for this year at the end of last year, look at how each division will perform, and then estimate what the guidance could be. We have been using a range of about 100 million euros for quite a while. Often, we don't react after Q1 because it's a small quarter. Now it's the same situation: Q1 was at least in line with our expectations. For Q2, we know April pretty well, so we don't see any threat scenarios yet. After that, the construction season will be largely behind us, and we will see much more. Then we can certainly refine it, as we have done before, narrowing the range. It's a question of in which direction and how much, but so far there is no reason to touch it.

Yes, thank you.