President and CEO, Kesko
Kesko Q1'25: Työ jatkuu
Päivittäistavarakaupan ja Onnisen tuloksen lasku painoi Keskon tulosta alkuvuonna, kun taas Rautakaupassa ja Autokaupassa nähtiin hyvää kehitystä. Päivitetty strategia on edennyt hyvin, mutta töitä riittää vielä. Keskon toimitusjohtaja Jorma Rauhala kommentoi Isa Huddin haastattelussa.
Aiheet:
00:00 Aloitus
00:15 Alkuvuoden pääkohdat
00:51 Hintainvestointiohjelman edistyminen
02:02 Kauppiasmalli päivittäistavarakaupassa
04:23 Onnisen odotetaan toipuvan loppuvuoden aikana
05:31 Yritysostot Tanskassa ja niiden kehitys
06:55 Autokaupassa voitettu markkinaosuuksia
07:51 Kauppasodan vaikutukset Ke...
About Jorma Rauhala
Jorma Rauhala, President and CEO of Kesko, commented on the company's second-quarter results in an interview published on July 22, 2026. He described the quarter as "strong," noting that the improvement in quarterly profit was the largest in over four years, driven primarily by the technical trade segment. Rauhala stated that Kesko gained market share significantly and highlighted a 20 million euro profit improvement in the building and building services technical wholesale business. Rauhala also discussed the integration of recent acquisitions, including the Dahl and Scoban businesses. He said the focus for these larger acquisitions is on separating them from their previous environments and ensuring IT systems and shared services function properly, rather than on cost synergies. Regarding outlook, Rauhala expressed a belief that the technical trade segment will continue to strengthen, though he noted that new housing sales in Finland have not yet picked up and are unlikely to impact the current year's results significantly. He added that international operations have been strong and that the company expects steady improvement across its segments.
Transcript (24 segments)
I
Interviewer0:00
Greetings and welcome to Helsinki's Kalasatama and Kesko's K-Campus. Today at Kesko we have a release day behind us and that's why I have my guest here. Jorma Rauhala. Welcome.
J
Jorma Rauhala0:13
Thank you.
I
Interviewer0:15
So Q1 is in the books. What are the observations?
J
Jorma Rauhala0:20
The observations are that it was very much as we expected. First of all, Q1 is clearly our smallest quarter when you look at the whole year. Clearly the smallest and very much in line with our expectations. So in daily grocery trade, it's of course steady operations, but there we made investments in the price program and the Easter shift was among the key reasons visible in the results. Building and building services technology, as expected, the market is starting to improve and that is now also visible in the numbers. And car trade is strong, as expected.
I
Interviewer0:50
Yes, you mentioned just now this price investment program. How has it progressed relative to your expectations?
J
Jorma Rauhala0:58
Yes, it has progressed as expected. We started it at the beginning of January and it's about permanent price reductions on everyday products. The prices of hundreds of products were lowered and they are very relevant products for consumers. They include the most purchased A-brands. Month by month, the results are improving. Consumers have found those products, there is double-digit sales development there. So it's fully in line with expectations. And of course, in the longer term, we will see a more positive price image for K-stores and through that, sales will grow even more.
I
Interviewer1:29
Yes. You often compare this price comparison program to Sweden's Ica. Yes. What are the key differences?
J
Jorma Rauhala1:38
Yes, that's true, and we have gone through it with them. But I would say two or three things. First, with Ica it was even more focused on hypermarkets. We also have that, but we have all formats included. That might be a difference. Also, they had somewhat more private labels. We have a lot of A-brands. And thirdly, maybe where we still have room to learn is perhaps even better in-store visibility for the entire program, but those are really the differences.
I
Interviewer2:05
At investor forums, the Kesko cooperative model has been discussed a lot and how much it brings competitiveness. How would you convince investors that it is still a good model to operate daily grocery trade?
J
Jorma Rauhala2:21
Well, yes, competitiveness, but especially competitive advantage. If we look at Finland and our daily grocery trade, we have over 8 years of history with this operating model, so we know it. And when you consider the current setup in Finland there is a very large cooperative player, and one of the world's largest hard discounters, it's hard to see what other model would work. So this specifically brings competitive advantage. And if you think generally, there are all kinds of models in the world and working models, but perhaps the extreme example would be a very centralized, tightly managed franchise, which would bring efficiency with the same assortment, pricing, logistics, etc., but then response to local situations would be poor.
The other extreme could be a very free model where competitiveness and efficiency are lost. And our model is a combination of these, meaning we have over one thousand K-stores, with certain common products, common assortment, common pricing, logistics, IT, marketing, etc. That creates efficiency and competitiveness. But if I were to rate it on a scale from one to ten in terms of how it performs when implemented, I'd say it's a seven, but on top of that comes the competitive advantage: the store-specific business concept. A good example is a K-Market, small format. Take a K-Market at a metro station in the Helsinki metropolitan area versus a K-Market in a cottage area. They are completely different. One needs to have fast food type items, the other needs to have products for summer vacation. So that is our strength: we adapt the store to local customer demand. So to investors, the message is that it certainly creates competitiveness and competitive advantage, and we will continue with that model.
I
Interviewer4:14
Exactly, so to investors, greetings that it certainly creates competitiveness and competitive advantage, and we continue with that model. Let's hear it. Yes.
If we then move on to building and building services trade. In hardware trade, the turnaround has happened and you mentioned specifically that it has improved. Yes. But what about Onninen's situation? How concerned are you and how does the rest of the year look?
J
Jorma Rauhala4:37
Not at all concerned. It's going that way. The years 2021-2022 were strong. In Q3 2022, hardware trade started to decline. Onninen started six months later. Yes. So now the same trend is visible: hardware trade started to recover first, and Onninen will follow. And in a way, we see that although sales were still slightly negative, we are hearing that we are getting requests for quotes, customers are saying there are many more quotes. In product groups, we see that what is being sold now are pipe fittings and other things, which are often at the early stage of construction. So the upturn is gradually starting from there. And as I said, hardware trade is already showing growth in P2P, professional customers and also consumers, and I believe that Onninen will also start growing at the latest in the second half of the year.
I
Interviewer5:29
Okay. Interesting. Yes. Well, the first of three Danish acquisitions has been completed and the second is now in the process of being implemented. Yes. How has this integration of new stores started and how will Kesko leverage the larger market share in Denmark?
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Jorma Rauhala5:45
Yes, and this is a bit of advance information, but the third one, Toomera, also looks very promising. We already have some information that it is progressing nicely, so it will also be included in our figures quite soon. It has started well. I have been in my previous role for many years and followed building services closely, and Davidsen in Denmark overall has started excellently. Now Roslev has only been with us for a couple of months, and the others will follow, but then we will naturally seek synergies. First of all, we become a nationwide player covering all of Denmark. Our volume doubles. We will pursue new purchasing terms, and with the increased volume, we will reorganize the entire company. So everything will be under Davidsen. Through that, there is of course some overlapping operations. We will unify many other things. These synergies are very much country-specific. There are fewer synergies between Krautta Finland and Davidsen, but more would be achieved country-specifically there. At the same time, I have to say that at the beginning there are always some extra costs, but it looks very good.
I
Interviewer6:57
Yes. Well, car trade, gaining market shares has continued. What is the secret and success recipe?
J
Jorma Rauhala7:04
Well, the whole package. Last year we performed particularly well in used cars. At the end of the year, new cars started to pick up. In new cars, it's very much about what model range we have. And now we have a good range and sales are going well, clearly better than the market. But our strength here is that we balance these three: new cars, used cars, and a very broad service sector. And this is somewhat newer for us. We are used to being new car dealers, perhaps servicing those cars. Now we have expanded: used cars, services, and also increasingly selling older used cars and servicing older cars. So the whole package is the solution. And now it shows well that different quarters are different, so one supports the other.
I
Interviewer7:52
Yes. A couple more questions. We are living in uncertain times. How does the geopolitical situation and potential trade war affect Kesko?
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Jorma Rauhala8:00
Well, there are no direct impacts at all. Because we don't export anything to America, and imports are very small. So it's hard to see a direct impact here. Perhaps some of our Onninen industrial customers might be affected if it impacts their exports. But on the other hand, the largest among them is Tela, which looks quite good. So there are hardly any such effects. It is more about consumer and business confidence, if factors come into play. Those could be positive or negative, so that is how it would reflect on us, but no direct impacts at all.
I
Interviewer8:37
Exactly. Thank you. Well, the updated strategy has been in place for almost a year. In which areas has Kesko progressed in terms of strategy and where is there still work to be done?
J
Jorma Rauhala8:45
We have progressed in all, and there is work to be done in all. The retail business is just such that there are no quick fixes. We systematically monitor it. We have business-specific strategies, for example in building services, there are different elements for K-rauta Finland versus Sweden's hardware trade, and they are systematically implemented. Daily grocery trade is a good example: the price network. Price is a fast-acting factor, so the price program is our approach. Quality comes with a slight delay, it can show quickly in individual stores, but in the entire network of hundreds of stores it is slower. But this is a continuous process; we are never ready. There is always work to be done. I am satisfied with what we have achieved in the results. But the work continues. The work continues. Yes.
I
Interviewer9:35
Thousands of thanks.
J
Jorma Rauhala9:35
Thank you.