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Why you should invest in Kesko

"In 2016, Kesko's net sales returned to significant growth and profitability improved. The return on capital employed also improved in comparison with the previous year."

Jukka Erlund, EVP, CFO

Six reasons for investing in Kesko

Strong market position in Finland and abroad
  • Market share of the grocery trade estimated at 37–38% in Finland following the acquisition of Suomen Lähikauppa
  • Market share of the building and technical trade around 40% in Finland, strong market position in Norway, the Baltic countries and Belarus
  • Kesko operates in the building and technical trade in nine countries and is the fifth largest operator in the European building and home improvement trade market 

Growth strategy
  • Growth of the grocery trade in Finland
  • Growth and expansion of the building and technical trade in Europe
  • Growth of the car trade, particularly in Finland
  • Strong progress was made on implementing the strategy thanks to the acquisitions completed in 2016
  • Best customer experience in the trading sector in all channels

Strong, stable financial performance and financial position
  • Enables investing in growth and long-term business development
  • Equity ratio of 48.6% and gearing of 5.8% (2016)
  • The acquisitions are expected to generate significant synergies in the near future

 

High dividend paying 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 €2.0 per share is proposed to be paid for 2016, which would represent an average rate of 99.5% on the comparable earnings per share, and the effective dividend yield of B share would be 4.2%
  • Dividends for the last five years were paid at the average rate of 93.6% on the comparable earnings per share, and the average effective dividend yield of B share was 5.5%

Recognised responsibility work
  • Kesko is included in numerous sustainability indices and listings, such as CDP's Climate A- level, FTSE4Good, STOXX Global ESG Leaders indices and the Global 100 Most Sustainable Corporations in the World list
  • The corporate responsibility programme applies to all of Kesko's divisions and contains both short- and long-term objectives

Competitive advantage from retailer entrepreneurship
  • 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 while listening to their wishes
  • In 2016 Kesko had 1,088 K-retailer entrepreneurs as partners
  • In 2016 approximately half of Kesko's net sales were generated by the retailer-entrepreneur business model

"Kesko seems to be firmly back on the front foot and our recent meeting with the Company in Helsinki confirmed that the business has strong momentum at the moment with management actions delivering good results. The Company meets our focus on change investment process and scores well on our proprietary quantitative screen which helps us scour the European investment universe for potentially interesting ideas that are going through some kind of change and where there is the potential for a valid non-consensus view."

Andrew Paisley, Investment Director, European Smaller Companies, Standard Life Investments Ltd.

Share development

Dividend history 2011-2016

* 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.