Kesko (KESKOB) Q1 2025 earnings summary

Executive summary

• Q1 2025 net sales increased to €2,827.7 million, up 2.5% year-over-year, while comparable operating profit declined to €95.6 million, reflecting seasonal and market factors.

• Performance was stable during the seasonally slowest quarter, with grocery trade facing anticipated declines due to Easter timing and price programs, while building and car trade segments posted growth.

• Major acquisitions in Denmark (Roslev Trælasthandel completed, C.F. Petersen & Søn approved, Tømmergaarden pending) are expected to strengthen future growth in building and home improvement.

• Profit guidance for 2025 remains unchanged, with comparable operating profit estimated at €640–740 million.

Financial highlights

• Q1 net sales exceeded €2.8 billion, up €68 million year-over-year; operating margin declined to 3.4% from 3.6% year-over-year.

• Comparable operating profit was €95.6 million; profit before tax was €65.1 million, and EPS (basic) fell to €0.13.

• Return on capital employed (ROCE) was 11.0% (rolling 12 months), with grocery trade at 13.8%, building and technical trade at 7.8%, and car trade at 15.3%.

• Net debt to EBITDA (excl. IFRS 16) was 1.6, up from 1.1 year-over-year.

• Cash flow from operating activities was negative at €-24.5 million, impacted by seasonal working capital needs.

Outlook and guidance

• Comparable operating profit for 2025 is estimated at €640–740 million, with gradual economic recovery expected across all operating countries.

• Grocery trade operating margin is expected to stay clearly above 6% despite ongoing price and network investments.

• Building and technical trade profitability is forecast to improve as the construction cycle turns; car trade profitability to remain strong despite muted new car demand.

• Key uncertainties include consumer confidence, investment appetite, and geopolitical risks.