Kesko (KESKOB) Q2 2022 earnings summary

Executive summary

• Strongest second quarter on record; comparable revenue rose 3.9% to €3,108.5m and comparable operating profit increased to €236.0m from €219.4m.

• H1 comparable operating profit reached €379.7m, up €44.1m year over year, on comparable revenue growth of 5.1%; all three business areas contributed.

• Pandemic impacts on operations clearly diminished as grocery shopping normalized and foodservice recovered with society reopening.

Financial highlights

• Q2 revenue was €3,108.5m, up 4.0% reported and 3.9% comparable; reported operating profit was €238.3m versus €218.1m.

• Q2 comparable operating margin was 7.6% versus 7.3%; comparable diluted EPS was €0.45 versus €0.40.

• H1 revenue was €5,815.8m, up 5.2% reported and 5.1% comparable; operating profit was €382.9m versus €333.8m.

• H1 net income was €282.7m versus €240.0m; comparable EPS was €0.71 versus €0.60.

• H1 operating cash flow fell to €333.5m from €501.7m, partly due to higher working capital and a €38.6m pension-fund surplus refund in the comparison period.

Outlook and guidance

• FY 2022 comparable operating profit guidance rose to €750–840m from €730–840m; FY 2021 comparable operating profit was €775.5m.

• Business outlook was positive, but assessment remained difficult amid uncertainty in the operating environment and broader economy.

• Automotive profitability had significant improvement potential as vehicle availability normalizes.