Kesko (KESKOB) Q2 2024 earnings summary

Executive summary

• Revenue and profit declined as anticipated, with Q2 2024 revenue at €3,093.4M, down 0.4% year-over-year; comparable revenue declined 4.1%.

• Comparable operating profit for Q2 was €178.3M (Q2 2023: €207.6M); margin 5.8% (6.7%).

• Strong operating cash flow year-over-year, with H1 2024 at €421.6M, up from €312.2M.

• Updated strategy published in June 2024, clarifying competitive advantages and targets by business area.

• Leadership changes in construction, automotive, finance, and legal functions, including new CEO and CFO appointments.

Financial highlights

• Q2 2024 revenue: €3,093.4M (Q2 2023: €3,104.7M); H1 2024 revenue: €5,852.9M (H1 2023: €5,930.6M).

• Comparable operating profit: Q2 €178.3M (Q2 2023: €207.6M); H1 €277.7M (H1 2023: €333.5M).

• EPS: Q2 €0.26 (Q2 2023: €0.38); H1 €0.42 (H1 2023: €0.59).

• Operating cash flow: Q2 €309.0M (Q2 2023: €285.2M); H1 €421.6M (H1 2023: €312.2M).

• Investments: H1 €457.4M (H1 2023: €393.0M); Q2 €128.4M (Q2 2023: €161.2M).

Outlook and guidance

• 2024 comparable operating profit guidance narrowed to €620–680M (previously €620–700M).

• Grocery and foodservice markets expected to remain stable despite intensified price competition; profitability to stay strong.

• Construction and building technology market expected to decline in 2024, with improvement anticipated in 2025.

• Automotive: new car sales to remain below 2023, but used car and service sales to grow; profitability to remain good but below 2023.

• Short recession expected in core markets; key risks include inflation, interest rates, and geopolitical tensions.