Kesko (KESKOB) Q4 2021 earnings summary

Executive summary

• FY 2021 was a record year: comparable revenue rose 8.2% to €11,300.2m and comparable operating profit reached €775.5m, up €207.7m; annual profit improved for a seventh consecutive year.

• Q4 comparable revenue grew 7.2% to €2,870.3m; comparable operating profit rose €37.9m to a quarterly record of €203.5m.

• All three business areas increased FY comparable operating profit, led by Building and Technical Trade.

Financial highlights

• FY reported revenue grew 5.9%; comparable revenue growth was 8.2%, excluding acquisitions and Kesko Senukai and measured in local currencies.

• FY reported operating profit was €775.2m vs €600.2m and reported profit before tax was €712.9m vs €527.6m; comparable profit before tax was €710.4m vs €481.9m.

• FY net income was €571.8m vs €435.3m; reported EPS was €1.44 vs €1.09 and comparable EPS €1.43 vs €0.97.

• Q4 comparable profit before tax was €187.9m vs €150.4m; comparable EPS was €0.40 vs €0.31, and net income was €161.6m vs €113.6m.

• FY operating cash flow was €1,152.0m; investment cash flow was -€292.3m vs -€421.3m. Q4 operating cash flow was €269.2m vs €308.4m.

Outlook and guidance

• FY 2022 comparable operating profit guidance is €680m–€800m, versus €775.5m in FY 2021; overall business prospects were assessed as positive.

• Grocery revenue is expected to remain at a good level; food-price inflation may support sales, while easing pandemic restrictions could shift demand from retail to foodservice.

• Building and Technical Trade expects business-customer sales to remain strong; consumer demand is expected to normalise, while prolonged inflation could reduce construction activity.

• Semiconductor-related supply-chain uncertainty and vehicle availability issues are expected to constrain Car Trade through 2022; fleet renewal and emissions-reduction needs support demand.