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IR - Kesko half-year financial report 1.1.-30.6.2025: Steady profit development - turnaround in construction cycle slower than previously anticipated

Company: Kesko Oyj Date: 2025-07-22 Language: English Register to download
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 Kesko half-year financial report 1.1.-30.6.2025: Steady profit development - turnaround in construction cycle slower than previously anticipated

# Kesko half-year financial report 1.1.-30.6.2025: Steady profit development - turnaround in construction cycle slower than previously anticipated

Financial performance in brief:

4-6/2025

  · Group net sales in April-June totalled €3,188.8 million (€3,093.4 million);
reported net sales grew by 3.1% while comparable net sales grew by 1.3%

  · Comparable operating profit totalled €176.7 million (€178.3 million);
comparable operating profit excluding the share of result from Kesko Senukai
increased (4-6/2024: €171.9 million excl. Kesko Senukai)

  · Operating profit totalled €177.9 million (€159.2 million)

  · Cash flow from operating activities totalled €323.9 million (€309.0 million)

  · Comparable earnings per share €0.29 (€0.30); reported earnings per share
€0.29 (€0.26)

1-6/2025

  · Group net sales in January-June totalled €6,016.5 million (€5,852.9
million); reported net sales grew by 2.8%, while comparable net sales grew by
1.2%

  · Comparable operating profit totalled €272.3 million (€277.7 million);
comparable operating profit excluding the share of result from Kesko Senukai
increased

  · Operating profit totalled €267.2 million (€256.4 million)

  · Cash flow from operating activities totalled €299.5 million (€421.6 million)

  · Comparable earnings per share €0.42 (€0.46); reported earnings per share
€0.42 (€0.42)

Key performance indicators

                         4-6/2025  4-6/2024  1-6/2025  1-6/2024  1-12/2024
Net sales, € million      3,188.8   3,093.4   6,016.5   5,852.9   11,920.1
Operating profit,           176.7     178.3     272.3     277.7      650.1
comparable, € million
Operating margin,             5.5       5.8       4.5       4.7        5.5
comparable, %
Operating profit, €         177.9     159.2     267.2     256.4      579.5
million
Profit before tax,          145.3     150.4     210.4     227.6      543.0
comparable, € million
Profit before tax, €        146.2     131.1     206.2     205.9      471.5
million
Cash flow from              323.9     309.0     299.5     421.6    1,008.2
operating activities, €
million
Capital expenditure, €      317.6     128.4     455.5     457.4      675.9
million

Earnings per share, €,       0.29      0.26      0.42      0.42       0.95
basic and diluted
Earnings per share,          0.29      0.30      0.42      0.46       1.11
comparable, €, basic

                               4-6/2  4-6/2024  1-6/2025  1-6/2024  1-12/2024
                                 025
Return on capital employed,     10.7      11.8      10.7      11.8       11.3
comparable, %,
rolling 12 months
Return on equity, comparable,   16.9      18.3      16.9      18.3       16.1
%, rolling 12 months

In this half-year financial report, the comparable change % in net sales has
been calculated in local currencies and excluding the impact of acquisitions and
divestments completed in 2025 and 2024. The comparable operating profit has been
calculated by deducting items affecting comparability from the reported
operating profit.

Outlook and profit guidance for 2025 (specified)

Kesko Group's profit guidance is given for the year 2025, in comparison with the
year 2024.

Kesko's operating environment is estimated to improve in 2025, but to still
remain somewhat challenging. Kesko's comparable operating profit is estimated to
improve in 2025. Kesko estimates that its 2025 comparable operating profit will
amount to €640-700 million. Kesko previously estimated that the comparable
operating profit would amount to €640-740 million. The profit guidance issued
now includes the acquisitions completed in Denmark in the first half of the
year: their impact on Kesko's 2025 comparable operating profit is estimated to
amount to less than €5 million due to costs related to integration and the
completion of acquisitions. Kesko Senukai did not report its financial figures
for the first half of the year as scheduled. The profit guidance is based on the
assumption that the share of result from Kesko Senukai will be at the same level
as in 2024. The updated profit guidance is based on developments in the first
year-half and updated estimates regarding a slower-than-anticipated cycle
recovery in building and technical trade. Key uncertainties impacting Kesko's
outlook are developments in consumer confidence and investment appetites, as
well as geopolitical crises and tensions.

In grocery trade, B2C trade and the foodservice market are estimated to remain
stable. In 2025, the comparable operating margin for the grocery trade division
is estimated to stay clearly above 6% despite the investments in price and the
store site network in accordance with Kesko's strategy for 2024-2026.

In building and technical trade, the cycle is expected to improve in 2025 from
the historically low levels. Profitability in the building and technical trade
division is estimated to improve on 2024, but the cycle turnaround in new
building construction in particular will be slower than previously anticipated.

In car trade, the market for new cars is expected to stay at a low level. Demand
for used cars and services is estimated to remain good. Profitability for the
car trade division is estimated to remain at a good level in 2025 despite weak
demand for new cars.

President and CEO Jorma Rauhala:

Kesko's sales and result were at a good level in the first half of 2025
considering the fact that consumer confidence remained low in all our operating
countries. Our Q2 net sales totalled €3,189 million, up by 3.1% year-on-year. In
comparable terms, net sales increased by 1.3%. Our comparable Q2 operating
profit stood at €177 million. The comparable operating profit increased when
excluding the impact from the share of result from Kesko Senukai. As planned, we
completed the three acquisitions of Roslev Trælasthandel, CF Petersen & Søn and
Tømmergaarden in Denmark during the first year-half. Following the acquisitions,
Kesko's position in the Danish building and home improvement trade market will
strengthen considerably, and our market share will rise to nearly 20%, thus
supporting overall growth for Kesko.

In the grocery trade division, net sales amounted to €1,606 million, and
comparable operating profit to €111 million. Comparable operating profit
improved in grocery store chain operations, but decreased in Kespro and K
-Citymarket's non-food trade. The price programme we launched in January has
proceeded according to plans and both the average purchase and customer flows
have grown. The loss of market share in grocery trade has become less
pronounced, and in the hypermarket segment, K-Citymarket won over market share
in Q2. K Group grocery sales increased by 2.0%, impacted by the timing of
Easter, which fell on April this year versus March last year. Online grocery
sales grew by 10.1%. Sales for the foodservice business decreased by 0.7%, but
the business still once again outperformed the market. Grocery price inflation
was at 2.3%. Our objective in grocery trade is to strengthen our market position
by focusing on quality, prices and our store network while still maintaining
good profitability.

In the building and technical trade division, net sales increased and totalled
€1,237 million, while the comparable operating profit stood at €51 million.
Excluding the impact of the share of result from Kesko Senukai, the division's
comparable operating profit improved slightly. Kesko Senukai did not report its
financial figures for the first half of the year as scheduled, which is why in
Kesko's reporting the share of result from Kesko Senukai is €0.0 million, versus
€6.3 million in the comparison period. The gradual recovery in building and home
improvement trade and acquisitions in Denmark lent support to net sales and
profit. Gradual recovery in the construction cycle has continued, but the pace
has been slower than previously anticipated in all Kesko operating countries,
especially in new building construction.

In the car trade division, both net sales and profit increased notably in the
second quarter, especially thanks to good performance in new car sales. We also
outperformed the market in used car sales, while service sales were down. Net
sales for the division totalled €352 million and comparable operating profit €22
million. Sales and profit in sports trade increased.

We are specifying our profit guidance, and now estimate that the comparable
operating profit for 2025 will be in the range of €640 - 700 million.

Further information, audioconference and webcast

Further information is available from Anu Hämäläinen, Executive Vice President,
Chief Financial Officer, tel. +358 105 323 713, Hanna Jaakkola, Vice President,
Investor Relations, tel. +358 105 323 540, and Eva Kaukinen, Vice President,
Group Controller, tel. +358 105 322 338. An English-language audio conference on
the results briefing will be held on 22 July 2025 at 9.00 am (EEST). The audio
conference login is available on Kesko's website at
w (https://www.kesko.fi/en/)ww.kesko.fi. A Finnish-language webcast of the
interim report briefing can be viewed at 10.30 am (EEST) at www.kesko.fi.

Kesko's interim report for January-September 2025 will be published on 30
October 2025. In addition, Kesko Group's sales figures are published monthly.
News releases and other company information are available on Kesko's website at
www.kesko.fi.

This is a summary of Kesko Corporation's January-June 2025 half-year financial
report. The complete report is attached to this release and also available
at www.kesko.fi/en/investor/ (https://www.kesko.fi/en/investor/reports-and
-presentations/#event57284)