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1. Company Snapshot

1.a. Company Description

Kesko Oyj engages in the grocery trading business in Finland.It operates through Grocery Trade, Building and Technical Trade, and Car Trade segments.The company's Grocery Trade segment is involved in the wholesale and B2B trade of groceries; and the retail sale of the home and specialty goods.


This segment operates approximately 1,200 K-food stores, including K-Citymarket, K-Supermarket, K-Market, and Neste K.Its Building and Technical Trade segment engages in the retail, wholesale, and B2B trade of building and home improvement, and electrical and HEPAC products, as well as trades in leisure goods.This segment operates retail store chains under the K-Rauta, K-Bygg, Byggmakker, and Onninen names, as well as leisure goods trade chains under the Intersport and Budget Sport names in Finland, Sweden, Norway, and the Baltic countries.


The company's Car Trade segment imports, markets, and retails Volkswagen, Audi, SEAT, CUPRA, Bentley, and Porsche passenger cars, as well as Volkswagen and MAN commercial vehicles in Finland.This segment is also involved in car leasing activities; and the provision of repair and maintenance, spare parts, and accessories services, as well as charging network for electric vehicles under the K-Charge name in Finland.Kesko Oyj was founded in 1940 and is headquartered in Helsinki, Finland.

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1.b. Last Insights on KESKOB

Kesko Oyj's recent momentum is fueled by robust net sales and market share gains, as highlighted in its Q4 2025 earnings call. The company's ability to navigate profitability pressures and consumer confidence uncertainties has been notable. With a strong sales growth trajectory, Kesko Oyj is poised to capitalize on its market position, driven by its resilient business model and strategic initiatives, despite near-term challenges.

1.c. Company Highlights

2. Kesko's Earnings Beat Expectations with Strong Revenue Growth

Kesko reported net sales of over EUR 12.5 billion for 2025, representing a 2.3% increase in comparable terms. The company's comparable operating profit stood at EUR 654.9 million, up by EUR 4.8 million from the previous year, with an operating margin of 5.3%. Earnings per share (EPS) came in at EUR 0.2499, below estimates of EUR 0.3038. The company's financial performance was driven by growth across all divisions, with Grocery Trade, Building and Technical Trade, and Car Trade all reporting increased net sales.

Publication Date: Feb -17

📋 Highlights
  • 2025 Net Sales Growth:: Net sales reached EUR 12.5 billion (2.3% increase), with Q4 growth of 3.1% (EUR 3.2 billion).
  • Operating Profit & Margin:: Comparable operating profit rose to EUR 654.9 million (up EUR 4.8 million), maintaining a 5.3% margin.
  • 2026 Profit Guidance:: Estimated comparable operating profit of EUR 650–750 million, driven by improved divisional performance.
  • CapEx & Cash Flow:: 2025 capital expenditure totaled EUR 735.7 million; operating cash flow was EUR 880 million.
  • Divisional Highlights:: Grocery Trade profitability declined due to price competition but maintained EBIT above 6%; B&T grew 7% in Q4 with market share gains.

Segment Performance

The Grocery Trade division saw an upturn in market share, with a strong profitability despite investments in price, quality, and network. Building and Technical Trade's comparable operating profit grew, driven by a strong performance in Denmark, while Car Trade's market position grew stronger, with a significant increase in comparable operating profit. The Finnish Building and Technical Trade (B&T) showed a surprisingly strong performance, up 7%, with good availability and market share gains, particularly in Q4, as noted by Sami Kiiski, "it's too early to call a recovery, but the company is doing better than the market."

Outlook and Guidance

Kesko estimates its comparable operating profit will amount to EUR 650 million to EUR 750 million in 2026, with an expected improvement in the operating environment and profit across all divisions and operating countries. The company continues to invest in growth, with capital expenditure estimated to be around EUR 400 million in 2026, including EUR 200-250 million for the grocery store site network strategy.

Valuation and Dividend

With a P/E Ratio of 20.39 and a Dividend Yield of 4.35%, Kesko's valuation appears reasonable. The company's ROE stands at 15.47%, indicating a strong return on equity. The proposed dividend of EUR 0.90 per share represents 84% of comparable EPS, in line with the dividend policy. Analysts estimate next year's revenue growth at 3.7%, suggesting a continued positive trajectory for the company.

Key Uncertainties

Key uncertainties impacting Kesko's outlook include developments in consumer confidence and investment appetites, as well as geopolitical crises and tensions. The company's ability to navigate these challenges and continue to invest in growth will be crucial to its future performance.

3. NewsRoom

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Kesko Oyj (KKOYY) Q4 2025 Earnings Call Highlights: Strong Sales Growth Amid Market Challenges

Feb -05

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LVMH: Share transactions disclosure

Sep -09

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The BANK of Greenland issued and early redemption of Senior Non-Preferred capital

Sep -09

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Sep -09

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Société Foncière Lyonnaise (ENXTPA:FLY): Assessing Valuation After a Year of Solid Share Price Gains

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Sep -09

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What Recent Earnings Mean for Forvia’s 2025 Value Prospects

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.68%)

6. Segments

Grocery Trade

Expected Growth: 3.5%

Kesko Oyj's 3.5% growth in Grocery Trade is driven by increasing demand for online grocery shopping, strategic expansion into new markets, and focus on private label products. Additionally, investments in digitalization, efficient supply chain management, and customer loyalty programs contribute to the growth. Furthermore, the company's strong market position and ability to adapt to changing consumer preferences also support the growth momentum.

Building and Technical Trade

Expected Growth: 3.8%

Kesko Oyj's Building and Technical Trade segment growth of 3.8% is driven by increasing demand for sustainable building solutions, investments in digitalization and e-commerce, and strategic acquisitions. Additionally, the segment benefits from a strong market position in Finland and a growing presence in Sweden and Norway, supported by a solid financial performance and efficient operations.

Car Trade

Expected Growth: 4.2%

Kesko Oyj's Car Trade segment growth of 4.2% is driven by increasing demand for new and used cars, expansion of online sales channels, and strategic partnerships with car manufacturers. Additionally, investments in digitalization and omnichannel retailing have improved customer experience, contributing to the segment's growth.

Common Functions

Expected Growth: 3.2%

Kesko Oyj's 3.2% growth is driven by increasing demand for grocery and food services, expansion of digital channels, and strategic acquisitions. Additionally, the company's focus on sustainability, cost savings, and operational efficiency have contributed to its growth. Furthermore, Kesko's strong market position in Finland and its ability to adapt to changing consumer behavior have also supported its growth momentum.

7. Detailed Products

Food Trade

Kesko Oyj's food trade segment operates in the grocery trade and offers a wide range of food products to consumers through its various store formats, including K-food, K-market, and K-citymarket.

Building and Technical Trade

Kesko Oyj's building and technical trade segment provides a wide range of building materials, technical products, and services to professional builders, contractors, and consumers.

Car Trade

Kesko Oyj's car trade segment operates in the automotive retail business, offering new and used cars, as well as car maintenance and repair services.

Home and Speciality Goods Trade

Kesko Oyj's home and speciality goods trade segment offers a wide range of home and speciality products, including interior decoration, leisure goods, and sports equipment.

8. Kesko Oyj's Porter Forces

Forces Ranking

Threat Of Substitutes

Kesko Oyj operates in the retail industry, where substitutes are readily available. However, the company's strong brand presence and customer loyalty mitigate the threat of substitutes.

Bargaining Power Of Customers

Kesko Oyj's customers have a high bargaining power due to the availability of substitutes and the company's dependence on a few large customers.

Bargaining Power Of Suppliers

Kesko Oyj has a diversified supplier base, which reduces the bargaining power of individual suppliers. The company's large scale of operations also gives it negotiating power over suppliers.

Threat Of New Entrants

The retail industry has high barriers to entry, including significant capital requirements and established relationships with suppliers. This reduces the threat of new entrants.

Intensity Of Rivalry

The retail industry is highly competitive, with many established players competing for market share. Kesko Oyj faces intense rivalry from both domestic and international competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 50.26%
Debt Cost 4.43%
Equity Weight 49.74%
Equity Cost 6.99%
WACC 5.70%
Leverage 101.04%

11. Quality Control: Kesko Oyj passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Sainsbury

A-Score: 6.9/10

Value: 6.6

Growth: 7.6

Quality: 2.3

Yield: 9.4

Momentum: 7.5

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Axfood

A-Score: 5.9/10

Value: 3.9

Growth: 5.8

Quality: 4.1

Yield: 5.6

Momentum: 7.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Kesko

A-Score: 5.6/10

Value: 5.4

Growth: 4.2

Quality: 3.8

Yield: 7.5

Momentum: 3.5

Volatility: 9.3

1-Year Total Return ->

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Carrefour

A-Score: 5.3/10

Value: 7.0

Growth: 4.4

Quality: 1.6

Yield: 6.9

Momentum: 3.0

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Greggs

A-Score: 5.0/10

Value: 6.8

Growth: 6.4

Quality: 5.6

Yield: 6.2

Momentum: 0.5

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Colruyt

A-Score: 5.0/10

Value: 6.7

Growth: 4.6

Quality: 4.2

Yield: 5.6

Momentum: 1.0

Volatility: 7.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

21.18$

Current Price

21.18$

Potential

-0.00%

Expected Cash-Flows