Ladies and gentlemen, welcome to Kesko's Q3 2021 release call. I'm Kesko's CEO, Mikko Helander. I have together with me our CFO, Jukka Erlund, and from Investor Relations, Hanna Jaakkola. The best results in Kesko's history. This is the eighth time in a row I have the great honor to announce a record result. Today's agenda is the following: I will first give a short overview of our business performance. Thereafter, I will go through our strategy and our three segments that are creating the solid foundation we are building future on. At the end, we will be happy to take questions both by phone and via chat. Key events in the Q3. As said, the best result in our history. All-time best profit and profitability in building and technical trade. In grocery trade, record result and continued profitability improvement. Good result also in car trade. Kesko acquired Byggarnas Partner last summer, and the acquisition was completed on the 1st September. Byggarnas Partner serves mainly professional builders and operates in Stockholm area in Sweden. Net sales in Q3 totaled EUR 2.9 billion. It was up comparably by 7.8%. Net sales increased in all our divisions. Rolling 12 months net sales totaled over EUR 11 billion. Comparable operating profit was record high, EUR 236.4 million, and it increased by EUR 54.5 million. In addition to sales growth in all our divisions, profitability improved, thanks to better sales margin development and further improvements in cost efficiency. Rolling 12 months comparable operating profit totaled EUR 738 million. Also good development when it comes to return on capital employed. It increased in all our divisions and was 16.3% for the whole group. Kesko's financial position is strong. Cash flow from operating activities was EUR 381 million. It increased thanks to EBITDA growth and improved working capital efficiency. Capital expenditure totaled EUR 69 million, including the acquisition of Byggarnas Partner. One of our financial targets, net debt to EBITDA excluding IFRS 16 impact was -0.1, well below the target level. Strong development continued in food trade. Grocery trade net sales were nearly EUR 1.5 billion, and it increased by 3.6%. Rolling 12 months net sales totaled nearly EUR 5.9 billion. Grocery trade's profitability continued to improve. Comparable operating profit was EUR 122 million, and it increased by EUR 13.5 million. Profitability was 8.1%, and it improved, thanks to good retail sales development in all food chains and improved sales development of Kespro's foodservice business. Also, cost ratio improved further. Rolling 12 months comparable operating profit was EUR 435 million and profitability 7.4%. During the quarter, food market grew. Retail sales grew by 3.3% and foodservice by 5.2%. Strong demand in grocery trade has continued. The general growth in demand for online grocery has normalized. Demand for restaurant quality ready meals is growing. Our market share in food trade strengthened. By food trade, I mean both grocery trade and foodservice. K-Group grocery store sales were up by 3.3%, and Kespro's sales were up 8.6%. Sales grew in all grocery store chains. Online grocery sales were back on the growth track and grew by 17.3%. Online sales were up by 334% compared to 2019. In building and technical trade, strong development continued in all operating countries. Net sales grew comparably by EUR 181 million to over EUR 1.1 billion. Net sales for the building and technical trade division grew in comparable terms in all operating countries. Growth in B2B trade continued strong. Rolling 12 months net sales was record high, over EUR 4.2 billion. Comparable operating profit for building and technical trade increased by EUR 31.3 million to almost EUR 105 million. The profitability improved and was record high, 9.2%. Rolling 12 months comparable operating profit was nearly EUR 290 million and profitability 6.9%. The changes that we have carried out in recent years have had a significant positive impact on the division's profitability. Also, the acquisitions and their successful integration have supported profitability. Also, the market development has been strong. Construction and renovation is still growing in Northern Europe. Demand in B2B trade has continued strong. Demand in B2C trade is still good, even if it's down from last year's peak levels. Issues with availability have continued in the market. Raw material costs have increased, especially for wood, plastic and metal products. Our result was a record. Sales and profitability improved in all operating countries. Profit for K-Rauta and Onninen in Finland continued to improve. In Norway, sales and profitability for Byggmakker and Onninen improved significantly. In Sweden, good development continued. In sports trade, sales and market share grew. Also, profitability has improved significantly. In car trade, transformation efforts are proceeding and bringing results. Net sales for the Q3 totaled EUR 261 million and grew comparable by 6.7%. Rolling two months net sales were over EUR 1 billion. Comparable operating profit in car trade was EUR 18.2 million, and it increased by EUR 10.8 million. Profitability was 7%. Rolling two months comparable operating profit was EUR 50 million and profitability was 4.8% going in the right direction. Demand for cars has recovered and also demand for servicing has increased. Car availability is an issue globally due to growing demand and component shortages. Earlier this autumn, the Finnish government proposed that starting from 1st of October, new electric cars would no longer be subject to car tax. Due to availability issues and change in taxation, first registrations were down by 16.7%. In Q3, 30% of passenger cars, car first registrations were all electric or plug-in hybrids. Market share of our brands has risen to 16.6%. New passenger car sales were down by 12.5% due to availability issues and tax proposal. All electric cars and rechargeable hybrid accounted for 42% of our sales. Profitability improved thanks to sales and sales margin growth, cost savings and exceptional positive items. The transformation of our operations is proceeding and bringing results. All our businesses are profitable. When looking forward, one thing is certain, we continue the execution of our growth strategy. As said, we continue the execution of our successful strategy. We have a good strategy business divisions, grocery trade, building and technical trade, and car trade. Kesko's profitability has constantly improved. Also, the good recent market development has contributed to profitability improvement. Sales growth through existing stores and systems has significantly improved our efficiency. By systems, I mean for example, logistics, IT, and sourcing. Since 2014, retail sales of our core businesses have grown by EUR 4.2 billion. At the same time, our cost ratio has significantly improved and is currently 16.4%, and there is still plenty of further potential. Acquisitions are significantly supporting profitability. Integration of acquired businesses has been successful. We have a growth strategy in Northern Europe. We are continuously looking for new acquisition targets that fit our strategy. Sales through our digital channels are now worth EUR 1.4 billion. B2B is especially strong when it comes to digital trade sales. Kespro represents 41% of all our digital trade sales and Onninen 37%. Both are growing fast. Consumers grocery online service, K-Ruoka, has grown fast and is our largest online store for consumers. Building and home improvement online store, K-Rauta, as well as the sports trade online stores are also fast growing. Our food trade business is unique. The strong combination of a wide grocery store network and market-leading food service business forms a good foundation for profitable growth also going forward. This is one of the reasons why we are one of the most profitable food trade operators in Europe. Our retail sales in food trade are nearly EUR 8 billion. Market share in food trade has grown significantly. Also, well-functioning K-retailer business model gives us a significant competitive advantage. The success is based on efficient sourcing, logistics and IT. Not to forget that we are a forerunner in food trade digitalization in Europe. In building and technical trade, strong country-specific actions are supporting growth. Our retail sales are EUR 6 billion and since 2014, retail sales of building and technical trades core business have grown by EUR 2.3 billion. Our position is strong in Finland and Scandinavia. It is good also in the Baltic countries. As said earlier, sales through digital channels is growing. Today, in building and technical trade, 75% of net sales come from B2B trade. Demand in B2B trade is growing strongly. Currently, the share of B2B trade in Finland is 75%, in Norway 77%, and in Sweden it has grown to 65%. Successful acquisitions have accelerated growth and improved profitability significantly. Car sector is EUR 1 billion, new cars being the largest business area, but used car business is growing fast. There are a lot of further sales growth potential in service sales too. In our strategy, digitalization and customer experience are at the core. Transformation program is proceeding well and it forms a basis for growth. Volkswagen Group's strong product offering supports also our success. We are a forerunner in e-mobility and K- Charge, our network of car charging stations, is a key focus area also going forward. Currently, our operating environment is good. Nordic countries are among the most stable and well-functioning societies in the world. We see good general economic development in Northern Europe. Household savings have grown, and people have money to spend. Domestic consumption remains high. Also, the so-called green transition will increase investments and offer growth opportunities. Guidance. Kesko estimates that its comparable operating profit in 2021 will be in the range of EUR 740 million-EUR 800 million. In 2020, Kesko's illustrative comparable operating profit totaled EUR 554 million. Thank you. Now we are ready for questions. First, we will take questions from the conference call lines. Thank you. If you would like to ask a question, please press zero one on your telephone keypad. If you need to withdraw your question, you may do so by pressing zero two to cancel. There will now be a brief pause while questions are being registered. The first question comes from Fredrik Ivarsson from ABG. Please go ahead. Your line is open. Thank you very much. Hi, Mikko. First, if we can start with pricing within the building and home improvement market, especially in Finland, where I think you raised prices by as much as 40% for some wood materials and so forth. Given that building and home improvement decreased, I think 20% sequentially, what do you expect in terms of pricing? Are these new price levels sustainable, or do you expect to get back to more normal levels as we look into next year? That's my first question. Yeah, thanks for your question. We should remember that, all in all, not just in Finland, but everywhere in Northern Europe, market is very strong, demand is very strong. Based on that, we have been also in good position to increase prices. We believe strongly that, also thanks to our strong market position, we can also in future convert price increases to the customer prices. Okay, thanks. On the construction market, do you believe that there's some significant pent-up demand currently driving that market as societies open up and then expect somewhat of a normalization eventually? Or how do you see that part of the business? All in all, we should remember that the economy is very strong and the outlook in global economy, European economy also in Northern Europe looks positive, at least in midterm. At the same time, I remind that the pandemic is not yet over, and nobody knows how long it last. Okay, good news is that vaccinations are improving situation. The pandemic is not yet over, and nobody knows how will be so-called new normal after pandemic. Maybe to add on that one, we've seen quite a good progress on building permits and new housing starts. Mm-hmm. Construction starts during the summer this year and since then. In that sense, the situation looks quite good. Yeah, thanks. Moving on to the cash and carry business, Kespro. I think sales were back at 2019 levels now. Can you say something about the margin? I think in Q2 you said that it expanded and was virtually back at 2019 levels. What did that look like in Q3, please? Very positive. All in all, outlook in Kespro food service business is very positive. And okay, market itself looks positive, but at the same time, we should remember that we have succeeded strengthen further our strong position in food service market. Also due to that reason, we believe that we are in a excellent position to continue profitable growth also in food service business. Right. My question was on the margin in Kespro. Did you expand that margin above the 2019 level, or what did the margin look like in Q3 please? As everywhere, we are working very hard to improve further margins. Also in Kespro, it's based on growth. If and when we can maintain this growth, we are also in an excellent position to improve margins. We are very optimistic that we can continue on this track. Okay. It's very clear that. You're not willing to share. Sorry, Fredrik. Just like Mikko said, it's very clear that the unit costs go down when this- Mm. Top line goes up. In that sense, that was also visible in Q3 in Kespro side. Mm. The profitability improved on that side. Also versus 2019. Q3. Well, altogether the margins are healthy. Yeah. Yeah, yeah. Yeah, because Q3 volume was still under 2019- Yeah. -volumes. Slightly, yeah. Yeah, slightly, but very close. Very close. Okay, fair enough. Last one before I let other ones on the line. Quick on car trade. The result here, obviously at all-time high levels, quite significantly above market expectations. Can you elaborate a little bit on that significant margin improvement? Then also how sustainable you think that these levels are. Yeah. It is combination of many different matters, but most important is that we are now renewing our car trade business and operations very successfully. Of course, at the same time, also Volkswagen Group's efforts to develop new electric vehicles is supporting our success. The very important element as part of our renewal process, we have succeeded also to reduce our operational costs. Fourth very important we are improving also business management, especially how we manage our sales force. That has also big impact. Again, I remind that we are now just in phase of this development and hard work also in car trade continue, and we will further renew and modernize also our car trade business. Perfect. That's all for me. Thank you. Thank you. The next question comes from Magnus Råman from Kepler Cheuvreux. Please go ahead. Your line is open. Thank you. I think I will tie into the last question from Fredrik first, around the car trade profitability. You write in the report that there was an exceptional positive item here, and perhaps you can elaborate on what that consisted of and the rough size of that exceptional item in Q3, please. Yeah. Well, let me start again with the situation that altogether we were really happy with the car trade sort of profitability development. It was driven by both the top line, also gross margin in different business areas, including also the used car sales and so on, improved. At the same time, as a third component, the operational cost came down. Then going to the exceptional items, yeah, there was. Well, there's always some areas with a little bit volatility when it comes to the profitability in certain items which are exceptional. During this quarter, we have some millions more on that side. We thought that it's worth mentioning there. It's related to both certain income items, but also some cost items which are of a nature a bit exceptional. That's the sort of area behind there. Altogether, I want to highlight the sort of operational improvement in the profitability side in the circumstances where at the same time we were a bit challenged due to the sort of getting new cars for sales and so on. I think the performance, including that one, was a really good one. Yeah, as you mentioned here, you've warned that component shortage may weaken profitability as you write in the Q4 in the car trade division. Can you give any help, any lead to what type of adverse effect we would possibly see on sales or results? Please remember that it's now a global problem in car trade. More or less all manufacturers have difficulties with components. Our understanding is that in Volkswagen Group, they're doing also an extremely good job on that side. The situation, we believe will improve in 2022. Also, it depends on those brand situations varying in different brands. When we discuss our car trade division, we should remember that at the same time, when we are increasing market share in new cars, we are now developing very strongly, and I would like to say also very successfully, second-hand car business as well as services. Those businesses are now also progressing very well and in the second-hand car business, services, new car business, all those businesses are now moving very fast in the right direction. Right. On the building and technical price increases that were already mentioned and asked about, would you say that the price increases have clearly outpaced sort of sourcing price increases in the market so that the gross margin has widened significantly? Or is it just the absolute gross profit that has come up with the volume increase, with the total sales increase, rather? Yeah. We are very happy how our people have worked also in building and technical trade in price increases, and they have succeeded very well to convert in all operational countries those higher purchasing costs to the sales prices. Definitely, it is also due to the fact that today our market position is very strong, especially in Finland, but we have succeeded also to strengthen our position in Scandinavia. All those things help, of course, us also in pricing. Right. Would you say that your price increases to end consumer have succeeded or the market's price increases to end consumer have succeeded the sourcing price increase in percentage? Yeah, especially we should remember that Kesko is today clearly the biggest building and technical trade company in Northern Europe, and our market position is very strong. All in all, we have succeeded to increase dramatically our sales, as well as we have improved dramatically internal operations everywhere in Kesko building and technical trade. Those are the main reasons why we can see such a good development in sales as well as in profitability. All right. That's clear. I just have a final sort of mini question on the grocery side here about the news you released about your micro automation fulfillment solution in a hypermarket store, if I understood it correctly. Is this the way you will go about with the online fulfillment and sort of automation investments also ahead, do you believe? Or do you foresee a set up on central premises such as dark stores or even larger site fulfillment centers similar to what we've seen in the Swedish market? Yeah. No, first, you're right, we have different approach, we have different strategy than some other Western European grocery trade companies. Our strategy based on the fact that we have extremely good and competitive grocery store network in Finland. We have today very clear strategy how we fully utilize e-com potential in hypermarket chain, in K-Citymarket. At the same time, we have developed very good and clear strategy for supermarkets as well as strategy for neighborhood stores. Based on that, we are very, very confident that we can fully utilize potential coming from store networks that we have in grocery business in Finland. In hypermarkets, especially in bigger cities, we believe that MFC concept is very, very competitive. Of course, at the same time, we will and we are ready to do other measures in supermarkets as well as in neighborhood stores to increase e-com in those chains. All right. Thank you very much. Thank you. Just a reminder that if you would like to ask a question via the phone line, please press zero one on your telephone keypad. We have no further questions from the phone lines, so I will pass back to the speakers. I think it's time to conclude the conference call then. Thank you so much, Mikko and Jukka, for the answers, and Mikko for the presentation. Any final comments for the audience? Yeah, just thank you for your participation. Hanna, Jukka, myself, we wish you very pleasant weekend. Thank you very much. Bye-bye. Yep. Thanks.