Welcome to the conference call. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing star 5 on their telephone keypad. Now I will hand the conference over to the speakers. Please go ahead. Ladies and gentlemen, welcome to Kesko's Financial Statements 2022 release call. I'm Kesko's CEO, Mikko Helander. I have together with me our business area presidents, Jorma Rauhala, Ari Akseli, and Matti Virtanen, as well as CFO Jukka Erlund and Investor Relations Hanna Jaakkola. In 2022, all divisions generated good results. Now, I will first give an overview of our business performance last year, as well as the updated guidance and outlook for this year. After the presentation, we will be happy to take questions both by phone and via chat. Key topics in 2022. First of all, good progress in strategy execution in all divisions. In Grocery trade, profitability remained good. In Building and Technical Trade, record result. In Car trade, profitability was good despite availability issues. One action with big impact was opening up already fixed purchasing agreements in grocery trade last spring to secure finished food production in new inflationary environment. Last year, earnings per share grew. Board of directors is proposing to the annual general meeting a dividend of EUR 1.08 per share. Net sales growth continued in 2022. Net sales totaled EUR 11.8 billion. It was up comparably by 4.4%. Net sales increased the most in building and technical trade, but it grew also in grocery trade. In Car trade, net sales decreased. Operating profit improved last year by some EUR 40 million and totaled EUR 815 million. Profitability was 6.9%. Operating profit increased in grocery trade and in Building and Technical Trade, and decreased in Car trade. Return on capital employed, one of our financial targets, was good at 16.9%, clearly above the lower limit of the financial target, which is 14.5%. Return on capital employed improved in building and technical trade division. Kesko's financial position is strong. Cash flow from operating activities was EUR 950 million. Capital expenditure totaled EUR 450 million. Net debt to EBITDA was 0.2. We continued the investments in growth and better operational efficiency also in 2022. In accordance with our growth strategy last year, we continued consolidating the scandinavian building and technical trade market by acquiring and integrating four companies in Sweden and one in Norway. Q4 results were good in all divisions in a weakened market. Some Q4 key figures for the whole group. Net sales grew 4.3% and totaled nearly EUR 3 billion. Operating profit was EUR 193 million, down by EUR 11 million compared to last year. Operating margin was at a good level, 6.5%. Cash flow totaled EUR 263 million. The net sales in Q4 totaled nearly EUR 3 billion. It was up comparably by 4.3%. The growth was strongest in car trade, 5.7%, but all divisions grew. In Q4, comparable operating profit was at a good level. Comparable operating profit was EUR 193 million. It decreased by EUR 11 million. The profitability was 6.5%. In Grocery trade, net sales grew in Q4. Net sales totaled EUR 1,618 million and grew comparably by 3.9%. Net sales for Kespro's food service business grew significantly, and sales to K Group grocery store chains grew too. In grocery trade, comparable operating profit for Q4 was EUR 123 million, and it decreased by EUR 8 million. Profitability was 7.6%. Changes in customer behavior, in particular, had a negative impact on Q4 operating profit. In grocery trade, profitability remained at a good level despite weakening market. Grocery sales in our stores grew by 1.1%, but fell short of the market. Changes in customer behavior due to the rise in food prices and growth in the share of campaign sales year-on-year had a negative impact on profitability. The rise in cost caused by inflation had also a negative impact on the result. In Q4, Kesko sales grew by over 14% and also the market share continued to grow in foodservice business. B2C online grocery sales grew, supported by Wolt collaboration. To building and technical trade. Net sales grew comparably by 4.6% to EUR 1,143 million. Net sales grew in comparable terms in all operating countries. Net sales growth continued strong in Onninen's technical wholesale. Sales grew in B2B trade, but decreased in B2C trade. Weakening norwegian, swedish and polish currencies against the euro impacted negatively net sales development in euro terms. In Building and Technical Trade, comparable operating profit was EUR 66 million. It decreased by EUR 8 million. The profitability was 5.8%. Profit for the building and technical trade division increased in Onninen's technical wholesale. Onninen's comparable operating profit grew in all countries except for Poland. In building and home improvement trade, comparable operating profit decreased in all operating countries. In Building and Technical Trade, result was good in weakening market. Division's sales grew in all operating countries, profitability weakened. Strong sales growth continued in technical wholesale and profit improved further. In building and home improvement trade, sales declined in B2C trade in particular. In sports trade, profitability stayed at a good level. Kesko Senukai's share of result boosted comparable operating profit by EUR 6.9 million. In Car trade, net sales for Q4 grew by 5.7% and was EUR 231 million. Net sales growth was slowed by the weaker than normal availability of cars. Comparable operating profit for the Car trade division grew by EUR 3.7 million- EUR 12.3 million. Profitability improved and was 5.3%. In car trade, result was good despite availability issues. Net sales grew and profitability improved as issues with car availability eased slightly. Growth in used car sales continued strong despite weakening market. Profit was improved by sales growth and better sales margins. Profitability was also improved by efforts to increase operational efficiency and reduction in provision related to warranty expenses. In the service business, sales grew and profitability remained good. All our divisions are in good shape for profit. Kesko's profit has improved also after the COVID-19 related restrictions were lifted. Especially the years 2020 and 2021 were the years of pandemic and pandemic-related restrictions. The result continued to improve also in 2022. In grocery trade, profitability is on a solid basis. Our share of the total Finnish EUR 20 billion food sales is significant. We have the most extensive store network with 913 K-retailing entrepreneurs. Kespro is the strong market leader in the growing foodservice wholesale business. Kesko is a forerunner in digitalization. Our stores have database store specific business ideas, and we are the biggest market operator in online grocery sales in Finland. Kesko is among the best in class in our sector in Europe in terms of profitability, efficiency and sustainability. Today, price is increasingly important in food trade. Our stores have been successful in shopping basket comparisons. Prices are constantly competitive in our stores and the offering of affordable private label products is the widest in our stores. Personalized benefits are great. We have increased offering of cheap product baskets too. In the picture, there are examples of the marketing campaign headlined the cheapest shopping basket from K-stores, and also comparison article from the largest newspaper, Helsingin Sanomat. Strong basis for the future in Building and Technical Trade. Kesko is a leading operator in building and technical trade and among the best in Europe in terms of profitability. Over 80% of sales is to B2B customers. Green transition efforts to improve energy efficiency and growing building renovation are supporting the demand. Our efficient sales and operating practices are supporting pro-profitability. Sales and services via digital channels are growing fast in all markets, and also acquisitions and their successful integration is truly yielding results. In Car Trade, what portfolio is leading the results? We have a comprehensive offering in Kesko, new cars, used cars, and services, and long-term collaboration with the Volkswagen Group. Efforts transform our operations and make them more efficient are yielding results. Today, Kesko is the number one in Finland in electric car sales and electric vehicle charging network. I am happy to say the availability of new cars is getting better after many difficult years. Some words about sustainability. Kesko is one of the most sustainable trading sector companies in the world. We have received strong proof regarding our sustainability work from esteemed international ratings. In Dow Jones Sustainability Indices, Kesko was ranked highest in the food and staples retailing category in Europe and the third best in the world. In Global 100 list, Kesko was ranked as the most sustainable grocery trade company in Europe. Kesko is the only company in the world that has been included in the list every single year since its start in 2005. We are a responsible operator in the Finnish food chain. There has been a discussion in Finland around food production in the light of higher costs. I would like to shortly highlight here that Kesko responded quickly to the crisis that was facing the Finnish agriculture and food industry by being the first operator to open up already made purchase agreements with the food industry in March 2022. This did set an example to the others and helped agriculture and food industry operators in a difficult situation. Next, outlook and guidance for 2023. Kesko estimates that its comparable operating profit in 2023 will be in the range of EUR 680 million-EUR 800 million. The guidance is based on an estimate for a relatively short recession in Kesko's operating countries. Key uncertainties impacting Kesko's outlook are developments in inflation and interest rate levels and Russia's ongoing offensive war in Ukraine. In the grocery trade division, B2C trade as a whole is estimated to remain stable, and the food service market is predicted to continue to grow. Price inflation will support sales development in Euro terms but will also increase costs. Operating profit is expected to remain at a good level. The construction market is expected to decrease somewhat compared to 2022. New building construction is estimated to decrease, but renovation, building, and construction related to the green transition are estimated to continue to grow. Operating profit is expected to remain at a good level also in building and technical trade. In the car trade division, car availability is estimated to improve, but demand is estimated to remain below long-term average. Profitability in the car trade division is expected to remain at a good level. Dividend proposal. Kesko's Board of Directors is proposing a dividend of EUR 1.08 per share. It is proposed to be paid again in four installments. Then to the latest news, growth strategy execution continues. Kesko acquires Elektroskandia in Norway. We announced on Monday that Kesko's subsidiary, Onninen, will acquire technical trade company, Elektroskandia Norge, from French Rexel Group. Elektroskandia has net sales of EUR 250 million and some 270 employees, as well as a highly automated distribution center and 13 stores and sales points in Norway. The acquisition complements Onninen's business in all current customer segments and increases Onninen's offering to the growing utility sector in Norway. Following the acquisition, Kesko's sales in Norway will approach EUR 1.5 billion. Approval from competition authorities, of course, is needed. Lastly, I would like to express my gratitude. Great results, excellent work made by everybody in K Group. Thank you for that. Thank you, Mikko. Now it's time for questions. Let's go first to the conference call line. Please, the stage is yours. If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. The next question comes from Calle Loikkanen from Danske Bank. Please go ahead. Yeah. Good morning. Good morning, everyone. I have a couple of questions regarding the grocery trade division. First of all, can you kind of explain or describe how the margins in Kespro did develop in Q4? Yeah. Maybe, Jukka, you can open more those numbers. Yeah. Kespro, as such, improved its profitability due to the good sales growth. Therefore, the margin development was good on Kespro sides. Okay. Okay. Then overall for the grocery trade division, in Q4, there was a rather significant drop in margins. The margin was 7.6% now in Q4. Is that a level that you're happy with, taking into consideration the kind of the operating environment and all of that? Was that a good level, do you think? We should remember that market has changed dramatically in grocery business, especially on B2C side, especially last autumn, end of last year. As of today, we have reported our guidance. We expect a short-term recession in Finnish market and maybe also wider in Europe. It depends on very much how economy, world's economy in Finland, economy in our operating countries will develop later this year. At the moment, we expect short-term recession. Of course, that has some negative impact on the market. All in all, we are positive. We are confident that we are in a good position to maintain good profitability in grocery business on B2C as well as on B2B side in 2023. Okay. expecting a similar kind of drop in margins continuing in the next couple of quarters sounds pretty reasonable. No, I don't go into the details. I repeat what I stated that we are in good position to maintain our strong performance in 2023. Even in a situation that the economy is getting weaker, we are in good shape. Okay. Okay. Then perhaps on the kind of drivers for the margins in this division. You mentioned in the presentation that price is increasingly important for consumers. But at the same time, you also said that increased share of campaign sales was the reason for the lower EBIT in grocery trade. Do you have any kind of... or what drivers would there be for you to be able to keep the margins level, margin levels where they are or even improve it? Is there any kind of positive drivers that you see? We have and we can see clearly, plenty of positive drivers. Once again, I would like to remind that we have exceptional strong position in Finnish grocery business. We have very strong position in B2C business. We have very extensive store network, wide store network in Finland. We have very strong online business for B2C and B2B customers, and we have exceptional strong food service company. That is, we can say, even unique setup in Europe. Thanks to that unique setup, we are definitely in good position to maintain good profitability, even in situation when economy is getting weaker. Of course, we will put even more efforts, to sharpening our marketing and to convince customers that, and consumers that even in this current situation, K-stores are excellent place also to make shopping and even excellent place for consumers who are seeking opportunities, to save money in domestic spendings. Definitely, we will spend more money for campaigning, and that will, in short-term, maybe little bit, reduce our earnings. All in all, thanks to our unique setup, we are good position to maintain good profitability in our grocery division. Okay. Thank you. That's very helpful. Maybe lastly, do you have an estimate on your current market share, in this division or how it has changed over the year and perhaps retail and food service separately? Yes. As we have reported, especially in the second half, we lost market share in B2C business. At the same time, we have continued to gain heavily market share in B2B business. All in all, in Finnish grocery, our market share is very, very stable. Of course, important to remember that especially in last five years, we have heavily gained market share also during pandemic time. Once again, I repeat that on B2C side, we lost market share especially in the second half of 2022. Okay. You don't wanna share any numbers? No, no. Numbers on that. Not yet. Okay ... necessary because we are waiting also more detailed information. We know that, in the second half in B2C we lost. Once again, I repeat, in B2B we heavily gained market share. Okay. That's clear. Thank you very much. That's all for me. The next question comes from Miika Ihamäki from DNB Markets. Please go ahead. Hi, this is Mika from DNB. Can you talk about your performance in building and technical trade first, perhaps on the building and home improvement profitability, which weakened significantly? I would like to ask about, the sales development related to green transition and energy efficiency portfolio. Thanks. Yeah. No, of course, first important to remember that, in building and technical trade as well as in grocery trade, we reported all-time best, numbers and results in 2022. In the last quarter in building and technical trade, technical trade business, again, improved profitability, especially home improvement business, B2C was weak. We have seen this trend already since 2021 everywhere in Europe that B2C business is softening, and we saw this development also in our business, in the last quarter, 2022. Of course, good news is that, today, thanks to our successful transformation, B2C represents less than 20% of our total business, and our position is exceptionally strong, nowadays in B2B segment. Maybe, Jorma, you can open more detail this development. Yes. If you look last year, as we know, technical trade was double-digit sales increase there and also the profitability growth on that area. Then we are looking building and home improvement, we can say what comes to sales that B2B was kind of flat and there was some decrease in consumer business, which started in whole market, 2021 autumn, consumer business started to decrease. If we look last year, definitely the second quarter was the weakest one. If we compare quarter one, quarter three and quarter four, the decrease was quite similar. The decrease didn't accelerate it anymore. What comes to profitability of the building and home improvement, I would say that the main reason is the sales mix, of course, more B2B sales. Then, then the, that we gain, inventory gains, 2021, quite significantly. Last year we didn't make so much. I would say that those are the most important reasons. Mika asked about the green transition. green transition, I don't have the exact figures how it increased, but, of course, double digit increase there. We see also in future there is huge demand on that area. As well as, of course, renovation building. We are not at all so worried about new constructions because Jorma, I remember that today more or less 50% of revenue is coming from renovation. More than 50%. More than 50%. More than 50%. Exactly. Yes. Any questions, Miika? Yeah. I think, this was good. Thank you. The next question comes from Nicklas Skogman from Handelsbanken. Please go ahead. Yes, hello. Good morning, everyone. I have a question on, we've seen building material prices started to flatline and also come down recently. How do you see that expecting, your growth, both in your building and home improvement business, but perhaps even more so in Onninen, given that you had inventory gains for a big part of 2022 as prices were increasing? Inflation is, of course, big, big issue also in building and technical trade. I'm extremely happy how well my colleagues in building and technical trade succeeded to manage inflation in 2022. When we look current situation when in many categories prices have turned down and declining, situation is very well under control, but Jorma, you can open more detailed also this situation. Yes. As we know, prices started to increase, first quarter in 2021, and had continued since that, also in fourth quarter last year. Also we know that this, also we have published our customers' new prices. As this first quarter this year also, prices continue to increase. Of course, it's difficult to forecast coming quarters. Still in first quarter, prices continue to increase. Inventories, quality of goods, value of goods, very well under control. Very well under control. Yes. We have, kind of invest, those product groups which prices increased. Mm. Also those green transition products. There are huge demand for those products, and we have a lot of those products in our inventory. Mm. Our inventory is very healthy, I would say. Mm. Okay. Thank you very much. Thank you, Nicklas. Please state your name and company. Please go ahead. Svante Krokfors from Nordea. Thank you for the presentation. Couple of questions from my side. First, regarding the guidance range, EUR 680 million-EUR 800 million. Could you elaborate a bit on the moving elements in that guidance? I mean, you expect a short recession, so that is one thing. How much of the range is how much is it mostly related to BTT uncertainty and how much related to grocery trade uncertainty? Thank you. As we have reported, outlook is, despite the recession, despite the war in Ukraine, despite inflation and higher interest rates, positive in all divisions. Despite all those challenges and difficulties in our business environment, we are confident that we can report good profitability in grocery trade, building a technical material trade as well as in car trade. Of course, this range, EUR 680 million-EUR 800 million clearly reports that we have a lot of uncertainty in the business. By the way, it is exactly the same range what we had 12 months ago when we started previous year. Unfortunately, world is today quite challenging place to make business. I hope that you understand despite those issues and difficulties, Kesko is in strong position to make good profit. I see that our guidance is very strong message that we are performing very well despite those challenges. Colleagues, do you want to open more your businesses and your feelings? No, they are happy. They are not ready to open more. Okay. Thank you. Then perhaps a question to Jorma regarding the visibility. I mean, we know what the expectations for construction market, renovation market, so on, is, green transition growing well. But could you elaborate a bit on how long your visibility really is in BTT on how long is your visibility? Could you elaborate a bit on that? It's quite difficult to say how we forecast what we have said, what you just mentioned, how the whole markets will go on. Of course, we know that we have very good situation with our customers. We have gained last year. For example, in technical trade, we gained market share in every countries. What comes to building and home improvement, we gained market share in Finland. We were flat in Sweden and lost little bit in Norway. I think we are in a very good position what comes to this started year. Very difficult to say more closely that or what the markets will go on. That's my comments. Thank you. The last question regarding your announced acquisition in Norway, Elektroskandia Norge. Seems like a quite good fit for you. You don't disclose the price, but is it fair to assume that the below group Rexel profitability suggests an attractive price tag? Yeah. We should remember that seller didn't want to report the sales price. It was very well in line our normal valuations, and we are extremely happy that we succeeded to make this deal. Of course, now we wait competition authorities approvals, we are extremely happy that we are in this stage and the strategic fit is perfect. We should remember that Onninen is and technical trade all in all is wonderful business and as many times reported, our aim is to strengthen and expand and consolidate building a technical trade and technical trade in Northern Europe. Also in Norway, our position, thanks to this acquisition, will be even stronger. All in all, our sales will be now close to EUR 1.5 billion. Many reasons to be happy, and we are extremely happy, and strategic fit is perfect. Okay, thank you. That's all from me. Please state your name and company. Please go ahead. Hi, this is Jutta Rahikainen from SEB. A few questions left for me. On the CapEx level for 2023, where will you roughly land? 2022, you say it was EUR 449 million. Is that a proxy for 2023 as well or something else perhaps? Thanks. Yeah. We continue implementation of our growth strategy also in 2023. Meaning that we will spend definitely also a lot of money for investments. We have in process excellent investments. We will further invest and modernize store networks in Finland. We will continue investments in digitalization, new technology. We will continue investments also to make acquisitions and we can see and we can feel that in current situation, we are now even in better position to expand our building and technical trade in Northern Europe. I repeat that expectation is that the investments will remain on higher level. Jukka, do you have some additional information? Yeah. Maybe just to sort of summarize the last year CapEx was around EUR 450 million, including also the, from the Keskuspankki fund transfer of one of the real estates, around EUR 40 million on that side and M&A acquisitions around EUR 50 million on that side. Going forward, we don't see any big changes on the overall level of, from that one, taking into consideration also that the Onninen new distribution center CapEx is also taking place, initially year by year starting this year. No big changes on the CapEx side overall. All right. Do I hear you right that if I kind of CapEx 2023 excluding any M&A, you would be, say, EUR 400 million? Is that a good proxy? Pretty much close to where we were last year. Yeah. Excluding M&A. Excluding M&A, EUR 450 million, roughly. Okay. Good. On the cost inflation, could you open up a bit what you expect for 2023 wages, rents, other cost items? I mean, will this be a uphill battle, or are you at ease how to handle it? No. Of course, inflation, as we have mentioned, is a challenge. Our expectation is that inflation will not be this year any more such a big issue as it was in previous year. We are expecting that in the first half that will still complicate the business, but hopefully in the second half that will not be any more such a big issue. Another positive matter is that energy crisis, we have not faced such a big energy crisis what we expected end of last year, and that we believe will bring positive impact also on cost inflation. Based on that, we have made our business plans, and based on that, we have given also our business guidance. Jukka. Yeah. Maybe just to add up that we are also all the time focusing a lot on the cost side just to reduce our costs in many areas. Looking at our organizational efficiency as well, indirect spending, a lot of initiatives on that side as well. This was very important, and we have really in process a lot of efficiency improvement measures, and we have succeeded already to implement those measures, and that has helped us to tackle also cost inflation. Those measures continue also in 2023. Thanks. One question on the dividend. It was pretty much in line with consensus. I had maybe expected a bit more. Could you walk us through your philosophy when you pay dividends? Because you obviously have the balance sheet to pay out massive amounts if you would choose to do so. You've said that you have the M&A agenda, naturally. You also have quite big investments, I mean now for 2023, but also for the coming years in the logistics side. How do all these, I mean, play out from a shareholder point of view? Again, you could pay a lot more in dividends if you wanted to. Just the thinking behind this would be nice. Jutta, you know us, we are hardworking people, and we are doing, and we have done our utmost to satisfy shareholders to pay every year better dividend. I'm extremely happy, and I know my colleagues, they are also extremely happy that we have been in position every single year to increase a dividend as we did also this time. That is a great thing, and I guarantee you that we are doing our best to maintain this positive development also in future. To be in that position means that we need to continue execution of our great strategy. We have to maintain this growth, and if and when we succeed, then we will be in position to pay higher dividends also in future. All right. That's clear. No further questions. Thank you. I think we have one more person online, please. The next question comes from Miika Ihamäki from DNB Markets. Please go ahead. Yes, thanks. Just quickly on the M&A pipeline. As said, you have quite a lot of firepower. Little bit color, are you looking still for something small? Is there perhaps something bigger coming ahead? Any estimate when you start really pushing out this firepower? Was it what we saw in Norway just the beginning? If you could give a little bit color on that. Thank you. Our strategy in Building and Technical Trade crystal clear, our aim is to consolidate building and technical trade in Northern Europe, as we have done. We are seeking small, medium-size, big objectives and targets which support our aim to consolidate those businesses in Northern Europe. We have good progress, and I'm also extremely happy and even a little bit proud on behalf of my colleagues, how well we have succeeded to integrate already those acquired businesses and companies to Kesko building and technical trade set up. Many times people raise this question, "Why you don't go to Continental Europe? Why you don't go to the U.K.? Why you don't go to North America?" Our strategy is crystal clear. We are doing our utmost to consolidate business in Northern Europe, and we are doing our best to be in Scandinavia, Finland, Northern European countries, as a position to be number one or number two. Where we have achieved those positions in consolidated markets, we can see very strong financial performance. Strategy, as I said, is very clear, and we can see plenty of opportunities now further develop this vision and strategy in 2023. Thank you. Sounds good. Very good. Thank you, Miika, for the questions. Thank you all, dear analysts, for the active discussion. I have a couple of questions from the chat function. First of all, congratulations, Mika and Jukka, for the strong performing 2022 closure. What digital initiatives are you taking to keep up the momentum? Any transformational projects you plan in 2023? Jukka can open more digital projects. About digital, I would like first to repeat that we are today among forerunners also in digitalization in European-wide in our businesses. We will continue development on that side. About transformation, we are completing successful transformation in our Car trade division. Thanks to that, despite challenges in business environment, we are reporting strong profitability. As I mentioned earlier, we are in process a lot of measures everywhere in Kesko company, Kesko businesses, further improve efficiency, further reduce operational expenses, and that kind of measures we continue. Jukka, please report about digitalization. We have had a lot of focus on the e-commerce side earlier, we'll continue on that side, both B2C operations, but especially B2B operations. There's still a lot of potential to go further there, even though we are really in a good position already. We'll continue on that side. On the acquisitions, like Mika said, we've done a number of acquisitions, obviously integrating those businesses and building the ERP capabilities and so on will take a bit of a effort. Digital marketing, personalized marketing, digital displays in the stores and so on, we have a lot of projects there as well, which we will continue. Continuing on the digital strategies that we have had on place. Very good. Thank you. That was our last question, I would like to thank all of you, there online. Any last comments, Miiko, Jukka, Ari Akseli, Matti? Thank you. Thank you for everybody online for active participation. Together we wish you very pleasant day. Thank you very much. Thank you. Thank you.