Dear all, warmly welcome you virtually to Helsinki and thank you for tuning in for Kesko's Q3 2024 release call. Today's headline is A Turn for the Better in Building and Technical Trade. Other divisions did well as well but we wanted to highlight the building and technical trade after many harsh quarters. Our agenda today is our President and CEO Jorma Rauhala will give the Q3 presentation. We have here together with our business division presidents Ari Akseli for grocery trade, Sami Kiiski for building and technical trade and Johanna Ali for car trade as well as CFO Anu Hämäläinen. After Jorma's presentation it is time for questions both by phone and via chat function. All the materials related to Q3 can be found at our webpage Kesko.fi under Investors. My name is Hanna Jaakkola, responsible for IR at Kesko. I will be at your service after the presentation for your questions and discussions, but now Jorma, the virtual stage is yours. Please. Thank you Hanna. Ladies and gentlemen, welcome also on my behalf to this release call. I am Jorma Rauhala and I have now the pleasure to present Kesko's Q3 results. Yes, a Turn for the Better in Building and Technical Trade is our headline and it highlights the biggest change in the third quarter. Other divisions performed well too. Now I will give an overview of our business performance and open up elements behind the result. Key events in the third quarter, Kesko's net sales increased and comparable operating profit decreased. Building and technical trade. Net sales increased. A turnaround can be seen year -on -year. Result increased for the first time in eight quarters. Grocery trade. Net sales increased. Result was flat year -on -year. Car trade. Net sales and result decreased. Profitability was at a good level. Kesko announced it will acquire three builders' merchants in Denmark: Roslev Trælasthandel, Davidsen Koncernen, and C.F. Petersen & Søn. The combined net sales of the companies total approximately EUR 400 million. Once the acquisitions are completed in first half of 2025, Kesko's market share in Danish building and home improvement trade is set to rise to some 20%. Kesko issued a EUR 300 million green bond which will mature on 2 February 2030. Net sales in Q3 totaled EUR 3 billion. It was up by EUR 77 million. Net sales increased in building and technical trade and grocery trade rolling 12 months. Net sales were flat compared to 2023 and totaled EUR 11.7 billion. Comparable operating profit was EUR 201.5 million and operating margin was 6.7%. Comparable operating profit increased slightly in grocery trade and building and technical trade and decreased in car trade. Rolling 12 months operating profit was EUR 650 million and operating margin was 5.5%. Return on capital employed was 11.5%. Return on capital employed decreased compared to 2023 in all divisions as earnings declined. Financial position increase in working capital impacted cash flow in Q3. Cash flow from operating activities was EUR 286 million. Cash flow was impacted by calendar as the last day of the quarter this year was Monday, while last year it was Saturday. There are typically large outpayments of trade payables on Mondays. Also, inventory growth affected the cash flow. Net debt to EBITDA was 1.2, well below our maximum target of 2.5. Interest bearing net debt increased year -on -year as a result of investments in acquisitions, grocery trade, store site network and logistics. I'll open up the logistics investments on the next slide. Onnela is Kesko's history's largest construction project. It is also the largest ongoing construction project in Finland at the moment. This is an investment in future growth. The center will serve both Onninen's technical trade and K-Auto's spare parts business. Implementation of the center will take place in stages from Q3 2025 onwards. Once the center is on full use by the end of 2026, it will remarkably improve operating efficiency. Timing for the construction has been good and the project cost is estimated to be less than the original cost estimate of EUR 300 million. Total investment so far is EUR 174 million. Capital received by Kesko through the issuance of green bonds is used to finance the project. In this project, special attention has been paid to reducing energy consumption and carbon footprint which reduces costs and emissions over the property's long life cycle. The site will host, for example, some 100 geothermal wells and an entire solar power plant. Expenses fared up due to Davidsen acquisition and real estate costs. We have succeeded well in focusing on cost efficiency. For example, excluding Davidsen, personnel expenses have increased only by 0.3% year to date despite wage increases. Fixed costs were EUR 484 million and cost ratio was 16%. It was down compared to last quarter, but up year -on -year. Now to the grocery. Stable performance in Q3. Net sales totaled EUR 1.6 billion and increased by EUR 16 million. Rolling 12 months, net sales totaled over EUR 6.3 billion in grocery trade. Comparable operating profit for Q3 was EUR 118.8 million and it was close to last year's level, up by EUR 0.5 million. Profitability was 7.4%. Rolling 12 months operating profit was EUR 440 million and operating margin was 6.9%. Key events in grocery trade in Q3. In the grocery trade division, net sales and profit increased. Operating margin was flat. Year -on -year, K Group grocery sales were down by 0.1%. Kespro's net sales were up by 3.1%, again exceeding market growth. K-Citymarket non-food sales were down by 4.1%. Good development continued in online grocery. Online sales were up by 13.9% thanks to express deliveries. Total grocery trade market was approximately 1.5% and group sales performance was likely below the market. Grocery price inflation in Finland was approximately 0.4%. Customer flows continued to grow thanks to campaigns but average purchase was down according to our strategy. Media business and data utilization are supporting profitability. Strategy execution is proceeded according to plan. I want to highlight our key actions in grocery trade. 1. Strengthening store specific business ideas. 2. Developing our store site network. 3. Improving price competitiveness. Impact from stronger store specific business ideas and investments in price will become visible from year 25 onwards. Investments in the store network continue. Impacts will become visible in the end of Kesko's strategy period. This year we will open 50 new stores and 44 renewed stores of which seven new and 14 renewed stores in Q4 2024. In 2025 we will open 18 new and 46 renewed stores. In building and technical trade the result was better than expected. Net sales increased by EUR 78 million to EUR 1.1 billion thanks to Davidsen acquisition. In comparable terms, net sales decreased by 2.2% due to the challenging construction cycle. Rolling 12 months, net sales were over EUR 4.6 billion. Comparable operating profit for the building and technical trade division totaled EUR 70.1 million and operating margin 6.2%. Rolling 12 months operating profit was EUR 173.6 million and operating margin was 4.1%. Comparable operating profit increased thanks to positive profit development in K-Rauta Finland and Davidsen acquisition. Key events in building and technical trade in Q3 construction cycle is still weak but we have seen a turnaround. Result for the division grew for the first time in eight quarters. Sales have picked up in both building and home improvement trade and technical trade but the market continues to be challenging. Net sales and operating profit development was better than anticipated. Operating profit for Onninen in Finland was at last year's level. Sales and profitability for solar power products have returned to normal levels. In Norway there have been logistics related delays in Elektroskandia's integration and Byggmakker slightly underperformed the market in Sweden. Increased focus on B2B trade under the K-Bygg brand has proceeded according to plan. Credit risks are well under control. Write-downs of overdue trade receivables totaled EUR 0.5 million. Share of result from Kesko Senukai was EUR 4.8 million. In this picture we can see K-Rauta and Onninen sales development in Finland since 2019. We showed this picture last quarter and here you can see the Q3 development added. K-Rauta is the market leader in building and home improvement business in Finland and Onninen in technical trade. Both have nearly 50% market shares. So this picture describes the Finnish building and home improvement market well. In the graph we can see now that after several quarters of weak cycle sales are turning. This positive trend has continued also in Q3 but numbers are still below zero level. We believe that the moderate sales development will continue but there are no major sales hikes in sight. Low comparable figures support the development too. This is Byggmakker sales development which is very similar to K-Rauta and Onninen graph. Norway is our second largest operating country and Byggmakker's market share in 2023 was some 13% and Byggmakker is among the largest players in the market. Here too we can see the consumer Covid boost starting in late 2020 and then in 2021 we saw B2B sales increase with high demand and global price increases turning. Construction cycle started to affect 2022 and sales declined sharply in first half of 2022. After several quarters of weak cycle we can now see sales returning. We estimate that the construction cycle will turn in 2025 in Norway too. In car trade we saw good performance in a challenging market. In car trade, net sales for Q3 decreased by EUR 16 million and were EUR 295 million. Net sales decreased in new cars and increased in used cars and services. In the comparison period, net sales for new cars increased by the clearing of order books as the availability of cars improved. The comparable operating profit totaled EUR 17.9 million and decreased by EUR 6.5 million. Year -on -year operating margin was 6% rolling 12 months. Operating profit was EUR 63.5 million and operating margin was 5.4%. Key Events in Car Trade in Q3. Market demand for new cars stayed muted. Q3 first registrations in Finland were -24.4%. Net sales and comparable operating profit decreased as market continued to be challenging. Profitability remained at a good level. New car sales were down but in new car orders the share of brands represented by K-Auto used car sales were up. K-Auto's market share strengthened significantly. Service sales continued to grow. Acquisition of Autotalo Lohja was completed in September. In sports trade, net sales and comparable operating profit increased and market share strengthened. Our business portfolio in car trade is balanced. 47% of K-Auto sales were new cars, 32% used cars and 21% services. Now to profit guidance 2024 and outlook for 2025. Kesko's operating environment is estimated to remain challenging in 2024. Kesko's net sales and operating profit are estimated to remain at a good level in 2024 despite the challenges in the company's operating environment. Kesko estimates that its comparable operating profit in 2024 will be will amount to EUR 630 million-EUR 680 million. Previously, the comparable operating profit was estimated to amount to EUR 620 million-EUR 680 million. The profit guidance specification is based on third quarter positive profit development in building and technical trade. Outlook for 2025, the operating environment is estimated to improve in 2025 and Kesko's comparable operating profit is also estimated to improve in 2025. In grocery trade, B2C trade and the food service market are estimated to remain stable in 2025. The comparable operating margin, the grocery trade division is estimated to stay clearly above 6% despite the investments in price and store site network. In accordance with Kesko strategy for 2024-26 in building and technical trade, the cycle is expected to improve in 2025 from the historically low levels. Profitability in building and technical trade division is estimated to improve compared to 2024. In car trade, new car orders are expected to stay at a low level in 2025. 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. Well, this was my presentation. Thank you. I guess it's time for questions now. Yes, thank you Jorma, for your presentation. Now it's time for questions. Like you said, let's turn to the conference call line first. If you wish to ask a question, please dial your telephone keypad to enter the queue. If you wish to withdraw your question, please dial six on your telephone keypad. The next question comes from Maria Wikström. Please go ahead. Hi, thank you for taking my question. This is Maria Wikström from SEB. I have two questions. I mean, firstly, on the 2025 guidance. I think you are probably the first company to actually guide for 25 and wanted to have a little bit more color. Firstly, if you have included these three acquisitions from Denmark in your guidance and if you would a little bit elaborate what kind of consumer environment you are picturing for 25 in your guidance, please. Yes, thank you for your questions. And what comes to next year we haven't included those three targets what we are now acquiring. And as we stated, we see that building and construction market will recover. Of course we have to remember that it's now in historically low level. But we expect that that market will improve in every country, in every eight countries. So that's I would say the biggest change. What will happen in car trade? Not big changes. We see that still new cars will be quite low level. What comes to next year in the Finnish market and in food grocery business to market is quite stable. But also in that side we could kind of expect that it wouldn't be worse than this year because of consumer confidence and salary increases and things like that. So I would say that all three divisions mainly in the technical trade there we can see some more positive trends, but also car and grocery businesses, not any negative signs. Okay, thank you. And then a bit more detail on the building and technical trade. I think in your numbers we have seen the DIY part already to see a pickup. And I think that was quite evident if we look at, like, the Byggmakker results from Sweden. But what kind of lag you see for the technical trade to actually show a pickup as well? I mean across your markets I can. Start, and maybe some can continue. But if you look our figures, last quarter figures or whole year figures, there is not any big differences between building and home improvement and technical trade. So they kind of go hand in hand what comes to market. But Sami, maybe you can continue. Yes, thank you. It's exactly like Jorma said. The big picture for technical trade is pretty much same in all our operating countries. But of course, you know, still more differences. And of course we have a little bit different market shares or how we concentrate also in the business-wise do we have more HEPAC or electrics. But the big picture is the same. Thank you. And then my final question on the grocery trade as I mean you have indicated that you will be investing in prices in order to gain some of the lost market share. So with the investment in prices, I mean how you are going to match the negative effect on profits from lower prices in order to as you guide for clearly above 6% margins for 2025 and 2026. So can you give a bit more color on these impacts and how you're going to compensate. Ari, would you like to have this one? Yes, thank you for excellent question, and we could say that when we invest into the prices it always bring more sales at the same time, so that's the good part and other part is that we have new income sources like a data business and also media businesses and these are bringing new incomes at the same time, so we think that it will have some kind of negative effect of course, but because of these factors it will be not so big. Thank you very much. I didn't have further questions at this point. For your questions. Is there any new questions on the line? Yes, please go ahead. The next question comes from Svante Krokfors from Nordea. Please go ahead. Good morning and thank you for the presentation. Svante Krokfors from Nordea. Question still regarding the price investments. What should we think about the timing on the grocery side and how will you monitor this so that we don't see any kind of negative development starting in groceries EBIT margin? Yes, I think you can take this one. As we stated that the price investment will be visible early next year, but you can continue. I think that the most important factor in how we are doing this new pricing is that we use a lot of data, so we put targeted offers and we can always calculate very clearly what is the effect of these and heavy offers. And at the same time we have new incomes coming when we are able to increase the sales. And also all the store owners are participating in this price program. So they are also putting effort for that. Thank you. And then you mentioned you had some on building and technical trade. You mentioned some issues in Elektroskandia and Byggmakker. Could you elaborate a bit on this? And what kind of measures have you? Okay, so I can start and then we can continue. But as we have said earlier, Elektroskandia's integration was maybe the biggest integration that we have in Kesko's history. Even Suomen Lähikauppa integration was kind of easier but it was very challenging. But we managed, we managed very well. Well, and we ended that integration, let's say May June. But we have some delays in logistics. But Sami, you can open a little bit. Yeah, thank you for the good question. Like Jorma said, it has been and still rather big integration. It's more related to our logistics and also how we have two warehouses there and how we do our shipments to our customers and there has been little bit delays in shipments and also how we treat our so-called split orders, in a way. So we believe that nothing what we cannot fix this. We can fix it, but it has been little bit delays in the shipments for some of the customers, not all. I would say that we are very close when it comes to market development. Not any big crisis on that one. But can you open a little bit to Byggmakker also? Exactly, and Norway market also having, you know, troubled waters in a way, and I think we are well positioned there. We see mainly that maybe we are a little bit losing market share in consumer business, but that has been also our strategy choice that we want to concentrate more B2B and there we are well positioned and we don't see any big changes. Pretty flat development for us. Thank you. Lastly, a question regarding the EPBD, the Energy Performance of Buildings Directive. Have you made any internal analysis how this could impact the technical trade side? Sami, can you. I think we don't have any calculation about that one, how that could affect us. But of course that could be positive one for us. But we are not counting so much on that. What comes to our outlook for next year. Okay, thank you. That's all from me. The next question comes from Calle Loikkanen from Danske Bank. Please go ahead. Good morning. Good morning and thank you for taking my questions. I have two questions. A bit of a follow up to the previous ones. Firstly, starting on the grocery trade, when do you expect the market share losses to start turning to flat or even growth? You can say also. But I think it's in our strategy. In this strategy period. Exactly like that. During this strategy period. Especially because network development takes time. Okay, okay, that makes sense. But do you think you have to revisit the strategy that you have? I mean, consumers have been very price sensitive and price focused and probably that maybe doesn't change in the coming years. So do you think you need to adjust the strategy that you have in grocery trade in terms of pricing and market share? No, I don't think so. Because we don't count on that. Somehow the market would remarkably improve, that the consumer wouldn't be as price sensitive. It includes our strategy that consumer continues to be price sensitive. It would be a positive surprise if that will improve, but as said, we will make those investments and of course price investments. We can see those effects earlier. Of course, of course we believe and we trust that next year, this year we will lose less market share than last year, and of course next year will be better, and at the latest in our strategy period, 2026, I think that we will gain market share. Okay, okay, that's helpful. Thank you. And then on the building and technical trade, looking at the Q3 margins, can you elaborate on what the margins would have been if we exclude the acquisitions? Exclude acquisition, but at all? Okay. Then it's mainly Davidsen. So not big deep effect. Davidsen was okay. Davidsen was a little bit better, what we expected. But I would say that no major differences. Yeah. Okay, that's all for me, thank you. The next question comes from Miika from DNB Markets. Please go ahead. Good morning, it's Miika here from DNB. Solid result in building and technical trade despite the challenging market. I was wondering if there was anything temporary that helped your performance during the quarter, and is it reasonable to expect continued profit growth for Q4 in the division? There wasn't any special item. I would say that it was better than we expected. Q3 was, because of safety, better than we expected, and also gross margin and costs are very good in our control. What comes Q4? It includes our guidance. So you upgraded your low end, kept high end intact. Could you open up the positives and negatives for the remaining Q4 and what is needed to reach the high point of your guidance? So, I didn't hear to start, but. The range, the lower end. Yeah, that's also, as we said, it was the reason why we increased that one was because building and technical trade, the Q3 EBIT was much better than we expected. Also, car business, building and technical trade. No. Any negative surprises on that? I would say that a little bit positive surprises on that one. But. When the year started, of course, we on that time, we believe that second half of the year will be stronger the first part of the year, especially in building and technical trade, and that we can see now Q2 was better. What comes to say is Q3 was better now, and of course we believe that this kind of trend. I would say how much. What will be the sales or EBITDA change? Difficult to estimate that one, but I believe that the positive trend all along will continue this end of year and next year. Excellent, thank you. The next question comes from Rob Joyce from BNP Paribas Exane. Please go ahead. Hi, good morning. Thank you very much for taking my questions. Just the first one on grocery, could you maybe just give us a little insight into what's going on in the sort of competitive situation in the market? And also on inflation you mentioned that's been pretty low in the quarter. What's your expectation for the food price inflation from here? Thank you. Okay, thank you, Ari, you can take this one. Yes, thank you. Market continues to be pretty challenging and quite much price driven, but I think it's actually positive sign that you know, the price inflation has gone down because if you look internationally then the importance of the prices start to go down because customers has been so worried about this high inflation of the food price. I think it's promising but at the same time there is lots of new store openings in the market, especially in the hypermarket segment, and I think that the customers, they are still looking for better offers and they are dividing their shopping basket. They are looking opportunities for the better offers from each and every store. I think this is the big picture about the market. But at the same time, we can see that some of the customers are looking for convenience. They are using more fast deliveries. They are buying more for the dairy meals and looking for quality. So it's divided. Just on the outlook for food inflation from here. Do you think it's going to trend in positive or do you think it continues to fall? I think it's very difficult to estimate but I think it's going to be quite stable. And then, just while I've got you on grocery, you mentioned data and media are starting to be contributors. Can you give us an idea of the sort of size of contribution you expect from those businesses in 2024 and maybe 2025, please. First, you have to say that this is a totally new income stream for us, and we are not giving exact figures, but the EBIT of these businesses are two double digits millions annually, and it's growing all the time. Okay, very helpful. And then final one from me, just at a group level, it looks like if I take the midpoint of the 2024 guidance versus next year's consensus, it's about a 5% EBIT growth consensus expecting. Is that broadly what your 2025 guidance is thinking about? No, we are not taking any date-specific figures, but we have given our outlook for next year. Okay, all right, I appreciate it, thank you. The next question comes from Fredrik Ivarsson from ABG. Please go ahead. Thank you. Good morning team. I just got one question and sorry to come back on the price investments but I sort of struggle to understand the timing of this. Why aren't you cutting prices already in Q4? What's the reason for waiting? I can start, but Ari, you can continue. We will do. Of course we have done some in Q3, we will do some extra pricing investments also in Q4 but idea is that we are starting 2025 because we want to plan that very well and also cooperation with retailers. So we won't have any sort of price campaign start of the year. So we want to make. Of course we have also benchmarked a lot of what ICA did in Sweden and how they did it. They did that. But Ari, would you like to continue your. I think the big picture is exactly like you said, that we are aiming long-term sustainable price program and it takes time to build and how to participate store owners, how to participate suppliers and how to build all the factors in the program. So this is how to manage at the same time good profitability and also start to gain market share. Okay, that's clear. Many thanks. Thank you for a lively discussion from the conference call line, and let's turn to the chat function. I have a couple of questions here. I will start with Arttu Heikura from Inderes asking to what extent price campaigns or price competition impacted grocery trade's profitability in Q3. So we're talking about Like you can. See from the numbers, they were quite good on the EBIT side, and I think that they had some negative impact of a couple of million euros, you can say. But at the same time, because we have these new income streams coming from media and data businesses, it was very balanced, very good. About the grocery store site network. What is the net of new grocery stores in 2025? We comment on the new stores but we don't comment the closings in the. Yeah, we don't comment the closings because they are confidential information. But of course those ones will be very small ones. Yes, they are usually very small ones. Very low profit stores in the rural areas typically. That's clear. Could you elaborate on market share development in building and technical trade? I can start and maybe Sami, you can continue if I don't remember all of those, but I would say that what comes in Finland if you look year to date K-Rauta has gained market share year to date. What comes to Onninen? We have gained market share in HEPAC products and AC products but lost a little bit in electric products. But that's mainly because of kind of customer mix. And then in Sweden I think K-Bygg has gained a little bit market share in Norway as we stated. Byggmakker and Onninen has lost a little bit in Poland. I think we have gained also in Baltics and in Denmark very very close. What comes to market? Yes, a little bit maybe loss. Yes. Yeah, very good. No big differences there. No big difference. Yeah. And then has the trend of recovering sales in building and technical trade continued? Also in October. Yes, we have. I would say so that there hasn't been any surprises. Yeah, very good. Well, regarding outlook 2025, could you specify the outlook for grocery trade? Are you expecting flat sales compared to 2024? And we are not guiding sales in our outlook commenting the EBIT here, so I guess you have to figure it out from our wording here. Then Magnus Råman from Kepler Cheuvreux asks, can you comment roughly how much building and technical trade division operating profit came from Davidsen? But we don't give any country specifics but he continues, or otherwise can you comment which driver behind your improvement to flat operating profit growth year- on -year in overall building and technical trade was most important. Was it Davidsen or improvement in Finland? Which one? Because we commented that it was from both. Both. But improvement in Finland. I think that's clear. Improvement in Finland is the answer. I don't have any further questions here. Any further questions on the conference call? No, then I will thank you for the lively discussion and if you have any further questions, don't hesitate calling me or sending me emails or anything. I'll be really happy to discuss the great result with you. Any last comments Jorma for the audience from your side? Yes, thank you Hanna. Thank you all for the participation and the questions. Yes, I like to underline that Q3 performance was a good level and it's nice to see signs of recovery in the market. I look forward to the end of the year and also next year, 2025, with confidence. I wish you all a nice day and the rest of the week. Thank you.