Earnings Transcript for KKOYY - Q4 Fiscal Year 2024

Hanna Jaakkola: Dear all warmly, welcome virtual to Helsinki and thank you for turning in for Kesko’s Q4 and Full Year 2024 Release Call. Today's headline is a Year-End Turnaround, Quarter Result Up for the First Time in Eight Quarters. This is good news after two years of declining quarter results. Our agenda today is the following

Jorma Rauhala: 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 full year and Q4 results. Yes, yearend turnaround, quarter result up for the first time in eight quarters is our headline and it highlights the change in the fourth quarter. Now I will give an overview of our business performance and open up elements behind the result. In the end, I present the guidance and outlook for 2025 and the revenue proposal to the annual general meeting. Year end turnaround, Q4 quarter result up for the first time in last two years highlights for the full year 2024. Kesko’s net sales increased and comparable operating profit decreased Grocery Trade net sales increased, profit was slightly down. In Building & Technical Trade cycle was historically low. Net sales were up, thanks to the Davidsen acquisition. Comparable operating profit was down. In Car Trade, net sales and profit decreased. Profitability was at a good level. There were a lot of changes in the management team last year. I started as President and CEO a year ago and there were several changes in Group Management Board. During 2024, Kesko expanded to Denmark by acquiring Davidsen and additional acquisition of Roslev, Tømmergaarden and CF Petersen & Søn were announced. The Roslev acquisition was completed last week and the company will be added to Kesko’s stickers starting from the beginning of February 25th. Once all the acquisitions are completed, Kesko’s market share in Danish building and home improvement rate is set to rise to some 20%. After these acquisitions, Denmark will become the third largest Kesko’s operating country after Finland and Norway. Dividend proposal to the annual general meeting is $0.90 per share. Dividend payout ratio will be 81%, slightly up from last year. Net sales for 2024 totaled over 11.9 billion Euros and it decreased by 2.3% in comparable terms. Net sales increased in Grocery Trade and decreased in comparable terms in Building & Technical Trade as well as in Car Trade. Comparable operating profit for last year was 650 million Euros. It decreased by 62 million Euros. Operating margin was 5.5%. Operating profit decreased in all divisions. Operating margin for Grocery Trade was at a good level 6.9% and for Car Trade 5.7%. For Building & Technical Trade, operating margin was 3.9%, which is a good result in historically low cycle. Return on capital employed was 11.3%. Return on capital employed decreased compared to 2023 in all division as earnings declined. Financial position; cash flow was almost flat year-on-year. Cash flow from operating activities was over 1 billion Euros. Capital expenditure totaled 676 million Euros. I'll open up investments on the next page. Interest bearing net debt increased year-on-year as a result of investments in acquisitions, Grocery Trade store side network and logistics. Net debt to EBITDA was 1.1, well below our maximum target of 2.5. We continue to investment in growth and the main CapEx was the Davidsen acquisition, the construction of Onninen and K-Auto’s shared logistics centre in Hyvinka, Finland and store site investments in Grocery Trade. The store site investments include real estate acquisitions of K-Supermarket car property in Espoo as well as K-Supermarket Salo’s property. IT investments were 18 million Euros but actually a large amount of IT investments are software type of SaaS investments and classified as OpEx instead of CapEx. We have a clear focus on improving our digital capabilities throughout the company. Other investments include the mentioned logistics center Onninen as well as investments in the leasing car fleet. Expenses, expenses were up due to Davidsen acquisition and real estate costs. We have succeeded well in focusing on cost efficiency. For example, excluding Davidsen, personal expenses have increased only by 0.9% year-to-date despite significant wage increases. Fixed costs were 2,076 million Euros and cost raise was 17.4%. And now to Q4 results. As said, this was the first quarter result improvement in eight quarters. Net sales in Q4 totaled over 3 billion Euros. It was up by 1.1% in comparable terms. The net sales grew in Grocery Trade by 1.2% and Car Trade by 9.7% but decreased in Building & Technical Trade in comparable terms by 1.7%. In Q4 comparable operating profit was at 170.8 million Euros and operating margin was 5.6. Comparable operating profit increased in Car Trade and decreased in Grocery Trade and Building & Technical Trade. Now to the Grocery Trade, in Q4 stable performance. Highlights in Grocery Trade in Q4, net sales grew and operating margin was at a good level. K-Group grocery sales were up by 1.6%. Kespro’s net sales were up by 2.5% and the growth exceeded again the market growth and Kespro gained market share. KCT market non-food sales were down by 1%. Online grocery sales grew by 7.6%, thanks to faster deliveries. Total grocery market growth in Finland was approximately 2.8%. We increased investments in price in line with our strategy. Market share decline slowed down towards the year end. Christmas sales were especially good in the KCT market chains which won over market share in the hypermarket category in December. General grocery price inflation in Finland was approximately 0.9% according to the statistics in Finland. Customer flows continued to grow, thanks to campaigns but average purchase decreased. In our Grocery Trade strategy, we have three main topics; price, quality and store network. Firstly to price program. Price program was introduced in stores in line with our strategy. Price program rolled out in January this year. We cut prices of some 1,200 products in K-Group grocery stores. Kesko and K retailers together are investing into this long-term program nearly 50 million Euros during 2025. Also our suppliers participate but their contribution is not included in this 50 million euro investment. We will continue executing the program throughout the year and the upcoming measures are included in the 50 million euro investment. Prices were cut on some 1,000 branded everyday products and some 200 popular Pirkka private label products. Price reductions on branded products were averaged to 4% to 6% and up to 15% to 20% in some cases and price reductions on Pirkka products were on average 9% to 12%. Operating margin target for Grocery Trade in 2024-2026 strategy period is clearly above 6%, despite investments in price and store network. And then to another strategic focus area, there is an increased focus on quality. K Group is and will be the quality leader in Finnish grocery markets. Our unique retailer business model enables the constant development of store-specific business ideas and the quality. Store-specific business ideas are created by using customer data based on customer profiles of local residents and customer purchasing behavior. This information is used when creating matching selections and services for the store's catchment area. Digitally assisted services enable increasingly personalized and individual customer experience. Increasing relevant personal offers are very important. The K-Ruoka app is the most popular in Finland and it has some 800,000 weekly users. The number of users is up by 38% in 2024. As the media and advertising environment is changing rapidly, the importance of K-Ruoka app is growing and we are in an excellent position in this change. Our selections are wide, we have a large variety from apron products to high quality private labels and also the most affordable price fighters. This gives a clear competitive advantage. There is also a lot of further potential in store-specific business ideas. Currently, executions of store-specific business ideas differs between stores. Kesko is supporting the K-Retailers by digital systems and services in executing their store-specific business ideas. We are also strengthening our store site network as planned. Investments in the store network continue. The impact will become visible especially towards the end of Kesko’s 2024-2026 strategy period. Kesko invests on average 200 million Euros to 250 million Euros annually in store updates and new stores. In 2024 we renewed 44 stores and opened 50 new stores. K-Citymarket Vuosaari in Helsinki was opened in November last year. In 2025 we will renew 48 stores and open 15 new stores including a new K-Citymarket in Lempaala Ideapark near Tampere and K-Citymarket Paavola replacing existing store in Lahti. In 2026 and 2027, new K-Citymarkets in Haapaniemi, Kuopio and Kivists, Vantaa, and a new K-Citymarket replacing existing store in Porvoo will be opened. New K-Citymarket stores are also planned for Ritaportti, Oulu, 2027, and Espoon keskus, Espoo in 2028. In the picture you can see a Virtual photo of K-Citymarket not too far from the Helsinki Vantaa port. This is a brand new and growing residential area without any other competing hypermarkets. Building & Technical Trade in Q4 results, in line with expectations. Building & Technical Trade highlights in Q4. If we look at the construction market in general, the construction cycle is still weak, but we saw sales development improvement in all our operating country towards the year end compared to the beginning of the year. In Denmark and Poland, sales improved clearly. In Finland, sales development of K-Rauta and Onninen were at Q3 level. In Norway, Byggmakker sales development improved and Onninen was almost flat on Q3. In Sweden, sales development was impacted by the closure of K-Rauta stores. Overall, Q4 net sales were in line with our expectation as well as comparable operating profit. Comparable operating profit for Finland, Denmark and Poland exceeded our expectations but fell short in Sweden and Norway. Full year 2024 operating margin of 3.9% is a good result in a historically weak cycle. It is good to bear in mind that our long-term target in this business is 6% to 8% operating margin and the target is very valid as the cycle turns. In Norway, Kesko made a 40 million euro goodwill write down for Byggmakker due to weaker than anticipated profit development in 2024, a weak cycle in Norwegian construction, and Norwegian high interest rates. This write down does not impact the comparable figures. Credit risks, risk is well under control even in this harsh market. Write downs of overdue trade receivables totaled 2.4 million Euros. Share of result from Kesko Senukai was 10.1 million Euros. In this picture we can see K-Rauta and Onninen sales development in Finland since 2019. We saw this picture twice already and here you can see the Q4 development too. K-Rauta is the market leader in building and home improvement business in Finland and Onninen in technical trade. Both have nearly 50% market share. So this picture describes the Finnish building and home improvement market well. In the graph we can see that sales development was pretty much in line with Q3 development. Last quarter I highlighted that the growth pace was not expected to continue as a straight line. For the current year, 2025, we will have one trading day less in January, but I can say that if we draw the line further, the development has improved. In January, K-Rauta was clearly about the zero level driven especially by good B2B sales. Onninen is at the zero level taking into account one less trading day. This is Byggmakker sales development. Norway is our second largest operating country and Byggmakker is among the largest players in the market. After several quarters of weak development in 2024, the year end and sales development has been improving and we can see the sales returning. The year ended just marginally below the zero level. For the current year, 2025, January sales are always impacted by the holiday season, but we can see that the end of the month sales development was improving in January. If we look at the other countries, the last quarter shown a strong sales development in Denmark, Poland and Baltic countries has continued also in January. As we have been saying for some time that we estimate that the construction cycle will turn in 2025. We will see low comparable figures in the first half. We expect the construction activity to grow in the second half which will support our performance. And then to Car Trade in Q4. Highlights for the Car Trade Q4, market demand for new cars remained muted. Q4 first registration of passenger cars and vans were minus 3% into market. At the same time, the first registration of brands represented by Kesko grew by 10%. Net sales and comparable operating profit grew clearly, despite the challenging market. New car sales increased in particular due to good sales of Volkswagen models such as ID.4 and ID.7. Used car sales increased and market share grew significantly. In service business, sales continued to grow. In sports trade, net sales declined and comparable operating profit increased in Q4. Q4 market share declined but full year 2024 market share grew clearly. Our business portfolio in Car Trade is balanced, 47% of K-Auto sales were new cars, 32% used cars and 21% services. And then outlook and guidance; profit guidance for 2025. Kesko group profit guidance is given for the year 2025 in comparison with the year 2024. Kesko's operating environment is estimated to improve in 2025, but to still remain somewhat challenging. Kesko's comparable operating profit is estimated to improve in 2025. Kesko estimates that its comparable operating profit in 2025 will amount to 640 million Euros to 740 million Euros. The profit guidance is based on an estimate of gradually improving economic cycle in all Kesko operating countries. Key uncertainties impacting Kesko's outlook are developments in consumer confidence, investment appetites as well as geopolitical crises and tensions. And then outlook for 2025. In Grocery Trade, B2C trade and the food service market are estimated to remain stable. In 2025, the comparable operating margin for the Grocery Trade division is estimated to stay clearly above 6% despite the investments in price and the store site network in accordance with Kesko's strategy for 2024-2026. In Building & Technical Trade, the cycle is expected to improve in 2025 from the historically low levels. Profitability in the Building & Technical Trade division is estimated to improve on 2024. In Car Trade, the market for new cars is expected to stay at a low level. Demand for used cars and services is estimated to remain good. Profitability for the Car Trade division is estimated to remain at a good level in 2025, despite weak demand for new cars. Dividend proposal, Board of Directors is proposing a dividend of EUR0.90 per share to the annual general meeting. It is proposed to be paid again in four installments. This proposed dividend represents 81% of the comparable EPS. Well, this was my presentation. I guess it's time for questions now.

Hanna Jaakkola: Thank you, Jorma, for the presentation. So, yes, like you said, time for questions now. We will first turn to conference call line, but you can also ask questions through the chat function and I read them as they come, but conference call please.

Operator: [Operator Instructions] The next question comes from Maria from Wikström. Please go ahead.

Maria Wikström: Yes, good morning, this is Maria Wikström from SEB. I had few questions and first I wanted to touch the guidance range that was given out today, the 640 million to 740 million, given that putting into a context that you did 650 million in 2024. So I kind of wanted to have a more color how did you come up with the low end of the range, given that you have stated earlier that you will defend the absolute EBIT in the Grocery Trade and you see the Building & Technical Trade cycle to turn in 2025 and you are facing easy comparables in the first half. So why you are actually seeing that 2% decline in absolute EBIT in the low end of the guidance range?

Jorma Rauhala: Okay, thank you, Maria. I think that now even several years we have started a year so that we have -- gave quite a wide range, 100 million Euros and it was also this year. Of course, this range -- of course we are not targeting the low end of the range. So we are very confident what we have said that our profitability will improve this year.

Maria Wikström: What will add into your EBIT this year will be the three Danish acquisitions of which, I mean, one you have already, so can you please give a little bit of color for the remaining two and what will be roughly about an expected EBIT that you expect this to add and you have included in your full year guidance.

Jorma Rauhala: Those targets from Denmark, I think they are not including. Now the figures and of course Roslev was now closed 1st of April includes our figures, but we don't know yet when the rest of Tømmergaarden and Petersen & Søn will be closed. So it's too early to say any estimates about those effects.

Maria Wikström: And just to double check, I mean the range that you've given doesn't include any assumption of closure of the remaining two of the Danish acquisitions. So you haven't calculated this additional EBIT in your guidance range.

Jorma Rauhala: That's true, they are not including.

Maria Wikström: And then my final question is on the relatively large extraordinary items reported in 2024, can you a little bit give a color, I mean what made you to do write downs in the Norwegian business at the end of the year?

Jorma Rauhala: Yes, maybe this one is that I can start and maybe Sami you can continue about Byggmakker and Norway. All in all, I think the construction market is and has been very challenging in Norway. We are not the only player which has had some problems there. But of course there are something to improve in our own performance. Especially I would say this interest rate, if Europe for 12 months is something like 2.35 now but in Norway interest rate is something like 4.5 and it has an impact to both what comes this is write down and also what comes to markets, so, those three elements weak market, our own performance and this interest rate. But maybe Sami, you can continue a little bit about Byggmakker and let's say even kind of a longer history what we have make those acquisitions since 2018 and all what happens with COVID time and things like that.

Sami Kiiski : Yeah, thank you, Jorma. Yeah, good question. Jorma already elaborate that pretty well with the or very well with the three points. But for Byggmakker of course when we -- a little bit about the history, 2018 we acquired -- since 2018 three or so companies there and of course then the COVID came and there was a big boom in construction market overall. And of course our business also was very healthy also during that time and we made some 70 million Euro annual results, for example, in Norway during that time. And of course then when the COVID passed and of course also the market a little bit calmed down and then went to minus we had some issues as I think everybody in the market to lower our cost levels, OpEx compared to the market and also I believe our integration after these acquisitions were a little bit not properly done because of the so busy years during the COVID. But these are the main reasons to say so and of course the market and interest rates like Jorma said, and also our own cost level has been the main reason for write down. But I would say also that -- yeah -- that we have fixed many of these issues now and we are looking forward of course 2025 in Byggmakker as well.

Jorma Rauhala: Yes, definitely the situation is much, much better now but Anu, you have something to add?

Anu Hamalainen: Yes, thank you for the question. What I would like to also emphasize here is that this write down was only 19% of the total goodwill and trademark. So we are not really talking about sort of -- this is not to me at least very dramatic. What happened really is that these three elements that were mentioned here, the weaker profit development in Byggmakker and then weaker cycle in Norwegian construction as well as the high interest rates which have not been going down, so those three elements are now at the same time. So let's put it like that, that if the interest rates would in Norway go down, would have gone down as the [Indiscernible] has, we wouldn't be in this situation. So I would say that this is no drama, only 19% of the total goodwill, so no big issue to me at least.

Hanna Jaakkola: Very good. Any further questions?

Maria Wikström: Thank you. I have one more which is relating the trends in the Grocery Trade, given that, I mean, you now lowered the prices of 1,200 products and I think you commented the January trends for the Building & Technical Trade. So have you seen this impacting your traffic in your stores, as you know, I mean seeing yourself more price competitive?

Jorma Rauhala: Okay, Ari, I think you can take this one.

Ari Akseli: Yes, thank you for excellent question. This is big and we planned this action to be a long-term strategic operation. So actually we are aiming to increase the average shopping baskets because we already have been improving the customer flow in the stores and it's pretty much what we have been expecting at current situation. We can see that customers buy these items, which has been decreased by prices and it will take time that the whole mindset of the customers will move, but currently it's like we have been expecting.

Maria Wikström: Thank you, I have no further question.

Hanna Jaakkola: Thank you. Maria. Any further questions on conference call line?

Operator: The next question comes from Magnus Råman from Kepler Cheuvreux, Please go ahead.

Magnus Råman: Thank you. Yes, Magnus here from Kepler Cheuvreux. Yeah, can I come back to the extraordinary items? I mean the goodwill impairment of Byggmakker is obviously a non-cash item. Could you help us how much in total or approximately of these 50 million are non-cash?

Anu Hamalainen: Of the Q4 -- was it the Q4 50 million write offs is cash?

Magnus Råman: Yes. How much of the total extraordinary [Multiple Speakers].

Anu Hamalainen: Well, if we take from 50 million, the 40 million away and then on top of that what we have there is this K-Rauta close downs in Sweden and then also the Neste K close down. So I would say that I don't have the exact amount but I would say that less than 10 million Euros because out of 50 million, 40 million is goodwill so that is not impacting on cash flow.

Magnus Råman: Great, that's helpful, thank you. And then on the investments here they are clearly stated in size, in total but then you say you're sharing this with the retailers. Can you help us understand, is it sort of roughly a 50

Jorma Rauhala: Thank you for excellent questions. Total amount is 50 million and we are not sharing how it's divided between the store owners and retailers and Kesko Group. But we are sure about the 50 million investment is enough for this year.

Magnus Råman: Right. Okay. I'm thinking you now delivered a 6.5% margin in the grocery business for the full year 2024 and you state that you will -- margins should remain above 6% and if I would assume a 50

Anu Hamalainen: Magnus, we are saying that it's clearly above 6 and not 6.

Jorma Rauhala: It's clearly about 6 and it's good level. All of these activities are partly covered with a better efficiency and cutting off the cost and also operational leverage from the sale growth.

Magnus Råman: Okay, clear. That's good. I can get it clearly there. All right. Okay, thanks. I just had one final. Here you talk about the strong end to the Car Trade business and driven by you mentioned here the ID.4 sales. Was it some sort of state incentive program that expired at the year end or something like that that triggered sales, or can we sort of -- should we expect the continuation of this positive EV sales development into the new year?

Jorma Rauhala: Johanna, you can take this one.

Johanna Ali: Yeah, thanks for the question. Yeah, there's of course in the quarter there's always some kind of campaigns going on, but nothing special in the end of the year. So we estimate sales to continue about at the same level.

Magnus Råman: All right, thank you very much.

Hanna Jaakkola: Thank you, Magnus.

Operator: The next question comes from Miika from DNB Markets. Please go ahead.

Miika Ihamaki: Hi, it's Miika from DNB. Thanks for the presentation. My first question would be can you give more color on how your year has started in Building & Technical Trade especially. I'm interested in whether you have seen sort of any worrying impacts or setbacks in Finland's outlook, given there have been some news of real estate fund closures, etc. And in overall, do you see the year developing without any major regional differences in the big picture or has something changed?

Jorma Rauhala: Okay, Building & Technical Trade this year, it has started, I would say, very, very much as we expected. So what comes to Finland and especially K-Rauta and B2B sales and January, I was, I would say, quite pleased when the sales figures were clearly positive, somewhere between 5% and 10% and also Onninen, also missing one sales day, but kind of flat level, so quite positive in Finland. Clearly Denmark, Poland and Baltic has been even more positive what we thought. Denmark, we can see that now there is clear sales increase and also in Poland. And Norway, Sweden, for example, EuroConstruction has gave them latest forecast, they decreased a little bit that says kind of market growth, but no any negative surprises. I'm quite pleased. January has started as we waited and expected. So it's -- all in all I would say that is the first half of the year, it's clear that those comparable figures are quite weak. And because of that I'm very positive that the sales will increase and also profit will increase. And then the second half of the year, I believe that there the market will be also more active on second half. But no surprises, let's say so even some positive signs.

Miika Ihamaki: Okay, thanks. And then if we assume sort of a 5% organic growth assumption for that for the full years, what would be the incremental margin for that growth?

Anu Hamalainen: Well, Miika, we have given the guidance 640, 740 so maybe we can refer and you can make your own estimates. We are not giving division specific guidances.

Jorma Rauhala: Yes, that's true.

Miika Ihamaki: Okay, that's clear. And then if you can comment a little bit how is your organic CapEx into 2025 and then is there any M&A firepower that you can think of?

Jorma Rauhala: Yes, maybe, Anu, you can continue with what comes to CapEx this year. Of course it's clear that we will complete this Onninen project, that this is a one. And of course then we know those three targets in Denmark, those we will land and of course store site investments in groceries, especially those 200 million Euros, 250 million Euros. So those are the main CapEx what we will have this year but, Anu, would you like to highlight something?

Anu Hamalainen: Yeah, a couple of words. So we are talking about approximately 450 million CapEx this year, or 2025, without the acquisitions and real estate arrangements. So these three Danish acquisitions are not included in this and neither are these kind of real estate arrangements what Jorma was talking earlier about 2024 when we talked about the two or one supermarket and one city market arrangement. But in general coming back to Onninen, what we have mentioned also earlier is that our Onninen real estate will be like we will put less money there than what we expected earlier, like which was 300 million Euros, so we are going to build it with a cheaper, cheaper.

Hanna Jaakkola: And then Miika asked about the firepower for additional M&A, so we commented that we are of course clearly below 2.5 net debt to EBITDA target. So would you like to give a number or -- we said last June, 1 billion.

Anu Hamalainen: Yeah, I would say 1 billion.

Miika Ihamaki: Okay, understood. Thank you so much.

Hanna Jaakkola: Thank you.

Operator: [Operator Instructions] The next question comes from Rob Joyce from BNP Paribas Exane. Please go ahead.

Rob Joyce: Hi, good morning. Thanks for taking my questions and firstly, just a couple on the grocery. Just if you could help us what kind of competitive response have you seen from your price investments in grocery? And are you anticipating any more in the guidance for 2025 and, as you sit here today, do these price cuts look like that your 2025 plan is enough or do you think there could be more to do in 2026? So that's grocery. And then the second one is just on capital returns, to follow on the last point on the firepower. If the acquisitions -- you don't come across these acquisitions, would you think about returning capital to investors in the way of special dividends or buybacks? Thank you.

Jorma Rauhala: So the first one, Ari, about the price program.

Hanna Jaakkola: The competitive response, what have competitors done after our program started?

Ari Akseli: Competition in the Finnish grocery market has been very tough during the recent years and it continues to be that. But at the same time, at the end of the year, we made more price investment during the quarter four, especially in December, and it seems that they worked very well, especially in the hypermarket segment but we are long-term players in the market and we will continue this price program during this year and if needed during the coming years. But at the same time, we differentiate our operation as much as possible from the other players in the market. And we are the quality leader in the market. So when the consumer actual buying power is increasing in Finland, we'll think that this will work in the future. And we have been able to increase the customer flow in our stores and we can see that these activities that we started into the beginning of January seems to work very well, especially if you look about the items which prices have been discounted, customers buy them now more, and that's what we expected. So we are sure that we can keep the profit level clearly above six during this program.

Jorma Rauhala: Was it something about firepower?

Hanna Jaakkola: It was about the firepower. Would we consider returning capital back to investors or pay a special dividend or something if we don't find any M&A targets? That was the question Rob asked.

Anu Hamalainen: Well, I would say no comments on that.

Rob Joyce: Okay. Is it within the sort of realms of your capital return, your capital allocation policy? Do you go -- you look at acquisition first, then returns, or how do you think about it maybe help us that way.

Anu Hamalainen: I think it's first the CapEx and -- well, let's see, it's also depending on the situation, our cash flow in general and profit and so on.

Hanna Jaakkola: And we have a dividend policy of paying 60% to 100% of comparable EPS today.

Jorma Rauhala: And what comes to acquisition, we are strictly following our strategy about that in Building & Technical Trade and especially those possible targets, let's say especially in Sweden now, we are doing those in Denmark now and in Norway we made this 2023, this Elektroskandia, but especially in Sweden, but we are following our strategy on that one.

Rob Joyce: Okay, thank you.

Hanna Jaakkola: Thank you. There are no more questions from the conference call line and I have a couple of questions here in the chat function, but we have basically answered the majority. There was a question about the -- in Grocery Trade, if price action started at 100% in January, at what rate were actions in Q4? So what type of actions did we do in price program? You also talked about that but would you like to say something?

Ari Akseli: Like I mentioned earlier, at the end of the year more price investments were made than the year before. But if you think about the level, it was reasonable and as we calculated. We made especially campaign investment to the end of the year. For a city market example, we had [Indiscernible] campaign to the end of the year, which was new. We didn't do it before. So -- and if you think about the investment of the 50 million, it's pretty much divided between the year. So it's the total investment of the year combined Kesko and the K-Retailers.

Hanna Jaakkola: Yes. And that 50 million is 25, so that wasn't used in Q4.

Ari Akseli: Yeah

Hanna Jaakkola: Very good. And we discussed that price matter already. Any further questions? The conference call line seems to be silent already, so I will turn to Jorma and ask to kind of wrap it up. Oh, there's one question, let's take that. Just a moment.

Operator: The next question comes from Arttu Heikura from Inderes. Please go ahead.

Arttu Heikura: Hello, it's Arttu Heikura. Good morning. I have only one question maybe regarding the Car Trade. So Finnish, I don't know authority or some organization, [Indiscernible] is expecting some 10% growth in new car sales this year. So do you see it as reasonable target in your new car business?

Jorma Rauhala: Okay, Johanna, please.

Johanna Ali: Thanks. Thanks Arttu. Yes, let's say that way that we say in the guiding that we estimate new car market to remain quite weak. So not maybe taking exact comment on that estimate, but we estimate it to be weak. However, we believe that in our product portfolio there is nice models or the model setup or the product portfolio is already really good and there will be new models launched still this year, so we see it quite positive in our product portfolio.

Arttu Heikura: All right, thank you.

Hanna Jaakkola: Thank you, Arttu, for the question and thank you everybody for the good questions and good discussion. And if you have anything else on your mind, please don't hesitate calling me or texting me or whatever. But back to the wrap up question for Jorma. How do you see the current year and what are your thoughts now that 2025 has begun?

Jorma Rauhala: Okay. Yes. Now we have one month already. So thank you all for your questions and discussion. And the year started as we expect. I am positive and confident about the current year although there are certainly national and global risks. I see the market situation all three reason better this year compared to last year. So thank you all and have a nice day. Thank you. Have a nice day.

Hanna Jaakkola: Thank you. Have a nice day.