Kesko Oyj (KESKOB) Earnings Call Transcript & Summary

Welcome to Kesko Sustainability Hour. We updated our sustainability strategy last spring. This virtual investor event, Kesko Sustainability Hour, gives you insight how we implement this new strategy and our -- all across our divisions. Sustainability is not just reports and theory in Kesko, it is a crucial part of our business strategy and everyday work. Today's agenda is the following: First, Riikka Joukio, EVP and Sustainability and Public Affairs, will go through the sustainability strategy for group level. Thereafter, we go into divisions, Ari Akseli, Grocery Trade first; Jorma Rauhala, Building and Technical Trade; and then Matti Virtanen, Car Trade. We have also a Q&A and our CFO, Jukka Erlund, will join the Q&A session in the end. You have a great opportunity to ask questions using the chat function in your iPad or your computer. My name is Hanna Jaakkola. I am responsible for Investor Relations at Kesko. Now without further ado, Riikka, the stage is yours.

Thank you, Hanna, and a warm welcome to the Sustainability Hour also on my behalf. My name is Riikka Joukio, and I'm heading the Sustainability and Public Affairs at Kesko. And as already mentioned, so we just updated the strategy, and it was approved by the Board of Directors in March this year. I would like to start with the megatrends and current crisis, which, of course, also has an impact on our operations environment. So climate change, of course, the biggest risk for the global economy. And as we know, so the past 5 years, 2017 to 2021 has been the warmest time period on record. And we are already over 1 degree over the -- celsus degrees over the pre-industrial time. So it really is crucial that we decrease the CO2 emissions. Now then nature loss is a newer topic, and it is intertwined with the climate change. And nature loss means weakening of biodiversity. So diversity of species and also a number of individuals in the species and their genetics. And this also -- the loss is happening also mainly due to human influence. Urbanization: Over half of the global population lives in urban areas at the moment and about 1.5 million people move to cities every week. And this long development, of course, is impacting our consumption patterns. Now globalization, we were a little bit thinking that if we even might call this de-globalization. But nevertheless, globalization is a broad topic. And when it comes to lifestyles markets, consumer habits, politics, communications, so there's still globalization ongoing. Then when we talk about the supply chains, maybe that will be also de-globalization. We will see. Next to the megatrends, there are the current crisis, war in Ukraine, COVID pandemic, and they have led us to rising energy prices and also maybe even energy shortages. There are these issues with the supply chains, availability and then, of course, the inflation and the prices -- rising prices for consumers. However, sustainability is good for business. And I'm often asked that how is that possible? And here in this slide, it is divided under 3 topics. So sustainability can help you create revenues. It can also mitigate risks or then save costs. And creating revenues can happen via differentiation. For example, so the company has a different offering or even like new market offerings, maybe like electric cars could be so to be one. And then market access is clearly one revenue-creating thing. For example, when it comes to public procurement, so if the criteria are not met, so you are not even in the case. Then mitigating risk is the, let's say, the kind of a common thinking in sustainability, what we're talking about. So these risks can be divided under different topics as well. So legal risks, of course, for example, there might be an environmental breach or there can be social or reputational risks if the company is not doing what it is saying. And these 2 can lead to financial risks. Now then the one -- the third one is saving cost, resource efficiency, so doing more from less, using, for example, the raw materials more carefully. Waste as input can be, for example, like plastic waste that can be then remade to new plastics. And labor productivity, one would not maybe think that so often, but it's been studied that a diverse and inclusive company culture actually improves also the labor productivity. So there are many ways that sustainability, thus for the business. This is the -- our Kesko growth strategy in a nutshell. And it shows that we are focusing on the 3 divisions that are listed here, and we hear a bit more later. We also work towards One Unified K. And then we have these 3 cornerstones that we think that by developing them, we will actually have a successful business. So those are customer experience, digitalization and then sustainability. And this is why we updated our strategy last year, and that was finalized early March this year. And this is the sustainability strategy in a nutshell. So we created a vision, which is that we enable sustainable choices for our customers and also drive change throughout the value chain. So not only that we're doing things ourselves but also driving change in the value chain. And our sustainability work is focused on 4 areas, and those are climate and nature, value chain, our people and then good governance. And the strategy is implemented in all 3 divisions, and we measure our progress, for example, by this app commonly known in decision ratings such as Dow Jones Sustainability Index. Hear a little bit more about how we think about the sustainability and our role in that. So you see these 3 bubble. And this is an example of the climate emissions, so CO2 emissions. And that little bubble in the middle, so that's the emission from the Kesko's own operations, so Scope 1 and 2, which is 94,000 tonnes CO2 equivalent. Then the emissions from the productions of products sold. So that is estimated to be about 5.6 million tonnes. And then on the other hand, going to the other direction in the value chain. So the emissions from the use and end-of-life treatment of the products sold is about 1.9 million tonnes. So our own emissions actually as a trade company are quite small, and they are about 1% of the emissions of the whole chain, which means and lead to the idea that if we want to have a significance on the work that we are doing in sustainability. So we really need to not only do the things ourselves, which is, of course, important, take care of our own operations but also drive change throughout the whole value chain. Now how we are going to do, this then in practice is shown in this picture. So we divided our actions under 4 focus areas. The number one is minimizing impact on climate and nature. So we really want to minimize negative impacts and maximize positive impacts. Number two is the value chain, so challenging suppliers to improve their operations and then, on the other hand, encourage and help our customers to make sustainable choices. Number three, supporting the well-being and success of our people. So the current and future employees. And then number four is the good governance ensuring good and transparent governance in the operations. And a little bit more about them you can see here. So what kind of subtopics there will be under each focus area? Climate and nature. So there's this intertwined triple topics, so achieving carbon-neutral K group, so climate change mitigation. Then the second one, a new part is promoting biodiversity. And then number three, enhancing circular economy. In value chain, so we want to ensure sustainability in the supply chains, particularly in the high-risk countries and then the customer choices also under this topic and not to forget creating the value for society through projects and value chains. And, Our People, we were thinking under 3 different issues. So the increase the safety and then also, of course, the well-being of our employees. And then the new topic fostering diversity, inclusion and equal opportunities also was lifted here. And good governance covers, of course, the committing to the K code of conduct. Also, what we lifted here is the remuneration based on sustainability performance. And we also published already the share-based commitment and incentive scheme for top management at the same time when this strategy was launched. We want to strengthen our personnel sustainability competencies and then also will start working a bit more with the data and see how we can utilize that and use it in a responsible and ethical way done so far also and create value for our customers. And you will have the targets and metrics visible more thoroughly in the web version of this presentation. To be able to then follow the performance and the progress, we have a, kind of a huge set of different targets and metrics, but wanted to really find some key performance indicators. And these 5 are the ones that we are currently working on and then would like to use in our communication and strategy. Progress follow-up in the future. So first, we have here the climate targets. So achieve carbon neutrality by 2025 and then make our own operations and transportation emission-free by 2030. So this is the carbon neutral K program. And the targets are based on science-based target initiatives. Then we want to challenge our to join the CDP supply chain program. And we have a target to require 67% of the suppliers by spend to have them by 2026. Supply chain, so the high-risk country. Social responsibility of directly imported goods. So we are aiming to have 100% of them appropriately audited. And then sustainable products, which is an important part of the -- of the customer choices that we really have the products that are sustainable. So we have made our own classification by businesses and we want to increase the share of these products on our net sales. And those are products, which are, for example, certified 5 products, they can be fair trade products. There are different metrics to this. And then the third -- fifth indicator is about the people, so conduct actions to support their health, well being and success. And we are currently working on a well-being index that is not ready yet. Heading towards the end of the general part of the presentation. I would like to have a leading slide here that how we really take the 3 divisions into account because they all have different -- slightly different focuses. There are common themes, but they also have their business-related specific teams, and they are briefly shown here. So grocery trade, of course, has a central role as part of the Finnish food chain and also in ensuring security of supply. Also active role in promoting wellbeing and nutrition. So we will hear a bit more later. And then building a technical trade. So of course, there is a significant role in driving forward, the green transition in living environment. And then there are differences between the operating countries and that we have to take account when moving on with our plans. And car trade, of course, is self-evident that they have a big role in reducing traffic emissions. So the strategy was approved in March, and we are already well on our way on this journey, which, of course, started already decades ago. So this as such, nothing completely new. But sustainability is never really ready. So still plenty remains to be done, and we really want to welcome everybody to join us on this journey. Thank you.

Good afternoon, everybody. My name is Ari Akseli, and I'm the President of the Kesko Grocery division. I have been working for Kesko now almost 30 years. And year after year, we have been putting more and more effort for the sustainability as a whole in the company. This is the slide that explains the big picture about the Grocery Trade division. We have about 1,200 grocery stores, of which more than 500 offer online grocery services. And we have a big opportunity where 1.2 million customers visit every day in our stores. Actually, if you make the math and calculate what actually means if we are able to increase the average shopping basket just by EUR 1, it actually means more sales, more than EUR 400 million. Stores offers both premium and bargains. That's excellent in these times that customers which are looking at the very good value, they are able to find best bargains and very low price private labels. Under the same roof, we are offering the best premium assortment in the Finnish market. Our market share is 38% of the total food market, including grocery stores, online sales and food service. And currently, the most rising businesses is Kespro, which is the leading food service operator in the Finnish market. And we are the market leader. We have almost like a 50% market share in this market. And if you look at the numbers, they are looking pretty good. Net sales has -- first time in the history, more than EUR 6 billion, and the operating margin is 7.6%, which is quite reasonable in the grocery market. And these are the focus areas for us. Sustainability is actually affecting into all areas currently. The key target for us and the vision of the company is that we are the most customer-driven and profitable Finnish grocery retailer. How we do it? We have the best store-specific business ideas, which are clearly visible for every customer. We have the best multichannel customer experience which is seamless in online and off-line. We have the leading assortment image and differentiation. We have a very high share of the different brands of -- which are only [ sale ] in K stores. For example, Pirkka, the best of the Pirkka and K-Menu which is our pride price by the brand. But at the same time, we have something very unique things like the best sushi offering in the Finland and also the best pizza offering and so on. And we are putting very much effort for improving the price and the price image of our stores. And we are putting also effort for the data-driven decision-making with customer focus. We have several tools for using this data. A good example is like, K assortment tools, which is able to optimize assortment in the store level. And the results have been very promising. Typical result is that when the assortment is based on the data, it's about 4x bigger sales for the individual SKUs than without of using that. Helping customers make more sustainable choices. And this is very important because the sustainability is like a big issue for every customer. But it depends a lot about customers, it's part of the sustainability is important for them. The best assortment and the service in the food service market. Food service market is very big and it's very much depending about the customers, what are the key things for them. If you are selling to the public sector, it's usually about the prices. But when you operate in with the high-quality restaurants is all about services and assortments. And we want to be the most wanted partner and business platform for all the suppliers and all the other partners. Our strategy responds to the changes in our operating environment. Here is like a bigger things like a polarization continues. It actually means that more and more Finnish are living in the urban areas. Population is aging. There is more and more single households. And we continue rise in the hybrid consumption and individualism. It actually means that we can see that same customers are visiting our stores in some categories, they are looking at the lowest price and certain other categories and at the same time, same customers are looking at the best premium. We can also see that there is no clear lines anymore between grocery stores and restaurants. And we have been offering more and more opportunities to customers visiting our stores to buy best restaurants meals with them. Competition challenging our business model because we have been very successful. They are player in the both fields also in price and quality. We have been investing on a lot to our online sales, and we are the market leader in online sales in grocery in Finland, and we have lots of capabilities how to use data and AI to improve our business performance. Customers expect seamless customer experience in all channels, compared to the international operators like Amazon and so on. New operators bringing new concepts and services to online sales. Customers and also other stakeholders expect responsible operation from us. If you look about the 3 main things that inflation is driving in the market as a whole in the grocery trade sector. Number one is that food prices is like a daily topic of conversation, especially in the media but also with some customers, which are worried about the rising levels of inflation, especially with the energy prices and so on. So the customers are a little bit worried about the buying power that they will have in the future. And we already can see some changes in buying behavior. Some customers are wishing for the lower-priced items, and we are very lucky in that position that we are able to provide that to the customers. But at the same time, we can see also the rise of the premium assortment. And for us, it's basically critical to maintain the customer trust in this strange times that we are currently living. Here, you can see that 6 key sustainable targets for the grocery trade division. Climate, like Riikka mentioned earlier, of course, one of the most critical. We have deployed the carbon neutral grocery store concept in year 2023. And it actually means that we are able to save a lot of cost in the stores also. We are shifting to use renewable diesel by year '25. And we are using more and more electricity for the transportation. We are putting much effort for the biodiversity, and it's special to note that buying, since you actually know where your products are coming from and we have fully transparency in that areas. We are up to a lot of efforts into sites and logistics center projects also. Circular economy is more and more important for the customers, and it also saves money if you are doing that. We are applying a lot of new packaging innovation. And at the same time, we have clear targets to how to reduce food waste by 25% to year 2026 and halving food waste by 2030. And actually, this is something that customers are looking how we can help them to help cut the home food waste too. And we have a lot of tools how to help them. Supply chain. We have set in product category-specific target for the sustainable selection. We are the market leader in Fairtrade in Finland by also the assortment we offer in the stores. And this is very critical for the customers that helping customers to make sustainable choices, which are relevant for themselves because every customers, they have like our own ways for the sustainable. Some customers are looking for the healthier choices. Some customers are looking how they can support Fairtrade. Or some customers, it's most important that they can do their shopping more from the stores, which are nearby. And so there is a lot of important issues. Finnish food. In this strange times, the importance of the Finnish origin is more and more important for the customers because they like to support the Finnish production. And from the total offer in our stores, about 80% is Finnish origin. And we have -- we are only retailer in Finnish market who are actually offering product -- like campaign that 'Thank the Producer' products. So these products are -- for the customers who would like to give special extra for the farmers, and this is offering opportunity for that. Sustainability actions also helped significantly improve cost efficiency. Many cases, some people think that if you are more sustainable, it actually means that you have higher cost. But in many areas, it actually helps you save money. I first have noticed this in year '95 when we started actual execution in the store levels in the city markets. For example, food waste. Our objective is cut the food waste by 25% by end year 2025. We also bring -- we'll also bring savings of millions of euros. When we are optimizing whole supply chains and offering in every store, and we are able to do it in the store and SKU level, it actually means big savings for us. Energy efficiency is more and more important for us. And whole electricity Kesko is using in Finnland is renewable, and it has been that since year 2017. And energy savings since 2017 is now 80 gigawatts. If you think about the prices of the electricity currently, it actually means big money for us. And we have big innovation, in-store heat recycling system helps us save even something like a 90% to 95% of the heating cost of the stores. And it was the first innovation in this area by globally. Circular Economy. Packaging reduced recycling up to 75%. It actually means big money from point of view of Kesko in the packaging and also help us to execute plastic policy. Better sorting can cut the waste cost of the -- an individual store by 20%. This is something that store owners are very motivated to do. Transport optimization reduces emission. And at the same time, it saves some money. And annual savings of the EUR 25 million by combining and optimizing distribution is big money from point of view of the Grocery Trade division. And one of the areas that we see that there is a lot of room for improvement is how we tell the customers in the stores about our sustainability. We have been 7x the most highly ranked grocery store in Global 100 by the sustainability. But how to sell this in the store level where we have this 1.2 million customers visit every day, it's important areas. How we can tell customers here is a couple of examples that we have very convenient recycling system for beverage packaging in every store and more than 90% of the packages are coming back. And we also have offering how to cut the food waste is [indiscernible] concept. And these are just a couple of examples how we can tell to the customers in the stores how to make sustainable choices in our stores. Thank you very much.

Good afternoon, I'm Jorma Rauhala, and I'm the President of Building and Technical Trade division. So building and Technical Trade in a nutshell, we are a leading operator in building a technical trade in Northern Europe. We are serving 3 customer segments, technical professional, builders and consumers. And now already some 80% of our sales comes from B2B sectors and renovation is more than half of our business. If we are looking at those numbers, we can see that sales has increased quite nicely since 2020. Now rolling 12 months, there is EUR 1 billion increase in sales and also the profitability has improved from 5.2% to 7.4% when we are looking -- rolling 12 months figures. Then our strategy, most important is that we have -- we have specific strategies for all our countries, 7 operating countries and businesses in countries. That's very, very crucial because we know that the markets are different -- our market position is different and also our operating model can be different. So of course, there are also some common areas and topics also, for example, proactive sales and sales management. This is B2B business. This is business with people and it's crucial how many customers we contact are those customers right customers who should be contacted and also what is the quality when we are having those contracts. Or, for example, synergies within and between our operating countries, we are seeking the synergies, for example, with private labels, e-com platform, ERP systems and concept development. But today, the main topic is sustainability. When we are looking our kind of mega trends in our business, we can say that this Building and Technical trade is volume business. And market has consolidated, and it's still consolidating and I would say that even accelerates because it's volume business. Also, when we are looking at this repair and investment debt, we know that some forecast companies has forecasted that next year, total volume -- construction volume would decrease a couple of percentage in our countries, operating countries. At the same time, the same companies are forecasting that renovation will increase also next year. And of course, all of those green transition, which will look a little bit closer. When we are talking kind of a green transition, what we mean? For example, solar panels is a quite big business for us, especially on and in site. All kind of pumps or air-water heating system and different kind of pumps. And of course, all infra business. It means water and sewage. It means electric grid, data network, rail road and those kind of infra, which are very big part of also our businesses. And of course, electric vehicle charging. And while we are looking at those, what I mentioned those solar panels, different kind of pumps EV-charging wind power. This is kind of those product groups, what we are meaning when we are talking about green transition. And I can say that those product categories has had very high increase in sales. I would say that something like 7x because sales increase compared to our average sale increase. But also consumers, especially they are now eager to save energy. And when we are talking about saving energy, we can see, for example, insulation products for seating, windows, doors, also some water-saving products like faucets and showers. Some energy efficient lighting, LED lighting, things like that. So in a summary, we can say that, in fact, quite a big part of our business is related to green transition and energy saving. Then those concrete actions what we have decided to do when it comes to our sustainable strategy. And I would like to highlight 3 of them. Of course, first one is that we achieve carbon neutrality by 2025. Of course, it means something with our real estate and logistics and things like that. Of course, that's important. But I would highlight is our suppliers. Like Riikka told when it comes to emissions, those products that we are selling are 50x more than our own emissions. So it's crucial that our suppliers are committed to science-based targets when it comes to emission and decrease of emission. And now we have dozens of big suppliers who have now joined this carbon disclosure project. And I'm very, very happy about that because we have to make it together. And the third one is, of course, customers. What are the products that we are offering to our customers? Of course, customer is the one who make the decision on which kind of product he or she wants to buy but we have to make easy to buy those sustainability products. And I would also highlight those 3 elements in our sustainable strategy. All in all, since our Board of Directors approved our sustainable strategy this spring, since that, we have now listed 300 different kinds of concrete actions in 7 countries, how we are implementing our strategy in coming months and coming years. So I think I'm very glad that we have so concrete action list and strategy, what we are doing. At the same time, as I mentioned, this green transition is quite a big business opportunity for us. So thank you, and I think Matti will be the next one.

And welcome on my behalf also to this presentation. My name is Matti Virtanen and I'm leading the Car Trade division at Kesko. And it's really my pleasure to present our part of the sustainability strategy as well. Just a few words about the division in itself. We have, first of all, made a huge transition in our internal operation over the last 18 months. We have been really focusing on many of the megatrends that we see in the car business in general happening. And that's, of course, bringing nice results. We are, as an operation, #1 in Finland in market share. Our total market share in terms of the brands is around 17%, depending, of course, now very much on how much the availability is allowing us to take the market share. But still a major transition is ongoing and has been ongoing in the division over the last 18 months. We operate with Volkswagen Group's business operation and represent Volkswagen and have a very deep relation with them. But as we all know, in car business, digitalization has becoming a necessity, and we have been really driving that actively as well. We are an operation about EUR 1 billion. We more than doubled our profitability based on the renewal of the division last year. And in spite of the very, very difficult supply situation, we have been able to improve our profitability still over the last 9 months. And one very important thing is we have invested significantly in our charging network. We have today 200 stations across Finland by the end of this year. Just a few words about the strategy focus areas. As I mentioned, we have been driving a huge transition inside the division with good results. We have been looking at the customer experience, making us the best in the industry. We have been digitalization [indiscernible] internal processes with close cooperation with Volkswagen Group and be looking very carefully our cost structure and our margin structure as well in all of the businesses we operate. And as you probably know, we are operating not only in the new cars, but we also operate in very efficiently in the used car business in the services business and the charging network as well. We have ambitious sustainability goals as part of the Kesko sustainability strategy. And those are the few words I would like to talk about them. One of the big transition that's happening in the car industry currently is, especially in Finland is a fast transition from diesel and benzine cars towards electrified cars whether them be in the hybrids or the plug-in hybrids or full electric cars. If we just only look at 2 years back, more than 50% was diesel or diesel/petrol cars. And now that transition has significantly changed. So a little bit more than 30% for the first 7 months this year has been only with diesel and petrol. So that is, of course, a significant change. And we are not only following this change. We are also driving this change as part of our sustainability strategy very effectively. And this is going to continue. So we believe that 2030, a significant part of the cars are electric cars, and we are naturally well positioned because we are #1 in electric car sales in Finland for the moment. Also in many areas as in other divisions, we are operating in our sustainability strategy, maintaining the leadership in electric vehicles is going to be a very important topic to keep the emissions down. But also, we are putting a lot of effort to renew the car base in Finland. We have about 2.7 million cars in Finland, and that average age of that car base is almost 13 years. So renewing that car base quicker will have an impact on the emissions, but it also will have a very important topic, which is very often forgotten and increase the traffic safety because the car driving assistance systems today in the new cars are very, very much better level and much better than before, and that will naturally have an impact on the traffic safety as well. Not forgetting they invest on the K Charge network, which is going to be a critical component of our sustainability strategy implementation. So just a few cases, customers really want electric cars momently. And we have been the most registered EV brand in Finland this year and the most registered EV brand in Finland 2021, and that position we want to keep. And electric vehicle sales already account for over 30% of the new car sales. So this transition is really key, and we are driving that. Another very important thing is the K Charge network. This year, we are doubling our investment in this area. And this is an example of our execution, our sustainability strategy to really help our customers to have a network to use across our big country to charge their cars. And really, the network will double this year, and our plan is to keep on investing on the network in a very effective manner. And what is very important is that the electricity is 100% Finnish wind power today, which is also very important for us. So I hope this has been a good quick picture of Car Trade sustainability strategy and our implementation as part of it. And hopefully, I've been able to give you a little bit insight for our activities in this respect. Thank you very much for listening.

Thank you. Welcome, Jukka, joining us for Q&A, and thank you, lady and gentlemen, for the great presentations.

Well, Kesko has a long history with the sustainability work, and now this is a new strategy. What has changed? What is -- what has really changed from the previous strategy?

The gentleman here can then continue. But I think that, of course, as you said, so there's a long story before this. So a lot of the content, of course, has been there. But what I think is different compared to the earlier ones is that now we created a structure together so that all the businesses really fit in and also put all the targets and metrics together. And then -- also, as this is a good example that we have the businesses along the work. It's not only something that happens on a corporate level, but also inside the businesses, and that I think is quite important. And then when it comes to the content. So then biodiversity and our people and maybe the good governance part also contains some new topics. And then last but not the least, of course, also the vision that was broadened to really driving change throughout the value chain. So not only what we do ourselves, but try to get other companies along. So this, I think, is...

Any comments or?

At least building a technical trade division, what was important is that we have now our strategy for each countries because it's a fact that those countries are different. For example, what are there now in discussion in Sweden are totally different compared to Poland. There is some 3 million refugees in Poland, and there are now maybe some different topics, what we have in Sweden where something like gender equality is the most important thing. So that was the key in our division that those country-specific actions also in the sustainability area.

Well, the talk of the day today is energy prices and inflation, and I get a question here. What has the energy -- what has the energy bill for Kesko Group [ been ] before the energy crisis? How many percentages of group sales is the question maybe?

Yes, sir. So the electricity costs have been only a fraction of our cost base. So in that sense, only a couple of tens of millions of euros. So not too big proportion on that one. And the good thing is that we have hedged a clear majority of our electricity consumption altogether. So in that sense, we are in a good position. But however, of course, the prices are now rising and so on. So we are also having our sort of latest initiatives in order to reduce our electricity consumption, which is obviously good for the environment as well. So in that sense, it's a topic that we are focusing quite a bit during these days.

And if we talk about inflation, I got a question here about the food inflation. Do you see, Ari, that from the sustainability perspective, you see inflation and more expensive food affecting consumer behavior in grocery stores, you mentioned that a bit, and how about foodservice business?

Yes, for sure, price is more important for some of the customers. And we are in a very good position in that sense because we are able to offer for the customers, both premium and also bargains under the same. That's good part for the B2C part. But it's even more true with the business-to-business side with Kespro. Because in that market, customers don't really see the brand and we have the share of the private brand, K-Menu, about 50% in Kespro business. So we are able to provide to our customers very good prices.

Thank you. Okay. And everybody talks about green transition. And by definition, there is a massive amount of money steered on that way. Is this really happening? Or is this rather a future plan or potential? Could you somehow quantify it for Kesko, how many percentages could it drive annual growth for Building and Technical Trade division?

Green transition products, like I mentioned, there are those solar panels or some air pumps and things like that. But for example, there are also if you have a car charger, there's also electric cables, what you need when you're installing those card chargers. So it's very difficult to say exactly how big part that is or what I mentioned also those insulation, how you are sealing your windows and doors and things like that. But also what I mentioned those concrete products, those sales increase is now 7x bigger than our average sales growth. So it's -- if you look at the whole picture, all of those products. I would say that it's quite remarkable part of our business.

So it is happening. It's not...

Really, it's happening right now.

Exactly.

Definitely. Yes.

Very good. This is actually I think this is for everybody. What is the weak spot of sustainability? And do you need to -- what do you need to improve the most?

I would like to say to that how we communicate that to the customers. That's the most critical part because we have done so many things during the decades already, but we haven't been able to communicate that right way to the customers. So that's the area we have to put more effort.