Ladies and gentlemen. Welcome to our third quarter 2020 release call. I'm Kescos CEO, Mick Kohalander. Together with me, I have our CFO, Yuka, Ehrond and Vice President of Investor Relations, Hana Yako. We celebrate our 18th anniversary with all time record result.
The performance of all the 3 divisions was very good. I will first give an overview of our business performance in 3rd quarter and thereafter, we will be happy to take a question bought by phone and via chat. Key events in the 3rd quarter. Record result and very strong cash flow. We achieved our financial targets In the grocery trade, good performance continued, building a technical trade division had strong performance in all the operating countries.
There was a clear positive turnaround in the Cartrade division. The red sales forecast continuing operations in 3rd quarter totaled 1,000,00652,000,000 it was up comparably by 4.6 percent, which equals €83,000,000. Rolling 12 months net sales were 1,000,000,000, 90,000,000. These numbers, excluding Tesco, senu kai. Comparable operating profit for 3rd quarter was record high 182,000,000 and it increased it increased by over 1,000,000.
It increased due to good sales development in all divisions. These numbers include as a joint venture instead, of, subsidiary. Keskochennokai had a €23,000,000 impact on the group's comparable operating profit. Rolling 12 month operating profit was all time based €509,000,000. Return on capital employed, 1 of our strategic targets improved and was at the target level 11%.
It improved into grocery trade and into building a technical trade. KESCO's financial position is strong. Cash flow from operating activities continued to strengthen, and it was €287,000,000 and our liquid assets were over €300,000,000. As I mentioned in the beginning, the company's financial targets were achieved and actually sooner than anticipated. Both comparable operating margin and return on capital employed reached their exact, target levels.
We can be proud of this great achievement reached thanks to hard work. Also, another great achievement is that our K Brand was recognized as the fastest growing brand in Finland and in the Nordic countries. Case, the number 5 among the top 10 most valuable brands in, Finland. Also, K Group's reputation has improved clearly during the past 6 years. And K is now one of the most trusted corporate, brands in Finland.
And now to cross retrade. In cross retrade, Morinized stores and customer oriented services are bringing, results. Net sales for the 3rd quarter totaled 1,462,000,000 and grew by 4.2 percent let's say, it's grown all food store chains. Comparable operating profit for 3rd quarter was record high nearly €109,000,000, and it increased by €50,000,000. Profitability was 7.4%, and it increased due to good sales development in food store chains and improved operational efficiency.
Rolling 12 months operating profit exceeded 6% and was 6.2. During the quarter, retail sales market grew by 7% while k food stores were up by 7.2%. Sales Pro in our k food store chains, this also good development in KCT market home and specialty crude trade, which was up by 3.5%. Also online grocery sales continued to grow. Our P2P business cash pro has been suffering during the corona epidemic and is still below normal levels.
However, during the third quarter, the sales grew from, to spring levels. Of course, the safety of customers and personnel is number one priority. 1 of our key strategic focus areas is to improve the customer experience, and we do it by utilizing data and new technologies. Store specific business ideas based on data, resulting in higher customer numbers, sales, and also market share road. Data new digital tools used in stores enable us to offer correct and quickly updated product selections for customers.
Tools in customers own pockets help them to make more sustainable and, for example, locally produced choices. Customers also receive inspiring and personalized marketing communications. Online grocery sales have, grown this year by nearly 400% And at the end of 3rd quarter, 456 k food stores offered online services. NPS is high at 80, and our market share in online grocery is over 55%. Still, I want to highlight that online represents 2.2% of our total grocery sales and physical store share is 97.8%.
Gast Pro strategy is working also under exceptional circumstances. The market has contracted, due to the epidemic and the restrictions imposed on risk tolerance. On the other hand, case process sales performance has clearly outperformed competitors in challenging market. We have managed to maintain a court level in services, availability, and reliability of deliveries. Thanks to our fast response and assessment measures, our operations have stayed profitable.
Also, new innovations such as restaurants and restaurant meals in case stores have supported the performance. In general, clear guidelines and more targeted restaurant specific restrictions are positive for the market during these challenging times. And now, to building a technical trade division where we saw strong profit development, thanks to good performance in all countries. Net sales, excluding, the specialty called freight and Cascosaeno case, grew comparably by 4.4% to 950 1,000,000. Net sales grew in Finland, Sweden, Norway.
Net sales increased in both P2P and P2C trade. Comparable operating profit, including Kescos and Okai as a joint venture, and exploring specialty growth rate increase by €21,000,000 to €73,000,000. The profitability improved and was, record high 7.7%. Into building a technical trade comparable operating profit grew into building and home improvement trade in Finland, Sweden, and Norway. Owninance comparable operating profit grew in Finland, Sweden, Norway, and Poland into politics, owning and comparable operating profit remained at level of the previous year.
The acquisitions carried out in Norway and Sweden in recent years accounted for 1,000,000 of the comparable operating profit in the 3rd quarter. Contraction activity has stayed at a good level in Northern Europe And P2. Sea trade has remained active. Growth in P2P trade is flattering in both building and home improvement trade and technical wholesaler. It remains it remains difficult to estimate how demand will develop during, the final months of 2020.
For K Group in, 3rd quarter net sales and profit grew, B2B trade continued to be good in, both building and home improvement stores and also on NMP to see sales. We acquire Cartel Frits, in Norway and pick interior, pick an interior in Sweden and these acquisitions as well as me up acquisition earlier this year helped to post, the sales. In Finland, could profitable fraud continuous for both kroute and on in an for kroute, the market share has clearly strengthened retail sales for the 1st 9 months of the year were up by nearly 10% with strong growth in both B2P and B2C sales. We could continue to modern modernization of stores and online services. We offer a wide range on brands in Gaye Rota and this year, sales of our own brands were up by 42%.
Oninnen has also gained market share and sales have been good. We have strengthened online and store network further. Also, collections has been expanded. The development of online and digital digital services continued. And now, an update of our Swedish business that are on a good crowd track.
Both k routers, P2C sales, and k books, and on enhanced P2P sales has grown strongly. We have successfully made changes in management management procedures. We have also achieved significant synergies, for example, in in purchasing and centralized logistics. Fredesic acquisitions continue during the year. MiAP was included into Onenenen and PUKen Interrier is now part of CapEx.
Also, going forward, we seek further growth both organically as well as via head resistance. Good sales and profitability development in Norway. Sales in Norway grew in both bookmakers building and home improvement rate and owning its technical wholesale. Profitability improved thanks to new customers, cost adjustment measures, carried out synergies and the acquisition of Casa Frits, following the acquisition of Casa Frits, the share of our own retailing, billing, and home improvement in Norway is now some 70%. We are welcoming Hilde Christophessen to join, case conaway as a new country director.
She has extensive experience and was a division director for Arceloria and Managing Director for Staples Noria. We believe we believe this is very good fit for both of us. Also in Norway, we seek further growth both organically as well as fire acquisitions. Strategic review into politics and Belarus continues. Esco Seno Kai sales have grown and profitability has improved as expected.
KESKozhanu Kai is reported as a joint venture instead of a subsidiary as of first July 2020. Operations in the politics do not have a material impact on Kisco's result or cash flow. The difficult political situation in Belarus has reduced the sales and profitability of Koscosenokay's OMA chain. This does not, however, have a significant impact on CashCall. Negotiations to resolve differ, differences of opinion concerning the management and development of TescoZeneca continue.
And to Cartrate where we saw a positive turnaround. Net sales for the 3rd quarter totaled 244,000,000 and grew by 9.6%. Net sales increased as demand strengthened clearly for both new and used cars. The rolling 12 months net sales were nearly €890,000,000. Comparable operating profit for 3rd quarter in card rate was 7 point €4,000,000, and it increased by €2,400,000.
Profitability was 3%. In the market, the first race relations of passenger cars and vans in Finland were down by 7.5% demand for used cars is growing. People increasingly prefer private cars over public transport due to the epidemic. Change is considered for car taxation, aim is to update the Finnish vehicle stock and meet climate, targets. Our card rate sales were up, by 10.1 percent availability of new cars improved used car sales grew by 24%.
Process sales grew clearly and was up by 120 3 0.4 percent, thanks to updated rains, especially Pausetitan. We see an increase of interest towards other all electric cars as well. Our own leasing fleet is nearly 2900 cars after sales demand and sales remain good. Outlook for Cartrack has improved. The car range we offer is the most extensive and with lots of alternatives.
We offer many new plug in hybrids and all electric cars as well as compast engine models. The availability of cars from Volkswagen Group's factories is constantly improving. In general, new car sales are expected to grow by approximately 10% in 2021. Also changes to taxation is under consideration and the first decision, support car sales. Guidance for 2020.
Kisco specifies its profit guidance for 2020. The company now estimates that the comparable operating profit for its continuing operations will be in the range of 530,570,000,000 in 2020. Before the company estimated that the comparable operating profit or continuing operations would be in the range of 10,000,001,000,000. Ladies and gentlemen, Cresco celebrates its 18th anniversary this year. The company was founded under exceptional circumstances back in October 1940.
And since 10 Kisco and K Group have grown into a leading retail operator in Northern Europe. I want to thank our customers, K retailers, all cake group, personnel, CashCallholders, and all other stakeholders for this past 80 years. Thank you. And now we are ready for questions. First, we will take questions from the conference call
session. Our first question is from Frederick Kimerson from ADG.
Thank you. Hi, Michael. A few questions from me. Starting with the new guidance, what exactly made you race it any particular parts of the business that's performing above your expectations? Or is it just a general strong performance across the board?
Yeah. Absolutely. At the moment, business is all in all. Are performing very, very strongly, especially grocery trade, building a technical trade, and building a tech technical trade in all countries performing very well. And due to that reason, we were in position to update also our guidance.
Okay. Thanks. And second one on the margin expansion in the grocery trade division. How much of that expansion came from, cost reductions, in, I guess, especially Caspero. And also if you could, elaborate a little bit on what you saw in terms of gross margin within the grocery business.
Main main drivers are, in sales and, and, interfact, that, we have succeeded, to implement very well. I would like to say successfully our growth strategy also in grocery trade. We have succeeded to improve customer experience everywhere. But at the same time, I would like to remind that we have still a lot of potential of further improve customer experience at that way to increase our sales and, and, strengthen our market share Of course, at the same time, we have reacted also very quickly, when we faced this exceptional exceptional situation, what we have worldwide due to COVID. But, but, main drivers are coming from a business side coming from the fact that our gross latency works very well.
Right. Can I just follow-up on that because you you mentioned cost reductions in the in the report and, just curious to get a feeling of of the the size of those? And also if it's something that's more sustainable or is it temporary due due to, COVID?
Yep. You're currently here, hi there. I would say that during the second quarter, we had some of sort of extra, sort of temporary lay of cost reductions, that impacted the sort of cost reductions during that time. But during the third quarter, the temporary layoffs were very minimal. Actually, they didn't play a role here.
So the cost reductions came from just operational efficiency, and we have done those in pretty much every category. Of course, that we have and and being just efficient in in different lines there. So in that sense, sort of they are something that we can call further as well.
Excellent. Thanks for that, Duke. That's that's very clear. One last question before I jump back in the queue. What's your outlook for the DIY market looking into next year?
Do you expect the growth stable or is it fair to assume that that market might contract on the back of difficult comps, obviously?
As you know, our book is very limited and, definitely, Also, next year, still quite challenging, to make those estimates. But but but, at the moment, we believe that, that that market will remain at least quite a stable let's see if this pandemic will continue next year. How badly pandemic hurts global economy economy in EU and Finland that if that, will happen, how big negative impact, those things have, not that European construction, business and DIY market. But at the moment, we are we are, let's say, a little bit more optimistic than pessimistic. Let's say it is
Okay. Thanks. That's all for me for now. I'll jump back in the queue. Thanks.
And there seem to be no further audio questions. So I will hand the word back to the speakers. Oh, we have a question from Freda Singh from ABG. Please go ahead.
Frederick? Sorry. I wasn't mute there. So one additional one from me then. We've seen a lot of retailers, investing in fully automated DCs to cope with a strong transition to online.
And I appreciate that the total share of online sales is low in Finland, but I'm just curious to hear what your internal discussions sounds like in that regard? Regarding, potential investments into fully, fully, automated distribution centers or warehouses.
Yes. Yes. Very, very, very, very good question. And, and, we have great development, as you know, and, close 400% growth 2020. And beside that, that, strong growth, we are working very hard, to develop, new new technologies to improve services and, productivity in, grocery, tradeecom, and, online business I believe that very soon, again, some, innovations, we will pilot and, collect experience from those, pilots and, and, definitely, very important now.
Utilize, new innovations and technologies, to improve services and productivity on that side. But at the moment, we are not yet ready to publish those ideas and developments.
Okay. Thank you
And we have a question from Magnus Erona from Kepler Cheuvreux. Please go ahead.
Yes. Hi. Hi there. I'm sorry. I came in a little bit late in the call.
So perhaps these questions have already been asked, but I'd like to ask you about, the current development of the pandemic and the new imposed social distancing rules and so on. And, to what extent you think about this when you plan, for the important Christmas trading season, especially in the grocery business, are you expecting, these measures to affect the way people the way people socialize and thereby, potentially affecting the consumption of, of, of, of food during this important period. That's my first one.
Yeah.
First, I must say that the for time being, we have succeeded very well, those measures to keep our business, safe. We have, in 8 countries, 1800 stores, we have 43,000 employees and normal work day. We have 1,900,000 customer contacts mainly at the stores. And, since last spring, we have in K Group 100 cases, such 100 cases, and, and I feel that, that, is strong message that we have succeeded very well to keep our stores and our services safe. We continue those measures.
And, we are pretty confident that, we can keep safe our business also in the future Absolutely, you are right that, that, Christmas time, will be very important first, from a business point of view, but also we are working very hard also to offer safe services our customers also, Christmas days when we know already that, our stores will be, very PC. Very important, also remember that we have succeeded, to develop, and improve our online services, and, we know already that also online services demand of online services, will, rocket also Christmas time. But also on that side, we are working very hard to be in even better position to serve, customers and meet this, growing demand.
Maybe worth mentioning also that. Obviously, quite a bit of solid household consumption has been focusing in, in the domestic market this year. And and we do expect that that sort of trying to continue for for the rest of the year as well.
Yeah. Yes. The domestication, of course, is is there a scene in the sort of Ethiopian China, but I was just curious about, I think, like, a major driver to the large grocery shopping over this period is related to gathering of families in large groups. So to speak, And if that will not happen at the same magnitude, if that if you believe that that might affect, those low market growth we'll speak about the overall market volumes with this period. Well, anyhow, if you don't have any further thinking about that, I'll I'll just move on to the second one, and it relates to to your continuous expansion strategy in the building and technical division, would you say that you deem that the pandemic has a, it made it harder for you to to, engage your, your, bolt on acquisition strategy due to higher prices given that, that sales has been very, very positive in this category, or is it so that you see more opportunities And that, that price points, perhaps, are attractive with that more sellers due to the situation.
What's your take there?
All in all, current situation offers company like Tesco. Great opportunities, great opportunities, to accelerate organic growth but also opportunities on acquisition side in building a technical trade. And, we have crowd strategy. We have success fully followed and implemented our growth strategy last 6 years. And, in current circumstances, we feel strongly that, that, we have even better opportunities now to increase market share and make successful acquisitions, in, not in Europe in future.
Maybe to add on that one, you know, in M and A always, it sort of varies always situation by situation, and we've done quite a few acquisitions during the past and so on. So So there's still room for consolidation in in the overall markets in the Nordic countries. For example, and for us, it's always a matter of, right, strategic fit in a way that it fits to our strategy and and that the valuations are right and so on. So it's a case by case type of thing always.
Right. And just finally, you mentioned here on the online side that you expect a search in demand here at the Christmas settlement period. And you're preparing for that, but when preparing for that, is it still the strategy only to deliver out of, major hypersal or Are you considering any other investments in docs or other type of fulfillment capabilities?
Well, currently, we are sort of happy with our online offering and the platform that's if you ask that one, so how that is sort of, getting the customer experience good when it comes to the selection and and and the delivery times and so on. So we are currently happy with that one. But like Nikko said earlier, obviously, we do follow the technologies and different kind of methods very closely and so on, but but like said, we don't have anything to sort of open up at this point more, but but but, happy with the current setup. For the current needs of the customers.
Alright. Thank you guys.
And we seem to have no further audio questions. So I will hand over back to the speakers.
Okay. Thank you, Magnus Afrezza for good questions. And now I have a couple of questions from the chat. First, is, can you talk a little bit more about the mix of products that you are sell doing so well in DIY And Building Division? Is it just more more seasonal, like gardening and barbecues, or is it the strong sales across all product lines?
More or less strong sales across all main product lines many, many, positive things and developments I would like to pinpoint, for example, strong sales development of our own private labels in Finland alone K router 45% increase of our own private label was of course excellent achievement. But all in all, strong developments in all categories, at least your capacities, my my understanding, or do you have more detailed information?
Maybe just a little add up on that one that, obviously, the garden products, for example, in the second quarter were at the strong level, but obviously coming towards the end of third quarter, obviously, the garden doesn't play that big role as still our sales were at a really good level. So that's sort of the home decoration products, for example, grew nicely and so on. So there is quite a bit of renovation. For example, both in homes, but also in summer Cottiches and so on. So like Mick said, widespread type of, increase in the different categories.
Very good. Thanks. And then about the government support. Has there be any government support this year? And in the last quarter, meeting support for veggies, etcetera.
No. No. Not for us. Not for us. Not for us, but, but, in Finland and my understanding, most of European Countries, governments are supporting businesses and companies who has barely suffered due to, pandemia, but, but, we are not that kind of case.
No subsidy. Subsidies, no supports from the government side.
Thank you. Actually, no further questions here and no no further questions on the conference call line either. So if you have any further questions, don't hesitate contacting me. Thank you, gentlemen.
Yes. Thank you. Everybody and myself, we wish very pleasant afternoon evening from surprise, surprise, Sunny Housing.
Good. Thanks.
Thanks, everybody. Bye bye. Bye.