Ladies and gentlemen, welcome to our 2nd quarter 2020 release call. I'm Casco CEO, Mick Colander. Together with me, I have our CFO, Yuka Ehland and vice president, investor relations, Anna Yap Cola. He published again record result for 2nd quarter. Profitability improved.
Thanks to fast response to exceptional circumstances and well functioning strategy. I will first give an overview of our business performance in 2nd quarter and thereafter, we will be happy to take questions both by phone and via set. Key events in second quarter. First of all, record, result and very strong cash flow. Grocery trade sales grew and profitability improved further.
Also demand continued to be strong in building and technical trade. Could development continued in K. Rota and on in and in Finland and there was a significant profit improvement in building and home improvement trade in Sweden. In July, we announced the acquisition of cars and fridge handle, which is a leading building and home improvement rate operator in the Oslo region in Norway. In card rate, the result was positive under difficult circumstances, thanks to adjustment, measures.
Also new ambitious climate targets were published. We are targeting for carbon neutral k by 2025 and 0 emissions by 2030. The net sales forecast continuing operations in second quarter 2020 totaled 1,000,000,815,000,000 It was up by 1.2%, comparably up by 2.2%. The quote equals €33,000,000. Rolling 12 months net sales were 10,893,000,000.
Comparable operating profit for 2nd quarter was 1,000,000, and it increased by 33,000,000. It is a record operating profit for 2nd quarter. Profitability was 5.5% and it increased due to good sales development. Rolling to our month operating profit exceeded half a 1,000,000,000 1,000,000, 500,000,000. Return on capital employed one of our strategic targets improved and was at the level of 10.1%.
It improved in the grocery trade and in the billing and technical trade. Cashco's financial position is strong. Cash flow from operating activities for us 422,000,000, it strengthened, operatively by 195,000,000. Cash flow for the comparison period contained exceptional positive items related to kronorWarren, Sautama, totaling 44,000,000. Our liquid assets were €462,000,000.
Interest bearing net debt, excluding lease liabilities, fast, 330,000,000, and the corresponding net debt to EBITDA ratio was 0.6. And now to cross rate trade, in cross rate trade, we saw that our strategy is successful also under exceptional circumstances like this corona, spring, and summer. Net sales for the second quarter, totaled 1,431,000,000, euros and grew comparably by 1.6 percent. Let's say scroll in all, k4 store change. Comparable operating profit for 2nd quarter was record high, €83,000,000 and it increased by €4,000,000.
Profitability was 5.8%, and it increased due to good sales development in all food tour chains and improved operational. Efficiencies. During the last quarter, there was a significant growth in retail sales of food due to the exceptional circumstances. K group's grocery retail sales increased by 12.3% which outpaced the market growth rate of 9.5 percent. Our market share growth continues stronger than before and sales grew in all k food store chains.
And the profitability improved despite the decrease in cash process sales. During, the corona epidemic customer visits have been down and average purchase up. The safety of customers and personnel has been emphasized demand for online grocery sales has increased strongly, and we have been able to respond to that demand for better than our competitors. K group people and successful strategy execution under exceptional circumstances are behind the court result. Core retailers have shown their strength by being agile and responding fast.
The k retailers as well as, store and kiosk stuff have performed exactly exact excellency, excellently, and, also, insert safety. We have managed to ensure pro product availability and deliveries to store under all circumstances. We have also established new services fast such as offering shopping assistance to people over 70 years and selling restaurant meals in grocery stores. Gescrow P2P business decline suddenly, and we successfully adjusted food service operations to the rapid sales decline. We have successfully responded to rapid growth in demand for online grocery sales during the first half of the year online grocery sales were €93,000,000, and it was up by almost 400 50%.
Online accounted now for 4.2% of sales. Online service store network is now 447 k food stores. And in 2nd quarter, 100 76 stores joined the network. Despite the rapid growth customer satisfaction have remained high at a NPS level of 18. We believe that the growth continues to be strong also after the epidemic.
And now to building and technical trade division where the result was also record high thanks to systematic strategy execution and good market. Net sales, exploring the specialty cost rate grew by 8.7 percent to €1,156,000,000. Net sales grew in Finland, Sweden, Norway, to public countries, and Belarus. Net sales increased in both P2C and P2P. Rate.
Comparable operating profit, excluding specialty coal trade, increased by €30,000,000 to 76,000,000. The profitability improved and was 6.5%. Into building a technical trade comparable operating profit grew into building and home improvement trade in all operating countries. The acquisitions carried out in Norway and Sweden in 2018, 2020 accounted for 12,000,000 of the comparable operating profit. On an end's comparable operating profit clearly strengthened in Finland, Sweden, and Norway.
And in, to Baltic Countries and Poland, it was at the previous year's level. P2P trade has continued strong in port building and home improvement trade and technical wholesale. Also, P2C demand across Northern Europe has been surprisingly high, but it is still difficult to estimate how demand will develop in, the second have. During the quarter, the demand in the lesser trade weakened heavily at the beginning of the epidemic, but the recovery has been fast since May. Our net sales grew forcefully and profit rose to a new level.
P to p trade continued to be strong in port building and home improvement stores and only then also P to C sales grew clearly. More than anticipated. We we stream to accelerate growth also via new acquisitions into Baltic Countries and Belarus Cascosenokai says and profitability recovered quickly from the problems caused by the coronavirus epidemic. Strong development has continued in Kroute and on in Finland and court sales development has accelerated market share growth. P2P rate has continued stronger than anticipated on earnings profitability in profit, thanks to all product availability among other things.
Care router speed to C trade has developed better than, anticipated during the exceptional circumstances, extended opening hours for K-twelve have improved service and increased sales. Also online sales have increased by some 100% supporting sales in physical stores. Strong strategy execution and strong market demand in Sweden has led to significant improvement in profitability, profit exceeded €10,000,000. Gerardo's net sales growth 17.1% comparatively in CapEx Road has also been strong. CapEx Shades And Profitability has developed well as part of Kisco.
We have taken significant measures to improve Kratos profitability, and that work will continue. During the court, the technical wholesale company, Mia was acquired in Sweden, and we Sweden has an important growth area also going forward. In July, we announced the acquisition of Carsten Fritzer handle, which is a leading building and home improvement trade operator in the Oslo region in Norway. Cards and feature has 25 stores and highly compliment, the bookmark store network. The company's net sales totaled some 201,000,000 and EBITDA, 13,300,000.
Debt free transaction price is some 142,000,000, and the objective is to complete the acquisition in August, September. Once the transaction has been completed, Keesco will be a leading building a technical trade operator in Norway with retail sales of nearly 100,000,000. The growth potential in Norway is significant also going forward. And to Cartrade, Cartrait managed a positive result under difficult circumstances. Net sales in the card rate decreased by 9.4% in comparable terms by 21.5% to 192,000,000.
Comparable operating profit was €3,800,000 and it decreased by €1,200,000 profitability was 2%. Our new car sales and orders were below normal levels, but car sales improved clearly in June. In June, Volkswagen was the market leader, market share of brands, represented by K Group rose to 17.8% in 2nd quarter and to 18.5% in shoe. In general, car industry has been struggling globally due to the coronavirus epidemic and tightened emission limits. Orders for new passenger cars in Finland were down by more than 40% orders for vans were down by nearly 20%.
Declline in demand for servicing, repairs, and spare parts services and used cars have been more moderate. There were signs of recovery in the car industry towards the end of second quote. Our card rate is based on the strategic partnership with the world's largest car manufacturer Volkswagen Group since 1977. This year, we celebrate we celebrate the Volkswagen 70 years in Finland. Today, more than 347,000 false in vehicle's trial around the roads of Finland.
And now an update on the strategic review of operations in Baltic Countries and Belarus we announced when publishing the first court results. As we announced in April, Kesco and UIP are invested here, have different views on how to develop Kesco and Ocai. We have strived to resolve significant differences of opinion with the other owner on how Tesco Seno Kai should be developed and managed. Tesco has proposed to the other owner, negotiations to change Kosco Geno Kais ownership structure, alternatives include, for example, splitting the company, Cresco acquiring the whole company or Cresco selling its stake. If the negotiations do not lead to a satisfactory result, Gascorp will seek to ensure appropriate management of the company in accordance with the Partnership agreement by legal means if necessary.
CASCO is currently examining extra mining ex examining conditions for subsidiary consolidation of CASKOS and OKI in CASKOS consolidated financial statements. Kaysco has maturity holding, voting, power, and maturity of port members in Kescos and OCai. Due to these agreements concerning the management and control of the company. Conditions for such reconsolidation Kesco Sanofi. Potential lack of control would mean that the company would be consolidated as an associate.
An associate would be presented on 1 on, one line in the income statement and balance sheet as opposed to line by line presentation for, subsidiary. The change in the method of consolidation would not affect the group's comparable result, EPS, or GESCO's dividend distribution. The change would also not have a material impact on the group's comparable operating profit or equity. Guidance for 2020. Outlook for Tesco's group's continuing operations is given 4 years 2020 in comparison with year 2019.
Tesco estimates that the comparable operating profit for continuing operations will be in the range of €430,510,000,000,000 in 2020. Before the company estimated that comparable operating profit for continuing operations would be in the range of 400,450,000,000. Thank you. Now it is time for questions from the conference call lines or via chat. Please.
Thank you. If you do wish to ask an audio If you wish to withdraw your question, you may do so by pressing 2 to cancel. Again, it's 1 on your telephone keypad if you wish to ask a question. Our first question comes from Frederick Iverson, ADG. The floor is not open to you.
Thank you. A few questions from me, if I may. First one on Casper. That improved quite a bit in June. I'm curious if you could say anything about the sequential improvements seen over the last 3 weeks or so.
Do you expect July to be better than June? And also maybe if you could say anything about the profitability in Casper, given that sales down almost 40%.
Yes. And 1st, we can confirm that the gas process business has developed also well, after the 2nd quarter. We can see clearly that, that the service market is recovering. And, cash flow, cash price also still gaining market share. All in all, we must be happy how we succeeded with Casper in the second quarter when the market dropped heavily despite that very difficult situation, KESPRA remained slightly positive, even in those difficult circumstances.
That is also clear message that our fortunate companies very well managed. Plus also, we should remember that, we came, during the second quarter also heavily market share from competition. Thanks. And
anything on profitability within cash pro?
No. As I said, cash profitability, of course, dropped heavily during the second quarter. But, it was slightly positive despite those difficulties. And now, of course, when sales is coming back and market is recovering, we are expecting also, very, very good, development in profitability.
Perfect. And then one question on the building and technical trade. Curious to hear if you've made any strategic shift in the short term to cope with the high demand for B2C. You mentioned, for instance, longer opening hours, but have you made maybe any other shift, the product wise, price wise campaign, etcetera?
No need. For any shift, we have we have crowd strategy also in building a technical trade. We have very professionally implemented our growth strategy since 2015. And today, we can see clearly that our strategy also in building a technical trade works, very well. Of course, we are very happy that, that we are getting even faster.
Now market share in Finland on owning insight as well as in K router, but of course, we are we are very happy that now also our strategy works very well in Sweden our people also in Sweden. They do extremely good job in the implementation of the strategy as well as now also development in Norway is, very strong. Outlook in building a technical trade is very promising and, I guarantee that, we do our utmost, to accelerate further our growth in, in, not in Europe, in billing and technical trade business.
Maybe to add a little bit to my cost comments on the tactical side, like you mentioned, opening hours have been extended and also the product availability has been really good. So our supply chain has been working well for the customers. And also, we have focused quite a bit on the e commerce side to really serve the customers well, especially in the sort of beginning of the COVID-nineteen impact a lot of customers sort of, we noticed the traffic in the stores and so on. So we wanted to be good on the e commerce online side as well. So just to add up a little on
a very, very important for us. P2P and P2C, And of course, today's numbers prove that now we have succeeded also to improve our B2C segment.
Perfect. That's, that's helpful. And one one short follow-up on that, topic, how should we think about profitability or margins in B2C versus b to b. Is there any difference there that we should, bear in mind?
No. No major, difference, Of course, it depends on to be discussed about the situation in Finland or fear and or Norway or in Baltic Countries, but, no huge difference. We should remember that, that, prices are better in B2C segment, but we need also more workforce on that side compared to sales that we do in P2P segment. Both are very good business, for us, and, it seems that our strategy works extremely well, nowadays, in P2P as well as in P2C segment.
Okay. Perfect. That's all for me. Thanks.
Thank you. You may do so by pressing 1 on the telephone keypad. Our next question comes from Magnus Roman, Kepler Cheuvreux. The floor is now open to you.
Thank you. First, I'd like to to ask about state support money. Did you make any aggregated calculation of of the amount of state support that you seat in Q2. And or if if, you made calculations on total savings on staff cost from from from from temporary state the state support, please?
Yeah. Of course, we have made the car relations, but But, first, I would like to underline that, record high result. Record high sales figures, especially are coming from, our growth strategy and right strategy soices and excellent implementation of the strategy, in those countries where we operate and especially coming from strong development in a grocery trade as well as in building and technical trade. But of course, second quarter was very exceptional due to epidemic And, and, we can also say that very quickly, we succeeded to make needed measures, implement needed measures to manage this difficult situation. And we succeeded also to curtail our operational expenses and that has, of course, also positive impact on our numbers.
You can do you want to add something?
Well, well, just on the state support side. So that doesn't impact our numbers. And for us, the most important things has been during the second quarter that we have been able to keep our stores open and the situation in the countries where we operate is stable. So that has generated our profitably profitability are not, not any kind of state sort of support type of things.
Do you even remember any state state support? No? Not in Finland, not,
Nothing major, at least.
That's very clear. Maybe some €100,000 box.
Right. I I was not thinking state for for for turn
on the support. So I was thinking about the temporary regulations on on temporary staff leave, or staff leave if there's been any difference there in Sweden, it has definitely, but Nothing in Finland on that front either.
No. Of course, we should remember that that in Finland, we have this option to make statutory layoffs. And that is, of course, a big benefit for Finnish Companies And Finnish Economy. But we should remember that, that, expenses related to the statutory layoffs, mainly, financed and paid by the companies. It is some kind of insurance And we have insurance fees, but we have to pay from every employee.
And, I don't call that, not at all, as a state support. It is some kind of insurance. And of course, when we have made a statutory layoff in Finland, we have and our employees, they have been entitled to collect money from that insurance.
Alright. So just to understand broad based or on an overview basis, how you resonate when you speak about the full year guidance and the elevated uncertainties that you see, representing the wide guidance that you provided. And that does not relate mainly to cost savings potentially, getting pulled away various state programs, will be removed. It rather relates to, elevated uncertainty when it comes to top line generation in for contributing and technicals in the coming quarters. Is that correct?
Absolutely. Absolutely. And of course, we should remember that that the profit rate has always very big impact on case cost, numbers and case cost per performance and, outlook in grocery trade is, still very positive plusviso. Remember that, already quite long time, we have every month gained market share from competition, mostly due to that reason, and, and also, of course, also because food service business is now recovering we are, we are very optimistic, related grocery trade. Pickers, question mark is, the market in building and technical trade in Finland and, and also other, not in European countries.
But I can confirm that, also third quarter, we have started very strongly. Every country where we operate. And at least at the moment, we don't, don't see, clouds in building and technical trade. But, again, I underlined that, that let's see, let's see, autumn 4th quarter, outlook is still very limited.
That's that's clear. I have a final one on the on the car trade division, that you mentioned here turned, positive growth at the end of of q 2. Do you see pent up demand being, a factor here being released? And should we expect this to have a material effect on one sales growth in the Cartrait business in Q3?
Yeah. That is also our expectation. And, and once again, I confirmed that, we saw in in June or already strong recovery in car sales. And this positive trend has continued also in July.
Alright. Thank you very much.
Thank you. Our next question comes from Nicholas Sockman, Hansgrove Banking, and the floor is now open to you.
Yes. Hi. It's Nicholas Guzman from Handelsbanken. I have a question on on the and it it seems like despite your dispute with the other owners in in the Baltics, the performance there definitely seems to have picked up are the drivers of the improved performance similar to the ones we've seen in the Nordics or has there been any change to the market recently?
No. No. No. No. Absolutely.
Very much, same, same, reasons. And, and a very similar situation in Baltic Countries, what we have in Finland, Sweden, Norway. Of course, we should remember that, that, more or less, 50% of revenue in Escrowave is coming from Latownia and down here, a senior contract, is not building and technical DIY contract. It is mixture of DIY and, department store, concept. It works in Latownia very well, but, but, it is, quite different compared to our concepts, in other Northern European countries, but, it works also very well in the town here, in current situation.
Maybe also good to remember that the stores were closed in Lithuania from the mid March until mid April. So obviously, that had some effect on the quarterly numbers, Q1, Q2. So good to remember.
Okay.
And despite those different opinions between us and Raghavlovskar's family, important to remind that business itself is, running as planned. And no no issues on that side.
It definitely seems to be the case. I was wondering on on this this but some majority, owner and having devoting power and so on. Do you have any closest in the contract that allows you to buy out the partner for a predetermined sum or no?
Yes, we don't open shareholders agreement that is, that is forbidden parties have agreed that, that those clauses, after agreement, we don't, open and we don't make it public. But But you remember our today's message that we have proposed, negotiations. No. It means that, we need to negotiate to agree this ownership structure.
Yep. Alright. Thank you.
Thank you. There appears to be no further questions, so I will hand back to the speeches for any other remarks.
I don't see any questions in the chat either, so I think we are kind of done this time. So if you have any further questions, don't hesitate me. After their call. Any final comments, the gentleman?
Yeah. Thank you. Okay. And thank you very much for your active participation. And, together with you, Kahana, I wish very present summer afternoon evening.
Thank you. Bye bye.