Ladies and gentlemen, welcome to our 2019 financial statements release call. I'm Cescocino, Mick Colander. Together with me, I have our CFO, Yuka Ireland, and vice president of Investor Relations, and Jaglkola. On the cover of the presentation, you can see the character called crushing carbon that is now widely used in our climate earnings marketing in our Crossroads trade business to carbon and create us all to follow the carbon footprint of our food basket and to make sustainable choices. I will first give a brief overview our business performance thereafter, we will be happy to take questions called by phone and via chat.
Year 2019 was a strong year. Our result was open how I Our financial position and cash flow were strong. The performance of the cross sell trade was excellent. Cashco was also ranked as the most sustainable grocery trade company in the world for the 6th time. Strong crowd continued into building a technical grade into Cartrate, good profit generation continued despite challenges in market and eligibility.
The net sales forecast continuing operations in 2019 totaled 1,000,00720,000,000, up 3.3%, comparably 1.5%, 1.4%. Thanks to our strong growth strategy execution. Net safety increase in grocery trade and building a technical trade. GASCO's comparable operator profit for continuing operations for 'nineteen was record high $461,600,000, up by 33,100,000 to grow the strongest in the browser trade division, 33,400,000. Return on capital employed, one of our strategic targets was at the level of 9.6% it improved in the grocery trade.
Our cross strategy execution continues and during the year, our investments totaled around 1,000,000. The most significant acquisitions include to face building and home improvement store chain in Sweden now called K. Duke and Volkswagen Audi and shared businesses from Halakkonen Banci Alto and Hutis and Largo Alto. Despite the acquisitions and the investments carried out this year our financial position is strong. At the end of December, our liquid assets totaled 1,000,000.
Cash flow from operating activities was 1,000,000, including year 16 impact. Cash flow was 1,000,000. Interest bearing net debt excluding lease liabilities was 446,100,000, and the corresponding net debt to EBITDA ratio was 0.5. To slide, I just went through, regarding the year 19 performance highlighted the fact that the chosen strategy works and is yielding results. Now let's focus on the last quarter of, the year, the Q4 2019 was all time best Q4 ever.
Said, the Q4 'nineteen was all time strongest. Sales and profitability continued to strengthen in the grocery trade. Into building a technical freight, demand remained at a good level. During the last quarter, we saw a change for better in the card rate. Last but not least, I'm really proud that KCT market Yaram, who are trying to best grocery store in the world.
The net sales forecast was continuing operations in October, December, totaled 2,000,000,000 €734,000,000, up three percent, comparably 0.9 percent. Let's say it increased in all our 3
divisions.
Cashcock Comparableoperatingprofit for continuing operations for the 4th quarter was 1,000,000, up by 1,000,000. Also profitability improved to 4.3 sessions. Next, we take a closer look at each of the divisions. 1st, grocery trade where the growth in sales and market share is based on good customer experience. Net sales for the 4th quarter totaled 1,456,000,000 and grew comparably by 1.9%.
Net sales grew in all food store chains and cash flow. Comparable operating profit for 4th quarter was, 98,600,000, and it increased by €10,100,000. Profitability was 6.8%, and it increased due to good sales and development and improved operational efficiency. During the last quarter, K group's gross results increased by 3.3% which outpaced the market growth rate of 2.9%. Price inflation was approximately 1.2% the quarter had the same amount of wholesale days than a year before.
There were some changes in the tax refund payments that had an impact on purchasing power. Our profitability continued to improve, thanks to sales growth and improved operational efficiency. Online sales, continued strong GESCO's acquisition of Hennon II Corp is now reviewed in market court. The good performance is based on our strong strategy implementation. Store specific business ideas are really the recipe behind the success.
To store specific business ideas improve customer experience and increase sales. We stand out from the competition which store specific business ideas build on top of the same concepts. Cescco supports the key retailers in creating good store specific business ideas based on customer data. The store specific business ideas are custom custom made for that particular area and customer base. Quality selection's and competitive pricing play an essential role, and they have improved customer satisfaction significantly.
We are never ready with the process. There is plenty of sales and profit potential in creating store specific business ideas for all 1200 K food stores in Finland. We are foreigners in digitalization of the trading sector. It is very important to extensively utilize the customer data in everything we do. We get to date from 3,500,000 k, closer loyalty program customers target to reach them in all channels.
Digitalization, marketing, data driven, targeted customer communication, easy to use online, and mobile services play all an important role in our digital strategy. Online sales prosaries are rapidly growing and we will continue to put emphasis on more extensive digital services that enhance customer each periods in 1200 k foot stalls. Like you already saw, on the cover page, CashCall is the most sustainable grocery trade company into the world. Transparent purchasing change are at the core of our corporate responsibility work, we are strongly involved in com combat combating climate change. Choosing that shop at a gay crop store is a responsible act itself.
Next billing and technical trade, where growth and profit improvement continue. Net sales, excluding the Specialty Court goods trade grew by 2.5 percent to 1,000,000. Contraple growth was minus 0.5%. Net sales grew in comparable terms in Finland, the Baltic Countries and Belarus in Norway and Sweden, net sales increased due to the acquisitions and divestments completed. Comparable operating profit, excluding specialty goods trade increased by €2,400,000 to €29,400,000.
The profitability improved and was 3 versions. The building and technical credit market overall in Q4 construction volumes in Northern Europe have returned to normal levels. The building and technical trade market in the Nordic countries decreased year on year housing construction came down, renovation, and infrastructure market was growing. Tesco's profitability improved, especially due to could development in Careout of Finland, onion, and CapEx in her feed. We acquired Oningen in 2016, and it has developed Bell as part of Tesco.
Oningen has given us strong access to the technical wholesale market. In 2019, net sales have increased and totaled nearly 1,600,000,000 and operating profit totaled 1,000,000. Onene has 38% market share and the market leading position in Finland. Market and crowd outlook for wholesale and honoring in this good in Finland and elsewhere in Northern Europe. I would like to highlight K routes as good performance in Finland.
It is growing and improving profitability in Finnish market. Market Leading position has strengthened and to market share is, very close 42%. Care router sales were all time high and, the profitability has increased significantly. Also with care of the Finland, we see potential for further growth by improving customer service and experience as well as implementing the store specific business IDs. Also online sales and extended opening hours to us potential of more further growth.
Multi position in Sweden has clearly strengthened. The Fraysk's acquisition has given us a strong access to the growing P2P trade. We have executed a fast and successful integration of SKS, rebranded it to KBook, the new KBook brand is well received. During the year, we performed the market turnaround in all in and loss making HEPAK business was divested successfully, and the process is good in the infra business where on and then it's, concentrating on in Sweden. Messaged to improve profitability in Karelto Sweden are ongoing going forward Sweden is an important growth area for Eskom.
And turn to Norway where we see significant fraud potential. Market was challenging in 19, came and declined in both building and home improvement trade and technical wholesale, also sales declined for Bitbucket and Onelenet. During 2018, 2019, we have strengthened on retailing in, the Duke market chain by acquiring 31 chain stores. Owning and sales and profitability was unsatisfactory last year, but the situation improved, improved towards the end of the year. In the long term, we see significant crop potential also in Norway.
Next Cartwright, new updating range strengthens our, competitiveness. Net sales in the card rate increased by 20.1 percent to 1000000. The market picked up, and the comparable growth was 2.6%. Comparable operating profit was 1,000,000 and it proved by 1,800,000. Profitability was 3.9%.
We have finalized extensive efficiency measures during the quarter. During the last quarter, tax rate in Europe has recovered. In Finland, importing of used cars has continued and first registrations were up by 11.6%. Our Cartrack sales grew and operating profit improved market share of tranche we represent was 16.4%. The demand for electric cars is clearly trolling.
Our own leasing fleet has grown to some 1900 cars. After a challenging period, the operating conditions have improved in a contract. Trulability of cars has improved and trains is being updated fast. We have strengthened our dealer network by acquiring independent dealers and, the integration of acquired retail outlets has been fast and successful. New leasing services have cropped strongly.
And the outlook Kesco continues to determine our customer oriented transformation of its business and execution of its strategy. In comparable terms, the net sales for continuing operations for the next 12 months are expected to exceed the level of the previous 12 months. The comparable operating profit for continuing operations for the next 12 month period is expected to exceed the level of the preceding 12 months. KESCO Sport of Directors proposed a €2.52 dividend to the annual general meeting. It corresponds a payout ratio of 85% and an effective T share dividend yield of 4%.
Dividend proposed to be paid in 2 installments. The proposal is in line with Tesco's dividend policy. The port proposes to the annual general meeting, 1 divided 4 share split to improve the liquidity of the company's share. The board proposes to the annual term meeting that shareholders be given 3 new assets for each current a share and 3 new pieces for each current a share without payment. The board also proposes the related amendment to the articles of association.
The total shareholder return of Pshare from the beginning of 2015 to the end of January 2020 is almost 160% an increase for more than €47. To value of P, the P share has more than doubled since the beginning of 2015. Thank you. And please mark the 28th May to your calendars for our Capital Markets Day here at K Campos in Helsinki. Now it's time for questions for the conference call lines or via chat.
If you have questions afterwards, please don't hesitate contacting our
Thank you, The first question we have is from the line of Frederic Revichon from ADG. Please go ahead, sir.
Thanks, operator. Hi, Mikael. Congrats on a good year. First of all, my first question is on the guidance of increasing comparable EBIT. Just curious, do you assume earnings growth within all three divisions?
Maybe start with that question.
Yes. Yes. That is our expectation and, not just the expectation. We continue very systematic implementation of our business strategies and based on that, we expect that all 3 divisions will improve. They will increase sales and they will improve also EBIT and financial performance.
Good. And my second question is on the grocery market in Finland. It grew pretty alright in 29 what pace do you expect the market to grow in 2020? And how do you sort of split that between volume and price?
Yes. Still outlook is a positive. 1st, expectation is that the Finnish economy will grow might be that the growth rate will be a little bit lower than, previous year, but anyhow, outlook is that, it is economy. Continuous growth. Based on that, we have also positive expectation in finished grocery market, our expectation is that price development will remain very conservative volume, we expect that we will see some volume crawled But of course, most important is that we are very optimistic that we can maintain very predictable growth also in future and gain also this year market share.
That's very clear. One last before I jump into the queue, on K route of Sweden, if we exclude the fresh business. It seems like revenue has sort of declined close to 10% in local currencies. So in the second half of last year, did, 2019 in total and up in black figures.
Oh, no. It was delayed. Numbers and heavy measures continue in Sweden in a case router. But, we have, current, country management, very capable of the country management, very detailed specified needed measures to improve, commercial and financial performance of CareWta speed and store by store, we have made those plans and the implementation of those plans continue 2020. And the expectation is that based on that, we will see improving numbers also in the future.
Short follow-up on that one. Are you, in that case, looking to close any underperforming stores, etcetera? Or how do you how do you think around that?
I'm I'm not in position to open, such a detailed level. Those plans we have made, and we will, fine tune the store specific business plans and later on, we will announce those measures.
Thank you. The next question we have is from Nicholas Skugman from Handelsbanken. Please go ahead.
Yes. Hi. Hello. I I know I've noticed that your sales outperformance in the grocery division versus the market has slowed over the past two quarters. Are you seeing tougher competition, or is there anything else behind this?
Oh, yeah. COVIDation in finished grocery market has been is still very tough, and it is tough between us three main players. And we have we have been very strong in this competition. Thanks to our strategy and thanks to our key retailing entrepreneurs. And, we are confident that we have good chance to succeed also very well in market.
But at the same time, we should remember that, of course, to other players who has lost market share or who has not succeeded to increase on sales, they're also working very hard and based on that, let's see. I believe that we will see definitely 2020 again, also interesting outcomes coming from competition. But I repeat, we are in very good shape And we are very optimistic that we can maintain this profitable growth also in the future.
Yeah. But have you noticed anything in the last 6 months or so in the market exchange?
Oh, yeah. Yeah. Both both, starting from summer. They have been more aggressive, for example, in marketing and, especially non folder segment also in pricing, especially Finnish market leader. And, and, that has created even tougher competition, especially in the last quarter compared to previous quarters.
Thank you. Good to also remind that as we have had the sort of, work on the customer experience improvement in the whole store side network, during the past couple of years. Of course, the competitors are also getting higher all the time. So in that sense, that's been visible in the past year's figures as well.
Yep. Okay. So maybe the benefits from from the work you've done in stores are starting to be smaller and smaller as we move forward.
Yeah. But We should remember that in Finland, we have about 1200 K stores. And we have in all those stores, excellent K retailing entrepreneurs and that is definitely a big benefit compared to other players. And now when we provide excellent tools for those entrepreneurs to create and develop based on data, customer data, store specific business ideas we can expect that when also remaining entrepreneurs will fully utilize this potential we are in good position to maintain profitable growth also in the coming years.
Yep. Thank you. And then I was wondering on the on the net profit improvement in the quarter, how much of that was thanks to divesting the loss making parts of the Swedish online business.
It has some some impact, but the major issue is that, only then Finland has very good development. And, on in Finland, the steadily improves, pay for months. Of course, we should also remember when we looked at three and a half years, but Olinen has been part of Tesco that all in all. London development is strong. Also, Poland has improved dramatically in Sweden.
We implement fit those quite heavy measures, to make Swedish business profitable but all in all, finished pay for months also in owning and has been very strong.
So the finish improvement is bigger than the it's a bigger contribution than the Swedish divestment contribution.
Yep. The Finnish operations is the biggest biggest driver of the profitability, but like you said, also we didn't have this positive definite, but the feeling was the biggest one.
Okay. Because I see Freshs had 2,200,000. And then on in the quarter, and then on Ninnen was positive from if we're counting contribution from acquisitions and divestments. But still, the total contribution was 1.6%. So was there a big Or how how was there a fairly big, negative effect from divesting the the Finnish agribusiness?
No. This was not such a big issue, but the but the major issue was a tough competition in Baltic, especially in Latvia. We had very tough fight against some, rivals in Latvia and he succeeded, but that had some negative impact on profitability in Escoceno Kai as well as a market in Norway was a little bit soft and also our sales and profitability declined in Norway. That was another negative issue compared to all other positive developments that we had in building a technical upgrade.
Okay. Thanks. But but I was specifically looking at the the impact from M And a, which was plus 1.6. And if Freshs added 2.2 and onion added maybe half a 1,000,000, something was negative. So I was just trying to figure out if if the acquired Norwegian big market business was the negative impact or if it was the Finnish agribusiness.
Yeah. You you are right. You are right. We need to, as you remember, there are plenty of, acquisitions in Norway and some of them, we have not yet completed successfully integration of those acquired store, and that had a certain negative impact in 2019.
Yes. And also want to mention, we have acquired also in the both the countries, a digital company. Where we have sort of invested also in order to sort of, grow the digital capabilities and that had some impact as well. It was not just coming from Norway.
Okay. The 1a acquisition. Yep. Okay. And finally, do you have a CapEx guidance for 2020?
We don't have a sort of official guidance on the CapEx, but we should come down from last year's figures store side CapEx most probably will come down compared to last year. And then it will the that decrease will be somewhat limited due to the investments in the digital side But overall, we would come down when it comes to the investments, CapEx in the car business this year, we are still investing the releasing cars and so on, but going then further, sort of, we are able to break some cash from those leasing fleets that we have there. So in that sense, the sort of trend is down there overall.
Thank you, sir. We have a follow-up question from Frederick from ABG. Please go ahead, sir.
Thank you. Short one on the Baltics. You've spoke about some price pressure and high inflation rates over the last or 1st 9 months of 2019, I remember. Just curious if you can give an update on what you saw in the last quarter. And maybe also what do you expect for 2020?
Good performance also in Kaesco Sanukai, especially Lithuania, Estonia strong. I mentioned already that in fact, we implemented, measures, in the middle of, tough competition. And that decreased our margins, but we protected successfully our market share. It has some negative impact on the peso general price financial figures. But market, all in all, looks positive.
Outlook is positive and demand continues strong in Baltic Countries. That is our expectation. And of course, important to remind that our market position is strong in all three public countries.
Thank you, If you change your mind and try to withdraw that question, simply key 2. You may also send your questions in via the chat as they have suggested.
Thank you so much for the good questions Klaus and Frederick. I think we are kind of ready now with the Q and A since I don't have any questions here at the chat system. So if you have any further questions, you don't hesitate contacting me. I will be at your service. Have a great and sunny day.
Thank
you. Suddenly. It was. Now it is semi sunny. Thank you.
Okay. Thank you, everybody. Bye bye.
Thank you. Ladies and gentlemen, that concludes your call for today. We thank you very much for your participation and ask that you disconnect your line. Have a great day morning or afternoon ahead. Thank you.