Ladies and gentlemen, welcome to our 2019 financial statements release call. I'm Kesko's CEO, Mikko Helander. Together with me, I have our CFO, Jukka Erlund, and Vice President of Investor Relations, Hanna Jaakkola. On the cover of the presentation, you can see the character called K-Crushing Carbon that is now widely used in our climate awareness marketing in our grocery trade business. The Carbon encourages us all to follow the carbon footprint of our food basket and to make sustainable choices. I will first give a brief overview of our business performance, and thereafter, we will be happy to take questions both by phone and via chat. Year 2019 was a strong year. Our result was all-time high. Our financial position and cash flow were strong. The performance of the grocery trade was excellent.
Kesko was also ranked as the most sustainable grocery trade company in the world for the sixth time. Strong growth continued into building and technical trade. In the car trade, good profit generation continued despite challenges in market and availability. The net sales for Kesko's continuing operations in 2019 totaled EUR 10.72 billion, up 3.3%, comparably 1.4%. Thanks to our strong growth strategy execution. Net sales increased in grocery trade and building and technical trade. Kesko's comparable operating profit for continuing operations for 2019 was record high, EUR 461.6 million, up by EUR 33.1 million. The growth strongest in the grocery trade division, EUR 33.4 million. Return on capital employed, one of our strategic targets, was at the level of 9.6%. It improved in the grocery trade. Our growth strategy execution continues. During the year, our investments totaled around EUR 690 million.
The most significant acquisitions include the Fresks building and home improvement store chain in Sweden, now called K-Bygg, and Volkswagen, Audi, and Seat businesses from Laakkonen, LänsiAuto and Huhtisen Laatuauto. Despite the acquisitions and the investments carried out this year, our financial position is strong. At the end of December, our liquid assets totaled EUR 169 million. Cash flow from operating activities was EUR 893.1 million, excluding year 2016 impact. Cash flow was EUR 564.8 million. Interest-bearing net debt, including lease liabilities, was EUR 446.1 million, and the corresponding net debt to EBITDA ratio was 0.9. The slides I just went through regarding the year 2019 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. The Q4 2019 was all-time strongest.
Sales and profitability continued to strengthen in the grocery trade. In the building and technical trade, demand remained at a good level. During the last quarter, we saw a change for better in the car trade. Last but not least, I'm really proud that K-Citymarket Järvenpää was ranked the best grocery store in the world. The net sales for Kesko's continuing operations in October, December totaled EUR 2 billion 734 million, up 3%. Comparably 0.9%. Net sales increased in all our three divisions. Kesko's comparable operating profit for continuing operations for the fourth quarter was EUR 129.7 million, up by EUR 15.2 million. Also, profitability improved to 4.3%. Next, we take a closer look at each of the divisions. First, grocery trade, where the growth in sales and market share is based on good customer experience.
Net sales for the fourth quarter total EUR 1,456 million and grew comparably by 1.9%. Net sales grew in all food store chains and cash flow. Comparable operating profit for fourth quarter was EUR 98.6 million. It increased by EUR 10.1 million. Profitability was 6.8%. It increased due to good sales and development and improved operational efficiency. During the last quarter, K Group's grocery sales 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 the 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 growth continued strong. Kesko's acquisition of Heinon Tukku 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. The store-specific business ideas improve customer experience and increase sales. We stand out from the competition with store-specific business ideas built on top of the same concepts. Kesko supports the K-retailers in creating good store-specific business ideas based on customer data. The store-specific business ideas are custom-made for that particular area and customer base. Quality selections 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 1,200 K food stores in Finland. We are forerunners in digitalization of the trading sector. It is very important to extensively utilize the customer data in everything we do.
We get the data from 3.5 million K-Plussa loyalty program customers and target to reach them in all channels. Digitalization of marketing, data-driven targeted customer communication, easy-to-use online and mobile services play all an important role in our digital strategy. Online sales of groceries are rapidly growing, and we will continue to put emphasis on more extensive digital services that enhance customer experience in 1,200 K food stores. Like you already saw on the cover page, Kesko is the most sustainable grocery trade company in the world. Transparent purchasing chains are at the core of our corporate responsibility work. We are strongly involved in combating climate change. Choosing to shop at a K Group store is a responsible act itself. Building and Technical Trade, where growth and profit improvement continue. Net sales, including the specialty goods trade, grew by 2.5% to EUR 976.6 million.
Comparable growth was -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 EUR 2.4 million to EUR 29.4 million. The profitability improved and was 3%. The building and technical trade 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 infra construction market was growing. Kesko's profitability improved especially due to good development in K-Rauta Finland, Onninen, and K-Bygg in Sweden. We acquired Onninen in 2016, and it has developed well as part of Kesko. Onninen has given us strong access to the technical wholesale market.
In 2019, net sales have increased and totaled nearly EUR 1.6 billion and operating profit totaled EUR 50 million. Onninen has a 38% market share and the market-leading position in Finland. Market and growth outlook for technical wholesale and Onninen is good in Finland and elsewhere in Northern Europe. I would like to highlight K-Rauta's good performance in Finland. It is growing and improving profitability in Finnish market. Market-leading position has strengthened and the market share is very close to 42%. K-Rauta sales were all-time high and the profitability has increased significantly. With K-Rauta Finland, we see potential for further growth by improving customer service and experience, as well as implementing the store-specific business ideas. Online sales and extended opening hours give us potential for further growth. Market position in Sweden has clearly strengthened. The Fresks acquisition has given us strong access to the growing B2B trade.
We have executed a fast and successful integration of Fresks, rebranded it to K-Bygg. The new K-Bygg brand is well received. During the year, we performed a market turnaround in Onninen. Loss-making HEPAC business was divested successfully and the process is good in the infra business, where Onninen is concentrating on in Sweden. Measures to improve profitability in K-Rauta Sweden are ongoing. Going forward, Sweden is an important growth area for Kesko. Then to Norway, where we see significant growth potential. Market was challenging in 2019, demand declined in both building and home improvement rate and technical wholesale, also sales declined for Byggmakker and Onninen. During 2018-2019, we have strengthened own retailing in the Byggmakker chain by acquiring 31 chain stores. Onninen sales and profitability was unsatisfactory last year, but the situation improved towards the end of the year.
In the long term, we see significant growth potential also in Norway. Next, Car Trade. New updating range strengthens our competitiveness. Net sales in the Car Trade increased by 20.1% to EUR 228.5 million. The market picked up and the comparable growth was 2.6%. Comparable operating profit was EUR 9 million and it grew by EUR 1.8 million. Profitability was 3.9%. We have finalized extensive efficiency measures during the quarter. During the last quarter, Car Trade in Europe has recovered. In Finland, importing of used cars has continued and first registrations were up by 11.6%. Our Car Trade sales grew and operating profit improved market share of France we represent was 16.4%. The demand for electric cars is clearly growing. Our own leasing fleet has grown to some 1,900 cars. After a challenging period, the operating conditions have improved in Car Trade.
Availability of cars has improved and range 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 grown strongly. The outlook. Kesko continues the determined 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. Kesko's board of directors propose a EUR 2.52 dividend to the annual general meeting. It corresponds a payout ratio of 85% and an effective B share dividend yield of 4%. Dividend proposed to be paid in two installments. The proposal is in line with Kesko's dividend policy.
The board proposes to the annual general meeting a one divided four share split to improve the liquidity of the company's share. The board proposes to the annual general meeting that shareholders be given three new A shares for each current A share and three new B shares for each current B share without payment. The board also proposes a related amendment to the articles of association. The total shareholder return of B share from the beginning of 2015 to the end of January 2020 is almost 160% and increased for more than EUR 47. The value of B share has more than doubled since the beginning of 2015. Thank you. Please mark the 28th of May to your calendars for our capital markets day here at K Campus 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 Hanna Jaakkola.
Thank you, sir. Ladies and gentlemen on the audio, if you wish to ask a question, please press zero one on your telephone keypad. If you wish to cancel the question, please press zero two on your telephone keypad. The first question we have is from the line of Fredrik Ivarsson from ABG. Please go ahead, sir.
Thanks, operator. Hi, Mikko. 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. That is our expectation and not just expectation. We continue very systematic implementation of our business strategies and based on that, we expect that all three divisions will improve. They will increase sales and they will improve also EBIT and financial performance.
Good. My second question is on the grocery market in Finland. It grew pretty all right in 2019. At 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 positive. First expectation is that the Finnish economy will grow. Might be that the growth rate will be a little bit lower than previous year. Anyhow, outlook is that Finnish economy continues growth. Based on that, we have also positive expectation in Finnish grocery market. Our expectation is that the price development will remain very conservative. Volume, we expect that we will see some volume growth. Of course, most important is that we are very optimistic that we can maintain very profitable 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-Rauta Sweden if we exclude the Fresks business, it seems like revenues sort of declined close to 10% in local currency. In the second half of last year, did 2019 in total end up in black figures?
It was still in red numbers and heavy measures continue in Sweden in K-Rauta. We have current country management, very capable country management, very detailed, specified needed measures to improve commercial and financial performance of K-Rauta Sweden. Store by store, we have made those plans and implementation of those plans continue 2020. The expectation is that based on that, we will see improving numbers also in future.
Short follow-up on that one. Are you in that case looking to close any underperforming stores, et cetera, or how do you think around that?
I'm not in position to open such a detailed level those plans we have made, and we will fine-tune store-specific business plans, and later on we will announce those measures.
Okay, fair enough. I will jump back into the queue. Thanks.
Thank you. The next question we have is from Nicklas Skogman from Handelsbanken. Please go ahead.
Yes. Hi. Hello. 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?
Yeah. Competition in Finnish grocery market is still very tough. It is tough between us three main players. We have been very strong in this competition thanks to our strategy and thanks to our K-retailers. We are confident that we have good chance to succeed also very well in market. At the same time, we should remember that, of course, two other players who has lost market share or who has not succeeded to increase on sales, they are also working very hard. Based on that, let's see. I believe that we will see definitely 2020 again also interesting outcomes coming from competition. I repeat, we are in very good shape, and we are very optimistic that we can maintain this profitable growth also in future.
Yeah. Have you noticed anything in the last six months or so in the market that's changed?
Yeah. Both starting from summer, they have been more aggressive, for example, in marketing and especially non-food segment, also in pricing, especially Finnish market leader. That has created even tougher competition, especially in 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 type network during the past couple of years, of course, the competitors are also getting higher all the time. In that sense, that's been visible in the past year's figures as well.
Yeah. Okay. Maybe the benefits from the work you've done in stores are starting to be smaller and smaller as we move forward.
Yeah, we should remember that in Finland, we have about 1,200 K stores, and we have in all those stores excellent K retailing entrepreneurs, and that is definitely big benefit compared to other players. Now when we provide excellent tools for those entrepreneurs to create and develop based on 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.
Yes. Thank you. I was wondering on the Onninen profit improvement in the quarter, how much of that was thanks to divesting the loss-making parts of the Swedish Onninen business?
It has some impact, but major issue is that Onninen Finland has very good development and Onninen Finland steadily improves performance. Of course, we should also remember when we look those three and a half years what Onninen has been part of Kesko that all in all, Onninen development is strong. Poland has improved dramatically. In Sweden, we implemented those quite heavy measures to make Swedish business profitable. All in all, Finnish performance also in Onninen has been very strong.
The Finnish improvement is a bigger contribution than the Swedish divestment contribution?
Yes. The Finnish operations is the biggest driver of the profitability. Like you said, also Sweden had its positive effort, but Finland was the biggest one.
I see Fresks add EUR 2.2 million and then Onninen in the quarter, and then Onninen was positive if we're counting contribution from acquisitions and divestments. Still the total contribution was EUR 1.6. Was there a fairly big negative effect from divesting the Finnish agri business?
No, it was not such a big issue, but major issue was tough competition in Baltic, especially in Latvia. We had very tough fight against some rivals in Latvia and we succeeded, but that had some negative impact on profitability in Kesko Senukai. As well as market in Norway was 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 and technical trade.
Okay, thanks. I was specifically looking at the impact from M&A, which was plus EUR 1.6 million, and if Fresks added EUR 2.2 million and Onninen added maybe half a million EUR, something was negative. I was just trying to figure out if the acquired Norwegian Byggmakker business was the negative impact or if it was the Finnish agri business.
Yeah, you are right. We did, as you remember, plenty of acquisitions in Norway, and some of them we have not yet completed successfully integration of those acquired stores. That had a certain negative impact in 2019.
Also I want to mention, we have acquired also in the Baltic countries a digital company where we have sort of invested also in order to sort of grow the digital capabilities. That had some impact as well. It was not just coming from Norway.
Okay. 1A acquisition?
Yes.
Okay. Finally, do you have a CapEx guidance for 2020?
We don't have a sort of official guidance on the CapEx. We should come down from last year's figures. Store side CapEx most probably will come down compared to last year. That decrease will be somewhat limited due to the investments in the digital side. Overall, we would come down when it comes to the investments CapEx in the car business this year, we are still investing the leasing cars and so on. Going further, sort of we are able to break some cash from those leasing fleets that we have there. In that sense, the sort of trend is down there overall.
Okay. Thank you very much.
Thank you, sir. We have a follow-up question from Fredrik from ABG. Please go ahead, sir.
Thank you. Short one on the Baltics. You spoke about some price pressure and high inflation rates over the last or first nine 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 you expect for 2020.
All in all, good performance also in Kesko Senukai, especially Lithuania, Estonia, strong. I mentioned already that in Latvia 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 Kesko Senukai's financial figures. Market all in all looks positive. Outlook is positive and demand continues strong in Baltic countries. That is our expectation. Of course, important to remind that our market position is strong in all three Baltic countries.
Thank you.
Thank you, sir. As a reminder, ladies and gentlemen, if you wish to ask a question, please press zero then one on your telephone keypad. If you change your mind and decide to withdraw that question, simply key zero two. You may also send your questions in via the chat as they have suggested. That's zero one if you wish to ask a question on the audio.
Thank you so much for the good questions, Nicklas and Fredrik. I think we are kind of ready now with the Q&A since I don't have any questions here at the chat system. If you have any further questions, don't hesitate contacting me. I will be at your service. Have a great and sunny day. Thank you.
Semi-sunny. It was. Now it is semi-sunny. Thank you.
Thank you.
Okay. Thank you, everybody. Bye 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.