Dear ladies and gentlemen, welcome to our 2018 third quarter results call. I'm Kescos president and CEO, Mick Kohrander, together with me, I have our CFO, Yuka Ehrond and Vice President, Investor Relations, Kia MLios. I will first give an overview of our business performance and after that we will be happy to take questions. Starting with 3rd quarter highlights. Our net sales grew by 3.5% At 113,000,000, we reached an all time best quarterly operating result.
Gross rate continued with strong market share and profit development. Building and technical trade operating profit improved by 7,000,000 Cash flow from operating activities increased to 1,000,000. In addition, to the net sales and operating profit growth, just mentioned, operating margin grew from 3.9to4.3percent. Earnings per share increased Return on capital employed increased from 12.4percentto13.8percent and return on equity from 9.9percentto11.6 percent. On group net sales, 3rd quarter net sales were 2,642,000,000 In comparable terms, net sales grew by 3.5%.
Looking at the group's quarterly operating profit, it increased by 12,000,000 from 100,500,000 to 112.6 1,000,000. The corresponding margin grew from 3.9% to 4.3%. Moving on to return on capital employed. At 13.8%, our return on capital employed was closed to the 14% targeted level. A few comments on our financial position At the end of 3rd quarter equity ratio was 1448.5 percent liquid assets were €319,000,000 interest bearing net debt to EBITDA ratio was 0.6 Cash flow from operating activities was 1000000.
Cash flow from investing activities was 1,000,000 including acquisitions, cash flow from investing activities totaled 1,000,000. Our financial position remains very good allowing us to develop our business going forward. Next, I will discuss business development by division, starting with grocery trade. In comparable terms, grocery trade grew 6.2 percent to 1,352,000,000 in the 3rd quarter. Gross rate, 3rd quarter operating profit increased from 59,400,000 to 64,700,000.
The corresponding margin grew from 4.5 to 4.8%. Market wise overall sector growth was 4.3% and within the price development was 2.4%. The market has developed well with increased importance on quality and selections. We see rising demand for good online food sales services. 3rd quarter highlights for grocery trade customer numbers, sales and market share all continued strong growth.
Online food sales grew by 74%. Also Casper continued to perform well in the food service market. We continued investments in store sites digital services and logistics operations. We have enjoyed strong growth in online food sales 3rd quarter growth was 74%. We are pleased with a high customer satisfaction level demonstrated by the net promoter score of 67.
We have nearly doubled the number of stores across Finland offering online food sales. Currently already over 140 stores offer online services. Also online visitor numbers have doubled compared to a year ago. Average perch says five times higher than in physical store. Next year, we target sales of over 1000000.
Next building and technical trade. 3rd quarter net sales in building and technical trade increased from 1,070,000,701,000,000 to 1,089,000,000. Each growing specialty cost rate net sales increased from 900 53000000 to 1000000. The comparable net sales growth was 2.5%. 3rd quarter operating profit in building a technical trade increased from 40,700,000 to €45,900,000 excluding specialty cost trade operating profit increased by 7,000,000 from 1,000,000 to 1,000,000.
Correspondingly, operating margin increased from 3.6 to 4.2%. The market situation for the billing and technical trade is expected to remain good. But the growth base is expected to slow down somewhat. Additionally, renovation building is gaining more ground in the construction market. In our building and technical trade division, Keyruta in Finland, Perham Vale, Onenen's growth and profitability also strengthened further, performance remained good in Finland and Poland in particular.
In Norway, operating profit increased, thanks to the acquisitions made to strengthen the big market chain. In Sweden, we continued efforts to improve the profitability of K router and OnNN. Gescos and UK's strong sales performance continued in the politics. We are happy. We are very happy with the development of Onlinen.
Since the acquisition, net sales have grown by 126,000,000 to nearly 1,600,000,000 and EBITDA by 1,000,000 to €55,000,000. That said, our efforts to improve sales and profitability further will continue in line with strategy. We see good growth prospects in technical wholesale. Next, Cartwright. In the third quarter, card rate net sales decreased by 5.6% to €200,000,000 due to the implementation of the new WLTP emission testing.
At 1,000,000, car rate operating profit remained on a good level despite the decrease in net sales. Market wise first time registrations of passenger cars and vans were at least at last year's level in the 3rd quarter up by 5% year to date. This reflects that WLTP emissions testing that is causing delays in car deliveries on the market. Measures to prevent rise in car tax are expected from the Finnish government. In the third quarter, the development of our card rate was in line with our expectations.
Net sales and operating profit were at a good level even though the implementation of the new WLTP emission testing at the beginning of September had a weakening impact on performance in the short term. This year, we have so far enjoyed excellent performance in the course of business. 3rd quarter sales growth was 35% and profitability strengthened further. Order book for new cars was plus 12%. Launching mobility services is a cornerstone of car trade strategy.
The leasing services for P2P and P2C customers from this spring are off to a good start with order book at around 5 cars. There has been good demand for car sharing services at the K supermarket And K router pilot store locations. We are also building a nationwide charging network for electric cars with nearly 400 charging points at more than 70 charging stations by the end of 2019. The first ten charging stations will open during this autumn. Also our partner, Volkswagen is having heavily into future mobility and new electric car models to customers.
The new all electric Audi e tron was launched recently to the market and will be available at the start of next year. We have already received 100 preorders for it. Other notable electric car models to enter the market include post a taikken and Volkswagen IT series. Lastly, a few comments on our outlook. 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. However, investments in the expansion of logistics operations and in information systems and digital services will burden profitability during the period. Furthermore, in the car trade profitabilities burdened by to shift to WLTP emissions testing, which postpone car delivery at times. Before we end, I would like to highlight that our growth strategy is working well. Since strategy launch in 2015, we have received growth in all core divisions and operating profit has improved by 46% from 221,000,000 to 1,000,000.
We will continue with our social approach strategy and see good value creation potential for upcoming years. This ends my prepared remarks. Thank you for your attention. We will now be happy to answer
Thank
you Our first question comes from the line of Frederic Everson from Kepler Cheuvreux. Please go ahead. Your line is now open.
Hi guys, thanks for taking the question and congrats a good quarter. First, a question on Olin and which have obviously shown a quite impressive improvement. I think the operating profit is up some 1,000,000, 1,000,000 during the the last 12 months. And I'm just curious how much of that improvement is more organic and how much is more related to to synergies being captured. That's my first question.
And the second one is related to online. Just curious on what you assume for next year because you mentioned a 75% growth pace at the moment. Do you think that we can see a similar or even higher growth pace next year? Or do you assume that it's going to come down closer to say 50% or so? Thanks.
Yeah, thank you. Thank you for your good questions. First, about Onlinen, we have we have very strong development in Owning and especially in Finland, We are also very happy with owning them in Poland. We have succeeded to make a real turnaround in Poland. And we can see clearly that a positive trend it will continue.
We are doing our utmost to support our colleagues in Oningen to maintain strong organic crowd everywhere where onion operates. Synergies, we have gained Synergies, but both very important when we look on in improving financial performance synergies, but especially I see that organic growth, growing sales figures, growing market share, supporting Onnett's profitability. About online, as mentioned, we are very happy with our grocery online services. And our strong belief is that we will even accelerate a road in online sales. We are now opening steadily new online services at K Stores.
And that will help, we believe strongly to accelerate our crowd also on that side.
Thank you. Very clear. Just a short follow-up on the on and related question because you are targeting $25,000,000 to $30,000,000 in synergies by 2020. And I'm just curious how much of that is sort of left?
Maybe on that side, we have some delays, but at the same time, we have succeeded to accelerate crode and we have succeeded to increase sales. But anyhow, we are still very optimistic that we have those synergies, but we have put more efforts and we have given higher priority to increase sales and market share in owning and business. And we are happy that synergies are coming in a little bit slower. But, Synezis and Synezis targets are still valid, what we have communicated also earlier.
Okay, very clear. Thank you. And one last, maybe on the grocery side, because we've seen obviously oil prices coming up quite significantly, and I would expect fuel prices to increase on your side. Can you confirm that you actually see that in the supply chain organization or what should we expect on that sort of side? Thank you.
Could you repeat, on supply?
Yes. So more related to fuel prices, and I would expect your costs to come up slightly there. And obviously fuel prices is a significant share of your OpEx on the grocery trades. So, just curious on what you see on that side and what to expect going forward?
No, we have mentioned first time you guys supposed already 1.5 years ago that, that, it has been temporary situation when food prices declined in Finland. And now we are back to normal, and we believe that that the price trend of increasing prices will continue all in all. Of course, we should remember that that 2.4% price increase what we reported, in Finnish grocery market includes also quite much tax increases, alcohol tax taxes of cigarettes increased and that has certain quite big impact. But anyhow, we have seen, we have heard that everywhere some of us very dry and that has definitely certain impact also on our business. But we are just now in the middle of price negotiations with the industry and we are very confident that in good cooperation with the industry for the industry, our suppliers we will manage successfully also those issues.
Sorry, Mikael. My question was actually to fuel prices and not food prices. So what do you see on that side and what do you expect please.
That is very small issue in our business, no material impact on our numbers and our businesses.
Okay, that's all for me.
Our next question comes from the line of Nicholas Skugman from Handelsbanken.
Yes. Hello. Thank you for taking the questions. Maybe I could just jump on to Frederic's question there. The reason it's not an issue for you guys, the increasing fuel price, is that because you pass that on very quickly to the retailers or or how come it's not an issue?
Yeah. You cut off here. So We have a business model where, like Micos said, it's not really a, big profitability issue for us. So, so sort of repeat what Mico said. So in our profitability, side, it's it doesn't play a big role.
Okay, perfect. Thank you very much. And then if maybe you could give an update on, I mean, I know it's still early days for the B And T action plan that you presented at the CMD, but could you maybe give an update on sort of actions taken and any success stories or any, issues that you have encountered so far?
Yep. So, obviously, the new management started at the, end of last year. And in that sense, we have built now the strategy. For all countries for all segments. And like I said in the report, we are happy how the, for example, on the end performed overall.
We are happy how finish, the Y and billing, you know, the, our, sort of, billers merchant and the Y business developed as well. Owning and turnaround is succeeding there as well. That's a good, good sort of, side as well. Gescos and Oka in the Baltic countries has really turnaround also operations, especially in Latvia. So overall, we are happy how the new more country specific, specific driven strategies implemented and, and, and, and, in a lot of markets things are developing well.
Also in Norway, the new acquisitions that we made there, have been fruitful, and we are happy with the integration and and so on. So like setting the report, there's plenty of issues that we are we are very happy with.
Okay. And in Sweden, is there any change for the battery or worse?
Brain Sweden, hard work continues. But, also, as you mentioned, we have everywhere country specific strategy, strategies have been made now on very detailed level approved by us. And in many countries, including also Sweden, we have on place, management, very skilled very professional guys. For example, Sweden and Reyes Pacific did excellent shop earlier in Norway, the ferry success will turn around in Poland, and now he has been About 6 months, the country had in Sweden and he has also appointed very skilled managers to the Swedish management team and your morale group, divisional president personally support entry, reports to Yorima, and, they have in process hundreds of, measures on K router on in an side to improve commercial as well as financial performance in our Swedish operations. But as I said, Hartburg continues.
Yeah. And the initiatives, they they really are, like Mick said, we have, a lot of initiatives up and running at the moment. And and covering all the, both the stores, assortment, logistics, and then, and so on and so. Just implementing that one.
All right. Perfect. There's been a bit of M and A activity in Sweden recently. On the builder's merchant side. Is that anything you're following closely or Or are you focused on turning, turning, doing it DIY doing it yourself or no?
No. I can confirm that everywhere not in Europe, in building and technical trade, we follow carefully M and A opportunities, including also Sweden. And of course, we should remember that the Swedish building a technical trade, business is still quite fragmented, offering exciting interesting opportunities for us. But at the same time, once again, I repeat that we put now lot of efforts to have more solid platform in Sweden further develop Swedish businesses from that solid foundation, Yurma, ENDre and ENDre's team as we said, they are doing now, hard work, and we are very confident that the business is now moving to the right direction.
Okay, perfect. And then lastly on your guidance, you've had the line with you expect growth in comparable profits, but that costs for various things, including logistics projects will weigh on the numbers. You've had that line in there for a while now. I was just wondering, have we already seen these costs weighing on profits? Or is it more something that's going to be visible further down the line?
No, I can start and you can maybe open more those numbers after me. But again, I remind that We have crows strategy since 2015. We have had crows strategy. Meaning that, we put a lot of efforts, to accelerate crowd in all our core businesses. And it means that, based on our strategic guidelines, we strongly develop and we invest also money on our 3 core businesses.
And we can see strong development and improving profitability. But it means also that we are not not at all maximizing our profitability in short term, we invest heavily also on future. And that way, we believe that we can maintain strong growth also in the coming years.
Yes. And maybe just to give a little bit more flavor as well. As you remember, we also mentioned about, you know, the store renewables and so on earlier on and, and have sort of, sort of dropped that, that side, from the guidance, earlier because they have been in the comparatives already but what we have in there now is the logistics. That's something that we have just increased our capacity there because our volumes have grown and, and there are certain costs coming from, from that side with the new expanded logistics. When it comes to the IT systems and digital capabilities, there we have had, of course, those investments already in the comparative figures as well.
But, but at this point, we have increased somewhat the levels in order to be really competitive on the ecommerce side on the mobile apps as well as in other sort of IT sites. And there, there's sort of, the, the, the, sort of, depreciation times are somewhat shorter than, than in the stores, obviously. So when we, when we have grown down those investments, it's somewhat affects the profitability as well. So I guess that's pretty much regarding those 2 issues.
Our next question comes from the line of Harry Poplar from Nordea. Please go ahead. Your line is now open. Yes. Yes.
Hello. So a question regarding the building and technical trade and the market outlook. You said it's slowing down. Do you think the the renovation will compensate for the slowdown in in the new build? How do you see the market going?
Yeah. 1st, first, to be precise, we are saying that, that the growth we believe that growth will slow down, but market will remain still very strong. And you are right, is our impression, our feeling that, on construction side, we will see a little bit less activities, but, but, more activities on renovation side. Please remember that, more or less everywhere in Northern Europe, human resources amount professionals is limited. And, today, even renovate quicker and fast properties in not the European countries, but as I said, professionals, amount of professionals is limited.
And when we will see less construction activities, that will regain capacity and professionals to the renovation sites.
Thank you.
As there are no further questions at this time, I'll hand the call back to you speakers. Please go ahead.
Okay, guys. Thank you very much for your attention for your active participation to Kakiya, myself, to be with you. Very pleasant afternoon. I see you, Nick. Thank you.
Bye bye.