Kesko's year 2007

16
Kesko's year 2007
Rautakesko
Rautakesko is engaged in the building
and home improvement trade in
Finland, Sweden, Norway, the Baltic
countries, Russia, and Belarus. It
manages and develops its retail chains
K-rauta, Rautia, Byggmakker and
Senukai as well as its B-to-B sales.
Rautakesko is responsible for the chains’
concepts, marketing, sourcing and
logistics services, store network
and retailer resources. Working in
cooperation with its customers,
Rautakesko enhances living and aims
to be the leading service provider in
the building and home improvement
trade in its operating area.
Market
Rautakesko’s retail store chains K-rauta,
Rautia, Byggmakker and Senukai serve both
consumer and professional customers. Consumer
customers mainly comprise home
builders, renovators and interior decorators.
Professional customers include construction
companies, manufacturers of prefabricated
houses and public institutions.
The total retail market of this sector in
Rautakesko’s operating area is about €17 billion.
Home building and improvement markets
are becoming concentrated and international
retail chains are establishing stores in
the largest cities. The market is growing
strongly in Russia and the Baltic countries,
whereas growth in the established Nordic
market is more moderate. Retail sales of
Rautakesko’s chains totalled €3,588.2 million
(incl. VAT) in 2007.
Finland
The Finnish retail market in the building and
home improvement sector totals some €4.0
billion. It increased by approximately 11.7% in
2007 (Finnish Hardware Association, DIY).
The K-Group’s market share in this sector was
about 36% (own estimate).
In Finland, Rautakesko operates the
K-rauta and Rautia retail chains and Rautakesko
B-to-B Service for construction companies,
the manufacturing industry and other
professional customers. The K-rauta chain
consists of 41 stores, about 70% of whose customers
are consumers. The Rautia chain consists
of 104 stores, of which 45 also operate as
K-maatalous stores engaged in the agricultural
trade. In the sales structure of Rautia,
the emphasis is on basic building products.
All Finnish K-rauta and Rautia stores are run
by retailer entrepreneurs.
The combined sales of the K-rauta and
Rautia chains, Rautakesko B-to-B Service and
K-customer agreement stores in Finland were
€1,575.3 million (incl. VAT). Principal competitors
in Finland are Starkki, Puukeskus, the
S Group and Bauhaus.
Sweden
The Swedish building and home improvement
market totals some €4.3 billion, an increase
of 10% in 2007 (SCB).
At the end of 2007, Rautakesko had 16 own
K-rauta stores and one retailer-owned store in
Sweden. K-rauta stores’ retail sales in Sweden
totalled €231.8 million (incl. VAT). Rauta-
kesko’s market share is about 4.5% (own estimate).
Private customers account for around
85% of K-rauta customers. Principal competitors
are Bauhaus, local speciality stores,
Byggmax and DT Group.
Norway
The Norwegian building and home improvement
market totals some €5.2 billion (TBF),
up by 15% in 2007 (own estimate).
In Norway, Rautakesko owns Byggmakker
Norge AS, which manages the Byggmakker
chain of 120 building and home improvement
stores, 22 of which are owned by Byggmakker.
Retailer entrepreneurs have a chain agreement
with Byggmakker. Retail sales of the
chain’s stores totalled €1,194.3 million in
2007. Rautakesko’s market share in Norway
is about 18% (own estimate). More than half
of all sales go to professional customers. Principal
competitors are Monter/Optimera (Saint
Gobain), Maxbo and Coop.
Estonia
The Estonian building and home improvement
market totals some €0.45 billion, an
increase of 8.0% in 2007 (own estimate). Rautakesko
has five retail stores and a nationwide
network of wholesale outlets in Estonia.
Retail sales of K-rauta stores totalled €108.7
million (incl. VAT) in 2007. Professional customers
account for some 63% of all customers.
Rautakesko’s market share in Estonia is
about 17% (own estimate). Principal competitors
are Ehituse ABC, Bauhof and Espak.
Latvia
The Latvian building and home improvement
market totals approximately €0.6 billion, an
increase of 9–10% in 2007 (CSB). Rautakesko
has seven K-rauta stores of its own, two
K-rauta partner stores and a wholesale network
covering the whole of Latvia. Retail
sales of K-rauta stores totalled €100.2 million
(incl. VAT) in 2007. It is estimated that Rautakesko’s
market share in Latvia has grown to
16% (own estimate). Principal competitors are
Depo DIY, Tapeks/Aile and Kursi.
Lithuania
The Lithuanian building and home improvement
market totals some €0.6 billion (own
estimate) and it increased by 15% in 2007
(own estimate). In Lithuania, Rautakesko has
the majority shareholding in UAB Senuku
Prekybos centras, which is the market leader