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Annual report 2013

Description of value creation

Kesko’s annual report aims to provide an overall picture of Kesko’s ability to create value and combine all information that is material from the perspective of value creation. We complemented Kesko’s value creation description in autumn 2014 by conducting a survey of our stakeholders’ views on the value created by Kesko. As a result of the survey, the value creation stories and related illustrative animation were prepared for this report.

In August 2014, Kesko made a decision to combine Kesko’s annual report and corporate responsibility report into a stakeholder report that makes use of the International <IR> Framework for integrated reporting. The development of integrated reporting commenced with a project examining the factors that affect value creation and the views of the management and stakeholders on value creation. Kesko’s first integrated annual report was published in March 2015.

Kesko’s operations create value for stakeholders

The main role of Kesko and K-stores as trading sector operators is to provide customers with the products and services they need. The products have to be well-researched, safe and responsibly manufactured.

Kesko selects its suppliers carefully and delivers goods to retail stores efficiently and taking environmental impacts into account. At the same time, Kesko provides suppliers with a distribution channel for their products.

Kesko is a listed company with strong solvency and creates shareholder value for its owners. As an employer and taxpayer, Kesko plays a significant role in society.

In addition to Kesko’s management, stakeholders’ views on value creation were expressed by representatives of investors, analysts, employees, retailers, organisations supervising other parties’ interests, suppliers, authorities, research institutes, the media and NGOs during the autumn.

The issues highlighted in stakeholder interviews included customer value, shareholder value and social value. Investors and analysts emphasised the importance of economic value. It was considered that the social value arises from Kesko’s significant role in Finnish society and the daily lives of Finnish people, as well as from the positive economic, social and environmental impacts of Kesko.

 

Kesko's value creation chart illustrates how Kesko’s operations create value for its stakeholders and society.

 

Desciption of value creation and value creation stories

The value creation stories of this report describe the value created by Kesko and Kesko’s impact on stakeholders and society.

The interviews reveal that Kesko is considered a strong, local operator that promotes domestic products and services. The key value creation factor mentioned was the success of the retailer business.
Read more: Retail stores as local operators and Impact on society.

The long-term building of shareholder value and financial success were considered another important value creation factor.
Read more: Impact on society and Investor’s address.

Stakeholders considered customer value to be incorporated in all of Kesko’s value creation activities. For the creation of customer value, good cooperation between Kesko, retailers, suppliers and service providers is important.
Read more: For the benefit of customers.

Kesko is a significant operator, particularly in Finnish society. Kesko creates value for society by providing employment and paying taxes, and through other economic impacts. 
Read more: Impact on society.


Supplying products to consumers efficiently, safely, responsibly and reliably is of key importance for Kesko’s value creation.
Read more: Product’s path.

Competent and healthy employees enable value creation for customers and shareholders. In the interviews, many expectations were voiced for Kesko as a major operator in society and a large employer.
Read more: Employees are our most important asset

Value creation animation

Besides the value creation stories, we also wanted to illustrate the value created by Kesko in an animation. This animation describes how Kesko creates value across society as a whole.

 

How does Kesko create value?