Kesko management meets analysts

1. 1
ANALYST MEETING
MIKKO HELANDER
JUKKA ERLUND
22.9.2016

2. 2
MARKETS AND
FINANCIAL
DEVELOPMENT

3. -4,0
-2,0
0,0
2,0
4,0
6,0
8,0
10,0
12,0
Estonia
Lithuania
Sweden
Norway
Latvia
Finland
RETAIL TRADE TRENDS IN OPERATING
COUNTRIES
ROLLING 3 MO
3
Source: Eurostat, excl. motor vehicles and fuels
%(rolling3mo)

4. KEY FIGURES, ROLLING 12 MO
4
Net sales, €m 9 024 8 881 8 780 8 679 8 610 8 993
Change in net sales, % * +0,7 -2,2 +1,2 +0,9 +0,2 +4,6
Gross margin, % 13,6 13,5 13,3 13,1 13,1 13,5
Operating profit**, €m 240,0 248,8 247,2 244,5 250,2 253,0
Earnings per share,
comparable, €, basic *
1,69 1,72 1,66 1,70 1,78 1,85
Interest-bearing net debt, €m +41 -359 -394 -448 -311 +330
ROCE, % ** 10,2 10,9 11,3 11,7 12,4 12,6
Capita expenditure, €m 202 205 195 219 218 672
* In local currencies, excl. Acquisitions and divestments ** comparable
Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16

5. RETURN ON CAPITAL EMPLOYED
COMPARABLE, ROLLING 12 MO
5
14.0
13.1
9.0 9.8 9.9
11.7
12.6
0
4
8
12
16
2010 2011 2012 2013 2014 2015 Q2 2016
%
Target
14%

6. RETURN ON CAPITAL EMPLOYED BY DIVISION
COMPARABLE, ROLLING 12 MO
6
Group totalBuilding and
technical trade
Grocery trade Car trade
%
22.2
10.1
22.5
12.6
0
5
10
15
20
25
30

7. KESKO GROUP'S SALES IN EUROS,
EXCLUDING VAT, IN JANUARY-AUGUST 2016
7
1.1. - 31.8.2016 Comparable
€ million Change, % change, %
Grocery trade, total 3,396.4 +10.3 +0.2
Building and technical trade, Finland
1,379.1 +12.5 +0.7
Building and technical trade, other
countries 1,241.0 +16.8 +5.9
Building and technical trade, total
2,620.0 +14.5 +3.2
Car trade, total 570.4 +7.8 +7.8
Common functions and
eliminations -4.7
Grand total 6,582.2 +11.6 +1.8
Finland, total 5,268.3 +10.4 +1.0
Other countries, total 1,313.9 +16.3 +7.2
Grand total 6,582.2 +11.6 +1.8

8. 8
GROCERY TRADE

9. KESKO GROCERY TRADE
9
Net sales €4,867m
Operating profit* €174m
Operating margin* 3.6%
ROCE* 22.2%
K-Group 32.7%
S-Group 45.9%
Lidl 8.3%
Suomen Lähikauppa 6.4%
Others 6.7%
Total market €16.6 billion in 2015
Source: Nielsen
* comparable
Q3/2015-Q2/2016

10. CONSUMER PRICE INDEX – FOOD AND NON-
ALCOHOLIC BEVERAGES
ANNUAL CHANGE, %
-4
-2
0
2
4
6
8
10
Source: Statistics Finland

11. 11
GROCERY TRADE STRATEGY PROGRESSING AS
PLANNED
• Renewal of neighbourhood store
network and conversion of Siwa and
Valintatalo stores into K-Markets
• Renewal of K-citymarket chain
• 70 renewed Neste K service station
stores by 2017
• Best digital services in the trading
sector

12. CONVERSION OF SIWA AND VALINTATALO
STORES INTO K-MARKETS
• K-neighbourhood store selection and Pirkka products
introduced
• Prices as much as 20% lower
• Some 100 stores already converted, over 200 by
the end of 2016
• Synergy benefits are estimated at approximately
€25–30 million at EBITDA level as of 2018
• The costs of store and network conversion, to be
treated as non-recurring restructuring cost, will
total approximately €30 million in 2016–2018
12

13. 13
BUILDING AND
TECHNICAL TRADE

14. BUILDING AND TECHNICAL TRADE
14
Net sales €3,335m
Operating profit* €82m
Operating
margin*
2.4%
ROCE* 10.1%
Sports trade
€186m
Furniture trade
€179m
Agricultural and machinery
trade Finland €500m
Others
€37m
Building and home improvement
trade Belarus €116m
Building and home
improvement trade
Russia €192m
Building and home
improvement trade
Finland €794m
Building and home
improvement trade
Scandinavia €627m
Building and home
improvement trade
Baltics €461m
Agricultural and machinery
trade Baltics €115m
* comparable
2015
Q3/2015-Q2/2016

15. GRANTED BUILDING PERMITS AND BUILDING
STARTS, MIL. M3, MOVING ANNUAL TOTAL
15
Source: Statistics Finland

16. GOOD PROFIT PERFORMANCE IN THE BUILDING
AND TECHNICAL TRADE DIVISION
• Good sales performance
• Strong growth in B2B trade
• Profitability improved especially in
the Baltics, Sweden and Norway
• Kesko Senukai’s profitability good
• Market still has significant growth
potential
16
0
10
20
30
40
50
60
70
80
90
Comparable rolling 12 mo operating profit
M€

17. STRENGTHENING OF PROFITABILITY AND
GROWTH
17
• Combination of Onninen and Kesko to
become the strongest B2B entity in the
market
• Widest selection in the market
• Most comprehensive store network and
largest sales organisation of northern Europe
• Most customer oriented logistics and digital
services for B2B customers
• Realisation of synergies has started
• Full synergies at EBITDA level around
€30 million per year as of 2020

18. GROWTH FROM EUROPE AND B2B SALES
• Growth from both B2C and B2B sales
• Strengthening of market position in
Finland
• Accelerating of growth and further
strengthening of positions in
Scandinavia
• Boosting Kesko Senukai’s growth
18
Current operating country
Poland with acquisition of Onninen as of 1 June

19. 19
CAR TRADE

20. CAR TRADE
20
Net sales €786m
Operating profit* €25m
Operating margin* 3.2%
ROCE* 22.5%
Volkswagen 11.0%
Toyota 10.8%
Skoda 9.7%
Ford 8.1%
Volvo 6.3%
Nissan 6.1%
Kia 6.1%
Audi 5.2%
Seat 2.0%
Others 34.7%* comparable
Q2/
2016
Q3/2015-Q2/2016

21. FIRST REGISTRATIONS OF PASSENGER CARS IN
FINLAND
21
Source: Statistics Finland