Kesko's presentation in SEB Nordic Seminar, Copenhagen, Jan. 2015

1. SEB Seminar
CFO Jukka Erlund
8.1.2015
Copenhagen

2. Kesko today
Net sales Q4/13-Q3/14
€9,166m
Food trade
Home and speciality goods trade
Building and home improvement trade
Car and machinery trade
Jukka Erlund2
• Kesko’s net sales €9.2bn
- K-Group’s sales €11.4bn
• 2,000 stores in eight
countries
• Over 1.3 million customer
visits every day
• Book value of real estate
€1.4bn
• Market capitalisation €2.9bn
(Dec. 30, 2014)
• 40,000 shareholders
• 23,000 employees
1/2015

3. Jukka Erlund3
Q4/2013-Q3/2014 key figures
Net sales, € million 9,166 9,412
Net sales performance, % -2.6 -3.1
Gross margin, % 13.8 13.6
Fixed costs*, € million 1,751 1,777
Operating profit*, € million 238 243
Profit before tax, € million 187 227
Return on capital employed*, % 10.0 9.7
Equity ratio, % 54.2 52.9
Capital expenditure, € million 197 228
* excluding non-recurring items
1/2015
Q4/13-Q3/14 Q4/12-Q3/13

4. Kesko’s divisions
Q4/2013-Q3/2014
1/2015Jukka Erlund4
Food trade
Building and home improvement trade Car and machinery trade
Home and speciality goods trade
Net sales: €4,345 M
(47%)
Operating profit:
€204.0m
ROCE: 26.1%
Net sales: €1,362 M
(15%)
Operating profit:
€-26.7m
ROCE: -6.6%
Net sales: €2,609 M
(28%)
Operating profit:
€44.7m
ROCE: 6.3%
Net sales: €1,022 M
(11%)
Operating profit:
€31.1m
ROCE: 19.3%

5. • Combination of the building and home improvement
trade with the home and speciality goods trade
• Integration of the non-food part of the K-citymarket
chain into Kesko Food
• Focus is on e-commerce and online services
• The objective is to improve efficiency and to have a
more competitive multi-channel non-food trade
• Starting from 1 January 2015, the reportable
segments are the grocery trade, the home
improvement and speciality goods trade, and the car
and machinery trade
Kesko changed its divisional structure
Jukka Erlund5 1/2015

6. Strategic priorities
Jukka Erlund6
Strengthening
sales growth and
improving
profitability
E-commerce and
multi-channel service
models
Utilising Russia’s
business
opportunities
1/2015
Strong financial position and good dividend payment capacity

7. How retail is changing?
• Growth of e-commerce and multi-
channel retailing in all product
lines
• Consumers are increasingly
product-aware and demanding
• The importance of customer-
oriented services as a
competitive asset is emphasised
• Slow economic growth and
consumers’ price awareness
• Increasing proportion of retailers’
private label brands
• Customer loyalty programmes
will be interactive and provide
more individual rewards
Jukka Erlund7 13.11.2014

8. Retail sales of non-food products,
excl. fuel
(index of turnover, yoy, cumulative 12 months avg)
-4
-2
0
2
4
6
8
10
12
2013M01
2013M02
2013M03
2013M04
2013M05
2013M06
2013M07
2013M08
2013M09
2013M10
2013M11
2013M12
2014M01
2014M02
2014M03
2014M04
2014M05
2014M06
2014M07
2014M08
2014M09
2014M10
Estonia
Latvia
Lithuania
Finland
Sweden
Norway
8
Source: Eurostat
%
1/2015Jukka Erlund

9. Consumers’ expectations for own finances
Own finances in 12 months, Finland
0
2
4
6
8
10
12
14
16
1/00
7/00
1/01
7/01
1/02
7/02
1/03
7/03
1/04
7/04
1/05
7/05
1/06
7/06
1/07
7/07
1/08
7/08
1/09
7/09
1/10
7/10
1/11
7/11
1/12
7/12
1/13
7/13
1/14
7/14
Expectations for own
finances
Expectation, 21st century
average
Jukka Erlund9
Source: Statistics Finland
1/2015

10. Russian retail growth has exceeded
GDP growth
-10
-5
0
5
10
15
20
2000 2002 2004 2006 2008 2010 2012 1-9/2014
Retail GDP
1/2015Jukka Erlund10
Source: Bofit
%

11. Jukka Erlund11
Food trade
•Net sales €4,345 million, -0.6%
•Operating profit* €204.0 million (4.7%),
€+4.2 million
•Return on capital employed* 26.1%
*excl. non-recurring items
Total 913 stores
1/2015
Q4/2013-Q3/2014 K-Group 34.0%
S-Group 45.7%
Suomen Lähikauppa 7.0%
Lidl 6.6%
Others 6.8%
34.0%
Total market €16.6 billion
Source: Nielsen

12. Food trade
1/2015Jukka Erlund12
K-food stores’ focus areas:
• Superior fresh food
departments
• Pirkka and K-Menu private
labels
- Share of sales 19%
• Developments in e-
commerce, personalised
marketing and pricing

13. Food trade in Russia
Jukka Erlund13
• Business was begun in St. Petersburg
- First store in 12/2012
- Net sales for 2013 €71million
- Today, a total of five K-ruoka
stores
• Net sales target for 2017 €500 million
and a positive business result
• ‘Best in Fresh’ concept
− Extensive fresh foods selections
1/2015

14. Jukka Erlund
Home and speciality goods trade
14 1/2015
Total 356 stores
•Net sales €1,362 million, -9.5%
•Operating profit* €-26.7 million (-2.0%), €-29.1 million
•Return on capital employed* -6.6%
*excl. non-recurring items
Division of sales, 2013
Hypermarkets, non-food, €613 m
Department stores, €380 m
Sports, €272 m
Furniture, €196 m
Home electronics, €41 m
Shoes, €42 m
Q4/2013-Q3/2014

15. Improvement of Anttila’s profitability
• Customer driven renewal of K-citymarket
non-food
• Maintaining Intersport Finland’s and Asko’s
and Sotka’s strong brands, market
positions and profitability
• Improvement of Anttila’s profitability
- Concept renewal
- Closing down of 12 department stores
- 6 in 2014, 6 during Q1/2015
- Cost savings
- Personnel reductions total
approximately 400 FTEs
1/2015Jukka Erlund15

16. Building and home improvement trade
Jukka Erlund16
Total 339 stores
1/2015
•Net sales €2,609 million, -2.2%
•Operating profit* €44.7 million (1.7%), €+28.8 million
•Return on capital employed* 6.3%
*excl. non-recurring items
Q4/2013-Q3/2014

17. Building and home improvement trade
• Sales performance of Kesko’s building and
home improvement trade in January-
November -0.2%
- Performance in local currencies +3.2%
• Especially in Norway and Russia, sales
affected by exchange rate movements
- Impact on NOK -7%
- Impact on RUB -16%
• Significant differences in country-specific
market developments
• Strengthening B2B sales
• Strong development of
online services
• Cost efficiency and inventory programs
Jukka Erlund17 1/2015

18. Building permits granted, mil. m3,
moving annual total, Finland
1/2015Jukka Erlund18
Source: Statistics Finland

19. Volkswagen 12.4%
Toyota 11.9%
Skoda 9.2%
Volvo 7.2%
Ford 7.1%
Nissan 6.2%
Audi 5.9%
Kia 5.9%
Seat 1.7%
Others 32.5%
20.0%
Car and machinery trade
Jukka Erlund19 1/2015
•Net sales €1,022 million, -1.6%
•Operating profit* €31.1 million (3.0%),
€-4.1 million
•Return on capital employed* 19.3%
*excl. non-recurring items
Source: TraFi
Q4/2013-Q3/2014
Market share (passenger cars),
new registrations 1-11/2014

20. New registrations of passenger cars in
Finland
Jukka Erlund
Source: Statistics Finland
20 1/2015

21. Kesko continues the preparation of a real
estate arrangement
• The intention is to sell some of the store sites
to a joint venture instead of a REIT.
• Expected to be implemented during H1/2015.
• Kesko would remain as one of its significant
investors and continue operating on the store
sites under long-term leases.
• The fair value of store sites planned to be sold
from Finland and Sweden has been specified
at a maximum of around €670 million.
• Launching depends also on whether it is
possible for Kesko to achieve such terms and
conditions in the arrangement that are
economically justifiable.
• The sale of store sites is estimated to generate
a significant non-recurring profit.
1/2015Jukka Erlund21
Owned properties € 1,423 M
Strategic properties 53%
Standard properties 43%
Development properties 4%
Realisation properties 0%

22. Mikko Helander is Kesko Corporation's
new Managing Director
• Kesko Corporation's Board of Directors has
appointed Mikko Helander, M.Sc. (Tech.), as
Kesko Corporation's Managing Director and
Kesko Group's President and Chief
Executive Officer as from 1 January 2015
• Helander joined Kesko as Kesko
Corporation's Executive Vice President and
Member of the Group Management Board
on 1 October 2014
• Helander has acted as the Chief Executive
Officer of Metsä Board Corporation and as a
Member of the Executive Management
Team of Metsä Group since 2006
• President and CEO Matti Halmesmäki will
retire on 31 May 2015
Jukka Erlund22 1/2015

23. Contact information
• IR@kesko.fi
• www.kesko.fi/investors
• Twitter.com/Kesko_IR
1/2015Jukka Erlund23