Roadshow presentation

1. 1
KESKO’S
ROADSHOW
JUKKA ERLUND
MAY 2016

2. • Net sales €8,610m
• Operating profit* €250m
• ROCE* 12.4%
• Personnel 22,000
• Shareholders 40,000
• Market capitalisation €3.8bn (Mar. 31, 2016)
* excl. non-recurring items
2
KESKO Q1/2016
ROLLING 12 MO

3. 3
OPERATIONS IN
EIGHT COUNTRIES
Norway
5% Sweden
2%
Finland
81%
Lithuania
4%
Latvia
1%
Estonia
2%
Russia
4%
Belarus
1%
Retail sales, € million, 2015
Finland 8,927
Sweden 209
Norway 664
Estonia 136
Latvia 90
Lithuania 366
Russia 311
Belarus 116

4. • K-Group’s sales €10.8bn
• Operations is eight countries
• Over 1.3 million customer visits
every day
• Personnel 40,000
FOR SHOPPING TO BE FUN
4
K-GROUP

5. NET SALES BY DIVISION Q1/2016
ROLLING 12 MO
€4,664m€3,172m
€763m
Grocery trade
-1.3%
Home
improvement
and speciality
goods trade
+1.9%
Car trade +0.6%
54%37%
9%
5
Comparable change

6. INVESTING IN STRATEGIC
GROWTH AREAS
• Grocery trade (Finland, Russia, Kespro)
• Increasing the market share in the Finnish grocery
trade
• Focus on the development of neighbourhood
retailing
• Building and home improvement trade (Europe)
• Increasing building and home improvement trade in
Europe
• Increasing B2B sales
• Car trade (Finland, the Baltic countries)
6

7. Real estate
arrangement
Divestment of
Anttila
Kesko–Senukai
arrangement in
the Baltic
countries
Acquisition of
Suomen
Lähikauppa
Acquisition of
Onninen
7
STRATEGY IMPLEMENTATION IS
PROGRESSING
One unified Kesko – the customer and quality in everything we do

8. GROCERY TRADE
8

9. KESKO GROCERY TRADE
9
Net sales €4,664m
Operating profit* €174m
Operating margin* 3.7%
ROCE* 21.0%
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
* excl. non-recurring items
Q2/2015-Q1/2016

10. RETAIL STORES
Sales 2015
€ million, VAT 0%
Number of stores at
31.12.2015
Concept
1,505+575 81 Hypermarket
1,716 219 Supermarket
1,189 476
Neighbourhood
store
106 9
Compact hyper,
Russia
Others 122 108 Incl. online store
Total 5,214 893
10

11. 11
STRATEGY PROGRESSING AS PLANNED
• Increasing market share
• Increase and development of neighbourhood
store network
• Renewal of K-citymarket chain
• Improvement of quality and service levels
• Improvement of price competitiveness and
price image
• Best digital services in the trading sector
• Development of retailer business model

12. 12
K-GROUP’S NEIGHBOURHOOD RETAIL SERVICES
WILL IMPROVE SIGNIFICANTLY
• K-market chain will be renewed, first
stores opened in April
• Siwa and Valintatalo stores converted
into K-markets within a year
• Selections will improve and price level
decrease, Pirkka products included in
selections
• K-retailers to run all stores within two
years
• Acquisition of Suomen Lähikauppa
enables significant synergies

13. HOME
IMPROVEMENT
AND SPECIALITY
GOODS TRADE
13

14. HOME IMPROVEMENT AND
SPECIALITY GOODS TRADE
14
Net sales €3,172m
Operating profit* €78m
Operating
margin*
2.5%
ROCE* 9.9%
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
* excl. non-recurring items
2015
Q2/2015-Q1/2016

15. 15
STRATEGIC OBJECTIVES OF THE BUILDING AND
HOME IMPROVEMENT TRADE
15
• Kesko #5 in Europe – strong potential for further growth organically or
through acquisitions
• Providing excellent services from the same store network to the three
different customer segments
• Consumer customers
• Project customers
• B2B customers
• A common core for all countries to ensure efficient operations
• Offering the best omni-channel digital services

16. 13.8
12.1
5.6
4.8 4.3
3.4
2.6
0
5
10
15
Groupe
Adeo
Kingfisher OBI Bauhaus K-group
and
Onninen
Hornbach Wolseley
Nordic
Net sales, 2014
KESKO AND K-GROUP ONE OF THE LEADERS IN
ITS FIELD IN EUROPE
Source: Companies’ annual reports, websites,
Baumarktmanager
€bn
16
5/2015

17. GROWTH FROM THE BUILDING AND TECHNICAL
TRADE
17

18. B2B SALES ARE GROWING FASTER THAN
B2C SALES
18
Building and renovation become increasingly technical
Consumers increasingly outsource building to professionals
Growing need for renovation building
Rising standard of living increases the use of services

19. 19
RENOVATION CONSTRUCTION IS INCREASING
index2010=100
Non-residential construction
Infra construction
Residential construction
Renovation construction
Source: Macrobond/The Confederation of Finnish Construction Industries RT
(CFCI), Euroconstruct

20. • B2B customers already account for
40% of the K-Group’s sales
• Acquisition of Onninen increases
the percentage to 60%
• B2B sales have long developed better
than B2C sales
• Building and renovation become
increasingly technical
• Consumers increasingly often
outsource building to professionals
20
B2B SALES CONTINUE TO STRENGTHEN

21. • Onninen’s HEPAC and electrical product
groups expand Kesko’s offering making
it the most comprehensive in the market
• Share of B2B sales rises strongly
• Significant synergies
• Completion of the acquisition is yet to be
approved by competition authorities
21
ACQUISITION OF ONNINEN STRENGTHENS
KESKO’S POSITION IN THE TRADE WITH
BUILDING PROFESSIONALS AND IN TECHNICAL
TRADE

22. CAR TRADE
22

23. CAR TRADE
23
Net sales €763m
Operating profit* €26m
Operating margin* 3.4%
ROCE* 24.1%
Toyota 11.1%
Volkswagen 10.9%
Skoda 9.7%
Ford 7.9%
Nissan 7.3%
Volvo 7.2%
Opel 5.6%
Audi 5.4%
Seat 1.7%
Others 33.6%* excl. non-recurring items
Q1/
2016
Q2/2015-Q1/2016

24. 24
MAXIMISING VALUE CREATION ALSO IN OTHER
BUSINESSES
• Important to have the best platform for Kesko’s small and medium
sized businesses to succeed in tight competition
• Furniture trade (Finland and Estonia)
• Agricultural trade (Finland)
• Machinery trade (Finland and the Baltic countries)
• Shoe trade (Finland)
• Sports trade (Finland and Russia)
• All options which improve competitiveness of other businesses and
retailer entrepreneurs are possible

25. FINANCIALS
25

26. NET SALES BY QUARTER
Q1 COMPARABLE NET SALES AT PREVIOUS YEAR’S LEVEL
26
2,500
2,000
1,500
1,000
500
0
Q4
2,166
2,267
Q3
2,203
2,304
Q2
2,227
2,371
Q1
2,013
2,0822,129
€m
201620152014

27. OPERATING PROFIT EXCL. NON-RECURRING ITEMS
BY QUARTER
27
62
84
68
19
59
82
76
27
32
0
20
40
60
80
100
Q4Q3Q2Q1
€m
20162014 2015

28. 28
FINANCIAL TARGETS AND
CAPITAL EXPENDITURE
• Return on capital employed 14%
• Return on equity 12%
• Interest bearing net debt / EBITDA < 2.5
• Capital expenditure in 2015–2017 approximately €750 million
• Excluding possible acquisitions
Dividend policy: Kesko Corporation distributes at least 50% of its earnings
per share excluding non-recurring items as dividends, taking however the
company's financial position and operating strategy into account.

29. RETURN ON CAPITAL EMPLOYED
EXCL. NON-RECURRING ITEMS, ROLLING 12 MO
29
14.0
13.1
9.0 9.8 9.9
11.7 12.4
0
4
8
12
16
2010 2011 2012 2013 2014 2015 Q1 2016
%
Target
14%

30. RETURN ON CAPITAL EMPLOYED BY DIVISION
MOVING 12 MO, EXCL. NON-RECURRING ITEMS
30
Group totalHome improvement
and speciality
goods trade
Grocery trade Car trade
%
21.0
9.9
24.1
12.4
0
5
10
15
20
25
30

31. 31
0
50
100
150
200
250
300
350
400
450
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Capital expenditure in store sites Acquisitions Other capital expenditure
average
CAPITAL EXPENDITURE
€m

32. STRONG FINANCIAL POSITION
32
31.3.2016 31.3.2015
Equity ratio, % 54.8 51.5
Liquid assets, €m 746 506
Cash flow from operating activities, €m -96 -75
Capital expenditure, €m 51 52

33. EARNINGS / SHARE AND DIVIDEND
33
2010 2011 2012 2013 2014 2015
2.5
2.0
1.5
1.0
0.5
0.0
2.50
1.70
1.50
1.65
1.40
1.68
1.20
1.47
1.20
1.84
1.30
1.78
Dividend (2015 Board’s proposal to the AGM)
Earnings / share excl. non-recurring items
€
€

34. 34
REAL ESTATE IN 2015
34
Owned properties
Country
Area,
1,000 m2
Finland 540
Other Nordic countries 66
Baltic countries and Belarus 109
Russia 191
Total
Carrying amount
906
€1,107m
Leased properties total
1,000 m2
2,951
Classification
Strategic properties 64%
Standard properties 26%
Development properties 9%
Realisation properties 1%

35. 35
SHAREHOLDERS 3/2016
The largest registered
shareholders by number of
shares
Foreign ownership of
B shares 39%
1 K-retailers´ Association 3,899,938 3.90
2 Vähittäiskaupan Takaus Oy 3,491,771 3.49
3 Kruunuvuoren Satama Oy 3,438,885 3.44
4
Ilmarinen Mutual Pension
Insurance Company 2,800,632 2.80
5 Valluga-sijoitus Oy 1,340,439 1.34
6
Varma Mutual Pension Insurance
Company 1,130,986 1.13
7
Foundation for Vocational Training
in the Retail Trade 1,122,832 1.12
8 Oy The English Tearoom Ab 1,000,000 1.00
9 The State Pension Fund 950,000 0.95
10 Elo Pension Company 896,968 0.90
%

36. MARKET
SITUATION AND
OUTLOOK
36

37. 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
1/15
7/15
1/16
Expectations for own finances
Expectation, 21st century
average
CONSUMER CONFIDENCE IN FINLAND
37
odotukset omasta taloudesta seuraavan 12 kk:n kuluttua
Source: Statistics Finland

38. -2,0
0,0
2,0
4,0
6,0
8,0
10,0
1/2013
2/2013
3/2013
4/2013
5/2013
6/2013
7/2013
8/2013
9/2013
10/2013
11/2013
12/2013
1/2014
2/2014
3/2014
4/2014
5/2014
6/2014
7/2014
8/2014
9/2014
10/2014
11/2014
12/2014
1/2015
2/2015
3/2015
4/2015
5/2015
6/2015
7/2015
8/2015
9/2015
10/2015
11/2015
12/2015
1/2016
2/2016
latestmonth
Estonia
Sweden
Lithuania
Latvia
Norway
Finland
38
RETAIL TRADE TRENDS IN OPERATING COUNTRIES
ROLLING 12 MO
Latest
month
Source: Eurostat, excl. motor vehicles and fuels
%(rolling12mo)

39. OUTLOOK
39
Estimates for the outlook of Kesko Group's net sales and operating profit excluding
non-recurring items are given for the 12-month period following the reporting period
(4/2016-3/2017) in comparison with the 12 months preceding the end of the reporting
period (4/2015-3/2016).
The general economic situation and the expected trend in consumer demand vary in
Kesko’s different operating countries. In Finland, owing to the weak trend in
consumers’ purchasing power, the trading sector’s performance is expected to
remain modest, which may be complicated further by actions taken to balance the
public finances. In the Finnish grocery trade, intense competition is expected to
continue. The markets for the Finnish building and home improvement trade and for
the car trade are expected to improve slightly. With respect to foreign countries, the
economic situation and consumers’ purchasing power, as well as the outlook in
Russia are still weak. In Sweden and Norway and the Baltic countries, the market is
expected to grow.
Kesko Group's net sales for the next 12 months are expected to exceed the level of
the preceding 12 months. The operating profit excluding non-recurring items for the
next 12-month period is expected to equal the level of the preceding 12 months. The
outlook does not take account of the acquisition of Onninen, in respect of which
estimates will be given in connection with its completion.

40. 40
THE WORLD’S
MOST
SUSTAINABLE
RETAIL OPERATOR
Davos, January 2015 and 2016:
’The Global 100 Most Sustainable
Corporations in the World’ list.

41. KESKO IS THE MOST RESPONSIBLE FOOD AND
STAPLES RETAILER IN THE WORLD
41
In 2015, Kesko rose to CDP’s Climate A List for the first time
At the top of the Nordic Climate Disclosure Leadership climate index since 2011.
In 2015, Kesko was awarded the full 100 points
In ’The Global 100 Most Sustainable Corporations in the World’ list since 2005
Included in the FTSE4Good index since 2009
Included in the STOXX Global ESG Leaders index family since 2011
Included in the Dow Jones sustainability indexes DJSI World and DJSI Europe
2003-2014

42. Q1 REPORT
42

43. Q1 HIGHLIGHTS
43
• Kesko’s net sales stable, comparable change +0.2%
• Profitability improved, operating profit excluding non-recurring items
€32.3 million (€26.5 million)
• Return on capital employed continued to improve to 12.4% (10.2%)
• Good profitability of the grocery trade, acquisition of Suomen Lähikauppa will
significantly increase net sales
• Profitability of the building and home improvement trade continued to improve,
strong growth in B2B sales
• Kesko entered into an agreement to acquire Onninen which will significantly
strengthen Kesko’s building and technical trade
• Sales of the car trade increased markedly, profitability at a good level

44. KEY PERFORMANCE INDICATORS
44
Q1/2016 Q1/2015
Net sales, €m 2,013 2,082
Operating profit*, €m 32.3 26.5
Operating margin*, % 1.6 1.3
Profit before tax, €m 35.7 -103.7
Earnings per share*, € 0.26 0.19
Return on capital employed*, %,
rolling 12 mo
12.4 10.2
Return on equity*, %, rolling 12 mo 8.7 7.9
*excl. non-recurring items

45. NET SALES BY DIVISION Q1/2016
€1,094m
€695m
€225m
Grocery trade
–0.5%54%
35%
11%
45
Car trade +7.1%
Home improvement
and speciality goods
trade –0.4%
Comparable change

46. GROCERY TRADE
46

47. GROCERY TRADE, Q1
47
• K-food stores’ retail sales at the previous year’s level, up 0.1%
• Strengthening of quality and price competitiveness continued in
accordance with strategy
• Change in the grocery market prices around -1.5%
• Despite intense price competition, profitability at a good level
• Renewal of Kesko’s neighbourhood retail services has started
• All K-markets will be renewed
• Siwa and Valintatalo stores acquired from Suomen Lähikauppa will be
converted into K-markets
• The first renewed Neste K service station opened in Tampere
• Objective is a network of nearly 100 stations extending across the
country

48. NET SALES
Q1 COMPARABLE CHANGE –0.5%
48
500
0
1,500
1,000
Q1/2016
1,094
Q1/2015
1,103
€m

49. OPERATING PROFIT
EXCL. NON-RECURRING ITEMS
49
0
25
50
Q1/2016
31.3
Q1/2015
34.9
€m

50. HOME
IMPROVEMENT
AND SPECIALITY
GOODS TRADE
50

51. HOME IMPROVEMENT AND SPECIALITY GOODS
TRADE, Q1
51
• Sales growth of B2B trade strengthened
• Improvement of profitability continued
• Good performance in the building and home improvement trade
outside Finland and in the agricultural and machinery trade
• Divestment of Anttila in March 2015
• Market share of the building and home improvement trade strengthened
especially in Finland
• Acquisition of Onninen will significantly strengthen Kesko’s building and
technical trade
• Completion of acquisition expected in H1/2016
• Acquisition is subject to EU Commission’s approval, FCCA’s
approval was obtained in April
• Kesko Senukai’s objective is growth in the Baltic countries and Belarus

52. NET SALES
Q1 IN LOCAL CURRENCIES EXCL. ANTTILA -0.4%
52
695
773
1,000
500
0
Q1/2016Q1/2015
€m
Reported net sales, €, incl. Anttila

53. OPERATING PROFIT
EXCL. NON-RECURRING ITEMS
53
-20
-10
0
10
-14.2
Q1/2016Q1/2015
0.3
€m

54. CAR TRADE
54

55. CAR TRADE, Q1
55
• Total car trade market performance in January-March was strong
• VV-Auto’s net sales growth +7.1%
• Combined market share of passenger cars and vans in January-March
18.5% (18.8%)
• Profitability remained at a good level, operating profit €9.4 million
(€9.8 million)

56. NET SALES
Q1 +7.1%
56
225
210
0
100
200
300
Q1/2016Q1/2015
€m

57. OPERATING PROFIT
EXCL. NON-RECURRING ITEMS
57
0
5
10
Q1/2016
9.8 9.4
Q1/2015
€m

59. 59
CONTACT INFORMATION
IR@kesko.fi
www.kesko.fi/investor
Twitter.com/Kesko_IR