Interim report, 22 July 2015

1. 11
INTERIM REPORT
JANUARY-JUNE
2015
PRESIDENT AND CEO MIKKO HELANDER
22 JULY 2015

2. KEY EVENTS IN Q2
• K-food stores’ market share is estimated to have increased
• Profitability of the home improvement and speciality goods trade continued to
improve
• Real estate arrangement was completed as planned,
positive cash flow effect €403 million
• Liquid assets rose to €843 million, Kesko has a very strong financial position
• New strategy was published
2

3. FINANCIAL PERFORMANCE
3
Q2/
2015
Q2/
2014
H1/
2015
H1/
2014
Net sales, €m 2,227 2,371 4,310 4,499
Operating profit, €m 176 69 72 56
Operating profit excl. non-recurring
items, €m
76 68 103 87
Operating margin excl. non-recurring
items, %
3.4 2.9 2.4 1.9
Net profit for the period, €m 153 54 42 42
Net profit for the period excl. non-
recurring items, €m
58 52 75 66

4. NET SALES IN LOCAL CURRENCIES
EXCL. ANTTILA IN Q2 -2.2% AND H1 -0.8%
TOTAL CHANGE FOR Q2 -6.0% AND FOR H1 -4.2%
4
5,000
4,000
3,000
2,000
1,000
0
H1/2015
4,310
H1/2014
4,499
Q2/2015
2,227
Q2/2014
2,371
€m
Reported net sales, €, incl. Anttila

5. Q2 NET SALES BY DIVISION
€1,149m
€797m
€277m
Grocery trade
Home
improvement
and speciality
goods trade
Car and machinery
trade
52%
36%
12%
5

6. OPERATING PROFIT EXCL. NON-RECURRING
ITEMS IMPROVED IN Q2 AND H1
6
0
20
40
60
80
100
120
H1/2015
102.9
H1/2014
86.7
Q2/2015
76.4
Q2/2014
67.6
€m

7. STEADY PROFIT PERFORMANCE CONTINUES
OPERATING PROFIT EXCL. NON-RECURRING ITEMS
7
0
20
40
60
80
100
Q2/2015
76.4
Q1/2015
26.5
Q4/2014
61.9
Q3/2014
84.0
Q2/2014
67.6
Q1/2014
19.1
Q4/2013
66.8
Q3/2013
83.6
Q2/2013
69.8
Q1/2013
18.6
€m

8. RETURN ON CAPITAL EMPLOYED INCREASES
EXCL. NON-RECURRING ITEMS, ROLLING 12 MO
8
0
2
4
6
8
10
12
Q2/2015
10.9
Q1/2015
10.2
Q4/2014
9.9
Q3/2014
10.0
Q2/2014
9.9
Q1/2014
9.9
Q4/2013
9.8
Q3/2013
9.7
Q2/2013
9.3
Q1/2013
8.8
%

9. STRONG CASH FLOW ALSO WITHOUT
REAL ESTATE ARRANGEMENT
9
-200
-100
0
100
200
300
400
500
600
Q2/2015
541.1
Q1/2015
-139.3
Q4/2014
98.6
Q3/2014
82.4
Q2/2014
79.9
Q1/2014
-138.5
Q4/2013
75.8
Q3/2013
80.3
Q2/2013
206.1
Q1/2013
-100.5
€m
Cash flow after capital expenditure

10. FINANCIAL POSITION
10
30.6.2015 30.6.2014
Equity ratio, % 52.2 52.3
Liquid assets, €m 843 461
Interest-bearing net liabilities, €m -359 78
Capital expenditure, €m 110 99
Return on capital employed*, % 10.9 9.9
Return on equity*, % 8.4 8.3
* Excl. non-recurring items, rolling 12 mo

11. 11
GROCERY TRADE
11

12. NET SALES FOR Q2 AND H1
12
2,500
2,000
1,500
1,000
500
0
2,252
H1/2014
2,304
Q2/2015
1,149
Q2/2014
1,202
H1/2015
€m

13. OPERATING PROFIT EXCL. NON-RECURRING
ITEMS FOR Q2 AND H1
13
0
20
40
60
80
100
120
H1/2015
78.2
H1/2014
100.7
Q2/2015
43.3
Q2/2014
55.3
€m

14. GROCERY TRADE IN Q2
• K-food stores’ market share in
Finland is estimated to have
increased
• Profitability improved to 3.8% from
the first months of the year
(Q1: 3.2%)
• Sales in Russia increased by
36% in roubles
• Kespro’s market share increased
and profitability remained at a good
level
14

15. MARKET SHARE IS ESTIMATED TO HAVE
INCREASED SINCE APRIL, NO SIGNIFICANT
CHANGE IN THE LONG TERM
15
33.4 33.9 33.7 34.2 35.0 35.3 34.7 34.0 33.1
0
10
20
30
40
2006 2007 2008 2009 2010 2011 2012 2013 2014
%

16. K-GROUP’S PERFORMANCE IN THE GROCERY
TRADE HAS BEEN GOOD
• Exceptional operating environment,
consumers’ purchasing power has declined
for three years
• Due to intense competition and consumers’
decreased purchasing power, food prices
have fallen by 1% in 2015
• K-Group has succeeded by investing in
both price and quality
• As the economic cycle turns, the K-Group
will have even better preconditions for
success
16

17. HOME IMPROVEMENT
AND SPECIALITY
GOODS TRADE
17

18. NET SALES IN LOCAL CURRENCIES
EXCL. ANTTILA IN Q2 +0.1% AND H1 +1.0%
TOTAL CHANGE FOR Q2 -10.4% AND FOR H1 -8.0%
18
797
890
2,000
1,500
1,000
500
0
H1/2015
1,519
H1/2014
1,651
Q2/2015Q2/2014
€m
Reported net sales, €, incl. Anttila

19. OPERATING PROFIT EXCL. NON-RECURRING
ITEMS IMPROVED CLEARLY IN Q2 AND H1
19
-40
-20
0
20
40
H1/2015
18.7
H1/2014
-25.6
Q2/2015
30.1
Q2/2014
5.8
€m

20. HOME IMPROVEMENT AND
SPECIALITY GOODS TRADE
IN Q2
• Building and home improvement trade
• Market share is estimated to have
increased in Finland, Sweden, the
Baltics and Russia
• Operating profit has improved for nine
consecutive quarters
• Best profit improvement was seen in
Sweden
• In the speciality goods trade, K-maatalous
improved its result in a difficult operating
environment
20

21. 21
CAR AND MACHINERY
TRADE
21

22. NET SALES FOR Q2 AND H1
22
538556
277283
0
200
400
600
Q2/2015Q2/2014 H1/2014 H1/2015
€m

23. OPERATING PROFIT EXCL. NON-RECURRING
ITEMS FOR Q2 AND H1
23
0
10
20
H1/2015
17.9
H1/2014
19.1
Q2/2015
11.0
Q2/2014
10.9
€m

24. CAR AND MACHINERY TRADE
IN Q2
• Profitability remained at a good level
despite the challenging operating
environment
• Uncertainty related to car taxation
has been removed
• Volkswagen continues as the market
leader
• Net sales growth of the machinery
trade 3.4%, profitability improved
• Yamarin boats had good sales
performance
24

25. MARKET SITUATION
AND FUTURE
OUTLOOK
25

26. 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
Expectations for own finances
Expectation, 21st century
average
CONSUMER CONFIDENCE IN FINLAND
26
odotukset omasta taloudesta seuraavan 12 kk:n kuluttua
Lähde: Tilastokeskus
Source: Statistics Finland

27. WEAK TREND IN THE RETAIL TRADE IN FINLAND
27
Source: Eurostat, excl. motor vehicles and fuels
-2
0
2
4
6
8
10
%(rolling12mo)
Estonia
Lithuania
Norway
Sweden
Latvia
Finland

28. FUTURE OUTLOOK
28
Estimates of the future outlook for Kesko Group's net sales and operating profit
excluding non-recurring items are given for the 12 months following the reporting
period (7/2015-6/2016) in comparison with the 12 months preceding the
reporting period (7/2014-6/2015).
The general economic situation and the expected trend in consumer demand
vary in Kesko’s different operating countries. In Finland, the trading sector’s
performance is expected to remain weak and the tough competitive situation is
expected to continue. In Sweden, Norway and the Baltic countries, the growth in
demand in the trading sector is expected to continue. In Russia, the economic
situation and consumers’ purchasing power are estimated to remain weak.
Kesko Group's net sales for the next 12 months are expected to be lower than
the level of the preceding 12 months and the operating profit excluding non-
recurring items for the next 12 months is expected to exceed the level of the
preceding 12 months.

29. THE TRAIN KEEPS RUNNING…
• Loss-making department store trade Anttila’s divestment
• Profitability problems in the building and home improvement trade in Sweden
and Norway clear profitability improvement
• Real estate arrangement incomplete real estate arrangement completed
• Declining food trade market share market share is estimated to have
increased
• Strategy new focused strategy
29