Q3 Interim Report material

1. Interim report
January-September 2014
22 October 2014
CFO Jukka Erlund

2. Kesko’s profitability at the previous year’s
level
• Kesko’s net sales were €6.8bn, change -2.2%
• Operating profit excl. non-recurring items was €171m (€172m) and
return on capital employed excl. non-recurring items was 10.0% (9.7%)
– Profitability remained at a good level in the food trade and the car trade,
improved significantly in the building and home improvement trade and
weakened in the home and speciality goods trade
• Strong financial position
– Liquid assets €503m (€537m), equity ratio 54.2% (52.9%)
– Kesko continues to look into setting up a real estate fund
• Kesko seeks more competitive multi-channel home improvement and speciality
goods trade
– The aim is that in 2015, Kesko’s reportable segments are the grocery trade,
the home improvement and speciality goods trade, and the car and
machinery trade.
• Kesko Group's net sales and operating profit excluding non-recurring items for the
next 12 months are expected to remain at the level of the preceding 12 months.
Q3 2014 Media 2 and analyst briefing 22.10.2014

3. Consumers’ expectations for own finances
Own finances in 12 months
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
Q3 2014 Media 3 and analyst briefing
Source: Statistics Finland
22.10.2014

4. Profit for 1-9/2014
Q3 2014 Media 4 and analyst briefing
1-9/2014 1-9/2013
Net sales, €m 6,804 6,953
Fixed costs excl. non-recurring items, €m 1,284 1,300
Operating profit excl. non-recurring items,
€m
171 172
Non-recurring items, €m -51 8
Net financial items, €m -1 -5
Income tax, €m 31 52
Net profit for the period, €m 87 122
22.10.2014

5. Financial position
1-9/2014 1-9/2013 1-12/2013
Equity ratio, % 54.2 52.9 54.5
Liquid assets, €m 503 537 681
Capital expenditure, €m 151 125 171
Interest-bearing net liabilities, €m -3 31 -126
Inventories, €m 803 776 797
Q3 2014 Media 5 and analyst briefing 22.10.2014

6. Net sales by division (€m)
Q3 2014 Media 6 and analyst briefing
1-9/2014 Change 7-9/2014 Change
Food trade 3,197 -1.3% 1,085 -1.0%
Home and speciality
goods trade
923 -9.3% 323 -8.1%
Building and home
improvement trade
2,013 +0.1% 696 -1.9%
Car and machinery
trade
796 -1.9% 240 -7.7%
Group total 6,804 -2.2% 2,304 -2.9%
22.10.2014

7. Anttila accounts for less than 4% of
Kesko’s net sales
Home and speciality goods trade
1,362
(15%)
1,022
(11%)
2,609
(28%)
Others
Intersport
7 Q3 2014 Media and analyst briefing 22.10.2014
4,345 Food trade
(47%)
Building and home
improvement trade
Car and machinery trade
K-citymarket
non-food
177 605
346
Indoor
Anttila
43
195
Net sales, moving 12 mo (10/2013-9/2014)

8. Operating profit excl. non-recurring items
by quarter
18.6
69.8
83.6
66.8
19.1
67.6
84.0
100
80
60
40
20
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3
Q3 2014 Media 8 and analyst briefing
2013 2014
€m
22.10.2014

9. Operating profit excl. non-recurring items
by division (€m)
Q3 2014 Media 9 and analyst briefing
1-9/2014 Change 7-9/2014 Change
Food trade 155.7 0.7 56.3 0.3
Home and speciality
goods trade
-48.3 -18.4 -7.4 -5.2
Building and home
improvement trade
45.8 19.0 29.6 5.7
Car and machinery trade 27.8 -2.8 8.7 -1.1
Group total 170.8 -1.2 84.0 0.4
22.10.2014

10. Year-on-year change in fixed costs
excluding non-recurring items
10.3%
7.5% 8.0%
12%
10%
8%
6%
4%
2%
0%
-2%
-4%
Q3 2014 Media 10 and analyst briefing
1.2%
-4.0% -4.5% -4.0%
-2.0% -1.3%
-1.0%
-1.6%
-6%
22.10.2014

11. Return on capital employed
excl. non-recurring items, moving 12 mo
Q3 2014 Media and analyst briefing
-6.6%
6.3%
19.3%
10.0%
%
30
25
20
15
10
5
0
-5
-10
Home and Group total
speciality
goods trade
Food
trade
Car and
machinery
trade
Building and
home
improvement
trade
11
26.1%
€782m €403m €714m €161m €2,373m
Capital
employed:
22.10.2014

12. In the food trade,
profitability at a good level
-1.0%
1,095 1,085
3,239 3,197
3500
3000
2500
2000
1500
1000
500
0
7-9/13 7-9/14 1-9/13 1-9/14
200
150
100
50
Q3 2014 Media 12 and analyst briefing
-1.3%
• Kesko Food’s net sales were down 1.3%
- Decline in purchasing power is also
reflected on food trade
- Price increases in the food trade have
stopped
- K-food stores’ sales below market
performance
• Performance of sales and profitability of
food stores in Russia were as planned
• Profitability improved by cost savings
• Capital expenditure €72m (€68m)
• Five new K-supermarkets opened in
Finland and the fifth K-ruoka in
155.0 155.7
56.0 56.3 St. Petersburg
0
7-9/13 7-9/14 1-9/13 1-9/14
22.10.2014
Net sales, €m
Operating profit excl.
non-recurring items, €m

13. In the home and speciality goods trade,
consumer demand continued to weaken
-8.1%
351 323
1,018
-9.3%
923
1200
1000
800
600
400
200
0
7-9/13 7-9/14 1-9/13 1-9/14
0
-10
-20
-30
-40
Q3 2014 Media 13 and analyst briefing
• Anttila’s financial performance declined
and was clearly loss-making
- Six department stores have been
closed, six will be closed in the first
part of 2015
• Profits of K-citymarket non-food,
Intersport Finland and Indoor remained at
a good level despite sales decline
• K-citymarket non-food is planned to be
transferred to the grocery division at the
beginning of 2015
• Sales of online stores increased
− Musta Pörssi will continue as an
online store
• Capital expenditure €12m (€17m)
-2.2 -7.4
-29.9
-48.3
-50
7-9/13 7-9/14 1-9/13 1-9/14
22.10.2014
Net sales, €m
Operating profit excl.
non-recurring items, €m

14. In the building and home improvement trade,
market share increased and profitability
improved
-1.9%
710 696
+0.1%
2,012 2,013
2500
2000
1500
1000
500
0
7-9/13 7-9/14 1-9/13 1-9/14
Q3 2014 Media 14 and analyst briefing
• Net sales of the building and home
improvement trade at the previous year’s
level, in local currencies net sales were up
3.7%
• Market position of K-rauta and Rautia in
Finland continued to strengthen
• Operating profit increased significantly
due to sales growth and enhancement
measures
− Profit improved especially in foreign
operations
• Capital expenditure €44m (€26m)
23.9
29.6 26.8
45.8
50
40
30
20
10
0
7-9/13 7-9/14 1-9/13 1-9/14
22.10.2014
Net sales, €m
Operating profit excl.
non-recurring items, €m

15. Kesko opened new K-ruoka,
K-rauta and Intersport stores
in Kamenka shopping centre,
St. Petersburg on 18
September 2014
Q3 2014 Media 15 and analyst briefing 22.10.2014

16. In the car and machinery trade, profitability
at a good level, Volkswagen continued as
market leader
Net sales, €m
-7.7%
260 240
-1.9%
811 796
1000
800
600
400
200
0
7-9/13 7-9/14 1-9/13 1-9/14
40
30
20
10
Q3 2014 Media 16 and analyst briefing
• Market share of Audi, Volkswagen and
Seat 20.7% (20.5%)
• Change in VV-Auto’s net sales +2.5%
- Market performance of new
registrations of passenger cars and
vans in Finland +2.4%
• Change in Konekesko’s net sales -12.2%,
weak market performance in the
agricultural machinery trade
• Profitability of the car trade at a good level
due to cost reductions
9.8 8.7
30.6
27.8
0
7-9/13 7-9/14 1-9/13 1-9/14
22.10.2014
Operating profit excl.
non-recurring items, €m

17. Capital expenditure
41
48
35
47
43
56
52
60
50
40
30
20
10
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3
Q3 2014 Media 17 and analyst briefing
2013 2014
€m
22.10.2014

18. Future outlook
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 (10/2014-9/2015) in comparison
with the 12 months preceding the reporting period (10/2013-9/2014).
Future prospects for the general economic situation and consumer
demand continue to be characterised by significant uncertainty. Due to
the weakened economic situation and the decline in consumers'
purchasing power, demand in the trading sector is expected to remain
weak.
Kesko Group's net sales and operating profit excluding non-recurring
items for the next 12 months are expected to remain at the level of the
preceding 12 months.
Q3 2014 Media 18 and analyst briefing 22.10.2014

19. 19
Thank you!
Q3 2014 Media and analyst briefing 22.10.2014