ANALYSTMEETINGJUKKA ERLUND18 DEC. 2015

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15

La

test m

onth

Estonia

Sweden

Lithuania

Norway

Latvia

Finland

2

RETAIL TRADE TRENDS IN OPERATING COUNTRIESROLLING 12 MO

Source: Eurostat, excl. motor vehicles and fuels

% (

roll

ing

12

mo

)

Latest

month

3

Net sales, €m 9,285 9,235 9,166 9,071 9,024 8,881 8,780

Gross margin, % 13.7 13.8 13.8 13.7 13.6 13.5 13.3

Operating profit*, €m 239.3 237.2 237.6 232.6 240.0 248.8 247.2

EPS*, basic, € 1.71 1.75 1.82 1.65 1.69 1.72 1.66

Liquid assets, €m 532 461 503 598 506 843 858

Return on capital

employed*, %9.9 9.9 10.0 9.9 10.2 10.9 11.3

Equity ratio, % 53.2 52.3 54.2 54.5 51.5 52.2 54.2

Capital expenditure, €m 173 181 197 194 202 205 195

Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15

*Excl. non.recurring items

KESKO’S KEY FIGURES, ROLLING 12 MONTHS

4

OPERATING MARGIN BY DIVISIONEXCL. NON-RECURRING ITEMS

Q1/

2014

Q2/

2014

Q3/

2014

Q4/

2014

Q1/

2015

Q2/

2015

Q3/

2015

Grocery trade 4.1 4.6 5.1 4.9 3.2 3.8 3.8

Home improvementand speciality goods

trade

-4.1 1.0 2.2 0.4 -1.8 3.9 4.2

Car trade 4.6 3.7 3.6 3.0 4.7 3.4 3.5

Total 0.9 2.9 3.6 2.7 1.3 3.4 3.7

KESKO GROUP’S SALES 1–11/2015

5

1.1. - 30.11.2015 Change, %

€ million Change,

%

in local

currencies

excl. Anttila

Grocery trade, total 4,250.8 -1.7 -0.9

Home improvement and speciality goods trade,

Finland 1,639.3 -12.5 -1.2

Home improvement and speciality goods trade,

other countries 1,448.8 -3.5 +5.6

Home improvement and speciality goods

trade, total 3,088.1 -8.5 +2.1

Car trade, total 707.7 -3.5 -3.5

Grand total 8,054.2 -4.3 0.0

Finland, total 6,512.2 -4.5 -1.8

Other countries, total 1,542.0 -3.4 +7.4

Grand total 8,054.2 -4.3 0.0

STRONG FINANCIAL POSITION

6

Liquid assets €858m €503m

Interest bearing net

liabilities€-394m €-3m

Equity ratio 54.2% 54.2%

Q3/2015 Q3/2014

7

ROCE AND ROEEXCL. NON-RECURRING ITEMS, %

12.4

14.7

10.2

7.4

14.013.1

9.09.8 9.9

11.3

14.0

10.0

14.6

8.1

3.8

8.7 8.8

6.97.7 7.6 8.0

12.0

0

2

4

6

8

10

12

14

16

2006 2007 2008 2009 2010 2011 2012 2013 2014 Q3/2015 target

ROCE ROE

7

CAPITAL EXPENDITURE IN STRATEGICGROWTH AREAS

• Grocery trade

• Building and home improvement trade

• Car trade

• Capital expenditure in range of €250 million / year,

excluding possible acquisitions

• Also acquisitions are considered in all three strategic

growth areas

8

KEY STRATEGIC OBJECTIVES

9

• Turning the market share in the Finnish grocery trade around

• Increasing the building and home improvement trade in Europe

• Strengthening the market leadership in the Finnish car trade

• The best omni-channel customer experience in the trading sector

• One unified Kesko, harvesting synergies

KESKO TO INVEST IN FINLAND BY ACQUIRING SUOMEN LÄHIKAUPPA

• Kesko has made an agreement to acquire the whole share capital of Suomen

Lähikauppa Oy from the private equity investment firm Triton

• Net sales of Suomen Lähikauppa in 2014 were €999.2 million

• Suomen Lähikauppa has 643 neighbourhood stores and 4,100 employees

• Transaction price of the debt-free acquisition, structured as a share purchase,

is approximately €60 million

• Kesko estimates that its capital expenditure in 2015-2017 will decrease from

the approximately €1 billion announced in the strategy to €750 million,

excluding possible acquisitions

10

GROCERY TRADE

11

• Net sales €4,684m, change in local

currencies -1.5%

• Operating profit* €185m (4.0%)

• ROCE* 20%

*excl. non-rec. items

Q4/2014-Q3/2015 (12 months)

11

• Strengthening of competitiveness is

progressing as planned

• Price trend in Finnish grocery trade

continues to decline (-1%)

• Sales in Russia in 1-9/2015, change

in local currency +34.5%, in euros

-2.4%

0

10

20

30

40

50

60

70

12

SALES, CHANGE %,IN LOCAL CURRENCIES1-11/2015

OPERATING PROFITEXCL. NON-REC. ITEMS

-4.5

0.6

7.6

-6.0

-3.3

-0.9-1.1

0.5

-0.4

-2.2

0.5

-8

-6

-4

-2

0

2

4

6

8% €m

PROGRESS OF GROCERY TRADE STRATEGY

• Expansion and renewal of store site network and renewal of concepts

• Acquisition of Suomen Lähikauppa

• Improving price competitiveness

• Some 300 K-Menu private label products

• K-Myllypuro boldly tests different food store concepts and models

• Kantar: Store of the Week in the World

• Digital services, such as K-ruoka app

13

GROCERY TRADE PERFORMANCE, TREND

14

60

70

80

90

100

110

120

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Net sales Volume index

• Market share of the K-Group’s

building and home improvement

stores has strengthened in Finland,

Norway, the Baltic countries and

Russia

• In Finland, market share has

strengthened by some +1 pp

• Profitablity has improved in 10

consecutive quarters

HOME IMPROVEMENT AND SPECIALITY GOODS TRADE

15

• Net sales €3,351m, comparable

change +1.6%

• Operating profit* €60m (1.8%)

• ROCE* 7%

*excl. non-rec. items

Q4/2014-Q3/2015

15

-40

-30

-20

-10

0

10

20

30

40

16

SALES, CHANGE %,IN LOCAL CURRENCIES1-11/2015*

OPERATING PROFITEXCL. NON-REC. ITEMS

%€m

*excl. Anttila

-0.8

3.1

1.8

-1.4-1.2

3.9

8.7

1.8

2.8

-0.9

6.1

-2

0

2

4

6

8

10

STRATEGIC OBJECTIVES OF BUILDING AND HOME IMPROVEMENT TRADE

• Kesko #5 Europe – strong potential to grow organically or through

acquisitions

• We offer excellent services from a single store network to three different

customer segments

• Business customers

• Project customers

• Consumer customers

• Common core for all operating countries to ensure operating efficiency

• We offer the best digital services on all channels

17

• In November, VW #2 in new

registrations of passenger cars

• Remedial solution proposals of NOx

vehicles have been presented to

and approved by the authorities

• Repair campaign will start in

Finland next spring, mainly as

software updates

CAR TRADE

18

• Net sales €745m, -3.0%

• Operating profit* €27m (3.7%)

• ROCE* 29%

*excl. non-rec. items

Q4/2014-Q3/2015

18

19

SALES, CHANGE %,1-11/2015

OPERATING PROFITEXCL. NON-REC. ITEMS

-11.4

-5.3

4.6

-2.5

-9.0

1.3

-2.1

-4.8

-0.1

0.2

-7.3

-12

-10

-8

-6

-4

-2

0

2

4

6

%

0

2

4

6

8

10

12€m

NEW REGISTRATIONS OF PASSENGER CARSIN FINLAND

20

Soure: Statistics Finland

NEW REGISTRATIONS OF PASSENGER CARS 14.12.2015

Brand December

December

mo % Prev. Prev. mo %

Change in

month, % Cum Cum. mo % Cum prev. Prev. mo %

K

u

VOLKSWAGEN 435 13,2 827 11,7 10,5 12 209 11,7 12 988 12,2

TOYOTA 404 12,2 836 11,8 1,5 11 738 11,3 12 558 11,8

FORD 308 9,3 436 6,1 48,4 8 309 8,0 7 424 7,0

SKODA 283 8,6 589 8,3 0,9 9 528 9,1 9 649 9,1

VOLVO 263 8,0 575 8,1 -3,9 7 036 6,8 7 695 7,2

OPEL 155 4,7 193 2,7 68,7 5 252 5,0 4 507 4,2

RENAULT 151 4,6 297 4,2 6,8 2 414 2,3 1 737 1,6

KIA 138 4,2 268 3,8 8,2 6 337 6,1 6 028 5,7

AUDI 137 4,1 496 7,0 -42,0 5 122 4,9 6 285 5,9

NISSAN 132 4,0 342 4,8 -18,9 7 102 6,8 6 437 6,1

HYUNDAI 129 3,9 107 1,5 153,2 2 593 2,5 2 158 2,0

BMW 121 3,7 465 6,6 -45,3 4 547 4,4 5 025 4,7

MERCEDES-BENZ 119 3,6 525 7,4 -52,4 4 882 4,7 5 631 5,3

DACIA 80 2,4 127 1,8 32,3 1 174 1,1 1 358 1,3

PEUGEOT 78 2,4 225 3,2 -27,2 2 652 2,5 2 591 2,4

HONDA 69 2,1 161 2,3 -10,0 2 437 2,3 2 934 2,8

SEAT 57 1,7 159 2,2 -24,7 1 598 1,5 1 801 1,7

CITROEN 54 1,6 152 2,1 -25,4 1 964 1,9 2 257 2,1

MAZDA 41 1,2 54 0,8 59,5 1 596 1,5 1 727 1,6

SUBARU 33 1,0 48 0,7 44,4 1 161 1,1 1 003 0,9

SUZUKI 24 0,7 14 0,2 260,1 642 0,6 648 0,6

MITSUBISHI 23 0,7 82 1,2 -41,1 1 664 1,6 1 578 1,5

FIAT 13 0,4 9 0,1 203,4 178 0,2 195 0,2

LEXUS 11 0,3 20 0,3 15,5 207 0,2 196 0,2

Total 3 307 100,0 7 091 100,0 -2,0 104 231 100,0 106 281 100,0

VV-AUTO TOTAL 629 19,0 1 482 20,9 -15,1 18 929 18,1 21 074 19,8

CUSTOMER ORDER BACKLOG

22

4 561

5 1465 4055 353

4 956

4 5704 4814 572

5 168

5 6035 5425 405

4 615

5 0185 3655 313

4 8274 598

4 0144 015

4 655

5 2084 854

5 0144 666

5 188

5 7835 639

4 893

4 353

3 7903 946

4 934

5 6695 380

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Customer order backlog (pcs) Rolling average 12 mth (pcs)