REVIEW 2015 BY THEPRESIDENT AND CEO

MIKKO HELANDER4.4.2016

Grocery trade• Finland• Kespro• Russia

Home improvement and specialitygoods trade• Building and home improvement

trade• Furniture trade• Leisure goods trade• Agricultural and machinery trade

Car trade• Import • Dealers

KESKO’S DIVISIONS

2

NET SALES €8.7 BILLION OPERATING PROFIT €244M

€4,673m€3,250m

€748m

Grocerytrade

Home improve-ment and specialitygoods trade

Car trade

54%37%

9%

€177.5m€63.6m

€26.1m

Grocerytrade

Home improve-ment and specialitygoods trade

Car trade

66%24%

10%

Excl. non-recurring items3

8,777 9,460 9,686 9,315 9,071 8,679

0

2000

4000

6000

8000

10000

1 2 3 4 5 6

NET SALES

4

€m

268 279230 239 233 244

0

100

200

300

1 2 3 4 5 6

OPERATING PROFIT EXCL. NON-RECURRING ITEMS

5

€m

• The €50 million savings programmeis progressing as planned

• Enhancement of operationscontinues

• The expense ratio is also improvedby increasing sales

OPERATIONS TO BE FURTHER ENHANCED

16,8 %17,0 %17,2 %17,4 %17,6 %17,8 %18,0 %18,2 %18,4 %

2010 2011 2012 2013 2014 2015

Expense ratio

Kulusuhde, Kesko-konserni ilman Anttilaa

18.4%18.2%18.0%17.8%17.6%17.4%17.2%17.0%16.8%

Expense ratio, Kesko Group excl. Anttila

6

RETURN ON CAPITAL EMPLOYEDEXCL. NON-RECURRING ITEMS

14.0 13.1

9.0 9.8 9.911.7

0

4

8

12

16

1 2 3 4 5 6

7

%

0.0

2.5

2.0

1.0

0.5

1.5

2.50

1.701.50

1.651.40

1.68

1.201.47

1.20

1.84

1.30

1.78

Dividend (for 2015, the Board of Directors’ proposal to the AGM)Earnings per share excl. non-recurring items

EARNINGS PER SHARE AND DIVIDEND€

2010 2011 2012 2013 2014 2015

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SHARE PRICE DEVELOPMENT

15,00

20,00

25,00

30,00

35,00

40,00

45,00

2011.03.31 2012.03.31 2013.03.31 2014.03.31 2015.03.31 2016.03.31

45.00

40.00

35.00

30.00

25.00

20.00

15.00

€

9

RENEWING K-GROUP

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MEGATRENDS GUIDE RENEWAL

Consumers’ increased ability to make analytical decisions

Ageing of population, urbanisation, and the growthof single households

Responsibilityand the strongbrand areincreasinglyimportant

Digital services play a key role

International retail companiesconcentrating on a single productline arechallenging localoperators

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GROWTH STRATEGY

• Growth in the grocery trade particularly in Finland

• Growth and expansion in the building and technicaltrade in Europe

• Growth in the car trade particularly in Finland

12

Real estatearrange-mentDivestment

of Anttila

Kesko Senukaiarrangementin the Baltic countries

Acquisition of Suomen Lähikauppa

Acquisition of Onninen

SIGNIFICANT ARRANGEMENTS

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RENEWALS IN THEGROCERY TRADE

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UNIQUE CHAIN OF NEIGHBOURHOOD STORES

• Our key strategic choice is growingour network of neighbourhood stores

• All the current over 400 K-market stores will be refurbished

• New stores will complement theexisting network

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• Suomen Lähikauppa has good store sitesin cities and population centres

• More than 600 Siwa and Valintatalo storeswill complement our network

We will bring the new era neighbourhood storecloser to every Finn than ever before

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AQCUISITON OF SUOMEN LÄHIKAUPPA WILL ACCELERATE THE IMPLEMENTATION OF OUR NEIGHBOURHOOD MARKET STRATEGY

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”TACTICS FOR BETTER STOPS”

• Kesko and Neste are leading Finnishservice stations to a new era

• Nearly 100 Neste K service stations

• High-quality and personalisedservices to customers quickly and easily

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K-CITYMARKETS REFURBISHED

• Refurbishment of the over 80 K-citymarket stores has started

• Work for revising the chain’s home and speciality goods selections and concepts is progressing

• sales development was 6.2 percentage points ahead of otheroperators in 2015*

*Source: Finnish Grocery Trade Association

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RETAILER ENTRE-PRENEURS IN THE CENTRE

• Strengthening the retailer entrepreneurship as K-food stores’ competitive asset

• Store-specific business idea based on customer data

• It is also possible for the retailer to run several stores

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BEST DIGITAL SERVICES IN THE TRADINGSECTOR: K-RUOKA MOBILE APP• Helps in shopping

• Knows the user and transmitsindividual offers

• Rose to the number one position on the App Store’s download liston the week it was launched

• The app and digital services arefurther improved every day

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RENEWALS IN THEBUILDING AND HOME IMPROVEMENT TRADE

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STRONG DEVELOPMENT AND GOOD RESULTS

• Good profit development

• Market shares are increasing

• The fifth largest in Europe

• Kesko Senukai accelerates growthin the Baltic countries and Belarus

• Pro Centers as growth drivers

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B2B SALES ARE GROWING FASTER THANCONSUMER SALES

Building and renovation become more technical

Consumers more often outsource construction to professionals

Growing need for renovation construction

Rising standard of living increases the use of services

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• Business customers alreadyaccount for 40% of sales

• B2B sales have long developed better thanconsumer sales

BUSINESS CUSTOMERS ARE ALREADY NOWKESKO’S LARGEST CUSTOMER GROUP

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ACQUISITION OF ONNINEN WILL RAISE THE SHARE OF B2B SALES FROM 40% TO 60%

1.6 1.6

1.3

2.7

0

1

2

3

4

5

K-Group K-Group and Onninen

Business customers

Project and consumercustomers

40%

60% 40%

60%

€ billion

€2.9 billion

€4.3 billion

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ONE UNIFIEDK-GROUP

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ONE UNIFIED K-GROUP• Synergy benefits will be exploited in

customer relationship management across business boundaries

• Ever closer cooperation with retailers

• Efficient use of internal synergybenefits, too

• One unified K-identity

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THE MOST RESPONSIBLE RETAILER IN THE WORLD

Both in 2015 and 2016, the World Economic Forum in Davos publishedKesko’s inclusion in ’the Global 100 MostSustainable Corporations in the World’ list.

We will continue our long-term responsibility work.

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