General Meeting. President and CEO Matti Halmesmäki 8 April 2013 K-GROUP IN VETURI SHOPPING CENTRE

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1 General Meeting President and CEO Matti Halmesmäki K-GROUP IN VETURI SHOPPING CENTRE

2 Thank you! 2

Changes in Kesko s Corporate Management Board effective 5

improvement trade Food trade Arja Talma Store Sites and

2013 Terho Kalliokoski Rautakesko Ltd s President Kesko Food

3 Changes in Kesko s Corporate Management Board effective 5 February 2013 Store Sites and Investments Building and home improvement trade Food trade Arja Talma Store Sites and Investments Rautakesko Ltd s President 1 Nov Feb Terho Kalliokoski Rautakesko Ltd s President Kesko Food Ltd s President 1 May Feb Jorma Rauhala Kesko Food Ltd s President 3

President, home and speciality goods trade and

VV-Auto Group Oy s President Human Resources and

Vice President, Chief Financial Officer Matti

4 Home and speciality goods trade Car and machinery trade Minna Kurunsaari Senior Vice President, home and speciality goods trade and e-services Accounting, Finance, IT Pekka Lahti VV-Auto Group Oy s President Human Resources and Stakeholder Relations 4 4 Jukka Erlund Senior Vice President, Chief Financial Officer Matti Mettälä Senior Vice President, Human Resources and Stakeholder Relations

5 K-Group s retail sales 12.1bn K-Group s retail and B2B sales (VAT 0%) m Food trade 5,515 Home and speciality goods trade 1,750 Building and home improvement trade 3,701 Car and machinery trade 1,138 Total 12,104 K-Group s retail sales (in 2012) 12,104 million S Group s retail sales (in 2012) 12,037 million 5

6 Kesko Group s net sales Breakdown by division, 2012 Car and machinery Food Building and home improvement 9,686m Finland Other countries Home and speciality goods 6

7 Operating profit excl. non-recurring items, million 350 Breakdown by division, Car and machinery Food Building and home improvement Home and speciality goods 235m 7

8 Return on capital employed, % excl. non-recurring items 16,0 % 14,0 % 12,0 % 10,0 % 8,0 % 8.1% 10.1% 9.6% 12.4% 14.7% 10.2% 7.4% 14.0% 13.1% 9.3% 6,0 % 4,0 % 2,0 % 0,0 %

9 Return on capital employed in 2012 Excl. non-recurring items % 25,0 20, ,0 10, , ,0 Building and Food Home and speciality Car and Kesko home trade goods trade machinery trade Group Capital improvement trade employed 840m 462m 748m 178m 2,479m 9

10 Capital expenditure Breakdown by division, 2012 Building and home improvement Home and speciality goods Car and machinery 378m Food 10

11 Equity ratio, %

12 Board s proposal for dividend/share ( ) 1,80 1, ,40 1,20 1, ,80 0,60 0,40 0,20 0,

13 Effective dividend yield of B share ( ) 8% 7% 6% 5.6% 5.6% 5% 4% 4.6% 3.8% 4.2% 3.9% 3.7% 4.6% 4.8% 3% 2% 1.20 / share 1% 0% -1% Effective dividend yield 5.03% at the closing rate of at the date of dividend distribution proposal, 4.9% at the current rate ( at 5 April 2013) 13

14 Share price trend, 10 years Kesko OMX Helsinki CAP 14

15 Higher sales and profitability from all divisions 15

16 Focus on the customer Over 1.3 million noin customer 2000 K-kauppaa visits every day (As at 31 Dec. 2012) Food trade Home and speciality goods trade Divisions Building and home improvement trade Car and machinery trade Category management Store site acquisition Marketing Information management Support functions Business models and concepts Kesko Group and Group control Competence development Real estate Finance and accounting control IT management Communications and brands Risk management Internal audit Corporate responsibility District operations Management system Sivu 16 Listed company Risk taking capacity Funding Culture and values Group strategy Portfolio strategy Internationalisation strategy Investment strategy Synergies Healthy growth Increasing Group value

17 Strategic focal points Strengthening sales growth and improving profitability Leveraging business opportunities in Russia E-commerce and multi-channel services Corporate responsibility and employees job satisfaction and wellbeing Strong financial position and good dividend payment capacity 17

18 Tightening economic and competitive situations Weakened employment Taxation is increasing and has increased VAT +1 percentage point, pressures to raise municipal tax rates Inflation has remained high Consumer confidence and spending intentions have fallen consumers purchasing power is weakening price increasingly important in purchasing decisions online shopping and price competition are increasing 18

3/00 6/00 9/00 12/00 3/01 6/01 9/01 12/01 3/02 6/02 9/02 12/02 3/03 6/03 9/03 12/03 3/04 6/04 9/04 12/04 3/05 6/05 9/05 12/05 3/06 6/06 9/06 12/06 3/07 6/07 9/07 12/07 3/08 6/08 9/08 12/08 3/09 6/09

19 3/00 6/00 9/00 12/00 3/01 6/01 9/01 12/01 3/02 6/02 9/02 12/02 3/03 6/03 9/03 12/03 3/04 6/04 9/04 12/04 3/05 6/05 9/05 12/05 3/06 6/06 9/06 12/06 3/07 6/07 9/07 12/07 3/08 6/08 9/08 12/08 3/09 6/09 9/09 12/09 3/10 6/10 9/10 12/10 3/11 6/11 9/11 12/11 3/12 6/12 9/12 12/12 Weak consumer confidence Consumers expectations for their own finances for the next 12 months Odotus Expectations omasta for own taloudesta finances Odotus, 2000-luvun KA Expectation, 21 st century average Statistics Finland 19

20 Trading sector s subdued outlook for economic development 50,00 40,00 30,00 Suhdannetilanne Economic situation Suhdanneodotukset Expectations 20,00 10,00 0,00-10,00-20,00-30,00-40,00-50,00 Source: Confederation of Finnish Industries (EK) 12/09 3/10 6/10 9/10 12/10 3/11 6/11 9/11 12/11 3/12 6/12 9/12 12/12 20

21 Market share trends in the food trade Soure: AC Nielsen s store register 2012, taxable sales K T Others S Suomen Lähikauppa 21

22 Kesko s profitability programme - 100m cost savings- progressing as planned Ensuring competitiveness, improving the return on capital employed Cost adjustments savings target 100 million measures for staff cost enhancement; reduction of workforce in the whole Group 885 person-years, of which 486 in Finland other significant savings in marketing, ICT purchases and real estate costs Capital adjustments adjustment of capital expenditure to million in the next few years reduction of working capitals, especially in inventories 22

23 23 Russian trade is growing

24 The first K-food store opened in St. Petersburg, Sittsevaya on 5 Dec Best in Fresh as the basic concept 23,000 products Target for openings in 2013, 3 K-food stores in St. Petersburg Target by 2016, a network of 10 stores Target for 2017, net sales of 500m and a positive result Capital expenditure in estimated at 300m Business in Moscow to be launched based on experiences from St. Petersburg 24

25 K-rauta Russia 14 K-rauta stores, net sales (2012) 284m St. Petersburg 9 Moscow 2 Jaroslavl, Kaluga, Tula In 2017, net sales target 800m Intersport Russia 100% ownership to Kesko in 04/ Intersport stores in six cities, net sales 28m In 2015, net sales target 50m 25

26 26 Online services improve customer service and competitiveness

27 Use of e-services growing strongly - K-Group s web pages have 5 million visitors per month searches per day have made online purchases YouTube users go to the web via search 27

28 Customers and competitive situation require comprehensive online interaction Selections are growing, price transparency is increasing and operating practices in supplier cooperation are changing 28

29 K-Group s online stores in Finland 29

30 Kesko Group s employee satisfaction rate of 3.94 (1-5) for 2012 represented the level of the previous year (3.92) Job satisfaction Life management Taking care of own physical, mental and social wellbeing Productivity Work and competence Meaningful work Competence Efficient time management Pleasant and safe working conditions Working community Openness and good flow of information Clear rules Working together Management and supervisory work Communication of strategy Clear objectives, monitoring and feedback Equality and fairness Appreciation and listening Development support 30 Responsibility

Kesko included on 'The Global 100 Most Sustainable Corporations in the World' list for the ninth time Kesko continues on the most important sustainable development indices: Dow Jones DJSI World and

31 Kesko included on 'The Global 100 Most Sustainable Corporations in the World' list for the ninth time Kesko continues on the most important sustainable development indices: Dow Jones DJSI World and DJSI Europe, FTSE4Good and Nordic Carbon Disclosure Leadership World Finance awarded Kesko for 'the Best Corporate Governance in Finland for a third successive time Kesko s Board approved the updated responsibility programme Kesko and K-retailers participate in the Youth Guarantee programme preventing social exclusion among young people Kesko s Board granted 100,000 from donation funds for the programme implementation 31

32 32

Welcome! 1 Q Media and analyst briefing Eva Kaukinen

Welcome! 1 Q Media and analyst briefing Eva Kaukinen Welcome! 1 Corporate Management Board to be revised 26 October 2011 Kesko s Corporate Management Board as from 1 December 2011 Chair Matti Halmesmäki President and CEO Terho Kalliokoski Food trade Minna