Financial Statements Release 20171 February 2018

President and CEO Mikko Helander

2017 –Year of Profitable Growth

• Good progress in the implementation of our strategy towards becoming a more focused and unified K Group

• Net sales grew in comparable terms by 1.8% and comparable operating profit rose to €297 million

• Grocery trade: sales and profitability grew, customer satisfaction continued to improve

• Building and technical trade: sales grew, profitability on a growth track

• Car trade: profitability improved, strong development in commercial vehicles and the Porsche business

2

Strategic Focus on Core Businesses Has Increased Pro-Forma Net Sales by €1.6bn and Operating Profit by €42m

3

Acquisitions 2016

• Suomen Lähikauppa • Onninen• AutoCarrera

Divestments 2015-2017

• Indoor Group • Leisure machinery trade• K-maatalous • Minority holding in Baltic machinery trade• Grocery and sports trade in Russia• Department store trade in Finland

• Onninen, Suomen Lähikauppa and AutoCarrera increased net sales by €2.3bn and operating profit by €40m

• Divestments in 2017 and 2016 decreased net sales by €0.7bn and increased operating profit by €2m

Highlights Q4/2017

Net sales growth +2.6%

Operating profit €81 million (+€18m)

Earnings per share €0.65 (+54%)

Grocery trade growth +4.5% and

operating profit €67 million (+€15m)

4 Comparable figures

Net Sales and Operating Profit grew

5

Q4/2017 Q4/2016 2017 2016

Net sales, €m 2,618 2,765 10,676 10,180

Net sales growth, comparable, % +2.6 +1.8

Comparable operating profit, €m 81.0 63.3 296.7 272.9

Comparable operating profit, % 3.1 2.3 2.8 2.7

Profit before tax, €m 57.6 -43.5 327.6 145.2

Comparable profit before tax, €m 82.0 60.2 300.1 271.4

Comparable earnings per share, € 0.65 0.42 2.28 2.01

Return on capital employed, comparable, %, rolling 12 months 12.2 11.9 12.2 11.9

Return on equity, comparable, %, rolling 12 months 10.9 9.8 10.9 9.8

Net Sales and Operating Profit 2017

49%36%

6%

9%

6

€5,282m,+2.4%

€3,823m,+3.1%

€909m,+1.0%

61%24%

5%

10%

Net sales* Comparable operating profit

Grocery tradeBuilding and technical trade excl. speciality goods tradeSpeciality goods tradeCar trade

€33m,+€4m

€10,676m+1.8%

€297m,+€24m

€79m,+€7m

€203m,+€27m

€663m,-11.5%

€16m,-€9m

*Comparable change

Net Sales and Operating Profit Q4/2017

54%35%

3%

8%

7

€1,399m,+4.5%

€921m,+3.8%

€218m,-5.3%

76%

16%

0%8%

Net sales* Comparable operating profit€7m,-€1m

€2,618m,+2.6%

€81m,+€18m

€14m,+€2m

€67m,+€15m

€80m,-13.3%

€0m,-€2m

*Comparable change

Grocery tradeBuilding and technical trade excl. speciality goods tradeSpeciality goods tradeCar trade

Net Sales by QuarterQ4/2017 -5.3%, in comparable terms +2.6%

8

2,647 2,618

1,000

500

2,000

2,500

1,500

3,000

0Q4

2,166

Q2

2,7652,792

Q3

2,203

2,610

2,227

Q1

2,0132,082

2,597

2,814

20162015 2017€m

9

Operating Profit by QuarterComparable

27

7682

59

32

79

98

63

29

85

103

81

0

20

40

60

80

100

120

Q3 Q4Q1 Q2

2016 20172015€m

1.1%1.6%1.3% 3.0%3.0%3.4% 3.5%3.7% 2.3%2.7%Operating profit-%, comparable

3.9% 3.1%

Return on Capital Employed 12.2%Comparable ROCE, rolling 12 months

21.3

9.8

23.8

11.9

25.7

8.5

21.5

12.2

0

10

20

30

Grocery trade Building and technical trade Car trade Group

2016 2017

10

%

11

Financial Position Q4/2017

31 December2017

31 December2016

Equity ratio, % 50.4 48.6

Liquid assets, €m 398 391

Interest-bearing net debt, €m 136 123

Interest-bearing net debt / EBITDA, rolling 12 months 0.3 0.4

Cash flow from operating activities, Q4, €m 116 108

Cash flow from operating activities per share, Q4, € 1.16 1.09

Cash flow from investing activities, Q4, €m -99 76

Capital expenditure, gross, Q4, €m 117* 105

*Capital expenditure includes real estate purchases of €46m from Kesko Pension Fund, which is to return to Kesko an estimated surplus amount of €58m in March 2018.

Grocery Trade

Grocery Trade

Q4

• Sales grew in all chains, comparably by 4.5%

• Significant increase in synergies

• Increased profitability in K-Citymarket and Kespro

• Sales of new stores off to a good start

2017

• Strategic concentration on service and quality increased

sales and profit

• Significant synergies from Suomen Lähikauppa’s integration

• Extensive redesign of chain brands and stores continued

13

The market

• Importance of quality and selections has continued to increase

• Growth in the economy has supported the grocery market, Q4/2017 growth approx. 2.0%

• Consumer prices are rising moderately

14

Grocery Trade Net SalesQ4/2017 -1.6%, in comparable terms +4.5%

2017

5,282

2016

2,447

Q4/2017

1,399

Q4/2016

1,422

€m5,236

5,000

2,000

1,000

4,000

0

3,000

15

Grocery Trade Comparable Operating ProfitSignificant improvement in profitability

€m

51.967.0

175.9

203.4

0

40

80

120

160

200

20172016Q4/2017Q4/2016

4.8%3.7% 3.9%3.4% Operating profit-%, comparable

Building and Technical Trade

Building and Technical Trade

Q4

• Onninen’s sales and profit grew year-on-year

• Divestments in speciality goods trade decreased operating

profit

• Measures to transform operations and increase efficiency

in Sweden ongoing

2017

• Continued focus on core businesses, divestment of

K-maatalous, furniture trade and leisure machinery

• Onninen’s integration into Kesko proceeded well

• Changes to store site network burdened profit in

the Baltics

17

The market

• Market situation in the Nordic and Baltic countries still good despite slower growth pace

• Construction continues strong in growth centres

Building and Technical Trade Net SalesQ4/2017 -10.8%, in comparable terms +2.2%

18

899 921

3,099

3,823

222 80

1,002

663

Q4/2016 Q4/2017 2016 2017

Building and technical trade excl. speciality goods trade Speciality goods trade

€m

1,121 1,000

4,100

4,486

4,000

3,500

2,500

1,500

500

2,000

1,000

3,000

0

Building and Technical Trade Comparable Operating ProfitProfitability of core businesses improved

19

12.4 14.3

72.579.5

2.0 0.3

25.5 16.2

0

20

40

60

80

100

120

Q4/2016 Q4/2017 2016 2017

Building and technical trade excl. speciality goods trade Speciality goods trade€m

14.6

97.9* 95.8

14.4*

1.5%1.3% 2.1%2.4%Operating profit-%, comparable

*The divested K-maatalous business and the Asko and Sotka furniture business contributed €0.0m to operating profit in Q4/2017 (€3.4m in Q4/2016) and €6.8m in 1-12/2017 (€15.0m in 1-12/2016)

Stronger country-specific approach to increase sales

20

CustomersB2B customers B2C customers

€387m €662m €1,675m €698m €217m €184m

Net sales €3,823m

Building and technical trade division management and common functions

Car Trade

Car Trade

Q4

• Sales and profitability at a good level

• Changes in taxation mean some sales were moved over

to 2018

• Order book for new cars +20%

2017

• Market share in passenger cars and vans 18.6%

• Strong performance development in vans, sales +25%

• Strong growth and profit in the Porsche business

22

The market

• First time registrations of passenger cars -0.4% in 2017 due to car tax debate earlier in the year

• Scrapping premiums and economic growth expected to increase registrations in 2018

23

Car Trade Net SalesQ4/2017 -1.4%, in comparable terms -5.3%

221 218

849909

0

150

300

450

600

750

900

2017Q4/2016 2016Q4/2017

€m

24

Car Trade Comparable Operating ProfitContinued improvement in full-year result

7.56.7

29.5

33.1

0

5

10

15

20

25

30

35

2016 2017Q4/2016 Q4/2017

€m

3.1%3.4% 3.6%3.5% Operating profit-%, comparable

Outlook

Outlook

26

Estimates for the outlook of Kesko Group's net sales and comparable operating profit are given for the 12-month

period following the reporting period (1/2018-12/2018) in comparison with the 12 months preceding the end of the

reporting period (1/2017-12/2017).

In comparable terms, the net sales for the next 12 months are expected to exceed the level of the previous 12

months. Due to divestments and restructuring, Kesko Group's net sales for the next 12 months are expected to fall

below the level of the previous 12 months. That development results from the divestments of the K-maatalous

business, the Asko and Sotka furniture trade, the Yamarin boat business and Kesko's Yamaha representation as well

as store closures and the transfer of Suomen Lähikauppa stores to retailers.

The comparable operating profit for the next 12-month period is expected to exceed the level of the preceding 12

months. However, investments in store openings and redesigns, in the expansion of logistics operations, and in

digital services will burden profitability during the period.

Board’s dividend proposal to General Meeting €2.20

1.44

0.71

1.78 1.84

1.47

1.68 1.65 1.70

2.01

2.28

1.000.90

1.301.20 1.20

1.401.50

2.50

2.00

2.20

0

1

2

3

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Comparable EPS DPS (2017, Board's proposal to the AGM)

27

€

Group Management Board as of 1 January 2018

28

Mikko HelanderPresident and

CEO

Jukka ErlundEVP,

Chief Financial Officer

Johan FrimanPresident of the

car trade division

Ari AkseliPresident of

the grocery trade division

Matti MettäläEVP, HR,

Corporate Responsibility and Regional

Relations

Jorma RauhalaDeputy to

President and CEO,

President of the building and

technical trade division

Anni RonkainenEVP,

Chief Digital Officer

Mika MajoinenGroup General

Counsel

Also reporting to the President and CEO

29

Karoliina PartanenSenior Vice President,

Communications and Identity

Pasi MäkinenSenior Vice President,

Chief Audit and Risk Officer

Eeva SalmenpohjaVice President, Public Affairs

Kesko is the most sustainable trading sector company in the world*

As a sign of our long-term commitment to corporate responsibility, in September 2017 Kesko was included in the Dow Jones Sustainability Indices, the DJSI World and the DJSI Europe, and in January 2018 Kesko was ranked as the most sustainable trading sector company in the world on the Global 100 list.

*The Global 100 list is prepared by the Canada-based Corporate Knights Inc. and it is based on a global assessment of 5,994 listed companies