engl. Analyytikko-aamiainen 190314

Analyst

breakfastSVP, CFO

Jukka Erlund19 March 2014

Kesko

0

1 000

2 000

3 000

4 000

5 000

Net sales€9,315m

Food trade

Home and speciality goods trade

Building and home improvement trade

Car and machinery trade

-50

0

50

100

150

200

250

Operating profit excl. non-recurring items

€239m

CFO Jukka Erlund2

• Net sales €9.3 billion

• Operating profit €239 million

• 2,000 stores in eight

countries

• Book value of real estate

€1.4 billion, lease liabilities

€2.4 billion

• Equity ratio 54.5%, interest

bearing net debt €-126 million

3/2014

Kesko has 2,000 stores engaged in chainoperations in eight countries

3/2014CFO Jukka Erlund

Total about 56m consumers

Food trade

• Finland, Russia

Home and speciality

goods trade

• Finland, Estonia, Latvia,

Russia

Building and home

improvement trade

• Finland, Sweden, Norway,

Baltic countries, Russia,

Belarus


• Finland, Baltic countries

3

4%

82%2%

1%

5%

1%

3%

1%

Strategic priorities

CFO Jukka Erlund4

Strengthening

sales growth and

improving

profitability

E-commerce and

multi-channel service

models

Utilising Russia’s

business

opportunities

3/2014

Strong financial position and good dividend payment capacity

CFO Jukka Erlund5

Key performance indicators in 2013

Net sales, €M 9,315 9,686

Change in net sales, % -3.8 +2.4

Fixed costs, €M 1,614 1,696

Operating profit*, €M 239 230

Profit before tax, €M 242 210

Liquid funds, €M 681 489

Return on capital employed*, % 9.8 9.0

Equity ratio, % 54.5 52.5

Cash flow from operating

activities, €M414 382

Capital expenditure, €M 171 378

2013 2012

3/2014

* excl. non-recurring items

Operating margin by divisionexcl. non-recurring items

1-3/2012

4-6/2012

7-9/2012

10-12/2012

1-3/2013

4-6/2013

7-9/2013

10-12/2013

Food 3.4 3.5 4.6 4.0 4.6 4.6 5.1 4.2

Home and specialitygoods

-3.5 -0.2 0.2 6.6 -5.2 -3.1 -0.6 4.9

Building and home improvement

-1.4 1.9 2.4 -1.6 -3.0 2.6 3.4 -0.2

Car and machinery

4.4 3.7 4.4 2.1 3.1 4.3 3.8 1.5

Total 1.0 2.4 3.2 2.9 0.9 2.9 3.5 2.8

3/2014CFO Jukka Erlund6

Year-on-year change in fixed costsexcl. non-recurring items

6.3%

8.8%7.9%

6.7%

10.3%

7.5% 8.0%

1.2%

-4.0% -4.5% -4.0%

-2.0%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

CFO Jukka Erlund7 3/2014

Return on capital employedexcl. non-recurring items

CFO Jukka Erlund

-1.9%

3.5%

21.1%

9.8%

-5

0

5

10

15

20

25

Group totalHome and

speciality goods

trade

Food

trade

Car and

machinery trade

Building and

home

improvement

trade

8

%24.8%

€821 m* €445 m* €732 m* €161 m* €2,438 m*

*Capital employed, cumulative average

3/2014

Consumers’ expectations for own financesOwn finances after 12 months

0

2

4

6

8

10

12

14

16

1/0

0

7/0

0

1/0

1

7/0

1

1/0

2

7/0

2

1/0

3

7/0

3

1/0

4

7/0

4

1/0

5

7/0

5

1/0

6

7/0

6

1/0

7

7/0

7

1/0

8

7/0

8

1/0

9

7/0

9

1/1

0

7/1

0

1/1

1

7/1

1

1/1

2

7/1

2

1/1

3

7/1

3

1/1

4

Expectations for own finances

Expectation, 21st centuryaverage

CFO Jukka Erlund9

Source: Statistics Finland

3/2014

Unemployment rate



Kesko Group’s sales 1-2/2014

11 CFO Jukka Erlund 3/2014

February 2014 1.1. -28.02.2014€ million Change, % € million Change, %

Food trade, total 320.8 -1.4 656.5 -1.9

Home and speciality goods trade, total 92.5 -10.6 204.6 -9.5

Building and home improvement trade, Finland

86.2 -6.8 164.3 -7.5

Building and home improvement trade, other countries

90.4 -0.3 182.7 -1.0

Building and home improvement trade, total

176.6 -3.6 346.9 -4.2

Car and machinery trade, total 81.4 7.4 182.0 13.1

Common operations and eliminations -12.1 -26.6

Grand total 659.2 -2.5 1,363.4 -2.1

Finland, total 551.3 -4.3 1,148.5 -3.3

Other countries, total 107.9 7.9 214.8 4.7

Grand total 659.2 -2.5 1,363.4 -2.1

3-month rolling sales performance

-2,0 %

0,0 %

2,0 %

4,0 %

6,0 %

8,0 %

10,0 %

12,0 %

Food trade


-15,0 %

-12,0 %

-9,0 %

-6,0 %

-3,0 %

0,0 %

3,0 %

6,0 %

9,0 %


-12,0 %

-8,0 %

-4,0 %

0,0 %

4,0 %

8,0 %

12,0 %

16,0 %


-30,0 %

-20,0 %

-10,0 %

0,0 %

10,0 %

20,0 %

30,0 %

40,0 %


CFO Jukka Erlund13

Food trade

•Net sales €4,387 million, +1.8%

•Operating profit* €203.3 million (4.6%),

€+35.8 million

•Return on capital employed* 24.8%

*excl. non-recurring items

Total 920 stores

3/2014

Q1-Q4/2013

Net sales, €M 2013 Change, %

Sales to K-foodstores

3,330 +0.1

Kespro 803 +2.0

K-ruoka Russia 71 ..

Others 184 -5.1

Total 4,387 +1.8

Operatingprofit *, €M

2013 2012

Total 203.3 167.5

Food trade

• For 1-2/2014, sales performance of Kesko’s food trade -1.9%

- One delivery day less than in the previous year

• Weakening of general economic situationand consumers’ purchasing power haveaffected buying behaviour also in the food trade

• Revision of fresh food departments is ongoing

- Fruit and vegetables- Bakery- Sevice counters: meat, fish and meals

• New own brand to be launched in spring2014

• Sales performance of food trade in Russiabetter than expected


CFO Jukka Erlund


15 3/2014

Total 370 stores

•Net sales €1,457 million, -9.1%

•Operating profit* €-8.3 million (-0.6%), €-27.9

million

•Return on capital employed* -1.9%


Q1-Q4/2013


2013 2012

Total -8.3 19.6


K-citymarket, home and speciality goods

628 -5.4

Anttila 391 -16.5

Intersport, Finland 190 +5.0

Intersport, Russia 18 -36.2

Indoor 182 -1.2

Musta Pörssi 29 -48.8

Kenkäkesko 21 -8.7

Total 1,457 -9.1


• For 1-2/2014, sales performance of Kesko’s home and speciality goodstrade -9.5%

- Most significant sales decline in the department store trade

- Sales of clothes and sportsequipment decreased due to weak winter season

- E-commerce sales performancewas positive

• All chains to have an online store bythe end of 2014

• Revision of Anttila’s concepts, planned network adjustment and expansion of NetAnttila’s selections



CFO Jukka Erlund17

Total 345 stores

3/2014


•Operating profit* €25.7 million (1.0%), €+12.4

million



Q1-Q4/2013


Rautakesko, Finland

1,173 -4.6

K-rauta, Sweden 205 -4.0

Byggmakker, Norway

470 -26.0

K-rauta, Estonia 69 +8.1

K-rauta, Latvia 52 +1.1

Senukai, Lithuania 263 -1.1

K-rauta, Russia 272 -4.2

OMA, Belarus 106 +22.7

Total 2,607 -7.8


2013 2012

Total 25.7 13.3

Building permits granted and building starts, mil. m3, variable annual sum


* Preliminary data


Building and home improvement trade• For 1-2/2014, sales performance of

Kesko’s building and home improvement trade -4.2%

- Change in terms of localcurrencies +1.3%

• Exchange rate movements affectedsales in Norway and Russia in particular

- NOK impact -12%- RUB impact -16%

• Sales performance strengthenedespecially in the Baltic countries

• Increasing e-commerce ande-services

• Increasing B2B sales





•Operating profit* €33.9 million (3.3%),

€-8.0 million



Q1-Q4/2013


VV-Auto 745 -5.7

Konekesko 293 -9.9

Total 1,037 -6.9


2013 2012

Total 33.9 41.9

First registrations of passenger cars in Finland

CFO Jukka Erlund21


3/2014


CFO Jukka Erlund22

Market share (passenger cars),

first registrations 1-2/2014

Toyota 12.2%

Volkswagen 12.2%

Skoda 9.4%

Volvo 8.0%

Audi 7.1%

Ford 6.3%

BMW 5.9%

Nissan 5.1%

Kia 5.0%

Seat 1.4%

Others 27.4%

20.7%

• Market trend of first registrations in

the car trade +15%

• For 1-2/2014, sales performance of

Kesko’s car and machinery trade

+13.1%

- VV-Auto +16.6%

- Konekesko -1.4%

• For 1-2/2014, combined market

share of Audi, Volkswagen and

Seat passenger cars and vans

21.5% (20.4%)

3/2014

Contact information

• [email protected]

• www.kesko.fi/investors

• Twitter.com/Kesko_IR


engl. Analyytikko-aamiainen 190314

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