Enhancing Cash Flow GenerationJukka Erlund

2

Net sales growthOperating profit*Operating margin %*

Net debt / EBITDA*Return on capital employed*Return on equity*

* comparable

+9.1%€269m

2.8%target

0.8 <2.512.5% 14%10.1% 12%

Kesko Key Figures 9/201612 month rolling

GDP Development in Kesko’s Operating Countries

3

GDP$ bn

GDPchange at constant prices, %

2015 2015 2016F 2017F 2018FFinland 232 0.2 0.9 1.1 1.3Norway 388 1.6 0.8 1.2 1.8Sweden 493 4.2 3.6 2.6 2.2Estonia 23 1.1 1.5 2.5 2.9Latvia 27 2.7 2.5 3.4 3.7Lithuania 41 1.6 2.6 3.0 3.3Russia 1,326 -3.7 -0.8 1.1 1.2Poland 475 3.7 3.1 3.4 3.3Belarus 55 -3.9 -3.0 -0.5 0.5

Source: International Monetary Fund, World Economic Outlook Database, October 2016

Real estatearrangementDivestment of

Anttila

Kesko Senukaiarrangement in theBaltic countries

Acquisition of Suomen Lähikauppa

Acquisition of Onninen

Major Progress in Portfolio Strategy

4

One unified

Divestmentof K-ruoka, Russia

Strategy Driven Capital Allocation

5

Megatrends and retail trends

Macro environment

Portfolio strategy

Investmentstrategy

• Competitive situation• Scale and capabilities• Growth potential• ROCE potential• Risks

0

2000

4000

6000

8000

10000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016*

Finland Other countries

6

+9.3%+3.3%

-11.9% +3.9%

+7.8% +2.4%-3.8%

€m

-2.6%

*2016 rolling 12 mo

-4.3%

+9.1%

Profitable Growth as a Key Shareholder Value Driver

6

Operating Margin – Targeting Further Growth

3.4

2.3

1.8

3.12.9

2.42.6 2.6

2.8 2.8

0

1

2

3

4

0

50

100

150

200

250

300

350

400

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016*

Comparable operating profit Comparable operating margin

7

*2016 rolling 12 mo

€m %

Operating Margin in Divisions – Potential for Further Growth

3.5

2.4

3.2

0

1

2

3

4

Grocery trade Building and technical trade Car trade

8

%

rolling 12 mo

Successfully Executing €50m Efficiency Program

643

557

86

221

131

Personnel costs

Rents and store site costs

ICT costs

Marketing and loyalty costs

Other costs

9

Total €1,638 million

Rolling 12 mo, € million*Main sources of the savings• Personnel efficiency• ICT costs• Marketing costs• Rents and store site costs

Majority of the actionscompleted – full impact 2017

Fixed cost base

* comparable

Target to Enhance Cash Flow Generation

244137

379 438216

382 414304 276 186

-85 -46

31

-240-441 -391

-152 -182

217

-648

-700

-500

-300

-100

100

300

500

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016*

CF from operating activities CF from investing activities

10

€m

*9/2016 rolling 12 mo

10

Capex and NWC efficiency to be

executed

Enhancing Cash Flow Generation• Further growth in net sales and operating margin in strategic growth areas

• Synergy benefits

• Suomen Lähikauppa progressed better than expected, full annual impact above €30m from 2018

• Onninen progressed as expected, full annual impact of €30m from 2020

• Executing the €50m cost savings program

• Annual capex level below €200m after 2017 (excl. acquisitions)

• In grocery trade less store site capex needs after 2017

• Reduced capex per store need in building and technical trade

• Target to improve NWC efficiency by €50m

• Potential further business and real estate divestments

11

Steady Growth in ROCEcomparable

12

14.7

10.2

7.4

14.013.1

9.09.8 9.9

11.712.5

0

4

8

12

16

2007 2008 2009 2010 2011 2012 2013 2014 2015 9/2016*

%Target

14%

Improving profitability

Real estate transaction2015

Anttila & IntersportRussia divestment

Further improvementfrom Kesko Food Russia divestment

*9/2016 rolling 12 mo

Aim to Continue Good Dividend Yield

2.2

1.4

0.7

1.8 1.8

1.51.7 1.6 1.7

2.1

1.6

1.0 0.9

1.3 1.2 1.21.4 1.5

2.5

0

1

2

3

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016*

Comparable EPS DPS

13

€

Kesko Corporation distributes at least 50% of its comparable earnings per share as dividends, taking however the company's financial position and operating strategy into account.

*9/2016 rolling 12 mo

14