Kesko Oyj : Goldman Sachs Consumer Staples and Retail Conference

KESKO

GROWTH STRATEGY EXECUTION DRIVING GROWTH

May 2024

KESKO TODAY

KEY FINANCIALS

	Q1/2024	2023	#1	Leading trading sector	~45 000 employees in the
	company in Northern	whole K Group,1,800 stores,
			Europe with retail and B2B	3 divisions, comprehensive
Net sales, € million	11,715.2	11,783.8
	sales of nearly €16bn	digital services in 8 countries
Operating profit, € million*	685.6	712.0
Operating margin, %*	5.9	6.0
Profit before tax, € million*	599.5	630.4
Cash flow from operating activities,	1,235.1	1,149.5		Sustainability at the	Market cap some €6.5bn
€ million
				core of the strategy	with over 110,000 shareholders
Return on capital employed, %*	12.5	13.4
Capital expenditure, € million	776.1	678.9
*comparable	rolling 12 months

2

KESKO SEGMENT KEY FIGURES

NET SALES

Car trade

OPERATING PROFIT

Car trade

€79.5m

€1,232m

Building and technical trade

Grocery trade

€6,372m

6.5%

€443.4m

7.0%

€4,134m€11,715m

Building and	€685.6m
technical trade	5.9%
€189.3m
4.6%

3	Q1 2024 rolling 12 months, division figures include common functions and eliminations

JORMA RAUHALA APPOINTED KESKO'S

PRESIDENT AND CEO AS OF 1 FEBRUARY 2024

MASTER OF SCIENCE (ECON.), BORN 1965

1. STRONG TRACK-RECORD IN RESULT-DRIVEN LEADERSHIP A LONG CAREER IN KESKO WITH VARIOUS RESPONSIBILITIES

• Joined Kesko Corporation in 1992
• President of building and technical trade division since 2017
• President of grocery trade division 2013-2017
• Managing Director of Kespro 2007-2012

A MODERN APPROACHABLE LEADER

GROCERY TRADE

STRONG POSITION IN FINNISH FOOD TRADE YIELDING GOOD RESULTS

5

STRONG POSITION IN ALL AREAS OF

FINNISH FOOD TRADE

• Strong No. 2 in Finnish grocery trade, with a market share of over 34%
• Finland's most extensive network of grocery stores, some 1,200 stores run by K-retailers
• Leading online grocery operator
• Some 1.6 daily store visits by customers

• No. 1 in Finnish foodservice trade, with a market share of approx. 48%
• Finland's biggest online store for food, some 70% sales via digital channels
• Strong private labels, which account for over 50% of sales

• Advanced common operations: sourcing, logistics and IT

6

GROCERY TRADE DIVISION

GROCERY STORE BUSINESS

In brief:

Operates in Finland, business comprises three grocery store chains with some 1,200 stores across the country operated by some 900 K-retailer entrepreneurs. Three different store formats. Also online grocery services and popular private label products. Accounts for 82% of the division's net sales.

Customers:

B2C trade: some 1.8 million daily customer encounters and 4.5 million weekly visits to digital channels.

Over 3.3 million members of the K-Plussa customer loyalty programme.

Key figures:

Net sales €5,196.7 million; operating profit €369.8 million;

operating margin 7.1%

Market and market shares:

Total Finnish grocery trade market €21-22 billion; Kesko the second biggest operator with a market share 34.3% (Nielsen). Market leader in Finnish online grocery.

Growth drivers:

GDP, purchasing power, price competition, urbanisation and

changes in population structure, customer data and insight.

Competitors and peers:

Grocery store operators in Finland: S Group, Lidl

International peers: Ahold Delhaize, Axfood, Coop Group,

Tesco, Kroger, Carrefour

7 Figures for 2023

GROCERY TRADE DIVISION

FOODSERVICE BUSINESS

In brief:

Operates in Finland, business comprises Kespro's foodservice wholesale with 13 cash-and-carry outlets and online sales (70% of total sales), a wide range of services and digital tools (e.g. training, menu development, reporting and forecasting), and Kespro's own brand products (50% of total sales).

Customers:

B2B trade: restaurants, cafés, workplace cafeterias, hotels and public operators such as municipalities and hospitals. Lunch and cafeteria type of sales account for ~ 70% of Kespro's sales.

Key figures:

Net sales €1,154.9 million; operating profit €75.0 million;

operating margin 6.5%

Market and market share:

Total Finnish foodservice market €2.5 billion; Kespro the market leader with a market share of ~ 48%.

Growth drivers:

The growing popularity of eating out, GDP, purchasing power,

price competition, urbanisation and changes in population

structure.

Competitors and peers:

Foodservice in Finland: Valio Aimo, Meira Nova, Metro-tukku

International peers: Marr, Snabbgross, Sysco

8 Figures for 2023

NEW HYPERMARKETS TO BE OPENED IN FINNISH GROWTH CENTRES

Several new growth centre hypermarkets in pipeline

• K-SupermarketColumbus in Eastern Helsinki to be converted into a K-Citymarket hypermarket in 2024
• New K-Citymarket in Lempäälä near Tampere in 2025
• New K-Citymarket in Lahti in autumn 2025, replacing K-Citymarket Paavola
• New K-Citymarket in Haapaniemi, Kuopio in 2026
• New K-Citymarket in Kivistö, Vantaa, Helsinki metropolitan area in 2026
• New K-Citymarket in Porvoo in spring 2027, replacing an outdated hypermarket
• A bigger grocery store under planning for Espoon keskus in Finland's second biggest city Espoo
• In 2024, nearly 50 grocery stores to be updated and renovated, of which 13 hypermarkets
• Investments in store updates and new stores totalling €200-250 million in 2023, same store-site capex level to be expected in upcoming years

K-Citymarket stores under planning/construction

K-Citymarket stores remodelled in 2024

KESKO AND K-RETAILERS

KESKO

Store concepts

Chain selections, wholesale

Responsible purchasing channels,

purchasing alliances, logistics

Own brands

Data-driven management,

customer data

Marketing services

Online stores

Store chains

Store sites

Centralised services

(IT, financial administration, other

support processes)

Retailer reserves

Wholesale,

product strategy

Chain agreement,

chain steering

Services and business

support

Wholesale profit

for Kesko

Chain fees based

on net sales

Store site fees based

on sales margin

Other cost-based

fees

K-RETAILERS

Responsible for ensuring customer

satisfaction, results and profitability

in their stores

Store-specific business ideas

based on customer data

Synergies from the multi-store model

Significant employers

Purchases from local businesses

Members of K-Retailers'

Association