KESKO CORPORATION STOCK EXCHANGE RELEASE ... - Euroland

KESKO CORPORATION STOCK EXCHANGE RELEASE 09.05.2001 AT 08.00
1(17)
KESKO´S INTERIM REPORT 1.1.-31.3.2001
Kesko Group´s net sales for the period from 1 January to 31
March 2001 amounted to EUR 1,432 million, which is 1.6 percent
less than in the corresponding period of the year 2000 (EUR
1,455 million). The Group´s profit before extraordinary items in
January-March was EUR 0.7 million (EUR 14.8 million). Earnings
per share were EUR 0.01 (EUR 0.12). Equity per share was EUR
15.31 (EUR 15.89). The information is unaudited.
Market review
According to advance information, the volume of Finnish
wholesale sales excluding the car trade increased by 5.9 percent
compared with the previous year. The corresponding increase in
retail sales was 5.1 percent. The trade in the car sector
decreased by 9.5 percent.
The year 2001 is expected to be the eighth successive year of
growth for the trading sector. An inquiry made by the Federation
of Finnish Commerce and Trade shows that wholesale sales
excluding the car trade will grow by 5.5 percent and retail
sales by 4.0 percent.
Consumer prices are forecast to increase by about two percent in
2001. In March 2001, the annual change in consumer prices was
2.9 percent. In 2001, private consumption is expected to grow by
3.8 percent and private investments by 7.5 percent.
Economic growth continued favourably in the Baltic countries at
the beginning of the year. Gross domestic products are expected
to increase by 4-6 percent during the first three months of the
year. Stores operating in chains are increasing their share of
overall retail sales in all of these countries. In Estonia,
chains already account for more than 25 percent of all grocery
sales. The value of the total grocery market is forecast to
increase to nearly EUR 4.5 billion during 2001.
In Sweden, the construction market is forecast to grow by about
5 percent in 2001, and private consumption by about 2.5 percent.
The volume of house production will continue to increase
strongly despite slightly slower growth than in 2000.
Net sales
Kesko Group´s net sales for the period from 1 January to 31
March 2001 were EUR 1,432 million, which is 1.6 percent less

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than in the previous year (EUR 1,455 million). As part of the
chain reform Kesko lowered its wholesale prices to the K-
retailers from the beginning of 2001. The effect of the new
pricing system on net sales is estimated to be two percentage
points.
Net sales by division
1-3/2001 1-3/2000 Change
EUR million EUR million %
Kesko Food 758 794 -4.5
Rautakesko 172 163 5.6
Keswell 154 164 -6.1
Kesko Agriculture and
Machinery 162 143 13.6
VV-Auto 130 150 -13.8
Kaukomarkkinat 73 66 9.6
Other units - eliminations -17 -25
Group total 1,432 1,455 -1.6
Performance
The Group´s profit before extraordinary items decreased, as
forecast, and was EUR 0.7 million (EUR 14.8 million), which was
0.1 percent of net sales (1.0%). The Group´s operating profit
was EUR -0.4 million (EUR 11.9 million). The operating profit
includes gains and losses from sales of fixed assets totalling
EUR 0.4 million (EUR 1.3 million). In addition to the weak sales
development, the initiation and conversion costs arising from
the on-going reform of the store network affected the Group´s
decreased operating profit. The chain reform has been supported
by additional investments. Pension costs are EUR 6.0 million
higher than during the comparison period, when income from
investments by the Kesko Pension Fund decreased the pension
costs. The parent company's operating profit was EUR 7.8 million
lower than in the comparison period.
The Group´s net financial income was EUR 1.1 million (EUR 2.9
million). The change resulted from increased net debt.
Earnings per share were EUR 0.01 (EUR 0.12). Equity per share
was EUR 15.31 (EUR 15.89).
Operating profit by division
1-3/2001 1-3/2000
EUR EUR
million million

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Kesko Food -4.2 -1.2
Rautakesko -1.8 0.2
Keswell -11.9 -10.9
Kesko Agriculture and 1.7 1.9
Machinery
VV-Auto 5.5 7.5
Kaukomarkkinat 1.5 0.4
Common operations 8.8 14.0
Group’s operating profit/loss -0.4 11.9
Net financial income 1.0 2.8
Associated companies 0.1 0.1
Profit before extraordinary
items
0.7 14.8
The practice used to disclose the operating profit of the
various divisions has been changed. The rents charged by the
real estate function for the real estate used by the Group have
been disclosed as rent expenses of other divisions. The
operating income from common operations includes the operating
profit of real estate. Common operations also include the net
expenses or income of other units’ common operations, as well as
Group items such as company management expenses and amortisation
of goodwill on consolidation that has not been allocated to the
divisions.
*) The figures for 2000 have been converted to comparable ones
to correspond to the changed practice.
Investments
The Group´s investments totalled EUR 47.9 million (EUR 101.2 million), which is
3.3 percent (7.1%) of net sales. Investments in the real estate, information
technology and fixtures of Kesko’s wholesale operations and subsidiaries
amounted to EUR 12.4 million, while investments in the buildings, fixtures and
information technology of the retail stores totalled EUR 35.5 million. More
detailed information on investment projects is given in the reviews of the
divisions.
Finance
Cash flow from operating activities was EUR -51.1 million and
from investing activities EUR -31.8 million. At the end of the
review period, the equity ratio was 55.4 percent (57.7%). The
interest-bearing net debt was EUR 264.5 million (EUR 79.0
million). The liquid assets totalled EUR 30.5 million (EUR 158.3
million).
Group administration and structure

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The new Articles of Association approved by Kesko´s
Extraordinary General Meeting held on 30 October 2000 were
entered in the Trade Register on 1 January 2001. The entry into
force of the new Articles of Association also started the term
of the Board members elected by the Extraordinary General
Meeting. Their term will expire at the close of the Annual
General Meeting in 2003.
Kesko’s Board of Directors elected Matti Kallio as its Chairman
and Keijo Suila as its Deputy Chairman at the Board meeting held
on 3 January 2001. Other Board members are Kesko’s President and
CEO Matti Honkala, B.S. (Econ.); Eero Kasanen, Dr.Sc. (Econ.);
Maarit Näkyvä, M.Sc. (Econ.); Kalevi Sivonen, retailer; Heikki
Takamäki, retailer; and Jukka Toivakka, retailer.
On 1 January 2001, a Corporate Management Board was established
in the Kesko Group. Its members represent the company’s
operating management. President and CEO Matti Honkala acts as
the Board’s Chairman, and the other members appointed are
Kalervo Haapaniemi, Matti Halmesmäki, Erkki Heikkinen, Juhani
Järvi, Matti Laamanen, Riitta Laitasalo and Jouko Tuunainen.
Acting in accordance with a previously decided plan, Kesko
Corporation transferred its foods and home and speciality goods
businesses to its wholly-owned subsidiaries, Kesko Food Ltd and
Keswell Ltd respectively, on 1 April 2001. Kalervo Haapaniemi
was appointed President of Kesko Food, responsible for the foods
trade, and Matti Laamanen the President of Keswell Ltd,
responsible for the home and speciality goods trade.
It is planned that two new subsidiaries, responsible for the
hardware and builders’ supplies trade and the agricultural and
machinery trade, will be formed on 1 October 2001.
Personnel
The Group’s average number of employees in the review period was
10,928 (10,543), divided by division as follows:
average average
1-3/2001 1-3/2000 31.3.2001
Kesko Food 4,887 4,672 6,293
Rautakesko 1,173 688 1,295
Keswell 2,453 2,749 3,202
Kesko Agriculture and 668 627 718
Machinery
VV-Auto 110 103 113
Kaukomarkkinat 841 757 875
Others 796 947 860
Total 10,928 10,543 13,356

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(The comparable figures have been adjusted to correspond with
the new organisation. In calculating the average number of
employees, part-time employees have been converted to full-time
employees in relation to their working hours.)
The total number of Kesko Group employees has increased
slightly. The number was increased by the expansion of Kesko
Food’s and Rautakesko’s operations in Estonia and those of
Rautakesko in Sweden. On the other hand, the number was
decreased by the outsourcing of service and support activities
in line with strategy. The Group employed 1,156 persons (523)
abroad.
Development of divisions
Kesko Food
Kesko Food´s net sales were EUR 758 million, a decrease of 4.5
percent. Revised pricing and charging practices related to the
chain reform has had an effect of about four percentage points
on Kesko Food´s net sales. The operating loss was EUR 4.2
million, compared with the operating loss of EUR 1.2 million in
the corresponding period of 2000. The main reasons for the
increased loss during the first three months of the year are the
costs of starting up the new chain operations and investments in
the store network. The investments totalled EUR 11.5 million.
Kesko Food Ltd started operating as an independent company on 1
April 2001.
The transfer to a pricing system and payment structure based on
the new chain operating system on 1 January 2001 has
significantly affected the development of Kesko Food´s net
sales. In the first quarter of the year, total grocery sales
increased by about 4-5 percent in Finland. The opening hours of
stores with a floor area of below 400 square metres were
extended at the end of January, which, together with Sunday
openings, stimulated sales. On the other hand, this change
slightly diminished the sales of kiosks, service stations and
large outlets.
The sales of the Estonian units developed better than Kesko
Food´s other units. The operating loss of Citymarket Oy, which
carries on the non-food trade in the Citymarket hypermarkets,
increased from the previous year and was EUR 6.7 million (EUR
5.6 million).
During the first three months of the year, five new K-grocery
stores were opened: a Citymarket in Kuusamo, a K-superstore in

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Oulu, a K-supermarket in Lahti and two new Pikkolo stores in
Helsinki. The Pikkolo stores are new urban convenience stores
that also focus on takeaway products. There are now five pilot
stores operating. The aim is to build a chain of about 100
stores within the next few years. The extension of the Salo
Citymarket will be completed in the spring. The major stores
under construction that are due to be opened this year are
Citymarkets in Espoo and Forssa, and K-superstores in Oulainen,
Oulu and Ulvila.
The expansion of Kesko Food´s operations in the Baltic countries
is progressing according to plan. A new logistics centre of
15,000 square metres started operations in Estonia in January.
The total investment amounted to about EUR 8.3 million. At the
same time, a new system for controlling operations, SAP, was
introduced. In Estonia, a new SuperNetto store was opened in
Tartu on 4 May 2001, and a new store will be opened in Pärnu in
the autumn. The first SuperNetto store in Latvia has reached the
"topping-out" phase and it will be opened in Riga in September
2001. Kesko’s target in the Baltic countries is to gain a share
of about 20-25 percent of their total grocery market, which is
about EUR 4.0 billion.
The Carrols chain aims to increase its operations in Finland in
line with strategy. At the end of March, it sold its restaurant
operations in Tallinn to Hesburger AS. Carrols AS had three
restaurants in Tallinn. At the end of the period, Carrols had 71
hamburger restaurants and four Drop Coffee Shops in Finland.
Kespro Ltd, a company providing services to catering customers,
is focusing on expanding its market for deliveries to customers.
A new wholesale network, which differs from the conventional
wholesale and cash & carry outlets with respect to opening
hours, range of goods, Internet service and fast deliveries,
will expand to Vantaa in May 2001. It will replace the former
cash & carry outlets in Vantaa and Ruoholahti, Helsinki. A new
cash & carry outlet is also under construction in Lahti. At the
end of the period, the number of cash & carry outlets was 20.
Internet business will continue to be developed in 2001.
Due to the costs arising from initiating the new chain operating
system and its expansion in the Baltic countries, Kesko Food´s
operating profit for the whole year is forecast to fall short of
the level of 2000.
Rautakesko
Rautakesko´s net sales amounted to EUR 172 million, an increase
of 5.6 percent. The increase was attributable to expansion in
Sweden and the Baltic countries. Foreign subsidiaries already
account for over 12 percent of Rautakesko´s net sales. The
operating loss was EUR 1.8 million (operating profit EUR 0.2

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million). In Sweden, K-rauta AB (former Kesko Svenska AB)
continued to show a loss. Investments totalled EUR 2.8 million.
Net sales in Finland fell slightly short of target, mainly as a
result of the late start to the season. A new chain operating
system was adopted at the beginning of the year. At the end of
the period under review, 45 stores were included in the K-rauta
chain and 105 stores in the Rautia chain. The sales volumes of
these chains will be at almost the same level after the reform
has been implemented. A new K-rauta store is under construction
in Ruoholahti, Helsinki.
The net sales of K-rauta AB in Sweden were EUR 9 million, a
growth of 32 percent. K-rauta AB now has 8 K-rauta stores
operating in Sweden. New K-rauta stores will be opened in
Helsingborg in May and in Göteborg in the autumn.
Fanaal AS in Estonia and Fanaal A/S in Latvia, a company acquired last year,
increased their sales. Kesko now has five stores in Estonia and one in Latvia.
The business operations and real estate of Räni Ehituskaupa in Tartu, Estonia
were acquired and a new store was built in its premises. A store in Lasnamäe,
Tallinn will be extended. Construction will begin on the first K-rauta store in
Riga in the summer.
Key focal areas of Rautakesko in 2001 include category
management and information systems development.
Internationalisation and investment in Internet operations and
business-to-business operations are of particular strategic
importance.
Rautakesko´s net sales are expected to increase in 2001, despite
the slackening rate of construction. Growth will be sought from
the Swedish and Baltic operations in particular. The operating
profit is forecast to improve.
Keswell
Keswell’s net sales were EUR 154 million, a decrease of 6.1
percent. Keswell´s operating loss was EUR 11.9 million. During
the same period in 2000, the operating loss was EUR 10.9
million. Investments totalled EUR 7.3 million. Keswell Ltd
started as an independent company on 1 April 2001.
The net sales of the Anttila Group were EUR 98 million, a
decline of 0.1 percent. The online trade and mail order business
developed the most favourably. The net sales of online trade
quadrupled, while the mail order business grew by 34.9 percent.
The sales of the Kodin Ykkönen department stores for interior
decoration and home goods increased by 25.5 percent, partly due
to the two new department stores opened in the previous year.
The sales of the Anttila department stores were down by 7.4%.
The Anttila Group´s operating loss was EUR 10.0 million, while

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the loss during the same period in 2000 was EUR 1.2 million
greater. The result was affected by the initiation costs of the
three department stores opened at the end of the previous year.
The result for the whole year is expected to be better than in
2000.
In the sports trade, retail sales have developed much better than in the
previous year. The net sales of Kesko Sports also progressed well, increasing by
26.8 percent. The long winter had a favourable effect on the trade in winter
sports goods.
Sales of home technology easily fell short of the previous
year’s level. The net sales of Kesko Musta Pörssi were 16.4
percent down on the year before. The greatest reason was the
drastic drop in sales of television sets. The drop is believed
to be a result mainly of consumers postponing their purchases
until digital TV programmes start in the autumn. On the other
hand, the trade in information technology and mobile phones has
advanced favourably.
The net sales of Kesko Shoes increased by 1.4 percent. Some of
the K-kenkä chain’s stores were organised into a new group
called Kenkäexpertti. At the end of the period under review,
there were 33 stores operating in the K-kenkä chain, 28 stores
in the Andiamo chain and 46 stores in the Kenkäexpertti group.
In April, after the period under review, an Intersport megastore
was opened in Lappeenranta. Musta Pörssi Maailma stores will be
opened in Turku in the spring, in Oulu in the summer and in
Lappeenranta towards the end of the year. Intersport megastores
will be opened in Tampere and Turku during the autumn. An
Intersport store and a Musta Pörssi store will be established in
the shopping centre that will be completed in Forssa towards the
end of the year. In addition, the premises for an Intersport
store and an Andiamo store will be built in the Mylly shopping
centre at Raisio that will be opened towards the end of the
year. An Andiamo store will be built in the Omena shopping
centre to be opened in Espoo in September.
Keswell´s result for the whole year is forecast to exceed the
previous year’s level.
Kesko Agriculture and Machinery
The net sales of Kesko Agriculture and Machinery were EUR 162
million, an increase of 13.6 percent, which was slightly better
than expected. The operating profit was EUR 1.7 million (EUR 1.9
million). Investments totalled EUR 0.5 million.
Kesko Agriculture´s sales increased in line with expectations by
7.9 percent. The good harvest in 2000 was reflected in the sales
volumes of grain. The delivery difficulties of the Zetor factory

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are still affecting tractor sales. Kesko Agriculture will start
the marketing of Deutz-Fahr tractors this year.
The overall net sales of Kesko Machinery were slightly better
than expected and grew by 19.7 percent, although the total
market in this sector contracted slightly. The market share of
the Man lorries expanded favourably at the beginning of the year
to reach 8.9 percent. Sales of Yamarin boats also continued
favourably.
The agricultural and machinery business in Estonia and Latvia
has progressed according to plan. A full-service agricultural
and machinery store will be started in Riga, Latvia in May.
At the beginning of February, the K-agricultural store in Forssa
was added to K-maatalousyhtiöt Oy´s network. K-maatalousyhtiöt
Oy now has a total of 20 K-agricultural stores. There are also
90 retailer-owned stores operating in the K-agricultural chain.
The operating profit of Kesko Agriculture and Machinery for the
whole year is expected to grow from the previous year.
VV-Auto
The VV-Auto Group´s net sales were EUR 130 million, a decrease
of 13.8 percent. The operating profit was EUR 5.5 million (EUR
7.5 million). Investments totalled EUR 0.8 million.
The overall car market in Finland dropped sharply at the
beginning of the year. The number of new cars registered was
25.7 percent lower and the number of commercial vehicles 1.5
percent lower than in the corresponding period of 2000.
The cars imported by the VV-Auto Group had a 13.8 percent market
share during the period under review. The market shares of
Volkswagen and Seat contracted slightly, whereas Audi sales did
well, thanks to the new A4 model. Concerning commercial
vehicles, Volkswagen´s market share rose to 23.0 percent, making
it the market leader.
The net sales of spare parts increased slightly despite the
contracting market, whereas the sales of accessories decreased,
resulting from the smaller sales volumes of new cars.
The VV-Auto Group´s net sales and operating profit are expected
to decrease from the previous year, due to the diminished
overall car market, but to remain at a good level.
Kaukomarkkinat
The Kaukomarkkinat Group´s net sales were EUR 73 million, which

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was 9.6 percent more than during the corresponding period in the
previous year. The Group´s operating profit was EUR 1.5 million
(EUR 0.4 million). Investments totalled EUR 0.7 million.
The increase in net sales were mostly attributable to Telko, a
company acquired in the autumn of 2000. Other units that
increased their net sales were Leipurien Tukku and the optical
sector. The Tähti Optikko chain continued to strengthen its
market share, as the Group´s optical sales grew by 10.1 percent.
The global sales of telecommunication products slowed down,
which was reflected in the Kauko East-West Division´s net sales.
The decreased net sales of Kauko Electronics resulted from an
over 20 percent decrease in TV sales in Finland. Consumers have
postponed their TV purchases due to the expectation of digital
TV programmes starting in the autumn. There have also been
problems with the trade in data equipment and communicators.
Sales of these product groups are expected to pick up towards
the end of the year.
East-West Trade, Telko and Adidas Suomi increased their
operating profit the most.
The Kaukomarkkinat Group´s operating profit for the whole year
is expected to exceed the level of the previous year.
Share and equities markets
Kesko Corporation’s share capital is EUR 180,426,800, with 35.2
percent of the share capital consisting of A shares and 64.8
percent of B shares.
The price of the company´s A share was EUR 16.95 at the end of 2000 and EUR
18.50 on 31 March 2001, an increase of 9.1 percent. The price of the B share was
EUR 10.75 at the end of 2000 and EUR 11.48 on 31 March 2001, an increase of 6.7
percent. The HEX general index dropped during the period by 36.0 percent and the
HEX portfolio index by 23.0 percent. The trading sector price index rose by 8.6
percent.
The market value of A shares was EUR 587 million and that of B shares EUR 671
million, i.e. the total market value of all shares amounted to EUR 1,258
million.
During the period under review, 0.5 million of Kesko’s A shares
with a total value of EUR 9.2 million and 4.6 million B shares
with a total value of EUR 51.2 million were traded on the
Helsinki Exchanges.
Kesko and the euro

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According to its transition plan, Kesko will prepare its
financial statements for 2001 in markkas and they will then be
converted into euros by using a conversion rate. When the
decisions on Kesko’s euro schedule were made, they were based
largely on the premise that the majority of Kesko’s customers
operate in Finland. During the transition period, the majority
of Kesko’s purchases and sales will be made in markkas. The
prices of stock items will remain in markkas until 31 December
2001. Based on the agreements made with customers, some
invoicing has been carried out in euros right from the beginning
of the transition period.
During the transition period, the transfer to the euro has been
managed by a special euro committee. The necessary information
system changes have been scheduled. The Group is expected to be
ready well before the changes are implemented in the early
autumn of 2001.
Events during the period under review
A chain operation reform affecting Kesko and about 1,450 K-
retailers was introduced at the beginning of 2001. Over 98
percent of the retailers approved the new chain agreement or a
customer agreement. Joint operation will be intensified
throughout the entire chain - in the development of chain
concepts, in category management, marketing, purchasing
operations and logistics. The new chain operation will
significantly strengthen Kesko´s competitiveness and the K-
stores´ ability to meet customer requirements in rapidly
changing markets.
A total of 34 retailers operating in various chains remained
outside the chain operation. On 21 February 2001, Kesko sent a
notice of termination to the 11 Citymarket retailers who did not
sign the new chain agreement. After adopting the new system,
Kesko cannot apply parallel systems.
On 10 April 2001, after the period under review, Kesko
Corporation was served a summons by nine Citymarket retailers to
whom Kesko had given notice. The Citymarket retailers primarily
demanded that Kesko pay damages amounting to approx. FIM 91
million (approx. EUR 15.3 million) for serving notice, which
they claim to be contrary to contract. Kesko contests all the
claims presented against it on the grounds that they are
unjustified and considers that it has sufficient legal grounds
to serve notice to terminate the agreements. Kesko demands that
the Citymarket retailers who have taken legal actions against it
shall pay full compensation for court costs and other damages
arising from this operation.

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On 29 January 2001, Kesko was granted an exceptional permit to
fix, on certain conditions, the highest prices for some of its
products offered by the K-superstores. The permit granted was
more restricted and applied to a shorter period than Kesko had
hoped. The exceptional permit is valid from 1 January 2001 to 31
December 2003. On 16 February 2001, the Office of Free
Competition granted the same kind of permits for the products
sold by the Citymarkets and K-supermarkets, and on 30 March 2001
for the products sold by the K-neighbourhood and K-extra stores.
Concerning the other chains, Kesko expects to receive the
decisions of the Office of Free Competition during this year.
According to Kesko, the permits granted by the Office provide
Kesko and the K-stores a good basis for operating in line with
the new chain system.
Kesko´s logistics centre at the junction of the Tallinn ring
road and the Tallinn-Tartu highway in Jüri was complemented on
20 February 2001. The logistics centre with a total floor area
of 16,200 square metres represents an investment of about EUR
8.4 million. The centre employs about 100 persons. The logistics
centre provides services to the entire area of Estonia. It
provides local retail stores and catering customers with a full
range of modern logistical services that meet EU standards. At
the same time, the centre serves as a warehouse for imported
groceries and supports the building of Kesko’s own retail store
network in the country. The unit also offers an efficient
distribution and export channel for the Estonian food industry.
On 5 March 2001, an environmental certificate was granted to
Kesko Food´s logistical operations and Kesped Ltd for
successfully installing an environmental system that complies
with the international ISO 14001 standard. The certificate
concerns the warehousing of groceries, terminal operations and
transport. This certificate for an environmental management
system is the first environmental award presented to a Finnish
food business.
On 30 March 2001, Kesko Corporation signed an agreement to sell
the majority shareholding (80%) of its IT subsidiary, Tietokesko
Oy, to TietoEnator Corporation. The aim is to implement the deal
so as to allow Tietokesko´s operations to continue under the new
ownership structure from 1 June 2001. The target of both owners
is to develop Tietokesko so that it can produce even better IT
services for Kesko´s business operations.
On 30 March 2001, the Carrols chain’s Estonian subsidiary,
Carrols AS, sold its restaurant operations in Tallinn to
Hesburger AS. Carrols AS had three restaurants in Tallinn.
Carrols will focus on growth in the Finnish market. In Finland,
the number of the Carrols restaurants will grow to 100 within a
few years, from the present number of 71 restaurants.

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On 9 April 2001, Kesko Corporation´s Annual General Meeting
adopted the financial statements for 2000, discharged those
accountable from any liability, and decided to pay a dividend of
EUR 1.00 per share. According to the Board of Directors’
proposal, the second paragraph of article 11 of the Articles of
Association was amended to read as follows: To have the right to
attend a General Meeting, shareholders shall register with the
company not later than on the date stated in the announcement of
the meeting, which date may not be earlier than (10) days prior
to the meeting.
On 4 May 2001, after the period under review, Kesko published
its first report on corporate responsibility. It is based on the
recommendations of the international Global Reporting Initiative
organisation.
Future outlook
According to the forecasts of the Research Institute of the
Finnish Economy, private consumption will increase by almost
four percent in Finland this year. Economic and consumer
forecasts for future development continue to be optimistic.
Together, they provide good operating conditions for domestic
trading. Kesko Group’s net sales are expected to grow by about
two percent in 2001, while the Group´s operating profit,
excluding non-recurring items, is expected to fall short of the
previous year’s level.
The ongoing chain reform will provide better conditions for
Kesko to increase its net sales and to improve its
profitability. This year, Kesko´s net sales are decreased by net
pricing, an essential part of the chain operations, which lowers
wholesale prices and decreases the Group’s net sales by about
two percentage points.
Helsinki, 9 May 2001
Kesko
Board of Directors
Further information: Executive Vice President and CFO Juhani
Järvi, telephone +358 1053 22209 and Vice President Paavo
Rönkkö, telephone +358 1053 22569.

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KESKO CORPORATION
Corporate Communications
Erkki Heikkinen
Senior Vice President
ATTACHMENTS
Group´s net sales by division
Income statement and balance sheet
Contingent liabilities
Kesko Corporation´s interim report for the first six months of
2001 will be published on 8 August 2001 at 8.00, and for the
first nine months on 14 November 2001 at 8.00. In addition,
Kesko Group´s sales figures are published each month. Releases
and other information are available on Kesko’s Internet pages at
Investor information, www.kesko.fi
DISTRIBUTION
HEX Helsinki Exchanges
Main news media

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TABLES:
Group’s net sales by division
EUR million Change, %
Kesko Food
Neighbourhood Chain Unit 237 -6.2
Supermarket Chain Unit 257 -3.4
Citymarket Oy 76 2.0
Kespro Ltd 166 -5.6
Kesko Eesti AS 9 72.5
Carrols 6 -10.6
Other subsidiaries 6 -11.9
./. eliminations 1
Total 758 -4.5
Rautakesko
Rautakesko 113 -2.3
Industrial and Constructor Sales 36 -4.7
K-rauta AB 9 32.3
AS Fanaal Estonia 7 -
A/S Fanaal Latvia 3 -
Other subsidiaries 1 -63.1
./. eliminations 3
Total 172 5.6
Keswell
Anttila Group 98 -0.1
Kesko Sports 28 26.8
Kesko Musta Pörssi 16 -16.4
Kesko Shoes 8 1.4
Other subsidiaries 4 -17.5
./. eliminations 0
Total 154 -6.1
Kesko Agriculture and Machinery
Kesko Agriculture 116 7.9
Kesko Machinery 38 19.7
K-maatalousyhtiöt Oy 32 25.1
Kesko Agro Eesti AS 3 -
SIA Kesko Agro 3 -
./. eliminations -30
Total 162 13.6
VV-Auto Group 130 -13.8
Kaukomarkkinat Group 73 9.6
Other subsidiaries – eliminations -17 -
GROUP TOTAL 1,432 -1.6

16
Consolidated income statement (MEUR)
1-3/2001 1-3/2000 Change, % 1-12/2000
Net sales 1,432 1,455 -1.6 6,308
Other operating income 84 66 27.6 336
Materials and services -1,261 -1,284 -1.8 -5,553
Personnel expenses -85 -74 14.3 -316
Depreciation and value adjustments -26 -26 1.9 -119
Other operating expenses
Share of associated companies’
profit (loss)
-144
0
-125
0
15.3
5.4
-540
1
Operating profit -0 12 -103.3 117
Financial income and expenses 1 3 -60.3 9
Profit before extraordinary items 1 15 -94.9 126
Extraordinary income
Extraordinary expenses
Profit before taxes 1 15 -94.9 126
Income taxes 0 -4 -94.9 -34
Minority interest 0 0 35.6 -1
Profit 1 11 -94.2 91
Consolidated balance sheet (MEUR)
1-3/2001 1-3/2000 Change, % 1-12/2000
Assets
Non-current assets
Intangible assets 147 131 11.8 149
Tangible assets 891 895 -0.4 883
Investments 157 154 1.4 153
Current assets
Stocks 567 500 13.3 536
Receivables
Long-term 91 89 2.2 92
Short-term 645 593 8.9 680
Marketable securities 8 136 -94.0 30
Cash on hand and at bank 22 23 -2.3 47
Total 2,528 2,521 0.3 2,570
Liabilities
Shareholders’ equity
Share capital 180 180 180
Other shareholders’ equity 1,201 1,254 -4.2 1,200
Minority interest 15 16 -4.4 16
Provisions 11 15 -29.0 12
Liabilities
Deferred tax liability 59 69 -13.2 61
Non-current debt 71 58 22.5 64
Current debt 991 929 6.6 1,037
Total 2,528 2,521 0.3 2,570

17
Operating profit of
divisions
1-3/2001 1-3/2000 4-6/2000 7-9/2000 9-12/2000 2000
Kesko Food -4.2 -1.2 10.7 15.9 15.6 41.0
Rautakesko -1.8 0.2 3.4 6.5 -3.7 6.4
Keswell -11.9 -10.9 -2.0 -2.4 7.5 -7.8
Kesko Agriculture and 1.7 1.9 5.7 -0.2 -2.9 4.5
Machinery
VV-Auto 5.5 7.5 5.3 3.2 1.8 17.8
Kaukomarkkinat 1.5 0.4 -0.4 3.8 0.7 4.5
Common operations 8.8 14.0 11.2 8.2 16.9 50.3
Operating profit -0.4 11.9 33.9 35.0 35.9 116.7
Group key indicators
3/2001 3/2000 Change, % 12/2000
Earnings/share, EUR 0.01 0.12 -94.9 1.00
Equity/share, EUR 15.31 15.89 -3.7 15.31
Return on invested capital, % 1.3 4.1 -66.1 8.5
Return on invested capital, %, moving
12 months 7.9 - 8.5
Return on equity, % 0.2 2.9 6.4
Return on equity, %, moving 12 months 5.7 - 6.4
Equity ratio, % 55.4 57.7 -4.3 54.7
Investments, EUR million 47.9 101.2 -39.2 246.9
Personnel, average 10,928 10,543 3.4 11,099
Group contingent liabilities (MEUR) 3/2001 3/2000 Change,% 12/2000
For own debt 161 148 15.5 176
For associated companies 1 1 0.0
For shareholders 1 1 0.0 1
For others 2 3 -19.3 2
Leasing liabilities 21 16 31.0 23
Liabilities arising from derivative
instruments
Market
value
3/2001 3/2000 31.3.2001 12/2000
Value of underlying instruments
31.12.
Interest rate derivatives
Forward and future contracts 6 2 0 4
Option agreements
Bought
Written
Interest rate swaps 8 0
Currency derivatives

18
Forward and future contracts 58 49 1 57
Option agreements
Bought 6 4 0 10
Written 1 0 1
Currency swaps
Equities derivatives
Forward and future contracts
Option agreements
Bought 0 2 0 2
Written 0 2 0
The figures are unaudited. The figures for 2000 have been
converted to comparable ones. The figures in this report are
based on markka-denominated bookkeeping and accounting, and the
euro-denominated figures have been calculated by using the
conversion rate 5.94573. The Finnish interim report with markka
figures is available from Kesko Corporate Communications.