Interim report for 1 January - 31 March 2011


KESKO CORPORATION STOCK EXCHANGE RELEASE 28.04.2011 AT 09.00 1(24)

Financial performance in brief:
*The Group's net sales for January-March increased by 7.4%.
*The operating profit excluding non-recurring items for January-March was €34.9
million, up €14.0 million on the previous year (€20.9 million).
*The Kesko Group's net sales are expected to increase during the next twelve
months. The operating profit excluding non-recurring items is expected to grow
during the next twelve months, regardless of significant expansion costs of the
store site network. The Group has amended its guidance on profitability
performance. Previously, the operating profit excluding non-recurring items was
expected to remain at the achieved level.

Key performance indicators
                                                       1-3/2011  1-3/2010

Net sales, € million                                      2,103     1,958

Operating profit excl. non-recurring items, € million      34.9      20.9

Operating profit, € million                                35.7      20.9

Profit before tax, € million                               36.1      21.9

Capital expenditure, € million                             64.1      42.0

Earnings/share, €, diluted                                 0.25      0.15

Earnings/share excl. non-recurring items, €, basic         0.24      0.15



                                                      31.3.2011 31.3.2010

Equity ratio, %                                            54.4      51.3

Equity/share, €                                           22.04     19.69


FINANCIAL PERFORMANCE

Net sales and profit for January-March 2011
The Group's net sales in January-March 2011 were €2,103 million, which is 7.4%
up on the corresponding period of the previous year (€1,958 million). In
Finland, net sales increased by 6.6% and in other countries by 12.7%.
International operations accounted for 14.6% (13.9%) of the net sales. In the
food trade, net sales grew by 3.9%, and K-food stores' grocery sales performance
was up 4.9%. In the home and speciality goods trade, net sales decreased by
2.0% and in the building and home improvement trade, net sales increased by
15.1%. In the car and machinery trade, net sales grew by 18.1%, in comparable
terms by 26.1%.

1-3/2011                 Net sales, M€ Change, %     Operating profit Change, M€
                                                  excl. non-recurring
                                                            items, M€

Food trade                         948      +3.9                 41.4       +9.7

Home and speciality
goods trade                        348      -2.0                 -7.4       -7.5

Building and home
improvement trade                  570     +15.1                 -9.1       +4.7

Car and machinery trade            279     +18.1                 12.2       +5.9

Common operations and
eliminations                       -42      +2.9                 -2.2       +1.3

Total                            2,103      +7.4                 34.9      +14.0


The operating profit excluding non-recurring items for January-March was €34.9
million (€20.9 million), representing 1.7% (1.1%) of the net sales.
Profitability improved in the food trade, the building and home improvement
trade and the car and machinery trade.

Operating profit was €35.7 million (€20.9 million). The operating profit
includes a total of €0.8 million of non-recurring items. The Group's profit
before tax for January-March was €36.1 million (€21.9 million).

The Group's earnings per share were €0.25 (€0.15). The Group's equity per share
was €22.04 (€19.69).

In January-March, the K-Group's (i.e. Kesko's and the chain stores') retail and
B2B sales (VAT 0%) were €2,520 million, up 7.4% compared to the previous year.
During the same period, K-food stores' grocery sales grew by 4.9% (VAT 0%). In
January-March, the K-Group chains' sales entitling to K-Plussa points were
€1,271 million excluding tax, up 3.5% compared to the previous year. In January-
March, the K-Plussa customer loyalty programme gained 21,838 new households. At
the end of March, there was 2,106,779
K-Plussa households.

Finance
In January-March, the cash flow from operating activities was €-25.3 million
(€8.0 million). The cash flow from operating activities was negatively impacted
by higher inventories and receivables. The cash flow from investing activities
was €-67.7 million (€-41.5 million). It included €1.7 million (€1.1 million) of
proceeds from the sales of fixed assets.

Throughout January-March, the Group's liquidity and solvency remained at an
excellent level. At the end of the period, liquid assets totalled €724 million
(€687 million). Interest-bearing liabilities were €444 million (€458 million)
and interest-bearing net liabilities €-279 million (€-229 million) at the end of
March. Equity ratio was 54.4% (51.3%) at the end of the period.

In January-March, the Group's net finance costs were €0.6 million (net finance
income €0.8 million).

Taxes
The Group's taxes in January-March were €11.2 million (€6.9 million). The
effective tax rate was 31.0% (31.4%), affected by loss-making foreign
operations.

Capital expenditure
In January-March, the Group's capital expenditure totalled €64.1 million (€42.0
million), or 3.0% (2.1%) of the net sales. Capital expenditure in store sites
was €54.6 million (€32.5 million) and other capital expenditure €9.5 million
(€9.5 million). Capital expenditure in foreign operations represented 19.6%
(39.5%) of total capital expenditure.

Personnel
In January-March, the average number of employees in the Kesko Group was 18,158
(17,557) converted into full-time employees. In Finland, the average increase
was 69 people, while outside Finland, it was 531.

At the end of March 2011, the total number of employees was 21,670 (21,059), of
whom 12,140 (12,110) worked in Finland and 9,530 (8,949) outside Finland.
Compared to the end of March 2010, there was an increase of 30 people in Finland
and 581 people outside Finland.

In January-March, the Group's staff cost increased by €9.7 million, or by 7.6%,
compared to the previous year.

SEGMENTS

Seasonal nature of operations
The Group's operating activities are affected by seasonal fluctuations. The net
sales and operating profits of the reportable segments are not earned evenly
throughout the year. Instead, they vary by quarter depending on the
characteristics of each segment.



Food trade
                                                          1-3/2011  1-3/2010

Net sales, € million                                           948       912

Operating profit excl. non-recurring items, € million         41.4      31.7

Operating profit as % of net sales excl. non-recurring
items                                                          4.4       3.5

Capital expenditure, € million                               30.9       16.5



Net sales, € million                                      1-3/2011 Change, %

Sales to K-food stores                                         734      +4.2

Kespro                                                         164      +4.8

Others                                                          50      -2.5

Total                                                          948      +3.9


January-March 2011
In Kesko's food trade, the net sales for January-March were €948 million (€912
million), up 3.9%. During the same period, the grocery sales of K-food stores
increased by 4.9% (VAT 0%). Good sales performance was achieved especially by K-
citymarkets and K-supermarkets. The sales performance of Pirkka products was
excellent and sales growth stood at 28.3% (VAT 0%). In January-March, the growth
rate of the total grocery trade market in Finland is estimated at some 3.5% (VAT
0%) compared to the previous year (Kesko's own estimate). The sales performance
was adversely impacted by all of Easter sales falling in the second quarter of
this year. The price change in the grocery market is estimated to have stood at
some 4% compared to the previous year (VAT 0%, Kesko's own estimate).

In January-March, the operating profit excluding non-recurring items of the food
trade was €41.4 million (€31.7 million), or €9.7 million up on the previous
year. Sales growth is partly attributable to increased selections of Pirkka
products and local foods in particular. Cost efficiency improved in logistics as
well as purchasing and store site operations. Operating profit was €42.1 million
(€31.7 million).

In January-March, capital expenditure in the food trade was €30.9 million (€16.5
million), of which capital expenditure in store sites was €29.0 million (€11.5
million).

In January-March, three new K-supermarkets and three K-markets were opened. In
addition, renovations and extensions were made in 14 stores. In April, a K-
citymarket was opened in Tammisto, Vantaa, another in Palokka, Jyväskylä and a
K-supermarket was opened in Sysmä.

The most significant store sites being built are the new K-citymarkets in
Hyvinkää, in Hämeensaari, Hämeenlinna, in Kouvola, in Karisto, Lahti, in
Päivölä, Seinäjoki and in Äänekoski. K-supermarket Mäntsälä is being extended
into a K-citymarket and K-citymarket Kolmisoppi in Kuopio is being extended. New
K-supermarkets are being built in Kilo, Espoo, in Hattula, in Myllypuro,
Helsinki, in Jalasjärvi, in Veikkola, Kirkkonummi, in Lappeenranta, Mäntyharju,
Pietarsaari, Pori, Savonlinna and Vihti. K-market Mukkula in Lahti and K-market
Pähkinä in Vantaa are being extended into K-supermarkets.

Home and speciality goods trade
                                                          1-3/2011  1-3/2010

Net sales, € million                                           348       355

Operating profit excl. non-recurring items, € million         -7.4       0.1

Operating profit as % of net sales excl. non-recurring
items                                                         -2.1       0.0

Capital expenditure, € million                                 8.1       3.5



Net sales, € million                                      1-3/2011 Change, %

K-citymarket home and speciality goods                         135      -1.4

Anttila                                                        109      -3.8

Intersport                                                      41      -2.9

Indoor                                                          41     +14.3

Musta Pörssi                                                    16     -23.0

Kenkäkesko                                                       6      -7.2

Total                                                          348      -2.0


January-March 2011
In the home and speciality goods trade, the net sales for January-March were
€348 million (€355 million), down 2.0%. Asko and Sotka increased their sales. At
the beginning of February, the Anttila department store in Tikkurila was closed
because its lease term expired. The Anttila department store in Hämeenlinna is
being converted into a K-citymarket, which will open in October 2011. As a
result of network restructuring, there were 13 less Musta Pörssi stores at the
end of March.

The operating profit excluding non-recurring items of the home and speciality
goods trade for January-March was €-7.4 million (€0.1 million), showing a €7.5
million year-on-year decrease. In addition to sales decrease, the operating
profit performance is partly attributable to the launch of Anttila's new
logistics centre, as well as the development of Anttila's and K-citymarket's
home and speciality goods selection.

Capital expenditure in the home and speciality goods trade in January-March was
€8.1 million (€3.5 million).

In late March, an Anttila Koti store was opened in Tiiriö, Hämeenlinna. It is a
new type of store mainly selling home and interior decoration goods. Budget
Sport opened a new store in Lahti at the end of March.

The gradual introduction of Anttila's new automated logistics centre has
progressed according to plan. The logistics centre will make e-commerce and
department store logistics significantly more efficient.

Building and home improvement trade
                                                          1-3/2011  1-3/2010

Net sales, € million                                           570       495

Operating profit excl. non-recurring items, € million         -9.1     -13.8

Operating profit as % of net sales excl. non-recurring
items                                                         -1.6      -2.8

Capital expenditure, € million                                18.7      18.0



Net sales, € million                                      1-3/2011 Change, %

Rautakesko Finland                                             280     +11.7

K-rauta Sweden                                                  43     +20.4

Byggmakker Norway                                              123     +13.5

Rautakesko Estonia                                              10      +3.2

Rautakesko Latvia                                                8      +3.1

Senukai Lithuania                                               44     +18.8

Stroymaster Russia                                              43     +23.8

OMA Belarus                                                     19     +77.8

Total                                                          570     +15.1


January-March 2011
In the building and home improvement trade, the net sales for January-March were
€570 million (€495 million), up 15.1%. Sales in the building and home
improvement trade increased in all operating countries. The growth rate and
structure vary between countries in terms of private customers and B2B
customers. The steadiest growth was seen in the largest markets in the Nordic
countries, whereas the Baltic countries still are an uncertain basis for growth.

In January-March, the net sales in Finland were €280 million, an increase of
11.7%. The building and home improvement product lines contributed €201 million
to the net sales in Finland, an increase of 11.3%. The agricultural supplies
trade contributed €79 million to the net sales, up 12.8%.

The net sales from foreign operations in the building and home improvement trade
were €290 million (€244 million), an increase of 18.6%. The net sales from
foreign operations increased by 14.8% in terms of local currencies. In Sweden,
net sales increased by 7.3% in terms of kronas. In Norway, net sales increased
by 9.6% in terms of krones. In Russia, net sales increased by 20.0% in terms of
rubles, and in Belarus, by 81.9% in terms of rubles. Foreign operations
contributed 50.8% to the net sales of the building and home improvement trade.

The operating profit excluding non-recurring items of the building and home
improvement trade was €-9.1 million (€-13.8 million), up €4.7 million. The
profit performance was impacted by the fact that sales growth was derived from
basic building materials with low margins and by the costs related to the
international enterprise resource planning system. Operating profit was €-9.1
million (€-13.8 million).

Capital expenditure in the building and home improvement trade totalled €18.7
million (€18.0 million), of which 67.3% (92.1%) abroad and 85.7% in store sites.

The retail sales of the K-rauta and Rautia chains in Finland grew by 11.7% to
€176 million (VAT 0%). The sales of Rautakesko B2B Service increased by 12.2%.
As a whole, the growth rate of Rautakesko's building materials sales is
estimated to have exceeded that of the market in Finland. The retail sales of
the K-maatalous chain were €79 million (VAT 0%), up 17.3%.

In January-March, Rautakesko's chains did not open new stores. On 16 April
2011, a new K-rauta was opened in St. Petersburg, Russia. A store site for a new
K-rauta was acquired in Turku, where also a new Rautia-K-maatalous store is
being built. New K-rauta stores are being built in Kuopio and Kouvola. In
Sweden, K-rauta stores are being built in Uppsala and Haparanda, and two more K-
rauta stores in Moscow, Russia.

 Car and machinery trade
                                                          1-3/2011  1-3/2010

Net sales, € million                                           279       236

Operating profit excl. non-recurring items, € million         12.2       6.4

Operating profit as % of net sales excl. non-recurring
items                                                          4.4       2.7

Capital expenditure, € million                                 6.0       4.0



Net sales, € million                                      1-3/2011 Change, %

VV-Auto                                                        218     +28.1

Konekesko                                                       61      -7.3

Total                                                          279     +18.1




January-March 2011
In January-March, the net sales of the car and machinery trade were €279 million
(€236 million), up 18.1%. The comparable net sales of the car and machinery
trade grew by 26.1%. The discontinued Baltic grain and agricultural inputs trade
has been eliminated from the comparable net sales.

VV-Auto's net sales for January-March were €218 million (€170 million), an
increase of 28.1%. In Finland, new registrations of passenger cars increased by
22.6% and those of vans by 48.4% compared to the previous year. In January-
March, the combined market share of passenger cars and vans imported by VV-Auto
was 18.9% (19.1%). Order books continued at a record high level. Availability of
vehicles coupled with dockworkers' stoppage affected delivery times.

Konekesko's net sales for January-March were €61 million (€66 million), down
7.3% compared to the previous year, as a result of the discontinuation of the
Baltic grain and agricultural inputs trade. Konekesko's comparable net sales
grew by 19.7%. The net sales in Finland were €49 million, up 14.5%. The net
sales from Konekesko's foreign operations were €13 million, down 44.4%. In line
with its strategy, Konekesko concentrates on the machinery trade also in the
Baltic countries.

In January-March, the operating profit excluding non-recurring items of the car
and machinery trade was €12.2 million (€6.4 million), which was €5.9 million
higher than in the previous year. The strong profit is attributable to excellent
sales performance and cost management. The operating profit for January-March
was €12.2 million (€6.4 million).

Capital expenditure in the car and machinery trade was €6.0 million (€4.0
million) in January-March.

Changes in the Group composition
There were no significant changes in the Group composition during the reporting
period.

Shares, securities market and Board authorisations
At the end of March 2011, Kesko Corporation's share capital totalled
€197,282,584. Of all shares 31,737,007, or 32.2%, were A shares and 66,904,285,
or 67.8%, were B shares. The aggregate number of shares was 98,641,292. Each A
share entitles to ten (10) votes and each B share to one (1) vote. During the
reporting period, there were no changes in the company's share capital or the
number of shares.

The price of a Kesko A share quoted on NASDAQ OMX Helsinki (the Helsinki stock
exchange) was €34.70 at the end of 2010, and €32.89 at the end of March 2011,
representing a decrease of 5.2%. Correspondingly, the price of a B share was
€34.93 at the end of 2010, and €33.00 at the end of March 2011, representing a
decrease of 5.5%. In January-March, the highest A share price was €36.00 and the
lowest was €30.26. For B share, they were €35.81 and €29.86 respectively. In
January-March, the Helsinki stock exchange (OMX Helsinki) All-Share index fell
by 1.9%, the weighted OMX Helsinki CAP index by 0.3%, while the Consumer Staples
Index was down 3.9% during the same period.

At the end of March 2011, the market capitalisation of A shares was €1,044
million, while that of B shares was €2,208 million. Their combined market
capitalisation was €3,252 million, a decrease of €187 million from the end of
2010. In January-March 2011, 504,558 A shares were traded on the Helsinki stock
exchange at a total value of €17 million, while 17.8 million B shares were
traded at a total value of €580 million.

The company operates the 2007 stock option scheme for management and other key
personnel, under which the share subscription period of 2007A option rights
began on 1 April 2010, that of 2007B option rights on 1 April 2011, and that of
2007C option rights will begin at the beginning of April 2012. The 2007A and
2007B option rights have also been included on the official list of the Helsinki
stock exchange since the beginning of the share subscription periods. A total of
9,650 2007A option rights were traded during the reporting period at a total
value of €14,103.

In addition to the authorisations by the Annual General Meeting of 4 April 2011
to acquire a total maximum of 1,000,000 own B shares and to issue a total
maximum of 1,000,000 own B shares held by the company, the Board of Directors
also has the authorisation by the Annual General Meeting of 30 March 2009 to
issue a maximum of 20,000,000 new B shares against payment or other
consideration. The authorisations have not been used. Further information on
Board authorisations is available at www.kesko.fi.

At the end of March 2011, the number of shareholders was 40,873, which is 2,615
more than at the end of 2010. At the end of March 2011, foreign ownership of all
shares was 23%, and foreign ownership of B shares was 34%.


Flagging notifications
Kesko Corporation did not receive flagging notifications during the reporting
period.

Main events during the reporting period
Merja Haverinen, M.Soc.Sc., was appointed Kesko Corporation's Senior Vice
President for Corporate Communications and Responsibility starting from 1 April
2011. Paavo Moilanen, Senior Vice President for Corporate Communications and
Responsibility, retired on 1 April 2011, in accordance with his service
contract. (Stock exchange release on 4 February 2011).

Events after the reporting period
Kesko's Annual General Meeting was held on 4 April 2011. President and CEO Matti
Halmesmäki announced in his review that Kesko Food will open four large-scale
grocery stores in Russia in 2012-2013. Kesko Food's objective is to achieve €500
million in net sales and a positive operating result in Russia by 2015. The
capital expenditure is estimated at €300 million in 2011-2015. At the same time
with new construction, Kesko Food will continue to explore business acquisition
opportunities in both St. Petersburg and Moscow. (Stock exchange release on 4
April 2011).

On 4 April 2011, Kesko's Board of Directors decided to introduce a new share-
based compensation plan for some 150 Kesko management personnel and other named
key personnel, in which a maximum of 600,000 own B shares held by the company
can be granted to people in the target group within a period of three years. The
plan encourages its participants to commit to the Kesko Group and provides them
with the opportunity to receive company shares, if the targets set in the share-
based compensation plan are achieved. A commitment period of three calendar
years is attached to the shares issued in compensation, during which shares must
not be transferred. (Stock exchange release on 4 April 2011).

Resolutions of the 2011 Annual General Meeting and decisions of the Board's
organisational meeting
Kesko Corporation's Annual General Meeting, held after the end of the reporting
period on 4 April 2011, adopted the financial statements for 2010 and discharged
the Board members and the Managing Director from liability. The General Meeting
also resolved to distribute €1.30 per share as dividends, or a total of
€128,233,679.60, as proposed by the Board of Directors. The dividend pay date
was 14 April 2011. The General Meeting also resolved to leave the number of
Board members unchanged at seven, elected PricewaterhouseCoopers Oy as the
company's auditor, with APA Johan Kronberg as the auditor with principal
responsibility, and approved the Board's proposals to authorise the Board to
acquire a total maximum of 1,000,000 own B shares, and to issue a total maximum
of 1,000,000 own B shares held by the company itself. The General Meeting also
approved the Board's proposal to decide in 2011 on the donation of a total
maximum of €300,000 for charitable or corresponding purposes.

The organisational meeting of Kesko Corporation's Board of Directors, held after
the Annual General Meeting, decided to maintain the compositions of the Board's
Audit Committee and Remuneration Committee unchanged.

More detailed information on the resolutions of the 2011 Annual General Meeting
and on the decisions of the Board's organisational meeting was given in stock
exchange releases on 4 April 2011.

Responsibility
The theme of Kesko's Day of Commerce seminar was "Finland's future lies in
competent and industrious people". At the same time, the nearly 700 invited
guests celebrated Kesko's 70th anniversary.

For the seventh time, Kesko ranked in the list of 'the Global 100 Most
Sustainable Corporations'. Kesko's ranking is now 26(th), compared with 33(rd) a
year before.

SAM (Sustainable Asset Management) assessed Kesko's performance in
responsibility work and placed it in Silver Class in the Food & Drug Retailers
sector of the SAM Sustainability Yearbook 2011. The assessment of companies in
this sector included aspects such as health and nutrition, environmental
systems, eco-efficiency of operations and standards of suppliers.
World Finance Magazine recognised Kesko for the best corporate governance in
Finland in terms of development and reporting.
Kesko participated in the WWF's worldwide Earth Hour 2011 event by switching off
office and store lights for one hour on 26 March 2011.

Kesko Food is one of the founder members of Pro Luomu ry, a registered
association for organic sector operators, founded on 22 March 2011. Kesko Food's
selections include nearly 700 organic products. The Pirkka range offers some 50
organic products.

Risk management
The Kesko Group has an established and comprehensive risk management process.
Risks and their management are regularly assessed within the Group and reported
to the Group's management. Kesko's risk management and risks related to business
operations are described in more detail in the corporate governance section of
Kesko's website. During the first months of the year, no material changes have
taken place in the risk components presented in Kesko's 2010 Annual report and
financial statements.

The most significant risks for Kesko's operating activities in the near future
are involved in the general economic development and consumer confidence in
Kesko's operating area and their impacts on the Kesko Group's sales and profit
performance.

The risks and uncertainties related to profit performance are described in the
future outlook section of this release.

Future outlook
Estimates of the future outlook for the Kesko Group's net sales and operating
profit excluding non-recurring items are given for the 12 months following the
reporting period (4/2011-3/2012) in comparison with the 12 months preceding the
reporting period (4/2010-3/2011).

The outlook for trends in consumer demand has remained steady, as a result of
high consumer confidence and continuously low interest rate levels. The trend in
economic development involves significant uncertainties relating to the
evolution of total production, tightening taxation and possible ramifications of
disturbances in the financial market.

The steady development in the grocery trade is expected to continue. The home
and speciality goods trade is expected to develop in line with the trend in
private consumption. The building and home improvement market is expected to
strengthen as a result of increasing housing construction. In the car and
machinery trade, the sales of new cars are expected to grow, and the situation
in the machinery market is expected to recover.

The Kesko Group's net sales are expected to grow during the next twelve months.
During the next twelve months, the operating profit excluding non-recurring
items is expected to increase regardless of significant expansion costs of the
store site network.


Helsinki, 27 April 2011
Kesko Corporation
Board of Directors


The information in this interim report is unaudited.

Further information is available from Arja Talma, Senior Vice President, CFO,
telephone +358 10 53 22113, and Eva Kaukinen, Vice President, Corporate
Controller, telephone +358 10 53 22338. A Finnish-language webcast from the
media and analyst briefing on the interim report can be accessed at www.kesko.fi
at 11.00. An English-language web conference on the interim report will be held
today at 14.30 (Finnish time). The web conference login is available at
www.kesko.fi.

Kesko Corporation's interim report for the period January-June will be released
on 26 July 2011. In addition, the Kesko Group's sales figures are published each
month. News releases and other company information are available on Kesko's
website at: www.kesko.fi.


KESKO CORPORATION


Merja Haverinen
Senior Vice President, Corporate Communications and Responsibility


ATTACHMENTS
Accounting policies
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated cash flow statement
Group performance indicators
Net sales by segment
Operating profit by segment
Operating profits excl. non-recurring items by segment
Operating margins excl. non-recurring items by segment
Capital employed by segment
Return on capital employed excl. non-recurring items by segment
Capital expenditure by segment
Segment information by quarter
Personnel average and at 31 March
Group contingent liabilities
Calculation of performance indicators
K-Group's retail and B2B sales



DISTRIBUTION
NASDAQ OMX Helsinki
Main news media
www.kesko.fi

ATTACHMENTS:

Accounting policies

This interim report has been prepared in accordance with the IAS 34 standard.
The interim report has been prepared in accordance with the same principles as
the annual financial statements for 2010, with the exception of the following
changes due to the adoption of new and revised IFRS standards and IFRIC
interpretations.

-IAS 24 (revised), Related Party Disclosures
-IAS 32 (amendment), Financial Instruments: Presentation - Classification of
Rights Issues
-IFRIC 14 (amendment), Prepayments of a Minimum Funding Requirement
-IFRIC 19, Extinguishing Financial Liabilities with Equity Instruments
- Annual amendments to the IFRSs (Annual Improvements)


The above amendments to standards and interpretations do not have a material
impact on the reported income statement, statement of financial position or
notes.

The Group accounts for real estate company acquisitions as acquisitions of
tangible assets. Previously, real estate company acquisitions were accounted for
as business combinations in accordance with IFRS 3. Adjustments relating to the
cost of acquisitions have been made retrospectively.


Consolidated income statement (€ million),
condensed

                                                    1-3/   1-3/ Change, %  1-12/
                                                    2011   2010             2010

Net sales                                          2,103  1,958       7.4  8,777

Cost of goods sold                                -1,814 -1,694       7.1 -7,547

Gross profit                                         289    263       9.7  1,230

Other operating income                               160    147       9.3    699

Staff cost                                          -138   -128       7.6   -521

Depreciation and impairment charges                  -29    -27       5.5   -121

Other operating expenses                            -247   -234       5.7   -981

Operating profit                                      36     21      70.3    307

Interest income and other finance income               5      6     -13.1     23

Interest expense and other finance costs              -4     -4       3.3    -15

Exchange differences                                  -1     -1      87.6     -1

Income from associates                                 1      0      (..)      0

Profit before tax                                     36     22      65.1    312

Income tax                                           -11     -7      63.1    -97

Profit for the period                                 25     15      66.0    216



Attributable to

  Owners of the parent                                25     15      62.3    205

  Non-controlling interests                            0      0      (..)     11



Earnings per share (€) for
profit attributable to equity
holders of the parent



Basic                                               0.25   0.15      61.4   2.08

Diluted                                             0.25   0.15      61.4   2.06



Consolidated statement of
comprehensive income
(€ million)

                                                    1-3/   1-3/ Change, %  1-12/
                                                    2011   2010             2010

Net profit for the period                             25     15      66.0    216

Other comprehensive income

Exchange differences on translating foreign
operations                                            -1      3      (..)      5

Cash flow hedge revaluation                           -5     -1      (..)     21

Revaluation of available-for-sale financial
assets                                                -1      1      (..)      1

Other items                                            -      -         -     -1

Tax relating to other comprehensive income             1      0      (..)     -6

Total other comprehensive income for the period,
net of tax                                            -5      3      (..)     20

Total comprehensive income
for the period                                        19     18       8.3    236



Attributable to

  Owners of the parent                                22     18      21.9    224

  Non-controlling interests                           -2      0      (..)     12

(..) Change over 100%

Consolidated statement of financial
position (€ million), condensed

                                        31.3.2011 31.3.2010 Change, % 31.12.2010

ASSETS

Non-current assets

Tangible assets                             1,295     1,131      14.5      1,261

Intangible assets                             178       178       0.0        180

Interests in associates and other
financial assets                               63        36      73.9         61

Loans and receivables                          71        65       8.0         72

Pension assets                                183       321     -43.1        186

Total                                       1,789     1,732       3.3      1,759



Current assets

Inventories                                   796       684      16.3        757

Trade receivables                             681       669       1.7        620

Other receivables                             151       154      -2.0        183

Financial assets at fair value through
profit or loss                                164       324     -49.3        242

Available-for-sale financial assets           512       297      72.4        549

Cash and cash equivalents                      47        66     -28.9         56

Total                                       2,351     2,194       7.1      2,406

Non-current assets held for sale                1         1      -0.8          1



Total assets                                4,141     3,927       5.4      4,167


                                       31.3.2011 31.3.2010 Change, % 31.12.2010

EQUITY AND LIABILITIES

Equity                                     2,174     1,938      12.2      2,152

Non-controlling interests                     56        65     -12.9         59

Total equity                               2,231     2,002      11.4      2,210



Non-current liabilities

Interest-bearing liabilities                 229       244      -6.3        235

Non-interest-bearing liabilities               6         6      -5.9          5

Deferred tax liabilities                      84       119     -29.5         87

Pension obligations                            2         2      -5.8          2

Provisions                                    12        14     -15.9         12

Total                                        332       385     -13.8        340



Current liabilities

Interest-bearing liabilities                 216       214       0.9        242

Trade payables                               878       804       9.2        838

Other non-interest-bearing liabilities       459       496      -7.4        507

Provisions                                    26        27      -4.8         29

Total                                      1,579     1,540       2.5      1,616



Total equity and liabilities               4,141     3,927       5.4      4,167

(..) Change over 100%


Consolidated statement of changes in equity (€ million)
                Share   Issue  Share  Other   Cur-   Revalu-  Re-    Non-  Total
               capital   of    premi- reser-  rency   ation  tained cont-
                        share    um    ves   trans-   sur-   earn-   rol-
                       capital               lation   plus    ings   ling
                                             differ-                inte-
                                              ences                 rests

Balance at
1.1.2010           197       0    194    243      -7      -3  1,381     64 2,070

Shares
subscribed
with options         0              1                                          1

Option cost                                                       2      0     2

Dividends                                                       -89          -89

Other changes                                                     0      0     0

Net profit for
the period                                                       15      0    15

Other
comprehensive
income

Exchange
differences on
translating
foreign
operations                                 0       3              0      0     3

Cash flow
hedge
revaluation                                               -1                  -1

Revaluation of
available-for-
sale financial
assets                                                     1                   1

Other
components

Tax relating
to other
comprehensive
income                                                     0                   0

Total other
comprehensive
income                                     0       3       0      0      0     3

Balance at
31.3.2010          197       0    195    243      -4      -3  1,310     65 2,002



Balance at
1.1.2011           197       0    198    243      -3      14  1,503     59 2,210

Shares
subscribed
with options

Option cost                                                       1      0     1

Dividends

Other changes                                                     0      0     0

Net profit for
the period                                                       25      0    25

Other
comprehensive
income

Exchange
differences on
translating
foreign
operations                                 0       1              0     -3    -1

Cash flow
hedge
revaluation                                               -5                  -5

Revaluation of
available-for-
sale financial
assets                                                    -1                  -1

Other
components

Tax relating
to other
comprehensive
income                                                     1                   1

Total other
comprehensive
income                                     0       1      -4      0     -3    -5

Balance at
31.3.2011          197       0    198    243      -1       9  1,529     56 2,231


Consolidated cash flow statement (€ million), condensed
                                                         1-3/ 1-3/ Change% 1-12/
                                                         2011 2010          2010

Cash flow from operating
activities

Profit before tax                                          36   22    65.1   312

Planned depreciation                                       29   27     5.8   116

Finance income and
costs                                                       1   -1    (..)    -6

Other adjustments                                           8   -7    (..)    97



Change in working capital

Current non-interest-bearing
trade and other receivables,
increase (-)/ decrease (+)                                -61  -63    -1.9   -15

Inventories
increase (-)/ decrease (+)                                -40  -13    (..)   -82

Current non-interest-bearing
liabilities,
increase (+)/decrease (-)                                 -13   55    (..)   153



Financial items and tax                                    15  -13    (..)  -136

Net cash generated from operating activities              -25    8    (..)   438



Cash flow from investing
activities

Capital expenditure                                       -69  -44    57.8  -367

Sales of fixed assets                                       2    1    59.2   124

Increase of non-current
receivables                                                 0    -    (..)     -

Decrease of non-current
receivables                                                 -    1    (..)     4

Net cash used in investing
activities                                                -68  -41    63.2  -240



Cash flow from financing
activities

Increase (+)/ decrease (-) in
interest-bearing liabilities                              -29    8    (..)    39

Increase (-)/decrease (+) in
current interest-bearing
receivables                                                 0   -2   -83.6    11

Dividends paid                                              -    -       -  -106

Equity increase                                             -    1    (..)     4

Increase (-)/ decrease (+) in short-term money market
investments                                                86 -180    (..)  -114

Other items                                                 0   -3   -88.6   -15

Net cash used in financing
activities                                                 57 -176    (..)  -181



Change in cash and cash
equivalents                                               -36 -209   -82.7    18



Cash and cash equivalents
and current portion of
available-for-sale financial
assets at 1 Jan.                                          509  491     3.7   491

Currency translation difference adjustment and
revaluation                                                 0    1   -91.9     0

Cash and cash equivalents
and current portion of
available-for-sale financial
assets at 31 Mar.                                         473  283    67.3   509

(..) Change over 100%

Group's performance indicators

                                            1-3/2011 1-3/2010  Change, 1-12/2010
                                                                    pp

Return on capital employed, %                    7.2      4.4      2.8      16.0

Return on capital employed, %, moving 12 mo     16.6     11.3      5.3      16.0

Return on capital employed excl. non-
recurring items, %                               7.0      4.4      2.7      14.0

Return on capital employed excl. non-
recurring items, %, moving 12 mo                14.6      8.5      6.1      14.0

Return on equity, %                              4.5      2.9      1.5      10.1

Return on equity, %, moving 12 mo               10.7      7.0      3.7      10.1

Return on equity excl. non-recurring items,
%                                                4.4      2.9      1.4       8.7

Return on equity excl. non-recurring items,
%, moving 12 mo                                  9.3      4.9      4.4       8.7

Equity ratio, %                                 54.4     51.3      3.2      53.5

Gearing, %                                     -12.5    -11.5     -1.1     -16.8

                                                              Change,%

Capital expenditure, € million                  64.1     42.0     52.4     325.3

Capital expenditure, % of net sales              3.0      2.1     41.9       3.7

Earnings per share, basic, €                    0.25     0.15     61.4      2.08

Earnings per share, diluted, €                  0.25     0.15     61.4      2.06

Earnings per share excl. non-recurring
items, basic, €                                 0.24     0.15     58.4      1.78

Cash flow from operating activities,
€ million                                        -25        8     (..)       438

Cash flow from investing activities,
€ million                                        -68      -41     63.2      -240

Equity/share, €                                22.04    19.69     11.9     21.81

Personnel, average                            18,158   17,557      3.4    18,215

(..) Change over 100%


Group's performance indicators by quarter          1-3/  4-6/  7-9/ 10-12/  1-3/
                                                   2010  2010  2010   2010  2011

Net sales, € million                              1,958 2,279 2,231  2,310 2,103

Change in net sales, %                             -3.0   6.4   4.6    7.3   7.4

Operating profit, € million                        20.9  79.0 123.9   82.8  35.7

Operating margin, %                                 1.1   3.5   5.6    3.6   1.7

Operating profit excl. non-recurring items, €
million                                            20.9  78.1  88.7   80.5  34.9

Operating margin excl. non-recurring items, %       1.1   3.4   4.0    3.5   1.7

Finance income/costs,
€ million                                           0.8  -0.2   0.8    4.6  -0.6

Profit before tax, € million                       21.9  78.7 124.5   87.3  36.1

Profit before tax, %                                1.1   3.5   5.6    3.8   1.7

Return on capital employed, %                       4.4  16.1  26.4   17.5   7.2

Return on capital employed excl. non-recurring
items, %                                            4.4  15.9  18.9   17.0   7.0

Return on equity, %                                 2.9  10.6  16.1   11.5   4.5

Return on equity excl. non-recurring items, %       2.9  10.5  11.1   11.2   4.4

Equity ratio, %                                    51.3  51.4  53.4   53.5  54.4

Capital expenditure,
€ million                                          42.0  45.7  35.9  201.6  64.1

Earnings per share, diluted, €                     0.15  0.51  0.81   0.59  0.25

Equity per share, €                               19.69 20.30 21.11  21.81 22.04


Segment information

Net sales by segment,                                  1-3/  1-3/ Change, 1-12/
(€ million)                                            2011  2010       %  2010



Food trade, Finland                                     948   912     3.9 3,896

Food trade, other countries*                              -     -       -     -

Food trade total                                        948   912     3.9 3,896

- of which intersegment trade                            43    42     3.0   162



Home and speciality goods trade, Finland                344   350    -1.8 1,553

Home and speciality goods trade, other countries*         4     4   -12.8    15

Home and speciality goods trade total                   348   355    -2.0 1,569

- of which intersegment trade                             3     5   -27.2    23



Building and home improvement trade, Finland            280   251    11.7 1,163

Building and home improvement trade, other countries*   290   244    18.6 1,357

Building and home improvement trade total               570   495    15.1 2,519

- of which intersegment trade                             1     0    (..)     0



Car and machinery trade, Finland                        266   213    25.0   859

Car and machinery trade, other countries*                13    23   -44.5    96

Car and machinery trade total                           279   236    18.1   955

- of which intersegment trade                             0     0    (..)     0



Common operations and eliminations                      -42   -40     2.9  -162

Finland total                                         1,797 1,686     6.6 7,309

Other countries total*                                  306   272    12.7 1,468

Group total                                           2,103 1,958     7.4 8,777

* Net sales in countries other than Finland.
(..) Change over 100%

Operating profit by segment (€ million) 1-3/  1-3/        1-12/
                                        2011  2010 Change  2010



Food trade                              42.1  31.7   10.4 158.4

Home and speciality goods trade         -7.4   0.1   -7.5 103.4

Building and home improvement trade     -9.1 -13.8    4.7  23.9

Car and machinery trade                 12.2   6.4    5.9  33.9

Common operations and eliminations      -2.2  -3.4    1.2 -12.8

Group total                             35.7  20.9   14.7 306.7



Operating profit excl. non-recurring items by segment (€ 1-3/  1-3/        1-12/
million)                                                 2011  2010 Change  2010



Food trade                                               41.4  31.7    9.7 160.1

Home and speciality goods trade                          -7.4   0.1   -7.5  66.0

Building and home improvement trade                      -9.1 -13.8    4.7  24.0

Car and machinery trade                                  12.2   6.4    5.9  33.1

Common operations and eliminations                       -2.2  -3.4    1.3 -15.0

Group total                                              34.9  20.9   14.0 268.1


Operating margins excl. non-recurring    1-3/ 1-3/            1-12/ Moving 12 mo
items by segment                         2011 2010 Change, pp  2010       3/2011



Food trade                                4.4  3.5        0.9   4.1          4.3

Home and speciality goods trade          -2.1  0.0       -2.2   4.2          3.7

Building and home improvement trade      -1.6 -2.8        1.2   1.0          1.1

Car and machinery trade                   4.4  2.7        1.7   3.5          3.9

Group total                               1.7  1.1        0.6   3.1          3.2


Capital employed by segment, cumulative
average (€ million)                      1-3/  1-3/        1-12/
                                         2011  2010 Change  2010



Food trade                                556   608    -53   590

Home and speciality goods trade           409   433    -24   431

Building and home improvement trade       658   631     27   627

Car and machinery trade                   149   201    -52   168

Common operations and eliminations        218    43    175   101

Group total                             1,990 1,916     74 1,918


Return on capital employed excl. non-    1-3/ 1-3/            1-12/       Moving
recurring items by segment, %            2011 2010 Change, pp  2010 12 mo 3/2011



Food trade                               29.8 20.8        8.9  27.1         29.3


Home and speciality goods trade          -7.3  0.1       -7.3  15.3         13.7


Building and home improvement trade      -5.5 -8.7        3.2   3.8          4.5

Car and machinery trade                  32.8 12.7       20.1  19.6         25.0

Group total                               7.0  4.4        2.7  14.0         14.6


Capital expenditure by segment (€ million) 1-3/ 1-3/        1-12/
                                           2011 2010 Change  2010



Food trade                                   31   16     14   117

Home and speciality goods trade               8    3      5    45

Building and home improvement trade          19   18      1    78

Car and machinery trade                       6    4      2    18

Common operations and eliminations            0    0      0    67

Group total                                  64   42     22   325


Segment information by quarter

Net sales by segment                 1-3/  4-6/  7-9/ 10-12/  1-3/
(€ million)                          2010  2010  2010   2010  2011

Food trade                            912   976   986  1 022   948

Home and speciality goods trade       355   334   378    501   348

Building and home improvement trade   495   712   687    625   570

Car and machinery trade               236   298   218    203   279

Common operations and eliminations    -40   -41   -39    -42   -42

Group total                         1,958 2,279 2,231  2,310 2,103


Operating profit by segment (€ million)  1-3/ 4-6/  7-9/ 10-12/ 1-3/
                                         2010 2010  2010   2010 2011

Food trade                               31.7 42.2  47.3   37.2 42.1

Home and speciality goods trade           0.1  7.0  50.6   45.6 -7.4

Building and home improvement trade     -13.8 17.9  19.9   -0.2 -9.1

Car and machinery trade                   6.4 15.0   8.6    3.9 12.2

Common operations and eliminations       -3.4 -3.2  -2.5   -3.7 -2.2

Group total                              20.9 79.0 123.9   82.8 35.7


Operating profit excl. non-recurring items by         1-3/ 4-6/ 7-9/ 10-12/ 1-3/
segment (€ million)                                   2010 2010 2010   2010 2011

Food trade                                            31.7 42.1 49.5   36.8 41.4

Home and speciality goods trade                        0.1  7.0 13.2   45.7 -7.4

Building and home improvement trade                  -13.8 17.9 20.0   -0.2 -9.1

Car and machinery trade                                6.4 14.1  8.7    3.9 12.2

Common operations and eliminations                    -3.4 -3.1 -2.8   -5.7 -2.2

Group total                                           20.9 78.1 88.7   80.5 34.9


Operating margins excl. non-recurring items by        1-3/ 4-6/ 7-9/ 10-12/ 1-3/
segment (€ million)                                   2010 2010 2010   2010 2011

Food trade                                             3.5  4.3  5.0    3.6  4.4

Home and speciality goods trade                        0.0  2.1  3.5    9.1 -2.1

Building and home improvement trade                   -2.8  2.5  2.9    0.0 -1.6

Car and machinery trade                                2.7  4.7  4.0    1.9  4.4

Group total                                            1.1  3.4  4.0    3.5  1.7


Personnel average and at 31 March

Personnel average by segment
                                    1-3/2011 1-3/2010 Change

Food trade                             2,646    2,822   -176

Home and speciality goods trade        5,363    5,264     99

Building and home improvement trade    8,587    7,985    602

Car and machinery trade                1,162    1,109     53

Common operations                        401      378     23

Group total                           18,158   17,557    601



Personnel at 31 March*
by segment                              2011     2010 Change

Food trade                             2,912    3,201   -289

Home and speciality goods trade        7,468    7,284    184

Building and home improvement trade    9,622    8,994    628

Car and machinery trade                1,230    1,158     72

Common operations                        438      422     16

Group total                           21,670   21,059    611

* total number incl. part-time employees

Group's contingent liabilities
(€ million)

                                             31.3.2011 31.3.2010  Change, %



For own commitments                                211       224       -6.1

For shareholders                                     0         0        0.0

For others                                           7         5       27.7

Lease liabilities for machinery and fixtures        23        22        6.4

Lease liabilities for real estate                2,306     2,291        0.6



Contingent liabilities arising from

derivative financial instruments

                                                                 Fair value

Values of underlying instruments at 31 Mar.  31.3.2011 31.3.2010  31.3.2011


Interest rate derivative contracts

  Forward and future contracts                       -         0          -

  Interest rate swap contracts                     201       206       4.42

Currency derivative contracts

  Forward and future contracts                     210       519      -3.83

  Currency swap contracts                          100       100     -15.95

  Option contracts                                   -         2          -

Commodity derivative contracts

  Electricity derivative contracts                  52        45       7.62



Calculation of performance indicators
Return on capital employed*, %         Operating profit x 100 / (Non-current
                                       assets + Inventories + Receivables +
                                       Other current assets - Non-interest-
                                       bearing liabilities) on average for the
                                       reporting period



Return on capital employed, %, moving  Operating profit for prior 12 months x
12 months                              100 / (Non-current assets + Inventories +
                                       Receivables + Other current assets - Non-
                                       interest-bearing liabilities) on average
                                       for 12 months



Return on capital employed excl. non-  Operating profit excl. non-recurring
recurring items*, %                    items x 100 / (Non-current assets +
                                       Inventories + Receivables + Other current
                                       assets - Non-interest-bearing
                                       liabilities) on average for the reporting
                                       period



Return on capital employed, excl. non- Operating profit excl. non-recurring
recurring items, %, moving 12 mo       items for prior 12 months x 100 / (Non-
                                       current assets + Inventories +
                                       Receivables + Other current assets - Non-
                                       interest-bearing liabilities) on average
                                       for 12 months



                                       (Profit/loss before tax - income tax) x
Return on equity*, %                   100 /
                                       Shareholders' equity



                                       (Profit/loss for prior 12 months before
Return on equity, %, moving 12 months  tax - income tax for prior 12 months) x
                                       100 /Shareholders' equity



                                       (Profit/loss adjusted for non-recurring
                                       items before tax - income tax adjusted
                                       for the tax effect of non-recurring
Return on equity excl. non-recurring   items) x
items*, %                              100 / Shareholders' equity



                                       (Profit/loss for prior 12 months adjusted
                                       for non-recurring items before tax -
                                       income tax for prior 12 months adjusted
Return on equity excl. non-recurring   for the tax effect of non-recurring
items, %, moving 12 months             items) x100 / Shareholders' equity



                                       Shareholders' equity x 100 /
Equity ratio, %                        (Balance sheet total - prepayments
                                       received)



                                       (Profit/loss - non-controlling interests)
Earnings/share, diluted                /
                                       Average number of shares adjusted for the
                                       dilutive effect of options



                                       (Profit/loss - non-controlling interests)
Earnings/share, basic                  /
                                       Average number of shares



Earnings/share excl. non-recurring     (Profit/loss adjusted for non-recurring
items, basic                           items - non-controlling
                                       interests)/Average number of shares



                                       Equity attributable to equity holders of
Equity/share                           the parent /
                                       Basic number of shares at balance sheet
                                       date



Gearing, %                             Interest-bearing net liabilities x 100 /
                                       Shareholders' equity


*Indicators for return on capital have been annualised.

K-Group's retail and B2B sales, VAT 0% (preliminary data):

                                                               1.1.-31.3.2011

K-Group retail and B2B sales                                 € million Change, %



K-Group food trade

K-food stores, Finland                                           1,049       4.6

Kespro                                                             162       4.4

Food trade total                                                 1,211       4.6



K-Group home and speciality goods trade

Home and speciality goods stores, Finland                          384      -1.9

Home and speciality goods stores, Baltic countries                   4     -11.6

Home and speciality goods trade total                              388      -2.0



K-Group building and home improvement trade

K-rauta and Rautia                                                 176      11.7

Rautakesko B2B Service                                              41      12.2

K-maatalous                                                         79      17.3

Finland total                                                      297      13.2

Building and home improvement stores, other Nordic countries       213      12.7

Building and home improvement stores, Baltic countries              62      14.1

Building and home improvement stores, other countries               62      35.1

Building and home improvement trade total                          634      14.9



K-Group car and machinery trade

VV-Autotalot                                                       100      30.9

VV-Auto, import                                                    126      28.3

Konekesko, Finland                                                  49      12.1

Finland total                                                      274      25.9

Konekesko, Baltic countries                                         13     -43.8

Car and machinery trade total                                      287      19.2



Finland total                                                    2,166       6.7

Other countries total                                              354      11.7

Retail and B2B sales total                                       2,520       7.4








[HUG#1509971]

Attachments

Keskos_interim_report_Q1_2011.pdf.pdf