Kesko's interim report for the period 1 Jan. to 30 Jun. 2014

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| Source: Kesko Oyj
KESKO CORPORATION INTERIM REPORT 22.07.2014 AT 09.00 1(32)

Kesko's interim report for the period 1 Jan. to 30 Jun. 2014

Financial performance in brief:
*The Group's net sales for January-June €4,499 million, change -1.8%.
*Operating profit excluding non-recurring items €86.7 million (€88.4 million).
*Earnings per share excluding non-recurring items €0.64 (€0.56).
*Equity ratio 52.3% (50.5%).
*Kesko Group's net sales and operating profit excluding non-recurring items for
the next 12 months are expected to remain at the level of the preceding 12
months, unless the overall consumer demand weakens significantly.

Key performance indicators
                                            1-6/2014  1-6/2013 4-6/2014 4-6/2013

Net sales, € million                           4,499     4,580    2,371    2,420

Operating profit excl. non-recurring
items, € million                                86.7      88.4     67.6     69.8

Operating profit, € million                     56.3      96.3     69.4     77.0

Profit before tax, € million                    57.0      93.0     71.4     77.2

Capital expenditure, € million                  99.1      89.5     55.7     48.1

Earnings per share, €, diluted                  0.39      0.62     0.51     0.50

Earnings per share excl. non-recurring
items, €, basic                                 0.64      0.56     0.49     0.45



                                           30.6.2014 30.6.2013

Equity ratio, %                                 52.3      50.5

Equity per share, €                            21.86     21.79


FINANCIAL PERFORMANCE

Net sales and profit for January-June 2014
The Group's net sales for January-June 2014 were €4,499 million, which is 1.8%
down on the corresponding period of the previous year (€4,580 million). The
weakening of the general economic situation and consumer demand in Finland and
exchange rate changes contributed to the performance. In terms of local
currencies, net sales were at the previous year's level. Net sales increased in
the building and home improvement trade and in the car trade and declined in the
food trade and in the home and speciality goods trade. In Finland, net sales
decreased by 2.8% and in the other countries, net sales increased by 3.4%. In
the other countries, net sales performance in euros was impacted by the
weakening of the exchange rates of the Russian rouble, the Norwegian krone and
the Swedish krona. Foreign currency net sales increased in foreign operations by
12.4%. International operations accounted for 18.0% (17.1%) of net sales.

1-6/2014                Net sales, € Change, %  Operating profit       Change, €
                             million                  excl. non-         million
                                                       recurring
                                                items, € million

Food trade                     2,112      -1.5              99.4            +0.4

Home and speciality
goods trade                      600     -10.0             -41.0           -13.2

Building and home
improvement trade              1,317      +1.2              16.2           +13.3

Car and machinery
trade                            556      +0.9              19.1            -1.7

Common operations
and eliminations                 -85      +2.9              -7.0            -0.6

Total                          4,499      -1.8              86.7            -1.7


The operating profit excluding non-recurring items for January-June was €86.7
million (€88.4 million). Profitability was weakened by the decreased sales of
the home and speciality goods trade and especially by Anttila's loss-making
operations. Profit performance was positively impacted by the increase of sales
in the building and home improvement trade and the enhancement measures
implemented in all operations. Operating expenses excluding non-recurring items
decreased by 1.1% despite the expansion of the store site network and cost
inflation.

Operating profit was €56.3 million (€96.3 million). The operating profit
includes €-30.4 million (€7.9 million) of non-recurring items. The non-recurring
items include a restructuring provision of €30.0 million for measures taken to
improve Anttila's profitability.

The Group's profit before tax for January-June was €57.0 million (€93.0
million).

The Group's earnings per share were €0.39 (€0.62). The Group's equity per share
was €21.86 (€21.79).

In January-June, the K-Group's (i.e. Kesko's and the chain stores') retail and
B2B sales (VAT 0%) were €5,539 million, down 1.4% compared to the previous year.
The K-Plussa customer loyalty programme gained 28,419 new households in January-
June. At the end of June, there was 2,260,655 K-Plussa households and 3.6
million K-Plussa cardholders.

Net sales and profit for April-June 2014
The Group's net sales for April-June 2014 were €2,371 million, which is 2.1%
down on the corresponding period of the previous year (€2,420 million). The
decrease in net sales is mainly attributable to the decline in the sales of the
home and speciality goods trade and the machinery trade. In Finland, net sales
were down 2.4% and 0.7% in the other countries. The net sales performance of the
building and home improvement trade in euros (-0.6%) was impacted by the
weakening of the exchange rates of the Russian rouble, the Norwegian krone and
the Swedish krona. In terms of local currencies, the net sales of the building
and home improvement trade increased by 3.7%. International operations accounted
for 19.6% (19.3%) of the Group's net sales.

4-6/2014                Net sales, € Change, %  Operating profit       Change, €
                             million                  excl. non-         million
                                                       recurring
                                                items, € million

Food trade                     1,106      +0.6              52.9            +2.2

Home and speciality
goods trade                      288     -10.5             -18.3            -8.2

Building and home
improvement trade                736      -0.6              26.6            +7.1

Car and machinery
trade                            283      -6.0              10.9            -2.1

Common operations
and eliminations                 -42      +1.2              -4.5            -1.1

Total                          2,371      -2.1              67.6            -2.1


The operating profit excluding non-recurring items for April-June was €67.6
million (€69.8 million), representing 2.9% (2.9%) of net sales. Profitability
was weakened by the decreased sales of the home and speciality goods trade and
especially by Anttila's loss-making operations. Due to enhancement measures,
operating expenses excluding non-recurring items decreased by 1.0%

Operating profit was €69.4 million (€77.0 million). The operating profit
includes €1.8 million (€7.3 million) of non-recurring items. The Group's profit
before tax for April-June was €71.4 million (€77.2 million).

The Group's earnings per share were €0.51 (€0.50).

In April-June, the K-Group's (i.e. Kesko's and the chain stores') retail and B2B
sales (VAT 0%) were €2,984 million, down 2.0% compared to the previous year.

Finance
In January-June, the cash flow from operating activities was €33.9 million
(€185.7 million). The cash flow from investing activities was €-92.5 million (€-
80.0 million) including a €6.3 million (€14.0 million) amount of proceeds from
the sale of fixed assets.

The Group's liquidity remained at an excellent level in January-June. At the end
of the period, liquid assets totalled €461 million (€474 million). Interest-
bearing liabilities were €539 million (€587 million) and interest-bearing net
debt €78 million (€113 million) at the end of June. Equity ratio was 52.3%
(50.5%) at the end of the period.

In January-June, the Group's net finance income was €0.6 million (net finance
costs €2.9 million).

In April-June, the cash flow from operating activities was €128.7 million
(€244.3 million). The cash flow from investing activities was €-48.8 million (€-
38.1 million) including a €4.4 million (€11.5 million) amount of proceeds from
the sale of fixed assets.
In April-June, the Group's net finance income was €2.2 million (€0.4 million).
It includes a €4.9 million (€4.0 million) amount of interest on cooperative
capital from Suomen Luotto-osuuskunta.

Taxes
In January-June, the Group's taxes were €15.1 million (€28.4 million). The
effective tax rate was 26.4% (30.5%), impacted by loss-making foreign
operations.

In April-June, the Group's taxes were €17.6 million (€23.6 million). The
effective tax rate was 24.6% (30.5%).

Capital expenditure
In January-June, the Group's capital expenditure totalled €99.1 million (€89.5
million), or 2.2% (2.0%) of net sales. Capital expenditure in store sites was
€74.4 million (€66.8 million), in IT €15.6 million (€12.1 million) and other
capital expenditure was €9.1 million (€10.6 million). Capital expenditure in
foreign operations represented 42.6% (42.2%) of total capital expenditure.

In April-June, the Group's capital expenditure totalled €55.7 million (€48.1
million), or 2.3% (2.0%) of net sales. Capital expenditure in store sites was
€46.6 million (€35.2 million), in IT €4.8 million (€6.5 million) and other
capital expenditure was €4.3 million (€6.4 million). Capital expenditure in
foreign operations represented 46.8% (47.0%) of total capital expenditure.

Kesko's strategic focus areas
The key focus areas in Kesko's business operations are to strengthen sales
growth and the return on capital in all divisions, to exploit business
opportunities in e-commerce and in Russia, and to maintain good solvency and
dividend payment capacity.

Profitability programme
Because of the further weakened economic situation and consumer demand, Kesko
continues to implement the profitability programme with the key objective of
improving the Group's cost-effectiveness. Cost savings will be implemented in
all divisions and across all types of expense. The most significant measures
will be targeted at operations with low profitability.

Improving Anttila's profitability
In order to improve Anttila's profitability, a decision was made during the
reporting period to close eight Anttila department stores operating in leased
premises. During the reporting period, it was also decided to close four Kodin1
department stores and to implement enhancement measures in the central units of
Anttila Oy and K-citymarket Oy.

The personnel reductions at the Kodin1 department stores to be closed, the other
Kodin1 department stores, the central unit and logistics operations total
approximately 200 full-time equivalents. The co-operation negotiations conducted
for improving profitability concerned a total of approximately 1,350 people and
at the beginning of the negotiations, the need for reduction was estimated at no
more than 220 full-time equivalents. In addition to the profitability driven
renewal of Anttila's operations, the option of selling Anttila Oy is also being
investigated.

Personnel reductions at the Anttila department stores, the Kodin1 department
stores, the central unit and logistics operations will total approximately 400
full-time equivalents.

Net sales targets in Russia
In consequence of the weakening of the Russian business environment and the
rouble, coupled with the availability of Russian store sites suitable for
Kesko's operations, the growth targets for Russian operations have been updated.
The total net sales from the Russian operations are expected to exceed €1
billion in 2017 and the operating profit is expected to be positive. The capital
expenditure in Russia is anticipated at approximately €100-150 million annually.
The net sales target of the building and home improvement trade for 2017 is set
at €500 million (previously €800 million). The objectives set for the food trade
have not been changed; for 2017, the net sales target is €500 million and a
positive business result.

Kesko looks into setting up a real estate fund
Kesko is looking into selling some of its store sites to a fund to be set up
with Kesko as one of its major investors. Kesko Group would continue its
operations in the store sites under long-term leases signed in connection with
their sales to the fund.

Kesko's objective is to set up a fund of mainly Kesko-owned store sites and
shopping centres in Finland, Sweden and Russia with a maximum fair value of
approximately €750 - 950 million.

Launching the real estate investment fund depends, in addition to investor
interest, on whether it is possible for Kesko to achieve such terms and
conditions in the arrangement that are commercially viable for it, taking the
Group's strong financial position into account. Moreover, starting a real estate
investment fund is subject to the authorisation of the Financial Supervisory
Authority.

The possible fund is expected to be launched in the course of 2014.

Personnel
In January-June, the average number of employees in Kesko Group was 19,935
(19,373) converted into full-time employees. In Finland, the average decrease
was 186 people, while outside Finland, there was an increase of 748 people.

At the end of June 2014, the number of employees was 24,493 (24,026), of whom
12,889 (13,252) worked in Finland and 11,604 (10,774) outside Finland. Compared
to the end of June 2013, there was a decrease of 363 people in Finland and an
increase of 830 people outside Finland.

In January-June, the Group's staff cost was €314 million, showing a 1.3%
increase  compared to the previous year. In April-June, staff cost increased by
0.9% compared to the previous year and was €158 million.

SEGMENT INFORMATION

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
                                           1-6/2014  1-6/2013 4-6/2014  4-6/2013

Net sales, € million                          2,112     2,144    1,106     1,099

Operating profit excl. non- recurring
items, € million                               99.4      99.0     52.9      50.8

Operating margin excl. non-recurring
items, %                                        4.7       4.6      4.8       4.6

Capital expenditure,
€ million                                      46.8      43.9     28.7      27.4



Net sales, € million                       1-6/2014 Change, % 4-6/2014 Change, %

Sales to K-food stores                        1,585      -3.4      834      -0.3

Kespro                                          380      -2.8      199      -2.4

K-ruoka, Russia                                  51      (..)       26     +90.9

Others                                           96      +7.5       46      +4.5

Total                                         2,112      -1.5    1,106      +0.6

(..) Change over 100%

January-June 2014
In the food trade, the net sales for January-June were €2,112 million (€2,144
million), down 1.5%. During the same period, the grocery sales of K-food stores
in Finland decreased by 2.3% (VAT 0%). In the grocery market, retail prices are
estimated to have changed by some +1% compared to the previous year (VAT 0%,
Kesko's own estimate based on the Consumer Price Index of Statistics Finland),
and the total market (VAT 0%) is estimated to have grown in January-June by some
0-1% compared to the previous year. (Kesko's own estimate). The rise of consumer
prices in the grocery trade has slowed towards the end of the reporting period.
The sales and profitability of the food stores in Russia were realised better
than expected for the reporting period despite the weakening of the Russian
rouble.

In January-June, the operating profit excluding non-recurring items of the food
trade was €99.4 million (€99.0 million), or €0.4 million up on the previous
year. Profitability was improved by savings achieved from enhanced operations.
Operating profit was €97.4 million (€103.3 million). Non-recurring expenses were
€2.0 million (non-recurring income €4.3 million).

The capital expenditure of the food trade in January-June was €46.8 million
(€43.9 million), of which €43.8 million (€38.9 million) in stores sites.

April-June 2014
In the food trade, the net sales for April-June were €1,106 million (€1,099
million), up 0.6%.

In April-June, the operating profit excluding non-recurring items of the food
trade was €52.9 million (€50.8 million), or €2.2 million up on the previous
year. The result from the fair value measurement of derivatives used for hedging
electricity purchases was €-0.2 million (€-2.0 million). Operating profit was
€52.0 million (€55.1 million). Non-recurring expenses were €0.9 million (non-
recurring income €4.3 million).

The capital expenditure of the food trade in April-June was €28.7 million (€27.4
million).

In April-June, one new K-supermarket and one new K-market were opened. Renewals
and space modifications were made in a total of 14 stores.

The most significant store sites being built are a K-citymarket in the Puuvilla
shopping centre in Pori and K-supermarkets in Jakomäki and Lauttasaari,
Helsinki, and in Hanko, Hollola and Lappeenranta. K-market Kreivintori in Raahe
is being expanded into a K-supermarket. The objective of Kesko Food is to open
three new food stores in the St Petersburg area in 2014.


Numbers of stores as at 30 June         2014 2013

K-citymarket                              80   80

K-supermarket                            220  215

K-market (incl. service station stores)  441  445

K-ruoka, Russia                            4    2

Others*                                  171  178

*incl. online food store

Home and speciality goods trade
                                           1-6/2014  1-6/2013 4-6/2014  4-6/2013

Net sales, € million                            600       667      288       322

Operating profit excl. non- recurring
items, € million                              -41.0     -27.8    -18.3     -10.0

Operating margin excl. non-recurring
items, %                                       -6.8      -4.2     -6.3      -3.1

Capital expenditure, € million                  7.4      13.8      3.7       5.8



Net sales, € million                       1-6/2014 Change, % 4-6/2014 Change, %

K-citymarket, home and speciality goods         267      -6.1      134      -7.3

Anttila                                         143     -16.1       67     -18.3

Intersport, Finland                              78     -10.5       32     -11.2

Intersport, Russia                                8     -21.9        3     -13.8

Indoor                                           85      -3.0       44      -1.2

Musta Pörssi                                     10     -37.2        5     -31.7

Kenkäkesko                                       10      -7.5        4     -11.7

Total                                           600     -10.0      288     -10.5


January-June 2014
In the home and speciality goods trade, the net sales for January-June were €600
million (€667 million), down 10.0%. Consumer demand in the home and speciality
goods trade has continued to weaken, and the change in customer behaviour has
strengthened during the reporting period. Sales declined especially in the
Anttila and Kodin1 department stores. Net sales performance was also impacted by
the network changes in Musta Pörssi and Intersport Russia. The sales of online
stores were up from the previous year.

In January-June, the operating profit excluding non-recurring items of the home
and speciality goods trade was €-41.0 million (€-27.8 million), down €13.2
million compared to the previous year. The performance was especially impacted
by the loss increased by the decline in Anttila's sales. The profit of
Intersport Finland remained at a good level despite sales decline. Operating
profit was €-72.0 million (€-23.3 million). The most significant non-recurring
item was the restructuring provision of €30.0 million for measures to be taken
to improve the profitability of Anttila.

The capital expenditure of the home and speciality goods trade in January-June
was €7.4 million (€13.8 million).

April-June 2014
In the home and speciality goods trade, the net sales for April-June were €288
million (€322 million), down 10.5%. Sales declined especially in the Anttila and
Kodin1 department stores. The net sales performances of Musta Pörssi and
Intersport Russia were impacted by network changes. The sales of online stores
increased.

In April-June, the operating profit excluding non-recurring items of the home
and speciality goods trade was €-18.3 million (€-10.0 million), down €8.2
million compared to the previous year. The performance was especially impacted
by the loss increased by the decline in Anttila's sales. Operating profit was €-
17.6 million (€-5.6 million).

The capital expenditure of the home and speciality goods trade was €3.7 million
(€5.8 million).

In April-June, a new Asko store, replacing the one closed at the same time, was
opened in Tampere. In addition, the Anttila Koti store in Hämeenlinna and two
Intersport stores in Russia were closed.

Numbers of stores as at 30 June                                  2014 2013

K-citymarket, home and speciality goods*                           81   81

Anttila department stores*                                         30   31

Kodin1 department stores for interior decoration and home goods*   13   13

Intersport, Finland                                                63   62

Budget Sport*                                                      11   11

Asko and Sotka                                                     87   84

Musta Pörssi*                                                       6    6

Kookenkä*                                                          46   48

Anttila, Baltics*                                                   3    3

Intersport, Russia                                                 18   20

Asko and Sotka, Baltics*                                           10   10

*incl. online stores

Building and home improvement trade
                                           1-6/2014  1-6/2013 4-6/2014  4-6/2013

Net sales, € million                          1,317     1,302      736       740

Operating profit excl. non- recurring
items, € million                               16.2       2.9     26.6      19.5

Operating margin excl. non-recurring
items, %                                        1.2       0.2      3.6       2.6

Capital expenditure,
€ million                                      27.3      21.6     15.3       9.1



Net sales,
€ million                                  1-6/2014 Change, % 4-6/2014 Change, %

Rautakesko, Finland                             625      +1.6      336      +0.5

K-rauta, Sweden                                 100      -3.0       62      -5.1

Byggmakker, Norway                              220      -7.5      120     -12.0

K-rauta, Estonia                                 36     +17.1       22     +17.5

K-rauta, Latvia                                  25      +6.3       15      +7.5

Senukai, Lithuania                              137     +20.5       80     +20.0

K-rauta, Russia                                 118      -8.1       68     -10.9

OMA, Belarus                                     57     +14.4       34     +14.7

Total                                         1,317      +1.2      736      -0.6


January-June 2014
In the building and home improvement trade, the net sales for January-June were
€1,317 million (€1,302 million), up 1.2%. In terms of local currencies, the net
sales growth in the building and home improvement trade was 5.8%. Net sales
increased in all operating countries in terms of local currencies.

In Finland, the net sales for January-June were €625 million (€615 million), an
increase of 1.6%. The building and home improvement products contributed €427
million to the net sales in Finland, an increase of 2.5%. The agricultural
supplies trade contributed €198 million to the net sales, down 0.4%.

The retail sales of the K-rauta and Rautia chains in Finland grew by 1.7% to
€489 million (VAT 0%). The sales of Rautakesko B2B Service increased by 3.1%.
The K-Group's sales of building and home improvement products in Finland
increased by a total of 1.9% and the total market (VAT 0%) is estimated to have
fallen by 1-2% (Kesko's own estimate). The retail sales of the K-maatalous chain
were €238 million (VAT 0%), up 0.6%.

In January-June, the net sales from foreign operations of the building and home
improvement trade were €692 million (€686 million), an increase of 0.8%. In
terms of local currencies, the net sales from foreign operations increased by
9.5%. In Sweden, net sales in kronas were up by 1.8% and in Norway net sales in
krones were up by 1.8%. In Russia, net sales in roubles increased by 8.2%.
Foreign operations contributed 52.5% (52.7%) to the net sales of the building
and home improvement trade.

In January-June, the operating profit excluding non-recurring items of the
building and home improvement trade was €16.2 million (€2.9 million), up €13.3
million compared to the previous year. Due to sales increase and enhancement
measures, profit performance was clearly positive. The financial performance
improved especially in foreign operations. Operating profit was €18.8 million
(€2.0 million).

In January-June, the capital expenditure of the building and home improvement
trade totalled €27.3 million (€21.6 million), of which 80.0% (47.3%) abroad.
Capital expenditure in store sites represented 82.6% of total capital
expenditure.

April-June 2014
In the building and home improvement trade, the net sales for April-June were
€736 million (€740 million), down 0.6%. In terms of local currencies, the net
sales growth in the building and home improvement trade was 3.7%.

In Finland, net sales were €336 million (€334 million), an increase of 0.5%. The
building and home improvement products contributed €230 million to the net sales
in Finland, an increase of 1.5%. The agricultural supplies trade contributed
€106 million to the net sales, down 1.6%. In April-June, the retail sales of the
K-rauta and Rautia chains in Finland were down by 0.2% to €310 million (VAT
0%). The sales of Rautakesko B2B Service remained at the previous year's level.
The retail sales of the K-maatalous chain were €146 million (VAT 0%), up 1.9%.

The net sales from foreign operations of the building and home improvement trade
were €400 million (€406 million), a decrease of 1.5%. In terms of local
currencies, the net sales from foreign operations increased by 6.2%. In Sweden,
net sales in kronas remained at the previous year's level. In Norway, net sales
in krones were down by 4.7%. In Russia, net sales in roubles increased by 3.8%.
Foreign operations contributed 54.3% (54.8%) to the net sales of the building
and home improvement trade.

In April-June, the operating profit excluding non-recurring items of the
building and home improvement trade was €26.6 million (€19.5 million), up €7.1
million compared to the previous year due to sales increase and enhancement
measures. Operating profit was €28.6 million (€18.0 million).

The capital expenditure of the building and home improvement trade was €15.3
million (€9.1 million), of which 82.9% (44.7%) abroad.

In April, Lithuania's 19th building and home improvement store was opened in
Siauliai.

Numbers of stores as at 30 June 2014 2013

K-rauta*                          42   42

Rautia*                           97   99

K-maatalous*                      82   83

K-rauta, Sweden                   20   21

Byggmakker, Norway                86   90

K-rauta, Estonia                   8    8

K-rauta, Latvia                    8    8

Senukai, Lithuania                19   17

K-rauta, Russia                   13   15

OMA, Belarus                      10    9

*in 2014, 46 Rautia stores also operated as K-maatalous stores
in 2013, 1 K-rauta store and 47 Rautia stores also operated as K-maatalous
stores

Car and machinery trade
                                           1-6/2014  1-6/2013 4-6/2014  4-6/2013

Net sales, € million                            556       551      283       301

Operating profit excl. non-recurring
items, € million                               19.1      20.8     10.9      13.0

Operating margin excl. non-recurring
items, %                                        3.4       3.8      3.8       4.3

Capital expenditure, € million                  9.4       8.7      6.5       4.8



Net sales, € million                       1-6/2014 Change, % 4-6/2014 Change, %

VV-Auto                                         410      +3.4      196      -4.0

Konekesko                                       146      -5.7       87     -10.3

Total                                           556      +0.9      283      -6.0


January-June 2014
In January-June, the net sales of the car and machinery trade were €556 million
(€551 million), up 0.9%.

VV-Auto's net sales for January-June were €410 million (€397 million), an
increase of 3.4%. In January-June, the combined market performance of first time
registered passenger cars and vans was +4.6%.

In January-June, the combined market share of passenger cars and vans imported
by VV-Auto was 21.0% (21.1%). Volkswagen was the market leader in passenger cars
and vans.

Konekesko's net sales for January-June were €146 million (€154 million), down
5.7% compared to the previous year. Net sales in Finland were €92 million, down
3.6%. The net sales from Konekesko's foreign operations were €54 million, down
8.8%. The net sales decline was especially impacted by the weak market
performance of the agricultural machinery trade in Finland and the Baltic
countries.

In January-June, the operating profit excluding non-recurring items of the car
and machinery trade was €19.1 million (€20.8 million), down €1.7 million
compared to the previous year. Profitability in the car trade remained at a good
level despite the weakened market situation.

The operating profit for January-June was €19.1 million (€20.8 million).

The capital expenditure of the car and machinery trade in January-June was €9.4
million (€8.7 million).

April-June 2014
In April-June, the net sales of the car and machinery trade were €283 million
(€301 million), down 6.0%.

VV-Auto's net sales for April-June were €196 million (€204 million), a decrease
of 4.0%. In April-June, the combined market share of passenger cars and vans
imported by VV-Auto was 21.2% (22.1%).

Konekesko's net sales for April-June were €87 million (€97 million), down 10.3%
compared to the previous year.

In April-June, the operating profit excluding non-recurring items of the car and
machinery trade was €10.9 million (€13.0 million), down €2.1 million compared to
the previous year. Profitability was negatively impacted by the decrease in
sales. The operating profit for April-June was €10.9 million (€13.0 million).

The capital expenditure of the car and machinery trade in April-June was €6.5
million (€4.8 million).

Numbers of stores as at 30 June 2014 2013

VV-Auto, retail trade             10   10

Konekesko                          1    1


Changes in the Group composition
No significant changes took place in the Group composition during the reporting
period.

Shares, securities market and Board authorisations
At the end of June 2014, the total number of Kesko Corporation shares was
100,019,752, of which 31,737,007, or 31.7%, were A shares and 68,282,745, or
68.3%, were B shares. At 30 June 2014, Kesko Corporation held 1,002,735 own B
shares as treasury shares. These treasury shares accounted for 1.47% of the
number of B shares and 1.00% of the total number of shares, and 0.26% of votes
carried by all shares of the company. The total number of votes carried by all
shares was 385,652,815. Each A share carries ten (10) votes and each B share one
(1) vote. The company cannot vote with own shares held as treasury shares and no
dividend is paid on them. At the end of June 2014, Kesko Corporation's share
capital was €197,282,584. During the reporting period, the number of B shares
was increased three times to account for the shares subscribed for with the
options based on the 2007 option scheme. The increases were made on 10 February
2014 (85,067 B shares), 30 April 2014 (62,778 B shares) and 4 June 2014 (39,214
B shares) and announced in stock exchange notification on the same days. The
shares subscribed for were listed for public trading on NASDAQ OMX Helsinki
(Helsinki Stock Exchange) with the old B shares on 11 February 2014, 2 May 2014
and 5 June 2014. The subscription price of €2,148,641.76 received by the company
was recorded in the company's reserve of invested non-restricted equity.

The price of a Kesko A share quoted on NASDAQ OMX Helsinki was €26.80 at the end
of 2013, and €27.73 at the end of June 2014, representing an increase of 3.5%.
Correspondingly, the price of a B share was €26.80 at the end of 2013, and
€28.87 at the end of June 2014, representing an increase of 7.7%. In January-
June, the highest A share price was €32.31 and the lowest was €26.39. For B
share, they were €33.33 and €26.15 respectively. In January-June, the Helsinki
stock exchange (OMX Helsinki) All-Share index was up 3.3% and the weighted OMX
Helsinki CAP index 3.8%. Correspondingly, the Retail Index was up 4.9%.

At the end of June 2014, the market capitalisation of A shares was €880 million,
while that of B shares was €1,942 million, excluding the shares held by the
parent company. The combined market capitalisation of A and B shares was €2,822
million, an increase of €162 million from the end of 2013. In January-June
2014, a total of 1.0 (0.5) million A shares were traded on the Helsinki stock
exchange, up 94.8%. The exchange value of A shares was €32 million. The total
number of B shares traded was 25.3 (22.2) million, up 14.3%. The exchange value
of B shares was €770 million. In terms of volumes, the Helsinki stock exchange
accounted for 66% of Kesko A and B share trading in January-June 2014. Kesko
shares were also traded on multilateral trading facilities, the most
significant  of which were BATS Chi-X with 26% and Turquoise with 8% of the
trades (source: Fidessa).

The company operated the 2007 option scheme for management and other key
personnel, under which the share subscription period of 2007C share options ran
from 1 April 2012 to 30 April 2014 (subscription period has expired). The share
options were included on the official list of the Helsinki stock exchange from
the beginning of the share subscription periods. A total of 94,859 2007C share
options were traded during the reporting period at a total value of €1,688,524.
The option scheme has expired and the share subscription periods of the
2007A, 2007B and 2007C share options under the option scheme and their trading
on the official list have ended.

The Board has the authority, granted by the Annual General Meeting of 16 April
2012 and valid until 30 June 2015, to issue a total maximum of 20,000,000 new B
shares. The shares can be issued against payment for subscription by
shareholders in a directed issue in proportion to their existing shareholdings
regardless of whether they consist of A or B shares, or, deviating from the
shareholder's pre-emptive right, in a directed issue, if there is a weighty
financial reason for the company, such as using the shares to develop the
company's capital structure, and financing possible acquisitions, investments or
other arrangements within the scope of the company's business operations. The
amount paid for the shares is recognised in the reserve of invested non-
restricted equity. The authorisation also includes the Board's authority to
decide on the share subscription price, the right to issue shares against non-
cash consideration and the right to make decisions on other matters concerning
share issuances.

In addition, the Board had the authority, granted by the Annual General Meeting
of 8 April 2013 and valid until 30 September 2014, to decide on the acquisition
of a maximum of 500,000 own B shares. Kesko's Board of Directors made the
decision in February 2014 to start acquiring own B shares. The decision to start
acquisition was announced in a stock exchange release on 4 February 2014 and
acquisition was started on 18 February 2014. The maximum amount of own B shares
the Board was authorised to acquire, 500,000, was purchased by 31 March 2014,
and the authorisation is thus fully used. Each purchase of own shares was
announced in a stock exchange release at the end of the day on which the
purchase was made. At 30 June 2014, Kesko Corporation held 1,002,735 own B
shares as treasury shares. In addition, the Board has the authority, valid until
30 June 2017, to decide on the issuance of the maximum of 1,000,000 own B shares
held as treasury shares by the company.

On 4 February 2014, the Board decided to grant own B shares held by the company
as treasury shares to persons included in the target group of the 2013 vesting
period, based on the authority to issue own shares granted by the Annual General
Meeting held on 8 April 2013, and the fulfilment of the vesting criteria of the
2013 vesting period of Kesko's three-year share-based compensation plan. The
issuance of a total of 50,520 own B shares, referred to above, was announced in
a stock exchange release on 24 March 2014 and on 25 March 2014. In January-June,
a total of 4,271 shares granted based on the fulfilment of the vesting criteria
of the 2011-2013 vesting periods were returned to the company in accordance with
the terms and conditions of the share-based compensation plan. The shares
returned during the reporting period were announced in a stock exchange
notification on 7 February 2014 and 23 May 2014. Further information on the
Board's authorisations is available at www.kesko.fi.

Based on the share-based compensation plan 2014-2016 decided by the Board, a
total of 600,000 own B shares held by the company as treasury shares can be
granted within a period of 3 years based on the fulfilment of the vesting
criteria. The Board will separately decide on the vesting criteria and target
group for each vesting period. The share-based compensation plan was announced
in a stock exchange release on 4 February 2014.

At the end of June 2014, the number of shareholders was 40,402, which is 2,407
less than at the end of 2013. At the end of June, foreign ownership of all
shares was 29%. At the end of June, foreign ownership of B shares was 42%.

Flagging notifications
Kesko Corporation did not receive flagging notifications during the reporting
period.
Key events during the reporting period
Kesko Corporation's Board of Directors has appointed Mikko Helander, Master of
Science (Technology), as Kesko Corporation's Managing Director and Kesko Group's
President and Chief Executive Officer as from 1 January 2015. Mikko Helander (b.
1960) will join Kesko as Kesko Corporation's Deputy Managing Director and Member
of the Group Management Board on 1 December 2014 at the latest and as Kesko
Group's President and CEO starting from 1 January 2015.Starting from 1 January
2015, President and CEO Matti Halmesmäki will continue as a special advisor and
in special assignments to be agreed with Kesko's Board of Directors until 31 May
2015 when he will retire. (Stock exchange release on 28 May 2014)

As a result of the employee cooperation negotiations to improve Anttila's
profitability, the decision was made to close eight Anttila department stores
operating in leased premises. The department stores to be closed have a total of
some 210 employees. In addition, 25 full-time equivalents will be reduced in
other Anttila department stores. Employee co-operation negotiations were also
started in the Kodin1 chain and after their completion, the decision was made to
close four Kodin1 department stores in the Kodin1 department store chain.
Employee cooperation negotiations were also started in the central units of
Anttila Oy and K-citymarket Oy. (Stock exchange release on 31 March 2014)

Kestra Kiinteistöpalvelut Oy, a subsidiary of Kesko Corporation, announced that
it would not participate in further financing of Fennovoima Ltd's Hanhikivi 1
nuclear power project due to the related financial, contractual and schedule
uncertainties. (Stock exchange release on 27 March 2014)

Resolutions of the 2014 Annual General Meeting and decisions of the Board's
organisational meeting
Kesko Corporation's Annual General Meeting, held on 7 April 2014, adopted the
financial statements for 2013 and discharged the Board members and the Managing
Director from liability. The General Meeting also resolved, as proposed by the
Board, to distribute €1.40 per share as dividends, or a total of
€138,484,759.00. The dividend pay date was 17 April 2014. The General Meeting
resolved that the number of Board members be unchanged at seven. In addition,
the General Meeting resolved to leave the Board members' fees and the basis for
reimbursement of expenses unchanged. The term of office of each of the seven (7)
Board members elected by the Annual General Meeting on 16 April 2012, namely Esa
Kiiskinen (Ch.), Seppo Paatelainen (Deputy Ch.), Ilpo Kokkila, Tomi Korpisaari,
Maarit Näkyvä, Toni Pokela and Virpi Tuunainen, will expire at the close of the
2015 Annual General Meeting in accordance with Kesko's Articles of Association.

The General Meeting elected PricewaterhouseCoopers Oy as the company's auditor,
with APA Johan Kronberg as the auditor with principal responsibility. The
General Meeting also approved the Board's proposal that it be authorised to
decide on donations in a total maximum of €300,000 for charitable or
corresponding purposes until the Annual General Meeting to be held in 2015.

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

The resolutions of the Annual General Meeting and the decisions of the Board's
organisational meeting were announced in more detail in stock exchange releases
on 7 April 2014.

Responsibility
Kesko's revised, electronic Corporate Responsibility Report for 2013 was
published at the end of April at yhteiskuntavastuu2013.kesko.fi and in English
at corporateresponsibility2013.kesko.fi.

Kesko gave out more than 16,000 Pirkka Fairtrade roses to mothers at the
Mother's Day celebration in Helsinki and in maternity wards across Finland.

K-food stores and K-citymarkets will join the Red Nose Day campaign in 2014.
During the autumn to come, the chains' stores across Finland will sell Red Nose
Day products that support the fundraising.
For the 27th time, Kesko's Board awarded scholarships to talented young athletes
and art students. The total amount of the scholarships awarded in May was
42,000 euros.
Kesko granted Fair Play scholarships to 3,000 young people ending their primary
education as rewards for exemplary promotion of peace and tolerance at school.
Risk management
Kesko Group has an established and comprehensive risk management process. Risks
and their management responses are regularly assessed within the Group and
reported to the Group management. Kesko's risk management and risks associated
with business operations are described in more detail on Kesko's website in the
Corporate Governance section.

The most significant near-future risks in Kesko's business operations are
associated with the general development of the economic situation and consumer
confidence, as well as their impact on Kesko's sales and profit. Because of the
continuing crisis in Ukraine, the country risks of Russia remain at a higher
level than before. In other respects, no material change is estimated to have
taken place in 2014 in the risks described in the report by the Board of
Directors and financial statements for 2013 and the risks described on Kesko's
website.

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

Future outlook
Estimates of the future outlook for Kesko Group's net sales and operating profit
excluding non-recurring items are given for the 12 months following the
reporting period (7/2014-6/2015) in comparison with the 12 months preceding the
reporting period (7/2013-6/2014).

Future prospects for the general economic situation and consumer demand continue
to be characterised by significant uncertainty in Kesko's operating area. Due to
the weakened economic situation and the decline in consumers' purchasing power,
demand in the trading sector is expected to remain weak.

Kesko Group's net sales and operating profit excluding non-recurring items for
the next 12 months are expected to remain at the level of the preceding 12
months, unless the overall consumer demand weakens significantly.

Helsinki, 21 July 2014
Kesko Corporation
Board of Directors


The information in the interim report release is unaudited.

Further information is available from Jukka Erlund, Senior Vice President, Chief
Financial Officer, telephone +358 105 322 113 and Eva Kaukinen, Vice President,
Group Controller, telephone +358 105 322 338. A Finnish-language webcast from
the media and analyst briefing on the interim report can be accessed at
www.kesko.fi at 10:00. 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 January-September will be released on 22
October 2014. In addition, 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
Vice President, Group Communications

ATTACHMENTS: TABLES SECTION
Accounting policies
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Group's performance indicators
Net sales by segment
Operating profit by segment
Operating profit excl. non-recurring items by segment
Operating margin 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
Change in tangible and intangible assets
Related party transactions
Fair value hierarchy of financial assets and liabilities
Personnel average and at the end of the reporting period
Group's commitments
Calculation of performance indicators
K-Group's retail and B2B sales

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


TABLES SECTION:

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 accounting
principles as the annual financial statements for 2013, with the exception of
the following changes due to the adoption of new and revised IFRS standards and
IFRIC interpretations:

-IFRS 10 Consolidated financial statements
-IFRS 11 Joint arrangements
-IFRS 12 Disclosure of interests in other entities

The above amendments to standards and interpretations do not have a material
impact on the reported income statement and statement of financial position. The
amendment will have an impact on the notes to the financial statements.

Consolidated income statement
(€ million), condensed

                                1-6/   1-6/           4-6/   4-6/          1-12/
                                2014   2013 Change%   2014   2013 Change%   2013

Net sales                      4,499  4,580    -1.8  2,371  2,420    -2.1  9,315

Cost of goods sold            -3,895 -3,965    -1.8 -2,046 -2,090    -2.1 -8,034

Gross profit                     604    615    -1.7    325    331    -1.7  1,281

Other operating income           351    367    -4.2    186    194    -3.8    734

Staff cost                      -314   -310     1.3   -158   -157     0.9   -611

Depreciation and impairment
charges                          -77    -76     0.7    -38    -40    -3.7   -153

Other operating expenses        -507   -498     1.8   -245   -251    -2.1 -1,003

Operating profit                  56     96   -41.5     69     77    -9.9    248

Interest income and other
finance income                     9     11   -15.4      7      7    -4.7     20

Interest expense and other
finance costs                     -8    -10   -21.9     -4     -5   -25.3    -20

Exchange differences               0     -3   -91.2     -1     -2   -47.4     -6

Investments accounted for
using the equity method            0      0    (..)      0      0   -30.3      0

Profit before tax                 57     93   -38.7     71     77    -7.5    242

Income tax                       -15    -28   -46.9    -18    -24   -25.5    -58

Net profit for the period         42     65   -35.1     54     54     0.4    185



Attributable to

  Owners of the parent            39     61   -35.9     50     50     0.8    173

  Non-controlling
  interests                        3      4   -20.8      4      4    -5.2     12



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



Basic                           0.39   0.62   -36.4   0.51   0.51     0.1   1.75

Diluted                         0.39   0.62   -36.3   0.51   0.50     0.3   1.75



Consolidated statement
of comprehensive income (€
million)

                                1-6/   1-6/ Change%   4-6/   4-6/ Change%  1-12/
                                2014   2013           2014   2013           2013

Net profit for the period         42     65   -35.1     54     54     0.4    185

Items that will not be
reclassified subsequently to
profit or loss

Actuarial gains/losses            -2      -       -    -10      -       -     12

Items that may be
reclassified subsequently to
profit or loss

Exchange differences on
translating foreign
operations                        -6     -7    -6.8      0    -10   -96.0    -14

Adjustment for hyperinflation      3      2    84.8      2      0    (..)      3

Cash flow hedge revaluation        0     -2    (..)      2     -2    (..)     -4

Revaluation of available-for-
sale financial assets             -3     -4   -31.4     -3     -4   -20.3     -5

Other items                        0      0    -3.2      0      0    -3.2      0

Total other comprehensive
income for the period, net of
tax                               -8    -12   -35.7    -10    -16   -37.4     -8

Total comprehensive income
for the period                    34     53   -35.0     44     37    16.8    177



Attributable to

  Owners of the parent            31     48   -36.6     39     34    15.0    166

  Non-controlling
  interests                        4      5   -17.6      4      3    36.0     11

(..) Change over 100%

Consolidated statement of financial
position (€ million), condensed

                                         30.6.2014 30.6.2013 Change % 31.12.2013

ASSETS

Non-current assets

Tangible assets                              1,658     1,665     -0.4      1,651

Intangible assets                              195       189      3.2        189

Investments accounted for using the
equity method and other
financial assets                               106       105      0.8        104

Loans and receivables                           14        87    -84.2         15

Pension assets                                 170       155      9.3        170

Total                                        2,143     2,202     -2.7      2,131



Current assets

Inventories                                    828       807      2.6        797

Trade receivables                              733       790     -7.1        617

Other receivables                              160       183    -12.3        136

Financial assets at fair value
through profit or loss                         154       115     33.4        171

Available-for-sale financial assets            202       271    -25.4        398

Cash and cash equivalents                      105        88     19.5        112

Total                                        2,182     2,253     -3.1      2,231

Non-current assets held for sale                 1         1     -1.7          1



Total assets                                 4,326     4,455     -2.9      4,362


                                       30.6.2014 30.6.2013 Change % 31.12.2013

EQUITY AND LIABILITIES

Equity                                     2,164     2,156      0.4      2,279

Non-controlling interests                     77        67     15.3         73

Total equity                               2,241     2,223      0.8      2,352



Non-current liabilities

Interest-bearing liabilities                 348       370     -6.0        355

Non-interest-bearing liabilities               8        12    -30.5         10

Deferred tax liabilities                      63        81    -21.4         68

Pension obligations                            2         2     10.6          2

Provisions                                    28        20     41.7         17

Total                                        450       484     -7.1        452



Current liabilities

Interest-bearing liabilities                 190       217    -12.1        199

Trade payables                               934     1,015     -7.9        825

Other non-interest-bearing liabilities       465       482     -3.5        494

Provisions                                    45        35     28.7         38

Total                                      1,635     1,748     -6.5      1,557



Total equity and liabilities               4,326     4,455     -2.9      4,362


Consolidated statement of changes in equity (€ million)
                  Share Res-     Cur-      Re-      Trea-   Re-    Non-    Total
                  capi- erves    rency     valu-    sury    tained cont-
                  tal            trans-    ation    sha-res earn-  rol-
                                 lation    reser-ve         ings   ling
                                 differ-                           inte-
                                 ences                             rests

Balance at
1.1.2013            197      442        -2       10     -19  1,578      67 2,272

Shares
subscribed
with options                  16                                              16

Treasury shares

Share-based
payments                                                  1              0     1

Dividends                                                     -118      -5  -122

Other
changes                        0                                 3             3

Net profit for
the period                                                      61       4    65

Other comprehen-
sive income

Items that will
not be
reclassified
subsequently to
profit or loss

Actuarial
gains/losses

Items that may be
reclassified
subsequently to
profit or loss

Exchange
differences
on translating
foreign
operations                     0        -6                              -1    -7

Adjustment for
hyperinflation                                                   0       2     2

Cash flow
hedge
revaluation                                      -3                           -3

Revaluation of
available- for-
sale financial
assets                                           -4                           -4

Others                                                           0             0

Tax relating to
other comprehen-
sive income                                       1                            1

Total other
comprehen-sive
income                         0        -6       -6              0       1   -12

Balance at
30.6.2013           197      457        -8        3     -18  1,525      67 2,223



Balance at
1.1.2014            197      461       -13        1     -18  1,651      73 2,352

Shares
subscribed
with options                   2                                               2

Treasury shares                                         -16                  -16

Share-
based payments                                            2                    2

Dividends                                                     -138          -138

Other changes                  0         0                       5       0     5

Net profit for
the period                                                      39       3    42

Other comprehen-
sive income

Items that will
not be
reclassified
subsequently to
profit or loss

Actuarial
gains/losses                                                    -2            -2

Items that may be
reclassified
subsequently to
profit or loss

Exchange
differences
on translating
foreign
operations                     0        -4                              -2    -6

Adjustment for
hyperinflation                                                   0       3     3

Cash flow
hedge
revaluation                                       0                            0

Revaluation of
available- for-
sale financial
assets                                           -3                           -3

Others                                                           0             0

Tax relating to
other comprehen-
sive income                                       0                            0

Total other
comprehen-sive
income                         0        -4       -2             -2       1    -8

Balance at
30.6.2014           197      463       -18       -1     -32  1,555      77 2,241



Consolidated statement of cash flows (€ million), condensed
                                       1-6/ 1-6/ Change% 4-6/ 4-6/ Change% 1-12/
                                       2014 2013         2014 2013          2013

Cash flows from operating activities

Profit before tax                        57   93   -38.7   71   77    -7.5   242

Planned depreciation                     76   75     1.4   37   38    -2.4   152

Finance income and costs                 -1    3    (..)   -2    0    (..)     6

Other adjustments                        19   -5    (..)   -1   -4   -76.0     8



Change in working capital

Current non-interest-bearing
operating receivables,
increase (-)/decrease (+)              -139 -117    18.7   19   28   -29.6    89

Inventories,
increase (-)/decrease (+)               -35    0    (..)   13   43   -69.6     3

Current non-interest-bearing
liabilities, increase (+)/
decrease(-)                              85  170   -50.1    5   83   -94.5    -1



Financial items and tax                 -29  -33   -13.9  -14  -20   -31.6   -85

Net cash from operating activities       34  186   -81.8  129  244   -47.3   414



Cash flows from investing activities

Investing activities                    -98  -94     4.4  -53  -49     6.7  -174

Sales of fixed assets                     6   14   -55.1    4   12   -62.0    22

Increase in non-current receivables      -1    0    (..)    0    0    66.3     0

Net cash used in investing activities   -92  -80    15.6  -49  -38    27.9  -152



Cash flows from financing activities

Interest-bearing liabilities, increase
(+)/decrease (-)                        -12  -19   -35.3  -17  -41   -58.6   -47

Current interest-bearing
receivables, increase (-)/
decrease (+)                             -1    2    (..)    2    1     9.3    78

Dividends paid                         -138 -118    17.5 -138 -118    17.5  -122

Equity increase                           2   16   -86.3    1   15   -92.5    20

Acquisition of own shares               -16    -       -   -1    -       -     -

Short-term money market investments,
increase (-)/ decrease (+)               14    0    (..)   29  -21    (..)   -91

Other items                               5   -1    (..)    2    1    88.1     5

Net cash used in financing activities  -148 -120    23.0 -122 -163   -24.7  -159



Change in cash and cash equivalents    -206  -14    (..)  -43   43    (..)   103



Cash and cash
equivalents and current
portion of available-for-sale
financial assets at 1 Jan.              453  352    28.7  288  294    -2.1   352

Currency translation difference
adjustment and revaluation               -1   -1    10.9    0   -1    (..)    -2

Cash and cash
equivalents and current
portion of available-for-sale
financial assets at 30 Jun.             246  337   -27.0  246  337   -27.0   453



(..) Change over 100%

  Group's performance indicators

                                          1-6/2014 1-6/2013 Change, pp 1-12/2013

  Return on capital employed, %                4.7      7.7       -3.0      10.2

  Return on capital employed, %,
  moving 12 mo                                 8.7      8.8       -0.1      10.2

  Return on capital employed, excl.
  non-recurring items, %                       7.3      7.1        0.2       9.8

  Return on capital employed excl.
  non-recurring items, %, moving 12 mo         9.9      9.3        0.7       9.8

  Return on equity, %                          3.7      5.7       -2.1       8.0

  Return on equity, %, moving 12 mo            7.3      6.5        0.8       8.0

  Return on equity, excl. non-
  recurring items, %                           5.7      5.2        0.5       7.7

  Return on equity excl. non-recurring
  items, %, moving 12 mo                       8.3      7.1        1.1       7.7

  Equity ratio, %                             52.3     50.5        1.8      54.5

  Gearing, %                                   3.5      5.1       -1.6      -5.4



                                                              Change %

  Capital expenditure, € million              99.1     89.5       10.7     171.5

  Capital expenditure, % of net sales          2.2      2.0       12.6       1.8

  Earnings per share, basic, €                0.39     0.62      -36.4      1.75

  Earnings per share, diluted, €              0.39     0.62      -36.3      1.75

  Earnings per share excl. non-
  recurring items, basic, €                   0.64     0.56       13.2      1.68

  Cash flow from operating activities,                                       414
  € million                                     34      186      -81.8

  Cash flow from investing activities,                                      -152
  € million                                    -92      -80       15.6

  Equity per share, €                        21.86    21.79        0.3     22.96

  Interest-bearing net debt                     78      113      -31.2      -126

  Diluted number of shares, average
  for the reporting period                  99,365   98,880        0.5    99,136

  Personnel, average                        19,935   19,373        2.9    19,489



Group's performance
indicators                1-3/        4-6/  7-9/ 10-12/  1-3/  4-6/
by quarter                2013        2013  2013   2013  2014  2014

Net sales, € million     2,159       2,420 2,374  2,362 2,129 2,371

Change in net sales, %    -6.9        -1.6  -3.1   -3.9  -1.4  -2.1

Operating profit, €
million                   19.2        77.0  84.1   68.0 -13.0  69.4

Operating margin, %        0.9         3.2   3.5    2.9  -0.6   2.9

Operating profit excl.
non- recurring items, €
million                   18.6        69.8  83.6   66.8  19.1  67.6

Operating margin
excl. non-recurring
items, %                   0.9         2.9   3.5    2.8   0.9   2.9

Finance income/costs,
€ million                 -3.3         0.4  -2.6   -0.4  -1.6   2.2

Profit before tax, €
million                   15.8        77.2  81.5   67.9 -14.4  71.4

Profit before tax, %       0.7         3.2   3.4    2.9  -0.7   3.0

Return on capital
employed, %                3.1        12.3  14.2   11.5  -2.2  11.5

Return on capital
employed, excl. non-
recurring items, %         3.0        11.1  14.1   11.3   3.2  11.2

Return on equity, %        1.9         9.5  10.2   10.8  -2.0   9.4

Return on equity, excl.
non-recurring items, %     1.8         8.6  10.1   10.6   2.3   9.1

Equity ratio, %           51.7        50.5  52.9   54.5  53.2  52.3

Capital expenditure,
€ million                 41.5        48.1  35.4   46.6  43.4  55.7

Earnings per share,
diluted, €                0.11        0.50  0.53   0.60 -0.11  0.51

Equity per share, €      22.62       21.79 22.39  22.96 22.83 21.86



Segment information

Net sales by segment                  1-6/  1-6/ Change  4-6/  4-6/ Change 1-12/
(€ million)                           2014  2013      %  2014  2013      %  2013



Food trade, Finland                  2,061 2,121   -2.8 1,079 1,085   -0.5 4,316

Food trade, other countries*            51    22   (..)    26    14   90.9    71

Food trade total                     2,112 2,144   -1.5 1,106 1,099    0.6 4,387

- of which intersegment trade           86    83    3.0    41    41    0.9   172



Home and speciality goods trade,
Finland                                585   649   -9.9   281   314  -10.7 1,424

Home and speciality goods trade,
other
countries*                              15    17  -13.1     7     7   -3.6    33

Home and speciality goods trade
total                                  600   667  -10.0   288   322  -10.5 1,457

- of which intersegment trade            7     8  -16.5     4     4  -13.2    17



Building and home improvement trade,
Finland                                625   615    1.6   336   334    0.5 1,173

Building and home improvement trade,
other countries*                       692   686    0.8   400   406   -1.5 1,435

Building and home improvement trade
total                                1,317 1,302    1.2   736   740   -0.6 2,607

- of which intersegment trade            0     0  -75.1     0     0   (..)    -1



Car and machinery trade, Finland       502   492    2.1   252   261   -3.4   921

Car and machinery trade, other
countries*                              54    59   -9.4    31    41  -23.1   116

Car and machinery trade
total                                  556   551    0.9   283   301   -6.0 1,037

- of which intersegment trade            1     1    1.3     0     0   -0.4     1



Common operations and
eliminations                           -85   -83    2.9   -42   -41    1.2  -173

Finland total                        3,688 3,795   -2.8 1,906 1,953   -2.4 7,661

Other countries total*                 812   785    3.4   464   467   -0.7 1,654

Group total                          4,499 4,580   -1.8 2,371 2,420   -2.1 9,315

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

Operating profit by segment (€         1-6/  1-6/         4-6/ 4-6/        1-12/
million)                               2014  2013 Change  2014 2013 Change  2013



Food trade                             97.4 103.3   -5.8  52.0 55.1   -3.1 208.0

Home and speciality goods trade       -72.0 -23.3  -48.7 -17.6 -5.6  -12.0  -2.1

Building and home improvement trade    18.8   2.0   16.9  28.6 18.0   10.6  24.8

Car and machinery trade                19.1  20.8   -1.7  10.9 13.0   -2.1  33.9

Common operations and eliminations     -7.0  -6.4   -0.6  -4.5 -3.4   -1.1 -16.3

Group total                            56.3  96.3  -39.9  69.4 77.0   -7.7 248.4


Operating profit excl.
non-recurring items                  1-6/  1-6/         4-6/  4-6/        1-12/
by segment (€ million)               2014  2013 Change  2014  2013 Change  2013



Food trade                           99.4  99.0    0.4  52.9  50.8    2.2 203.3

Home and speciality goods trade     -41.0 -27.8  -13.2 -18.3 -10.0   -8.2  -8.3

Building and home improvement trade  16.2   2.9   13.3  26.6  19.5    7.1  25.7

Car and machinery trade              19.1  20.8   -1.7  10.9  13.0   -2.1  33.9

Common operations and eliminations   -7.0  -6.4   -0.6  -4.5  -3.4   -1.1 -15.8

Group total                          86.7  88.4   -1.7  67.6  69.8   -2.1 238.8


Operating margin
excl. non-recurring    1-6/ 1-6/           4-6/ 4-6/           1-12/ Moving12 mo
items by segment , %   2014 2013 Change pp 2014 2013 Change pp  2013      6/2014



Food trade              4.7  4.6       0.1  4.8  4.6       0.2   4.6         4.7

Home and speciality
goods trade            -6.8 -4.2      -2.7 -6.3 -3.1      -3.2  -0.6        -1.5

Building and home
improvement trade       1.2  0.2       1.0  3.6  2.6       1.0   1.0         1.5

Car and machinery
trade                   3.4  3.8      -0.3  3.8  4.3      -0.5   3.3         3.1

Group total             1.9  1.9       0.0  2.9  2.9       0.0   2.6         2.6


Capital employed by                                                 Moving 12 mo
segment, cumulative    1-6/  1-6/         4-6/  4-6/        1-12/         6/2014
average (€ million)    2014  2013 Change  2014  2013 Change  2013



Food trade              780   842    -62   785   842    -57   821            792

Home and speciality
goods trade             403   478    -76   402   481    -79   445            412

Building and home
improvement trade       723   763    -40   736   769    -33   732            713

Car and machinery
trade                   166   164      3   165   160      5   161            160

Common operations and
eliminations            315   258     57   319   259     60   278            306

Group total           2,387 2,504   -118 2,407 2,511   -104 2,438          2,384


Return on capital                                                   Moving 12 mo
employed excl.      1-6/  1-6/ Change pp  4-6/ 4-6/ Change pp 1-12/       6/2014
non-recurring       2014  2013            2014 2013            2013
items
by segment, %



Food trade          25.5  23.5       2.0  27.0 24.1       2.8  24.8         25.7

Home and
speciality goods
trade              -20.4 -11.6      -8.7 -18.2 -8.3      -9.8  -1.9         -5.2

Building and home
improvement trade    4.5   0.8       3.7  14.5 10.1       4.3   3.5          5.5

Car and machinery
trade               23.0  25.4      -2.4  26.4 32.5      -6.1  21.1         20.1

Group total          7.3   7.1       0.2  11.2 11.1       0.1   9.8          9.9


Capital expenditure                 1-6/ 1-6/        4-6/ 4-6/        1-12/
by segment (€ million)              2014 2013 Change 2014 2013 Change  2013



Food trade                            47   44      3   29   27      1    92

Home and speciality goods trade        7   14     -6    4    6     -2    23

Building and home improvement trade   27   22      6   15    9      6    38

Car and machinery trade                9    9      1    7    5      2    15

Common operations and eliminations     8    2      7    1    1      0     4

Group total                           99   90     10   56   48      8   171



Segment information by quarter

Net sales by segment                 1-3/  4-6/  7-9/ 10-12/  1-3/  4-6/
(€ million)                          2013  2013  2013   2013  2014  2014

Food trade                          1,045 1,099 1,095  1,148 1,007 1,106

Home and speciality goods trade       345   322   351    439   312   288

Building and home improvement trade   562   740   710    596   581   736

Car and machinery trade               249   301   260    226   272   283

Common operations and
eliminations                          -42   -41   -43    -46   -44   -42

Group total                         2,159 2,420 2,374  2,362 2,129 2,371


Operating profit by                  1-3/ 4-6/ 7-9/ 10-12/  1-3/  4-6/
segment (€ million)                  2013 2013 2013   2013  2014  2014

Food trade                           48.2 55.1 56.5   48.3  45.4  52.0

Home and speciality goods trade     -17.7 -5.6 -2.1   23.3 -54.5 -17.6

Building and home improvement trade -16.1 18.0 23.9   -1.0  -9.7  28.6

Car and machinery trade               7.8 13.0  9.8    3.3   8.2  10.9

Common operations and
eliminations                         -3.0 -3.4 -4.0   -5.9  -2.5  -4.5

Group total                          19.2 77.0 84.1   68.0 -13.0  69.4


Operating profit excl.
non-recurring items                  1-3/  4-6/ 7-9/ 10-12/  1-3/  4-6/
by segment (€ million)               2013  2013 2013   2013  2014  2014

Food trade                           48.2  50.8 56.0   48.3  46.5  52.9

Home and speciality goods trade     -17.8 -10.0 -2.2   21.6 -22.7 -18.3

Building and home improvement trade -16.6  19.5 23.9   -1.1 -10.4  26.6

Car and machinery trade               7.8  13.0  9.8    3.3   8.2  10.9

Common operations and
eliminations                         -3.0  -3.4 -4.0   -5.4  -2.5  -4.5

Group total                          18.6  69.8 83.6   66.8  19.1  67.6


Operating margin excl.
non-recurring items                 1-3/ 4-6/ 7-9/ 10-12/ 1-3/ 4-6/
by segment, %                       2013 2013 2013   2013 2014 2014

Food trade                           4.6  4.6  5.1    4.2  4.6  4.8

Home and speciality goods trade     -5.2 -3.1 -0.6    4.9 -7.3 -6.3

Building and home improvement trade -3.0  2.6  3.4   -0.2 -1.8  3.6

Car and machinery trade              3.1  4.3  3.8    1.5  3.0  3.8

Group total                          0.9  2.9  3.5    2.8  0.9  2.9




Change in tangible and intangible assets (€ million)

                                              30.6.2014 30.6.2013

Opening net carrying amount                       1,840     1,870

Depreciation, amortisation and impairment           -77       -76

Investments in tangible and intangible assets       106        90

Disposals                                           -10       -20

Currency translation differences                     -6       -10

Closing net carrying amount                       1,853     1,854


Related party transactions (€ million)

The Group's related parties include its key management (the Board of Directors,
the Managing Director and the Group Management Board) and companies controlled
by them, the Group's subsidiaries, associates as well as Kesko Pension Fund.

The following transactions were carried out with related parties:

                                 1-6/2014  1-6/2013

Sales of goods and services            45        42

Purchases of goods and services        12        11

Other operating income                  0         0

Other operating expenses               15        13

Finance costs                           -         0

                                30.6.2014 30.6.2013

Receivables                             8         8

Liabilities                            21        20





Fair value hierarchy of financial assets and liabilities (€ million)

                                                 Level Level 2 Level 3 30.6.2014
                                                     1

Financial assets at fair value through profit or
loss                                              14.3   139.5             153.8

Derivative financial instruments at fair value
through profit or loss

Derivative financial assets                                2.5               2.5

Derivative financial liabilities                          17.0              17.0

Available-for-sale financial assets               61.1   141.0    13.3     215.3



Fair value hierarchy of financial assets and liabilities (€ million)

                                                 Level Level 2 Level 3 30.6.2013
                                                     1

Financial assets at fair value through profit or
loss                                              10.0   105.3             115.4

Derivative financial instruments at fair value
through profit or loss

Derivative financial assets                                5.7               5.7

Derivative financial liabilities                          15.9              15.9

Available-for-sale financial assets               21.8   249.0     6.8     277.6


Level 1 instruments are traded in active markets and their fair values are
directly based on quoted market prices. The fair values of level 2 instruments
are derived from market data. The fair values of level 3 instruments are not
based on observable market data.

Personnel, average and as at 30 June

Personnel average by
segment                             1-6/2014 1-6/2013 Change

Food trade                             3,412    3,030    381

Home and speciality goods trade        5,585    5,805   -220

Building and home improvement trade    9,257    8,852    404

Car and machinery trade                1,250    1,245      5

Common operations                        432      440     -9

Group total                           19,935   19,373    562



Personnel at 30 June*
by segment                              2014     2013 Change

Food trade                             4,035    3,706    329

Home and speciality goods trade        8,111    8,462   -351

Building and home improvement trade   10,520   10,016    504

Car and machinery trade                1,323    1,329     -6

Common operations                        504      513     -9

Group total                           24,493   24,026    467

*total number incl. part-time employees

Group's commitments (€ million)                 30.6.2014 30.6.2013   Change %



Own commitments                                       206       191        7.8

For associates                                         65        65        0.0

For others                                             10        10        4.2

Lease liabilities for machinery and equipment          25        25       -2.4

Lease liabilities for real estate                   2,251     2,413       -6.7


Liabilities arising from derivative instruments

(€ million)

                                                                    Fair value

Values of underlying instruments at 30 June     30.6.2014 30.6.2013  30.6.2014


Interest rate derivatives

   Interest rate swaps                                101       203      -0.83

Currency derivatives

   Forward and future contracts                       303       232      -1.05

   Option agreements                                    -         4          -

   Currency swaps                                      50       100      -6.28

Commodity derivatives

   Electricity derivatives                             27        38      -6.31



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



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



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



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



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



                                          (Profit/loss for prior 12 months
Return on equity, %, moving 12 months     before tax - Income tax for prior 12
                                          months) x100 / Shareholders' equity



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



                                          (Profit/loss for prior 12 months
                                          adjusted for non-recurring items
Return on equity excl. non-recurring      before tax - Income tax for prior 12
items, %, moving 12 months                months adjusted for the tax effect of
                                          non-recurring items) x 100 /
                                          Shareholders' equity



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



                                          (Profit/loss - Non-controlling
Earnings/share, diluted                   interests) /
                                          Average diluted number of shares



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



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



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



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



                                          Interest-bearing liabilities - Money
Interest-bearing net debt                 market investments - Cash and cash
                                          equivalents


* Indicators for return on capital have been annualised.



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

                                             1.1.-30.6.2014     1.4.-30.6.2014

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



K-Group's food trade

K-food stores, Finland                         2,256     -2.6     1,167     -1.4

Kespro                                           377     -2.8       198     -2.1

K-ruoka, Russia                                   51     (..)        26     90.8

Food trade total                               2,684     -1.5     1,391     -0.6



K-Group's home and speciality goods trade

Home and speciality goods stores, Finland        652     -9.2       317     -9.8

Home and speciality goods stores, other
countries                                         14    -11.4         7      2.5

Home and speciality goods trade total            666     -9.2       324     -9.5



K-Group's building and home improvement
trade

K-rauta and Rautia                               489      1.7       310     -0.2

Rautakesko B2B Service                            91      3.1        51      0.0

K-maatalous                                      238      0.6       146      1.9

Finland total                                    818      1.5       507      0.4

Building and home improvement stores,
other Nordic countries                           424     -4.4       250     -7.2

Building and home improvement stores,
Baltic countries                                 201     18.5       118     18.5

Building and home improvement stores,
other countries                                  175     -1.8       102     -3.8

Building and home improvement trade total      1,618      1.3       977     -0.3



K-Group's car and
machinery trade

VV-Autotalot                                     200      2.1        99     -6.1

VV-Auto, import                                  223      5.6       103     -0.5

Konekesko, Finland                                92     -3.6        56     -1.2

Finland total                                    515      2.5       259     -2.9

Konekesko, other countries                        56     -7.7        33    -20.9

Car and machinery trade
total                                            571      1.4       292     -5.3



Finland total                                  4,618     -2.3     2,448     -2.4

Other countries total                            920      3.5       536     -0.2

Retail and B2B sales
total                                          5,539     -1.4     2,984     -2.0

(..) Change over 100%


[HUG#1833032]