Kesko Corporation’S Board of Directors and Profit Divisions Was Redefined

Stock Exchange Release 7 June 2000 at 11.00 hours KESKO’S INTERIM REPORT 1.1.-30.4.2000 Kesko Group’s net sales for the period from 1 January to 30 April 2000 totalled EUR 1,976 million, which was 0.9% more than during the corresponding period in 1999 (EUR 1,959 million). The Group’s profit before extraordinary items during the period was EUR 31.7 million (EUR 28.4 million), which is 1.6% of net sales (1.4%). Earnings per share were EUR 0.27 (EUR 0.23). Equity per share was EUR 14.56 (EUR 15.15). The figures are unaudited.

Market review The trading sector developed better than expected during the first four months of the year. According to advance information from Statistics Finland, the volume of wholesale sales, adjusted for the annual number of trading days, increased by 2.3% during January-March from the previous year. The volume of retail sales increased by 4.5%. According to the inquiry of the Federation of Finnish Commerce and Trade, retail sales, car trade excluded, grew by 4.4% in January-March, while sales of consumer goods increased by 4.8% during the same period. The year 2000 is expected to be the seventh successive year of growth for the trading sector. The Research Institute of the Finnish Economy estimates that output in the wholesale trade will grow by 5%, in retail trade by 4% and in car trade by 7%. The same institute estimates that private consumption will grow by nearly 4% this year. Improving employment and rising income levels will contribute to the growth in disposable real income. The consumer price index is estimated to increase by 2.3%. The Research Institute of the Finnish Economy estimates that private investments will grow by 8%. Statistics Finland’s consumer survey of May 2000 shows that the confidence of Finnish consumers in favourable economic growth remains strong. However, the confidence has slightly dropped since January.

Net sales Kesko Group’s net sales from 1 January to 30 April 2000 totalled EUR 1,976 million, which was 0.9% more than during the corresponding period in 1999 (EUR 1,959 million). The product groups recording the best sales development were hardware and builders’ supplies, groceries, home goods and interior decoration, whereas the trade in clothing, shoes and agricultural products decreased. At the end of the period, there were over 1.3 million households in the Plussa customer loyalty system and about 2.3 million Plussa cardholders.

Net sales by profit division 1-4/2000 1-4/1999 Change EUR million EUR million % Foodstuffs Division 1,075 980 9.7 Home and Speciality Goods Division 221 264 -16.1 Builders’ and Agricultural Supplies Divion 440 413 6.4 Kaukomarkkinat 86 90 -4.5 VV-Auto 185 196 -5.2 Other units - eliminations -31 16 Group total 1,976 1,959 0.9

Kesko’s sales of groceries to Anttila department store grocers was transferred from the Home and Speciality Goods Division to the Foodstuffs Division at the turn of the year. Sales during the corresponding period in 1999 totalled EUR 40.1 million.

Performance The Group’s profit before extraordinary items amounted to EUR 31.7 million (EUR 28.4 million), which was 1.6% of net sales (1.4%). The Group’s operating profit was EUR 23.9 million (EUR 24.8 million), which includes profits of EUR 0.6 million on the sale of shares or real estate (EUR 2.7 million). Pension and social security expenses decreased by EUR 10.6 million due to the income from investments by Kesko Pension Fund. The development of the operating profit was affected by the biggest investments of Kesko’s history and other input in the network of grocery and home and speciality goods stores both in Finland and in Estonia. The investment programme will strengthen the Group’s future competitiveness. The parent company’s operating profit was EUR 32.1 million (EUR 21.6 million). Citymarket Oy’s operating loss amounted to EUR 4.4 million (EUR 2.6 million). The heavy investment programme and renovation of existing outlets had a negative affect on the profit during the first part of the year. Anttila Group’s operating loss was EUR 12.0 million. The division of responsibilities between Anttila and Kesko was changed at the beginning of the year. Anttila is acting as a chain company in the speciality goods trade and the chains of the Foodstuffs Division are now responsible for the foodstuffs trade. Anttila opened three new department stores in late 1999 and started extensive on-line retailing. Organising costs in existing department stores, the initiation of new department stores and the launch of NetAnttila e-commerce affected the operating profit, which decreased from the comparable figure for the previous year by EUR 1.5 million. Due to the vigorous expansion of the chain, Kesko Svenska AB’s operations continued to be loss-making. Two new hardware department stores, in Örebro and in Haninge, were opened in Sweden. Kaukomarkkinat Group’s operating profit was EUR 0.5 million (EUR 3.5 million). The result was primarily affected by the trade of adidas products being transferred to the company held by Kaukomarkkinat and the principal with equal ownerships. VV-Auto’s operating profit was EUR 9.2 million (EUR 11.1 million). The Group’s net financial income was EUR 7.8 million (EUR 3.5 million). Dividend income increased by EUR 4.0 million. Earnings per share were EUR 0.27 (EUR 0.23). Equity per share was EUR 14.56 (EUR 15.15).

Operating profit by profit division 1-4/2000 1-4/1999 EUR million EUR million* Foodstuffs Division 9.9 16.9 Home and Speciality Goods Division -8.2 -10.4 Builders’ and Agricultural Supplies Division 6.2 6.4 Kaukomarkkinat -0.6 2.2 VV-Auto 9.2 11.0

Common divisions 7.4 -1.3 Group’s operating profit 23.9 24.8

Net financial income 7.7 3.5 Associated companies 0.1 0.1 Profit before extraordinary items 31.7 28.4

The common divisions include the Resource Management Division and the Finance and Administration Division. Their results, including the profits and losses on the sale of shares and real estate, have not been allocated to the profit divisions engaged in commercial operations. Other expenses resulting from corporate administration have been allocated to the profit divisions in the table. *) Figures for 1999 have been converted to comparable ones.

Investments The Group’s total investments amounted to EUR 116 million (EUR 55 million), which is 5.9% (2,8 %) of net sales. The investments in Kesko’s wholesale operations’ and subsidiaries’ real estate, information technology and fixtures totalled EUR 46 million, while investments in the buildings, fixtures and information technology of retail stores amounted to EUR 70 million. Of the total amount, EUR 62 million concern uncompleted targets. More detailed information on investment targets are given profit divisions’ reviews.

Finance The cash flow from operating activities amounted to EUR 20 million and the total cash used in investing activities to EUR 102 million. The dividend paid on 20 April 2000 was EUR 1.50 per share, or a total of EUR 135 million, which included EUR 90 million paid as additional dividend to change the balance sheet structure. Investments and dividends were mainly paid by liquid funds. The loans increased by EUR 58.7 million. The Group’s financial position remained good. On 30 April 2000, the equity ratio was 51.5% (54.8%). The interest-bearing net debt was EUR 230 million (EUR 199 million). The liquid funds totalled EUR 112 million (EUR 101 million).

Group administration The Kesko Group’s new organisation became effective on 1 January 2000 with the aim of streamlining administration and improving the efficiency of business operations. At the same time, the division of responsibilities between Kesko Corporation’s Board of Directors and profit divisions was redefined. The Annual General Meeting held on 10 April 2000 unanimously confirmed that all the nine members of the Supervisory Board shall continue in their duties. The Supervisory Board members are Mr. Matti Kallio, retailer; Dr. Eero Kasanen, Econ.; Mr. Hannu Loukko, retailer: Ms. Hannele Näppi, retailer; Mr. Paavo Pitkänen, M.A.; Mr. Kalevi Sivonen, retailer; Mr. Keijo Suila, B.Sc.(Econ.); Mr. Heikki Takamäki, retailer; and Mr. Jukka Toivakka, retailer. Kesko’s Supervisory Board elected in its meeting on 27 April 2000 Matti Kallio to continue as its Chairman, while Heikki Takamäki continues as the Supervisory Board’s Deputy Chairman. Matti Kallio also continues as the Chairman of the Supervisory Board’s Working Committee. Heikki Takamäki and Keijo Suila are the other persons who continue as Working Committee members.

Personnel The average number of personnel in the Group was 10,481 (10,651), divided by profit division as follows: 1-4/2000 1-4/1999 Foodstuffs Division 4,643 4,651 Home and Speciality Goods Division 2,684 2,976 Builders’ and Agricultural Supplies Division 1,339 1,276 Kaukomarkkinat 760 787 VV-Auto 103 97 Others 952 864 Total 10,481 10,651

The number of Kesko Group personnel decreased by 170 persons. The number of personnel grew in Citymarket Oy as it opened new hypermarkets and in Kesko Svenska AB due to the expansion of the hardware trade in Sweden and in Kesko Eesti AS due to expanded cash & carry operations in Estonia. The number of personnel was reduced by the sale of Aleksi 13 Oy and turning some of Carrols Oy’s outlets into franchise-run businesses. The Group employed 552 persons (423) abroad. The bonuses for 1999 based on the profit-sharing scheme were paid to the personnel in March. In addition to the financial result, the key factor contributing to this bonus is customer satisfaction. For the management, the job satisfaction of personnel is another contributing factor. For 1999, the sum paid under this scheme totalled EUR 7.4 million including social security expenses.

Development by profit division Foodstuffs Division The Division’s net sales totalled EUR 1,075 million. The growth of 9.7% in net sales was slightly smaller than expected. During the first months of the year, the foodstuffs trading did not develop as favourably as other product lines. The operating profit was EUR 9.9 million, compared with EUR 16.9 million during the corresponding period in 1999. The major reasons for the decreased figure were the heavy investments made in the store network, and the converting of the foodstuffs departments of the Anttila department stores to K-superstores, K-supermarkets and Rimi stores. Investments amounted to EUR 17.3 million. Among the Division’s chain units, the sales of the Superstore Chain Unit recorded the best result. The non-food trade of the Citymarket Chain Unit also progressed favourably. The sales by the Neighbourhood Chain Unit, in comparable figures, were at the level of the previous year. During the first four months of the year, four new K-grocery stores were opened, with the K-superstores in Lahti and Nokia being the most significant ones. A total of 22 stores were renovated and five stores were expanded. In addition, seven foodstuffs departments of the Anttila department stores were converted to the K-superstore format and two to the K-supermarket format. The most important projects under construction are Citymarket hypermarkets in Lappeenranta and Pirkkala, and a K-superstore in Kokemäki. In addition, the extension of the Citymarkets in Imatra, Pietarsaari, Tampere and Rauma, and the extension of the K-superstores in Kankaanpää, Hanko, Jyväskylä, Ikaalinen and Ylivieska will be completed this year. The network of neighbourhood stores will be expanded by 12 new K-stores by the end of 2000. Two new Carrols hamburger restaurants were opened in Finland. Carrols Oy also opened the first Drop Coffee Shop in the downtown Helsinki and another in June, after the period under review. The purpose is to expand the café chain fast to form a nationwide chain of 50-60 units. On 7 June 2000, after the period under review, the first Pikkolo store was opened in Helsinki. It is a new kind of urban store, in which take-away products have an important role. The experiences from the pilot store will be used in the building of the new chain. The objective is to establish a chain of around 100 stores. On 23 May 2000, after the period under review, a new SuperNetto store of 4,000 square metres was opened in Western Tallinn. This store format combines retail store and cash & carry operations, which solution is based on the nature of the grocery trade and the customer structure in Estonia. The next SuperNetto stores will be opened in Eastern Tallinn, Tartu and Pärnu by the spring of 2001. Kesko aims to build a cash & carry and store network covering the whole country to serve the local retailers, catering customers and consumers. An objective of Kesko’s internationalisation strategy is to obtain a share of about 25% of the Estonian grocery market, which totals some EUR 0.7 billion. Due to the heavy investments made in grocery stores, the operating profit for 2000 is forecast to fall short of the profit achieved in 1999.

Home and Speciality Goods Division The net sales of the Division totalled EUR 221 million, a decrease of 16.1%. Net sales were adversely affected by the transfer of sales to Anttila department store grocers from the Home and Speciality Goods Division to the Foodstuffs Division and the sale of Aleksi 13 Oy’s share capital. The operating loss was EUR 8.2 million, slightly smaller than budgeted. During the corresponding period last year the operating loss was EUR 10.4 million. Investments totalled EUR 2.8 million. The division’s profit for the year 2000 is expected to be considerably higher than the one reached the year before. The net sales of the Anttila Group was EUR 130 million, an increase of 7.5%. Sales of Kodin Ykkönen department stores and mail order, in particular, developed favourably. Anttila will concentrate on speciality goods trade organised under the concepts of Anttila department store, Anttila Kodin Ykkönen, mail order sales and on-line trading. The process of joining food departments of Anttila department stores in K-Superstore, K-supermarket and Rimi chains has proceeded according to plan. The operating loss of the Anttila Group was EUR 12,0 million. The comparable operating loss increased by 1.5 million, but the loss fell short of budget. The results were affected by the initiation costs of three new units and the e-commerce development costs. In a short time, NetAnttila has become the most popular electronic store in Finland. Due to the nature of the department store trade, the latter part of the year will be more important for the total performance. The Anttila Group aims at performance that clearly exceeds that of the previous year. In the sports trade, the growth in the sales of clothing has stopped, whereas sales of sports equipment developed well during the first four months of the year. During the period under review, the sales of home technology exceeded the level of the previous year. Sales developments were the best for domestic appliances and wide screen television sets. Sales of mobile phones continued to increase. In the shoe trade the period was not up to expectations and the sales fell clearly short of the 1999 level. In September 1999, Kesko Corporation redefined its strategy for the clothing business and decided to dispose of its speciality clothing chains. In February 2000, Kesko sold the whole of Aleksi 13 Oy’s share capital and the Vaatehuone chain logo to L-Fashion Group Oy, for the account of a company that was established. In 1999, the net sales of the company was EUR 39 million. Kesko also withdrew from the Nicky&Nelly chain operation from 1 January 2000. The most important retail outlet project of the first part of 2000 was the opening of Intersport Megastore at Mikonkatu, the centre of Helsinki in April. New Anttila Kodin Ykkönen department stores will be opened in Tampere and Jyväskylä, and new Musta Pörssi Maailma stores likewise in Tampere and Jyväskylä in autumn. A new Anttila department store that will replace the existing downtown store will be opened in Turku. Two Anttila department stores, located in Iisalmi and Rauma, were closed down in February 2000.

Builders’ and Agricultural Supplies Division The Division’s net sales totalled EUR 440 million, an increase of 6.4%. The growth was attributable to the lively hardware business at the beginning of the year. On the contrary, the trade in agricultural supplies decreased. The operating profit was EUR 6.2 million (EUR 6.4 million), and the investments amounted to EUR 8.9 million. The net sales of Kesko Hardware and Builders’ Supplies were EUR 169 million, a rise of 5.4%. Construction activities started lively. The sales by retail stores have been growing, which increased sales to the K-rauta and Rautia chains. The net sales of the Industrial and Constructor Sales unit, whose main customers are professional builders, rose by 7.0 % to EUR 51 million. In Sweden, the net sales by the six K-rauta stores of Kesko Svenska AB amounted to EUR 10 million, an increase of 96.6%. After the period under review, new K-rauta stores were opened in Örebro and in Haninge, Stockholm. The aim is to build a network of around 25 K-rauta stores in Sweden. The sales of the hardware wholesale outlet of ZAO Kestroy in Moscow continues to remain at a low level. In April, Kesko acquired the majority shareholding in AS Fanaal. The company has five stores in Estonia, as well as a subsidiary and one store in Riga, Latvia. The name used by AS Fanaal in Estonia is Ehitusmaailm, and it is the leading hardware store chain in Estonia with a 20% market share. This acquisition is in line with Kesko’s internationalisation strategy. In the hardware business, its goal is to be the market leader in Northern Europe. The net sales by Kesko Agriculture and Machinery were EUR 197 million, a decrease of 1.6%. This mainly resulted from reduced grain prices and the poor availability of Zetor tractors. The combine harvester market has contracted clearly. The market of investment machines grew, which increased Kesko Machinery’s sales, with construction machines recording the best result. The trade in recreational machines, boats and motors in particular, progressed well at the beginning of the year. The agricultural sales in Estonia have reached the targets. In Latvia, the operations of the subsidiary carrying on agricultural business have started according to plan. New K-rauta stores were opened in Oulu and Seinäjoki. The K-rauta stores in Tampere, Espoo and Lahti were refurbished and extended. In May, after the period under review, the largest K-rauta store operating in Finland was opened in Vantaa. In the hardware business, the demand is expected to continue strong towards the end of the year. The agricultural trade will develop steadily and the demand is forecast to remain at the previous year’s level. The operating profit of the profit division is estimated to reach the level of 1999.

Kaukomarkkinat The net sales by the Kaukomarkkinat Group were EUR 86 million, a decrease of 4.5% compared with the corresponding period in 1999. The Group’s operating profit was EUR 0.5 million (EUR 3.5 million). Domestic sales increased in most business sectors, compared with the corresponding period in 1999. Decreased net sales resulted from the transfer of the adidas products from 1 January 2000 to Adidas Suomi Oy, a company equally owned with the principal. Consequently, only 50% of the adidas sales were recorded in the Kaukomarkkinat Group’s net sales. Other domestic trade, which progressed favourably, could not fully compensate for this loss. The Tähti Optikko chain strengthened its market position, since the Group’s sales of eye optics grew by 26.8%. The trade in professional electronics also increased significantly, or by 19.9%, while sales of consumer electronics were up by 10.1%. The Leipurien Tukku Division, which has expanded its business operations to Poland, increased its sales by 2.1%. The modest growth was attributable to the decreased machinery and equipment trade at the beginning of the year, whereas the ingredients sales to bakers continued to develop favourably. At the end of the period under review, Kaukomarkkinat acquired RK-Tek Oy, a company manufacturing equipment for the bakery business, in order to improve the Group’s competitiveness as a versatile supplier in this sector. The net sales of the Group’s international sector went down by 4.3%, which mainly resulted from decreased imports to Russia. Trading in China, Poland and the Baltic countries has increased clearly over the previous year, and this trend is expected to continue, whereas it is difficult to forecast the development of the Russian trade. The Group’s domestic trade in various product lines is expected to continue to progress positively, although the continuously tightening price competition may weaken profit development and the Group’s operating profit for 2000 is estimated to slightly remain below the previous year’s level.

VV-Auto The net sales of the VV-Auto Group totalled EUR 185 million, a drop of 5.2%. The operating profit was EUR 9,2 million (EUR 11,1 million). The total market of cars grew by only 3.3%, while that of commercial vehicles diminished by 1.0%. The good development at the beginning of the year started to weaken in March-April due to labour market disturbances in the harbour and transport operations. They caused delays in the deliveries of Volkswagen cars in particular. Sales of Audi progressed briskly and its market share expanded clearly. The trade in Seat cars continued to grow strongly at the beginning of the year, with its market share being 2.7%. The overall market share of the cars imported by the Group was 15.0% (15.1%), while the market share of commercial vehicles amounted to 21.2% (19.5%). The drop in the car business at the end of the period under review may remain temporary, and the total sales figures for 2000 are expected to increase clearly. The operating profit is forecast to remain at a good level.

Shares and equity markets Kesko Corporation's share capital was EUR 180,426,800 on 30 April 2000, with 35.2% of the share capital consisting of A shares and 64.8% of B shares. The price of Kesko’s A share was EUR 13.60 at the end of 1999, and EUR 17.00 at the end of the period under review, an increase of 25.0%. The price of Kesko’s B share was EUR 12.60 at the end of 1999 and EUR 12.10 at the end of the period under review, a decrease of 4.0%. During the period, the business sector price index grew by 4.2%, while the HEX general index increased by 21.6%. The market value of A shares was EUR 540 million and that of B shares EUR 708 million, i.e. the total market value of all shares amounted to EUR 1,247 million. During the period, 0.4 million of Kesko’s A shares with a total value of EUR 6.6 million and 5.8 million of Kesko’s B shares with a total value of EUR 77.4 million were traded on the Helsinki Exchanges.

Decisions made by the Annual General Meeting Kesko’s Annual General Meeting held on 10 April 2000 adopted the financial statements for 1999, discharged those accountable from their responsibilities and decided to pay a dividend of EUR 1.50 per share. The Annual General Meeting approved the Board of Directors’ proposal for the management’s warrant scheme. There are two classes of warrants issued, B warrants and C warrants, both without consideration. There are 3,825,000 B warrants issued and 2,015,000 C warrants issued, i.e. a total of 5,840,000 warrants. Each B warrant and C warrant entitles to subscribe to one of Kesko’s B shares. A decision was made to issue warrants giving entitlement to subscribe to the company’s B shares to the upper and middle management of Kesko Group. This deviation from the shareholders’ pre-emptive right is part of the management’s incentive programme. The warrant scheme will comprise about 450 persons, and the number of warrants issued to each person depends on his or her duties. The C warrants will be issued for subscription to Sincera Oy, a subsidiary of Kesko Corporation, which will assign them later to persons working in Kesko Group’s management in accordance with the instructions given by Kesko’s Board of Directors. The subscription period for B warrant will begin on 1 November 2002 and that for C warrant on 1 November 2003, terminating on 31 March 2006 for both warrant types. The share subscription price for B warrants shall be the trade volume weighted average price of Kesko’s B share on the Helsinki Exchanges during March 2000 with an addition of 15%, and for C warrants the trade volume weighted average price of the B share on the Helsinki Exchanges during March 2001 with an addition of 15%. The share subscription price shall be reduced by the amount of the dividend distributed after the period for the determination of the share subscription price has ended but before the date of subscription for shares. The Annual General Meeting also decided to sell Kesko Corporation’s A and B shares in a joint book-entry securities account for the benefit of their owners in the way referred to in Article 3a of Chapter 3a of the Companies Act. On 5 April 2000, according to the shareholder register, the number of Kesko’s A shares in the joint account totalled 56,345, which is 0.18% of all A shares, and the number of B shares totalled 50,310, which is 0.09% of all B shares.

Kesko and the euro When the decisions on Kesko’s euro schedule were made, they were based largely on the premise that the majority of Kesko’s customers operate in Finland. During the transition period, the majority of Kesko’s purchases and sales will be made in markkas. Kesko is preparing its financial statements for 2000 and 2001 in markkas and they will then be converted into euros. The prices of stock items will remain in markkas until 31 December 2001. Kesko has also been prepared since 1 January 1999 to draw up invoices in euros if so agreed with customers.

Main events during the period under review On 9 December 1999, Kesko’s Supervisory Board decided that the cooperation between Kesko and the retailers belonging to the K-retailer chains will be further developed by adopting more cohesive chain operations. Co-operation will be increased in the management of the entire operational chain; in the development of chain concepts, and in the area of category management, marketing, purchasing and logistics. The transfer to the new operational model will be carried out gradually in about two years. It is expected to significantly improve the chains’ efficiency and competitiveness. A total of about 1,650 K-retailers are today operating within the current sixteen K-retailer chains. On 5 June 2000, after the period under review, Kesko’s Board of Directors made decisions on the contents, agreement structure and implementation of the chain operations reform. On 5 January 2000, Kesko purchased Rautakirja Oyj’s shares. As a result of this deal, Kesko Corporation how holds 9.99% of Rautakirja Oyj’s share capital and 11.87% of its voting rights. On 2 February 2000, in accordance with the preliminary agreement signed on 20 December 1999, Kesko sold the whole of Aleksi 13 Oy’s share capital to L-Fashion Group Oy, for the account of a company that was established. On 16 March 2000, K-Plus Oy made a co-operation agreement with Sonera Corporation Mobile Services unit. According to the agreement, Plussa points can now be gained for domestic mobile phone calls made and text messages sent through Sonera’s GSM subscriber connection. On 17 March 2000, Kesko Corporation and Alma Media Corporation made an agreement on forming an alliance for e-commerce. At the first stage, Alma Media and Citymarket Oy will boost the expansion of Internet connections in Finland by introducing a total package which gives customers a computer and an Internet connection for a fixed monthly payment. The cornerstones of this co-operation are the Internet services provided by k-netti.com and mtv3.fi. On 3 April 2000, Kesko published the ethical principles for its purchasing, based on the basic rules agreed by the International Labour Organisation and the United Nations. The tool used is the international SA 8000 standard on Social Accountability which contains basic rules on child and forced labour, occupational health and safety, right of association, segregation and treatment, working hours and compensation. Last winter, the principles were tested with about 80 suppliers mainly in the Far East. On 28 April 2000, Kesko acquired 98.4% of AS Fanaal that owns Ehitusmaailm, the largest hardware store chain in Estonia, and made a bid for the remaining shares. AS Fanaal owns five hardware stores in Estonia and one in Latvia. Last year, the net sales of AS Fanaal totalled about EUR 50 million. On 26 May 2000, after the period under review, Kesko Home Technology and Musta Pörssi retailers joined the Electronic Partner:International purchasing and service organisation. EP:International promotes the business operations of its members by means of framework agreements, joint purchases and common information management. It has members in 14 European countries and the total number of member stores is nearly 6,000. On 5 June 2000, Kesko’s Board of Directors decided to approve the warrant scheme issued for Kesko’s senior and middle management. All B and C warrants were subscribed within the time fixed.

Future outlook Kesko will continue extensive investments in wholesale and retail operations in Finland in particular. Investments in Sweden and the Baltic area will also be increased. In Finland, co-operation between stores organised in chains will be strengthened by adopting more cohesive chain operations. The reforms will considerably strengthen Kesko’s competitiveness and improve the basis for increasing sales and performance from the year 2001 on. Kesko Group’s net sales are expected to exceed EUR 6.2 billion in 2000 and the operating profit, excluding profits from the sale of fixed assets, to grow clearly. Helsinki, 7 June 2000 Kesko Board of Directors For additional information, please contact CFO Juhani Järvi, tel. +358 1053 22209, or Paavo Rönkkö, Director of Accounting, tel. +358 1053 22569. KESKO CORPORATION Corporate Communications Erkki Heikkinen Director

ENCLOSURES Kesko Group’s net sales by profit division Consolidated statement of income and balance sheet Contingent liabilities Kesko Corporation will publish its interim report for the first eight months of 2000 on 11 October 2000 at 11.00 hours. Kesko Corporation also publishes its monthly sales figures. Monthly sales releases, other key releases and the list of major shareholders, updated monthly, are also published in Kesko’s web site at Investor Information, www.kesko.fi.

DISTRIBUTION The Helsinki Exchanges Main news media

TABLES: Group net sales by profit division EUR million Change, % Foodstuffs Division Neighbourhood Chain Unit 342 1.6 Superstore Chain Unit 215 24.7 Citymarket Chain Unit 141 6.8 Citymarket Oy 101 17.7 Kespro 303 3.4 Carrols Group 9 -23.8 Other subsidiaries 10 -9.5 ./. inter-Group sales -46 Total 1,075 9.7

Home and Speciality Goods Division Anttila Group 130 7.5 Kesko Clothing & Shoes 20 -43.5 Kesko Sports 34 -10.8 Kesko Home Technology 24 -6.3 Other subsidiaries - inter-Group sales 13

Total 221 -16.1

Builders’ and Agricultural Supplies Division Kesko Hardware and Builders’ Supplies 169 5.4 Industrial and Constructor Sales 51 7.0 Kesko Svenska AB 10 96.6 Kesko Agriculture and Machinery 197 -1.6 K-maatalousyhtiöt Oy 40 6.8 Other subsidiaries 7 -15.3 ./. inter-Group sales -34 Total 440 6.4

Kaukomarkkinat Group 86 -4.5 VV-Auto Group 185 -5.2 Other subsidiaries - eliminations -31 -

GROUP TOTAL 1,976 0.9

Consolidated income statement (EUR million) 1-4/2000 1-4/1999 Change, % 1-12/1999 Net sales 1,976 1,959 0.9 6,111 Other operating income 90 75 20.3 292 Materials and services -1,753 -1,722 1.8 -5,359 Personnel expenses -99 -109 -8.9 -317 Depreciation and reduction in value -35 -34 1.7 -113 Other operating expenses -155 -144 8.1 -496 Share of associated companies’ 0 0 - -2 profits/losses Operating profit 24 25 -3.6 116 Financial income and expenses 8 3 120.1 12 Profit before extraordinary items 32 28 11.8 128 Extraordinary income - - - - Extraordinary expenses - - - -4 Profit before taxes 32 28 11.8 124 Income taxes -7 -7 -9.9 -39 Minority interest 0 0 1.7 0 Profit 25 21 20.2 85

Consolidated balance sheet (EUR million) 1-4/2000 1-4/1999 Change-% 1-12/1999 Assets Non-current assets Intangible assets 131 139 -6.1 133 Tangible assets 900 898 0.3 865 Investments 156 83 87.1 126 Current assets Stocks 501 499 0.4 492 Receivables Long-term 90 85 5.4 89 Short-term 700 741 -5.4 594 Securities 84 84 0.3 232 Cash on hand and at bank 28 17 61.5 39 Total 2,590 2,546 1.7 2,570

Liabilities Shareholders’ equity Share capital 180 180 - 180 Other shareholders’ equity 1,134 1,187 -4.5 1,252 Minority interest 15 24 -34.9 16 Provisions 14 17 -19.9 16 Liabilities Deferred tax liability 69 70 -1.6 70 Non-current debt 66 76 -13.1 69 Current debt 1,112 992 12.1 967 Total 2,590 2,546 1.7 2,570

Group key indicators 4/2000 4/1999 Change-% 12/1999 Earnings/share, EUR 0.27 0.23 20.7 0.98 Equity/share, EUR 14.56 15.15 -3.9 15.87 Return on investment, % 6.4 5.7 8.0 Return on investment, %, moving 12 8.5 9.2 8.0 months Return on equity, % 5.3 4.3 6.1 Return on equity, %, moving 12 months 6.8 7.4 6.1 Equity ratio, % 51.5 54.8 56.6 Investments, EUR million 116 55 110.0 202 Average number of personnel 10,481 10,651 -1.6 10,993

Group contingent liabilities (EUR million) 4/2000 4/1999 Change-% 12/1999

For own debt 150 147 1.8 14 For associated companies 1 - - For shareholders 1 1 - For others 3 3 -19.7 Leasing liabilities 16 9 76.8 1

Liabilities arising from derivative instruments Market value Value of underlying instruments 30.4. 4/2000 4/1999 30.4.2000 12/1999 Interest rate derivatives Forward contracts 2 - -0.0 1 Option agreements Bought - - - - Written - - - - Interest rate swaps - - - - Currency derivatives Forward contracts 48 36 0.1 28 Option agreements Bought 4 4 0.0 - Written - - - - Currency swaps - - - - Equities derivatives Forward contracts - - - - Option agreements Bought 2 2 0.2 - Written 2 2 0.1 -

The figures are unaudited. The figures for 1999 have been converted to comparable ones. The figures are based on markka-denominated bookkeeping and accounting, and the euro-denominated figures have been calculated by using the conversion rate 5.94573. The Finnish interim report with markka figures is available from Kesko Corporate Communications.