Kesko Oyj - Company Announcement

Kesko to sell its grocery trade in Russia to Lenta

KESKO CORPORATION STOCK EXCHANGE RELEASE 26.10.2016 AT 06.00 1(2)
Kesko to sell its grocery trade in Russia to Lenta
 Kesko Food Russia Holding Oy, part of Kesko Group, has signed an agreement to
sell its grocery trade business in Russia to Lenta Ltd. Lenta is one of Russia's
largest grocery trade chains. The aggregate consideration for the disposal is
approximately RUB 11 billion (approximately €158 million), which will be paid in
cash in connection with the completion of the disposal.

"Kesko's strategic objective is growth in the Finnish grocery trade, in the
building and technical trade and in the car trade. We concentrate on the
development of the Finnish grocery trade and dispose of the grocery trade in
Russia, the growth of which would have required significant capital
expenditures. The disposal will have a minor impact on Kesko's net sales, but it
will improve Kesko's profitability and cash flow," says Kesko's President and
CEO Mikko Helander.
In 2015, the net sales of Kesko's grocery trade in Russia were €106 million and
operating profit was €-14 million. The disposal includes 11 food stores
operating in the St. Petersburg and Leningradskiy regions, three land plots in
the Moscow and Leningradskiy regions, as well as administrative and support
functions. The business and assets are included in the six legal entities which
are sold in the transaction (business entity OOO Kesko Food Rus and five Russian
real estate companies). The sold companies have a total of approximately 1,300
employees.
Lenta is the largest hypermarket chain in Russia in terms of selling space and
the country's fifth largest retail chain in terms of 2015 sales. Lenta operates
156 hypermarkets in 72 cities across Russia and 42 supermarkets in Moscow and
St. Petersburg, with a total of approximately 968,595 sq.m of selling space.
Lenta's largest shareholders include TPG Capital and the European Bank for
Reconstruction and Development.
Kesko Corporation's outlook in respect of net sales and comparable operating
profit for the period Q3/2016-Q2/2017 remains unchanged. The outlook according
to the half year financial report published on 3 August 2016 was as follows:
Kesko Group's net sales and comparable operating profit for the next 12 months
are expected to exceed the level of the preceding 12 months. Estimated based on
the current exchange rate, Kesko Corporation will record a non-recurring expense
of approximately €69 million on the disposal for the last quarter of 2016.
The disposal is yet subject to the approval of the Russian competition
authority, The Federal Antimonopoly Service of the Russian Federation, FAS, and
the fulfilment of the other terms and conditions of the disposal. The processing
of the matter and the disposal are expected to be completed on November
30, 2016.
Further information:
Jukka Erlund, Senior Vice President, Chief Financial Officer, Kesko Corporation,
tel. +358 105 322 113, jukka.erlund@kesko.fi
Jorma Rauhala, Executive Vice President and Senior Vice President for the
grocery trade division, tel. +358 105 322 211, jorma.rauhala@kesko.fi
Riikka Toivonen, Head of Financial Communications, Kesko Corporation, tel.
+358 105 323 495, riikka.toivonen@kesko.fi
Kesko Corporation
DISTRIBUTION
Nasdaq Helsinki Ltd
Main news media
www.kesko.fi
Kesko is a Finnish listed trading sector company. Kesko operates in the grocery
trade, the building and technical trade and the car trade. Its divisions and
chains act in close cooperation with retailer entrepreneurs and other partners.
Kesko's net sales were €9 billion (rolling 12 months, 1 July 2015-30 June 2016)
and the total number of personnel was approximately 30,000 as at 30 June 2016.
Kesko has over 1,500 stores engaged in chain operations in Finland, Sweden,
Norway, Estonia, Latvia, Lithuania, Russia, Belarus and Poland. Kesko's shares
are listed on Nasdaq Helsinki. The company's domicile and main premises are in
Helsinki. Kesko is the most sustainable trading sector company in the world (The
Global 100 Most Sustainable Corporations in the World list). www.kesko.fi



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