Future outlook 2008 Q2

Interim financial report 1-6/2008 (Published on 22 July 2008)

An estimate of the future outlook for the Kesko Group's and its divisions' net sales and operating profits excluding non-recurring items is given for the 12 months following the reporting period (7/2008-6/2009) in comparison with the 12 months preceding the reporting period (7/2007-6/2008).

The Group's operating activities are affected by the economic outlook in its different market areas and especially by the growth rate of private consumption. During the past quarter, the economic outlook has deteriorated in the Nordic and Baltic countries, especially as a result of inflation, higher interest rate levels and weakened consumer confidence. Market growth is expected to decelerate in the Nordic and the Baltic countries, especially in the construction market and in the home and speciality goods and machinery trade.

The net sales from the Group's continuing operations are expected to grow during the next 12 months compared with the 12 months preceding the reporting period, which is especially attributable to the expansion of the food store and the building and home improvement store networks, and the expected increase in car sales. However, net sales growth is expected to decelerate as a result of the general slowdown of economic growth.

During the next 12 months, the Kesko Group's operating profit excluding non-recurring items from continuing operations is expected to remain at a good level, although lower than in the preceding 12 months. In addition to the slowing market growth, profitability will be impacted by an intensive expansion and renovation of the store site network.