743700OX6HSVMCAHPB95-2024-12-31-en


		2

REPORT BY THE BOARD

OF DIRECTORS


Report by the Board of Directors ...............................	3
Operating environment .................................................	3
Outlook and guidance 2025 ..........................................	3
Financial performance ...................................................	4
Segments .........................................................................	7
Changes in Group composition ....................................	10
Key events during the financial year .............................	10
Events after the financial year .......................................	11
Resolutions of the 2024 Annual General meeting ......	11
Information contained in the notes to the financial statements ......................................................................	11
Corporate governance statement .................................	11
Risk management ...........................................................	11
Significant risks and uncertainties ................................	12
Proposal for profit distribution ......................................	13
Annual General Meeting ...............................................	13
Shares and securities markets .......................................	14
Analysis of shareholding ................................................	15
Board authorities ...........................................................	17
Group’s key performance indicators ............................	18
Calculation of performance indicators .........................	19
Sustainability statement ................................................	23

This report is a translation of the Finnish original.


		3

REPORT BY THE BOARD OF DIRECTORS

Kesko is a Finnish listed trading sector company. Kesko has

approximately 1,700 stores engaged in chain operations in

Finland, Sweden, Norway, Denmark, Estonia, Latvia,

Lithuania and Poland.

Kesko Group's reportable segments consist of its business

divisions, namely the grocery trade, the building and

technical trade, and the car trade.

The Group's parent company, Kesko Corporation, is a

Finnish public limited company constituted in accordance

with the laws of Finland. The Company's business ID is

0109862-8, it is domiciled in Helsinki, Finland and it's

registered address is PO Box 1, 00016 KESKO, Finland.

Together, Kesko and K-retailers form K Group, whose retail

sales (preliminary) totalled some €15.9 billion (0% VAT)

in 2024.

Operating environment

Identified trends impacting the operations of K Group

include the impacts of interest rates and inflation on

consumer and business confidence and customer

behaviour, the impact of urbanisation on living,

consumption habits and mobility, as well as population

change. Convenience is emphasised in consumer behaviour,

and habits are changing quickly. In addition, climate change

and the green transition, digitalisation and the possibilities

of artificial intelligence all impact the operating

environment. Globalisation impacts supply chains, and the

importance of risk management grows.

Key opportunities and risks in our operating environment

are related to developments in our economic operating

environment, digital services and data-driven management,

the geopolitical situation, sustainable purchasing and

human rights, and climate change. Emerging risks include

the loss of biodiversity and extreme weather phenomena.

Risks are described in more detail in the ‘Significant risks

and uncertainties’ section of this Report by the Board of

Directors.

Outlook and guidance 2025

Kesko Group’s profit guidance is given for the year 2025, in

comparison with the year 2024.

Kesko’s operating environment is estimated to improve in

2025, but to still remain somewhat challenging. Kesko’s

comparable operating profit is estimated to improve in

2025. Kesko estimates that its comparable operating profit

in 2025 will amount to €640-740 million. The profit

guidance is based on an estimate of a gradually improving

economic cycle in all Kesko operating countries. Key

uncertainties impacting Kesko’s outlook are developments

in consumer confidence, investment appetites, as well as

geopolitical crises and tensions.

In grocery trade, B2C trade and the foodservice market are

estimated to remain stable. In 2025, the comparable

operating margin for the grocery trade division is estimated

to stay clearly above 6% despite the investments in price

and the store site network in accordance with Kesko’s

strategy for 2024-2026.

In building and technical trade, the cycle is expected to

improve in 2025 from the historically low levels. Profitability

in the building and technical trade division is estimated to

improve on 2024.

In car trade, the market for new cars is expected to stay at a

low level. Demand for used cars and services is estimated to

remain good. Profitability for the car trade division is

estimated to remain at a good level in 2025 despite weak

demand for new cars.


		4

Financial performance

Net sales and profit in 2024


1-12/2024	Net sales, € million	Change, %	Change, comparable, %	Operating profit, comparable, € million	Change, € million
Grocery trade	6,381.4	+0.5	+0.4	438.0	-6.8
Building and home improvement trade	2,160.7	+13.0	-6.9	57.9	-7.1
Technical trade	2,255.0	-3.8	-5.2	90.5	-38.1
Kesko Senukai	-	-	-	20.9	+1.9
Building and technical trade, total	4,351.6	+3.8	-6.0	169.1	-43.3
Car trade	1,209.4	-4.2	-4.0	69.3	-13.3
Common functions and eliminations	-22.4	-	-	-26.4	+1.4
Total	11,920.1	+1.2	-2.3	650.1	-62.0

Group net sales grew by 1.2%. In comparable terms, net

sales decreased by 2.3%. Net sales decreased in

comparable terms by 1.8% in Finland, while in other

operating countries, they decreased by 5.1%. The

comparable change % has been calculated in local

currencies and excluding the impact of acquisitions and

divestments completed.

Net sales for the grocery trade division increased by 0.5%.

Sales to K Group grocery store chains grew by 1.0%. Net

sales for Kespro’s foodservice business increased by 1.3%.

Net sales for the building and technical trade division

increased by 3.8%, while in comparable terms, net sales

decreased by 6.0%, impacted by the weak construction

cycle. Net sales for technical trade decreased by 3.8%,

while in comparable terms, net sales decreased by 5.2%. In

building and home improvement trade, net sales increased

by 13.0% thanks to acquisitions completed, while in

comparable terms, net sales decreased by 6.9%. The Danish

building and home improvement trade chain Davidsen has

been consolidated into the building and technical trade

division’s figures as of 1 February 2024.

Net sales for the car trade division decreased by 4.2%, while

in comparable terms net sales decreased by 4.0%. Of the

car trade businesses, net sales decreased in new cars, and

increased in used cars and services. In the comparison

period, net sales for new cars were increased by the

clearing of order books as the availability of cars improved.

Net sales for sports trade decreased.

The Group’s comparable operating profit totalled

€650.1 million (€712.0 million), representing a decrease of

€62.0 million. The comparable operating profit for the

grocery trade division decreased by €6.8 million. The

comparable operating profit for the building and technical

trade division decreased by €43.3 million. The decrease was

due to a decline in net sales, which was mainly impacted by

the weak construction cycle. In the first year-half, net sales

and gross margin for solar power products in particular fell

short of the comparison period. Comparable operating

profit decreased in all operating countries. Onninen’s

comparable operating profit in Finland totalled

€69.0 million (€90.8 million). In Finland, profitability in

building and home improvement trade remained good.

Building and home improvement trade profitability was

burdened by a €2.5 million expense related to the Davidsen

acquisition, recorded in the allocation of fair value. The

share of result from Kesko Senukai was up by €1.9 million

year-on-year. The comparable operating profit for the car

trade division decreased by €13.3 million. The comparable

operating profit for the car trade businesses decreased by

€11.4 million due to a decline in net sales. In sports trade,

the comparable operating profit decreased by €1.9 million

on the comparison period.


		5


Items affecting comparability, € million	1-12/2024	1-12/2023
Operating profit, comparable	650.1	712.0
Items affecting comparability
+gains on disposal	+11.4	+0.4
-losses on disposal	-1.6	-1.0
-Impairment charges	-40.0	-
+/- structural arrangements	-40.4	-16.1
Items affecting comparability, total	-70.6	-16.7
Operating profit	579.5	695.4

The most significant items affecting comparability were

related to a €40.0 million write-down of goodwill for the

Byggmakker building and home improvement chain in

Norway, to the reorganisation of the K-Rauta chain in

Sweden, in which the Swedish building and home

improvement trade operations were concentrated in the K-

Bygg chain, the discontinuation of the Neste K chain, and to

acquisitions. The goodwill write-down for Byggmakker was

impacted by weaker-than-anticipated profit development, a

weak cycle in Norwegian construction, and high interest

rates.

K Group's (Kesko and the chain stores) retail and B2B sales

(0% VAT) totalled €15,853.0 million, representing a

decrease of 2.2%. During the 12-month period that ended in

December 2024, the number of Finnish households

belonging to the K-Plussa loyalty scheme and using the K-

Plussa network totalled 2.6 million, with 3.4 million K-

Plussa loyalty card users.

Net finance costs, income tax and earnings per


	1-12/2024	1-12/2023
Net finance costs, € million	-111.7	-83.9
Interests on lease liabilities, € million	-78.6	-73.4
Profit before tax, comparable, € million	543.0	630.4
Profit before tax, € million	471.5	613.5
Income tax, € million	-92.0	-118.0
Earnings per share, comparable, €	1.11	1.28
Earnings per share, €	0.95	1.25
Equity per share, €	6.84	6.93

The increase in Group net finance costs was impacted by

the increase in interest-bearing debt and the rise in interest

rate levels. Net finance costs were reduced by a positive

change in the fair value of interest rate derivatives. The

share of result of associates totalled €3.8 million

(€2.1 million).

The Group’s effective tax rate was 19.5% (19.2%).

The Group’s earnings per share and comparable earnings

per share decreased compared to the year before.

Cash flow and financial position


€ million	1-12/2024	1-12/2023
Cash flow from operating activities	1,008.2	1,049.5
Cash flow from investing activities	-597.5	-590.2
Cash flow from financing activities	-149.8	-492.2


€ million	31.12.2024	31.12.2023
Liquid assets	488.1	227.3
Interest-bearing liabilities	3,396.3	2,787.0
Lease liabilities	2,051.0	1,997.9
Interest-bearing net debt excl. lease liabilities	857.2	561.9
Interest-bearing net debt/ EBITDA, excl. IFRS 16 impact	1.1	0.7
Gearing, %	106.3	92.8
Equity ratio, %	32.5	35.8

The Group’s cash flow from operating activities totalled

€1,008.2 million (€1,049.5 million), impacted by a profit

performance that fell short of the comparison period and

growth in net interests paid.

The Group’s cash flow from investing activities totalled

€-597.5 million (€-590.2 million). Cash flow from investing

activities included a positive item of €0.5 million

(€54.3 million) from the redemption of money market

funds, included in the Group’s liquid assets.

The Group’s net debt excluding lease liabilities increased

due to acquisitions completed and investments made in the

store site network for grocery trade and Onninen’s logistics

centre in Finland.


		6

Capital expenditure


€ million	1-12/2024	1-12/2023
Capital expenditure	675.9	678.9
Store sites	289.2	300.3
Acquisitions	172.9	141.1
IT	18.0	25.0
Other investments	195.8	212.5
As of 1 January 2024, investments in Kespro’s cash-and-carry outlets are reported under capital expenditure in store sites, while before they were reported under other investments. Figures for the comparison periods have been adjusted accordingly.

Capital expenditure in store sites decreased by €11.1 million

year-on-year. Capital expenditure included the March

acquisition of store sites in Espoo and Salo, where Kesko’s

grocery trade has long been the primary tenant.

Other investments included an investment of €82.8 million

(€90.1 million) in the construction of Onninen and K-Auto’s

shared logistics centre in Hyvinkää, Finland. The

construction project is expected to be completed in 2025.

Capital expenditure included the acquisition of the Danish

building and home improvement trade company Davidsen

Koncernen A/S, completed on 31 January 2024, and the

acquisition of Autotalo Lohja, completed on 1 September

2024. Capital expenditure in the comparison period

included the acquisitions of Elektroskandia Norge AS in

Norway, completed on 1 March 2023, and Zenitec Sweden

AB, completed on 5 April 2023.


		7

Segments

New segment structure

Kesko changed its division structure and segment reporting

from 1 April 2023 onwards. Sports trade became part of the

car trade division, while it previously had been part of the

building and technical trade division. Data concerning the

comparison periods have been adjusted to correspond to

the new segment structure. Kesko published comparison

figures for the new segment structure for 2022 and for the

first quarter of 2023 on 25 May 2023.

Grocery trade


	1-12/2024	1-12/2023
Net sales, € million	6,381.4	6,351.6
Operating profit, comparable, € million	438.0	444.8
Operating margin, comparable, %	6.9	7.0
Return on capital employed, comparable, %	16.0	17.4
Capital expenditure, € million	276.0	303.7
Average number of personnel converted into full-time employees	6,346	6,257

Net sales for the grocery trade division totalled


Net sales, € million	1-12/2024	1-12/2023	Change, %	Change, comparable, %
Sales to K Group grocery stores	4,529.3	4,484.0	+1.0	+1.0
K-Citymarket, non-food	602.6	615.5	-2.1	-2.1
Kespro	1,169.6	1,154.9	+1.3	+1.3
Others	79.8	97.3	-18.0	-21.8
Total	6,381.4	6,351.6	+0.5	+0.4

€6,381.4 million (€6,351.6 million), an increase of 0.5%.

Sales to K Group grocery store chains grew by 1.0%. Net

sales for Kespro’s foodservice business increased by 1.3% .

The total grocery retail market in Finland (incl. VAT) is

estimated to have grown by approximately 2.0% (Finnish

Grocery Trade Association PTY), and retail prices are

estimated to have risen by some 0.5% (incl. VAT, Statistics

Finland). K Group's grocery sales grew by 0.9% (incl. VAT).

Online grocery sales grew by 13.5%, and accounted for

approximately 3.7% of K Group’s grocery sales (incl. VAT).

All K Group grocery store chains offer online grocery

services. The number of K Group stores offering online

grocery services was 776 , up by 47 from the previous year.

The total market for the foodservice business is estimated

to have decreased by 1.1% (PTY). Kespro’s market share is

estimated to have continued to grow.

The comparable operating profit for the grocery trade

division totalled €438.0 million (€444.8 million), down by

€6.8 million. The development of comparable operating

profit was impacted by an increase in store site costs and a

decline in the net sales for K-Citymarket’s home and

speciality goods (non-food). Kespro’s comparable operating

profit totalled €77.8 million (€75.0 million). Operating profit

for the grocery trade division totalled €420.9 million

(€443.6 million). Items affecting comparability totalled

€-17.2 million (€-1.3 million), and were mainly related to the

discontinuation of the Neste K chain.

Capital expenditure for the grocery trade division totalled

€276.0 million (€303.7 million). Capital expenditure in store

sites totalled €255.2 million (€265.0 million). Capital

expenditure in stores sites included the March acquisition of

store sites in Espoo and Salo, where Kesko’s grocery trade

has long been the primary tenant.


		8

Building and technical trade


Net sales, € million	1-12/2024	1-12/2023	Change, %	Change, comparable, %
Building and home improvement trade, Finland	888.4	937.6	-5.3	-5.3
K-Rauta, Sweden	101.6	149.8	-32.2	-
K-Bygg, Sweden	277.0	280.0	-1.1	-5.1
Byggmakker, Norway	517.9	547.6	-5.4	-5.2
Davidsen, Denmark	379.8	-	-	-
Building and home improvement trade, total	2,160.7	1,912.1	+13.0	-6.9
Technical trade, Finland	1,132.1	1,234.0	-8.3	-8.3
Technical trade, Sweden	130.6	132.8	-1.7	-3.2
Technical trade, Norway	501.7	517.5	-3.0	-5.0
Technical trade, Baltics	127.4	129.1	-1.3	-1.3
Technical trade, Poland	368.1	336.9	+9.3	+3.6
Technical trade, total	2,255.0	2,344.7	-3.8	-5.2
Total	4,351.6	4,193.2	+3.8	-6.0
The reorganisation of the K-Rauta chain in Sweden was completed in December 2024. In October-November 2024, a total of 8 K-Rauta stores were transferred under the K-Bygg chain. The comparable change in K-Bygg net sales has been calculated in local currencies by adding the net sales of the transferred K-Rauta stores to the comparison period figures at dates corresponding to the change in store chains.


	1-12/2024	1-12/2023
Net sales, € million	4,351.6	4,193.2
Building and home improvement trade	2,160.7	1,912.1
Technical trade	2,255.0	2,344.7
Operating profit, comparable, € million	169.1	212.5
Building and home improvement trade	57.9	65.0
Technical trade	90.5	128.5
Kesko Senukai	20.9	19.0
Operating margin, comparable, %	3.9	5.1
Building and home improvement trade	2.7	3.4
Technical trade	4.0	5.5
Return on capital employed, comparable, %	7.8	11.4
Capital expenditure, € million	293.7	273.0
Average number of personnel converted into full-time employees	6,538	6,073

Net sales for the building and technical trade division

increased by 3.8%. In comparable terms, net sales

decreased by 6.0%. Net sales development was impacted

by the weak construction cycle. Net sales for technical

trade decreased by 3.8%, while in comparable terms, net

sales decreased by 5.2%. In building and home

improvement trade, net sales increased by 13.0% thanks to

acquisitions carried out, while in comparable terms, net

sales decreased by 6.9%. The Danish building and home

improvement trade chain Davidsen has been consolidated

into the division’s figures as of 1 February 2024. Net sales

development in euro terms was increased by the

strengthening of the Polish zloty and Swedish krona, and

decreased by the weakening of the Norwegian krone

against the euro.

In Finland, net sales for the building and technical trade

division totalled €1,967.9 million (€2,115.0 million), a

decrease of 7.0%. Net sales from international operations

totalled €2,383.7 million (€2,078.2 million), an increase of

14.7% thanks to the acquisitions carried out. In comparable

terms, net sales from international operations decreased

by 5.1%.

The comparable operating profit for the building and

technical trade division totalled €169.1 million

(€212.5million), and it decreased by €43.3 million, due to a

decline in net sales, which was mainly impacted by the weak

construction cycle. In the first year-half, net sales and gross

margin for solar power products in particular fell short of

the comparison period. Comparable operating profit

decreased in all operating countries. Onninen’s comparable

operating profit in Finland totalled €69.0 million

(€90.8million). In Finland, profitability in building and home

improvement trade remained good. Profitability in building

and home improvement trade was burdened by a €2.5

million expense related to the Davidsen acquisition,

recorded for the allocation of fair value. The share of result

from Kesko Senukai was up by €1.9 million year-on-year.

Operating profit for the building and technical trade division

totalled €116.3 million (€201.9 million). Items affecting

comparability totalled €-52.8 million (€-10.5 million). The

most significant items affecting comparability were related

to a €40.0 million write-down of goodwill for the

Byggmakker building and home improvement chain in

Norway, to the reorganisation of the K-Rauta chain in

Sweden, in which the Swedish building and home

improvement trade operations were concentrated in the K-

Bygg chain, and to acquisitions. The goodwill write-down

for Byggmakker was impacted by weaker-than-anticipated

profit development, a weak cycle in Norwegian

construction, and high interest rates.


		9

Capital expenditure for the building and technical trade

division totalled €293.7 million (€273.0 million). Capital

expenditure included an investment of €82.8 million in the

construction of Onninen and K-Auto’s shared logistics

centre in Hyvinkää, Finland. Construction on the centre is

expected to be completed in 2025. Capital expenditure also

included the acquisition of the Danish building and home

improvement trade company Davidsen Koncernen A/S,

completed on 31 January 2024. Capital expenditure in the

comparison period included the acquisitions of

Elektroskandia Norge AS in Norway, completed on 1 March

2023, and Zenitec Sweden AB, completed on 5 April 2023.

Car trade


	1-12/2024	1-12/2023
Net sales, € million	1,209.4	1,262.3
Car trade	1,040.9	1,078.6
Sports trade	168.7	183.9
Operating profit, comparable, € million	69.3	82.6
Car trade	61.7	73.1
Sports trade	7.6	9.5
Operating margin, comparable, %	5.7	6.5
Car trade	5.9	6.8
Sports trade	4.5	5.1
Return on capital employed, comparable, %	13.8	15.8
Capital expenditure, € million	89.0	80.3
Average number of personnel converted into full-time employees	1,556	1,531


Net sales, € million	1-12/2024	1-12/2023	Change, %	Change, comparable, %
Car trade	1,040.9	1,078.6	-3.5	-3.3
Sports trade	168.7	183.9	-8.3	-8.3
Total	1,209.4	1,262.3	-4.2	-4.0

Net sales for the car trade division decreased by 4.2%, while

in comparable terms, net sales decreased by 4.0%. Of the

car trade businesses, net sales decreased in new cars, and

increased in used cars and services. In the comparison

period, net sales for new cars were increased by the

clearing of order books as the availability of cars improved.

Net sales for sports trade decreased.

The combined market performance of first registrations of

passenger cars and vans was -15.2%. The combined market

share of the Volkswagen, Audi, SEAT, CUPRA, Porsche and

Bentley passenger cars and Volkswagen vans imported by

Kesko’s car trade division was 14.5% (15.1%).

The comparable operating profit for the car trade division

totalled €69.3 million (€82.6 million). The comparable

operating profit for the car trade businesses decreased by

€11.4 million, as net sales declined. In sports trade, the

comparable operating profit decreased by €1.9 million year-

on-year.

Operating profit for the car trade division totalled €69.3

million (€82.4 million). Items affecting comparability

totalled €0.0 million (€-0.1 million).

Capital expenditure for the car trade division totalled

€89.0million (€80.3 million). Capital expenditure included

the acquisition of Autotalo Lohja, completed on

1 September 2024.


		10

Changes in Group composition

Kesko acquired 90% of the share capital of the Danish

building and home improvement trade company Davidsen

Koncernen A/S on 31 January 2024. The acquisition of

Autotalo Lohja was completed on 1 September 2024.

Key events during the financial year

Kesko’s Board of Directors appointed Jorma Rauhala as the

managing director of Kesko Corporation and President and

CEO of Kesko Group as of 1 February 2024, as Mikko

Helander announced on 8 December 2023 his intentions to

retire. (Stock exchange release 19.12.2023)

Kesko announced in August 2023 it would expand its

operations to Denmark by acquiring 90% of the shares in

Davidsen Koncernen A/S. On 5 January 2024, the EU

Commission approved the acquisition without conditions.

The transaction was completed on 31 January 2024.

(Investor news releases 23.8.2023 and 31.1.2024)

Kesko withdrew from operating the Neste K service

stations, where it had been responsible for the grocery

trade operations and additional services. During the year,

Kesko withdrew from operating 64 Neste K service stations.

The stations will continue as a service offered by Neste. The

motive behind the decision is the diminished role of grocery

sales at service stations. (Investor news release 23.1.2024)

Kesko Corporation’s Chief Financial Officer Jukka Erlund

announced that he will be leaving Kesko and joining Fazer

Group as Chief Financial Officer. Erlund acted as Kesko’s

CFO and a member of the Group Management Board since

November 2011. (Stock exchange release 13.2.2024)

Sami Kiiski was appointed as President of Kesko’s building

and technical trade division and a member of Group

Management Board, and Johanna Ali was appointed as

acting President of the car trade division and a member of

Group Management Board, both as of 1 April 2024. (Stock

exchange release 20.3.2024)

Anu Hämäläinen (M.Sc. Econ.) was appointed as Kesko’s

Chief Financial Officer and a member of Group

Management Board, and Lasse Luukkainen (Master of

Laws) was appointed as Kesko’s Executive Vice President,

Legal and Sustainability, and a member of Group

Management Board, both effective as of 1 June 2024.

(Stock exchange release 14.5.2024)

The Board of Directors of Kesko Corporation confirmed an

updated strategy for the company. The main pillars of the

strategy remain intact, while each division’s competitive

advantages and objectives were refined. Central to Kesko’s

growth strategy continues to be profitable growth in three

selected divisions, namely grocery trade, building and

technical trade, and car trade. (Investor news release

4.6.2024)

Johanna Ali (M.Sc. Econ.) was appointed as President of

Kesko’s car trade division and a member of Group

Management Board as of 4 June 2024. (Stock exchange

release 4.6.2024)

Kesko established a Green Finance Framework applicable

for the issuance of green debt instruments. (Investor news

release 4.6.2024)

The two largest shareholders in Kesko on 1 September 2024

by votes were K-Retailers' Association and Ilmarinen Mutual

Pension Insurance Company. Both used their right of

nomination for Kesko's Shareholders' Nomination

Committee. The members of Kesko’s Shareholders’

Nomination Committee are Pauli Jaakola, retailer,

appointed by K-Retailers' Association, Jouko Pölönen,

President and CEO, appointed by Ilmarinen Mutual Pension

Insurance Company, and Esa Kiiskinen, Chair of Kesko’s

Board of Directors. At its organisational meeting on 23

September 2024, the Committee elected Pauli Jaakola to

continue as Committee Chair. (Stock exchange releases

7.6.2024 and 23.9.2024)

Kesko agreed to acquire three builders’ merchants in

Denmark: Roslev Trælasthandel A/S, Tømmergaarden A/S,

and CF Petersen & Søn A/S. The combined net sales of the

three operators total some €400 million. The acquisitions

are part of the execution of Kesko’s growth strategy in

Northern Europe, and once completed, will make Kesko’s

subsidiary Davidsen a significant nationwide operator in the

Danish builders’ merchant market. The completion of all

three acquisitions is subject to the approval of the

competition authorities and the fulfilment of certain other

conditions. The transactions are expected to be completed

in the first half of 2025 at the latest. (Investor news release

14.8.2024)

The Finnish Competition and Consumer Authority (FCCA)

investigated actions by Kesko Group company Onninen as

well as several other companies in the HPAC infra plastic

pipe product market for nearly a decade. The investigation

concerned events between 2009 and 2016. Kesko was

aware of the ongoing investigation when it acquired

Onninen in 2016. Kesko was not at any point of the

investigation suspected of violations. In 2022, the FCCA

decided to take the matter to the Market Court, and


		11

proposed that a penalty payment be imposed on Onninen

and the other companies. In its decision on 28 August 2024,

the Market Court dismissed all FCCA demands. The Market

Court furthermore ordered the FCCA to reimburse Onninen

for litigation costs. Apart from the issue of reimbursement

of litigation costs, the Market Court decision has gained

legal force. (Investor news release 28.8.2024)

Kesko signed a €150 million 7-year sustainability-linked loan

with the Nordic Investment Bank (NIB), where the interest

rate margin is tied to Kesko’s attainment of certain

sustainability targets set for greenhouse gas emissions and

food waste. (Investor news release 13.9.2024)

Kesko announced it would be issuing senior unsecured

green notes of €300 million, with a maturity of

approximately five years and four months. The notes

mature on 2 February 2030. The notes carry a fixed annual

interest of 3.500 percent. The issue price of the notes was

99.317 percent. The issue date of the notes was 2 October

2024, and trading began on 4 October 2024 on the list of

sustainable bonds of Nasdaq Helsinki Ltd. The net proceeds

from the notes issue will be used for financing or

refinancing eligible green projects or assets or otherwise in

accordance with the Green Finance Framework established

by Kesko in May 2024. (Stock exchange releases on

20.9.2024, 25.9.2024 and 2.10.2024)

Events after the financial year

Kesko announced on 14 August 2024 that it would acquire

Roslev Trælasthandel A/S and two other Danish builders'

merchant companies. The acquisition of Roslev

Trælasthandel received all necessary approvals and was

completed on 31 January 2025. (Investor news release

31.1.2025)

Resolutions of the 2024 Annual

General meeting

The Annual General Meeting of Kesko Corporation held on

26 March 2024 adopted the company’s financial statements

for 2023. The Annual General Meeting resolved to

distribute a dividend of €1.02 per share – based on the

adopted balance sheet for 2023 – on shares held outside

the company at the time of distribution. The remaining

distributable assets remain in equity. The dividend was paid

in four instalments: the record date of the first dividend

instalment of €0.26/share was 28 March 2024 and the pay

date 9 April 2024; the record date of the second dividend

instalment of €0.25/share was 16 July 2024 and the pay

date 23 July 2024; the record date of the third dividend

instalment of €0.26/share was 15 October 2024 and the

pay date 22 October 2024; and the record date of the

fourth dividend instalment of €0.25/share was 14 January

2025 and the pay date 21 January 2025. The Board was

authorised to decide, if necessary, on new dividend

payment record dates and pay dates for the second, third

and/or fourth instalments, if the rules and statutes of the

Finnish book-entry system change or otherwise so require.

The resolutions of the Annual General Meeting were

communicated in more detail in a stock exchange release

issued on 26 March 2024.

Information contained in the notes to

the financial statements

Information on the Group’s personnel is disclosed in Note

2.5.

Financial risks are presented in Note 4.3 and information on

financial instruments measured at fair value is disclosed in

Note 4.5.

Related party transactions are disclosed in Note 5.2 .

Information on disputes and legal and authority proceedings

is disclosed in Note 5.4.

Corporate governance statement

Kesko Corporation issues the Corporate Governance

Statement in compliance with the reporting requirements of

the Finnish Corporate Governance Code 2025 issued by the

Finnish Securities Market Association and effective as of 1

January 2025. Kesko Corporation issues the statement

separately from the Report by the Board of Directors.

Risk management

Risk management at Kesko is proactive and an integral part

of day-to-day management to assess and manage business-

related opportunities and risks.

Kesko’s divisions and common operations are responsible

for identifying, assessing, handling and managing risks

related to their operations, and they report on risks, risk

management responses and the results of those responses

to the Group risk management function. Members of the


		12

Group Management Board are responsible for the effective

and efficient implementation of internal control and risk

management in their respective areas of responsibility.

A risk management function independent of businesses is

responsible for providing a framework and guidance for

internal control and risk management, and it supports,

coordinates and supervises risk management

implementation in Kesko Group. The Chief Audit and Risk

Officer reports functionally to the Chair of the Audit

Committee and administratively to Kesko’s President and

CEO on matters related to internal audit, and to the

Group’s Chief Financial Officer on matters related to risk

management. The Risk Management Steering Group

headed by the Chief Financial Officer is responsible for

establishing the Group’s overview of the risk situation. The

President and CEO is responsible for the effectiveness and

efficiency of the Group’s risk management, and approves

Group risk reports before they are reviewed by the Board of

Directors. Kesko’s Board of Directors monitors and

assesses the effectiveness of risk management and

supervises the assessment of risks related to the company’s

strategy and operations and their management, aided by

the Audit Committee.

The Group's most significant risks and uncertainties, as well

as material changes in and management responses to them,

including indicators, are reported to Kesko Board's Audit

Committee quarterly in connection with the review of

interim reports, the half-year financial report, and the

financial statements. The Audit Committee Chair reports on

risk management to the Board as part of Audit Committee

reporting. The most significant risks and uncertainties and

emerging risks are reported to the market by the Board in

the Report by the Board of Directors, and any material

changes in them in the interim reports and the half-year

financial report.

Significant risks and uncertainties

Slower-than-anticipated economic

recovery and recovery in demand

High interest rates, weakened employment, and economic

uncertainty have an impact on consumer purchasing power

and companies’ willingness to invest. In grocery trade,

product price has an emphasised impact on consumer

purchase decisions, while customers in car trade may

postpone their purchases. In building and technical trade,

construction and renovation projects may continue to be

postponed, which would impact sales and inventory

management.

Geopolitical risks

Growing tensions in security policy as a result of the war in

Ukraine and other military conflicts, as well as the potential

expansion of the conflicts and tightened military and

economic competition between superpowers could have a

significant impact on Kesko’s operating environment,

supply chain continuity, and product availability.

Cybercrime

Growing, professional cybercrime has resulted in higher risk

on business continuity and loss of critical information.

Targets of cyber-attacks may include, for example, data

systems critical for business continuity or personal data.

Cyber-attacks may result in business disruptions, loss of

customer trust, or fines imposed by authorities.

Compliance with laws and agreements

Changes in legislation and authority regulations could

necessitate significant changes and result in additional

costs. Compliance with laws and agreements is an

important part of Kesko's corporate responsibility. Non-

compliance can result in fines, claims for damages and

other financial losses, as well as loss of trust and reputation.

Climate change

Delays in actions aimed at mitigating climate change and an

increase in extreme weather phenomena can impact

product availability and cause disturbances in logistics and

the store site network. The impacts of Kesko’s operations

on the climate, in turn, are related to Kesko’s energy

solutions and emissions, and the lifecycle impact of

products and services sold in the whole supply chain.

Product safety

A failure in product safety control or in the quality

assurance of the supply chain could result in financial

losses, the loss of reputation and customer trust, or, in the

worst case, a health hazard to customers.

Store sites and properties

Good store sites are a key competitive factor for business

growth and profitability. The acquisition of store sites can

be delayed by town planning and permit procedures and the

availability and pricing of sites. Considerable amounts of

capital or lease liabilities are tied up in properties for years.

As a result of urbanisation, changes in the market situation,

growing significance of e-commerce, or a chain concept

proving inefficient, there is a risk that a store site or a

property becomes unprofitable, and operations are

discontinued while long-term liabilities remain.


		13

Responsible operating practices and

reputation management

Various aspects of corporate responsibility, such as

ensuring responsibility in the purchasing chain of products,

fair and equal treatment of employees, the prevention of

corruption, and environmental protection, are increasingly

important to customers. Any failures in corporate

responsibility and sustainability could result in negative

publicity for Kesko and cause operational and financial

damage.

Reporting to the market

In its investor communication and financial reporting, Kesko

follows the disclosure policy approved by Kesko’s Board of

Directors. Kesko's objective is to produce and publish

reliable and timely information. Disclosure follows the

principle of providing all market participants information in

a timely manner and non-selectively to form the basis for

the price formation of Kesko’s financial instruments such as

shares. Should the information published by Kesko prove

incorrect, or should communications fail to meet

regulations in other respects, it could result in losing

investor and other stakeholder trust and in possible

sanctions. Significant business arrangements, tight

disclosure schedules and the dependency on information

systems create challenges for the accuracy of financial

information.

Risks of damage

Accidents, natural phenomena and epidemics can cause

significant damage to people, property or business. In

addition, risks of damage may cause business disruptions

that cannot be prevented.

Proposal for profit distribution

The Board of Directors of Kesko Corporation proposes to

the Annual General Meeting to be held on 24 March 2025

that a dividend of €0.90 per share be paid for the year 2024

based on the adopted balance sheet on shares held outside

the company at the date of dividend distribution. The

remaining distributable assets will remain in equity. The

Board proposes that the dividend be paid in four

instalments.

The first instalment of €0.23 per share is to be paid to

shareholders registered in the company's register of

shareholders kept by Euroclear Finland Ltd on the

instalment’s record date 26 March 2025. The Board

proposes that the dividend instalment pay date be

2 April 2025.

The second instalment of €0.22 per share is to be paid to

shareholders registered in the company's register of

shareholders kept by Euroclear Finland Ltd on the

instalment’s record date 15 July 2025. The Board proposes

that the dividend instalment pay date be 22 July 2025.

The third instalment of €0.23 per share is to be paid to

shareholders registered in the company's register of

shareholders kept by Euroclear Finland Ltd on the

instalment’s record date 14 October 2025. The Board

proposes that the dividend instalment pay date be

21 October 2025.

The fourth instalment of €0.22 per share is to be paid to

shareholders registered in the company's register of

shareholders kept by Euroclear Finland Ltd on the

instalment’s record date 13 January 2026. The Board

proposes that the dividend instalment pay date be

20 January 2026.

The Board proposes that it be authorised to decide, if

necessary, on new dividend payment record dates and pay

dates for the second, third and/or fourth instalments, if the

rules and statutes of the Finnish book-entry system change

or otherwise so require, or if the payment of dividends is

prevented by laws or regulations applied.

As at the date of the proposal for the distribution of profit,

4 February 2025, a total of 397,956,408 shares were held

outside the company, and the corresponding total amount

of dividends is €358,160,767.20.

The distributable assets of Kesko Corporation total

€1,539,047,794.71, of which profit for the financial year is

€357,128,787.22.

Annual General Meeting

The Board of Directors has decided that Kesko’s Annual

General Meeting will be held on 24 March 2025 at 1.00 pm

(EET). Kesko Corporation will publish a notice of the

General Meeting on the its website and as a stock exchange

release on 5 February 2025.


		14

Shares and securities markets

At the end of 2024, the total number of shares in Kesko Corporation was 400,079,008, of

which 126,948,028 or 31.7%, were A shares, and 273,130,980 or 68.3%, were B shares. On 31

December 2024, Kesko Corporation held 2,122,600 of its own B shares as treasury shares.

These treasury shares accounted for 0.78% of the total number of B shares, 0.53% of the

total number of shares, and 0.14% of the votes attached to all shares in the company. The

total number of votes attached to all shares was 1,542,611,260. Each A share carries ten (10)

votes and each B share one (1) vote. The company cannot vote with own shares held by it as

treasury shares and no dividend is paid on such shares. At the end of 2024 , Kesko

Corporation's share capital was €197,282,584.

The price of a Kesko A share quoted on Nasdaq Helsinki was €18.02 at the end of 2023 and

€18.06 at the end of 2024 , representing an increase of 0.2%. Meanwhile, the price of a

Kesko B share was €17.93 at the end of 2023 and €18.18 at the end of 2024, representing an

increase of 1.4%. In 2024, the highest price for an A share was €20.05 and the lowest €16.06,

while the highest price for a B share was €20.49 and the lowest €15.63. The Nasdaq Helsinki

All-Share index (OMX Helsinki) was down by 6.2% and the weighted OMX Helsinki Cap

index down by 4.5% in 2024. The Retail Sector Index was down by 13.8% .

The market capitalisation of Kesko’s A shares was €2,293 million at the end of 2024, while

the market capitalisation of Kesko’s B shares was €4,927 million, excluding the shares held

by the parent company as treasury shares. The combined market capitalisation of the A and

B shares was €7,220 million, up by €76 million compared to the end of 2023.

In 2024, a total of 5.2 million Kesko A shares were traded on Nasdaq Helsinki. The exchange

value of the A shares was €93.4 million. Meanwhile, 139.1 million B shares were traded, for an

exchange value of €2,442.2 million. Nasdaq Helsinki accounted for over 95% of the trading

on Kesko’s A and B shares. Kesko shares were also traded on multilateral trading facilities,

the most significant of which were Turquoise and BATS (source: Euroland).

At the end of 2024, the number of registered shareholders was 113,700. At the end of 2024,

foreign ownership of all shares was 33.2%, and foreign ownership of B shares 47.7%.

Share performance turnover


		2022	2023	2024
Share price as at 31 Dec.
A share	€	20.35	18.02	18.06
B share	€	20.62	17.93	18.18
Average share price
A share	€	21.89	18.47	17.80
B share	€	23.11	18.49	17.56
Market capitalisation as at 31 Dec., A share	€ million	2,583.4	2,287.6	2,292.7
Market capitalisation as at 31 Dec., B share	€ million	5,577.9	4,855.8	4,926.9
Turnover
A share	Million pcs	7	6	5
B share	Million pcs	144	143	139
Relative turnover rate
A share	%	5.8	4.4	4.1
B share	%	52.2	52.3	50.5
Diluted average number of shares	Thousand pcs	397,383	397,706	397,922


		15

Analysis of shareholding

Analysis of shareholding by shareholder type as at 31 Dec. 2024


All shares	Number of shares, pcs	Percentage of all shares, %
Nominee-registered and non-Finnish holders	132,739,287	33.18
Households	103,856,060	25.96
Non-financial corporations and housing corporations	95,387,211	23.84
General government*	31,805,411	7.95
Non-profit institutions serving households**	21,743,369	5.43
Financial and insurance corporations	14,547,670	3.64
Total	400,079,008	100.00


A shares	Number of shares, pcs	Percentage of A shares, %	Percentage of all shares, %
Non-financial corporations and housing corporations	74,953,400	59.04	18.73
Households	23,839,798	18.78	5.96
General government*	14,169,777	11.16	3.54
Non-profit institutions serving households**	11,260,708	8.87	2.81
Nominee-registered and non-Finnish holders	2,437,873	1.92	0.61
Financial and insurance corporations	286,472	0.23	0.07
Total	126,948,028	100.00	31.73


B shares	Number of shares, pcs	Percentage of B shares, %	Percentage of all shares, %
Nominee-registered and non-Finnish holders	130,301,414	47.71	32.57
Households	80,016,262	29.30	20.00
Non-financial corporations and housing corporations	20,433,811	7.48	5.11
General government*	17,635,634	6.46	4.41
Financial and insurance corporations	14,261,198	5.22	3.56
Non-profit institutions serving households**	10,482,661	3.84	2.62
Total	273,130,980	100.00	68.27
* General government, for example, municipalities, the provincial administration of Åland, authorised pension providers and social security funds ** Non-profit institutions, for example, foundations awarding scholarships, organisations safeguarding certain interests and various charitable associations

Analysis of shareholding by number of shares as at 31 Dec. 2024


All shares Number of shares	Number of shareholders, pcs	Percentage of share- holders, %	Share total, pcs	Percentage of shares, %
1−100	49,558	43.59	1,983,218	0.50
101−500	33,394	29.37	8,562,712	2.14
501−1,000	10,876	9.57	8,141,322	2.03
1,001−5,000	14,549	12.80	33,265,124	8.31
5,001−10,000	2,632	2.31	18,626,702	4.66
10,001−50,000	2,236	1.97	45,354,794	11.34
50,001−100,000	233	0.20	16,168,338	4.04
100,001−500,000	181	0.16	36,411,360	9.10
500,001−	41	0.04	231,565,438	57.88
Total	113,700	100.00	400,079,008	100.00


		16


A shares Number of shares	Number of shareholders, pcs	Percentage of A share- holders, %	A share total, pcs	Percentage of A shares, %
1−100	16,170	55.58	560,115	0.44
101−500	6,753	23.21	1,651,190	1.30
501−1,000	1,674	5.75	1,248,899	0.98
1,001−5,000	2,638	9.07	6,787,641	5.35
5,001−10,000	762	2.62	5,478,926	4.32
10,001−50,000	863	2.97	17,973,813	14.16
50,001−100,000	123	0.42	8,850,369	6.97
100,001−500,000	97	0.33	19,090,388	15.04
500,001−	12	0.04	65,306,687	51.44
Total	29,092	100.00	126,948,028	100.00


B shares Number of shares	Number of shareholders, pcs	Percentage of B share- holders, %	B share total, pcs	Percentage of B shares, %
1−100	36,868	40.44	1,545,267	0.57
101−500	28,286	31.03	7,362,421	2.70
501−1,000	9,772	10.72	7,326,793	2.68
1,001−5,000	12,570	13.79	28,112,051	10.29
5,001−10,000	2,035	2.23	14,339,116	5.25
10,001−50,000	1,405	1.54	27,307,774	10.00
50,001−100,000	111	0.12	7,493,863	2.74
100,001−500,000	86	0.09	17,241,669	6.31
500,001−	26	0.03	162,402,026	59.46
Total	91,159	100.00	273,130,980	100.00

10 largest shareholders by number of shares held

as at 31 Dec. 2024


		Number of shares, pcs	Percentage of shares, %	Number of votes	Percentage of votes, %
1.	K-Retailers' Association	21,858,292	5.46	218,582,920	14.17
2.	Ilmarinen Mutual Pension Insurance Company	13,760,000	3.44	137,600,000	8.92
3.	Vähittäiskaupan Takaus Oy	13,195,008	3.30	131,950,080	8.55
4.	Elo Mutual Pension Insurance company	6,073,725	1.52	9,725,250	0.63
5.	Varma Mutual Pension Insurance Company	5,978,944	1.49	5,978,944	0.39
6.	Foundation for Vocational Training in the Retail Trade	5,709,109	1.43	57,091,090	3.70
7.	The State Pension Fund	3,500,000	0.87	3,500,000	0.23
8.	K-Food Retailers' Club	2,605,792	0.65	26,057,920	1.69
9.	Heimo Välinen Oy	2,280,000	0.57	22,800,000	1.48
10.	OP-Finland Fund	2,183,510	0.55	2,183,510	0.14

Table above includes registered shareholders.The table does not contain shares held by

Kesko Corporation, amounting to 2,122,600 on 31 December 2024.

Nominee-registered shareholder BlackRock, Inc held 4.91% of shares and 1.27% of votes in

Kesko Corporation on 31 December 2024 (stock exchange release 2 January 2025).


		17

10 largest shareholders by number of votes as at 31.12.2024


		Number of shares, pcs	Percentage of shares, %	Number of votes	Percentage of votes, %
1.	K-Retailers' Association	21,858,292	5.46	218,582,920	14.17
2.	Ilmarinen Mutual Pension Insurance Company	13,760,000	3.44	137,600,000	8.92
3.	Vähittäiskaupan Takaus Oy	13,195,008	3.30	131,950,080	8.55
4.	Foundation for Vocational Training in the Retail Trade	5,709,109	1.43	57,091,090	3.70
5.	K-Food Retailers' Club	2,605,792	0.65	26,057,920	1.69
6.	Heimo Välinen Oy	2,280,000	0.57	22,800,000	1.48
7.	Food Paradise Oy	1,564,164	0.39	15,641,640	1.01
8.	Elo Mutual Pension Insurance company	6,073,725	1.52	9,725,250	0.63
9.	Pokela Oy Iso Omena	792,600	0.20	7,926,000	0.51
10.	T.A.T. Invest Oy	792,080	0.20	7,726,400	0.50

Management's shareholdings

At the end of December 2024, Kesko Corporation's Board members, the President and CEO

and the corporations controlled by them held 778,910 Kesko Corporation A shares and

399,125 Kesko Corporation B shares, i.e. a total of 1,178,035 shares, which represents 0.29%

of the total number of shares and 0.53% of votes carried by all shares of the Company.

At 31 December 2024 the President and CEO held 238,029 Kesko Corporation B shares,

which represented 0.06% of the total number of shares and 0.02% of votes carried by all

shares of the Company. At 31 December 2024, the Group Management Board including the

President and CEO held 2,824 Kesko Corporation A shares and 581,181 Kesko Corporation B

shares, which represented 0.15% of the total number of shares and 0.04% of votes carried by

all shares of the Company.

Board authorities

Kesko has a share-based commitment and incentive scheme. To implement the scheme,

Kesko’s Board of Directors may decide, within the share issue authorisations granted by the

company’s General Meeting, to transfer Kesko B shares held by the company as treasury

shares. In 2024, Kesko Corporation transferred 196,208 Kesko B shares held as treasury

shares to members of management and other key persons in the company, while a total of

17,100 B shares were returned to Kesko in accordance with the terms and conditions of

Kesko's share-based commitment and incentive plan. Kesko issued related stock exchange

releases 15 March 2024, 20 March 2024, 18 June 2024 and 8 July 2024. Kesko issued a stock

exchange release on 30 January 2024 regarding the most recent share-based commitment

and incentive plans. In addition, Kesko transferred 7,789 B shares held by the company as

treasury shares to members of Kesko’s Board of Directors as part of their annual fees, and

issued a related stock exchange release on 26 April 2024.

Kesko’s Annual General Meeting of 26 March 2024 authorised the Board to decide on the

issuance of a maximum of 33,000,000 new B series shares or B shares held by the company

as treasury shares, and on the repurchase of a maximum of 16,000,000 of the company’s

own B shares. The authorisations are valid until 30 June 2025, and were communicated in a

stock exchange release issued on 26 March 2024.


		18

Group’s key performance indicators


		2022	2023	2024
Income statement
Net sales	€ million	11,809.0	11,783.8	11,920.1
Change in net sales	%	4.5	-0.2	1.2
Change in net sales, comparable	%	4.4	-0.8	-2.3

Operating profit, comparable	€ million	815.1	712.0	650.1
Operating margin, comparable	%	6.9	6.0	5.5

Operating profit	€ million	816.5	695.4	579.5
Operating margin	%	6.9	5.9	4.9

Profit for the year	€ million	609.9	495.6	379.1
Profit for the year as percentage of net sales	%	5.2	4.2	3.2

Profitability
Return on equity	%	23.1	18.0	13.8
Return on equity, comparable	%	23.2	18.5	16.1
Return on capital employed	%	17.0	13.1	10.1
Return on capital employed, comparable	%	16.9	13.4	11.3

Funding and financial position
Interest-bearing net debt	€ million	2,104.2	2,559.8	2,908.2
Interest-bearing net debt excluding lease liabilities	€ million	184.1	561.9	857.2
Gearing	%	76.7	92.8	106.3
Equity ratio	%	36.9	35.8	32.5
Interest-bearing net debt/EBITDA excluding the impact of IFRS 16		0.2	0.7	1.1
Interest-bearing net debt/EBITDA, IFRS		1.6	2.1	2.4


		2022	2023	2024
Other performance indicators
Capital expenditure	€ million	449.2	678.9	675.9
Capital expenditure as percentage of net sales	%	3.8	5.8	5.7
Cash flow from operating activities	€ million	915.2	1,049.5	1,008.2
Cash flow from investing activities	€ million	-344.3	-590.2	-597.5

Average number of personnel converted into full-time employees		14,633	14,766	15,347
Personnel as at 31 Dec.		17,841	17,702	18,309

		2022	2023	2024
Share performance indicators
Earnings/share, basic and diluted	€	1.53	1.25	0.95
Earnings/share, comparable, basic	€	1.54	1.28	1.11
Equity/share	€	6.90	6.93	6.84
Dividend/share*	€	1.08	1.02	0.90
Payout ratio	%	70.4	81.9	94.5
Payout ratio, comparable	%	70.1	79.7	80.9
Cash flow from operating activities/share	€	2.30	2.64	2.53
Price/earnings ratio (P/E), A share		13.26	14.46	18.95
Price/earnings ratio (P/E), B share		13.44	14.39	19.08
Effective dividend yield, A share	%	5.3	5.7	5.0
Effective dividend yield, B share	%	5.2	5.7	5.0
* Proposal to the General Meeting


		19

Calculation of performance indicators

Kesko uses alternative performance measures to reflect business performance and

profitability. These indicators should be examined together with the IFRS-compliant

performance indicators.

Change in comparable net sales is used to reflect changes in the Group’s business volume

between periods. The indicator reflects the change in net sales excluding the impact of

acquisitions and divestments, in local currencies. The comparable net sales have been

calculated by including in the net sales the business operations that have been part of Kesko

Group in both the reporting period as well as the comparison period. Other structural

arrangements related to acquisitions and divestments have been adjusted in the same

manner as acquisitions.

Exceptional transactions outside the ordinary course of business are treated as items

affecting comparability. Performance indicators reflecting comparable profit and profitability

are used to improve the comparability of operational performance between periods. Gains

and losses on disposal of real estate, shares and business operations, impairment charges

and significant restructuring costs are identified as items affecting comparability. Gains on

disposal have been presented within other operating income, and losses on disposal within

other operating expenses in the income statement. Impairment charges and significant profit

and loss items related to changes in lease agreements are presented in the income statement

under depreciation, amortisation and impairment charges.

Alternative performance measures that have been adjusted for the impact of IFRS 16 are

used to monitor the achievement of certain financial targets. The EBITDA excluding the

impact of IFRS 16 corresponds to EBITDA before the adoption of IFRS 16, and the interest-

bearing net debt excluding lease liabilities correspond to interest-bearing net debt before the

adoption of the standard. These restated indicators are included as components in the

Group’s financial target “interest-bearing net debt excluding lease liabilities divided by

EBITDA excluding the impact of IFRS 16”.

In addition, financial performance indicators for the Group have been presented as

alternative performance measures. The management uses these indicators to monitor and

analyse business performance, profitability and financial position.

Profitability


Operating profit, comparable		Operating profit +/– items affecting comparability

Items affecting comparability		– gains on disposal + losses on disposal + impairment charges +/- structural arrangements

Return on equity, %		(Profit/loss before tax - Income tax) x 100 / Shareholders' equity, average of the beginning and end of the reporting period

Return on equity, %, comparable		(Profit/loss for the preceding 12 months before tax - Income tax for the preceding 12 months) x 100 / Shareholders' equity on average for 12 months

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

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

EBITDA		Operating profit + Depreciation and amortisation + Impairments

EBITDA excluding the impact of IFRS 16		EBITDA – Rents from lease agreements


		20

Funding, capital expenditure and financial position


Equity ratio, %		Shareholders’ equity x 100 / (Total assets – Advances received)

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

Interest-bearing net debt		Interest-bearing liabilities + Lease liabilities – Current other financial assets – Cash and cash equivalents

Interest-bearing net debt excluding lease liabilities		Interest-bearing net debt – Lease liabilities

Interest-bearing net debt excluding lease liabilities / EBITDA excluding the impact of IFRS 16		Interest-bearing net debt excluding lease liabilities / EBITDA excluding the impact of IFRS 16

Interest-bearing net debt / EBITDA, including the impact of IFRS 16		Interest-bearing net debt / EBITDA, including the impact of IFRS 16

Capital expenditure		Performance indicator includes investments in tangible and intangible assets, subsidiary shares, shares in associates and joint ventures and other shares. Additions of right-of-use assets for leases in the consolidated statement of financial position are not capital expenditure. Redemption of a leased property (right- of-use asset) is reported as capital expenditure.

Share performance indicators


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

Earnings/share, diluted		(Profit – Non-controlling interest) / Average diluted number of shares

Earnings/share, basic, comparable		(Profit/loss adjusted for items affecting comparability - Non- controlling interests adjusted for items affecting comparability) / Average number of shares

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

Payout ratio, %		(Dividend/share) x 100 / (Earnings/share)

Price/earnings ratio (P/E)		Share price at balance sheet date / (Earnings/share)

Effective dividend yield, %		(Dividend/share) x 100 / Share price at balance sheet date

Market capitalisation		Share price at balance sheet date x Number of shares

Cash flow from operating activities/share		Cash flow from operating activities / Average number of shares

Yield of A share and B share		Change in share price + Annual dividend yield


		21

Reconciliation of alternative performance measures to IFRS financial statements


€ million	2024	2023
Items affecting comparability
Gains on disposal	11.4	0.4
Losses on disposal	-1.6	-1.0
Impairment charges	-40.0	-
Structural arrangements	-40.4	-16.1
Items in operating profit affecting comparability	-70.6	-16.7
Items in financial items affecting comparability	-0.8	-0.2
Items in income taxes affecting comparability	7.7	3.1
Total items affecting comparability	-63.7	-13.7

Items in EBITDA affecting comparability	-12.3	-12.8

Operating profit, comparable
Operating profit	579.5	695.4
Net of
Items in operating profit affecting comparability	-70.6	-16.7
Operating profit, comparable	650.1	712.0

EBITDA
Operating profit	579.5	695.4
Plus
Depreciation and impairment charges	247.9	184.0
Depreciation and impairment charges for right-of-use assets	375.5	353.2
EBITDA	1,202.9	1,232.5

EBITDA, comparable
EBITDA	1,202.9	1,232.5
Net of
Items in EBITDA affecting comparability	-12.3	-12.8
EBITDA, comparable	1,215.2	1,245.3


€ million	2024	2023
Profit before tax, comparable
Profit before tax	471.5	613.5
Net of
Items in operating profit affecting comparability	-70.6	-16.7
Items in financial items affecting comparability	-0.8	-0.2
Profit before tax, comparable	543.0	630.4

Net profit, comparable
Profit before tax, comparable	543.0	630.4
Net of
Income tax	92.0	118.0
Items in income taxes affecting comparability	7.7	3.1
Net profit, comparable	443.3	509.3

Net profit attributable to owners of the parent, comparable
Net profit, comparable	443.3	509.3
Net of
Net profit attributable to non-controlling interests	-0.4	-
Net profit attributable to owners of the parent, comparable	442.9	509.3

Earnings per share, comparable, €
Net profit attributable to the owners of the parent, comparable	442.9	509.3
Average number of shares, basic, 1,000 pcs	397,922	397,706
Earnings per share, comparable, €	1.11	1.28

Return on capital employed, %
Operating profit	579.5	695.4
Capital employed, average	5,758.7	5,313.3
Return on capital employed, %	10.1	13.1

Return on capital employed, comparable, %
Operating profit, comparable	650.1	712.0
Capital employed, average	5,758.7	5,313.3
Return on capital employed, comparable, %	11.3	13.4


		22


€ million	2024	2023
Return on equity, %
Net profit	379.1	495.6
Equity, average	2,746.7	2,750.3
Return on equity, %	13.8	18.0

Return on equity, comparable, %
Net profit, comparable	443.3	509.3
Equity, average	2,746.7	2,750.3
Return on equity, comparable, %	16.1	18.5

Equity ratio, %
Shareholders’ equity	2,734.9	2,758.4
Total assets	8,471.2	7,754.3
Advances received	43.4	56.7
Equity ratio, %	32.5	35.8


		23

SUSTAINABILITY

STATEMENT


General information .....................................................	24
Kesko in brief ..................................................................	24
General basis of preparation .........................................	24
Material sustainability topics and sustainability targets .............................................................................	25
Identification and assessment of material impacts, risks and opportunities ..................................................	27
Strategy, business model and value chain ...................	30
Interests and views of stakeholders ..............................	32
Sustainability governance ..............................................	33
Environment ...................................................................	36
EU Taxonomy ..................................................................	36
E1 Climate change ..........................................................	46
E5 Resource use and circular economy ........................	56
Social ...............................................................................	61
S1 Own workforce ..........................................................	61
S2 Workers in the value chain .......................................	73
S4 Consumers and end-users .......................................	77
Governance ....................................................................	83
G1 Business conduct ......................................................	83
Appendices to sustainability statement ....................	87

This report is a translation of the Finnish original.

Sustainability statement is part of the Report by the Board of

Directors.


		24

GENERAL INFORMATION

Kesko in brief

Kesko is a Finnish listed trading sector company. Kesko has approximately 1,700 stores

engaged in chain operations in Finland, Sweden, Norway, Denmark, Estonia, Latvia, Lithuania

and Poland.

Kesko Group's reportable segments consist of its business divisions, namely the grocery

trade, the building and technical trade, and the car trade.

The Group's parent company, Kesko Corporation, is a Finnish public limited company

constituted in accordance with the laws of Finland. The Company's business ID is 0109862-8,

it is domiciled in Helsinki, Finland and it's registered address is PO Box 1, 00016 KESKO,

Finland.

General basis of preparation

Kesko prepares Kesko Group’s sustainability statement annually. The scope of the

sustainability statement is the same as that of the consolidated financial statements, and the

sustainability statement reports on the Group as a whole. Sustainability reporting covers the

subsidiaries included in Kesko’s consolidated financial statements. Associates and joint

ventures included in the consolidated financial statements using the equity method are not

included in the Group‘s sustainability reporting, as they are reported as part of Kesko’s value

chain through a potential business relationship. Information on acquired subsidiaries is

included in the sustainability statement from the date on which control of the company

transfers to Kesko Group. The sustainability statement covers Kesko’s upstream and

downstream value chains. The sustainability statement has the same reporting period as the

consolidated financial statements.

Kesko’s sustainability statement has been prepared for the first time in accordance with the

principles of the European Sustainability Reporting Standards (ESRS) as defined in the EU’s

Corporate Sustainability Reporting Directive (CSRD). Kesko is using the transitional

provision enabled by the ESRS 1 General Requirements Standard, in which the undertaking is

not required to disclose the comparative information in the first year of preparation of the

sustainability statement under the ESRS. The Standard also contains a list of disclosure

requirements that are phased in. These simplifications are applied in particular to the

disclosure requirements for financial effects.

Comparative information for the year 2023 is included in the tables of performance

indicators for turnover, capital expenditures, and operating expenses in accordance with the

Taxonomy Regulation. This comparative information has not been subject to assurance

procedures by the sustainability reporting auditor.

A separate statement on due diligence and a statement on risk management and internal

controls over sustainability reporting have not been included as part of the first sustainability

statement. The definition and implementation of processes will be continued during 2025.

The Sustainability Audit Firm Deloitte Oy has issued the company with a third-party

sustainability reporting auditor’s limited assurance engagement on Kesko’s sustainability

statement in accordance with ISAE 3000 (revised).

Kesko Group’s sustainability statement does not cover the tagging of the Group

sustainability statement with digital XBRL sustainability tags in accordance with Chapter 7,

Section 22, Subsection 1(2), of the Accounting Act, because sustainability reporting

companies have not had the possibility to comply with that provision in the absence of the

ESEF regulation or other European Union legislation.

Kesko’s Board of Directors approved the publication of this sustainability statement on

4 February 2025.


		25

Material sustainability topics and sustainability targets

Material sustainability topics

As a result of the double materiality assessment, Kesko identified material impacts related to

six ESRS standards and their sub-topics. The identified material impacts are either actual

impacts or potential impacts with a time horizon that has been estimated to be short term.

Risks were identified for a total of four standards. Identified risks are either short- or

medium-term risks. No material opportunities were identified in the assessment.

Based on the double materiality assessment process, no material impacts, risks or

opportunities were identified for a total of four standards, E2 Pollution, E3 Water and marine

resources, E4 Biodiversity and ecosystems and S3 Affected communities.

The material impacts and risks are described in more detail in connection with the

information on each topical standard.


ESRS standards		Material sustainability topics
Environment
	Climate change	Climate change mitigation Energy
	Resource use and circular economy	Resource outflows related to products and services: Packaging Waste Food waste
Social
	Own workforce	Working conditions Equal treatment and opportunities for all
	Workers in the value chain	Working conditions Child labour and forced labour
	Consumers and end- users	Health and safety Privacy
Governance
	Business conduct	Corporate culture Protection of whistleblowers Management of relationships with suppliers Corruption and bribery

Non-material ESRS standards
	Pollution
	Water and marine resources
	Biodiversity and ecosystems
	Affected communities


		26

Sustainability targets

Kesko has set sustainability targets and more details on the setting and progress of these is

provided in the information on each topic-specific standard. The targets have been set as

part of the update of Kesko’s sustainability strategy in 2024. The target related to improving

energy efficiency is part of Kesko’s energy strategy. The energy strategy was approved by

the Group Management Board in 2024. The sustainability statement includes the targets set

out in the sustainability strategy that will contribute to addressing the material impacts and

risks identified in the double materiality assessment.

In 2024, the Board of Directors approved the Group's sustainability strategy for the strategy

period 2024-2026 and the strategic targets. The President and CEO is responsible for the

implementation of the strategic targets set out in the sustainability strategy and for reporting

progress to the Board of Directors. Key stakeholders have not been significantly involved in

the process of setting the targets.


			Target
Target	Unit	2024	2025	2026	2030
Environment
E1 Climate change
Greenhouse gas emissions (Scope 1 + Scope 2 market-based)	tCO2eq	84,576			~59,000
Greenhouse gas emissions (Scope 3 Purchased goods and services), emissions reductions targets of suppliers	%	48%		67%
Energy efficiency measures	GWh	20.9			95.0
E5 Resource use and circular economy
Waste recycling rate	%	67%			73%
Food waste in Kesko’s warehousing and logistics operations	%	0.45%			0.22%
Food waste in K-food retailers’ store operations	%	1.68%			1.10%
Social
S1 Own workforce
Workplace injuries, own workforce	Total Recordable Injury Frequency (TRIF)	25.9			22.0
Employee wellbeing	Wellbeing index	83			86
Diversity and inclusion	D&I index	87			89
Gender balance in top management	% of underrepresented gender	27.7%			40.0%
Gender balance in middle management	% of underrepresented gender	32.8%			45.0%
S4 Consumers and end-users
Decrease the amount of salt in private label products	kg	15,353	50,000
Decrease the amount of sugar in private label products	kg	97,171	200,000
Decrease the amount of saturated fat in private label products	kg	32,347	50,000
Governance
G1 Business Conduct
Employee commitment to K Code of Conduct	%	85%			100%


		27

Identification and assessment of material impacts, risks

and opportunities

Kesko's double materiality assessment was conducted in two parts during 2023-2024. In the

first phase of the assessment in 2023, sustainability impacts, risks, and opportunities were

identified within Kesko's own operations and value chain, and a preliminary view of their

materiality was established.

Building on the results of the first phase, the second phase of the materiality assessment

included a more detailed identification of impacts and strengthened their connection to the

topics, sub-topics, and sub-sub-topics of the ESRS standards. The impacts were identified in

topic-specific workshops and scored to achieve preliminary prioritization. In the next phase,

the impact scores were reviewed to ensure they were consistent and that no impact was

over- or underestimated. The impacts were assessed based on their severity and likelihood.

The severity of an impact is based on its scale, scope, and, in the case of negative impacts, its

remediability.

The identification and assessment of risks and opportunities were conducted as part of

Kesko's risk management process. Kesko's risk management process follows the

methodology of the COSO Enterprise Risk Management model. The assessment of risks and

opportunities was carried out by division, after which a Group-level assessment was formed.

The sustainability risk assessment was also reviewed alongside other risks identified in the

Group's risk assessments. Risks and opportunities were evaluated based on their financial

impact and likelihood. The assessment examined potential risks or opportunities arising from

identified impacts. Potential negative impacts related to value chain employees, product

safety, and data protection also carry the risk of negative financial impacts for Kesko. The

same scale, commonly used in Kesko's risk management process, was applied in the risk

assessment. No material opportunities were identified in the assessment.

The impacts and risks that exceeded the defined materiality threshold were classified as

material. Based on the scoring, the impacts and risks identified as material were reviewed by

management, where the final determination of material sustainability topics was made.

The majority of the assessment of impacts, risks, and opportunities was conducted internally

within the Group. Experts from all three of Kesko's divisions and common functions

participated in this work. The double materiality assessment covers not only Kesko's own

operations but also the identification and assessment of impacts, risks, and opportunities in

the upstream and downstream value chain. Stakeholder consultations were conducted

through separate interviews, with a focus on financial market participants, suppliers, and B2B

customers. In this process, we gathered information on how stakeholders perceive the key

impacts, risks, and opportunities of Kesko’s operations across various sustainability topics.

The interviews also validated the existing view of material sustainability topics for Kesko. The

results of the internally conducted double materiality assessment and the stakeholder

interviews supported each other.

The results of the double materiality assessment were first presented to the Group

Management Board and the Audit Committee in September 2024. The double materiality

assessment and the significant changes made to it after September 2024 were reviewed by

the Audit Committee and approved by the Board of Directors on February 4, 2025, as part

of the final sustainability statement.

Kesko updated its strategy in May 2024 for the strategy period 2024-2026. In connection

with the update, Kesko emphasises being a forerunner in sustainability as a competitive

advantage. During the strategy work, Kesko's divisions identified impacts and business

opportunities related to sustainability topics. Since the double materiality assessment was

still ongoing at the time of the strategy update, the material impacts and risks identified

could not be fully incorporated into the strategy work. In the future, the connection between

the outcome of the double materiality assessment and Kesko's strategy and business models

will be assessed in more detail as part of both the annual strategy process and normal

business and sustainability management.

Kesko updated its sustainability strategy at the end of October 2024. In the new

sustainability strategy, sustainability matters were taken into account and concrete targets

were set to contribute to or otherwise positively influence the material impacts and risks that

had been identified so far in the double materiality assessment.


		28

E1 Climate change

Kesko's impacts on climate change arise from greenhouse gas emissions generated both in

its own operations and in the value chain. Kesko has identified the key sources of emissions

in its own operations. The largest source of Scope 1 emissions is the emissions from fuel

usage in transportation, logistics operations, and company cars. The largest source of Scope

2 emissions is emissions from district heating consumption. Most of the value chain’s Scope 3

emissions are generated during the life cycle of purchased and sold products, from their

production, use and end-of-life treatment. In addition, emissions are generated from the

manufacture of fixed assets and logistics transport.

No significant climate-related risks have been identified for the Group’s risk map, which has

a 12-month review period. In the medium term, climate-related risks have been identified,

particularly in relation to real estate. The risk in question is a physical climate-related risk.

Kesko owns and manages under lease agreements a significant number of properties in all its

operating countries. Extreme weather conditions that are becoming more common in the

future will increase the burden on real estate. Individual assets may be exposed to damage

risks or investment needs due to extreme weather conditions.

The main extreme weather conditions in Kesko’s operating countries are related to chronic

climate risks such as heat stress and changes in precipitation patterns and types. Acute risks

are related to heatwaves, storms, heavy rainfall and floods. Conditions are simulated, for

example, by using future weather data, and weather conditions are anticipated by

considering the risks in the planning guidelines of real estate projects.

Kesko has not conducted a resilience analysis on the climate resilience of the company’s

strategy and business model as required in the E1 Climate Change standard.

E5 Resource use and circular economy

Material impacts on the environment arise from the waste generated by Kesko’s operations,

particularly as part of warehousing and logistics operations and retail trade operations. The

largest waste fraction in Kesko’s operations is cardboard, which is generated from packaging

used during the transportation and storage of products. The waste generated by Kesko’s

operations is mainly non-hazardous waste. The amount of hazardous waste in Kesko’s

operations is low.

In terms of resource use, resource outflows are generated particularly from packaging. The

product’s logistical chain includes several packages, from logistics packaging to the sales

packaging of a single product.

As a food industry operator, preventing food waste also plays a key role in Kesko’s

operations. Food waste is generated as part of warehousing and logistics operations, as well

as in cash-and-carry outlets. However, the most significant aspect in the prevention of food

waste is the prevention of food waste in K-food retailers’ store operations, where most of the

food waste is generated.

The impacts related to resource use and the circular economy are such that it has not been

considered necessary to arrange consultations with the affected communities.

G1 Business conduct

Ensuring ethical and transparent business conduct and compliance with laws and regulations

has been identified as a material sustainability topic. Ethical business conduct influence

corporate culture and employee behaviour within the work community and in cooperation

with stakeholders. The principles for preventing corruption and bribery, as well as the

SpeakUp channel and whistleblower protection, are a key part of implementing an ethical

corporate culture throughout the value chain.

Kesko has a large number of suppliers and service providers. Kesko’s partners, especially

suppliers and service providers, have their own K Code of Conduct for business partners,

which contributes to the implementation of ethical operating culture in the procurement of

goods and services. In Kesko’s business model, the implementation of ethical business

practices in the supply chain promotes the responsibility of the entire value chain.

The increasing legislation related to sustainability and the potential changes in the business

model that it may require, as well as potential future investment needs to comply with the

legislation, were identified as risks that, if realised, may direct the use of Kesko’s resources.


		29

Non-material ESRS standards

E2 Pollution

Potential impacts were identified in Kesko’s own operations related to pollution of soil in

properties owned and leased by Kesko. However, the nature of Kesko’s operations does not

pose a significant risk of pollution of soil and the potential impacts are limited to a small

geographical area. Based on historical data, there may have been a few isolated cases each

year where soil has been decontaminated at Kesko sites.

In addition to pollution of soil, impacts were identified in relation to microplastics. In Kesko’s

operations, microplastics are generated in particular by vehicle tyres and products sold. Own

brand cosmetics and detergents no longer contain microplastics. Kesko’s product range

includes products classified as substances of concern. However, they make up a small share

of the product range.

In the product value chain, impacts were identified in particular in primary food production

and the manufacturing industry. Impacts related to pollution in Kesko’s own operations and

in the product value chain did not emerge as material impacts in the double materiality

assessment.

Impacts related to pollution are not material in Kesko’s operations at the time of the

assessment and therefore no consultations with affected communities have been arranged

regarding these impacts.

E3 Water and marine resources

In Kesko’s own operations, water consumption is not significant. The municipal water supply

is mainly used for water consumption in operations and the municipal sewer system for

wastewater treatment. Kesko’s operations do not involve water withdrawal from ground or

surface water.

Impacts related to water were identified in the upstream value chain of products in the

primary production of products, particularly through products originating in areas suffering

from water scarcity. Issues related to water use are continuously considered when making

selection and sourcing decisions on products and product categories with identified impacts

and risks related to water. In terms of Kesko’s extensive product range, impacts in the

product value chain or impacts on product availability did not, however, emerge as a material

sustainability topic as part of the double materiality assessment.

Kesko product selection includes fish and shellfish. The fish and shellfish selection is

managed to ensure it does not include endangered species. The range of seafood products

makes up a small share of Kesko’s operations.

Impacts related to water and marine resources are not material in Kesko’s operations at the

time of the assessment and therefore no consultations with affected communities have been

arranged regarding these impacts.

E4 Biodiversity and ecosystems

The double materiality assessment identified impacts on biodiversity and ecosystems in

Kesko’s own operations related to land-use changes in Kesko’s real estate operations.

During 2024, Kesko analysed the scope and significance of land-use change related to its

construction management and property portfolio based on the LEAP (Locate, Evaluate,

Assess and Prepare) approach. As part of the LEAP analysis work, the land-use categories of

Kesko’s owned and leased properties were determined with geospatial analysis using land-

use data. The significance of the change was assessed by calculating the proportion of areas

covered by vegetation in the immediate vicinity of the coordinate points of the properties

and by using the results of the WWF Risk Filter tool to estimate the risks associated with

land-use change.

In Finland, 80% of the sites surveyed were located in areas where they are not expected to

have negative impacts on protected areas. Of the sites, 19% were located in the vicinity of

protected area under Finland’s Nature Conservation Act and 1% in the immediate vicinity.

The distances of the sites from habitats of special importance under the Forest Act were also

examined. Based on this, 97% of the sites were located in areas where they are not expected

to have impacts on important habitats. Of the sites, 3% were located in the vicinity of

important habitats. No Kesko sites were located in the immediate vicinity of important

habitats.

For sites in the other operating countries, the distance to the areas in the World Database on

Protected Areas (WDPA), and to the areas in the database of European protected sites


		30

maintained by the EU’s Environmental Environment Agency (EEA), was determined. Of all

the operating countries’ sites 11% were located in the vicinity of a protected area. Of the

sites, 89% were located at a distance from the protected area where they are not expected to

have negative impacts on the protected area.

Of the Finnish sites examined, 17 are under construction, which means that the impacts on

the surrounding nature and sensitive areas may be greater. One of the sites under

construction is located in a protected area. Four of the sites are located in the vicinity of

protected areas and 12 sites are located at a distance from the protected area where they are

not expected to have negative impacts on the protected areas.

Construction is highly regulated and store sites and other properties are only constructed on

sites planned by municipalities for business properties. A large proportion of the construction

projects are taking place in a built environment. We estimate that land-use changes related

to ownership and construction, as well as their extent and significance, are not material

impacts in Kesko’s operations.

In Kesko’s supply chains, land-use change is taking place especially in primary production,

such as agriculture, forestry, mining and fishing. Kesko has analysed the risks and

geographical scope of its supply chains’ land-use change as part of the LEAP study. Risks

were mapped by product category by identifying the key product categories with biodiversity

impacts, as well as their nature-related risks and dependencies using the ENCORE tool. The

supply chains of the identified key product categories were studied at country level, for the

largest supply countries in each of the supply chains examined. The method enabled us to

identify the key countries in Kesko’s global supply chains, and in those countries the key

biomes for which the land-use change risk was assessed using the WWF Risk Filter tool.

The study of the value chain was not completed during 2024 and will be completed in early

2025. In the assessments carried out for the double materiality assessment, we did not,

however, identify any material impacts in the value chain of products or product categories

that would be considered material impacts at the time of the analysis.

S3 Affected communities

Affected communities was identified as a non-material topic for Kesko in the first phase of

the double materiality assessment.

The nature of Kesko’s business, with numerous sites in the operating area and operations

concentrated in Northern Europe, does not lead to such impacts on communities that would

be considered material impacts on the communities in question from the perspective of the

standard's sub-topics.

The affected communities standard and sub-topics were found to be non-material and the

assessment was not continued in the next phase of the double materiality assessment.

Strategy, business model and value chain

In May 2024, Kesko updated its strategy for the strategy period 2024-2026. Our vision is to

be the leading and most attractive trading sector company in Northern Europe. Our targets

are delivering profitable growth, increasing customer value and strengthening market

position in all three divisions: grocery trade, building and technical trade and car trade. The

strategic work is based on quality and efficiency, continuous improvement of the

omnichannel customer experience, K-retailers and sustainability in all operations.

Kesko has operations in Finland, Sweden, Norway, Denmark, Estonia, Latvia, Lithuania and

Poland. Kesko‘s business models are the chain business model, own retail trade and B2B

trade. In the chain business model, Kesko acts as a wholesaler for the retailers and

independent retailer entrepreneurs are responsible for resale to end customers. In own retail

trade, consumer and corporate customers are Kesko’s customers. Kesko’s wholesale to

retailers accounted for 45% (46%) of the Group’s net sales in 2024. B2B trade accounted for

37% (39%) of the Group’s net sales in 2024. Kesko’s BtoC trade accounted for 18% (15%) of

the Group’s net sales.

Kesko has three divisions, which are reportable segments in the consolidated financial

statements: grocery trade, building and technical trade, including the building and home

improvement operations and the technical trade operations, and car trade, including the car

trade operations and the sports trade operations. For more information on the operating

activities of the different divisions, their financial information and the geographical


		31

breakdown of net sales, see note 2.2 Segment information in the consolidated financial

statements. Head count in Kesko’s operating countries can be found in the section S1 Own

workforce of the sustainability statement.

In the retail sector value chain, Kesko’s role is to make products manufactured by suppliers

available to customers in physical stores or through digital channels. Key areas include

efficient sourcing, selection management and logistics processes.

Material sustainability impacts relate to the products sold by Kesko in all business areas.

Most of the impacts occur in the upstream value chain from the manufacture of products or

in the downstream value chain from the use of products. The range of products sold changes

as manufacturers develop new products and remove obsolete products from their ranges.

Sustainability considerations are a factor in product development and the launch of new

products. As a retail sector operator, Kesko’s role is to actively make new products available

to customers and produce comprehensive product information, including information on the

sustainability of the products.

Changes in the product selections, availability, and pricing due to sustainability matters

affect market participants in general. Sustainability requirements are constantly guiding the

development of new and substitute products. At the Group level, Kesko's sensitivity in the

value chain to market-wide sustainability-driven changes in the selections, availability, or

pricing of individual products is considered to be low. This is due to the diversity of Kesko's

business operations and the products sold.

In contrast, the ethics, compliance, and sustainability factors of Kesko's own operations, such

as achieving climate and environmental targets and minimising negative impacts on its own

personnel, value chain workers, consumers, and end-users, are crucial for Kesko's business.

These factors directly influence Kesko's attractiveness as a partner from the perspective of

suppliers and customers. Additionally, achieving sustainability-related targets can directly

affect the cost of the Group’s debt financing, highlighting the financial significance of

sustainability in Kesko's operations. The negative sustainability impacts of an individual

goods or service provider's operations reflect on Kesko’s business and can affect the

achievement of Kesko's sustainability targets.

Kesko’s strategy implementation and business model, with its three divisions, is not critically

dependent on individual customers, supply chains or product categories. Overall, Kesko’s

business model is expected to adapt in relation to the individual sustainability topics

identified. For the aforementioned reasons, Kesko has not conducted an analysis in 2024 on

the resilience of its strategy and business model in addressing material sustainability topics.

At the end of the reporting period, Kesko has not identified any material sustainability risks

related to its financial position, performance, and cash flow.


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Interests and views of stakeholders

Dialogue with stakeholders is vital for the development of operations. Effective and active

dialogue enables us to understand stakeholders‘ perspectives, concerns and ideas for

improving our operations. Our communication with stakeholders is active and transparent.

The table below contains descriptions of Kesko’s main stakeholders, forms of cooperation,

the most important sustainability topics for stakeholders and their impact on our operations.

During 2025, the aim is to further develop our stakeholder engagement activities.


Stakeholder	Forms of cooperation	Key sustainability topics	Impacts on Kesko‘s operations
Consumers and end- users	• Daily customer encounters • Customer service channels and applications • Customer surveys • K-Kylä customer community • Social media	• Healthiness of products • Product safety • Origin of products and sustainable supply chains • Circular economy solutions and waste reductions • Promoting sustainability at local level	• Increasing transparency on origin and production • Returning purchase data to the customer • Innovative foods using food waste • K-retailers’ sustainability actions
B2B customers	• Customer meetings • Supplier trainings and trade fairs	• Origin of products and sustainable supply chains • Products’ carbon footprint data	• Increasing transparency on origin and production • Carbon footprint data and calculators
Own workforce	• Personnel surveys and performance and development reviews • Personnel events • Cooperation with personnel representatives • SpeakUp reporting channel	• Employee wellbeing • Occupational health and safety • Diversity, equity and inclusion • Good leadership and opportunities for personal development	• Wellbeing solutions for employees • Occupational health services and measures to reduce work-related accidents • DEI action plan, target setting and developing diversity-supporting recruitment • Measures and coaching to support development and leadership
K-retailers and store staff	• Retailer events and meetings • Electronic communication channels and trade magazines • SpeakUp reporting channel	• Employee wellbeing • Occupational health and safety • Diversity, equity and inclusion • Good leadership and opportunities for personal development	• Wellbeing solutions for employees • Occupational health services and measures to reduce work-related accidents • Recruitment to support diversity • Measures and coaching to support development and leadership
Investors, shareholders, analysts and other representatives of capital markets	• General Meeting • Financial reporting and press conferences • Investor websites and social media channels • Investor and analyst meetings • Surveys and assessments	• Greenhouse gas emissions and transition plan for reducing emissions • Biodiversity and water • Sustainable supply chains • Employee-related social responsibility • Governance and remuneration	• Transition plan and emission reduction measures • Assessments on biodiversity loss and water use and measures in the value chain • Verification of sustainable procurement through due diligence processes • Measures to improve wellbeing, safety at work and diversity • Verification of good governance and linking sustainability to remuneration
Suppliers, service providers and supply chain workers	• Meetings with suppliers and business partners • Business partner events • Organisations and purchasing alliances	• Human rights in the supply chain • Measures for reducing emissions • Sustainable products and services	• Human rights commitments, assessments and audits • Challenging partners to set climate targets (CDP) • Cooperation to introduce sustainable products into the selection
NGOs and corporate advocacy activities in organisations	• Dialogue with NGOs • Corporate advocacy - activities in organisations	• Origin of products and supply chain working conditions • Value chain’s environmental impacts • Development of regulation on sustainability	• Increasing transparency on origin and production • Cooperation with NGOs on key sustainability issues • Anticipation of and preparation for regulatory changes


		33

Sustainability governance

The sustainability statement provides information on the sustainability governance model.

Sustainability management and steering model

Kesko_2024_VSK_Vastuullisuuden_johtamismalli_KAPEA_EN.svg

Board of Directors and Board Committees

Kesko’s Board of Directors is responsible for the Company’s corporate governance and the

proper organisation of its operations, which also includes responsibility for sustainability

topics. The Board has confirmed a written charter of the Board’s duties and principles of its

operations. According to its charter, the Board reviews and makes decisions on matters that

are financially, operationally or fundamentally significant to the Group. The Board

Committees support the Board’s work and prepare matters for which the Board is

responsible. The charters of the Board and its Audit Committee include tasks related to

monitoring and evaluating sustainability reporting and its assurance.

The Board of Directors decides on the Group’s strategy, including sustainability topics and

strategic targets related to sustainability. The progress made in the strategy and targets is

reported regularly to the Board, for example as part of the review by the President and CEO.

The Board approves all Group-level policies. The Board of Directors has approved and

adopted the Group’s ethical business practices, the K Code of Conduct. In addition to these,

other policies approved by the Board of Directors that address various sustainability topics

include the sustainability policy, the HR policy, the risk management policy, the governance

policy, the data protection policy and the tax policy.

During 2024, the Board has addressed the following sustainability-related topics:

• Approved the update of the sustainability strategy and targets

• Approved the updated climate targets (Scope 1 and 2) and the associated transition plan

• Decided to issue a green bond

• Decided on a sustainability-linked loan agreement between Kesko and the Nordic

Investment Bank (NIB)

• Approved the updated K Code of Conduct

The chair of the Board of Director’s Audit Committee reports on the Committee’s work at the

Board meeting following a Committee meeting. At each regular meeting of the Audit

Committee, the Group’s risk map and any changes to it are discussed. Twice a year, the

Audit Committee reviews the Compliance & Ethics report, which includes information on the

status of K Compliance programmes and reports received through the SpeakUp reporting

channel. One of the focus areas of the Compliance function is the prevention of corruption

and bribery, which has its own K Compliance programme. In 2024, the Audit Committee

regularly reviewed the measures related to the implementation of sustainability reporting,

the progress made in relation to them and the risks related to the implementation in five of

the six Audit Committee meetings. The Audit Committee reviewed the preliminary results of

Kesko's double materiality assessment in a meeting solely dedicated to the topic.

The Board of Directors has the power to take the necessary measures to perform its duties.

Thus, the Board may use external legal, financial or other advisors at its discretion in matters

also related to sustainability topics.


		34

Diversity of the Board of Directors and independence of Board members

According to the Articles of Association, Kesko’s Board of Directors is composed of a

minimum of five (5) and a maximum of eight (8) members. The General Meeting decides on

the number of Board members, elects all the Board members, and decides on their

remuneration.

The principles regarding Board diversity are included in the diversity policy approved by

Kesko’s Board of Directors. The policy describes the objectives in the achievement of

diversity in the operations and composition of the Board of Directors.

The experience, educational backgrounds and professional competencies of the Board

members represent multiple disciplines and diversity. Several Board members have

experience in the trading sector and the principal occupation of two of the seven Board

members is acting as a K Group grocery retailer, while one is a K Group building and home

improvement retailer. Several Board members also have experience in international business

operations. Approximately 71% of the Board members are men and approximately 29% are

women. The age of the Board members varies from 48 to 72.

The Board carried out its annual independence evaluation at its meeting in March 2024.

Based on the independence evaluations, the Board considers the majority of the Board

members (approximately 57%) to be independent of the Company. The Board members

(86%), apart from one member, were deemed independent of the Company‘s significant

shareholders. The Board and Committee compositions meet the independence requirements

of the Finnish Corporate Governance Code issued by the Finnish Securities Market

Associations and effective as of 1 January 2020. All members of Kesko’s Board or Directors

are non-executive directors. There are no personnel representatives on the Board.

The Group’s President and CEO and the Group Management Board

The Board of Directors appoints the Company’s Managing Director, who at Kesko is referred

to as the President and CEO. The work of Kesko’s President and CEO is supported by

Kesko’s Group Management Board.

Kesko’s President and CEO has overall responsibility for the implementation of the

sustainability strategy and for achieving the common objectives. The Group Management

Board supports the President and CEO in this role and regularly discusses in its meetings the

most material sustainability impacts, risks, opportunities and progress towards the targets.

At the end of 2024, 62.5% of the members of the Group Management Board were men and

37.5% were women.

In 2024, the sustainability matters addressed by the Group Management Board included the

following:

• The updated of sustainability strategy 2024-2026

• The updated climate targets (Scope 1 and 2) and the associated transition plan

• The update and approval of energy strategy

• Corporate Sustainability Reporting Directive (CSRD), including the results of the double

materiality assessment and the roll-out of other legislative projects related to

sustainability

• K Code of Conduct

• Compliance & Ethics report

• Diversity, equity and inclusion (DEI)

• Results of the personnel survey

• Occupational health strategy

• Occupational safety plan.

The President and CEO has the legal power to take the necessary measures to perform their

duties. The Board has authorised the President and CEO to seek external advice at the

President and CEO’s discretion, also in matters related to sustainability.


		35

Group sustainability management team and divisions

The task of the Group sustainability management team is to promote any matters included in

the sustainability strategy, monitor the progress of the strategy, coordinate Group-level

initiatives and to share best practices at Kesko. The management team is chaired by the

Executive Vice President of Legal and Sustainability who is a member of the Group

Management Board and reports directly to the President and CEO. He is responsible for the

content of the sustainability strategy and for monitoring its progress, and he supports the

implementation of division-specific sustainability strategies. The other members of the

Group sustainability management team represent the divisions and Kesko’s common

functions.

Division Presidents are responsible for achieving Group-level and division-specific

sustainability targets in their own divisions, for monitoring the progress of measures,

allocating resources and making the necessary investments. The Group’s common functions

support progress in sustainability work.

Sustainability-related targets in incentive schemes

Kesko has two share-based commitment and incentive plans: Performance Share Plan (PSP)

and Key Personnel Share Plan (KPSP). The share-based commitment and incentive schemes

are described in Note 5.3 Share-based compensation of the consolidated financial

statements.

One of the performance criteria in the PSP is Kesko’s sustainability target with a weight of

10%. The most significant sustainability targets are emission reductions targets and targets

linked to international sustainability indices and assessments. The terms of the PSP share

program are approved by the board of directors. In the KPSP, sustainability metrics are

linked to the individual’s job description and responsibilities, and they are approved by the

individual’s manager.

In 2024, in addition to the share-based plans, one of the performance bonus criteria for the

members of the management teams of Kesko’s divisions and common functions and the

persons reporting to them has been the sustainability target in accordance with the

sustainability strategy. Sustainability targets have also been set for a large number of key

personnel covered by the performance bonus scheme, according to their role. The

performance bonus criteria are approved by the individual’s manager.

Statement of due diligence

The Group’s statement on sustainability due diligence processes is described in the sections

of the sustainability statement mentioned below:

• S2 Workers in the value chain – Policies related to value chain workers

• S4 Consumers and end-users – Policies related to product safety

• S4 Consumers and end-users – Policies related to data protection

• G1 Business conduct – Policies related to corporate culture and business conduct


		36

ENVIRONMENT

EU TAXONOMY

Kesko’s reporting on EU Taxonomy complies with Regulation (EU) 2020/852 of the European

Parliament and of the Council (18 June 2020). The EU Taxonomy is a classification system for

sustainable financing, designed to help companies and investors assess whether an economic

activity can be considered environmentally sustainable. The Taxonomy defines a set of

criteria for a business activity that enables companies to assess to what extent the company’s

activities support the attainment of environmental and climate objectives.

Companies shall disclose information on how and to what extent their activities can be

deemed environmentally sustainable in the manner referred to in the EU Taxonomy based on

six climate and environmental objectives:

• Climate change mitigation

• Climate change adaptation

• The sustainable use and protection of water and marine resources

• The transition to a circular economy

• Pollution prevention and control

• The protection and restoration of biodiversity and ecosystems

Key performance indicators are presented for Taxonomy-eligible activities and Taxonomy-

aligned activities. These indicators are the proportion of the company’s net sales (turnover),

capital expenditure (CapEx), and operating expenditure (OpEx) as defined in the Taxonomy.

Currently, the Taxonomy does not specifically mention activities that are typical of the

trading sector, meaning that trading sector companies report on Taxonomy-eligible activities

if they engage in them. It is likely that the Taxonomy will include an expanding number of

activities, and that assessment criteria will be established consequently also for the trading

sector and possibly for its different product segments.

Taxonomy-eligible activities and assessing Taxonomy

alignment

Kesko has identified the car leasing operations and sales of used cars in its car trade division

and the owning, leasing and construction of properties for own business needs as Taxonomy-

eligible activities in its operations. In addition, logistics operations in Denmark are identified

as a Taxonomy-eligible activity.

With each Taxonomy-eligible activity, Kesko has assessed its Taxonomy alignment.

Taxonomy alignment has been determined by assessing whether an activity significantly

contributes to at least one of the climate and environmental objectives. The assessment of

Taxonomy alignment is made based on the technical screening criteria applied for each

activity. In addition to meeting said criteria, Kesko has confirmed that the activity does not

cause significant harm to the other climate and environmental objectives referred to in the

Taxonomy Regulation, using the separate DNSH (‘Does Not Significantly Harm’) criteria, and

that minimum safeguards under the Taxonomy Regulation are met.

Kesko has examined the implementation of minimum safeguards in relation to human rights,

corruption and bribery, fair competition, and taxation. The aforementioned areas of minimum

safeguards and related Kesko operating instructions and measures are described in more

detail in this report in the sections S2 Workers in the value chain, G1 Business Conduct. As a

result of the review, Kesko concludes that the minimum safeguards are being met in all of the

four areas in Kesko’s operations.

The following table presents the activities identified by Kesko as Taxonomy-eligible, and

Kesko’s assessments of their Taxonomy alignment.


		37


				Performance indicators
Taxonomy activity		Activity description	Assessment of Taxonomy alignment	Turnover	CapEx	Opex
CCM 6.5	Transport by motorbikes, passenger cars and light commercial vehicles	Purchase, financing, renting, leasing and operation of vehicles designated as category M1, N1 or L. The activity includes leasing operations in the car trade division.	The significant contribution criterion is met if the vehicle’s emissions are below 50 g CO2/km. This criterion is met by fully electric vehicles and hybrids. As part of the 'do no significant harm' criteria, tyres’ external rolling noise requirements must belong to the best available class. Information on tyre rolling noise is not available, making it not possible to determine the Taxonomy alignment of the vehicles. Vehicles in the leasing business are classified as eligible but not Taxonomy-aligned.	√	√	√
CCM 6.6	Freight transport services by road	Purchase, financing, renting, leasing and operation of vehicles designated as category N1, N2 or N3 for freight transport serivces by road. Activity includes vehicles used in logistics operations of in Davidsen Koncernen A/S in Denmark.	To meet the Taxonomy criteria, the vehicles must be low-emission or zero-emission vehicles. The vehicles are also not dedicated for the transportation of fossil fuels. Additionally, the vehicles must comply with the 'do no significant harm' criteria set for the activity. The logistics vehicles are classified as eligible but not Taxonomy- aligned.		√	√
CCM 7.1	Construction of new buildings	The construction of buildings for residential and non-residential use. The activity includes building projects developed by Kesko for its own use. These are mainly new store and logistics properties.	For new buildings, an energy efficiency rating (E-value) is defined during the planning phase, which must beat least ten percent lower than the nationally set threshold. An assessment of the building’s Taxonomy alignment is made during the planning phase. The realisation of the E-rating is verified upon the building’s completion. Energy efficiency must be certified with an Energy Performance Certificate. Additionally, the activity sets criteria for buildings over 5,000 m² regarding air-tightness and thermal integrity of the building. The operation also includes detailed 'do no significant harm' criteria. The criteria for Taxonomy alignment are considered already during the planning phase of the building, when the decision to construct the building in accordance with the criteria is made.		√
CCM 7.2	Renovation of existing buildings	Extensive repairs to existing buildings. Extensive repairs in properties owned by Kesko and in leased properties where Kesko is responsible for basic repairs.	Building renovations comply with the requirements applied to major renovations. Alternatively, the renovations lead to a reduction of primary energy demand of at least 30 %. The operation also includes detailed 'do no significant harm' criteria. Large renovations have not been deemed Taxonomy-aligned, as the ‘do no significant harm’ criteria for Taxonomy alignment related to activity 7.2 have not been met.		√
CCM 7.3	Installation, maintenance and repair of energy efficiency equipment	Individual renovation measures related to energy efficiency equipment, such as adding insulation to parts of existing buildings, energy efficient replacements for external doors and windows, installing energy efficient light sources, and the installation, maintenance, repair and replacement of ventilation equipment with efficient technologies. The activity mainly includes the above-mentioned renovation measures in Kesko store sites where Kesko is the lessee.	Capital expenditure in energy efficiency mainly includes capital expenditure in LED lighting in properties where Kesko is a lessee. In order to meet the substantial contribution criteria for activity 7.3, a light source must be in the top two energy categories. The LED lighting used in Kesko’s projects does not meet the Taxonomy alignment criteria.		√


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				Performance indicators
Taxonomy activity		Activity description	Assessment of Taxonomy alignment	Turnover	CapEx	Opex
CCM 7.4	Installation, maintenance and repair of charging stations for electric vehicles in buildings	The installation, maintenance and repair of charging stations for electric vehicles in buildings and parking spaces attached to buildings. The activity covers Kesko’s K-Lataus stations in Finland and charging stations installed at store sites in Kesko’s other operating countries.	All investments related to the activity have been classified as Taxonomy-aligned. The 'do no significant harm' criterion related to climate change adaptation is not considered to significantly affect the assessment of Taxonomy alignment for investments related to charging stations.		√
CCM 7.5	Installation, maintenance and repair of instruments and devices for measuring, regulation and controlling energy performance of buildings	The installation, maintenance and repair of instruments and devices for measuring, regulation and controlling energy performance of buildings. The activity covers the aforementioned capital expenditures in properties where Kesko is a lessee.	When the activity consists of individual measures listed in the Taxonomy regulation, all investments related to the activity have been classified as Taxonomy-aligned investments. The criterion of 'do no significant harm' related to climate change adaptation is not considered to significantly affect the assessment of Taxonomy alignment of these investments.		√
CCM 7.6	Installation, maintenance and repair of renewable energy technologies	Individual measures related to renewable energy sources, where the technology is installed on-site as part of the building's technical systems. The activity covers the aforementioned capital expenditures in properties where Kesko is a lessee.	When the activity consists of individual measures listed in the Taxonomy Regulation, all investments related to the activity have been classified as Taxonomy-aligned investments. The criterion of 'do no significant harm' related to climate change adaptation is not considered to significantly affect the assessment of Taxonomy alignment of these investments.		√
CCM 7.7	Acquisition and ownership of buildings	Buying real estate and exercising ownership of that real estate. The activity includes properties acquired during the reporting period, and the amounts of right-of-use assets recognised in the balance sheet based on lease agreements for properties. Moreover, capital expenditure in properties owned by Kesko in line with the above-mentioned activities 7.3 and 7.5 and activity 7.6 ‘Installation, maintenance and repair of renewable energy technologies’ have been included in activity 7.7 ‘Acquisition and ownership of buildings’.	For buildings built after 2020, the assessment of Taxonomy alignment has been made based on the climate change mitigation substantial contribution criteria of activity 7.1. ‘Construction of new buildings’. A building built during or before 2020 must have at least a category A energy certificate, or the building must be in the top 15% in the region in terms of primary energy demand. The assessment method is mainly applied to leased properties. A climate risk assessment is also conducted for the buildings.		√	√
CE 5.4	Sale of second-hand goods	The sale of second-hand goods that have been used for their intended purpose before by a customer. In Kesko, the sale of second-hand goods includes the used car business in the car trade division.	The sale of second-hand goods is one of the Taxonomy activities for circular economy. Comprehensive data on used cars is not available, making it difficult to reliably assess their Taxonomy alignment. Used cars are classified as eligible but not Taxonomy-aligned.	√


		39

Kesko’s Taxonomy-eligible turnover comprises the car leasing business and sales of used

cars to customers in the car trade division.

Kesko owns and leases properties in all operating countries for business purposes. The

Group uses some 1,600 owned or leased retail, logistics and office properties. The Group’s

Taxonomy-eligible capital expenditure includes investments in new store sites and logistics

properties, investments in building improvement measures, and investments in lighting,

machinery and equipment to improve the energy efficiency of buildings, and automation for

measuring and monitoring energy efficiency. In addition, Taxonomy-eligible CapEx includes

charging equipment for electric vehicles and investments in vehicles for the leasing

operations of the car trade division. Land areas are not classified as Taxonomy-eligible

CapEx.

In addition, Taxonomy-eligible CapEx includes charging equipment for electric vehicles,

investments in vehicles for the leasing operations of the car trade division, and investments

in logistics vehicles for the building and home improvement trade business in Denmark.

Operating expenditure under the Taxonomy Regulation in Kesko Group is in particular

related to expenses for the use, maintenance and repair of properties. Taxonomy-eligible

expenses include expenses for servicing of the leasing car fleet and the logistics vehicles fleet

in Denmark.

Kesko does not have Taxonomy activities related to gas or nuclear power.

Activities related to nuclear power and fossil gas


	Nuclear energy related activities
1.	The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle.	NO
2.	The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies.	NO
3.	The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades.	NO


	Fossil gas related activities
4.	The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels.	NO
5.	The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels.	NO
6.	The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels.	NO

EU Taxonomy performance indicators

Kesko presents the performance indicators for turnover, capital expenditure (CapEx) and

operating expenditure (OpEx) in accordance with the tables determined for non-financial

undertakings in the Taxonomy Regulation. The tables for the performance indicators show

the proportion of turnover, capital expenditure and operating expenditure derived from

economic activities in line with the Taxonomy.

Comparative information for the year 2023 is included in the tables of performance

indicators for turnover, capital expenditures, and operating expenses in accordance with the

Taxonomy Regulation. This comparative information has not been subject to assurance

procedures by the sustainability reporting auditor.

Accounting policies

Turnover

When calculating the performance indicator for turnover, Kesko applies the same IFRS

accounting principles as it does in the consolidated financial statements. The accounting

principles for revenue recognition are presented in Note 2.1 of the consolidated financial

statements. The net sales figure used in calculating the turnover performance indicator is

the Kesko Group net sales presented in the income statement. The Taxonomy-eligible

turnover is the share of total Group net sales that comes from Taxonomy-eligible activities.

In Kesko’s business operations, car leasing operations and used car sales in the car trade

division have been identified as Taxonomy-eligible activities that generate net sales.

Kesko’s primary operations which generate net sales are the sales of products and services


		40

to customers and retailers. Product sales are currently not a Taxonomy-eligible activity, with

the exception of used car sales.

Capital expenditure (CapEx)

Capital expenditure (CapEx) as defined in the Taxonomy Regulation includes additions to

tangible and intangible assets during the financial year, before depreciation, amortisation

and any re-measurements. Capital expenditure also includes additions to tangible and

intangible assets resulting from business combinations. In accordance with the Taxonomy

Regulation, Kesko includes in its CapEx calculation investments in tangible and intangible

assets and the aggregate sum of additions to the right-of-use assets recognised in the

balance sheet based on lease agreements. Goodwill recorded in acquisitions is not included

in the Taxonomy CapEx definition. Additions to property, plant and equipment are

presented in Note 3.2, additions to intangible assets in Note 3.3, and additions to right-of-

use assets related to leases in Note 3.4 of the consolidated financial statements.

The Taxonomy definition of CapEx differs from the definition of the ‘capital expenditure’

performance indicator reported by Kesko. In Kesko’s definition, the performance indicator

includes investments in tangible and intangible assets and subsidiary shares. The indicator

does not include additions to right-of-use assets related to leases recognised in the balance

sheet. Group capital expenditure in 2024 totalled €675.9 million (€678.9 million).

The following table details the capital expenditure items used to calculate the Taxonomy

CapEx indicator.

Capital expenditure (CapEx) under EU Taxonomy


€ million	2024	2023
Property, plant and equipment - Additions (Note 3.2)	494,9	511,2
Property, plant and equipment - Acquisitions (Note 3.2)	94,4	3,7
Intangible assets - Additions (Note 3.3)	16,2	21,9
Intangible assets - Acquisitions excluding goodwill (Note 3.3)	39,7	16,4
Right-of-use assets - Additions (Note 3.4)	457,5	437,3
Right-of-use assets - Acquisitions (Note 3.4)	12,3	15,7
Total	1 115,1	1 006,1

Operating expenses (OpEx)

Operating expenditure (OpEx) as defined in the Taxonomy Regulation includes direct non-

capitalised costs that relate to research and development, building renovation measures,

maintenance and repair, and any other direct expenditure relating to the servicing of assets

of property, plant and equipment by the undertaking or a third party to whom activities are

outsourced that are necessary to ensure the continued and effective functioning of such

assets.

In Kesko Group’s income statement, operating expenditure as defined in the Taxonomy

Regulation is included under ’Other operating expenses’, which are presented in Note 2.5 of

the consolidated financial statements.

Operating expenditure under the Taxonomy Regulation in Kesko Group is in particular

related to expenses for the use, maintenance and repair of properties – which in the

financial statements are included in ‘Property and store site maintenance expenses’ – the

total sum of which was €198.5 million (€185.1 million) in 2024. In addition to property

maintenance and repair costs, the figure includes expenses related to e.g. heating,

electricity and water consumption, and waste management, which are not included in the

Taxonomy definition of operating expenditure. In addition, Taxonomy-eligible expenses

include expenses for servicing of the leasing car fleet and the logistics vehicles fleet in

Denmark.

In Kesko’s business model, operating expenditure is not material in the transition to more

sustainable activities, but instead, building renovation measures, such as those related to

improving energy efficiency, are capital expenditure by nature.


		41

Proportion of turnover from products or services associated with Taxonomy-aligned economic activities 2024


Financial year 2024	2024			Substantial contribution criteria						DNSH criteria ('Does Not Significantly Harm')
Economic activites	Code	Turnover	Proportion of turnover, year 2024	Climate change mitigation	Climate change adaption	Water	Pollution	Circular economy	Biodiversity	Climate change mitigation	Climate change adaption	Water	Pollution	Circular economy	Biodiversity	Minimum safeguards	Proportion of Taxonomy aligned (A1) or eligible (A2) turnover, year 2023	Category enabling activity)	Category transitional activity
		€ million	%	Y; N; N/EL	Y; N; N/EL	Y; N; N/EL	Y; N; N/EL	Y; N; N/EL	Y; N; N/EL	Y/N	Y/N	Y/N	Y/N	Y/N	Y/N	Y/N	%	E	T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (Taxonomy- aligned)
Turnover of environmentally sustainable activities (Taxonomy-aligned) (A.1)		0.0	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%							Y	0.0%
Of which Enabling		0.0	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%							Y	0.0%	E
Of which Transitional		0.0	0.0%	0.0%												Y	0.0%		T
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
				EL; N/EL	EL; N/EL	EL; N/EL	EL; N/EL	EL; N/EL	EL; N/EL
Transportation by motorbikes, passenger cars and light commercial vehicles	CCM 6.5 CCA 6.5	26.5	0.2%	EL	EL	N/EL	N/EL	N/EL	N/EL								0.2%
Sale of second-hand goods	CE 5.4	321.3	2.7%	N/EL	N/EL	N/EL	N/EL	EL	N/EL								2.4%
Turnover of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2)		347.7	2.9%	0.2%	0.0%	0.0%	0.0%	2.7%	0.0%								2.6%
A. Turnover of Taxonomy eligible activities (A.1+A.2)		347.7	2.9%	0.2%	0.0%	0.0%	0.0%	2.7%	0.0%								2.6%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy-non-eligible activities		11,572.3	97.1%
Total		11,920.1	100.0%

Codes:

Climate change mitigation: CCM

Climate change adaptation: CCA

Circular economy: CE

Y – Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant

environmental objective

N – No, Taxonomy-eligible but not Taxonomy-aligned activity with the

relevant environmental objective

EL – Taxonomy-eligible activity for the relevant objective

N/EL – Taxonomy-non-eligible activity for the relevant objective


		42

Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities 2024

Financial year 2024

2024

Substantial contribution criteria

DNSH criteria

('Does Not Significantly Harm')

Economic activites

Code

CapEx

Proportion of CapEx, year 2024

Climate change mitigation

Climate change adaption

Water

Pollution

Circular economy

Biodiversity

Climate change mitigation

Climate change adaption

Water

Pollution

Circular economy

Biodiversity

Minimum safeguards

Proportion of Taxonomy aligned (A1) or

eligible (A2) CapEx, year 2023

Category enabling activity)

Category

transitional activity

€ million

Y; N;

N/EL

Y; N;

N/EL

Y; N;

N/EL

Y; N;

N/EL

Y; N;

N/EL

Y; N;

N/EL

Y/N

A. TAXONOMY-ELIGIBLE ACTIVITIES

A.1 Environmentally sustainable activities (Taxonomy-

aligned)

Construction of new buildings

CCM 7.1

CCA 7.1

CE 3.1

101.4

9.1%

N/EL

8.6%

Installation, maintenance and repair of charging stations for

electric vehicles in buildings

CCM 7.4

CCA 7.4

8.7

0.8%

N/EL

0.5%

Installation, maintenance and repair of instruments and

devices for measuring, regulation and controlling energy

performance of buildings

CCM 7.5

CCA 7.5

0.2

0.0%

N/EL

0.1%

Installation, maintenance and repair of renewable energy

technologies

CCM 7.6

CCA 7.6

0.0

0.0%

N/EL

Acquisition and ownership of buildings

CCM 7.7

CCA 7.7

63.3

5.7%

N/EL

1.9%

CapEx of environmentally sustainable activities

(Taxonomy-aligned) (A.1)

173.6

15.6%

0.0%

11.0%

Of which Enabling

8.9

0.8%

0.0%

0.6%

Of which Transitional

0.0

0.0%

Codes:

Climate change mitigation: CCM

Climate change adaptation: CCA

Circular economy: CE

Y – Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant

environmental objective

N – No, Taxonomy-eligible but not Taxonomy-aligned activity with the

relevant environmental objective

EL – Taxonomy-eligible activity for the relevant objective

N/EL – Taxonomy-non-eligible activity for the relevant objective


		43

Financial year 2024

2024

Substantial contribution criteria

DNSH criteria

('Does Not Significantly Harm')

Economic activites

Code

CapEx

Proportion of CapEx, year 2024

Climate change mitigation

Climate change adaption

Water

Pollution

Circular economy

Biodiversity

Climate change mitigation

Climate change adaption

Water

Pollution

Circular economy

Biodiversity

Minimum safeguards

Proportion of Taxonomy aligned

(A1) or eligible (A2) CapEx,

year 2023

Category enabling activity)

Category

transitional activity

€ million

Y; N;

N/EL

Y; N;

N/EL

Y; N;

N/EL

Y; N;

N/EL

Y; N;

N/EL

Y; N;

N/EL

Y/N

A.2 Taxonomy-eligible but not environmentally

sustainable activities (not Taxonomy-aligned activities)

EL;

N/EL

EL;

N/EL

EL;

N/EL

EL;

N/EL

EL;

N/EL

EL;

N/EL

Transportation by motorbikes, passenger cars and light

commercial vehicles

CCM 6.5

CCA 6.5

52.7

4.7%

N/EL

4.5%

Freight transport services by road

CCM 6.6

CCA 6.6

4.9

0.4%

N/EL

Construction of new buildings

CCM 7.1

CCA 7.1

CE 3.1

27.0

2.4%

N/EL

4.6%

Renovation of existing buildings

CCM 7.2

CCA 7.2

CE 3.2

102.9

9.2%

N/EL

10.2%

Installation, maintenance and repair of energy efficiency

equipment

CCM 7.3

CCA 7.3

3.3

0.3%

N/EL

0.6%

Acquisition and ownership of buildings

CCM 7.7

CCA 7.7

481.7

43.2%

N/EL

48.2%

CapEx of Taxonomy-eligible but not environmentally

sustainable activities (not Taxonomy-aligned activities)

(A.2)

672.4

60.3%

0.0%

68.2%

A. CapEx of Taxonomy eligible activities (A.1+A.2)

846.0

75.9%

0.0%

79.2%

B. TAXONOMY-NON-ELIGIBLE ACTIVITIES

CapEx of Taxonomy-non-eligible activities

269.1

24.1%

Total

1,115.1

100.0%

Codes:

Climate change mitigation: CCM

Climate change adaptation: CCA

Circular economy: CE

Y – Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant

environmental objective

N – No, Taxonomy-eligible but not Taxonomy-aligned activity with the

relevant environmental objective

EL – Taxonomy-eligible activity for the relevant objective

N/EL – Taxonomy-non-eligible activity for the relevant objective


		44

Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities 2024

Financial year 2024

2024

Substantial contribution criteria

DNSH criteria

('Does Not Significantly Harm')

Economic activites

Code

OpEx

Proportion of OpEx,

year 2024

Climate change

mitigation

Climate change

adaption

Water

Pollution

Circular economy

Biodiversity

Climate change

mitigation

Climate change

adaption

Water

Pollution

Circular economy

Biodiversity

Minimum safeguards

Proportion of

Taxonomy aligned

(A1) or eligible (A2)

OpEx, year 2023

Category enabling

activity)

Category

transitional activity

€ million

Y; N;

N/EL

Y; N;

N/EL

Y; N;

N/EL

Y; N;

N/EL

Y; N;

N/EL

Y; N;

N/EL

Y/N

A. TAXONOMY-ELIGIBLE ACTIVITIES

A.1 Environmentally sustainable activities (Taxonomy-

aligned)

OpEx of environmentally sustainable activities

(Taxonomy-aligned) (A.1)

0.0

0.0%

Of which Enabling

0.0

0.0%

Of which Transitional

0.0

0.0%

A.2 Taxonomy-eligible but not environmentally

sustainable activities (not Taxonomy-aligned activities)

EL;

N/EL

EL;

N/EL

EL;

N/EL

EL;

N/EL

EL;

N/EL

EL;

N/EL

Transportation by motorbikes, passenger cars and light

commercial vehicles

CCM 6.5

CCA 6.5

1.8

2.8%

N/EL

3.2%

Freight transport services by road

CCM 6.6

CCA 6.6

0.9

1.4%

N/EL

Acquisition and ownership of buildings

CCM 7.7

CCA 7.7

61.9

95.8%

N/EL

96.8%

OpEx of Taxonomy-eligible but not environmentally

sustainable activities (not Taxonomy-aligned activities)

(A.2)

64.6

100.0%

0.0%

100.0%

A. OpEx of Taxonomy eligible activities (A.1+A.2)

64.6

100.0%

0.0%

100.0%

B. TAXONOMY-NON-ELIGIBLE ACTIVITIES

OpEx of Taxonomy-non-eligible activities

0.0

0.0%

Total

64.6

100.0%

Codes:

Climate change mitigation: CCM

Climate change adaptation: CCA

Circular economy: CE

Y – Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant

environmental objective

N – No, Taxonomy-eligible but not Taxonomy-aligned activity with the

relevant environmental objective

EL – Taxonomy-eligible activity for the relevant objective

N/EL – Taxonomy-non-eligible activity for the relevant objective


		45

Taxonomy eligibility and alignment per environmental objective


	Proportion of turnover / Total turnover
	Taxonomy-aligned per objective	Taxonomy-eligible per objective
CCM	0.0%	0.2%
CCA	0.0%	0.0%
WTR	0.0%	0.0%
CE	0.0%	2.7%
PPC	0.0%	0.0%
BIO	0.0%	0.0%

CCM: Climate change mitigation

CCA: Climate change adaptation

WTR: Water and marine resources

CE: Circular economy

PPC: Pollution prevention and control

BIO: Biodiversity and ecosystems


	Proportion of CapEx / Total CapEx
	Taxonomy-aligned per objective	Taxonomy-eligible per objective
CCM	15.6%	60.3%
CCA	0.0%	0.0%
WTR	0.0%	0.0%
CE	0.0%	0.0%
PPC	0.0%	0.0%
BIO	0.0%	0.0%


	Proportion of OpEx / Total OpEx
	Taxonomy-aligned per objective	Taxonomy-eligible per objective
CCM	0.0%	100.0%
CCA	0.0%	0.0%
WTR	0.0%	0.0%
CE	0.0%	0.0%
PPC	0.0%	0.0%
BIO	0.0%	0.0%


		46

E1 CLIMATE CHANGE

Material impacts, risks and opportunities

Impacts related to climate change


Nature of impact	Value chain	Description	Management
Climate change mitigation
Actual negative	Own operations	Kesko‘s own operations generate greenhouse gas (GHG) emissions (Scope 1 and Scope 2). The most significant source of Scope 1 emissions is from the fuel emissions of transportation and logistics. The most significant source of Scope 2 emissions is from district heating consumption emissions.	• Kesko has set Scope 1 and Scope 2 climate targets to reduce GHG emissions. We are pursuing validation of our emissions targets through the Science Based Targets initiative (SBTi). • The most significant investments in emissions reductions are related to the electrification of the logistics fleet and improving energy efficiency by installing energy recycling systems.
Actual negative	Value chain	Kesko‘s value chain generates GHG emissions (Scope 3). Most of the value chain emissions arise during the life cycle of purchased and sold products, from their production, use, and end-of-life treatment. Additionally, emissions are generated from the manufacturing and transportation of capital goods.	• Kesko is committed to setting net-zero targets and reduce emissions in the entire value chain to net zero by 2050. We are pursuing validation for these targets through SBTi. • Suppliers are encouraged to set their own science-based emissions targets.
Energy
Actual negative	Own operations	The consumption of fossil energy sources in properties owned and managed by Kesko and in transport and logistics generates GHG emissions.	• The transition to fossil-free energy sources and the electrification of logistics transport. • Consumption of renewable and non-fossil purchased electricity and heat.

Risks related to climate change


Time horizon	Nature of risk	Description	Management
Medium-term	Physical risk	Kesko owns and manages a significant number of properties through leases in all its operating countries. In the future, increasing extreme weather events will put additional strain on these properties. Individual assets may face risks of damage or investment needs due to extreme weather phenomena.	• Construction projects take into account common climate risks observed in Finland, such as heat stress, heavy rainfall, and snow loads on roofs. • A risk assessment is conducted for properties to identify climate risks. Preparing for future climate risks is integrated into property planning guidelines.

The process for identifying and assessing impacts, risks, and opportunities is described in the section of the sustainability statement titled General disclosures, Identification and assessment of

material impacts, risks and opportunities.


		47

Climate targets


			Target
Target	Unit	2024	2026	2030
Greenhouse gas emissions (Scope 1 + Scope 2 market-based)	tCO2eq	84,576		~59,000
Greenhouse gas emissions (Scope 3 Purchased goods and services), emissions reductions targets of suppliers	%	48%	67%
Energy efficiency measures	GWh	20.9		95.0

During 2024, Kesko updated its climate targets and set emissions reductions targets for its

own operations extending to 2034. The target is to halve emissions from own operations

(Scope 1 and Scope 2) by the end of 2034 from the 2024 baseline. Using the 2034 target, a

target level has been calculated for 2030, which is about 30% reduction in emissions from

the 2024 baseline. The emission baseline and target have been calculated on a market-based

approach.

Most of the greenhouse gas emissions in Kesko’s value chain (Scope 3) arise during the life

cycle of purchased and sold products, from their production, use, and end-of-life treatment.

Our target is that 67% of suppliers and service providers, measured by spend, will set

science-based emission reduction targets by the end of 2026. In 2024, 48% of suppliers had

set science-based, short-term emission targets. The achievement is calculated based on

2023 spend.

Our energy strategy aims to improve energy efficiency by 10% between 2024 and 2030. To

achieve this goal, we need to implement energy efficiency measures totalling 95 GWh.

In setting the new emissions reductions targets for Kesko’s own operations (Scope 1 and

Scope 2), we identified the sources of emissions and assessed their development on the basis

of the available technical options, taking into account both financial and other constraints,

and calculated the annual development of emission impacts from different emission sources.

The most significant emission sources of Kesko’s own operations (Scope 1 and Scope 2) are

the use of district heating and fuels in transportation, logistic operations, and company cars.

In the emission scenario work, the impact of the Onninen logistics centre, which is under

construction, and the planned renovation projects for store sites and new store sites to be

opened were also taken into account regarding district heating emissions. The district heat

emission scenario also considers the emission reduction plans published by district heating

companies to the extent that the information has been available. We have assumed that

these plans will be realised and that the emission factor will decrease as planned. A reduction

plan is in place for around 80% of the total volume of Kesko’s district heat. If a district

heating company had not announced any emission reduction plans, the emission factor was

estimated to remain unchanged.

The majority of emission in transportation, logistic operations, and company cars are

generated in Finland by the grocery trade division’s transportations. The development of

logistics emissions has taken into account the estimated progress of electrification.

Potential future corporate and property acquisitions and their impact on energy consumption

and emissions have not been assessed. Stakeholders have not been involved in setting

climate targets.

In addition to the updated Scope 1 and Scope 2 emission targets for our own operations,

Kesko is committed to setting net-zero targets and reduce emissions in the entire value chain

(Scope 3) to net zero by 2050. We are pursuing validation of our emissions targets through

the Science Based Targets initiative (SBTi) during 2025. SBTi approval of the emission targets

means they are aligned with the goals of the Paris Agreement. Kesko has not been excluded

from the EU’s Paris Agreement benchmarks.

In September 2024, Kesko‘s Board of Directors approved new climate targets extending to

2034 and the related transition plan.

The achievement of climate targets is one of the indicators in the performance-based share

plan for senior management. For more information on sustainability targets as part of

remuneration schemes, see the section Sustainability governance, Sustainability-related

targets in incentive schemes of the sustainability statement.


		48

Policies related to climate change mitigation and

adaptation

Kesko’s sustainability policy steers Kesko’s climate work. In our sustainability policy, we are

committed to the goals of international climate summits for the mitigation of global warming

and to reduce emissions in our own operations and in the value chain. The sustainability

policy has been approved by Kesko’s Board of Directors. The implementation of the

principles of the policy is the responsibility of the Executive Vice President, Legal and

Sustainability of Kesko Group, who is a member of the Group Management Board.

Additionally, Kesko has an energy strategy that guides energy procurement and sets

principles for improving energy efficiency. The energy strategy was approved by Kesko’s

Group Management Board in February 2024, and its implementation is overseen by Kesko

Group’s Energy Director. Our energy strategy aims to improve energy efficiency by 10%

between 2024 and 2030. Furthermore, starting from the beginning of 2025, we will transition

to using renewable purchased electricity, ensuring that at least 80% of Kesko’s total

electricity consumption is renewable.

Transition plan and actions related to climate change

mitigation

Our target is to reduce our own operational emissions (Scope 1 and Scope 2) around 30%

from the 2024 baseline by the end of 2030.

Use of district heat

A significant portion of Kesko’s emissions (Scope 1 and Scope 2) from its own operations is

generated from the consumption of district heating.

Approximately 67% of the district heating emission reduction target is estimated to be

achieved through the greening of district heating production and the reduction of emissions.

The share of emission reductions from our own energy efficiency measures is estimated to be

around 33%.

A key energy efficiency measure is the installation of energy recycling system, which uses

waste heat from store refrigeration systems, as part of our project to upgrade store site

refrigeration systems. This will reduce the consumption of the district heat purchased for the

site. Kesko has been conducting similar projects for several years, so there is a good basis of

data about the impact on energy consumption. Projects conducted in previous years have

reduced district heat consumption by an average of around 50% compared to the level

before the upgrade.

We also conduct annual maintenance projects for the renovation or improvement of

properties and setpoint optimisations, based on energy audits conducted at the sites or

observations arising from energy data analysis.

Kesko has around 600 properties that use district heating where the maintenance of a

certain minimum emission level continues to be identified after all possible energy efficiency

measures have been implemented. So far, we have estimated that emissions could potentially

continue to decrease beyond 2030, but we have not been able to estimate an exact residual

level of emissions, as it depends on the actions of district heating producers.

Transition plan to reduce Scope 1 and Scope 2 emissions


		49

Transport and logistics

For Kesko’s emissions (Scope 1 and Scope 2) from its own operations, the most significant

source is the fuel consumption in transportation, logistics operations, and company cars.

Emissions from the consumption of fossil fuels are estimated to decrease with the increase in

electrification and the use of biofuels. We estimate that around 20% of logistics transport will

be electric by 2030, provided that suitable equipment is sufficiently available.

Fossil fuel consumption may still cause emissions beyond 2030, but it is not possible to

estimate the residual amount with the existing information.

Electricity consumption

Kesko primarily uses renewable or emission-free electricity in its operations. Emissions from

electricity consumption mainly arise from the electricity used in properties in the Baltics and

Poland. Over the coming years, we will gradually transition to using renewable electricity in

these locations as well.

Refrigerant emissions

Kesko’s refrigerant emissions include leaks from refrigeration equipment in Kespro’s cash-

and-carry outlets and grocery trade logistics sites, as well as leaks from property

refrigeration equipment. To reduce emissions, refrigeration systems will be upgraded to

systems using natural refrigerants by 2030.

Refrigerant emissions from K-stores’ refrigeration systems are included in Kesko’s value

chain (Scope 3) emissions.

Self-produced heat

Kesko has approximately 85 sites using oil or gas heating, most of which are leased for

Kesko’s use. Our goal is to upgrade the heating solutions in these sites to emission-free

alternatives or district heating by 2029.

Investments and financing related to the transition plan

The transition plan investments relate to investments in the electrification of logistics fleet, in

improving energy efficiency in properties and in replacing oil and gas heating with other

forms of heating.

Energy efficiency investments are made as part of the maintenance of properties, and the

investment relates both to the maintenance needs of the property and to the reduction of

emissions in the properties. The investment needs anticipated for the electrification of the

logistics fleet relate in particular to investments in the charging infrastructure for heavy

vehicles.

The transition plan has been prepared by estimating the amount of investment needed for

the target years. Investment decisions and their implementation are part of the annual

strategy work and annual planning. The investments needed to implement Kesko's transition

plan do not make up a significant share of the Group’s total investments. The annual

investment requirement is estimated to be around 2–4% of Kesko's estimated total

investments.

In 2024, Kesko issued a green notes of €300 million under the Green Finance Framework to

finance investments that meet the criteria of the Framework.

Taxonomy-aligned investments

Kesko does not have CapEx plans as defined by the Taxonomy Regulation, based on which

Kesko’s owned properties or logistics vehicles would become Taxonomy-aligned. For existing

properties, this means that improvements to properties would lead to a reduction in primary

energy demand of at least 30%. Regarding the logistics fleet, vehicles should have zero

emissions. Plans for Taxonomy-aligned investments have not yet during 2024 been directly

linked to the Group’s new emission reduction targets and to the investments required by the

transition plan.

Kesko’s principle is to build new properties based on the technical screening criteria as

Taxonomy-aligned. In 2024, Kesko had nine construction projects underway in Finland,

where the properties are being built in accordance with the technical screening criteria of the

Taxonomy. The largest of these projects is the logistics centre in Hyvinkää that is intended

for Onninen and K-Auto. Not all new construction projects in progress during 2024 meet the

Taxonomy criteria, as the planning and construction decisions have been made before the

publication of the technical screening criteria and its adoption by Kesko.


		50

Energy consumption

Energy consumption and energy mix


MWh	2024
Energy consumption from non-renewable sources
Fuel consumption from coal and coal products	-
Fuel consumption from crude oil and petroleum products	184,372
Fuel consumption from natural gas	6,211
Fuel consumption from other fossil sources	2,326
Consumption of purchased or acquired electricity, heat, steam, and cooling from fossil sources	120,811
Total fossil energy consumption	313,720
Share of fossil sources in total energy consumption, %	42%
Consumption from nuclear sources	302,436
Share of consumption from nuclear sources in total energy consumption, %	40%
Energy consumption from renewable sources
Fuel consumption for renewable sources	655
Consumption of purchased or acquired electricity, heat, steam, and cooling from renewable sources	126,856
The consumption of self-generated non-fuel renewable energy	9,027
Total renewable energy consumption	136,538
Share of renewable sources in total energy consumption, %	18%
Total energy consumption	752,695

Energy intensity


MWh / Net sales, € million	2024
Energy intensity from activities in high climate impact sectors based on net sales	63

In 2024, we implemented energy efficiency measures totalling approximately 20.9 GWh. The

most significant measures included the installation of an energy recycling system using waste

heat in 20 sites, which is estimated to reduce district heat consumption by around 10 GWh.

Additionally, we converted the heating systems in two oil- or gas-heated properties to

district heating or heat pump solutions and permanently closed one oil-heated property. In

total, we carried out 288 energy efficiency improvement measures recorded in our

information system. As a result of these measures, emissions from heat consumption

decreased by approximately 1,580 tCO2eq.

The energy efficiency measures carried out during 2024 cannot be directly included Kesko’s

reporting aligned with the Taxonomy Regulation, as the measures are spread across several

classification system functions and cannot be directly included in the energy efficiency

measures described above.

Accounting policies

Energy consumption includes properties owned and managed by Kesko, covering all Kesko

divisions and operating countries to the extent that consumption data are available or can

be estimated. The evaluation is based on a coverage figure, which is calculated using data

on floor area. Kesko’s joint venture Kesko Senukai is not included in the energy

consumption figures.

The consumption figures are based on the consumption of purchased electricity and district

heating by energy source, as well as the calculated energy consumption of self-generated

heat and fuel for transport, logistics operations and company cars. Consumption data is

obtained from Kesko’s various information systems and invoices.

In Finland, Sweden, Norway and Denmark, electricity and heating consumption data are

obtained from the operational information system. Energy managers monitor consumption

and make corrections to metered figures if necessary, based on error reports. For district

heating and cooling, only measured consumption is reported. The reporting of district heat

consumption uses the district heat production breakdown into fossil and renewable sources

maintained by the Local Power organisation, by locality for the sites for which data is

available in the service.

The consumption of oil and gas includes buildings that have been heated wholly or partly by

oil or gas during the reporting period.

The calculated energy consumption of transportation and logistics operations is based on

fuel consumption. The calculated energy consumption of fuel for company cars is also

largely based on fuel consumption, except for benefit cars, where the calculated energy

consumption is based on kilometres driven and average consumption.


		51

Energy intensity is calculated by dividing total energy consumption by the amount of net

sales reported in the consolidated financial statements.

Kesko’s business operations can mainly be classified as a high climate impact sector.

Among the products and services offered by Kesko, only the car leasing business is not

classified as having a high climate impact. The net sales from the leasing business is not

significant in relation to the total net sales reported by the Group. The energy consumption

of the leasing business cannot be separated from other energy consumption.

The metrics presented in this section have not been validated by an external third party

other than the sustainability reporting auditor.

Greenhouse gas emissions

Scope 1, Scope 2 and Scope 3 GHG emissions


	Base year	Target
tCO2eq	2024	2030	Average annual emission reduction (%)
Scope 1 GHG Emissions
Gross Scope 1 GHG emissions	56,637	~43,000	3.9%
Percentage of Scope 1 GHG emissions from regulated emission trading scheme, %
Scope 2 GHG Emissions
Gross location-based Scope 2 GHG emissions	42,950	~42,000	0.4%
Gross market-based Scope 2 GHG emissions	27,939	~16,000	7.3%
Significant Scope 3 GHG emissions
Total gross indirect Scope 3 GHG emissions	7,122,142
1 Purchased goods and services	6,108,778
2 Capital goods	144,096
3 Fuel and energy-related Activities (not included in Scope 1 or Scope 2)	8,372
4 Upstream transportation and distribution	90,076
5 Waste generated in operations	9,488
6 Business travelling	1,774
7 Employee commuting	9,140
8 Upstream leased assets (Kesko as a lessee)
9 Downstream transportation	87,713
10 Processing of sold products
11 Use of sold products	505,950
12 End-of-life treatment of sold products	126,873
13 Downstream leased asset (Kesko as a lessor)
14 K-retailers (Franchising)	29,881
15 Investments
Total GHG emissions
Total GHG emissions, location-based	7,221,729
Total GHG emissions, market-based	7,206,718


		52

Scope 1 and Scope 2 GHG emissions by emissions sources


tCO2eq	2024
Direct GHG emissions (Scope 1)
Transportation, logistics and company cars	48,954
Self-produced heat	3,296
Refrigerant leakages	4,386
Total (Scope 1)	56,637
Indirect GHG emissions (Scope 2)
Location-based	42,950
Purchased electricity	12,871
District heat	30,078
District cooling	-
Market-based	27,939
Purchased electricity	4,538
District heat	23,401

GHG intensity


tCO2eq / Net sales, € million	2024
Total GHG emissions (location-based) per net sales	606
Total GHG emissions (market-based) per net sales	605

Accounting policies

Kesko reports direct and indirect greenhouse gas (GHG) emissions (Scope 1, Scope 2, and

Scope 3) in accordance with the GHG Protocol Corporate Accounting and Reporting

Standard and the Corporate Value Chain Accounting and Reporting Standard. The principle

of financial control is applied to emissions reporting, whereby emissions are reported for

the companies in which Kesko has control (subsidiary) or joint control (joint venture).

Associates are not included in the emissions calculation. The emissions of Kesko Senukai,

Kesko’s joint venture, have not been included in the emissions calculation or the emission

reduction targets. Under the GHG Protocol, the share of the joint venture’s emissions

would be calculated in accordance with the share of ownership.

Kesko has set 2024 as the new base year for emissions calculations. In line with the

Corporate Sustainability Reporting Directive’s transitional provisions to ease first-time

application, comparative data for previous years are not presented. Kesko completed an

emissions inventory and reviewed and revised its emissions calculation in 2024.

The emission factors used in the calculation are largely from local Finnish databases or

global databases. The databases used include Ecoinvent 3.10, DEFRA GHG conversion

factors (2023), IEA energy statistics (2023), GLEC Framework V3.1, Statistics Finland's Fuel

classification (2024) and the Emissions database for construction (2024). Individual factors

and emission data have been obtained directly from suppliers and service providers and

other business partners.

I some cases it has not been possible to calculate all the emission data for the sustainability

statement’s entire reporting period. In these cases, emissions have been estimated to cover

the whole reporting period based on the averages from the reported months.

The calculation includes the most material greenhouse gases for each emission source, as

they are included in the emission factors used. Emissions have been converted and

expressed as carbon dioxide equivalents (tCO2eq). The material GHG emissions are CO2,

NOx and SO2. Kesko does not report the biogenic emissions of CO2 emissions because

Kesko does not have its own production that would generate biogenic emissions.

The greenhouse gas intensity is calculated by dividing the total greenhouse gas emissions

by the net sales reported in the consolidated financial statements.

The metrics presented in this section have not been validated by an external third party

other than the sustainability reporting auditor.

Scope 1 – Direct GHG emissions

Scope 1 emissions from own operations include emissions arising from the consumption of

fuels for self-generated heat, emissions from fuels consumed by transportation, logistics

and company cars, and emissions from refrigerant leakages.

Emissions from self-generated heat have been calculated mainly based on fuel

consumption.


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Transportation emissions in Finland are calculated on the basis of tonne-kilometres based

on the mode of transport and accurate route information. The calculation is based on the

ISO 14083:2023 standard and the GLEC Framework V3.1. For logistics operations in Finland

and transportation in other operating countries, emissions are calculated based on fuel

consumption.

Emissions from company cars are calculated mainly on the basis of actual fuel consumption.

For benefit cars, the calculation is based on kilometres driven and the cars’ average

emissions per kilometre driven. Emissions from company cars include company cars in

Finland, Denmark and Latvia.

Emissions from refrigerant leakages include refrigeration equipment and leakages from

refrigeration systems in properties. Emissions from refrigerant leakages are calculated

based on the refrigerant capacity and the GWP (global warming potential) values of the

different refrigerants. The refrigerant emissions also include an estimate of the leakage

rates of the refrigeration systems in properties. The leakage rates of the refrigeration

systems in properties are based on the available data for individual properties, from which

the average leakage rates for all properties are calculated based on the floor area of the

property.

Scope 2 – Indirect GHG emissions from energy consumption

Scope 2 emissions from own operations include emissions from purchased energy. This

includes purchased electricity, and district heat and cooling.

Both location-based and market-based emissions are calculated for purchased electricity.

Location-based emissions are calculated using national average emission factors. The

market-based figure is calculated on the basis of the energy contracts used by Kesko and

guarantee of origin certifications. Purchased electricity covered by guarantees of origin is

counted as zero-emission. Other market-based purchased electricity is calculated with

national emission factors according to the residual mix.

Of Kesko’s purchased energy, i.e. purchased electricity, district heat and district cooling, a

total of 60%, approximately 331 GWh, is covered by guarantees of origin or renewable

energy certificates. The electricity covered by guarantees of origin and renewable energy

certificates is generated by nuclear and wind power.

Consumption data for purchased electricity covers 97% of the properties and the remainder

is estimated on the basis of existing data. In Finland, the district heat consumption data

covers 98% of properties. In some of the operating countries, there is incomplete data on

district heat. However, the proportion of missing data is not significant.

Scope 3 – Indirect GHG emissions from the value chain

Kesko reports Scope 3 value chain emissions in categories 1, 2, 3, 4, 5, 6, 7, 9, 11, 12 and 14.

The omitted categories have been identified as non-material in relation to Kesko’s Scope 3

emissions, or Kesko does not have the activity described by the category. In some of the

Scope 3 categories there are shortcomings in the data for the operating countries. The most

significant shortcomings are indicated for the category in question in the text describing the

calculation methodology. The calculation of the indirect emissions from the value chain is

largely based on estimates and therefore the calculation methods and sources used contain

a considerable degree of uncertainties and can only be used as a very high-level estimate of

the actual climate impacts.

The basic data for the calculation have been collected from Kesko’s systems, external

service providers or directly from business partners. The emission factors used are largely

from local Finnish databases or global databases. The databases used include DEFRA GHG

conversion factors (2023), GLEC Framework V3.1, Statistics Finland's Fuel classification

(2024) and the Emissions database for construction (2024). Individual emission factors and

emission calculations have been obtained directly from suppliers and service providers and

other business partners.

Kesko’s largest value chain emissions are generated in category 1 Purchased goods and

services. In the following, we explain in more detail the calculation methods for the main

emission categories.

Category 1 – Purchased goods and services, category 11 – Use of sold products

and category 12 – End-of-life treatment of sold products

Emissions from purchased goods and services are calculated based on the weights of the

purchased goods. If purchase data are not available, sales data are used. If data on the

weight of the goods is not available, emissions are calculated based on euros. The

calculation of vehicle emissions utilises a commonly used tool within the automotive

industry.


		54

In the building and technical trade division, the share of emissions generated during the use

of the product is assumed to be 30% of emissions from the entire life cycle of relevant

product categories, e.g. electrical appliances. Emissions generated during end-of-life

treatment in the car trade are assumed to be 5% of emissions generated during the entire

life cycle.

The emission calculation for services includes emissions from the car trade division’s

demonstration and servicing activities, as well as emissions from cleaning, property

maintenance and technical services, and IT services purchased by Kesko. For services, the

emission factors are based on the factors reported by the service providers. The calculated

average of these factors is then used to estimate emissions for all similar services.

The emissions from the use of leased vehicles are included in the categories Use of sold

products (11) and End-of-life treatment of sold products (12), as the vehicles are generally

sold after the lease period. Therefore, the emissions during the lease period are not

included in category 13 Leased assets.

Category 2 – Capital goods

The calculation includes emissions from new buildings under construction or completed

during 2024 that are owned by Kesko. Only emissions during the construction phase are

included, as it is assumed that emissions during use or at the end of the building's life cycle

are included in Kesko’s own Scope 1 and Scope 2 emissions. Emissions generated during

construction are allocated across the entire construction period.

Additionally, the category includes vehicle investments in K-Auto leasing.

Category 4 – Upstream transportation and distribution

Emissions from upstream transportation and distribution are mainly calculated on the basis

of tonne-kilometres based on transportation mode and route data. International route data

are based on averages. Accurate route data is used for transportation and distribution in

Finland. The data used for calculating emissions are obtained from Kesko’s ERP systems.

The calculation is based on the ISO 14083:2023 standard and the GLEC Framework V3.1.

In addition, emissions from the direct deliveries of Kesko’s largest suppliers in its grocery

trade and car trade and emissions from postal services in Finland are included in the

emissions in this category.

The transportation emissions of K-Bygg and Byggmakker are calculated on the basis of

actual fuel consumption. The data includes estimates due to incomplete information.

Category 14 – K-retailer operations (Franchising)

The emission calculation for K-retailer activities includes the emissions from energy

consumption in properties owned or rented by the retailers and the emissions from

refrigerant leakages from retailers’ refrigeration equipment.

The energy consumption emissions of stores owned or rented by K-retailers are calculated

on the basis of the floor area of the store and the specific consumption of electricity and

heat. Specific consumption is assumed to be in line with the sites used in Kesko’s own retail

trade operations.

Emissions from refrigerant leakages are calculated based on the refrigerant capacity and

the GWP (global warming potential) values of the different refrigerants.

Targets

For Scope 1 and Scope 2 emissions, our goal is to achieve a total reduction of approximately

30% compared to the 2024 base year. The base year and target level for emissions have

been calculated market-based basis. The target levels for emissions reductions by 2030

have also been defined separately for Scope 1 and Scope 2 emissions, based on an

assessment of the development of different emission sources. The Scope 2 emission target,

calculated on a location-based basis, is based on an estimate of electricity and heat

consumption in 2030. Since there is no outlook available for the development of national

average emission factors for purchased electricity and heat, the calculation has been carried

out using the national emission factors for 2024.

The target for Kesko’s value chain is that 67% of suppliers and service providers, measured

by spend, will set science-based emissions reductions targets by the end of 2026. In 2024,

48% of suppliers had set science-based, short-term emission targets. The achievement is

calculated by dividing the purchase euros of suppliers who have set science-based emission


		55

targets by Kesko’s total purchase euros. The monitoring of science-based emission targets

is based on the databases of SBTi and CDP. The spend euros for 2023 are used, as the 2023

spend euros are the selection criterion for suppliers invited by Kesko to respond to the CDP

climate questionnaire.

Our energy strategy aims to improve energy efficiency by 10% between 2024 and 2030. To

achieve this goal, we need to implement energy efficiency measures totalling at least 95

GWh. The implemented energy efficiency measures and their impacts are monitored based

on the actions recorded in Kesko’s information system and the recorded electricity and heat

savings data.


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E5 RESOURCE USE AND CIRCULAR ECONOMY

Material impacts, risks and opportunities

Impacts related to resource use and circular economy


Nature of impact	Value chain	Description	Management
Resource outflows related to packaging
Actual negative	Own operations	The logistics chain of products includes several packages, from logistics packaging to the sales packaging of a single product.	• Reducing the use of plastic in packaging. • Participation in R&D projects on packaging materials.
Waste and food waste
Actual negative	Own operations	Waste is generated in Kesko’s operations, especially in warehousing and stores.	• Increasing the waste recycling rate by ensuring proper collection facilities at each site and personnel competence. • Reducing amount of energy waste for incineration.
Actual negative	Own operations	Kesko’s warehousing and wholesalers generate food waste.	• Food waste hierarchy measures to prevent waste through order and selection management and an efficient logistics process.
Actual negative	Downstream	K-food retailers’ store operations generate food waste.	• Food waste hierarchy measures to prevent waste through order and selection management, and discounted prices as the best-before date or expiry date approaches.

The process for identifying and assessing impacts, risks, and opportunities is described in the section of the sustainability statement titled General disclosures, Identification and assessment of

material impacts, risks and opportunities.

Targets related to circular economy


			Target
Target	Unit	2024	2030
Waste recycling rate	%	67%	73%
Food waste in Kesko’s warehousing and logistics operations	%	0.45%	0.22%
Food waste in K-food retailers’ store operations	%	1.68%	1.10%

In 2024, Kesko set a target to improve its waste recycling rate by six percentage points by

the end of 2030 compared to the 2024 baseline. This target relates to the recycling level of

waste hierarchy.

Kesko’s grocery trade division is committed to halving its food waste percentage from the

2019 baseline by 2030. The target to halve the percentage covers Kesko’s warehousing and

logistics operations as well as K-food retailers’ store operations. The target relates to the

reduction of waste level of the waste hierarchy. Food industry operators are required by law

to report their food waste to the Natural resources institute in Finland. The food waste target

is also one of the indicators of Kesko’s sustainability-linked loans.

The targets have been set voluntarily and they are not science based.


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Policies related to resource use and circular economy

In its sustainability policy, Kesko is committed to reducing food waste in its own operations

as well as in collaboration with stakeholders such as K-food retailers who operate

downstream in Kesko’s value chain. In the sustainability policy, Kesko also commits to

reducing the use of packaging materials, especially plastic, and promoting recyclable

packaging material in its private label products’ packaging. The policies for Kesko’s private

label products’ packaging and logistics packaging are described in the packaging policy. The

sustainability policy does not include the waste hierarchy or prioritise minimising waste over

recycling. The sustainability policy covers the Kesko Group operations.

The Executive Vice President, Legal and Sustainability at Kesko Group is responsible for

implementing the principles of Kesko’s sustainability policy.

Resource outflows related to packaging

Kesko has a packaging policy for its private label products and logistics packaging. In its

packaging policy, Kesko is committed to avoiding the use of excess packaging material and

reducing the use of plastic in its packaging.

Several different packages are included in the logistical chain of a product. The packaging

hierarchy levels are transport package, multipack and sales package. These packaging

hierarchy levels cover packaging ranging from transport packages containing hundreds of

products to sales packages for a single product.

Kesko is committed to several national Green Deals related to the circular economy. The

grocery trade is committed to the food industry’s material efficiency commitment and the

SUP (Single Use Plastic) Green Deal. These include targets and actions on food waste,

increasing waste recycling rates and reducing single-use plastics. The commitments cover

both Kesko’s own operations and the operations of downstream retailer entrepreneurs. The

building and technical trade in Finland has joined the Construction Plastics Green Deal,

which aims to accelerate the circular economy of plastics by reducing the use of single-use

plastics, to increase the use of recycled plastics and promote the recycling of plastics in the

construction sector.

Kesko is also involved in several research and development projects in which, in cooperation

with partners, the aim is to find new solutions that support the circular economy and

solutions for example reducing the amount of plastic throughout the value chain.

Recyclability of packaging

The materials used in the packaging of Kesko's private lablel products are 97% recyclable.

The figure is calculated on the basis of the materials used for the product’s sales packaging.

The figure indicates the recyclability of the material, but does not indicate whether the

packaging is actually ultimately recycled. The figure covers packaging of private label

products in Finland. The recyclable materials are materials that can be sorted for recycling by

consumers in Finland. Non-recyclable packaging materials include rubber, wood in consumer

packaging, ceramics and porcelain. Private label products are products where trademark is

owned by Kesko or where Kesko is mentioned in the contact details on the product’s product

labelling.

Food waste

Kesko is committed to halving its food waste percentage by 2030 from the 2019 baseline.

The commitment covers Kesko’s warehousing and logistics operations, as well as K-food

retailers’ store operations.

Kesko has developed a food waste roadmap and a food waste hierarchy to reduce the

amount of food waste. In line with the target to halve food waste, the food waste hierarchy

also takes into account the food waste generated by both Kesko’s and K-food retailers’

operations and the measures to reduce it.

The primary means of preventing food waste include selection management at K-food stores

and Kespro’s cash-and-carry outlets, as well as forecasting and demand planning. In practice,

this means having the right amount of products that customers want in the right place at the

right time. The most important decisions in terms of preventing food waste are made at the

selection planning stage.

In addition to preventing food waste, a key means to reduce waste at K-food stores is to sell

products at a discount as the products’ ‘best before’ or ‘use by’ date approaches.


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Edible but unsellable fruit and vegetable waste generated in Kesko's warehouse and logistics

operations is used to produce waste-based products. An example of this is soups made from

tomato and pepper waste generated during storage.

Food waste covers the two lowest levels of the food waste hierarchy, the donation of edible

food to food aid and non-edible organic waste. K-food stores and Kespro cash-and-carry

outlets donate edible products removed from sale for distribution as food aid. Biogas is

produced from non-edible food waste and used as energy.

Kesko food waste hierarchy

The food waste management steering group monitors food waste reduction targets in

Kesko’s grocery trade. The steering group’s role is to ensure that the annual targets of the

food waste roadmap are met. Reducing food waste is an ongoing effort, involving a wide

range of grocery trade personnel in different roles, as well as K-food retailers and their

employees.

During 2024, K-food stores have taken measures such as reducing minimum stock levels and

reducing and refining pre-ordering. Additionally, new basic and advanced level online

training courses on the reduction of food waste have been launched for the grocery store

employees.

Progress towards the target in 2024


				Target
Target	Unit	2019	2024	2030
Food waste in Kesko’s warehousing and logistics operations	%	0.44%	0.45%	0.22%
Food waste in K-food retailers’ store operations	%	2.12%	1.68%	1.10%

The base year for the target to halve food waste is 2019. The food waste percentage in

Kesko’s warehousing and logistics operations was 0.44%. The food waste percentage in K-

food retailers’ store operations was 2.12%.

Kesko’s grocery trade warehousing and logistics operations include warehousing and

logistics operations serving K-food stores and Kespro’s foodservice customers. The relative

food waste level of Kesko’s warehousing and logistics operations has remained at the same

as the 2019 baseline. In the warehousing and logistics operations serving only K-food stores,

the relative food waste percentage has decreased from the 2019 level, from 0.36% in 2019 to

0.29% in 2024.

The combined food waste percentage from logistics operations serving K-food retailers and

K-food stores was 2.32% in 2019. The food waste percentage has decreased to 1.84% by

2024. The percentage is calculated by comparing the total amount of food waste generated

in logistics operations serving the stores and in the K-food stores to the amount of food sold

in kilograms by the stores.


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Food waste includes food that ends up as waste or animal feed and food aid donations. The

food waste percentage is calculated by comparing the kilograms of food waste to the

kilograms of food sold during the reporting period.

Actions on waste management and circular economy

Kesko is committed to reducing the amount of waste directed to disposal and increasing the

amount of waste directed to recycling in its operations.

Kesko has a centralised waste management agreement, a circular economy agreement,

which largely covers Kesko’s operations in Finland. Independent grocery and building and

home improvement stores can also enter the agreement. The aim of the agreement is to

prevent waste, enhance recycling and promote the circular economy.

Key measures to improve the efficiency of waste management and increase recycling rates

are ensuring proper collection facilities at each site, ensuring personnel competence and

recycling concepts. Key measures to increase the waste recycling rate are improving the

separate collection of plastic packaging fractions and reducing the amount of energy waste

going to incineration.

The key actions to promote the circular economy and increase the recycling rate of waste

start from formatting the Group’s waste hierarchy and division-specific action plans. Many

circular economy measures are already part of everyday operations at Kesko’s sites, but new

circular economy operating models are being explored and efforts are being made to

continuously improve the efficiency of operations.

Progress towards the target

The target for increasing the recycling rate was set in 2024. Progress towards the target will

be monitored at the division level. In the divisions, progress towards the target is monitored

by their sustainability steering groups. The role of the steering groups is to monitor and steer

the recycling rate and set the necessary division-specific measures through action plans. At

Group level, progress towards the target is reported to the Group sustainability management

team.

Amount and type of waste

Total waste


Tonnes	2024
Non-hazardous waste	27,177
Hazardous waste	782
Total waste	27,959
Total recycled waste	18,854
Total non-recyclable waste	9,105
Percentage of non-recyclable waste from total waste, %	33%

Non-hazardous waste


Tonnes	2024
Waste diverted from disposal
Preparation for reuse	-
Recycling	18,470
Other recovery operations	7,959
Total waste diverted from disposal	26,430
Waste directed to disposal
Incineration	210
Landfill	531
Other disposal operations	6
Total waste directed to disposal	747
Total non-hazardous waste	27,177

Hazardous waste


Tonnes	2024
Waste diverted from disposal
Preparation for reuse	2
Recycling	384
Other recovery operations	376
Total waste diverted from disposal	762
Waste directed to disposal
Incineration	9
Landfill	2
Other disposal operations	9
Total waste directed to disposal	21
Total hazardous waste	782


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Most of the waste is generated in Kesko’s own retail store operations, warehousing and

logistics operations. The largest waste fraction in Kesko’s operations is cardboard, which is

generated from packaging used during the transportation and storage of products. The

second largest is energy waste, which is incinerated to produce heat and electricity.

In the grocery trade division a significant waste stream is biowaste, which includes former

food products of animal origin (category 3 by-product), such as meat and fish products,

which are no longer fit for human consumption and by-products from food storage, handling

and manufacturing. Waste streams in the building and technical trade include, in particular,

wood waste, mixed waste and various construction product waste. In addition to cardboard,

the car trade division generates metal and steel waste and hazardous waste from, for

example, car batteries, paints and oils used in servicing and damage repair work.

The nuclear energy purchased by Kesko in Finland and Sweden produced 141 kg of

radioactive waste. In Finland and Sweden the management and disposal of nuclear waste is

strictly regulated and controlled.

Accounting policies

The amount of waste covers the amount of waste generated at Kesko’s own sites and the

amount of waste generated by outsourced storage services.

Data on the amount of waste generated is obtained from the databases of waste

management partners and from invoices or lessors of properties. Data on individual sites

have been estimated on the basis of existing data if the amount of waste generated by

Kesko’s operations is not directly available. Such sites include, for example, locations in

shopping centres where Kesko does not have its own waste management contract. The

amount of waste in outsourced storage services and in some department stores in the K-

Citymarket chain includes estimates of the amount of waste generated by Kesko.

Incineration with energy recovery has been classified as other recovery operation in all

operating countries, in accordance with Annexes 1 and 2 of the European Parliament

Directive 2008/98. Incineration without energy recovery is classified as incineration.

Hazardous Waste is classified according to Annex 3 of the European Parliament Directive

2008/98. All other waste is classified as non-hazardous. Waste disposal is classified

according to the waste treatment methods of each operating country, which may result in

differences between countries.

The recycling percentage includes recycled waste, which is calculated as a proportion of the

total amount of waste generated during the reporting period.

The metrics presented in this section have not been validated by an external third party,

other than the sustainability reporting auditor.


		61

SOCIAL

S1 OWN WORKFORCE

Material impacts, risks and opportunities

Impacts related to own workforce


Sub-topics	Nature of impact	Value chain	Description	Management
Working conditions
Employment and cooperation between the parties • Secure employment • Adequate wage • Collective bargaining • Social dialogue	Potential positive	Own operations	Ongoing cooperation with employees and employee representatives on secure employment, adequate wages, employment terms and dialogue ensure fair employment terms and working conditions for employees.	Kesko has agreed cooperation concepts in place that allow employees to influence matters that concern them and that describe the way in which ongoing dialogue can be used to influence the culture of cooperation.
Ways of working, work-life balance • Working time • Work-life balance	Potential positive	Own operations	Improving the ways of working and work-life balance provide the opportunity for meaningful and flexible working throughout the life cycle of an employment relationship. The entitlement and opportunity for employees to take family leave are essential. We offer various options to ensure employees achieve balance between work and private life.	We are enhancing workplace flexibility and streamlining processes, and offer a range of flexibilities, such as flexible working hours, adaptable working time, part-time work and, for specialists, hybrid work. These possibilities have an impact on job satisfaction, a good employee experience and commitment to the job.
Health, safety and wellbeing	Actual negative	Own operations	We offer a wide range of jobs, and the health and safety challenges of these jobs also vary. These may affect employees’ work capacity in the short or long term.	We respond to the identified impacts with an occupational safety management model and systematic planning to anticipate and mitigate various occupational health and safety challenges. The weighting of impacts and their management vary in different units and age groups.
Equal treatment and opportunities for all
Equal treatment and inclusion • Gender equality and equal pay • Diversity • Measures against harassment in the workplace	Potential positive	Own operations	Equal treatment, diversity and inclusion have a major impact on the attractiveness of a workplace and employee retention. Kesko has a zero-tolerance policy on violence and harassment to ensure employees’ health and safety.	We manage impacts related to equal treatment through the DEI (diversity, equity, inclusion) programme. Non-discriminatory recruitment, good management, functional HR practices, anti- harassment policies and training promote positive impacts. We ensure gender equality and equal remuneration through our remuneration principles and practices.
Training and skills development	Potential positive	Own operations	Employees have the opportunity for continuous learning, skills development and career advancement.	Competence development is based on business targets. In accordance with the management model’s annual cycle, a development discussion is held between managers and employees to agree on the competence development actions. Kesko has a range of classroom and online training courses for employees, and information on available trainings is provided on the intranet.

The process for identifying and assessing impacts, risks, and opportunities is described in the section of the sustainability statement titled General disclosures, Identification and assessment of

material impacts, risks and opportunities.


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Material impacts, risks and opportunities and their interaction with

strategy and business model

Material impacts, risks and opportunities relating to own workforce have been assessed by

Kesko’s HR management, and material impacts have been discussed by the Group’s

employee representative team. Own workforce includes all Kesko employees who are in an

employment relationship with Kesko. The types of employment relationships are described in

more detail in S1 Key figures for personnel. Personnel recruited through employment

agencies work in some of Kesko’s business areas. To ease the first-time application, we

utilise the phased-in provisions and we do not include information on non-employees in the

first year of preparing the sustainability statement.

Kesko has identified positive impacts on its own workforce in the following areas:

employment and cooperation between parties, ways of working and work-life balance, equal

treatment and inclusion, and training and skills development. These are described in more

detail under the different sub-topics. We have identified an actual negative impact in the

area of occupational safety in relation to work-related accidents. Work-related accidents are

usually individual accidents, and mainly minor. The highest number of work-related accidents

take place among logistics workers, car mechanics and store employees. In Finland, the

proportion of people under 35 years of age was higher in work-related accidents than in

other age groups.

The rate of sickness absences has begun to decline. The primary cause of diagnosed sickness

absence was mental health disorders, which were particularly prevalent among young people

under 35 and among store employees. Absences due to musculoskeletal disorders were

notably prevalent among workers aged over 50.

Kesko does not have any particularly high-risk operations in operating countries or

geographical areas, for example, which would be associated with a significant risk of forced

labour or child labour among its own workforce. The S2 Workers in the value chain section

also covers the risk of forced labour and child labour. Kesko has not identified any material

impact on its own workforce in relation to the green transition plan.

Management of impacts

Kesko’s HR management conducts an HR risk analysis quarterly. Risk assessments and the

necessary mitigation measures are an integral part of all operations and decision-making

related to Kesko’s own workforce. Separate systematic monitoring of occupational safety,

health and wellbeing is carried out using data and planning of further measures in

cooperation by the Group and the business areas. We work closely with insurance

companies and occupational health service providers to manage and reduce negative

impacts. The responsible persons in the Group’s and divisions’ HR, Legal Affairs and

Sustainability units and the responsible persons and managers in the business areas are the

key parties responsible for managing the identified material impacts. Within the various sub-

topics, extensive cooperation is carried out with employees and employee representatives,

and this is described in more detail in the Engagement with own workforce section.

Material identified impacts from the perspective of Kesko’s own workforce have been taken

into account in Kesko’s sustainability strategy and HR strategy and the related objectives.

Targets related to own workforce


			Target
Target	Unit	2024	2030
Workplace injuries, own workforce	Total Recordable Injury Frequency (TRIF)	25.9	22.0
Employee wellbeing	Wellbeing index	83	86
Diversity and inclusion	D&I index	87	89
Gender balance in top management	% of underrepresented gender	27.7%	40.0%
Gender balance in middle management	% of underrepresented gender	32.8%	45.0%

Kesko’s sustainability targets and metrics for the sub-topics of wellbeing and occupational

safety and diversity, equity and inclusion are set out in the table above. The sustainability

targets have also been discussed in the Group’s team of employee representatives.

The Group Management Board regularly follows the targets related to own employees as

part of the progress of the sustainability strategy. HR management and sustainability

management, responsible persons at HR, steering and working groups and employee


		63

representatives monitor achievement of the targets. Key monitoring tools include employee

engagement survey results, continuous performance management and performance reviews

and development discussions. Targeted surveys and interviews are also conducted to identify

needs by business area or country.

We monitor our gender balanced representation using data from Kesko’s HR system. The

workforce-related targets are based on our personnel policies. The year 2024 is the base

year for the human resources metrics and the target level is set for 2030.

Policies related to own workforce

The Group‘s HR policy and the K Code of Conduct, as well as the sustainability and HR

strategies, steer and support goal-driven actions related to employees. The HR policy

includes guidelines and principles of the following topics: leadership cornerstones,

performance management, compensation, competence development, equality, non-

discrimination and diversity, safety and wellbeing, and recruitment. These are complemented

by health and occupational safety principles, competence development principles and

remuneration principles. In line with the K Code of Conduct, we do not accept the use of

child labour, any form of forced labour, or human trafficking or any other forms of modern

slavery. All these policies mentioned cover the entire own workforce in all operating

countries and they are available for the personnel on Kesko’s intranet. The policies do not

include employment and cooperation between parties, or work-life balance. The HR policy, K

Code of Conduct and the occupational health and safety principles are available on Kesko’s

external website.

The HR policy has been approved by Kesko’s Board of Directors and the occupational health

and safety principles by Kesko’s labour protection steering group. The most senior role that

has responsibility for implementation of the policies concerning personnel mentioned above

is the Executive Vice President, HR, who is a member of the Group Management Board. The

policies are also addressed in each separate topic.

Section G1 Business Conduct lists Kesko‘s own guidelines and operating models relating to

corporate culture, business conduct and respect of human rights are listed, as well as the

international guidelines and principles to which Kesko is committed in all its operations. In

addition to these, Kesko complies with the ILO Declaration on Fundamental Principles and

Rights at Work and is committed to the UN’s Women‘s Empowerment Principles to promote

gender equality and professional development for women.

Our operations are based on non-discrimination and equal opportunities. We do not accept

any forms of forced labour or child labour. We ensure safe and healthy working conditions in

accordance with local laws, international occupational safety standards and best practices.

Kesko’s engagement with employees is based on openness, inclusion and continuous

dialogue.

Kesko protects the personal data and privacy of employees both during and after the

employment relationship. Employee data is processed securely and responsibly. In addition

to internal control, external parties regularly conduct audits on operations.

Key figures for own workforce

Employee head count by gender


Gender	Number of employees
Male	10,853
Female	7,444
Other	12
Not reported	-
Total employees	18,309

The average number of Group personnel converted to full-time equivalent employees by

segment is presented in the Note 2.5 Operating expenses and geographical breakdown in

the Note 2.2 Segment information of the consolidated financial statements.

Employee head count in countries where there are at least 50 employees

representing at least 10% of the total number of employees


Country	Number of employees
Finland	12,555
Norway	2,091


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Employee head count by contract type and gender


	2024
	Male	Female	Other	Not reported	Total
Employees	7,444	10,853	12	-	18,309
Permanent	6,528	9,183	10	-	15,721
Temporary	659	896	1	-	1,556
Non-guaranteed hours	257	774	1	-	1,032
Full-time	3,845	8,533	4	-	12,382
Part-time	3,599	2,320	8	-	5,927

Employee turnover


	2024
Number of employees who have left undertaking	4,161
Employee turnover, %	18.5%

Employee head count by contract type and operating country


	2024
	Finland	Norway	Sweden	Denmark	Estonia	Latvia	Lithuania	Poland	China*	Total
Number of employees	12,555	2,091	1,458	893	181	93	88	935	15	18,309
Permanent	10,862	1,711	1,224	825	172	93	87	732	15	15,721
Temporary	794	380	101	68	9	-	1	203	-	1,556
Non-guaranteed hours	899	-	133	-	-	-	-	-	-	1,032
Full-time	7,746	1,554	1,084	699	179	88	87	930	15	12,382
Part-time	4,809	537	374	194	2	5	1	5	-	5,927

*Kesko’s building and technical trade has a purchasing office in Shanghai, serving all operating countries in purchasing.

Accounting policies

Key figures related to own workforce cover Kesko Group employees in all operating

countries. The own workforce figure used in the calculations is expressed as the number of

employees as at the last day of the year. This figure also includes people who are not

actively working, such as those on family leave.

The gender distribution of the workforce by number of employees is as follows: male,

female, other or not reported by the employee.

Employee turnover includes all employees who left the Group during the year divided by the

average number of employees during the year. The average number of employees for the

year is calculated as the average of the average number of employees over the reporting

months.

The metrics presented in this section have not been validated by an external third party,

other than the sustainability reporting auditor.


		65

Engagement with own workforce

Processes for engaging with own workforce and their

representatives

Actual and potential impacts on own workforce are discussed in close cooperation between

the employer and employee representatives in those Kesko operating countries where there

are employee representatives. Kesko takes the views of its employees into account in its

decision-making, which helps the company to better understand the potential risks and

impacts related to its workforce.

Kesko has multible employee forums where there is regular dialogue between employees and

the employer. The dialogue is conducted directly with employees, their representatives and

managers. Cooperation models vary by country, depending on the local legislation. Kesko

Group has the following employee forums to develop and follow the impacts on our

employees: Kesko’s cooperation group meets twice a year, employee representative team

meets monthly, the HR management groups for each business area meet monthly or at least

quarterly, and the equality and non-discrimination group meets twice a year. The person with

the most senior role that has operational responsibility for ensuring engagement of and

cooperation with employee representatives is the Executive Vice President, HR, who is a

member of the Group Management Board.

In Finland, there is an agreement on the organisation of employee representation. At Kesko,

we have also made a European Works Council (EWC) statement to deepen our cooperation

and dialogue. The effectiveness of inclusion of the employees is measured by the amount of

dialogue, the topics discussed, the continuous feedback from employee representatives and

the questions presented to senior level management at the Group cooperation meeting.

At Kesko, a K Voices employee engagement survey has been conducted on the entire

workforce to gather views and experiences on a broad scale. Based on the employee survey,

teams and units drew up development plans in 2024. For example, in Finland, there have

been discussions with individuals representing language minorities on how to better include

them in the working community, and communication in English has been increased.

Kesko respects employees’ freedom of association and collective bargaining in accordance

with local legislation. Regarding issues related to working conditions, wages and collective

agreements, we provide employees with channels to influence the decisions that affect them.

Processes to remediate negative impacts and channels for own

employees to raise concerns

We organise employee forums and consultations where employees can raise their views on

any problems they may have regarding working conditions, occupational health and safety or

discrimination. The challenges raised by employees can lead to concrete changes in

practices, which can help to manage potential negative impacts.

Kesko is committed to ensuring a fair and safe working environment for all its employees.

Kesko involves employees and labour protection representatives in the assessment of

working environment risks. Inclusion of employees helps to identify both current and

potential risks more effectively.

We address employee concerns appropriately and effectively through the following topics:

clear communication, prompt and systematic investigation, and a fair handling process that

protects the employee when necessary. We actively monitor the effectiveness of remedies

and implement new measures, as necessary.

Kesko collaborates closely with employee representatives, such as employee representatives

and trade unions. We organise regular discussion events where employees can raise their

concerns and discuss them directly with management. At these events, we discuss topical

issues and seek solutions together. Dialogue has focused on issues such as workload, the

working capacity of senior employees, hybrid working models, i.e. combining on-site and

remote work, and remuneration practices.

Employees are informed about the available reporting channels and how to use them, for

example via intranets and screens at sites. Employees and consultants should report

suspected misconduct primarily to their manager or responsible person at K Group. When

for some reason the the information can not be delivered to the persons in charge, the

SpeakUp whistleblowing channel, where all reports are handled confidentially, can be used.

The employees of the company maintaining the SpeakUp channel are bound by strict

confidentiality obligations. The reports to be investigated by Kesko are handled by Kesko´s


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Governance, Compliance & Ethics Group function. Other experts or authorities may be

needed in investigations on a case-by-case basis. The SpeakUp channel is described in more

detail in section G1 Business Conduct, Whistleblower protection.

In addition to the SpeakUp channel, representatives of Kesko‘s employees, occupational

health and safety representatives or employee representatives, are available to the workforce

locally. In Finland, the Task Force approach can be used to investigate more extensive or

serious reports from employees. There are also various surveys through which employees

can express their views and wishes anonymously. Cases and internal investigations other

than those submitted through the SpeakUp channel are part of the normal HR work and

employment law and are not included in the statistics. The business areas’ HR and employee

representatives address the challenges and concerns of employees and monitor the

effectiveness of implemented measures.

Employment and cooperation between the parties

Employment and cooperation between the parties covers following sub-sub-topics of the

Own workforce standard relating to working conditions: coverage of collective agreements

and social dialogue, adequate pay and social protection.

Policies related to employment and cooperation between the

parties

We promote continuous dialogue with employees and employee representatives to ensure

fair employment terms and working conditions.

Actions related to employment and cooperation between the

parties

A good employer brand is a key factor in ensuring the recruitment of skilled employees and

commitment to the job. Equal treatment, diversity, inclusion, opportunities for personal

development and related measures have a major impact on the attractiveness of the

workplace and employee retention.

Trade union representation at the workplace is widespread in the Nordic countries. Social

partners engage in intensive and ongoing dialogue to consult employees on their

expectations. We participate in dialogue, for example, in Finland as a member of the Finnish

Commerce Federation, an association for employers in negotiating collective agreements,

and as members of its various decision-making bodies. At the local level, we engage in

dialogue with elected employee group representatives in many of the negotiation forums

mentioned above. There are no collective agreements in Estonia, Lithuania, Latvia or Poland.

Kesko is committed to paying all its employees competitive wages that meet or exceed the

minimum legal requirements and are sufficient to cover basic living costs. Wages are based

on the level defined in the collective agreement. In countries where there is no collective

agreement practice, employees are entitled to at least a minimum wage.

At Kesko, all employees are covered by social protection in accordance with collective

agreements, legislation or insurance. Social protection covers the following situations against

possible loss of income: sickness, unemployment, employment injuries and disability,

parental leave and retirement.

Coverage of collective bargaining and social dialogue


	Collective Bargaining Coverage		Social Dialogue
Coverage Rate	Employees – EEA	Employees – Non- EEA	Workplace representation (EEA only)
0-19%
20-39%
40-59%
60-79%	Finland
80-100%	Norway		Finland, Norway
for countries with >50 employees representing >10% total employees

Employees covered by collective bargaining agreements


	2024
Percentage of total employees covered by collective bargaining agreements	75.6%


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Accounting policies

The number of employees who are covered by collective agreements and in an employment

relationships is set in proportion to the number of employees with an employment

relationship. In Finland, Norway and Denmark, blue-collar and white-collar workers are

covered by collective agreements, excluding senior salaried employees in Finland. In

Sweden, all employees, excluding the country director, are covered by collective

agreements.

An employee’s base salary is compared to the applicable base salary, which, depending on

the country’s practice, is either the salary according to the collective agreement or the

minimum wage. In the Nordic countries, an employee’s base salary is compared to the

salary according to the collective agreement. In Estonia, Latvia, Lithuania and Poland, an

employee’s base salary is compared to the minimum wage. The metrics presented in this

section have not been validated by an external third party, other than the sustainability

reporting auditor.

Ways of working, work-life balance

The ways of working, work-life balance section covers the following sub-sub-topics of the

Own workforce standard related to working conditions: working time and work-life balance.

Policies related to work-life balance and ways of working

We are committed to supporting work-life balance with flexible working conditions and

respecting family rights such as parental leave and the right to care for dependants. At

Kesko, all employees are entitled to family leave in all operating countries in accordance with

local legislation. Separate principles on ways of working, such as hybrid work, have been

drawn up and may vary from country to country.

Actions related to work-life balance and ways of working

At Kesko, we offer various opportunities for a good work-life balance, such as flexible

working time, part-time work during different life situations and the opportunity for

specialists to do hybrid work. Various flexibilities and family leave policies contribute to

employee wellbeing and retention at different stages of the career.

Distribution of employees entitled to take family-related leave and employees

who have taken family-related leave


	2024
Employees that are entitled to take family-related leave, %	100%
Male employees that have taken family-related leave, %	3.2%
Female employees that have taken family-related leave, %	5.5%
Other or unknown that have taken family-related leave, %	-

During 2024, a total of 4.2% of Kesko´s employees have been on a family-leave.

Accounting policies

The metric is based on the legislation on family leave in different operating countries.

Eligibility for family leave is defined in the legislation of each country. All employees are

entitled to family leave. The distribution of employees on family leave is presented by

gender (male, female, other or not known) as a percentage of the group entitled to family

leave. The metrics presented in this section have not been validated by an external third

party, other than the sustainability reporting auditor.

Health, safety and wellbeing

Policies related to health, occupational safety and wellbeing

Our operations are guided by Kesko‘s HR policy that covers all operating countries, separate

health and occupational safety principles and the K Code of Conduct.

Occupational health and safety management is based on legal requirements, the

identification of material risks and the implementation of good practices. Our occupational

safety management model defines responsibilities at different levels of the organisation.

Occupational safety risks are assessed and analysed within the Group in accordance with its

approved risk assessment system. Managers are responsible for the induction of

occupational health and safety topics to new employees, and employees are also provided

with occupational safety training. The manager, together with occupational health and HR

specialists, also assesses the employee’s work capacity and wellbeing. At Group level, we

measure wellbeing and psychosocial load regularly as part of the K Voices employee

engagement survey.


		68

Kesko’s occupational safety steering group is responsible for the defining strategic targets,

specifying the division of responsibilities at different organisational levels, coordinating

measures and monitoring their effectiveness. Measures include occupational safety induction

and job training, opportunity to make safety observations and a comprehensive risk

assessment process, as well as guidance on how to investigate work-related accidents that

result in absence from work. Management models vary according to the countries of

operation and local legislation.

Kesko’s employees can share their observations and views on occupational safety as agreed

within the work community. The managers have operational responsibility for occupational

safety in their units and the labour protection managers coordinate cooperation in their area

of responsibility. The Group’s occupational safety unit reports on key occupational safety

indicators and measures to the division and Group management every six months.

It is important for everyone to identify the resources that support wellbeing and to address

factors and situations that threaten health and work capacity. Services that support

employees’ occupational health are organised in accordance with the practices and

legislation of each country. Support for mental health is also available in some operating

countries. Kesko’s HR policy includes principles for supporting work capacity throughout the

career. The means vary according to the legislation and practices of the operating countries.

We are also committed to helping persons with partial work capacity to continue in working

life through various means. The priorities for supporting groups in vulnerable situations vary

by country.

Actions related to health, occupational safety and wellbeing

The occupational health and safety management system covers 100% of the entire

workforce. Occupational safety systems and measures vary from country to country. At

Kesko, we prevent potential negative impacts on occupational health, safety and wellbeing

by fulfilling legal requirements, identifying, preventing and mitigating material risks and

implementing good occupational health and safety practices. The business areas are mainly

responsible for occupational safety, employees’ wellbeing at work, and related measures.

Occupational safety managers and representatives play a key role in planning and

developing. We develop cooperation with employees and employee representatives in

accordance with national laws and practices. We ensure the management of impacts through

concrete action plans and the monitoring of their implementation, and through effective

processes and human resources planning.

Occupational health and safety issues are discussed at Group level three times a year in the

Occupational Safety Group Personnel Committee. In addition, in Finland, business area

managers and HR review occupational health and safety issues every six months, monitor the

development of indicators and decide on the necessary measures for occupational safety and

wellbeing at work. The Group sustainability management team reviewed the execution of the

occupational safety and wellbeing objectives during 2024.

In 2024, communication guidelines were compiled at Kesko, according to which all operating

countries are obliged to inform Kesko Group’s communications about, for example, fatal

accidents at work that have occurred at a Kesko workplace. In Finland, for example, labour

protection officers received training on more preventive labour protection work, and new

thematic labour protection training and online training for labour protection delegates were

implemented. A safety campaign for commuting was also launched. Surveys, risk

assessments and statistical data have been used to assess the risks and hazards of work.

Specific support has been provided to managers whose teams have experienced harmful

psychosocial loading. Work-related accidents are recorded in work-related accident systems

to facilitate their investigation.

Kesko’s units create an annual action plan outlining topics for development, and HR monitors

its implementation. Division and Group management also carry out occupational safety

management measures on the basis of semi-annual reporting. Occupational safety is

promoted both through internal audits and external ISO 45001 certification in the building

and technical trade in all operating countries. The principles of the certification are also

applied elsewhere at Kesko.

Absences, accidents and occupational diseases are prevented at Kesko through systematic

operating models and close cooperation between the Group, the business areas and

employee representatives. Examples of this include the sickness absence and occupational

safety management model and, in Finland, developing the competence of HR employees and

managers in work capacity management. At Kesko, we actively support employees in

individual situations where their work capacity is reduced, for example by modifying their


		69

work. Different countries have different priorities for supporting groups in vulnerable

situations.

Work-related accidents, cases of work-related ill health and fatalities


	2024
Number of recordable work-related accidents	714
Rate of recordable work-related accidents (TRIF)	25.9
The number of cases of work-related ill health	4
The number of fatalities as a result of work-related injuries and work-related ill health	-
The number of days lost to work-related injuries and fatalities	2,147

Accounting policies

Work-related accidents, occupational diseases, fatalities due to work-related accidents and

occupational diseases, number of days lost due to work-related accidents and fatalities are

reported for own workforce. The number of work-related accidents is the number of work-

related accidents that have been reported to the employer from all countries. The work-

related accident frequency is calculated by multiplying the number of work-related

accidents by one million hours worked and dividing by the number of hours actually worked

(TRIF). The figure includes all work-related accidents and work-related pain cases reported.

Occupational diseases include confirmed cases of occupational diseases according to the

ILO List of Occupational Diseases.

The days lost due to work-related diseases and fatalities are calculated in calendar days,

including the whole absence period from the first full day of absence. The number includes

days lost due to work-related accidents. The number of fatalities due to work-related

accidents and occupational diseases are added together. The figures for work-related

accidents, occupational diseases and fatalities do not include data on non-employees, such

as recruitment agency employees. The metrics presented in this section have not been

validated by an external third party, other than the sustainability reporting auditor.

Equal treatment and inclusion

The Equal treatment and inclusion section comprises the following sub-sub-topics related to

the equal treatment and equal opportunities sub-topic of the Own workforce standard:

Gender equality and equal pay, diversity, and measures against violence and harassment in

the workplace.

Policies related to equal treatment

In accordance with Kesko’s HR policy and the K Code of Conduct, we are committed to

promoting non-discrimination, equality and fairness in all our operations. We are committed

to ensuring there is no discrimination based on gender, ethnicity, nationality, skin colour,

religion, political views, marital status, sexual orientation, gender identity, age, disability, or

any other personal characteristic at the workplace. Competence, education, and motivation

are emphasised in our recruitment process. Equality is promoted by means of a participatory

approach, and is coordinated by Kesko’s employee equality and non-discrimination group.

We promote equality and non-discrimination across all our operating countries, though the

organisation and processes vary by country.

A diverse working community and a culture of inclusion are shaped through the behaviour,

attitude and choices of each employee. This is the foundation for preventing discrimination at

the workplace. Kesko is committed to the UN‘s Women’s Empowerment Principles to

strengthen the position and career development of women.

We promote equal treatment and prevent discrimination through Kesko’s common operating

principles, the K Code of Conduct and by following operating models to prevent harassment

and inappropriate behaviour and, where necessary, systematic resolution processes.

Diversity and inclusion is promoted through a programme that supports the DEI targets, with

a focus on promoting a diverse and inclusive workplace, equal remuneration and gender

equality at all levels of the organisation. At Kesko, we have prepared statutory equality and

non-discrimination plans, and we have an operating model to prevent harassment and

inappropriate behaviour and guidelines on how to act in possible discrimination situations.

Kesko’s core principles of remuneration are competitive total remuneration based on

performance and the transparent and equitable treatment of employees. The purpose of

remuneration is to encourage good performance and to commit employees to the company


		70

and its key targets. Kesko uses a job evaluation system which enables the comparison of

salaries in comparable jobs.

Actions related to equal treatment

Kesko is committed to the targets, measures and indicators determined in its diversity, equity

and inclusion (DEI) programme. In all operating countries, we regularly monitor employee

experience of equity and inclusion through the D&I Index. In the employee engagement

survey, the index score for 2024 was 87 on a scale of 0-100. We scored highly regarding our

employees’ perceptions that they feel accepted in the work community as individuals and

that managers treat them fairly and with respect. There was room for improvement in how

different opinions are valued in the work community.

Kesko has reviewed its recruitment process from a diversity perspective and practical

changes will be made in 2025. Awareness of diversity and equity is promoted through a

range of online training courses. Diversity and equity matters are also part of the Leader@K

training for new managers at Kesko.

At Kesko, we want to promote the career development of women. In 2024 in Finland, we

launched a leadership programme for women in partnership with Mothers in Business (MiB),

to empower women with encouragement and coaching to advance in their careers. Thirty

women are participating in the programme, which runs from 2024 to 2025.

During 2024, the English language was taken into use more extensively in Finland, which

enables more diverse employment in the future. In Finland, the grocery trade’s programme

for people with an immigrant background combines on-the-job training with training and,

where possible, employment in a store after the on-the-job training period.

The Group HR management team and the Group sustainability management team regularly

monitor the progress of the DEI programme targets.

Age distribution of employees


Age	Number	Percentage
Under 30 years	4,763	26.0%
30-50 years	8,547	46.7%
over 50 years	4,999	27.3%

Gender distribution of top management


Gender	Number	Percentage
Female	26	27.7%
Male	68	72.3%
Other or unknown	-	-

Gender pay gap by employee group


	2024
Management	2%
Managers and specialists	3%
White collar	3%
Blue collar	1%

At Kesko in 2024, the remuneration ratio between genders is 2%. The ratio between the

annual total remuneration of the highest paid individual and the median annual total

remuneration (excluding the highest paid person) was 33.

Cases that come through other channels than through SpeakUp channel are routine

investigations related to regular HR and employment lawyers´ duties and are not registered

on a case-by-case basis. In 2024, it is estimated that Kesko received around 10–15

notifications of discrimination and harassment concerning its own workforce. This estimate

includes uncertainties, as it excludes reports that do not align with the situations defined in

the policy on inappropriate treatment or according to investigation results are other disputes

related to employment. Through the SpeakUp channel, 15 reports were received concerning

the working conditions or terms of employment of Kesko’s own workforce and other

employment-related rights, excluding notifications related to discrimination or harassment.

In 2024, no serious human rights violations were found at Kesko. Kesko has not been fined or

faced any other consequences in the cases mentioned above.


		71

Accounting policies

The age distribution of employees is reported as a number and percentage of employees in

three age groups.

The gender distribution of the top management is reported as a number and percentage. At

Kesko, the top management level consists of directors with a director agreement.

The remuneration figures are based on employees in active employment on the last day of

the year. The average pay gap between the total remuneration of women and men is

calculated as the weighted average of the number of people working in the same operating

country and between women and men in comparable jobs. The difference in total

remuneration is defined by employee group in the table.

The ratio of the highest-paid individual’s annual total remuneration has been calculated by

comparing it to the median of annual total remuneration. The median is calculated

excluding individuals who started after the beginning of the reporting year, who have been

absent for more than 3 months during the reporting year, and the remuneration of the

highest paid individual.

The total number of notifications on discrimination and harassment concerning the own

workforce is reported as an estimate. The main uncertainties in the assessment are

described in the measures. The number of notifications received through the SpeakUp

channel includes reports relating to own workforce and possible inappropriate behaviour,

excluding notifications of harassment and discrimination, taking place at the workplace.

The metrics presented in this section have not been validated by an external third party,

other than the sustainability reporting auditor.

Training and skills development

Policies related to competence development

In accordance with Kesko’s HR policy, competence development is based on strategy and

business objectives. As a part of annual planning process, Kesko has developed a

comprehensive plan outlining priorities and measures for competence development at both

at a Group level and within individual business units. The training plan includes competence

development actions in the following areas: leadership and management, interaction and

work life skills, and various areas of professional expertise. Group HR and responsible

persons in business areas work closely on competence development and systematically

monitor the implementation of the plans.

Sufficient level of competence ensures success at work, wellbeing at work and offers

opportunities for professional development and career advancement. We promote

competence development through training and on-the-job learning. Progress is discussed

and actions are agreed as part of the performance management process and in other

discussions with individuals.

Actions related to competence development

In 2024, the focus areas in competence development were influencing and self-leadership,

leadership and management, diversity at work, and fluent usage of IT and digital tools. In the

stores, the focus was on strengthening sales and customer interaction as well as service and

product competence. For example, store employees in Finland are provided with a broad

selection of professional training courses in a virtual learning environment, including chain-

specific training, eLearning courses and opportunities to complete vocational degrees.

Workplace instructors work in stores extensively to support employees with their learning. In

Sweden, there is also a learning platform providing extensive selection of both vocational and

general training that can be utilised by all employees.

Performance management and competence development

Performance and development discussions and performance review discussions are a

systematic part of Kesko’s performance management model. 63.5% of the own workforce

participated in performance management discussions and reviews in accordance with the

common operating approach. In addition, Kesko´s business areas have separate performance

management practices.


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Performance management and competence development


	2024
% of employees that participated in regular performance and development discussions	92.7%
Male	88.1%
Female	97.4%
Other or unknown	100%
The average number of training hours per employee	4.4
Male	5.5
Female	3.2
Other or unknown	1.6

Accounting policies

The percentages of performance management discussions displayed in the table represent

the performance management discussions (target setting and development discussions and

performance review discussions) conducted in accordance with Kesko’s common operating

approach. The ratio of performance management discussions is calculated on the basis of

the number of people with the opportunity to have performance and development

discussions in accordance with Kesko’s common operating approach (target setting and

development discussions and performance evaluation review). These discussions are

documented in the personnel data system. In situations such as long absences or when an

employment relationship starts near the end of the year, the development discussion is not

conducted during the same calendar year. For individuals working in certain jobs, such as in

logistics and grocery store operations, team-, department- or store-level targets are set and

discussions are held regularly, but these discussions are not reported according to Kesko’s

common model.

The number of training hours, for both internal and external training, is calculated by the

reported training hours. For online training, the duration of one training session is estimated

to be 15 minutes.

The metrics presented in this section have not been validated by an external third party,

other than the sustainability reporting auditor.


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S2 WORKERS IN THE VALUE CHAIN

Material impacts, risks and opportunities

Impacts related to workers in the value chain


Nature of impact	Value chain	Description	Management
Working conditions
Potential negative	Upstream	Inadequate working conditions weaken value chain workers’ wellbeing and quality of life.	• The K Code of Conduct for business partners and the amfori BSCI Code of Conduct as part of the contracts with suppliers and service providers include requirements on respecting working conditions and human rights. • We require social responsibility audits and corrective actions where necessary from our direct suppliers in risk countries.
Child labour and forced labour
Potential negative	Upstream	Infringements of labour rights affecting value chain workers cause suffering for the affected workers and their families.	• The K Code of Conduct for business partners and the amfori BSCI Code of Conduct as part of the contracts with suppliers and service providers include a ban on child labour and forced labour. • We require social responsibility audits and corrective actions where necessary from our direct suppliers in risk countries.

Material risks


Time horizon	Description	Management
Short-term	A breach of the supplier agreement between the supplier and Kesko and conduct that violates the K Code of Conduct may affect Kesko’s reputation and lead to disruptions in business operations if the business relationship with the supplier has to be terminated.	• We require social responsibility audits and corrective actions where necessary from our direct suppliers in risk countries.

The process for identifying and assessing impacts, risks, and opportunities is described in the section of the sustainability statement titled General disclosures, Identification and assessment of

material impacts, risks and opportunities.

Material impacts, risks and opportunities and their interaction with

strategy and business model

Ensuring the sustainability of the value chain is a key part of Kesko’s strategy, where

sustainability is identified as a material competitive advantage. Kesko’s value chains are

extensive, and sustainable sourcing processes are an integral part of Kesko’s sustainability

work.

Kesko has identified potential negative impacts especially in the upstream value chain, i.e.

the workers of suppliers and service providers. Due to Kesko’s business model and extensive

product range, products sold by Kesko are supplied from countries where value chain

workers may face negative impacts. The potential negative impacts particularly affect the

workers of suppliers in countries where the risks for human rights violations are the highest.

We apply the amfori risk country classification for evaluating the risks in countries of origin,

which is based on the Worldwide Governance Indicators provided by the World Bank. The


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risk of inadequate working conditions is particularly related to the workers of Kesko’s

suppliers who participate in the manufacture or primary production of goods in these

countries. The workers of Kesko’s risk country suppliers are also face the highest risk of child

labour or forced labour.

In Kesko’s downstream value chain, a key group of workers is the K-retailers’ personnel, but

no material risks related to working conditions were identified for this group.

Policies related to value chain workers

Kesko’s principles on human rights issues and working conditions in supply chains are

defined in Kesko’s sustainability policy. Kesko pays special attention to human rights issues

and working conditions in supply chains in countries where the risks of human rights

violations are the highest. In assessing our suppliers located in risk countries, we use

international social responsibility assessment systems. Our policy is to collaborate only with

risk country suppliers that are included in the scope of social responsibility audits. Division

Presidents are responsible for the execution of the policy and supplier selections. The

implementation of the principles of the sustainability policy is the responsibility of the

Executive Vice President, Legal and Sustainability of Kesko Group.

Kesko has published a statement of commitment on human rights and an impact assessment

in compliance with the UN Guiding Principles on Business and Human Rights. Kesko respects

all internationally recognised human rights and is committed to several international

declarations and conventions.

Kesko requires its suppliers and service providers to commit to the requirements outlined in

the K Code of Conduct for business partners. Suppliers and service providers must respect

all internationally recognised human rights principles, including the UN Universal Declaration

of Human Rights and the UN Convention on the Rights of the Child, the OECD Guidelines

for Multinational Enterprises and the OECD Due Diligence Guidance for Responsible

Business Conduct, the ILO Declaration on Fundamental Principles and Rights at Work, and

the UN Guiding Principles on Business and Human Rights.

The K Code of Conduct for business partners commits business partners to comply with

requirements related to working conditions, such as responsible recruitment, proper working

conditions, decent working hours, fair remuneration, freedom of association and collective

bargaining, and occupational health and safety. Business partners must not use forced labour

in any form, including all types of involuntary work and human trafficking. Business partners

must abstain from directly or indirectly employing children below the legal minimum age for

employment.

Our business partners must ensure that their subcontractors, suppliers and service providers

follow principles and standards similar to those set out in the K Code of Conduct for business

partners.

Kesko is a member of amfori, an association promoting sustainable trade, and takes part in

amfori BSCI (Business Social Compliance Initiative). In addition to Kesko’s own K Code of

Conduct for business partners, contracts with suppliers and service providers contain

contractual clauses concerning the amfori BSCI Code of Conduct. Through the amfori BSCI

Code of Conduct, suppliers and service providers commit to ensuring respect for human

rights in their supply chains in accordance with internationally recognised principles. The

Code of Conduct includes requirements relating to working conditions and the prohibition of

child labour, forced labour and human trafficking.

Kesko guides the procurement of products containing raw materials identified as critical from

a social responsibility perspective with sustainability guidelines. We have identified human

rights challenges particularly related to the production of cocoa, coffee, tea, palm oil, soy,

and cotton. These guidelines direct the procurement of raw materials for Kesko’s private

label products, mainly produced in accordance with internationally recognised certification

systems. The certification standards include criteria for respecting workers’ working

conditions and human rights.

Engagement with value chain workers

Processes for engaging with value chain workers about impacts

Kesko recognises that, especially in global value chains, cooperation between different

operators is needed to prevent material negative impacts. We engage about the impacts on

value chain workers primarily through multi-stakeholder initiatives. Currently, there is no

engagement with value chain workers that would allow their perspectives to be taken into

account in decisions or activities aimed at managing the impacts on value chain workers. Due


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to the large number of workers in Kesko’s value chain, enabling such engagement is for now

not considered realistic.

We engage indirectly with the workers of our direct suppliers in risk countries through social

responsibility audits conducted by third parties. A direct supplier in a risk country refers to a

supplier whose products manufactured in a risk country are imported directly by Kesko from

those risk countries. In the assessment of social responsibility of our direct risk country

suppliers, we favour primarily amfori BSCI audits, which are based on the amfori BSCI Code

of Conduct. We accept other social responsibility assessment systems if their criteria

correspond to those of amfori BSCI auditing and if the audit is conducted by an independent

party. Audits provide us with information on workers’ working conditions, including the

safety of working conditions in production, the wages and working hours of workers and their

rights of freedom of association and collective bargaining. Interviews with workers are a key

part of amfori BSCI, SMETA and Fairtrade audits, for example.

Processes to remediate negative impacts and channels for value

chain workers to raise concerns

Corrective actions and follow-up for identified issues are determined on a case-by-case basis

based on the audit report. When issues related to value chain workers arise, the

sustainability unit and purchasing personnel of the responsible division address the issues

and corrective actions as needed in cooperation. Situations are discussed with the supplier,

and the aim is to get the supplier to commit to corrective actions.

Serious violations of value chain workers’ human rights and working conditions are handled

in collaboration with Kesko Group’s sustainability unit. Kesko does not terminate

cooperation with a supplier that undertakes to resolve the identified issues. The effectiveness

of corrective actions is assessed through follow-up audits, for example. The final decision on

whether to continue the cooperation lies with the management of the purchasing unit.

Kesko is a member of the Centre for Child Rights and Business, an organisation promoting

children’s rights. Kesko receives up-to-date information on child labour and its prevention at

the organisation’s regular working group meetings. If the use of child labour is detected in

Kesko’s value chain, the organisation’s remediation model is available.

In accordance with the K Code of Conduct for business partners, Kesko’s partners must

implement mechanisms to receive, address and respond to complaints or concerns that

relate to potential non-compliance with the K Code of Conduct for business partners. The K

Code of Conduct for business partners provides information about K Group’s SpeakUp

reporting channel that is open to all and allows workers in the value chain to report any

concerns. The SpeakUp channel is described in more detail in section G1 Business Conduct,

Protection of whistleblowers.

Actions related to value chain workers

In accordance with Kesko's policy, 100% of the factories of direct suppliers in risk countries

must undergo a social responsibility audit. These purchases from direct suppliers in risk

countries accounted for 0.9% of Kesko’s purchases of goods in 2024.

In 2024, a total of 705 factories of direct suppliers in risk countries had a valid social

responsibility audit, resulting in an audit coverage of 90.7% of all factories of direct risk

country suppliers. The most common audit systems were amfori BSCI and SMETA. Missing

audits include situations where an audit was not valid or the audit process was incomplete or

delayed at the time of purchasing, or necessary information regarding the audit was not

received. In some cases, it has been possible to continue purchasing on the basis of an

exemption or while the audit process has been ongoing.

Kesko is taking part in the International Accord for Health and Safety in the Textile and

Garment Industry, which promotes occupational health and safety at garment and textile

factories in Bangladesh. We require the factories in Bangladesh that manufacture clothing

and home textiles for the grocery trade division’s own brands to be included in the

International Accord process.

The majority of the deficiencies in amfori BSCI audits were related to compliance with

working time regulations and to social management systems at factories. The amfori BSCI

audit process includes a Zero Tolerance Protocol, which is followed when an auditor observes

a particularly critical issue during the audit. In 2024, Kesko supported one of its suppliers in

the remediation of an incident related to occupational safety measures that was detected at a

production facility in autumn 2023. Corrective actions are assessed through audits. The

production facility was last audited in spring 2024 and will be audited again in spring 2025.


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In 2024, we terminated cooperation with two factories because consensus could not be

reached with the factories regarding necessary corrective actions.

Kesko participated in a pilot project initiated in 2024 by Fairtrade Finland, aimed at

addressing human rights challenges in the wild berry picking industry in Finland, together

with companies representing the entire supply chain. The core focus of the project was on

the concerns related to the working conditions, earnings and recruitment costs of the foreign

wild berry pickers who came to Finland. In the pilot, a new operating model and Fairtrade

certification criteria were created for the wild berry industry in Finland. Kesko also organised

training sessions on the requirements of the K Code of Conduct for companies in the wild

berry industry.

The material negative impacts on workers in Kesko’s value chain are related to individual

incidents. During the reporting period, no verified severe human rights incidents were

reported to Kesko from the upstream or downstream value chain, but Kesko is aware of one

ongoing legal case within its value chain.

Kesko’s suppliers in risk countries have the opportunity to participate in training sessions on

working conditions and human rights organised by Kesko’s partners. During 2024, 62 of

Kesko’s suppliers participated in training provided by amfori on topics such as fair

remuneration and working hours, zero tolerance for violence and harassment, and

remediation.

Kesko regularly organises responsible purchasing training for its purchasing organisations. In

2024, human rights in global supply chains and social responsibility audits were covered in

training for Kespro’s purchasing organisation and in the building and technical trade as part

of the training in commerce.


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S4 CONSUMERS AND END-USERS

Material impacts, risks and opportunities

Impacts related to consumers and end-users


Sub-topics	Nature of impact	Value chain	Description	Management
Health and safety
Enabling healthy choices	Potential positive	Downstream	Kesko has the opportunity to influence the health of consumers and end-users by offering healthier products that contain less salt, sugar or saturated fat.	• Reducing the amount of salt, sugar and fat in private label food products by reformulating the nutritional content of products.
Product safety	Potential negative	Downstream	Deficiencies in the safety of the products sold by Kesko can have significant negative impacts on the health and safety of consumers and end-users.	• Documented own-control plans for food safety management. • Safety and quality systems.
Privacy
Data protection	Potential negative	Downstream	Kesko processes large amounts of data related to consumers’ personal data in its operations. Deficiencies in Kesko’s data protection principles and personal data processing procedures can expose consumers to misuse of their personal data.	• The data protection compliance programme ensures that competence and awareness of data protection guidelines in relation to protection of personal data remain at a high level.

Material risks


Sub-topics	Time horizon	Description	Management
Health and safety
Product safety	Short-term	The realisation of product safety risk may cause reputational damage and may result in liability for damages for Kesko.	• Documented own-control plans for food safety management. • Safety and quality systems. • Risk assessments and continuous improvement of processes.
Privacy
Data protection	Short-term	The realisation of data protection risk may cause reputational damage and may result in liability for damages for Kesko.	• Risk assessments are conducted at the planning stage of personal data processing. • Data protection risk management conducted as part of the annual risk assessment process.

The process for identifying and assessing impacts, risks, and opportunities is described in the section of the sustainability statement titled General disclosures, Identification and assessment of

material impacts, risks and opportunities.


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Material impacts, risks and opportunities and their interaction with

strategy and business model

The quality and safety of the products offered to consumers and end-users are a key part of

Kesko’s strategy, where the trusted K-brand and quality in all operations are material

competitive advantages. Product safety, correct product labelling and instructions for use,

and the protection of the privacy of consumers shopping at K Group (Kesko and chain

stores) retail stores or online stores are a material part of the implementation of these

strategic priorities and cornerstones of day-to-day operations.

Kesko sells products either directly to consumers or to retailers who sell the products to

consumers. Kesko’s broad product range includes products that may have negative impacts

on the health of consumers and end-users. The sale of these products is strictly regulated

and subject to the laws governing their sale. Products that are harmful to health display

labelling with health warnings and special care is taken in the sale of these products,

according to the principles of sales restrictions and own control.

Accurate product information is an essential part of a product. In food products, labelling on

the allergens contained in the products, is essential for consumers or end-users when they

are considering the suitability of the product. Instructions for the use of products such as

chemicals and electrical appliances, and information on the suitability of the product for use

in different conditions, are also essential information for consumers and end-users in relation

to the use of products.

Consumers belonging to the K Group’s (Kesko and the chain stores) K-Plussa customer

loyalty programme have been identified as a significant group of persons whose data are

collected and used primarily for the provision of services.

Kesko protects the data of its customers, personnel and stakeholders and ensures that the

data protection rights of individuals are fulfilled when data is processed. Kesko’s data

protection instructions and methods are based on the company’s data protection policy

approved by the Kesko Board of Directors. Personal data processing is planned in advance,

ensuring that the processing is lawful. Kesko processes the personal data only to the extent

that it is necessary for the purpose of use, and only for as long as it is necessary and justified

for the purpose of use.

Due to Kesko’s business model, the group of consumers and end-users involved in Kesko’s

operations is extensive. Kesko has not identified specific groups of consumers and end-users

who would be particularly affected by negative impacts. The potential impacts would equally

affect the entire group of consumers and end-users.

Potential negative impacts on consumers and end-users were identified in relation to product

safety and data protection. In each case, the potential negative impacts are individual

incidents in nature.

The potential positive impacts on consumers and end-users relate to Kesko’s private label

food products and the healthiness of these products’ nutritional content. Kesko operates in

the grocery trade in Finland, so the impact is limited to Kesko’s grocery trade customers in

Finland.

Channels for engaging with consumers and end-users

Kesko has numerous channels for engaging with consumers. In Finland, Kesko’s key channel

for engaging with consumers is the K-Kylä customer community, which is used by all three

divisions. The aim of the K-Kylä customer community is to increase customer understanding

and develop business in a customer-oriented way. Through the K-Kylä customer community,

Kesko can communicate with members of the customer community through surveys or

recruit members to participate in interviews or user testing. Feedback is also actively

collected from consumers through several other channels.

Kesko has communication channels through which consumers or end-users can

communicate with Kesko. All Kesko’s business areas have websites through which consumer

customers can give feedback, report problems or submit a product complaint. Customers

can also contact Kesko’s customer service by telephone. Feedback received by customer

service is recorded in the customer service system, and the progress made in and resolution

of the feedback is recorded in the system. Feedback and product complaints are monitored,

and multiple instances of feedback received on the same issue within a short period of time

lead to further investigation and possibly corrective measures. The president of each division

holds senior operational responsibility for the communication channels and the functioning

of these channels.


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In 2024, the grocery trade’s Consumer Service Unit received a total of some 25,600

instances of consumer feedback, of which a total of some 18,500 were product complaints.

In the building and technical trade in K-Rauta, the total number of complaints was some

39,400, of which a total of some 11,200 were product complaints.

Consumers and end-users can report suspected malpractice through the SpeakUp channel.

The SpeakUp channel is described in more detail in section G1 Business Conduct of the

sustainability statement. However, SpeakUp is not a communication channel specifically

targeted at consumers and end-users, although it is open to consumers. We do not

separately assess consumers’ and end-users’ trust in the SpeakUp channel.

Making healthy choices easier for consumers and end-

users


			Target
Target	Unit	2024	2025
Decrease the amount of salt in private label products	kg	15,353	50,000
Decrease the amount of sugar in private label products	kg	97,171	200,000
Decrease the amount of saturated fat in private label products	kg	32,347	50,000

As a retail sector operator, Kesko has opportunities to make it easier for consumer to make

food choices that promote their wellbeing. To support consumers in making healthier

choices, Kesko is committed to reformulating the nutritional content of its private label

products by reducing the amount of salt, sugar and saturated fat. The reformulation of

nutritional content, especially in everyday staples, reduces consumers’ intake of salt, sugar

and saturated fat. Kesko has set a target of reducing the amount of added salt by 50,000 kg,

the amount of added sugar by 200,000 kg and the amount of saturated fat by 50,000 kg by

the end of 2025 from the 2021 baseline by reformulating the nutritional content its products.

The nutritional content of a total of 89 private label products was reformulated by the end of

2024 from the 2021 baseline. The reformulation of nutritional contents has achieved a total

reduction of 15,353 kg in salt, 97,171 kg in sugar and 32,347 kg in saturated fat compared to

the 2021 baseline. These amounts represent 31% of the target to reduce salt, 49% of the

target to reduce sugar and 65% of the target to reduce saturated fat by the end of 2025.

During 2024, the nutritional content of a total of 42 products was reformulated, which

resulted in a total reduction of 7,535 kg in salt, 19,833 kg in sugar and 4,174 kg in

saturated fat.

The realisation of the target is monitored by comparing the changed nutrient contents with

the baseline, i.e. how much the amounts of salt, sugar and saturated fat have been reduced in

the nutritional contents of the products relative to the baseline volume.

Product safety

Policies related to product safety

At Kesko, each division is responsible for monitoring product safety and product quality and

taking the necessary measures.

Grocery trade

In the grocery trade, quality assurance is based on own control throughout the chain. Each

stage, such as purchasing, storage, transport, grocery stores and cash-and-carry outlets, has

its own documented own control plan. The own control plans contain descriptions of the

measures to manage food safety at different stages of the food chain. In production, the own

control plans are based on HACCP (Hazard Analysis and Critical Control Points) and on the

identification of food safety hazards. The own control plan for purchasing covers all food

products in Kesko’s range. Kesko requires the manufacturing plants of suppliers of private

label products to have a valid certified product safety system approved by Kesko or that

Kesko has conducted an audit of the manufacturing plant.

K-Logistics, which is responsible for transportation and warehousing for K-food stores and

Kespro, and of Kesko’s subsidiaries Reinin Liha and Kalatukku E. Eriksson, have a certified

food safety system (FSSC 22000). The food safety system focuses on the assessment of food

safety hazards and on ensuring practices to prevent these hazards. The system is based on

the idea of continuous improvement. The systems also require the ability to respond to

various types of exceptional situations.

The product quality managers of the grocery trade’s Quality and Product Development Unit

monitor the product safety and quality of private label products and own imports. Product

quality managers take samples of products during the product development phase before


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they are launched on the market. Samples of products on the market are taken according to

an annual plan based on a product-specific risk assessment and, if necessary, based on

customer feedback. Samples are tested in the Quality and Product Development Unit’s own

ISO 17025 accredited laboratory (T251) and product development kitchen and, if necessary,

in an accredited outsourced laboratory.

Building and technical trade

The quality assurance of the building and technical trade’s private label and own import

products is conducted by the building and technical trade’s quality manager in cooperation

with the product managers, the purchasing department and the logistics centres. There are

product standards for most of the products that set the required level of quality assurance

for the product and any testing and approval requirements. The requirements for private

label products are specified separately in the purchasing contract.

Onninen’s units and the B2B sales unit in building and home improvement trade in Finland, as

well as Kesko AB in Sweden, have a certified quality management system (ISO 9001) in use.

The system requires the existence of quality assurance measures, response to various

anomalies and continuous improvement of performance.

Car trade

In the car trade, Kesko is an importer of Volkswagen, Audi, SEAT, CUPRA, Porsche and

Bentley passenger cars and Volkswagen commercial vehicles. It is Kesko’s responsibility to

document any safety concerns raised by consumers and report them to the manufacturer.

Recall campaigns are the responsibility of the manufacturer, who will provide information on

the content of the campaign and the cars targeted by the campaign. Kesko is responsible for

implementing the campaign in its own market area.

There is an evaluation process for receiving used cars and inspecting the condition of the

cars, where the condition of the car is inspected and necessary repairs are identified before

the car is resold. In addition, comprehensive data on the car is collected for resale purposes.

Actions related to product safety

The grocery trade’s Quality and Product Development Unit decides on the recall of private

label and is responsible for providing information on the matter internally at Kesko, to K-food

stores, Kespro’s B2B customers, consumers and the authorities. In the case of products other

than private label products, the supplier or importer of the product is responsible for the

product safety of its own products and makes the decision on whether to recall products.

Kesko’s Quality and Product Development Unit is responsible for communicating recalls

based on information received from the supplier.

In 2024, 170 product recalls were made in the grocery trade. Of these, 34 were private label

or own import products. In other cases, we assisted the product manufacturers in the

product recall. If a defect or error in a product could have health impacts, a public recall is

carried out. In 2024, this happened three times for our private label products.

In the building and technical trade, quality managers are responsible, together with the

product manager, for the recall of private label products and related measures. Information is

provided internally at Kesko, to K-Rauta stores, to Onninen, and to customers and

authorities.

In the building and technical trade in Finland, there were no public product recalls of private

label or own import products that would have required a product recall from the customer in

2024. During 2024, one product withdrawal was made, where a product is withdrawn from

sales channels.

In 2024, a total of 22 recall campaigns were initiated for the brands represented by K-Auto.

During 2024, we also increased our used car dealers’ competence in assessing the condition

of used cars.

Data protection

Policies related to data protection

Kesko protects the data of its customers, personnel and stakeholders and ensures that the

data protection rights of individuals are fulfilled. The data protection and information security

policies have been approved by Kesko’s Board of Directors and cover the Group’s operations

in all operating countries. The data protection policy determines principles, procedures and

responsibilities to ensure the lawful processing of personal data and a high level of data

protection. Ensuring data protection is part of Kesko’s compliance function, risk

management and the K Code of Conduct.


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The management of data protection risks is part of Kesko’s risk management process. Risk

assessments are conducted at the planning stage of personal data processing and as part of

the annual risk assessment. Data Protection Impact Assessments (DPIAs) are carried out in

situations where this is required by regulation and guidance from the authorities. The

specification of technical and organisational management tools for data protection is based

on the results of risk assessments.

The processing of personal data is lawful, reasonable and transparent, and personal data is

processed for a specific purpose in accordance with a legal basis laid down by law. Kesko

processes data only to the extent that it is necessary for the purpose of use, and only for as

long as it is necessary for the purpose of use.

The implementation of data protection is ensured by documenting personal data processing

practices and by issuing the related guidelines. Sufficient data protection competence is

ensured through training and communication.

Kesko selects as its contractual partners only those personal data processors who adhere to

good personal data processing practices through appropriate technical and organisational

measures, comply with the requirements of the GDPR, and are able to ensure the realisation

of the data subject's rights. Kesko prepares written agreements with personal data

processing partners in accordance with the law.

Processes for engaging with consumers and end-users on data

protection topics

Kesko has processes and channels in place that enable communication with customers on

issues related to data protection. In Finland, Kesko has a public data protection portal on its

website, which contains information and guidelines on data protection. Individuals can make

data protection requests regarding their personal data through the data protection portal or

by contacting register-specific contact points or customer service channels. Questions and

requests raised will be answered without undue delay.

Kesko ensures that the data subjects’ rights are implemented in accordance with the GDPR

by informing data subjects about the processing of data and by determining procedures and

guidelines for situations where data subjects wish to exercise their rights to familiarise

themselves with the information collected, or request the rectification or erasure of their

personal data. Kesko aims to ensure the accuracy of the data used, and the data is updated

from the person themselves or from reliable sources.

Data subjects can contact the Data Protection Officer regarding any matters related to the

processing of their personal data and the exercise of their rights under the data protection

regulation. The Data Protection Officer ensures that the data subject receives a response to

their inquiry.

Kesko documents all information security breaches and reports them to the data protection

authorities if the controller believes that the incident poses a risk to the data subject. If the

risk of malpractice or damage is deemed to be high, Kesko also informs without undue delay

the person whose personal data protection has been jeopardised about the information

security breach and provides instructions on what to do in the situation.

Actions related to data protection

Kesko Corporation and its subsidiaries as data controllers ensure and monitor the

implementation of data protection in their own operations. Data protection requests

submitted by data subjects are processed by the business unit that owns the respective

addition, Kesko’s Legal Affairs unit has persons focusing on data protection matters as part

of the Governance, Compliance & Ethics function.

Ensuring data protection in operations

Kesko’s data protection compliance programme ensures that competence and awareness of

data protection guidelines remain at a high level.

The guidelines consist of a Group data protection manual and supplementary country-

specific instructions. Kesko’s data protection guidelines concern all employees and include

key rules, operating instructions and processes for implementing data protection and

identifying and processing incidents and risks.

Regular data protection risk assessment provides guidelines for the annual data protection

plan and data protection programme. Kesko also carries out internal and commissions

external data protection audits, when there are changes in business operations and, on a

case-by-case basis, in connection with business acquisitions.


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In 2024, Kesko processed in Finland 875 data protection requests submitted through its data

protection portal. Requests were also processed in other channels.

Kesko Group detected and investigated a total of 347 information security breaches in its

operations in Finland in 2024. Of these, 63 were also reported to the office of the Data

Protection Ombudsman. A total of 6 information security breaches were detected in other

operating countries. Of these, 3 were reported to the local competent supervisory

authorities. In individual cases, the affected data subject was also notified of the information

security breach.

Training and communication

The onboarding programme and continuous training for each employee handling personal

data include achieving and maintaining the level of data protection expertise required for

their role.

Up-to-date instructions concerning data protection are easily available to all employees.

Active communications, information bulletins and continuous training ensure a high level of

data protection competence.

Targeted training events complement the regular training activities. During the year, a total

of 24 Data Protection Interest Group events were organised for six target groups. The events

covered the latest data protection application practices, instructions issued by the

authorities, amendments to legislation and best practices.


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GOVERNANCE

G1 BUSINESS CONDUCT

Material impacts, risks and opportunities

Impacts on business conduct


Nature of impact	Value chain	Description	Management
Corporate culture
Potential positive	Own operations, value chain	The K Code of Conduct supports the principles of ethical corporate culture. Kesko has two versions of the K Code of Conduct: a K Code of Conduct that covers the entire K Group and a separate K Code of Conduct for business partners. Both support the principles of an ethical corporate culture throughout the value chain.	Corporate culture is strengthened by training and communication, and effective investigation of potential cases. Tone from the top – corporate culture is strongly shaped by participation of management and leading by example.
Whistleblower protection
Potential positive	Own operations, value chain	Kesko has a confidential SpeakUp channel that is open to personnel, customers, suppliers and other stakeholders. Kesko has anti-harassment and non-discrimination policies in place which, in line with the absolute prohibition of retaliation, ensure that the reporting of incidents or suspected incidents does not adversely affect the reporter or their employment relationship.	Kesko communicates on the SpeakUp channel to ensure people are aware of the channel and the principles of whistleblower protection, thus encouraging people to report concerns. Reports are investigated promptly and impartially, and it is ensured that the prohibition of retaliation is upheld in practice.
Corruption and bribery
Potential negative	Own operations, upstream	Potential cases of corruption and bribery have a negative impact on society and undermine trust throughout the value chain. Kesko has a zero-tolerance approach to corruption and bribery. Prevention of corruption and bribery is an integral part of the K Code of Conduct and contributes to creating a more ethical value chain.	Communication and training is provided to ensure that personnel know what to do and how to identify cases of corruption and bribery and report them to the right parties.
Relationships with suppliers and service providers
Potential positive	Upstream	Kesko‘s requirements for suppliers and service providers, such as commitment to the K Code of Conduct for business partners, promote an ethical and sustainable value chain.	The K Code of Conduct for business partners and other Kesko requirements are incorporated into suppliers’ and service providers' contracts. Trainings and information events are organised for suppliers and service providers.

Material risks


Time horizon	Description	Management
Short-term	Increasing sustainability regulation may lead to changes in the business model and require investments only to meet legislative requirements.	Changes in regulation are monitored actively and the impact of changes on business is assessed proactively.

The process for identifying and assessing impacts, risks, and opportunities is described in the section of the sustainability statement titled General disclosures, Identification and assessment of

material impacts, risks and opportunities.


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Targets related to corporate culture


			Target
Target	Unit	2024	2030
Employee commitment to K Code of Conduct	%	85%	100%

Kesko has set target to strengthen employee commitment to the K Code of Conduct and

increase awareness of it. The target is to achieve a 100% annual confirmation rate by 2030.

Corporate culture and business conduct policies

Ethical business conduct and compliance in Kesko Group is ensured by complying with

legislation and with the K Compliance operating model and the K Code of Conduct both of

which approved by Kesko’s Board of Directors. In addition, Kesko is committed to complying

with the amfori BSCI Code of Conduct, the OECD Guidelines for Multinational Enterprises

and the OECD Due Diligence Guidance for Responsible Business. Kesko‘s operations are

also guided by the UN’s Guiding Principles on Business and Human Rights, Global Compact

initiative and Sustainable Development Goals (SDGs).

Putting the K Compliance operating model into practice is supported by the K Compliance

programmes approved by Kesko’s President and CEO. In 2024, Kesko’s K Compliance

programmes covered data protection, competition law, trade sanctions and export control,

as well as prevention of corruption and bribery. The Governance, Compliance & Ethics

function at Kesko leads actions in accordance with the K Compliance operating model and

reports on its activities to Kesko’s President and CEO and the Audit Committee of the Board

of Directors.

The K Code of Conduct that covers the entire personnel and Kesko’s business partners

serves as a basis for the K Compliance operating model. The updated K Code of Conduct

entered into force on 1 March 2024. The updated K Code of Conduct meets better the

requirements of increasing sustainability legislation and stricter interpretations on bribery

and hospitality, and takes into account the conditions set by Kesko‘s business. The Board of

Directors of Kesko approves the K Code of Conduct and any material changes to it. The

President and CEO is responsible for the implementation of the K Code of Conduct

throughout the organisation, ensuring that it is integrated into all areas of operation.

All members of Kesko’s personnel confirm their commitment to compliance with the K Code

of Conduct annually. The annual confirmation process also includes a discussion between

each employee and their manager on the application of the K Code of Conduct in practice.

The proportion of Kesko’s personnel who submitted the annual confirmation in 2024

was 85%.

The focus areas of ensuring compliant and ethical business conduct were the training of

personnel and performance of compliance audits in accordance with to the annual plan. In

2024, personnel completed training on the updated K Code of Conduct either online or as

classroom training. During 2024, 88% of the Group‘s employees completed the training.

Depending on their role, personnel are also required to complete other compliance-related

online training, such as competition law and data protection training.

The role of managers is emphasised in ensuring the compliance and ethics of Kesko’s

business operations in daily work. According to the K Code of Conduct, activities must be

transparent, and a culture of doing the right thing is emphasised. Suspected misconduct or

unethical behaviour should always be reported, primarily to one’s own manager or the

responsible unit. If this is not possible for some reason, any suspected misconduct can be

reported to K Group’s SpeakUp channel, which is a confidential reporting channel open to

everyone and which can be found through the Kesko.fi website. The channel also allows

anonymous reporting.

Protection of whistleblowers

SpeakUp is a confidential reporting channel for the whole K Group. The whistleblowing

channel helps to maintain the trust of employees, customers and stakeholders in Kesko‘s and

K Group‘s business operations. Through the channel, K Group’s employees and suppliers,

customers and other stakeholders can report their observations concerning Kesko Group, K

Group or Kesko Pension Fund regarding suspected misconduct or criminal offences or

activities that breach the K Group‘s K Code of Conduct.

Kesko surveys its employees‘ confidence in the SpeakUp channel and its operations, as well

as in the reporting of grievances in general, with the K Voices personnel survey conducted

every other year. Maintaining the channel is an essential part of Kesko’s K Compliance

operating model and is the responsibility of the Governance, Compliance & Ethics function.

Kesko strictly complies with all applicable legislation, including in the investigation of reports


		85

and the protection of whistleblowers. Both national and European Union legislation on

whistleblower protection imposes an obligation on Kesko to protect persons who report

violations of European Union law and certain fields of national law to Kesko. As a general

rule, personal data related to individuals involved in SpeakUp investigations is processed only

when it is absolutely necessary for the investigation. In accordance with its Anti-

Discrimination and Anti-Harassment Principles Kesko is committed to protecting its

employees and other stakeholders who report suspected discrimination, harassment, abuse

or other prohibited conduct to Kesko, and to preventing any retaliation in relation to such

reports. Kesko prohibits any attempt to sanction or in any way disadvantage or harass

persons who express an intention to report or who have already reported suspected

misconduct. Kesko's principle of protecting whistleblowers applies to anyone who reports a

suspicion of wrongdoing in good faith, even if the concern later proves to be unfounded. All

employees who experience or witness retaliation or otherwise observe behaviour that

appears to be retaliatory should immediately report it to either the supervisor, the

Occupational Health and Safety Department, Human Resources or Kesko's Governance,

Compliance & Ethics function. They may also report their concerns through Kesko's

confidential SpeakUp channel. Kesko's Anti-Harassment and Anti-Discrimination Principles

also protect persons who participate in the investigation of reports, act as witnesses or

otherwise assist in the investigation, or make decisions or recommendations in connection

with investigations. A finding of retaliation or harassment may lead to disciplinary action,

such as termination of employment, liability for damages or legal sanctions. Kesko's anti-

discrimination principle also applies when the report does not fall within the scope of national

or European Union whistleblower protection legislation.

Kesko Group‘s Governance, Compliance & Ethics function is responsible for investigating

reports received through the channel. Other experts or authorities may be needed in the

investigation on a case-by-case basis. Those who regularly take part in investigating reports

receive training on how to perform the investigations. Information about the channel, its

functioning and reporters‘ rights can be found on the Group‘s internal intranet pages and on

Kesko.fi. The K Code of Conduct eLearning also includes a section on SpeakUp. An external

service provider is responsible for the technical implementation of the channel.

A total of 53 reports concerning Kesko were submitted through the SpeakUp channel in

2024. No incidents of serious misconduct were identified. Reports were submitted on

unethical behaviour, conflict of interest and harassment, for example. No misuse of the

reporting channel was observed.

Prevention of corruption and bribery

The prevention of corruption and bribery is one of the focus areas of Kesko’s compliance

operations. Kesko manages this work through the K Compliance programme, which also

includes regular risk assessments conducted throughout Kesko. The programme has

identified as specific risk areas in Kesko‘s operations property and store site operations,

procurement of goods and services, participation in public procurement, operations in new

geographical and business areas, relations with government officials, and mergers and

acquisitions. All those working with high-risk areas are required to complete the K Code of

Conduct eLearning, including the section on corruption and bribery. In 2024, 94% of Kesko's

white collar employees completed the K Code of Conduct eLearning, and this figure can be

considered comparable to the completion rate of employees in risk areas. Kesko’s K Code of

Conduct includes anti-corruption and anti-bribery guidelines, which were complemented by

more detailed anti-corruption and anti-bribery principles that entered into force in 2024.

Every new employee must also complete the K Code of Conduct eLearning, which includes a

comprehensive section on combatting corruption and bribery. In addition to the eLearning,

new employees receive training on the K Code of Conduct at Welcome to K Group events,

for example, where rules on gifts and hospitality, among other things, are covered. Members

of the Board of Directors of Kesko Corporation also complete this training.

The unified guidelines and training help to ensure that everyone at Kesko has the same

understanding of the anti-corruption and anti-bribery principles and practices that guide

daily work. The training also includes a section on Kesko‘s SpeakUp channel, with

information such as where to find the channel and how to use it.

Compliance with the anti-corruption and anti-bribery guidelines throughout Kesko‘s entire

operation chain requires knowing the partners and their commitment to the contract terms.

Kesko‘s business partners are expected to have an operating model that prevents corruption

and bribery. This is ensured in contracts with partners by requiring them to commit to the K

Code of Conduct for business partners or equivalent instructions, and by requiring suppliers

to commit to the amfori BSCI Code of Conduct. A violation of these may even lead to


		86

termination of the contractual relationship. Kesko may seek compensation from a business

partner for damages caused by the violation.

In 2024, Kesko did not become aware of any confirmed cases of corruption or bribery. As

with all SpeakUp cases, reports related to corruption and bribery are investigated

independently by Kesko‘s Governance, Compliance & Ethics function. SpeakUp cases are

reported regularly to Kesko‘s Audit Committee and, if required by the investigation, other

management. Kesko works with the authorities as required by law.

Management of relationships with suppliers

Kesko expects its business partners to act responsibly and commit to sustainable business

practices. Business partners must comply with all applicable laws, regulations and

international standards relevant to their operations, as well as Kesko‘s K Code of Conduct for

business partners or their own corresponding principles. The K Code of Conduct is an

integral part of our contracts with suppliers and service providers. The K Code of Conduct

for business partners requires business partners to respect human rights, to provide a safe

and healthy working environment and working conditions, to commit to minimising negative

and maximising positive impacts on climate and nature, and to carry out ethical business

conduct. Ethical business practices cover the prevention of corruption and bribery,

guidelines on hospitality and gifts, the requirement to engage in fair, honest and transparent

competition, the respect of intellectual property rights and confidential information,

compliance with trade sanctions and export controls, and the management of personal data

legally and responsibly.

In 2024, a sustainability attachment was added to Kesko‘s supplier agreements in the

building and technical trade. The attachment contains Kesko‘s key objectives and measures

to promote sustainability in the value chain, as well as the related guidelines and

requirements for suppliers. The sustainability attachment includes topics related to climate,

biodiversity, environmental protection, social responsibility and conflict minerals, as well as

guidelines on chemicals. The attachment covers an increasing number of supplier

agreements as they are updated.

With the principles of the K Code of Conduct for business partners, we also bring similar

principles of our B2B customers into our supply chain. In turn, our business partners must

promote responsible business practices throughout their supply and value chains. Our

business partners must ensure that their subcontractors and suppliers and service providers

comply with principles and standards that are similar to those set out in the K Code of

Conduct for business partners. We expect our business partners to implement appropriate

due diligence processes to monitor and manage their subcontracting relationships.

When selecting its suppliers and service providers, Kesko takes into account criteria related

to social responsibility and the environment, for example by requiring suppliers and service

providers to commit to the K Code of Conduct or its own principles of a similar level and the

aforementioned sustainability attachment. Social responsibility in the value chain is central to

Kesko‘s relationships with suppliers and services providers, and our principle is to cooperate

only with suppliers from high-risk countries that are subject to social responsibility audits.

Social responsibility is described in more detail in S2 Workers in the value chain.

Kesko annually organises sustainability trainings and information events for its business

partners, both independently and in cooperation with its partners. Business partners are also

actively encouraged to provide training, workshops or resources to their subcontractors and

their suppliers and service providers, and to ensure that they understand and maintain these

principles.


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APPENDICES TO SUSTAINABILITY STATEMENT

Appendix A: ESRS Disclosure Requirements


ESRS 2 General disclosures	Page
BP-1 General basis for preparation of sustainability statements	24
GOV-1 Disclosures in relation to specific circumstances	33, 34
GOV-2 Information provided to and sustainability matters addressed by the undertaking’s administrative, management and supervisory bodies	33, 34
GOV-3 Integration of sustainability-related performance in incentive schemes	35
GOV-4 Statement of due diligence	35
GOV-5 Risk management and internal controls over sustainability reporting	24
SBM-1 Strategy, business model and value chain	30, 31
SBM-2 Interests and views of stakeholders	32
SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model	27, 62, 73, 74, 78
IRO-1 Description of the processes to identify and assess material impacts, risks and opportunities	27, 28, 29, 30
IRO-2 Disclosure requirements in ESRS covered by the undertaking’s sustainability statement	27, 87, 88
Environment	Page
E1 Climate change
E1-1 Transition plan for climate change mitigation	48, 49
E1-2 Policies related to climate change mitigation and adaptation	48
E1-3 Actions and resources in relation to climate change policies	48, 49, 50
E1-4 Targets related to climate change mitigation and adaptation	47
E1-5 Energy consumption and mix	50, 51
E1-6 Gross Scopes 1, 2, 3 and Total GHG emissions	51, 52, 53, 54, 55
E5 Resource use and circular economy
E5-1 Policies related to resource use and circular economy	57
E5-2 Actions and resources related to resource use and circular economy	57, 58, 59
E5-3 Targets related to resource use and circular economy	56
E5-5 Resource outflows	57, 58, 59, 60


		88


Social	Page
S1 Own workforce
S1-1 Policies related to own workforce	63, 66, 67, 69, 71
S1-2 Processes for engaging with own workers and workers’ representatives about impacts	65
S1-3 Processes to remediate negative impacts and channels for own workers to raise concerns	65, 66
S1-4 Taking action on material impacts on own workforce, and approaches to mitigating material risks and pursuing material opportunities related to own workforce, and effectiveness of those actions	66, 67, 68, 69, 70, 71
S1-5 Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities	62, 63
S1-6 Characteristics of the undertaking’s employees	63, 64
S1-8 Collective bargaining coverage and social dialogue	66, 67
S1-9 Diversity metrics	70
S1-10 Adequate wages	66
S1-11 Social protection	66
S1-13 Training and skills development metrics	71, 72
S1-14 Health and safety metrics	69
S1-15 Work-life balance metrics	67
S1-16 Compensation metrics (pay gap and total compensation)	70
S1-17 Incidents, complaints and severe human rights impacts	70
S2 Workers in the value chain
S2-1 Policies related to value chain workers	74
S2-2 Processes for engaging with value chain workers about impacts	75
S2-3 Processes to remediate negative impacts and channels for value chain workers to raise concerns	75
S2-4 Taking action on material impacts on value chain workers, and approaches to managing material risks and pursuing material opportunities related to value chain workers, and effectiveness of those action	75, 76
S4 Consumers and end-users
S4-1 Policies related to consumers and end-users	79, 80, 81
S4-2 Processes for engaging with consumers and end-users about impacts	78, 79, 81
S4-3 Processes to remediate negative impacts and channels for consumers and end-users to raise concerns	78, 79, 81
S4-4 Taking action on material impacts on consumers and end-users, and approaches to managing material risks and pursuing material opportunities related to consumers and end-users, and effectiveness of those actions	80, 81, 82
S4-5 Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities	79
Governance	Page
G1 Business conduct
G1-1 Corporate culture and business conduct policies and corporate culture	84
G1-2 Management of relationships with suppliers	86
G1-3 Prevention and detection of corruption and bribery	85, 86
G1-4 Confirmed incidents of corruption or bribery	86


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Appendix B: List of datapoints in cross-cutting and topical standards that derive from other EU legislation


Disclosure requirement and related datapoint	SFDR reference	Pillar 3 reference	Benchmark regulation reference	EU climate law reference	Materiality	Page
ESRS 2 GOV-1 Board's gender diversity paragraph 21 (d)	Indicator number 13of Table #1 of Annex 1		Commission Delegated Regulation (EU) 2020/1816, Annex II		Material	34
ESRS 2 GOV-1 Percentage of board members who are independent paragraph 21 (e)			Delegated Regulation (EU) 2020/1816, Annex II		Material	34
ESRS 2 GOV-4 Statement on due diligence paragraph 30	Indicator number 10 Table #3 of Annex 1				Material	35
ESRS 2 SBM-1 Involvement in activities related to fossil fuel activities paragraph 40 (d) i	Indicators number 4 Table #1 of Annex 1	Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/245328Table 1: Qualitative information on Environmental risk and Table 2: Qualitative information on Social risk	Delegated Regulation (EU) 2020/1816, Annex II		Non-material
ESRS 2 SBM-1 Involvement in activities related to chemical production paragraph 40 (d) ii	Indicator number 9 Table #2 of Annex 1		Delegated Regulation (EU) 2020/1816, Annex II		Non-material
ESRS 2 SBM-1 Involvement in activities related to controversial weapons paragraph 40 (d) iii	Indicator number 14 Table #1 of Annex 1		Delegated Regulation (EU) 2020/1818, Article 12(1) Delegated Regulation (EU) 2020/1816, Annex II		Non-material
ESRS 2 SBM-1 Involvement in activities related to cultivation and production of tobacco paragraph 40 (d) iv			Delegated Regulation (EU) 2020/1818, Article 12(1) Delegated Regulation (EU) 2020/1816, Annex II		Non-material
ESRS E1-1 Transition plan to reach climate neutrality by 2050 paragraph 14				Regulation (EU) 2021/1119, Article 2(1)	Material	47
ESRS E1-1 Undertakings excluded from Paris-aligned Benchmarks paragraph 16 (g)		Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template 1: Banking book- Climate Change transition risk: Credit quality of exposures by sector, emissions and residual maturity	Delegated Regulation (EU) 2020/1818, Article12.1 (d) to (g), and Article 12.2		Material	47
ESRS E1-4 GHG emission reduction targets paragraph 34	Indicator number 4 Table #2 of Annex 1	Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template 3: Banking book – Climate change transition risk: alignment metrics	Delegated Regulation (EU) 2020/1818, Article 6		Material	47
ESRS E1-5 Energy consumption from fossil sources disaggregated by sources (only high climate impact sectors) paragraph 38	Indicator number 5 Table #1 and Indicator n. 5 Table #2 of Annex 1				Material	50
ESRS E1-5 Energy consumption and mix paragraph 37	Indicator number 5 Table #1 of Annex 1				Material	50
ESRS E1-5 Energy intensity associated with activities in high climate impact sectors paragraphs 40 to 43	Indicator number 6 Table #1 of Annex 1				Material	50


		90


Disclosure requirement and related datapoint	SFDR reference	Pillar 3 reference	Benchmark regulation reference	EU climate law reference	Materiality	Page
ESRS E1-6 Gross Scope 1, 2, 3 and Total GHG emissions paragraph 44	Indicators number 1 and 2 Table #1 of Annex 1	Article 449a; Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template 1:Banking book – Climate change transition risk: Credit quality of exposures by sector, emissions and residual maturity	Delegated Regulation (EU) 2020/1818, Article 5(1), 6 and 8(1)		Material	51
ESRS E1-6 Gross GHG emissions intensity paragraphs 53 to 55	Indicators number 3 Table #1 of Annex 1	Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template 3: Banking book – Climate change transition risk: alignment metrics	Delegated Regulation (EU) 2020/1818, Article 8(1)		Material	52
ESRS E1-7 GHG removals and carbon credits paragraph 56				Regulation (EU) 2021/1119, Article 2(1)	Non-material
ESRS E1-9 Exposure of the benchmark portfolio to climate-related physical risks paragraph 66			Delegated Regulation (EU) 2020/1818, Annex II Delegated Regulation (EU) 2020/1816, Annex II		Phased-in
ESRS E1-9 Disaggregation of monetary amounts by acute and chronic physical risk paragraph 66 (a), ESRS E1-9 Location of significant assets at material physical risk paragraph 66 (c).		Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 paragraphs 46 and 47; Template 5: Banking book - Climate change physical risk: Exposures subject to physical risk.			Phased-in
ESRS E1-9 Breakdown of the carrying value of its real estate assets by energy-efficiency classes paragraph 67 (c).		Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 paragraph 34; Template 2: Banking book -Climate change transition risk: Loans collateralised by immovable property - Energy efficiency of the collateral			Phased-in
ESRS E1-9 Degree of exposure of the portfolio to climate- related opportunities paragraph 69			Delegated Regulation (EU) 2020/1818, Annex II		Phased-in
ESRS E2-4 Amount of each pollutant listed in Annex II of the E- PRTR Regulation (European Pollutant Release and Transfer Register) emitted to air, water and soil, paragraph 28	Indicator number 8 Table #1 of Annex 1 Indicator number 2 Table #2 of Annex 1 Indicator number 1 Table #2 of Annex 1 Indicator number 3 Table #2 of Annex 1				Non-material
ESRS E3-1 Water and marine resources paragraph 9	Indicator number 7 Table #2 of Annex 1				Non-material
ESRS E3-1 Dedicated policy paragraph 13	Indicator number 8 Table 2 of Annex 1				Non-material


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Disclosure requirement and related datapoint	SFDR reference	Pillar 3 reference	Benchmark regulation reference	EU climate law reference	Materiality	Page
ESRS E3-1 Sustainable oceans and seas paragraph 14	Indicator number 12 Table #2 of Annex 1				Non-material
ESRS E3-4 Total water recycled and reused paragraph 28 (c)	Indicator number 6.2 Table #2 of Annex 1				Non-material
ESRS E3-4 Total water consumption in m3 per net revenue on own operations paragraph 29	Indicator number 6.1 Table #2 of Annex 1				Non-material
ESRS 2- IRO 1 - E4 paragraph 16 (a) i	Indicator number 7 Table #1 of Annex 1				Non-material
ESRS 2- IRO 1 - E4 paragraph 16 (b)	Indicator number 10 Table #2 of Annex 1				Non-material
ESRS 2- IRO 1 - E4 paragraph 16 (c)	Indicator number 14 Table #2 of Annex 1				Non-material
ESRS E4-2 Sustainable land / agriculture practices or policies paragraph 24 (b)	Indicator number 11 Table #2 of Annex 1				Non-material
ESRS E4-2 Sustainable oceans / seas practices or policies paragraph 24 (c)	Indicator number 12 Table #2 of Annex 1				Non-material
ESRS E4-2 Policies to address deforestation paragraph 24 (d)	Indicator number 15 Table #2 of Annex 1				Non-material
ESRS E5-5 Non-recycled waste paragraph 37 (d)	Indicator number 13 Table #2 of Annex 1				Material	59
ESRS E5-5 Hazardous waste and radioactive waste paragraph 39	Indicator number 9 Table #1 of Annex 1				Material	59, 60
ESRS 2- SBM3 - S1 Risk of incidents of forced labour paragraph 14 (f)	Indicator number 13 of Table #1of Annex 1				Material	62
ESRS 2- SBM3 - S1 Risk of incidents of child labour paragraph 14 (g)	Indicator number 12 Table #3 of Annex I				Material	62
ESRS S1-1 Human rights policy commitments paragraph 20	Indicator number 9 Table #3 and Indicator number 11 Table #1 of Annex I				Material	63, 84
ESRS S1-1 Due diligence policies on issues addressed by the fundamental International Labor Organisation Conventions 1 to 8, paragraph 21			Delegated Regulation (EU) 2020/1816, Annex II		Material	63
ESRS S1-1 processes and measures for preventing trafficking in human beings paragraph 22	Indicator number 11 Table #3 of Annex I				Material	63
ESRS S1-1 workplace accident prevention policy or management system paragraph 23	Indicator number 1 Table #3 of Annex I				Material	67, 68
ESRS S1-3 grievance/complaints handling mechanisms paragraph 32 (c)	Indicator number 5 Table #3 of Annex I				Material	65, 66
ESRS S1-14 Number of fatalities and number and rate of work-related accidents paragraph 88 (b) and (c)	Indicator number 2 Table #3 of Annex I		Delegated Regulation (EU) 2020/1816, Annex II		Material	69
ESRS S1-14 Number of days lost to injuries, accidents, fatalities or illness paragraph 88 (e)	Indicator number 3 Table #3 of Annex I				Material	69


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Disclosure requirement and related datapoint	SFDR reference	Pillar 3 reference	Benchmark regulation reference	EU climate law reference	Materiality	Page
ESRS S1-16 Unadjusted gender pay gap paragraph 97 (a)	Indicator number 12 Table #1 of Annex I		Delegated Regulation (EU) 2020/1816, Annex II		Material	70
ESRS S1-16 Excessive CEO pay ratio paragraph 97 (b)	Indicator number 8 Table #3 of Annex I				Material	70
ESRS S1-17 Incidents of discrimination paragraph 103 (a)	Indicator number 7 Table #3 of Annex I				Material	70
ESRS S1-17 Non-respect of UNGPs on Business and Human Rights and OECD paragraph 104 (a)	Indicator number 10 Table #1 and Indicator n. 14 Table #3 of Annex I		Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1818 Art 12 (1)		Non-material
ESRS 2- SBM3 – S2 Significant risk of child labour or forced labour in the value chain paragraph 11 (b)	Indicators number 12 and n. 13 Table #3 of Annex I				Material	73, 74
ESRS S2-1 Human rights policy commitments paragraph 17	Indicator number 9 Table #3 and Indicator n. 11 Table #1 of Annex 1				Material	74
ESRS S2-1 Policies related to value chain workers paragraph 18	Indicator number 11 and n. 4 Table #3 of Annex 1				Material	74
ESRS S2-1 Non-respect of UNGPs on Business and Human Rights principles and OECD guidelines paragraph 19	Indicator number 10 Table #1 of Annex 1		Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1818, Art 12 (1)		Non-material
ESRS S2-1 Due diligence policies on issues addressed by the fundamental International Labor Organisation Conventions 1 to 8, paragraph 19			Delegated Regulation (EU) 2020/1816, Annex II		Material	74, 75, 76
ESRS S2-4 Human rights issues and incidents connected to its upstream and downstream value chain paragraph 36	Indicator number 14 Table #3 of Annex 1				Material	76
ESRS S3-1 Human rights policy commitments paragraph 16	Indicator number 9 Table #3 of Annex 1 and Indicator number 11 Table #1 of Annex 1				Non-material
ESRS S3-1 non-respect of UNGPs on Business and Human Rights, ILO principles or and OECD guidelines paragraph 17	Indicator number 10 Table #1 Annex 1		Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1818, Art 12 (1)		Non-material
ESRS S3-4 Human rights issues and incidents paragraph 36	Indicator number 14 Table #3 of Annex 1				Non-material
ESRS S4-1 Policies related to consumers and end-users paragraph 16	Indicator number 9 Table #3 and Indicator number 11 Table #1 of Annex 1				Material	79, 80, 81


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Disclosure requirement and related datapoint	SFDR reference	Pillar 3 reference	Benchmark regulation reference	EU climate law reference	Materiality	Page
ESRS S4-1 Non-respect of UNGPs on Business and Human Rights and OECD guidelines paragraph 17	Indicator number 10 Table #1 of Annex 1		Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1818, Art 12 (1)		Non-material
ESRS S4-4 Human rights issues and incidents paragraph 35	Indicator number 14 Table #3 of Annex 1				Non-material
ESRS G1-1 United Nations Convention against Corruption paragraph 10 (b)	Indicator number 15 Table #3 of Annex 1				Non-material
ESRS G1-1 Protection of whistleblowers paragraph 10 (d)	Indicator number 6 Table #3 of Annex 1				Material	84, 85
ESRS G1-4 Fines for violation of anti-corruption and anti- bribery laws paragraph 24 (a)	Indicator number 17 Table #3 of Annex 1		Delegated Regulation (EU) 2020/1816, Annex II)		Material	86
ESRS G1-4 Standards of anti-corruption and anti-bribery paragraph 24 (b)	Indicator number 16 Table #3 of Annex 1				Non-material


		94

FINANCIAL REVIEW


Consolidated financial statements (IFRS) .................	95
Consolidated income statement ...................................	95
Consolidated statement of comprehensive income	95
Consolidated statement of financial position ..............	96
Consolidated statement of cash flows .........................	97
Consolidated statement of changes in equity .............	98
Notes to the consolidated financial statements ..........	99

1. Accounting policies for the consolidated financial statements .................................................	99
1.1 Basic information about the Company ...............	99
1.2 Basis of preparation .............................................	99
1.3 Critical accounting estimates and assumptions	99
1.4 Critical judgements in applying accounting policies ........................................................................	100
1.5 Consolidation principles .....................................	100
1.6 Discontinued operations and non-current assets classified as held for sale and related liabilities .....................................................................	101
1.7 New IFRS standards and IFRIC interpretations and the impact of new and updated standards ......	102

2. Financial results ....................................................	103
2.1 Revenue recognition ...........................................	103
2.2 Segment information ..........................................	103
2.3 Material and services ..........................................	112
2.4 Other operating income .....................................	112
2.5 Operating expenses ............................................	112
2.6 Foreign exchange differences recognised in operating profit ..........................................................	113

This report is a translation of the Finnish original.


2.7 Income tax ............................................................	113
2.8 Earnings per share ..............................................	116
2.9 Additional details related to the statement of cash flows ...................................................................	116

3. Capital employed .................................................	117
3.1 Acquisitions ..........................................................	117
3.2 Property, plant and equipment ..........................	120
3.3 Intangible assets ..................................................	121
3.4 Leases ..................................................................	125
3.5 Inventories ...........................................................	127
3.6 Trade and other current receivables .................	128
3.7 Pension assets .....................................................	129
3.8 Shares in associates and joint ventures ............	133
3.9 Provisions .............................................................	134

4. Capital structure and financial risks .................	135
4.1 Capital management ...........................................	135
4.2 Shareholders' equity ...........................................	138
4.3 Financial risks ......................................................	139
4.4 Finance income and costs ..................................	146
4.5 Financial assets and liabilities by category .......	147
4.6 Commitments and contingencies ......................	151

5. Other .....................................................................	152
5.1 Subsidiaries, associates, joint ventures and proportionately consolidated mutual real estate companies ..................................................................	152
5.2 Related party transactions .................................	154


5.3 Share-based compensation ................................	156
5.4 Legal disputes and possible legal proceedings ...............................................................	158
5.5 Events after the balance sheet date ..................	158

Parent company's financial statements (FAS) ..........	159

Signatures .......................................................................	175

Auditor's report .............................................................	176

Assurance report on the sustainability statement ...	180

Auditor's ESEF assurance report ................................	183


		95

CONSOLIDATED FINANCIAL STATEMENTS (IFRS)

Consolidated income statement


€ million	Note	1 Jan.-31 Dec. 2024	1 Jan.-31 Dec. 2023
Net sales	2.1	11,920.1	11,783.8
Materials and services	2.3	-10,184.1	-10,035.0
Change in inventory		-21.6	-72.0
Other operating income	2.4	994.6	975.2
Employee benefit expense	2.5	-842.5	-786.6
Depreciation, amortisation and impairment charges	3.2 3.3	-247.9	-184.0
Depreciation and impairment charges for right-of-use assets	3.4	-375.5	-353.2
Other operating expenses	2.5	-684.5	-651.8
Share of result of joint ventures		20.9	19.0
Operating profit		579.5	695.4
Interest income and other finance income	4.4	17.7	16.9
Interest expense and other finance costs	4.4	-49.5	-26.3
Interest expense for lease liabilities	4.4	-78.6	-73.4
Foreign exchange differences	4.4	-1.3	-1.1
Total finance income and costs	4.4	-111.7	-83.9
Share of result of associates		3.8	2.1
Profit before tax		471.5	613.5
Income tax	2.7	-92.0	-118.0
Profit for the year		379.6	495.6

Profit for the year attributable to
Owners of the parent		379.1	495.6
Non-controlling interests		0.4	-

Earnings per share for profit attributable to owners of the parent
Basic and diluted, Group total, €	2.8	0.95	1.25

Consolidated statement of comprehensive income


€ million	Note	1 Jan.-31 Dec. 2024	1 Jan.-31 Dec. 2023
Profit for the year		379.6	495.6
Items that will not be reclassified subsequently to profit or loss
Actuarial gains and losses	2.7 3.7	37.6	-5.5
Items that may be reclassified subsequently to profit or loss
Currency translation differences on foreign operations	2.7	-31.6	-19.5
Share of other comprehensive income of associates and joint ventures	2.7	0.5	-1.8
Cash flow hedge revaluation	2.7	-7.7	-31.0
Total comprehensive income for the year, net of tax		-1.2	-57.9
Total comprehensive income for the year		378.3	437.7

Comprehensive income for the year attributable to
Owners of the parent		377.9	437.7
Non-controlling interests		0.4	-


		96

Consolidated statement of financial position


€ million	Note	31 Dec. 2024	31 Dec. 2023
ASSETS
Non-current assets
Property, plant and equipment	3.2	2,403.3	2,055.6
Goodwill	3.3	643.0	663.7
Intangible assets	3.3	234.2	211.4
Right-of-use assets	3.4	1,867.7	1,816.9
Shares in associates and joint ventures	3.8 5.1	239.7	232.8
Other investments	4.3 4.5	14.8	14.0
Non-current receivables	4.3 4.5	65.9	71.4
Deferred tax assets	2.7	16.9	13.7
Pension assets	3.7	127.5	79.6
Total non-current assets		5,612.9	5,159.1

Current assets
Inventories	3.5	1,101.5	1,083.9
Interest-bearing receivables	3.6 4.5	4.2	4.3
Trade receivables	3.6 4.3 4.5	957.9	970.5
Income tax assets	3.6	12.9	6.6
Other non-interest-bearing receivables	3.6 4.5	287.1	302.6
Other financial assets	4.3 4.5	15.0	15.4
Cash and cash equivalents	4.5	473.1	211.9
Total current assets		2,851.7	2,595.2
Non-current assets classified as held for sale		6.6	-
Total assets		8,471.2	7,754.3


€ million	Note	31 Dec. 2024	31 Dec. 2023
EQUITY AND LIABILITIES
Share capital	4.2	197.3	197.3
Share premium	4.2	197.8	197.8
Other reserves	4.2	266.8	266.9
Currency translation differences	4.2	-103.3	-71.7
Revaluation reserve	4.2	-3.4	4.3
Treasury shares		-22.8	-26.7
Retained earnings		2,189.7	2,190.6
Equity		2,722.1	2,758.4
Non-controlling interests		12.9	-
Total equity		2,734.9	2,758.4

Non-current liabilities
Interest-bearing non-current liabilities	4.3 4.5 4.6	1,054.0	690.7
Lease liabilities	4.5 4.6	1,628.8	1,647.2
Non-interest-bearing non-current liabilities	4.3 4.5	42.8	24.5
Deferred tax liabilities	2.7	76.3	70.9
Provisions	3.9	6.3	6.9
Total non-current liabilities		2,808.1	2,440.2

Current liabilities
Current interest-bearing liabilities	4.3 4.5 4.6	291.3	98.5
Lease liabilities	4.5 4.6	422.2	350.6
Trade payables	4.3 4.5	1,404.4	1,418.3
Other non-interest-bearing liabilities	4.3 4.5	342.4	250.0
Income tax liabilities		12.2	11.2
Accrued liabilities	4.3 4.5	442.4	415.1
Provisions	3.9	13.2	12.0
Total current liabilities		2,928.1	2,555.7
Liabilities related to non-current assets classified as held for sale		0.1	-
Total liabilities		5,736.3	4,995.9
Total equity and liabilities		8,471.2	7,754.3


		97

Consolidated statement of cash flows


€ million	Note	1 Jan.-31 Dec. 2024	1 Jan.-31 Dec. 2023
Cash flows from operating activities
Profit before tax		471.5	613.5
Adjustments
Depreciation according to plan		207.4	184.0
Depreciation and impairment for right-of-use assets		375.5	353.2
Finance income and costs		33.1	10.5
Interest expense for lease liabilities		78.6	73.4
Other adjustments	2.9	22.2	-10.8
		716.9	610.3
Change in working capital
Current non-interest-bearing receivables, increase (-)/decrease (+)		43.8	69.3
Inventories, increase (-)/decrease (+)		25.5	58.3
Current non-interest-bearing liabilities, increase (+)/ decrease (-)		-44.8	-137.1
		24.5	-9.5

Interest paid and other finance costs		-45.6	-24.9
Interest paid on lease liabilities		-78.6	-73.4
Interest received		16.9	15.0
Dividends and capital repayments received from associated companies and joint ventures		22.3	24.4
Dividends received from others		0.5	2.4
Income taxes paid		-120.2	-108.3
Net cash flows from operating activities, total		1,008.2	1,049.5


€ million	Note	1 Jan.-31 Dec. 2024	1 Jan.-31 Dec. 2023
Cash flows from investing activities
Payments for acquisition of subsidiary shares, net of cash acquired	3.1	-151.6	-140.1
Payments for investments consolidated using the equity method		-0.1	-
Payments for property, plant, equipment and intangible assets	2.9	-491.4	-539.2
Proceeds from sale of subsidiaries and businesses, net cash deducted		-	9.9
Proceeds from sale of property, plant, equipment and intangible assets		45.0	24.8
Proceeds from sale of other investments		0.0	0.1
Loan receivables and other financial assets, increase (-)/decrease (+)		0.5	54.3
Net cash flows from investing activities, total		-597.5	-590.2

Cash flows from financing activities
Interest-bearing liabilities, increase (+)/decrease (-)	4.1	534.0	283.4
Repayments for lease liabilities	3.4 4.1	-370.9	-354.3
Interest-bearing receivables, increase (-)/ decrease (+)	4.1	3.9	2.2
Dividends paid		-320.3	-430.3
Other items		3.5	6.8
Net cash flows from financing activities, total		-149.8	-492.2

Change in cash and cash equivalents		260.9	-32.9

Cash and cash equivalents as at 1 January	4.5	211.9	245.5
Currency translation difference adjustment and change in value		0.3	-0.7
Cash and cash equivalents as at 31 December	4.5	473.1	211.9


		98

Consolidated statement of changes in equity


€ million	Share capital	Reserves	Currency translation differences	Revaluation reserve	Treasury shares	Retained earnings	Non-controlling interests	Total
Balance as at 1 January 2024	197.3	464.7	-71.7	4.3	-26.7	2,190.6	-	2,758.4
Share-based payments					3.9			3.9
Dividends						-405.9		-405.9
Increase of non-controlling interests						-17.0	12.4	-4.5
Other changes		-0.0	-			4.8		4.8
Transactions with owners, total		-0.0	-		3.9	-418.1	12.4	-401.8
Comprehensive income
Profit for the period						379.1	0.4	379.6
Actuarial gains and losses						37.6		37.6
Currency translation differences on foreign operations			-31.6			-	0.0	-31.6
Share of other comprehensive income of associates and joint ventures				-		0.5		0.5
Cash flow hedge revaluation				-7.7		-		-7.7
Total other comprehensive income for the period, net of tax			-31.6	-7.7		38.1	0.0	-1.2
Total comprehensive income for the period			-31.6	-7.7		417.2	0.4	378.3
Balance as at 31 December 2024	197.3	464.7	-103.3	-3.4	-22.8	2,189.7	12.9	2,734.9

Balance as at 1 January 2023	197.3	464.7	-52.2	35.3	-28.1	2,125.2	-	2,742.2
Share-based payments					1.4			1.4
Dividends						-429.6		-429.6
Other changes		-0.0	-0.0			6.7		6.7
Transactions with owners, total		-0.0	-0.0		1.4	-422.8	-	-421.5
Comprehensive income
Profit for the period						495.6	-	495.6
Actuarial gains and losses						-5.5		-5.5
Currency translation differences on foreign operations			-19.5			-	-	-19.5
Share of other comprehensive income of associates and joint ventures				-		-1.8		-1.8
Cash flow hedge revaluation				-31.0		-		-31.0
Total other comprehensive income for the period, net of tax			-19.5	-31.0		-7.3	-	-57.9
Total comprehensive income for the period			-19.5	-31.0		488.2	-	437.7
Balance as at 31 December 2023	197.3	464.7	-71.7	4.3	-26.7	2,190.6	-	2,758.4

Further information on share capital and reserves is disclosed in Note 4.2 and on share-award plans in Note 5.3. Deferred tax related to components of other comprehensive income is

presented in Note 2.7.


		99

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. ACCOUNTING POLICIES FOR THE CONSOLIDATED

FINANCIAL STATEMENTS

The notes to the consolidated financial statements have

been grouped into sections based on their subject. The

basis of preparation is described as part of this note, while

the accounting policies directly related to a specific note are

presented as part of the note in question. The notes contain

the relevant financial information as well as a description of

the accounting policies and key estimates and judgements

applied for the topics of the individual note.

1.1 Basic information about the Company

Kesko is a Finnish listed trading sector company. Kesko has

approximately 1,700 stores engaged in chain operations in

Finland, Sweden, Norway, Denmark, Estonia, Latvia,

Lithuania and Poland.

Kesko Group's reportable segments consist of its business

divisions, namely the grocery trade, the building and

technical trade, and the car trade.

The Group's parent company, Kesko Corporation, is a

Finnish public limited company constituted in accordance

with the laws of Finland. The Company's business ID is

0109862-8, it is domiciled in Helsinki, Finland and it's

registered address is PO Box 1, 00016 KESKO, Finland.

Copies of Kesko Corporation's financial statements and the

consolidated financial statements are available from Kesko

Corporation, visiting address Työpajankatu 12, Helsinki,

Finland and from the internet at www.kesko.fi/en.

These consolidated financial statements were authorised for

issue by the Board of Directors on 4 February 2025.

Kesko has issued an XHTML financial review complying

with the ESEF requirements on Kesko’s website. The Audit

firm Deloitte Oy has provided to company an independent

auditor’s reasonable assurance report in accordance with

ISAE 3000 (Revised) on Kesko’s ESEF Financial Statements.

1.2 Basis of preparation

Kesko's consolidated financial statements have been

prepared in accordance with International Financial

Reporting Standards (IFRS) approved for adoption by the

European Union, and they comply with the IAS and IFRS

standards and respective SIC and IFRIC Interpretations

effective on 31 December 2024. The International Reporting

Standards refer to standards and their interpretations

approved for adoption within the EU in accordance with the

procedure enacted in EU regulation (EC) 1606/2002,

included in the Finnish Accounting Act and regulations

based on it. The Group has applied new and amended

standards that became effective in the financial year that

began on 1 January 2024. The improvements and

amendments to existing standards did not have an impact

on the consolidated financial statements. Accounting

standards not yet effective have not been adopted

voluntarily for the consolidated financial statements. The

notes to the consolidated financial statements also include

compliance with Finnish accounting and corporate

legislation.

All amounts in the consolidated financial statements are in

millions of euros and based on original cost, with the

exception of items specified below, which have been

measured at fair value in compliance with the standards.

1.3 Critical accounting estimates and

assumptions

The preparation of consolidated financial statements in

conformity with international accounting standards requires

the use of certain estimates and assumptions about the

future that affect the reported amounts of assets and

liabilities, contingent liabilities, and income and expense.

The actual results may differ from these estimates and

assumptions.

The impact of climate risks has been assessed on the

Group’s business operations and the consolidated financial

statements. Climate change related risks on Kesko are

assessed based on selected climate scenarios. Kesko Group

has not identified any business operations subject to

material climate risks in terms of business continuity or

valuation of asset items. Kesko owns and manages via

leases a substantial number of properties in all its operating

countries. Individual asset items may be subject to risks of


		100

damage or investment needs due to, for example, extreme

weather phenomena.

The estimates and judgements made are continuously

evaluated, and they are based on historical experience and

other factors, including expectations of future events that

are believed to be reasonable under the circumstances.

The critical accounting estimates and assumptions used in

the preparation of consolidated financial statements are

further described in the corresponding notes.

• Income tax (Note 2.7)

• Acquisitions (Note 3.1)

• Intangible assets (Note 3.3)

• Leases (Note 3.4)

• Inventories (Note 3.5)

• Trade and other current receivables (Note 3.6)

• Pension assets (Note 3.7)

• Provisions (Note 3.9)

1.4 Critical judgements in applying

accounting policies

The Group's management uses its judgement in the

adoption and application of accounting policies in the

financial statements. The management has exercised its

judgement in the application of accounting policies in the

income statement with regard to the presentation of income

(Note 2.1), the existence of control over subsidiaries (Note

1.5), measuring receivables, determining provisions for

restructuring, and measuring assets and liabilities

recognised in the balance sheet based on lease agreements

(Note 3.4).

1.5 Consolidation principles

Subsidiaries

The consolidated financial statements combine the financial

statements of Kesko Corporation and subsidiaries

controlled by the Group. Control exists when the Group has

more than half of the voting rights of a subsidiary or

otherwise exercises control. An investor controls an

investee when it is exposed, or has rights, to variable

returns from its involvement with the investee and has the

ability to affect those returns through its power over the

investee. Acquired subsidiaries are consolidated from the

date on which the Group gains control until the date on

which control ceases. The existence of potential voting

rights has been considered when assessing the existence of

control in the case that the instruments entitling to potential

control are currently exercisable. Subsidiaries are listed in

Note 5.1.

Mutual shareholding is eliminated by using the acquisition

cost method. The cost of assets acquired is determined on

the basis of the fair value of the acquired assets as at the

acquisition date, the issued equity instruments and liabilities

resulting from or assumed on the date of the exchange

transaction. The identifiable assets, liabilities and

contingent liabilities acquired are measured at the fair value

at the acquisition date, gross of non-controlling interest.

Intragroup transactions, receivables and payables,

unrealised profits and internal distributions of profits are

eliminated when preparing the consolidated financial

statements. Unrealised losses are not eliminated if the loss

is due to the impairment of an asset. Non-controlling

interest in the profit for the period is disclosed in the

income statement and the amount of equity attributable to

the non-controlling interests is disclosed separately in

equity.

The Group accounts for its real estate company acquisitions

as acquisitions of assets.

Associates

Associates are companies over which the Group has

significant influence but not control. In Kesko Group,

significant influence accompanies a shareholding or

agreement of between 20% and 50% of the voting rights.

Investments in associates are accounted for using the

equity method and are initially recognised at cost.

The Group’s share of post-acquisition profits or losses is

recognised in the income statement. The cumulative post-

acquisition movements are adjusted against the carrying

amount of the investment. If the Group’s share of losses in

an associate equals or exceeds its interest in the associate,

the Group does not recognise further losses.

Unrealised gains on transactions between the Group and

the associates are eliminated to the extent of the Group’s

interest in the associates. Unrealised losses are also

eliminated, unless the transaction provides evidence of an

impairment of the asset transferred. Dividends received

from associates are deducted from the Group's result and

the cost of the shares. An investment in an associate

includes the goodwill generated by the acquisition.

Goodwill is not amortised.


		101

Joint agreements

Joint agreements are arrangements in which the sharing of

joint control has been contractually agreed between two or

more parties. Joint control exists only when decisions about

the relevant activities require the unanimous consent of the

parties sharing control. A joint venture is a joint agreement

whereby the parties that have joint control of the

agreement have rights to the net assets of the agreement.

Investments in joint ventures are accounted for using the

equity method, and on initial recognition, they are

recognised at cost.

The Group’s share of post-acquisition profits or losses is

recognised in the income statement. The cumulative post-

acquisition movements are adjusted against the carrying

amount of the investment. If the Group’s share of losses in

a joint venture equals or exceeds its interest in the joint

venture, the Group does not recognise further losses.

Unrealised gains on transactions between the Group and

the joint ventures are eliminated to the extent of the

Group’s interests in the joint ventures. Unrealised losses are

also eliminated, unless the transaction provides evidence of

an impairment of the asset transferred. Dividends received

from joint ventures are deducted from the Group's result

and the cost of the shares. An investment in a joint venture

includes the goodwill generated by the acquisition.

Goodwill is not amortised.

Mutual real estate companies are consolidated as joint

operations on a line-by-line basis in proportion to

ownership. The Group's share of mutual real estate

companies' loans and reserves is accounted for separately

in the consolidation.

Associates and joint ventures and proportionately

consolidated mutual real estate companies are listed in

Note 5.1.

Foreign currency items

The consolidated financial statements are presented in

euros, which is both the functional currency of the

environment in which the Group’s parent operates and the

presentation currency. On initial recognition, the amounts

with respect to the result and financial position of the

Group companies located outside the euro zone are

recorded in the functional currency of each of their

operating environments.

Foreign currency transactions are recorded in euros by

applying the exchange rate at the date of the transaction.

Receivables and liabilities denominated in foreign currency

are translated into euros using the closing rate. Exchange

rate gains and losses on foreign currency transactions as

well as receivables and liabilities denominated in foreign

currency are recognised in the income statement, with the

exception of monetary items that form a part of a net

investment in a foreign operation and loans designated as

hedges for foreign net investments and regarded as

effective. These exchange differences are recognised in

equity and their changes are presented in other

comprehensive income. The exchange differences are

presented in the income statement on disposal of the

foreign operation or settlement of the hedges. The Group

has currently no loans designated as hedges for foreign net

investments. Foreign exchange gains and losses resulting

from operating activities are included in the respective

items above operating profit. Foreign exchange gains and

losses from foreign exchange forward contracts and options

used for hedging financial transactions, and from foreign

currency borrowings are included in finance income and

costs.

The income statements of the Group companies operating

outside the euro zone have been translated into euros at the

average rate of the financial year, and their balance sheets

at the closing rate. The foreign exchange difference

resulting from the use of different rates, the translation

differences arising from the elimination of the acquisition

cost of subsidiaries outside the euro zone, exchange

differences arising from monetary items that form a part of

a net investment in a foreign operation and the hedging

results of net investments are recognised in equity, and the

changes are presented in other comprehensive income. In

connection with the disposal of a subsidiary, translation

differences are recognised in the income statement as part

of the gains or losses on the disposal.

Goodwill arising on the acquisition of foreign operations

and the fair value adjustments of assets and liabilities made

upon their acquisition are treated as assets and liabilities of

these foreign operations and translated into euros at the

closing rate.

1.6 Discontinued operations and non-

current assets classified as held for sale and

related liabilities

Non-current assets (or a disposal group) are classified as

held for sale if their carrying amount will be recovered

principally through the disposal of the assets and the sale is

highly probable. If their carrying amount will be recovered

principally through their disposal rather than through their

continuing use, they are measured at the lower rate of the

carrying amount and fair value net of costs to sell.


		102

The comparative information in the income statement is

adjusted for operations classified as discontinued during the

latest financial period being reported. Consequently, the

result of discontinued operations is presented as a separate

line items also for the comparatives. The Group did not

have any discontinued operations in 2024 and 2023.

1.7 New IFRS standards and IFRIC

interpretations and the impact of new and

updated standards

New ‘IFRS 18 Presentation and Disclosure in

Financial Statements’

The new standard ‘IFRS 18 Presentation and Disclosure in

Financial Statements’ was published on 9 April 2024, and it

will be effective for financial reporting periods beginning on

or after 1 January 2027. Comparison period shall be

restated accordingly. The new standard includes

instructions especially in relation to the presentation of the

statement of profit or loss. The standard includes two

defined subtotals and one total which shall be presented in

the statement of profit or loss: the subtotals are ‘operating

profit’ and ‘profit before financing and income taxes’ and

the total is ‘profit for the year’. According to the standard,

income and expenses included in the statement of profit or

loss shall be classified under five categories: operating,

investing, financing, income tax and discontinued

operations. The standard also requires the presentation of

Management-defined Performance Measures in the

financial statements. The Group estimates that the new

standard will impact the presentation of the statement of

profit or loss and the information presented in the financial

statements. The Group will analyse the need for changes in

accordance with the requirements of the standard.

Other annual improvements or amendments to existing

standards that become effective on or after 1 January 2025

are not estimated to have a material impact on the

consolidated financial statements.


		103

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. FINANCIAL RESULTS

2.1 Revenue recognition

Accounting policies

In the consolidated income statement, net sales comprise the sales of goods, services and

energy based on customer agreements. The share of sales of services and energy of total

net sales is not significant. The Group sells products to retailers and other business

customers and engages in own retailing. Income from sales of goods and services is

recognised when the customer obtains control of the goods or services. Customers obtain

control when they have the ability to direct the use of and obtain the benefits from the

goods or services. As a rule, income from sales of goods can be recognised at the time of

transfer. Income from services is recognised as the service is being performed. Sales to

retailers and business customers are based on invoicing. Sales to consumers are mainly in

cash or by credit card.

When calculating net sales, sales revenue is adjusted for indirect taxes, sales adjustment

items and the exchange differences of foreign-currency-denominated sales. In businesses in

Finland that are part of the K-Plussa customer loyalty scheme, sales adjustment items

include loyalty award credits, recognised as part of sales transactions. Income from

corresponding sales is recognised when the award credits are redeemed or expire. Contract

liability is recognised in the balance sheet. Loyalty award credits affect the net sales of

those businesses that grant K-Plussa customer loyalty award credits in Finland and engage

in retailing.

Other operating income includes income other than that associated with the sale of goods

or services based on customer agreements, such as lease income, store site and chain fees

charged from retailers, and various other service fees and commissions. Fees charged from

retailer entrepreneurs are based on a partnership agreement (chain agreement) based on

which the retailers engage in business in line with the chain’s operating models and

objectives. Store site fees and chain fees vary depending on the growth and profitability of

the retailer’s business operations under the chain agreement. Chain marketing fees and

data system fees are cost-based charges. More detailed information on other operating

income is presented in Note 2.4.

Other operating income also includes gains on the disposal of property, plant and

equipment and intangible assets as well as gains on disposal of businesses and realised and

unrealised gains on derivatives used for hedging foreign currency risks associated with

commercial transactions.

Interest income is recognised on a time apportionment basis using the effective interest

method. Dividend income is recognised when the right to receive payment is established.

2.2 Segment information

Accounting policies

The Group's reportable segments are composed of the Group's divisions, namely the

grocery trade, the building and technical trade, and the car trade.

Segment information is reported in a manner consistent with the internal reporting provided

to the chief operating decision maker. The chief operating decision maker, responsible for

allocating resources to the divisions, has been identified as the Group Management Board.

The reportable operating segments derive their net sales from the grocery trade, the

building and technical trade, and the car trade. Sales between divisions are charged at

prevailing market rates.

The Group Management Board uses alternative performance measures alongside the IFRS

financial statements indicators in the Group’s results reporting. The Group Management

Board assesses the divisions' performances based on operating profit, comparable


		104

operating profit, and comparable return on capital employed. Results reporting to

management corresponds to the accounting policies of the consolidated financial

statements apart from items affecting comparability. Finance income and costs are not

allocated to the divisions as the Group’s cash and cash equivalents and financial liabilities

are managed by the Group Treasury. Changes in the fair values of intra-Group foreign

exchange forward contracts entered into and realised gains and losses are reported as part

of other operating income and expenses to the extent that they hedge the divisions’ foreign

exchange risk.

The assets and liabilities of a division's capital employed consist of operating items that can

be justifiably allocated to the divisions. The assets of capital employed comprise property,

plant and equipment and intangible assets, right-of-use assets related to leases, interests in

associates and joint ventures and other investments, pension assets, inventories, trade

receivables and other non-interest-bearing receivables, interest-bearing receivables, and

assets held for sale. The liabilities of capital employed consist of trade payables, the share of

other non-interest-bearing liabilities and provisions. The Group’s real estate assets and the

revenue and costs generated from them have been allocated to the divisions. Capital

employed does not include deferred tax assets and liabilities, financial assets at fair value

through profit or loss with the exception of fair value of foreign exchange forward contracts

recognised in the balance sheet, cash and cash equivalents, or interest-bearing liabilities.

The same revenue recognition policies apply to segment information as to the consolidated

financial statements and consolidated statement of financial position. The revenue

recognition policies are presented in Note 2.1.

Kesko’s business models

Kesko’s principal business model in the Finnish market is the chain business model, in which

independent K-retailers run retail stores in Kesko's chains, and B2B trade. Kesko manages

the operations of the chains made up of the stores. Chain operations ensure higher

competitiveness and a strong operational basis for K-retailers in terms of purchasing goods,

building selections, marketing and price competition. Outside Finland, Kesko mainly engages

in own retailing and B2B trade. Kesko’s wholesale to retailers accounted for 45% (46%) of the

Group’s net sales in 2024. B2B trade accounted for 37% (39%) of the Group’s net sales in

2024. Kesko’s BtoC trade accounted for 18% (15%) of the Group’s net sales. The

management views that these categories depict how the nature, amount, timing and

uncertainty of revenue and cash flows are affected by economic factors.

New segments structure

Kesko changed its division structure and segment reporting from 1 April 2023 onwards.

Sports trade became part of the car trade division, while it previously had been part of the

building and technical trade division. Data concerning the comparison periods have been

adjusted to correspond to the new segment structure.

Grocery trade

The grocery trade division comprises the wholesale and B2B trade of groceries and the

retailing of home and speciality goods in Finland. There are approximately 1,100 grocery

stores operated by K-retailers in Finland. These stores form the K-Citymarket, K-

Supermarket and K-Market grocery retail chains. The Neste K chain was discontinued during

the year 2024. Kespro is a foodservice provider and wholesaler in Finland. For the part of K-

Citymarket's home and speciality goods trade, Kesko operates as a retailer in Finland.

Building and technical trade

The building and technical trade division operates in the wholesale, retail and B2B trade in

Finland, Sweden, Norway, Denmark, the Baltic countries and Poland. On 31 January 2024

Kesko expanded its operations to Denmark by acquiring 90% of the shares in Davidsen

Koncernen A/S. In building and home improvement trade, Kesko operates with the K-retailer

business model in Finland, and as a retail operator in Sweden, Norway and Denmark. The

retail store chains are K-Rauta (Finland), K-Bygg (Sweden), Byggmakker (Norway) and

Davidsen (Denmark). The reorganisation of the K-Rauta chain in Sweden was completed in

December 2024. In October-November 2024, a total of 8 K-Rauta stores were transferred

under the K-Bygg chain. The building and home improvement stores serve both consumers

and business customers. Technical trade provides HEPAC and electrical products and

services to business customers. Technical trade has around 140 places of business in Finland,

Sweden, Norway, Poland and the Baltic countries.


		105

Car trade

The car trade division comprises the business operations of new cars, used cars, services and

leasing. The new cars business includes the import, marketing and retail of Volkswagen,

Audi, SEAT, CUPRA, Porsche and Bentley passenger cars and of Volkswagen commercial

vehicles in Finland, and the import of SEAT and CUPRA passenger cars in the Baltics. The

used car business includes the purchase of used cars from Finland and elsewhere and the

retail of the cars in Finland. The service business includes repair and maintenance services,

spare parts sales and accessories services in Finland. The leasing business provides car

leasing services for both private and corporate customers. Services provided by the car trade

division also include the K-Lataus charging network for electric vehicles. The business

acquisition of Autotalo Lohja was completed on 1 September 2024. In the comparison period

Kesko completed the divestment of its MAN business (trucks and buses).

Sports trade is included in the car trade division, and comprises in Finland the Intersport and

Budget Sport chains.

Common functions

Common functions comprise Group support functions.

Segment information 2024

Profit


€ million	Grocery trade	Building and technical trade	Car trade	Common functions	Total
Division net sales	6,381.4	4,351.6	1,209.4	1.5	11,943.9
of which intersegment sales	-16.1	0.2	-7.3	-0.7	-23.9
Net sales from external customers	6,365.3	4,351.8	1,202.1	0.8	11,920.1

Change in net sales in local currency excluding acquisitions and disposals, %	0.4	-6.0	-4.0	-	-2.3
Change in net sales, %	0.5	3.8	-4.2	-	1.2

Other division income	813.0	144.1	29.0	12.7	998.7
of which intersegment income	-0.9	-2.0	0.1	-1.3	-4.1
Other operating income from external customers	812.0	142.1	29.1	11.3	994.6

Depreciation and amortisation	-108.6	-76.9	-31.4	-31.0	-247.9
Depreciation and impairment charges for right-of-use assets	-243.9	-100.8	-24.2	-6.6	-375.5
Share of result of joint ventures	-	20.9	-	-	20.9
Operating profit	420.9	116.3	69.3	-26.9	579.5

Items affecting comparability	-17.2	-52.8	-0.0	-0.5	-70.6
Comparable operating profit	438.0	169.1	69.3	-26.4	650.1

Finance income and costs					-111.7
Share of result of associates					3.8
Profit before tax					471.5


		106

Assets and liabilities


€ million	Grocery trade	Building and technical trade	Car trade	Common functions	Eliminations	Total
Property, plant, equipment and intangible assets	1,697.0	1,215.9	286.5	82.4	-1.3	3,280.5
Right-of-use assets	1,258.9	472.3	78.6	57.9	-	1,867.7
Interests in associates and joint ventures and other investments	6.2	160.8	0.1	88.1	-0.6	254.5
Pension assets	18.6	5.0	-	103.8	-	127.5
Inventories	285.8	586.0	229.7	-	-	1,101.5
Trade receivables	363.5	524.1	71.1	2.1	-2.9	957.9
Other non-interest-bearing receivables	71.5	197.5	24.2	45.5	-31.5	307.2
Interest-bearing receivables	1.1	-	-	61.9	-	63.0
Non-current assets classified as held for sale	-	6.6	-	-	-	6.6
Assets included in capital employed	3,702.7	3,168.1	690.1	441.7	-36.3	7,966.3

Unallocated items
Deferred tax assets						16.9
Other financial assets						15.0
Cash and cash equivalents						473.1
Total assets	3,702.7	3,168.1	690.1	441.7	-36.3	8,471.2

Trade payables	603.4	736.3	52.3	14.6	-2.2	1,404.4
Other non-interest-bearing liabilities	312.6	269.7	113.4	45.5	-22.7	718.5
Provisions	1.1	5.2	12.6	0.5	-	19.5
Liabilities related to non-current assets classified as held for sale	-	0.1	-	-	-	0.1
Liabilities included in capital employed	917.1	1,011.4	178.3	60.6	-24.9	2,142.4

Unallocated items
Interest-bearing liabilities						1,345.3
Lease liabilities						2,051.0
Other non-interest-bearing liabilities						121.3
Deferred tax liabilities						76.3
Total liabilities	917.1	1,011.4	178.3	60.6	-24.9	5,736.3

Total capital employed as at 31 December	2,785.6	2,156.7	511.8	381.1	-11.4	5,823.8
Average capital employed	2,734.9	2,172.8	503.0	350.7	-2.7	5,758.7
Return on capital employed, %, comparable	16.0	7.8	13.8	-	-	11.3

Number of personnel as at 31 December	8,257	7,341	1,752	959		18,309
Average number of personnel converted into full-time employees	6,346	6,538	1,556	908		15,347


		107

Segment information 2023

Profit


€ million	Grocery trade	Building and technical trade	Car trade	Common functions	Total
Division net sales	6,351.6	4,193.2	1,262.3	-0.0	11,807.1
of which intersegment sales	-16.5	0.9	-7.4	-0.3	-23.3
Net sales from external customers	6,335.1	4,194.1	1,254.9	-0.3	11,783.8

Change in net sales in local currency excluding acquisitions and disposals, %	3.7	-10.5	13.9	-	-0.8
Change in net sales, %	3.7	-8.7	12.2	-	-0.2

Other division income	803.6	135.8	29.3	10.6	979.3
of which intersegment income	-0.4	-1.8	0.1	-2.0	-4.1
Other operating income from external customers	803.2	133.9	29.4	8.7	975.2

Depreciation and amortisation	-93.6	-30.8	-28.6	-31.0	-184.0
Depreciation and impairment charges for right-of-use assets	-232.0	-91.9	-22.8	-6.4	-353.2
Share of result of joint ventures	-	19.0	-	-	19.0
Operating profit	443.6	201.9	82.4	-32.6	695.4

Items affecting comparability	-1.3	-10.5	-0.1	-4.8	-16.7
Comparable operating profit	444.8	212.5	82.6	-27.8	712.0

Finance income and costs					-83.9
Share of result of associates					2.1
Profit before tax					613.5


		108

Assets and liabilities


€ million	Grocery trade	Building and technical trade	Car trade	Common functions	Eliminations	Total
Property, plant, equipment and intangible assets	1,534.9	1,035.5	265.7	96.4	-1.8	2,930.7
Right-of-use assets	1,233.1	441.4	81.1	61.2	-	1,816.9
Interests in associates and joint ventures and other investments	5.5	155.7	0.1	86.2	-0.6	246.8
Pension assets	18.6	4.9	-	56.0	-	79.6
Inventories	271.9	578.2	233.8	-	-	1,083.9
Trade receivables	389.8	509.9	71.2	2.1	-2.5	970.5
Other non-interest-bearing receivables	80.3	189.2	28.1	35.9	-15.6	318.0
Interest-bearing receivables	1.7	0.0	-	65.3	-	66.9
Assets included in capital employed	3,535.9	2,914.9	680.0	403.1	-20.6	7,513.3

Unallocated items
Deferred tax assets						13.7
Other financial assets						15.4
Cash and cash equivalents						211.9
Total assets	3,535.9	2,914.9	680.0	403.1	-20.6	7,754.3

Trade payables	620.4	717.7	55.4	26.5	-1.7	1,418.3
Other non-interest-bearing liabilities	295.0	242.2	96.6	47.3	-16.6	664.5
Provisions	0.2	5.2	13.2	0.4	-	18.9
Liabilities included in capital employed	915.5	965.0	165.2	74.2	-18.3	2,101.7

Unallocated items
Interest-bearing liabilities						789.2
Lease liabilities						1,997.9
Other non-interest-bearing liabilities						36.3
Deferred tax liabilities						70.9
Total liabilities	915.5	965.0	165.2	74.2	-18.3	4,995.9

Total capital employed as at 31 December	2,620.4	1,949.8	514.7	329.0	-2.3	5,411.6
Average capital employed	2,555.4	1,865.1	523.6	371.5	-2.3	5,313.3
Return on capital employed, %, comparable	17.4	11.4	15.8	-	-	13.4

Number of personnel as at 31 December	8,184	6,934	1,641	943		17,702
Average number of personnel converted into full-time employees	6,257	6,073	1,531	905		14,766


		109

Alternative performance measures in segment reporting