Sales, employment and investment Outlook for the retail, wholesale and motor vehicle trades in Finland 2011-2012 Sales, employment and investment

Sales 2010 Total EUR 118.6 billion (excl. VAT) Source: Statistics Finland, Turnover of Trade Jaana Kurjenoja 10.8.2011

Employees 2010 Total 298,000 Jaana Kurjenoja 10.8.2011 Source: Statistics Finland, Labour Force Survey Jaana Kurjenoja 10.8.2011

Outlook - background Retail trade sales volume grew by 3.5%, motor vehicle sales by 24% and wholesale trade sales by 1% in January-May 2011. During the second quarter of 2011, employment in the retail trade grew by 2.7%, in the motor vehicle trade by 2.6% and in the wholesale trade by 1.6%. GDP grew by 3.6% in 2010. This year economic growth will wane considerably and even more so next year. We are facing several years of low economic growth. Inflation is over 3% this year and will slow down to well under 3% next year. Household purchasing power will hardly grow at all during 2011-2012; for employees, the growth will remain under 1% as the improvement in employment will further slow down. The purchasing power of single employee households will decrease. The global financial crisis and public debt will undermine consumer confidence; consumer expectations about their own financial situation have clearly dimmed. Growth in industrial production will substantially decrease towards the end of the year, and investment in machinery and equipment will not pick up as expected. Construction investment in 2011 will rely greatly on service companies and households and will also decrease in 2012. Jaana Kurjenoja 10.8.2011

Consumer expectations about their financial situation over the next 12 months Balance figure Jaana Kurjenoja 10.8.2011

View of the economic situation in Finland held by companies in the retail, wholesale and motor vehicle trades Balance figure Jaana Kurjenoja 10.8.2011

Retail trade sales Annual average of the volume index Sales volume will grow by 2% this year and by 1% in 2012. Jaana Kurjenoja 10.8.2011

Employees in the retail trade x 1,000 The number of employees in the retail trade will grow by 1.5% this year and by 0.5% in 2012. Jaana Kurjenoja 10.8.2011

Wholesale trade sales Annual average of the volume index Sales volume will grow by 2% both this year and in 2012. Jaana Kurjenoja 10.8.2011

Employees in the wholesale trade x 1,000 The number of employees in the wholesale trade will grow by 1.5% both this year and in 2012. Jaana Kurjenoja 10.8.2011

Motor vehicle trade sales Average of the volume index Sales volume will grow by 12% this year and by 3% in 2012. Jaana Kurjenoja 10.8.2011

Employees in the motor vehicle trade x 1,000 The number of employees in the motor vehicle trade will grow by 2.5% this year and by 1.5% in 2012. Jaana Kurjenoja 10.8.2011

Outlook - summary Growth in retail trade sales volume will slow down in the second half of 2011 and in 2012. This year the sales volume growth will be 2% and next year 1%. The average growth in retail trade sales in 1995-2010 was 4.3%. In 2011, employment in the retail trade will grow by 1.5% and in 2012 by 0.5%. Sales volume in the wholesale trade has grown slowly this year due to the rise in energy and raw material prices and insufficient growth in industrial investment in machinery and equipment. Sales volume in the wholesale trade will grow by about 2% both this year and in 2012. The average growth in wholesale trade sales in 1995-2010 was 3.1%. Employment in the wholesale trade will grow by 1.5% both this year and in 2012. Thanks to good sales in early 2011, the sales volume in the motor vehicle trade will grow by about 12% this year but by only 3% in 2012. The average growth in motor vehicle trade sales in 1995-2010 was 5.6%. Employment in the motor vehicle trade will grow by 2.5% this year and by 1.5% in 2012. Jaana Kurjenoja 10.8.2011

Expectations of companies in the retail and wholesale trades Investment 2011 Jaana Kurjenoja 10.8.2011

Retail, wholesale and motor vehicle trades as investors in the national economy x EUR million 2010 Source: Statistics Finland Jaana Kurjenoja 10.8.2011

Retail, wholesale and motor vehicle trades as investors in the national economy x EUR million 2010 Source: Statistics Finland * Housing construction Jaana Kurjenoja 10.8.2011

Impact of demand outlook on investment decisions in 2011 Balance figure Jaana Kurjenoja 10.8.2011

Construction and real estate investment 2011 Compared to 2010 % of respondents Fewer than one in three companies in the retail trade will increase their construction investment, and just over one in four in the wholesale trade. 80% of companies investing in construction are renovating existing premises. Jaana Kurjenoja 10.8.2011

Investment in machinery and equipment 2011 (excl Investment in machinery and equipment 2011 (excl. motor vehicles) Compared to 2010 % of respondents The retail trade in particular is investing in machinery and equipment this year; the wholesale trade is investing less. 82% of companies in the retail and wholesale trades are renewing existing equipment. Jaana Kurjenoja 10.8.2011

Investment in motor vehicles 2011 Compared to 2010 % of respondents The wholesale trade in particular is investing in motor vehicles this year. 90% of companies in the retail and wholesale trades are renewing existing vehicle fleets. Jaana Kurjenoja 10.8.2011

Investment survey in the retail and wholesale trades The demand outlook has clearly increased uncertainty regarding the desire of companies to invest. Investment in the rest of 2011 will not match the planned levels. In summer 2011, in contrast to plans made earlier in the year, retail and wholesale companies began to increase investment only in transport equipment. In the wholesale trade, investment in motor vehicles was greater than planned in regard to renewal of existing fleets, and less than planned in regard to acquiring additional new vehicles. This year companies primarily invested in machinery and equipment. 90% of companies are investing in machinery and equipment, and 41% are increasing their investment in this from last year. Transfer to the Single Euro Payments Area (SEPA) will have an impact on investment in the retail trade. Investment in the retail, wholesale and motor vehicle trades has decreased over two successive years now, by a total of 14%. Investment in machinery, equipment and transport equipment has decreased the most, which means that despite the economic conditions, there is a need for renewal. Except for investments in transportation equipment and retail trade investment in machinery and equipment, investment in the retail and wholesale trades will not increase this year. Jaana Kurjenoja 10.8.2011