Q4 report 2014 - Press and analyst meeting 11 February 2015 Per - PowerPoint PPT Presentation

Q4 report 2014 - Press and analyst meeting 11 February 2015 Per Strömberg, CEO Sven Lindskog, CFO

Q4 strong sales development and investments for continued growth • Net sales increased by 6.2% Q4 YTD MSEK • In local currency +5.6% 2014 2013 2014 2013* • Increased sales in ICA Sweden and Rimi Baltic Net Sales 23,180 21,820 87,174 82,993 • EBIT excluding non-recurring items +2% EBIT excl. non-recurring items 1,081 1,058 3,937 3,695 EBIT 1,065 753 4,097 3,482 • Large strategic investments for continued growth Profit for the period 879 531 2,667 1,424 • Acquisition of Apotek Hjärtat finalized EBIT margin excl. non-recurring items 4.7% 4.8% 4.5% 4.5% • Integration according to plan EBIT margin 4.6% 3.5% 4.7% 4.2% Earnings per ordinary share, SEK 4.09 2.49 12.53 7.18 • Norwegian divestment ongoing • Permission from the Swedish FSA to conduct insurance business • Preparations continues to launch P&C** insurance by the end of the year • The Board proposes a dividend of 9.50 SEK *2013 proforma ** Property & Casualty 2

The market in Sweden • Repo rate still at zero – Riksbanken maintained the rate in December • Food inflation rate* higher in Q4: +1.3%, 0.6% FY 2014 • Total retail market showed strong development in 2014; +3.8% in fixed prices. Growth for food retail was +1.5% in fixed prices *DHI 3

Segments during the quarter ICA Sweden • Store sales growth outperformed market • Increased market shares in Q4 • Investing for future growth • New stores, Cura pharmacies and Online • Strategic priorities better than plan: • PL share increased to 22.7% (21.5) • 14 new ICA stores established in 2014 • No of pharmacies 67 (58) end of Q4 4

Online update • Successful launch in November • 4 stores in Östergötland, off to a good start • Online platform works well • Extended test in Q1 - more stores in Östergötland • Further launches starting in Q2 • New regions • Technical upgrade of IT-platform • ICA Online is well received by customers and retailers 5

Segments during the quarter (cont’d) Rimi Baltic • Solid Q4 with continued good sales and profitability growth • Increased market shares during Q4 for Rimi Baltic • Improving in all countries, particularly in Latvia • Ambitious programme for store conversions and new stores, mainly in Lithuania • Total Rimi Baltic 2014: 12 new stores • In total 242 stores by year end ICA Bank • Business volume continues to increase • Adverse repo rate impact • Number of customers increased in 2014 to 656 000 (+ 7%) 6

Segments during the quarter (cont’d.) ICA Real Estate • Långeberga project in final stage with good progress • Norwegian real estate is made ready for divestment • Awaiting closure of ICA Norway divestment • Sales process ready to be initiated late 2015 Portfolio companies • Hemtex and Cervera deliver full year profit • Divestment process of Cervera is initiated 7

The new pharmacy business • Transaction closed on January 15, 2015 • Apotek Hjärtat included in ICA Gruppen from that date • Pharmacy business (Apotek Hjärtat + Cura apotek) reported as separate segment from Q1 2015 • Apotek Hjärtat is a solid business with strong momentum: • Sales 2014 of SEK 9.6 bn (8.3) • EBIT 2014 of 401 MSEK (288) • CEO of ICA Gruppen’s Pharmacy business: Anders Nyberg (former CEO of Apotek Hjärtat) • Integration process runs according to plan 8

The quarter in numbers

Net sales development in Q4 • Net sales increased by 6.2% Net sales (MSEK) • In local currencies +5.6% 25 000 23 180 21 820 • Higher sales volumes 20 000 • ICA Sweden • Rimi Baltic Sales in 15 000 local • Price development currencies: Net sales 5.6% 10 000 • Sweden: slightly higher than +5.8% previously in 2014; 1.4% in Q4, 5 000 (YTD 0.6%) • Latvia’s price development was 0 slightly up in Q4, the other Baltic Q4 2013 Q4 2014 countries at continued low level in Q4 10

Earnings development in Q4 • Group EBIT excluding non-recurring EBIT excluding non-recurring items (MSEK) items increased by 2.2% MSEK 1 200 1 081 • Positive sales volume impact 1 058 1 000 • Higher store costs 800 • New stores in Sweden EBIT excl. non-recurring • Additional Cura pharmacies 600 items +2.2% • More hypermarkets in Latvia and Lithuania 400 200 0 Q4 2013 Q4 2014 11

Sales development for ICA stores and the food retail market in Sweden Total store sales (including Non-food) Percent (value) 5,00 4,00 3,00 2,00 1,00 0,00 -1,00 Food Retail Market ICA ICA, Comparables Inflation Food retail market and inflation according to HUI Retail Sales Index 12

Store sales in Sweden October-December 2014 January-December 2014 Development Development Development Development Store sales excl. VAT MSEK MSEK total comparable total comparable 5.4% 3.3% 3.4% 2.2% Maxi ICA Stormarknad 8,383 31,152 5.9% 3.5% 4.5% 2.2% ICA Kvantum 6,653 25,230 2.2% 2.6% 1.7% 1.4% ICA Supermarket 8,114 32,261 2.7% 2.9% 1.3% 2.1% ICA Nära 3,835 15,712 Total 26,985 4.2% 3.1% 104,356 2.8% 1.9% Development compared with the same period 2013 13

ICA Sweden Increased market shares and investments for future growth Q4 YTD • Increased net sales +6.2% MSEK 2014 2013 2014 2013 mainly due to: Net Sales 18,696 17,602 71,026 67,992 • Dry goods and fresh EBIT excl. non-recurring items 816 819 3,249 3,058 • Cura Pharmacy EBIT margin excl. non-recurring items 4.4% 4.7% 4.6% 4.5% • New stores PL share of store sales - - 22.7% 21.5% Number of stores - - 1,314 1,321 • EBIT excluding non- MSEK MSEK recurring items almost flat 20 000 1 000 due to: 16 000 800 • Store openings drive cost 12 000 600 • Intensive phase of strategic 8 000 400 initiatives 4 000 200 0 0 Q4 2013 Q4 2014 Net Sales EBIT excl. non-recurring items 14

Sales development for Rimi stores and the food retail market in the Baltics Percent (value) 10,00 8,00 6,00 4,00 2,00 0,00 -2,00 Food Market (EE adj) Rimi retail sales Rimi comparable retail sales Market Inflation 15

Rimi Baltic Strong Q4 and increased market shares • Net sales rose by more than Q4 YTD MSEK 2014 2013 2014 2013 12% in Q4 Net Sales 3,195 2,838 11,632 10,333 • In local currencies +7.7% and EBIT excl. non-recurring items 145 113 383 308 comparable stores +3.9% EBIT margin excl. non-recurring items 4.5% 4.0% 3.3% 3.0% • Increases in all countries and PL share of store sales - - 19.9% 18.2% categories Number of stores - - 242 235 • Improved EBIT excl. non- MSEK MSEK 4 000 recurring items +28% 150 3 000 • Higher sales • Improved gross margin 100 2 000 • Better format mix and 50 1 000 increased PL share 0 0 Q4 2013 Q4 2014 Net Sales EBIT excl. non-recurring items Note: exchange rates SEK/EURO Q4 2014: 9.2802 Q4 2013: 8.8729 16

ICA Bank Increased business volume • Increased business volume, Q4 YTD MSEK now 656 000 customers (+7%) 2014 2013 2014 2013 Net Sales 207 215 848 850 • Slightly lower revenues in Q4 EBIT excl. non-recurring items 45 51 189 201 due to lower net interest, driven EBIT margin excl. non-recurring items 21.7% 23.7% 22.3% 23.6% by low repo-rate Business volume - - 26,353 24,772 • Lower EBIT excl. non-recurring MSEK MSEK items: 200 • Lower revenues partly compensated by cost 50 reductions 100 • Lower credit loss provision 0 0 Q4 2013 Q4 2014 release compared to Q4 last Net Sales EBIT excl. non-recurring items year 17

ICA Real Estate Stable business development • Net sales in line with Q4 last Q4 YTD MSEK year 2014 2013 2014 2013 Net Sales 575 573 2,253 2,255 • Lower EBIT excl. non-recurring Depreciation -130 -107 -515 -421 items: EBIT excl. non-recurring items 95 123 409 473 • Significantly higher depreciation EBIT margin excl. non-recurring items due to changed assessment of 16.5% 21.5% 18.2% 21.0% life length MSEK MSEK 700 150 • Large divestments end Q3 2014 600 • Partly off-set by income from 500 100 new investments 400 300 50 200 100 0 0 Q4 2013 Q4 2014 Net Sales EBIT excl. non-recurring items 18

Portfolio companies A more streamlined business Q4 YTD MSEK • Excl Forma, sales increased 2014 2013 2014 2013 by 2.8%, mainly due to Net Sales 833 892 2,564 2,657 Hemtex EBIT excl. non-recurring items 116 131 53 21 • Comparable EBIT (excl Forma EBIT margin excl. non-recurring items 13.9% 14.7% 2.1% 0.8% and Kjell & Company) on par with last year: 116 MSEK (118) MSEK MSEK • Improved EBIT in Hemtex and 1 000 150 Cervera but lower result in 800 100 inkClub 600 400 50 200 0 0 Q4 2013 Q4 2014 Net Sales EBIT margin excl. non-recurring items 19

Net sales and EBIT excluding non-recurring items in Q4 Net sales, EBIT excl. non-recurring items, Q4 2014 Q4 2013 Q4 2014 Q4 2013 MSEK MSEK ICA Sweden ICA Sweden 18,696 17,602 816 819 Rimi Baltic Rimi Baltic 3,195 2,838 145 113 ICA Bank ICA Bank 207 215 45 51 ICA Real Estate ICA Real Estate 575 573 95 123 Portfolio companies Portfolio companies 833 892 116 131 Intra-group sales & other Intra-group sales & other -326 -300 -136 -179 Total 23,180 21,820 Total 1,081 1,058 20