We make every day a little easier. Q3 13 November 2013 Per Strömberg, CEO Sonat Burman-Olsson, Deputy CEO and CFO

Transcription

1 We make every day a little easier Q3 13 November 2013 Per Strömberg, CEO Sonat Burman-Olsson, Deputy CEO and CFO

2 Continued strong performance for ICA Gruppen Strong performance in Q3 Operations continued to develop well: Net sales rose 2.3%* Operating profit excl. non-recurring items +10% Our work with strategic priorities proceeding according to plan Good growth in retail operations Share of private labels increasing Continued efficiency improvements in logistics Continued challenges in ICA Norway Q Q3 Pro forma Pro forma Net sales 24,830 24,387 99,535 Operating profit excl. nonrecurring items 1, ,061 Operating profit (EBIT) 1, ,000 Profit for the period Operating margin excl. nonrecurring items 4.2% 3.9% 3.1% Operating margin 4.1% 3.9% 3.0% Earnings per ordinary share * Adjusted for currency fluctuations compared with pro forma for corresponding period in 2

3 Important events during the third quarter Co-operation with Norgesgruppen Norwegian Competition Authority decided to extend temporary suspension until 10 January 2014 New notification expected 10 January Decision to expand ICA To Go store concept with 10 stores over next two years. ICA Real Estate acquired the warehouse property in Helsingborg for SEK 931 million together with Alecta. A key step in long-term improved efficiency of the logistics structure in Sweden. 3

4 Segments during the quarter ICA Sweden Good profitability development Store sales stronger than the market for tenth consecutive quarter Strategic priorities according to plan: Private label share of sales rose to 21.4% (20.0%) Q3 YTD Good sales growth for Cura pharmacies Extension and modernisation of distribution centre in Helsingborg started Increased interest in food benefits the grocery trade 4

5 Segments during the quarter (cont d) ICA Norway Continued challenges Continued weak sales and profitability development in Norway Uncertainty about co-operation with Norgesgruppen affecting business but work continues Launch of new price strategy in Rimi stores Rimi Baltic Good sales growth and good margin development Increased focus on the Rimi brand Conversion of a number of discount stores to Rimi Good growth opportunities in the future 5

6 Segments during the quarter (cont d) ICA Bank Named best retail bank Investments in marketing and adjustments to new regulatory requirements Recruitment of new CEO has started ICA Real Estate Stable real estate operations Acquisition of warehouse property in Helsingborg completed in August Portfolio companies Improved earnings Evaluation of portfolio companies underway and proceeding according to plan 6

7 The quarter in figures

8 Positive sales development in Q3 Consolidated net sales increased due to higher sales in all segments except ICA Norway. Adjusted for currency fluctuations sales increased by 2.3% Q3 Net Sales () Net sales adjusted for currency +2.3% Q3 * Q * figures pro forma 8

9 Strong earnings development for ICA Gruppen Operating profit excluding nonrecurring items increased by 10% mainly due to higher operating profit in ICA Sweden and Rimi Baltic. EBIT excl. non-recurring items () EBIT excluding non-recurring items +10% 0 Q3 * Q * figures pro forma 9

10 Continued strong sales in Swedish ICA stores Store sales July-September 2013 January-September 2013 Change total Change like-for-like Change total Change like-for-like Maxi ICA Hypermarket 7, % 3.6% 22, % 3.5% ICA Kvantum 6, % 2.2% 17, % 2.3% ICA Supermarket 8, % 3.5% 23, % 3.6% ICA Nära 4, % 3.7% 11, % 2.8% TOTAL 25, % 3.3% 75, % 3.1% Performance compared with same period in 10

11 ICA Sweden Increased net sales and higher operating profit in Q3 Increased net sales due to higher sales within wholesale, Cura pharmacies and non-food. Improved operating profit excluding non-recurring items due to increased sales Q Q3 Jan- Sep 2013 Q3 Q Jan- Sep Full year Net sales 17,170 16,497 50,390 48,566 65,750 EBIT excl. non-recurring items EBIT margin excl. non-recurring items ,239 2,071 2, % 5.2% 4.4% 4.3% 4.4% Private label share 21.4% 20.0% 19.6% Number of stores 1,321 1,329 1,330 Net sales +4.1% Net sales EBIT excl. non-recurring items 11

12 ICA Norway Weak sales and profitability development in Q3 Lower sales due to weak sales and fewer stores. Operating result excluding nonrecurring items slightly lower due to lower sales and a lower gross margin Q Q3 Jan- Sep 2013 Jan- Sep Full year Net sales 4,030 4,395 12,319 14,369 19,050 EBIT excl. non-recurring items EBIT margin excl. non-recurring items % -3.0% -4.8% -4.6% -3.1% Private label share 9.7% 10.3% 9.6% Number of stores incl. Matkroken Cost-cutting measures led to lower administrative expenses Net sales Q3 Q EBIT excl. non-recurring items

13 Rimi Baltic Continued favourable devleopment of sales and earnings in Q3 Sales increased by 2.6% in local currency. Operating profit excluding nonrecurring items in local currency rose 23%. Higher sales and improved gross margins contributed to increased earnings. Increase in private label share of sales Net sales Q Q3 Jan- Sep 2013 Q3 Q Jan- Sep EBIT excl. non-recurring items Full year Net sales 2,548 2,417 7,495 7,425 10,050 EBIT excl. non-recurring items EBIT margin excl. non-recurring items % 2.9% 2.7% 2.1% 2.6% Private label share 14.0% 12.8% 12.6% Number of stores Sales +2.6% in local currency

14 ICA Bank Positive development of operating profit Higher net commissions were counteracted by lower net interest income due to a lower repo rate than in the previous year. Higher costs in connection with adjustment to new regulations. 200 Q Q3 Jan- Sep 2013 Jan- Sep Full year Net sales EBIT excl. non-recurring items EBIT margin excl. non-recurring items % 29.0% 23.6% 25.5% 22.2% Business volume 24,529 22,563 23, Q3 Q Net sales EBIT excl. non-recurring items 0 14

15 ICA Real Estate Stable performance Operating profit excluding nonrecurring items increased due to rental income from new properties and increased share of profits from joint ventures. Acquisition of warehouse property in Helsingborg together with Alecta Q3 Q Net sales Q Q3 Jan- Sep 2013 Jan- Sep EBIT excl. non-recurring items Full year Net sales ,682 1,697 2,252 EBIT excl. non-recurring items EBIT margin 45.4% 43.4% 43.5% 44.7% 43.7%

16 Portfolio companies Slightly higher net sales and improved earnings Sales increased in Kjell & Company and Hemtex, were unchanged in inkclub and decreased slightly in Cervera and Forma. Q Q3 Jan- Sep 2013 Jan- Sep Full year Net sales ,765 1,872 2,726 EBIT excl. non-recurring items EBIT margin excl. non-recurring items % -6.2% -6.2% -8.3% -4.5% In total for the segment profit excluding non-recurring items improved due to improved earnings in Kjell & Company and Hemtex Net sales Q3 Q EBIT excl. non-recurring items

17 Net sales and operating profit per segment Net sales, Q Q3 * ICA Sweden 17,170 16,497 ICA Norway 4,030 4,395 Rimi Baltic 2,548 2,417 ICA Bank ICA Real Estate Portfolio companies Other Intra-group sales Net sales 24,830 24,387 Operating profit/loss excl. non-recurring items Q Q3 * ICA Sweden ICA Norway Rimi Baltic ICA Bank ICA Real Estate Portfolio companies Other Operating profit excl. nonrecurring items *pro forma Q3 17

18 Non-recurring items Q3 Q Q3 Jan-Sep 2013 Jan-Sep EBIT excl. non-recurring items 1, , Capital gain ICA Real Estate Capital gains other Impairment Effects of acquisitions - - 8,652 - EBIT 1, ,

19 Cash flow Cash flow from operating activities* Stable cash flow from operating activities in ICA Gruppen in the third quarter of Q Q *excluding ICA Bank Former ICA Group ICA Gruppen 19

20 ICA Gruppen s debt ICA Gruppen net debt/ebitda At 30 September 2013 the Group s net debt was SEK 13.8 billion, corresponding to 2.8 x EBITDA pro forma x 2.8x Long-term target net debt/ EBITDA At 30 September 2013 the bridging loan had been reduced to SEK 7 billion 2 2.0x x New issue of SEK 5 billion to the company s shareholders in May 1 In June, bonds were issued in SEK for SEK 5 billion Target to reduce net debt/ebitda to 2.0 before the end of Q Q1 net debt / pro forma EBITDA Q3 net debt / pro forma EBITDA Target Q Long-term target 20

21 ICA Gruppen going forward

22 ICA Gruppen s strategic priorities Grow the retail business (in Sweden and Baltics) 2. Increase profitable private label penetration 3. Ensure competitive prices and fair price perception 4. Building a leading digital sales position 5. Turn around the Norway business 6. Collaborate to capture synergies across OpCos 7. Develop efficient operations with focus on supply chain 8. Develop common ICA values 9. Develop portfolio strategy Stronger growth in metropolitan regions in Sweden 8 new Cura pharmacies this year Two newly opened stores in Lithuania New non-food concept in ICA Maxi stores developing well 10 new ICA To Go planned 22

23 ICA Gruppen s strategic priorities Grow the retail business (in Sweden and Baltics) 2. Increase profitable private label penetration 3. Ensure competitive prices and fair price perception 4. Building a leading digital sales position 5. Turn around the Norway business 6. Collaborate to capture synergies across OpCos 7. Develop efficient operations with focus on supply chain 8. Develop common ICA values 9. Develop portfolio strategy Growth in Sweden +1.4 pp New private label strategy in Norway, e.g. Smart 365 Growth in Baltic countries +1.2 pp 23

24 ICA Gruppen s strategic priorities Grow the retail business (in Sweden and Baltics) 2. Increase profitable private label penetration 3. Ensure competitive prices and fair price perception 4. Building a leading digital sales position 5. Turn around the Norway business 6. Collaborate to capture synergies across OpCos 7. Develop efficient operations with focus on supply chain 8. Develop common ICA values 9. Develop portfolio strategy Project for launch of online sales in 2014 going according to plan Approximately 900,000 visits to ICA.se per week 1,000,000 downloaded ICA apps 24

25 ICA Gruppen s strategic priorities Grow the retail business (in Sweden and Baltics) 2. Increase profitable private label penetration 3. Ensure competitive prices and fair price perception 4. Building a leading digital sales position 5. Turn around the Norway business 6. Collaborate to capture synergies across OpCos 7. Develop efficient operations with focus on supply chain 8. Develop common ICA values 9. Develop portfolio strategy Co-operation Norgesgruppen Improve price perception and customer offering Cost-cutting measures 25

26 ICA Gruppens strategiska prioriteringar Grow the retail business (in Sweden and Baltics) 2. Increase profitable private label penetration 3. Ensure competitive prices and fair price perception 4. Building a leading digital sales position 5. Turn around the Norway business 6. Collaborate to capture synergies across OpCos 7. Develop efficient operations with focus on supply chain 8. Develop common ICA values 9. Develop portfolio strategy New groupwide purchasing function established Increased co-operation related to non-food range & purchasing between Sweden and the Baltic countries 26

27 ICA Gruppen s strategic priorities Grow the retail business (in Sweden and Baltics) 2. Increase profitable private label penetration 3. Ensure competitive prices and fair price perception 4. Building a leading digital sales position 5. Turn around the Norway business 6. Collaborate to capture synergies across OpCos 7. Develop efficient operations with focus on supply chain 8. Develop common ICA values 9. Develop portfolio strategy Simplicity Entrepreneurship Commitment 27

28 Summary Strong performance in Q3 Operations continued to develop well: Net sales increased by 2.3%* Operating profit excluding non-recurring items +10% Our work with strategic priorities proceeding according to plan Good growth in retail operations Private label share of sales increasing Continued efficiency improvements in logistics Continued challenges in ICA Norway * Adjusted for currency fluctuations compared with pro forma for corresponding period in 28