Q3 report November Per Strömberg, VD Sven Lindskog, CFO

Transcription

1 Q3 report November 214 Per Strömberg, VD Sven Lindskog, CFO

2 General information Divestment ICA Norway As a consequence of ICA Gruppen s divestment of the retail operations in Norway, from the start of the third quarter ICA Norway is reported as Profit from discontinued operations. This means that in this presentation ICA Norway is not included in the Group s consolidated sales and operating profit. ICA Norway s earnings are reported on a line in the consolidated income statement before Profit for the period. The consolidated income statement from 1 January 212 will be changed in the same manner. In the balance sheet, ICA Norway is recognized as Assets available for sale and Liabilities available for sale respectively. ICA Norway is included in consolidated cash flow. ICA Norway is included in the calculation of consolidated capital employed. Acquisition of Apotek Hjärtat The acquisition of Apotek Hjärtat that was announced today November 12, 214 will not be presented in this quarterly report. A separate presentation of the acquisition is available on ICA Gruppen s website. 2

3 ICA Norway divested acquisition of Apotek Hjärtat Net sales increased by 5.8% In local currency +5.% Increased sales in ICA Sweden and Rimi Baltic SEK m Q3 214 Q Proforma EBIT excluding non-recurring items +6% ICA Norway divested for SEK 2.8 billion, conditional upon approval from the Norwegian competition authority, Konkurransetilsynet Gain approximately SEK 1 billion Acquisition of Apotek Hjärtat Forma divested Purchase price SEK 155 million, no earnings impact Impairment of goodwill in inkclub of SEK -322 million Net sales 22,16 2,8 82,993 EBIT excl. non-recurring items 1,172 1,11 3,695 EBIT 94 1,19 3,482 Net result ,424 EBIT margin excl. nonrecurring items 5.3% 5.3% 4.5% EBIT margin 4.1% 5.3% 4.2% Profit per share, SEK

4 The market in Sweden Continued low inflation Repo rate at zero - Riksbanken reduced the repo rate again in October Still low grain prices due to continued good harvests and large quantities available for export Within retail, consumer durables showed strong development so far this year, +5.6% in fixed prices, while growth for grocery retail was +1.4% in fixed prices According to HUI Research, the grocery market is expected to grow by 1.5% this year and in 215 4

5 Segments during the quarter ICA Sweden Higher market growth than the food retail market in general Increased market shares in Q3 Strategic priorities better than plan: PL share increased to 22.7% (21.4) High growth for Cura pharmacies. No of pharmacies 64 (55) as of Q3 9 new ICA stores established YTD Q3, of which 4 in metro areas Test launch of Online initiated 5

6 Segments during the quarter (cont d) Rimi Baltic Increased market shares during Q3 for Rimi Baltic Good growth in Latvia and Lithuania Rimi is the third most preferred brand in Latvia 6 new stores YTD Q3, out of 12 planned this year ICA Bank Low repo rate impact Number of customers and bank cards have continued to increase during Q3 (compared with Q2) 13, new bank customers 24, new bank cards 6

7 Segments during the quarter (cont d.) ICA Real Estate 1 properties sold to Ancore, a total value of SEK 918 million Portfolio companies Impairment in inkclub Lower profitability Delayed effects from a new technical platform and brand strategy Forma divested 7

8 The quarter in numbers

9 Net sales development in Q3 Net sales increased by 5.8% In local currencies +5.% Net sales (SEK m) Higher sales volumes Increased market shares in a growing market Price impact limited (store sales) Sweden, +.5% The Baltics, +.7% Net sales +5.8% 5 Q3 213 Q

10 Earnings development in Q3 Group EBIT excluding non-recurring items increased by 6% Driven by increased volumes Partly re-invested in larger strategic activities Improved EBIT mainly in ICA Sweden EBIT excluding non-recurring items () EBIT excl. nonrecurring items +6% 2 Q3 213 Q

11 Sales development for ICA stores and the food retail market in Sweden Total store sales (including Non food) Percent (value) 6, 5, 4, 3, 2, 1,, -1, -2, Food retail market ICA ICA, comparables Inflation Food retail market and inflation according to HUI Retail Sales Index 11

12 Store sales in Sweden Store sales excl. VAT July-September 214 January-September 214 Development total Development comparable Development total Development comparable Maxi ICA Stormarknad 7,78 3.1% 1.9% 22, % 1.8% ICA Kvantum 6, % 2.4% 18,577 4.% 1.8% ICA Supermarket 8, % 1.9% 24, %.8% ICA Nära 4, % 2.6% 11,88.9% 1.8% TOTAL 26,716 3.% 2.1% 77, % 1.5% Development compared with the same period

13 ICA Sweden Strong quarter Increased net sales +4.8% EBIT excl non-recurring items increased by approximately 1 percent High wholesale sales Improved profit sharing from stores vs last year Improved results Cura pharmacy and own stores Increased costs for strategic initiatives Q3 214 Q3 213 Jan-Sep 214 Jan-Sep 213 FY 213 Net Sales 17,997 17,171 52,33 5,39 67,992 EBIT excl. non-recurring items ,433 2,239 3,58 EBIT margin excl. non-recurring items 5.5% 5.2% 4.6% 4.4% 4.5% PL share of store sales % 21.4% 21.4% Number of stores - - 1,313 1,321 1, Q3 213 Q3 214 Net sales EBIT excl. non-recurring items

14 Rimi Baltic Continued good sales Net sales rose by 16% in Q3 In local currencies +9% Slightly improved EBIT excl. non-recurring items: Improvement mainly due to increased sales in Latvia Off-set by costs from conversions and new store openings Note: exchange rates SEK/EURO Q3 214: , Q3 213: Q3 214 Q3 213 Jan-Sep 214 Jan-Sep 213 FY 213 Net sales 2,952 2,548 8,437 7,495 1,333 EBIT excl. non-recurring items EBIT margin excl. nonrecurring items % 3.4% 2.8% 2.6% 3.% PL share of store sales % 18.% 18.1% Number of stores Net sales Q3 213 Q3 214 EBIT excl. non-recurring items

15 ICA Bank Increased business volume Slightly lower revenues in Q3 due to lower net interest, driven by low repo-rate Lower EBIT excl. non-recurring items: Lower revenues Increased costs mainly due to new regulations and higher personnel costs Release of credit loss reserve gave positive impact of SEK +9 million Q3 214 Q3 213 Jan-Sep 214 Jan-Sep 213 FY 213 Revenues EBIT excl. non-recurring items EBIT margin excl. nonrecurring items % 3,% 22.5% 23.6% 23.6% Business volume ,85 24,529 24, Q3 213 Q Net sales EBIT excl. non-recurring items 15

16 ICA Real Estate Solid development Net sales in line with Q3 last year Slightly lower EBIT excl. nonrecurring items: Higher depreciations of SEK 25 million, compensated by higher revenues from new investments 1 properties sold to Ancore Value SEK 918 million, net gain SEK 59 million, cash flow effect SEK 71 million New market value SEK 14.1 billion (incl. Långeberga) Q3 214 Q3 213 Jan-Sep 214 Jan-Sep 213 FY 213 Net sales ,678 1,686 2,255 Depreciation EBIT excl. nonrecurring items EBIT margin excl. nonrecurring items % 22.2% 18.7% 2.8% 21.% Q3 213 Q3 214 Net sales EBIT excl. non-recurring items

17 Portfolio companies Depreciation of goodwill InkClub Net sales rose adjusted for divestment of Forma Books (fall 213), +5.1% EBIT excluding non-recurring items slightly improved: Higher results in Cervera and Hemtex Depreciation of goodwill in inkclub, SEK -322 million MKr Q3 214 Q3 213 Jan-Sep 214 Jan-Sep 213 FY 213 Net sales ,731 1,765 2,657 EBIT excl. nonrecurring items EBIT margin excl. nonrecurring items % -2.6% -3.6% -6.2%.8% 2 Q3 213 Q3 214 Net sales EBIT excl. non-recurring items -5 17

18 Net sales and EBIT excluding non-recurring items in Q3 Net sales, Q3 214 Q3 213 ICA Sweden Rimi Baltic Portfolio companies ICA Bank ICA Real Estate Intra-group sales & other Total EBIT excl. non-recurring items, Q3 214 Q3 213 ICA Sweden Rimi Baltic Portfolio companies ICA Bank ICA Real Estate Other Total

19 Cash flow Excluding ICA Bank Cash flow in the quarter is weaker than last year Increased working capital calendar effects Q1 Q2 Q3 Q4 Q1 Q2 Q Cash flow from operating activities, excl. ICA Bank Cash flow R12 Pro forma until Q

20 Net debt / EBITDA ratio lower Net Debt/EBITDA at 1.5x follow better 12Mth rolling EBITDA and lower Net Debt (down SEK.8 billion in the quarter to SEK 8.3 billion) The lower Net Debt at third quarter closing is mainly due to real estate divestments in Sweden and Rimi Baltic x ICA Gruppen Net debt / Proforma EBITDA 2.8x 2.1x 2.1x 1.7x 1.5x Long-term goal <2.x 2

21 ICA Gruppen s financial targets Goal Grow faster than the market Actual 12 months rolling 3 September 214 Sweden Baltics Long-term All markets EBIT margin excl. non-recurring items 4.6% 4.% Return on capital employed* 9.3% 9.% Net debt/ebitda** 1.5x <2.x Dividend (% profit for the year) 68%*** 5% As a consequence of the acquisitions and divestments that have taken place during the fall, an overview of the group s financial targets will be made during the fourth quarter Potential adjustments will be announced as soon as they are decided upon * Excluding ICA Bank ** Interest-bearing liabilities excluding pensions and ICA Bank minus cash and cash equivalents in relation to EBITDA, excluding effects of acquisitions, before depreciation and impairment. *** Based on profit for

22 Outlook Sweden Continued strong development for ICA Sweden Increased costs for strategic activities A moderate market growth is expected, weaker than in the past (HUI Research, expects the grocery market to grow by 1.5% this year and in 215) Baltics Good sales growth for Rimi Baltic Continued great focus on new establishments Another 6 store openings after the end of Q3 ICA Bank Lower repo rate impacts future earnings expectations 22

23 Outlook (cont d) ICA Real estate Expansion of Helsingborg warehouse continues according to plan Divested properties in Q3 gives lower revenues short-term Streamlining and growth Complete the divestment of ICA Norway Successful integration of Apotek Hjärtat 23

24 Summary Continued positive development during the third quarter Net sales +5.8% EBIT excluding non-recurring items +6% ICA Norway divestment Acquisition of Apotek Hjärtat Increased market shares in Sweden and the Baltics Our work with strategic priorities continues according to plan, among others: Increased PL share in Sweden and the Baltics Establishing new stores in Sweden and the Baltics Start building a leading position within Online 24

25 ICA Gruppen s capital markets day 1 December at for analysts, investors and media Spårvagnshallarna Birger Jarlsgatan 57A, Stockholm Registration starts at 12.3 To join, please visit 25

26