Post on 02-Oct-2021
Capital Markets Day15 December 2016
Per Strömberg, CEO ICA Gruppen
Winning in a changing market
Winning in a changing market
15/12/2016 ICA Gruppen CMD 2016 2
We have a strong foundation for future growth
Rapidly changing retail market
Clear strategy to deliver on our targets
DIVESTMENTS:
• Kjell & Co, 2014
• Forma Publishing Group, 2014
• ICA Norway, 2015
• Cervera, 2015
• Apotek Hjärtat, B-2-B, 2015
• inkClub, 2016
• ICA Real Estate Norway, 2017
ACQUISITIONS:
• Apotek Hjärtat, 2015
• Hemtex (Acquisition of minority shares, now wholly owned), 2015
NEW BUSINESS:
• ICA Insurance, 2015
Many structural changes delivered in thepast three years…
ICA Gruppen CMD 2016 315/12/2016
..have been an important driver of EBIT improvement since 2012…
15/12/2016 ICA Gruppen CMD 2016 4
EBIT-margin excl. non-recurring items
20122.7 %
EBIT-margin excl. non-recurring items 4.4 %
Divestments
ICA Norway 0.6 pp
Kjell & Co, Forma, Cervera 0.0 pp
Acquisitions
Apotek Hjärtat 0.4 ppImprovementICA Sweden 0.5 pp
Rimi Baltic 0.2 pp
Other 0.0 pp
Q3 2016 (R12)
..and have led to ICA Gruppen’s current structure
GroceryNon Food
Bank &Insurance
Pharmacy
Real Estate
5ICA Gruppen CMD 201615/12/2016
Well positioned for continued growth
• A very strong position in our core businesses− Clear #1 in Sweden with good business momentum and high margins− #2 in Rimi Baltic with leading position in Latvia and increasing market
share in Estonia and Lithuania− Strong and improving #2 position in the Swedish pharmacy market− Excellent brand positions across the group
• High quality retail real estate portfolio in Sweden, well positioned to further strengthen the store network
• ICA Bank’s +700,000 customers provide a good base for future growth
• Strong cash flow and balance sheet to fund further business growth and business development
15/12/2016 6ICA Gruppen CMD 2016
Delivering on our strategic priorities 2016
CREATEGROWTH
SIMPLICITY
CUSTOMEREXPERIENCE
PEOPLE
BRAND & LOYALTY
ENABLEGROWTH
Drive efficiency throughout the value chain
Create customer engagement and responsible, climate-neutral operations
Engage and develop our people in a fast-moving and diverse organisation
Provide a great offering, value for money, a strong store network and a personal, omni-channel experience
Strengthen customer relationships through leading brands, loyalty programs and CRM
1. Ensure competitive pricing and fair price perception 2. Build ICA’s overall health offering and position 3. Strengthen the Non Food offering, leveraging Hemtex4. Build a leading omni-channel offering across OpCos and platforms5. Further strengthen our position in the Baltics
6. Develop leading CRM and build a common Swedish loyalty program
7. Drive efficiency throughout the value chain, with focus on store operations and digitalisation
8. Improve IT development through closer business integration and new ways of working
9. Integrate ICA’s common values and improve talent management
10. Drive sustainable customer choices and climate-smart operationsSUSTAINABILITY
15/12/2016 ICA Gruppen CMD 2016 7
Delivering on our strategic priorities in 2016
15/12/2016 ICA Gruppen CMD 2016 8
Invested in Private Label pricing, (”Nytt lägre pris”)New pricing strategy Apotek Hjärtat online
Grown online sales in the retail business. +46% in Grocery (Q3), +117% in Pharmacy,CDO in place (Chief Digital Officer)
Launched common loyalty program for ICA Sweden, ICA Banken and Apotek Hjärtat
Grown market share in Rimi Baltic, +0.5pp
Delivering on our strategic priorities in 2016
15/12/2016 ICA Gruppen CMD 2016 9
”Leading way of working” (LEAN) scaled up in stores
Introduced agile development in several areas (ICA Bank, ICA Sweden, marketing)
ICA Values rolled out and fully embedded
On track to reach 2020 climate neutrality target (focus transportation and cooling)
Continuing to strengthen sustainability to meet stakeholder demands
ICA Gruppen CMD 2016 10
• ICA Gruppen won the UN Momentum for Change award during COP22 for the project ”Klimaträtt” (Climate Right)
• Chief Corporate Responsibility Officer appointed in Q3 to the executive management team
• New sustainability committee at board level
15/12/2016
ICA Real Estate – supporting urban growth, Norwegian divestment completed
ICA Gruppen CMD 2016 11
• Agreement signed for divesting Norwegian properties− Transaction to be finalized Q1 2017− 1.9 SEK billion cash-flow− 400 MSEK capital gain
• Stable EBIT development
• Focus ahead:− Continue to develop attractive locations− Implement urban strategy− Land & property banking, larger project
scope*Excluding real estate in Norway
EBIT* excl. non-recurring items, MSEK
323
377366
2014 2015 2016 Q3 R12
15/12/2016
ICA Bank – Actions show result, underlying improvements coming through
ICA Gruppen CMD 2016 12
• Operational environment difficult in 2016
• Many mitigating actions have been implemented and should reverse trend in coming years− ICA insurance off to a good start and follows
plan but not yet contributing to profits− Improved customer loans and mortgage
offering− Continue launch of ICA Bank Corporate
services
EBIT excl. non-recurring items, MSEK
189
110
67
2014 2015 2016 Q3 R12
15/12/2016
Hemtex – in a transition phase
ICA Gruppen CMD 2016 13
• Profit level clearly not satisfactory
• Market conditions:− Moderate growth for the home textile
market− Increasing competition − Online sales growing quickly
• New strategy/actions− Clearer assortment and pricing strategy− New store concept− Develop omni-channel & e-commerce− Reduce overhead and improve efficiency
in stores
-30
-20
-10
0
10
20
30
-1 200
-900
-600
-300
0
300
600
900
1 200
2014 2015 2016 Q3 R12
Net sales EBIT excl non-recurring items
EBIT excl. non-recurring items, MSEK
15/12/2016
Three dominant forces affecting retail
15/12/2016 ICA Gruppen CMD 2016 14
Advancements in technology and innovation
Changing face of the consumer
Structural industry shifts
15/12/2016 ICA Gruppen CMD 2016 15
Urbanization centralizes shopping
Migration and growing
minorities drive new assortments
Millennials early adopters of new technology and shopping habits
Changing face of the consumer
Structural industry shifts
15/12/2016 ICA Gruppen CMD 2016 16
Optimize portfolio and formats
towards growing channels
Consider M&A to reach scale and
improve cost position
Technology changes require
finding new talent
Advancements in technology and innovation
15/12/2016 ICA Gruppen CMD 2016 17
Digitalization to improve
processes and lower costsData to improve
customer offering and customer
experience
Core areas to focus on and invest in…
Convenience
18
Digital transformation Price value Health and
sustainabilityICA Gruppen CMD 201615/12/2016
19
...reflected in our 2017 Strategic Priorities
CREATEGROWTH
CUSTOMEREXPERIENCE
ENABLEGROWTH
SIMPLICITY
Drive efficiency throughout the value chain
PEOPLE
Engage and develop our people in a fast-moving and diverse organisation
Provide a great offering, value for money, a strong store network and a personal, omni-channel experience
BRAND & LOYALTY
Strengthen customer relationships through leading brands, loyalty programs and CRM
1. Ensure competitive pricing and fair price perception 2. Implement new strategies with strengthened customer offerings for
Non Food, Hemtex and ICA Bank3. Build a leading omni-channel offering across businesses and platforms4. Strengthen store network and concepts with focus on urban areas,
convenience and health5. Further strengthen our position in the Baltics*
6. Develop leading CRM and leverage the common Swedish loyalty program
7. Drive reliability and efficiency throughout the value chain with focus on logistics and store operations
8. Improve speed and project delivery through new ways of working
9. Improve performance management process and change ability
10. Drive sustainable customer choices and climate-smart operationsCreate customer engagement and responsible, climate-neutral operationsSUSTAINABILITY
15/12/2016 ICA Gruppen CMD 2016
Strategic priorities 2017
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Ensure competitive pricing and fair price perception
Build a leading omni-channel offering across businesses and platforms
1
3
– Price perception and online
Strategic priorities 2017
15/12/2016 ICA Gruppen CMD 2016 21
Strengthen store network and concepts with focus on urban areas, convenience and health
Develop leading CRM and leverage the common Swedish loyalty program
4
6
– strengthen urban network and leveraging Swedish loyalty program
Strategic priorities 2017
15/12/2016 ICA Gruppen CMD 2016 22
Drive reliability and efficiency throughout the value chain with focus on logistics and store operations
7
– efficiency in focus
Winning in a changing market
15/12/2016 ICA Gruppen CMD 2016 23
We have a strong foundation for future growth
Rapidly changing retail market
Clear strategy to deliver on our targets