ICA H1 2019: +3.9% to SEK58.6 bn

Date : 15 August 2019

ICA has released its first half results, reporting consolidated net sales increased by 3.9% to SEK58,627m (US$6.1bn). Operating profit excluding items affecting comparability was SEK2,490m (US$259m) while cash flow from operating activities was SEK4,737m (US$493m).

CEO: good H1 but more to do

Commenting on the results, CEO Per Strömberg said, “I can affirm that we have had a good first half of the year – in terms of sales, earnings, and in the progress of our development projects… There is more to do – especially coupled to the opportunities offered by digitalisation to create better customer offerings in all of our businesses and in further increasing our efficiency and impact.”

Sweden: net sales +3.3% driven by volumes, wholesaling, purchasing and prices

In Sweden, net sales increased by 3.3% to SEK41,673m (US$4.3bn). ICA attributed this to, “price effects, but higher wholesale volumes, with a higher share of purchasing by ICA stores, also made a positive contribution”. Meanwhile, operating profit excluding items affecting comparability grew by SEK232m to SEK1,774m (US$184.5m).

Sales for ICA’s Swedish stores increased by 3.9% on a like-for-like basis and were in line with the market trend. ICA said the growth was mainly driven by “a higher average spend, but also by a larger number of items per customer visit”.

Private label products as a share of accumulated sales totalled 25.9% compared with 25.6% in the same period in 2018.

All formats in growth, strongest in hypermarkets (+4%)

All store formats reported sales and like-for-like growth during the first half. The strongest performance came from Maxi ICA Stormarknad stores, which saw net sales excluding VAT increase by 4% to SEK18,485m (US$1.9bn). Like-for-like sales here rose by 3.1%.

ICA Kvantum supermarkets next best performing banner (+3%)

ICA’s Kvantum supermarket banner saw sales excluding VAT increase by 3% to SEK14,444m (US$1.5bn). Like-for-like sales increased by 2.3%.  ICA’s other supermarket banner saw sales excluding VAT increase by 1.4% to SEK17,777m (US$1.8bn). Like-for-like sales increased by 1.9%.

Meanwhile, convenience store sales excluding VAT grew by 1.5% to SEK8,849m (US$920m).

As of the end of the first half, ICA operated 1,272 stores in Sweden, a decrease of five stores compared with the end of 2018.

Online sales totalled US$119m

As of the end of the first half, ICA achieved online sales of SEK1,142m (US$119m).

291 of ICA’s Swedish stores offered an online grocery service, while over 620 stores offered the ICA Matkassen meal kit service. ICA enjoyed a 42% growth in online grocery and a 6% growth for ICA’s meal bags.

ICA Sweden appoints new CSO

In other news, ICA Sweden has appointed Anders Bärlund as its new chief strategy and business development officer. In his upcoming role as CSO, Bärlund will lead and develop ICA’s major business strategy projects and drive digitalisation.

Baltics H1: +2.8% to US$816m, driven by Lithuania

Meanwhile in the Baltics, net sales in the first half increased by 2.8% to SEK7,845m (US$816m). During the period, four new stores were opened, and one store was closed, bringing the total store count to 270 stores. An additional eight to ten stores are expected to open by the end of 2019.

In Lithuania, net sales increased by 4.3% to €161.8m (US$180.4m). Like-for-like sales here increased by 3.7%. Net sales in Estonia and Latvia also grew by 3.3% to €189m (US$210.7m) and 1.5% to €387.9m (US$432.5m) respectively. Like-for-like sales grew by 1.7% in Estonia and by 5.7% in Latvia.

ICA said the converting of Supernetto stores in Latvia had "an estimated negative impact on sales for Rimi Baltic of 1.6%". Rimi Baltic’s market share also decreased during the period.

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