ICA Gruppen net sales increase 2.6% in Q4 FY19

06 Feb '20

4 min read

Pic: ICA Gruppen

ICA Gruppen, a Swedish retailer, posted 2.6 per cent jump in net sales to SEK 30,850 million in Q4 FY19 that ended in December 2019. Net sales for year-on-year (YoY) increased 3.4 per cent to SEK 119,295 million. Company reported that In FY19 the sales in ICA stores increased at good pace. Rimi Baltic and ICA Bank dominated with strong earnings performance.

Operating profit for Q4 excluding items affecting comparability was SEK 1,267 million. Profit for Q4 was SEK 915 million.

Operating profit YoY excluding items affecting comparability was SEK 5,356 million. Profit for the complete year was SEK 3,450 million.

The group reported that their favourable growth online continued, and also during Q4 the company grew faster than the market for both groceries and pharmacy products. In November company also started up their e-commerce business in Rimi Baltic.

ICA Sweden, groups grocery retail store, reported net sales for Q4 increased by 3.1 per cent to SEK 22,020 million compared with a year ago. The increase was mainly attributable to price effects, but higher wholesale volumes also made a positive contribution. ICA Sweden's net sales in complete FY19 increased by 3.4 per cent to SEK 85,187 million compared with the preceding year. The group stated in the report that their priorities in e-commerce, meal solutions, price value, personalisation and health & sustainability were well-aligned with what customers prioritise and what is dominating market growth. To further achieve success in these areas, the group believes that continued digitalisation will be of utmost importance, and they continue to invest in this area with undiminished speed.

Ecommerce in total for the group grew 25 per cent in Q4 compared with the same period a year ago, with 30 per cent growth in food online and 3 per cent reduction for ICA Matkassen.

Sales (excluding VAT) for Swedish ICA stores increased by 3.7 per cent in Q4 and by 3.5 per cent on a like-for-like basis. Sales growth during the period was driven mainly by a higher average spend owing to higher average prices, while the number of items purchased per customer visit decreased slightly.

Rimi Baltic, subsidiary of ICA, continued to grow in Q4 with net sales increased by 2 per cent to SEK 4,279 million. Net sales increased by 2.7 per cent to SEK 16,168 million during the year. The group reported that the sales in Rimi Baltic continued to be price-driven with weak underlying volume growth that was temporarily hampered by completion of store conversions in Latvia.

Net sales for Apotek Hjärtat in Q4 increased by 4.7 per cent to SEK 3,813 million. The increase in Q4 was driven by positive mix effects, growth in e-commerce and new pharmacies. While sales during grew 4.7 per cent to SEK 14,778 million and were reported to be affected by disruptions during Q3 associated with the start-up of the new, automated warehouse in Norrköping.

The real estate segment's net sales for Q4 totalled SEK 688 million. Net sales in real estate for the year totalled SEK 2,731 million, and operating profit excluding items affecting comparability increased to SEK 504 million.

ICA Bank's revenue in Q4 increased to SEK 410 million. While for the entire year sales increased to SEK 1,570 million.

Apart from group's focus on their long-term sustainability targets, intensive work is reportedly being carried out on many fronts in sustainability. To meet customers' demands for locally produced food, group has partnered with the dairy company Norrmejerier to produce a Swedish alternative to halloumi.

Looking at the coming year, the group reported that continued growth will be in focus for which they will require to be successful in a number of key areas that the group presented at their Capital Markets Day in December.

Fibre2Fashion News Desk (JL)

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