Annual Report 2013
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Avsnitt Annual Report 2013 Content Operations 1 This is ICA Gruppen 2 2013 in brief 3 History 4 CEO comments 8 Goals and strategy 10 Business model 16 Market 18 ICA Gruppen’s six segments 21 ICA Sweden 22 ICA Norway 26 Rimi Baltic 29 ICA Bank 32 ICA Real Estate 35 Portfolio companies 38 Values 40 Employees 42 Sustainability report 45 ICA’s sustainability work 46 Comment from SVP CR 47 Principles 48 Environment 56 Quality 62 Ethical trade 66 Health 70 Community engagement 73 Sustainability awards 77 About the Sustainability Report 78 Financial information and governance 85 Board of Director’s Report 86 Risk and risk management 91 Corporate governance report 2013 96 Shares and shareholders 110 Group 113 Group Notes 118 Parent Company 143 Parent Company Notes 148 Auditor’s report 156 Calendar 158 The annual report is also available on reports.icagruppen.se/en/ar/2013/home ICA Gruppen’s segments ICA Gruppen’s operations are reported in six segments: ICA Sweden, ICA Norway, Rimi Baltic, ICA Real Estate, ICA Bank and Portfolio Companies. Read more about the segments from page 21 onwards. Goals and strategies ICA Gruppen follows a well-defined Group strategy with clear priorities for each area. Read more about the strategy, priorities and the new financial goals presented at the end of 2013 on page 10. Avsnitt With a focus on groceries At the heart of the ICA Gruppen’s oper- ations is grocery retail, and our grocery stores are the core of our business. Around our stores we have built up a Governance and control number of operations which, individually Read more about ICA Gruppen’s or in combination, contribute to our corporate governance from page attractive customer offering and our stable 96 onwards. market position. Read more about the business model on page 16. Avsnitt A market in transition Health, price consciousness, more digitalisation, simplicity and sustainability. These are Welcome to a few of the trends that are making their mark on the ICA Gruppen’s grocery retail market. Read Annual Report more about the market on page 18. At ICA Gruppen we understand the importance of maintaining the trust of our customers and stakeholders. This, of course, also applies to the information communicated about us and our operations at a more general level. We see the Annual Report as one of the most important documents in this regard. Our operations are both easy to understand and complex; easy because so many people have a relationship to us and with what we offer, complex because so many aspects need to interact to create a great customer experience and generate good profit- ability. I hope that the Annual Report will help people better understand how we operate. Our aim is to provide a picture that is as comprehensive as possible. We want to go behind the numbers and show what drives us and what we are doing to maintain our success. We want to reflect the dynamics that drive our organisation and make it so exciting. Corporate responsibility Per Strömberg, Within ICA Gruppen a CEO ICA Gruppen AB conscious focus on sustain- ability goes hand in hand with long-term profitability. Read more about sustainability from page 45 onwards. ICA Gruppen Annual Report 2013 1 Operations | This is ICA Gruppen This is ICA Gruppen With 2,100 of our own and retailer-owned grocery stores in five geographical markets, ICA Gruppen is one of the leading retail companies in the Nordic region. The core business is grocery retail. The other businesses are ICA Bank, ICA Real Estate and a number of wholly-owned or partly-owned portfolio companies. Within ICA Gruppen, entrepreneurship is employees, most of them in Sweden, combined with large-scale and diverse Norway and the Baltic region. Around operations, and local adaptation is combined 50,000 people work at ICA in offices, with economies of scale and efficiency. with logistics or in one of ICA’s own or Through cooperation and development of retailer-owned stores. mutually supporting operations, ICA Gruppen ICA Gruppen’s share is listed in the has succeeded in securing customer confi- Large Cap segment of NASDAQ OMX dence, good profitability and a leading Stockholm. The largest shareholder at market position. the end of the year was ICA-handlarnas In 2013 ICA Gruppen had net sales of Förbund (the Association of ICA around SEK 100 billion and more than 21,000 Retailers). A leading player in grocery retail ICA Gruppen is one of the Nordic region’s main players in grocery retail. At the end of 2013 there were 2,127 wholly-owned or retailer-owned stores, 1,321 of which are located in Sweden, 571 in Norway and 235 in the Baltic region. Bank with the most satisfied customers ICA Bank fulfils several important functions. In addition to providing user-friendly banking services, ICA Bank is also helping to improve loyalty to the ICA stores while reducing the cost of the financial flows in the ICA system. The Nordic region’s largest real estate company focusing on retail properties ICA Real Estate is one of the largest commercial real estate companies focusing on retail properties in the Nordic region. The overall mission is to meet the Group’s long-term need for appropri- ate properties in the right locations in Sweden and Norway. The portfolio companies ICA Gruppen also owns, wholly or partly, a publishing company and four retail companies. After an evaluation of the portfolio companies in 2013, ICA Gruppen decided to divest Forma, Kjell & Company and Cervera. Hemtex and inkClub are believed to have the potential to support the core business and will therefore not be divested. 2 ICA Gruppen Annual Report 2013 Outcome 2013 • In Sweden ICA Gruppen grew faster than the market overall. Rimi Baltic had a growth rate slightly below the market. In Norway the growth was below the market. • Operating profit excluding non-recurring items amounted to about SEK 3 billion, representing an increase in the operating margin to 3%. • Ne t debt amounted to 2.1 times EBITDA. • Proposed dividend: 68% of profit for the year. • Dir ect climate impact was reduced by 18% compared with 2006. • 77% of ICA’s suppliers of corporate brand products in high-risk countries are socially audited. • 59% of ICA’s food suppliers of corporate brand products are quality certified. 2013 in brief • Hakon Invest acquires Ahold’s shares in ICA AB. • Hakon Invest changes its name to ICA Gruppen. • New Executive Management team for ICA Gruppen. • The Norwegian Competition Authority imposes a temporary suspension on cooper- ation agreement with Norgesgruppen. The Key figures, pro forma * relevant ministry gives a temporary go-ahead to a joint purchase while the final decision is Group 2013 2012 pending. Net sales, SEK m 99,456 99,602 • ICA Gruppen issues new shares for SEK 5 billion. Operating income (EBIT) excluding non-recurring items, SEK m 3,004 2,715 • Decision on expanding the warehouse in Operating income (EBIT), SEK m 2,547 2,607 Helsingborg. • ICA Gruppen issues bonds. Income before tax, SEK m 1,919 2,091 • The Norwegian Competition Authority Income for the year, SEK m 1,424 312 extends the suspension of the cooperation agreement. Operating margin excluding non-recurring items, % 3.0 2.7 • ICA Sweden decides to expand ICA To Go. Operating margin, % 2.6 2.6 • ICA Real Estate completes the acquisition of a Return on capital employed, % 6.1 7.0 warehouse property in Helsingborg. • Evaluation and decisions regarding portfolio Return on equity, % 6.0 1.1 companies and a new non-food strategy. Earnings per ordinary share, SEK 7.0 5 1.65 • ICA Bank named Sweden’s best private bank. 7.0 5 1.65 • ICA Real Estate issues preference shares. Earnings per C share, SEK • New financial goals are presented. Dividend per ordinary share, SEK 8.0 0 Important events after the end of the year • ICA Gruppen signed an agreement to refinance the last outstanding bridge loans with other debt financing. All the bridge loans raised in conjunction with the acquisition of the remaining shares in ICA AB have now been refinanced. • The Norwegian Competition Authority has notified in an advance ruling that it will not approve the cooperation with Norgesgruppen. At the time of writing, a review of the decision and the consequences it may have for the Company’s operations in Norway is in progress. * See glossary page 159. ICA Gruppen Annual Report 2013 3 Operations | History New Group with long history ICA Gruppen is a new group of companies In autumn 2012 Ahold in the Netherlands more clearly reflect the focus and future formed in 2013, but just as before, the core announced that it intended to evaluate its direction of the business Hakon Invest changed business is grocery retail. All of the oper stake in ICA AB and in February 2013 Hakon its name in May 2013 to ICA Gruppen. ations can be developed based on their own Invest (listed on NASDAQ OMX Stockholm) Through cooperation and continued merits, while at the same time supporting the and Ahold reached an agreement whereby development of mutually supporting core business. Hakon Invest would acquire Ahold’s shares. operations, ICA Gruppen is determined to This made Hakon Invest the sole owner of ICA. firmly establish its leading position in the Even before this acquisition, ICA was the grocery retail market, further improve dominant holding in Hakon Invest’s portfolio in customer confidence and at the same time terms of value. In 2013 the operational activities create a stable platform for sustained of ICA and Hakon Invest were merged, and to profitability and growth.