Building on our strong core business Capital Markets Day December 14, 2017 Anders Svensson, CEO ICA , Deputy CEO ICA Gruppen Building on our strong core business

A strong market leader …

… in a rapidly changing market …

… with an excellent position to capture new growth

2 ICA Gruppen CMD 2017 2017-12-14 A strong market position – market leader for more than 50 years …

Consumables other ICA Stores 36% 30%

Netto 1% 3% Bergendahls 4% Axfood 13% Coop 13%

Source: SCB, HUI, Company data. Sales as percentage of total consumption of consumables in Sweden 2016

3 ICA Gruppen CMD 2017 2017-12-14 … with a better 2017 store sales momentum …

% 6,0 • Sales trend improved in 2017 5,0 • Market share gains 4,0 • Food inflation higher than

3,0 last year

2,0 • ICA online grew YTD 49% - market grew by 17% 1,0

0,0

-1,0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2015 2016 2017 Sales Index, Def ICA ICA, LFL Food price inflation

Source: ICA and HUI Research AB (owned by The Swedish Trade Federation)

4 ICA Gruppen CMD 2017 2017-12-14 … and EBIT margins for the stores remain on high levels …

4,00% Adjusted for paid profit share • Average store margins 3,50% slightly down in 2016 mainly due to higher payroll taxes 3,00% for young employees 2,50% – 3-400 MSEK in extra costs all things equal across all stores 2,00% • In addition – high activity in 1,50% store refurbishments, online business etc – i.e investing 1,00% for future growth Retailer owned ICA stores EBIT % 0,50% ICA Sweden EBIT as % of store sales

0,00% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

5 ICA Gruppen CMD 2017 2017-12-14 … as does ICA Sweden’s reported EBIT margin

• Slightly down in 2017 due to: – Lower profit sharing – High project activity – Store openings 4,7% 4,7% 4,7% 4,6% 4,5% 4,6%

2012 2013 2014 2015 2016 2017 Q3 R12

6 ICA Gruppen CMD 2017 2017-12-14 Continued robust brand position

Spontaneously knows about 95% Considering to shop at 97% Likes & buys their private label 62%

Source: Nielsen Shopper Trends 2017 Source: Brand Funnel 2017 & ICA Brand Tracking October 2017

7 ICA Gruppen CMD 2017 2017-12-14 A rapidly changing market Addressing customer expectations and growth opportunities …

Price focus Digitalisation Meal solutions

9 ICA Gruppen CMD 2017 2017-12-14 … to develop our core business and to take new positions …

Online

Traditional Meals retailers

Hard discount

10 ICA Gruppen CMD 2017 2017-12-14 Develop our core business Value for money – offering attractive price points

• Price positions stable in the Swedish market • Promotional share slightly higher in 2017 vs 2016 • Price initiatives in 2016 & 2017 to improve price perception – targeted SKUs within private label – KPI price perception now in line with long term objective • Using big data to drive price volume and optimize promotions vs shelf prices

12 ICA Gruppen CMD 2017 2017-12-14 ICA’s private label shows fastest growth in the market

Almost 4,000 products in the PL assortment 613 +6.5% +24.7% new of which sales share of sales 158 YTD Sep YTD Sep meal solutions

13 ICA Gruppen CMD 2017 2017-12-14 Winning the future – take new positions On our way to becoming market leader online – sales up 49% YTD

60% Sales growth ICA Market ICA (YTD Sep 2017) 50% Food Online +59% +37% Menu Baskets +21% -9% 40% Total +49% +17%

30%

20% Market 10%

0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 2016 2017

15 ICA Gruppen CMD 2017 2017-12-14 Good population coverage but we need to increase reach and strengthen offering in larger cities…

Groceries online Menu baskets Number of stores 203 Number of stores 563

Number of municipalities 190 (of 290) Number of municipalities 224 (of 290)

Share of population 76% Share of population 92%

% Home delivery 50% % Centrally picked 60%

% Click’n Collect 50% % Home delivery 5%

% Click’n Collect 95%

Delivery / C&C Delivery / C&C No coverage No coverage

16 …and these are some of our key initiatives

• Fleet service in started • Growing the online store footprint • Projecting for a ”dark store” solution in Stockholm and larger cities – Initially small scale and manual – Supplementary service to retailers

17 ICA Gruppen CMD 2017 2017-12-14 Customer Loyalty 2020 Marketing transformation program

Why the need for a transformation? • Our customer demands relevant communication • New competition and benchmarks • Maintain ICA’s leading position both in the physical and digital world • Modernize our technical IT-platforms

18 ICA Gruppen CMD 2017 2017-12-14 Building the way to Customer Loyalty 2020 - Marketing transformation program

Modernizing and digitizing ICA’s marketing offer in order to realize our OMNI vision • Moving from manual, analogue processes to digital tools based on behavior, preferences and life situation • Driving sales and increase loyalty in a more efficient way, securing efficient and continued development within the CRM area • Utilizing the vast amount of customer data ICA have to build a customer centric marketing program

19 ICA Gruppen CMD 2017 2017-12-14 Focus on meal solutions: - new concepts and products broadening the offering

20 ICA Gruppen CMD 2017 2017-12-14 From zero to 50 pizzerias in ICA stores in one year

Sample concepts Criteria for profitable meal solutions: Pizza • Large-scale potential • Produced locally in store • Efficient in-store production Cooked food • Take away concept

Hamburgers

Sandwich bar

Coffee

21 ICA Gruppen CMD 2017 2017-12-14 Welcome to taste Sushi Daily at lunch today!

22 ICA Gruppen CMD 2017 2017-12-14 Celebrating 100 successful years with an excellent position to capture new growth

Win the core business

Win together

Win the future

23 ICA Gruppen CMD 2017 2017-12-14