ICA disappoints the market

E-shopping in ICA store. Photo: ICA/Jessica Gow/TT
Photo: ICA/Jessica Gow/TT
By Reidar Molthe

11 February 2021 13:02

ICA disappoints the market

The Swedish giant, ICA, disappoints the market at the end of the year and the stock exchange sends the share values down by about 0,4 percent. The reason is that ICA is growing slower than the market, hence losing market share in a market that is growing strongly due to the Corona pandemic.

ICA CEO Per Strömberg. Photo: ICA/Anders Wiklund/TT
ICA CEO Per Strömberg loses market share and the market sends Ica shares down despite strong margins and proposed dividends of 63 percent of net profits. Photo: ICA/Anders Wiklund/TT

In isolation, ICA is doing very well, but relatively worse than most of its competitors.

Net sales increased by 5.6 per cent to SEK 32.6 billion. Operating profit ended at 1.4 billion against 1.3 billion in 2019 CEO Per Stömberg revealed under the yearly presentation Wednesday, February 10th

The board proposes a dividend of NOK 13 (12) per share. This corresponds to 63 per cent of the year's result.

Strong health ambitions

ICA is not only a large and dominant player, but also has a pronounced aim of being socially conscious. At the beginning of 2021, their health ambitions will increase both on behalf of their customers and employees.

The ambition includes three clear focus areas and applies to all companies in Sweden: physical well-being, mental well-being, and a healthy and safe use of antibiotics.

Per Strömberg also proudly announce that ICA already has reached its old climate goal with a reduction of greenhouse gas emissions with 76 percent from the base year 2006. The goal is to be climate neutral no later than 2030.

Lost market shares

ICA has lost some market share in Sweden during the fourth quarter and full year 2020, something that CEO Per Strömberg largely refers to the effects of the pandemic.

“We understand why we can lose a little in 2020. When you look at it, we feel a sense of security that when the pandemic releases, we will be able to grow our market shares ," he argues.

He explains that when summarizing the development throughout 2020, it is clear that during periods of high infection spread, high disease rates and closure of society, then ICA has had a lower market share. In periods of less contagion, ICA has taken market shares, he explains:

ICA has a larger share with small and medium-sized stores, which are affected to a greater extent when people during periods of high spread of infection shop more in larger stores or online.

During the fourth quarter, sales in the Swedish Ica stores increased by 7.2 percent for comparable stores, while market growth amounted to 7.5 percent during the quarter.

Bonus of SEK 10.000 per employee

For the fourth quarter, Per Strömberg highlights the margin in Ica Sweden as a bright spot. During the fourth quarter, the adjusted operating margin in Sweden increased to 4.2 percent (3.8).

“The final quarter of the year follows a pattern known for the year with continued impact from the covid19 pandemic - volume growth in ICA Sweden, while Rimi Baltic, and especially Apotek Hjärtat, had a weaker development. At the same time, e-commerce continues to grow very strongly.”

“It has been a strenuous year in many ways, and I am therefore extra happy that with the strong result behind us, we can hand out a historically high-performance bonus of SEK 10,000 per employee. The bonus is distributed to employees who are not covered by any other variable remuneration program.”

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