Focus on growth into

the next decadeICA Gruppen Capital Markets Day, December 11, 2019

Sven LindskogCFO ICA Gruppen

Lena BobergCEO ICA Real Estate

Margin recovery…

2

4,3%

3,8%

4,3%

3,9%

3,6%

4,2%

17-H1 18-H1 19-H1

ICA Sweden, EBIT % EBIT, % Group

ICA Sweden recovery

Improved profitability across

all other segments

Hemtex divested

..and we are close to meeting our long term financial targets..

TargetR12

(30/9 2019)

Long term targets

from 2019

Grow faster than the market

Sweden

Baltics

Pharmacy

All markets

Operating profit excl. items affecting

comparability,%4.4 4.5

ROCE1,% 7.9 7.5

Net Debt/EBITDA2 2.1x <3.0x

Dividend (% of net results 2018) 66 At least 50

1. Excluding ICA Bank

2. Net debt excludes pension debt and ICA Bank

3

…with margins remaining strong vs peers

Peer group comparison 2014-2018

4,3%

2,9%

ICA Gruppen* Peer Group**

Going forward: growing sales and

maintaining margins

• Focus on topline growth incl. E-commerce

• Continue to push digital agenda

• Develop store format & network

• Expand PL assortment

• Leverage improvement projects

• ..and more

4

*Does not include ICA store margin **Axfood, Kesko, NorgesGruppen, Metro, Ahold Delhaize,

Colruyt, Carrefour, Casino, Sainsbury’s, Tesco,

• Maintaining margins

• Managing working capital

– Continued improvement in 2019 –

from -13.1 to -15.1 days

– One day represents 320 MSEK in

freed up capital on group level

– SCF* initiative has freed up more

than 1.5 SEK billion (+0.2 YTD

2019) of OWC since end of 2017

and project continues

• Solid Real Estate cash flow

generation

Healthy and sustained cash flow is funding our digital

transformation and growth investments

*Supply Chain Financing

4 064 4 546 5 684 5 816 6 555 7 046

5 6005 785

6 164

6 653

6 097 6 226

5 600

2014 2015 2016 2017 2018 2019 R12 Q3

Operating CF (free cash flow)

EBITDA excl. Bank

Average oper. CF 2014-2019

All figures excl IFRS 16 effect

5

Timing effects shifting investments into 2020. Underlying in

line with 2019…

MSEK

700 MSEK lower than earlier

guidance – mainly timing

Real Estate

Retail & Bank

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

5 000

2014 2015 2016 2017 2018 2019 2020

Actual Guidance

Retail Guidance

Real Estate Guidance

~3,300

~4,000

2,100 2,400

1,6001,200

6

3,507

Capex

Real Estate=ICA Real Estate (Sweden)

..with investments in 2020 driven mainly by Real Estate and

Riga DC project in Rimi Baltic

• IT, online & digital, (ICA

Sweden and Rimi B) +200

MSEK

• Store network; primarily ICA

Sweden, +100 MSEK

• Rimi B; mainly new DC in

Riga, +100 MSEK

• ICA Real Estate +400 MSEK

In addition:

• Capital injection in new

mortgage business estimated

at 300 MSEK

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

2018 2019 2020

Guidance

~4,000

IT, online & digital

Store network/logistics

Rimi B real estate incl new DC

Real estate Sweden

3,3003,500

7

• ICA Real Estate +400 MSEK

– E-commerce warehouses, other logistics and development

• Net investments continue to be high as divestments currently on low level

• Average annual net investments 2010-2020 is ~-270 MSEK

• Annual depreciations ~500 MSEK

• ICA Real Estate annual EBITDA approx. SEK 1 billion per year in past five years

• Favorable development of property values

E-commerce logistics is a major driver of Real Estate

investments in 2020

MSEK

Investments

Divestments

-3 000

-2 000

-1 000

0

1 000

2 000

3 000

4 000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Guidance

Average net

investment

Net

investments

8

Real Estate=ICA Real Estate (Sweden)

9

• Ocado CFC in Brunna north-west of Stockholm

– Built by ICA Fastigheter and operational 2022

– Size 32,000 sqm, included an office building in wood

– Aiming for BREEAM Excellent certification

– Total real estate capex 2018-2022 estimated at SEK ~1 billion

• New ICA Logistic site in Brunna northwest of Stockholm

– Operational 2020

– Size 7,500 sqm

– New distribution facility to support current facility in Stockholm

• Forward purchase of new ICA Maxi store in Bålsta outside of Stockholm

Some examples of large projects for

ICA Real Estate in Sweden in 2020

FOCUS AREAS

Estimated market growth in

2020: 2.5% (price ~2.0%)

ICA

Sweden

Estimated market growth in

2020:

• Estonia: 2.3% (price 2.1)

• Latvia: 3.0% (price 2.4)

• Lithuania: 3.3% (price 2.3)

Rimi

Baltic

• Grow faster than the market, long-term stable margins

• Successfully manage new competition

• E-commerce offering/meal solutions/convenience

• Strengthen store network – especially in Lithuania

• Secure successful DC project in Riga

MARKET

• Grow faster than the market, maintain margins

• E-commerce growth and efficiency

• Omni-channel/loyalty programs/CRM

• Meal solutions/Convenience/ICA Maxi pilot

• Organizational efficiency, logistics costs

ICA Sweden – sales growth, cost efficiency and executing on growth projects

Rimi Baltic – meeting new competition while maintaining strong position

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FOCUS AREAS

Estimated market growth in

2020 3.7%.

• OTC: 2.5% (price -1.0%)

• Traded goods: 9.0%

(price 1.0%)

Apotek

Hjärtat

• Robust market for commercial properties within groceries due to stable cash-flows

• High demand for modern and well-located logistic facilities, especially when close to urban areas

Real Estate

• Continued active management of the property portfolio

• Development of urban locations for establishment of

new stores

• Meet high upgrade activity level in current store network

• Increased focus on sustainability and digitalization

MARKET

• Grow faster than the market, improve margins

• E-commerce/omni-channel/last mile

• Leverage investment in Min Doktor

• Leverage investment in new automated warehouse

Apotek Hjärtat – e-commerce and Min Doktor expansion

Real Estate – portfolio management, securing value creation

11

ICA Bank – launching a mortgage company

Group costs on same level in 2020

FOCUS AREAS

• Repo rate remains negative

• Intense bank competition

• Insurance market growing at

steady pace ~3%

ICA

Bank &

Insurance

MARKET/COMMENT

• Partnership for new mortgage company

• Broaden existing customer relationship/omni-channel

• Profitable growth of Insurance business

• Scale-up use of digital tools – AI/Advanced analytics

Central functions incl. ICAx Group • Group costs in 2020 ~450 MSEK

12

Focus on growth into the next decade

Margins have recovered

Investments continue into 2020

Grow sales and maintain margins

13

Forward-looking statements

This presentation contains forward-looking statements. Such statements are subject to risks

and uncertainties as various factors, many of which are beyond the control of ICA Gruppen AB

(publ.), may cause actual developments and results to differ materially from the expectations

expressed in this presentation.

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Disclaimer