The Board of ICA Gruppen has adopted the following long-term financial
Grow faster than the market
Good sales development and a strong market position are key factors in achieving and maintaining good profitability. This target applies to the Group’s grocery operations within ICA Sweden and Rimi Baltic, and to Apotek Hjärtat.
In the very challenging market situation that arose in 2022 with high inflation and falling volumes, ICA Sweden and Rimi Baltic have not achieved their target to grow faster than the market but rather have lost market share. At the same time, Apotek Hjärtat has achieved its target and strengthened its leading position in the Swedish pharmacy market. Apotek Hjärtat’s market share has increased due to a growth in physical pharmacy sales that is much higher than the market.
Achieve an operating margin excluding items affecting comparability of 4.5%
The target level provides room for investments in the business and a return on invested capital, and is at a good level for the industry. The target is measured excluding items affecting comparability.
The outcome was 4.3% (4.6). Margins have been squeezed during the year as inflation has increased and cost increases have grown. This has particularly affected ICA Sweden and Rimi Baltic, which has had an impact on the Group’s operating margin. The operating margin of other operations was strengthened.
Achieve a return on capital employed of 7.5%
The target level indicates that the Group is using capital effectively. ICA Bank is not included in the calculation because banking legislation stipulates that its assets and liabilities are not available to the Group. Instead ICA Bank has a target for return on equity that is a more appropriate target for banking operations.
The outcome was 9.1% (9.2). On the one hand, the Group’s operating profit was higher – both from operations and through capital gains, particularly from property divestments. On the other hand, the merger with Murgröna meant that the average capital employed increased by around SEK 5.7 billion, which overall meant a lower return but still well above the Group’s target of 7.5%.
Net debt excl. ICA Bank and IFRS 16 Leases/EBITDA excl. IFRS 16 Leases <2.0
A good balance between earnings and borrowing gives the Company the freedom and ability to act, even in times of recession. The target was changed in 2022 from
The debt ratio increased in 2022 from 0.6 to 3.3 times, as a consequence of ICA Gruppen being merged with Murgröna. The increase in debt was mitigated by stable cash flow from operations during the year, lower taxes paid and significantly lower net investments. Net investments fell mainly because of the property divestments that took place in 2022.