Anders Svensson, CEO

ICA Sverige AB

Market leader in Sweden for 47 years

• 11.5 million customer visits per week

• Market share 36.7 %

• Store sales SEK 98,272 million

• Net sales SEK 65,750 million

• 1,330 stores

• 7,229 employees (excl. stores)

• Store sales have increased more than the

market for 10 consecutive quarters

2012 figures

The ICA idea is unique

• Independent retailers in co-operation, who

successfully combine diversity and local

adaptation with large-scale operations and

efficiency.

“ ”

ICA Sweden – main supplier to ICA retailers

• Brands and marketing

• Product range development and

sourcing

• Support for store operation

• Logistics

• Establishment and upgrades

• Retailer recruitment

• New business Our unique expertise is to encourage the

entrepreneurial spirit and meet customer

expectations through dialogue and collaboration

ICA Sweden’s earnings via business model

Income from stores

via ICA contract 24%

Supply of goods

to stores (wholesaling) 74%

Sale of services to

stores 2%

The model provides incentive for ICA Sweden

to promote sales and earnings in stores

ICA idea – overview systems and flows

ICA retailers

Ownership

10,000 external

suppliers

Other owners Dividend

Membership

Member service

Cost

reimburse-

ment and

profit

Goods and

services Consumers

External

suppliers

Invoicing of cost reimbursements and profits from

ICA to stores is governed by the business model

Optional

Market priced

supplementary services

e.g. accounting and

marketing

Mandatory

Common organisation

aka. ICA Subscription

Based on store sales (%)

Logistics charges

Based on wholesale sales

(%)

Profits

Wholesale profits

Based on wholesale

sales (%)

ICA contracts

Royalty/Profit sharing

Royalty based on store

sales (%)

Cost-based

supplementary services

e.g. store IT

Stable development of sales and operating profit

0

10 000

20 000

30 000

40 000

50 000

60 000

70 000

0

500

1 000

1 500

2 000

2 500

3 000

Sales, SEKm Operating profit, excl.

non-recurring items, SEKm

2008 2009 2010 2011 2012

The store

Stores which meet customer needs daily, weekly

and lifelong

Number of stores: 77

Sales: SEK 28 735 million

No. of items: 30 000-45 000

Number of stores: 121

Sales: SEK 23 577 million

No. of items: 10 000 – 30000

Number of stores: 431

Sales: SEK 30 919 million

No. of items: 8 000 – 10 000

Number of stores: 688

Sales: SEK 15 041 million

No. of items: 5 000-8 000

Number of stores: 4

No. of items: 800-900

Number of pharmacies: 56

No. of items: 3 800

Sales 2012. Number of stores at 30 September 2013

Continued strong sales in Swedish ICA stores

Store sales July-September 2013 January-September 2013

SEKm

Change all

stores

Change like-

for-like SEKm

Change all

stores

Change like-

for-like

Maxi ICA Hypermarket 7 477 5.0% 3.6% 22 171 4.5% 3.5%

ICA Kvantum 6 061 4.3% 2.2% 17 995 4.3% 2.3%

ICA Supermarket 8 206 2.8% 3.5% 23 691 2.7% 3.6%

ICA Nära 4 186 3.4% 3.7% 11 738 2.6% 2.8%

TOTAL 25 930 3.9% 3.3% 75 595 3.6% 3.1%

Performance compared with same period 2012

ICA 36%

Coop 15%Axfood 13%

Bergendahls 5%

Lidl/Netto 4%

Other grocery stores 9%

Other sales channels 18%

Market shares of ICA stores and competitors*

* 2011 figures according to Source: SCB/HUI and magazine Market 2012

Tyresö

Huddinge

Botkyrka

Salem

Nyköping

Eskilstuna

Västerås Håbo

Upplands Väsby

Upplands-BroTäby

Sollentuna

DanderydJärfälla

Sundbyberg

Solna

Stockholm

Österåker

Värmdö

Trosa

Nynäshamn

Haninge

Norrtälje

Vallentuna

Ekerö

Nykvarn

Södertälje

Nacka

Lidingö

Vaxholm

SigtunaEnköping

Gnesta

Oxelösund

Flen

Katrineholm

Strängnäs

Norrköping

Sala

Knivsta

2,052,800 population (average 2012)

ICA’s market share 2011: 29.57%

Gre

ate

r S

tco

kh

olm

Varberg

Lerum

PartilleGöteborg

Mölndal

Uddevalla

Lilla Edet

Grästorp

Essunga

Alingsås

Tjörn

Kungälv

Öckerö

Gnosjö

Mullsjö

Habo

Gislaved

Vaggeryd

Jönköping

Värnamo

Falkenberg

Kungsbacka

Härryda

Stenungsund

Orust

Sotenäs

AleVårgårda

Bollebygd

Karlsborg

TranemoMark

Svenljunga

Herrljunga

Vara

Tibro

Lysekil

Vänersborg

Trollhättan

Borås

Ulricehamn

Lidköping

Skara

Skövde

Hjo

TidaholmFalköping

941,530 population (average 2012)

ICA’s market share 2011: 32.93%

Gre

ate

r G

oth

en

burg

StaffanstorpBurlöv

Malmö

Kävlinge

Lund

Vellinge

HässleholmKlippan

Hörby

Höör

Eslöv

Skurup

Tomelilla

Helsingborg

Karlshamn

Sölvesborg

Svalöv

Östra Göinge

Bjuv

Lomma

Svedala

Sjöbo

Bromölla

Perstorp

Åstorp

Landskrona

Ystad

Trelleborg

Kristianstad

Simrishamn

604,472 population (average 2012)

ICA’s market share 2011: 30.20%

Gre

ate

r M

alm

ö

ICA has bigger shares in rural areas

but smaller shares in conurbations

Store network one of our

most valuable assets

• New store openings

• Exterior changes and profile changes

• Format & concept development

1,330

stores

throughout

Sweden

More than

200 stores

upgraded

every year

Establishment process

and retailer career path Retail

survey

Retailer

recruitment

Employed/

independent

ICA contract at establishment Example

• ICA finances new establishment

• Store operated as subsidiary

• When initial losses and structural costs

including interest have been repaid the

retailer can acquire the store at book value

• After the retailer has acquired the store a

royalty and in some cases profit share is

paid to ICA.

• Retailer is obliged to offer ICA first refusal

for store at a predetermined value.

ICA contract allocates earnings Example from an actual Kvantum

1 2 3 4 5 6 7 8 9 10 -20 000

0

20 000

40 000

60 000

80 000

100 000

SEK thousand

ICA’s share of

store earnings

Retailer’s share of

store earnings

But ICA also makes money on sales to stores Example from an actual Kvantum

1 2 3 4 5 6 7 8 9 10

-20 000

0

20 000

40 000

60 000

100 000

120 000

SEK thousand

80 000

ICA’s wholesale profits

ICA’s share of

store earnings

Retailer’s share of

store earnings

Planned establishment 2014

Stabby, Uppsala, April

Farsta, Stockholm, May

Barkarby, Järfälla, May

Gnista, Uppsala, Oct

Tybblekullen, Örebro, Nov

Sjöstaden, Stockholm, April

Älvsbyn, Sep

Kramfors, Oct

Mönsterås, Oct

Closest to customers

Driving forces and customer trends

Source: SCB, Restaurant Index, Internet and Swedes, Swedish National Institute of Public Health.

More older people

Urbanisation

Multi-cultural

Eating out

Technology

Public health problems

To feel well

To be smart

To feel secure

To be good

To be myself

To have fun

Affordable

& smart

Sustainable

& local

Fun &

enjoyable

Personal

& engaging

Digital &

analogue

Open &

honest

Healthy

& natural

Simple &

convenient

Priorities ahead

Strategic themes

Simplify our business

Strengthen customer loyalty & brand position

Engage & develop our people

Strenghten & expand our customer offering

Excel in corporate responsibility

Optimize and broaden our sales channels

Price

Digital

Health

Efficiency

Loyalty/CRM

Dialogue with retailers

Leadership & values

ICA Sweden 2014

Fresh PL

Vision

We will make

everyday a

little easer

A wide range is fundamental

Items for all

tastes and

pockets

Jan Mar Feb May Apr July Jun Aug Nov Oct Sep Dec

Price focus – value for money

• Discount range in all stores

• Good implementation of pricing strategies

• Price and range ladder

Our private labels: quality, choice and a good price

Advantages for customer

• Lower price

• Assured quality

• Unique items

Advantages for store

• Profitability

• Unique items

• Assured quality

Advantages for ICA

• Strengthens the brand

• Profitability

• Bargaining power

Active and

emotional

choice

Objective: customer’s

first choice

Fresh foods drive sales and position

Seasonal thinking

and innovative

meal solutions

We want to make it easy for customers to live

healthily

The brand

ICA’s Good Business: to meet customer expectations

for transparency, quality and food safety

Key for accountability:

• Transparency

• Morals and ethics

• Food safety

• Animal welfare

• Local products*

* Source: ICA Customer CR Survey, Feb 2013. Ipsos.

Sweden: 4.6

Spain: 4.3 Switzerland : 4.2

4: Bulgaria: 3.6 5. Netherlands: 3.5 6. Romania: 3.4 8: Portugal: 3.4 7. Slovakia: 3.2

1 2 3

Strongest retail brand in Europe

ICA Stig concept

– a strategic business tool

National and local marketing

ICA-wide Profile ICA stores

TV

Buffé monthly magazine

ICA.se

DR

CSM

Billboards

In-store TV

Local advertising

Mail shots

Our digital communication today

ICA’s apps have been

downloaded a million

times

ICA.se Sweden’s

largest food site with

a millions visits a

week

200,000 fans on

Facebook, Sweden’s 7th

largest company

ICA is most visible on

Google

ICA Play Commercials shown five

million times a year on

YouTube

ICA In-store TV reaches

8.2 million customers per

week

4.1 million active customers in our loyalty programme

Name

Personal ID number

Gender

Address

Store

Time

Products

Purchase sum

Payment method Customer-driven

approach

Customised

offers

Adapted to

local retailer

Customer database foundation for customer insights

and CRM ~70 % of ICA’s sales value identifiable

Identified

sales

Unidentified

sales

%

100

75

50

25

0

Online focus 2014-2017

A comprehensive ICA experience

Home delivery

Collection Store

Online

We want to maximise availability to customers by combining

stores and online sales

Market’s best online offering over time Launch to start in autumn 2014

19

Kanaler

Cura pharmacy Non food

New business

Food

Banking services

Services

Channels

Local presence online as well

Primarily in-store picking and collection

Value chain – Efficient, flexible and sustainable

SOURCING

Sourcing from 2,500 suppliers

worldwide. Many are ICA’s

private label products.

WAREHOUSE

OPERATIONS

Daily deliveries to ICA’s

6 warehouses.

ITEM PICKING

Every day 950,000 cases are

picked for onward delivery to

the stores. Automation is

increasing.

TRANSPORT

Lorries drive a total of about

100,000 km per day and deliver to

approximately 1,300 stores in

Sweden.

WELL-FILLED SHELVES

ICA’s automatic order system

ensures there are never gaps on

the store shelves.

Customer focused logistics chain world-class

More efficient, higher quality and lower environmental impact

2

5

24

22

28

3

0

1

5

0

51

33

34

35

3

6 39

5

6 5

7

52

4

4

54

53

46

45

59 5

8

66

67

6

0

12

15

70

16

73

71

68

77

18

1

76

74

78

0

81

82

84

85

86

83

88 89

90

91

92

93

96

95

98

94

2

97

8

3

BORLÄNGE

KUNGÄLV

HELSINGBORG

KALLHÄLL/

VÄSTERÅS

2

5

24

22

28

3

0

1

5

0

51

33

34

35

3

6 39

5

6 5

7

52

4

4

54

53

46

45

59 5

8

66

67

6

0

12

15

70

16

73

71

68

77

18

1

76

74

78

0

81

82

84

85

86

83

88 89

90

91

92

93

96

95

98

94

2

97

UMEÅ

BORLÄNGE

KUNGÄLV

HELSINGBORG

25

24

22

28

30

1

50

51

33

34

35

36 3

9

56

57

52

44

54

53

46

45

59

58

66

67

60

12

15

70

16

73

71

68

18

1

76

74

78

0

81

82

84

85

86

83

88 89

90

91

92

93

96

95

98

94

2

97

83

77

BORLÄNGE

DC Kungälv

DP Umeå

DC Borlänge

DC Helsingborg (via DP as previously

– not shown)

DP Västerås DP Örebro

DP Uppsala

DP Stockholm Syd

DC Kallhäll … but more

distribution points Fewer warehouses

KALLHÄLL/

ÅRSTA

Both invest in the customer offering

and develop profitability

Cost efficiency

Lower

consumer

prices

More and

increasingly loyal

customers

Increased

volume

Retained

/increased

profitability

Develop

customer

offering