ICA Gruppen AB: ICA Gruppen Presents Financial Targets and Evaluation of Portfolio Companies

Regulatory News:

Against the background of ICA Gruppen’s (STO:ICA) acquisition of the remaining shares in ICA in spring 2013, the Board has reviewed the Group’s financial targets and evaluated the five portfolio companies that the company owns in addition to the ICA operations. The result of this evaluation means that Forma, Kjell & Company and Cervera may be divested, while Hemtex and inkClub are assessed as having the potential to contribute to the core business and will therefore be retained with unchanged ownership.

Financial targets

ICA Gruppen is one of the Nordic region’s leading retail companies with a clear strategy for profitable growth. The Group’s financial targets are intended to ensure that ICA Gruppen provides shareholder value over time and reflect the Group’s focus on the stable grocery market. The Board of ICA Gruppen has adopted the following long-term financial targets[1] (http://connect.ne.cision.com#_ftn1) for the Group:

- To grow faster than the market (unchanged)

- Operating margin of 4% (previously 3.5-4%)

- Return on capital employed of 9% (new)

- Net debt/EBITDA ?2.0 (previously 1-1.5)

- Dividend 50% of profit for the year (previously good and stable dividend)

ICA Gruppen’s CEO, Per Strömberg, comments: "We have a clear focus on continued growth with good profitability. A strong cash flow and healthy capitalstructure provide scope for future dividends and investments.”

Evaluation of portfolio companies and new non-food strategy

ICA Gruppen’s evaluation of the five portfolio companies owned by the Group in addition to the ICA operations has been performed in parallel with the formulation of a new non-food strategy for the Group. The result of this evaluation means Forma, Kjell & Company and Cervera may be divested, while Hemtex and inkClub are assessed as having the potential to contribute to the core business and will therefore be retained with unchanged ownership. ICA Gruppen’s CEO, Per Strömberg, says: "In parallel with our evaluation of the portfolio companies we have developed a new non-food strategy. Non-food is a key complement to our grocery offering and an area in which we see opportunities for growth.”

ICA Gruppen’s strategy for non-food is primarily intended to strengthen the competitiveness of the Group’s hypermarket concept and of a future online offering. Overall, this involves continuously renewing and developing the range and strengthening the offering within selected non-food categories and making them attraction products. Within Maxi ICA Hypermarket, it is ICA Sweden centrally which runs and owns the non-food departments in the stores.

The subsidiaries Forma and Cervera had combined net sales of approximately SEK 1.1 billion during the twelve-month period which ended on 30 September 2013. This corresponds to about 1% of ICA Gruppen’s total net sales. Kjell & Company is a joint venture and is reported according to the equity method which means that the company’s net sales are not consolidated in ICA Gruppen’s financial statements.

ICA Gruppen AB discloses the information provided herein pursuant to the Securities Market Act and/or the Financial Instruments Trading Act. The information was submitted for publication at 08.35 CET on Wednesday, 27 November 2013.

[1] (http://connect.ne.cision.com#_ftnref1) Comparisons relate to former ICA AB Group’s targets and the targets expressed for ICA Gruppen in conjunction with the acquisition of the remaining shares in ICA AB in spring 2013.

ICA Gruppen AB (publ) is one of the Nordic region’s leading retail companies, with around 2,400 of its own and retailer-owned stores in Sweden, Norway, Estonia, Latvia and Lithuania. The Group includes the retail companies ICA Sweden, ICA Norway and Rimi Baltic, ICA Real Estate, which owns and manages properties and ICA Bank, which offers financial services to Swedish customers. The Group also includes the wholly owned portfolio companies Forma Publishing Group and inkClub and partly owned portfolio companies Cervera, Hemtex and Kjell & Company. For more information see www.icagruppen.se

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