Report on Year 2000 Operations for the ICA AB Group

Report on Year 2000 Operations for the ICA AB Group · Overall store sales up more than the market. · Earnings before interest and taxes increased by 35 % to MSEK 1,770 (1,310). Earnings include surplus funds from SPP with MSEK 138. · Earnings before taxes increased by 32 % to MSEK 1,738 (1,318). · Continued strong financial position. Financial Information in Summary* 2000 1999 Net sales, MSEK 59,09 58,09 2 1 EBITDA, MSEK 2,923 2,316 EBIT, MSEK 1,770 1,310 Earnings before taxes, MSEK 1,738 1,318 Net earnings, MSEK 1,183 917 Total assets, MSEK 25,30 23,15 8 0 EBIT margin, percent 3.0 2.3 Equity/assets ratio, percent 37.2 38.6 Return on capital employed, 13.7 13.0 percent Return on equity, percent 13.1 9.7 * According to Swedish GAAP Comment by the Chairman - 2000 has been one of our most successful years so far. Store sales have been very strong, particularly in Sweden. The Group result is our best ever. We have established the partnership with Royal Ahold and the coordination between the two companies proceeds according to plan. A new corporate structure has been established. We are in an excellent position for future growth, further improvement of our results, and to continue to serve our customers well in an increasingly competitive marketplace, says Roland Fahlin, ICA Ahold AB Chairman. The ICA Group 2000 In April the partnership between Royal Ahold, ICA Förbundet and Canica was established through the newly founded company ICA Ahold AB, which controls 100.0 % of the shares in ICA AB. ICA Ahold AB is owned by Royal Ahold by 50 %, ICA Förbundet 30 % and Canica 20 %. A new board of directors was appointed in April. Roland Fahlin is chairman with Jan Andreae and Stein-Erik Hagen as vice-chairmen. Other members are Michael Meurs, Gerard van Breen, Han Willemse, Per-Anders Olofsson, and Claes-Göran Sylvén. To maximize business development throughout Scandinavia and step up service to its millions of customers, the ICA-Ahold joint venture streamlined its management structures in Sweden, Norway, Denmark and the Baltic States. ICA Ahold AB and ICA AB will merge into one company. The CEO's of the operating companies report directly to the Board. The Chairman and President of the company, Roland Fahlin, is liaison officer for ICA Handlarnas and ICA Menyföretagen. Deputy Chairman and Deputy President Stein Erik Hagen is the Board's liaison officer for Hakon Gruppen and ICA Baltic. Two of the operating companies have appointed new CEO's during the year, Kenneth Bengtsson for ICA Handlarnas AB and Oyvind Winther for Hakon Gruppen AS. Also, Lennart Käll has been appointed CEO for ICA's planned bank. ICA Handlarnas AB took a decision to group all stores into store formats. The profiles are: ICA Nära, ICA Supermarket, ICA Kvantum, Maxi ICA Stormarknad, and Rimi. The different formats satisfy different purchase needs of the customer. These distinct store formats will facilitate the building of brands, development of the product range and marketing. The work with the realisation of synergies between ICA Handlarnas and Hakon Gruppen continued. Several important steps were taken within sourcing, private label and IT. New Nordic supplier agreement were signed, a new Nordic strategy for ICA's private label products is being implemented, and the work to create a mutual IT-structure is well under way. The coordination between ICA and Statoil Detaljhandel has led to several concrete results during the year. By end of 2000 a total of 66 ICA Express stores had been established at Statoil gas stations in Sweden (34), Norway (28) and Denmark (4). As a consequence, the first store with the ICA brand has opened in Denmark. Further, ICA Customer card members now can use their card and earn bonus through purchases at Statoil stations in Sweden. ICA has continued its expansion in the Baltics during the year. In February, the Interpegro-stores in Latvia were acquired. In November, ICA Baltic acquired 12 stores from Vikonda Group through its 50/50 owned Lithuanian company EKO. At the end of 2000 ICA Baltic operated in total 51 stores in the Baltic region and annualized store sales amount to some MSEK 1,700. In Denmark ICA has strengthened its presence through the acquisition of 50 % of ISO, with sales of MSEK 1,300 and 11 stores in the greater Copenhagen area. This agreement is an important step in the establishment of a position in the Danish every-day-food market. In July, ICA Finans signed an agreement for a syndicated bank loan of 5,000 MSEK with a group of banks, led by ABN Amro Bank, Den Norske Bank and Svenska Handelsbanken. The Market Sweden The ICA retailers increased sales by 4.4 percent during the year (3.6 % for comparable stores). This is better than the total for the sector, which increased by 2.9 %. The Maxi, Kvantum and Rimi stores had the best sales development within ICA. Total store sales amounted to 68 BSEK (incl. VAT). Norway The sales in Hakon Gruppen's stores increased by 2.2 % (0.9 % for comparable stores) in 2000. Discount stores continued to increase at the expense of traditional supermarkets on the Norwegian market. The largest increase within Hakon Gruppen was seen for Maxi and Rimi. Total store sales for Hakon Gruppen amounted to 19 BNOK (excl. VAT). The Baltic region Sales for ICA Baltic's stores in the Baltic countries continued to grow and amounted to 1.3 (0.3) BSEK. Sales and Earnings Group sales amounted to 59,092 MSEK (58,091), an increase with 1.7 % compared to last year. Group sales have been negatively effected by lower sales for ICA Menyföretagen. Earnings before interest, taxes, depreciation and amortization (EBITDA) increased by 26 % to 2,923 MSEK (2,316). Earnings before interest and taxes (EBIT) increased by 35 % to 1,770 MSEK (1,310) and the EBIT margin to 3.0 % (2.3 %). In the EBIT, surplus funds from SPP are included as other operating earnings to an amount of MSEK 138. Excluding the SPP-funds the EBIT increased by 25 % to MSEK 1,632. Earnings before taxes increased by 32 % to MSEK 1,738 (1,318). Excluding the capital gain on the divestiture of ICA-Förlaget during the first quarter 1999, the 1999 result was MSEK 1,200. Share of earnings in associated companies increased to MSEK 186 (35) due to higher result in Statoil Detaljhandel. Net financial expenses increased by MSEK 73 to MSEK -218 (-145), foremost as a consequence of higher interest expenses due to the Group's higher net debt. Free cash flow from operations after capital expenditure and changes in working capital amounted to MSEK -1,848 (-3,543). Return on capital employed improved to 13.7 % (13.0). Return on equity increased to 13.1 % (9.7). Financial Position Total assets increased by MSEK 2,158 to MSEK 25,308 (23,150) since the beginning of the year. Capital employed increased by MSEK 1,081 to MSEK 16,848 (15,767). The Group's cash and cash equivalents as of 31 December 2000 amounted to MSEK 732 (1,150). Net interest bearing debt increased to MSEK 6,707 (5,710). Shareholders' equity amounted to 9,313 MSEK (8,798). The equity to assets ratio was 37.2 % (38.6). Capital Expenditures Capital expenditures amounted to gross MSEK 4,664 (5,671). The largest capital expenditures were the investment in ISO in Denmark and the acquisition of Interpegro in Latvia. Parent Company The parent company had no sales during the period. The EBIT was MSEK -98 (- 59). Important Events during the Fourth Quarter 2000 The Board has decided to start banking operations. As a consequence, on November 10, ICA Kundkort AB submitted its application for a bank license to the Swedish Financial Supervisory Authority. Operations are planned to begin during the third quarter 2001. ICA Handlarnas AB presented a simplified new organizational structure with a pronounced retail focus from 2001. The new organization will reduce annual costs with MSEK 150 and reduce employees with 150. Hakon Gruppen AS presented a new organizational structure to secure retail focus. Stockholm March 6, 2001 ICA AB (publ.) Roland Fahlin President This release has not been audited by the Company's auditors. For further Information Roland Fahlin, President, ICA AB, via + 46 8 585 505 51 Dirk Anbeek, Chief Financial Officer, ICA AB, via + 46 8 585 500 00 ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2001/03/06/20010306BIT00670/bit0002.doc The full year-end report http://www.bit.se/bitonline/2001/03/06/20010306BIT00670/bit0002.pdf The full year end report