Swedish retailer ICA Gruppen has posted a 3.4% increase in consolidated net sales in the first quarter of its financial year, to SEK 28.1 billion (€2.62 billion).
Operating profit at the business rose to SEK 1.13 billion, up from SEK 972 million a year ago.
The operating profit for the period excludes items affecting comparability, including the calendar effect of Easter, which is valued at around SEK 35 million.
'At the same time, the result includes positive effects in roughly the same amount from divestments of store subsidiaries in ICA Sweden and the effect of the changed assessment of the useful life for properties and their components in ICA Real Estate', ICA said in a statement.
Cash flow from operating activities amounted to SEK 1.67 billion, while if ICA Bank is excluded, cash flow was SEK 1.6 billion.
The period also saw ICA adopt a strategy to cut food waste across its operations in half by 2025.
A Good Start
“We have had a good start to the year with good sales and profitability in most of our businesses," commented ICA chief executive Per Strömberg.
"This is particularly noticeable for ICA Sweden and Rimi Baltic, which despite negative calendar effects for Easter posted a considerably better quarter than a year ago. Starting with this report we are integrating the sustainability report in our quarterly earnings reports. In doing so we are further underscoring the importance of – and our strong focus on – sustainability issues," he added.
Analyst Viewpoint
Commenting on its performance, Barclays European Food Retail Equity Research said, "ICA Sweden EBIT in 1Q came in at SEK 825mn, implying a c+30bps margin improvement to 4.2%. Note this includes a SEK 20mn gain related to store disposals. Underlying top line performance remained weak, since ICA Sweden’s LFL sales rose by a modest +0.7%.
"Adjusted for inflation and the -1.8% negative calendar impact, volume growth declined by -0.1% in 1Q. EBIT at Rimi Baltic was SEK 145mn in 1Q (Barclays SEK 120mn, consensus SEK 121mn) implying a +50bps margin improvement to 3.8% mainly thanks to a positive price and mix effects and lower promotional intensity."
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
