Good morning everyone. Warm welcome to the presentation of Axfood's full year report 2018. I'm glad that some of you have made it through the snow here in Stockholm. The result will be presented by Axfood's President and CEO, Klas Balkow, and together with the CFO, Anders Lexmon. After the presentation, there will of course, be time for questions, both from you here in the audience as well as from the conference call. Those of you who are watching us on webcast, you can send in the questions and we will then address the questions in the call. With these practicalities, I welcome the first speaker, Klas Balkow.
Thank you, Cecilia. Of course, I also have to say a warm welcome for all of you who made it to come here this morning. I've heard there's been some issues with our transportation systems in Stockholm. We are glad that you are here, and we're also glad to welcome all the rest of you who made it into the webcast. My and our agenda for today is that we will go through the fourth quarter. It will give us an opportunity to sum up 2018. We'll also go through the key priorities that we have laid out for 2019. I'll also cover the outlook, particularly in terms of our planned CapEx, as well as our store expansion program. Let me also remind you all of our model in terms of our house of brands structure.
It's a structure that gives us the opportunity to drive different brands in different segments, while at the same time, through tight collaboration, create a strong economy of scale. If I, in the report, should take out 3 key highlights, I would like to start with that retail and Axfood goes through many changes. I must say that I'm pleased to see how we so far are delivering on our plans, leading to increased market shares and a record profit. In this quarter and also the full year, both Willys and Axfood Snabbgross performed significantly well. I also would like to highlight that we are getting up to speed when it comes to further develop our logistical platform. It's a small first step, but in this period, we were able to start our first semi-automated warehouse for our fresh products in Jönköping.
Let's now move into the key ratios for the quarter. If I start with our sales, our net sales is up with a growth of 4.6%. Our store sales of 4.7% with a strong like-for-like of +4.6%, which includes Hemköp franchise. Willys continued to outperform the market. Hemköp had a like-for-like of 2.9%. The total sales that was somewhat lower, 2.2%, which was affected by a couple of larger stores that was converted in the period to Willys. Snabbgross had another very strong quarter. Dagab growth is in line with our internal sales.
Moving into what I started with in terms of gaining market share, because if I look at our store sales of 4.7%, it's clearly outperforming the market, as both the preliminary SCB numbers and as you may have seen this morning that there's a report from Svensk Dagligvaruhandel together with HUI Research, that both of these reports report a significantly lower market growth of 2.3% in the quarter and 3% for the full fiscal year. Our profit relates to, of course, our strong sales. We've improved versus last year. It's driven by the positive like-for-like. This can be clearly noted in both Willys as well as in Axfood Snabbgross number. It's also been positive to note that we have recovered from the somewhat challenging period in our logistics from the summer, which was affecting our efficiency in Dagab, and with now good service levels, we are back on track.
We also see that in the numbers in Dagab with an improvement. Hemköp profit development is affected by somewhat lower like-for-like development in our group-owned stores in combination, I would say, with an increased campaign level and some higher marketing costs that will strengthen Hemköp for the future. If I leave the fourth quarter, it sums up to what I would like to say a successful 2018. Let me go into the numbers for 2018. We have a net sales of up 4.6%, leading to a total turnover of above SEK 48 billion. The strong store sales of above 5% and all segments that we are reporting is showing a positive contribution to our performance, where again, for the full year, both Willys and Axfood Snabbgross stands out with the very strong like-for-like.
Looking then at the market for the full year, our store sales, including e-com, is above 5% to 5.3% growth, which meets our long-term target of growing more than the market. To the profit number, the positive sales paved the way for that we can sum up actually a record profit for Axfood, where we are delivering above SEK 2 billion in profit for the first time. Key drivers has been our like-for-like, but also as if you remember, we had a very positive sales mix that we had in the summer that has supported the numbers for us. On the negative side, we've had a higher logistical cost due to the summer period, and we are also seeing somewhat higher fuel costs that is still impacting our numbers. As I shared, the recent marketing activities in Hemköp in the last quarter influenced the numbers negatively.
Let me now go through the numbers segment by segment. I have to say, if I take just a small step back and reflect that our largest segment, Willys, it's been a fantastic year. We are growing twice as much as the market. We have good cost control, which leads then to a result that is a very positive development. As also would like to mention that the acquisition we made in Eurocash has now been positively integrated into Willys. We also have had a very positive performance of Eurocash. That is something that also is supporting the ratios for Willys. Moving ahead, our new store concept that I presented in the last quarter has been received very well in the market.
Focus now going forward is to refurbish with full speed to this new concept, as well as roll out more of our online offer to more stores and to more cities, particularly our click and collect offer. Hemköp, at a glance compared to Willys it's somewhat lower, but have to state Hemköp is growing well in line with the overall market. The somewhat softer like-for-like in our group, though, in combination with the increased marketing activities, has affected our margin and the slight margin drop you see for the full year. Obviously, we would have liked to see a better effect on some of our initiatives.
When I look and when I compare the market data that we just see that come out in the market, particularly the latest one from HUI, it's clear to see that it's been a somewhat strong headwind in the market, particularly in December numbers that was somewhat low. That has affected our performance, of course, as well. I have to say, and I must say that I'm pleased to see the performance that we are now seeing in the newly refurbished stores in Hemköp. We will continue to invest in our refurbishment program. We'll also continue to invest in our communication, particularly capitalize on our customer program, and we'll continue to strengthening our customer offer via more flexible assortment, more sustainable offers, and more meal solutions. 2018 was the first time we reported Axfood Snabbgross as an own segment.
I think in one way, we are pleased to see when you come out first time with one segment that you're also performing well. For sure, that's something that Axfood Snabbgross has done in 2018. We had a very positive strong sales, and we are clearly gaining market shares also for Axfood Snabbgross in their marketplace. We have in the summer been able to attract significantly more customers, and we're pleased to see that we've been able to maintain this customer base also for the coming quarters. Our operating margin has been stable, and hence we've also been able to improve our profit numbers. Dagab reports a 3.2% growth, which is drivers then being our sales in our own concept. While the growth rate has been somewhat negatively affected by last year's comparables that, if you remember, included Mathem.
We report now a stable profit despite, I would say, the challenging summer, where we had some significant higher logistical costs and also, as we said, some higher fuel costs moving forward. Our online brand, Mat.se, which is included in Dagab numbers, continued to show positive growth, but even if we are not profitable in Mat.se, the growth does not worsen our margin in Dagab any longer. You may have follow, and you may have seen that in the quarter, we have also increased our ownership in Urban Deli. We have owned and worked with Urban Deli for many years. We are now taking next step. We're taking a further step in our collaboration. With an increased ownership, we are now investing more and be able to invest more into this innovative concept.
At the same time, we can close up our collaboration and cooperation and do more development together, particularly, I would say, in private label production. That sums up some of the ratios for the quarter as well as the ratios and for activities for 2018. With this, I hand over to our CFO, Mr. Anders Lexmon, to take us through our financial position.
Thank you, Klas. Thank you very much. Let me first begin to summarize the cash flow for the year. We have a significantly better, higher cash flow compared to last year, and that is mainly due to our acquisitions last year, which affected us approximately SEK 700 million last year that we don't have this year. We can also see this year that we have improvements in our net working capital. I will come back to that later. On the other hand, we have a higher dividend this year compared to last year, since we increased the dividend per share from SEK 6 to SEK 7. This means that we end up with a cash balance with approximately a little lower than SEK 1.6 billion at the end of December.
Going into the investments for the year, we have lower total investments this year, but if we exclude the acquisitions that we made last year, we have a higher level, which sums up to SEK 905 million this year compared to SEK 828 million last year. That is mainly due to higher investments in our wholesale operation in Dagab, and that is connected to our new automated warehouse in Jönköping. The investment level in retail and IT is pretty much in the same level as last year. Coming back then to the development of our net working capital, we can see that we decrease the levels this year, both in kronor and as in percent of sales. In 2017, we had approximately -2.0% working capital on net sales.
This year we have decreased it to -2.6% on net sales, which means that we have released approximately SEK 280 million this year in net working capital. It's both accounts payable and accounts receivable that we have increased. Coming in then to the net receivable position that we have at the year-end, we have increased also that with approximately SEK 150 million at the end of December, and we have a high equity ratio of 37%, little bit lower than last year, but well above our long-term goal of 25%. Looking into the return on capital employed, is very stable, around 40% also this year. Finally, I will come in to try to explain our new accounting principles for 2019 that will affect us.
I think you're aware of that we have a new standard, IFRS 16 leases, which means that we now have to recognize all our leasing contracts in the balance sheet. When we have done the calculation for this, we have used a modified retrospective approach, which means that the accumulated effects will be recognized in equity with approximately minus SEK 0.4 billion, and the non-current assets will increase with approximately SEK 6 billion as of the 1st of January this year. This will also affect a couple of key ratios for us. Our equity ratio will decrease from 37% to approximately 23%, and we will turn our net receivable position to a net debt of approximately SEK 5.2 billion.
We will also have effects in the P&L, but this is quite hard to estimate because we don't right now know what types of contracts we will extend or what we will terminate. We will come back in Q1 to describe the effects a little bit more in detail. We will have a positive effect in EBITDA and EBIT. We will have a negative effect on return on capital employed, and we will not have any effect in the cash flow total, but we will have some effects within the cash flow. We will have increase in cash flow from operating activities, and we will have a decrease in the financing activities. This ends up my end of the presentation, Klas. I hand over to you again.
Thank you, and I must say I'm pleased that you are the one presenting IFRS numbers. It's not that easy to follow. I think it will clear out as we move into our first quarter, and we start to report it. Let me now take the last minutes of this presentation to give you an update on our strategic agenda. Last year, I presented this new strategic platform with some clear priorities within our highlighted strategic areas. Our priorities or Agenda 2018, as we called it, became then the foundation for our business plan, a plan that I must say worked fairly well. For 2019, there's not going to be any revolution in this. It's more of an evolution, same direction, same areas, however, some new priorities.
I'm not going to go through all of the priorities for you in detail, but as it is the starting point of our year, I will quickly share with you the map for our priorities and just dig into a few of these areas. Starting with our customer offer, similar to last year, we will focus on developing our range in good and sustainable food. We will intensify our work in terms of our value proposition for our private labels. We will use more data to increase efficiency and synergies in purchasing. Finally, we will focus to deliver more ready-made meal solutions. We have three clear priorities in our customer meeting. We will improve and strengthen our digital customer meeting, and we will do this for all our brands.
We have a strong performance, as I said, in our digital meeting, it's a new area for all of us, and I think we still have a lot to do and a lot to work in this area. We're going to have high focus and tempo in refurbishing our store network, both in Willys and in Hemköp. We will invest, and we have invested in new technology and competence to capitalize on our strong customer base and loyalty program that is, we believe, a strong plan for the future to better meet the customer needs and to be more relevant for the customers in the future. When it comes to expansion, we have focusing on three clear areas. We will add more stores to our network. Target is to add five to 10 more stores in 2019.
Last year, as you may noted, was a year when we had some of the stores that we planned to open up was postponed into 2019. My expectation for 2019 is that we will be in the higher end of the scale of five to 10 new stores. We also will focus to increase our online reach, mainly within Willys store network, as I've mentioned in terms of their click and collect, but also for all brands, particularly in Stockholm, Gothenburg, behind the new combined dark store. I must say, I am pleased to finally be able to state, after some initial struggle, that we are now able to say that our online pharmacy store is now up and running with our Apohem.
We have a new leader, Gustav Hagéus, soon on board and focus now the coming period will be to expand the range and expand the assortment, build up the awareness of the brand, and promote the offer through Axfood's channels. As shared earlier and also in the last quarter, we are moving into a period with some large investments into our supply chain. We have today three dark stores, and focus initially is now to roll out the first combined dark store in the Stockholm area, where we will handle all the picking for both Mataffärer , Willys, as well as Hemköp. It will still be a manual warehouse, so most of the synergies and effects we will get from this will be in combining our transports. Will give us some efficiency and also reduce the environmental impact. We have started our journey towards a more automized warehouse.
The first step, I must say a very good learning, was to build the semi-automated warehouse for our fresh food products in Jönköping. You can see some of the short film on this behind. The first order was shipped in mid-December, the system is now being ramped up. In full speed, we will be able to double our capacity with the same manpower as before. If that was the first step, the largest step, as I shared last quarter, is to automize our warehouse in Stockholm. The warehouse we have today starts to reach its limit, and with the new investments, we will secure capacity for further growth as well as significantly improve our efficiency. In this new warehouse, we will combine, to be clear, both the picking for our stores as well as the picking for our online in the same facility.
We are moving ahead well in line according to our plan. Even if we're not giving you so much more details today, we are enabled and we believe, and I will say, we'll come back at latest in the next quarter report to give you some more details regarding both location as well as the technology we will use. As shared earlier, we expect to increase the CapEx for the automation of this in the range of SEK 400 million-SEK 600 million per year, the coming 4 years. When it comes to the priorities in our work approach, it very much boils down to using new technology, be more agile in our work, and be more able to develop and capitalize on the strong source of data that we have in our system. Finally, we have, of course, high focus on our most important asset, our people.
In a time when there's a lot of changes going on around us and within Axfood, we need to put a lot of focus to continue to develop our culture, to continue to secure and develop the right competence, increase diversity, as well as focus on the positive work climate to improve work attendance rate. I hope you see, and that clearly the market around us, as you know, is changing, but we have a strong agenda and high energy to move ahead for the coming year and for the years after that. If I then look at the outlook for 2019, first, let me share with you some adjustments we have made and done in our long-term strategic targets. We have adjusted our equity ratio due to the new IFRS 16 reporting, as Mr. Lexmon just reported.
The new target is the equity ratio of at least 20% at the year-end. We also expanded one of our sustainability targets. Previously, we covered share of sales of organic food. Now we've expanded this to also include a basket of sustainability certified goods. The new target is a share of total sales of at least 25% at 2025 of sustainability certified goods. The financial guidance in terms of CapEx is very much in line what we've seen before. We are continuing to invest in the normal operation, we are now guiding that we will in the coming or 2019, spend SEK 600 million for the new automation for future logistic solution. That adds up to SEK 1.5 billion-SEK 1.6 billion as a guidance for our CapEx for 2019, excluding then any potential acquisitions and our leasehold.
Our financial position is strong. The board suggests an ordinary dividend of SEK 7 per share, corresponding to 94% of our profit after tax, which is well in line with our dividend policy. Finally, if I sum up this presentation, I must say that we are leaving a strong quarter behind us. We're also summing up a strong 2018. It's been fantastic to see the strong sales growth in both Willys and Axfood Snabbgross, we are as a whole, clearly gaining market shares in the market. We're delivering a record profit, I would like to say that we have exciting and solid plans for the future. With that, I think we hand over to you, Cecilia, to lead the Q&A session.
Yes. What you have seen is the first presentation in our new form. We have a new logo, new colors, so this was the first clothing you saw. We think this is a forward-leaning design that fits very well to Axfood. Now I'm sure that you will give some color on the figures that you heard today. We start with Niklas Ekman here in the audience.
Yes. Thank you. Niklas Ekman here from Carnegie. Maybe starting with the last item there. You almost answered it yourself here with the CapEx guidance, SEK 1.5 billion-SEK 1.6 billion. It looks like a clear step up, at SEK 600 million of that you are then linking to automation.
Yeah.
The underlying CapEx then should be largely in line with previous years?
That's correct. We've guided SEK 400 million-SEK 600 million. We have planned for the higher level of SEK 600 million in this guidance. Obviously, when all of the details come through in this, we will see where it ends up, that's part of the guidance. We want to be very clear that's more or less normal levels including them, then excluding then the SEK 600 million.
Are you then-When you say SEK 600 million instead of SEK 400 million-SEK 600 million, are you then being a bit conservative or rather expecting that?
No, that's our expectation at this stage with the current knowledge we have. As I said, as soon as we are signing contracts, we will come out with more details and then this will more clear up. This is the forecasted levels that we expect today.
Can you talk a bit about your refurbishment plans here as well?
Yeah.
It sounds like you're talking about a step up in refurbishment. How many stores are we talking about? Are we talking about also an increased investment in new stores or refurbished stores?
For Hemköp, we started this program. We'll continue, I would say, more or less the same pace as we've had. We are taking further steps in Willys. As I shared with you last quarter, we have developed a new concept 4.0 in Willys, it's been something that's been very well received positively by the market. We will step up the rollout of that, which will increase some investments obviously as well.
You talk about online sales here as well. You don't give a number for the share of sales. Is that something you're willing to share? Also when you talk about improved profitability, I assume that means that the losses have narrowed.
Yeah, that's correct. I understand that the interest of our online share of sales is high. We are looking into when we will release that. We have not done it in this report. Now, correct. We've had a very positive online development, with the volume, we're also seeing that we are getting some efficiency, even if it's still something that is a burden on our margins currently.
IFRS 16, just a question on the new financial targets here, where you're adjusting your equity ratio, only from 25% to 20%. It looks like you are then actually raising the underlying target. Is that the right assumption?
Also like Klas said, it's at year-end. Earlier we had 25% at each quarter. It's a difference there.
On the EBIT margin, are you sticking to that target or is that something you are waiting to see how the EBIT exactly will be affected? You might come back and adjust the EBIT margin target or?
We are sticking to the target.
You're sticking to the target. Okay. I think I'll pause there and I might come back later.
Okay, we hand over to the operator. Do you have any questions in line?
Thank you. Yes, we have two already lined up. Just to remind participants, if you do wish to ask a question, please dial zero one on your telephone keypads. The first in the queue is from Daniel Schmidt of Danske Bank. Please go ahead. Your line is open.
Yes, good morning, Klas and Anders. May I start off with a question on Hemköp, which was, of course, a slight negative surprise for us and maybe also for you. If you look at the profitability on wholly owned stores and exclude the franchise fee, it does look like it's close to zero in the quarter, and you said that you were disappointed with the like-for-like, but it's still picking up. It's actually the highest in five quarters. I guess that refers to that you spend a lot on the long-term marketing positioning of the group or the concept. Would that continue in 2019 as well, or how should we look at that?
Hi, Daniel. No, I think you are following it or capturing it very well. We will continue to work with Hemköp and to work with the refurbishment program. As I stated, we've seen very positive results out of the recent refurbished stores. We are seeing a positive pickup in our like-for-like in the group-owned stores. However, I would like to see more, and we'll work on that with some of the areas I presented in terms of refurbishment. We also will work on that with our communication, some of our activities, capitalize on our customer program, use more of the data that we have, be even more relevant in terms of our range.
It's a full focus, but also would like to remind us of all that we also been in the Q4 into somewhat soft market as well, that has impacted and where I think as a result of we didn't get the full effect of some of our market investments we made.
All right. Do you see a tipping point anytime soon, or you see any changes to the fact that you've seen a pickup in like-for-like but hasn't really been paying off yet, and maybe you've had some headwind towards the end of last year, as you said. Do you see any tipping point soon where you start to see this turning into a positive change to profitability? Or is that going to be a more medium-term thing?
I think obviously it would be easy to say when I see the like-for-like coming through, but we have a long-term approach on this. We are refurbishing our stores. We are working long term to be very relevant out in the market. We'll continue to have full focus on that.
Yeah. Okay. Can I just jump on then, Klas and Anders, to something that we did discuss quite a lot during the late summer and beginning of autumn when it came to the drought and the effects from that, and you said that we will see how this plays out when it comes to Nordic or Swedish suppliers and price negotiations. Could you give us a better understanding of what the effects will be if any, going forward?
Well, first of all, we had some effects, if you recall, in terms of our logistical efficiencies that I am pleased to see that the workforce in Dagab has been able to improve and where we see now better service levels again, which is now resulting in improved efficiency, which supports and helps. When it comes to the drought effects, I don't think we can today still outline the exact effects out of it. We've seen an inflation of around two, a little more than 2%, which is also something that HUI is forecasting for the coming years. I don't have any doubts to say anything different or anything different than their forecast.
It is still, and I think the challenge will be to see how can we source and get the amount of source for Swedish products, that I think is still to be seen, due to these effects. We don't have the full data on that yet.
Okay, fine. Thank you. Can I just finish off by, you, of course, talk about a lot of things happening at the same time, and you've stated that for some time, and the CapEx guidance, and it's now clear for 2019. At the same time, of course, this is also driving costs, I guess. Could you say anything about some sort of group cost guidance for 2019?
No, not more than what we have in terms of our overall targets. That's what we are guiding on. Obviously, when it comes to our ratios for our cost, as you know, like-for-like is critical for you to follow, and that will also determine a lot of the ratios.
Okay. Thank you, guys. Thank you.
Okay, operator. We can take another question from the conference call.
Thank you. There's one further question in the queue, that's from Gustav Sandström of SEB. Please go ahead. Your line is open. It seems Gustav has left the conference. There is one further question coming through, then, that's from Fredrik Ivarsson of Kepler Cheuvreux. Please go ahead. Your line is open.
Thank you. Morning, all. One question on Hemköp, a follow-up there. You mentioned the intensified marketing efforts you're investing in. First, are you willing to quantify these investments in any way? Also, I'm curious to hear whether you have seen any payback in terms of improved like-for-like in Hemköp post these intensified marketing efforts.
Well, even if I'm not quantifying, but as you also see on the numbers in the quarter four compared to Willys, we are on a lower rate in Hemköp. Obviously there it's when you have these millisecond changes, you also have an impact when you're investing in long-term activities that has an impact. I'm not quantifying it, but as you can see on the lower range that we have, you get an impact when you start to do, particularly when you start to do some TV commercials. Now, the effects, what we have seen is, as I said, a slightly positive development in our like-for-like in our group- owned, and I think that's positive to see. I'm not saying anything else that I would like to see more, and hope that that will come.
Clear. Thank you.
Okay, operator, do we have another question?
We do. Gustav Sandström of SEB is back on the line. Your line is now open, Gustav.
Yeah. Can you hear me now?
Yeah, we can. Hi, Gustav.
We can.
Hello?
Yes. All right. Adding on to Daniel's question regarding Hemköp, looking at like-for-like in your own stores, I guess it would indicate that you have negative volume in the quarter. Given that online is most predominant within the concept in your own stores, I'm guessing you're now approaching, I guess, low to mid single digits of volume decline in Hemköp. I guess we're approaching a situation at some point where you need to look at spacing and optimizing. Is that something on your plan in 2019 or something that is included in your CapEx guidance today?
It's included in our CapEx guideline to continue to refurbish stores. We constantly look at spacing. Maybe just a comment in terms of your indication in terms of volume. As I stated, we have increased some of our campaign levels, so even if we have had some volume, it's also been somewhat lower pricing on that, which will not give the full value effect out of in terms of total growth. It's included in the CapEx in terms of that we continue to refurbish, and we will have focus on that. We have a constant for all our concept look at our space, when the space is right or if we should adjust.
Okay. A question on the capital allocation internally, given your return rate today, your 4% margin target. I'm just curious, given that there's an increasing gap between your CapEx levels and your depreciation levels, do you apply your depreciation levels when looking at your margins internally? How do you view that, given that there seems to be a bigger trend within the industry of a growing disconnect between depreciations and CapEx?
Well, I think, of course, we are
Calculate. It's a combination of the CapEx level and depreciation, as you say. Of course, we take that in line in our further calculations. Or
Do you want to elaborate a little bit more, Gustav?
Okay. Now I'm thinking, given that your CapEx has now tripled over three to four years, and it's now, I guess, twice the amount of your depreciation levels. Do you believe that CapEx will ultimately return to normalized levels, or isn't this a new situation and a new phase you've entered with higher capital intensity?
I think it's important to understand that the level we had last year, and that we guide for 2019, it's not to make that level as the same as it is going to be in the long range for us. We are now in an intensive period. That's clear.
We will not do this logistical platform every year, so to speak.
Okay. Last question for me. The distribution and warehouse efficiencies for you in southern and western Sweden, are you happy with that today, even with the investments in Stockholm? Or should we assume that you have further initiatives lined up for the rest of Sweden once you've concluded or getting closer to the end of the investment phase in Stockholm?
Well, I think we have a strong plan now for Stockholm, also we've done the optimization for Jönköping. We're now taking Stockholm, we will obviously evaluate this and see how the operation goes. If we get very positive results, which we expect, of course, we will also over time move along, but we are not there yet at all.
Great. Thank you so much for taking my questions. Good luck guys.
Okay, we have no more questions from the conference call.
Thank you.
Do we have another question from the audience here? No. Yes?
My name is Henrik. I am a brand strategist and professor of marketing. We can all appreciate the premium position of Urban Deli and the soft discount of Willys, et cetera, and Hemköp that has been up here today, I see as a bit more vulnerable. My question is, where we sit right now today is we can call one of the few destination stores in Hemköp as I see it. You may include Karlaplan and a few. You talk about customer bases in Westland. Do you have any strategy to create a destination brand?
No.
Coffee, so whatever, to make people come to the store, experience-based.
Maybe it's a separate topic, but if I elaborate a little bit on it. The strength that we have with our house of brand strategy is to meet various consumer demands. I think Hemköp fits very well into being very close and nearby where you live. As we're pointing out, a lot of the focus right now is also to meet the needs of more ready-made meal solutions for you when you're nearby, where the consumer is changing their habits, and where we from our side can meet these changes in a better way versus what we've done before. Just around the corner here, we are today serving between 1,500 to 2,000 lunches every day of ready-made meal solutions for the customers that is in this area. I think we can continue to develop that approach. We have similar parts in Hemköp City, downtown, et cetera.
Rightly, we have some different targets with our different brands where we're meeting some different needs for the consumers. There, I think and strongly believe Hemköp has a very strong platform and position for the future.
Sure. Given that position, can you increase the experience factor on that level of the brand?
Absolutely, I think that's why we are refurbishing our stores, and we are working on to provide that experience with good sustainable food, with more inspiration, with more meal solutions, with more variety in our range, et cetera, to meet new demands and new needs, which also is different depending on where you live out in the country. You have some needs here in Stockholm, and you have some other needs out in the countryside.
Yeah, Okay, thank you.
Okay. Operator, I think we have another question from the conference call. Please go ahead.
Thank you. Our next question comes from the line of Andreas Lundberg of ABG. Please go ahead. Your line is open.
Thank you so much. Actually, it was a lot tilted to the last question on Hemköp's positioning. Where do you see it today positioning in the market, and how do you want it to be positioned in the future of grocery retail?
Hi, Andreas. I think, and maybe I hope that partly we answered that.
You did.
Yeah. Okay. Thanks.
If I can take one on working capital, which was obviously very positive here in 2018, or at least a relief of working capital. How do you see the levels you have now, and how do you look upon working capital going forward, thank you?
Yeah, we continuously work on several levels of that, but it's hard to give any guidance, actually, of the development going forward.
Is there much you can do to reduce it further? Should we expect it to grow in line with your business?
We have some tool in our basket. It's hard to say how this is going to develop, actually.
Constant focus, but difficult to forecast.
Yeah.
Okay. Thanks, guys.
Okay, if we don't have any further questions, neither from the conference call nor here in the audience, I will thank you all for participating today, and have a good day.
Thank you very much.