To Axfood's presentation of the fourth quarter and the full year 2017. Our President and CEO, Klas Balkow, will present the year together with CFO, Anders Lexmon. After the presentation, there will be time for questions from you here in the audience, as well as from those of you who are watching us over on the website or over telephone conference. With this, I hand over to the first speaker, Klas Balkow.
Thank you, Cecilia. Of course, let me also then welcome you to our fourth quarter financial presentation that will also cover up our full fiscal year 2017. Perhaps also must comment on it's an exciting day, but I was more to relate it's been an exciting year. Not only that it's been my first full year as CEO of Axfood, but also due to all the progress and all the activities that have happened in Axfood in 2017. Our agenda today will cover, obviously, the key ratios for the quarter as well as for the full year. As Cecilia said, Mr. Lexmon, our CFO, will then go through our financial position. I will then make a few comments regarding our strategic agenda and our position, as well as a comment about our outlook going forward. Then obviously we will have a Q&A session.
Before we go into the numbers and into the quarter, let me just give you a quick update about Axfood as it is today. We are a clear house of brands platform. We're in what I would say very well-positioned, unique concept in the sector, in our various segments, and also in very strong segments, in the low price, in the convenience as well as in online. In this platform that we have, one of the key ingredients for us that creates success and also profitability is our strong collaboration in the back end mainly, relates to the range development, relates to the logistics as well as IT. On a rolling 12 basis, we're now up at SEK 46 billion. We have, and we are happy to note that we have over four million customers in our sales units every week.
We cover today almost 300 own stores and have a collaboration over 1,100 stores across the Swedish market. Back to the report. If I should comment and make three highlights of the report that I'm about to present today, it's clearly one, a fantastic growth that we see in 2017. We are clearly gaining market shares. Two, our profit is very much in line with not only our forecast, it's also in line with last year and also our long-term financial target of over 4% EBIT margin. We have made some historically high investment during this period to drive and for future profitable growth. Let's now go into the quarter and into some of our key ratios, and I will then start with a few comments about our fourth quarter. We are reporting another strong sales period with a top-line growth of 7.3%.
You can see on the slide, we have a like-for-like development on a healthy 3.6%. All segments that we are reporting is also showing a very good growth, even if one must highlight and list out the fantastic performance made by Willys in this period with an 11% growth in the quarter, obviously supported by the acquisition of Eurocash. As you can see, the like-for-like performance that we are now seeing in Willys is over 4%, which is, as you know, it's very strong. Looking at our margins in the quarter, we are coming in at SEK 398 million profit, which is in line with last year.
As previous quarters when we reported our profit, we are seeing the benefit of a positive like-for-like, while the margin is hampered by some of the investments we are doing, particularly on the online development that we're currently running. This quarter, we also have a fairly large effect, as you can see in the various segments, we have large effect of the store expansion in Närlivs, as well as some restructuring costs compared to what we've done or linked into the changes we've done in the segment as we reported in the fourth quarter. Also for comparison, I must note we need to highlight that last year we also had a fairly high one-off on the pension refund, the so-called Fora money, which is obviously affecting the comparison between the quarters. By segment, positive to see again, Willys continued to make strong progress.
Hemköp is in line with the trend. Närlivs, as pointed out, somewhat sticks out due to some of the changes that we've seen with the one-offs in the quarter. Dagab is also very strong in their performance. I will come back a little bit more related to some of the various segments when I cover in the full year. Let's now go into the full year for 2017 and our numbers, starting with the sales performance for 2017. If I summarize it, I must say it's been a successful 2017 with the top-line growth in Axfood as a whole of 7%. Again, the like-for-like, which is healthy and strong at 3.8% for the full year. Also similar to the fourth quarter, for the full year, all segments are showing positive development. As you can see, Hemköp. I comment Willys, strong performance.
Hemköp is also driving good in the market at a 4.6% growth, as well as Närlivs at 3.5% and Dagab. Obviously supported by External Customers, but also by our strong drive in our various concept is up over 5%. With that, if we're looking into our top-line sales in our various concept in the store sales, which include Hemköp franchise, we are actually reporting for 2017 almost an 8% growth. If you look at the overall market that has a growth of little more than two, it is obviously clear that we are gaining some significant market shares during 2017. When we started this year, we were clear about some of the investments we're about to make and the strategic plan for that. That I think is also seen when we're coming in with our profit for the year.
We are reporting a profit of SEK 1,886 million, which is more or less in line with last year. The somewhat lower margin, again, even if we are supported by the like-for-like, but the somewhat lower margin is a reflection of the strategic investments we've done, particularly on online. Also, we have expanded more stores, compared to last year, both in Närlivs and Hemköp, as well as we have invested a lot with the refurbishment program, particularly in Hemköp. Our operating margin at 4.1%, well in line with our long-term target of over 4%. As you can see, when you're coming into the segments, again, Willys and Dagab continue to have strong performance and on actually reporting all-time high levels, while Hemköp and Närlivs is more affected by some of the strategic steps and the investments we've done.
Let me go through or comment some of the data by each segment. I start with the largest segment that we have, Willys. Again, we've comment the sales performance for the year. It's been a positive year with almost 10% growth. Eurocash acquisition has played out well for us in terms of top-line growth. Also, as you can see, we are really noting a strong healthy year overall from the Willys store chain in general, delivered by more customers visiting now our stores and online and also a higher ticket value. We're able to maintain our profitability during this period. We have a strong investment going on for the online business, and actually it's doing really good in terms of our online performance.
We continue to drive more customers to be able to meet more customers from an online perspective as we are rolling out our online platform to more and more stores and cities. Hemköp is also clearly gaining market shares behind a healthy 4.6% overall top-line growth. Our like-for-like has also been positive at 3.1%. We have closed some stores during this period. We've opened up some stores, and we also converted some stores in the period to franchise. It's been a year with high investments, regarding particularly into the online segment. As you can see, we already today have one-third of our own stores is now covering online service to our customer. It's been a year with high investments, it's also been a year where we've taken some steps in terms of developing our store and our store structure.
As you can see, the margin has been hampered somewhat by that. It's been an investment year for us in Hemköp. If I comment the reason for that, I will actually cover this in the previous quarters, let me just remind you of the three clear areas that has affected Hemköp in this year, it has been the refurbishment of the stores, particularly, even if we have more stores that we refurbish than ever. One store particularly has been highlighted out, which is Hemköp City that we had to close for four months. It was one of our biggest stores that had a big impact during the year. We've opened up five more stores compared to last year. As you know, starting new stores, it hampers the margin initially until you're up to full speed.
Online, as comment, we have rolled out online fairly aggressive in the program or in the stores or in the network. Let's now go into Axfood Närlivs, which also showing a good growth and I would say a solid profit when you look at the full year. As comment on the Q4 was affected of some of the refurbishment, but from a whole year, it's been a solid year. We have some elements in this where it's been seen a positive sales performance in Snabbgross, and we have a positive drive from that. But also clearly we've seen lately the impact on our margin in terms of restructuring that's been in the area around SEK 10 million, but also store expansion. We have in this year opened up two more stores, which relates to almost 10% of all the store networks.
Even if two stores is not that many, but for Snabbgross, it's a fairly high portion. We have seen an effect of the slowdown of the dinner bags that has impacted somewhat, and we made the reorganization. We made some structuring, and I will come back somewhat to that as well as we are now restructuring Axfood Närlivs going forward as of 2018. We also rolled out the online platform for Snabbgross, which has been a very positive, and obviously a positive way for us to meet our customers in an even better way. Finally, in terms of going through our various segment, let me just give you some comments about Dagab. Obviously an overall top line here, it's a very solid performance that has been reported in our Dagab operation. We have positive sales. We have improved our efficiency.
We have positive effects from the Saba acquisition that we made in the beginning of this year. I would say we've also been able to maintain our margins in Dagab despite that it also includes the acquisition of Mat.se, as you know, was a company that made some losses last year. So, that ends my first part in terms of going through some of the numbers. Anders, please join me here on stage and hand over to you to go through our financial position.
Thank you very much, Klas. Let me then begin to talk a little bit about the cash flow for the year. We had a strong growth in Axfood, and that provided us a good operating cash flow during the year that is in the same level with last year. We have increased our investments quite high if you compare to last year, and that is both acquisitions and organic investment in our operation. I will come back to that later. We have also a positive effect in net working capital during the year, and that is mainly explained by a positive calendar effect in December. We have also decreased our dividend during the year if you compare to last year. We ended up with a cash and cash equivalents with approximately SEK 1.4 billion at the end of the year.
If we take a closer look at the development of our net working capital, we can see over the last years that we have released quite much working capital, both in Swedish krona and as well if you compare to net sales. We have improved the most important balance sheet items, for example, accounts receivable, inventories, and accounts payable. We have not managed to develop that this year. We have a little increase in working capital, and that is mostly explained by our new acquired companies that are not that effective in working capital as Axfood in total. Coming back to the investments for the year, as Klas said, we have historically high investments with approximately little lower than SEK 2 billion.
If you exclude the acquisitions of SEK 1.1 billion, we have invested in our operations in wholesale, retail, and IT with approximately SEK 828 million, which is an increase from last year. We have increased it in all segments, both in retail, and that is mostly explained by an increase in Hemköp, but also in the wholesale business and in IT. If we take a look at the depreciation levels, that is very stable. If you compare to our investments, they varies a little bit more, but the depreciation is a little bit lower than the investment if you look back a couple of years. If you take it in relation to net sales, that is very stable, approximately 1.7% of net sales. That had decreased a little bit this year, and that is also explained by the acquired companies.
Let me also take a summary of the balance sheet effect of the acquired companies. We have boosted our balance sheet with approximately SEK 500 million. We have increased our goodwill with approximately SEK 800 million, and that is around 70% of our purchase price for the four companies. We have also acquired, as you can see, other intangible assets, and that is trademarks mostly, but also customer relations. We have a minor impact on the P&L with about SEK 4 million in amortization yearly. If we take a look at our development of our net debt, you can see that we have been debt-free since 2014. Of course, we have debt in our quarters, mainly in the first quarter due to our dividend. At year-end, we are debt-free.
We also see that we have a very stable equity ratio of a little bit over 40%, and that is well met if you compare it to our long-term goal of over 25%. To summarize, we have managed to grow and invest with our internal resources. Our capital employed is in the same level as last year, and also the return on capital employed is in the same level as last year. We have a financial solid base, and we are well-equipped for future growth. With that, Klas, I hand over to you again.
Thank you. Thank you, Anders. Well, as you can see, we are in a very positive financial position, but also, I would say, on a healthy trend in terms of growth. If I then move on from here, also it's clear to see that even if we are in this position, we're also now entering a fast-changing market with a lot of opportunities, but also obviously some challenges as always. I'm not going to go through my strategic plan in too much detail. We covered some of this in the third quarter, where we also covered some of the trends that we talked about in terms of how consumers are now changing into more service, the digitalization, the sustainability, et cetera. We covered that in the third quarter, but also we covered that on the Capital Markets Day.
Let me, just for the sake of it, at least make a quick recap in terms of our strategic platform, where we outline that in form of a strategic house, where we are clear about that our direction is to take leadership in good and sustainable food at great value. We have outlined five strategic areas to be able to deliver upon this mission. Growth is a top priority for us as we have three out of these six areas will cover growth, two will cover efficiency, and obviously one will cover our people, they're our most important asset that we have. Across all areas, it relates to an integrated operation in terms of how we drive our sustainability agenda.
Last, as we covered on the Capital Markets Day and in the third quarter, let me just outline and remind you of some of the key priorities that we are now focusing on. I'm not going to go through all the areas, but one of the more important ones is obviously our customer offer, where the priority is very much in terms of how are we developing our range to make sure we drive the good and sustainable food that relates to organic, relates to vegetarian, relates to health options, et cetera. We have a very strong platform in terms of our private labels, where we have really strong brands, as you can see at least also behind me here as well in terms of Garant, et cetera. We'll continue to develop our private labels in line with market and market expectations.
We're also very much working closely with our suppliers, not only to drive the range, but also to see how can we take out cost out of the system to secure that we always continue to provide great customer value. Finally, from the customer offer point of view, the change that consumer is now adapting in terms of more prepared dinner solutions, the mix that they want to see us offering, we'll continue to develop that platform even further that we can do a better job to meet these customer demands for today as well as for the future. Going into the customer meeting, we have also equally three clear priorities in that. As you've seen for 2017, we've taken some clear steps in terms of how we are updating our store network, where we're focusing particularly on Hemköp. We'll continue that program.
We are around 60%-65% covered the own stores in terms of the refurbishment program for Hemköp. We will continue to drive that. We have a very strong loyalty programs both in Willys and Hemköp, obviously this gives a lot of opportunities for us with managing and handling the data that we can have from these programs, but also how we can meet the customers in a better way. We will continue to develop that. Finally, of course, the omni-channel agenda is clear for us, I don't think that anyone has missed that in terms of how we are driving an omni-channel experience in Hemköp and Willys, but also to continue to add on the benefit of the pure online concept that we have in our house of brands strategy. From an expansion point of view, last year we made a lot of expansion in terms of acquisitions.
As I said, we still have acquisitions on our radar, it's not the first priority in terms of doing the same that we have done 2017. As we are now focusing very much on the 4 acquisitions we have made, as well as also to develop the online pharmacy startup that we are working together with some entrepreneurs to drive that and to link that as we go along into our network in Axfood in general. We also continue to open up stores. We are now guiding yearly in terms of store openings, where we have a span of 4 to 8 stores that we plan to open up in 2018. Majority of these stores is planned at this stage in Willys, but we also see opportunities for all our stores, all our chains, or our concept.
We will continue to expand the online offer that we have across the Swedish market, where obviously the more we are able to open up stores, the more online reach we will get. Finally, let me comment also on one of the key areas for us being a retailer and to become efficient is to drive the logistical agenda or the supply agenda. We are now taking steps into optimization. We are already today working to optimize our warehouse in Jönköping. We will continue to drive that. We will have 3 dark stores today, and we will continue to develop these dark stores to link that as we move along into an even more efficient operation, as well as one of the areas that is crucial for us as we going forward is also the online distribution.
I will stop there in terms of the strategic focus and just end this part of the presentation to make a few comments about the outlook for 2018. Let me just start with what we reported in the third quarter in terms of restructuring of Närlivs, which we believe is beneficial for the group in a very positive way, where we are now taking the Tempo organization and Tempo structure that will be linked or it will be handled into Hemköp. All the external customers that is very much a logistical operation will be run by Dagab through a separate segment within Dagab, called External Customer. We are now lifting up Snabbgross as a separate segment in the group.
As pointed out then, as well as I'm pointing out today, this will have no impact from a group level, but obviously it will be some minor changes within the segment, and we will report that as we come along in the first quarter 2018. We also have adjusted our long-term financial targets, as you know, historically, we have not had any growth target, but we now added this which we think reflects our ambition and our goal to gain market share. We've added a long-term target that we will grow more than the market. All other targets remained. With this, we are now leaving the yearly forecast and instead is focusing on our goal to every year deliver according to our long-term targets, i.e., to grow more than the market and to deliver an operating margin at least 4%.
Finally our dividend policy is, as you know, a dividend of at least 50%. Based on our strong financial position and current outlook, the board has decided to propose to the AGM a dividend of SEK 7 per share which is, as you know, an increase of the ordinary dividend of last year, which was SEK 6, it's an increase of 16%. Let me sum up my presentation, then I will go into the Q&A. We are, from an Axfood perspective, leaving 2017 as a successful and expansive year. We have a strong growth and it's been a year where we made some actually historically large investments. We have a solid profitability which is in line with forecast and is in line with our long-term target.
I must say we have a lot of energy and I would say a clear agenda for moving forward to drive further profitable growth. With that, I'll hand over to you, Cecilia, to lead us, guide us through the Q&A.
Well, I'm sure there are lots of questions around here, let's start with Niklas.
Thank you. Niklas Ekman from Carnegie. Can I start with a question on Hemköp? You have been investing quite a bit in recent quarters, as you mentioned, on store refurbishment, on online sales. Still you've seen that the sales growth of recent quarters has slowed, and it looks like in like-for-like sales at least, you're growing a bit less than the market. Why do you see this? Why are these investments not rewarding you more?
Well, I think if I won't correct you, but in terms of when you're mentioning the like-for-like according to the market, our top line is clearly we're continuing to gain market shares in Hemköp. From that perspective, we are growing. We are also meeting some fairly higher numbers last year. Clearly we started and we've converted some stores, as you've seen, we have closed some stores. We also converted some stores to franchise. We've opened up new stores. Some of these stores is not up to full speed yet. Some of the refurbishment we've done, it's also taken some time until they're up to full speed, which we think is a normal way. We're putting in a lot of focus right now to drive Hemköp further. We are in a period where we are adapting and changing and investing and we'll continue to drive that.
If you adjust for newly opened stores and the ongoing refurbishment, do you see that the underlying trend in Hemköp is stronger than the reported like-for-like?
Well, I think in terms of the underlying, of course, it's like-for-like numbers, it's nothing more than an underlying. I cannot argue about that. If I look at the franchise development that we have, and if I look at the top line developments we were making, we are gaining positive share, but we're also meeting very high numbers versus last year. Now can we see more? Of course, we want to do that. We want to drive that. I'm not saying that the investment we are doing, it's also clearly some steps we need to do to really adapt ourselves to the next level.
You mentioned that the goal for 2018 was to increase your online reach. Do you have a goal here in terms of where you want to be at the end of the year? This year you've obviously opened a lot of online stores in both Willys and Hemköp.
In terms of online reach, you mean?
Online stores providing online sales.
True. The focus now is where we are focusing more for Willys to open up online, rather than Hemköp. Hemköp is already today, as I pointed out, covering already one third of the stores is already today covering online. We made some adjustments, as you have seen, in terms of the Hemköp offer. We are now focusing more for Hemköp on the coverage we have, which is fairly large as it is a third of the stores.
Can I ask about, you mentioned some one-offs in this quarter with the structural changes in Närlivs. Was that the SEK 10 million that you mentioned under the full year impact?
Correct, sorry if I was not clear about that. That is the fourth quarter restructuring.
Okay, good. Finally, I was curious about the significant increase in dividend with 100% payout ratio. You obviously have the cash for it, but it was still a little surprising given that you're still looking at 2018 as a year of high CapEx and focus is on top line growth, not margins. Just curious on why raising the dividend by so much in a year like this?
Well, we had a dividend payout of SEK 9 the year before that. Last year it was SEK 6, also was a year when we made a lot of acquisitions that we are not planning to do this year in the same pace. When we think we have a strong financial position and a good outlook, I think it reflects that.
Okay. Thank you.
Before we hand over to Daniel, I just wanted to talk to the telephone conference and maybe you remind them how to ask a question on the telephone conference.
Thank you very much. Ladies and gentlemen on the telephones, if you want to ask a question, please press 01 on your telephone keypads.
Okay, now we'll take a question from Daniel Schmidt.
Yes. Could you shed some more light on the investments that are in terms of the online business that are impacting the P&L in 2017, and how should we look at that into 2018? Can you also say something about the growth rate of the online business in 2017 and maybe, I don't know, elaborate a little bit about the share of the group in terms of online?
Absolutely. I'm not sure you're going to be totally pleased with my answers. Let me start with the first one. The online investment that affects P&L today, if you compare that in 2017, and if you should then compare that as moving forward. Obviously, a large investment for us was the acquisition of Mat.se, which as you know, was losing money last year. We continue to see that as they are in an investment phase. That will continue, but it's not going to be that jump as we're not acquiring the same as we did in 2017. In terms of Hemköp and Willys, obviously, we made initially some large investments where you start to depreciate some of the IT investment when you're starting that. That has rolled in. We are obviously seeing when we are getting more and more volume, that will support us as we move along.
Where you have an impact is every time you open up a new store and depends on how fast you open up new stores, because that creates some investments and some startup costs for that. Apples to apples in that it was a large investment year, I would say 2017 in terms of now we are obviously seeing that hopefully with more volume, we're seeing that will support us as we move along. When in terms of growth rate, we have a very healthy growth rate on online. We are better than the market, but we are not specifying specifically. Also it's fair to say, if we are significantly better than the market, we're also starting from somewhat lower levels, which is fair to say.
Can you say anything more specific in terms of the CapEx guidance that you gave? You can see on the chart that it looks like IT was maybe SEK 250 last year. Is that the part that will be coming up quite a bit in 2018 or any details?
That we can see now is that the IT investments will be in line with 2017, actually.
What's the gap between the SEK 820 something versus the nine to SEK 1 billion that you're guiding for then?
I would say it's in all segments. In the stores and of course in the wholesale operations and in IT.
Okay.
One area where the optimization is one thing, for example, that we are doing in the warehouse.
Is it right to believe that the change of guidance that you are abolishing the yearly EBIT guidance and adding the top-line guidance, should that be seen as something signaling that there will be some pressure on profitability in 2018 but you hope to compensate to gaining further market shares or?
Well, I think there is nothing to do in terms of what we are trying to guide versus lastly that we are changing. My opinion, it's more clear in terms of I want to have a clear long-term target, both on growth and on margin, and that's how we are driving it. Obviously, if you're seeing it, we are at 4.1% operating margin. We're seeing that we are going to continue to drive growth, and we want to secure that we are also delivering on our margin target as well. I think that gives you a clear direction on where we're heading.
Thank you.
Okay. Let us take one question from the conference call. Operator?
Thank you. Our first question comes from the line of Stellan Hellström of Nordea. Please go ahead. Your line is now open.
Thank you. Yeah, I would like to ask about Närlivs. Did you have positive like-for-like sales in your stores in Q4? Is there anything to comment on recent development in the market? Anything you see that is changing?
Hi, Stellan. Our development on Snabbgross was positive in the fourth quarter. We see that as we pointed out that there is a market that is, for us at least, very positive in terms of how we are reaching out to the segment in terms of cafe restaurant that Snabbgross is covering. We are positive about that, and we'll continue to drive that agenda. That's why also we've opened up more stores, which short term has some negative impact, but long term, we believe it's right to do to further cover the market.
All right. If I may, I'd just also ask about why you removed the guidance for the current year here. Is there anything in particular that makes it more difficult to predict profitability development going forward?
It's just when I look at the guidance we've done, if I look at the comparison, what we are driving and how we are guiding now, I think that it's equally clear. For us, it's more in terms of how we want to lay out the long-term target in terms of growth. We are clear about how we are seeing the growth. We're also clear about what we want to do from an EBIT margin. There's no other signals in that.
All right. Finally, just on the reorganization here of Närlivs, is there any tangible cost savings that you see from this?
From the reorganization, you mean?
Yes.
Not tangible. There are, of course, we believe that we can be somewhat more efficient as we are combining some of the operations in Dagab, as an example, also in Hemköp. They also very much aim to support our business even further. There are some, but there is not significant for you in terms of how you calculate on it. Yeah.
All right. Thank you.
Before we take the next question over the phone, we go over to Andreas from ABG.
Thank you. Andreas Lund, ABG. To continue on the dividend question, but maybe the opposite question, why are you not hiking the dividend given you have a very high equity ratio given targets, free cash flow is clearly above 100% on net profits?
No, I'm not smiling because there's always two various opinions apparently even out here in the audience. We've made a judgment in terms of how we look at it from our financial position and also from in terms of how the outlook we are moving forward. I think this is a balanced way.
Okay. Different topic. This European Union law by 2020 saying that you cannot have refrigerators affecting the environment, right?
Yeah.
What's the status there on Axfood and what's the CapEx need, basically?
I'm not sure whether you want to comment that in more detail, Anders. We have already begin to convert it, of course, and we are doing it all the time. We don't have any more specific detail than that. I think we are well in line with the plans. We worked on this for some time and will continue to drive that. That's also part of the refurbishment program as well. Where we're changing refrigerators and so forth in this program. We are in line with what we know we need to have handled by 2020.
Okay. Thank you. On the Hemköp, given the refurbishments you've done and the other things you have touched upon here during 2017, what's the status there? Should we expect continued margin pressure, or are you done with what you would like to achieve?
I don't think we should expect another Hemköp City effect, which was fairly significant as you know, and we talked about in particularly the Q1 and Q2. We still want to continue that refurbishment program. As I said, we are slightly above 60% in terms of the number of stores that we have refurbished. We'll continue to do that. That program will continue as well as obviously online is also continuing in Hemköp. We made also some measures on online, and as I pointed out, we are not planning to open up too many more stores in Hemköp at this stage. We also have adjusted some of the models that we have for online. We have a very positive growth for Hemköp, but we're also now looking into how we can become more efficient from an operational point of view.
Could you please remind me of the updated changed modeling in Hemköp online?
We changed the fees. We had a 20 SEK fee historically, and now we've added a fixed cost if you're purchasing less than 700 SEK.
Okay, got you. Have you seen any differences in online pickup between Willys and Hemköp, given that you have had different fee structures in place?
I think that's the beauty of the house of brands strategy, that we actually are able to meet the customers in different ways and also in different models. Willys is very clear in terms of they have the value and great prices, but also very clear on their fees in terms of both for click and collect and from online, and it's been received very positive from the customers. We have a click and collect share that is above 50%, which is if you compare that to Hemköp, that the majority of Hemköp is home delivery. We see various behaviors, and also of course with Mat.se, where we can even be more innovative.
We're taking learnings all the time, but we're also making sure that we also have different models because I don't think that we are really sure of yet in terms of how exactly this will model out as we move along. The share online on food is still fairly small.
How far are we from the fact that maybe Mat.se/Dagab will handle the deliveries for Hemköp or Willys?
For Hemköp, I think we are looking into various steps here. We have the dark stores today where we're looking into how can we collaborate that with also particularly where we have the dark store Stockholm, Gothenburg, Malmö. We're already today starting to work with the transports, so we can use the same transports for the group. It's a progress that we're working on more. We're clear about that ongoing development. Long term, as we talked about on the Capital Markets Day, of course, this requires higher volumes. This requires also different kind of warehouses where we can also add optimization into this program as well to be able to meet. As you know, the margins are low. We need to handle it differently when volume comes up.
Last one. I don't think you mentioned food inflation. What you see for 2018?
No, I did not. Obviously, as we've seen some of the HoReCa numbers that we believe may be look a bit high. We are in more of the 1%-2% range at this stage. Obviously, it's difficult at the early stage to predict, but that's in the range we are into in our mindset at this stage.
Thank you, Andreas. We hand over to the conference call and take questions from there. Operator, I hand over to you.
Thank you very much. Again, to remind everyone, if you'd like to ask a question, please press 01 on your telephone lines. Our next question comes from the line of Kristoff Sandstrom of SEB. Please go ahead. Your line is open.
Thank you, operator, and thank you for taking my questions. Regarding online again, you are in the report that online growth was strong but also affecting margins negatively. Obviously, it's a new business for you and you have startup costs and so forth. Going into 2018, online share of sales, of course, for the group should be higher compared to 2017. Then perhaps you would enjoy some advantages of scale in that business. Net, assuming a market growth for online in the tune of 30% for 2018, are we looking at online being less or more of a drag on margins compared to 2017? Thanks.
Our aim is to have a less margin drain, if that makes a quick answer to your question. Obviously, with volumes and with investment we have done. Now it obviously depends on how many more, as I pointed out, how many more cities and how many stores we roll out. Compared to the base that we have today, we will see that depending on, as you're pointing out, we're getting the growth, of course, that will support, that we will not see even further margin deterioration, even if online still compared to the group is less profitable.
Right. A follow-up. At this stage, have any of your franchisees within the Hemköp business signed up for selling online? Would you prepare to incentivize this group further if there's continued low demand to sell through online? Thanks.
Far it's more from Hemköp. It's group-owned stores that have started to roll out online. Our franchise partners are looking into this, but we are still at this stage it's group-owned. Again, even no matter franchise or group-owned, what we are working on that will support everyone as we move along. That is more to drive the back end in a more efficient way. That will also include Hemköp as we go along.
just to be clear, no franchisees as of yet. We shouldn't expect any franchisees to hook onto this platform within the next few months at least?
In terms of what you should expect, of course, that is dependent on the franchisers. At this stage, no franchisers have rolled out it and we are also, of course, they are following this and are looking into this and following it closely.
Thank you.
Thank you. Our next question comes from the line of Fredrik Ivarsson of Kepler Cheuvreux. Please go ahead. Your line is open.
Thank you. Yet another online question, more specifically, comparing Willys to Hemköp. We saw you planning on opening up in 10 new cities in Willys, whereas no new cities is planned for Hemköp. How should we read that? Does it mean that Willys is performing better than Hemköp when it comes to online? If yes, what sort of mistakes did you do in Hemköp and planning to improve in 2018? Thanks.
Well, you should read that as I pointed out, we already have one-third of the stores in Hemköp are offering online, which we don't have in Willys. For us, we see an opportunity to open up in more cities, more stores in Willys. Also, as I pointed out, the Willys concept and the customer acceptance today in terms of a high click and collect is obviously also something that we think is positive and we are driving.
Thanks. Very clear. A follow-up on the CapEx guidance as well, more looking to 2019 and onwards. Should we see this as more of a normal level going forward or is it more high due to the optimization of Jönköping and the dark stores, et cetera?
Well, we are guiding yearly now, 2018. I'm sure we'll come back to 2019. If I just come back to the Capital Markets Day, if you look further on, of course, we're also seeing opportunities from a logistical standpoint in terms of how to drive that. Then we'll come back to that. That's further down the line.
Fair enough. Thank you. That's all from me. Thanks.
Okay. I don't think we have any more questions from this telephone conference. Do we have any questions in the audience? If not, I would like to thank you for your attendance. If you have any further questions, don't hesitate to contact us. Otherwise, we wish you a good day. Thank you. Bye bye.
Thank you.
This now concludes our call. Thank you for attending. Participants you may disconnect.