Axfood Ab · OMXSTO:AXFO
Axfood Ab — Q1 2019 Earnings Presentation
41 slides from Axfood Ab's earnings presentation, 2019
Slide 1: A strong start to 2019
A strong start to 2019 Klas Balkow President and CEO 1
Slide 2: Agenda
Agenda • Q1 2019 • Financial position • Update strategic agenda • Outlook 2019 • Q&A 2
Slide 3: Axfood – a leading Swedish food retailer
Axfood – a leading Swedish food retailer RTM Net sales SEK 48.6 bn 10,260 employees (FTE) Efficient sourcing and Customer reach logistics solutions for all >4 million customers a week brands and channels 301 Group-owned stores Innovative development of 120 franchise Hemköp private label products In
Slide 4: Highlights
Highlights Developing Strong growth in Well positioned logistics center all segments within online of the future 4
Slide 5: Q1 2019
Q1 2019 5
Slide 6: Strong growth across all segments
Strong growth across all segments • Group net sales growth of 4.2% Net sales, SEK m 11,931 • Negative Easter effect of approx. 1.5% 11,444 10,305 10,639 9,566 Total LFL Willys 5.3% 4.8% Hemköp incl. franchise 1.7% 2.3% Axfood Snabbgross 8.3% 9.3% Dagab 4.6% Q1-15 Q1-16 Q1-17 Q1-18 Q1-19 6
Slide 7: Gaining market share
Gaining market share 5% Axfood Group store sales Axfood growth 4% 4.1% Axfood online 3% growth 35% Market online 2% growth 19% Retail trade index (excl alcohol) Market growth 1% 0.9% 0% Q2 Q3 Q4 Q1 2018 2018 2018 2019 Source: SvDH/HUI 7
Slide 8: Increased operating profit
Increased operating profit ■ Operating profit, SEK m • Operating profit SEK 485 m (435), ▬ Operating margin, % including IFRS 16 effect of SEK 43 m 485 + LFL development 435 408 397 − Dark store start up costs − Lower efficiency in fruit and vegetable warehouse 329 − Hemköp investments in customer m
Slide 9: Willys: Outperforming the market
Willys Outperforming the market ■ Operating profit, SEK m • Strong sales growth 5.3% and LFL 4.8% ▬ Operating margin, % ‒ Negative Easter effect 6,860 6,513 ‒ More customers and higher average ticket 5,643 5,764 • Store network 209 (208) 5,261 • High online growth 4.3 ‒ Online in six new cities/stor
Slide 10: Hemköp: Growing faster than market
Hemköp Growing faster than market ■ Operating profit, SEK m • Total store sales growth 1.7% and LFL 2.3% ▬ Operating margin, % ‒ Group owned -0,6% and LFL 1.0% 1,608 1,599 1,545 1,547 ‒ Franchise 3.7% and LFL 3.4% 1,401 • Total store network 188 (186) ‒ Two larger stores converted to Willys 4.3 4.2
Slide 11: Östenssons
New franchisee Östenssons • 9 stores in county Östergötland, a bakery, a central butchering operation and a catering business • Sales SEK 600 m in 2018 ‒ Expected whole sale distribution from Dagab of approximately 50% of sales • Östenssons brand remains in combination with Hemköp • Changing supplie
Slide 12: Axfood Snabbgross: Great performance
Axfood Snabbgross Great performance ■ Operating profit, SEK m • Great net sales growth 8.3% and LFL 9.3% ▬ Operating margin, % ‒ Increase customer base and average ticket 730 655 674 • Gaining market shares ‒ Market growth 2019 (Delphi) Jan-Feb 5.8% • Operating profit SEK 18 m (9), including IFRS 16
Slide 13: Dagab: Stable profitability
Dagab Stable profitability ■ Operating profit, SEK m • Good net sales growth 4.6% ▬ Operating margin, % ‒ Supported by increased ownership in Urban Deli 10,577 10,114 9,746 • Operating profit SEK 165 m (165), 9,312 including IFRS 16 effect of SEK 5 m + Strong sales in Axfood’s food concepts − Dark s
Slide 14: Financial position
Financial position Anders Lexmon Chief Financial Officer 14
Slide 15: Cash flow
Cash flow SEK m Q1 2019 Q1 2018 Change Cash and cash equivalents, 1 Jan 1,571 1,376 195 Operating cash flow before changes 988 615 373 in working capital and paid tax Paid tax -110 -90 -20 Changes in working capital -158 117 -275 Net investing activities -153 -164 11 Debt 187 169 18 Amortization of
Slide 16: Increased investments
Increased investments SEK m 1,934 SEK m 245 1,021 4 189 69 764 1 643 580 67 32 Acquisition Other 14 IT 140 107 Wholesale Retail 2014 2015 2016 2017 2018 Q1-18 Q1-19 16
Slide 17: Decreased net working capital
Decreased net working capital Decreased net working capital Continuous focus on most important items NWC, SEK m NWC as % of sales Index % of sales 0 0% 120 Accounts payable -7.4% 110 -500 -1% Inventories 100 5.0% -1,000 -2% 90 Accounts receivable 2.1% -1,500 -3% 80 2015 2016 2017 2018 RTM 19 2015 20
Slide 18: Stable financial position
Stable financial position 6,047 Net debt (+)/receivable (-), SEK m 712 37.2% 33.2% Equity ratio 30.9% 30.6% 18.0% 161 122 116 * 4 Mar 15 Mar 16 Mar 17 Mar 18 Mar 19 Mar 19 Incl. IFRS 16 18
Slide 19: Return on capital employed affected by IFRS 16
Return on capital employed affected by IFRS 16 Capital employed 9,531 ROCE 49.8% 49.6% 46.9% 38.7% 30.6% 3,945 4,193 4,046 3,460 Mar 15 Mar 16 Mar 17 Mar 18 Mar 19 19
Slide 20: Balance sheet effects from IFRS 16
Balance sheet effects from IFRS 16 • Modified retrospective approach • Additional SEK 5,6 bn in total assets due to IFRS 16 SEK bn 31 March 31 December Statement of financial position, Group 2019 2018 Change Right-of-use assets 5.6 – 5.6 Other assets 11.1 12.2 -1.1 Total assets 16.7 12.2 4.5 Total s
Slide 21: IFRS 16 effect on key ratios
IFRS 16 effect on key ratios 31 March 31 March 2019 2019 excl IFRS 16 Equity ratio,% 18.0 30.5 Net debt, SEK m 6,047 116 Q1 2019 Q1 2019 excl IFRS 16 EBITDA, SEK m 1,015 628 EBIT, SEK m 485 442 Profit for the period, SEK m 354 343 ROCE, % 30.6 50.7 Cash flow from operating activities, SEK m 720 366
Slide 22: Update strategic agenda
Update strategic agenda Klas Balkow 22
Slide 23: Axfood's strategic areas
Customer Customer Supply Work Our Expansion offer meeting chain approach people Sustainability Axfood’s strategic areas 23
Slide 24: Customer offer
Customer offer Priorities 2019 Develop and strengthen Strengthen price Increase efficiency Develop complete the assortment of good perception within and synergies in meal solutions and sustainable food private label purchasing 24
Slide 25: Steg inom hållbarhet
Steg inom hållbarhet Increased sustainability focus Target 2025: 25% sustainability certified goods of sales 25
Slide 26: Developing new meal solutions
Developing new meal solutions 26
Slide 27: Customer meeting
Customer meeting Priorities 2019 Strengthen the digital Roll out updated Develop and strengthen customer customer meeting concepts program for increased relevance 27
Slide 28: Online market – share of sales small but growing
Online market – share of sales small but growing Online sales estimated share of % market 60 50 ~ 2% 40 30 20 10 0 2014 2015 2016 2017 2018 2019 Source: D-food Index, SvDH Index 28
Slide 29: Axfood well positioned online with a broad approach
Axfood well positioned online with a broad approach • 35% online growth Q1 (market growth 19%) • SEK 334 m online sales Q1 • Differentiated business models • Various delivery options • Different fee options 29
Slide 30: Supply chain
Supply chain Priorities 2019 Implement common Start the development of Increase efficiency dark store for online automated warehouse for in logistics orders store and online picking 30
Slide 31: Building the logistics solution for the future
Building the logistics solution for the future • Highly automated warehouse • Supporting both store and online • Planned to be fully operational 2023 • Witron, selected automation supplier • Located in Bålsta/Stockholm with NREP as real estate service provider • Annual investment in automation of SE
Slide 32: Six facilities to be consolidated into one
Six facilities to be consolidated into one Today 2023 • Capacity expansion of at least 115,000 sqm 100,000 sqm 40% in 2023 Skellefteå • Financed by credit facilities • Share of logistics costs in 2023 estimated in line with the current Borlänge level, including lease and increased Sätra Bålsta depre
Slide 33: Outlook 2019
Outlook 2019 33
Slide 34: Outlook 2019
Outlook 2019 Planned capex 2019 SEK 1,500−1,600 m Including approx. Excluding acquisitions SEK 600 m investment and leasehold in automation for future logistics solution 34
Slide 35: Summary
Summary • Strong sales growth • Outperforming the market and gaining market share • Improved profit • Exciting plans for the future 35
Slide 36: Q&A
Q&A 36
Slide 37: Axfood
Axfood ■ Net sales, SEK m Key ratios Q1 Q1 ▬ Operating margin, % SEK m 2019 2018 Change 2018 11,931 Net sales 11,931 11,444 4.2% 48,085 11,444 10,305 10,639 9,566 Change in like- 4.0% 5.3% -1.3 3.7% for-like sales 4.0 4.1 Operating profit 485 435 11.6% 2,025 3.7 3.8 3.4 Operating 4.1% 3.8% 0.3 4.2%
Slide 38: Willys
Willys ■ Net sales, SEK m Key ratios Q1 Q1 ▬ Operating margin, % SEK m 2019 2018 Change 2018 6,860 6,513 Net sales 6,860 6,513 5.3% 27,066 5,643 5,764 5,261 Change in like- 4.8% 6.3% -1.5 4.3% for-like sales 4.3 3.7 3.7 Operating profit 294 241 22.0% 1,197 3.3 3.5 Operating 4.3% 3.7% 0.6 4.4% margin
Slide 39: Hemköp
Hemköp ■ Net sales, SEK m Key ratios Q1 Q1 ▬ Operating margin, % SEK m 2019 2018 Change 2018 1,608 1,599 Net sales 1,599 1,608 -0.6% 6,403 1,545 1,547 1,401 Change in like- 1,0% 1.8% -0.8 1.1% for-like sales 4.3 4.2 Operating profit 59 67 -11.3% 227 3.6 3.8 3.7 Operating 3.7% 4.2% -0.5 3.5% margin N
Slide 40: Axfood Snabbgross
Axfood Snabbgross ■ Net sales, SEK m Key ratios Q1 Q1 ▬ Operating margin, % SEK m 2019 2018 Change 2018 730 655 674 Net sales 730 674 8.3% 3,241 Operating profit 18 9 88.5% 121 2.5 Operating 2.5% 1.4% 1.1 3.7% margin 1.6 1.4 Number 24 24 0 24 of stores Q1-15 Q1-16 Q1-17 Q1-18 Q1-19 40
Slide 41: Dagab
Dagab ■ Net sales, SEK m Key ratios Q1 Q1 ▬ Operating margin, % SEK m 2019 2018 Change 2018 10,577 10,114 9,746 Net sales 10,577 10,114 4.6% 42,456 9,312 Operating profit 165 165 0.1% 685 1.8 1.8 1.6 1.6 Operating 1.6% 1.6% 0.0 1.6% margin Delivery 96.9 96.8 0.1 96.1 reliability, % Q1-15 Q1-16 Q1-17