Axfood Ab · OMXSTO:AXFO
Axfood Ab — Q1 2021 Earnings Presentation
42 slides from Axfood Ab's earnings presentation, 2021
Slide 1: Solid quarter with improved profitability
Solid quarter with improved profitability Interim report Q1 2021
Slide 2: Agenda
• Market update • Q1 2021 • Financial position • Update strategic agenda • Outlook 2021 • Q&A 2
Slide 3: Axfood – good and sustainable food for everyone
Axfood – good and sustainable food for everyone R12M net sales SEK 53.8 bn 11,251 employees (FTEs) Efficient sourcing and Customer reach logistics for all brands ~4.5 million customers a week and channels 311 Group-owned stores Innovative development of 136 franchise Hemköp 126 franchise Tempo priva
Slide 4: Outstanding employee engagement to serve customers in an extraordinary time
Outstanding employee Demonstrated strength to Great efforts to live up to engagement to serve handle an exceptional important and societally customers in an situation and maintain essential role during extraordinary time product supply pandemic 4
Slide 5: Market update
Market update 5
Slide 6: Strong demand but high comps in food retail
• Strong demand in food retail as consumers have continued Strong to eat at home, but high comps from prior year’s hoarding and a negative calendar effect demand but • Exceptionally high online growth • Continued challenging situation for certain segments of the high comps in food retail market, inc
Slide 7: Food retail market
Food retail market High demand but high comps Food retail trade index, price and calendar adjusted (sales in stores and online) % 12 11 10 9 8 7 6 5 4 3 2 1 0 -1 -2 -3 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 19 19 19 19 19 19 19 19
Slide 8: Food retail market online
Food retail market online Still exceptional growth Food retail trade index (online sales) % 200 Food retail market Q1 2021 Sales online 150 7% 100 93% Sales in stores 50 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 19 19 19 19 19 19 19
Slide 9: Market growth driven by Click and Collect
Food retail market online Market growth driven by Click and Collect Food retail trade index (online sales) % Home delivery Click and Collect in store (C&C) 400 350 300 3x Sales split online Sales split online Growth rate segment Q1 2020 segment Q1 2021 250 C&C/home delivery 200 Click and Click and C
Slide 10: Q1 2021
Q1 2021 10
Slide 11: Growing almost in line with the overall market, despite Eurocash headwind
Growing almost in line with the overall market, despite Eurocash headwind Store sales development (including online) % Axfood store sales Q1 12 +2.4% 10 8 6 Market growth Q1 +3.0% 4 Food retail trade index 2 Axfood Group store sales 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2018 2018 2019 2019 2019 2019 20
Slide 12: Growing faster than the market online
Growing faster than the market online Sales development online % Axfood online sales Q1 160 Axfood +139% 140 Group online sales 120 Food retail trade index 100 80 Market online growth Q1 +128% 60 40 20 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2019 2019 2019 2019 2020 2020 2020 2020 2021 Source: Axfood/HUI Resea
Slide 13: A solid first quarter with high comps
Net sales A solid first quarter with high comps • Net sales increased 1.0% during the first quarter o High comps from prior year’s hoarding (-4 pp. negative effect on +1.0% store sales growth) and a negative calendar effect (-0.5 percent) Net sales, SEK m 13,067 13,203 o Lower inflation rate compare
Slide 14: Higher profit and profitability
Operating profit Higher profit and profitability • Operating profit SEK 565 m (544) Operating margin, % +3.9% + Cost control Operating profit, SEK m + Significantly higher operating profit for Dagab 565 + Improved sales mix 544 − Negative result for Eurocash (SEK -52 m) and certain Hemköp 485 stores
Slide 15: Willys: Growth above market including Eurocash headwind
Willys Growth above market including Eurocash headwind • Sales growth of 3.2% and LFL 0.4% +3.2% o Slower rate of sales growth on high comps and negative Operating margin, % calendar effect 7,740 7,985 Net sales, SEK m o Continued very challenging situation for Eurocash, sales down 6,860 more than 8
Slide 16: Hemköp: Continued challenges at central urban locations
Hemköp Continued challenges at central urban locations • Total store sales growth 0.8% and LFL 0.5% o Group owned -4.6% and LFL -1.1%, franchise 4.7% and LFL 1.6% Operating margin, % Net sales, SEK m -4.4% o Strong growth for franchise stores, sales for Group-owned stores negatively impacted by conv
Slide 17: Snabbgross: Sustained outperformance of weak market
Snabbgross Sustained outperformance of weak market • Sales decline of -5.3% and LFL -7.9% o Continued outperformance despite sales decline, private food Operating margin, % -5.3% service market -29% according to market data Net sales, SEK m 777 o Increase in customer base, positive effect from attra
Slide 18: Snabbgross: Expanding Snabbgross Club
Snabbgross Expanding Snabbgross Club Continued Concept to be positive consumer expanded to feedback on new two new stores membership- Successful in upcoming based store launch of year concept Stockholm store Snabbgross Club with more than 6,000 members signing up 18
Slide 19: Dagab: High productivity and service levels
Dagab High productivity and service levels • Net sales growth of 2.1% +2.1% o Higher sales to Willys stores and Hemköp franchise Operating margin, % Net sales, SEK m 11,880 o Lower sales to service trade, Snabbgross and Eurocash 11,634 o Sales decline for Urban Deli 10,577 9,746 10,114 • Operating p
Slide 20: Financial position
Financial position Anders Lexmon Chief Financial Officer 20
Slide 21: Strong operating cash flow
Strong operating cash flow SEK m Q1 2021 Q1 2020 Operating profit 565 544 Non-cash items 583 566 Net interests -30 -28 Paid tax -116 -114 SEK 1.1 bn Working capital 125 367 Operating cash flow 1,127 1,335 Investing activities -308 -291 Loans raised 0 200 Amortization of debt -388 -379 Operating cash
Slide 22: Investments (ex. IFRS 16)
Investments (ex. IFRS 16) Acquisition Other Joint group Wholesale Retail SEK m SEK m 2,000 1,934 500 1,481 450 SEK 292 mn 400 350 1,021 1,031 292 1,000 300 276 764 250 92 101 Total investments 200 500 580 150 19 29 in Q1 2021 100 165 162 50 0 0 2015 2016 2017 2018 2019 2020 Q1 Q1 2020 2021 22
Slide 23: Improved net working capital
Improved net working capital NWC as % of sales NWC, SEK m -2.0% -3.6% -2.6% -919 -3.0% -3.4% -1,236 -3.6% -1,513 NWC as % of sales -1,800 -1,918 2017 2018 2019 2020 R12M to Mar. 2021 23
Slide 24: Financial position
Financial position Net debt (ex. IFRS 16), SEK m 6,047 Net debt, SEK m Net debt/EBITDA 1.0x Net debt/EBITDA 5,449 5,454 5,218 5,185 5,082 5,131 5,016 4,577 18.4% 1.2 1.2 1.1 1.1 1.0 1.0 116 Equity ratio -315 -404 -377 -259 -478 -350 -782 -1,131 31 Mar. 30 Jun. 30 Sep. 31 Dec. 31 Mar. 30 Jun. 30 Sep.
Slide 25: Return on capital employed
Return on capital employed Impacted by IFRS 16 ROCE Capital employed, SEK m 10,674 9,825 10,178 10,149 9,531 9,567 9,526 9,648 9,651 26.6% 30.6% 30.9% 30.6% 30.1% 26.6% 24.7% 24.5% 24.5% 24.2% Return on capital employed 31 Mar. 30 Jun. 30 Sep. 31 Dec. 31 Mar. 30 Jun. 30 Sep. 31 Dec. 31 Mar. 2019 201
Slide 26: Update strategic agenda
Update strategic agenda Klas Balkow President and CEO 26
Slide 27: Strategic focus areas
Strategic focus areas Customer Customer Expansion Supply chain Work approach Our people offering meeting We will grow in new and We will be a driver of We will develop an We will attract, recruit We will offer our existing markets by sustainable product innovative, customer- and develop the Through
Slide 28: Continuing to develop the logistics for the future
Supply chain Continuing to develop the logistics for the future Work on new, highly automated logistics centre in Pilot of new Transport Management System extended Bålsta, Stockholm, continuing according to plan to include in-store picking for e-commerce 28
Slide 29: Move of warehouse for fruit and vegetables
Supply chain Move of warehouse for fruit and vegetables • A 15-year lease has been signed for a new, larger and more efficient nationwide warehouse for fruits and vegetables in Landskrona ‒ Replaces current warehouse in Helsingborg ‒ To be fully operational at the end of 2022 ‒ Prime location and in
Slide 30: New checkout system and payment terminals in stores
Customer meeting New checkout system and payment terminals in stores New checkout systems and payment terminals are currently being rolled out in stores Leads to lower operating and maintenance costs with long expected useful life Streamlines shopping process and supports multiple payment methods Ro
Slide 31: Apohem
Apohem Strong full year growth, sales Apohem improved +255% market position and Opportunities Strong growth and higher efficiency for efficiency, expansion and ambitious plans synergies with warehouse move New IT- to Axfood’s platform Stockholm dark and store improved website 2019 2020 31
Slide 32: Progress in sustainability efforts
Progress in sustainability efforts GHG emissions* Food waste Share of sustainability- labelled products -76% -27% +1.3pp 1.72% 30.0% 27.0% 26.9% 28.3% 1.26% 0.86% 2009 2020 Target 2015 2020 Target 2018 2019 2020 Target (base 2020 (base 2025 2025 year) year) * Measured in CO2 equivalents, tonnes. Ref
Slide 33: Outlook 2021
Outlook 2021 33
Slide 34: Looking ahead
Looking ahead • Still exceptional time due to Covid-19, uncertainty with the pandemic ‒ While the food retail market in general benefits from the high demand, there are large variations between segments • High comps in 2021 for the food retail market 34
Slide 35: Outlook 2021 (unchanged)
Outlook 2021 (unchanged) • Planned capital expenditures in 2021 of SEK 1,800−1,900 m ‒ Excluding acquisitions and leasehold ‒ Including SEK 585 m investment in automation solution for the new logistics centre in Bålsta, in accordance with payment plan ‒ Including SEK 115 m investment in land in conn
Slide 36: Summary
Solid quarter with high comparison figures • Increased sales with higher profit and profitability • High activity level in the organization, progress Summary in sustainability efforts • Strong financial position 36
Slide 37: Q&A
Q&A
Slide 38: Axfood
Axfood Key ratios Q1 Q1 Operating margin, % SEK m 2021 2020 Change 2020 Net sales, SEK m Net sales 13,203 13,067 1.0% 53,696 53,696 53,832 50,740 48,085 Change in like- 45,968 0.5% 9.3% -8.8 6.9% for-like sales 4.5 4.7 4.7 4.1 4.2 Operating profit 565 544 3.9% 2,510 Operating 4.3% 4.2% 0.1 4.7% marg
Slide 39: Willys
Willys Key ratios Q1 Q1 Operating margin, % SEK m 2021 2020 Change 2020 Net sales, SEK m Net sales 7,985 7,740 3.2% 31,793 31,793 32,038 29,029 Change in like- 27,066 0.4% 11.0% -10.6 7.9% 25,415 for-like sales 4.9 4.9 4.8 4.2 4.4 Operating profit 340 348 -2.5% 1,551 Operating 4.3% 4.5% -0.2 4.9% ma
Slide 40: Hemköp
Hemköp Key ratios Q1 Q1 Operating margin, % SEK m 2021 2020 Change 2020 Net sales, SEK m Net sales 1,554 1,625 -4.4% 6,354 6,199 6,403 6,378 6,354 6,283 Change in like- -1.1% 4.7% -5.8 2.8% for-like sales 3.8 3.8 3.6 3.6 Operating profit 59 61 -3.5% 229 3.5 Operating 3.8% 3.7% 0.0 3.6% margin Number
Slide 41: Snabbgross
Snabbgross Key ratios Q1 Q1 Operating margin, % SEK m 2021 2020 Change 2020 Net sales, SEK m Net sales 736 777 -5.3% 3,417 3,443 3,417 3,376 3,241 2,984 Change in like- -7.9% 6.0% -13.9 -2.2% for-like sales 4.8 4.4 4.2 3.7 3.7 Operating profit 14 24 -39.3% 150 Operating 1.9% 3.0% -1.1 4.4% margin Nu
Slide 42: Dagab
Dagab Key ratios Q1 Q1 Operating margin, % SEK m 2021 2020 Change 2020 Net sales, SEK m Net sales 11,880 11,634 2.1% 48,091 48,091 48,338 44,895 41,128 42,456 1.8 Operating profit 217 164 32.2% 829 1.7 1.6 1.7 1.5 Operating 1.8% 1.4% 0.4 1.7% margin Delivery 2017 2018 2019 2020 R12M to 96.6 92.7 3.9