Slide 1: Strong net sales growth and solid profitability
Strong net sales growth and solid profitability Interim report Q1 2022
Slide 2: Agenda
Agenda • Market update • Q1 2022 • Financial position • Update strategic agenda • Outlook 2022 • Q&A 2
Slide 3: Market update
Market update 3
Slide 4: Post pandemic changes in consumer behaviour
Post pandemic changes in consumer behaviour Strong recovery for Customer returns to Strong recovery in E-commerce decline restaurants physical stores cross-border trade due to high comps 4
Slide 5: Current situation in Europe
Current situation in Europe 5
Slide 6: Food price inflation picking up
Food price inflation picking up Fuel prices, transportation, Currency fluctuations Raw materials and fertilizers and energy packaging 6
Slide 7: Food retail market
Food retail market Negative Easter effect, increased food price inflation Food retail trade index, sales in stores and online by month Food price inflation by quarter % % 15 5.0 14 12.8 4.5 13 12 4.0 3.9 11 10.6 3.5 3.3 3.3 10 9.3 9.0 9 8.2 8.3 3.0 2.8 8 7.6 2.5 2.6 2.5 6.7 2.5 7 6.3 6.4 6.1 5.9 6 5
Slide 8: Food retail market
Food retail market Strong come back for stores – online meet high comps Food retail trade index, physical store sales by month Food retail trade index, online sales by month % % 15 200 191.6 14 13 180 165.3 11.7 12 160 11 10.3 143.2 136.1 137.8 10 140 135.3 8.8 9 8 120 109.1 107.8 101.2 7 6.4 100 6.
Slide 9: Q1 2022
Q1 2022 9
Slide 10: Mat.se and Mathem merger completed
Mat.se and Mathem merger completed • The transaction was completed on 1 March • Capital gain of SEK 221 m reported in Q1 • Divestment of Mat.se in exchange for shares in Mathem, Axfood now has an ownership of 16.5% in Mathem • A long-term delivery and cooperation agreement between Dagab and Mathem h
Slide 11: Axfood vs the market
Axfood vs the market Retail sales development, total including online Sales development, online Axfood retail sales Axfood online sales Food retail trade index Food retail trade index % % 12 160 11 140 10 120 9 8 100 7 80 6 60 5 4 4.1 40 3 20 2 0 1 -16.6 0 -20 -19.1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Slide 12: Strong net sales growth
Group net sales Strong net sales growth • Net sales increased by 25,7% • Positive impact from Bergendahls Food acquisition, but also strong sales excluding Bergendahls Food of +6.6% Net sales, SEK m o Easter effect of approx. -1.0% +25.7% o Strong LFL sales development in Willys, solid LFL in Hemköp
Slide 13: Increase supported by all business segments
Group operating profit Increase supported by all business segments • Operating profit SEK 835 m (565), adjusted operating profit* SEK 653 m (565) o Items affecting comparability totalled SEK 182 m Adj. operating margin, %* o Higher operating profit in all segments supported by solid LFL development
Slide 14: Willys
Willys Beats the market, strong Eurocash recovery • Net sales increased by 5.4% and LFL 4.1% o Strong sales increase, growth well above market Operating margin, % o Significantly higher sales for Eurocash with low comps, Net sales, SEK m +5.4% however not back to pre pandemic sales levels (first qua
Slide 15: Hemköp
Hemköp Solid like-for-like sales, improved profitability • Net sales increased by 2.2% Operating margin, % • Total store sales growth 1.6% and LFL 1.3% Net sales, SEK m o Solid LFL growth for Group-owned stores with increased +2.2% customer traffic in city centre-based stores Solid growth for Hemköp
Slide 16: Snabbgross
Snabbgross Strong recovery and record operating profit • Net sales increased by 26.9% and LFL 24.7% Operating margin, % Net sales, SEK m +26.9% o Strong growth attributable to low comps, eased pandemic restrictions and a positive market development 934 o Positive development for Snabbgross Club 777
Slide 17: Dagab
Dagab Solid performance in times of intense activity • Net sales increased by 26.8% o Net sales increase of +5.6% excluding Bergendahls Food Adj. operating margin, %* o Growth driven by increased sales to Group food retail concepts and Net sales, SEK m +26.8% increased demand within cross boarder tr
Slide 18: Financial position
Financial position Anders Lexmon Chief Financial Officer 18
Slide 19: Strong operating cash flow
Strong operating cash flow SEK m Q1 2022 Q1 2021 Operating profit 835 565 Non-cash items 444 583 Net interests -37 -30 Paid tax -213 -116 SEK 1.4 bn Working capital 400 125 Operating cash flow 1,429 1,127 Investing activities -581 -308 Loans raised 60 0 Amortization of debt -428 -388 Operating cash
Slide 20: Increased investments according to plan
Increased investments according to plan Acquisition Other Joint group Wholesale Retail SEK m SEK m 4,000 600 531 SEK 3,547 531 m 500 91 1,934 400 1,481 1,500 1,031 300 292 341 Total investments 1,021 101 1,000 764 200 29 in Q1 2022 580 500 100 162 99 0 0 2015 2016 2017 2018 2019 2020 2021 Q1 Q1 2021
Slide 21: Net working capital
Net working capital NWC as % of sales NWC, SEK m -2.0% -3.8% -919 -2.6% -3.0% -1,236 -3.4% -1,513 -3.8% -3.9% -1,800 NWC as % of sales -2,260 -2,305 2017 2018 2019 2020 2021 R12M to Mar. 2022 21
Slide 22: Financial position
Financial position Net debt (ex. IFRS 16), SEK m Net debt, SEK m Net debt/EBITDA 8,225 1.5x Net debt/EBITDA 7,640 5,131 5,454 5,218 5,185 5,481 5,082 5,016 4,920 1.5 1.5 17.6% 1.2 4,577 1.2 1.1 1.1 1.1 1.0 1.0 1.0 1,648 1,236 Equity ratio -404 -377 -259 -478 -350 -462 -1,131 -782 -1,156 30 Sep. 31 D
Slide 23: Return on capital employed
Return on capital employed ROCE Capital employed, SEK m 13,550 12,865 12,360 10,674 10,326 26.5% 9,825 10,178 10,149 9,526 9,648 9,651 30.6% 30.1% 26.6% 25.6% 26.5% 24.7% 24.5% 24.5% 24.2% 22.6% 22.4% Return on capital employed 30 Sep. 31 Dec. 31 Mar. 30 Jun. 30 Sep. 31 Dec. 31 Mar. 30 Jun. 30 Sep.
Slide 24: Rights issue proposal
Rights issue proposal • To maintain a strong financial position over time, Axfood intends to carry out a new share issue of SEK 1.5 billion with preferential rights for existing shareholders. ‒ Purpose to help ensure the long-term financing of the Important dates 2022* acquisition of Bergendahls Foo
Slide 25: Update strategic agenda
Update strategic agenda Klas Balkow President and CEO 25
Slide 26: Strategic focus areas
Strategic focus areas Customer Customer Expansion Supply chain Work approach Our people offering meeting Axfood will grow in new Axfood will develop a Axfood is to be a Axfood aspires to be Axfood will offer an With relevant concepts and existing areas by sustainable product customer-oriented, the m
Slide 27: Joint efforts in supply chain necessary
Joint efforts in supply chain necessary 27
Slide 28: Bergendahls Food integration well according to plan
Bergendahls Food integration well according to plan • Identified synergies of SEK 200 m on a yearly basis from 2025 • Estimated integration cost of SEK 120 m in 2022 of which SEK 33 m reported in Q1 Common sourcing and Hässleholm warehouse City Gross integration starts organisation established integ
Slide 29: Taking the lead in promoting a sustainable food system
Taking the lead in promoting a sustainable food system Solar panel More sustainable Supporting platform Awarded work on installations packaging for risk crops inclusion 29
Slide 30: Outlook 2022
Outlook 2022 30
Slide 31: Outlook 2022
Outlook 2022 • Integration and transition costs totalling SEK 340 m ‒ Costs related to the transition to Bålsta of SEK 220 m ‒ Integration costs of SEK 120 m related to Bergendahls Food • Planned capital expenditures of SEK 2,600−2,700 m ‒ Excluding acquisitions and leasehold ‒ Including SEK 1,300 m
Slide 32: Q1 summary
A strong start to 2022 Q1 • Strong growth and solid profitability in a market difficult to predict • Strengthened concepts with a growing customer base summary • High activity in the integration of Bergendahls Food • Good progress in our investments for the future 32
Slide 33: Q&A
Q&A 33
Slide 34: Affordable, good and sustainable food for everyone
Affordable, good and sustainable food for everyone R12 net sales SEK 61.3 bn 12,193 employees (FTEs) Efficient sourcing and Customer reach logistics for all brands ~4.5 million customers a week and channels 318 Group-owned stores Innovative development of 135 franchise Hemköp 130 franchise Tempo pri
Slide 35: Axfood
Axfood Key ratios Q1 Q1 SEK m 2022 2021 Chg 2021 Net sales 16,593 13,203 25.7% 57,891 Operating margin, % Change in like- Net sales, SEK m 3.1% 0.5% +2,6 0.3% for-like sales* 61,281 Operating profit 835 565 47.8% 2,704 57,891 53,696 50,740 Adjusted operating 48,085 4.7 4.7 4.9 653 565 15.5% 2,690 4.
Slide 36: Willys
Willys Key ratios Q1 Q1 Operating margin, % SEK m 2022 2021 Chg 2021 Net sales, SEK m 31,793 32,424 32,856 Net sales 8,418 7,985 5.4% 32,424 29,029 27,066 Change in like- 4.1% 0.4% +3.7 0.0% 4.9 4.9 4.7 4.7 for-like sales 4.4 Operating profit 367 340 8.1% 1,512 Operating margin 4.4% 4.3% +0.1 4.7% N
Slide 37: Hemköp
Hemköp Key ratios Q1 Q1 Operating margin, % SEK m 2022 2021 Chg 2021 Net sales, SEK m Net sales 1,589 1,554 +2.2% 6,202 6,403 6,378 6,354 6,202 6,237 Change in like- 2.5% -1.1% +3.6 1.3% for-like sales* 4.4 4.5 3.8 3.6 Operating profit 66 59 13.1% 271 3.5 Operating margin 4.2% 3.8% 0.4 4.4% Number o
Slide 38: Snabbgross
Snabbgross Key ratios Q1 Q1 Operating margin, % SEK m 2022 2021 Chg 2021 Net sales, SEK m Net sales 934 736 26.9% 3,825 4,024 3,825 3,443 3,417 Change in like-for- 3,241 24.7% -7.9% 32.6 9.3 5.0 5.2 like sales 4.8 4.4 3.7 Operating profit 30 14 111.0% 193 Operating margin 3.2% 1.9% 1.3 5.0% Number 2
Slide 39: Dagab
Dagab Key ratios Q1 Q1 Operating margin, % SEK m 2022 2021 Chg 2021 Net sales, SEK m Net sales 15,062 11,880 26.8% 52,295 55,477 52,295 48,091 Operating profit 429 217 97.7% 932 44,895 2.1 42,456 1.9 1.7 Adjusted operating 1.6 1.5 247 217 13.6% 976 profit Operating margin 2.8% 1.8% 1.0 1.8% Adjusted