Axfood Ab · OMXSTO:AXFO
Axfood Ab — Q2 2021 Earnings Presentation
46 slides from Axfood Ab's earnings presentation, 2021
Slide 1: A strong quarter with high intensity
A strong quarter with high intensity Interim report Q2 2021
Slide 2: Agenda
• Market update • Q2 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 54.2 bn 11,544 employees (FTEs) Efficient sourcing and Customer reach logistics for all brands ~4.5 million customers a week and channels 310 Group-owned stores Innovative development of 137 franchise Hemköp 130 franchise Tempo priva
Slide 4: Market update
Market update 4
Slide 5: Strong demand but lower growth
• Strong demand in food retail as consumers have continued to eat Strong at home, but high comps in the prior year, a negative calendar effect and food price deflation demand but • Sales in the online channel strong, but significantly lower pace of growth due to high comps in the prior year lower gr
Slide 6: Food retail market: historically low food price inflation
Food retail market Historically low levels of food price inflation Food price inflation by month (y-o-y) % 9 8 7 6 5 4 3 2 1 0 -1 -2 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Source: Statistics Sweden (SCB) 6
Slide 7: Food retail market: high demand but high comps
Food retail market High demand but high comps Food retail trade index (sales in stores and online) % 13 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 Apr May Jun 19 19 19 19 19 19 19 19 19 19 19 19 20
Slide 8: Food retail market: high demand but high comps
Food retail market High demand but high comps Food retail trade index, price and calendar adjusted The food retail market, value % (sales in stores and online) 12 11 CAGR 3% 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 De
Slide 9: Food retail market online
Food retail market online Lower rate of growth due to high comps Food retail trade index (online sales) % 200 Food retail Sales split online market Q2 2021 segment Q2 2021 Sales online 150 6% Home Click and 52% 48% delivery Collect 100 94% Sales in stores 50 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct
Slide 10: EKOLOGISK [M) EKOLOGISK as’
EKOLOGISK [M) EKOLOGISK as’ APELSIN a WICE | MED fied | be Axfood
Slide 11: Growing faster than the market
Growing faster than the market Store sales development (including online) % Axfood store sales Q2 12 +1.1% 10 8 6 Market growth Q2 +0.6% 4 Axfood Group store sales 2 Food retail trade index 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 Source: Axfood/HUI Research
Slide 12: Growing faster than the market online
Growing faster than the market online Sales development online % Axfood online sales Q2 160 +36% 140 120 100 80 Market online growth Q2 +27% 60 Axfood Group online 40 sales 20 Food retail trade index 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 Source: Axfood/HUI
Slide 13: Solid quarter with high comps and deflation
Net sales Solid quarter with high comps and deflation • Net sales increased 2.5% during the second quarter o High comps from prior year and negative calendar effect (-1.0 percent) +2.5% o Lower food prices compared to prior year (-0.6 percent deflation) Net sales, SEK m o Growth above market for Wil
Slide 14: Higher operating profit
Operating profit Higher operating profit Operating profit and margin excl. items affecting comparability • Operating profit SEK 607 m (605), operating profit excl. items affecting comparability SEK 661 m (605) Operating margin, %* +9.2% Operating profit, SEK m* + Significantly higher operating profi
Slide 15: Willys: Solid sales but very high comps
Willys Solid sales but very high comps • Sales growth of 0.9% and LFL -1.1% o High volume growth, but lower rate of sales growth due to negative +0.9% calendar effect and food price deflation Operating margin, % Net sales, SEK m o Willys large format stores +1.2 percent (prior year growth +14.9 perc
Slide 16: Eurocash: Solid outlook for the cross-border trade
Eurocash Solid outlook for the cross-border trade Share of Norwegians What Norwegians who plan to shop in appreciate the most about the cross-border trade* the cross-border trade* 73% 67% The low prices 41% The trip 19% The wider and more 13% varied assortment Ease of shopping 4% New and exciting 4%
Slide 17: Hemköp: Solid like-for-like and higher profitability
Hemköp Solid like-for-like and higher profitability • Total store sales growth 1.5% and LFL 1.1% Operating margin, % o Group owned -2.4% and LFL 1.9%, franchise 4.2% and LFL 0.5% Net sales, SEK m -2.3% o Strong growth for franchise stores 1,608 1,614 1,591 o Solid LFL growth for Group-owned stores,
Slide 18: Snabbgross: Record sales and significantly higher profit
Snabbgross Record sales and significantly higher profit • Sales growth of 13.1% and LFL 10.9% Operating margin, % o Strong growth partially attributable to positive market development on low comps from prior year Net sales, SEK m +13.1% o Increase in customer base and higher average ticket value 971
Slide 19: Dagab: Strong performance with high efficiency
Dagab Strong performance with high efficiency • Net sales growth of 2.8% o Growth driven by sales to Hemköp, Snabbgross and service trade Operating margin, % Net sales, SEK m +2.8% • Operating profit SEK 235 m (189) 12,152 12,488 + High capacity utilization and improved productivity in logistics, 11
Slide 20: Financial position
Financial position Anders Lexmon Chief Financial Officer 20
Slide 21: H1 sales and operating profit excl. items affecting comparability
H1 sales and operating profit excl. items affecting comparability Net sales, SEK m Operating margin excl. items affecting comparability, % Operating profit excl. items +1.8% affecting comparability, SEK m 26,636 27,106 +6.7% 24,969 22,564 23,665 1,225 1.8% 1,086 1,148 980 884 4.4 4.5 4.1 4.3 3.9 Net
Slide 22: Strong operating cash flow
Strong operating cash flow SEK m H1 2021 H1 2020 Operating profit 1,172 1,148 Non-cash items 1,197 1,142 Net interests -61 -63 Paid tax -220 -225 SEK 2.2 bn Working capital 161 192 Operating cash flow 2,248 2,194 Investing activities -625 -517 Amortization of debt -779 -754 Operating cash flow Share
Slide 23: Investments (ex. IFRS 16)
Investments (ex. IFRS 16) Acquisition Other Joint group Wholesale Retail SEK m SEK m 1,934 596 2,000 600 1,481 SEK 494 596 mn 500 212 1,021 1,031 400 166 1,000 78 764 300 59 Total investments 500 580 200 in H1 2021 269 306 100 0 0 2015 2016 2017 2018 2019 2020 H1 H1 2020 2021 23
Slide 24: Improved net working capital
Improved net working capital NWC as % of sales NWC, SEK m -2.0% -3.7% -919 -2.6% -3.0% -1,236 -3.4% -3.7% -1,513 -1,800 NWC as % of sales -2,030 2017 2018 2019 2020 R12M to June 2021 24
Slide 25: Financial position
Financial position 5,449 Net debt (ex. IFRS 16), SEK m 5,082 5,131 5,454 Net debt, SEK m 5,218 5,185 Net debt/EBITDA 1.0x Net debt/EBITDA 5,016 4,920 4,577 19.9% 1.2 1.2 1.1 1.1 1.0 1.0 1.0 -315 -259 -350 Equity ratio -404 -377 -478 -782 -1,131 -1,156 30 Jun. 30 Sep. 31 Dec. 31 Mar. 30 Jun. 30 Sep.
Slide 26: Return on capital employed
Return on capital employed ROCE Capital employed, SEK m 10,674 10,326 9,825 10,178 10,149 9,567 9,526 9,648 9,651 25.6% 30.9% 30.6% 30.1% 26.6% 25.6% 24.7% 24.5% 24.5% 24.2% Return on capital employed 30 Jun. 30 Sep. 31 Dec. 31 Mar. 30 Jun. 30 Sep. 31 Dec. 31 Mar. 30 Jun. 2019 2019 2019 2020 2020 20
Slide 27: Update strategic agenda
Update strategic agenda Klas Balkow President and CEO 27
Slide 28: Bergendahls update
Bergendahls update • On 31 May, Axfood announced its acquisition of the wholesale business Bergendahls Food and strategic partnership with City Gross ‒ Compelling deal with clear industrial logic ‒ Transaction leads to economies of scale, cost synergies and improved competitiveness ‒ Partnership to
Slide 29: 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 30: Update logistics centre Bålsta
Supply chain Update logistics centre Bålsta Work on new, highly automated logistics centre in Work has Bålsta, Stockholm, now begun on continuing installing the according to plan automation solution 30
Slide 31: Investments for a best-in class logistics platform
Supply chain Investments for a best-in class logistics platform • Construction ongoing of new, highly automated logistics centre in Bålsta, outside Stockholm. Today 2023-2025* ‒ The logistics centre will replace six facilities Central and regional and is planned to be fully operational in 2023. ware
Slide 32: New and automated e-commerce warehouse
Supply chain New and automated e-commerce warehouse • In Gothenburg, Dagab will build a new and highly automated e-commerce warehouse in connection to the distribution centre in Backa. ‒ New warehouse to be completed in 2024 and fully operational during spring 2025. ‒ Current Gothenburg dark store w
Slide 33: Development of Backa distribution centre
Supply chain Development of Backa distribution centre • Dagab’s current high-bay warehouse in the distribution centre in Backa, Gothenburg, will be developed to add more capacity. ‒ Two new automated aisles will be built. ‒ The new automated aisles will increase the warehouse capacity with approxima
Slide 34: Automation in new fruit and vegetables warehouse
Supply chain Automation in new fruit and vegetables warehouse • As communicated in April, 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
Slide 35: First fully electric truck now in operation
Supply chain First fully electric truck now in operation In 2020 a long-term partnership The next phase has now been Investing and participating was begun with truck maker initiated, with Scania’s first in the development of Scania, to develop new solutions series produced fully electric electric tr
Slide 36: Outlook 2021
Outlook 2021 36
Slide 37: Looking ahead
Looking ahead • Still exceptional time due to Covid-19 ‒ Somewhat improved situation around the pandemic, but still significant uncertainty ‒ While the food retail market in general benefits from the high demand, there are large variations between segments ‒ Improved situation in the cross-border tr
Slide 38: 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 39: Summary
A strong quarter with high intensity • Increased sales with higher profit • High pace of development with new initiatives to strengthen competitiveness Summary • Strong financial position 39
Slide 40: Save the date: Axfood Capital Markets Day 2021
Save the date Axfood Capital Markets Day 2021 16 December 2021 40
Slide 41: Q&A
Q&A
Slide 42: Axfood key ratios
Axfood Key ratios Q2 Q2 H1 H1 Operating margin, % SEK m 2021 2020 Chg 2021 2020 Chg 2020 Net sales, SEK m Net sales 13,903 13,570 2.5% 27,106 26,636 1.8% 53,696 26,636 27,106 24,969 23,665 Change in like- 22,564 -0.4% 6.3% -6.7 0.0% 7.8% -7.8 6.9% for-like sales* 4.4 4.3 4.3 3.9 4.1 Operating profit
Slide 43: Willys key ratios
Willys Key ratios Q2 Q2 H1 H1 Operating margin, % SEK m 2021 2020 Chg 2021 2020 Chg 2020 Net sales, SEK m 16,127 Net sales 8,141 8,068 0.9% 16,127 15,809 2.0% 31,793 15,809 14,283 13,331 Change in like- 12,365 -1.1% 7.2% -8.3 -0.3% 9.1% -9.4 7.9% 4.7 for-like sales 4.6 4.4 3.9 4.1 Operating profit 3
Slide 44: Hemköp key ratios
Hemköp Key ratios Q2 Q2 H1 H1 Operating margin, % SEK m 2021 2020 Chg 2021 2020 Chg 2020 Net sales, SEK m Net sales 1,554 1,591 -2.3% 3,108 3,216 -3.3% 6,354 3,215 3,212 3,216 3,108 3,091 Change in like- 1.9% 2.0% -0.1 0.4% 3.3% -2.9 2.8% for-like sales* 4.2 3.9 3.9 Operating profit 62 53 17.5% 121
Slide 45: Snabbgross key ratios
Snabbgross Key ratios Q2 Q2 H1 H1 Operating margin, % SEK m 2021 2020 Chg 2021 2020 Chg 2020 Net sales, SEK m 1,708 Net sales 971 859 13.1% 1,708 1,636 4.4% 3,417 1,654 1,636 1,540 1,444 Change in like- 10.9% -8.3% 19.2 1.9 -2.0 3.9 -2.2% for-like sales 4.5 4.1 3.4 3.3 3.5 Operating profit 57 34 64.
Slide 46: Dagab key ratios
Dagab Key ratios Q2 Q2 H1 H1 Operating margin, % SEK m 2021 2020 Chg 2021 2020 Chg 2020 Net sales, SEK m 23,787 24,368 22,086 Net sales 12,488 12,152 2.8% 24,368 23,787 2.4% 48,091 20,423 20,899 1.9 1.7 1.7 1.6 Operating profit 235 189 24.5% 452 353 28.1% 829 1.5 Operating 1.9% 1.6% 0.3 1.9% 1.5% 0.