Axfood Ab · OMXSTO:AXFO
Axfood Ab — Q2 2019 Earnings Presentation
35 slides from Axfood Ab's earnings presentation, Jul 15, 2019
Slide 1: Strengthening our position and investing for the future
Strengthening our position and investing for the future Klas Balkow President and CEO 1
Slide 2: Agenda
Agenda • Q2 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 49.4 bn 10,341 employees (FTE) Efficient sourcing and Customer reach logistics for all brands >4 million customers a week and channels 304 Group-owned stores Innovative development of 121 franchise Hemköp private label products Collaborating
Slide 4: Highlights
Highlights Investing for Gaining market Solid future profitable shares profitability growth 4
Slide 5: Q2 2019
Q2 2019 5
Slide 6: Strong growth
Sales Strong growth Net sales, SEK m 13,038 • Group net sales growth of 6.7% to above 13 SEK bn 11,925 12,221 10,901 • Positive Easter effect estimated to approx. 1.5% 10,478 Sales Total LFL Willys 8.9% 7.9% Hemköp incl. franchise 3.4% 3.0% Axfood Snabbgross 6.8% 6.8% Dagab 6.7% Q2 -15 Q2-16 Q2-17 Q
Slide 7: Outperforming the market
Outperforming the market 8% Total sales development, store and online Axfood growth Axfood Group 7.0% 6% 4% Market growth 4.3% 2% Food retail trade index 0% Q2 Q3 Q4 Q1 Q2 2018 2018 2018 2019 2019 Source: Axfood//HUI Research 7
Slide 8: Axfood well positioned online with a broad approach
Axfood well positioned online with a broad approach % Axfood online growth Q2 2019 60 37.0% 50 40 Q2 30 Q2 20 Market online growth Q2 2019 10 23.9% 0 2014 2015 2016 2017 2018 2019 Source: D-´food Index, SvDH Index Swedish online market growth Axfood Group 8
Slide 9: Performing yet a solid second quarter
Profit Performing yet a solid second quarter • Operating profit SEK 601 m (545), ■ Operating profit, SEK m ▬ Operating margin, % including a positive IFRS 16 effect of SEK 44 m 601 545 + LFL development 494 487 + Expansion according to plan and re-opening of 431 refurbished stores 4.5 4.5 4.6 + Cost
Slide 10: Willys: Outperforming the market
Willys Outperforming the market ■ Net sales, SEK m • Strong sales growth 8.9% and LFL 7.9% ▬ Operating margin, % • Positive Easter effect 7,423 • Store expansion and re-opening of refurbished stores 6,601 6,818 • More customers, higher average ticket, increased 5,691 5,823 online sales 5.0 4.5 • Sto
Slide 11: Hemköp: Growth driven by strong franchise development
Hemköp Growth driven by strong franchise development ■ Net sales, SEK m • Total store sales growth 3.4% and LFL 3.0% ▬ Operating margin, % • Group owned 0.2% and LFL 1.8% 1,608 1,614 1,563 1,544 • Franchise 5.9% and LFL 4.0% 1,470 4.5 4.2 • Total store network 189 (186), of which group owned 68 (69)
Slide 12: Axfood Snabbgross: Continues to deliver growth and results
Axfood Snabbgross Continues to deliver growth and results ■ Net sales, SEK m • Great sales growth 6.8% and LFL 6.8% ▬ Operating margin, % • Slightly negative Easter effect 924 • Increased customer base and average ticket 866 789 6.1 • Operating profit SEK 57 m (42), including a positive IFRS 16 effe
Slide 13: Dagab: Stable performance
Dagab Stable performance ■ Net sales, SEK m • Good net sales growth 6.7% ▬ Operating margin, % 11,509 ‒ Supported by strong sales in Willys, Hemköp (franchise) and 10,786 10,677 Axfood Snabbgross 9,894 • Operating profit SEK 179 m (181), including a positive IFRS 16 effect of SEK 6 m 1.7 1.7 1.6 1.6
Slide 14: Financial position
Financial position Anders Lexmon Chief Financial Officer 14
Slide 15: Strong growth and positive profit development
Strong growth and positive profit development Net sales, SEK m ■ Operating profit, SEK m 24,969 ▬ Operating margin, % 23,665 22,564 1,086 21,206 20,044 980 902 884 760 4.3 4.1 4.4 3.8 3.9 H1-15 H1-16 H1-17 H1-18 H1-19 H1-15 H1-16 H1-17 H1-18 H1-19 Operating profit including a positive IFRS 16 effect
Slide 16: Cash flow
Cash flow SEK m H1 2019 H1 2018 Change Cash and cash equivalents, 1 Jan 1,571 1,376 195 Operating cash flow before changes 2,100 1,349 751 in working capital and paid tax Paid tax -246 -245 -1 Changes in working capital -49 38 -87 Net investing activities -398 -490 92 Amortization of debt -716 0 -71
Slide 17: Increased investments according to plan
Increased investments according to plan SEK m SEK m 1,934 497 421 1,021 764 643 Acquisition 580 Other IT Wholesale Retail 2014 2015 2016 2017 2018 H1-18 H1-19 17
Slide 18: 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 4.9% -1,000 -2% 90 Accounts receivable 2.1% -1,500 -3% 80 2015 2016 2017 2018 RTM 19 2015 20
Slide 19: Financial position in line with year end target
Financial position in line with year end target 5,449 Net debt (+)/receivable (-), SEK m 38.6% Equity ratio 34.6% 33.4% 33.8% 267 19.9% -6 -316 -315 -427 Jun-15 Jun-16 Jun-17 Jun-18 Jun-19 Jun-19 excl IFRS 16 19
Slide 20: Return on capital employed affected by IFRS 16
Return on capital employed affected by IFRS 16 Capital employed 9,567 ROCE 46.9% 47.2% 47.2% 37.8% 30.9% 4,276 4,168 4,258 3,850 Jun-15 Jun-16 Jun17 Jun-18 Jun-19 20
Slide 21: IFRS 16 effect on key ratios
IFRS 16 effect on key ratios 30 June 30 June 2019 2019 excl IFRS 16 Equity ratio,% 19.9 32.3 Net debt, SEK m 5,449 -315 Q2 2019 Q2 2019 excl IFRS 16 EBITDA, SEK m 1 138 748 EBIT, SEK m 601 557 Profit for the period, SEK m 429 416 ROCE, % 30.9 48.6 Cash flow from operating activities, SEK m 1 085 723
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: Expansion
Expansion Priorities 2019 Establish 5-10 Expand online Establish presence new stores in online pharmacy market 24
Slide 25: 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 25
Slide 26: Introducing a sustainable and more efficient B2C online logistics
Introducing a sustainable and more efficient B2C online logistics • One joint dark store now supports mat.se, Willys, Hemköp and Middagsfrid B2C online operations in Stockholm • Next step before implementing in Gothenburg 2020 • Capture learnings • Improve efficency Stockholm Gothenburg Malmö 26
Slide 27: Outlook 2019
Outlook 2019 27
Slide 28: 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 28
Slide 29: Summary
Summary • Strong sales growth • Outperforming the market and gaining market share • Solid profitability • Investing for the future 29
Slide 30: Q&A
Q&A 30
Slide 31: Axfood
Axfood ■ Net sales, SEK m ▬ Operating margin, % Key ratios Q2 Q2 H1 H1 SEK m 2019 2018 Change 2019 2018 Change 2018 24,969 Net sales 13,038 12,221 6.7% 24,969 23,665 5.5% 48,085 23,665 22,564 21,206 20,044 Change in like- 6.3% 2.0% +4.3 pp 5.2% 3.5% +1,7 pp 3.7% for-like sales 4.4 Operating 4.3 4.1
Slide 32: Willys
Willys ■ Net sales, SEK m ▬ Operating margin, % Key ratios Q2 Q2 H1 H1 SEK m 2019 2018 Change 2019 2018 Change 2018 14,283 13,331 Net sales 7,423 6,818 8.9% 14,283 13,331 7.1% 27,066 12,365 11,466 10,952 Change in like- 7.9% 2.1% +5.8 pp 6.4% 4.0% +2.4 pp 4.3% for-like sales 4.6 3.9 4.1 Operating 3.
Slide 33: Hemköp
Hemköp ■ Net sales, SEK m ▬ Operating margin, % Key ratios Q2 Q2 H1 H1 SEK m 2019 2018 Change 2019 2018 Change 2018 3,108 3,215 3,212 Net sales 1,614 1,608 0.4% 3,212 3,215 -0.1% 6,403 3,091 2,871 Change in like- 1.8% -0.2% +2.0 pp 1.4% 0.8% +0.6 pp 1.1% for-like sales Operating 4.2 4.2 52 68 -23.7%
Slide 34: Axfood Snabbgross
Axfood Snabbgross ■ Net sales, SEK m ▬ Operating margin, % Key ratios Q2 Q2 H1 H1 SEK m 2019 2018 Change 2019 2018 Change 2018 1,654 1,540 1,444 Net sales 924 866 6.8% 1,654 1,540 7.4% 3,241 Operating 4.5 profit 57 42 35.1% 74 51 45,0% 121 3.4 3.3 Operating 6.1% 4.8% +1.3 pp 4.5% 3.3% +1.2 pp 3.7% m
Slide 35: Dagab
Dagab ■ Net sales, SEK m ▬ Operating margin, % Key ratios Q2 Q2 H1 H1 SEK m 2019 2018 Change 2019 2018 Change 2018 22,086 20,423 20,899 Net sales 11,509 10,786 6.7% 22,086 20,899 5.7% 42,456 19,206 Operating 179 181 -1.0% 344 346 -0.4% 685 profit 1.7 1.7 1.7 1.6 Operating 1.6% 1.7% -0.1 pp 1.6% 1.7%