Axfood Ab · OMXSTO:AXFO
Axfood Ab — Q1 2018 Earnings Presentation
35 slides from Axfood Ab's earnings presentation, 2018
Slide 1: Q1 2018: Good start to the year – strong growth with higher earnings
Q1 2018: Good start to the year – strong growth with higher earnings Klas Balkow, President and CEO
Slide 2: Agenda
Agenda • Q1 results • Financial position • Update on strategic agenda • Q&A 2
Slide 3: Axfood – a strong Swedish food retailer
Axfood – a strong Swedish food retailer R12 Net sales SEK 46.8 bn 9,550 employees (FTE) Strong supply-chain company Customer reach for all brands > 4 million customers a week 301 Group-owned stores 117 franchise Hemköp • Purchasing and product development In total collaborating with 1,155 stores • A
Slide 4: Highlights Q1 2018
Highlights Q1 2018 Strong sales Increased Positive growth – operating online especially margin development Willys 4
Slide 5: New structure in place
New structure in place Willys Hemköp Axfood Snabbgross Dagab DD DD DD DD Axfood Närlivs DD 5
Slide 6: Axfood Q1 2018
Axfood Q1 2018 6
Slide 7: Q1: Strong LFL and overall growth
Q1: Strong LFL and overall growth • Net sales growth 7.6% – Like-for-like (LFL) store sales 5.3% Net sales, SEK m • Good growth in all segments 11 444 Concept Overall LFL 10 305 10 639 9 566 8 946 Willys 13.0% 6.3% Hemköp 3.9% 3.2% Group-owned 3.9% 1.8% Franchise 4.0% 4.4% Axfood Snabbgross 2.9% 0.1
Slide 8: Outperforming the market
Outperforming the market • Store sales (inkl Hemköp franchise) Q1 2018, +9.7% • Preliminary market growth Jan-Feb 2018, 2.4% (source: HUI/SCB) % 12.0 10.0 8.0 6.0 4.0 2.0 0.0 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 -2.0 Axfood Group store sales Retail trade index (excl alcohol) 8
Slide 9: Q1: Increased profit and margin
Q1: Increased profit and margin • Operating profit SEK 435 m (397) + LFL development + Reduced central costs (acquisition and project costs) ■ Operating profit, SEK m − Online business ▬ Operating margin, % • Operating margin 3.8% (3.7) 435 • Stable underlying profitability 408 397 329 Operating mar
Slide 10: Willys – very good growth
Net sales +13.0% Willys – very good growth • Strong Easter sales both in Willys stores and Eurocash ■ Net sales, SEK m • LFL sales, 6.3% ▬ Operating margin, % ‒ More customers and higher average ticket value 6,513 5,643 5,764 • Willys 7.6% growth excl. Eurocash 4,941 5,261 • One new Willys (converte
Slide 11: Hemköp – strong performance
Net sales Store sales Group-owned Hemköp total Hemköp – strong performance 3.9% 3.9% • LFL growth Hemköp total, 3.2% ■ Net sales, SEK m ‒ Higher average ticket value ▬ Operating margin, % ‒ Lower campaign level 1,545 1,547 1,608 • Store network of total 186 stores (187) 1,355 1,401 ‒ Store refurbish
Slide 12: Axfood Snabbgross – moderate growth
Net sales +2.9% Axfood Snabbgross – moderate growth • Sales negatively affected by a long cold winter and ■ Net sales, SEK m a calendar effect with Easter ▬ Operating margin, % ‒ Business for Middagsfrid transferred to mat.se 655 674 • Low market growth, negative development in February-March • Gain
Slide 13: Dagab – good growth
Net sales +3.8% Dagab – good growth • Good growth mainly due to strong store chain development ■ Net sales, SEK m ‒ Supported by mat.se including Middagsfrid ▬ Operating margin, % 11 10,114 9,746 10 9,312 ‒ Comparables includes sales to Mathem 9 8 • B2B customers from Axfood Närlivs incorporated 7 6
Slide 14: Financial position
Financial position Anders Lexmon Chief Financial Officer
Slide 15: 2017 EBIT pro forma impact
2017 EBIT pro forma impact Q1 2017 Full-year 2017 SEK m 250 1200 +39 +11 1000 200 -6 800 +2 150 600 100 400 +7 +38 50 200 -79 -12 0 0 Willys Hemköp Närlivs/ Dagab Willys Hemköp Närlivs/ Dagab Snabbgross Snabbgross 15 Actual Pro forma
Slide 16: Cash flow affected by dividend payout and debt
Cash flow affected by dividend payout and debt Q1 2018 Q1 2017 Cash and cash equivalents, 31 Dec 2017/16 1,376 1,726 Operating cash flow before changes 615 565 in working capital and paid tax Paid tax -90 -72 Changes in working capital 117 -455 Investing activities -164 -722 Debt 169 501 Dividend pa
Slide 17: Continued investments
Continued investments SEK m SEK m 1,934 788 806 622 764 189 643 580 1 67 41 14 7 107 118 2013 2014 2015 2016 2017 Q1-18 Q1-17 Acquisition Other IT Wholesale Retail Estimated capex 2018: SEK 900-1,000 m 17
Slide 18: Improved net working capital
Improved net working capital Decreased net working capital Contributions from all important items SEK m NWC NWC as % of sales Index Accounts receivable Inventories Accounts payable 0 0,0% 115 % of sales 110 -7.1% -0,5% 105 -500 -1,0% 100 2.1% 95 -1,5% -1 000 4.9% 90 -2,0% 85 -1 500 -2,5% 80 2014 201
Slide 19: Strong financial position
Strong financial position Net debt (+)/receivable (-) SEK m Equity ratio, % 800 50 40 600 30 400 20 200 10 0 0 Mar 14 Mar 15 Mar 16 Mar 17 Mar 18 19
Slide 20: Maintained return on capital employed
Maintained return on capital employed Capital employed ROCE 6 000 60% 5 000 50% 4 000 40% 3 000 30% 2 000 20% 1 000 10% 0 0% Mar 14 Mar 15 Mar 16 Mar 17 Mar 18 20
Slide 21: Update on strategic agenda
Update on strategic agenda Klas Balkow President and CEO
Slide 22: Strategy to become the leader in good and sustainable food
Strategy to become the leader in good and sustainable food Growth Efficiency Customer Customer Supply Work Our Expansion offer meeting chain approach people Sustainability 22
Slide 23: Priorities within customer offer
Priorities within customer offer Customer offer Good and Private Prepared dinner Value sustainable food label solutions 23
Slide 24: ”Bread beer” added to the sustainable assortment
”Bread beer” added to the sustainable assortment 24
Slide 25: Priorities within customer meeting
Priorities within customer meeting Customer meeting Refurbishment Customer Omnichannel of stores programme 25
Slide 26: Priorities in expansion
Priorities in expansion Expansion Open 4-8 new stores 2018 Acquisitions and start-ups Store openings Online reach 26
Slide 27: Priorities within work approach
Priorities within work approach Digital Business Robotization work flow intelligence 27
Slide 28: Financial guidance
Financial guidance Long-term financial targets • Grow more than the market • Long-term target of an operating margin of at least 4% • Equity ratio of at least 25% during all quarters Capital expenditure • Planned capex 2018, excluding acquisitions: SEK 900−1,000 m 28
Slide 29: Summary
Summary • Strong sales growth ‒ High LFL sales ‒ Online growth • Improved profitability ‒ Including strong e-commerce growth • Strong financial position • Clear agenda for future profitable growth 29
Slide 30: Questions & answers
Questions & answers Klas Balkow, President and CEO Anders Lexmon, CFO
Slide 31: Axfood Q1 2018 Key ratios
Axfood Q1 2018 Key ratios ■ Net sales, SEK m SEK m Q1 2018 Q1 20171) Change ▬ Operating margin, % Net sales1) 11,444 10,639 7.6% 11,444 1.00 10,305 10,639 0.90 9,566 Change in like-for-like 8,946 0.80 5.3% 1.3% 4.0 0.70 sales 0.60 0.50 Operating profit 435 397 9.6% 4.0 3.7 3.8 0.40 3.4 0.30 2.7 0.20
Slide 32: Willys Q1 2018 Key ratios
Willys Q1 2018 Key ratios ■ Net sales, SEK m SEKm Q1 2018 Q1 20171) Change ▬ Operating margin, % 6,513 Net sales 6,513 5,764 13.0% 5,643 5,764 5,261 4,941 Change in like-for-like 6.3% 1.2% 5.1 sales 3.7 3.7 Operating profit 241 212 13.7% 3.4 3.3 3.5 Operating margin 3.7% 3.7% 0.0 Q1-14 Q1-15 Q1-16 Q
Slide 33: Hemköp Q1 2018 Key ratios
Hemköp Q1 2018 Key ratios ■ Net sales, SEK m SEKm Q1 2018 Q1 20171) Change ▬ Operating margin, % 1,608 Net sales 1,608 1,547 3.9% 1,545 1,547 1,401 65,0 1,355 55,0 Change in like-for-like 1.8% 2.0% -0.2 sales 45,0 4.3 4.2 3.8 Operating profit 67 66 1.5% 3.6 35,0 2.6 25,0 Operating margin 4.2% 4.3% -
Slide 34: Axfood Snabbgross Q1 2018 Key ratios
Axfood Snabbgross Q1 2018 Key ratios ■ Net sales, SEK m ▬ Operating margin, % SEKm Q1 2018 Q1 20171) Change 80 Net sales 674 655 2.9% 70 655 674 60 50 Operating profit 9 10 -10.0% 40 30 Operating margin 1.4% 1.6% -0.2 20 1.6 1.4 10 0 1) Q1-14 Q1-15 Q1-16 Q1-17 Q1-18 Number of stores 24 23 1 1) Pro f
Slide 35: Dagab Q1 2018 Key ratios
Dagab Q1 2018 Key ratios ■ Net sales, SEK m SEKm Q1 2018 Q1 20171) Change ▬ Operating margin, % Net sales 10,114 9,746 3.8% 12 11 10,114 9,746 10 9,312 Operating profit 165 171 -3.5% 9 8 7 6 1.8 1.8 Operating margin 1.6% 1.8% -0.2 1.6 5 4 3 2 Delivery reliability, % 96.8 97.4 -0.6 1 0 1) 1) Q1-14 Q1