Axfood Ab · OMXSTO:AXFO
Axfood Ab — Q3 2021 Earnings Presentation
41 slides from Axfood Ab's earnings presentation, 2021
Slide 1: A solid quarter with good profitability
A solid quarter with good profitability Interim report Q3 2021
Slide 2: Agenda
• Market update • Q3 2021 • Financial position • Update strategic agenda • Outlook 2021 • Q&A 2
Slide 3: Market update
Market update 3
Slide 4: Solid market, gradual change in dynamics
• Strong demand in food retail, but high comps and low food price inflation dampened overall growth Solid market, • Gradual change in market dynamics following eased restrictions around the Covid-19 pandemic gradual change ‒ Improved situation for restaurants and certain segments of the food retail
Slide 5: Food retail market
Food retail market Solid demand but high comps and low 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 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 5.3
Slide 6: Food retail market: consumers going back to physical stores
Food retail market Consumers going back to physical stores Food retail trade index, physical store sales by month Food retail trade index, online sales by month % % 15 200 191.6 14 13 180 11.7 165.3 12 11 160 10.3 143.2 10 137.8 8.8 140 135.3 136.1 9 8 120 109.1 7 6.4 107.8 6.0 101.2 6 5.4 100 5.0 8
Slide 7: Q3 2021
Q3 2021 7
Slide 8: Axfood growth versus the market
Axfood growth versus the market Store sales development, total including online Sales development, online Axfood Group store sales Axfood Group online sales Food retail trade index Food retail trade index % % 12 160 11 140 10 9 120 8 100 7 6 80 5 60 4 3 40 2 1.2 20 8.9 1 0.7 0 0 3.0 Q1 Q2 Q3 Q4 Q1 Q
Slide 9: Solid quarter with high comps and low inflation
Net sales Solid quarter with high comps and low inflation • Net sales increased 2.2% during the third quarter o High comps from prior year and low food price inflation (+0.3 percent) o Flat sales for Willys with very high comps, increase for Eurocash but still Net sales, SEK m +2.2% significantly lo
Slide 10: A highly profitable quarter
Operating profit A highly profitable quarter • Operating profit SEK 793 m (796), operating profit Operating profit and margin excl. items affecting comparability SEK 811 m (796) excl. items affecting comparability o Higher operating profit for Hemköp and Snabbgross Operating margin, %* +1.9% o Lower
Slide 11: Willys: Sales flat due to very high comps
Willys Sales flat due to very high comps • Sales virtually flat compared to prior year, LFL -1.2% o Comps for Willys among the highest on the market, especially for the Operating margin, % large format Willys stores where prior year growth was +12.9% Net sales, SEK m +0.1% o Negative effect of appro
Slide 12: Willys: Strong market position
Willys Strong market position Willys #1 fastest Sales growth for the Willys chain Market share development for the growing top Q3’19 to Q3’21 Willys chain* brand in Sweden +1 pp. In ranking of Sweden’s 50 most valuable 12% brands by Brand Finance, the world’s 13% leading brand valuation consultancy.
Slide 13: Hemköp: Solid like-for-like sales and strong profitability
Hemköp Solid like-for-like sales and strong profitability • Total store sales growth 2.0% and LFL 1.5% Operating margin, % o Group owned -1.8% and LFL 1.8%, franchise 4.6% and LFL 1.4% Net sales, SEK m o Strong growth for franchise stores despite high comps -1.6% o Solid LFL growth for Group-owned s
Slide 14: Hemköp: Improved trend for central urban stores
Hemköp Improved trend for central urban stores • Planned capital expenditures in 2021 of SEK 1,800−1,900 m of people Development flow in city centres ‒ Excluding acquisitions and leasehold ‒ Including 30% Small city SEKMid-sized 585 mcityinvestment Larger city in Large city 20% automation solution f
Slide 15: Snabbgross: All time high sales, profit and profitability
Snabbgross All time high sales, profit and profitability • Sales growth of 14.3% and LFL 11.6% Operating margin, % o Strong growth partially attributable to positive market development Net sales, SEK m +14.3% o New store establishments, an increase in the customer base and a higher average ticket va
Slide 16: Dagab: Solid performance with high efficiency
Dagab Solid performance with high efficiency • Net sales growth of 1.8% Net sales and operating margin o Growth driven by sales to Hemköp, Snabbgross and service trade excl. items affecting comparability • Operating profit ex. items affecting comparability SEK 247 m (246) Operating margin, %* +1.8%
Slide 17: Financial position
Financial position Anders Lexmon Chief Financial Officer 17
Slide 18: 9M sales and operating profit excl. items affecting comparability
9M sales and operating profit excl. items affecting comparability Net sales, SEK m Operating margin excl. items affecting comparability, % Operating profit excl. items +1.9% affecting comparability, SEK m 40,062 40,829 +4.8% 37,700 34,142 35,715 1.9% 1,944 2,036 1,801 1,488 1,599 4.5 4.8 4.9 5.0 4.4
Slide 19: Strong operating cash flow
Strong operating cash flow SEK m 9M 2021 9M 2020 Operating profit 1,965 1,944 Non-cash items 1,804 1,721 Net interests -92 -85 Paid tax -323 -318 SEK 3.3 bn Working capital -52 99 Operating cash flow 3,302 3,361 Investing activities -1,255 -760 Loans raised 1,500 Amortization of debt -1,168 -1,133 O
Slide 20: Investments (ex. IFRS 16)
Investments (ex. IFRS 16) Acquisition Other Joint group Wholesale Retail SEK m SEK m SEK 1,209 mn 2,000 1,934 1,400 1,481 1,209 1,200 281 1,000 1,000 1,021 1,031 Total investments 800 713 764 546 in the first nine 600 223 500 580 113 months 2021 400 200 378 382 0 0 2015 2016 2017 2018 2019 2020 9M 9
Slide 21: Improved net working capital
Improved net working capital NWC as % of sales NWC, SEK m -2.0% -4.0% -919 -2.6% -3.0% -1,236 -3.4% -1,513 -4.0% -1,800 NWC as % of sales -2,180 2017 2018 2019 2020 R12M to Sep 2021 21
Slide 22: Financial position
Financial position 5,082 Net debt (ex. IFRS 16), SEK m 5,131 5,454 5,218 Net debt, SEK m 5,185 Net debt/EBITDA 5,481 1.1x Net debt/EBITDA 5,016 4,920 4,577 22.2% 1.2 1.2 1.1 1.1 1.1 1.0 1.0 1.0 -259 -350 Equity ratio -404 -377 -478 -462 -782 -1,131 -1,156 30 Sep. 31 Dec. 31 Mar. 30 Jun. 30 Sep. 31 D
Slide 23: Return on capital employed
Return on capital employed ROCE Capital employed, SEK m 12,360 10,674 10,326 9,825 10,178 10,149 9,526 9,648 9,651 30.6% 30.1% 24.7% 24.5% 24.5% 24.2% 26.6% 25.6% 22.6% 22.6% Return on capital employed 30 Sep. 31 Dec. 31 Mar. 30 Jun. 30 Sep. 31 Dec. 31 Mar. 30 Jun. 30 Sep. 2019 2019 2020 2020 2020 2
Slide 24: Update strategic agenda
Update strategic agenda Klas Balkow President and CEO 24
Slide 25: Bergendahls transaction
Bergendahls transaction On 1 October, Axfood completed its acquisition of the wholesale business Bergendahls Food as well as of the 9.9* percent minority position in City Gross which is part of a strategic partnership. The acquisition creates economies of scale and synergies, and through greater eff
Slide 26: Bergendahls integration
Bergendahls integration 2023 At closing of the transaction, Bergendahls Food Focus on integrating became part of Dagab, and the integration process stores with processes and IT infrastructure was initiated. Up until the second quarter 2022, the focus of the process will be on integrating the wholesa
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: Food 2030 – Axfood's sustainable food strategy
Sustainability Food 2030 – Axfood’s sustainable food strategy • The food industry is facing great sustainability challenges, and ensuring sustainability across the entire value chain requires joint efforts. • In September, Axfood published the Food 2030 report, with 100 recommendations to the busine
Slide 29: Adding more green electricity to the grid
Sustainability Adding more green electricity to the grid • Axfood continues to focus on renewable energy and has signed a power purchase agreement for Sweden’s largest solar park. • The facility will be operational in early 2023. • Total energy capacity will amount to ~40 MW, which corresponds to ~1
Slide 30: Strengthened offering in good and sustainable food
Sustainability Strengthened offering in good and sustainable food Cashewmeetly, new and Recently launched sustainable vegetarian meat private label products based on cashew apples in sustainable food 30
Slide 31: Outlook 2021
Outlook 2021 31
Slide 32: 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 33: Summary
A solid quarter with high profitability • Higher sales and operating profit excluding items affecting comparability • Strong position on the market as society gradually returns to a new normal post-Covid Summary • Creating history in food retail with the acquisition of Bergendahls Food and minority
Slide 34: Axfood Capital Markets Day 2021
Axfood Capital Markets Day 2021 16 December 2021, 1.00-4.30 p.m. (CET) More information at axfood.se 34
Slide 35: Q&A
Q&A 35
Slide 36: Axfood – good and sustainable food for everyone
Axfood – good and sustainable food for everyone R12M net sales SEK 54.5 bn 12,128 employees (FTEs) Efficient sourcing and Customer reach logistics for all brands ~4.5 million customers a week and channels 312 Group-owned stores Innovative development of 136 franchise Hemköp 130 franchise Tempo priva
Slide 37: Axfood key ratios
Axfood Key ratios Q3 Q3 9M 9M Operating margin, % SEK m 2021 2020 Chg 2021 2020 Chg 2020 Net sales, SEK m Net sales 13,723 13,426 2.2% 40,829 40,062 1.9% 53,696 40,062 40,829 37,700 35,715 Change in like- 34,142 -0.4% 5.9% -6.3 -0.1% 7.2% -7.3 6.9% 4.9 for-like sales* 4.8 4.8 4.4 4.5 Operating profi
Slide 38: Willys key ratios
Willys Key ratios Q3 Q3 9M 9M Operating margin, % SEK m 2021 2020 Chg 2021 2020 Chg 2020 Net sales, SEK m 23,670 23,999 Net sales 7,873 7,862 0.1% 23,999 23,670 1.4% 31,793 21,541 20,033 18,782 Change in like- 5.2 5.1 -1.2% 6.9% -8.1 -0.6% 8.3% -8.9 7.9% 4.7 4.9 for-like sales 4.4 Operating profit 4
Slide 39: Hemköp key ratios
Hemköp Key ratios Q3 Q3 9M 9M Operating margin, % SEK m 2021 2020 Chg 2021 2020 Chg 2020 Net sales, SEK m 4,735 4,726 4,699 Net sales 1,459 1,483 -1.6% 4,567 4,699 -2.8% 6,354 4,561 4,567 Change in like- 1.8% 1.9% -0.1 0.8% 2.9% -2.1 2.8% for-like sales* 4.3 3.8 4.0 3.8 3.7 Operating profit 76 62 23
Slide 40: Snabbgross key ratios
Snabbgross Key ratios Q3 Q3 9M 9M Operating margin, % SEK m 2021 2020 Chg 2021 2020 Chg 2020 Net sales, SEK m 2,840 Net sales 1,132 990 14.3% 2,840 2,626 8.1% 3,417 2,598 2,626 2,446 2,257 Change in like- 11.6% 3.2% 8.4 5.6 -0.1 5.7 -2.2% 5.1 5.2 for-like sales 4.7 4.3 3.9 Operating profit 77 64 20.
Slide 41: Dagab key ratios
Dagab Key ratios Q3 Q3 9M 9M Operating margin, % SEK m 2021 2020 Chg 2021 2020 Chg 2020 Net sales, SEK m 35,781 36,579 Net sales 12,211 11,995 1.8% 36,579 35,781 2.2% 48,091 33,238 30,601 31,391 1.8 1.9 1.6 1.6 1.7 Operating profit 229 246 -6.8% 681 599 13.8% 829 Operating 1.9% 2.1% -0.2 1.9% 1.7% 0