Axfood AB: announces strong Q2-2021 with high intensity

Stockholm / SE. (axf) Sweden’s Axfood AB is developing in a fast pace and is taking significant steps to ensure future competitiveness. A few weeks ago, the acquisition of Bergendahls Food and a minority stake in City Gross was announced – a logical deal that is beneficial to customers and strengthens the parties’ market positions, and is currently being reviewed by the Swedish Competition Authority. Axfood is also now solidifying the base of its future logistics platform with a number of new, important investments.

Chief Executive’s Commentary

President and CEO Klas Balkow said: «I can happily note that we have closed yet another strong quarter at the same time that we continue to maintain a very high tempo in our investments for the future. Despite high comparison figures, a negative calendar effect and the lowest food price inflation in many years, Axfood continued to grow with growth in store sales that was higher than the market. Excluding costs related to the Bergendahls transaction, Group operating profit and profitability grew significantly. We continue with a high tempo to ensure competitiveness also in the longer term. Today we can unveil new, exciting initiatives entailing that in the coming years we will be moving and automating our e-commerce warehouse in Backa in Gothenburg, automating our new fruit and vegetable warehouse in Landskrona, and expanding and automating our high-bay warehouse in Backa. These investments complement our new logistics centre in Bålsta and will strengthen the entire Axfood family and external customers, and will create further conditions for growth and profitability for many years to come.»

Second quarter summary

  • Net sales totalled SEK 13,903 million (13 570), an increase of 2.5 percent.
  • Store sales for the Axfood Group totalled SEK 12,059 million (11,928), an increase of 1.1 percent.
  • Operating profit, including items affecting comparability pertaining to acquisition costs of SEK 54 million for the transaction with Bergendahls, was SEK 607 million (605). The operating margin was 4.4 percent (4.5 percent). Operating profit excluding items affecting comparability totalled SEK 661 million (605), an increase of 9.2 percent. The operating margin excluding items affecting comparability was 4.8 percent (4.5 percent).
  • Net profit for the period was SEK 455 million (446), and earnings per share before dilution were SEK 2.27 (2.22).
  • On 31 May Axfood announced that it reached an agreement to acquire 100 percent of Bergendahl Food AB and a minority stake corresponding to 9.9 percent of the shares in City Gross Sverige AB with an option to acquire shares up to a total shareholding of 30 percent. Completion of the transaction is subject to approval by the Swedish Competition Authority.

First half summary

  • Net sales totalled SEK 27,106 million (26,636), an increase of 1.8 percent.
  • Store sales for the Axfood Group totalled SEK 23,809 million (23,411), an increase of 1.7 percent.
  • Operating profit was SEK 1,172 million (1,148). The operating margin was 4.3 percent (4.3 percent). Operating profit excluding items affecting comparability totalled SEK 1,225 million (1,148), an increase of 6.7 percent. The operating margin excluding items affecting comparability was 4.5 percent (4.3 percent).
  • Net profit for the period was SEK 885 million (848), and earnings per share before dilution were SEK 4.43 (4.15).

Significant events after the balance sheet date

  • To further develop and improve efficiency in the logistics operations and handle future growth, agreements have been signed for a new, automated e-commerce warehouse in Backa in Gothenburg, expansion along with automation of the existing high-bay warehouse in Backa, and automation of the new and larger nationwide warehouse for fruits and vegetables that is being built in Landskrona. Total investments in automation will amount to approximately EUR 65 million during the period 2021 to 2024.

For additional information please read the company’s PDF file below (753 KB).

20210715-AXFOOD-Q2-2021
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