Axfood AB: reports substantial growth in 9M-2022

Stockholm / SE. (axf) With positive contributions from all businesses and an outstanding performance by Willys, Sweden’s Axfood AB continued to grow significantly more than the market in the third quarter. With distinctive concepts, investments in the business, and an ability to respond to rapid changes, Axfood is well equipped to continue to strengthen its position. President and CEO Klas Balkow’s comments on the interim report for the third quarter 2022:

«We operate in a time with high inflation and changing market dynamics. We know that many of our customers are in a challenging situation, and we are doing everything we can to make sure that our offering is affordable and competitive. As customers find themselves with less money in their wallets, value for money becomes more important, and it is clear that many people are searching for discounted products and campaigns.

«We reported substantial sales growth in the third quarter, clearly strengthening our position and gaining market share, which led to a positive earnings development calculated in SEK. Growth was particularly strong for Willys, whose business concept of offering Sweden’s cheapest bag of groceries is attracting a growing number of customers. But also Eurocash is delivering strong sales growth now that cross-border shopping has recovered. The continued recovery for stores in central urban locations is particularly beneficial for Hemköp, and Snabbgross once again recorded a very strong quarter, despite high comparison figures.

«However, certain factors impacted earnings negatively during the quarter. The rapid pace of price increases from suppliers has not yet been fully reflected in consumer prices. We are also noting a higher share of campaign products, and significant supply chain disruptions has led to increased costs and caused our delivery reliability to remain relatively low.

«Overall, we are well positioned and have the ability to manage the challenges with which we are presented. With our distinctive concepts, we cater to consumers’ various preferences, and a rapid pace of development across all areas of the Group is further strengthening our competitiveness and bringing us closer to our vision of being the leading company within affordable, good and sustainable food.»

Third quarter summary

  • Net sales totalled SEK 18,674 m (13,723), an increase of 36.1 percent including the acquired Bergendahls Food.
  • Retail sales totalled SEK 14,026 m (12,149), an increase of 15.5 percent.
  • Operating profit amounted to SEK 975 m (793) including items affecting comparability of SEK -40 m (-18). The operating margin was 5.2 percent (5.8).
  • Adjusted operating profit amounted to SEK 1,015 m (811), an increase of 25.2 percent. The adjusted operating margin was 5.4 percent (5.9).
  • Net profit for the period was SEK 745 m (601) and earnings per share before dilution amounted to SEK 3.40 (2.90).
  • In September, a dividend of SEK 3.75 per share was paid out, the second part of the dividend to shareholders totalling SEK 7.75 (7.50) per share.
  • Axfood’s holding in Mathem was revalued at SEK 206 m, a decline of SEK 635 m, which is in line with the decline in valuation for comparable companies.

Summary January-September

  • Net sales totaled SEK 53,735 m (40,829), an increase of 31.6 percent including the acquired Bergendahls Food.
  • Retail sales totaled SEK 40,541 m (36,939), an increase of 9.7 percent.
  • Operating profit amounted to SEK 2,599 m (1,965) including items affecting comparability of SEK 103 m (-72). The operating margin was 4.8 percent (4.8).
  • Adjusted operating profit amounted to SEK 2,496 m (2,036), an increase of 22.6 percent. The adjusted operating margin was 4.6 percent (5.0).
  • Net profit for the period was SEK 2,017 m (1,486) and earnings per share before dilution amounted to SEK 9.43 (7.30).
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