Continued high inflow of customers at Axfood AB in Q1-2024

Stockholm / SE. (axf) Sweden’s Axfood AB summarises a quarter characterised by a continued positive trend in customer traffic, volume growth and strengthened market positions. Despite very high comparison figures, growth was once again higher than the market’s, leading to a solid earnings performance. Additional steps were also taken as part of the Group’s investments to strengthen its competitiveness over time.

Commentary by the President and CEO

President and CEO Klas Balkow’s comments on the Q1-2024 interim report as follows: «Given that we were facing uniquely high comparison figures, the beginning of the year was strong, with 6.9 percent growth in retail sales. The fact that we posted solid growth in a market with low inflation was a result of significant volume growth. This confirms that our customers appreciate the offerings in our various concepts.

«Willys has a competitive offering, with the ambition to deliver Sweden’s cheapest bag of groceries, and has attracted many new customers for a long time. During the first quarter, Willys continued to gain market share, albeit at a somewhat slower rate than previously, which is natural given the exceptionally high comparison figures. Compared with the same period two years ago, Willys has grown more than twice as much as the market.

«The first quarter saw another excellent performance from Hemköp, with like-for-like growth of 7.0 percent. With a focus on price value and store modernisations, more consumers are being drawn to Hemköp’s concept. In the café and restaurant market, the beginning of the year was weak, including a negative effect from Easter. This was reflected in Snabbgross’s performance, even though Snabbgross once again gained market share during the quarter.

«With continued volume growth and a positive trend in customer traffic, Axfood delivered a solid earnings performance for the first quarter.

«In the back-end operations, we are establishing a new logistics structure and are still in a ramp-up phase at the new logistics centre in Bålsta. The deployment of automation and transfer of inventory for dry and refrigerated goods is now complete, and operations within the frozen assortment were also initiated recently according to plan. We continue to expect improvements in efficiency from the second half of the year. During the quarter, we also put the automation solution at our new fruit and vegetable warehouse in Landskrona into operation.

«Sustainability work at Axfood is wide-ranging and we are continuously taking steps in many areas. Right now, we are accelerating the transition to renewable fuel in our transports from warehouses to stores, which meant that we drastically reduced our climate impact per tonne of goods transported during the quarter. We also increased the amount of self-generated energy from solar panels, and are continuing to develop an assortment of sustainable and healthy products.

«We can now look back at a positive beginning to the year, during which we continued to attract new customers and gained market share in an increasingly competitive market. With an ambitious agenda for continued development, we have a good opportunity to take additional steps towards being the leader in affordable, good and sustainable food.»

First quarter summary

  • Net sales totalled SEK 20,252 m (19,252), an increase of 5.2 percent.
  • Retail sales totalled SEK 16,281 m (15,225), an increase of 6.9 percent.
  • Operating profit amounted to SEK 817 m (695) including items affecting comparability of SEK – m (-55). The operating margin was 4.0 percent (3.6).
  • Adjusted operating profit amounted to SEK 817 m (750), an increase of 9.0 percent. The adjusted operating margin was 4.0 percent (3.9).
  • Net profit for the period was SEK 560 m (472) and earnings per share before dilution amounted to SEK 2.60 (2.20).
  • The Annual General Meeting (AGM) on 20 March approved a dividend to shareholders of SEK 8.50 (8.15) per share. The amount is divided into two equal payments of SEK 4,25 each, in which the first payment was made in March and the second will be made in September. The AGM also elected Thomas Ekman as the new Chairman, and the Board of Directors resolved on the repurchase of no more than 385,000 shares related to the long-term share-based incentive programme LTIP 2024.
  • On 6 February it was announced that Klas Balkow chooses to leave his role as President and CEO of Axfood by year-end 2024 the latest.

Significant events after the balance sheet date

On 17 April, it was announced that Axfood’s Board of Directors has appointed the current Managing Director of Hemköpskedjan, Simone Margulies, as Axfood’s new President and CEO from 15 August 2024.