Continued strong customer traffic and increased market share

During the third quarter, Axfood continued to report strong growth and stable profitability, a testament to the fact that customers appreciate the Group’s affordable and competitive offering. At the same time, Axfood continued to pursue an extensive development agenda to strengthen its position for the future, and took major steps in the establishment the Group’s new warehouse and logistics structure during the quarter.

President and CEO Klas Balkow’s comments on the interim report for the third quarter 2023:

“Despite high comparison figures, Axfood delivered robust growth of 13% during the quarter, compared with 6% growth in the food retail industry. Axfood’s growth was thus twice as high as the market’s, which follows the trend we have seen since the beginning of last year.

Willys once again reported exceptional growth, reaching an impressive 16% this quarter. The number of new customers and members of Willys Plus is continuing to grow at a rapid rate, and new and existing customers alike are becoming increasingly loyal and shopping more at the chain.

With a clear focus on price value, Hemköp grew faster than the market for the fourth consecutive quarter. In a market that mainly favours the low-price players, Hemköp delivered a strong performance. It is truly gratifying to see a return on the chain’s investment in store modernisation and assortment development, with a focus on health and sustainability.

At the same time, we are seeing a certain slowdown in the café and restaurant market from previously high levels. Nevertheless, Snabbgross’s focus on an affordable and flexible offering generated favourable growth, resulting in a higher market share.

In line with the trend in the first half of the year, operating profit increased in the third quarter, and the adjusted operating margin was on a par with the previous year. This profit trend was attributable to the Group’s strong sales growth, which compensated for the continued market investments in the store chains, negative currency effects and higher operating expenses, such as increased rental levels and salary costs.

It is with a sense of humility in the face of an uncertain global backdrop that I present a strong third quarter for Axfood. It is clear that more and more customers appreciate the offerings of our various store concepts and operations. Together with all of our dedicated employees, we will maintain a high level of ambition and pace of development in order to further strengthen our position in the market.”

Third quarter summary

• Net sales totalled SEK 20,293 m (18,674), an increase of 8.7%.
• Retail sales totalled SEK 15,873 m (14,026), an increase of 13.2%.
• Operating profit amounted to SEK 1,036 m (975) including items affecting comparability of SEK -60 m (-40). The operating margin was 5.1% (5.2).
• Adjusted operating profit amounted to SEK 1,095 m (1,015), an increase of 7.9%. The adjusted operating margin was 5.4% (5.4).
• Net profit for the period amounted to SEK 738 m (745) and earnings per share before dilution to SEK 3.38 (3.40).
• In September, a dividend of SEK 4.00 per share was paid out, the second part of the dividend to shareholders totalling SEK 8.15 (7.75) per share.

Summary January – September

• Net sales totalled SEK 60,342 m (53,735) an increase of 12.3%.
• Retail sales totalled SEK 47,196 m (40,541) an increase of 16.4%.
• Operating profit amounted to SEK 2,609 m (2,599) including items affecting comparability totalling SEK -179 m (103). The operating margin was 4.3% (4.8).
• Adjusted operating profit amounted to SEK 2,787 m (2,496), an increase of 11.7%. The adjusted operating margin was 4.6% (4.6).
• Net profit for the period amounted to SEK 1,841 m (2,017) and earnings per share before dilution to SEK 8.50 (9.43).

Significant events after the balance sheet date

• Hans Bax was appointed as the new Managing Director of Dagab and effective 1 February 2024 will succeed Nicholas Pettersson, who will take on the role as Managing Director of Willys on the same date.
• The Nominating Committee of Axfood proposes that Thomas Ekman be appointed new Chairman of the Board at the Annual General Meeting in 2024. Axfood's current Chairman, Mia Brunell Livfors, has declined re-election.

Axfood will present the interim report for the third quarter 2023 in a webcast at 9:30 a.m. (CEST) today, Wednesday, 25 October 2023. The report will be presented by Klas Balkow, President and CEO, and Anders Lexmon, CFO. You can find a link to the webcast at axfood.com. A link to register to participate via conference call is also available at axfood.com. Upon registration, a telephone number and conference ID for the conference call will be provided.

 

For further information, please contact:
Alexander Bergendorf, Head of Investor Relations, Axfood AB, tel +46 73 049 18 44
 

The information herein is such that Axfood AB (publ) is required to make public in accordance with the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person listed above, at 7:00 a.m. CEST on 25 October 2023.

This document is an English translation of the Swedish original. In the event of any discrepancies, the Swedish version shall govern.