Strong growth characterised by acquisition and high food price inflation

Axfood continues to grow significantly more than the market in an exceptional time with high food price inflation. The acquisition of Bergendahls Food, a strong quarter for Willys and a robust recovery for Eurocash and Snabbgross contributed to strong sales growth and higher earnings.

President and CEO Klas Balkow’s comments on the interim report for the second quarter 2022:

“In recent months, we have approached nearly double-digit food price inflation. The trend we are seeing is a consequence of a number of external factors such as the Covid-19 pandemic, the war in Ukraine, sharp increases in electricity and fuel prices, shortages of raw materials and packaging, and disruptions in the transport sector. The world situation is affecting the entire supply chain, from primary production to our own operations.

The extremely rapid pace of the price increases from our suppliers has not yet been reflected in consumer prices. Demand for campaign products has also increased, and continued high costs for electricity and fuel have had a negative impact. But thanks to our strong growth in physical stores, with Willys benefiting from the prevailing low-price trend and the return to cross-border shopping, as well as higher volumes from the acquired company Bergendahls Food, we once again delivered increased earnings this quarter. The divestment of Mat.se and effective cost control in our chains also contributed to the positive earnings trend.”

Second quarter summary

• Net sales totalled SEK 18,468 m (13,903), an increase of 32.8%, including the acquired Bergendahls Food.
• Retail sales totalled SEK 13,803 (12,583), an increase of 9.7%.
• Operating profit amounted to SEK 789 m (607) and included items affecting comparability of SEK -39 m (-54). The operating margin was 4.3% (4.4).
• Adjusted operating profit amounted to SEK 828 m (661), an increase of 25.3%. The adjusted operating margin was 4.5% (4.8).
• Net profit for the period amounted to SEK 590 m (455) and earnings per share before dilution to SEK 2.75 (2.26).
• A rights issue was completed with the support of the AGM's authorisation and the Board of Directors' decision. The rights issue was fully subscribed, and Axfood received SEK 1,499 m before issue costs.

First half of 2022 summary

• Net sales totalled SEK 35,061 m (27,106), an increase of 29.3%, including the acquired Bergendahls Food.
• Retail sales totalled SEK 26,514 m (24,790), an increase of 7.0%.
• Operating profit amounted to SEK 1,623 m (1,172) and included SEK 143 m (-54), net, in items affecting comparability. The operating margin was 4.6% (4.3).
• Adjusted operating profit amounted to SEK 1,480 m (1,225), an increase of 20.8%. The adjusted operating margin was 4.2% (4.5).
• Net profit for the period amounted to SEK 1,272 m (885) and earnings per share before dilution to SEK 6.02 (4.40).

Axfood will present the interim report for the second quarter of 2022 in a conference call at 9.30 a.m. (CET) today, 15 July 2022.
The report will be presented by Klas Balkow, President and CEO, and Anders Lexmon, CFO.
To follow the presentation, visit www.axfood.com or call:
Sweden: +46 8 519 99 383,  UK: +44 333 300 9267, USA: +1 646 722 4904

For further information, please contact:
Elisabet Johansson, acting Head of Investor Relations, Axfood AB, tel +46 72 22 11650

The information herein is such that Axfood AB (publ) is required to make public in accordance with the EU Market Abuse Regulation and the Securities Market Act. The information was submitted for publication, through the agency of the contact person listed above, at 7:00 a.m. CEST on 15 July 2022.

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