===== SIDA 1 ===== Continued strong customer traffic and increased market share 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. Net sales, SEK m 20,293 18,674 8.7% 60,342 53,735 12.3% 80,082 73,474 Retail sales, SEK m 15,873 14,026 13.2% 47,196 40,541 16.4% 62,376 55,721 Operating profit, SEK m 1,036 975 6.2% 2,609 2,599 0.4% 3,111 3,101 Operating profit excl. items affecting comparability. SEK m1) 1,095 1,015 7.9% 2,787 2,496 11.7% 3,521 3,229 Operating margin, % 5.1 5.2 -0.1 4.3 4.8 -0.5 3.9 4.2 Operating margin excl. items affecting comparability, %1) 5.4 5.4 0.0 4.6 4.6 0.0 4.4 4.4 Net profit for the period, SEK m 738 745 -0.9% 1,841 2,017 -8.7% 2,194 2,370 Earnings per share before dilution, SEK 3.38 3.40 -0.7% 8.50 9.43 -9.9% 10.12 11.04 Earnings per share before dilution excl. items affecting comparability, SEK1) 3.60 3.55 1.4% 9.16 8.89 3.1% 11.63 11.36 Cash flow from operating activities, SEK m 1,423 1,487 -4.3% 3,588 4,083 -12.1% 5,432 5,927 Return on capital employed R12, % 20.5 25.8 -5.4 20.5 25.8 -5.4 20.5 20.9 Sustainability-labelled products, share of sales, % 26.0 25.9 0.1 26.4 27.1 -0.7 26.1 26.6 Key ratios Q3 2023 Q3 2022 Change 9 mos. 2023 9 mos. 2022 Change R12 Full-year 2022 1) See Note 9 Items affecting comparability for more information. For further information, please contact: Alexander Bergendorf, Head of Investor Relations, 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. CET on 25 October 2023. This interim report is an English translation of the Swedish original. In the event of any discrepancies, the Swedish version shall govern. Interim report 1 January - 30 September 2023 Q3 8.7% Net sales growth for the Axfood Group during the third quarter 13.2% The Axfood Group’s growth in retail sales during the third quarter ===== SIDA 2 ===== CEO message During the third quarter, Axfood continued to report strong growth and stable profitability, a testament to the fact that our customers appreciate our affordable and competitive offering. At the same time, we continued to pursue our extensive development agenda to strengthen our position for the future, and we took major steps in the establishment the Group’s new warehouse and logistics structure during the quarter. Annual food price inflation continued to slow considerably in the third quarter. However, there is still uncertainty concerning future developments due to various factors, such as the turbulent global situation, extreme weather and the weak Swedish krona. The current inflation rate is putting a strain on household finances, and it is clear that consumers are continuing to focus on price value and low prices. Continued momentum thanks to strong growth 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. Increased earnings and stable profitability 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. Continued scale-up of new logistics platform Our new highly automated logistics centre in Bålsta outside Stockholm is a large-scale project that represents a completely new way of running our warehouse and logistics operations. The transition to Bålsta progressed during the quarter, with a focus on continuing to scale up and stabilise the operations. A growing number of stores and larger volumes were connected to the flow of the dry range during the quarter, and the first deliveries of refrigerated items from Bålsta to stores were recently made. In addition to scaling up the centre in Bålsta, we also continued our efforts to strengthen other parts of our new logistics platform. Planning for the new high-bay warehouse in Backa, Gothenburg, is under way, and at the new fruit and vegetable warehouse in Landskrona, testing of IT solutions and control systems is ongoing now that the automation solution has been fully installed. Promoting a sustainable food strategy for Sweden While focusing on delivering affordable, good and sustainable food here and now, and developing our operations to enable greater efficiency going forward, we must not lose sight of the longer-term challenges. We recently presented a new version of Food 2030, Axfood’s proposal for a sustainable food strategy, filled with 125 recommendations that can make a real difference in accelerating the green transition. As a leading player in the food retail industry, we want to take the lead in promoting a sustainable food system in Sweden, and Food 2030 is an important part of our work to influence decision-makers and drive industry issues. A strong third quarter 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. Klas Balkow President and CEO, Axfood AB Axfood interim report 1 January– 30 September 2023 | 2 “It is with a sense of humility in the face of an uncertain global backdrop that I present a strong third quarter. We are taking further steps in our development and continuing to strengthen our market position, and it is clear that more and more customers appreciate our offerings.” Significant events during the third quarter • Strong growth double that of the market • High customer traffic and increased loyalty • Continued progress towards new logistics platform ===== SIDA 3 ===== Axfood interim report 1 January– 30 September 2023 | 3 Financial calendar • The Capital Markets Day 2023 will be held on 24 November 2023 • The year-end report for 2023 will be published at 7:00 a.m. CET on 1 February 2024 • The 2024 Annual General Meeting (AGM) will be held on 20 March 2024 • The interim report for the first quarter of 2024 will be published at 7:00 a.m. CET on 25 April 2024 • The interim report for the second quarter of 2024 will be published at 7:00 a.m. CET on 12 July 2024 • The interim report for the third quarter of 2024 will be published at 7:00 a.m. CET on 24 October 2024 Selection of press releases from Axfood during the third quarter of 2023 4 September 2023 Double bonus points on organic food as Hemköp gears up 11 September 2023 Invitation to Axfood’s Capital Markets Day 2023 13 September 2023 Axfood partners with BalticWaters on new research laboratory for Baltic Sea fish 22 September 2023 Nominating Committee ahead of Axfood’s 2024 Annual General Meeting Presentation of the interim report for the third quarter of 2023 Axfood will present the interim report for the third quarter of 2023 in a webcast at 9:30 a.m. CET today, Wednesday, 25 October 2023. The report will be presented by Klas Balkow, President and CEO, and Anders Lexmon, CFO. A link to the webcast is available 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. ===== SIDA 4 ===== The Swedish food retail market Market development According to the Swedish Food Retail Index, total sales growth during the third quarter of 2023 amounted to 6.2%. The calendar effect during the quarter is estimated at -0.2 of a percentage point. Sales in physical stores increased by 6.5%. E-commerce sales declined by 0.6%. The share of food retail sales from e-commerce amounted to 3.6% during the quarter. Food price inflation During the July–September 2023 period, food prices increased by 9.1% compared with the year-earlier period, according to Statistics Sweden. The annual rate of inflation thus continued to decline compared with the preceding quarter and the level of 14.5% in the second quarter of 2023. Growth in Axfood’s retail sales1) compared with the Swedish Food Retail Index 13.2% 6.2% Axfood retail sales Retail trade index svDH/HUI Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 0% 4% 8% 12% 16% 20% 1) Includes retail sales growth in the Tempo concept as of the first quarter of 2022. Comparison figures are not restated. Growth in Axfood’s online sales1) compared with the Swedish Food Retail Index 8.3% -0.6% Axfood online sales Retail trade index online svDH/HUI Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 -30% -20% -10% 0% 10% 20% 1) Mat.se is included in the sales figures until February 2022. Axfood interim report 1 January– 30 September 2023 | 4 ===== SIDA 5 ===== Group performance Net sales Third quarter Net sales totalled SEK 20,293 m (18,674), an increase of 8.7%. This increase is attributable to high food price inflation and a higher number of new customers. Retail sales totalled SEK 15,873 m (14,026), an increase of 13.2%, which was significantly higher than the market’s growth of 6.2%. Volume growth, pricing and positive mix effects contributed to this performance. Like- for-like sales growth was 10.5%, primarily driven by Willys’ strong performance, but also good growth for Hemköp relative to the market. Online sales totalled SEK 723 m (667), an increase of 8.3% which compares to the market's growth of -0.6%. The share of retail sales attributable to e-commerce was 4.6% (4.8), which was higher than the e-commerce penetration on the market of 3.6%. The share of retail sales attributable to private label products was 31.9% (31.0). January - September Net sales totalled SEK 60,342 m (53,735), an increase of 12.3%. Retail sales increased 16.4% and amounted to SEK 47,196 m (40,541). Like-for-like growth was 13.8%. Online sales totalled SEK 2,404 m (2,327), an increase of 3.3%. The share of retail sales attributable to e-commerce was 5.1% (5.7). The share of retail sales attributable to private label products was 32.4% (31.1). Read about the performance of the Willys, Hemköp, Snabbgross and Dagab operating segments on pages 9-12. Net sales per segment SEK m Q3 2023 Q3 2022 Change 9 mos. 2023 9 mos. 2022 Change R12 Full-year 2022 Willys 10,945 9,450 15.8% 32,432 27,071 19.8% 42,813 37,451 Hemköp 1,779 1,608 10.6% 5,456 4,858 12.3% 7,248 6,650 Snabbgross 1,437 1,324 8.6% 4,072 3,557 14.5% 5,242 4,727 Dagab 18,410 16,971 8.5% 55,167 48,780 13.1% 73,387 66,999 Joint-Group 342 305 12.2% 1,012 897 12.9% 1,350 1,234 Internal sales between segments Dagab -12,333 -10,709 15.2% -36,953 -30,619 20.7% -48,824 -42,490 Joint-Group/other -287 -275 4.5% -846 -809 4.6% -1,134 -1,097 Total 20,293 18,674 8.7% 60,342 53,735 12.3% 80,082 73,474 Retail sales SEK m Q3 2023 Q3 2022 Change Change like-for-like stores 9 mos. 2023 9 mos. 2022 Change Change like-for-like stores R12 Full-year 2022 Willys 10,951 9,453 15.8% 12.4% 32,440 27,079 19.8% 16.6% 42,818 37,458 Hemköp1) 4,923 4,573 7.6% 6.4% 14,756 13,462 9.6% 8.1% 19,557 18,263 Total 15,873 14,026 13.2% 10.5% 47,196 40,541 16.4% 13.8% 62,376 55,721 1) Refers to Hemköp (Group-owned and retailer-owned) and Tempo. Axfood interim report 1 January– 30 September 2023 | 5 8.7% Net sales growth for the Axfood Group during the third quarter Net sales and growth 12.7 13.4 13.7 18.7 20.3 5.7 5.5 2.2 36.1 8.7 Net Sales, SEK bn Growth, % Q3 2019 Q3 2020 Q3 2021 Q3 2022 Q3 2023 ===== SIDA 6 ===== Operating profit Third quarter Operating profit amounted to SEK 1,036 m (975), an increase of 6.2%. Operating profit includes items affecting comparability totalling SEK -60 m (-40), which pertained entirely to parallel warehouse operation during the transition to the new logistics centre in Bålsta. The operating margin was 5.1% (5.2). Operating profit excluding items affecting comparability amounted to SEK 1,095 m (1,015), an increase of 7.9%. The increase was mainly attributable to strong growth and effective cost control. Overall, this compensated for lower gross margins in the segments and higher market investments. In addition, operating profit was affected by negative currency effects, increased rental levels and personnel costs, including the discontinuation of lower employer payroll tax for young people. The operating margin excluding items affecting comparability was 5.4% (5.4). Net financial items for the period amounted to SEK -80 m (-33), a change mainly attributable to higher interest expenses for leases. Profit after financial items amounted to SEK 956 m (942) and profit after tax to SEK 738 m (745). January - September Operating profit for the period totalled SEK 2,609 m (2,599), an increase of 0.4%. Operating profit includes items affecting comparability of SEK -179 m (103), net, which pertained entirely to parallel warehouse operation during the transition to the new logistics centre in Bålsta. In the year-earlier period, items affecting comparability included a capital gain of SEK 221 m for the divestment of Mat.se. 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 financial items for the period amounted to SEK -236 m (-114), a change mainly attributable to higher interest costs for leasing. Profit after financial items amounted to SEK 2,373 m (2,485). Profit after tax amounted to SEK 1,841 m (2,017). Read about the performance of the Willys, Hemköp, Snabbgross and Dagab operating segments on pages 9-12. Operating profit per segment excluding items affecting comparability SEK m Q3 2023 Q3 2022 Change 9 mos. 2023 9 mos. 2022 Change R12 Full-year 2022 Willys 652 602 8.3% 1,608 1,434 12.2% 2,033 1,859 Hemköp 78 77 0.7% 222 207 7.2% 298 283 Snabbgross 86 90 -4.3% 207 201 3.4% 259 252 Dagab 340 309 9.9% 952 845 12.7% 1,247 1,139 Joint-Group -59 -62 -4.7% -203 -191 6.3% -315 -303 Operating profit excl. items affecting comparability 1,095 1,015 7.9% 2,787 2,496 11.7% 3,521 3,229 Items affecting comparability1) -60 -40 -179 103 -410 -129 Operating profit 1,036 975 6.2% 2,609 2,599 0.4% 3,111 3,101 Net financial items -80 -33 -236 -114 -288 -166 Profit after financial items 956 942 1.5% 2,373 2,485 -4.5% 2,822 2,935 1) See Note 9 Items affecting comparability for more information. Operating margin per segment excluding items affecting comparability % Q3 2023 Q3 2022 Change 9 mos. 2023 9 mos. 2022 Change R12 Full-year 2022 Willys 6.0 6.4 -0.4 5.0 5.3 -0.3 4.7 5.0 Hemköp 4.4 4.8 -0.4 4.1 4.3 -0.2 4.1 4.3 Snabbgross 6.0 6.8 -0.8 5.1 5.6 -0.5 4.9 5.3 Dagab 1.8 1.8 0.0 1.7 1.7 0.0 1.7 1.7 Operating margin excl. items affecting comparability 5.4 5.4 0.0 4.6 4.6 0.0 4.4 4.4 Operating margin 5.1 5.2 -0.1 4.3 4.8 -0.5 3.9 4.2 Axfood interim report 1 January– 30 September 2023 | 6 Adjusted operating profit and operating margin 0.7 0.8 0.8 1.0 1.1 5.6 5.9 5.9 5.4 5.4 Operating profit, SEK bn Operating margin, % Q3 2019 Q3 2020 Q3 2021 Q3 2022 Q3 2023 ===== SIDA 7 ===== Capital expenditures Total capital expenditures in intangible assets and property, plant and equipment during the January - September period amounted to SEK 1,417 m (1,709). Of these capital expenditures, SEK 644 m (1,062) pertained to investments in the wholesale operations, of which SEK 388 m (747) related to investments in automation solutions. The year-earlier period also included an investment in land amounting to SEK 79 m. Investments in the retail operations amounted to SEK 461 m (346) and joint-Group and IT investments amounted to SEK 313 m (301). Investments in right-of-use assets, mainly premises, amounted to SEK 1,428 m (1,216), during the January - September period, of which SEK 390 m (370) pertained to newly acquired assets and SEK 1,038 m (847) pertained to revaluations of existing leases, primarily due to upward indexation and extensions. Of the total investments in leases, SEK 251 m (166) pertained to the wholesale operations, SEK 1,160 m (1,039) pertained to the retail operations and SEK 17 m (11) pertained to joint-Group operations and IT. Financial position and cash flow Cash flow from operating activities amounted to SEK 3,588 m (4,083) during the January - September period. The decrease was mainly due to higher working capital as a result of a parallel warehouse operations connected to the new logistics centre in Bålsta. Paid tax totalled SEK -526 m (-477). Net capital expenditures had an impact of SEK -1,650 m (-1,872) on cash flow. Cash flow from financing activities was SEK -1,987 m (-2,650) during January - September. Cash and cash equivalents held by the Group amounted to SEK 510 m compared with SEK 559 m at 31 December 2022. Interest-bearing liabilities and provisions totalled SEK 10,758 m compared with SEK 9,542 m at 31 December 2022. Interest bearing net debt amounted to SEK 10,247 m compared with SEK 8,982 m at 31 December 2022, which is primarily attributable to loans raised. The equity ratio was 22.7% compared with 24.1% at 31 December 2022 and 26.4% at 30 September 2022. Net debt/EBITDA was 1.7 compared with 1.6 at 31 December 2022. Net debt/EBITDA excluding IFRS 16 was 0.3 compared with 0.0 at 31 December 2022. Derivation of total investments and net capital expenditures in cash flow SEK m 9 mos. 2023 9 mos. 2022 Total capital expenditures -2,845 -2,926 Investments in leases 1,428 1,216 Divestment of property, plant and equipment/intangible assets 1 1 Acquisitions of financial assets -241 -135 Acquisitions of operations -3 10 Divested operations — -38 Dividends from joint ventures and associated companies 10 — Cash flow from investing activities -1,650 -1,872 Parent Company The Parent Company’s net sales and other operating income during the January - September period amounted to SEK 302 m (232). After operating expenses of SEK -412 m (-344) and net financial items of SEK 728 m (257) profit after financial items amounted to SEK 618 m (145). Net financial items include SEK 735 m (255) in dividends from subsidiaries. Investments during the period totalled SEK 5 m (3). The Parent Company had an interest-bearing net receivable of SEK 1,367 m at the end of the quarter, compared with SEK 1,449 m at 31 December 2022. The Parent Company has no significant transactions with related parties, other than transactions with subsidiaries. Axfood interim report 1 January– 30 September 2023 | 7 Net debt/EBITDA 1.2 1.6 1.9 1.8 1.7 0.1 0.0 0.4 0.3 0.3 Net debt/EBITDA, multipe Net debt/EBITDA excluding IFRS 16 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Capital expenditures and depreciation/ amortisation 274 883 551 558 309 218 223 227 264 272 Investments excl. acqusitions and right-of-use assets, SEK m Depreciation/amortization excl. right-of-us assets, SEK m Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 ===== SIDA 8 ===== Sustainable development For Axfood, sustainable development is about seeing the whole picture and the relentless pursuit of improvements. Sustainability permeates all operations and encompasses the entire food system, taking into account the environment, animal welfare, and the people who produce, sell and consume food. Axfood will take the lead in promoting a sustainable food system by influencing decision makers, leading the way through its own initiatives and driving important industry issues. The foundation of these efforts is Axfood’s sustainability programme designed to strengthen its operations while contributing to the UN SDGs and Sweden’s Environmental Objectives. The sustainability programme is an important governance instrument that includes a sustainability policy and 40 targets. Food Axfood strives to make it easier for consumers to make sustainable choices through a broad assortment of sustainability-labelled products. During the third quarter, the share of sales attributable to sustainability-labelled products remained essentially unchanged compared with the year-earlier period at 26.0% (25.9). The share of sales attributable to organic products declined to 4.4% (5.2). Generally speaking, this change was mainly the result of current inflation, which is a disadvantage for products that are priced slightly higher. However, Hemköp currently has the highest share of sales of organic products in the industry and launched double points on purchases of organic and KRAV-certified food for members of the Klubb Hemköp loyalty programme during the quarter. The share of sales attributable to KRAV-certified meat declined slightly to 2.6% (2.7) while the growth rate for vegetarian protein substitutes was 1.9% (7.9). Axfood’s offering of fish and seafood must come from sustainable stocks and be traceable. The aim is to offer only green-listed and sustainability-certified fish. As part of its strategic work, Axfood has become a long-term partner in the BalticWaters Foundation’s investment in a new, unique research laboratory for fish. The laboratory will create the conditions for new research and restocking of endangered fish species in the Baltic Sea. During the quarter, Garant launched a new quark from cows fed a soy-free diet, with the soy in their feed replaced by rapeseed. Soy is widely used as animal feed and is challenging from a sustainability perspective as expanded cultivation areas risk contributing to rainforest deforestation, which negatively impacts both the climate and biodiversity. Environment Axfood is striving to reduce the climate impact of food production as far as possible. The Group’s climate targets encompass both its own and suppliers’ operations as well as reducing the climate impact per kilo of food sold. Axfood is working to reduce its climate impact from transports. During the quarter, five older diesel trucks were replaced with five trucks powered by liquid biogas. The CO2 effect per tonne of delivered goods for the Group’s own transports declined to 11.6 CO2e (11.9). The Group’s annual energy intensity amounted to 238.6 kWh per square metre, a decrease compared to 2022 (276.2). The change is mainly attributable to more large warehouses being included as part of Axfood’s central electricity agreement. The store chains are also implementing an action plan developed in 2022 in order to reduce electricity consumption in their own operations. People Axfood aspires to be a positive force in society and is working to improve work and social conditions throughout the food supply chain, including customers, agricultural and production workers, and its own employees. Social audits are conducted in all risk countries in order to ensure compliance with Axfood’s Code of Conduct among suppliers of private label products. Of the 19 audits conducted by Amfori BSCI during the quarter, 18, or 94.7% (95.5) had acceptable results. Unacceptable results are followed up by developing action plans with measures. Axfood is committed to diversity and inclusion, and firmly believes that a mix of skills and perspectives produces better results. Gender balance in senior positions is an important part of this work. The share of women in management positions during the quarter was 50.5% (50.6), which was in line with the Group’s long-term target. Sickness-related absence during the third quarter amounted to 5.5% (5.9), which is the lowest level recorded since the corresponding period in 2020. Axfood’s target is for sickness-related absence not to exceed 5.3%. For more information on Axfood’s sustainability work and key ratios, see the website and the 2022 Annual and Sustainability Report. Sustainability key ratios Q3 2023 Q3 2022 Change 9 mos. 2023 9 mos. 2022 Change R12 Full-year 2022 Sustainability-labelled products, share of sales, % 26.0 25.9 0.1 26.4 27.1 -0.7 26.1 26.6 Organic products, share of sales, % 4.4 5.2 -0.8 4.6 5.2 -0.6 4.6 5.1 KRAV-certified meat, share of sales, % 2.6 2.7 0.0 2.6 2.9 -0.4 2.5 2.7 Growth in vegetarian protein substitutes, % 1.9 7.9 -6.1 4.2 1.4 2.7 3.8 1.7 Share of approved social audits, % 94.7 95.5 -0.7 95.2 98.5 -3.3 94.4 96.8 Electricity consumption, kWh/m2 (stores and warehouses) — — — — — — 238.6 276.2 CO2e, kg/tonne of goods 11.6 11.9 -0.3 13.2 13.1 0.1 13.2 13.6 Share of women in management positions, % — — — 50.5 50.6 -0.1 — 50.7 Sickness-related absence, % 5.5 5.9 -0.4 6.3 7.1 -0.8 6.4 7.0 Axfood interim report 1 January– 30 September 2023 | 8 ===== SIDA 9 ===== Operating segment performance Willys Third quarter Net sales totalled SEK 10,945 m (9,450), an increase of 15.8%. Growth in retail sales amounted to 15.8%, which was significantly higher than the market. Growth in like-for-like sales amounted to 12.4%. As food price inflation has increased, price value has become increasingly relevant to consumers, resulting in increased customer traffic. Volume growth, pricing and positive mix effects contributed to the Willys chain’s strong performance. Within cross-border shopping, Eurocash’s sales increased. The number of stores in the segment amounted to 239 (230), of which 178 (171) were Willys stores, 54 (52) were Willys Hemma stores and 7 (7) were Eurocash stores. At the end of the quarter, online shopping was offered in 153 (138) stores. Operating profit increased and totalled SEK 652 m (602), corresponding to an operating margin of 6.0% (6.4). The increase in operating profit was primarily attributable to the strong growth in like-for-like sales and effective cost control. Price increases by suppliers were not fully reflected in prices for consumers, which had a negative effect on the gross margin. Operating profit was negatively impacted by increased market investments, higher personnel costs and increased rental levels. January - September Willy´s net sales for the period totalled SEK 32,432 m (27,071), an increase of 19.8% compared with the corresponding period during the prior year. Willys growth in retail sales was 19.8%. Operating profit amounted to SEK 1,608 m (1,434) and the operating margin was 5.0% (5.3). Willys key ratios Q3 2023 Q3 2022 Change 9 mos. 2023 9 mos. 2022 Change R12 Full-year 2022 Net sales, SEK m 10,945 9,450 15.8% 32,432 27,071 19.8% 42,813 37,451 Operating profit, SEK m 652 602 8.3% 1,608 1,434 12.2% 2,033 1,859 Operating margin, % 6.0 6.4 -0.4 5.0 5.3 -0.3 4.7 5.0 Retail sales, SEK m 10,951 9,453 15.8% 32,440 27,079 19.8% 42,818 37,458 Like-for-like sales growth, % 12.4 18.3 -5.9 16.6 11.1 5.5 — 13.5 Number of stores — — — 239 230 9 — 232 of which, Wilys — — — 178 171 7 — 173 of which, Willys Hemma — — — 54 52 2 — 52 of which, Eurocash — — — 7 7 — — 7 Stores offering online shopping — — — 153 138 15 — 149 Private label products, share of sales, % 33.6 32.9 0.7 34.2 32.9 1.3 33.9 33.1 Sustainability-labelled products, share of sales % 27.5 26.6 0.9 28.0 28.0 0.0 27.7 27.4 Average number of employees — — — 7,126 6,732 394 — 6,669 Share of women in management positions, %1) — — — 62.4 60.4 2.0 — 60.6 Sickness-related absence. % 5.3 5.7 -0.4 6.2 7.0 -0.8 6.2 6.8 1) The definition of “Share of women in management positions” has been revised to also include team managers. Comparison figures have been restated. Axfood interim report 1 January– 30 September 2023 | 9 Net sales and operating margin 7.3 7.9 7.9 9.4 10.9 6.3 6.0 5.8 6.4 6.0 Net sales, SEK bn Operating margin, % Q3 2019 Q3 2020 Q3 2021 Q3 2022 Q3 2023 With the business concept of offering Sweden’s cheapest bag of groceries, Willys is the country’s leading discount grocery chain, offering a broad assortment both in Group-owned stores and online. The Willys operating segment includes the concepts Willys, Willys Hemma, the partly owned cross- border grocery chain Eurocash and a minority stake in the City Gross hypermarket chain. ===== SIDA 10 ===== Hemköp Third quarter Net sales (including franchise fees) amounted to SEK 1,779 m (1,608), an increase of 10.6%. Growth in retail sales (including Tempo) amounted to 7.6%, which is more than the market and significantly higher than the rate of growth in the traditional grocery segment. Growth in like-for-like sales amounted to 6.4%. Hemköp is continuing to strengthen its position by focusing on sustainability and price value, and investing in the modernisation of existing stores. The development of Hemköp stores was better than the development of Tempo stores. The number of stores in the segment amounted to 332 (332), of which 65 (64) were Group-owned Hemköp stores, 136 (137) were retailer-owned Hemköp stores and 131 (131) were retailer-owned Tempo stores. At the end of the quarter, online shopping was offered in 68 (68) stores. Operating profit totalled SEK 78 m (77), corresponding to an operating margin of 4.4% (4.8). The increase in operating profit was primarily attributable to the growth in like-for-like sales and effective cost control. Price increases by suppliers were not fully reflected in prices for consumers, which had a negative effect on the gross margin. Operating profit was negatively impacted by increased market investments, higher personnel costs and increased rental levels. January - September Net sales for Group-owned Hemköp stores (including franchise fees) for the period totalled SEK 5,456 m (4,858), an increase of 12.3%. Growth in retail sales (including Tempo) amounted to 9.6%. Operating profit totalled SEK 222 m (207), corresponding to an operating margin of 4.1% (4.3). Hemköp key ratios Q3 2023 Q3 2022 Change 9 mos. 2023 9 mos. 2022 Change R12 Full-year 2022 Net sales, SEK m 1,779 1,608 10.6% 5,456 4,858 12.3% 7,248 6,650 Operating profit, SEK m 78 77 0.7% 222 207 7.2% 298 283 Operating margin, % 4.4 4.8 -0.4 4.1 4.3 -0.2 4.1 4.3 Retail sales, SEK m 4,923 4,573 7.6% 14,756 13,462 9.6% 19,557 18,263 Like-for-like sales growth, % 6.4 6.4 0.0 8.1 3.8 4.3 — 4.5 Number of stores — — — 332 332 — — 332 of which, Group-owned Hemköp/Tempo stores — — — 65 64 1 — 64 of which, retailer-owned Hemköp stores — — — 136 137 -1 — 137 of which, retailer-owned Tempo stores — — — 131 131 — — 131 Hemköp stores offering online shopping — — — 68 68 — — 68 Private label products, share of sales, % 26.6 25.6 1.0 27.3 26.3 1.0 26.9 26.2 Sustainability-labelled products, share of sales % 26.6 26.8 -0.2 26.7 27.5 -0.8 26.4 27.0 Average number of employees — — — 1,667 1,646 21 — 1,632 Share of women in management positions, %1) — — — 51.0 50.7 0.2 — 49.4 Sickness-related absence. % 5.6 5.5 0.1 6.1 6.7 -0.6 6.2 6.7 1) The definition of “Share of women in management positions” has been revised to also include team managers. Comparison figures have been restated. Axfood interim report 1 January– 30 September 2023 | 10 Net sales and operating margin 1.5 1.5 1.5 1.6 1.8 4.4 4.2 5.2 4.8 4.4 Net Sales, SEK bn Operating margin, % Q3 2019 Q3 2020 Q3 2021 Q3 2022 Q3 2023 Hemköp offers a broad, attractively priced assortment with a rich offering of fresh product. Through Group-owned stores, retailer-owned stores and an online business, Hemköp inspires good meals. The Hemköp operating segment also includes Tempo, a mini-mart format comprising retailer-owned stores. ===== SIDA 11 ===== Snabbgross Third quarter Net sales totalled SEK 1,437 m (1,324), an increase of 8.6% which was more than the market. Growth in like-for-like sales amounted to 7.4%. Developments in newly established stores and sales to consumers through the member- based Snabbgross Club store concept contributed to this growth. The number of stores in the segment amounted to 30 (29), of which 25 (26) were Snabbgross stores and 5 (3) were Snabbgross Club stores. In addition to establish- ments of new Snabbgross Club stores, existing stores are being converted to the concept on an ongoing basis. Operating profit amounted to SEK 86 m (90), corresponding to an operating margin of 6.0% (6.8). The positive earnings effect of the growth in like-for-like sales was offset by costs related to new store establishments, increased personnel costs and higher rental levels. January - September Net sales for the period was SEK 4,072 m (3,557), an increase of 14.5%. Operating profit for the period amounted to SEK 207 m (201) and the operating margin was 5.1% (5.6). Snabbgross key ratios Q3 2023 Q3 2022 Change 9 mos. 2023 9 mos. 2022 Change R12 Full-year 2022 Net sales, SEK m 1,437 1,324 8.6% 4,072 3,557 14.5% 5,242 4,727 Operating profit, SEK m 86 90 -4.3% 207 201 3.4% 259 252 Operating margin, % 6.0 6.8 -0.8 5.1 5.6 -0.5 4.9 5.3 Wholesale sales, SEK m 1,442 1,329 8.5% 4,087 3,571 14.4% 5,264 4,748 Like-for-like sales growth, % 7.4 12.9 -5.5 12.2 21.6 -9.4 — 20.1 Number of stores — — — 30 29 1 — 29 of which, Snabbgross — — — 25 26 -1 — 24 of which, Snabbgross Club — — — 5 3 2 — 5 Sustainability-labelled products, share of sales % 18.9 18.3 0.7 19.1 18.8 0.3 19.0 18.8 Average number of employees — — — 577 530 47 — 524 Share of women in management positions, %1) — — — 41.1 37.3 3.8 — 40.7 Sickness-related absence. % 5.7 6.5 -0.8 6.4 7.4 -1.0 6.7 7.5 1) The definition of “Share of women in management positions” has been revised to also include team managers. Comparison figures have been restated. Axfood interim report 1 January– 30 September 2023 | 11 Net sales and operating margin 0.9 1.0 1.1 1.3 1.4 6.2 6.5 6.8 6.8 6.0 Net sales, SEK bn Operating margin, % Q3 19 Q3 20 Q3 21 Q3 22 Q3 23 Snabbgross is one of Sweden’s leading restaurant wholesalers with a customer base of restaurants, fast food operators and cafés. Snabbgross offers personal service, accessibility, and quality at its stores and online. The Snabbgross operating segment also includes the concept Snabbgross Club, which is directed at consumers. ===== SIDA 12 ===== Dagab Third quarter Net sales totalled SEK 18,410 m (16,971), an increase of 8.5%. The growth in net sales was mainly attributable to the increase in sales to food retail stores. Operating profit amounted to SEK 280 m (253), corresponding to an operating margin of 1.5% (1.5). Operating profit includes items affecting comparability of SEK -60 m (-56), which pertained entirely to parallel warehouse operation during the transition to the new logistics centre in Bålsta. Adjusted operating profit amounted to SEK 340 m (309) and the adjuster operating profit was 1.8% (1.8). The higher operating profit was primarily attributable to strong growth. The higher operating profit was primarily attributable to favourable growth. Operating profit was impacted by negative currency effects, which were offset by synergy effects from the acquisition of Bergendahls Food. The work on the Group’s new warehouse and logistics structure is proceeding. The scale-up of the new logistics centre in Bålsta continued during the third quarter, with significantly higher delivery volumes of products from the dry assortment. The refrigerated area of the facility was put into operation at the end of the quarter, and the first deliveries were made in mid-October. January - September Net sales for the period totalled SEK 55,167 m (48,780), an increase of 13.1%. Operating profit amounted to SEK 773 m (915), corresponding to an operating margin of 1.4% (1.9). Operating profit includes items affecting comparability of SEK -179 m (70), which pertained entirely to parallel warehouse operation during the transition to the new logistics centre in Bålsta. In the year-earlier period, items affecting comparability included a capital gain of SEK 221 m for the divestment of Mat.se. Dagab key ratios Q3 2023 Q3 2022 Change 9 mos. 2023 9 mos. 2022 Change R12 Full-year 2022 Net sales SEK m 18,410 16,971 8.5% 55,167 48,780 13.1% 73,387 66,999 Operating profit, SEK m 280 253 10.4% 773 915 -15.5% 836 978 Operating profit excl. items affecting comparability, SEK m1) 340 309 9.9% 952 845 12.7% 1,247 1,139 Operating margin, % 1.5 1.5 0.0 1.4 1.9 -0.5 1.1 1.5 Operating margin excl. items affecting comparability, %1) 1.8 1.8 0.0 1.7 1.7 0.0 1.7 1.7 Average number of employees — — — 3,354 3,432 -78 — 3,438 Share of women in management positions, %2) — — — 28.5 29.9 -1.4 — 28.8 Sickness-related absence. % 6.1 6.7 -0.6 7.0 8.1 -1.0 7.6 7.9 1) See Note 9 Items affecting comparability for more information. 2) The definition of “Share of women in management positions” has been revised to also include team managers. Comparison figures have been restated. Axfood interim report 1 January– 30 September 2023 | 12 Net sales and operating margin 11.2 12.0 12.2 17.0 18.4 1.6 2.1 1.9 1.5 1.5 Net sales, SEK bn Operating margin, % Q3 19 Q3 20 Q3 21 Q3 22 Q3 23 Dagab operates and develops the Group’s assortment, purchasing and logistics, but also conducts sales to external customers. The Dagab operating segment also includes retailer-owned Handlar’n and Matöppet, the meal kit company Middagsfrid, the online pharmacy Apohem and the restaurant chain Urban Deli. ===== SIDA 13 ===== Other information Long-term targets and capital expenditures 2023 Axfood’s long-term financial targets: • Grow faster than the market • Long-term operating margin of at least 4.5% • Equity ratio of at least 20% at year-end Axfood’s dividend policy is that the shareholder dividend is to be at least 50% of profit after tax. The dividend is to be paid out on two occasions. Investments in 2023 are expected to amount to between SEK 1,800 m and SEK 1,900 m, excluding acquisitions and right-of-use assets, of which approximately SEK 400 m pertains to the new logistics centre in Bålsta outside Stockholm and SEK 170 m pertains to the nationwide warehouse for fruits and vegetables in Landskrona (the majority of which concerns automation). During 2023, Axfood plans to speed up its rate of expansion by establishing 10–15 new stores. Costs affecting comparability of approximately SEK 250 m are expected to be charged against Axfood’s operating profit for 2023 in order to ensure stable operation and a transition to the new logistics centre in Bålsta outside Stockholm. The investments are expected to result in SEK 200-300 m in annual efficiency improvements beginning in the second half of 2024, which will then increase to SEK 300-400 m at full capacity. Nominating Committee Ahead of the 2024 AGM and in accordance with the applicable instructions for Axfood’s Nominating Committee, the following Nominating Committee has been appointed. The Nominating Committee consists of Marie Ehrling (Axel Johnson AB), Caroline Sjösten (Swedbank Robur Fonder), Sussi Kvart (Handelsbanken Fonder) and Hjalmar Ek (Lannebo Fonder). Marie Ehrling is the Chairman of the Nominating Committee. Axfood’s Chairman, Mia Brunell Livfors, is a co-opted member of the Nominating Committee. Shareholders who wish to submit proposals to the Nominating Committee ahead of the AGM can do so by emailing valberedning@axfood.se. In order for the Nominating Committee to be able to address submitted proposals in a constructive manner, proposals must be received in due time before the AGM. 2024 Annual General Meeting Axfood’s Annual General Meeting (AGM) will be held on 20 March 2024 in Stockholm. All AGM documentation including the Annual and Sustainability Report will be available on the Company’s website not later than three weeks before the AGM. The documents will be available at the Company’s head offices and can be sent by post to shareholders who so request and provide their postal address. Stockholm, 25 October 2023 Klas Balkow, President and CEO Axfood interim report 1 January– 30 September 2023 | 13 ===== SIDA 14 ===== Auditor’s review report To the Board of Directors of Axfood AB (publ) Corporate registration number 556542-0824 Introduction We have reviewed the interim report for Axfood AB (publ) for the period 1 January 2023–30 September 2023. The Board of Directors and the President are responsible for the preparation and presentation of this interim financial information in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review. Scope of the review We conducted our review in accordance with the International Standard on Review Engagements (ISRE) 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review has a different focus and is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (ISA) and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that we would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion based on an audit. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the interim report is not, in all material aspects, prepared for the Group in accordance with IAS 34 and the Annual Accounts Act, and for the Parent Company in accordance with the Annual Accounts Act. Stockholm, 25 October 2023 Deloitte AB Didrik Roos Authorised Public Accountant Axfood interim report 1 January– 30 September 2023 | 14 ===== SIDA 15 ===== Financial statements, Group Condensed statement of profit or loss and other comprehensive income, Group SEK m Q3 2023 Q3 2022 9 mos. 2023 9 mos. 2022 R12 Full-year 2022 Net sales 20,293 18,674 60,342 53,735 80,082 73,474 Cost of goods sold1) -17,471 -16,006 -51,876 -46,131 -69,136 -63,392 Gross profit 2,822 2,668 8,466 7,603 10,946 10,083 Selling expenses1) -945 -866 -2,952 -2,671 -3,902 -3,620 Administrative expenses1) -1,023 -1,006 -3,396 -3,042 -4,593 -4,239 Share of profit in associated companies and joint ventures -16 -11 -39 -39 -66 -66 Other operating income1) 203 195 545 809 770 1,034 Other operating expenses1) -5 -6 -15 -62 -45 -92 Operating profit 1,036 975 2,609 2,599 3,111 3,101 Interest income and similar profit/loss items 21 7 44 11 59 26 Interest expense and similar profit/loss items -100 -41 -280 -125 -347 -193 Profit before tax 956 942 2,373 2,485 2,822 2,935 Tax -219 -197 -532 -468 -629 -564 Net profit for the period 738 745 1,841 2,017 2,194 2,370 Other comprehensive income Items that cannot be reclassified to profit or loss for the period, net after tax Revaluation defined benefit pensions 2 9 7 26 51 70 Changes in holdings measured at fair value2) — -635 -273 -635 -273 -635 Items that can be reclassified to profit or loss for the period, net of tax Changes in hedging reserve -29 22 -48 82 -44 86 Other comprehensive income for the period -27 -604 -315 -528 -266 -479 Total comprehensive income for the period 711 141 1,526 1,489 1,928 1,892 Net profit for the period attributable to Owners of the parent 729 735 1,835 2,011 2,185 2,360 Non-controlling interest 9 10 5 6 9 10 Total comprehensive income for the period attributable to Owners of the parent 702 130 1,521 1,483 1,919 1,882 Non-controlling interest 9 10 5 6 9 10 Earnings per share before dilution, SEK 3.38 3.40 8.50 9.43 10.12 11.04 Earnings per share after dilution, SEK 3.36 3.39 8.46 9.39 10.08 10.99 1) Includes items affecting comparability, see Note 9 Items affecting comparability for more information. 2) See Note 5 Financial assets and liabilities for more information. Axfood interim report 1 January– 30 September 2023 | 15 ===== SIDA 16 ===== Condensed statement of financial position, Group SEK m 30 Sep 2023 30 Sep 2022 31 Dec 2022 Assets Goodwill 3,606 3,406 3,526 Other intangible assets 1,414 1,451 1,464 Property, plant and equipment 5,821 4,731 5,294 Right-of-use assets 8,955 6,332 9,025 Financial assets 611 617 598 Deferred tax assets 258 301 253 Total non-current assets 20,665 16,837 20,159 Inventories 4,237 3,520 3,839 Trade receivables 2,337 2,092 2,143 Other current assets 1,613 1,577 1,917 Cash and cash equivalents 510 295 559 Assets held for sale — 46 — Total current assets 8,696 7,529 8,459 Total assets 29,361 24,367 28,618 Equity and liabilities Equity attributable to owners of the parent 6,353 6,194 6,609 Equity attributable to non-controlling interests 298 230 292 Total equity 6,651 6,424 6,901 Non-current lease liabilities 7,312 4,785 7,388 Provisions for pensions 265 329 292 Deferred tax liabilities 1,278 1,191 1,289 Other non-current liabilities 7 30 6 Total non-current liabilities 8,862 6,335 8,975 Current lease liabilities 1,711 1,548 1,662 Current interest-bearing liabilities 1,469 502 200 Trade payables 7,138 6,389 7,190 Other current liabilities 3,529 3,169 3,691 Total current liabilities 13,848 11,608 12,743 Total equity and liabilities 29,361 24,367 28,618 Axfood interim report 1 January– 30 September 2023 | 16 ===== SIDA 17 ===== Condensed statement of cash flows, Group SEK m Q3 2023 Q3 2022 9 mos. 2023 9 mos. 2022 R12 Full-year 2022 Operating activities Operating profit 1,036 975 2,609 2,599 3,111 3,101 Adjustments for non-cash items 26 35 101 -146 122 -125 Depreciation, amortisation, impairment 758 642 2,214 1,930 2,900 2,615 Interest paid -101 -38 -280 -116 -331 -167 Interest received 23 3 44 5 51 12 Paid tax -142 -151 -526 -477 -617 -568 Changes in working capital -178 21 -574 289 195 1,058 Cash flow from operating activities 1,423 1,487 3,588 4,083 5,432 5,927 Investing activities Acquisitions of operations — — -3 10 -3 10 Acquisitions of intangible assets -79 -52 -322 -207 -489 -374 Acquisitions of property, plant and equipment -229 -222 -1,095 -1,503 -1,811 -2,219 Acquisitions of financial assets — -14 -241 -135 -262 -156 Other changes in investing activities 1 2 11 -37 9 -39 Cash flow from investing activities -307 -286 -1,650 -1,872 -2,556 -2,778 Financing activities Issue of shares — — — 1,485 — 1,485 Loans raised 1,154 302 3,339 463 3,539 663 Amortisation of debt -1,199 -726 -3,508 -2,837 -4,441 -3,770 Shareholder contribution from minority owners — — — — 59 59 Share repurchases — — -59 -115 -59 -115 Dividend paid out -863 -810 -1,759 -1,646 -1,759 -1,646 Cash flow from financing activities -908 -1,235 -1,987 -2,650 -2,661 -3,324 Cash flow for the period 208 -34 -49 -439 215 -175 Condensed statement of changes in equity, Group SEK m 30 Sep 2023 30 Sep 2022 31 Dec 2022 Amount at start of year 6,901 5,176 5,176 Total comprehensive income for the period 1,526 1,489 1,892 Change in non-controlling interests — — 0 Rights issue1) — 1,485 1,485 Share repurchases -59 -115 -115 Share-based payments 42 34 50 Shareholder contribution from minority owners — — 59 Dividend to shareholders -1,759 -1,646 -1,646 Amount at end of period 6,651 6,424 6,901 1) See Note 8 Equity for more information Axfood interim report 1 January– 30 September 2023 | 17 ===== SIDA 18 ===== Financial statement, Parent Company Condensed income statement, Parent Company SEK m Q3 2023 Q3 2022 9 mos. 2023 9 mos. 2022 Full-year 2022 Net sales 5 2 16 6 8 Selling and administrative costs -134 -117 -412 -344 -514 Other operating income 95 73 286 226 301 Operating profit -33 -42 -110 -112 -205 Net financial items -2 2 728 257 260 Profit/loss after financial items -35 -40 618 145 56 Appropriations, net — — — — 2,154 Profit before tax -35 -40 618 145 2,209 Tax -1 7 11 19 -410 Net profit for the period -36 -33 629 164 1,799 Net profit/loss for the period corresponds to total comprehensive income for the period. Condensed balance sheet, Parent Company SEK m 30 Sep 2023 30 Sep 2022 31 Dec 2022 Assets Property, plant and equipment 29 34 33 Participations in Group companies 4,412 4,319 4,389 Other financial assets 1 1 1 Deferred tax assets 7 8 8 Total non-current assets 4,449 4,362 4,431 Receivables from Group companies1) 5,608 3,975 6,244 Other current assets 424 351 28 Cash and cash equivalents 4 11 96 Total current assets 6,036 4,338 6,368 Total assets 10,485 8,700 10,799 Equity and liabilities Restricted equity 296 296 296 Non-restricted equity 2,915 2,411 4,062 Total equity 3,211 2,708 4,358 Untaxed reserves 3,661 3,847 3,661 Provisions 1 6 6 Non-current liabilities 8 9 8 Current interest-bearing liabilities 1,469 502 200 Trade payables 18 12 18 Liabilities to Group companies2) 2,025 1,823 2,363 Other current liabilities 91 154 186 Total current liabilities 3,604 2,490 2,767 Total equity and liabilities 10,485 8,700 10,799 1) Of which, interest-bearing receivables 4,858 3,936 3,849 2) Of which, interest-bearing liabilities 2,024 1,823 2,291 Axfood interim report 1 January– 30 September 2023 | 18 ===== SIDA 19 ===== Notes Note 1 Accounting policies Axfood applies the International Financial Reporting Standards (IFRS) as endorsed by the EU. The accounting policies, measurement principles and definitions applied correspond with those described in the 2022 Annual and Sustainability Report, except for what is stated below. This interim report has been prepared for the Group in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. For the Parent Company, the interim report has been prepared in accordance with recommendation RFR 2 Accounting for Legal Entities, issued by the Swedish Financial Reporting Board (RFR), and the Swedish Annual Accounts Act. New accounting policies effective in 2023 and later Axfood has determined that new or amended standards and interpretations do not and will not have any material effect on the consolidated financial statements. Significant estimates and assessments Preparing the financial statements in accordance with IFRS requires the Board and Executive Committee to make judgements and estimates as well as assumptions that affect the application of the accounting policies and the Company’s result and position as well as other disclosures in general. The actual outcome may deviate from these estimates and assessments. Note 2 Other material information Seasonal effects Axfood’s sales are affected to some degree by seasonal variations. Sales increase in the quarter in which Easter falls, which is either the first or second quarter. Sales also increase ahead of Midsummer during the second quarter as well as ahead of the major holiday season during the fourth quarter. Significant risks and uncertainties Like all business activities, Axfood’s business is exposed to risks. The risks are broken down into operational, strategic and financial risks. Climate and environmental risks are included in operational risks. In recent years, the risk scenario has been impacted by a number of external factors, such as the spread of the Covid-19 pandemic and the war in Ukraine. The risks that could have the greatest impact on the Group are the risk of disruptions in the logistics chain, IT and information security risks, and liability and trust risks. Axfood works continuously with risk identification and assessment. Major emphasis is placed on preventive work and on planning to maintain operating continuity in the event of unforeseen events. For a thorough account of the risks that affect the Group, please refer to the 2022 Annual and Sustainability Report. Transactions with related parties The Axfood Group’s transactions with related parties, aside from those covered by the consolidated financial statements, consist of transactions with associated companies and with subsidiaries within the Axel Johnson Group. During the second quarter, a company was acquired from Axel Johnson AB. The acquisition is not considered material. Electricity support for businesses In the second quarter, the government decided on electricity support for businesses. For businesses that are part of an associate enterprise, electricity support for the entire associate enterprise may amount to a maximum of SEK 20 m. Since Axfood is part of the Axel Johnson Group, Axfood has received its proportional share of the associate enterprise’s total electricity support, which for Axfood amounted to SEK 16 m. The support is recognised as other revenue in each segment in the third quarter. Note 3 Operating segments Segments have been defined based on how Axfood’s Executive Committee monitors and governs the operations to evaluate performance and allocate resources. The operating segments that have been identified are Willys, Hemköp, Snabbgross and Dagab. Joint-Group pertains to support functions, such as the Executive Committee, Accounting, Legal Affairs, HR, Communications, Business Development and IT. The Executive Committee reviews the segments’ operating profit or loss, both including and excluding items affecting comparability. For information about Axfood’s operating segments, see pages 9-12 of this interim report. For a more detailed description of the segments, please refer to the 2022 Annual and Sustainability Report. Note 4 Acquired and divested operations No significant acquisitions or divestment took place in the third quarter 2023. Axfood interim report 1 January– 30 September 2023 | 19 ===== SIDA 20 ===== Note 5 Financial assets and liabilities Financial assets measured at fair value amounted to SEK 147 m (271). SEK 14 m (66) is attributable to Level 2 of the fair value hierarchy and SEK 134 m (206) is attributable to Level 3. Financial liabilities measured at fair value amounted to SEK 35 m (0). The entire amount is attributable to Level 2 of the fair value hierarchy. The carrying amount of the call option agreement entered into with City Gross in conjunction with the acquisition amounted to SEK 0 m (0). The call option agreement is recognised at fair value based on an assessment of the change in City Gross’s future sales and earnings performance. The carrying amount of the participation in Mathem amounted to SEK 134 m (206). Carrying amount of the participation in Mathem amounted to SEK 134 m at the beginning of the quarter. Axfood's shareholding in Mathem amounted to 18.5% (16.5). The valuation corresponds to an EV/sales multiple of 0.3x based on Mathem’s LTM sales as of 30 June 2023. A 10% increase in the multiple would have resulted in a valuation of SEK 146 m, while a corresponding reduction of the multiple would have resulted in a valuation of SEK 122 m. Forward exchange contracts are measured at fair value based on the Central Bank of Sweden’s spot rates on the accounting date, which is assessed to be a reasonable approximation of fair value. Note 6 Pledged assets and contingent liabilities Group, SEK m 30 Sep 2023 30 Sep 2022 31 Dec 2022 Parent Company, SEK m 30 Sep 2023 30 Sep 2022 31 Dec 2022 Pledged assets — — — Pledged assets — — — Contingent liabilities 19 20 20 Contingent liabilities 256 244 256 Note 7 Long-term share-based incentive programmes The 2023 AGM resolved to adopt a new long-term share- based incentive programme that runs over a three-year period, LTIP 2023. The programme corresponds in all essential respects to LTIP 2022, with the exception that the number of savings shares that may be allocated has been reduced to the number of shares that applied for LTIP 2021 and the reference group of companies for measuring the share price performance has been adjusted for a delisted share. To secure the Company´s obligations under LTIP 2023, Axfood repurchased 155,000 shares for a total of SEK 37 m during the second quarter of 2023, at an average price of SEK 239.53 per share. The holding of treasury shares amounts to 1,065,652 shares, which is sufficient to secure the delivery of shares for all the Company´s incentive programmes. For more information about incentive programmes, see Axfood’s 2022 Annual and Sustainability Report. Note 8 Equity A rights issue was carried out during the second quarter of 2022. The rights issue comprised 6,972,528 shares, and Axfood received SEK 1,499 m from the rights issue before issue costs. The number of registered shares is 216,843,240 after the rights issue. Axfood interim report 1 January– 30 September 2023 | 20 Changes in the fair value of financial assets attributable to Level 3, SEK m Amount at start of year 206 Convertible loans 101 Revaluation via other comprehensive income -273 Conversion of convertible loans/issue of convertibles 17 New issue 83 Amount at end of period 134 Change in number of shares and share capital Number of shares Share capital, SEK 1 January 2022 209,870,712 262,338,390 Rights issue 2022 6,972,528 8,715,660 31 December 2022 216,843,240 271,054,050 ===== SIDA 21 ===== Note 9 Items affecting comparability Items affecting comparability in the third quarter of 2023 amounted to SEK -60 m and cumulative items affecting comparability amounted to SEK -179 m. Items affecting comparability pertained entirely to parallel warehouse operations within Dagab. The costs mainly included premises and personnel costs and were entirely attributable to the transition to the new logistics centre in Bålsta. The costs are included in cost of goods sold. Items affecting comparability in the third quarter of 2022 comprised integration costs, structural costs and a repayment from Fora/Afa. Cumulative items affecting comparability also included a capital gain. Integration costs totalled SEK -16 m during the quarter and cumulative integration costs totalled SEK -74 m. The costs pertained entirely to the integration of Bergendahls Food and were included in other operating expenses. Structural costs in the quarter amounted to SEK -40 m and cumulative structural costs amounted to SEK -77 m. Structural costs pertained to costs connected with the restructuring of Dagab’s logistics operations and were included in cost of goods sold. The capital gain of a cumulative SEK 221 m pertained to earnings from the divestment of Mat.se, which was recognised in other operating income. Fora/Afa amounted to SEK 16 m in the quarter and cumulative Fora/Afa amounted to SEK 33 m and pertained to a repayment from Fora/Afa employer’s liability. The revenue was included in other operating income. Segment Q3 2023 Q3 2022 9 mos. 2023 9 mos. 2022 R12 Full-year 2022 Parallel warehouse operations Dagab -60 — -179 — -179 — Integration costs Dagab — -16 — -74 -46 -120 Structural costs Dagab — -40 — -77 -186 -263 Capital gain Dagab — — — 221 — 221 Fora/Afa Joint-Group — 16 — 33 — 33 Total -60 -40 -179 103 -410 -129 Note 10 Significant events after the balance sheet date Hans Bax was recruited 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 interim report 1 January– 30 September 2023 | 21 ===== SIDA 22 ===== Key ratios Change in store structure Number of stores Dec 2022 New establishment/ acquisitions Sales/ closures Conversions Sep 2023 Sep 2022 Willys/Willys Hemma/Eurocash 232 7 — — 239 230 Hemköp/Tempo, Group-owned stores 64 1 -1 1 65 64 Snabbgross/Snabbgross Club 29 1 — — 30 29 Total, Group-owned stores 325 9 -1 1 334 323 Hemköp, retailer-owned stores 137 2 -2 -1 136 137 Tempo, retailer-owned stores 131 2 -2 — 131 131 Total, retailer-owned stores 268 4 -4 -1 267 268 Total, Group-owned and retailer-owned stores 593 13 -5 0 601 591 Key ratios and other data, Group 9 mos. 2023 9 mos. 2022 Full-year 2022 Operating margin, % 4.3 4.8 4.2 Operating margin excl. items affecting comparability, % 4.6 4.6 4.4 Equity ratio, % 22.7 26.4 24.1 Net debt (+)/net receivable (-), SEK m 10,247 6,868 8,982 Net debt (+)/net receivable (-) excl. IFRS 16, SEK m 1,224 536 -68 Net debt/EBITDA, multiple 1.7 1.2 1.6 Net debt/EBITDA excl. IFRS 16, multiple 0.3 0.1 0.0 Net debt-equity ratio (+)/net receivable-equity ratio (-), multiple 1.5 1.1 1.3 Net debt-equity ratio (+)/net receivable-equity ratio (-), excl. IFRS 16, multiple 0.2 0.1 0.0 Capital employed, SEK m 17,408 13,588 16,442 Return on capital employed R12, % 20.5 25.8 20.9 Return on equity R12, % 34.8 49.9 40.8 Average number of employees during the year 13,269 12,834 12,772 Total capital expenditures, SEK m 2,845 2,926 6,967 Investments in intangible assets and in property, plant and equipment, SEK m 1,417 1,709 2,593 Depreciation/amortisation, SEK m -2,214 -1,930 -2,580 Number of shares outstanding at end of period 215,777,588 215,805,384 215,805,384 Average number of shares outstanding before dilution 215,805,142 212,221,661 213,117,592 Average number of shares outstanding after dilution 216,835,622 213,100,288 214,036,026 Key data per share Earnings per share before dilution, SEK 8.50 9.43 11.04 Earnings per share before dilution excl. items affecting comparability, SEK 9.16 8.89 11.36 Earnings per share after dilution, SEK 8.46 9.39 10.99 Ordinary dividend per share, SEK1) — — 8.15 Equity per share, SEK 29.44 28.70 30.62 Cash flow per share, SEK -0.23 -2.07 -0.82 1) Paid out on two occasions. Axfood interim report 1 January– 30 September 2023 | 22 ===== SIDA 23 ===== Quarterly overview, Group SEK m Q3 2023 Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 Q4 2021 Net sales 20,293 20,797 19,252 19,740 18,674 18,468 16,593 17,062 Operating profit 1,036 878 695 502 975 789 835 739 Operating profit excl. items affecting comparability 1,095 942 750 734 1,015 828 653 653 Operating margin, % 5.1 4.2 3.6 2.5 5.2 4.3 5.0 4.3 Operating margin excl. items affecting comparability, % 5.4 4.5 3.9 3.7 5.4 4.5 3.9 3.8 Net profit for the period 738 631 472 353 745 590 682 608 Earnings per share before dilution, SEK1) 3.38 2.93 2.20 1.62 3.40 2.75 3.27 2.90 Earnings per share before dilution excl. items affecting comparability, SEK1) 3.60 3.16 2.40 2.47 3.55 2.90 2.43 2.57 Cash flow from operating activities 1,423 1,684 481 1,844 1,487 1,167 1,429 1,288 Cash flow from operating activities per share, SEK 6.59 7.80 2.23 8.54 6.89 5.51 6.83 6.16 Return on capital employed R12, % 20.5 20.6 20.3 20.9 25.8 26.4 26.5 22.4 Return on equity R12, % 34.8 37.4 47.1 40.8 49.9 51.3 65.5 46.3 Equity per share, SEK 29.44 26.11 23.44 30.62 28.70 28.15 19.35 23.68 Total capital expenditures 594 835 1,417 4,046 544 1,247 1,135 929 Investments in intangible assets and property, plant and equipment 309 558 551 883 274 904 531 616 Depreciation/amortisation -758 -756 -700 -651 -642 -644 -644 -634 Items affecting comparability -60 -64 -55 -232 -40 -39 182 86 Net debt (+)/net receivable (-) 10,247 10,226 10,889 8,982 6,868 7,005 8,225 7,640 Share price, SEK 250.40 228.20 253.20 285.90 254.90 294.30 306.20 260.40 1) Comparison figures were restated for the bonus issue element of the rights issue that was completed in the second quarter of 2022. Axfood interim report 1 January– 30 September 2023 | 23 ===== SIDA 24 ===== Financial key ratios In addition to the financial key ratios prepared in accordance with IFRS, Axfood presents financial key ratios that are not defined by IFRS or by the Swedish Annual Accounts Act, so- called alternative performance measures (APMs). These APMs aim to provide supplementary information that contributes to analysing Axfood’s operations and development. The APMs used are considered generally accepted in the industry. APMs should not be seen as a substitute for financial information presented in accordance with IFRS, but as a complement. The APMs are defined below under the financial key ratio definitions. Certain APMs are also reported excluding IFRS 16 to enable a follow-up of operational development excluding the technical accounting effects as a result of IFRS 16. Some APMs are also reported excluding items affecting comparability since the adjusted performance measure provides a better understanding of the operations’ underlying development when comparing between periods. Reconciliation of EBITDA SEK m Q3 2023 Q3 2022 9 mos. 2023 9 mos. 2022 R12 Full-year 2022 Operating profit 1,036 975 2,609 2,599 3,111 3,101 Depreciation, amortisation, impairment 758 642 2,214 1,930 2,900 2,615 EBITDA 1,794 1,617 4,823 4,528 6,010 5,716 IFRS 16 Lease fees -553 -461 -1,638 -1,373 -2,169 -1,904 EBITDA excl. IFRS 16 1,241 1,157 3,185 3,155 3,842 3,812 For reconciliation of additional key ratios, see Axfood´s Website, axfood.com. Financial key ratio definitions Capital employed: Total assets less non-interest-bearing liabilities and non-interest-bearing provisions. Measures the Group’s capital use and efficiency. Cash flow from operating activities per share: Cash flow from operating activities for the period divided by the average number of shares outstanding before dilution. Indicates cash flow generated from operating activities. Cash flow per share: Cash flow for the period divided by the average number of shares outstanding before dilution. Indicates cash flow generated per share. Earnings per share (defined in IFRS): Net profit for the period attributable to owners of the parent divided by the average number of shares outstanding. Reported both before and after dilution. Earnings per share are also reported based on earnings excluding items affecting comparability. EBITDA: Operating profit before depreciation, amortisation and impairment. Also reported excluding the effects of reporting in accordance with IFRS 16 as EBITDA excl. IFRS 16. Indicates the underlying development of the operations. Equity per share: Share of equity attributable to owners of the parent divided by the number of shares outstanding at the end of the period. Indicates shareholders’ share of the Company’s total equity per share. Equity ratio: Equity including non-controlling interests as a percentage of total assets. An equity ratio of at least 20% at year-end is one of Axfood’s Group-wide strategic targets. Items affecting comparability: Financial effects in connection with major acquisitions and divestments or other major structural changes as well as material non-recurring items that are relevant in order to understand the results when comparing between periods. Net debt/EBITDA: Net debt divided by EBITDA on a rolling 12-month basis. Also reported excluding the effects of reporting in accordance with IFRS 16. Indicates the Group’s ability to pay its debt. Net debt-equity ratio/net receivable-equity ratio: Net debt/ net receivable divided by equity including non-controlling interests. Also reported excluding the effects of reporting in accordance with IFRS 16. Indicates the Company’s debt-equity ratio. Net debt/net receivable: Interest-bearing non-current and current receivables and liabilities less cash and cash equivalents and interest- bearing financial assets. Net indebtedness is also referred to as net debt. Net receivable is also referred to as net receivables. Used to show the Company’s net interest-bearing assets and liabilities. Net debt/net receivable excluding IFRS 16: Interest-bearing non-current and current receivables and liabilities, excluding lease liabilities, less cash and cash equivalents and interest-bearing financial assets. Operating margin: Operating profit as a percentage of net sales for the period. An operating margin of at least 4.5% is one of Axfood’s strategic Group-wide targets. Operating margin excluding items affecting comparability: Operating profit excluding items affecting comparability as a percentage of net sales for the period. Also referred to as adjusted operating margin. Operating profit: Profit before net financial items and tax. Indicates profitability for operating activities. Operating profit excluding items affecting comparability: Profit before net financial items and tax adjusted for items affecting comparability. Also referred to as adjusted operating profit. Return on capital employed: Profit after financial items, plus financial expenses on a rolling 12-month basis as a percentage of average capital employed. Indicates profitability in both equity and borrowed capital in the Company. Return on equity: The share of net profit for the period on a rolling 12-month basis attributable to owners of the parent as a percentage of the share of average equity attributable to owners of the parent. Indicates the return that owners receive on capital invested. Sales growth: Percentage change in sales between two periods. Axfood monitors growth in both retail sales and net sales. One of Axfood’s Group- wide strategic targets is to grow faster than the market and growth in retail sales is the target Axfood uses to measure this. Axfood interim report 1 January– 30 September 2023 | 24 ===== SIDA 25 ===== Operating key ratio definitions and glossary Average number of employees: Total number of hours worked divided by the number of hours worked per year of 1,920. Joint-Group: Pertains to support functions, such as the Executive Committee, Finance/Accounting, Legal Affairs, Communications, Business Development, HR and IT. Like-for-like sales: Sales in stores that existed and generated sales in the current period and the comparison period. Online sales: Reported online sales of the concepts Willys, Hemköp Group- owned stores and Hemköp retailer-owned stores. Private label products, share of sales: Sales of private label products, excluding meat, fruits and vegetables, as a percentage of retail sales. R12: The sum of the past 12 months determined on a rolling basis. Retail sales: Reported store sales including online sales for the concepts Willys, Willys Hemma, Eurocash, Hemköp Group-owned stores, Hemköp retailer-owned stores and Tempo, excluding adjustments mainly related to customer bonuses. Share price: Closing share price. Wholesale sales: Company and private customer sales including online for the concepts Dagab and Snabbgross (including Snabbgross Club). Key ratio definitions for sustainability Electricity consumption in stores and warehouses: Reported as the number of kilowatt hours (kWh) of purchased electricity used per square metre (sq. m.). The selection includes electricity consumption under joint contracts for a total of 303 of Axfood’s Group-owned stores and ten warehouses. The number of square metres corresponds to the total area of all stores and warehouses in the selection. Reported data is presented on a rolling 12-month basis. As of the first quarter of 2023, more warehouses are included in the calculation since they are now encompassed by Axfood’s central power purchase agreement. Comparison figures have not been restated. Emissions from own transports: Emissions (kg CO2e) from purchased fuel (litres) in relation to total transported goods (tonnes) between warehouses and stores. Reported data pertains only to goods delivered by own transports. Reported data for the quarter and accumulated are presented with a one-month lag. Gender equality: The share of women in management positions at the end of the current period. Management positions are defined as employed managers with employee responsibility, including the Executive Committee. As of the first quarter of 2023, the key ratio has been redefined to also include team managers. Comparison figures have been restated. Reported data is presented on a rolling 12-month basis. Growth in vegetarian protein substitutes: Percentage change in sales of vegetarian protein substitutes compared with the year-earlier period. Vegetarian protein substitutes include refrigerated and frozen items. The selection includes Group-owned stores in the Willys, Eurocash, Hemköp and Snabbgross store chains. KRAV-certified meat share of sales: Sales from KRAV-certified meat items (fresh and frozen) as a percentage of the Axfood Group’s total sales of meat products. The selection includes Group-owned stores in the Willys, Hemköp and Snabbgross store chains. Organic products share of sales: Sales from organic-labelled products with a valid country of origin marking as a percentage of Axfood’s total food sales. The selection includes Group-owned stores in the Willys, Eurocash, Hemköp and Snabbgross store chains. Share of approved social audits: Share of social audits where the supplier received a score of A, B or C on a scale of A to E, where A is without remarks and E is unacceptable. Social audits comprise on-site visits and inspections to ensure suppliers fulfil the requirements of Axfood’s Code of Conduct. The selection includes on-site visits carried out by the organisation Amfori BSCI. Sickness-related absence: The number of reported hours of sickness- related absence in relation to scheduled work time. The selection includes active employees in Axfood. Active employees pertains to all employees in the Group except for employees of Urban Deli AB and Hall Miba AB. Internal consultants and employees on parental leave or leave of absence are not included. Sickness-related absence for the third quarter pertains to time worked during the June–August period. Sustainability-labelled products share of sales: Sales from sustainability- labelled products with a valid country of origin marking as a percentage of Axfood’s total food sales. The selection includes Group-owned stores in the Willys, Eurocash, Hemköp and Snabbgross store chains. Axfood interim report 1 January– 30 September 2023 | 25 ===== SIDA 26 ===== About Axfood Axfood is a leader in food retail in Sweden and a family of different concepts in collaboration. Axfood has more than 13,000 employees (FTEs) and net sales of approximately SEK 80 billion. Axfood aspires to be a strong force in society that drives development toward more sustainable food production and consumption. The share is listed on Nasdaq Stockholm and the principal owner is Axel Johnson. Purpose Better quality of life for everyone. Vision A leader in affordable, good and sustainable food. Business concept A family of different concepts in collaboration. Business model and strategy Axfood’s business model covers purchasing and assortment, logistics and sales channels and concepts. The customer is always in focus and value is created for Axfood and the Group’s stakeholders in every step. Axfood pursues a strategy of growth-promoting and efficiency enhancing priorities. The strategy is built on six strategic focus areas: customer offering, customer meeting, expansion, supply chain, work approach and our people. To promote growth, the focus is on developing and offering an attractively priced assortment. Apart from growing sales at existing stores, key initiatives include continued expansion through the e-commerce roll-out and establishment of new formats and more stores. We are striving to increase efficiency in the organisation through a more data-driven work approach and continuous development of logistics solutions of the future. To stay at the forefront, we need to continue building a culture that enables the industry’s best employees to be attracted and developed. Axfood aspires to take the lead in promoting a sustainable food system and to be a strong force for change in society. Long-term financial targets and dividend policy Axfood’s long-term financial targets: • Grow faster than the market • Long-term operating margin of at least 4.5% • Equity ratio of at least 20% at year-end Axfood’s dividend policy is that the shareholder dividend is to be at least 50% of profit after tax. The dividend is to be paid out on two occasions. 2030 targets Axfood’s purpose is to create a better quality of life for everyone. We work to improve and simplify life around food for everyone we impact through our different concepts, operations and brands. Our ambition is to, by 2030: • be Sweden’s most inclusive food company • be the strongest driving force for sustainable food in Sweden • have created a healthier Sweden • be a leader in the development of the simplest and best food experiences Operating segments • Willys has the ambition to offer Sweden’s cheapest bag of groceries and is the leading discount grocery chain. Willys aims to develop the discount segment in food retail with a wide assortment in Group-owned stores and online. The Willys operating segment includes the concepts Willys, Willys Hemma, the partly owned cross-border grocery chain Eurocash and a minority stake in the City Gross hypermarket chain. • Hemköp offers a broad, attractively priced assortment with a rich offering of fresh products. Through Group-owned stores, retailer-owned stores and an online business, Hemköp inspires good meals. The Hemköp operating segment also includes Tempo, a mini-mart format comprising retailer-owned stores. • Snabbgross is one of Sweden’s leading restaurant wholesalers with a customer base of restaurants, fast food operators and cafés. Snabbgross offers personal service, accessibility and quality at its stores and online. The Snabbgross operating segment also includes the concept Snabbgross Club, which is directed at consumers. • Dagab operates and develops the Group’s assortment, purchasing and logistics, but also conducts sales to external customers. The Dagab operating segment also includes retailer-owned Handlar’n and Matöppet, the meal kit company Middagsfrid, the online pharmacy Apohem and the restaurant chain Urban Deli. Investment case • The food retail market is relatively unaffected by economic swings and is driven largely by population growth and inflation. Axfood has a clear strategy for addressing the trends in the market through concrete priorities in six focus areas. The goal is to grow faster than the market with a long-term operating margin of at least 4.5%. • To meet customers’ varying needs, Axfood is a family of different concepts with strong market positions. With a clear expansion plan, a focus on the customer meeting in physical stores and in e-commerce as well as the development of meal solutions, customers’ evolving behaviours in the market are being met. • Economies of scale and cost efficiency are achieved through close collaboration between the central functions and Group companies. Dagab is the joint purchasing and logistics company, setting high demands for price, quality and sustainability. Axfood’s common IT company has a crucial role in the Group’s digital development, automation and data-driven work approach to meet future needs. • Axfood has a solid balance sheet, and the business model generates stable cash flow with efficient management of working capital. During the last five years, the dividend yield has been close to 4%. • Axfood has long been working to be a positive force in society. Axfood is taking the lead in promoting a sustainable food system, and innovative and sustainable products are being launched through the private label assortment. Axfood AB, 107 69 Stockholm Solnavägen 4 Tel. (switchboard): +46 8-553 990 00 Corporate reg. number: 556542-0824 info@axfood.se, axfood.se linkedin.com/company/axfood Instagram: @axfoodkoncernen Twitter: @axfood facebook.com/axfoodkoncernen