FULLTEXT DEL 1 AV 1
Kvartalsrapport Q3 2023
===== 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