Axfood AB · OMXSTO:AXFO
Axfood AB — Q4 2021 Earnings Presentation
45 slides from Axfood AB's earnings presentation, February 2022
Slide 1: A strong quarter ends a successful and eventful year
A strong quarter ends a successful and eventful year Year-end report 2021
Slide 2: Agenda
• Market update • Q4 2021 • Financial position • Update strategic agenda • Outlook 2022 • Q&A 2
Slide 3: Market update
Market update 3
Slide 4: A solid and resilient market
• Strong demand in food retail, solid and resilient market • High comps dampened overall growth, food price inflation higher on sequential basis but still relatively low A solid and • Continued shift in market dynamics following eased restrictions around the Covid-19 pandemic resilient market ‒ Reco
Slide 5: Food retail market
Food retail market Solid demand but high comps, somewhat higher inflation Food retail trade index, sales in stores and online by month Food price inflation by quarter % % 15 5.0 14 12.8 4.5 13 12 4.0 11 10.6 3.5 3.3 3.3 10 9.3 9.0 9 8.2 8.3 3.0 2.8 8 7.6 2.5 2.6 2.5 6.7 2.5 7 6.3 6.4 6.1 5.9 6 5.3 2
Slide 6: Food retail market
Food retail market Continued good growth for physical stores Food retail trade index, physical store sales by month Food retail trade index, online sales by month % % 15 200 191.6 14 13 180 165.3 11.7 12 160 11 10.3 143.2 136.1 137.8 10 140 135.3 8.8 9 8 120 109.1 107.8 101.2 7 6.4 100 6.0 89.1 6 5.
Slide 7: Axfood Q4 2021
Q4 2021 Axfood
Slide 8: Axfood growth versus the market
Axfood growth versus the market Store sales development, total including online Sales development, online Axfood Group store sales Axfood Group online sales Food retail trade index Food retail trade index % % 12 160 11 140 10 120 9 8 100 7 80 6 60 5 4 40 3 3.1 20 2 0 -11.5 1 0.5 -16.7 0 -20 Q1 Q2 Q3
Slide 9: Strong quarter, positive Bergendahls Food impact
Net sales Strong quarter, positive Bergendahls Food impact • Net sales increased 25.1% during the fourth quarter o Positive impact from Bergendahls Food acquisition, but strong sales increase also excluding Bergendahls Food of +5.6% Net sales, SEK m +25.1% o High comps from prior year and relatively
Slide 10: Improved profit and margin
Operating profit Improved profit and margin • Operating profit SEK 739 m (566), adjusted operating profit* SEK 653 m (566) o Items affecting comparability totalled SEK 86 m, of which SEK 112 for Fora/Afa insurance payout, SEK -21 m for Bergendahls integration and SEK -6 m in costs for logistics rest
Slide 11: Willys: Sales growth for Willys and Eurocash
Willys Sales growth for Willys and Eurocash • Net sales increased 3.7%, LFL 1.5% o Comps for Willys among the highest on the market, especially for the Operating margin, % large format Willys stores where prior year growth was +14% Net sales, SEK m +3.7% o Willys the food retail concept on the marke
Slide 12: Hemköp: Solid like-for-like sales, strong profitability
Hemköp Solid like-for-like sales, strong profitability • Total store sales growth 1.9% and LFL 1.2% o Group owned -1.1% and LFL 2.7%, franchise 4.0% and LFL 0.3% Operating margin, % o Solid LFL growth for Group-owned stores with increased customer Net sales, SEK m traffic in city centre-based stores
Slide 13: Snabbgross: Strong recovery with improved profitability
Snabbgross Strong recovery with improved profitability • Net sales growth of 24.6% and LFL 21.6% o Strong growth attributable to low comps, eased pandemic Operating margin, % restrictions and a positive market development Net sales, SEK m +24.6% o Contribution to sales also from new store establishm
Slide 14: Dagab: Solid performance with increased volumes
Dagab Solid performance with increased volumes • Net sales growth of 27.7% o Net sales increase of +6.0% excluding Bergendahls Food Adj. operating margin, %* o Growth driven by sales to the food retail concepts and the service trade Net sales, SEK m +27.7% • Operating profit SEK 250 m (230), adjuste
Slide 15: Sustainability highlights
Sustainability highlights • Willys and Dagab launched ”Skeva skivor” from Garant • More recyclable smoothies and juices from Garant • Willys co-founder of Matmissionen in Skåne • Axfood contracts Sweden’s largest solar park • Snabbgross first wholesaler to reject cage chicken eggs • Willy’s first gr
Slide 16: Financial position
Financial position Anders Lexmon Chief Financial Officer 16
Slide 17: A year of strong growth
Full year net sales A year of strong growth • Net sales increased 7.8% during the year o Growth driven by Bergendahls Food acquisition, new store Net sales, SEK m +7.8% establishments and higher sales for Willys, Snabbgross and Dagab o Solid growth for Willys despite the toughest comps on the market
Slide 18: Higher profit and solid profitability
Full year operating profit Higher profit and solid profitability • Operating profit SEK 2,704 m (2,510), adjusted operating profit* SEK 2,690 m (2,510) Adj. operating margin, %* Adj. operating profit, SEK m* o Positive contribution from Bergendahls Food acquisition o Higher operating profit for Hemk
Slide 19: Cash flow impacted by investments
Cash flow impacted by investments SEK m 2021 2020 Operating profit 2,704 2,510 Non-cash items 2,461 2,304 Net interests -120 -108 Paid tax -406 -370 SEK 4.6 bn Working capital -49 515 Operating cash flow 4,590 4,851 Investing activities -3,842 -1,080 Loans raised 1,900 Amortisation of debt -1,878 -1
Slide 20: Investments for the future
Investments for the future Acquisition Other Joint group Wholesale Retail SEK m 4,000 3,547 SEK 1,934 1,500 1,000 764 580 1,021 1,481 1,031 3.5 bn Investments in 2021 500 0 2015 2016 2017 2018 2019 2020 2021 Excluding IFRS 16. 20
Slide 21: Improved net working capital
Improved net working capital NWC as % of sales NWC, SEK m -2.0% -3.9% -919 -2.6% -3.0% -1,236 -3.4% -1,513 -3.9% -1,800 NWC as % of sales -2,260 2017 2018 2019 2020 2021 21
Slide 22: Financial position
Financial position Net debt (ex. IFRS 16), SEK m Net debt, SEK m Net debt/EBITDA 7,640 1.5x Net debt/EBITDA 5,454 5,218 5,185 5,481 5,082 5,131 5,016 4,920 4,577 1.5 21.8% 1.2 1.2 1.1 1.1 1.1 1.0 1.0 1.0 1,236 Equity ratio -404 -377 -259 -478 -350 -462 -782 -1,131 -1,156 30 Sep. 31 Dec. 31 Mar. 30 J
Slide 23: Return on capital employed
Return on capital employed ROCE Capital employed, SEK m 13,550 12,360 10,674 10,326 22.4% 9,825 10,178 10,149 9,526 9,648 9,651 30.6% 30.1% 26.6% 25.6% 24.7% 24.5% 24.5% 24.2% 22.6% 22.4% Return on capital employed 30 Sep. 31 Dec. 31 Mar. 30 Jun. 30 Sep. 31 Dec. 31 Mar. 30 Jun. 30 Sep. 31 Dec. 2019
Slide 24: Rights issue proposal
Rights issue proposal • To maintain a strong financial position over time, Axfood intends to carry out a new share issue of SEK 1.5 billion with preferential rights for existing shareholders. ‒ Purpose to help ensure the long-term financing of the Important dates 2022* acquisition of Bergendahls Foo
Slide 25: Update strategic agenda
Update strategic agenda Klas Balkow President and CEO 25
Slide 26: Strategic focus areas
Strategic focus areas Customer Customer Expansion Supply chain Work approach Our people offering meeting We will grow in new and We will be a driver of We will develop an We will attract, recruit We will offer our existing markets by sustainable product innovative, customer- and develop the Through
Slide 27: Customer offering
Customer offering We will offer our customers an attractive, efficient, wide and affordable assortment. Develop and Integrate the strengthen the Develop the customer offering Strengthen assortment of offering to for warehouse the price affordable, good address sector operations in position and susta
Slide 28: Customer meeting
Customer meeting Through our brands and formats, we will meet our customers’ varying needs – no matter where, when and how the customer meets us. Accelerate Develop the Develop development customer meeting and optimise of the digital with respect to the store customer sustainability and network meet
Slide 29: Expansion
Expansion We will grow in new and existing markets by establishing stores and developing new segments, categories and services. Convert store Expand Strengthen customers from store network positions of warehouse operations and e-commerce development in Hässleholm to companies Axfood platforms 29
Slide 30: Supply chain
Supply chain We will be a driver of sustainable product supply with high efficiency and quality across the entire chain. Integrate Streamline Develop Streamline operations in and develop future warehouse e-commerce Hässleholm with future transport structure logistics Axfood processes solutions 30
Slide 31: Work approach
Work approach We will develop an innovative, customer- oriented and dynamic organization in which efficiency and cost control are in focus. Develop, Manage the Establish and streamline and integration develop the modernise of warehouse partnership with work approach operations City Gross and tools i
Slide 32: Our people
Our people We will attract, recruit and develop the industry’s best employees. Integrate Attract Develop Strengthen employees at Develop and develop leadership and a sustainable the operations in culture expertise collaboration work life Hässleholm 32
Slide 33: Axfood new partner to Mathem
Axfood new partner to Mathem • On 14 December, Axfood announced it is entering into a strategic partnership with Mathem through the divestment of Mat.se in exchange for Mathem shares corresponding to a shareholding of 16.5%. • The combination of Mat.se and Mathem will create synergies and economies
Slide 34: Continued very strong momentum for Apohem
Continued very strong momentum for Apohem Strong trend and improved market position, fast sales growth in 2021 Move to new warehouse in late 2020 offers conditions for further growth New e-com platform solid, scalable and results in high conversion rates Increased marketing and brand building, focus
Slide 35: Outlook 2022
Outlook 2022 35
Slide 36: Outlook 2022
Outlook 2022 • Items affecting comparability of SEK 340 m ‒ Costs related to the transition to Bålsta of SEK 220 m ‒ Integration costs of SEK 120 m related to Bergendahls • Planned capital expenditures of SEK 2,600−2,700 m ‒ Excluding acquisitions and leasehold ‒ Including SEK 1,300 m for the new lo
Slide 37: Dividend
Dividend • The dividend policy sets the goal that the shareholder dividend shall be at least 50 percent of profit after tax. Dividend payout ratio (%) ‒ The dividend amount is to be paid on two occasions. • The Board proposes an increased ordinary dividend per 100 94 92 share of SEK 7.75 (7.50), cor
Slide 38: Summary
A strong quarter ends a successful and eventful year • Higher sales and profit, good operational performance • Strengthened concepts, well positioned for continued growth • Significant investments in logistics and digital development Summary • Strategic transactions with Bergendahls Food, City Gross
Slide 39: Q&A
Q&A 39
Slide 40: Axfood – good and sustainable food for everyone
Axfood – good and sustainable food for everyone Annual net sales SEK 57.9 bn 12,202 employees (FTEs) Efficient sourcing and Customer reach logistics for all brands ~4.5 million customers a week and channels 316 Group-owned stores Innovative development of 134 franchise Hemköp 130 franchise Tempo pri
Slide 41: Axfood key ratios
Axfood Key ratios Q4 Q4 SEK m 2021 2020 Chg 2021 2020 Chg Net sales 17,062 13,633 25.1% 57,891 53,696 7.8% Operating margin, % Change in like- Net sales, SEK m 1.4% 6.2% -4.8 0.3% 6.9% -6.6 for-like sales* 57,891 53,696 50,740 Operating profit 739 566 30.6% 2,704 2,510 7.7% 48,085 45,968 Adjusted op
Slide 42: Willys key ratios
Willys Key ratios Q4 Q4 Operating margin, % SEK m 2021 2020 Chg 2021 2020 Chg Net sales, SEK m 31,793 32,424 Net sales 8,424 8,123 3.7% 32,424 31,793 2.0% 29,029 27,066 25,415 Change in like- 1.5% 6.7% -5.2 0.0% 7.9% -7.9 4.9 4.9 4.7 for-like sales 4.2 4.4 Operating profit 343 339 1.2% 1,512 1,551 -
Slide 43: Hemköp key ratios
Hemköp Key ratios Q4 Q4 Operating margin, % SEK m 2021 2020 Chg 2021 2020 Chg Net sales, SEK m Net sales 1,635 1,656 -1.2% 6,202 6,354 -2.4% 6,199 6,403 6,378 6,354 6,202 Change in like- 2.7% 2.7% 0.0 1.3% 2.8% -1.5 for-like sales* 4.4 3.8 3.8 3.6 Operating profit 73 53 38.0% 271 229 18.4% 3.5 Opera
Slide 44: Snabbgross key ratios
Snabbgross Key ratios Q4 Q4 Operating margin, % SEK m 2021 2020 Chg 2021 2020 Chg Net sales, SEK m 3,825 Net sales 986 791 24.6% 3,825 3,417 11.9% 3,443 3,417 3,241 Change in like-for- 2,984 21.6% -8.8% 30.4 9.3 -2.2 11.5 5.0 like sales 4.8 4.4 3.7 3.7 Operating profit 45 28 60.0% 193 150 28.4% Oper
Slide 45: Dagab key ratios
Dagab Key ratios Q4 Q4 Operating margin, % SEK m 2021 2020 Chg 2021 2020 Chg Net sales, SEK m 52,295 Net sales 15,716 12,310 27.7% 52,295 48,091 8.7% 48,091 44,895 Operating profit 250 230 8.6% 932 829 12.3% 41,128 42,456 1.9 1.7 1.7 Adjusted operating 1.6 277 230 20.2% 976 829 17.7% 1.5 profit Oper