Axfood AB · OMXSTO:AXFO
Axfood AB — Q2 2022 Earnings Presentation
43 slides from Axfood AB's earnings presentation, July 2022
Slide 1: Strong growth characterised by acquisition and high food price inflation
Strong growth characterised by acquisition and high food price inflation Interim report Q2 2022
Slide 2: Agenda
Interim report Q2 2022 2 Agenda –Market update –Q2 2022 –Financial position –Brief update strategic agenda –Outlook 2022 –Q&A
Slide 3: Market update
Interim report Q2 2022 3 Market update
Slide 4: March 2020 – the start of a turbulent period
Interim report Q2 2022 4 March 2020 – the start of a turbulent period Covid-19 declared global pandemic End of Winter holiday in Upgraded risk assessment Sweden in Sweden by the Public Travel restrictions Health Agency introduced in Norway March Hoarding in stores and online Supply constraints due t
Slide 5: Entering new exceptional times – following two years of pandemic
Interim report Q2 2022 5 Entering new exceptional times – following two years of pandemic Covid-19 Travel restrictions Russian Raging fuel Highest inflation Increased restrictions Norway lifted invasion of and energy rate since policy rate lifted Ukraine prices December 1991 9 Feb 12 Feb 24 Feb Mar
Slide 6: Historically high food price inflation
Interim report Q2 2022 6 Historically high food price inflation Moving towards double-digit food price inflation, a development not experienced for decades Increased electricity and fuel price, Shortages of raw materials Covid-19 pandemic Russian invasion of Ukraine disturbances in transportation an
Slide 7: Consumers adjusting to high inflation
Interim report Q2 2022 7 Consumers adjusting to high inflation We see consumer behavior changing as household budgets are becoming more strained Strong demand for low-price Private label becoming Slightly higher frequency and Lower demand for and campaigns more attractive lower average ticket value
Slide 8: Return to pre-pandemic consumer behaviour
Interim report Q2 2022 8 Return to pre-pandemic consumer behaviour We see consumer behavior returning to what prevailed before the Covid-19 pandemic Return to physical stores and Strong recovery in Strong recovery for central metropolitan areas cross-border trade cafés and restaurants Online trade d
Slide 9: Well positioned portfolio of concepts and brands
Interim report Q2 2022 9 Well positioned portfolio of concepts and brands Efficient sourcing and logistics Customer reach for all brands and channels • ~4.5 million customers a week Innovative development of • 322 Group-owned stores private label products • 134 franchise Hemköp • 131 franchise Tempo
Slide 10: Food retail market: Increased food price inflation
Interim report Q2 2022 10 Food retail market Increased food price inflation Food retail trade, index sales in stores and online by month, % Food price inflation by quarter % % 8.9 15 9 14 12.8 8 13 12 10.6 7 11 10 9.3 9.0 6 9 8.2 8.3 8 7.6 7.2 5 7 6.7 6.1 6.3 6.4 5.9 3.9 6 5.3 4 5.0 5.1 3.3 5 3.3 4.
Slide 11: Food retail market: Strong come back for stores – online meet high comps
Interim report Q2 2022 11 Food retail market Strong come back for stores – online meet high comps Food retail trade index, physical store sales by month Food retail trade index, online sales by month % % 15 200 191.6 180 165.3 11.7 160 10.3 10.2 143.2 136.1 137.8 10 140 135.3 8.8 120 109.1 107.8 6.7
Slide 12: Q2 2022
Interim report Q2 2022 12 Q2 2022
Slide 13: Axfood vs the market
Interim report Q2 2022 13 Axfood vs the market Retail sales development, total including online Sales development, online Axfood retail sales Axfood online sales Food retail trade index Food retail trade index % % 12 160 11 140 10 9.7% 120 9 100 8 7 80 6 60 5 5.4% 40 4 20 3 2 0 -27.5% 1 -20 0 -40 -2
Slide 14: Group net sales: Strong net sales growth
Interim report Q2 2022 14 Group net sales Net sales, SEK m +32.8% Strong net sales growth 18,468 13,570 13,903 13,038 12,221 –Net sales increased by 32,8% –Bergendahls Food acquisition –Food price inflation –Strong LFL sales development in Willys –Strong recovery Eurocash –Record sales Snabbgross Q2
Slide 15: Group operating profit
Interim report Q2 2022 15 Group operating profit Strong increase supported by strong sales growth and good cost control Adj. operating margin, %* +25.3% Adj. operating profit, SEK m* 828 –Operating profit SEK 789 m (607), 601 605 661 adjusted operating profit* SEK 828 m (661) 545 –Items affecting co
Slide 16: Willys
Interim report Q2 2022 16 Willys Double digit net sales increase, strong Eurocash recovery Operating margin, % Net sales, SEK m –Net sales increased by 13.0% and LFL 11.2% +13.0% –Willys show strong LFL retail sales increase –Significantly higher sales for Eurocash 9,204 –Total store network 228 (22
Slide 17: Hemköp
Interim report Q2 2022 17 Hemköp Stable development Operating margin, % Net sales, SEK m –Net sales increased by 6.9% +Customer traffic increased in larger stores +6.9% in central metropolitan locations –Stores close to homes affected by declining customer traffic 1,608 1,614 1,591 1,661 1,554 –Tota
Slide 18: Snabbgross
Interim report Q2 2022 18 Snabbgross Another all time high second quarter Operating margin, % Net sales, SEK m –Net sales increased by 33.7% and LFL 29.3% 33.7% –Strong growth attributable to low comps first two months in the quarter, food price inflation, more customers and sales increases in 1 299
Slide 19: Dagab
Interim report Q2 2022 19 Dagab Growth supported by Bergendahls Food volumes and high overall demand Operating margin, % Net sales, SEK m –Net sales increased by 34.1% +34.1% –Net sales increase of +12.7% excluding Bergendahls Food –Growth driven by increased sales to Group food retail concepts, inc
Slide 20: Financial position
Interim report Q2 2022 20 Financial position Anders Lexmon Chief Financial Officer
Slide 21: Strong sales and EBIT growth H1
Interim report Q2 2022 21 Strong sales and EBIT growth H1 Operating margin excl. items Net sales, SEK m affecting comparability, % Net sales, growth H1 29.3% Operating profit excl. items affecting comparability, SEK m +29.3% +20.8% 35,061 1,480 Adjusted EBIT, growth H1 20.8% 26,636 27,106 1,225 24,9
Slide 22: Strong operating cash flow
Interim report Q2 2022 22 Strong operating cash flow SEK m H1 2022 H1 2021 Operating profit 1,623 1,172 Operating cash flow H1 2.6 bn Non-cash items 1,107 1,197 Net interests 76 -61 Paid tax -326 -220 SEK Working capital 268 268 161 Operating cash flow 2,596 2,748 2,249 2,248 Investing activities -1
Slide 23: Increased investments according to plan
Interim report Q2 2022 23 Increased investments according to plan Acquisition Other Joint group Wholesale Retail SEK m SEK m Total investments H1 2022 1,435 m 4,000 1 500 1 435 SEK 3,547 219 1,934 1 000 1,481 1,500 981 1,021 1,031 596 1,000 764 500 212 580 78 500 306 235 0 0 2015 2016 2017 2018 2019
Slide 24: Net working capital
Interim report Q2 2022 24 Net working capital NWC as % of sales NWC, SEK m NWC as % of sales -3.6% -2.0% -919 -2.6% -3.0% -1,236 -3.4% -1,513 -3.6% -3.9% -1,800 -2,260 -2,389 2017 2018 2019 2020 2021 R12M to Jun. 2022
Slide 25: Financial position
Interim report Q2 2022 25 Financial position Net debt (ex. IFRS 16), SEK m Net debt, SEK m Net debt/EBITDA Net debt / EBITDA, 5,454 5,481 7,640 8,225 7,005 1.2x 5,131 5,218 5,185 5,016 4,920 1.5 1.5 4,577 Equity ratio 1.2 24.8% 1.2 1.2 1.1 1.1 1.1 1.0 1.0 1.0 1,648 1,236 515 -377 -259 -478 -350 -462
Slide 26: Return on capital employed
Interim report Q2 2022 26 Return on capital employed ROCE Capital employed, SEK m Return on capital employed 26.4% 13,550 13,628 12,865 12,360 10,674 10,326 10,178 10,149 9,526 9,648 9,651 30.1% 26.6% 25.6% 26.5% 26.4% 24.7% 24.5% 24.5% 24.2% 22.6% 22.4% 31 Dec. 31 Mar. 30 Jun. 30 Sep. 31 Dec. 31 Ma
Slide 27: Update strategic agenda
Interim report Q2 2022 27 Update strategic agenda Klas Balkow President and CEO
Slide 28: Strategic focus areas
Interim report Q2 2022 28 Strategic focus areas Customer offering Customer meeting Expansion Supply chain Work approach Our people – Axfood will offer an – With relevant concepts – Axfood will grow in new – Axfood will develop a – Axfood is to be a – Axfood aspires to be attractive assortment and hi
Slide 29: Bergendahls Food integration well in line with plan
Interim report Q2 2022 29 Bergendahls Food integration well in line with plan March April June Common sourcing and common Hässleholm warehouse integration City Gross integration initiated, planned organisation initiated and established successfully completed in line with plan, to be finalized end of
Slide 30: Establishing new logistics platform
Interim report Q2 2022 30 Establishing new logistics platform Today 2023–2025 Central and regional warehouses E-commerce warehouses Perishables and fruit and vegetable warehouses Skellefteå Borlänge Örebro Årsta Sätra Bålsta Jordbro Backa Frölunda Jönköping Backa Jönköping Hässleholm Hässleholm Hels
Slide 31: Steps toward new logistics platform
Interim report Q2 2022 31 Steps toward new logistics platform 2019 2020 2021 2022 2023 2024 2025 Automated perishable Fully warehouse in Jönköping operational Automated logistics Construction Installation of Property Re-scheduling, centre in Bålsta start automation initiated take over fully operatio
Slide 32: More sustainable food to Swedish consumers
Interim report Q2 2022 32 More sustainable food to Swedish consumers Sustainability integrated in all parts of Axfood including activities linked to the entire food system Sustainability communication Climate education tool to help Recyclable packaging of Large-scale and circular in Hemköp stores su
Slide 33: Outlook 2022
Interim report Q2 2022 33 Outlook 2022
Slide 34: Unchanged outlook 2022
Interim report Q2 2022 34 IDA: Ny färsk bild på Bålsta Unchanged outlook 2022 –Integration and transition costs totalling SEK 340 m –Costs related to the transition to Bålsta of SEK 220 m –Integration costs of SEK 120 m related to Bergendahls Food –Planned capital expenditures of SEK 2,600−2,700 m –
Slide 35: Q2 summary
Interim report Q2 2022 35 Q2 summary –Strong growth in exceptional times –Well positioned in the market –Integration of Bergendahls Food well in line with plan –Strong financial position –Rights issue fully subscribed –Solid agenda for continued growth development
Slide 36: Q&A
Interim report @2 2022 Q&A 36 Axfood
Slide 37: Affordable, good and sustainable food for everyone
Interim report Q2 2022 37 Affordable, good R12 net sales SEK Employees (FTEs) and sustainable food for everyone 65.8bn 12,232 Efficient sourcing and logistics Customer reach for all brands and channels • ~4.5 million customers a week Innovative development of • 322 Group-owned stores private label p
Slide 38: Axfood key ratios
Interim report Q2 2022 38 Axfood Q2 Q2 H1 H1 Key ratios SEK m 2022 2021 Chg 2022 2021 Chg 2021 Net sales 18,468 13,903 32.8% 35,061 27,106 29.3% 57,891 Change in like- 8.5% -0.4% 8.9 5.8% 0.0% 5.8 0.3% Operating margin, % for-like sales* Net sales, SEK m Operating profit 789 607 29.9% 1,623 1,172 38
Slide 39: Willys
Interim report Q2 2022 39 Willys Operating margin, % Q2 Q2 H1 H1 Net sales, SEK m Key ratios SEK m 2022 2021 Chg 2022 2021 Chg 2021 33,919 31,793 32,424 29,029 Net sales 9,204 8,141 13.0% 17,621 16,127 9.3% 32,424 27,066 4.9 4.9 Change in like- 4.7 4.8 for-like sales 11.2% -1.1% 12.3 7.6% -0.3% 7.9
Slide 40: Hemköp
Interim report Q2 2022 40 Hemköp Q2 Q2 H1 H1 Operating margin, % Key ratios SEK m 2022 2021 Chg 2022 2021 Chg 2021 Net sales, SEK m Net sales 1,661 1,554 6.9% 3,250 3,108 4.6% 6,202 6,403 6,378 6,354 6,202 6,344 Change in like- 5.8% 1.9% 3.9 4.2% 0.4% 3.8 1.3% for-like sales* 4.4 4.4 Operating profi
Slide 41: Snabbgross
Interim report Q2 2022 41 Snabbgross Operating margin, % Q2 Q2 H1 H1 Net sales, SEK m Key ratios SEK m 2022 2021 Chg 2022 2021 Chg 2021 4,351 3,825 Net sales 1,299 971 33.7% 2,233 1,708 30.8% 3,825 3,443 3,417 3,241 5.4 Change in like-for- 5.0 29.3% 10.9% 18.4 27.3% 1.9% 25.4 9.3% 4.8 like sales 4.4
Slide 42: Dagab
Interim report Q2 2022 42 Dagab Q2 Q2 H1 H1 Operating margin, % Key ratios SEK m 2022 2021 Chg 2022 2021 Chg 2021 Net sales, SEK m Net sales 16,746 12,488 34.1% 31,808 24,368 30.5% 52,295 59,736 52,295 Operating profit 233 235 -1.2% 661 452 46.3% 932 48,091 44,895 42,456 Adjusted operating 1.7 1.9 1
Slide 43: Thank you
Interim report Q2 2022 43 Thank you