Axfood AB · OMXSTO:AXFO
Axfood AB — Q2 2018 Earnings Presentation
36 slides from Axfood AB's earnings presentation, July 2018
Slide 1: Q2 2018: Strong earnings in all segments
Q2 2018: Strong earnings in all segments Klas Balkow, President and CEO
Slide 2: Agenda
Agenda • Q2 results • Financial position • Update on strategic agenda • Q&A 2
Slide 3: Axfood – a strong Swedish food retailer
Axfood – a strong Swedish food retailer R12 Net sales SEK 47.1 bn 9,745 employees (FTE) Strong supply-chain company Customer reach for all brands > 4 million customers a week 301 Group-owned stores 117 franchise Hemköp • Purchasing and product development In total collaborating with 1,154 stores • A
Slide 4: Highlights Q2 2018
Highlights Q2 2018 Early and steady Strong profits in Continued high summer weather all segments growth in online boosted sales – leading to business with especially in Q2 record profit increased Axfood efficiency Snabbgross 4
Slide 5: Axfood Q2 2018
Axfood Q2 2018 5
Slide 6: Q2: Good growth despite calendar effect
Q2: Good growth despite calender effect • Net sales growth 2.5% – Like-for-like (LFL) store sales (incl Hemköp franchise) 2.0% – Negative calender effect due to Easter Net sales, SEK m 12,221 11,925 • Good growth in all segments 10,901 10,478 Concept Overall LFL 9,804 Willys 3.3% 2.1% Hemköp 3.0% 1.
Slide 7: Gaining market share
Gaining market share • Store sales (incl Hemköp franchise) Jan-Jun, +6.3% • Preliminary market growth Jan-May, 3.0% (source: HUI/SCB) % 12.0 10.0 8.0 6.0 4.0 2.0 0.0 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 -2.0 Axfood Group store sales Retail trade index (excl alcohol) 7
Slide 8: Q2: Strong profit and margin
Q2: Strong profit and margin • Operating profit SEK 545 m (487) + LFL development + Sales mix ■ Operating profit, SEK m + Less store expansion and refurbishments ▬ Operating margin, % 545 − Online business, although improved 494 487 431 • Operating margin 4.5% (4.1) 376 4.5 4.5 • Strong profitabilit
Slide 9: Willys – continued momentum and strong profitability
Net sales +3.3% Willys – continued momentum and strong profitability • Good sales despite negative Easter effect ■ Net sales, SEK m • LFL sales, 2.1% ▬ Operating margin, % ‒ More customers and higher average ticket value 6,601 6,818 5,691 5,823 • Store network 208 (205) 5,374 ‒ Opened Willys Hemma M
Slide 10: Hemköp – improved profitability
Net sales Store sales Group-owned Hemköp total Hemköp – improved profitability 4.1% 3.0% • LFL growth (incl Hemköp franchise), 1.7% ‒ More customers and higher average ■ Net sales, SEK m ticket value ▬ Operating margin, % • Improved profitability, 4.2% (3.6) 1,470 1,563 1,544 1,608 65, 1,364 ‒ Neith
Slide 11: Axfood Snabbgross – very strong sales
Net sales +9.7% Axfood Snabbgross – very strong sales • Strong sales development; positively affected by ■ Net sales, SEK m ▬ Operating margin, % ‒ Early and steady summer weather 866 1 789 ‒ Positive Easter effect in restaurant market 1 1 • LFL sales, 8.9% 9 • Market growth of 5.9% in April-May 7 4
Slide 12: Dagab – good development
Net sales +1.0% Dagab – good development • Sales growth hampered by: ‒ Calendar effect (Easter and no. of delivery days) ■ Net sales, SEK m ▬ Operating margin, % ‒ Comparables includes sales to Mathem 12 10,677 10,786 11 9,894 • Good growth from Axfood’s store chains and online 10 9 business 8 7 1.7
Slide 13: Financial position
Financial position Anders Lexmon Chief Financial Officer
Slide 14: Good growth and earnings in H1
Good growth and earnings in H1 • Net sales growth +4.9% ‒ LFL store sales (incl Hemköp franchise) +3.5% • Operating profit SEK 980 m (884) Net sales, SEK m Operating profit, SEK m 23,665 980 22,564 902 884 21,206 20,044 760 18,750 622 4.3 4.1 3.8 3.9 3.3 1) 1) H1-14 H1-15 H1-16 H1-17 H1-18 H1-14 H1-
Slide 15: Strong cash position despite high dividend payout
Strong cash position despite high dividend payout (1,219) (-234) 3 000 (120) (-1,208) 1,349 -245 38 -490 2 500 (-28) (-1,259) (28) -30 -1,485 0 2 000 (1,726) 1,376 1 500 1 000 (364) 513 500 Cash flow -863 (-1,362) 0 31 Dec 17, Operating Paid tax Changes in Investing Debt Repurchase Dividend 30 June
Slide 16: Continued investments
Continued investments SEK m SEK m 1,934 1,420 421 806 1,095 764 643 580 123 84 76 20 217 219 2013 2014 2015 2016 2017 H1-18 H1-17 Acquisition Other IT Wholesale Retail Estimated capex 2018: SEK 900-1,000 m 16
Slide 17: Improved net working capital
Improved net working capital Decreased net working capital Further focus on most important items SEK m NWC NWC as % of sales Index Accounts receivable Inventories Accounts payable 0 0,0% 115 % of sales 110 -7.2% -0,5% 105 -500 -1,0% 100 4.9% 95 -1,5% -1 000 90 -2,0% 85 2.1% -1 500 -2,5% 80 2014 2015
Slide 18: Strong financial position
Strong financial position Net debt (+)/receivable (-) SEK m Equity ratio, % 500 440 40 267 300 30 100 20 -6 -100 10 -300 -316 -500 -427 0 Jun 14 Jun 15 Jun 16 Jun 17 Jun 18 18
Slide 19: Maintained return on capital employed
Maintained return on capital employed Capital employed ROCE (RTM) 6 000 60% 5 000 50% 4 000 40% 3 000 30% 2 000 20% 1 000 10% 0 0% Jun 14 Jun 15 Jun 16 Jun 17 Jun 18 19
Slide 20: Update on strategic agenda
Update on strategic agenda Klas Balkow President and CEO
Slide 21: Strategy to become the leader in good and sustainable food
Strategy to become the leader in good and sustainable food Growth Efficiency Customer Customer Supply Work Our Expansion offer meeting chain approach people Sustainability 21
Slide 22: Axfood's climate footprint: -84% reduction since 2009
Axfood’s climat footprint: -84% reduction since 2009 Co2-equivalents 120 000 0% 2017 100 000 -20% 7% 80 000 -40% 60 000 26% 40% -60% 40 000 20 000 -80% 27% 0 -100% 2009 2014 2015 2016 2017 Refrigerants Transports 1) CO2-equivalents Change vs base year 2009 Electricty consumption Business travel Clos
Slide 23: Customer offer
Customer offer axfood 23
Slide 24: More good and sustainable food
More good and sustainable food Customer offer Frozen food Less sugar & salt -30% 24
Slide 25: News in private label
News in private label Customer offer new products 70 Smarter packaging 30g organic products 17 25
Slide 26: Expansion priorities
Open 4-8 new stores 2018 Expansion priorities 26
Slide 27: Apohem launched its shopping site
Apohem launched its shopping site Expansion 27
Slide 28: Supply-chain
Supply-chain 28
Slide 29: Joint dark store
Joint dark store • One dark store for all online food brands • Common picking and home delivery • Launch in first part of 2019 in Stockholm • Further steps in improving online efficiency Willys Hemköp mat.se Willys Hemköp mat.se Willys Hemköp mat.se Willys Hemköp mat.se 29
Slide 30: Summary
Summary • Good sales growth ‒ Despite negative Easter effect • Strong online growth in all three brands with increased efficency • Good progress in sustainability • Record profit ‒ Supported by positive sales mix • Strong financial position 30
Slide 31: Questions & answers
Questions & answers Klas Balkow, President and CEO Anders Lexmon, CFO
Slide 32: Axfood H1 2018
Axfood H1 2018 Key ratios ■ Net sales, SEK m Q2 Q2 H1 H1 SEK m Change Change 2018 20171) 2018 20171) ▬ Operating margin, % 23,665 Net sales1) 12,221 11,925 2.5% 23,665 22,564 4.9% 22,564 0.80 21,206 20,044 0.70 18,750 Change in like-for- 0.60 1.7% 5.9% 4.2 3.4% 3.6% -0.2 like sales 0.50 4.3 4.1 3.8
Slide 33: Willys H1 2018
Willys H1 2018 Key ratios ■ Net sales, SEK m Q2 Q2 H1 H1 SEKm 2018 20171) Change 2018 20171) Change ▬ Operating margin, % 13,331 Net sales 6,818 6,601 3.3% 13,331 12,365 7.8% 12,365 11,466 10,952 10,315 Change in like-for-like 2.1% 6.7% -4.6 4.0% 4.0% 0.0 sales 3.8 3.8 3.9 4.1 Operating profit 307 2
Slide 34: Hemköp H1 2018
Hemköp H1 2018 Key ratios ■ Net sales, SEK m Q2 Q2 H1 H1 SEKm 2018 20171) Change 2018 20171) Change ▬ Operating margin, % 3,108 3,091 3,215 Net sales 1,608 1,544 4.1% 3,215 3,091 4.0% 2,871 65,0 2,719 55,0 Change in like-for-like -0.2% 2.6% -2.8 0.8% 2.3% -1.5 sales 45,0 4.2 4.2 3.9 Operating profit
Slide 35: Axfood Snabbgross H1 2018
Axfood Snabbgross H1 2018 Key ratios ■ Net sales, SEK m Q2 Q2 H1 H1 ▬ Operating margin, % SEKm 2018 20171) Change 2018 20171) Change 1,540 80 1,444 Net sales 866 789 9.7% 1,540 1,444 6.6% 70 60 50 Operating profit 42 39 7.7% 51 49 4.1% 40 3.4 3.3 30 Operating margin 4.8% 4.9% -0.1 3.3% 3.4% -0.1 20
Slide 36: Dagab H1 2018
Dagab H1 2018 Key ratios ■ Net sales, SEK m Q2 Q2 H1 H1 SEKm 2018 20171) Change 2018 20171) Change ▬ Operating margin, % Net sales 10,786 10,677 1.0% 20,899 20,423 2.3% 22 20,423 20,899 21 19,206 20 19 18 17 Operating profit 181 177 2.3% 346 348 -0.6% 16 15 14 13 12 11 1.7 1.7 1.7 Operating margin 1