Continued market share gains in an exceptional time

Axfood is reporting a fourth quarter with continued inflow of customers and high levels of growth, and a full year during which the Group grew twice as much as the market and strengthened its position in all market segments. A high tempo is maintained in investments for the future which will begin to generate positive effects in 2024, not least in logistics.

President and CEO Klas Balkow’s comments on the year-end report for 2023:

“Axfood ended the year with retail sales up nearly 9% compared with 6% for the market, despite significantly higher comparison figures. With the growth in the fourth quarter, and consistently high growth over the full year, the Group passed SEK 80 billion in net sales for the first time.

Willys has a unique concept on the market and continues to attract customers with the ambition to offer Sweden's cheapest bag of groceries, modern stores and a wide and attractive assortment. In the fourth quarter, Willys continued to gain market share through robust volume growth, and the loyalty of existing customers remained strong.

Hemköp continued to strengthen its position in the traditional food segment and once again succeeded in outperforming market growth. For several years, Hemköp has worked to consolidate its position, with a high rate of store modernisation, investments in price value and important progress in the area of sustainability. This has created the right conditions and is now helping to further boost Hemköp’s impressive performance.

The market in which Snabbgross operates has shown a gradual deterioration during the year, and many cafés and restaurants are facing challenges. Snabbgross has however delivered a stable performance thanks to its flexibility and ability to adapt its offering.

Thanks to a large influx of new customers and robust growth, Axfood delivered a stable earnings trend during the year, despite higher costs at all levels that have not been fully passed on to consumers.

We have made major investments in recent years in order to improve our competitiveness in the market. The implementation and ramp-up of our new, highly automated logistics centre in Bålsta outside Stockholm continued throughout most of 2023, and the automation solution at our new fruit and vegetable warehouse in Landskrona was recently put into operation. Our combined investments will result in significant efficiency improvements and cost savings starting in the second half of 2024.

In sustainability, we have maintained a high level of ambition. In particular, we are continuing to offer our customers a sustainable and healthy assortment of products in our stores and to guide them towards sustainable and healthy choices. We have also started the two-year process of converting to renewable fuels for our transports from warehouse to stores, both internal and external.

At an exceptional time of historically high inflation and changing consumer behaviour, we are closing the books on a successful year in which we strengthened our market positions and took major steps to improve our competitiveness in the long term.”

Fourth quarter summary

• Net sales totalled SEK 20,769 m (19,740), an increase of 5.2%.
• Retail sales totalled SEK 16,507 m (15,180), an increase of 8.7%.
• Operating profit amounted to SEK 744 m (502) including items affecting comparability of SEK -71 m (-232). The operating margin was 3.6% (2.5).
• Adjusted operating profit amounted to SEK 815 m (734), an increase of 11.0%. The adjusted operating margin was 3.9% (3.7).
• Net profit for the period was SEK 533 m (353) and earnings per share before dilution amounted to SEK 2.42 (1.62).

Summary January – December

• Net sales totalled SEK 81,111 m (73,474), an increase of 10.4%.
• Retail sales totalled SEK 63,703 m (55,721), an increase of 14.3%.
• Operating profit amounted to SEK 3,353 m (3,101) including items affecting comparability totalling SEK -249 m (-129). The operating margin was 4.1% (4.2).
• Adjusted operating profit amounted to SEK 3,602 m (3,229), an increase of 11.5%. The adjusted operating margin was 4.4% (4.4).
• Net profit for the period was SEK 2,373 m (2,370) and earnings per share before dilution amounted to SEK 10.92 (11.04).

Significant events after the balance sheet date

• The Board of Directors proposes an increased dividend of SEK 8.50 per share (8.15) to be split into two payments, SEK 4.25 per share in March 2024 and SEK 4.25 per share in September 2024.

Investments and store establishments in 2024

• Investments in 2024 are expected to amount to between SEK 1,600 and SEK 1,700 m, excluding acquisitions and right-of-use assets.
• During 2024, Axfood plans to establish 10–15 new stores.

Axfood will present the year-end report 2023 in a webcast at 9:30 a.m. (CEST) today, Thursday, 1 February 2024. The report will be presented by Klas Balkow, President and CEO, and Anders Lexmon, CFO. You can find a link to the webcast 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.

For further information, please contact:
Alexander Bergendorf, Head of Investor Relations, Axfood AB, 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. CEST on 1 February 2024.

This document is an English translation of the Swedish original. In the event of any discrepancies, the Swedish version shall govern.

Axfood aspires to be the leader in good and sustainable food. Our family of companies includes the store chains Willys and Hemköp as well as Tempo, Handlar’n and Matöppet. B2B sales are handled through Snabbgross, and our support company Dagab is responsible for the Group's product development, purchasing and logistics. The Axfood family also includes Middagsfrid and Urban Deli as well as the partly owned companies Apohem, Eurocash, City Gross and Mathem. Together the Group has more than 13,000 employees and sales of approximately SEK 80 billion. Axfood has been listed on Nasdaq Stockholm since 1997, and the principal owner is Axel Johnson AB. Read more at www.axfood.com.