Interim Report, Axfood AB (publ.) for the period 1 January - 31 March 2002

• Consolidated sales amounted to SEK 7,990 m (7,595), an increase
of 5.2%.
• Operating profit increased by slightly more than 60%, compared
with the same period a year ago, to SEK 234 m (145). Willys, the
wholesale operations and Spar Finland, in particular, contributed to the
strong result.
• Profit after net financial items rose by SEK 94 m to SEK 205 m
(111).
• Favourable launch for the new discount chain, Willys Hemma.
• Profit for the period includes a net capital gain of SEK 20 m
(0) on the sale of real estate.


Key figures
SEK m Jan.-March Jan.-Dec.
2002 2001 2001
Net sales 7,990 7,595 32,428
Operating profit before depreciation 364 262 1,171
Operating profit 2341 145 653
Operating margin, % 2.9% 1.9% 2.0%
Profit after financial items 205 111 527
Profit for the period 130 71 328
Earnings per share, SEK 2.44 1.33 6.16
Equity ratio, % 18.6% 15.3% 17.0
Return on capital employed, % 19.8% 7.4% 17.3%
Return on shareholders' equity, % 34.1% 14.8% 31.8%
Net asset value per share 24.90 17.70 22.70
1. Operating profit includes a capital gain of SEK 20 m on the
sale of real estate.
2.
CEO's comments
Axfood recorded a strong first quarter in 2002. The Group's structure is
well-established, enabling us to work on developing and improving the
efficiency of our business activities. Lower overall costs and
favourable volume growth are enhancing earnings.

During the first quarter Willys noted a continued positive trend, with
favourable sales and result development. Axfood's wholesale operations
also posted robust earnings as a result of good volumes and continued
cost-cutting. Spar Finland improved its profit compared with the same
period a year ago, through lower marketing and administrative expenses.
Hemköp showed a slight earnings improvement compared with the same
period a year ago due to lower costs.

In February the first stores in Axfood's new discount chain, Willys
Hemma, were opened. During the first half of the year some 30 units with
the new concept will be opened, either through new establishment or
conversions. Sales for the new stores have been positive and in line
with our expectations.

We continue to stand by our forecast for improved earnings in 2002
compared with 2001.

Mats Jansson
President and CEO

Important events during the first quarter
• The new Willys Hemma store chain was launched. Willys Hemma
today has about 20 stores and will have about 50 stores by the start of
2003.
• Willys rolled out its first line of private label goods and
opened three new stores with the modified concept that now applies for
the nationwide Willys chain.
·
Market trend
Volume growth for the retail food sector during the first quarter of
2002 is estimated to have amounted to 1.2% in Sweden and 3.5% in
Finland. Food prices rose 5.8% in Sweden.

Sales and earnings of the Axfood Group
Consolidated sales of the Axfood Group for the period 1 January - 31
March amounted to SEK 7,990 m (7,595), an increase of 5.2%.

The Axfood Group's sales in Sweden during the first quarter (in own and
collaborating stores), including VAT, amounted to SEK 8,721 m (8,277),
an increase of 5.5%.

Operating profit for the period amounted to SEK 234 m (145). The
operating margin was 2.9% (1.9%). Operating profit included a net
capital gain of SEK 20 m (0) on the sale of real estate.

Net financial items amounted to SEK -29 m (-34). Profit after financial
items was SEK 205 m (111). The margin after financial items was 2.6%
(1.5%).

Store operations
The Axfood Group's store operations are conducted via the wholly owned
retail chains Hemköp, Willys and Willys Hemma. Collaboration with
independent grocers is conducted via the Spar and Tempo franchise
concepts. Vivo Stockholm is run via a separate economic association. The
grocers in this chain are customers of Axfood's wholesaling operation.
The Vivo brand is owned by Axfood.

Hemköp
Hemköp continues to carry out its process of change. The new strategy is
expected to have an effect by the fourth quarter of 2002 at the latest.
During the first quarter Hemköp lowered its prices on a trial basis in
stores in southern and western Sweden. This new, lower price level will
be introduced throughout the chain in May.

Hemköp showed a slight earnings improvement compared with the same
period a year ago due to lower costs. Sales during the first quarter
amounted to SEK 1,607 m (1,596). Operating profit (EBIT) was SEK 42 m
(39). The operating margin for the period was 2.6% (2.4).

During the period, three stores were converted to other concepts in the
Group and two stores were closed.

Willys
Willys is Axfood's chain of large discount stores. The chain comprises
62 stores, of which 33 are still working under the Exet/Matex brand.
Conversion of these stores has begun and will continue through 2003.

Willys showed a strong first quarter, with a 15% rise in same-store
sales. The gross margin increased by 0.3%.

Sales during the period in wholly owned stores amounted to SEK 1,938 m
(1.453). Profit (EBIT) totalled SEK 67 m (49). The operating margin was
3.5% (3.4%).

During the first quarter two stores were converted to Willys, one was
acquired, and three stores were closed.

Willys Hemma
In February the Group launched Willys Hemma, a new store chain with the
goal of having nationwide coverage by 2005. This new, hard-discount
concept is based on a slim, carefully selected range of slightly more
than 2,000 items, prices that are among the lowest in the market, and
streamlined and cost effective operation. The stores will be located
primarily in residential areas to meet the needs of a customer category
that has not had access to discount stores.

The base of Willys Hemma is the some 30 stores in the HP Billigt & Nära
chain which were acquired in 2001. Conversion of these units to Willys
Hemma has begun, and by year-end 2002 the chain will consist of some 50
stores. Sales and earnings growth in the newly opened Willys Hemma
stores has been positive and in line with the business plan. Initially,
however, earnings will be affected by conversion costs.

Sales for Willys Hemma amounted to SEK 252 m (252) during the period.
Profit (EBIT) was SEK 2 m (5). The operating margin was 0.8% (2.0%).

Axfood Franchise
Axfood's collaboration with independent grocers is coordinated in Axfood
Franchise and the two store concepts Spar and Tempo. The Spar chain was
started in 2001 in connection with the decision by the former Vivo
retailers outside Stockholm to be included in the new chain. As of the
end of the first quarter, 122 stores had been converted to Spar. The
Spar chain will have a total of some 150 stores. The conversion process
has gone well, and the stores have increased their sales by an average
of 2%.

The independent grocers are customers of Dagab's wholesale business and
account for about half of sales. Roughly half of these stores' sales
consist of products supplied by Dagab.

Axfood Franchise is reported under joint-Group items. Profit (EBIT) for
the period was SEK 6 m (6).

Change of store structure - Group-owned stores, first quarter 2002
Sales/ Conversions
Dec. '01 Acquisitions closures to/from March '02
Hemköp 106 2 -3 101
Willys 62 1 3 2 62
Willys Hemma 29 2 - 1 32
Spar Finland 77 1 - - 78
274 273

Axfood Partihandel (wholesaling)
Axfood's wholesaling operations (Dagab and Axfood Närlivs) posted sales
of SEK 4,795 m (4,222) during the first quarter.

Dagab is the wholesaler for the Group's wholly owned chains and the
large stores run by independent grocers. Dagab strives to optimise and
refine product-, information- and capital flows between suppliers and
retailers.

During the first three months of the year Dagab continued its internal
cost-cutting work. Examples include the merger of two meat and processed
meat companies and the start of the changeover to geographically-steered
distribution.

Dagab's sales during the period amounted to SEK 4,153 m (3,203). Profit
(EBIT) was SEK 55 m (40). The operating margin was 1.3% (1.2%).

Axfood Närlivs is a wholesale function for convenience stores. It has
contracted customers such as the OKQ8, Shell and Preem service station
chains, small convenience store chains, and small store operations.
Axfood Närlivs also has a cash-and-carry operation with 25 outlets.

During the first quarter Axfood Närlivs further reduced its internal
costs at the same time that growth was favourable.

Axfood Närlivs' sales amounted to SEK 1,075 m (1,019) during the period.
Profit (EBIT) was SEK 16 m (10). The operating margin was 1.5% (1.0%).

Spar Finland
Spar Finland Abp consists of 78 wholly owned stores and collaborates
with 227 independent stores. In total the Spar Group has an approximate
9% share of the Finnish retail food market. Spar Finland is responsible
for the flow of goods in the Spar Group and also provides support
services to independent grocers working with the Spar Group. Spar
Finland owns 35% of the logistics company Tuku Logistics Oy, which
handles logistics and transports within the Spar Group.

In 2001 Spar Finland centralised key functions such as purchasing and
marketing, and carried out major cost reductions within the Group. This
work made a positive contribution to first-quarter earnings. The number
of store chains will be reduced from five to two (Eurospar and Spar). A
price increase during the first quarter also contributed to the earnings
improvement.

Sales during the first quarter amounted to SEK 1,300 m (1,303), and
profit (EBIT) was SEK 7 m (-5). The operating margin for the period was
0.5% (neg.).

Capital expenditures
Capital expenditures during the first quarter amounted to SEK 87 m. Of
these, investments in fixed assets in the wholesaling operations and in
the store network in Sweden accounted for SEK 72 m, and investments in
fixed assets by Spar Finland for SEK 15 m. During the period, Axfood
sold real estate, which made net contribution of SEK 20 m to earnings.
At the end of the period, Axfood Fastigheter's real estate portfolio had
a book value of SEK 502 m.

Financial position
Cash flow from continuing operations amounted to SEK 115 m (141) during
the first quarter. Lending by Handelskredit decreased by SEK 54 m and
amounted to SEK 295 m (492) at the end of the period. The Group's liquid
assets totalled SEK 334 m (216). Interest-bearing assets amounted to SEK
609 m (682). Interest-bearing net debt was SEK 1,580 m (2,163) at the
end of the period.

The equity ratio was 18.6% (15.3%), while the debt-equity ratio, net,
was 1.1 (1.9).

Employees
The Axfood Group had 8,093 (8,221) full-time employees at the end of the
first quarter. Of these, slightly more than 5,000 worked in stores.

Parent Company
Other operating revenue for the Parent Company amounted to SEK 8 m (-)
during the period. After administrative expenses of SEK 21 m and net
financial items of SEK -20 m, profit after financial items was SEK -23 m
(-20). Capital expenditures totalled SEK 0.

Accounting principles
In preparing this interim report the Group has applied the accounting
recommendations that took effect on 1 January 2002. In other respects,
the same accounting principles and calculation methods used in the 2001
Annual Report have been applied.

The next reporting date will be 1 August 2002.

Stockholm, 25 April 2002

Axfood AB (publ.)
The Board of Directors