Strong growth generates results
Our efforts to develop the offering, modernize stores, expand e-commerce and increase digitalization and automation of our work processes are generating results. Axfood continues to grow considerably faster than the market and has managed to deliver its highest third quarter operating profit ever. Willys continues to distinguish itself with outstanding growth at the same time that the Group’s investments in developing the customer meeting, a sustainable assortment and the logistics solutions of the future are proceeding according to plan.
President and CEO Klas Balkow’s comments on the interim report for the third quarter 2019:
“With 6.7% growth in store sales and a full 38% growth in online, I can affirm that this quarter we continued to outpace growth in the market in both channels. Willys continues to distinguish itself with tremendous performance, where the roll-out of the online offering to more cities and stores has contributed to making Willys increasingly relevant for more customers. In addition, we are seeing favourable growth in Hemköp’s store sales including franchises, now with an added boost from the addition of Östenssons’ nine stores starting on 1 September. Also Axfood Snabbgross, which had a very strong third quarter last year, posted good growth for the quarter. Operating profit for the third quarter exceeded last year’s strong result even without the effect of IFRS 16. The improvement can be credited mainly to favourable sales growth for all of our chains.”
Third quarter summary
- Consolidated net sales amounted to SEK 12,731 m (12,050), an increase of 5.7%.
- Operating profit totalled SEK 715 m (620), an increase of 15.4%. The operating margin was 5.6% (5.1%). The new accounting standard for leasing (IFRS 16) had a positive effect on operating profit of SEK 43 m and on the operating margin of 0.3 percentage points.
- Net profit for the period totalled SEK 536 m (482), and earnings per share before dilution were SEK 2.50 (2.24).
- The Östenssons store chain is a Hemköp franchisee as from 1 September 2019.
- As a step in the development of Axfood’s new highly automated logistics centre in Bålsta, in accordance with the previously communicated Letter of Intent, a long-term lease has been signed with the property owner NREP Logicenters.
Summary January - September
- Consolidated net sales amounted to SEK 37,700 m (35,715), an increase of 5.6%.
- Operating profit totalled SEK 1,801 m (1,599), an increase of 12.6%. The operating margin was 4.8% (4.5%). The new accounting standard for leasing (IFRS 16) had a positive effect on operating profit of SEK 129 m and on the operating margin of 0.3 percentage points.
- Net profit for the period totalled SEK 1,319 m (1,249), and earnings per share before dilution were SEK 6.19 (5.87).
Significant events after the balance sheet date
- No significant events has taken place after the balance sheet date.
Welcome to today’s conference call where President and CEO Klas Balkow together with CFO Anders Lexmon will present the interim report for the tird quarter 2019. The presentation starts at 9:00 a.m. CET and can be followed via axfood.se or by phone:
Sweden: +46 8 566 427 04, UK: +44 333 300 92 71, USA: +1 833 526 8396.
For further information, please contact:
Elisabet Johansson, Interim Head of Investor Relations, Axfood AB, tel +46 72 23 606 43
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 a.m. CET on 24 October 2019.
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 Direkten. B2B sales are handled through Axfood Snabbgross, and our support company Dagab is responsible for the Group’s product development, purchasing and logistics. The Axfood family also includes Mat.se, Middagsfrid and Urban Deli as well as the partly owned companies Apohem and Eurocash. Together the Group has more than 10,000 employees and sales of nearly SEK 50 bn. Axfood has been listed on Nasdaq Stockholm since 1997, and the principal owner is Axel Johnson AB. Read more at www.axfood.se.