Continued growth for Axfood in a turbulent time
The Axfood Group continues to perform and grow more than the market. The very strong development within certain parts of the company, where the accelerated growth rate for the Willys stores is particularly noteworthy, have compensated for those parts of the company that to a large extent have been negatively affected by the corona pandemic. Despite these challenges, Axfood summarizes a quarter of strong growth and maintained profitability.
President and CEO Klas Balkow’s comments on the interim report for the second quarter 2020:
“In the second quarter Axfood reported higher sales and once again grew faster than the market, with 8.3% growth in store sales. Very strong like-for-like growth for Willys’ stores, which in a time of great economic uncertainty benefits from the position as Sweden’s leading discount chain, compensated for the parts of our business that have been negatively impacted during the pandemic. During the quarter we continued to work hard to ramp up our digital offering and ways of working, and as a result, we also continued to grow faster than the market online with growth of a full 128%. The pandemic has prompted more and more people to shop online, and we are seeing a steady stream of new customers, not least in the older age groups. At the same time that we have devoted efforts to meeting new needs and behaviours, during the quarter we continued working with sustainability and with taking steps toward developing our business for the future.”
Second quarter summary
Consolidated net sales totalled SEK 13,570 m (13,038), an increase of 4.1%.
Operating profit totalled SEK 605 m (601), an increase of 0.7%. The operating margin was 4.5% (4.6%).
Net profit for the period totalled SEK 446 m (429), and earnings per share before dilution were SEK 2.22 (2.01).
The quarter was characterized by changed shopping behaviour among consumers due to the spread of the coronavirus, Covid-19. An increase in consumption of food at home had a favourable impact on sales growth. However, certain businesses with exposure to cafés and restaurants as well as cross-border shopping and locations where customer traffic has decreased significantly were negatively impacted.
To secure the company’s obligation to provide conditional matching and performance shares under LTIP 2020, during the quarter Axfood repurchased 258,000 shares for a total of SEK 53 m.
First half summary
Consolidated net sales totalled SEK 26,636 m (24,969), an increase of 6.7%.
Operating profit totalled SEK 1,148 m (1,086), an increase of 5.7%. The operating margin was 4.3% (4.4%).
Net profit for the period totalled SEK 848 m (783), and earnings per share before dilution were SEK 4.15 (3.69).
Axfood will present the interim report for the second quarter of 2020 in a conference call at 9.30 a.m. (CET) today. The report will be presented by Klas Balkow, President and CEO, and Anders Lexmon, CFO. To follow the presentation, visit www.axfood.se or ring: Sweden: +46 8 505 583 54, UK: +44 333 300 9035, USA: +1 833 823 0590
For further information, please contact:
Alexander Bergendorf, Head of Investor Relations, Axfood AB, tel +46 730 49 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 a.m. CET on 15 July 2020.
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