Increased market shares and strong earnings
Axfood sums up a strong quarter with growth that once again exceeded the market and improved profitability. An impressive performance for the Willys stores and a recovery for Snabbgross more than compensated for the businesses that continue to be challenged by the ongoing pandemic.
President and CEO Klas Balkow’s comments on the interim report for the third quarter 2020:
“Axfood continues to gain market shares, and particularly noteworthy was growth for Willys, which is strengthening its position as Sweden’s leading discount grocery chain. Profit for the third quarter was strong, and despite challenges for parts of our operations we improved our profitability. The pandemic is putting demands on our operations, which entails a strong focus on adapting to meet changed customer needs and behaviours. Despite this we continue to develop our business at a fast pace within many areas.”
Third quarter summary
- Consolidated net sales totalled SEK 13,426 m (12,731), an increase of 5.5%.
- Operating profit totalled SEK 796 m (715), an increase of 11.3%. The operating margin was 5.9% (5.6%).
- Net profit for the period totalled SEK 605 m (536), and earnings per share before dilution were SEK 2.95 (2.50).
- Payment of SEK 3.50 per share was made in September – the second portion of the total shareholder dividend of SEK 7.25 (7.00) per share.
- The quarter was characterized by changed shopping behaviour among consumers due to the coronavirus/Covid-19. An increase in consumption of food at home had a favourable impact on sales. However, certain businesses with exposure to cafés and restaurants as well as cross-border shopping and in locations where customer traffic has decreased significantly were negatively impacted, although to a lesser extent than during the second quarter.
- A decision was made that Snabbgross will launch a new B2C store concept, Snabbgross Club, towards the end of the year.
- Consolidated net sales totalled SEK 40,062 m (37,700), an increase of 6.3%.
- Operating profit totalled SEK 1,944 m (1,801), an increase of 7.9%. The operating margin was 4.9% (4.8%).
- Net profit for the period totalled SEK 1,454 m (1,319), and earnings per share before dilution were SEK 7.10 (6.19).
Significant events after the balance sheet date
- On 1 October Axfood’s new Head of IT Karin Hedlund began her introduction period with the Company prior to assuming her position in November.
Axfood will present the interim report for the third 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 69, UK: +44 333 300 9260, USA: +1 833 526 8347
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 22 October 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