Axfood AB: 2022 begins with strong growth

Stockholm / SE. (axf) Sweden’s Axfood AB has started off the year with strong growth, continued gains in market share and increased earnings in every business segment. Axfood continues to maintain a high rate of development throughout all operations. The integration of Bergendahls Food is proceeding according to plan, and the divestment of Mat.se to Mathem was completed on 1 March. At the same time, Axfood is operating in an exceptional time in a market that is growing increasingly unpredictable.

President and CEO Klas Balkow’s comments on the interim report for the first quarter 2022: «We continued to maintain a rapid pace in all parts of the operations during the first quarter and we have started the year with retail sales growth that is significantly higher than the market. This shows that our food and store concepts continue to attract existing and new consumers who value affordable, good and sustainable food.

All operating segments reported higher operating profit for the quarter, with strong sales and healthy productivity gains compensating for significantly higher fuel costs and a weak SEK. As a result, we can report higher adjusted operating profit of SEK 653 m and an adjusted operating margin of 3.9 percent, that was diluted by the consolidation of Bergendahls Food.

After a long period of low food price inflation in Sweden, we have seen a sharp increase in recent months. These price increases have been driven by several different factors – higher prices for raw materials as well as higher costs for packaging materials, fuel, electricity and transports. What is now happening in Ukraine is causing increased uncertainty and instability, and there is much to suggest that prices will continue to rise.»

First quarter summary

• Net sales totalled SEK 16,593 m (13,203), an increase of 25.7 percent, including the acquisition of Bergendahls Food.
• Retail sales totalled SEK 12,711 m (12,207), an increase of 4.1 percent.
• Operating profit amounted to SEK 835 m (565) and included items affecting comparability of net SEK 182 m. The operating margin was 5.0 percent (4.3).
• Adjusted operating profit amounted to SEK 653 m (565), an increase of 15.5 percent. The adjusted operating margin was 3.9 percent (4.3).
• Net profit for the period amounted to SEK 682 m (430) and earnings per share before dilution to SEK 3.30 (2.16).
• Mat.se was divested to Mathem on 1 March in exchange for newly issued shares in Mathem. The transaction resulted in a capital gain of SEK 221 m, which was recognised as an item affecting comparability during the quarter. Axfood is the second-largest owner of Mathem, with an ownership stake of 16.5 percent.
• Axfood’s Annual General Meeting (AGM) on 23 March authorised the Board to carry out a rights issue amounting to approximately SEK 1.5 bn. The AGM also approved a dividend to shareholders of SEK 7.75 (7.50) per share. The dividend amount is divided into two payments. The first payment of SEK 4.00 was made in March, and the second payment of SEK 3.75 will take place in September.