Interim Report Axfood AB (publ)

Transcription

1 Interim Report Axfood AB (publ) THIRD QUARTER SUMMARY Axfood's consolidated sales for the period July September totalled SEK 9,44 m (8,735), an increase of 3.5%. Retail sales for Group-owned stores increased by 3.% during the period. Like-for-like sales were unchanged during the period. Operating profit for the period was SEK 368 m (37). Profit after financial items was SEK 359 m (362) for the period. Profit after tax totalled SEK 265 m (267) for the period, and earnings per share were SEK 5.6 (5.9). Ola Andersson resigned as President of Hemköpskedjan. Anders Strålman was appointed as Acting President. Axfood's goal for is to achieve an operating profit at the same level as in. NO SIGNIFICANT EVENTS HAVE TAKEN PLACE AFTER THE BALANCE SHEET DATE Key ratios SEK m Change Full year Change Net sales 9,44 8, % 27,54 25, % 34,795 Operating profit % % 1,25 Operating margin, % Profit after financial items % % 1,214 Profit after tax % % 891 Earnings per share, SEK % % Cash flow per share, SEK ,3% Cash flow from operating activities per share, SEK % % 26.4 Return on capital employed, % Return on shareholders' equity, % Shareholders' equity per share, SEK % 61.7 Equity ratio, % ) Before and after dilution. 2) Moving 12-month figures. 3) Net asset value per share corresponds to shareholders' equity per share. For further information, please contact: Anders Strålman, President and CEO, mobile Karin Hygrell-Jonsson, CFO, mobile Anne Rhenman-Eklund, Head of Corporate Communications, , mobile The information in this interim report is such that Axfood is required to disclose in accordance with the Securities Market Act. Submitted for publication at 7.3 a.m. (CET) on 23 October. 1

2 CEO'S COMMENTS Axfood reported yet another quarter of stable earnings and sales performance. All units once again continued to this through efficiency and cost control in all areas. Positive result for all units Hemköp has continued to show positive development with good sales. However, thus far during the year earnings have been affected by nonrecurring costs in connection with store closures. During the period, a number of different marketing activities contributed to sales growth and to strengthening the Hemköp brand. Focus is now on attractively priced customer offers aimed at boosting sales. The former Vi stores that were converted to Hemköp a year ago also performed well. Willys' profitability remained good with stable sales, despite the ongoing renewal of the chain's stores. An additional three stores were remodelled, and a total of 93 stores have now been modernized. These investments in a better shopping experience will further strengthen Willys' market position. The remaining approximately 2 stores in the renewal programme will be upgraded in 213. PrisXtra once again delivered a positive result, however, as previously sales were unsatisfactory on account of disruptive road work. Axfood Närlivs posted favourable sales performance and grew its market share. Growth can be credited mainly to deliveries to new customers. However, like-for-like sales were hurt by generally poor weather during the summer. Dagab's performance is characterized by efficiency and high delivery reliability. At the same time, implementation of the new business system is continuing, which like earlier quarters has entailed higher costs. As planned, additional costs for this work will be charged against earnings also in the coming quarters. Private label products For many years, private label products have been a key part of Axfood's strategy for profitable growth. In September we reached our goal of attaining a 25% private label share. The increase can be credited in part to our ambitious rollout in recent years of the Group-wide Garant brand, which has been well-received by customers. Market outlook The economic turbulence in Europe and the USA remains. This is creating uncertainty about how the Swedish economy will develop moving forward. Despite this, Swedish consumers are still cautiously optimistic. Axfood therefore sees no major changes in the market outlook for the remainder of the year. We continue to believe that food price inflation will stay at 1% for the year, despite higher prices for certain staples. Strategy for profitable growth The ambitious pace of investment aimed at ensuring profitable growth continues. Investing in store modernizations is a prerequisite for meeting our customers' expectations for a better shopping experience. Inviting stores and attractively priced customer offers, along with a high share of private label products, will together lead to higher sales. At the same time, strict cost control will be maintained. Parallel with this, implementation of a new business system, SAP, will continue until 214. The pace of investment in the coming year will therefore be level with, in the range of SEK 9-1, m. Axfood's goal for is to achieve an operating profit at the same level as in. Anders Strålman President and CEO, Axfood AB 2

3 SALES, AXFOOD GROUP Third quarter Consolidated wholesale and retail sales for the Axfood Group totalled SEK 9,44 m (8,735) during the third quarter, an increase of 3.5%. Store sales for the Axfood Group (wholly owned stores and Hemköp franchises) totalled SEK 7,65 m (6,976), an increase of 9.%. Sales for Axfood-owned retail operations increased by 3.% during the third quarter, while like-for-like sales were unchanged. Axfood's private label share was 25.% (23.1%) as of September. Consolidated wholesale and retail sales for the Axfood Group totalled SEK 27,54 m (25,881) during the period, an increase of 4.5%. Store sales for the Axfood Group (wholly owned stores and Hemköp franchises) totalled SEK 23,62 m (2,911), an increase of 1.3%. Sales for Axfood-owned retail operations increased by 3.2% during the period, with a.2% rise in like-for-like sales. Net sales per operating segment SEK m Full year Hemköp 1,225 1,143 3,735 3,532 4,787 Willys 4,818 4,76 14,48 14,56 18,94 PrisXtra Axfood Närlivs 1 1,652 1,483 4,766 4,134 5,516 Dagab 1 6, 6,16 18,286 18,22 24,295 Other 1, 2 1,113 1,38 3,354 3,137 4,156 Internal sales Dagab -4,811-4,785-14,722-14,49-19,436 Axfood Närlivs Other -1, ,214-2,991-3,965 Total 9,44 8,735 27,54 25,881 34,795 1) The operations of Dagab, Axfood Närlivs and Axfood Sverige were legally combined on 1 January. Internal sales between these units have ceased as from. Comparative figures have been adjusted and are shown in the tables on page 9. 2) Includes joint-group support functions, such as purchasing coordination, IT and corporate offices. Retail sales, Group-owned and franchise stores SEK m % 1) sales, % 1) % 1) sales, % 1) Like-for-like Like-for-like Hemköp 1, , Hemköp franchises 1, , Hemköp total 2, , Willys total 4, , PrisXtra total Total 7, , ) Percentage change compared with the corresponding period a year ago. Change in store structure, nine Dec. New establishment Acquisitions Sales/ closures Conversions to/from Sept. Hemköp Willys 1) PrisXtra 5 5 Total, Group-owned Hemköp franchises ) Of which, Willys Hemma

4 EARNINGS, AXFOOD GROUP Third quarter Operating profit for the quarter totalled SEK 368 m (37). The operating margin was 4.1% (4.2%). Net financial items totalled SEK -9 m (-8), and profit after financial items was SEK 359 m (362). The margin after financial items was 4.% (4.1%). Profit after tax was SEK 265 m (267). Joint-Group costs were affected by higher amortization for the new business system. Operating profit for the period totalled SEK 936 m (928). The operating margin was 3.5% (3.6%). Net financial items for the period totalled SEK -3 m (-26), and profit after financial items was SEK 96 m (92). Profit after tax was SEK 668 m (665). Axfood has no significant transactions with related parties, other than transactions with subsidiaries. Operating profit for the period, broken down by operating segment SEK m Full year Hemköp Willys PrisXtra Axfood Närlivs Dagab Other Operating profit for the period, total ,25 1) Includes joint-group support functions, such as purchasing coordination, IT and corporate offices. Also includes charges for, among other things, amortization of surplus value pertaining to the acquisition of PrisXtra and amortization of SEK 39 m (24) pertaining to the new business system. 2) Net financial items are not distributed per operating segment. CAPITAL EXPENDITURES Total capital expenditures during the period January September amounted to SEK 679 m (696), of which SEK 159 m (49) pertained to acquisitions of businesses. In addition, SEK 272 m (345) pertained to investments in non-current assets in retail operations, SEK 43 m (78) to investments in non-current assets in wholesale operations, and SEK 151 m (156) to IT development. During the period, nine stores were acquired as well as 5% of the wholesale company Hall Miba, a supplier of car care products and automotive accessories. Axfood has control of the partly owned wholesale business that was acquired in January, through shareholder agreements and board dominance. Combined consideration for the acquisitions amounted to SEK 159 m, of which SEK 28 m consisted of contingent payments. Intangible assets associated with the acquisitions amounted to approximately SEK 153 m, including approximately SEK 131 m in goodwill. Goodwill is primarily attributable to the synergies that the acquired operations are expected to generate. Combined annual sales of the acquired businesses amount to approximately SEK 8 m. Consideration for the acquisitions, excluding the contingent payments, has been paid in cash. Equity ratio, % Debt-equity ratio, multiple Capital expenditures*, depreciation/amortization, SEK m Q4 11 Q1 12 Q Q4 11 Q1 12 Q Q4 11 Q1 12 Q Capital expenditures* * Excluding goodwill Depreciation/amortization 4

5 FINANCIAL POSITION Cash flow from operating activities before paid tax was SEK 1,498 m (1,279) during the first nine of the year. Paid tax amounted to SEK -113 m (-275). Cash and cash equivalents (interest-bearing assets) held by the Group amounted to SEK 387 m, compared with SEK 317 m in December. Interestbearing liabilities and provisions totalled SEK 956 m at the end of the period, compared with SEK 1,42 m in December. Interest-bearing net debt was SEK 569 m at the end of the period, compared with SEK 725 m in December. Payout of the shareholder dividend affected cash flow by SEK -63 m (-63), and net capital expenditures affected cash flow by SEK -593 m (-664). The equity ratio was 38.6%, compared with 39.1% in December. THE SWEDISH FOOD RETAIL MARKET According to Statistics Sweden's retail trade index for August, accumulated sales for the food retail segment have risen 3.6% since the start of the year in current prices. In fixed prices, adjusted for price and calendar effects, volume increased by 1.3%. STORE OPERATIONS Willys Third quarter Willys reported continued good profitability and stable sales performance. Sales amounted to SEK 4,818 m (4,76), an increase of 2.4% compared with a year ago. Like-for-like sales decreased by.1%. As part of efforts to improved customers' shopping experience and boost sales, an additional three stores were modernized during the period. A total of 93 stores have now been remodelled, and the remaining approximately 2 stores will be modernized in the coming two years. Operating profit amounted to SEK 215 m (212), an increase of 1.4%. The operating margin was 4.5% (4.5%). The private label share as of September was 27.5% (25.3%) for Willys and 29.7% (29.%) for Willys Hemma. The number of stores was unchanged during the period. Willys' sales during the period January September amounted to SEK 14,48 m (14,56), an increase of 3.% compared with the same period a year ago. Like-for-like sales were unchanged compared with the same period a year ago. Operating profit for the first nine of the year was SEK 64 m (574), and the operating margin was 4.2% (4.1%). During the period, one Willys Hemma store was established and one was acquired. Willys thereby comprises 172 stores, of which 46 are Willys Hemma. Sales, SEK m, and operating margin, % Key ratios 6, 5, 4, 3, 2, 1, 4, , , ,961 4, SEK m Full year Net sales 4,818 4,76 14,48 14,56 18,94 Change in like-for-like sales, % Operating profit Operating margin, % Number of Group-owned stores Q4 11 Q1 12 Q Average number of employees - - 3,48 3,359 3,41 Private label share (Willys/Willys Hemma) / / /29.7 5

6 Hemköp Third quarter Hemköp's sales performance remained favourable, with stable earnings. A number of different marketing activities associated with the new brand platform contributed to the positive performance. Sales for Hemköp's stores both Group-owned and franchises rose 24.5% during the third quarter. Sales for Group-owned stores amounted to SEK 1,27 m (1,13), an increase of 6.8%. Like-for-like sales for Group-owned stores increased by 1.1% during the period. Sales for franchise stores totalled SEK 1,467 m (1,17), an increase of 44.2%. Compared with the same period a year ago, sales were favourably affected by the 43 Vi stores that were converted to Hemköp franchises during the preceding year. Like-forlike sales for franchise stores increased by.1%. Operating profit for the third quarter was SEK 32 m (34). Profit a year ago was favourably affected by a reversal of structural costs for store closures in the amount of SEK 4 m. The operating margin for the period was 2.6% (3.%). Hemköp's private label share (including franchise stores) continued to rise and was 18.7% (17.6%) as of September. As part of efforts to improve customers' shopping experience and further boost sales, three stores were modernized during the quarter. Two stores were acquired during the period and one was closed. At the start of September, the first Hemköp store began operating under to so-called 91/9 agreement. The model entails that the store is majority-owned by Axfood during the initial years. The goal is that the store's proprietor will then attain 99% ownership of the store, while Axfood's stake will decrease to 1%. During the quarter, Ola Andersson announced his departure as President of Hemköpskedjan. Anders Strålman, President and CEO of Axfood, has been appointed as Acting President of Hemköp. Like-for-like sales for Group-owned stores increased by 2.3% during the period. Sales for Hemköp's stores both Group-owned and franchises increased by 27.3% during the period January September. Sales for Group-owned stores amounted to SEK 3,681 m (3,493), an increase of 5.4%. Sales for franchise stores totalled SEK 4,526 m (2,953), an increase of 53.3%, with a 1.2% rise in likefor-like sales. Operating profit for the period January September amounted to SEK 78 m (7). The operating margin for the period was 2.1% (2.%). Operating profit was affected by nonrecurring expenses totalling SEK 13 m (8). During the first nine of the year, eight stores were acquired, one was established and four were sold. Also during the period, one franchise store was established, three were acquired, and 11 were sold or closed. Hemköp had 181 stores at the end of the period, of which 67 were wholly owned. Sales, SEK m, and operating margin, % 1,6 6 1,255 1,239 1,271 1, ,2 1, Q4 11 Q1 12 Q Key ratios SEK m Full year Net sales 1,225 1,143 3,735 3,532 4,787 Change in like-for-like sales, % Operating profit Operating margin, % Number of Group-owned stores Average number of employees - - 1,394 1,36 1,364 Private label share

7 PrisXtra Third quarter PrisXtra once again reported a positive result. As previously, sales were unsatisfactory due to traffic rerouting and road work in Stockholm. Sales during the third quarter totalled SEK 113 m (123), a decrease of 8.1%. Like-for-like sales decreased by 8.1%. Operating profit was SEK 4 m (-1), and the operating margin was 3.5% (-.8%). PrisXtra's sales during the period January September amounted to SEK 375 m (49), a decrease of 8.3%. Like-for-like sale decreased by 8.3% during the period. Operating profit for the period January September was SEK 13 m (1), and the operating margin was 3.5% (2.4%). Sales, SEK m, and operating margin, % Key ratios SEK m Full year Net sales Change in like-for-like sales, % Operating profit Operating margin, % Number of Group-owned stores Average number of employees Q4 11 Q1 12 Q AXFOOD WHOLESALING Dagab Third quarter Dagab had stable performance during the quarter, with a high level of delivery reliability and high productivity. Sales during the third quarter amounted to SEK 6, m (6,16). Operating profit totalled SEK 46 m (56), and the operating margin was.8% (.9%). Implementation of the new business system continued during the period, which like in earlier quarters entailed higher costs. According to plan, additional costs for this work will be charged against earnings in coming quarters. Dagab's sales during the period January September amounted to SEK 18,286 m (18,2). Operating profit for the period was SEK 119 m (138), and the operating margin was.7% (.8%). Sales, SEK m, and operating margin, % 8, 7, 6,16 6,273 6,22 6,264 6, 6, 5, , 3,.6.5 2, 1, Key ratios SEK m Full year Net sales 6, 6,16 18,286 18,22 24,295 Distributed sales 4,189 4,193 12,715 12,549 16,981 Operating profit Operating margin, % Average number of employees Delivery reliability, % Q4 11 Q1 12 Q

8 Axfood Närlivs Third quarter Axfood Närlivs has had continued favourable growth, largely driven by deliveries to new customers. However, like-for-like sales were negatively affected by poorer weather compared with a year ago. Sales during the third quarter amounted to SEK 1,652 m (1,483), an increase of 11.4%. Operating profit for the third quarter amounted to SEK 5 m (44), and the operating margin was 3.% (3.%). Axfood Närlivs' sales during the period January September amounted to SEK 4,766 m (4,134), and increase of 15.3%. Operating profit for the period amounted to SEK 86 m (86), and the operating margin was 1.8% (2.1%). Sales, SEK m, and operating margin, % 2, 5 1,673 1,652 1,6 1,483 1, ,382 1, Key ratios SEK m Full year Net sales 1,652 1,483 4,766 4,134 5,516 Distributed sales 1,512 1,338 4,369 3,732 4,992 Operating profit Operating margin, % Axfood Snabbgross, no. stores Average number of employees Delivery reliability, % Q4 11 Q1 12 Q Legal combination of companies On 1 January a legal combination of the operations of Dagab AB, Axfood Närlivs AB and Axfood Sverige AB was carried out. The combination entailed the transfer of the operations of Dagab and Axfood Närlivs to Axfood Sverige AB. Axfood Närlivs AB has been combined with Axfood Sverige AB through a merger, and Dagab AB has transferred its entire operations to Axfood Sverige AB through an asset and liability transfer. No changes will be made in the monitoring and reporting of the respective units as a result of the combination. Dagab and Axfood Närlivs will continue to be monitored and reported as separate segments. Combining the operations will lead to simpler administrative flows between the companies in the Axfood Group. Internal sales between the companies ceased as of 1 January, and the comparative figures for the respective units have been adjusted, as shown in the tables below. Total sales for the Axfood Group are not affected. The combination entails no change in the comparative figures for earnings in, neither per unit nor in total. Sales, pro forma Q1 Adjustment Q1 pro forma Axfood Närlivs 1, ,184 Dagab 6, ,87 Other 1,2-1,2 Internal sales Dagab -5, ,668 Axfood Närlivs Other

9 Sales, pro forma Q2 Adjustment Q2 pro forma Six Adjustment Six pro forma Axfood Närlivs 1, ,467 3, ,651 Dagab 6, ,199 12, ,6 Other 1,82-3 1,79 2,12-3 2,99 Internal sales Dagab -5, ,956-1,785 1,161-9,624 Axfood Närlivs Other -1,32 3-1,29-2,6 3-2,3 Sales, pro forma Adjustment pro forma Adjustment pro forma Axfood Närlivs 1, ,483 4, ,134 Dagab 6, ,16 19,191-1,169 18,22 Other 1,38 1,38 3,14-3 3,137 Internal sales Dagab -5, ,785-16,21 1,81-14,49 Axfood Närlivs Other , ,991 Sales, pro forma Q4 Adjustment Q4 pro forma Full year Adjustment Full year pro forma Axfood Närlivs 1, ,382 6, ,516 Dagab 6, ,273 25,813-1,518 24,295 Other 1,21-2 1,19 4, ,156 Internal sales Dagab -5, ,27-21,792 2,356-19,436 Axfood Närlivs Other ,97 5-3,965 SIGNIFICANT RISKS AND UNCERTAINTIES In the course of its business the Axfood Group is exposed to operational, strategic and financial risks. Operational and strategic risks include business and liability risks, among others, while financial risks include liquidity risk, interest rate risk and currency risk. Axfood works continuously with risk identification and assessment. One of the most significant business risks that Axfood has identified in its safety analysis work is a total loss, such as from a fire at one of the central warehouses in Jordbro or Backa. Major emphasis is put on preventive work, and the organization for this is well developed, as is the Company's planning to maintain operating continuity in the event of unforeseen events. For a thorough account of the risks that affect the Group, please refer to the Annual Report. SEASONAL EFFECTS Axfood has no significant seasonal variations. ENVIRONMENTAL IMPACT One of Axfood's strategic objectives is to work actively for sustainable development. In the day-to-day activities, sustainability aspects are integrated in product purchasing and selection as well as in logistics, product flows and store operations. Priority areas for Axfood's environmental sustainability work are energy consumption, transports and the eco-cycle. All of these areas have major bearing on Axfood's business and have large potential for improvement. One overall goal is to reduce the climate impact of the Group's operations by 75% during the period The remainder of the Group's environmental impact will be climate-compensated. One area of importance going forward involves work on improving energy efficiency and changing over to refrigerants 9

10 that do not have any adverse climate impact. Following a procurement process, a system for detailed measurement and control of electricity consumption is being installed in all Group-owned stores. The system will enable central regulation and monitoring aimed at reducing electricity consumption. In 21 Axfood changed over to renewable electricity for most Group-owned stores and warehouses. Dagab and Axfood Närlivs are working continuously to minimize their climate impact. These measures include maximizing load capacity in delivery vehicles and the use of so-called eco-driving techniques to reduce fuel consumption. In addition, Dagab and Axfood Närlivs use "Evolution" diesel, which is partly based on pine oil. Evolution diesel has been improved through a increased proportion of pine oil and now generates 16% 25% lower CO 2 emissions than conventional diesel fuel, depending on the time of year. The previous reduction in CO 2 emissions was 5% 16%. Axfood also focuses on recycling, where most waste is either recycled for use as raw material by the recycling industry or converted to energy. Energy efficiency improvement will continue to have high priority. A more detailed description of Axfood's work with environmental matters can be found at axfood.se. PARENT COMPANY Other operating revenue for the Parent Company during the period January September amounted to SEK 135 m (132). After selling and administrative expenses, totalling SEK 27 m (187), and net financial items totalling SEK -3 m (-3), profit after financial items was SEK -75 m (-58). Capital expenditures during the period totalled SEK 3 m (2). The Parent Company's interest-bearing net debt was SEK 446 m at the end of the period, compared with SEK 749 m in December. The Parent Company has no significant transactions with related parties, other than transactions with subsidiaries. ACCOUNTING POLICIES Axfood applies International Financial Reporting Standards (IFRS) as endorsed by the European Union. This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting, the Swedish Annual Accounts Act, and recommendation RFR 2 Reporting for Legal Entities, issued by the Swedish Financial Reporting Board (RFR). In order to prepare the financial statements in accordance with IFRS, the Board and Executive Committee make estimations and assumptions that affect the Company's result and position as well as other disclosures in general. These estimations and assumptions are based on historical experience and are reviewed on a regular basis. The accounting policies used by the Parent Company and Group are unchanged compared with the most recently published annual report. FORECAST Axfood's goal for is to achieve an operating profit at the same level as in. NEXT REPORT The year-end report for the period January December will be released on 7 February 213. NOMINATING COMMITTEE Shareholders who wish to submit nominations to the Nominating Committee ahead of Axfood's Annual General Meeting on 13 March 213 may do so by at: valberedning@axfood.se. ANNUAL GENERAL MEETING The Annual General Meeting will be held at 5 p.m. on 13 March 213 at Cirkus, in Stockholm. The Annual Report will be published on 18 February 213 on Axfood's website, at which time it will be available 1

11 at Axfood's head offices in Solna. In addition, printed versions will be distributed by post to shareholders, upon request, approximately one week before the Annual General Meeting. This interim report has been reviewed by the Company's auditors. The review report can be found on page 12. Anders Strålman President and CEO PRESS RELEASES ISSUED DURING THE THIRD QUARTER 28 August Ola Andersson leaves Hemköpskedjan Anders Strålman appointed Acting President 7 September Axfood wins award as Listed Company of the Year 11

12 AUDITORS' REVIEW REPORT To the Board of Directors of Axfood AB (publ) Reg. no Introduction We have reviewed the accompanying interim report for Axfood AB (publ) for the period 1 January 3 September. The Board of Directors and the President are responsible for the preparation and presentation of the interim report in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review. Scope of review We have conducted our review in accordance with the Swedish Standard on Review Engagements, SÖG 241, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review has another focus and is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (ISA) and other generally accepted auditing standards. The procedures performed in a review to not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion based on a review does not provide the same level of assurance as a conclusion based on an audit. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the interim report, in all material respects, is not prepared for the Group in accordance with IAS 34 and the Swedish Annual Accounts Act and for the Parent Company in accordance with the Swedish Annual Accounts Act. Stockholm, 23 October KPMG AB Thomas Thiel Authorized Public Accountant 12

13 FINANCIAL STATEMENTS, GROUP Condensed statement of comprehensive income, Group SEK m Full year Net sales 9,44 8,735 27,54 25,881 34,795 Cost of goods sold -7,821-7,53-23,388-22,255-29,877 Gross profit 1,223 1,232 3,666 3,626 4,918 Selling/administrative expenses, etc ,73-2,698-3,668 Operating profit ,25 Net financial items Profit before tax ,214 Tax Profit for the period Other comprehensive income Change in fair value of forward exchange contracts Change in fair value of available-for-sale financial assets Tax attributable to components in other comprehensive income Other comprehensive income for the period Total comprehensive income for the period Operating profit includes depreciation/amortization of Earnings per share, SEK Profit for the period attributable to Owners of the parent Non-controlling interests 1 1 Total comprehensive income for the period attributable to Owners of the parent Non-controlling interests

14 Condensed statement of financial position, Group SEK m 3/9/ 3/9/ 31/12/ Assets Goodwill 1,744 1,597 1,613 Financial assets Other non-current assets 2,78 2,568 2,684 Total non-current assets 4,499 4,197 4,341 Inventories 1,785 1,832 1,916 Accounts receivable trade Other current assets ,65 Cash and bank balances Total current assets 3,983 3,714 3,937 Total assets 8,482 7,911 8,278 Shareholders' equity and liabilities Equity attributable to owners of the parent 3,248 3,9 3,237 Equity attributable to non-controlling interests Total shareholders' equity 3,275 3,9 3,237 Non-current interest-bearing liabilities Noninterest-bearing non-current liabilities Total non-current liabilities Current interest-bearing liabilities Accounts payable trade 2,446 2,212 2,273 Other current noninterest-bearing liabilities 1,59 1,432 1,418 Total current liabilities 4,493 4,274 4,324 Total shareholders' equity and liabilities 8,482 7,911 8,278 Contingent liabilities Pledged assets Condensed statement of cash flows, Group SEK m Full year Operating activities Cash flow from operating activities before changes in working capital, before paid tax 1,359 1,337 1,777 Paid tax Changes in working capital Cash flow from operating activities 1,385 1,4 1,384 Investing activities Acquisitions of operations, net Acquisitions of non-current assets, net Change in financial non-current assets, net - - Cash flow from investing activities Financing activities Change in interest-bearing liabilities Change in non-controlling interest Dividend paid out Cash flow from financing activities Cash flow for the period

15 Condensed statement of changes in equity, Group SEK m 3/9/ 3/9/ 31/12/ Amount at start of year 3,237 2,972 2,972 Total comprehensive income for the period Dividend to shareholders Acquisition of previous non-controlling interest - - Amount at end of period 3,275 3,9 3,237 Key ratios and other data, Group Full year Operating margin, % Margin after financial items, % Equity ratio, % Debt-equity ratio, net, multiple Debt-equity ratio, multiple Interest coverage, multiple Capital employed, SEK m 4,231 4,52 4,279 Return on capital employed, % Return on shareholders' equity, % Capital expenditures, SEK m Earnings per share, SEK Dividend per share, SEK Shareholders' equity per share, SEK 1, Cash flow per share, SEK Number of shares outstanding 1 52,467,678 52,467,678 52,467,678 Average number of employees 7,165 6,948 7,62 Work attendance rate, % CO 2, kg/tonne goods Electricity consumption, kwh/m 2 (stores and warehouses) ) The number of shares is the same before and after dilution. The average number of shares is the same as the number of shares outstanding. Axfood has no holdings of treasury shares. 2) Net asset value per share corresponds to shareholders' equity per share. 3) Pertains to the total volume for Dagab's and Axfood Närlivs' transports from warehouses to stores with own delivery vehicles. 4) Pertains to rolling 12. Quarterly overview Q4 1 Q1 11 Q Q4 11 Q1 12 Q Sales 8,885 8,257 8,889 8,735 8,914 8,718 9,292 9,44 Operating profit Operating margin, % Earnings per share, SEK Shareholders' equity per share, SEK Return on shareholders' equity, % Cash flow from operating activities per share, SEK Capital expenditures

16 FINANCIAL STATEMENTS, PARENT COMPANY Condensed income statement, Parent Company SEK m Full year Net sales Selling/administrative expenses, etc Operating profit Group contributions received, net ,182 Other net financial items Profit after financial items ,13 Appropriations Profit before tax Tax Net profit for the period Operating profit includes depreciation/amortization of Profit for the period corresponds to total comprehensive income for the period. Condensed balance sheet, Parent Company SEK m 3/9/ 3/9/ 31/12/ Assets Property, plant and equipment Participations in Group companies 3,558 3,468 3,452 Other financial non-current assets Deferred tax assets Total non-current assets 3,577 3,484 3,469 Receivables from Group companies ,13 Other current assets Cash and bank balances - Total current assets 1,17 1,22 2,17 Total assets 4,684 4,74 5,639 Shareholders' equity and liabilities Restricted shareholders' equity Unrestricted shareholders' equity 2,699 2,73 3,384 Total shareholders' equity 2,986 2,992 3,646 Untaxed reserves Non-current interest-bearing liabilities Noninterest-bearing non-current liabilities Total non-current liabilities Current interest-bearing liabilities Liabilities to Group companies ,42 1,47 Accounts payable trade Other current noninterest-bearing liabilities Total current liabilities 1,391 1,676 1,683 Total shareholders' equity and liabilities 4,684 4,74 5,639 Contingent liabilities Pledged assets ) Of which, interest-bearing receivables ) Of which, interest-bearing liabilities 862 1,36 1,3 16

17 FINANCIAL DEFINITIONS Average number of employees: Total number of hours worked divided by the number of hours worked per year (1,92 hours). Capital employed: Total assets less noninterest-bearing liabilities and noninterest-bearing provisions. Average capital employed is calculated as capital employed at the start of the year plus capital employed at the end of the year, divided by two. Cash flow per share: Cash flow for the year divided by a weighted average number of shares outstanding. Debt-equity ratio: Interest-bearing liabilities divided by shareholders equity including non-controlling interests. Dividend yield: Dividend per share divided by the yearend share price. Earnings per share: Net profit for the year attributable to owners of the parent divided by a weighted average number of shares outstanding. Equity ratio: Shareholders' equity including noncontrolling interests as a percentage of total assets. Interest cover ratio: Profit after financial items plus financial expenses, divided by financial expenses. Margin after financial items: Profit after financial items as a percentage of net sales for the period. Net asset value per share: Equity attributable to owners of the parent divided by the number of shares outstanding. Net debt: Cash and cash equivalents plus interest-bearing receivables less interest-bearing liabilities and provisions. Net debt-equity ratio: Interest-bearing liabilities and provisions less cash and cash equivalents and interestbearing receivables, divided by shareholders equity including non-controlling interests. Operating margin: Operating profit as a percentage of net sales for the period. P/E multiple before and after dilution: Share price in relation to earnings per share. Return on capital employed: Profit after financial items, plus financial expenses, as a percentage of average capital employed. Return on shareholders equity: Net profit for the year attributable to owners of the parent as a percentage of average equity attributable to owners of the parent. Average equity is calculated as shareholders equity at the start of the year plus shareholders equity at the end of the year, divided by two. GLOSSARY Autoorder: An automated store restocking system. Delivery reliability: The share of delivered goods in relation to the share of ordered goods. E-learning: An interactive training program. EMAB: EMAB is a collaborative organization for independent service station stores, with approximately 4 members within the Shell, Statoil 123, Hydro, Bilisten and Preem service station chains. Evolution diesel: Environmental diesel fuel that is based partly on pine oil. GRI: Global Reporting Initiative. Like-for-like sales: Like-for-like sales refer to store sales reported on the basis of an entire comparison period, i.e., two years. Axfood AB, Solna Visitors' address: Hemvärnsgatan 9 Tel , Fax info@axfood.se, axfood.se ABOUT AXFOOD Axfood conducts food retail and wholesale business in Sweden. Retail business is conducted through the wholly owned grocery chains Willys, Hemköp and PrisXtra. The number of Group-owned stores is 244. In addition, Axfood collaborates with a number of proprietor-run stores that are tied to Axfood through agreements, including stores in the Hemköp chain, but also stores operating under the Handlar n and Tempo profiles. Wholesale business is conducted through Dagab and Axfood Närlivs. Axfood has an approximate 2% share of the food retail market in Sweden. Axfood is listed on Nasdaq OMX Stockholm AB's Large Cap list. Axfood's principal owner is Axel Johnson AB, with 5.1% of the shares. Mission Axfood s business mission is to develop and run successful food retail concepts based on clear and attractive customer offerings. Business model Axfood's business model is built upon a strong purchasing function, focus on private label products, efficient logistics and attractive grocery stores. Strategy Axfood will be the most profitable company in the Swedish food retail market and grow its market shares by strengthening and developing its position. Axfood's longterm goal is to attain an operating margin of 4%. Axfood's strategy is built upon five cornerstones: customers, profitability, growth, the environment and social responsibility, and employees and organization. Read more on axfood.se. Value drivers Factors that affect Axfood's performance include: Access to strategic store locations Development of an attractive product offering Innovativeness for enhancing customer benefit 17

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