axfood presentation year-end report 2012

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Axfood

January-December, 2012

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Axfood January-December 2012

• Favourable sales: SEK 36,306 m (34,795) +4.3%

• Stable earnings: SEK 1,247 m (1,250) exkl impairment– Operating margin: 3.4% (3.6) exkl

impairment

• Positive result for all business units

• Impairment of SEK 55 m for the PrisXtra brand

36,306+4.3%

Net sales

Willys – Best result ever

• Stable sales growth: SEK 19,407 m (18,904), +2.7%– Like-for-like sales: 0.0% (-1,6)

• Good result: SEK 796 m (775) +2.7%

– Operating margin: 4.1% (4.1)

• High pace in store modernization– Remaining 20 stores will be modernized

during this year

• Developed a customer loyalty program that will be launched next week 796

+2.7%

Operating profit

4

Hemköp – Best result in 10 years

• Good sales performance: SEK 5,082 m (4,787), +6.2%

– Like-for-like sales: +2.0% (0,4)

• Best result in ten years: SEK 133 m (94)

– Operating margin: 2.6% (2.0)

• Target 2013: At least 3% operating margin

• Increased marketing activities

• Thomas Gäreskog appointed as new CEO in December +6.2%

Net sales

PrisXtra’s largest store to become Hemköp

• PrisXtras largest store at Norra Station will become Hemköp in 2013– Future strategic location

• Remaining four stores will gradually be converted to Hemköp or Willys

• Impairment of SEK 55 m for the PrisXtra brand

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PrisXtra – Continued positive result

• Decrease in sales due to major road constructions– Net sales: SEK 502 m (549), -8.6%

• Positive result: SEK 16 m (15)

7

Axfood Närlivs – Wholesale operation

• Favourable sales growth, SEK 6,336 m (5,516), +14.9%

– Deliveries to new customers and good development in cash-and-carry business

– New e-commerce site for business-to-business– Sales affected by bad weather conditions

• Operating profit: SEK 113 m (110)

+14.9%Net sales

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Dagab – Efficient logistics

• Stable development– Efficiency and high delivery reliability

• Operating profit: SEK 163 m (192)– Increased costs due to implementation of the

new business system– Will continue to affect the result during 2013

97.5%Delivery reliability

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Market outlook

• Uncertain development in Swedish economy but stable food retail market

• Food price inflation initially at low levels

• Competition remains high

• Price conscious customers

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Strategy for profitable growth

• Further stimulate sales growth– Well operated stores

• High level of private label

• Efficiency and cost control

• Ambitious pace of investment– High pace in store establishments and

renewals– Implementation of the new business

system continues

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Axfood’s goal for 2013

Achieve an operating profit

at the same level as in 2012

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Financial Overview

January-December, 2012

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Net sales, SEK m Operating margin, % Key ratios

SEK m 2012 2011 Change

Net sales 36,306 34,795 4.3%

Change in like-for-like sales, % 0.3% -1.1% 1.4

Operating profit 1,192 1,250 -4.6%

Operating margin, % 3.3% 3.6% -0.3

Number of stores, Group-owned 246 237 9

Axfood January-December 2012

9,044 9,2528,914 8,718

9,292

Q4 -11 Q1 -12 Q2 -12 Q3 -12 Q4-12

2.8

3.44.1

3.6

2.8

• Stable earnings and sales development

• Impairment of SEK 55 m for the PrisXtra brand

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Net sales, SEK m Operating margin, % Key ratios

SEK m 2012 2011 Change

Net sales 19,407 18,904 2.7%

Change in like-for-like sales, % 0.0% -1.6% 1.6

Operating profit 796 775 2.7%

Operating margin, % 4.1% 4.1% -

Number of stores 174 170 4

Willys January-December 2012

4,9614,7014,848 4,9274,818

Q4 -11 Q1 -12 Q2 -12 Q3 -12 Q4 -12

4.4 4.53.94.1

3.6

• Best result ever

• High pace in store modernization

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Net sales, SEK m Operating margin, % Key ratios

SEK m 2012 2011 Change

Net sales 5,082 4,787 6.2%

Change in like-for-like sales, %, Group-owned 2.0% 0.4% 1.6

Operating profit 133 94 41.5%

Operating margin, % 2.6% 2.0% 0.6

Number of stores Group-owned Franchise

67 114

62 121

5-7

Hemköp January-December 2012

1,2711,2391,255

1,3471,225

Q4 -11 Q1 -12 Q2 -12 Q3 -12 Q4 -12

1.7

2.6

4.1

1.9 1.9

• Good profit and sales performance

• Increased marketing activities

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Net sales, SEK m Operating margin, % Key ratios

SEK m 2012 2011 Change

Net sales 502 549 -8.6%

Change in like-for-like sales, % -8.6% -10.0% 1.4

Operating profit 16 15 6.7

Operating margin, % 3.2% 2.7% -0.5

Number of stores 5 5 -

PrisXtra January-December 2012

113130132140

127

Q4 -11 Q1 -12 Q2 -12 Q3 -12 Q4 -12

3.8 3.5

2.4

3.63.0

• Positive result

• PrisXtra stores will be converted to Hemköp or Willys

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Net sales, SEK m Operating margin, % Key ratios

SEK m 2012 2011 Change

Net sales 6,336 5,516 14.9%

Distributed sales 5,822 4,992 16.6%

Operating profit 113 110 2.7%

Operating margin, % 1.8% 2.0% -0,2

Number of stores, Axfood Snabbgross 20 20 -

Delivery reliability, % 97.9 97.7 0.2

Axfood Närlivs January-December 2012

1,673

1,4411,3821,5701,652

Q4 -11 Q1 -12 Q2 -12 Q3 -12 Q4 -12

1.7

3.0

1.71.7

0.6

• Good sales mainly driven by deliveries to new customers and new businesses

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Net sales, SEK m Operating margin, % Key ratios

SEK m 2012 2011 Change

Net sales 24,634 24,295 1.4%

Distributed sales 17,205 16,981 1.3%

Operating profit 163 192 -15.1%

Operating margin, % 0.7% 0.8% -0.1

Delivery reliability, % 97.5 97.1 0.4

Dagab January-December 2012

6,2646,0226,2736,3486,000

Q4 -11 Q1 -12 Q2 -12 Q3 -12 Q4 -12

0.6

0.80.7

0.9

0.5

• Increased costs due to implementation of the new business system

– Will continue to affect the result during 2013

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Other January-December 2012

• Net sales: SEK 4,521 m (4,156), +8.8%

• Operating profit: SEK -29 m (64)– Impairment of SEK 55 m for the PrisXtra

brand– Amortization of new business system of

SEK 55 m (33)

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Key ratios January-December 2012

• Balance sheet, total: SEK 8,798 m (8,278)

• Cash flow operating activity: SEK 1,915 m (1,384)

• Capex: SEK 932 m (993)– Investment plan 2013: SEK 900-1,000 m

• Reduced company tax rate had a positive effect on profit after tax by SEK 50 m

• The Board of Directors proposes a dividend of SEK 12 per share (12)

0

200

400

600

800

1 000

-09 -10 -11 -12

SEK m

Capital expenditure

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Financial targets & dividend policy

• Axfood's goal for 2013 is to achieve an operating profit at the same level as in 2012

• Equity ratio of at least 25%

• Shareholder dividend of at least 50% of profit for the year after tax

• Long term target for an operating margin of 4%

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Summary

• Stable result and sales performance

• All business units delivered a positive result

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Axfood

Q&A