2010-04-20 presentation at media and analyst meeting

1

Axfood AB

Interim ReportJanuary – March, 2010

2

Axfood AB January - March 2010

• Consolidated sales: SEK 8,210 m (7,682), an increase of 6.9%

• Good operating profit: SEK 245 m (234)

• Operating margin: 3.0% (3.0)

• Positive operating margin in all operations

3

Willys January - March 2010

• Continued good performance– Stable earnings and sales

• High pace in store establishments– Six new stores

• Leading position in soft discount– Attractive mix between price &

assortment

• 2010: Sales growth and increased number of stores

4

Hemköp January - March 2010

• Positive result despite increased marketing costs– New price strategy– Increased marketing activities

• 2010: Focus on improving sales and profitability– Close or convert five stores– Reduction with 14 positions at head office

5

PrisXtra January - March 2010

• Positive development in four of six stores

• Decrease in sales for two stores due to major road work

66

Axfood Närlivs January - March 2010

• Stable development and good profitability

• Good service level: 97.7%

7

Dagab January - March 2010

• Good service level: 97.2%

• Good cost control

• Cooperation with Vi-stores continues to work well

8

New union agreement

• New union agreement over 24 months– Increased total costs by 3.85 % for

retail employees– Increased total costs by 3.55 % for

whole sale employees

9

New business system

• Implementation on track– Accounting system successfully

installed

• Project will run over five years

• Total investment of SEK 500 - 600 m

10

Market trends 2010

• Continued high price competition

• Price conscious customers

• Price inflation remain at low levels

11

Strategy for profitable growth

• Good cost control and efficiency

• High pace in store establishments

• Develop the various concepts

• Optimize store operations

• Stimulate sales

• Develope private label

12

Axfood´s goal for 2010

To achieve an operating profit at least in level with 2009

13

Financial Performance

January – March, 2010

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Axfood AB January - March 2010

• Good profitability

• Good sales performance

• Positive operating margin in all operations

-

+ 4.7%

+6.9 %

Change

3.0%3.0%Operating margin

234245 Operating profit

7,6828,210Net sales

20092010Group , SEK m

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Willys January - March 2010

+6.7%

Sales Operating profit

-10 -09

4,1864,466

-10 -09

167 167

4.0%3.7%Operating margin

20092010

16

Hemköp January - March 2010

Sales Operating profit

-10 -09

1,357 1,279

-10 -09

13

6

1.0%0.5%Operating margin

20092010

17

PrisXtra January - March 2010

• Positive development in four of six stores

• Decrease in sales for two stores due to major road work

-

-

- 6.0%

Change

0,0%1.8%Operating margin

03 Operating profit

182171 Net sales

20092010PrisXtra, SEK m

1818

Axfood Närlivs January - March 2010

• Good development in distributedsales– Increased by 6.6 %

-

-

+ 3.1%

Change

1.3%1.1%Operating margin

1614 Operating profit

1,2541,293 Net sales

20092010Axfood Närlivs, SEK m

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Dagab January - March 2010

• Good development in distributed sales– Increased by 10.4 %

• Stable results

-

-

+ 9.0%

Change

0.4%0.5%Operating margin

2430 Operating profit

5,6696,179 Net sales

20092010Dagab, SEK m

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Other January - March 2010

• Sales: SEK 993 m (728)

• Operating profit: SEK 25 m (14)

• Higher results are due to increasedvolumes in fruit & vegetables and centrally packed meat

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Key ratios

• Balance sheet, total: SEK 7,453 m (7,226)

• Cash flow operating activity: SEK 422 m (384)

• Capex: SEK 204 m (135)

• Equity ratio: 30.7% (27.7)

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Strong financial position

Q1 2006 – Q1 2010

0

400

800

1 200

1 600

2 000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q10

0,25

0,5

0,75

1

1,25Debt, short term, MSEK

Debt, long term, MSEK

Debt equity ratio mutiple

2006 2007 2008 2009 2010

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Financial targets & dividend policy

• Axfood´s goal for 2010 is to achievean operating profit at least in levelwith 2009

• Equity ratio of at least 25%

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

• For 2009 a dividend of SEK10 (8) waspaid out

• Long term target for operating margin: 4%

2424

Summary financial performance

• Stable result

• Good sales performance

• Positive operating profit in all operations

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Time for questions!