Today, December 16, axfood organizes a Capital Markets Day from 13:00 CET. Topics presented at Capital Markets Day will include the Group’s new, higher profitability target and more detailed information on ongoing investments for the future that will form the basis for long-term, profitable and sustainable growth. The Group will discuss whether Willys e-commerce is expected to break even before the end of the year, other store concepts are strengthening their position and how comprehensive investments in logistics and automation are leading to cost savings and an efficient and sustainable logistics platform for many years to come.
“We maintain a high pace in developing all aspects of the Group and will continue to make major progress in the coming years. We remain focused on improving our competitiveness through our portfolio of strong and distinctive brands, and the acquisition of Bergendahls Food and the partnership with City Gross will also open up exciting new opportunities to grow our affordable, good and sustainable food offering.We also continue to develop an optimized logistics platform, with increased automation, increased share of digitalization and a more data-driven approach. Thanks to these investments, we will continue to grow faster than the market and become even more efficient, which will allow us to elevate our long-term profitability objective and demonstrate the effectiveness of our actions,” says Klas Balkow, President and CEO of axfood.
A family of different concepts in collaboration: Willys e-commerce in balance before the end of the year
Axfood’s different concepts continue to develop and strengthen their positions in the market. With its unique position and strong brand, Willys is increasing its market share and attracting a growing number of consumers. Recently, the Willys Plus loyalty program passed the three million member mark. Willys also has a strong position in e-commerce, and with a clear and competitive offer, its e-commerce profitability should break even before the end of the year.
“We have a successful e-commerce platform that has grown considerably faster than the market over the past few years, and we expect to break even in e-commerce before the end of the year. Profitability in e-commerce is a tough nut to crack, especially for expensive home deliveries. With a strong focus on the omnichannel experience both in-store and online, the impressive success of the in-store pickup Willys Hämta and a transparent payment model, we can now take this major step,” says Thomas Eversson, CEO of Willys.
Hemköp continues to develop its concept and, thanks to its distinctive sustainability profile and the Klubb Hemköp loyalty program, customer loyalty continues to increase. Snabbgross’ concept, customer base and market share were strengthened during the year, and the membership system Club Snabbgross concept creates entirely new growth opportunities. Through its partnership and minority stake in City Gross, axfood further expands its reach while creating new opportunities for City Gross to further develop its concept and grow organically as well as through new establishments.
Strategic partnership with Mathem
Earlier in the week it was announced that axfood entered into a strategic partnership with Mathem and will become co-owner of the company as axfood sells Mat.se in exchange for shares in Mathem, merging two powerful pure-play online retailers offering home deliveries. At the same time, Mathem enters into a long-term delivery partnership with Axfood’s purchasing and logistics company Dagab. The purchase price for Mat.se amounts to SEK688 m in cash and without debt, and payment will be made through newly issued shares of Mathem corresponding to a 16.5% interest.
Optimization of the future logistics platform resulting in significant savings
To develop an even more sustainable, efficient and competitive product offering, axfood progressing rapidly and consolidating the foundations of a first-rate national logistics platform for many years to come. In addition to its investment in Bålsta’s new highly automated logistics center, outside stockholm, the Group is also investing in a new automated e-commerce warehouse in Backa in Gothenburg, expanding and automating the existing high-bay warehouse in Backa, and the automation of its new large-scale national warehouse for fruit and vegetables, the construction of which has recently begun in Landskrona. These investments are expected to result in efficiency improvements from 2024. Efficiency improvements are expected to amount to between 200SEK and 300 m per year from 2025 and then increase between 300 SEK and 400 m per year from 2027.
“Investments in our logistics platform will ensure a national, efficient and sustainable solution, which will translate into significant cost savings and provide us with the conditions to maintain profitable growth. We are developing a modern product flow with a share of ‘significantly higher automation, thus improving the customer offer and the customer encounter,’ explains Nicholas Petterson, CEO of Axfood’s the logistics and purchasing company Dagab.
Investments between SEK2.6 and 2.7 billion in 2022 and a faster pace of setting up new stores
Axfood’s capital expenditure in 2022 is expected to be between SEK2.6 and 2.7 billion excluding acquisitions and rights of use, of which SEK1.3 m relates to the logistics center in Bålsta (the majority of which relates to partial payment for an automation solution), 100 SEK m relates to the national fruit and vegetable warehouse in Landskrona (the majority of which relates to partial payment for an automation solution), and 110SEK m relates to IT costs related to the acquisition of Bergendahls. During 2022, axfood plans to increase its rate of expansion and open 8 to 13 new stores. In 2022, Axfood’s operating profit will be allocated to structural costs of around 340SEK m connected to the new logistics center in Bålsta and the integration of Bergendahls Food, the majority of which should be completed in the second half of 2022.
High profitability target and ambitious sustainability targets
axfood has exceeded its profitability target of a long-term operating margin of at least 4% since 2015. Following the acquisition of Bergendahls Food, which resulted in increased wholesale volumes and non-recurring costs related to integration, margins will be somewhat lower for some time. With the investments that are made today in logistics, as well as the development of our chains, favorable conditions have been created for increased profitability over time. axfood thus raises its profitability objective to a long-term operating margin of at least 4.5%.
Axfood’s the financial growth and financial situation objectives remain unchanged. This also applies to the Group’s ambitious sustainability goals, which include net zero climate ambition by 2030 at the latest, a 50% reduction in food waste in our own operations by 2025 (baseline 2015) and an equal gender distribution in leadership positions.
Axfood’s Capital Markets Day will be held digitally in Swedish with real-time English translation and will be streamed live for registered attendees on 1:00 p.m. today. You can find a link to the webcast at https://www.axfood.com/investors/. Attendees will also have the opportunity to ask questions during the event. A recording of Capital Markets Day and presentation material will be made available after the event.
For more information, please contact:Alexander Bergendorf, Head of Investor Relations, axfood, +46 73 049 18 44, [email protected]
Magnus Törnblom, Head of Press, axfood, +46 70 266 27 12, [email protected]
axfood aspires to be the leader in good and sustainable food. Our family of companies includes the chain stores Willys and Hemköp as well as Tempo and Handlar’n. B2B sales are handled by Snabbgross, and our support company Dagab is responsible for the Group’s product development, purchasing and logistics. the axfood The family also includes Mat.se, Middagsfrid and Urban Deli as well as the partially owned companies Apohem, eurocash and raw city. Together, the Group has more than 12,000 employees and a turnover of more than 54 billion Swedish crowns. axfood has been listed on Nasdaq Stockholm since 1997, and the principal owner is Axel Johnson AB. Learn more at www.axfood.se.
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