Axfood (AXFO) Q1 2025 earnings summary

Executive summary

• Achieved strong volume growth and increased market share, with Willys, Hemköp, and Snabbgross outperforming the market in Q1 2025; City Gross, acquired in November 2024, is undergoing a comprehensive turnaround program.

• Retail sales growth outpaced the market, driven by higher volumes and new customer inflow.

• Bålsta logistics centre ramp-up completed, with productivity gains realized and further expansion planned in southern Sweden from 2030.

• Net sales rose 3.9% to SEK 21,040m, with retail sales up 15.7% to SEK 18,829m, driven by City Gross acquisition and organic growth.

• AGM approved a dividend of SEK 8.75 per share, split into two payments.

Financial highlights

• Group net sales grew 3.9% year-over-year to SEK 21,040m; retail sales up 15.7% (3.0% excluding City Gross).

• Adjusted operating profit was SEK 757m (3.6% margin), down from SEK 817m; operating profit SEK 719m (3.4% margin), with SEK -38m in items affecting comparability from City Gross.

• Willys operating profit SEK 495m (4.3% margin), Hemköp SEK 94m (4.6% margin), Snabbgross SEK 25m (2.0% margin), Dagab SEK 287m (1.5% margin).

• City Gross posted a negative adjusted operating profit of SEK -80m (margin -3.9%) and a net sales of SEK 2,059m.

• Cash flow from operating activities was SEK 1,232m, down 27.3% year-over-year, mainly due to working capital effects.

Outlook and guidance

• 2025 remains a transitional year for City Gross, with profitability targeted for the second half of 2026.

• 2025 investments expected at SEK 1,600–1,700m, excluding acquisitions and right-of-use assets.

• Plan to open 10–15 new Group-owned stores in 2025.

• Efficiency gains of SEK 200–300m from Bålsta logistics center expected from Q2 2025 onward.

• No change to full-year outlook.