Axfood (AXFO) Q3 2024 earnings summary

Executive summary

• Net sales grew 3.0% in Q3 2024 to SEK 20,902m, with retail sales up 3.5% and strong market positions maintained.

• Simone Margulies led her first interim report as President and CEO, emphasizing strategic initiatives in logistics, IT, and sustainability.

• Solid growth across all operating segments, with increased customer volumes and continued logistics progress, including Bålsta ramp-up.

• City Gross acquisition approved in October, to be completed 1 November, expanding presence in the hypermarket segment.

• Consumer behavior remains cautious, with price value now the most important factor for shoppers.

Financial highlights

• Group net sales increased by 3.0% year-over-year to SEK 20,902m in Q3 2024; retail sales up 3.5%.

• Q3 operating profit was SEK 1,007m (down 2.8% YoY); adjusted operating profit SEK 1,007m (down 8.0%).

• Operating margin at 4.8% (5.1% prior year); adjusted margin 4.8% (5.4%).

• Cash flow from operating activities decreased to SEK 1,013m from SEK 1,423m year-over-year.

• Net debt/EBITDA was 1.6; equity ratio at 23.7%, improved from prior year.

Outlook and guidance

• Outlook for the year remains unchanged, with investments for 2024 projected at SEK 1,600–1,700m, including SEK 300m for automation.

• Plan to establish 10–15 new Group-owned stores in 2024.

• City Gross acquisition expected to expand reach in the hypermarket segment and contribute positively to EPS by 2026.

• Cost savings from logistics transformation expected to materialize in 2025, with extra costs phasing out.

• Long-term targets: grow faster than the market, operating margin ≥4.5%, equity ratio ≥20% at year-end.