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• Market Growth: 3.6% in Q3, with adjusted growth of 2.2% considering calendar effects and inflation.

• Retail Sales Growth: 3.5% increase in Q3.

• E-commerce Sales Growth: 10.2% increase in Q3.

• Consolidated Net Sales Growth: 3% increase in Q3.

• Operating Profit: Adjusted operating profit approximately SEK 1 million with a margin of 4.8%.

• Willys Operating Profit: SEK 556 million with an operating margin of 4.9%.

• Hemkop Operating Profit: SEK 94 million with an operating margin of 5.1%.

• Snabbgross Operating Profit: SEK 85 million with an operating margin of 5.6%.

• Dagab Net Sales Growth: 3.7% increase in Q3.

• Group Net Sales (First 9 Months): Increased by 3.1% to over SEK 62 billion.

• Operating Profit (First 9 Months): Decreased 4.5% to SEK 2.7 billion.

• Cash Flow (Q3): Negative SEK 358 million compared to SEK 208 million last year.

• Net Debt Ratio: 2.3, unchanged from a year ago.

• Equity Ratio: 23.7%, 1% point higher than last year.

• Total Investments (First 9 Months): SEK 1,058 million, 359 million lower than last year.

• New Store Openings: Three new group-owned stores in the quarter.

• Warning! GuruFocus has detected 5 Warning Signs with FRA:AXL1.

Release Date: October 24, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Axfood AB (FRA:AXL1) reported a 3.5% increase in retail sales, indicating a positive trend in consumer traffic.

• E-commerce sales for Axfood AB (FRA:AXL1) increased by 10.2%, outperforming the market and demonstrating strong online presence.

• The Hemkop segment showed strong growth with a 4.5% increase in like-for-like sales, driven by effective cost control and store modernization.

• Snabbgross, Axfood AB (FRA:AXL1)'s restaurant wholesaler, experienced a 5.6% growth in the quarter, reflecting a strong market position.

• Axfood AB (FRA:AXL1) received approval from the Swedish Competition Authority for the acquisition of City Gross, which is expected to enhance competitiveness in the hypermarket segment.

Negative Points

• Operating profit for Axfood AB (FRA:AXL1) declined, with adjusted operating profit amounting to approximately SEK 1 million, impacted by price investments and high cost inflation.

• Willys, a leading discount retailer under Axfood AB (FRA:AXL1), experienced negative profit development due to price investments and high cost inflation.

• The transition to a new logistics structure incurred additional costs of approximately SEK 20 million, affecting overall profitability.

• Axfood AB (FRA:AXL1) faced a negative cash flow of SEK 358 million in the third quarter, primarily due to negative cash flow from networking capital.

• The acquisition of City Gross will result in a negative profit effect of SEK 120 million to SEK 160 million in the fourth quarter due to revaluation.