Axfood — Interim / Quarterly Report 2012

Apr 27, 2012

Interim Report Axfood AB (publ)

FIRST QUARTER SUMMARY

• Axfood's consolidated sales for the period January–March totalled SEK 8,718 m (8,257), an increase of 5.6%.
• Retail sales for Group-owned stores increased by 2.9% during the period.
• Like-for-like sales increased by 0.2%.
• Operating profit for the period was SEK 248 m (241).
• Profit after financial items was SEK 239 m (233) for the period.
• Profit after tax totalled SEK 177 m (172) for the period, and earnings per share were SEK 3.37 (3.28).
• Axfood Närlivs and EMAB signed a new, three-year cooperation agreement.
• Axfood's goal for 2012 is to achieve an operating profit at the same level as in 2011.

NO SIGNIFICANT EVENTS HAVE TAKEN PLACE AFTER THE BALANCE SHEET DATE

Key ratios
SEK m	Q1 2012	Q1 2011	Change	Full year 2011
Net sales	8,718	8,257	5.6%	34,795
Operating profit	248	241	2.9%	1,250
Operating margin, %	2.8	2.9	-0.1	3.6
Profit after financial items	239	233	2.6%	1,214
Profit after tax	177	172	2.9%	891
Earnings per share, SEK1	3.37	3.28	2.7%	16.99
Cash flow per share, SEK	-0.1	-2.5	96.0%	0.0
Cash flow from operating activities per share, SEK	7.9	5.6	41.1%	26.4
Return on capital employed, %2	31.1	33.7	-3.7	31.0
Return on shareholders' equity, %2	34.0	35.8	-2.9	28.7
Shareholders' equity per share, SEK3	52.5	47.9	9.6%	61.7
Equity ratio, %	32.4	32.6	-0.2	39.1

1) Before and after dilution.

2) Moving 12-month figures.

3) Net asset value per share corresponds to shareholders' equity per share.

The information in this interim report is such
that Axfood is required to disclose in accor
Submitted for publication at 7.30 a.m. (CET)
dance with the Securities Market Act.

CEO'S COMMENTS

Axfood's positive performance continues. 2012 started out with favourable sales growth, a growing number of customers and good profitability.

Favourable earnings and stable development

Willys posted strong earnings despite a continued high pace of store modernization. Sales as well as customer numbers increased during the period. However, as in the preceding year, like-for-like sales were affected by dampened growth for the stores that have not yet been modernized. The pace of modernization will therefore continue unabated, and an additional 30 stores will be upgraded during the coming two years.

The positive trend for Hemköp continued, with favourable growth in sales as well as earnings. The Vi stores that have been converted to Hemköp franchises have also performed well. In April a brand new store will be opened in central Stockholm, which will further strengthen Hemköp's position in the important Stockholm market.

PrisXtra again posted a profit despite weak sales. As previously, the two largest stores have been negatively affected by major road construction nearby.

Axfood Närlivs showed favourable growth in all parts of its business. This is mainly due to additional volumes from new agreements, favourable development for Axfood Snabbgross, and a slightly positive Easter effect compared with the preceding year.

Dagab noted continued high efficiency, with delivery reliability measuring 97.5%. However, earnings were affected by higher fuel prices and planned, higher costs associated with the implementation of the new business system. The higher costs for the new business system will continue to affect Dagab's earnings for the rest of the year.

Increase in private label sales

Private label products have been a successful and profitable part of Axfood's strategy for a number of years. During the period, the highest private label share to date was reached, 24.7%, and Axfood is now well on track to achieving the goal of a 25% private label share by year-end. The increase can be credited in part to the ambitious investment in the Group-wide Garant brand, which has been well-received by the customers.

Market outlook for 2012

At the start of the year, Swedish consumers showed cautious optimism compared with a year ago. Lower energy prices combined with continued low inflation were contributing factors. At the same time, there is still uncertainty in the market due to the continued unstable economic situation in Europe and the USA. It is therefore too early to say how the food retail market will perform for the rest of the year. Axfood's view, however, is that food inflation will remain relatively low in 2012 and will not exceed one per cent.

In April the Swedish Trade Federation and the Commercial Employees' Union reached a new collective agreement. The agreement, which is for 12 months from 1 April, entails a cost increase of 2.6% during the agreement period.

Strategy for profitable growth

Axfood's strategic agenda for profitable growth is unchanged. Focus is on stimulating sales growth, boosting efficiency and maintaining strict cost control. At the same time, we are maintaining an ambitious pace of investment in new as well as existing stores in our efforts to create an improved shopping experience for our customers. Parallel with this, we are also following through with the implementation of the new business system. Capital expenditures in 2012 are estimated to amount to SEK 900-1,000 m (993).

Axfood's goal for 2012 is to achieve an operating profit at the same level as in 2011.

Anders Strålman President and CEO

SALES, AXFOOD GROUP

First quarter

Consolidated wholesale and retail sales for the Axfood Group totalled SEK 8,718 m (8,257) during the first quarter, an increase of 5.6%. Store sales for the Axfood Group (wholly owned stores and Hemköp franchises) totalled SEK 7,570 m (6,811), an increase of 11.1%. Sales for Axfood-owned retail operations increased by 2.9% during the first quarter, with a 0.2% rise in like-for-like sales. Axfood's private label share was 24.7% (23.1%) as of March.

Net sales per operating segment
SEK m	Q1 2012	Q1 2011	Full year 2011
Hemköp	1,239	1,205	4,787
Willys	4,701	4,545	18,904
PrisXtra	132	144	549
Axfood Närlivs1	1,441	1,184	5,516
Dagab1	6,022	5,807	24,295
Other1, 2	1,079	1,020	4,156
Internal net sales
Dagab	-4,859	-4,668	-19,436
Axfood Närlivs	-2	-6	-11
Other	-1,035	-974	-3,965
Total	8,718	8,257	34,795

1) The operations of Dagab, Axfood Närlivs and Axfood Sverige were legally combined as per 1 January 2012. Internal sales between these units have ceased as from 2012. Comparative figures have been adjusted and are shown in the tables on page 8.

2) Includes joint-Group support functions, such as purchasing coordination, IT and corporate offices.

Retail sales, Group-owned and franchise stores
SEK m	Q1 2012	1) %	Like-for-like sales, %1)
Hemköp	1,221	2.4	3.1
Hemköp franchises	1,516	63.0	3.3
Hemköp total	2,737	29.0	3.2
Willys total	4,701	3.4	-0.3
PrisXtra total	132	-8.3	-8.3
Total	7,570	11.1	0.6

1) Percentage change compared with the corresponding period a year ago.

Change in store structure, three months 2012

	Dec. 2011	New establishment	Acquisitions	Sales/closures	Conversions to/from	March 2012
Hemköp	62		5	-3		64
Willys1)	170					170
PrisXtra	5					5
Total, Group-owned	237	-	5	-3	-	239
Hemköp franchises	121			-2		119
1) Of which, Willys Hemma	44					44

EARNINGS, AXFOOD GROUP

First quarter

Operating profit for the quarter totalled SEK 248 m (241). The operating margin was 2.8% (2.9%). Net financial items totalled SEK -9 m (-8), and profit after financial items was SEK 239 m (233). The margin after financial items was 2.7% (2.8%). Profit after tax was SEK 177 m (172). Joint-Group costs were affected by higher depreciation for the new business system.

Axfood has no significant transactions with related parties, other than transactions with subsidiaries.

Operating profit for the period, broken down by operating segment
SEK m	Q1 2012 Q1 2011 Full year 2011
Hemköp	24	13	94
Willys	171	157	775
PrisXtra	4	7	15
Axfood Närlivs	8	6	110
Dagab	33	41	192
Other1	8	17	64
Operating profit for the period, total2	248	241	1,250

1) Includes joint-Group support functions, such as purchasing coordination, IT and corporate offices. Also includes charges for, among other things, amortization of surplus value pertaining to the acquisition of PrisXtra and depreciation of SEK 10 m (6) pertaining to the new business system.

2) Net financial items are not distributed per operating segment.

CAPITAL EXPENDITURES

Total capital expenditures during the period January–March amounted to SEK 323 m (220), of which SEK 155 m (14) pertained to acquisitions of businesses. In addition, SEK 83 m (137) pertained to investments in non-current assets in retail operations, SEK 12 m (14) to investments in non-current assets in wholesale operations, and SEK 51 m (46) to IT development.

During the first quarter, five stores were acquired as well as 50% of the wholesale company Hall Miba, a supplier of car care products and automotive accessories. Axfood has control of the wholesale business through shareholder agreements and board dominance. Combined consideration for the acquisitions amounted to SEK 155 m, of which SEK 28 m pertains to contingent payments. Intangible assets associated with the acquisitions amount to approximately SEK 151 m, including approximately SEK 129 m in goodwill. Goodwill is primarily attributable to the synergies that the acquired operations are expected to generate. Combined annual sales of the acquired operations amount to approximately SEK 600 m. Consideration for the acquisitions, excluding the contingent payments, was paid in cash.

* Excluding goodwill

FINANCIAL POSITION

Cash flow from operating activities before paid tax was SEK 481 m (389) during the quarter. Paid tax amounted to SEK -65 m (-96). Cash and cash equivalents (interest-bearing assets) held by the Group amounted to SEK 313 m, compared with SEK 317 m in December 2011. Interest-bearing liabilities and provisions totalled SEK 1,565 m at the end of the period, compared with SEK 1,042 m in December 2011. Interest-bearing net debt was SEK 1,252 m at the end of the period, compared with SEK 725 m in December 2011. Payout of the shareholder dividend affected cash flow by SEK -630 m (-630), and net capital expenditures affected cash flow by SEK -258 m (-211).

The equity ratio was 32.4%, compared with 39.1% in December 2011.

THE SWEDISH FOOD RETAIL MARKET

According to Statistics Sweden's retail trade index for February, accumulated sales for the food retail segment have risen 3.9% since the start of the year in current prices. In fixed prices, adjusted for price and calendar effects (incl. leap year), volume increased by 1.5%.

STORE OPERATIONS

Willys

First quarter

During the first quarter Willys had good profitability and favourable sales growth. Sales amounted to SEK 4,701 m (4,545), an increase of 3.4% compared with a year ago. Like-for-like sales decreased by 0.3%. Sales were affected by continued dampened growth for stores that have not yet been modernized. During the period, Willys therefore maintained a continued high pace of remodelling, and an additional eight stores were upgraded. A total of 86 stores have now been remodelled, and some 30 additional stores will be upgraded in the coming two years. Operating profit amounted to SEK 171 m (157), an increase of 8.9%. The operating margin was 3.6% (3.5%). The favourable profitability can be credited to good cost control and efficiency.

The private label share as of March was 27.2% (25.6%) for Willys and 29.9% (29.3%) for Willys Hemma.

The number of Willy and Willys Hemma stores was unchanged compared with the fourth quarter of 2011.

Key ratios

SEK m	Q1 2012	Q1 2011	Full year 2011
Net sales	4,701	4,545	18,904
Change in like-for-like sales, %	-0.3	-2.7	-1.6
Operating profit	171	157	775
Operating margin, %	3.6	3.5	4.1
Number of Group-owned stores	170	162	170
Average number of employees Private label share (Willys/Willys	3,444	3,340	3,410
Hemma)	27.2/29.9	25.6/29.3	26.7/29.7

5

Hemköp

First quarter

Hemköp had continued favourable performance in both sales and earnings.

Sales for Hemköp's stores – both Group-owned and franchises – rose 29.0% during the first quarter. Sales for Group-owned stores amounted to SEK 1,221 m (1,192), an increase of 2.4%. Like-for-like sales for Group-owned stores increased by 3.1% during the period. Sales for franchise stores amounted to SEK 1,516 m (930), an increase of 63.0%. Compared with the same period a year ago, sales were favourably affected by the 43 Vi stores that were converted to Hemköp franchises during the preceding year. Like-forlike sales increased by 3.3%.

Operating profit for the first quarter was SEK 24 m (13). Operating profit for the period was negatively affected by a nonrecurring expense of SEK 6 m (12). The operating margin for the period was 1.9% (1.1%).

Hemköp's private label share (including franchise stores) was 18.8% (17.1%) as of March.

Hemköp's loyalty card, which plays a key role in efforts to strengthen customer loyalty and sales, has developed well, with 597,000 cards in issue at the end of the period.

PrisXtra

First quarter

PrisXtra's earnings continued to be positive during the first quarter. As previously, sales continue to be hurt by traffic re-routing and roadwork in Stockholm. Sales for the first quarter totalled SEK 132 m (144), a decrease of 8.3%. Like-for-like sales decreased by 8.3%. Operating profit was SEK 4 m (7), and the operating margin was 3.0% (4.9%).

Key ratios
SEK m	Q1 2012	Q1 2011	Full year 2011
Net sales	132	144	549
Change in like-for-like sales, %	-8.3	-12.7	-10.0
Operating profit	4	7	15
Operating margin, %	3.0	4.9	2.7
Number of Group-owned stores	5	5	5
Average number of employees	123	150	135

AXFOOD WHOLESALING

Dagab

First quarter

Dagab had stable performance during the quarter, with a high level of delivery reliability. Sales for the first quarter amounted to SEK 6,022 m (5,807). Operating profit totalled SEK 33 m (41), and the operating margin was 0.5% (0.7%). Earnings were affected by higher fuel prices and planned, higher costs in connection with implementation of the new business system. The higher costs for the new business system will affect Dagab's earnings for the rest of the year.

Key ratios
SEK m	Q1 2012	Q1 2011	Full year 2011
Net sales	6,022	5,807	24,295
Distributed sales	4,211	4,051	16,981
Operating profit	33	41	192
Operating margin, %	0.5	0.7	0.8
Average number of employees	992	947	961
Delivery reliability, %	97.5	97.0	97.1

Axfood Närlivs

First quarter

Axfood Närlivs again reported a quarter with good sales growth in all parts of its business. Sales for the first quarter totalled SEK 1,441 m (1,184), an increase of 21.7%. New contracts, favourable growth for Axfood Snabbgross and a slightly positive Easter effect contributed to the good performance.

Operating profit for the first quarter amounted to SEK 8 m (6), and the operating margin was 0.6% (0.5%).

Key ratios
SEK m	Q1 2012	Q1 2011	Full year 2011
Net sales	1,441	1,184	5,516
Distributed sales	1,326	1,072	4,992
Operating profit	8	6	110
Operating margin, %	0.6	0.5	2.0
Axfood Snabbgross, no. stores	20	19	20
Average number of employees	756	679	735
Delivery reliability, %	97.9	97.9	97.7

Legal combination of companies 2012

On 1 January 2012 a legal combination of the operations of Dagab AB, Axfood Närlivs AB and Axfood Sverige AB was carried out. The combination entailed the transfer of the operations of Dagab and Axfood Närlivs to Axfood Sverige AB. Axfood Närlivs AB has been combined with Axfood Sverige AB through a merger, and Dagab AB has transferred its entire operations to Axfood Sverige AB through an asset and liability transfer.

No changes will be made in the monitoring and reporting of the respective units as a result of the combination. Dagab and Axfood Närlivs will continue to be monitored and reported as separate segments. Combining the operations will lead to simpler administrative processes between the companies in the Axfood Group.

Internal sales between the companies ceased as of 1 January 2012, and the comparative figures for the respective units have been adjusted, as shown in the tables below. Total sales for the Axfood Group are not affected. The combination entails no change in the comparative figures for earnings in 2011, neither per unit nor in total.

Sales 2011, pro forma
	Q1	Adjustment	Q1 pro forma
Axfood Närlivs	1,370	-186	1,184
Dagab	6,141	-334	5,807
Other	1,020	-	1,020
Internal sales
Dagab	-5,185	517	-4,668
Axfood Närlivs	-9	3	-6
Other	-974	-	-974

Sales 2011, pro forma

	Q2	Adjustment	Q2 pro forma	Six months	Adjustment	Sex mos. pro forma
Axfood Närlivs	1,691	-224	1,467	3,061	-410	2,651
Dagab	6,623	-424	6,199	12,764	-758	12,006
Other	1,082	-3	1,079	2,102	-3	2,099
Internal sales
Dagab	-5,600	644	-4,956	-10,785	1,161	-9,624
Axfood Närlivs	-6	4	-2	-15	7	-8
Other	-1,032	3	-1,029	-2,006	3	-2,003

Sales 2011, pro forma
-----------------------	--	--	--

	Q3	Adjustment	Q3 pro forma	Nine months	Adjustment	Nine mos. pro forma
Axfood Närlivs	1,714	-231	1,483	4,775	-641	4,134
Dagab	6,427	-411	6,016	19,191	-1,169	18,022
Other	1,038	0	1,038	3,140	-3	3,137
Internal sales
Dagab	-5,425	640	-4,785	-16,210	1,801	-14,409
Axfood Närlivs	-3	2	-1	-18	9	-9
Other	-988	0	-988	-2,994	3	-2,991

	Q4	Adjustment	Q4 pro forma	Full year	Adjustment	Full year pro forma
Axfood Närlivs	1,590	-208	1,382	6,365	-849	5,516
Dagab	6,622	-349	6,273	25,813	-1,518	24,295
Other	1,021	-2	1,019	4,161	-5	4,156
Internal sales
Dagab	-5,582	555	-5,027	-21,792	2,356	-19,436
Axfood Närlivs	-4	2	-2	-22	11	-11
Other	-976	2	-974	-3,970	5	-3,965

SIGNIFICANT RISKS AND UNCERTAINTIES

In the course of its business the Axfood Group is exposed to operational, strategic and financial risks. Operational and strategic risks include business and liability risks, among others, while financial risks include liquidity risk, interest rate risk and currency risk.

Axfood works continuously with risk identification and assessment. One of the most significant business risks that Axfood has identified in its safety analysis work is a total loss, such as from a fire at one of the central warehouses in Jordbro or Backa. Major emphasis is put on preventive work, and the organization for this is well developed, as is the Company's planning to maintain operating continuity in the event of unforeseen events.

For a thorough account of the risks that affect the Group, please refer to the 2011 Annual Report.

SEASONAL EFFECTS

Axfood has no significant seasonal variations.

ENVIRONMENTAL IMPACT

One of Axfood's strategic objectives is to work actively for environmentally sustainable development. In the day-to-day activities, sustainability aspects are integrated in product purchasing and selection as well as in logistics, product flows and store operations. Priority areas for Axfood's environmental sustainability work are energy consumption, transports and the eco-cycle. All of these areas have major bearing on Axfood's business and have large potential for improvement. One overall goal is to reduce the climate impact of the Group's operations by 75% during the period 2009–2020. The remainder of the Group's environmental impact will be climate-compensated. So-called green diesel, containing a blend of pine oil, is now being used for transports, and investments have been made to reduce energy consumption at stores and warehouses. Axfood also emphasizes recycling, where most waste is either recycled for use as raw material for the recycling industry or converted to energy. Energy efficiency improvement will continue to have high priority in 2012. A more detailed description of Axfood's work with environmental matters can be found at axfood.se.

PARENT COMPANY

Other operating revenue for the Parent Company during the period January–March amounted to SEK 43 m (44). After selling and administrative expenses, totalling SEK 69 m (64), and net financial items totalling SEK -3 m (-2), profit after financial items was SEK -29 m (-22). Capital expenditures during the period totalled SEK 1 m (0).

The Parent Company's interest-bearing net debt was SEK 342 m at the end of the period, compared with SEK 749 m in December 2011. The Parent Company has no significant transactions with related parties, other than transactions with subsidiaries.

ACCOUNTING POLICIES

Axfood applies International Financial Reporting Standards (IFRS) as endorsed by the European Union. This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting, the Swedish Annual Accounts Act, and recommendation RFR 2 – Reporting for Legal Entities, issued by the Swedish Financial Reporting Board (RFR). In order to prepare the financial statements in accordance with IFRS, the Board and Executive Committee make estimations and assumptions that affect the Company's result and position as well as other disclosures in general. These estimations and assumptions are based on historical experience and are reviewed on a regular basis. The accounting policies used by the Parent Company and Group are unchanged compared with the most recently published annual report.

FORECAST

Axfood's goal for 2012 is to achieve an operating profit at the same level as in 2011.

NEXT REPORT

The interim report for the period January–June 2012 will be released on 16 July 2012.

This interim report has not been reviewed by the Company's auditors.

Stockholm, 27 April 2012

Anders Strålman

President and CEO

PRESS RELEASES ISSUED DURING THE FIRST QUARTER

16 January 2012	More than SEK 4 m to Save the Children
7 February 2012	Axfood's sales of organic products up 6.3%
8 February 2012	Nominating Committee proposes re-election of the Board of Axfood AB
14 March 2012	Resolutions made at Axfood AB's Annual General Meeting on 14 March 2012
14 March 2012	Louise Ring receives award for "Diversity Initiative of the Year"
20 March 2012	Axfood Närlivs AB and EMAB sign new agreement

FINANCIAL STATEMENTS, GROUP

Condensed statement of comprehensive income, Group
SEK m	Q1 2012	Q1 2011	Full year 2011
Net sales	8,718	8,257	34,795
Cost of goods sold	-7,518	-7,111	-29,877
Gross profit	1,200	1,146	4,918
Selling/administrative expenses, etc.	-952	-905	-3,668
Operating profit	248	241	1,250
Net financial items	-9	-8	-36
Profit before tax	239	233	1,214
Tax	-62	-61	-323
Profit for the period	177	172	891
Other comprehensive income
Change in fair value of forward exchange contracts	0	1	0
Change in fair value of available-for-sale financial	-	-	5
assets Tax attributable to components in other compre
hensive income	0	0	-1
Other comprehensive income for the period	0	1	4
Total comprehensive income for the period	177	173	895
Operating profit includes depreciation/amortization of	152	141	588
Earnings per share, SEK	3.37	3.28	16.99

Condensed statement of financial position, Group
SEK m	31/3/2012	31/3/2011	31/12/2011
Assets
Goodwill	1,742	1,576	1,613
Other financial assets	46	32	44
Other non-current assets	2,702	2,425	2,684
Total non-current assets	4,490	4,033	4,341
Inventories	1,924	1,876	1,916
Accounts receivable – trade	793	648	639
Other current assets	1,083	969	1,065
Cash and bank balances	313	183	317
Total current assets	4,113	3,676	3,937
Total assets	8,603	7,709	8,278
Shareholders' equity and liabilities
Equity attributable to owners of the parent	2,756	2,515	3,237
Equity attributable to non-controlling interests	28	-	-
Total shareholders' equity	2,784	2,515	3,237
Non-current interest-bearing liabilities	767	400	409
Noninterest-bearing non-current liabilities	297	218	308
Total non-current liabilities	1,064	618	717
Current interest-bearing liabilities	798	855	633
Accounts payable – trade	2,425	2,196	2,273
Other current noninterest-bearing liabilities	1,532	1,525	1,418
Total current liabilities	4,755	4,576	4,324
Total shareholders' equity and liabilities	8,603	7,709	8,278
Contingent liabilities	31	18	20
Pledged assets	3	16	3

Condensed statement of cash flows, Group
SEK m		Three mos 2012 Three mos 2011	Full year 2011
Operating activities
Cash flow from operating activities before changes in working capital,
before paid tax	386	370	1,777
Paid tax	-65	-96	-323
Changes in working capital	95	19	-70
Cash flow from operating activities	416	293	1,384
Investing activities
Acquisitions of operations, net	-106	-14	-68
Acquisitions of non-current assets, net	-152	-197	-873
Change in financial non-current assets, net	-	-	0
Cash flow from investing activities	-258	-211	-941
Financing activities
Change in interest-bearing liabilities	468	416	190
Change in non-controlling interest	-		-1
Dividend paid out	-630	-630	-630
Cash flow from financing activities	-162	-214	-441
Cash flow for the period	-4	-132	2
Condensed statement of changes in equity, Group
SEK m	31/3/2012	31/3/2011	31/12/2011
Amount at start of period	3,237	2,972	2,972
Total comprehensive income for the period	177	173	895
Dividend to shareholders	-630	-630	-630
Acquisition of previous non-controlling interest	-	-	0
Amount at end of period	2,784	2,515	3,237
Key ratios and other data, Group
	Three mos 2012	Three mos 2011	Full year 2011
Operating margin, %	2.8	2.9	3.6
Margin after financial items, %	2.7	2.8	3.5
Equity ratio, %	32.4	32.6	39.1
Debt-equity ratio, net, multiple	0.5	0.4	0.2
Debt-equity ratio, multiple	0.6	0.5	0.3
Interest coverage, multiple	27.6	26.9	29.9
Capital employed, SEK m	4,349	3,770	4,279
Return on capital employed, %	31.1	33.7	31.0
Return on shareholders' equity, %	34.0	35.8	28.7
Capital expenditures, SEK m	323	220	993
Earnings per share, SEK1	3.37	3.28	16.99
Dividend per share, SEK	-	-	12.00
Shareholders' equity per share, SEK1, 2	52.5	47.9	61.7
Cash flow per share, SEK1	-0.1	-2.5	0.0

1) The number of shares is the same before and after dilution. The average number of shares is the same as the number of shares outstanding. Axfood has no holdings of treasury shares.

2) Net asset value per share corresponds to shareholders' equity per share.

Number of shares outstanding¹

Quarterly overview
	Q2 10	Q3 10	Q4 10	Q1 11	Q2 11	Q3 11	Q4 11	Q1 12
Sales	8,583	8,582	8,885	8,257	8,889	8,735	8,914	8,718
Operating profit	279	364	321	241	317	370	322	248
Operating margin, %	3.3	4.2	3.6	2.9	3.6	4.2	3.6	2.8
Earnings per share, SEK1	3.79	5.00	4.32	3.28	4.30	5.09	4.32	3.37
Shareholders' equity per share, SEK1	47.3	52.3	56.6	47.9	52.2	57.4	61.7	52.5
Return on shareholders' equity, %	34.8	32.3	30.7	35.8	34.0	31.0	28.7	34.0
Cash flow from operating activities per share, SEK	5.5	6.3	6.2	5.6	6.6	6.9	7.3	7.9
Capital expenditures	250	138	270	220	268	208	297	323

Average number of employees 7,190 6,969 7,062

52,467,678 52,467,678 52,467,678

FINANCIAL STATEMENTS, PARENT COMPANY

Condensed income statement, Parent Company
SEK m	Q1 2012	Q1 2011	Full year 2011
Net sales	-	-	-
Selling/administrative expenses, etc.	-26	-20	-74
Operating profit	-26	-20	-74
Group contributions received, net	-	-	1,182
Other net financial items	-3	-2	-5
Profit after financial items	-29	-22	1,103
Appropriations	-	-	-274
Profit before tax	-29	-22	829
Tax	8	5	-217
Net profit for the period Operating profit includes deprecia	-21	-17	612
tion/amortization of	0	0	2

Profit for the period corresponds to total comprehensive income for the period.

Condensed balance sheet, Parent Company
SEK m	31/3/2012	31/3/2011	31/3/2011
Assets
Property, plant and equipment	3	3	2
Participations in Group companies	3,514	3,468	3,452
Other financial non-current assets	5	4	6
Deferred tax assets	9	10	9
Total non-current assets	3,531	3,485	3,469
Receivables from Group companies1	1,276	1,110	2,103
Other current assets	148	65	67
Cash and bank balances	0	-	0
Total current assets	1,424	1,175	2,170
Total assets	4,955	4,660	5,639
Shareholders' equity and liabilities
Restricted shareholders' equity	287	262	262
Unrestricted shareholders' equity	2,733	2,755	3,384
Total shareholders' equity	3,020	3,017	3,646
Untaxed reserves	275	1	275
Non-current interest-bearing liabilities	330	32	31
Noninterest-bearing non-current liabilities	4	7	4
Total non-current liabilities	334	39	35
Current interest-bearing liabilities	769	823	603
Liabilities to Group companies2	522	743	1,047
Accounts payable – trade	14	13	14
Other current noninterest-bearing liabilities	21	24	19
Total current liabilities	1,326	1,603	1,683
Total shareholders' equity and liabilities	4,955	4,660	5,639
Contingent liabilities	371	357	382
Pledged assets	-	-	-
1) Of which, interest-bearing receivables	1,276	1,110	888
2) Of which, interest-bearing liabilities	520	740	1,003

FINANCIAL DEFINITIONS

Average number of employees: Total number of hours worked divided by the number of hours worked per year (1,920 hours).

Capital employed: Total assets less noninterest-bearing liabilities and noninterest-bearing provisions. Average capital employed is calculated as capital employed at the start of the year plus capital employed at the end of the year, divided by two.

Cash flow per share: Cash flow for the year divided by a weighted average number of shares outstanding.

Debt-equity ratio: Interest-bearing liabilities divided by shareholders' equity including non-controlling interests.

Dividend yield: Dividend per share divided by the yearend share price.

Earnings per share: Net profit for the year attributable to owners of the parent divided by a weighted average number of shares outstanding.

Equity ratio: Shareholders' equity including noncontrolling interests as a percentage of total assets.

Interest cover ratio: Profit after financial items plus financial expenses, divided by financial expenses. Margin after financial items: Profit after financial items as a percentage of net sales for the period.

GLOSSARY

Autoorder: An automated store restocking system.

Delivery reliability: The share of delivered goods in relation to the share of ordered goods.

E-learning: An interactive training program. EMAB: EMAB is a collaborative organization for independent service station stores, with approximately 400 Net asset value per share: Equity attributable to owners of the parent divided by the number of shares outstanding.

Net debt: Cash and cash equivalents plus interest-bearing receivables less interest-bearing liabilities and provisions.

Net debt-equity ratio: Interest-bearing liabilities and provisions less cash and cash equivalents and interestbearing receivables, divided by shareholders' equity including non-controlling interests.

Operating margin: Operating profit as a percentage of net sales for the period.

P/E multiple before and after dilution: Share price in relation to earnings per share.

Return on capital employed: Profit after financial items, plus financial expenses, as a percentage of average capital employed.

Return on shareholders' equity: Net profit for the year attributable to owners of the parent as a percentage of average equity attributable to owners of the parent. Aver age equity is calculated as shareholders' equity at the start of the year plus shareholders' equity at the end of the year, divided by two.

members within the Shell, Statoil 123, Hydro, Bilisten and Preem service station chains.

GRI: Global Reporting Initiative.

Like-for-like sales: Like-for-like sales refer to store sales reported on the basis of an entire comparison period, i.e., two years.

Axfood AB, 171 78 Solna Visitors' address: Hemvärnsgatan 9 Tel. +46-8-553 990 00, Fax +46-8-730 03 59 info@axfood.se, axfood.se

ABOUT AXFOOD

Axfood conducts food retail and wholesale business in Sweden. Retail business is conducted through the wholly owned grocery chains Willys, Hemköp and PrisXtra. The number of Group-owned stores is 239. In addition, Axfood collaborates with a number of proprietor-run stores that are tied to Axfood through agreements, including stores in the Hemköp chain, but also stores operating under the Handlar'n and Tempo profiles. Wholesale business is conducted through Dagab and Axfood Närlivs. Axfood has an approximate 20% share of the food retail market in Sweden. Axfood is listed on Nasdaq OMX Stockholm AB's Large Cap list. Axfood's principal owner is Axel Johnson AB, with 50.1% of the shares.

Mission

Axfood's business mission is to develop and run successful food retail concepts based on clear and attractive customer offerings.

Business model

Axfood's business model is built upon a strong purchasing function, focus on private label products, efficient logistics and attractive grocery stores.

Strategy

Axfood will be the most profitable company in the Swedish food retail market and grow its market shares by strengthening and developing its position. Axfood's longterm goal is to attain an operating margin of 4%. Axfood's strategy is built upon five cornerstones: customers, profitability, growth, the environment and social responsibility, and employees and organization. Read more on axfood.se.

Value drivers

Factors that affect Axfood's performance include:

• Access to strategic store locations
• Development of an attractive product offering
• Innovativeness for enhancing customer benefit