Axfood AB (publ)

In Q2, group operating profit increased to SEK 964 million and operating margin rose to 4.2%; adjusted operating profit was SEK 972 million and adjusted margin was 4.2%. Group net sales grew just below 1% in the quarter, retail sales increased 2.1%, and first-half net sales rose 1.7% to almost SEK 45 billion, with retail sales up 2.9%. First-half adjusted operating profit increased 4% to almost SEK 1.8 billion, and adjusted operating margin improved by 0.1 percentage points to 4%. Cash flow in Q2 was SEK -47 million, and investment cash flow was SEK -376 million. For the full year, management said outlook is unchanged and includes investments, new store establishments, and items affecting comparability; they also said they aim for 10-15 new store openings in 2026 and had seven so far year to date. On the balance sheet, Axfood had utilized approximately SEK 2.8 billion of credit facilities at the end of Q2, down from SEK 3.1 billion at the end of Q1.

Simone Margulies framed the quarter as one of high activity, stronger earnings, and continued execution on long-term strategy despite food price deflation and tough comps. She stressed that Axfood is strengthening presence, competitiveness, and efficiency across its multi-brand portfolio, while also using tactical measures in the short term to support growth, especially at Willys. Her tone was confident but measured, repeatedly noting the market remains highly competitive and consumers remain price focused.

Anders Lexmon focused on profitability, cash flow, and capital structure. He said first-half adjusted operating profit rose 4% to almost SEK 1.8 billion on 1.7% sales growth, with the adjusted operating margin improving to 4%, while Q2 cash flow was SEK -47 million due in part to the VAT cut’s impact on working capital. He also noted Q2 investment cash flow of SEK -376 million, first-half investments of SEK 927 million excluding leasehold debt and acquisitions, credit facility usage of SEK 2.8 billion at quarter-end, and an equity ratio of 19.1%; ROCE improved by 0.9 percentage points compared with 2025.

Analysts pressed management on Willys’ weaker growth, the nature of its tactical measures, and whether pricing needs to widen its gap versus the market; management said the issue was mainly high comps and deflation, and that the tactical actions are targeted customer-insight measures to drive traffic, not a new broad pricing strategy. Questions also centered on City Gross, where management said the priority is both profitability and healthier like-for-like growth, with the goal of being profitable in the second half of the year and the possibility of more structural changes over time. The call also covered fuel-cost headwinds, VAT-related working-capital effects, and online profitability; management said the VAT impact was about half of the more than SEK 700 million first-half working-capital swing and that online profitability is lower than store sales but was not the main driver of margin pressure this quarter.