Axfood AB (publ)

Axfood said Q2 group operating profit increased to SEK 964 million, with an operating margin of 4.2%. On an adjusted basis, operating profit was SEK 972 million and the margin was also 4.2%, flat year over year; last year’s comparable items affecting comparability were SEK -25 million versus SEK -8 million this quarter. For the first half, net sales increased 1.7% to almost SEK 45 billion, retail sales rose 2.9%, adjusted operating profit increased 4% to almost SEK 1.8 billion, and the adjusted operating margin improved by 0.1 percentage points to 4%. Q2 cash flow was SEK -47 million, negatively affected by the VAT cut and SEK -376 million of investment cash flow. Full-year outlook was unchanged and still covers investments, new store establishments, and items affecting comparability; for 2026 the company said it is aiming for 10-15 incremental new store openings, with seven already opened year to date.

Simone Margulies said the quarter was marked by high activity, better earnings, and continued execution on strategy despite a market shaped by food price deflation and strong competition. She emphasized that Axfood is strengthening presence, competitiveness and efficiency, and said the group is well positioned for the future. Her tone was constructive but measured: she repeatedly noted tough comps, price pressure, and uncertainty, while pointing to tactical measures, new store concepts, and logistics efficiency as the way to support growth.

Anders Lexmon highlighted that first-half net sales rose 1.7% to almost SEK 45 billion and adjusted operating profit increased 4% to almost SEK 1.8 billion, with the adjusted margin at 4%. He said Q2 cash flow was SEK -47 million, hurt by the VAT cut’s effect on working capital, and that investment cash flow was SEK -376 million, lower than last year due mainly to reduced warehouse and IT spending. He also said credit facility usage was about SEK 2.8 billion at quarter-end versus SEK 3.1 billion at Q1 end, and noted net debt increased versus year-end 2025 because of higher leasehold debt, credit utilization and lower cash, while ROCE improved by 0.9 percentage points.

Analysts focused on Willys’ weaker growth, asking whether there were one-offs, whether tactical measures meant more pricing, and whether margins could come under pressure; management said the issue was mainly tough comps and deflation, and that the new measures are targeted traffic-driving actions rather than a replay of prior pricing moves. Questions on City Gross centered on how to reverse negative sales and whether the profit goal was still intact; Simone said profitability depends on driving volume, reaffirmed a goal to be profitable sometime in the second half of 2026, and said the Linköping pilot will be evaluated before any broader rollout. There were also questions about fuel cost and the VAT-related working-capital hit; Anders said the fuel impact depends on market conditions, and that roughly 50% of the more than SEK 700 million first-half working-capital impact came from the VAT cut and would reverse when the tax is reversed.