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Axfood AB

Interim ReportApril – June, 2010

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Axfood AB April - June 2010

• Consolidated sales: SEK 8,583 m (8,216), an increase of 4.5%

• Stable operating profit: SEK 279 m (269)

• Operating margin: 3.3% (3.3)

• Like for like sales: -1.9%

• High activity in all areas

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Willys April - June 2010

• Stable and profitable development

• Like for like sales affected by competition and a weak food retail market

• Increased market share

• High pace in store establishments– Six new stores– Number of stores: 159 (142)

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Hemköp April - June 2010

• Positive result and like for like sales– Successful marketing strategy

• Changes in store structure– Number of Group-owned stores: 65 (76)

• Targeting EBIT margin of 1% 2010

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PrisXtra April - June 2010

• Unsatisfying development

• Decrease in sales for two stores due to major road work

• Possible positive EBIT for full year

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Axfood Närlivs April - June 2010

• Acquisition of cold-storage distribution centre

• New delivery agreements– Reitan Servicehandel Sverige AB

(5 years)– Preem (2 years)

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Dagab April - June 2010

• Best service level ever in June: 97.8%

• Good cost control

• Satisfying cooperation with Vi-stores

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Market trends 2010

• No major changes in the market conditions

• Continued fierce competition

• Price conscious customers

• Price inflation remain at low levels

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Strategy for profitable growth

• Good cost control and efficiency

• High pace in store establishments

• Develop the various concepts

• Optimize customer offerings

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Axfood´s goal for 2010

To achieve an operating profit at least in level with 2009

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April – June, 2010

Financial Performance

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Axfood AB April - June 2010

• Improved operating profit

• Like for like sales: -1.9%

-

+ 3.7%

+4.5 %

Change

3.3%3.3%Operating margin

269279 Operating profit

8,2168,583Net sales

20092010Group , SEK m

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Willys April - June 2010

+3,9%

Sales Operating profit

-10 -09

4,4924,665

-10 -09

195 177

3.9%4.2%Operating margin

20092010

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Hemköp April - June 2010

Sales Operating profit

-10 -09

1,3441,224

-10

-09

-10

10

- 0.7%0.8%Operating margin

20092010

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PrisXtra April - June 2010

• Decrease in sales for two stores due to major road work

-

-

- 8.0%

Change

1.7%- 1.9%Operating margin

3- 3 Operating profit

175161 Net sales

20092010PrisXtra, SEK m

1616

Axfood Närlivs April - June 2010

• Stable development– Distributed sales increased by

3.8 %

-

-

+ 1.6%

Change

2.6%2.3%Operating margin

3834 Operating profit

1,4681,491 Net sales

20092010Axfood Närlivs, SEK m

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Dagab April - June 2010

• Successfull cooperation with Vi-stores

• Service level in June: 97.8%

-

-

+ 4.3%

Change

0.6%0.5%Operating margin

3634 Operating profit

6,1596,422 Net sales

20092010Dagab, SEK m

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Other January - June 2010

• Sales: SEK 1 026 m (887)

• Operating profit: SEK 9 m (25)

• Lower result due to negative effect of the reduction of profit in internalinventories

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Key ratios

• Balance sheet, total: SEK 7,556 m (7,129)

• Cash flow operating activity: SEK 708 m (695)

• Capex: SEK 454 m (319)

• Equity ratio: 32.9% (30.7)

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Strong financial position

Q1 2006 – Q2 2010

0

400

800

1 200

1 600

2 000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q20

0,25

0,5

0,75

1

1,25Debt, short term, MSEK

Debt, long term, MSEK

Debt equity ratio mutiple

2006 2007 2008 2009 2010

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Financial targets & dividend policy

• Axfood´s goal for 2010 is to achievean operating profit at least in levelwith 2009

• Equity ratio of at least 25%

• Shareholder dividend of at least 50% of profit for the year after tax

• Long term target for operating margin: 4%

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Time for questions!