Axfood AB (publ)

Thank you, Alex, and good morning, everyone. We summarize the quarter with the volume growth, improved efficiency and increased profitability, and that in a market that is characterized by a high activity level. Through a clear customer focus and collaboration, we continue to create value with our strong and distinctive concepts. Before we start the presentation, I briefly want to comment on the situation in the world around us. It is clear that global uncertainty has increased over the past few months, and it's currently very difficult to assess the long-term effects of the war in the Middle East. In recent years, we have successfully navigated a volatile and uncertain environment, adapting quickly as conditions have changed, and we're carefully monitoring developments. Turning to page three. With that very brief introduction, let me now take you through the recent market developments and Axel's first quarter performance. So next page is number four. Market growth amounted to 4.4% during the quarter, a similar level compared to the fourth quarter last year. Stronger volumes contributed to this development as the annual rate of food price inflation came down and amounted to 1.7%, according to Statistics Sweden. Inflation decreased gradually during the quarter, and particularly in March, when the overall price level was unchanged compared to the prior year. This was mainly driven by the dairy category, but prices were also lower in several other categories, including fruit and vegetables. In addition to the improved volume trend, a 0.5% positive calorie effect from Easter also contributed to the market development this quarter. So please go to the next slide, number five. As a result of positive volume traffic and high volumes, Saxford retail sales increased 3.8% in the quarter. This was below the market and also lower than what we had hoped for. Excluding Citigrass, where sales had been impacted by recent store closures, growth was in line with the market. Over a two-year period, we continued to clearly outperform with contribution from Citigrass. Competition remains intense and in general market dynamics continue to be characterized by a strong focus on price value. As you all probably know, the VAT on food was halved on April 1st from 12 to 6% and this measure was implemented just before Easter, which typically is an important holiday for the industry. With this, the overall activity level of the market was particularly high. In Axford, we worked intensively during the quarter to prepare for and implement the VAT reduction. Through extensive collaboration and focus on execution throughout the organization from stores and support functions to Dargab and Axford IT, the price points on millions of items were updated in a very short amount of time. We're now on page six. Consolidated net sales for Axel grew 2.6% in the quarter. And as I just mentioned, this was mainly driven by higher volumes. We saw growth in all of our segments except Citigrass. And there, as I just mentioned, it is of course important to consider that total growth was impacted by store closures. So please go to the next page, number seven. We report a strong financial development in the quarter. Group operating profit increased to 806 million SEK and the operating margin was higher at 3.7%. Operating profit included items affecting comparability of minus 6 million related to CIFIOS. Last year's items affecting comparability also related CIFIOS and then amounted to minus 38 million SEK. Operating profit and margin on adjusted basis, which excludes items affecting comparability, also increased. Adjusted operating profit was 812 million SEK and the adjusted operating margin amounted to 3.8%. The improved profitability was primarily driven by high sales volumes and growth in both total and life-for-life sales, a stable gross margin, improved efficiency and also an effective cost control. So now let's turn to Willis and page 8. Willis continued to demonstrate volume growth in the quarter through an increased number of customer visits and a higher average ticket value, but total growth was below the rate of the market. Store establishments contributed to growth, although the new stores in the first quarter were established late in March and as such only contributed to a small extent. In recent months, Willys has temporarily closed two stores ahead of relocation, and together with ongoing larger store modernizations, this impacted growth negatively in the first quarter. Earnings grew to 498 million SEK, which corresponded to an operating margin of 4.1%. The increase in operating profit was primarily driven by the increased sales volumes and a stable gross margin development. Willys is Sweden's leading discounter and two days before the VAT reduction Willys chose to lead the way by reducing prices corresponding to the lower VAT. This together with the increased marketing activities which were largely concentrated to the end of the quarter negatively impacted sales and profitability. As I mentioned Willys store expansion progress was also concentrated to the end of the quarter Even so, the expansion pace remains high, and based on the chain's strong position among consumers, there is significant potential to increase the market presence. We are now on page 9. Hemship displayed a strong performance in the first quarter and clearly increased its market share, delivering retail sales growth of almost 6%. Growth was primarily driven by an increase in customer traffic and, in addition, a higher average ticket value that contributed positively. Like-for-like growth was also strong, contributing to a solid earnings performance. With a focus on modernizing stores and enhancing its offering in terms of price value, fresh produce and meal solutions, Hampshire has made excellent progress in recent years. The current growth clearly demonstrates that customers truly appreciate Hemsharp. In total, operating profit increased to 114 million SEK and operating margin also increased to 5.1%. The increase in operating profit was mainly driven by the increased sales volumes, a stable gross margin development and solid cost control. Earnings in the prior year was impacted by new store establishments. Turning to page 10. Our efforts to develop Citigröss into a long-term competitive hypermarket chain is proceeding according to plan. Citigröss continued to deliver a positive performance in the first quarter with healthy like-for-like growth of 3.6% and a positive earnings trend. Our improvement initiatives to develop the customer offering and streamlining operations are clearly yielding results. Citygross's loss for the quarter amounted to minus 48 million SEK on an adjusted basis, corresponding to an operating margin of minus 2.4%. This was an improvement compared to the prior year, which came from the positive like-for-like growth, effects from structure measures, as well as efforts to streamline operations. Similarly to Willys, Citigrass went ahead and reduced prices corresponding to the VAT cut two days prior to implementation. And together with increased marketing activities, this negatively impacted sales and profitability. On a reported basis, the operating loss amounted to minus 54 million SEK, which corresponds to an operating margin of minus 2.7%. This included the items affecting comparability I mentioned, which refers to structural measures for stores. We are now on page 11. Growth for Snabrios amounted to 1% in the quarter, with weak sales development for B2B consumers. The trend in the B2C sales through Snabrios Club was however strong, both in total and like-for-like sales. In terms of the operating profit, Snabrios managed to offset the weak growth through strict cost control and delivering earnings on par with last year. In total, operating profit amounted to 25 million, corresponding to an operating margin of 2%. Next page, number 12. Dagab's first quarter net sales increased by almost 4%, driven by sales to food retail customers and especially Axel's own concepts. Operating profit also increased to 298 million SEK and operating margin was unchanged at 1.5%. The performance was primarily due to the sales growth and a lower cost level with increased productivity in logistics. Operating profit was, however, negatively impacted by a lower gross margin due to market investments. Late in the quarter, DAGAP also negatively was impacted by higher fuel costs and weaker Swedish krona. That concludes the first part of the presentation. So now it's time for our CFO, Anders, to take you through the financials. And we are now on page 13, but please go to the next page, number 14. And Anders, please go ahead.

Thank you, Simon. During the first quarter, the cash flow was minus 692 million SEK, which was almost 300 million SEK lower compared to last year. The strong operational performance was offset by a negative working capital effect due to inventory build ahead of Easter. This resulted in a somewhat weaker cash flow from operating activities of almost 1.1 billion SEK, 129 million lower compared to last year. The negative cash flow from investment activities of minus 560 million SEK included the initial payment of 185 million for automation in the logistics center in Kungsbacka. Excluding this automation investment, the capital expenditure in the quarter was in line with last year. By the end of Q1, Exford utilized approximately 3.1 billion SEK of our credit facilities compared to 3.3 billion SEK in Q1 last year and 2.7 billion SEK as year-end 2025. The cash flow from financing activities of 1.2 billion SEK was in line with last year and included the first dividend payment of just below 1 billion SEK. We are now on page 15. The net debt increased compared to year-end 2025 due to dividend payout. The net debt to EBITDA was improved compared to Q1 last year due to a strong EBITDA development, despite increased leasehold debt. The equity ratio amounted to 17.3%, which was lower than in December 2025 due to the dividend improved. The Q1 equity ratio was however 0.5 percentage points higher compared to Q1 2025. Total investments excluding leasehold and acquisitions amounted to 561 million SEK in Q1 compared to 371 million SEK last year. During the quarter we established four new Groupon stores, two more than last year. Our investments in store establishments have therefore increased during Q1 compared to last year. And as I mentioned before, the investments included the first payment of 185 million SEK connected to automation in the new logistics center in Kungsbacka. And then let's turn to page 16. When we look at the capital efficiency, we have a stable development in our rolling 12-month networking capital and also in relation to net sales. Capital employed has increased over the last years, mainly due to the acquisitions of Bedlands Food and Citigos, as well as the investments in Bålstam. The level of capital employed, however, decreased slightly during Q1, as equity was reduced not only by dividend paid, but also the dividend to be paid in Q3 later this year. The effect was partly offset by higher leasehold debt, thanks to an improved earnings trend and the reduced capital employed ROC improved by one percentage points during the first quarter compared to year-end 2025. And by that, Simon, I have come to the end of my presentation and hand over to you again.

Thank you, Anders. And we are now on page 17, and it's time for me to give you an update on our strategic agenda and priorities. So let us turn to page 18. We have a clear house of brand strategy in our group, and this makes us unique in Swedish food retail. We aim to deliver the strongest customer experiences, and we are present in all segments of the market with our different concepts. Please turn to next page, number 19. To create the right conditions for our retail concepts to be able to succeed on the market, we leverage our strengths as a group and focus on six strategic development areas. We have shown you this before, and I would now like to go through some recent key strategic developments, so please turn to next page 20. Our ambition is to provide the most attractive assortment on the market with a distinctive offering on branded as well as private label products to meet customers' diverse needs and preferences. During the first quarter, we had a high pace in developing our private label portfolio and launched more than 100 new products. We had product launches across many categories, but I would like to highlight our focus on expanding the range of our international assortment In addition, we expanded the Mevolution brand to strengthen our offering in personal care. Our product labels represent quality and innovation, and we also focus a lot on sustainability and health, with a wide selection of sustainability labeled and organic products. In addition, we have a large selection of products with Swedish origin, with more than 400 products under the Garant brand. In the space of sustainability and health, we have previously launched several innovative hybrid products. And this quarter, we launched ready-made meatballs made from a combination of minced meat, vegetables and legumes. An exciting launch that really can contribute to better eating habits, not least among younger people. Our product labels, including the Garant and Eldorado brands, are a significant competitive edge, and with all the new products, we complement our existing portfolio and improve the offerings within our various concepts. So, overall, our product label share of sales increased in the quarter and amounted to just over 32%, driven by high penetration in Hemshep and Citvios. We are now on page 21. We will continue to develop our attractive store network in the coming years by accelerating the pace of expansion while maintaining a high rate of modernization of existing stores. This work creates new growth opportunities by ensuring that our concepts provide the best possible store experience for their customers. Willys focuses on significantly expanding its presence, but at the same time, the chain gradually rolls out its most recent store concept 5.0. HempShop is maintaining a high pace in modernizing the stores and in addition expands its presence when it sees good potential to do so. For Citigros, focus in the past year has been on closing underperforming stores with one store closure in the first quarter this year and one planned for the second. This is really about creating a healthy core in Citigros store base from which the chain can grow from. That said, Citygross has also established a new store recently in February in Norrtälje. Lastly, to create better conditions for both the restaurant trade and the convenience trade, to achieve long-term growth with improved profitability, we have made the decision to bring the two operations together into a single organization. The convenience trade business, which is currently part of Dagab, will be transferred to Snabgross as of January next year. The logistics operation will however remains in dagab. With consolidation opportunities are being created to further strengthen the customer meetings and offerings both for restaurants and convenience trade customers. Moving on to page 22. We are also improving our competitiveness by maintaining a clear focus on efficiency and productivity. We are enhancing the way we work, increasing use of data and AI in all our processes. More than 100 AI models have been taken into production in recent years and we focus a lot on developing and empowering employees through AI tools and training and assistance. We are also further optimizing our new logistics structure and during the quarter we completed the rollout of a new order and purchasing system that will further strengthen our supply chain. With this new system, we can be more accurate in forecasts and planning and really strengthen how we manage our order flows to balance supply and demand. As previously communicated, we plan to establish a new highly automated logistics center in Kungsbacka that will be completed in 2030 and ensure increased capacity and efficiency for future growth in southern Sweden. During the first quarter work continue according to plan with this project and we will get back to you when the property lease contract is entered into. Now let's turn to page 23. Sustainability is an integral part of our operations and strategies. We aim to be a positive force in society and to take the lead in promoting a sustainable food system by influencing decision makers, leading the way through our own initiatives and driving industry issues. Last year we completed the transition to renewable fuels and electricity both in our own and procured transports. A truly important achievement and consequently we have seen a significant decrease in emissions. Using comparable emissions factors, emissions from own transport decreased 15% in the first quarter compared to the prior year. In addition to the increased use of renewable fuels, this reduction was due to a higher number of electrical vehicles and roofed optimisation. Diversity and inclusion are also areas that are of great importance to us, and by 2030 we aim to be Sweden's most inclusive food company. During the quarter, we concluded the first work placements under the so-called SAU program at Vilis and Hemsjö. This program aims to help young people in vulnerable areas to strengthen their position in the labour market and motivate them to study. We've been a part of this initiative since the start and we will be offering more young people jobs in the future as the program is developed and scaled up. Lastly, I want to highlight our efforts to promote sustainable food consumption. Hampshire is the leading industry leader with regards on organic products and helps customers to shop more sustainably. Recently, an independent survey showed that Hampshire leads the market in terms of promoting organic food through campaigns. Willis is also doing a lot in this area and came out second in the survey. In a market where price awareness among consumers remains high, campaigns are important and I think this really shows that we continue to push forward and take our responsibility. Moving on from our strategic agenda and we are now on page 24. Our outlook for the year is unchanged and it covers investments, new store establishments and items affecting comparability. With regards to the new establishments, as Anders talked about, in total we opened up four new group-owned stores in the quarter, of which two Willys, one Hemshöp and the New City Growth Store I mentioned earlier. So please now turn to page 25. And let me sum up. We summarized a quarter with positive customer traffic, volume growth and increased profitability. We are investing in line with our long-term plan to gain further market share and create the conditions for continued profitable growth. And that was all for today. So now please turn to page 26 and I hand over to the operator to open up the line for questions. Thank you.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Magnus Rahman from SB1 Markets. Please go ahead.

Thank you. I could start off asking about the temporary negative effects on Willys sales growth from major store refurbishment. Can you help quantify in any way the effects here? Is it correct that it's one store that is closed altogether pending the build of replacing store? And then are there other stores that have significant amount of store space closed for renovation currently?

As you said, there are some facing effects, I would say, in the quarter regarding Willys stores. The first thing is that we had a little less new stores and the stores that were open, opened in the end of the quarter. However, we will have a high pace as we already communicated in establishing new wheelie stores this year. And the other thing that you said is that we have closed two stores for relocating them. So they are closed and they will reopen in new places. And then we also have some large modernizations in large stores that's also affecting the like-for-like growth. So this in total have a negative effect in the sales growth in Vilnius for the quarter.

Great. And these two stores that are temporarily closed altogether, have they been closed sort of for the major of the duration of Q1 for the most of that period?

Yes, yes. They closed by the end of the last year for relocating them.

So if these two stores would have been in operation, retail sales growth in Vilis should have been around one percentage point higher. That is fair to assume.

I would say that the phasing in the source for the Q1 together with the marketing investment came in the late of the quarter together have a negative effect and make Vilis grow a little bit less than we hoped for.

Right. Thanks. And then I also wanted to ask if there's any way to quantify the cost you have been taking here in terms of halving the food BAT two days in advance in both Vilis and in Citygross. Any help there to quantify? I mean, should we do two divided by 90 and then a little bit more because those were more trading intensive days? times 5.4 percent or and you think you could you help us there with any figure.

The reduction of prices that we made both in Viljus and in Citigröss and Eurocash two days in advance had a negative effect and also increased marketing activities in the quarter by the end of the quarter together that we had increased personal cost since it was a lot of manual work of changing millions of prices in stores. And also we've had IT development costs during the quarter. And of course, also, as you said, the real effect of reducing the prices.

But is it fair to say also that this sort of short-term top line strengthening effect of this was maybe less than what you had hoped for.

Yeah, the purpose of doing that was to strengthen the position for Willis as the leading discounter on a long-term effect and by that leading the price reduction. But as you said, we didn't get the volumes as we had hoped for. So the sales for Easter came as it normally does from in the middle of the week until and by the end of the week. So we didn't really got the volumes that we had hoped for.

Understood. So sort of subsidizing the ordinary spending, but not being able to push forward the Easter shopping.

Yeah. yeah however i mean one one large purpose for us was to strengthen the position as a leading discounter so so so so and and that is more on a long-term effect regarding the brand so i mean uh right yeah that that was mission accomplished all right and then this final one from me here uh

the effects of the war in the Middle East. You mentioned here in the report that the early, or late into the quarter, the early effects you've seen on fuel costs and then you acknowledged the currency change, the weakening again of the Swedish krona. But you have not seen any negative effects on electricity prices. Is that correct?

We have seen a little bit higher electricity prices but we work with the hedge, we hedge the prices so we have a more sort of long-term effect when it comes to electricity.

Right and then when thinking about possible inflationary effects on food commodities is it in your opinion even if this is more for the farmers maybe is it fair to assume that the price increase and possible supply squeeze as well of fertilizers, i.e. the urea prices, that would mainly have an effect on next year's crops rather than this year's crop season.

If you look on the direct effects on the fuel cost, it of course depends on how the development will be going on forward in the Middle East. Regarding the fertilizers, it also depends a lot on the development going on forward. This summer's crops, of course, are already done, but then you have the autumn crops and also going for next year. So depending on how the development will be, there will be some delays, but there could be also effects also in this autumn since you have crops not only once a year.

Great, thank you for the replies.

Thank you.

The next question comes from Daniel Schmidt from Danske Bank. Please go ahead.

Yes, good morning Simone and Anders. Good morning. Just coming back to sort of you start out saying that this sort of the recent months have brought increased uncertainty and we can all sort of acknowledge that. and that the focus on value for money is still very high. And I hear you when you say that you didn't get the volumes that you expected when it came to the price cuts that you made a couple of days before the 1st of April. But sort of this uncertainty in itself, wouldn't that sort of been a tailwind for especially Willys in the quarter since early March that you didn't expect before we went into this conflict in the Middle East. And I was just wondering sort of why are you growing slower than the market? And I hear you in terms of refurbishments and all that, but you do have more stores now than you had last year. And sort of what is the dynamics? What sort of happened in the market in Q1, you think? Or is it just sort of these things that you mentioned in terms of refurbishments and closed, temporary closed stores?

I'll try to give you an answer. I mean, if we look upon the first quarter as the market as a whole, we had a good growth in the market that was primarily coming from volumes since the inflation was low and also we had deflation in March. By that also, as you said, the activity level in the quarter also increased. And in that environment, we also had the facing of refurbishments going on, closing down to stores. The new stores that we opened up came in late in the quarter, together with VET or our price reduction that we made. That together made us go a little bit lower than we had hoped for. So that was all. And then I would say that The cost levels for the customers, it will, of course, depend a lot on what is happening going forward. I mean, the increased use came in later in the quarter and also... So, I mean, there are many things that is happening for the consumers in the quarter, but also in the market. However, I would like to zoom out a little bit and say, like, Willys has a really strong position as one of Sweden's strongest a food retailer, they are the most recommended chain, and we will continue to have a high expansion pace for Willys, since we see there's a great potential to accelerate our expansions in Willys.

Yeah, okay, but do you see that sort of these issues that we've talked about now Have they corrected themselves as we go into the second quarter of this year and you had the lowering of the VAT and all that is basically behind us now? Are you seeing a better market on the back of the lowering of the VAT? Or is that still too early to call?

I think it's too early. There are still uncertainties. The VAT and the initiatives to strengthen the consumers' buying power are, of course, positive. On the other hand, consumers have higher prices for electricity and also fuels. How the increased buying power how large that will by the end of the day become and also how the consumers will use their consumption. It's difficult and it's a little bit too early to say anything actually about that.

Yeah, okay. And just the last one on the cost for the repricing. Was all that taken in Q1 or is there anything taken in Q2, early Q2 for Hemköp?

For Hemköp?

given that they didn't do the changes two days before?

Yeah. You mean the cost for personnel and marketing and so on?

Exactly. Exactly. Repricing.

Yeah, that was taken for all the chains were taking in the first quarter. I mean, both marketing, personal costs.

Yeah. Okay. And just the fact that you have to reprice the entire assortment Is that resulting in a number that you want to share in terms of extra staff to just get that done?

Extra what?

Staff.

Ah, extra staff. Okay. No, we don't... give any details about that. But as you say, there were a large cost, of course, for personnel to doing the job and also marketing and also the price by itself.

Okay. Thank you. Thank you. That's all for me.

Thank you.

The next question comes from Erik Sandstedt from Kepler Shoebrew. Please go ahead.

Thanks, Erik Sandstedt here with Kepler. Three questions, please. The first one is a follow-up on one of the earlier questions here. Because you say that gross margins at Viljus were stable in the quarter, right? And given these pre-VAT prices reductions, which I assume had a slight negative impact on gross margins, can you just explain then what sort of supported gross margins to offset that impact? And given that gross margins were stable and the EBIT margin were down, I suppose OPEX sales then must have driven that margin contraction. I know it's not a big margin decline, but I'm just trying to understand the underlying drivers a bit better here.

So the offset was, according to as we said in the report, that the marketing investment came in the later part of the quarter. And that also on the other hand had marketing cost and cost for personnel that made the margin a little bit softer.

Yeah, but there must have been some positive gross margin impacts as well then if the pre-VAT reductions had a negative impact.

Yeah, and that was because the marketing investment came late in the quarter.

Okay, but marketing, that's an OPEX, right?

It could be both. Okay. It could be marketing costs, but it could also be price reductions.

Campaigns.

Okay, you're talking about price campaigns. Yeah, that makes sense. Perfect. Then secondly, if input costs now go up on the back of the geopolitical tensions, Will it be tougher to pass that sort of underlying price inflation on, given the price competition we're seeing in the market presently?

I mean, increasing costs, of course, there are some, how is it, time, there's a time when they appear until you can see it in the stores and you haven't seen them in the stores. And also that depends on development going on further. But if the development continues with increased costs, you will, of course, we are a low margin company. industry and and and if that will continue you will see it in the stores also but it also depends on how the yeah how the situation will develop from now And also it's difficult to assess what the long-term effects, but I mean, as we wrote the first, in the end of the quarter, we saw increased costs for fuels. And also the war affects the fertilizers and that also affects, I mean, the entire food industry. It could be both animal production, but also from all the crops. So we'll see. how that will affect in short and long term.

Yeah, but maybe to frame it differently, do you see the market being more price competitive now than, let's say, just a few quarters ago or a couple of years ago?

Yeah, we've seen a high competition in the market. I mean, for the last 18 months there's been a really really or forever but i mean the increased competition for the last two years i would say and that's also why i'm so happy that we can see that the effects we're doing on cost uh cost control uh also the efficiency we're seeing coming from from the investments that were made both in in in bosta and our district structure but also now uh we are implemented a new buying and forecasting system that will also help us to become more efficient And also, of course, the help of AI and data helps us to be more efficient and also improve our customer meetings.

Okay, thanks. And then just finally, in terms of joint group costs, they were higher both versus the same period last year as well as versus Q4, but you have done some cost initiatives on that line, I think. So what drove the costs here and what's a normalized level going forward?

Yes, as you mentioned, I mean it can varies from quarter to quarter. We have seen that in the past as well and now we have in this quarter a little bit higher level and that is due to a couple of projects that we have done in. In for the whole group and that we have taken now so so a little bit higher this quarter and. I would say it's more more. fair to look at the first quarter last year if you want to have a decent level of the joint group costs.

Perfect. Thank you so much. Thank you.

The next question comes from Fredrik Iversen from ABG. Please go ahead.

Thank you. Two questions from my side, and sorry if you have to repeat yourself. I came in a bit late to the call. But first, if you could say anything about the consumer behavior since the VAT reductions. Have you seen any changes to, let's call it, shopping patterns so far?

It's a little bit early to say that since we have also effects from Easter moving within the month. So it's too early, I would say. There's only a couple of weeks going in with the lower VAT. And also there, as we talked a lot about today, there are There's a turbulent environment around the consumers with the war going on in the Middle East and increased costs for fuels and energy. So it's too early to say what effects that will have on the consumers. increased buying power, how large will that be? There are important measures that have been taken with the lowering on the VAT, but how much will that by the end of the day when the increase of fuels and increase of energy on our consumers have and will they buy more food? Will they buy a new sofa or will they save more money? It's really too early actually to say that. We see that the price value is really important and that the focus on price and priceworthiness is important for the consumers. And here we are really well positioned with Willis who choose to clarify its position by going two days in advance with the price reductions and also Citigröss that has strengthened its priceworthiness and also Hemsjö the last couple of years.

Okay, thank you. And second one, if you could say anything about the monthly performance in Villis. Did you see January, February being more in line with the market and then somewhat weaker in March? And where I'm getting at is that historically we've seen the market leader performing better than the competition during Easter due to... I guess it's location of its store network and so on.

I would say that the phasing of the stores that they came lately in the quarter and also that we made the price reduction that had an effect but as We also know Willis has a really, really strong position, but we have also had a natural, a little bit extra positive effects during the years of high inflation. And also last year in the first six months, we had a high inflation. So we got a little bit extra, of course, growth. And that's when you look upon the comparison. Comparison figures, that was difficult to say. Comparison figures that also, of course, have an effect in if you look on Willis growth for the first quarter.

Okay, that's all. Thank you. Thank you.

As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Rob Joyce from BNP Paribas. Please go ahead.

Hi, thanks for taking the questions. Just a couple from me. Just the first one. Have we seen any changes in your relative price positions since the VAT cut came in? I mean, have any of your competitors gone and cut prices lower or even less? So has there been any change there? And has that marketing spend or noise in the market died down since then? since the beginning of April. That's the first one. Thank you.

Yeah, we do not comment our pricing strategies and the price gaps. For us, it's always important to be clear with the price position, of course, for Willis as the market leader in discounting. And also, it's important for all our chains to have an attractive price position. I mean, and since the entire VAT, it was the same for all the all the actors, not actors, all the chains in the market. That was relatively the same for all the players in the market.

And in terms of marketing spend, you saw yourself elevated, I guess the whole market picked up at the end of the quarter. Has that died down as the second quarter started or is it still high?

Could you please repeat? I didn't really understand.

So you pushed marketing spend higher into the end of the quarter behind the new prices. I'm guessing the whole market did as well. Firstly, have you pulled your spend back since then, and has the market done the same, or has the market pulled back on spend?

We only come in the first quarter, and as I said, the entire market had a really high activity level by the end of the quarter, regarding to the Easter, but also for the VAT. reduction. What we did is that we also went ahead with the price reduction two days in advance for Citigroup's VLIS and also Eurocash. So we made some extra marketing investments due to that.

Okay. And I guess the second question I have is just maybe a bit more theoretical, but I guess Hemshop and Citigroup, which would be your higher price chains, seem to have traded better in the quarter on a like-for-like basis as inflation fell. Is there any concern that willies may see a continuation of the kind of underperformance as prices fall further with the VAT reduction?

I would say if we start with Hemsharp. Hemsharp's result is the result of a job that's been made for many years now in modernizing stores. We've had some really good modernizations done in the last months. Also a job in improving the uh both the price position but also improving the assortment and focus on on meal solution and and fresh produce so ham shop is the result of a long long-term job that's been made and we're really happy about the performance they made in the quarter we city girls is also the result of the job that we made a couple of months for a couple of months now since we since we made the the acquisition one half year ago. And so we continue to see a positive growth in Syktegross. will still have a really strong position and has been growing for many years no matter what economy we're in both in in good economies and bad economies but with that said also phyllis have had some extra push during the high inflation we had high inflation in 2023 and also last year in the first six months we had a high inflation so i mean uh I think, and we see still a high focus on price and price value. I don't think that that behavior will, I think that behavior will last. And in that, Willys has a really, really strong position also going forward. And on top, we have a pretty low discounter share in Sweden. So there's a great potential to continue to grow Willys.

Okay, thank you very much.

Thank you.

There are no more questions at this time, so I hand the conference back to the speakers for closing comments.

So by that I would like to thank you all for joining today and all the questions and I wish you a good end of the day. Thank you very much.