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.