Axfood AB (publ)

Good morning, everyone, and welcome to the Axfood second quarter 2026 earnings presentation. My name is Alexander Weindorf, head of IR here at Axfood. With me today are Simon Margulis, president and CEO, and Anders Lexborn, CFO. In the investor section of our Axfood.com website, you will find the presentation material for today's call. We encourage you to have that presentation at hand as you listen to our prepared commentary. After the presentation, we will be taking questions. A recording of this call will be made available on our website. With that, I will now hand over the word to Simon. So please go to page number two.

Thank you, Alex. Axo maintained a high level of activity during this second quarter with focus on further strengthening presence, competitiveness and efficiency. We delivered positive growth and increased earnings against high comparison figures in a market characterized by food price deflation. We are well positioned for the future and continue to pursue our long-term strategic plan, while we at the same time implement targeted tactical measures to strengthen our growth also in the short term. Turning to page three, with that very brief introduction, let me now take you through recent market development and Axwood's second quarter performance. So let's move on to page four. Market growth amounted to 3.7% during the quarter, which was a somewhat lower level on a sequential basis. However, compared to the first quarter this year, there was deflation in food prices that impacted market growth negatively. As you all probably know, the VAT on food was reduced on April 1st from 12 to 6%, and this was fully reflected in the price development on the market. But also excluding that effect, there was deflation, mainly driven by lower prices in the dairy category. In total, the annual rate of deflation was minus 6.2%, including VAT, according to Statistics Sweden. And excluding VAT, the deflation is estimated at minus 0.9%. Adjusting for the deflation and the negative Calloran effect of minus 0.3%, market growth was strong at 4.9%. It is, of course, still early days to determine how the reduced VAT has affected consumer purchasing behaviors. But that said, the second quarter development of the market clearly shows an improved volume trend. At the same time, the world around us remains uncertain, and it's also clear that consumers continue to focus on price value. Next slide, please. Number five. Axwell's retail sales increased 2.1% in the second quarter, also driven by higher volumes. We faced high comps from last year and we really outperformed the market then, by quite a large extent, and this is evident if you analyze the development over a two-year period. This is shown in the chart to the right on this slide. Last year we also had contribution from Citigrass. Despite the strong sales increase last year, deflationation and the negative calendar effect, growth did not reflect our ambitions. We are now on page 6. Consolidated net sales for Axos grew just below 1% in the quarter. And as I just mentioned, this was mainly driven by higher volumes. The development varied between our various retail chains. Hampshire really stands out this quarter with continued very strong growth. As for Citigros, as a reminder, total growth continues to be impacted by store closures. So please go to the next page, number seven. In all, we report increased earnings in the quarter despite the lower growth. Group operating profit increased to 964 million SEK and the operating margin was higher at 4.2%. Operating profit included items affecting comparability of minus 8 million SEK related to city growth. Last year, items affecting comparability also related to city growth and amounted to minus 25 million SEK. On an adjusted basis, operating profit increased to 972 million SEK and the margin was flat year over year amounting to 4.2%. The improved profit was primarily driven by higher sales volumes, a stable gross margin trend and effective cost control. Earnings were negatively impacted by deflationation and also costs of SEK 40 million due to higher fuel prices. Joint group reported a narrowed operating loss, partly due to cost savings from our measures to improve efficiency within and between the group's support functions, including workforce reductions. Let's now turn to Willis and page 8. The high comps we faced this quarter was mainly in Willis. Last year, Willys really outperformed the market as growth in the period amounted to 10.2% compared to 6.1% of the market. In addition, Willys growth this quarter was negatively impacted by deflation. In all, Willys grew 1% in total and minus 1% on a comparable basis. With the negative growth in life-for-life sales, earnings declined to 524 million SEK corresponding to an operating margin of 4.2%. The gross margin development was stable. I will get back to Ville's development and strategic agenda later on this presentation, but for now, let's turn to page 9 and Hemshöp. As I mentioned, Hemshöp continued to demonstrate a very strong performance in the second quarter and clearly increased its market share once again, delivering retail sales growth of more than 7%. Growth WAS DRIVEN BY HIGHER VOLUMES WITH AN INCREASE IN CUSTOMER TRAFFIC AND IN ADDITION A HIGHER AVERAGE TICKET VALUE CONTRIBUTED POSITIVELY. ON THE OTHER HAND DEFLATION IMPACTED GROWTH NEGATIVELY. LACK FOR LACK GROWTH WAS ALSO VERY STRONG. IN TOTAL OPERATING PROFIT INCREASED TO 123 MILLION SEK AND THE OPERATING MARGIN WAS ALSO HIGHER AT 5.4%. The development was mainly driven by the increased sales volumes, a stable gross margin and solid cost control. Turning to page 10. With the Citigrass acquisition, we have taken position in the attractive hypermarket segment and worked to develop the chain so that it can become a long term competitive player is ongoing. This quarter Citigrass once again delivered a positive profit development with a narrowed operating loss. In total, the loss amounted to minus 11 million SEK on an adjusted basis, corresponding to an operating margin of minus 0.5%. Citigrass reported somewhat weaker growth this quarter, so the improvement was mainly due to effects from structural measures as well as efforts to streamline operations. On a reported basis, the operating loss amounted to minus 3 million SEK, which corresponds to an operating margin of minus 0.1%. This included the items affecting comparability I mentioned, which refers to structure measures for stores. In late May, Citygross closed its store in Länna, Stockholm, its fourth store closure so far. Later this summer, Citygross will be closing down its Helsingborg store, which will be converted to villas during the fall. We are now on page 11. Snabgross' sales were unchanged compared with the corresponding quarter last year. both in total and on like-for-like basis. Earnings were just slightly below last year. The gross margin trend was stable, but the weak sales development could not offset the cost inflation. In total, operating profit amounted to SEK 93 million, corresponding to an operating margin of 5.8%. Next, page number 12. DAGAP's second quarter net sales increased by approximately 1%. As for the development in our retail chains, growth was negatively impacted by deflation, so also here the development was driven by higher volumes, mainly to DAGAP's food retail customers and especially Hemshöp. Operating profit amounted to 280 M SEK and the operating margin was 1.3%. Earnings were negatively impacted by deflation, market investments and increased costs due to higher fuel prices, which I mentioned earlier. Improvements in productivity from our new logistics structure had a positive impact on the profit development. Dagab continues to optimize the flow of goods to further improve efficiency and productivity. Dagab also continues to invest in transports with ambitions of electrifying 50% of its vehicle fleet by 2030. In addition to investments in logistics, the company maintains a high pace of assortment development, launching 60 new products under a private label grant during the quarter. That concludes the first part of today's presentation. Now it's time for me to hand over to 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 half of the year, net sales for the group increased 1.7% to almost 45 billion SEK. Retail sales increased 2.9%, which was lower than the market in total, where growth amounted to 4%. Adjusted operating profit increased 4% to almost 1.8 billion SEK. The adjusted operating margin increased by 0.1 percentage points to 4%. Next page number 15. During the second quarter, the cash flow was minus 47 million SEK, 86 million SEK lower compared to last year. Cash flow from operating activities and networking capital was negatively impacted by the VAT cut on food from 12% to 6% as of the 1st of April. The negative cash flow from investment activities of minus 376 million SEK in Q2 was somewhat lower compared to last year, mainly driven by lower investments in warehouses and IT. Investments in our retail operations were in line with last year. The increased cash flow from financing activities was explained by lower amortization of credit facilities compared to Q2 last year, By the end of Q2, EX would utilize approximately 2.8 billion SEK of our credit facilities compared to 3.1 billion SEK by the end of Q1. Please turn to the next page, page number 16. Net debt increased compared to year-end 2025 due to higher leasehold debt, utilization of credit facilities and lower level of cash. The net debt to EBITDA improved compared to Q1 thanks to a strong EBITDA development and the lower net debt. The equity ratio amounted to 19.1% which was lower than in December 2025 due to the dividend. The Q2 equity ratio was however 0.9 percentage points higher compared to Q2 last year. Investments excluding leasehold debt and acquisitions amounted to 927 million SEK during the first six months. Year-to-date, we have established seven new Groupon stores, which was in line with last year. Compared to last year, investments in store establishments and warehouse automation has increased, while investments in IT and trucks has decreased. Please turn to next page, page number 17. Exxon has a solid negative net working capital. The recent VAT cut has however had a negative impact and consequently the 12-month rolling KPI was negatively impacted in the first six months. Capital employed has increased in recent years mainly due to the acquisitions of Bergendalsfjord and Citygross as well as investments in our Båstad Logistics Center. The level of capital employed has however decreased slightly slightly since year end, as equity was reduced not only by dividend paid, but also the dividend to be paid in Q3. This effect was partly offset by higher leasehold debt. Thanks to improved earnings and reduced capital employed, ROC improved by 0.9 percentage points compared to 2025. And with that, Simon, I am finished with my presentation, so I hand over to you again.