Five reasons to invest in Axfood
Axfood is a stable company and one of the leading players in food retail in Sweden. A broad presence, strong brands and efficiency through collaboration create the conditions for long-term profitable growth. Five reasons to invest in Axfood are highlighted below.
1. Clear strategy in a non-cyclical and growing market
The food retail market is relatively unaffected by economic swings and is driven largely by population growth and inflation. Annual market growth has historically been stable at 2–3%. However, in the past few years it has been impacted by the pandemic and substantial food inflation. Axfood has a clear strategy with concrete priorities in six focus areas: customer offering, customer meeting, expansion, supply chain, work approach and people. The goal is to grow faster than the market with a long-term operating margin of at least 4.5%.
2. Family of well-positioned concepts in attractive segments
Axfood consists of a variety of businesses and concepts with strong market positions and offerings that meet varying customer needs. Willys is the leader in the discount segment, Hemköp is a strong player in traditional grocery, and City Gross operates in the hypermarket segment. With Tempo, Handlar’n and Matöppet, Axfood also has a position in mini-marts, while Eurocash operates stores in cross-border shopping adjacent to Norway. Snabbgross and Urban Deli hold a position in the café and restaurant industry, and Apohem is active in the online pharmacy market. With a clear expansion plan, a focus on price value in physical stores and in e-commerce, and the continuous development of the offering, customers’ evolving behaviours are being met.
3. Sustainable economies of scale and close collaboration
Economies of scale and cost efficiency are achieved through close collaboration within Axfood between the Group companies and the central support functions. Dagab is the joint purchasing and logistics company, creating conditions for price value, quality and sustainability. Efficient and modern logistics convey many advantages and lay the foundation for profitable growth and a competitive offering. Axfood’s common IT company have a crucial role in the Group’s digital development, automation and data-driven work approach to meet future needs.
4. Strong financial position and stable cash flow
Axfood has a solid balance sheet and a stable cash flow with efficient management of working capital. According to Axfood’s dividend policy, the shareholder dividend is to be at least 50% of profit after tax and is to be paid out on two occasions. During the last five years, the dividend yield has averaged just over 3% on an annual basis. Axfood’s gearing is low, and excluding the accounting effects of IFRS 16, the Group’s net debt divided by EBITDA amounted to 0.6 at year-end 2024.
5. Positive force in society
Axfood has long been working to be a positive force in society. This means offering affordable, good and sustainable food for everyone and being an inclusive business that is conducted in a responsible way. Axfood is taking the lead in promoting sustainable and healthy food in Sweden, and innovative, sustainable and healthy products are being launched through the private label assortment. Decision-makers, politicians and authorities are engaged in an ongoing dialogue on how the industry can be developed to increase sustainability and competitiveness.
