Axfood Q2 2025 slides: Strong growth outpaces market as market share expands

Introduction & Market Context

Axfood AB (STO:AXFO) presented its Q2 2025 interim report on July 11, showcasing significant market outperformance and continued momentum across all business segments. The Swedish food retail company reported substantial growth in both sales and market share, building on the positive trajectory established in Q1.

The company’s retail sales grew by 22.9% year-over-year in Q2, significantly outpacing the overall food retail market’s growth of 6.2%. Even excluding the City Gross acquisition, Axfood’s retail sales increased by 8.8%, still comfortably ahead of the market.

"A strong quarter with increased market shares," was the headline of Axfood’s presentation, supported by data showing the company’s steady market share expansion from 17.6% in 2015 to 25.4% in the first half of 2025.

As shown in the following chart of Axfood’s market outperformance and share development:

Quarterly Performance Highlights

Axfood reported consolidated net sales of SEK 22,995 million in Q2 2025, representing a 9.3% increase compared to the same period last year. This acceleration from the 4% growth reported in Q1 2025 indicates strengthening business momentum.

Operating profit reached SEK 934 million, up from SEK 836 million in Q2 2024, while adjusted operating profit rose to SEK 959 million. The company maintained a solid adjusted operating margin despite ongoing integration costs related to City Gross.

The following chart illustrates Axfood’s consistent sales growth trajectory and segment breakdown:

The company’s operating profit has shown steady improvement, with adjusted operating profit increasing from SEK 661 million in Q2 2021 to SEK 959 million in Q2 2025:

Cash flow from operating activities remained strong at SEK 1,929 million in Q2 2025, providing the company with financial flexibility to pursue its strategic initiatives while maintaining a solid balance sheet.

Segment Performance Analysis

Willys, Axfood’s discount grocery chain, continued to be the standout performer with net sales increasing by 10.2% (8.3% like-for-like) to SEK 12,458 million. The chain’s value proposition appears to be resonating strongly with price-conscious consumers in the current economic environment.

Hemköp delivered solid results with net sales growth of 6.4% and like-for-like growth of 4.6%, demonstrating the effectiveness of its premium yet value-oriented positioning.

City Gross, which Axfood acquired in 2024, reported net sales of SEK 2,319 million with positive retail sales growth of 2.6% (3.5% like-for-like). However, the segment posted an operating loss of SEK 45 million (adjusted loss of SEK 20 million), confirming management’s earlier statements that 2025 would be a transitional year for City Gross integration, with profitability expected in the second half of 2026.

Snabbgross achieved net sales growth of 5.9% (4.7% like-for-like) despite what the company described as "a weak market," while Dagab, Axfood’s wholesale operation, increased net sales by 7.9% with improved efficiency in logistics operations.

Strategic Initiatives and Sustainability

Axfood highlighted significant progress in its sustainability efforts during Q2, most notably the inauguration of Sweden’s largest solar park in Hallstavik. This initiative forms part of the company’s strategy to fully phase out fossil fuels in its transport operations.

The company reported that emissions from its own transports decreased by approximately 20%, with emissions per tonne of goods falling from 16.8 kg CO2e in 2021 to 7.1 kg CO2e in Q2 2025, demonstrating tangible progress toward its environmental goals.

As shown in the following visualization of Axfood’s green transition initiatives:

The company also outlined its ongoing store expansion strategy, with plans to establish 10-15 new Group-owned stores in 2025. This expansion, combined with the City Gross integration, positions Axfood for continued market share growth.

Financial Position and Outlook

For the first half of 2025, Axfood reported net sales of SEK 44,034 million, a 6.6% increase from H1 2024. Adjusted operating profit for the period rose 3.8% to SEK 1,716 million, with the adjusted operating margin slightly decreasing from 4.0% to 3.9%.

The company’s financial position remains solid, with investments for 2025 expected to range between SEK 1,600 million and SEK 1,700 million. Management noted that items affecting comparability of SEK 100 million relate to structural costs associated with City Gross store conversions.

Axfood’s key financial metrics demonstrate its overall strong performance and position in the market:

Looking ahead, Axfood maintained its outlook for 2025, confirming earlier guidance that this would be a transitional year. The company announced its upcoming Capital Markets Day, scheduled for September 18, 2025, in Stockholm, where further details on long-term strategy are expected to be shared.

Axfood’s stock closed at SEK 286 on July 10, 2025, down 0.21% for the day, but remains near its 52-week high of SEK 293, reflecting investor confidence in the company’s growth trajectory and market position.

Full presentation:

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