The food company Axfood falls hard on the Stockholm stock exchange after an interim report for the second quarter, down 8 percent.
The unexpectedly weak result is primarily due to disruptions in logistics, according to outgoing CEO Klas Balkow.
We have a slightly weaker development in Dagab, our logistics company, which has had increased costs during this period, says Klas Balkow.
According to Balkow, it is about an ongoing transformation of the warehouse, where the change in handling of frozen goods has been troublesome.
We have rolled out the dry and the chilled. And when we started rolling out the frozen assortment, we got some disruptions. Then we have increased both staffing and transportation to get as little impact as possible in the stores, says Balkow.
"A significantly better place"
The situation has stabilized now, according to Balkow.
There are a few steps left to take in the frozen section after the summer, but we are in a significantly better place now and we have come a long way in this entire transformation, he says.
During the second quarter, Axfood announced its intention to buy the entire City Gross supermarket chain. Balkow does not believe that the Competition Authority and the EU Commission, which must give the green light, will condition the deal with concessions.
In the supermarket segment, City Gross is the chain with the fewest number of stores, and this will rather strengthen competition there, he says.
Both Willys and Hemköp – Axfood's flagship – had a positive development with customer growth and increased sales despite high comparison figures in the second quarter, according to Balkow.
"In full swing"
The outgoing CEO announced as early as February that he would leave Axfood's CEO position in August after seven and a half years on the post – and over 17 years in total as a listed company CEO.
I have worked at full speed in full swing, he says.
Going forward, he sees himself taking on a more advisory role in the business community.
I have no ambitions or plans to take on a new operational job. Rather, I want to have time for other things in life.
Corrected: In an earlier version of this text, an incorrect word occurred in a quote at the beginning of the text.
Axfood – which, among other things, operates the food chains Willys and Hemköp, as well as the food wholesaler Dagab – reports an operating profit of 836 million kronor for the second quarter.
During the corresponding quarter last year, the profit was 878 million kronor, but that included a comparative item that reduced the result by 64 million.
Analysts had on average expected an increase in profit to 959 million kronor, according to Bloomberg's compilation of forecasts.
Axfood's net sales increased by 1.2 percent to 21.0 billion kronor in the quarter.
