Good morning. This is the Axfood Year End Report 2024 Telephone Conference. And with me today are Simone Margulies, President and CEO; and Anders Lexmon, CFO. My name is Alexander Bergendorf, and I'm the Head of Investor Relations at Axfood. In the Investors 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 words to Simone. So, please go to Page 2, and please go ahead, Simone.

Thank you, Alex and good morning, everyone. 2024 was an eventful year for Axfood, a year with continuous strong operational development. For us, what really drives long term growth and profitability in food retail is customer traffic, loyalty, and volume growth. Our strong development in all these areas is clear evidence to how much our customers appreciate our offerings. In addition, 2024 was also a year with continued progress in our initiatives and investments for the future, including the acquisition of City Gross as well as in logistics and sustainability. I will cover all these areas in the presentation. So let us take a look at today's agenda on Page 3. I'll start with a brief market overview and then I will give you a review of our fourth quarter performance and strategic agenda. Following that, Anders will take you through some full year numbers and give you an update on our financial position. I will then cover the outlook for 2025 that we are issuing today, as well as the Board's dividend proposal, before we open up for Q&A. So turning to Page 4, Axfood is summarizing a fourth quarter and a full year characterized by stronger market positions. At the same time, strategically important investments were made during the year to further strengthen the Group. Let's move to Page 5. Food retail market growth was just over 4% in the fourth quarter, a higher level than in both the second and the third quarter. However, adjusting for calendar effects and inflation, market growth has been very stable at just over 2% for most parts of 2024. Volumes in the food retail market are therefore continuing to gradually recover at a steady pace. The market dynamics in 2024 were characterized by cautious and price conscious consumers as well as more intense competition. We are well positioned to navigate a changing market, thanks to our strong and distinctive concepts. And during the year, we gained market share, despite high comparison figures and in the fourth quarter, we increased our market presence with City Gross. In total, retail sales increased 14%. Retail sales growth over a two year period amounted to 24%, more than double the rate of the market, which was slightly below 11%. Please go to the next Page 6. During the quarter, Axfood's e-commerce sales increased slightly more than 7%, which again was higher than the market, and over two-year period, growth was more than 3 times the market growth. Our share of consumer sales from e-commerce was approximately 5%, which was almost 1 percentage point higher than the penetration of the market. So we clearly have a strong presence in this channel and more than our fair share. We are now on Page 7. Axfood has a long track record of market share gains and has outperformed the market every year during the past 10 years. With City Gross, our market share now amounts to 25%, which compares to somewhat more than 17%, if we go back to 2015. We are the clear number two player on the market and we continue to push forward and challenge. Turning to Page 8, growth in consolidated net sales for the Group amounted to 5% during the fourth quarter, mainly from higher volumes. City Gross contributed to that performance, but City Gross aside, we saw strong growth across all operating segments. Please go to the next page, Page 9. In total, Group operating profit amounted to SEK629 million and the operating margin was 2.9%. Operating profit includes items affecting comparability of minus SEK143 million pertaining to a re-evaluation of our previous minority stake in City Gross. Items affecting comparability last year related to cost for transitioning to our new logistics structure. Although, the transition is still ongoing, related costs are no longer deemed as affecting comparability as parallel warehouse corporations have been phased out gradually. Adjusted operating profit, which excludes items affecting comparability amounted to SEK772 million and the adjusted operating margin was 3.5%. Excluding the negative profit contribution from City Gross, adjusted operating profit was in line with the prior year. While the sales development in the other chains was positive with like-for-like growth, the consumer behavior and intense competition is putting pressure on our gross margin and we're also facing a high cost inflation. We're increasing our focus on productivity and cost efficiencies. With our structure and investments in the base operations, we have a solid foundation in this work to gradually improve our competitiveness over time. Let's go into a little bit more detail starting with Willys on Page 10. Willys grew more than the market in the fourth quarter, as retail sales increased almost 5% against very high comparison figures. The pace of new establishments were high and during the quarter, a total of four new stores were opened, two large Willys and two Willys Hemma. Operating profit amounted to SEK443 million corresponding to an operating margin of 3.7%. Increased volumes had a positive impact on earnings. However, somewhat low gross margin and high cost inflation in primarily personnel and rental levels, resulted in a decrease in profit compared to the prior year. Turning to Page 11, Willys is the leading discounter in Sweden and among consumers, the most recommended food retail chain on the market. Willys' market position is unique with a combination of low prices, a wide assortment, modern stores, and e-commerce. The chain has a great momentum and its growth in 2024 was mainly driven by high volumes. 2023 was an exceptional year. However, volume growth in 2024 was more than double the rate in both 2021 and 2022, so a very strong growth rate overall this year. The loyalty program Willys Plus now has almost 3.8 million members and an increase from last year was substantial. In addition to attracting many new customers, we see strong and stable loyalty, when we measure brand perception of Willys, as measured by consumer consideration and preference. We have showed you these charts before, but they are worth showing again as these metrics really display how strong the Willys brand is among consumers. We are now on Page 12 and Hemkop. Hemkop continues to demonstrate strong like-for-life growth, which amounted to 4.6% this quarter and again was higher than growth for the overall market. Total retail sales growth was lower than 3.1%, reflecting changes to the store structure. Hemkop is continuing to strengthen its position by focusing on price value, fresh products and meal solutions. Hemkop is also investing in the modernization of existing stores and strengthen its sustainability profile. The total number of members in Hemkop's loyalty program now amounts to almost 2.1 million. Operating profit amounted to SEK61 million corresponding to an operating margin of 2.9%. Increased volumes had a positive impact on earnings, however capital effects impacted negatively. First, Hemkop has had a high pace in expansion recently with three new group-owned stores. Cost for these new establishments has a negative impact on profits, as it takes time to establish stores in a new marketplace. Also, a lower gross margin and high cost inflation also contributed to development. Turning to Page 13, the acquisition of the hypermarket chain City Gross was completed on 1st November. In total, net sales amounted to SEK1.6 billion during the November to December period. On a like-for-like basis, compared to the year earlier, when Axfood was not the full owner of City Gross, retail sales were basically flat. In total, retail sales decreased minus 1.7%, mainly due to volume declines and closures of one store. In total, City Gross has 42 stores, mainly on the southern part of Sweden and an e-commerce business through all stores. As anticipated, the operating profit was negative and amounted to minus SEK40 million, corresponding to an operating margin of minus 2.4%. The negative profit is mainly explained by the weak growth in like-for-like sales in combination with a lower gross margin related to negative inventory effects and a higher share of sales from campaigns. We are now on Page 14. Axfood's know how and experience provide the conditions to further develop and strengthen the City Gross concept as well as its competitive edge over other players in the hypermarket segment. The acquisition gives Axfood a clear presence in the hypermarkets, the fastest growing segment in the market after discount, thereby expanding the Group's reach. In connection with the takeover, a new Board was appointed and Patrick Grabenbauer, previously Willys, was appointed as Managing Director, effective immediately. Work has since focused on strengthening City Gross's competitiveness through several improvement initiatives. Our estimate now is that City Gross will reach profitability at some point during the second half of 2026 and thereafter gradually improve its profitability. We are developing the brand and store concept and reviewing the customer offering, including a special focus on attractiveness, efficiency, price value and private label products. To streamline operations, a chain management structure is now being implemented, including a new operational model and new routines and procedures. We are also planning structural measures at a handful of stores in 2025, mainly related to conversions to other concepts. These structural measures are expected to have a negative impact of approximately SEK100 million on operating profit in 2025 and will be classified as items affecting comparability. Moving on to Page 15. Our restaurant wholesaler Snabbgross reports a strong performance in a challenging market with an increase in numbers of stores and high market share. Growth was strong in the quarter and amounted to 6.1% with higher volumes. Sales were up 5.3% on a like-for-like basis. In addition, the trend in consumer sales through Snabbgross Club remained strong. Operating profit was basically in line with the prior year and amounted to SEK57 million corresponding to an operating margin of 4.3%. Increased volumes had a positive impact on earnings. However, a somewhat low gross margin and high cost inflation impacted development negatively. We are now on Page 16 and Dagab. Dagab's net sales increased by 4.3%. Sales to Willys, Hemkop, and Snabbgross drove the increase in the quarter. Reported and adjusted operating profit amounted to SEK329 million and the operating margin, both on a reported and on an adjusted basis was 1.7%. The profit development was primarily derived from a growth in sales in combination with a lower overall cost level due to progress in the work on the restructuring logistics operation. Please turn to Page 17. So let me elaborate on the improved cost levels in Dagab. Following completion of the ramp up for stores in the new logistics center in Balsta in the autumn, our focus has been on optimizing operations. E-commerce flows are also being implemented in parallel. With this work, we're now starting to see increased productivity and efficiency and by the end of the year, productivity as measured by number of handled cases per worked hour had increased almost 20% since the start of the year. We expect a continued gradual improvement during the course of this year. To sum up the transition to Balsta, last year, we closed our full assortment warehouse in Jordbro for grocery trade volumes. We now only have very small scale operations there to serve the convenience trade with frozen goods. Our fresh produce warehouse in Borlange has been closed for some time. Our e-commerce warehouse in Arsta will be closing during the next couple of months in pace with the ramp up of the e-commerce in Balsta. As previously communicated, we will keep our Orebro warehouse which will handle convenience trade volumes and we will gradually shift volumes there from our convenience trade warehouses in Skelleftea and Satra which will then close during the first half of 2026 the latest. So compared to the original plan with the new logistics structure, which was established five, six years ago, we're closing down five warehouses instead of six. But it makes a lot of sense to keep Orebro. Concentrating convenience trade volumes there means that we can create the necessary conditions to deliver better quality and high efficiency in both food retail and the convenience trade and really utilize our new Balsta facility the best way possible, filling it with large scale grocery trade volumes that are by far more suited for automated processes than smaller scale convenience trade volumes that requires a lot of manual handling. So that's our rationale behind this decision. In addition to substantial progress in Balsta, the expansion of this existing high-bay warehouse in Backa, Gothenburg and the optimization of the fruit and vegetable warehouse in Landskrona have entered their final phases. Now we are on Page 18. Important progress was also made in sustainability in 2024. As we previously announced, we have chosen to accelerate the transition to renewable fuels and transports and to move the deadline for phasing out fossil fuels ahead by five years. This positive trend continued during the fourth quarter, resulting in a reduction of over 30% in the carbon footprint from our own transports since last year and nearly 60% over a three year period. We also reached our 50% reduction target in food waste in own operations compared with the base year 2015, a full year ahead of schedule. At the same time, consumers price awareness continue to have a negative impact on sustainable and healthy food consumption. We are working intently to reverse this trend by offering our customers sustainable and healthy assortment of products and guiding them towards sustainable and healthy choices. Turning to Page 19. Now it's time for Anders to walk you through the financial development. So, please go to the next Page 20. And Anders, please go ahead.

Thank you, Simone. For the full year, net sales for the Group increased with 3.6% to SEK84 billion. Retail sales increased with 6.8%. Excluding City Gross, retail sales increased with 4.3% higher than the food retail market in total, where growth amounted to 4.1%. Adjusted operating profit, which excluded items affecting comparability of minus SEK143 million decreased by SEK169 million to SEK3.4 billion. The decrease was explained by lower gross margins and increased costs, mainly related to higher personnel costs and rents. The contribution from City Gross from November to December period was also negative. Operating margin, excluding items affecting comparability, was 4.1%, which was 0.4 percentage points lower compared to last year. Items affecting comparability pertain entirely to revaluation of the minority stake in City Gross as Simone mentioned earlier. Last year, items affecting comparability pertained to cost for parallel warehouse operations during the transition to the new logistics center in Balsta. Let's then turn to Page 21. In the fourth quarter, cash flow from operating activities was SEK347 million lower compared to the prior year. The relatively weak cash flow from operating activities was mainly due to a negative calendar effect in net working capital. This negative calendar effect is also the explanation to the lower cash flow from operating activities for the full year, SEK348 million lower compared to last year. The cash flow from investment activities of SEK2 billion was significantly lower compared to last year as a result of the acquisition of City Gross. The investment in City Gross amounted to almost SEK1.6 billion and on the other hand, the investments in automation for the full year was lower compared to last year. At the end of the fourth quarter, we utilized approximately SEK2.9 billion of our credit facilities, approximately SEK2.4 billion more than the fourth quarter last year. At the end of the third quarter, we utilized approximately SEK1.1 billion. We are now on Page 22. If we then take a look at the financial position, the net debt has increased compared to previous quarters due to the acquisition of City Gross. In addition to the loans raised for the acquisition, net debt also increased with the City Gross leasehold debt of SEK2 billion. This is also reflected in the higher net debt ratio. The equity ratio at year end amounted to 20.9% of the target of 20% but lower compared to last year and the lower equity ratio was also a result of the City Gross acquisition. Total investments excluding leasehold and acquisitions for the year amounted to just over SEK1.5 billion. This was a slightly lower level than estimated due to lower pace in investments related to the wholesale operation. Dagab had lower investments in automation and a minor part has been postponed to 2025. We have established 12 new Group owned stores during 2024, which was in line with the development last year. We also increased the number of stores with 42 hypermarkets following the acquisition of City Gross, and we will come back to the Investments outlook for 2025, later in this presentation. So then, please turn to Page 23. Looking at the capital efficiency, we had a positive development of net working capital as a result of the continuous work to improve working capital. The impact of the City Gross acquisition was on the other hand negative, increasing the KPI with approximately 0.3 percentage points on a rolling 12 month basis. Capital employed has increased over the last years, mainly due to both the acquisitions of Bergendahls Food and City Gross, as well as the investments in Balsta. The higher level of capital employed in combination with a lower profitability for 2024 have had a diluting effect on the return on capital employed. The return on capital employed amounted to 16.6%. And with that, Simone, I hand over to you again.

Thank you, Anders. We are on Page 24, but let us turn to Page 25. So today, we're issuing the outlook for 2025. Investments are expected to amount to SEK1.6 billion to SEK1.7 billion, excluding acquisitions and right of use assets. The largest part of this is related to recurring investments in our operations and also covers expansion. To encourage even more customers to shop with us, we will continue to maintain a high rate of new store establishments in 2025 and beyond. Our ambitions for 2025 is to expand the store network by 10 to 15 new Group-owned stores, the majority of which will be Willys. Moving on to the dividend and Page 26. Axfood has a strong financial position and the Board of Directors will propose to the Annual General Meeting an increased dividend of SEK8.75 per share. The dividend will be split into two payment, SEK4.50 per share in March and SEK2.25 per share in September. The dividend proposal corresponds to 86% of profit after tax, well in line with our dividend policy. Now turning to the final page on this presentation, Page 27. So let me summarize. We have now ended a year during which we increased our market share and took major steps to improve the customer meeting and strengthen our competitiveness. We are entering 2025 fully energized and see major opportunities to further challenge, strengthen our positions and take advantage of our longer term initiatives. So that concludes the presentation. Now please turn to Page 28 and I hand over to the operator to open up the line for questions. So, thank you.

[Operator Instructions] The next question comes from Rob Joyce from BNP Paribas Exane. Please go ahead.

Hi, good morning. Thanks very much for taking my questions. A couple from me. Just want to understand firstly what the sort of profitability trajectory is at Willys. I'm just trying to understand the major differences between the sort of minus 100 basis point EBIT margin in the third quarter and the minus 40 basis points in the fourth quarter and whether we should think of is minus 40 basis points what we should be thinking of into the first half next year or how do we -- sorry, 2025? How do we think about the margin progression in 2025 there at Willys? And then also just in terms of the -- excuse me, there's an obvious question in the net debt. I just noticed that the net debt is up around SEK5 billion, SEK5.5 billion versus 4Q last year and City Gross SEK2 billion. What's the difference I'm missing there? Thank you.

So I can begin with the net debt, your last question there. So as I mentioned in previous pictures, it's SEK2 billion in the leasehold for -- connected to the City Gross, and then we also have increased our external loans with approximately SEK2 billion, and then we also had revaluation of our own or old rent contracts and also new rental contracts for new stores in '24. And that sum up the approximately SEK1 billion. So there you have your SEK5 billion.

And regarding Willys and the profitability development, it's difficult to see it quarterly by quarterly, but for Willys, of course, the high volume growth is one positive effect in the margins and on the other side, high competition is also affecting the margins. But if you look on margins, there's of course a lot of factors affecting the margins. It's the customer mix, it's also about the campaign mix and also the product mix. It's also affecting the margins and also in December, we have a seasonal mix affecting the margins. So, all in all, Q3 was a little bit weaker than we are used to seeing Willys. But if we also talk about this year's, as I told, it's many factors that's also affecting the margins. But Q3 was a little bit weaker than we are used to see, due to both. As we said, we strengthened the price position for Willys during this year and we had a little bit more positive effect also in volumes during the fourth quarter for Willys.

Which makes sense. I guess the question I have is, if we look into 2025 with the impression you had in second half of '24, does it make sense for consensus to expect Willys' margins to be up in 2025, or should we see a bit of pressure still into that first half at least?

I don't give any forecast for this year. It's also, of course, for us it's important to Willys' customer trust is all lies on having this cheapest bag of groceries and it has also been a very successful strategy for Willys for many years and we will not leave that strategy. And of course, there's many things affecting, of course, the market, but also, as I said, the product mix and also the campaign mix will affect the margin development during the year. And as you said, Q3 was weaker than we used to see.

Okay, thank you.

The next question comes from Gustav Hageus from SEB. Please go ahead.

Hi, sorry. Thanks for taking my call. I'm a bit late into the call, but I was wondering about the ambition of the store openings for 2025, 10 to 15. Could you give a rough indication, if you believe, in a net store opening in 2025 given rightsizing of City Gross and maybe some other closures? That'd be helpful. Thanks.

Yes. As you said, we're guiding on 10 to 15 new stores in the Group and we see a positive net effect of store openings during 2025. And regarding the City Gross, as we said, we see that we need to do structural measures on a handful of stores. Majority of those is to change the concepts to new -- to other concepts that we're having in our Group.

Yes. Thanks.

[Operator Instructions] The next question comes from Nicklas Skogman from Nordea. Please go ahead.

Yes. Good morning, everyone. I'd like to just first go back to Willys. So, based on what you said earlier, is it fair to assume that the impact on the margin in Q3 and Q4 from competitive pressures were the same? It was just different items impacting the margin differently in Q3 versus Q4.

We have had a high competition in the market during the entire year and we also think and that is why we also decided to strengthen the price position for Willys to be able to really ensure customers that they are having -- that they will find the cheapest bag of groceries in Willys and I would say, we have the same market dynamics now that we have had for the entire year. This is a high price focus from the consumers and also high price intensity in the market, which I think we are navigating very successfully, since we see better volumes during the fourth quarter and during the entire year, actually. So we see there some evidence that the customer really likes our offering and as I said, there are many things that is affecting the margin. It's all about how we develop in campaign mix and product mix and also the mix between the stores and the concepts we have in our Group.

All right, thanks. And then maybe you could talk a bit about the margin development in Hemkop which is quite different from Q3.

Yes. In Hemkop, of course, also it's important to have an attractive price position and as I said, the market dynamics, there is a high competition and also Hemkop is important to be price relevant in their market segment. But what you see in the third quarter -- fourth quarter, sorry, is that we established three new stores in the end of the third quarter and in the beginning of the fourth quarter and three new stores for Hemkop is a high amount and since it takes time to establish on a new marketplace, that is the biggest affecting factor on the result in Hemkop and that will even out over time. But since we have three new stores in only two months, that is what you see in the result of Hemkop.

All right, good. And then on the City Gross conversions, is it mainly into Willys stores you plan to convert, given the size of the stores, I assume.

We see it necessary to do structural measures and as we said, like a handful of stores and majority is to be converted into other store concepts. The details on that, it's an ongoing work that we are doing at the moment and we will get back to you as soon as we have the exact stores and as we see there are -- we have, as you know, many different brands in our Group. So the majority of them will be converted to another concept.

Okay. And then perhaps last on the Group costs, which were rather low for a second quarter in a row. Is that still sort of a lower project intensity and do you expect that to normalize ahead?

That can vary over quarters, as you have seen in the previous quarters, but we have a little bit lower intensity in the projects in Q4 and also somewhat lower IT costs in Q4. But as you know, it tends to differ from quarter-to-quarter and it was a little bit lower in Q4, as you mentioned.

Okay. Thank you very much.

Thank you.

Thank you.

There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.

So, I would thank you all for joining us today and hope to see you soon. Have a good day.