Axel Johnson's Year End Report for 2020 - ​Accelerated renewal and financial strength despite the challenging climate

2020 was an exceptional year for all of Axel Johnson’s operations. The industrial group Axel Johnson International and Axfood noted record profits. At the same time, sales and profits, primarily at Martin & Servera and Åhléns, were hard hit by restrictions linked to the Coronavirus pandemic. Axel Johnson’s sales amounted to SEK 86.9 (88.2) billion, and our profitAX was SEK 2,754 (3,400) million, while cash flow after investments was stronger at SEK 2,016 (20) million, which provides a continued solid financial platform and plenty of scope for renewal.

Mia Brunell Livfors, President and CEO of Axel Johnson, says,

“2020 was a very demanding year for people, companies and society. This was also the case in our operations. But our 2020 is also a story of resilience and leadership, and of many leaders and employees who stepped up to continue to develop our businesses and ensure that we fulfilled our responsibilities towards our customers, at a time when nothing could be done on autopilot. It is with pride that we end the year with a profit of SEK 2,754 million.

Since we operate in many of the industries hardest hit by the pandemic, this is an outstanding collective achievement, and provides a good reason to be optimistic. This is because each of our companies, even those such as Axfood and Axel Johnson International who recorded record profits, will, under more normal market conditions, have every opportunity to grow further, with further improved profitability.

Even more important than the results of this individual year is the fact that we managed to keep our eyes on the long term and keep up with our renewal pace. During 2020, we continued to invest in improved e-commerce, increased technical competence and increased capacity, as well as in automation and the development of ever more modern and sustainable logistics. The fact that we were able to maintain a high tempo is also reflected in our figures. When we measure our progress towards our 10/50 goal – which states that in ten years’ time, half of our revenue should be from things we don’t do today – we see that we are continuing to progress at a steady pace.

None of us know exactly when and how society will go back to a normal, vaccinated life. But if we’ve learned anything during the past year, it’s to expect the unexpected, and react quickly when it happens. When society and the markets experience an upturn, we must be equipped for growth in all operations within Axel Johnson.

When we look to the future, we do so from a very stable platform with a strong financial base, a high transformation pace, and with the long-term family ownership and the will to develop a sustainable business as our foundation. If we can also build on the culture of willingness to change that we showed last year, there is every opportunity to make 2021 a year of growth and successful renewal.”

ProfitAX is EBT according to IFRS for the listed companies, and EBT excluding goodwill amortization, adjustments of contingent consideration, items affecting comparability and discontinued operations for the non-listed companies. ProfitAX is used to facilitate comparability between Group companies and other listed companies outside the Group, and comparisons between years.

Our Group Companies

Our industry group Axel Johnson International reports record profits of SEK 816 million (746). The fact that this occurred during a challenging year, where many European societies and borders were closed for large parts of the year, and with disruptions in supply chains, is an outstanding achievement.

Axfood reports very strong profits of SEK 2,394 million (2,173), and is once again growing faster than the market, both in-store and online, where growth reached 112 percent. Although the grocery market as a whole has been strong during the pandemic, the reality is more nuanced. At the same time as Willys recorded record sales, we saw large losses in visitor numbers in the shops along the Norwegian border, and in many shops in metropolitan locations. In light of this, the improvement in earnings is a message of strength, which also signals further potential going forward.

Dustin grew by 5.3 percent, with profits of SEK 335 million (445). During the spring, many small and medium-sized companies increased their investments in hardware such as screens and webcams, while investments that demands presence in offices were put on hold. Meanwhile, public clients were largely unaffected, and profitability in the large corporate segment was strengthened. The general trend towards accelerated digitalization, and the need for professional IT environments in many homes, means that Dustin is very well positioned for growth going forward thanks to its combination of hardware and online services.

During a year with a large drop in visitor numbers to physical stores, Kicks showed that the investments in technology and new skills made in recent years have created great value. Through fast-growing and profitable e-commerce sales in combination with savings, earnings improved reaching SEK 37 million (11), despite difficult and rapidly changing market conditions. E-commerce growth has increased further since the start of the year.

As Sweden’s leading restaurant wholesaler, Martin & Servera has had a very challenging year, where the fall in the private restaurant market has been as high as 75–80 percent at times. This has, of course, hit profits hard, and they were recorded at SEK -62 million (426). Despite the market climate, Martin & Servera continued to invest in digitalization and sustainability, and streamlined the organization by consolidating business areas. When society and the restaurant market experience an upturn, Martin & Servera is well equipped for growth, in a market that has good conditions for structural growth.

Åhléns recorded a result of SEK -331 million (-116), as the restrictions led to a drastic reduction in visitor numbers and sales in physical stores, especially in city department stores in metropolitan areas. At the same time, e-commerce sales grew by more than 50 percent to 764 million, and sales in Åhléns Outlet discount stores also developed positively. The new CEO, Annica Hagen, is leading the work of developing a sustainable future model for Åhléns, based on an omni-offering with a further improved e-commerce experience and profitability in the physical department stores.

Our investment business Novax showed a very high level of activity and completed around 20 transactions. Novax’s new investments focused on Health & Wellness, Technical Security, Food of the Future and Retail Technology – areas that have the potential to become significant future parts of Axel Johnson. Among other things, the wholly owned subsidiary RCO acquired a majority stake in DinBox, Sweden’s largest supplier of property boxes, and EasyAccess, a supplier of digital and biometric locks based in Norway. Just before the turn of the year, an agreement was entered into for an investment in Aqua Dental, which makes Novax a major stakeholder in Sweden’s fastest growing dental chain.

AxSol, which gathers together our investments in solar energy, joined Svea Solar and Solkompaniet as owners. Alight, which targets the corporate market, entered into an agreement with Martin & Servera in December to construct Sweden’s largest solar park, and the marketplace company Otovo was listed on the Euronext exchange in Oslo. In Sweden, the private market was somewhat hesitant during the autumn, but then accelerated on 1 January 2021, when the new Sol-ROT tax deduction came into force. We see great opportunities for continued European expansion for our existing holdings and for new investments, in a market where we can really grow with one of the megatrends of our time.

Online skincare clinic Skincity continued its good growth journey in Sweden, and had an even higher growth rate in its other geographical markets – Great Britain, Norway and Finland. After a year of heavy investments in 2019, Skincity recorded a positive result for 2020 despite its continued growth focus. 

Axel Johnson’s 2020 results

Group companies

Translated from the original Swedish. In case of discrepancies, the Swedish original text prevails.

For more information, please contact David Salsbäck, Director of Sustainability and Communications, Axel Johnson, +46 8 701 61 05, david.salsback@axeljohnson.se.