Year-end report, Axfood AB (publ.) 1 January – 31 December 2001 • • • • • • •

Consolidated sales totalled 32,428 m (30,230), an increase of 7.3%. Operating profit was SEK 653 m (112). Adjusted before items affecting comparability and restructuring costs in the store network, totalling SEK 106 m, profit was SEK 759 m (274). Profit after net financial items was SEK 527 m (0). Adjusted for items affecting comparability and restructuring costs, profit after net financial items was SEK 633 m (162). Strong development in fourth quarter, especially for Axfood Lågpris and the wholesaling operations. Axfood closed its e-commerce business in December. Axfood decided to launch a new discount chain, called "Willys Hemma." The Board proposes a dividend of SEK 2.50 per share (0).

SEK m Sales Operating profit before depreciation Operating profit Operating margin, % Operating profit before items affecting comparability and restructuring costs Operating margin before items affecting comparability and restructuring costs Profit after financial items Profit after tax Earnings per share, SEK Equity ratio, % Return on capital employed, % Return on shareholders' equity after tax, % Net asset value per share

Sept.-Dec. 2001 2000 8,556 8,064 314 116 155 6 1.8% 0.1%

Jan.-Dec. 2001 2000 32,428 30,230 1,171 550 653 112 2.0% 0.4%

228

42

759

274

2.7% 124 71 1.33 -

0.5% - 20 - 34 - 0.64 -

2.3% 527 328 6.16 17.0% 17.3% 31.8% 22.70

0.9% 0 -34 - 0.64 13.7% 3.8% neg. 16.10

CEO's comments The fourth quarter entailed favourable development for the Group as a whole. We noted particular success in our discount chain, which posted a 49% increase in sales for the year. Competition in the discount segment is expected to intensify further as new retailers establish operations in Sweden in the years ahead. To maintain our leading position in this segment, in February 2002 we are launching "Willys Hemma," a new hard-discount store chain. This new chain will be built upon some 30 small stores (formerly run under the HP Billigt & Nära name) at neighbourhood locations. The Hemköp chain is currently carrying out an ambitious plan designed to improve efficiency, lower prices and revitalize its customer offering. A review of the store structure is another important element in Hemköp's strategy work, which is expected to yield positive effects by the fourth quarter of 2002 at the latest.

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Axfood's wholesaling operations, Dagab and Axfood Närlivs, posted a strong finish to the year. Higher volumes at Dagab, combined with sharp cost-cutting, led to a near doubling in profit for the year. During the year, Axfood Närlivs centralized and streamlined its distribution structure, which can be credited for most of the earnings improvement. Spar Finland's favourable growth during the year continued into the fourth quarter. In December, Axfood's board of directors decided to close the Group's e-commerce business. Given the inadequate customer inflow, despite an intensified marketing effort, we could see no signs that the market was ready for an online grocery store alternative. Wind-up costs totalled SEK 28 m. Profit for 2001, with an adjusted operating margin of 2.3%, shows that we have made good progress toward achieving our long-term target of a 3% margin. As I see it, we have good chances of achieving a profit for 2002 that is better than that reported for 2001. Mats Jansson President and CEO

Important events during the fourth quarter • Axfood is winding up its e-commerce operation, taking a one-time charge of SEK 28 m. • The Group's store network was restructured, entailing a one-time charge of SEK 27 m (reported among other items). Important events during the year • The discount chains Willys, Exet/Matex and HP Billigt & Nära were merged to form a single nationwide company operating under the joint name of Willys. • Approximately 150 private grocers decided to affiliate themselves with Spar, Axfood's new franchise concept. • Spar Finland Abp turned a loss into profit. • Axfood increased its holding in Spar Finland, bringing its ownership at year-end to 69.3% of the capital and 75.3% of the votes. • Axfood wrote down its involvement in Baltic Food, for a total cost of SEK 46 m, of which SEK 21 m was in the fourth quarter. The involvement is now terminated and the holding has been completely written off. • Axfood increased is sales area by 12,800 sq.m. • Axfood decided to divest its real estate holdings. • The Group discontinued its new lending activities to private grocers.

Market development Volume growth for the retail food sector in 2001 is estimated to have amounted to 2.1% in Sweden and 1.5% in Finland. Food prices in rose 2.9% in Sweden and 4.3% in Finland. Sales and earnings of the Axfood Group Consolidated sales of the Axfood Group for the full year totalled SEK 32,428 m (30,230).

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The Axfood Group's sales in Sweden for the full year (in own and collaborating stores), including VAT, amounted to SEK 35,017 m (33,354), an increase of 5.0%. Operating profit for the period amounted to SEK 653 m (112). The operating margin was 2.0% (0.4). The operating margin before items affecting comparability and restructuring costs in the store network, totalling SEK 106 m, was 2.3% (0.9). Items affecting comparability during the year amounted to SEK –79 m (–162) and pertained primarily to the closure of the Group's ecommerce operation, totalling SEK –28 m, and the write-down of Axfood's involvement in Baltic Food, totalling SEK –46 m. In addition, one-time costs for restructuring of the Group's store network, totalled SEK –27 m and are reported under other costs. Profit after financial items was SEK 527 m (0). The margin after financial items was 1.6% (0.0).

Store operations The Axfood Group's store operations are conducted via the wholly owned retail chains Hemköp, Willys, and starting in 2002, Willys Hemma. Collaboration with independent grocers is conducted via the Spar and Tempo franchise concepts. Vivo Stockholm is run via a separate economic association. The grocers in this chain are customers of Axfood's wholesaling operation. The Vivo brand is owned by Axfood. Hemköp 2001 was a year of transition. The newly installed management is gradually carrying out an action programme which will result in lower store overheads, lower consumer prices, clearer customer offerings and a more modern store structure. The new strategy is expected to yield effects by the fourth quarter of 2002 at the latest. Sales during the year totalled SEK 6,536 m (6,562). Operating profit before goodwill (EBITG) was SEK 130 m (172). The operating margin for 2001 was 2.0% (2.6). During the year, three stores were converted to other concepts in the Group, two stores were closed, and five stores were added to the chain.

Axfood Lågpris (Willys, with effect from 2002) Axfood's discount businesses operated under three brands during the year, Willys, Exet/Matex, and HP Billigt & Nära. During the year the decision was made that the some 60 large stores run by Axfood Lågpris will be launched in a nationwide chain, called Willys. Conversion of some 30 Exet/Matex stores was begun during the first quarter of 2002. Administrative services, productline work and business control during the year have been conducted in a single legal entity, Axfood Lågpris AB, resulting in lower costs and improved efficiency. In Sweden the discount segment had the strongest growth in the retail food market in 2001, growing 15.1%. Axfood is the market leader, with 49% of the market (wholly owned store sales). Axfood Lågpris posted a strong fourth quarter, with higher volumes and earnings. Sales during the year by wholly owned stores totalled SEK 7,924 m (5,333). Profit for 2001 (EBITG) totalled SEK 300 m (133). The operating margin was 3.8% (2.5).

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During the year four stores were closed and five were converted to Willys units. Six stores were acquired. During the fourth quarter the Group developed a new chain of small discount stores, Willys Hemma, which was launched in February 2002 with the goal of having nationwide coverage by 2005. This new, hard-discount concept is based on a slim, carefully selected range of slightly more than 2,000 items, prices that are among the lowest in the market, and streamlined and cost effective operation. The stores will be located primarily in residential areas to meet the needs of a customer category that has not had access to discount stores. The base of the chain will be the some 30 stores that are currently operated under the HP Billigt & Nära name, with sales in 2001 of SEK 981 m. Profit for HP Billigt & Nära in 2001 totalled SEK 27 m, with an operating margin of 2.8%. The goal is to expand to approximately 50 units in 2002 and thereafter to grow the chain to approximately 120 stores by year-end 2005, with sales in the range of SEK 3-4 billion. Axfood Franchise Axfood's collaboration with independent grocers is coordinated in Axfood Franchise and the two store concepts Spar and Tempo. The Spar chain was started in 2001 in connection with the decision by the former Vivo retailers outside the Stockholm area to be included in the new chain. At year-end 2001, 107 stores had been converted to Spar units, and a total of some 150 units will be included in the Spar chain. The conversion process has gone well, with the stores reporting average sales growth of 4-5%. Small stores have come under fierce competitive pressure in recent years through the establishment of hypermarkets and discount stores. Opportunities for small stores lie in offering an attractive, complementary range of products and finished meal solutions. This is Tempo's business concept. The Tempo chain has approximately 100 units. Through these retail concepts, the independent grocers are customers of Dagab's wholesale business and account for about half of sales. It is estimated that about half of these stores' sales consist of products supplied by Dagab. Axfood Franchise is reported under joint-Group items. Profit (EBITG) for 2001 totalled SEK 26 m (12). Axfood Partihandel (wholesaling – Dagab and Axfood Närlivs) Dagab is the wholesaler for the Group's wholly owned chains and the large stores run by independent grocers. Dagab strives to optimize and refine product-, information- and capital flows between suppliers and retailers. In 2001 Dagab streamlined its subsidiary structure, resulting in lower internal costs and improved efficiency. Two meat- and processed meat companies were merged into a single company. Two plants were closed, and logistics and administration were coordinated. The warehouse activities were also overhauled, and a small warehouse was closed. A major restructuring of the warehouse and terminal operations in southern Sweden was started in 2001. These activities, together with higher volumes and a price adjustment carried out in January, led to a strong increase in earnings compared with the preceding year, especially for Axfood Lågpris.

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Axfood Närlivs is a wholesale business for convenience stores. It has contracted customers such as the OK/Q8, Shell and Preem service stations, small convenience store chains, and small store operations. Axfood Närlivs also has a cash-and-carry operation with 25 outlets. In 2001 Axfood Närlivs streamlined and restructured its operation, resulting in substantial cost reductions. In addition, volumes increased during the year as a result of new customers and new agreements. Axfood's wholesale business had sales of SEK 18,613 m (17,313) during the period. Of this total, Dagab's sales were SEK 15,054 m (13,078) and Axfood Närlivs' were SEK 4,618 m (4,335). Profit for the year (EBITG) was SEK 381 m (222), and the operating margin was 2.0% (1.7). Dagab's profit was SEK 308 m (193) and Axfood Närlivs' was SEK 73 m (29). Spar Finland Spar Finland Abp has 77 wholly owned stores and 227 collaborating stores. The Spar Group has an approximate 9% share of the Finnish retail food market. Spar Finland is responsible for the flow of goods in the Spar Group and also provides support services to the Spar Group's independent grocers. Spar Finland Abp owns 35% of the logistics company Tuku Logistics Oy, which handles logistics and transport within the Spar Group. In 2001 Axfood increased its ownership in Spar Finland, and by year-end it owned 69.3% of the capital and 75.3% of the votes. During the year spar Finland centralized key functions such as purchasing and marketing, and carried out major cost reductions within the Group. The number of store chains will be reduced from five to two (Eurospar and Spar). A review of the store structure resulted in the closure of 23 units during the year. Preparations for the transition to the euro were made during the year, particularly through training programmes. As a result of these measures, Spar Finland strongly improved its earnings during the year. Spar Finland had a relatively even trend during the fourth quarter. Sales in 2001 amounted to SEK 5,683 m (5,139), and profit (EBITG) was SEK 37 m (-25). The operating margin for 2001 was 0.7% (neg.). Capital expenditures Capital expenditures during the fourth quarter amounted to SEK 179 m. Of these, investments in fixed assets in the wholesaling operation and in the store network in Sweden accounted for SEK 129 m, and investments in fixed assets by Spar Finland accounted for SEK 30 m. Capital expenditures in 2001 amounted to SEK 561 m, including SEK 397 m in investments in the wholesaling operation and store network. Capital expenditures for Spar Finland amounted to SEK 71 m for the year. During the year, shares in Spar Finland worth SEK 93 m were acquired. Real estate valued at SEK 22 m was sold during the year. At year-end, Axfood Fastigheter's real estate portfolio had a book value of SEK 570 m. Financial position Cash flow from continuing operations amounted to SEK 1,046 m (445) during the year. Lending from Handelskredit decreased by SEK 157 m and amounted to SEK 302 m at year-end. The Group's liquid assets totalled SEK 406 m (278). Interest-bearing assets amounted to SEK 766 m (761) at year-end. Interest-bearing net debt was SEK 1,669 m (2,206) at year-end.

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The equity ratio was 17.0% (13.7), while the debt-equity ratio, net, was 1.3 (2.1). Employees The Axfood Group had an average of 8,514 full-year employees in 2001 (8,146). Of these, slightly more than 5,000 worked in stores. Parent Company The Parent Company’s sales during the period amounted to SEK xx m. After SEK 25 m in administrative expenses (16), SEK –54 m. in items affecting comparability, and net financial items of SEK –27 m, profit after financial items was SEK –145 m (–31). Capital expenditures totalled SEK 2 m. Accounting principles The Group has applied the accounting recommendations that took effect on 1 January 2001. In other respects the same accounting principles and calculation methods as in the 2000 Annual Report have been applied. Proposed Dividend The Board of Directors proposes a dividend for 2001 of SEK 2.50 per share, for a total dividend payout of SEK 133 m (0), based on 53,229,028 shares. Share Repurchases The company's holdings of own shares at the start of the year was 830,889, corresponding to 1.6% of the share capital, which was managed on behalf of others. In 2001 an additional 751,775 shares were repurchased, corresponding to 1.4% of the share capital. All of these shares were transferred during the year to complete the acquisition of HP Billigt & Nära, and thus at 31 December 2001 the company did not own any of its own shares. Axfood's annual report will be published on 11 March 2002. The next reporting date will by Monday, 25 April 2002. The Annual General Meeting of Axfood AB will be held on Thursday, 25 April 2002, in Stockholm. Stockholm, 11 February 2002 Axfood AB (publ.) The Board of Directors

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Sales per business unit and market, SEK m Sept.-Dec. 2001 2000 1,795 1,820 2,178 1,369 26 22 1,450 1,326 5,151 4,678 568 658 - 2,612 -1,809 8,556 8,064

Hemköp Axfood Lågpris Axfood Direkt Spar Finland Axfood wholesaling 1) Other Internal sales Total

Jan.-Dec. 2001 2000 6,536 6,562 7,924 5,333 82 84 5,683 5,139 18,613 17,313 2,247 1,896 - 8,657 - 6,097 32,428 30,230

Operating profit for the period before goodwill amortization (EBITG) is broken down as follows: SEK m Sept.-Dec. Jan.-Dec. 2001 2000 2001 2000 Hemköp 32 31 130 172 Axfood Lågpris 83 13 300 133 Axfood Direkt - 11 -2 - 41 -20 Spar Finland 5 - 11 37 -25 Axfood wholesaling 125 82 381 222 1) 2) 2) Other -6 - 46 41 - 97 Total 228 67 848 385 Items affecting comparability Operating profit before goodwill amortization

- 46

- 36

-79

- 162

182

31

769

223

Goodwill amortization Operating profit for the period

- 27 155

- 25 6

- 116 653

- 111 112

Condensed profit and loss account SEK m

Sept.-Dec. 2001 2000 8,556 8,064 - 7,338 - 7,133 1,218 931

Net sales 3) Cost of goods sold Gross profit 3)

Selling/administrative expenses Operating profit before depreciation Depreciation Operating profit before goodwill amortization Goodwill amortization Operating profit Net financial items Profit after financial items Taxes Minority share Profit for the period Earnings per share, SEK Earnings per share after dilution, SEK

1)

Jan.-Dec. 2001 2000 32,428 30,230 - 28,062 -26,872 4,366 3,358

- 904 314 - 132

- 815 116 - 85

- 3,195 1,171 - 402

- 2,808 550 - 327

182 - 27 155 - 31 124 - 48 -5 71 1.33 1.32

31 - 25 6 - 26 - 20 -5 -9 - 34 - 0.64 - 0.64

769 - 116 653 - 126 527 - 188 - 11 328 6.16 6.07

223 - 111 112 - 112 0 - 24 - 10 - 34 - 0.64 - 0.64

1) Includes joint-Group functions and the support companies IT, Fastigheter, Handelskredit, Private Labels and Franchise. 2) Fourth quarter profit was charged with a provision of SEK 27 m to a store restructuring reserve. 3) For 2000, cost of goods sold has been adjusted by SEK 500 m against the item selling expenses, in accordance with a changed definition in 2001. 4) After taking into account outstanding convertible and warrant programmes.

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Condensed balance sheet SEK m 31/12/2001

31/12/2000

Assets Goodwill Financial fixed assets Other fixed assets Inventories Other current assets Cash and bank balances

1,119 541 2,310 1,559 1,832 406

1,195 681 2,206 1,518 1,707 278

Total assets

7,767

7,585

Shareholders' equity and liabilities 1) Shareholders' equity Minority interests Interest-bearing provisions 1) Noninterest-bearing provisions 2) Interest-bearing liabilities Noninterest-bearing liabilities

1,208 109 365 272 2,070 3,743

855 181 357 187 2,610 3,395

Total shareholders' equity and liabilities 7,767 7,585 1) A change in accounting principles has been made. Booking of taxes has been adapted to Swedish Financial Accounting Standards Council recommendation no. 9. 2) Of which, finance leases, 112 (-). Adaptation has been made to the recommendation issued by the Swedish Financial Accounting Standards Council on finance leases as per 1 January 2001. The reason for the change as per 1 January 2001 is that the new Group structure was formed in 2000.

Cash flow statement SEK m

Cash flow from operating activities Investing activities: - Company acquisitions - Purchase of fixed assets, net - Reduction of financial fixed assets Cash flow from investing activities Financing activities - New issue - Change in interest-bearing liabilities - Dividends received, etc. - Dividend Cash flow from financing activities Cash flow for the period

Jan.-Dec. 2001 1,046

Jan.-Dec. 2000 445

- 118 - 328 153 - 293

- 212 - 612 134 - 690

- 645 20 - 625

180 226 - 75 331

128

86

8

Shareholders' equity, change from 31/12/ 2000, SEK m

Amount at start of year New issue Warrants/convertibles Convertibles redeemed in subsidiaries Reversal of write-down/ write-down of own shares Translation difference Shareholder dividend Profit for the period Closing balance as per adopted balance sheet 1) Change of accounting principle Amount at end of period

31/12/2001 855 10 -6 5 6 328 1,208 1,208

31/12/2000 368 553 2 -2 -5 3 - 65 - 34 820 35 855

1) A change of accounting principles to RR9 has been made as from 31 December 2000. The reason for this accounting method is the new Group structure that was established in 2000.

Key ratios and other data

Operating margin (%) Margin after financial items (%) Equity ratio (%) Debt-equity ratio, net (multiple) Debt-equity ratio, (multiple) Interest coverage (multiple) Capital employed (SEK m) Return on capital employed (%) Return on shareholders' equity (%) Capital expenditures (SEK m) Earnings per share (SEK) Earnings per share after dilution, (SEK) Dividend/share (SEK) Net asset value per share (SEK) Number of shares outstanding Number of full-year employees

31/12/2001 2.0% 1.6% 17.0% 1.3 1.85 4.7 3,752 17.3% 31.8%

31/12/2000 0.4% 0.0% 13.7% 2.1 2.86 1.0 4,003 3.8% Neg.

404 6.16 6.07 2.501) 22.70 53,229,028 8,514

579 - 0.64 - 0.64 0 16.10 53,229,028 8,146

1) Proposed by the Board of Directors.

For further information, please contact: Mats Jansson, President and CEO, +46-8-553 998 10, mobile +46-70-569 48 11 Lars Nilsson, Executive Vice President and CFO, +46-8-553 998 11, mobile +46-70-569 66 33 Bodil Eriksson, Executive Vice President, Corporate Communications, +46-8-553 998 17, mobile +46-70-629 66 34

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