Contents Report on operations Axfood in brief 1 Highlights 2006 2 CEO’s message 4 Strategy and goals 6 Business model 8 Axfood share data 10 Axfood’s supply chain 11 Private labels 12 Trends in the marketplace 16 Hemköp 18 Willys, Willys hemma 24 Employees 26 Corporate responsibility at Axfood Financial statements 32 Administration report 36 Income statement 37 Comments on the income statement and balance sheet 38 Balance sheet 40 Cash flow statement 41 Comments on cash flow and shareholders’ equity 42 Summary of changes in shareholders’ equity 43 Risks 46 Notes 68 Proposed disposition of the Company’s profit 69 Audit Report Corporate governance 20 Dagab 22 Axfood Närlivs 70 Corporate governance report 78 Corporate governance/Board of Directors Axfood is a Swedish company that is governed by 80 Corporate governance/Executive Committee Swedish law. All monetary amounts stated herein are in Swedish kronor. Millions of kronor are abbreviated as SEK m and billions as SEK bn. Figures in parenthe 82 Several-year overview ses pertain to 2005, unless stated otherwise. Market and competitive data are Axfood’s own estimates, 84 Defi nitions unless reference is made to a specific source. These 85 Annual General Meeting and financial information estimations are based on the best and most recent data available from published sources in the public Addresses sector, the consumer goods industry and competitors.