Ahold delivered a strong start to the year with good momentum across all markets
- 4.3% increase in Q1 Group sales to €11.8 billion (up 3.5% at constant exchange rates)
- Continued strong online sales growth, with net consumer sales up 27.4% at constant exchange rates
- Underlying operating margin of 3.8% (Q1 2015: 3.5%)
- 15.1% increase in Group underlying operating income (up 14.7% at constant exchange rates)
- Strong free cash flow of €287 million (Q1 2015: €186 million)
- Simplicity program and continued cost control driving improved profitability
- Announced merger with Delhaize on track to close in mid-2016
Analyst conference call - webcast
Zaandam, The Netherlands – Ahold today announced a strong start to the year, reflecting good performances across all its markets. This included net sales of €11.8 billion, driven by solid store operations and a continued strong increase in online sales, improved profitability and a strong free cash flow.
Ahold CEO Dick Boer said: “We continue to deliver on our strategic objectives, with a good operational and financial performance in the first quarter. Our focus remains on serving our customers and delivering on our Simplicity program, in order to invest in our great local brands to ensure that we provide even more value and innovation.
"In the Netherlands, we were pleased to continue to deliver strong identical sales growth, as our customers respond positively to the ongoing improvements we are making to our stores, assortment and service. Our online businesses, bol.com and ah.nl, delivered excellent growth of over 30% in net consumer sales during the quarter. In the United States, we had a solid performance and continued to invest in our customer proposition, including the rollout of our new bakery departments. Peapod reported double-digit sales growth, further expanding its customer base in New York City. We were pleased with the encouraging performance in the Czech Republic, where the sales trend of the larger former SPAR stores further improved.
"Finally, we continue to make good progress on our proposed merger with Delhaize, which we expect to complete in mid-2016. Working together towards this common goal reaffirms our view that the merger will create a better and more innovative retailer, capable of delivering enhanced value for our customers, associates and shareholders.”
This communication contains forward-looking statements, which do not refer to historical facts but refer to expectations based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance, or events to differ materially from those included in such statements. These statements or disclosures may discuss goals, intentions and expectations as to future trends, plans, events, results of operations or financial condition, or state other information relating to Ahold, based on current beliefs of management as well as assumptions made by, and information currently available to, management. Forward-looking statements generally will be accompanied by words such as “anticipate,” “believe,” “plan,” “could,” “estimate,” “expect,” “forecast,” “guidance,” “intend,” “may,” “possible,” “potential,” “predict,” “project” or other similar words, phrases or expressions.
This communication contains Ahold forward-looking statements as to, amongst others, the intended merger between Ahold and Delhaize, serving customers, Ahold's Simplicity program, investments in local brands and expected value and innovations, price investments, underlying operating margins, new and revised IFRSs, dividend, reverse stock split and capital return.
Many of the risks and uncertainties relate to factors that are beyond Ahold’s control. Factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, the occurrence of any change, event or development that could give rise to the termination of the merger agreement, the risk that the necessary regulatory approvals may not be obtained or may be obtained subject to conditions that are not anticipated, failure to satisfy other closing conditions with respect to the transaction on the proposed terms and time frame, the possibility that the transaction does not close when expected or at all, the risks that the new businesses will not be integrated successfully or promptly or that the combined company will not realize the expected benefits from the transaction, Ahold’s ability to successfully implement and complete its plans and strategies and to meet its targets, risks related to disruption of management time from ongoing business operations due to the proposed transaction, the benefits from Ahold’s plans and strategies being less than anticipated, the effect of the announcement or completion of the proposed transaction on the ability of Ahold to retain customers and retain and hire key personnel, maintain relationships with suppliers, and on their operating results and businesses generally, litigation relating to the transaction; the effect of general economic or political conditions, Ahold’s ability to retain and attract employees who are integral to the success of the business, business and IT continuity, collective bargaining, distinctiveness, competitive advantage and economic conditions; information security, legislative and regulatory environment and litigation risks and product safety, pension plan funding, strategic projects, responsible retailing, insurance and unforeseen tax liabilities and other factors as discussed in Ahold's public filings and other disclosures.
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