Ahold achieved strong results, led by solid store performance and a substantial increase in online sales:
- 21.4% increase in Q4 Group sales to €9.8 billion (up 11.8% at constant exchange rates)
- 4.3% increase in Q4 sales excluding gas (at constant exchange rates and adjusted for an additional week)
- Online sales growth continued to accelerate, with Q4 adjusted net consumer sales up 29.1% at constant rates
- Q4 underlying operating income up 39.4% to €421 million; underlying operating margin at 4.3%
- Strong Q4 free cash flow of €401 million, resulting in €1,184 million full year free cash flow
- Proposed dividend of €0.52, up 8.3% compared to last year
- Announced merger with Delhaize on track to close in mid-2016; EGM to be held on March 14
Analyst conference call - webcast
Zaandam, The Netherlands - Ahold today announced strong financial results for the fourth quarter and full year 2015, reflecting good performances across its key markets and multiple formats. This included net annual sales of €38 billion, driven by excellent store operations, especially during the holiday season, and a strong increase in consumer online sales.
Ahold CEO Dick Boer said: “With a sharp focus on supporting our great local brands and investing to serve the rapidly changing interests and needs of our customers, we have made very good progress and achieved strong operating and financial results for the fourth quarter and the year. We challenged ourselves to innovate faster, to bring our customers fresher products in new and different ways, and to deliver greater value. This progress was supported by reinvesting the substantial savings achieved through our company-wide Simplicity program. We are pleased with the response from our customers and appreciate the continued great work of our associates, which led to robust sales performance, market share gains and an increase in Group operating income for the year.
“In the Netherlands, sales momentum remains strong, with a 3.2% increase in identical sales. This reflects our successful omni-channel strategy, a strong holiday season and positive sales momentum at Albert Heijn. Albert Heijn's customers are benefiting from our broader and innovative product range and the expansion of healthy choices in our Fresh departments, resulting in increased market share for Q4 and the full year.
"In the United States, we grew sales excluding gas by 4.1%, adjusted for an additional week. We continue to make good progress with our investments in quality and price, highlighted by growth in identical sales and market share gains, primarily in the New York Metro market where we further strengthened our position with the successful conversion of 25 former A&P stores.
“Our online performance was also strong with a nearly 30% increase in consumer sales in the fourth quarter. Bol.com maintained its position as the number one online retail destination in the Netherlands and had a particularly strong December. In addition, Peapod and ah.nl remain leading online grocers in their respective markets.
“Finally, our proposed merger with Delhaize continues to progress on schedule. The combination of Ahold and Delhaize will create an even better retail leader for customers and associates and will enable us to further build on the position of our respected and popular local brands in the communities we serve.”
No offer or solicitation
This communication is being made in connection with, among others, the proposed business combination transaction between Koninklijke Ahold N.V., also known as Royal Ahold (“Ahold”), and Delhaize Group NV/SA (“Delhaize”). This communication is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction in connection with the proposed transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and applicable Dutch, Belgian and other European regulations. This communication is not for release, publication or distribution, in whole or in part, in or into, directly or indirectly, any jurisdiction in which such release, publication or distribution would be unlawful.
Important additional information will be filed with the SEC
In connection with the proposed transaction, Ahold has filed with the U.S. Securities and Exchange Commission (the “SEC”) a registration statement on Form F-4, which includes a prospectus. On January 28, 2016, the SEC declared the registration statement effective, and the prospectus was mailed to the holders of American Depositary Shares of Delhaize and holders of ordinary shares of Delhaize (other than holders of ordinary shares of Delhaize who are non-U.S. persons (as defined in the applicable rules of the SEC)) on or around February 5, 2016. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT AHOLD, DELHAIZE, THE TRANSACTION AND RELATED MATTERS. Investors and security holders are able to obtain free copies of the prospectus and other documents filed with the SEC by Ahold and Delhaize through the website maintained by the SEC at www.sec.gov. In addition, investors and security holders are able to obtain free copies of the prospectus and other documents filed by Ahold with the SEC by contacting Ahold Investor Relations at firstname.lastname@example.org or by calling +31 88 659 5213, and are able to obtain free copies of the prospectus and other documents filed by Delhaize by contacting Investor Relations Delhaize Group at Investor@delhaizegroup.com or by calling +32 2 412 2151.
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. Many of these risks and uncertainties relate to factors that are beyond Ahold’s control. Therefore, investors and shareholders should not place undue reliance on such statements. 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 ability to obtain the approval of the transaction by Ahold’s and Delhaize’s shareholders; 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, unforeseen tax liabilities and other factors discussed in Ahold’s public filings and other disclosures.
Furthermore, this communication contains Ahold forward-looking statements as to investments in online businesses, the translation of new and innovative ideas into products in store, price campaigns and differentiation with local products in the Czech Republic, underlying margins, the Simplicity cost saving and efficiency program, investments in logistical infrastructure in The Netherlands, liquidity, cash, working capital, capital expenditures, interest payments, dividends, debt repayments, leverage, investment grade credit rating, the impact of new accounting standards, expected synergies from the combination of operations and Ahold’s ability expand its geographic reach, capital return, reverse stock split, Ahold’s Global Reward Opportunity program and the use of treasury shares.
The foregoing list of factors is not exhaustive. Investors and shareholders are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this communication. Ahold does not assume any obligation to update any public information or forward-looking statements in this communication to reflect subsequent events or circumstances, except as may be required by applicable laws. Outside the Netherlands, Koninklijke Ahold N.V., being its registered name, presents itself under the name of "Royal Ahold" or simply "Ahold."