Delhaize Q1 2011 results

Financial Highlights First Quarter 2011 (at identical exchange rates)

  • Revenue growth of 0.7% (1.5% at actual exchange rates); increase of revenues at all our segments
    Improvement of U.S. comparable store sales evolution to -0.3%, flat comparable store sales in Belgium
  • Operating margin of 4.3% resulting in an underlying operating margin of 4.4%
  • Excellent free cash flow generation (EUR 252 million at actual exchange rates or 5.0% of revenues) and further decrease of net debt to equity ratio to 29.3%

Other Highlights

  • Re-launch of Food Lion markets of Raleigh (North Carolina) and Chattanooga (Tennessee) after important brand reinforcement work
  • Increased gross store openings target for the full year 2011 to a range of 135 to 145
     

CEO Comments

Pierre-Olivier Beckers, President and Chief Executive Officer of Delhaize Group, commented: “In the first quarter of 2011, our Group posted revenue growth in all operating segments. Comparable store sales trends continued to improve in the U.S., helped by retail inflation while we continued to stay on price strategy. Alfa Beta continued to grow revenues and gain strong market share in a declining market. Our cost savings projects, on track to achieve EUR 500 million gross annual savings by the end of 2012, continue to deliver the fuel to fund the many projects of the New Game Plan. Despite these ongoing cost reductions achieved across all banners, the first quarter of 2011 was, as planned, impacted by expenses incurred for key strategic initiatives that will bear fruit as from later this year. Free cash flow generation was again very strong and puts Delhaize Group in an excellent position to pay for the Delta Maxi Group acquisition using available cash balances.”
 
“Today, we have re-launched around 200 Food Lion stores in the Raleigh and Chattanooga markets that will serve as phase one of the fundamental re-positioning work focused on the brand elements of price, assortment and shopping experience. Helped by what we learn from this first phase, we will roll out the re-positioning work to the large majority of the Food Lion network by the end of 2012.”

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