Delhaize Q2 2011 results

Financial Highlights Second Quarter 2011 (at identical exchange rates)

  • Group revenue growth of +3.9% (-4.2% at actual exchange rates) supported by all operating segments
  • Positive comparable store sales evolution of +1.6% in the U.S. (+2.6% unadjusted for Easter); flat comparable store sales in Belgium
  • Operating profit growth of +0.5% (-7.8% at actual exchange rates)
    Operating margin of 4.1% (5.2% in Belgium)
  • Revenue growth in the SEE & Asia of +7.8% (+7.6% at actual exchange rates)

Financial Highlights First Half 2011 (at identical exchange rates)

  • Revenue growth of +2.4% (-1.4% at actual exchange rates)
  • Operating margin of 4.2%

Other Highlights

  • Re-launched Food Lion stores show good results and receive positive customer feedback
    Completion of the Delta Maxi acquisition, making Delhaize Group a leading food retailer in Southeastern Europe
  • Achieved approximately EUR 300 million or 60% midway to the 2012 year-end EUR 500 million gross annual cost savings target
  • Updated full year 2011 cash capex guidance to a range of EUR 820 to EUR 840 million

CEO Comments

Pierre-Olivier Beckers, President and Chief Executive Officer of Delhaize Group, commented: “In the second quarter, revenue growth accelerated in all operating segments as a result of the continued implementation of our New Game Plan. Comparable store sales growth, helped by sales initiatives and higher retail inflation, turned positive again in the U.S. We are especially encouraged by improving volume trends in the U.S. Southeast, while our Hannaford operations continued their strong performance. Alfa Beta again gained market share and grew revenues despite the tough Greek economic climate. The acquisition of Delta Maxi, allowing us to accelerate revenue contribution in Southeastern Europe, is a significant step in the rebalancing of our portfolio towards higher growth markets.”
 
“At the end of the first half of 2011, our results are in line with our plans. Despite the slight delay we are experiencing in the U.S. category management and supply chain savings, we are confident that the second half of the year will show an acceleration of our revenue and profit momentum. In addition, first results from the two re-launched Food Lion markets are very encouraging and strengthen our conviction that we are pulling the right levers.”
 
“At the end of the second quarter, we are midway towards our 2012 annual gross savings target of EUR 500 million and we have achieved already 60% of the planned cost savings to date. These continue to provide us with the necessary fuel to further invest in prices, other sales building initiatives, such as our Food Lion brand repositioning work, and to cover inflation and other cost increases.”

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