Delhaize Q3 2012 results

Financial Summary Third Quarter 2012

  • Revenue growth of 1.6% (2.1% organic growth) at identical exchange rates
  • Comparable store sales decreased by 1.6% in the U.S. and increased by 0.6% in Belgium
  • Food Lion repositioning is delivering encouraging results with positive comparable sales growth in repositioned stores. The Food Lion network posted flat real growth during Q3.
  • Strong revenue and profitability increase in SEE&A
  • Underlying operating margin of 4.0%, impacted by ongoing price investments
  • Reiterate free cash flow target of €500 million in 2012 following €323 million generated over the first nine months, €197 million in Q3
  • Confirm full year underlying operating profit guidance at the bottom-end of the range of a 15-20% decline

CEO Comments

Pierre-Olivier Beckers, President and Chief Executive Officer of Delhaize Group, commented:  “Despite tough market conditions, we are seeing signs that our investments are yielding positive results, with revenues increasing and strong cash generation in the last three months. The repositioning of Food Lion continues to give us confidence for the future. In the third quarter, the repositioned stores, which account for over 60% of the Food Lion network, delivered positive comparable store sales, leading to a flat performance for the Food Lion banner when adjusted for inflation. The recent arrival of Roland Smith, who joined as CEO of Delhaize America, will help to further accelerate the ongoing transformation of our U.S. operations.”
“In Belgium, the economic and competitive environment has not improved. While we are not happy with the evolution of our market share, we are encouraged by the second consecutive quarter of positive comparable store sales growth. In addition, in Southeastern Europe & Asia, our initiatives are gaining momentum and delivering solid revenue growth coupled with improved profitability. ”
“We remain focused on improving our price competitiveness while maintaining our cash flow discipline. This approach should lead to sustainable revenue growth and the realization of shareholder value. We have made considerable progress towards realizing our free cash flow target of €500 million for 2012, generating €323 million through the first nine months of 2012. However, during the quarter, the Group’s underlying operating margin continued to be impacted by our efforts to structurally improve our price positioning across the group. We are confident that we will reach the bottom-end of our full year underlying operating profit guidance range.”

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