Ahold Delhaize reports a strong fourth quarter and raises the dividend for 2016, integration progresses well
- Pro forma Q4 net sales of €15.5 billion, up 2.8% at constant exchange rates, adjusted for week 53 in 2015
- Pro forma Q4 underlying operating margin of 3.9%, driven by strong performance in the Netherlands and at Delhaize America
- Pro forma full-year underlying operating margin of 3.7%, up 20 basis points compared to 2015
- Strong free cash flow of €874 million in Q4, resulting in €1.4 billion full-year free cash flow
- Proposed dividend of €0.57, up 9.6% compared to the Ahold dividend last year
- Integration on track, with synergies from the Better Together strategy delivering according to plan
Watch our Year in Review video for the highlights:
Zaandam, the Netherlands, March 1, 2017 - Ahold Delhaize, a leader in supermarkets and eCommerce with market-leading local brands in 11 countries, reported a strong fourth quarter and full year performance with solid sales growth and margins in the year of its landmark merger.
Dick Boer, CEO of Ahold Delhaize, said: "2016 was not only a year where we brought together two strong food retailers. It was also a year in which our great local brands drove solid performance, serving our customers both in stores and online.
"I am very pleased with the financial results in the fourth quarter with volume growth and strong margins, while making good progress implementing our Better Together strategy which we announced in December. Our teams are working hard on the integration, leveraging best practices and realizing synergy targets.
"Pro forma sales grew by 2.8% in the fourth quarter at constant exchange rates and adjusted for the 53rd week in 2015, driving volumes while operating in a deflationary environment in the U.S.
"Ahold USA continued to focus on its “Heading Northeast” strategy by offering better value, better quality and improved service to its customers, resulting in resilient volume trends. Underlying operating margin performance was slightly better than last year, adjusted for week 53 last year, supported by ongoing cost initiatives and synergies.
"Delhaize America showed continued good performance at both Food Lion and Hannaford with strong volume growth, more than offsetting the impact of deflation on sales. Underlying operating margins improved, driven by the "Easy, Fresh & Affordable" strategic initiative and synergies.
"In The Netherlands performance was outstanding, driven by both supermarkets and our online businesses ah.nl and bol.com. Underlying operating margin exceeded last year’s margin, reflecting operational efficiency and synergies.
"In Belgium, sales performance reflected a softer holiday season compared to 2015. However, underlying operating margins slightly improved due to capturing synergies.
"In Central and Southeastern Europe sales growth was mainly driven by Romania. Underlying operating margins decreased mainly due to our Serbian and our Czech business.
"Our strong free cash flow of €1.4 billion for the full year allows us to continue to fund growth in key channels, as well as to return excess liquidity to our shareholders. In January, we started a €1 billion share buyback to be carried out throughout 2017.
"Finally, we are pleased to propose a dividend of €0.57 to our shareholders, an increase of 9.6% compared to Ahold last year, representing a payout ratio of 48% of pro forma underlying income from continuing operations."
Analyst conference call - webcast
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