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Press release
Ahold Delhaize reports a strong quarter with full-year underlying earnings per share up 29.6%
Fourth quarter:
Full year:
*from continuing operations
Zaandam, the Netherlands, February 27, 2019 – Ahold Delhaize, one of the world’s largest food retail groups and a leader in both supermarkets and eCommerce, reports a strong fourth quarter with 29.6% growth of full-year underlying earnings per share from continuing operations, at constant exchange rates.
Frans Muller, President and CEO of Ahold Delhaize, said: “In 2018 we essentially completed the merger integration process and delivered on the synergies we promised. At the same time, we continued our strong business performance, while investing in meeting the needs of our customers in a rapidly changing industry. Today, Ahold Delhaize is fit for the future, with a very robust financial profile and the right structure to further grow our brands, both in-store and online.
"With our Leading Together strategy in place, our focus turns to further strengthening our great local brands by accelerating investments in omnichannel growth, technology, and a healthy and sustainable offering to customers. The Save for Our Customers program will support the funding of our investments in future profitable growth.
"Total net consumer online sales reached €3.5 billion in 2018, growing by 24.8% at constant exchange rates, and is firmly on track to double to around €7 billion in 2021. Throughout our business we are adding capacity and developing and sharing digital capabilities to stay ahead and meet increasing customer expectations regarding range, speed and convenience.
"In the U.S. we continued to see good momentum in the financial performance across the brands. We are excited about the program to refresh the look and feel of our Stop & Shop brand and the rapid expansion of our Click and Collect options for our customers. In addition, Food Lion reported its 25th quarter of positive comparable sales and volumes, supported by the rollout of its 'Easy, Fresh and Affordable' program.
"In the Netherlands Albert Heijn reported another solid quarter and bol.com continued its strong consumer sales growth during the year, reaching €2.1 billion with positive EBITDA margins. The new strategy for our Delhaize brand in Belgium is gaining traction, reflected by both improved sales performance and margin recovery in 2018. In Central and Southeastern Europe, we expanded our store network by 130 stores in 2018, mainly in Romania and Greece, and continued to see a strong performance in the Czech Republic.
"With synergy savings of €432 million in 2018 and a run-rate of €120 million in the last quarter, we are close to our target of €500 million net synergies on an annual basis. For 2019, we expect to realize €540 million of cost savings, which allows us to invest in organic and inorganic growth while keeping group margins in line with 2018.
"For the full year we delivered a strong free cash flow of €2.3 billion, supported by further improvements in net working capital. We expect free cash flow for 2019 of around €2.0 billion, with capital expenditure of €2.0 billion. We will return €1 billion through our share buyback program for 2019 and are pleased to propose a €0.70 dividend to our shareholders, an increase of 11.1% compared to 2017, reflecting of our ambition of sustainable growth of the dividend per share. For 2019 we expect underlying income per share from continuing business to grow by high single digits as a percentage."
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This communication includes forward-looking statements. All statements other than statements of historical facts may be forward-looking statements. Words such as strategy, propose, promise, (fit for the) future, focus, sustainable, will, on track, stay ahead, expect, target, ambition, plan, expand, aim, commit, to be, can, outlook, guidance, policy, estimated or other similar words or expressions are typically used to identify forward-looking statements.
Forward-looking statements are subject to risks, uncertainties and other factors that are difficult to predict and that may cause actual results of Koninklijke Ahold Delhaize N.V. (the “Company”) to differ materially from future results expressed or implied by such forward-looking statements. Such factors include, but are not limited to, risks relating to the Company’s inability to successfully implement its strategy, manage the growth of its business or realize the anticipated benefits of acquisitions; risks relating to competition and pressure on profit margins in the food retail industry; the impact of economic conditions on consumer spending; turbulence in the global capital markets; natural disasters and geopolitical events; climate change; raw material scarcity and human rights developments in the supply chain; disruption of operations and other factors negatively affecting the Company’s suppliers; the unsuccessful operation of the Company’s franchised and affiliated stores; changes in supplier terms and inability to pass on costs to prices; risks related to corporate responsibility and sustainable retailing; food safety issues resulting in product liability claims and adverse publicity; environmental liabilities associated with the properties that the Company owns or leases; competitive labor markets, changes in labor conditions and labor disruptions; increases in costs associated with the Company’s defined benefit pension plans; the failure or breach of security of IT systems; the Company’s inability to successfully complete divestitures and the effect of contingent liabilities arising from completed divestitures; antitrust and similar legislation; unexpected outcomes in the Company’s legal proceedings; additional expenses or capital expenditures associated with compliance with federal, regional, state and local laws and regulations; unexpected outcomes with respect to tax audits; the impact of the Company’s outstanding financial debt; the Company’s ability to generate positive cash flows; fluctuation in interest rates; the change in reference interest rate; the impact of downgrades of the Company’s credit ratings and the associated increase in the Company’s cost of borrowing; exchange rate fluctuations; inherent limitations in the Company’s control systems; changes in accounting standards; adverse results arising from the Company’s claims against its self-insurance program; the Company’s inability to locate appropriate real estate or enter into real estate leases on commercially acceptable terms and other factors discussed in the Company’s public filings and other disclosures.
Forward-looking statements reflect the current views of the Company’s management and assumptions based on information currently available to the Company’s management. Forward-looking statements speak only as of the date they are made, and the Company does not assume any obligation to update such statements, except as required by law.