Delhaize Group third quarter 2014 results

Financial Summary Third Quarter 2014

• Revenue growth of 3.3% at identical exchange rates (3.3% organic growth)
• Comparable store sales growth of 5.3% in the U.S. and -5.0% in Belgium
• Group underlying operating profit of €192 million, underlying operating margin of 3.5% (4.2% in the U.S., 1.4% in Belgium)
• Free cash flow generation of €118 million (€426 million for the first nine months of 2014)

Highlights

• Agreement to sell Bottom Dollar Food store locations
• 31 Food Lion stores relaunched under the “Easy, Fresh & Affordable” strategy in August, 45 additional stores will be relaunched next week

CEO Comments

Frans Muller, President and Chief Executive Officer of Delhaize Group, commented: “While our overall performance  in  the  third  quarter  met  our  expectations,  results  were  decidedly  mixed  among our  key regions.  In  the  U.S.,  comparable  store  sales  growth  was  very  strong  at  5.3%,  resulting  from  both continued  good  momentum  at  Food  Lion  and  favourable,  albeit  temporary,  competitive  dynamics  at Hannaford.  These  positive  volume  trends  resulted  in  a  10%  increase  in  our  U.S.  underlying  operating profit.  In  August,  we  have  launched  the  first  31  Food  Lion  stores  deploying  our  new  “Easy,  Fresh  & Affordable”  strategy.  Although  it  is  too  early  to  draw  conclusions,  they  are  experiencing good  initial customer response. We will roll out the next 45 stores next week.”
 
“In Belgium, results were impacted by both weak summer trading and uncertainty caused by the June announcement  of  the  Transformation  Plan.  While  we  believe  this  impact  is  temporary  in  nature, disruptions have persisted and conditions have deteriorated in the fourth quarter. We remain determined to make our business more sustainable in the long term and continue to be in a dialogue with our social partners to realize this. In Southeastern Europe, we faced weak economic conditions in our markets and deflation in Serbia, both of which have continued in the fourth quarter. We remain focused on our store expansion plans to increase our strong and growing market positions.”