Koninklijke Ahold Delhaize N.v. · EURONEXT:AD
Koninklijke Ahold Delhaize — Ahold — FY2012 Earnings Presentation
39 slides from Koninklijke Ahold Delhaize's earnings presentation, Feb 28, 2013
Slide 1: Fourth quarter and full year 2012 results
Fourth quarter and full year 2012 results Analyst meeting February 28, 2013
Slide 2: Safe harbor
Safe harbor • In today's meeting statements may be made that do not refer to historical facts but refer to expectations based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materiall
Slide 3: Agenda
Agenda • Introduction Dick Boer • Financial review Jeff Carr • Business highlights Dick Boer • Q&A Dick Boer / Jeff Carr Amsterdam, February 28, 2013 - Ahold 2012 results 3
Slide 4: Introduction
Introduction Fourth quarter and full year 2012 Dick Boer, CEO 4
Slide 5: 2012 was a successful year
2012 was a successful year • Delivering on our reshaping retail strategy • Expanded geographic reach • Increased cost reduction program to €600 million • Continued to invest more into value for customers • Market share gains in all major markets • Solid financial performance • Net sales increased 3.
Slide 6: Financial review
Financial review Fourth quarter and full year 2012 Jeff Carr, CFO
Slide 7: Operating performance
Operating performance (in millions of euros) Quarter 4 Full year 2012 2011 Change 2012 2011 Change Sales 7,835 7,290 7.5% 32,841 30,271 8.5% Gross profit margin 26.1% 26.2% (0.1) 26.0% 26.2% (0.2) Underlying operating 355 341 4.1% 1,414 1,375 2.8% income At constant exchange rates 355 346 2.7% 1,414
Slide 8: Net income
Net income (in millions of euros) Quarter 4 Full year 2012 2011 Change 2012 2011 Change Underlying operating income 355 341 4.1% 1,414 1,375 2.8% Pension restructurings (88) - (88) (88) - (88) IT restructuring (88) - (88) (88) - (88) Impairments and other (23) (13) (10) (51) (28) (23) Operating inco
Slide 9: Adjusted net income
Adjusted net income (in millions of euros) Full year 2012 2011 Change Net income from continuing operations 830 1,032 (19.6%) ICA adverse tax ruling 90 - Frozen plan settlement (after-tax) 72 - Write-down of capitalized software development costs (after-tax) 52 - Release of tax contingency reserve -
Slide 10: Sales development – Ahold USA
Sales development – Ahold USA (in millions of US dollars) Quarter 4 Full year 1.9% 6,142 25,845 1.0% 1.7% 1.4% 25,072 0.5% 0.9% 5,887 4.3% 3.1% Q4 2011 ID sales Gasoline New sales Q4 2012 2011 ID sales Gasoline New sales 2012 (ex gas) sales area (ex gas) sales area • Price inflation significantly do
Slide 11: Operating performance – Ahold USA
Operating performance – Ahold USA (in millions of US dollars) Quarter 4 Full year 2012 2011 Change 2012 2011 Change Sales 6,142 5,887 4.3% 25,845 25,072 3.1% Underlying operating income 255 239 6.7% 1,069 1,067 0.2% Underlying operating margin 4.2% 4.1% 0.1 4.1% 4.3% (0.2) • Good cost controls conti
Slide 12: Sales development – The Netherlands
Sales development – The Netherlands (in millions of euros) Quarter 4 Full year 2,698 11,054 2.1% 1.4% 5.4% 2.8% 2,506 0.2% 10,506 1.0% 7.7% 5.2% Q4 2011 ID sales bol.com New sales Q4 2012 2011 ID sales bol.com New sales 2012 area area • The fourth quarter was impacted by the timing of year end and a
Slide 13: Operating performance – The Netherlands
Operating performance – The Netherlands (in millions of euros) Quarter 4 Full year 2012 2011 Change 2012 2011 Change Sales 2,698 2,506 7.7% 11,054 10,506 5.2% Underlying operating income 171 173 (1.2%) 644 666 (3.3%) Underlying operating margin 6.3% 6.9% (0.6) 5.8% 6.3% (0.5) • Excluding bol.com und
Slide 14: Sales development – Other Europe
Sales development – Other Europe (in millions of euros) Quarter 4 Full year 413 1,739 404 0.5% 0.3% 1,675 (2.5%) (2.2%) (0.1%) 0.8% (1.9%) (0.8%) (2.2%) (3.7%) Q4 2011 ID sales Gasoline New Currency Q4 2012 2011 ID sales Gasoline New Currency 2012 (ex gas) sales sales impact (ex gas) sales sales imp
Slide 15: Operating performance – Other Europe
Operating performance – Other Europe (in millions of euros) Quarter 4 Full year 2012 2011 Change 2012 2011 Change Sales 404 413 (2.2%) 1,675 1,739 (3.7%) Underlying operating income 9 8 12.5% 21 20 5.0% Underlying operating margin 2.2% 1.9% 0.3 1.3% 1.2% 0.1 • Czech Republic 2012 operating margin up
Slide 16: Free cash flow and uses of cash
Free cash flow and uses of cash (in millions of euros) Full year 2012 2011 Change Operating cash flow 2,103 2,023 79 Change in working capital 147 (26) 173 Net investment (860) (732) (128) Interest / Tax paid, dividend JVs, other (202) (300) 98 Free Cash Flow 1,188 965 223 Acquisitions (744) (43) (7
Slide 17: Gross and net debt
Gross and net debt (in millions of euros) • Gross debt at €3.2 billion, down 3.7 3.2 €0.5 billion • Cash balances down €0.7 billion 1.4 Gross debt 1.1 • Net debt at €1.4 billion, up €0.3 billion Cash and cash equivalants • Net lease-adjusted debt / EBITDAR at 1.8 (1.9)* Net debt (2.6)* times • New €
Slide 18: Pension plans status
Pension plans status (in millions of euros) Summary position YE 2012 YE 2011 Company plans surplus (654) 255 (defined benefit plans) Multi-employer plans deficit (732) (729) Funding ratios Largest Dutch pension plan 114% 106% Ongoing U.S. pension plan 118% 92% • Actively managing our pension plans •
Slide 19: Pension plans: adoption of IAS19R and discount rate
Pension plans: adoption of IAS19R and discount rate • Following adoption of IAS19R in 2013, key changes include: • Pension charges will be split between service costs as part of operating expenses and net financial expense • Corridor approach eliminated • Restated 2012 IAS 19R has no significant imp
Slide 20: Summary
Summary • Sales growth of 3.5% at constant exchange rates in 2012 • Delivering on our cost reduction program of €600 million • Record free cash flow of €1.2 billion • Continued strong capital discipline • Return on capital in top quartile of the sector • Proposed dividend of €0.44 per share • New €5
Slide 21: Business highlights
Business highlights Fourth quarter and full year 2012 Dick Boer, CEO 21
Slide 22: We have taken great strides in the past five years
We have taken great strides in the past five years Net sales (in millions of euros) 32,841 29,530 30,271 27,925 25,648 2008 2009 2010 2011 2012 • Net sales increased by €7.2 billion to €32.8 billion, driven by twenty consecutive quarters of identical sales growth Amsterdam, February 28, 2013 - Ahold
Slide 23: We have realized steady market share growth…
We have realized steady market share growth… United States Albert Heijn • Gained in both all-outlets and supermarket channel • Share increased in a consolidating market +240 bps +240 bps 33.6% 33.5% 33.7% 28.9% 29.4% 29.8% 30.5% 28.1% 32.8% 17.4% 17.5% 17.8% 31.3% 2008 2009 2010 2011 2012 2008 2009
Slide 24: And consistently strong cash generation
And consistently strong cash generation Free cash flow (in millions of euros) 1,188 1,112 948 965 638 2008 2009 2010 2011 2012 • Free cash flow almost doubled, to a record €1.2 billion in 2012 Amsterdam, February 28, 2013 - Ahold 2012 results 24
Slide 25: We have a robust and successful business today
We have a robust and successful business today #1 right strong 225,000 leadership people online food grocer in our formats 75% 125 employed markets in the supermarkets, of our sales via years of across the loyalty cards heritage worldwide U.S. and the small stores, company Netherlands online Amsterd
Slide 26: The world is changing fast and the only constant is change
The world is changing fast and the only constant is change We are increasingly urban We value our people and We are getting older and Digital convenience is and global; demographics our planet our lifestyles are changing something we have come are shifting to expect Amsterdam, February 28, 2013 - Ah
Slide 27: The retail environment we operate in is incredibly dynamic
The retail environment we operate in is incredibly dynamic Huge growth of online, Great locations are an Customers are focused Customers look for Strong own brands are both in food and important differentiator on price without inspiration, a driver of loyalty non-food compromising on convenience and
Slide 28: Our strategy is helping us leverage the consumer trends
Our strategy is helping us leverage the consumer trends Our promises Our promises Better place to shop Better place to shop Better every day Better Better Better place toevery work day neighbour Better Better place to work neighbour Amsterdam, February 28, 2013 - Ahold 2012 results 28
Slide 29: Highlights of the year: The Netherlands
Highlights of the year: The Netherlands Integrating new Albert Heijn opened stores into our Albert its first three New Albert Heijn to Heijn banner pick-up points go format launched Albert Heijn celebrated its Aquired internet 125th anniversary retailer bol.com Amsterdam, February 28, 2013 - Ahold 2
Slide 30: Highlights of the year: The Netherlands
Highlights of the year: The Netherlands Nine new stores Albert.nl service Health and beauty opened in Belgium extended to 500,000 segment under and three in Germany new households pressure, challenging Gall & Gall increased period for Etos Online shopping market share, adding available through nine
Slide 31: Customers are looking for convenience and flexibility
Customers are looking for convenience and flexibility Opening pick-up points to make shopping more convenient Eight more pick-up points open in the United States and first three open in the Netherlands Amsterdam, February 28, 2013 - Ahold 2012 results 31
Slide 32: Retailing is fundamentally about people
Retailing is fundamentally about people Studying how leadership impacts business results 750 store managers involved in a study on leadership Amsterdam, February 28, 2013 - Ahold 2012 results 32
Slide 33: Highlights of the year: Other Europe
Highlights of the year: Other Europe The Albert Charity Foundation ran a number of Albert rolled out improved Albert maintained Albert continued its roll out initiatives that contributed to deli departments in all its market share in a highly of a new compact hyper community well-being. 226 Czech su
Slide 34: Highlights of the year: United States
Highlights of the year: United States Increased participation in Divisions reduced points-based loyalty inventory levels of back programs, with nearly eight Ahold USA served room of every 10 primary Giant Carlisle acquired and customers during shoppers now participating converted 15 Genuardi’s Hurri
Slide 35: Highlights of the year: United States
Highlights of the year: United States Stop & Shop rolled out The divisions reformulating ScanIt! Mobile to all stores. Giant Landover acquired Peapod opened its first one in five own-brand and converted two Eight pick-up points products to meet higher Fresh & Green’s stores quality standards Amsterd
Slide 36: Customer loyalty is more important than ever
Customer loyalty is more important than ever Transferring best practices in customer insight across continents Analyzing customer data and turning it into insights about pricing, promotions and assortment Amsterdam, February 28, 2013 - Ahold 2012 results 36
Slide 37: We are operating at the heart of our communities
We are operating at the heart of our communities Our Family Foundation 2012 donations via our Family Foundation amounted to $67 million Amsterdam, February 28, 2013 - Ahold 2012 results 37
Slide 38: 2013 – the year ahead
2013 – the year ahead Belgium Roll out pick up points Simplicity ICA Amsterdam, February 28, 2013 - Ahold 2012 results 38
Slide 39: Questions and answers
Questions and answers Amsterdam, February 28, 2013 - Ahold 2012 results 39