Koninklijke Ahold Delhaize N.v. · EURONEXT:AD
Koninklijke Ahold Delhaize — Q3 2022 Earnings Presentation
30 slides from Koninklijke Ahold Delhaize's earnings presentation, Nov 11, 2022
Slide 1: Q3 2022 Ahold Delhaize Results
Q3 2022 Ahold Delhaize Results November 9, 2022
Slide 2: Cautionary notice
Cautionary notice This communication includes forward-looking statements. All statements other than statements of historical facts may be forward-looking statements. Words and expressions such as focused, mitigate, introducing, expanding, constant, start, beginning of 2023, growth, position, to date
Slide 3: Welcome
Welcome JP O’Meara SVP Investor Relations Ahold Delhaize - Q3 2022 Results 3
Slide 4: Ahold Delhaize reports strong increase in Q3 sales and earnings
• With high inflation levels in the U.S. and Europe, our brands are focused on helping customers manage their spending. Supported by our €850 million Save for Our Customers cost savings program, our brands are working with suppliers to mitigate cost increases for customers, introducing more entry-pr
Slide 5: Q3 2022 Business Highlights
Q3 2022 Business Highlights Frans Muller, President & CEO
Slide 6: Empowering customer choice with great value and easy access to affordable food
Empowering customer choice by providing great value and easy access to affordable and healthy food options Effective negotiations Deepening with suppliers engagement with and efficient our customers end-to-end through optimized process loyalty programs Expanding own-brand and healthy assortment Ahol
Slide 7: Strong portfolio delivers resilient Q3 performance
Strong portfolio delivers resilient Q3 performance Strengthening our positions Net Sales €22.4 bn vs LY constant rates +9.1% Diluted Underlying EPS €0.70 vs LY current rates +31.6% Ahold Delhaize - Q3 2022 Results 7
Slide 8: Strong and relevant customer value proposition drives growth
Strong and relevant customer value proposition drives growth 88 Ahold Delhaize - Q3 2022 Results Ahold Delhaize - Q3 2022 Results
Slide 9: Industry-leading local omnichannel food retailer
Total stores 7,625 Optimized Industry-leading local own-brand products omnichannel food retailer Dense networks Own-brand 1,471 penetration in U.S. loyalty customers of Click & Collect the EU of ~50% 20M with ~80% points in U.S. and U.S. of ~30% loyalty sales penetration Benelux loyalty customers of
Slide 10: Food Lion winning streak continues
Food Lion winning streak continues Highlights: • 10 years of positive comparable store sales growth • Food Lion To Go is available in 601 stores. Food Lion To Go and/or home delivery services will expand to nearly 1,000 Food Lion stores by the end of 2022 Ahold Delhaize - Q3 2022 Results 10
Slide 11: Albert Heijn winning market share
Albert Heijn winning market share Highlights: ‘100 items •bol.com net under €1’ campaign •consumer Expansion online to 1,600 Price Favorite sales was items to€1.2 drive customer value billion in Q3 2022 •upLaunched 5.6% ‘Leftovers’ in the AH App to reduce food waste and bringing value to customers A
Slide 12: Stop & Shop NYC remodels encouraging
Stop & Shop NYC remodels encouraging Highlights: Stop & Shop announced • 5 remodels in NYC in 2022 and 7 more a $140 million targeted planned by the end of the year investment for New York City stores • 40% of the store fleet now remodeled over the next two years since 2018; remodeled stores continu
Slide 13: Delhaize Belgium growth rates improve
Delhaize Belgium growth rates improve Highlights: • Driving value with ‘Little Lions’ campaign with 500 own-brand products • Optimized its SuperPlus loyalty program with focus on fresh products with 10% discount to encourage healthy eating • Opened the largest wine bottling plant in the Benelux Ahol
Slide 14: Bol.com third party sales grow double-digit
Bol.com third party sales grow double-digit Hightlights: • bol.com net consumer online sales was €1.2 bn bol.com gained market in Q3, up 5.6% versus same period last year share well over one percentage point year to • bol.com platform partner sales grew at a date double-digit rate in Q3, representin
Slide 15: Strategic priorities for the next years
4 priorities for the next 4 years For customers For operations For our portfolio For Health & Sustainability Accelerate Serve Create Lead the omnichannel customers with the ecosystem for the transformation transformation & deeper (digital) smarter into a healthy & continue to be the relationships cu
Slide 16: Highlights & Outlook: Customer Priority
• In Q3, net consumer online sales increased by 11.5%. Our online grocery sales Highlights & Outlook: were up 16.9% with strong growth in both regions Customer Priority • Albert Heijn helps customers shop affordably with more than 1,600 Price Favorite products and runs successful campaign featuring
Slide 17: Highlights & Outlook: Operational Priority
• Our Save for Our Customers cost savings program remains on track to Highlights & Outlook: produce savings of more than €850 million in 2022 Operational Priority • Ahold Delhaize acquires minority stake in advertising technology company, Adhese, to drive development of digital advertising opportuni
Slide 18: Highlights & Outlook: Healthy & Sustainable
• Albert Heijn launched ‘Leftovers’ in the AH App to reduce food waste and bring value to customers Highlights & Outlook: • Delhaize Belgium supports purchasing power and reduces food waste with Healthy & Sustainable its ‘Waste less, pay less’ initiative • The GIANT Company now has 106 zero waste st
Slide 19: Q3 2022 Financial Highlights
Q3 2022 Financial Highlights Natalie Knight, Chief Financial Officer
Slide 20: External environment providing headwinds and tailwinds
External environment providing headwinds and tailwinds Omnichannel trends Inflation rates at War in Ukraine drive new shopping highest levels in drives major cost behaviors 40 years increases Ongoing Stronger dollar supply chain and higher challenges interest rates Ahold Delhaize - Q3 2022 Results 2
Slide 21: Third Quarter results: underlying performance
Comparable Sales Growth excl. gas Net sales €22.4 bn +7.9% U.S. 8.2% EU 7.4% vs LY constant rates Third +9.1% Quarter results Underlying operating income Net Consumer 2022 Online Sales1 €993 m €2.7 bn vs LY constant rates Operating margin vs LY constant rates +9.7% +11.5% 4.4% Underlying in line vs
Slide 22: Third Quarter results: IFRS-reported results
Net sales €22.4 bn Online Sales vs LY actual rates +20.8% €2.1 bn Third vs LY actual rates +20.2% Quarter results Negatively impacted by an Operating impairment charge of €187 m income for FreshDirect 2022 €887 m vs LY actual rates Operating margin Positively impacted by €62 m from the release of a
Slide 23: Comparable sales growth trends by region
Actuals excluding gas Ex weather/calendar Comparable sales growth trends by region Ex. Gas Q3 Group Comparable Sales Growth excl. gas Europe U.S. Q3 8.2% 7.8% Q3 +7.9% 7.5% +8.2% +7.4% 7.4% 6.4% 5.5% 4.8% 5.0% 3.7% 3.9% 3.3% 2.9% 1.0% 1.8% 0.9% 1.1% 0.2% -0.2% -2.4% -3.1% Q3 2021 Q4 2021 Q1 2022 Q2
Slide 24: Highlights: United States
Highlights: United States • Net sales grew 8.8% at constant rates, 27.4% at actual rates to €14.7 bn • Q3 comparable sales excluding gasoline increased 8.2% • 20.8% online sales growth in Q3 (constant rates); building on top of 53% growth in the same quarter last year • Underlying operating margin w
Slide 25: Highlights: Europe
Highlights: Europe • Net sales were €7.7 bn, an increase of 10.1% at constant exchange rates and 10.0% at actual exchange rates • Q3 Europe comparable sales excluding gasoline increased 7.4% • Q3 market share gains at Albert Heijn, Bol.com and in the CSE region • Net consumer online sales in the seg
Slide 26: Rising energy costs having significant impact on European operating margins
Rising energy costs having significant impact on European operating margins Electricity Forward Buy Rates Power Sustainable savings facilities initiatives LED Efficient Jan/21 Apr/21 Jul/21 Oct/21 Jan/22 Apr/22 Jul/22 Oct/22 lighting cooling The Netherlands Belgium systems Netherlands Czech Republic
Slide 27: Strong Q3 operating cash flow underpins free cash flow target
Strong Q3 operating cash flow underpins free cash flow target of ca. €2 bn FCF Q3 2022 vs Last Year, 2020 and 2019 (in €m) Unfavorable working capital impacts largely due to timing 484 176 FCF Q3 2019 FCF Q3 2020 Ahold Delhaize - Q3 2022 Results 27
Slide 28: 2022 Outlook: management increases EPS guidance
2022 2022 Outlook: ≥4% New ≥€850 million management Underlying Operating Margin increases EPS Growth by low- Save for Our Customers guidance double-digit Underlying EPS Our great local brands continue to support customers to manage their shopping ~€2.5 billion baskets efficiently, ~€2.0 billion ensu
Slide 29: Increasing shareholder value and a firmly anchored investment grade rating
Increasing shareholder value and a firmly anchored investment grade rating Dividend Share Buy payout ratio1,2 Back1 40%-50% €1 bn YoY growth in dividend per share 2023 1. Management remains committed to the share buyback and dividend program, but, given the uncertainty caused by the wider macro-econ
Slide 30: Thank you
aS Ahold “ Delhaize Thank you FOOD#ALION $sToPasHoP. albert _bolcom’” Banr Giant Qe ‘Company Eto3 GalleGall nun DIED 64 Tempo (Gy Pzetenoutes [ENAS202 sfreshdirect Peaped @ Retail Business Sa Services: “4 | European Apusa 0% | BUSINESS APRS EP Siro Proud companies of [) Ahold Delhaize
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