Koninklijke Ahold Delhaize N.v. · EURONEXT:AD
Koninklijke Ahold Delhaize — Q4 2016 Earnings Presentation
31 slides from Koninklijke Ahold Delhaize's earnings presentation, Mar 1, 2017
Slide 1: Q4/Full year 2016
March 1, 2017 Q4/Full year 2016
Slide 2: Better Together - Ahold Delhaize Strategic Framework
2 Better Together - Ahold Delhaize Strategic Framework Our purpose Together, we build Great Local Brands, bringing Fresh Inspiration Every Day Our sustainable business model Our promises Save for our customers: Invest in our customer A better • Buy better proposition: place to • Operate smarter • Af
Slide 3: Ahold Delhaize… Better Together
Ahold Delhaize… Better Together Recap of our new strategy presented at the Capital Markets Day Well positioned to win… ...by building on our Better Together strategy • Great local brands • Save for our customers: • Buy better • Best-in-class Supermarkets • Operate smarter • Superior Omni-channel / D
Slide 4: Highlights
Highlights Strong fourth quarter, raised dividend for 2016, integration progressing 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
Slide 5: Integration on track
Integration on track • Merger related store divestments almost completed in the U.S. • Richmond and Belgium store divestment process ongoing • Ahold USA and Delhaize America announced plans to further strengthen their brands, while leveraging scale at Retail Business Services • Synergy programs in b
Slide 6: Group performance: Pro forma operating performance
Group performance Pro forma operating performance € in million Quarter 4 Full year 2016 2015 Change Change 2016 2015 Change Change actual rates constant rates actual rates constant rates Net sales 15,505 15,667 (1.0%) (2.2%) 62,331 60,881 2.4% 2.1% Net sales adj. for 53rd week 2.8% 3.4% Underlying E
Slide 7: Group performance: Pro forma income from continuing operations
Group performance Pro forma income from continuing operations € in million Full year 2016 2015 Change actual rates Underlying operating income 2,298 2,155 6.6% Restructuring and related charges 246 193 27.5% Other 78 63 23.8% Operating income 1,974 1,899 3.9% Net financial expenses (601) (425) 41.4%
Slide 8: Performance by segment: Pro forma Quarter
Performance by segment Pro forma € in million Quarter 4 Delhaize Ahold USA The Netherlands Belgium CSE America 2016 Change 2016 Change 2016 Change 2016 Change 2016 Change constant rates constant rates constant rates Net sales 5,590 (7.0%) 3,969 2.0% 3,208 (1.1%) 1,280 (1.0%) 1,458 4.3% Net sales adj
Slide 9: Performance by segment: Pro forma Full year
Performance by segment Pro forma € in million Full year Delhaize Ahold USA The Netherlands Belgium CSE America 2016 Change 2016 Change 2016 Change 2016 Change 2016 Change constant rates constant rates constant rates Net sales 23,316 0.5% 15,501 1.9% 13,015 3.1% 4,942 1.7% 5,557 8.1% Net sales adj. f
Slide 10: Ahold USA Pro forma results Q4 2016
Ahold USA Pro forma results Q4 2016 € in million Net sales • Net sales grew 0.7% at Comparable sales growth ¹ constant rates excl week 53 103 32 13 in 2015 -8 • Deflation of 1.2% -452 2.0% 1.9% 5,903 • Market share growth across 1.5% 5,553 5,590 its divisions 1.1% 0.6% • Comp sales impacted by 0.2%
Slide 11: Delhaize America Pro forma results Q4 2016
Delhaize America Pro forma results Q4 2016 € in million Net sales • Net sales grew 2.0% at Comparable sales growth constant rates 68 82 -3 • Deflation of 1.7% 3.2% 3.0% • Continued strong volume 2.2% 2.0% 2.2% 3,890 3,969 growth at both Food Lion 1.6% 1.6% 3,822 1.3% and Hannaford • 142 Food Lion st
Slide 12: Netherlands Pro forma results Q4 2016
Netherlands Pro forma results Q4 2016 € in million Net sales • Net sales grew 7.5% Comparable sales growth adjusted for week 53 in 192 32 6.6% 2015 • Inflation of 1.2% 4.0% 4.5% • Strong Comp sales growth 3.0% 3.5% 3.2% 3.5% 3.3% 3,245 -261 3,208 in supermarkets • Online net consumer sales growth >3
Slide 13: Belgium Pro forma results Q4 2016
Belgium Pro forma results Q4 2016 € in million Net sales • Net sales decreased by 1.0% Comparable sales growth • Inflation of 1.9% • Softer holiday sales -10 -3 compared to 2015 4.0% 3.9% • Stable FY market share vs. 2.6% 1,293 1,280 LY 1.9% 1.3% -2.8% -1.4% -0.9% Q4'15 Comp sales New/closed Q4'16 Q
Slide 14: Central and Southeastern Europe Pro forma results Q4 2016
Central and Southeastern Europe Pro forma results Q4 2016 € in million Net sales • Net sales grew 6.7% Comparable sales growth ¹ adjusted for week 53 in 45 7.0% 6.6% 2015 at constant rates 6.0% 46 • Comp sales growth driven 5.5% -31 -6 1,458 by Romania and Serbia, flat 3.4% 3.4% 1,404 in Czech Repub
Slide 15: Synergies: on track for €500 million in 2019
Synergies 2016 delivered according to plan, on track for €500 million in 2019 Timeline 2016 – 2019 € in million Q4 2016 2016 € in million 500 United States 8 8 420 Europe 7 7 220 GSO* 4 7 Total 19 22 22 * Global Support Office 2016 2017 2018 2019 • Net synergies 2016: €22 million • Net synergies tar
Slide 16: Integration & transaction costs
Integration & transaction costs In line with prior guidance 2016 integration costs €147 million USA 45% 47% EU GSO 8% € in million Total one-off costs update Expected Balance 2015 FY 2016 FY Total 2017 to go Integration costs 23 147 123 57 350 Transaction costs 62 73 - - 135 Includes Delhaize Group
Slide 17: Free cash flow generation
Free cash flow generation ¹ Strong delivery at €1.4 billion for the year 201 -47 605 -445 -57 -64 1,441 1,377 1,184 Free cash flow Operating cash Working Income tax Net Interest and Free cash flow Delhaize FCF "Real" free Ahold 2015 flow ² capital paid investments dividends joint 2016 (IFRS) prior t
Slide 18: Capital structure and net debt evolution
Capital structure and net debt evolution Net debt in line with guidance at €3.2 billion, leverage at 2.0x € in billion 7.3 7.6 3.6 3.2 0.9 0.2 0.3 Cash * 3.6 Gross debt 3.2 (3.7) (4.3) Net debt Q3 2016 YE 2016 Q3 2016 Q4 2016 Yen bond FX, Amort YE 2016 Net debt FCF transaction and other Net debt • 2
Slide 19: Outlook 2017
Outlook 2017 • Focused on implementing our strategic initiatives to further improve the customer proposition and drive volumes, however deflationary environment expected to continue in the United States through the first quarter of 2017 • We confirm our target for 2017 of realizing €220 million net
Slide 20: Business highlights
Business highlights Q4/Full Year Results 2016 20
Slide 21: Business highlights: Ahold USA
Business highlights Ahold USA AUSA • Our Nature’s Promise own brand voted as best-in-class brand, by the 2016 Brand Tracker • Giant Carlisle recently opened 18 beer & wine stores in Pennsylvania resulting in 33 in total and planning for an additional 36 in 2017 • Hundreds of savings offered weekly t
Slide 22: Business highlights: Delhaize America
Business highlights Delhaize America Food Lion Hannaford • 142 stores in Charlotte market relaunched in • Successful early learnings from concept store Q4 under Easy, Fresh & Affordable in Bedford, to be deployed to 2017 remodels • Next wave of 160 stores will be remodeled in • “Harvest to Home” ini
Slide 23: Business highlights: The Netherlands
Business highlights The Netherlands Albert Heijn • Innovative assortment through new partnerships, adding more than 1,000 products to the assortment • Successful second edition of the Allerhande Christmas festival; completely sold out, welcoming 36,000 visitors while giving 80 workshops varying from
Slide 24: Business highlights: Delhaize Belgium
Business highlights Delhaize Belgium • New store organization successfully introduced in all company-operated stores as part of the Transformation Plan • Enhanced shopping experience by 70 stores renovations in 2016 and 120 more planned for 2017 • Launch of “natural branding” initiative to reduce pa
Slide 25: Business highlights: Central & Southeastern Europe
Business highlights Central & Southeastern Europe • In Greece, Alfa Beta celebrated the 20-year anniversary of its successful loyalty card program – the first in Greece when it was launched • Overall improved performance of former-Spar stores in Czech Republic, including larger stores • Mega Image i
Slide 26: Sustainable retailing: Achievements 2016 – some examples
Sustainable retailing Achievements 2016 – some examples Delhaize Belgium stripped 17 tons of salt Delhaize America was the only U.S. grocery from its range of own-brand bread. And store to receive a perfect LGBT Corporate that was after it already removed 38 tons of Equality Index score from the HRC
Slide 27: Sustainable retailing: Targets 2020
Sustainable retailing Targets 2020 Create healthy and inclusive Focus areas Promote healthier eating Reduce food waste workplace Product safety & Associate Local community Essentials Climate impact Safety at work sustainability development connection Focus areas: • 45% own brand sales from healthy p
Slide 28: Important dates
Important dates 2017-2018 • Annual General Meeting April 12, 2017 • Pro forma information aligning calendars April 13, 2017 • Ahold Delhaize Q1 2017 results May 10, 2017 • Ahold Delhaize Q2 2017 results August 9, 2017 • Ahold Delhaize Q3 2017 results November 8, 2017 • Ahold Delhaize Q4/FY 2017 resu
Slide 29: Wrap up 2016
Wrap up 2016 • Proud to have brought together two strong food retailers in 2016 • Our great local brands showed a solid financial performance throughout the year • Continued strong free cash flow delivered of €1.4 billion • Proposed dividend of €0.57, up 9.6% compared to Ahold dividend last year • A
Slide 30: Cautionary notice
Cautionary notice This communication includes forward-looking statements. All statements other than statements of historical facts may be forward-looking statements. Words such as sustainable, invest, growth, promises, well positioned, strategy, customer proposition, proposed, on track, ongoing, pla
Slide 31: Thank you
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Koninklijke Ahold Delhaize — Q4 2016 Earnings Presentation on 6ix