Delhaize Group SA — Q1 2013 Earnings Presentation
18 slides from Delhaize Group SA's earnings presentation, May 8, 2013
Slide 1: Q1 2013 results
DELHAIZE #4 GROUP Q1 2013 results May 8, 2013
Slide 2: Forward looking statements
Forward looking statements “This presentation includes forward-looking statements within the meaning of the U.S. federal securities laws that are subject to risks and uncertainties. Forward-looking statements describe further expectations, plans, options, results or strategies. Actual outcomes and r
Slide 3: Q1 2013 highlights
Q1 2013 highlights • U.S. • Volume trends further improved p both at Food Lion and Hannaford • Helped by favorable weather conditions, positive calendar impact • Belgium • Revenue growth mostly due to inflation and expansion, also helped by weather conditions and strong Easter sales • Market share t
Slide 4: Financial Update
Dip DELHAIZE #53 GROUP Financial Update
Slide 5: Financial results – Q1 2013
Financial results – Q1 2013 Q1 Actual Rates Identical Rates (€ in Millions) 2012 2013 R Revenues 5 442 5,442 5 521 5,521 1 5% 1.5% 2 1% 2.1% Gross Margin 24.8% 24.7% (10 bps) (10 bps) Underlying Operating Profit 190 214 13.0% 13.7% Underlying Operating Margin 3.5% 3.9% 40 bps 40 bps (1) G Group Shar
Slide 6: EBITDA
EBITDA (€ in Millions) Underlying EBITDA EBITDA Q1 2012 348 Q1 2012 189 At Id Identical ti l +7.1% +44.3% Rates Q1 2013 372 Q1 2013 271 Q1 2012 348 Q1 2012 189 At Actual +6.4% +43.5% Rates Q1 2013 369 Q1 2013 270 6
Slide 7: Strong Free Cash Flow generation in Q1
Strong Free Cash Flow generation in Q1 (€ in Millions) Free Cash Flow evolution 255 19 Underlying EBITDA 369 67 Portfolio optimization and reorganisation cash-out (32) Changes g in core working g capital p 25 Payment of interest and taxes (30) 60 Cash capex (78) Q1 2013 FCF 255 87 22 Q1 2012 Underly
Slide 8: Delhaize U.S. organic revenue growth and comparable store sales growth
Delhaize U.S. organic revenue growth and comparable store sales growth Delhaize America +0.7% +1.1% -2.7% 2 7% 3.7% 2013 Q1 +1.9% 1 9% 1.0% CSS Calendar Expansion Organic Store Revenue Impact growth closings growth 8
Slide 9: Transactions continue to drive volume growth in Food Lion Phase stores…
Transactions continue to drive volume growth in Food Lion Phase stores… # Transactions # Items per # Items growth Transaction growth growth +4.5 +3.5 +1.0 2012 Q4 -1.2 +0.2 -1.4 +5 6 +5.6 +3.2 +2.4 2013 Q1 -0.4 -0.2 02 -0.2 02 Phase stores (698 stores) 6.0% Rest of Network (421 stores) outperformanc
Slide 10: …translating into strong CSS growth despite negative retail inflation
…translating into strong CSS growth despite negative retail inflation # Items Average price Comparable Store growth change per item Sales Growth +4.5 -2.1 +2.3 2012 Q4 -1.2 -1.6 -2.8 (1) -3.4 +5.6 -1.3 +4.2 2013 Q1 -0.4 04 -0.9 09 -1.4 14 Phase stores (698 stores) 5.6% Rest of Network (421 stores) o
Slide 11: Delhaize U.S. Q1 profitability supported by favorable elements
Delhaize U.S. Q1 profitability supported by favorable elements Delhaize America Underlying Operating Profit Strong Q1 2013 impact: • Weather & calendar • BDF entering ~ 80bps Pittsburgh in Q1 ~130 bps 4.2% 2012 3.7% Price investments Remainder of 2013: • Hannaford price - BDF and Sweetbay investment
Slide 12: Delhaize Belgium organic revenue growth and comparable store sales growth
Delhaize Belgium organic revenue growth and comparable store sales growth Delhaize Belgium -1.8% +1.8% 2013 Q1 +2.4% 2.4% CSS Calendar Impact Expansion Organic growth 12
Slide 13: Delhaize Belgium revenues and profitability
Delhaize Belgium revenues and profitability Delhaize Belgium 5.1% 4.6% 3 8% 3.8% 4 0% 4.0% 3.5% 3.2% 2.4% 2.4% 0.4% 0.4% Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Underlying operating margin Revenue growth 2013 Belgium underlying operating margin will be impacted by: •Targeted price investments •Timin
Slide 14: SEE revenues and profitability
SEE revenues and profitability Southeastern Europe 10.6% 9.7% 9.4% 7.0% 6.8% 5.1% 3.2% 2.8% 2.0% 1.4% Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Underlying operating margin Revenue growth at identical exchange rates •Revenues continue to grow due to store openings but impacted by lower consumer spendin
Slide 15: Operational Update
DELHAIZE #81 GROUP Operational Update
Slide 16: Our priorities are clear
Our priorities are clear • Food Lion repositioning Revenue • Targeted price investments • Accelerate organic growth in selected markets • Strengthening g g our brands • Ruthless discipline in our capital allocation Free Cash • Further F th working ki capitalit l iimprovementst Flow • Average of appr
Slide 17: Priorities per segment specified
Priorities per segment specified • Accelerate the transformation of Food Lion: focus on implementation of Phases roll-out roll out U.S. • Strengthen Hannaford: targeted price investments • Optimize Bottom Dollar Food: accelerate path to profitability • Reinforce historical strengths of Quality, Heal
Slide 18: 2013 Guidance
2013 Guidance (1) • Underlying operating profit of €775 million compared to €804 million in 2012 • Flat SG&A as percentage of revenues • Reduction in net finance costs to approximately €210 million • Target capex of approximately €650 million • 200 store openings • Average of approximately €500 mill