Delhaize Group SA — Q3 2015 Earnings Presentation
17 slides from Delhaize Group SA's earnings presentation, Oct 29, 2015
Slide 1: Q3 2015 results
Q3 2015 results October 29, 2015
Slide 2: Disclaimers
Disclaimers 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 out
Slide 3: Q3 2015 highlights by region
Q3 2015 highlights by region • U.S. • Continued solid CSS and real growth at Food Lion and Hannaford (excluding competitor disruption last year) • Underlying operating margin impacted by pre-opening expenses at Food Lion • Relaunched 162 Easy, Fresh & Affordable Food Lion stores in Raleigh mid- Octo
Slide 4: Financial results – Q3 2015
Financial results – Q3 2015 Q3 % Growth (€ in Millions) 2014 2015 Actual Rates Identical Rates Revenues 5,365 6,141 14.5% 2.3% Gross Margin 24.1% 24.3% 18 bps (3 bps) SG&A as % of revenues 20.9% 21.2% 22 bps 9 bps Underlying Operating Profit 194 218 12.5% (1.7%) Underlying Operating Margin 3.6% 3.5%
Slide 5: EBITDA
EBITDA (€ in Millions) EBITDA Underlying EBITDA Q3 YTD Q3 YTD At 2014 328 954 337 964 Identical -11.0% -8.7% +0.5% +1.1% Rates 2015 292 871 338 974 2014 328 954 337 964 At Actual +2.1% +5.8% +13.7% +15.7% Rates 383 1,115 2015 335 1,009 5
Slide 6: Delhaize America - organic revenue growth and comparable store sales growth
Delhaize America - organic revenue growth and comparable store sales growth Adjusted for Market Delhaize America Basket’s disruptions in 2014 4.1% -1.4% +1.7% 2015 Q3 -0.2% +0.1% 2.4% CSS Calendar Expansion Organic Impact Revenue Growth CSS Organic revenue growth 3.0% -0.1% 0.0% +2.2% +2.1% 2015 YTD
Slide 7: Delhaize America – underlying operating margin
Delhaize America – underlying operating margin Delhaize America Underlying Operating Margin Q3 2014 4.4% Q3 2015 4.2% - Q3 margin impacted by: • Price investments of around ~25bps • One-time costs (Easy, Fresh & Affordable) at Food Lion and investment in IT projects • Impact of Market Basket last ye
Slide 8: Delhaize Belgium - organic revenue growth and comparable store sales growth
Delhaize Belgium - organic revenue growth and comparable store sales growth Delhaize Belgium +0.6% -0.1% 2015 Q3 +2.2% +1.7% CSS Calendar Impact Expansion Organic Revenue Growth -0.2% 2015 YTD -0.5% +0.4% -0.1% CSS Calendar Impact Expansion Organic Revenue Growth 8
Slide 9: Delhaize Belgium – underlying operating margin
Delhaize Belgium – underlying operating margin Delhaize Belgium Underlying Operating Margin Q3 2014 1.4% Q3 2015 1.4% - Q3 margin impacted by: • Advertising • Shrink • Price investments • Increased depreciation due to more remodelings YTD 2014 2.6% • Transformation Plan savings • Better supplier ter
Slide 10: SEE - organic revenue growth and comparable store sales growth
SEE - organic revenue growth and comparable store sales growth Southeastern Europe +6.8% +11.9% 2015 Q3 0.0% +5.1% CSS Calendar Impact Expansion Organic Revenue Growth +6.7% +8.9% 2015 YTD +0.2% +2.0% CSS Calendar Impact Expansion Organic Revenue Growth 10
Slide 11: Southeastern Europe – underlying operating margin
Southeastern Europe – underlying operating margin Southeastern Europe Underlying Operating Margin Q3 2014 4.3% Q3 2015 4.5% - Q3 margin impacted by: • Volume growth across the segment • Better procurement conditions • Serbia store expansion costs YTD 2014 3.4% YTD 2015 3.8% 11
Slide 12: Free Cash Flow generation
Free Cash Flow generation (€ in Millions) Operating Free YTD 2015 Free Cash Flow evolution Cash Flow 1,104 35 YTD 2014 255 195 YTD 2015 146 509 Free Cash Flow 88 YTD 2014 426 117 160 YTD 2015 160 Underlying Changes in Net payment Cash capex Non-recurring Other Free Cash 2 EBITDA1 core working of int
Slide 13: Delhaize America is delivering on its 2015 plans
Delhaize America is delivering on its 2015 plans • Easy, Fresh & Affordable – remodelings • 76 stores in Wilmington and Greenville • Significant progress on shrink, gross margin and labor • 162 additional stores in Raleigh launched on October 14 • Currently working on 2016 plans • Easy, Fresh & Affo
Slide 14: Transformation Plan in Belgium executed according to plan
Transformation Plan in Belgium executed according to plan • Process to sign up voluntary leavers has been completed in October 2015 • Aim to generate at least €80 million savings by 2018 • New Store Organisation implemented in 53 stores by mid-November • Strong performance of our Affiliated network
Slide 15: SEE: market share gains continue thanks to well adapted store formats
SEE: market share gains continue thanks to well adapted store formats and concepts and constant customer focus • Strong performance in the region, driven by all countries • Double-digit CSS growth in Romania • Market share growth in Greece, Serbia & Romania • Optimistic to continue growing in Greece
Slide 16: Ahold Delhaize merger process is on track
Ahold Delhaize merger process is on track • Moving forward with the integration planning • Closing still foreseen for mid 2016 • Different workstreams underway on key topics (synergies, strategy, operating model, …) • Key milestones • Ahold F-4 (US SEC), Dutch prospectus (AFM) • EGMs • Competition a
Slide 17: 2015 outlook
2015 outlook • Continue to focus on our two strategic initiatives • Food Lion « Easy, Fresh and Affordable » • 162 Raleigh stores relaunched on October 14 • Delhaize Belgium Transformation Plan • Implementation of New Store Organisation • Trends for Q4 2015 • Positive volume growth in the 3 segments