Ahold Delhaize delivers strong sales and earnings growth, increasing free cash flow guidance for 2018
- Net sales of €15.8 billion, up 3.6% at constant exchange rates
- US comparable sales up 3.0% (excluding hurricane up 2.5%) with positive volume growth
- Net consumer online sales up 27.6% at constant exchange rates
- Underlying operating margin of 4.1%, up 0.2% points, supported by synergies
- Net income up 26.7% to €459 million, up 26.0% at constant exchange rates
- Strong free cash flow of €538 million, up €112 million, full year guidance raised to at least €2.0 billion
Zaandam, the Netherlands, November 7, 2018 - Ahold Delhaize, one of the world's largest food retail groups and a leader in both supermarkets and e-commerce, reports a strong third quarter with improved sales across the board and strong growth of underlying operating income.
Frans Muller, CEO of Ahold Delhaize, said: "We are pleased with these results, demonstrating the strength of our great local brands, which is underpinned by their leading market positions. We are proud of the strong engagement of our 370,000 associates serving local communities and especially those that were affected by natural disasters.
"Third quarter sales rose 3.6% at constant exchange rates, while margins improved by 0.2% points to 4.1%, supported by synergies. Net consumer online sales were up 27.6%, boosted by another very strong quarter for bol.com. This puts us firmly on track to realize at least €5 billion in net consumer online sales by 2020.
"We continued to renew our store network and invest in our digital capabilities and new technologies to make shopping easier for customers, while offering them even more options to live healthier lives. In the U.S., Stop & Shop remodeled all its stores in the Hartford area, as the first phase of its repositioning program. In the Netherlands, Albert Heijn to go opened its first checkout-free stores, offering customers super-fast shopping without waiting in line. Delhaize Belgium became our latest brand to provide customers with at-a-glance guidance on the nutritional quality of own brand products.
"In the United States, comparable sales grew significantly by 3.0% compared to the previous quarter, excluding gasoline, with positive volume growth. Comparable sales were up 2.5% adjusted for the impact of extreme weather events on the performance of Food Lion. Online sales rose 11.8%, supported by improving sales trends at Peapod.
"In the Netherlands, performance was very strong with comparable sales up 5.9%. Net consumer online sales grew 33.2% as bol.com continued its rapid growth as the leading e-commerce platform in the Benelux. In Belgium, Delhaize grew sales and margins as the implementation of its new strategy and improvement plans continued to make steady progress. In Central and Southeastern Europe, we are particularly pleased by the performance of our Czech business. Sales in the segment were impacted by negative comparable sales in Greece, which we expect to improve during the fourth quarter of 2018.
"Free cash flow was €538 million and we expect free cash flow this year to be at least €2.0 billion, exceeding our previous guidance of €1.9 billion. Our strong cash generation enables us to provide a balance between investing in further growth of our business, while at the same time returning excess liquidity to shareholders through our share buyback program in 2018.
"Ahold Delhaize will provide an update on our strategy at the Capital Markets Day on November 13 in New York City. We're excited to share our plans on e-commerce and digital in the U.S. and Europe and on the repositioning program at Stop & Shop along with further plans to drive growth in the years ahead as we continue the expansion of the leading position of our great local brands."
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