Ahold Delhaize: Does the Q2 volume growth slowdown in the US mask a more promotional market? (
Ahold Delhaize: (NEUTRAL, Fair Value EUR19 (-9%))Does the Q2 volume growth slowdown in the US mask a more promotional market?
Ahold Delhaize has reported Q2 figures globally in line with expectations with sales of EUR15.53bn (vs. EUR15.47bn e) and a 4% underlying EBIT margin (vs 4% e). While the Netherlands remains strong and Belgium is recovering, questions concern the slowdown in volume growth in the US (is the competitive environment becoming more promotional again?). All guidance has been reiterated, implying a stable strong FCF of EUR1.9bn in 2018, higher CAPEX (3.1% of sales in 2018 vs 2.7% in 2017) to modernize and digitalise the store network and EUR500m in net synergies (implying EUR250m in price investments). Neutral recommendation with a FV of EUR19.
Koninklijke Ahold Delhaize is an international group of supermarket and foodservice operators based in Europe and the U.S. Co. operates supermarkets and convenience stores. In addition, Co. provides online food retailing services. Co. also finances, develops and manages store sites and shopping centers. Ahold Europe comprises Albert Heijn in the Netherlands and Belgium; Etos, Gall & Gall, and albert.nl in the Netherlands; and Albert / Hypernova in the Czech Republic and Slovakia. Ahold USA is organized into four retail divisions: Giant Carlisle, Giant Landover, Stop & Shop New England, and Stop & Shop New York Metro. The Peapod online business is also part of Ahold USA.
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