Strong Performance At Home Lifts Ahold Delhaize In Fourth Quarter
Ahold Delhaize’s home market of the Netherlands posted a 6.0% increase in comparable sales in the fourth quarter of the year – its best-performing division, according to the group’s fourth-quarter and full-year sales.
Its Belgian business was flat (0.0%) in Q4, while its Central and South-Eastern European business was up marginally, with comparable sales growth of 0.3%.
In the US, Ahold USA posted a 0.6% increase in comparable sales in Q4, with Delhaize America rising by 1.5%.
Pro-forma full-year sales at the group were €62.3 billion – up 0.6%, or 1.7% at constant-currency levels.
Full-year 2017 pro-forma underlying operating margin is expected to be 3.9%.
Commenting on its European performance for the quarter, Ahold Delhaize said that its Dutch business was boosted by a “strong holiday season” at Albert Heijn, driven by “successful commercial campaigns”, while its Bol.com operation posted 29.8% growth in the quarter.
Price inflation in the Netherlands was 2.8% – slightly higher than the previous quarter, it noted.
In Belgium, while comparable sales were flat, that was an improvement on the same period last year, when sales fell by 0.9%. Ahold Delhaize noted that it expects full-year market share “to be broadly in line with last year”.
In Central and South-Eastern Europe, an overall “strong sales performance” in the region was “offset by negative sales growth in Greece, where the sales performance reflected a normalisation of market circumstances since the second quarter this year”.
On the other side of the Atlantic, Ahold Delhaize said that sales performance was “in line with the previous quarter”, with Giant Carlisle reporting a strong quarter.
Delhaize America reported “positive comparable sales growth” for both Food Lion and Hannaford, with the former benefitting from the roll-out of the ‘Easy, Fresh and Affordable’ programme in selected markets.
Commenting on the group’s performance, analyst Bruno Monteyne of Bernstein Research said that while its trading results for the quarter were relatively “soft”, they were more than offset by the increase in free cash flow (FCF).
“FCF guided to be ‘significantly ahead of expectations’ (consensus expects €1,609 million) for full-year 2017, due to improved working capital, capex lower than the €1.9 billion forecast and higher dividends from JVs, rather than increased operating cash flows,” Monteyne said. “Assuming that ‘significantly’ means €200 million ahead, that would add 1% to the EV, or equity value, of Ahold.”
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.