1 Sec econ ond d Qua uarter er 20 2017 Re 7 Resu sults August 9, 2017
Q2 Q2 Hi High ghli ligh ghts ts Dick Boer President and CEO
3 Second Quarte rter r 2017 7 Results sults Highlights – second quarter 2017 Improved pro forma sales performance, up 3.4% (+1.8% at constant exchange rates) to € 16.0 • billion, US slightly inflationary in the quarter Pro forma underlying operating income increased by € 64 million to € 626 million, up 10.2% at • constant exchange rates Net synergies of € 61 million in the quarter, € 117 million YTD, € 220 million expected for 2017 • Pro forma underlying operating margin strong at 3.9%, up 0.3% versus last year due to merger • synergies; FY 2017 underlying operating margin expected broadly in line with H1 2017 Total expected merger synergies increased to € 750 million, with € 250 million reinvestments • in our brands and € 500 million to the bottom line Integration costs expected at € 380 million; additional € 70 million one-time charge related to • set-up of US brand-centric organization Free cash flow of € 400 million in the quarter, on track to deliver € 1.6 billion for the full year •
Fin inanc ancial ial Re Resu sult lts Jeff Carr CFO
5 Second Quarte rter r 2017 7 Results sults Group performance - pro forma Quart rter r 2 € in million Change Change 2017 2016 actual rates constant rates Net sales es 16,044 15,509 3.4% 1.8% Net sales excl gas 15,802 15,273 3.5% 1.9% Under erlyin lying g EBITDA 1,079 995 8.4% 7.0% Underlying EBITDA margin 6.7% 6.4% Under erlyin lying g operat ating ing income 626 562 11.4% 10.2% Underlying operating margin 3.9% 3.6% Operating Income 584 503 16.1% 14.8% Income from continu nuin ing g operat atio ions ns 378 317 19.2% 17.8%
6 Second Quarte rter r 2017 7 Results sults Ahold USA – pro forma results Q2 2017 s growth 1 Net sales Comparable le sales € in million • Net sales flat at constant 21 3 145 rates -24 • Comparable sales ex gas up 0.3% 5.934 5.934 2,0% 5.789 1,3% • Retail inflation of 0.8% -1,8% 0.3% -0,5% -0,1% • Calendar impact more than offset by former A&P stores Q2'16 FX Q1'16 Comp Gas New/ Q2'17 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 constant sales closed re-openings ¹ Comparable sales growth excl gas rates ex gas stores Underlying lying EBITDA margin in Underlying lying operating rating margin in 7,2% 7,1% 6,9% • Underlying operating 6,8% 6,8% 6,5% margin up 0.4 percentage 4,3% 4,2% 4,0% 4,0% 3,9% 3,6% points • Strong synergy delivery • Launched price investments in June Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 *
7 Second Quarte rter r 2017 7 Results sults Delhaize America – pro forma results Q2 2017 Net sales Comparable le sales s growth € in million • Net sales +1.2% at constant 54 95 rates -3 • Comparable sales up 1.3% 3,0% • Retail inflation of 0.1%, 3.989 2,2% 3.843 3.938 2,0% 1,3% 1.3% Hannaford in line with 0,0% AUSA, Food Lion slightly deflationary Q2'16 FX Q1'16 Comp New/ Q2'17 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 constant sales closed • Continued volume growth rates stores at Food Lion Underlying lying EBITDA margin in Underlying lying operating rating margin in • Underlying operating margin up 0.4 percentage 7,1% 7,1% 6,8% 6,6% 6,6% 6,5% points 3,9% 3.8% 3,6% 3,5% 3,4% 3,4% • Strong synergy delivery and Save for our Customer programs • Unrecovered costs related Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 to fire at DC
8 Second Quarte rter r 2017 7 Results sults The Netherlands – pro forma results Q2 2017 Net sales Comparable le sales s growth € in million • Net sales +5.6% 22 159 6,0% • Comparable sales up 4.9% 4.9% 4,4% (+3.8% ex bol.com) 3,424 3,3% 3,0% 2,8% • Retail inflation of 1.9% 3,243 • Continued strong growth both in online and Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q2'17 Comp sales New/closed Q2'17 supermarkets stores Underlying lying EBITDA margin in Underlying lying operating rating margin in 7,3% • Underlying operating 7,2% 7,2% 7,1% 6,9% 6,9% margin flat at 5.1% vs strong Q2 16 5,1% 5,1% 5,0% 4,9% 4,7% 4,5% • Synergies and good cost control offset by higher pension costs • Margin ex bol.com at 5.8% Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17
9 Second Quarte rter r 2017 7 Results sults Belgium – pro forma results Q2 2017 Net sales Comparable le sales s growth € in million • Net sales +0.2% 3 0 • Comparable sales flat 3,9% • Retail inflation of 0.8% 2,6% 1,258 1,255 • Strong performance at 1,3% affiliate stores offset by -0,6% 0,0% -0,9% weaker integrated stores Q2'16 Comp sales New/closed Q2`17 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 performance stores Underlying lying EBITDA margin in Underlying lying operating rating margin in • Underlying operating margin down 0.4 5,8% 5,5% 5,5% 5,4% 5,2% 5,0% percentage points • Synergies offset by 2,9% 2,5% 2,5% 2,4% 2,3% 2,0% investments in promotions and higher shrink Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17
10 10 Second Quarte rter r 2017 7 Results sults CSE – pro forma results Q2 2017 s growth 1 Net sales Compara rable le sales € in million • Net sales +3.9 % at constant 34 22 7,4% 4 rates 6,5% 5,7% • Comparable sales ex gas 3,5% 1,439 up 1.7%, driven by Romania, 1,383 1,379 1.7% Serbia and Czech Republic 1,5% • Sales in Greece impacted by ongoing market Q2'16 FX Q2'16 Comp sales New/closed Q2'17 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 contraction and constant stores ¹ Comparable sales growth excl gas rates normalizing competitive environment Underlying lying EBITDA margin in Underlying lying operating rating margin in 7,6% 7,0% 6,7% • Underlying operating 6,5% 5,8% 5,7% margin down 0.5 5,0% percentage points 4,3% 4,1% 3 . 8% 3,1% 3,0% • Margin down in Greece due to strong prior year comparatives Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17
11 11 Second Quarte rter r 2017 7 Results sults Free cash flow generation * 2017 2016 € in million Q2 H1 Q2 H1 Operating cash flow 1,054 2,055 977 1,931 Change in working capital 7 (339) 194 (397) Income tax paid (189) (217) (190) (224) Cash from operating activities 872 1,499 972 1,303 Investments (385) (816) (407) (712) Divestments 13 63 6 17 Net interest paid (112) (163) (131) (195) Dividends from joint ventures 12 14 12 14 Free cash flow (post-tax) 400 597 461 435 * This represents the combined free cash flow of Ahold and Delhaize excluding pro forma adjustments.
In Inte tegr grati ation on Up Upda date te Frans Muller Deputy CEO Chief Integration Officer
13 13 Second Quarte rter r 2017 7 Results sults Outline 1. Organization 2. Synergies and one-time costs 3. Transformation
14 14 Second Quarte rter r 2017 7 Results sults Integration roadmap 2016 2017 2018 2019 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Design GSO Implement GSO organization organization Design EU Implement EU support support organization organization Design U.S. Retail Implement U.S. Retail Business Services Business Services Implement U.S. Design U.S. brand- brand-centric centric organization organization Design IT roadmap Implement IT roadmap Plan synergies Deliver synergies Day 1 Today
15 15 Second Quarte rter r 2017 7 Results sults U.S. operating model: local brands supported by Retail Business Services LOCAL BRAND STRATEGIES… Ahold USA Local expertise within brands to win Delhaize America in local markets: Marketing • Merchandising / Category • Pricing • Operations Great local brands operating with a unique brand • strategy differentiated in the marketplace HR • …SUPPORTED BY RETAIL BUSINESS SERVICES (RBS) Leverage scale and expertise across portfolio: Own brands, Digital, Finance, HR • Retail Business Services provide innovative systems and services, Legal, IT and solutions by leveraging scale & expertise Supply chain Retail Business Services to deliver • $120m G&A synergies
16 16 Second Quarte rter r 2017 7 Results sults Synergies 2016 – 2019 Synergy rgy phasing ng Net Synergi rgies es delivered red € in million 750 2017 Gross synergies € in million Q2 YTD 600 Net synergies United States 37 72 Europe 16 31 300 500 500 Global Support Office 8 14 420 420 220 220 22 Ahold ld Delhaize aize Group 61 61 117 117 2016 2017 2018 2019 Procurement synergies exceeding original plans across all categories and geographies • Gross synergies identified at € 750million, of which € 250 million to be reinvested in our brands • Reinvestments in the customer proposition started in Q2 17 •
Recommend
More recommend
