EUROPE: Ahold, Delhaize Report Strong Q2 Growth

The new Ahold Delhaize entity has reported strong growth for the respective fiscal second quarters of the Ahold and Delhaize groups, the last individual reports by the retail majors.

For the six months to 17 July, Ahold saw its underlying operating profit rise by 11.6% to €804m (constant-currency basis), net profit grew by 10.4% to €450m, and sales were up 3.6% to €20.7bn on the same basis.

In the US, sales were up 3.1% to €12.8bn on a constant-currency basis, with like-for-like sales up 1.2% (excl. fuel).  In its home market, sales grew by 4.8% to €6.96bn, on LFL growth of 3.3%. And the Czech Republic operations saw sales edge up 0.1% to €931m, on LFL growth of 1.0% (excl. fuel).

Meanwhile, Delhaize saw its first-half revenues grow by 4.3% to €12.4bn on a constant-currency basis, with underlying profit up 18.2% to €468m, and net profit up 70.3% to €227m on the same basis.

In the US, sales were up 2.4% to €8.1bn, on LFL growth of 2.9%.  Sales in Belgium were up 3.2% to €2.5bn (LFL +2.1%), while its Southeastern Europe operations recorded a 14.9% jump to €1.83bn (LFL +8.7%).

Dick Boer, CEO of Ahold Delhaize, said: “We have started our new chapter as Ahold Delhaize with good momentum, with these two strong sets of pre-merger results. Building on our solid financial foundation, common values and great local brands, we are driving ahead with full energy to deliver even more for customers and communities, associates and shareholders. We look forward to continuing to shape Ahold Delhaize, with a strong commitment to delivering great food, value and innovations for customers across our 11 markets, both in stores and online.”

Starting from the third quarter of 2016, Ahold Delhaize will report its quarterly financial performance for five business segments: The Netherlands, Belgium, Central and Southeastern Europe and two reporting segments in the United States. To provide a comparable base, pro-forma historical quarterly segment information will be published on 6 October, which will exclude the financial impact of divestments, as well as merger transaction costs.

The group said it expects to meet its synergy target of €500m on an annual run-rate basis by mid-2019. In 2016, synergies are expected to positively impact operating income by €30m in the second half.  It also still expects €350m in one-off costs related to the merger, of which €141m will be booked this year. This excludes transaction costs, which is expected to be within €140m.

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