Ahold Delhaize presents Better Together
strategy, gives update on integration and financial framework
Ahold Delhaize, a leader in
supermarkets and e-commerce with strong local brands in 11
countries, is holding a Capital Markets Day for institutional
investors and analysts today in London, United Kingdom, at 9am GMT
(10am CET). Highlights include:
- Better Together strategy captures benefits of
international scale to build great local brands
- Confirms rationale of Ahold Delhaize merger, sets
direction to realize full potential
- Combined company in full-execution mode following
merger completion on July 23, 2016
- Integration is on track with clear visibility to
generating €500 million in net synergies in 2019
- Operating model committed to grow leading
supermarket brands while remaining rigorously focused on cost
discipline
- New target to double net consumer online sales by
2020 from expected 2016 level of €2.3 billion
- Better Together strategy reflects full commitment
to Sustainable Retailing
- Continued focus on strong free cash flow with
€1.6 billion expected for 2017
- Dividend pay-out ratio of 40-50% of pro-forma
underlying income from continuing operations
- Launch of €1 billion share buyback program in
2017
Zaandam, the
Netherlands, December 7, 2016 - Ahold Delhaize today presents
its Better Together strategy, its plan for fully capturing the
benefits of international scale combining with great local brands
and associate expertise. Building on a solid financial foundation
and strong track record of cost discipline, Ahold Delhaize will
drive profitable growth in supermarkets, eCommerce, and smaller
formats.
The company will also provide an update
on synergies and its financial framework following completion of
the merger between Ahold and Delhaize Group in July
2016.
Dick Boer, CEO of Ahold Delhaize, said:
"We are excited to share our Better Together strategy, which builds
naturally on our combined strong performance as well as the strong
foundations of the local brands in our group. Guided by this common
compass, we will continue to improve our family of brands to be a
better place to shop, a better place to work, and a better
neighbor, every day. We are meeting the needs of customers today
and anticipating those of tomorrow, by providing more value,
quality and convenience.
"Our integration is on track and we
have a clear plan to deliver €500 million in net synergies in 2019.
We are convinced more than ever that our merger is the right
combination at the right time. Driven by our purpose "Together, we
build great local brands, bringing fresh inspiration every day," we
will continue to shape a stronger future for Ahold Delhaize,
providing fuel for the brands to grow to the benefit of customers,
associates, communities and shareholders."
Better Together:
our strategic framework
Our Better Together strategy will
enable us to drive profitable growth and deliver the benefits of
international scale, combining great local brands and local
associate experience while driving savings and investments to
benefit customers, and create value for shareholders.
It encapsulates our purpose, with clear
promises to customers, associates and communities and with values
that drive our actions. It is completed by the sustainable business
model, with three key pillars:
- Save for our customers: Buy better, Operate
smarter, Waste less
- Invest in our customer proposition: Affordable
for all, Best own brands, Fresher & Healthier, Most local &
personal service
- Funding growth in key channels: supermarkets,
eCommerce and smaller formats
Growing our
largest channel: supermarkets
At our Capital Markets Day, Ahold
Delhaize management will give an update on local programs that
continue to drive sales and improve price, assortment and service
for the customers of our great local brands.
Transformation Plan
Belgium
Delhaize Belgium is on track to deliver
€80 million in savings in 2018 through the Transformation Plan. A
New Store Organization was deployed to 128 company operated
stores, and now aims to drive sales through a clear commercial
strategy.
Food Lion - Easy,
Fresh and Affordable. you can count on Food Lion every
day
Food Lion continues to win with its
Easy, Fresh and Affordable strategy and will roll it out to 160
additional stores in 2017, bringing the total to 540, or 55% of
total sales at the brand.
Ahold USA - Heading
Northeast
Ahold USA is building momentum with its
"Heading Northeast" strategy as its investments in pricing, service
and quality pay off with gains in customer perception and sales
volume increases.
Growing in new
channels: doubling eCommerce sales by the end of
2020
Ahold Delhaize confirms its commitment
to its eCommerce businesses by meeting the growing customer demand
for online grocery solutions and by building the leading eCommerce
platform in the Netherlands and Belgium. Ahold Delhaize today
presents an ambition to double net online consumer sales by
2020.
Sustainable
Retailing
Our success as a business is closely
tied to how well we meet the needs of multiple stakeholders. Ahold
Delhaize is prioritizing three areas where we can have the most
impact on the lives of our stakeholders and, in doing so, become a
stronger, more sustainable company: promoting healthier eating,
reducing food waste, and creating healthy and inclusive workplaces
for the 375,000 associates at our brands.
Therefore, all brands will set clear
targets in the areas of product integrity, sourcing, tackling
climate change, and taking care of our people. Ahold Delhaize will
provide more details in 2017.
Clear roadmap to
delivering €500 million in net synergies
The integration is on track and has
been completed at our Global Support Office and EU Support
Office.
Ahold Delhaize remains committed to
deliver net synergies of €500 million in 2019, incremental to
operating income and confirms integration costs of €350 million for
2015-2019.
Financial
framework
Continuing to exercise rigorous cost
discipline, the company will further improve its cost base to fund
growth and invest in price, quality and service for
customers.
Ahold Delhaize will also continue to
deliver strong cash flow generation, fueling free cash flow with
synergies and working capital improvements. In 2017, free cash flow
is expected to be around €1.6 billion.
The company is committed to a balanced
approach between funding growth in key channels, managing the debt
portfolio and returning cash to shareholders. It targets a 40-50%
dividend pay-out ratio based on pro-forma underlying income from
continuing operations. In addition, in 2017 Ahold Delhaize will
return €1 billion through a share buyback program.
Further
information
All presentations for the Ahold
Delhaize Capital Markets Day will be available on
www.aholddelhaize.com from 9am GMT (10am CET). A webcast (audio) is
available from that time, also on www.aholddelhaize.com.
161207_AD2016CMD_press
release
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announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Ahold Delhaize via Globenewswire
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