Delhaize Group First Quarter 2016 Results

27 april 2016

Financial Summary

» Revenue growth of 4.3% at identical exchange rates

» Comparable store sales growth of 2.6% in the U.S. (3.7% real growth), 2.9% in Belgium and 10.8% in Southeastern Europe

» Group underlying operating profit of €221 million (+26.0% at identical exchange rates)

» Group underlying operating margin of 3.6% (3.9% in the U.S., 2.7% in Belgium and 4.1% in Southeastern Europe)

»   CEO Comments

Frans Muller, President and Chief Executive Officer of Delhaize Group, commented: "We have started 2016 with further improving revenue trends. In the U.S., although we continued to see deflation, we are also realizing ongoing solid 3.7% real growth. In Belgium, we reported good comparable store sales growth of 2.9% and a 50 basis points improvement in our market share compared to the first quarter of last year. While our sales trend continued to be largely driven by the Affiliated network, we remained focused on improving execution in our integrated stores. Finally, our Southeastern European operations reported an outstanding performance. In Greece, our Alfa Beta stores, uniquely positioned, have implemented successful promotional and marketing plans, in a grocery market that continues to shrink. In Romania, our operations continued to build on their strong momentum and commercial programs and benefited from favorable economic conditions, driven by lower VAT. Finally, we also enjoyed positive comparable store sales growth in Serbia." 

"We realized a robust performance in our first quarter profitability with a 3.6% underlying operating margin. Although the group benefited from a slightly stronger gross margin mainly in the U.S., profitability was especially boosted by lower SG&A as a percentage of revenues in Belgium and Southeastern Europe. We reported a negative free cash flow in the first quarter but we remain confident to generate a healthy free cash flow for the full year. "

"Following shareholders' approval for the merger obtained on March 14, our main focus for this year is to complete the merger with Royal Ahold on schedule. The remaining major milestone is to receive approval from the U.S. Federal Trade Commission in order to be able to complete the transaction by mid-2016."

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