Delhaize surprises with good quarterly figures in Belgium and the US

Organic sales growth of 3.8%

Delhaize’s provisional quarterly numbers show that sales have
risen by 1.5 percent to 5.5 billion euro. At stable exchange rates that becomes
2.1 percent and organic growth is 3.8 percent.

In the United States comparable sales growth
was 1.9%, mainly due to good weather conditions and a growth in volumes at Food
Lion and Hannaford. In Belgium comparable sales growth was 2.4
percent, with inflation and better volumes as most important causes. In South-East
Europe sales rose by 6.8 percent, at unchanged exchange rates.

Better profit margins

In that same period the underlying company
profit was 214 million euro, 13.7% higher than in the past year at
unchanged exchange rates, but due to currency fluctuations the real profit growth is slightly lower, at 13%.

The underlying operational profit margin in the
US was 4.2 percent, compared to 3.7% the year before, mainly because of higher
sales, the closing of badly performing shops and good results
at Bottom Dollar Food. Parts of it had to be sacrificed though to finance price
reductions.

The underlying operation profit margin in
Belgium evolved, mainly due to cuts and better sales, from 4.6% to 5.1%. The weak part in this success story is
South-East Europe, where underlying operational profit margins dropped from 2.0
percent to 1.4 percent, with price reductions as the main cause.

Higher operating cash flow

The underlying operating cash flow (ebitda) is
7.1 percent higher than in the previous year at 369 million euro: the free cash
flow was 255 million euro, compared to 87 million in the previous year.
Delhaize is predicting an underlying company profit for the whole year of 775
million euro at unchanged exchange rates. That was 810 million euro in 2012.

The complete results of the first quarter will
be announced on 8 May. Delhaize also said in a press release that the “Capital
Markets Day” planned for that day will be pushed to a later date. The extra
time will be used to explain the update on the activities and the long-term vision
of Delhaize more extensively. It seems changes are coming at the company with
the lion…