Belgian supermarket chain Delhaize has seen its 2014 profits halved to 89 million euro, due to the restructuring in its home market. The good news comes from the US and South-Eastern Europe, with turnover growths over 4 %.
Quarterly loss of 55 million euro
Delhaize had already revealed its most essential results at the end of January: the total turnover grew 3.7 % to 21.4 billion euro, but its Belgian turnover dropped 3 % to 4.9 billion euro. The fourth quarter was quite devastating for Delhaize Belgium, with a 6.9 % turnover loss to 1.3 billion euro because of repeated strikes (shutting down stores for several days) and lower prices. The chain's Belgian market share dropped 77 points to 24.7 %.
The full-year results show that the company had a 55 million euro net loss in its fourth quarter as Delhaize set aside 137 million euro, to be used for early retirement plans and voluntary departures of some 1,800 employees. In the end, the group had a full-year net profit of 89 million euro, half of 2013's result.
For its current fiscal year, the group will focus on two specific areas: Delhaize will expand its "Easy, Fresh & Affordable" strategy in the United States to another 160 Food Lion stores and in Belgium, it will implement its highly-debated "transformation plan". The Belgians also seek additional growth at Hannaford and in South Eastern Europe, without losing sight of "the operational efficiency and the continued investment discipline".
"We are pleased with the progress at Delhaize America as both Food Lion and Hannaford achieved solid revenue growth while maintaining profitability", CEO Frans Muller said. "We believe [the expansion of our Easy, Fresh & Affordable approach] will favorably position us in an increasingly competitive Southeastern US market."
In South-Eastern Europe excellent results in Greece and Romania lifted turnover 4.3 % higher. CEO Muller is highly satisfied with the group's local market share growth, despite the challenging context (especially in Serbia).
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Board and management changes
CEO Frans Muller immediately announced several changes at the top of the company: Philippe Dechamps will become "General Counsel and Corporate Secretary" at group level. The experienced lawyer with degrees at several Belgian universities and Harvard Law School has been with Delhaize since 2008.
At the same time, Delhaize has confirmed that Pierre-Olivier Beckers will not have another go for a seat in the board of directors. He has been with Delhaize for more than 30 years and has been its CEO between 1999 and 2013. Co-director Didier Smits will also step down after 19 years of service. There has been no indication as to whom may replace both individuals. "The company is in advanced stages of discussion with candidates for election", it said.