Ahold Delhaize's worst performance comes from Belgium

Turnover for the new merger company Ahold Delhaize has grown 2.4 % in the past fiscal year, but Belgium did not perform as well: it was the only region to suffer a fourth quarter turnover drop.

Lower net profit

Ahold Delhaize’s total turnover in 2016 reached 62.3 billion euro, which is a 2.4 % increase over the year before. Its fourth quarter turnover dropped 1 % as 2016 had one fewer week than 2015, but excluding that and exchange rate fluctuations fourth quarter turnover actually grew 2.8 %.

Operational profit went up 3.9 % to 1.974 billion euro, while its underlying operational margin jumped 0.2 % to 3.7 % overall. As a result, Ahold Delhaize increased its dividend 9.6 % to 0.57 euro per share, despite a 21 million euro net profit loss to 830 million euro. A debt refinancing plan was the main culprit for this net profit drop. These financial results are still merely pro forma, because both Ahold and Delhaize still operated separately in the first half of 2016.

Smallest growth in Belgium

Delhaize’s home territory, Belgium, had the worst performance out of any separate market: its fourth quarter turnover dropped 1 % and its full-year performance was a mere 1.7 % turnover increase to 4.94 billion euro. Delhaize’s market share remained stable, at 24.1 %. “In Belgium, sales performance reflected a softer holiday season compared to 2015. However, underlying operating margins slightly improved due to capturing synergies”, CEO Dick Boer said.

Ahold Delhaize fared much better in the Netherlands, where fourth quarter turnover grew 7.5 % and full-year turnover went up 5.03 % to 13.01 billion euro. Albert Heijn’s market share grew to 35.2 % and its Dutch like-for-like turnover followed suit, up 4.1 %. “In the Netherlands, performance was outstanding, driven by both supermarkets and our online businesses ah.nl and bol.com”, Boer added. The company had already revealed its fourth quarter online turnover had grown 27.9 %.

Save 500 million euro in costs

Across the Atlantic, Ahold USA and Delhaize America grew 2.9 and 2.3 % respectively, but its largest increase came from Central and Southeastern America with an 8.6 % turnover increase to 5.56 billion euro. Results factored in a 52-week year, instead of the 53 weeks from 2015.

For its current fiscal year, Ahold Delhaize wants to continue creating merger synergies, which already helped save up to 22 million euro in costs in 2016’s fourth quarter. By the end of 2017, that sum should increase to 220 million euro and in the next two years, the company should have cut costs up to 500 million euro.