The merger between Belgian Delhaize Group and Dutch Ahold, to be finalized by mid-2016, is "on schedule".The Belgian distributor released the news together with its quarterly results, which saw the group's turnover increase and profits drop.
6.14 billion euro turnover
The supermarket group continues "to report robust sales in this third quarter", according to its Dutch CEO Frans Muller. Ignoring exchange rate fluctuations, turnover rose 2.3 % to 6.14 billion euro, while net profit dropped 8.4 % to 118 million euro as a result of one-time costs related to the Belgian restructuring program and the preparations for the Ahold merger.
Belgian quarterly turnover grew 2.2 % to 1.2 billion euro, while the underlying operational income was up 3.6 % and like-for-like turnover grew 1 %. "Our return to positive comparable store sales growth in Belgium is just a first step as we are putting our operations back onto a path of sustainable growth", said the CEO.
"During the third quarter, our stores were impacted by significant changes as a result of the agreed departure of many employees. We have started the roll-out of our new store organisation which will be implemented in 53 stores by mid-November."
American like-for-like turnover up 1.7 %
Like-for-like turnover in the US (the area from which Delhaize, just like Ahold, gets the lion share of its turnover) has grown 1.7 %, while overall turnover growth only reached 0.1 % to 4.5 billion euro. " At Delhaize America, while our revenue growth was driven by Food Lion, Hannaford also posted positive volume growth once adjusted for the competitive turmoil of last summer", he said.
"We made significant progress with our key strategic initiative ‘Easy, Fresh & Affordable´ at Food Lion by further fine-tuning Wilmington and Greenville, relaunching 162 stores in the Raleigh market two weeks ago and preparing for our next market in 2016."
Southeastern Europe experienced the biggest turnover growth (+ 5.1 %): "In Southeastern Europe, we continued to benefit from a strong summer in our Greek operations, excellent momentum in Romania, and Serbia also posted good comparable store sales growth", says Frans Muller.
"Merger on schedule"
For the fourth quarter, the Delhaize CEO expects volume growth in the three core markets: the United States, Belgium and Southeastern Europe. "We are looking forward to the important fourth quarter of the year and we are confident that we will deliver results and free cash flow in line with expectations", he boasts confidently.
No news is good news about the impending merger with Ahold: "At the same time, we continue to make progress with the proposed merger with Ahold and we are on track to complete the transaction by mid-2016.” Over the first 9 months of 2015, Delhaize already spent 28 million euro on the impending merger, with 9 million euro spent in the third quarter.