Weak second quarter for Ahold

Weak second quarter for Ahold

Dutch distributor Ahold has suffered turnover and profit drops in its second quarter. The Albert Heijn and Bol.com owner failed to capitalize on the WC football and had to deal with large remodeling and reorganization costs.

Lower profit

The group's turnover reached 7.4 billion euro in Ahold's second quarter, 4.1 % lower than the same period last year. The strong euro impacted the results, as the drop would only have been 1.1 % if exchange rate fluctuations are eliminated. The company also points to Easter, as the traditionally weaker post-holiday week arrived in the second quarter this year.

 

The underlying company profit reached 288 million euro, 15.5 % lower than the year before. Profit margins dropped from 4.4 to 3.9 %, a consequence of "volume pressure" and "price level investments". Net profit, after taxes, was 147 million euro, a 28.6 % drop.

 

Level in the Netherlands, double-digit growth in Belgium

Dutch (which includes Belgium) quarterly turnover reached 2.7 billion euro, 0.1 % higher than last year. It was a 1.7 % drop on a like-for-like basis because Ahold believes Albert Heijn customers did not spend as much in the previous quarter, despite the WC football which usually delivers a sales spike. Albert Heijn's Dutch market share remained level, but its underlying profit margin was 0.5 % lower than before, reaching 5 %.

 

Like usual, Ahold does not reveal any separate numbers for Belgium. It merely refers to the "successful progression of Belgian expansion: currently 23 stores and double-digit like-for-like turnover growth".

 

Its e-commerce branch grew extensively, as its joint turnover grew 18.6 % (on a like-for-like basis) to 273 million euro. AH.nl knew "further strong growth", partly because of several new pick-up point openings. Bol.com's "plaza sales" (third-party sales) grew 121 %, while Bol.com's Belgian growth was also quite large: + 110 %.

 

American market share lost

Ahold's very important American activities represented 4.4 billion euro, 6.2 % lower than a year before (- 1.7 % without exchange rate fluctuations). Increased competition has resulted in a loss of market share, as other chains are quickly opening new stores while the total market remained stagnant. Ahold is currently remodeling its American stores with an increased focus on fresh food, which has also impacted its profit margin.

 

American web shop Peapod is a success, with double-digit growth, while it has also opened a new half-automatic logistics center in New Jersey.

 

Subsidiary Albert has managed a 306 million euro turnover in the past quarter in the Czech Republic, - 3.3 % without exchange rate fluctuations. On a like-for-like basis, it was a 2.9 % drop. Ahold finalized the purchase of the Spar stores on 1 August, which has made Albert the Czech market leader with 640,000 daily customers in some 330 stores.

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