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Ahold Delhaize generated more profit in the third quarter thanks to better-than-expected synergies. Delhaize Belgium has improved, but still lags behind: a closer collaboration with Albert Heijn should help boost performance.
Cut costs
Ahold’s third quarter turnover dropped slightly, to 15.1 billion euro, entirely in line with expectations. Operational profit grew to 595 million euro and net profit reached 362 million euro. Its cost-cutting measures and the merger’s synergies have helped it in that regard. The synergy effects should even outperform its 220 million euro expectations, up to 250 million euro, for 2017.
Belgian turnover remained stable at 1.213 billion euro, but its operational profit did grow 3.1 % to 37 million euro. That is still lower than the group margin (3.9 %). Starting now, Delhaize, Albert Heijn and bol.com should be able to collaborate better, seeing how it has managed to find new owners for every store it was forced to sell to comply with the Bureau of Competition. Dutch turnover grew to 3.277 billion euro.
Investment program
CEO Dick Boer was very happy with the quarterly results: the group gained market share in the United States, with a decent volume growth for Food Lion. Online sales shot up more than 20 %, which means the group will surpass the 3 billion euro online turnover milestone this year. It will even reach 5 billion by 2020. Boer is keeping a close eye on Amazon, which has shown an interest in the European supermarket industry and just launched the Prime subscription in the Benelux.
He promises an improved investment program for 2018, for both the stores and online. The group will also buy back 2 billion euros’ worth of shares in 2018, after it had already acquired 1 billion euros’ worth of shares this year.
