In the last quarter prior to their official merger, both Belgian Delhaize and Dutch Ahold performed well with 12 and 8 % underlying profit increases respectively.
Growth in nearly every market
The merger was made official a month ago, but the published second quarter results refer to the last quarter they both operated independently. “We have started our new chapter as Ahold Delhaize with good momentum, with these two strong sets of pre-merger results. Building on our solid financial foundation, common values and great local brands, we are driving ahead with full energy to deliver even more for customers and communities, associates and shareholders”, a satisfied CEO Dick Boer said.
Both companies’ profitability went up significantly: Delhaize’s underlying profit grew 12.1 % to 247 million euro, while Ahold’s improved 8 % to 355 million euro. The Dutch company managed a 3 % second quarter turnover growth to 8.951 billion euro, with growth both in the United States and the Netherlands. However, it did have to deal with a minor turnover drop in Czechia. Delhaize on the other hand managed a 2.8 % turnover growth to 6.286 billion euro, which would have been 4.3 % if exchange rates had remained level. Unlike Ahold, it did manage growth in every market.
Ahold CEO Dick Boer thanked the Dutch online consumer, who helped boost turnover in that division more than 30 %, and he also pointed to the improved margins thanks to the Simplicity program. Bol.com’s excellent performance in Belgium also stood out, as the website’s turnover grew an astonishing 59 %.
Delhaize’s American turnover grew 3.9 %, largely thanks to a 2.9 % organic growth. There was ‘only’ a 2.6 % organic growth in Belgium, but the company withheld overall numbers for the country. Like on many occasions in the past, Delhaize Group’s Southeastern Europe division grew the fastest, with a 14.2 % organic growth thanks to strong Romanian and Greek performances.
And now: the future
From now on, Ahold Delhaize will present its results in five different segments: the Netherlands, Belgium, Central and Southeastern Europe and two for the United States. It will also provide historical quarterly segments and like-for-like data dating back to 2015’s first quarter. The third quarter results will be published on 17 November, its full-year results on 1 March.
The merger group is “confident that we will meet our synergy target of €500 million on an annual run-rate basis by mid-2019”. By the second half of 2016, a positive 30 million euro impact on operating income should already be visible. However, the company still expects about 500 million euros in one-off integration and transaction costs, as previously estimated.
