• Q1 Group net sales were €21.7 billion, up 1.3% at constant exchange rates and up 0.4% at actual exchange rates. Q1 comparable sales excluding gas increased by 1.6% for the Group, with an increase of 0.8% in the U.S. and an increase of 2.8% in Europe.
• Net consumer online sales decreased by 1.0% in Q1 at constant exchange rates, negatively impacted by 5.7 percentage points due to the divestment of FreshDirect. This was partially offset by double-digit growth at Food Lion and Hannaford and accelerating growth at Albert Heijn.
• Q1 underlying operating margin was 4.0%, in line with the prior year. Improvements in European performance were offset by modest declines in the U.S.
• Q1 IFRS operating income was €803 million and IFRS diluted EPS was €0.54. IFRS results were €58 million lower than underlying results primarily due to costs related to the Belgium Future Plan.
• Q1 diluted underlying EPS was €0.59, a decrease of 2.9% compared to the prior year at actual rates.
• The Company reiterates its 2024 full-year outlook, including underlying operating margin of >=4.0%; underlying EPS at around 2023 levels; free cash flow of around €2.3 billion; and net capital expenditures of around €2.2 billion.
Zaandam, the Netherlands, May 8, 2024 - Ahold Delhaize, one of the world's largest food retail groups and a leader in both supermarkets and e-commerce, reports first quarter results today.
Comments from Frans Muller, President and CEO of Ahold Delhaize
"I am pleased to report a stable first quarter, placing us well on track to reach our goals and aspirations for the year. The external environment remained challenging, similar to the second half of 2023. Our brands have been very active during the quarter in delivering great value, quality and savings to customers, creatively using the full spectrum of their own-brand assortments and omnichannel toolkits.
"Group net sales grew 1.3% at constant rates, while comparable sales excluding gas increased by 1.6%. These are strong results, when taking into account the divestment of FreshDirect and the end of tobacco sales in the Netherlands. In the U.S., net sales declined by 0.6% at constant rates, while comparable sales growth excluding gas was 0.8%, positively impacted by calendar shifts. Net sales in Europe grew by 4.6% at constant rates, while comparable sales growth was 2.8%. Sales were supported by the timing of Easter and the cycling of the strike impact at Delhaize. The end of tobacco sales at Albert Heijn had a negative impact of 1.9 percentage points on Europe's comparable sales growth.
"As we tee up to our new strategic plan, we are working hard to ensure we are fit and ready to transition to a more robust growth profile. Further simplifying our organization and maintaining a strong cadence in our Save for Our Customers program to sustain growth investments and drive innovation are key focus areas for both our regions. The largest of these simplification initiatives this year is the Belgium Future Plan. One year into the plan, the Delhaize team has made great progress and achieved many significant milestones. In February, Delhaize finalized agreements to franchise all of the 128 own-operated stores. To date, 76 stores have already transitioned to their new owners and we expect that all conversions will have taken place by the end of the year. From the stores already transitioned, we are seeing promising results, with customer frequency and basket size trending upwards.
"This will play an important role in European margin recovery in the coming years. Despite high levels of year-over-year cost inflation, I am pleased that we saw margin improvements during Q1 in Europe, with a 0.3 percentage-point rise. These improvements ensure we can maintain overall consistent margins at a Group level, while, at the same time, allowing us more flexibility to invest in our customer value propositions in the U.S., particularly in those areas that were hardest hit by inflation and a reduction in Supplemental Nutrition Assistance Program (SNAP) benefits.
"The impact can already be seen in our first quarter profitability numbers, as we delivered a consistent underlying operating margin of 4.0%. As a result, diluted underlying EPS was €0.59, slightly lower than last year, due to foreign exchange rates and higher financing expenses and income taxes. On an IFRS basis, we delivered operating income of €803 million and diluted EPS of €0.54. IFRS results were negatively impacted by costs related to the transition of stores as part of the Belgium Future Plan.
"In the U.S., our decision to orient our online fulfilment capabilities towards more efficient, less asset intense same-day delivery models, such as click and collect, is also paying off. Our online sales in the U.S. grew 4.7% in the first quarter on a like-for-like basis, fueled by new customer growth, as well as strong retention of existing e-commerce customers. Driving more growth and leverage from our online capabilities is also a top priority for our European teams, as we continue to benefit from increasing demand and new external partnerships. For example, in the Benelux region, our brands are offering new, innovative propositions for business customers, with the ambition to offer quality and accessible services to a wide range of companies at an affordable price. Albert Heijn has entered new partnerships with large child care services and healthcare providers. The brand has also started offering all business customers a standard 10% discount on all organic products and items from AH Terra, Albert Heijn's fully plant-based own-brand product line, as we extend our health and sustainability ambitions from the home to the workplace. In total, our strong grocery online sales growth of 10.7% in Europe in the first quarter shows why our online business is such a powerful competitive advantage for our future growth in the region.
"In line with Ahold Delhaize's annual report, several of our brands issued sustainability reports during the quarter. These include many examples of the health and sustainability initiatives the brands have in place and are undertaking. To support the further reduction of our scope 3 carbon emissions, all our brands in Europe have now launched climate hubs to help suppliers set their own reduction targets. Ahold Delhaize USA launched a first supplier collaboration focusing on reducing carbon emissions, with several more to follow this year.
"Given the solid start to the year, we reconfirm our guidance for 2024. It is an important year for our company, as we pivot to our refreshed strategy, which we are very much looking forward to unveiling on May 23. With our strong market positions, our financial strength and the great foundational work we have carried out over the last few years, I am confident we have a great starting point and strong plans for our next phase of growth."
Full press release:
https://www.aholddelhaize.com/en/news/ahold-delhaize-reports-solid-first-quarter-and-reiterates-2024-outlook/
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