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Ahold Delhaize records strong Q4

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Retailer says its integration is on track

Ahold Delhaize records strong Q4

ZAANDAM, the Netherlands — Ahold Delhaize reported strong fourth quarter and full year results, and said it was making good progress on implementing the Better Together strategy it announced in December.

Chief executive officer Dick Boer said he was pleased with the merged company’s volume growth and strong margins, and stated that “2016 was not only a year where we brought together two strong food retailers. It was also a year in which our great local brands drove solid performance, serving our customers both in stores and online.”

He added that “our teams are working hard on the integration, leveraging best practices and realizing synergy targets.”

Pro forma sales at Ahold Delhaize grew by 2.8% in the fourth quarter at constant exchange rates and adjusted for the 53rd week in 2015. Boer pointed out that those gains came despite the fact a deflationary environment in the U.S.

“Ahold USA continued to focus on its ‘Heading Northeast’ strategy by offering better value, better quality and improved service to its customers, resulting in resilient volume trends,” Boer said. “Underlying operating margin performance was slightly better than last year, adjusted for week 53 last year, supported by ongoing cost initiatives and synergies.

“Delhaize America showed continued good performance at both Food Lion and Hannaford with strong volume growth, more than offsetting the impact of deflation on sales. Underlying operating margins improved, driven by the “Easy, Fresh & Affordable” strategic initiative and synergies.”

The Netherlands was another strong market for Ahold Delhaize, Boer said, with strong sales in both its supermarkets and online businesses. Underlying operating margin exceeded last year’s margin, reflecting operational efficiency and synergies. Operating margins also improved somewhat in Belgium, he said, although sales performance in that market reflected a softer holiday season compared to 2015.

“Our strong free cash flow of €1.4 billion for the full year allows us to continue to fund growth in key channels, as well as to return excess liquidity to our shareholders,” Boer said, noting that the company has launched a €1 billion share buyback program and proposed a dividend 9.6% higher than Ahold’s last year.


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